Company: KELYB
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000055135-25-000080
Chunk: 109

Company: KELLY SERVICES INC
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 2
Chunk 109
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Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Executive Overview

In the third quarter, Kelly continued to capture growth in more resilient markets. The Education segment delivered revenue growth driven by continued demand in the K-12 staffing and pediatric therapy specialties. In SET, demand for engineering and telecom workforce solutions remained robust driven by investments in large capital projects such as data centers. Payroll process outsourcing continued to be a source of strength within the ETM segment’s talent solutions offerings and delivered revenue growth over the prior year. 

Kelly’s results also reflect reduced volumes in parts of our portfolio driven by lower demand among certain large customers and a more measured approach to hiring among employers in some sectors, primarily in response to the dynamic macroeconomic environment. Results in ETM continued to be impacted by demand reductions among three large customers, which Kelly disclosed in the second quarter. Staffing volumes in ETM and SET associated with the U.S. federal government, which were materially reduced beginning in the first quarter of 2025 as a result of government efficiency actions, continued to trend lower in the third quarter. Throughout the third quarter, Kelly maintained its commitment to aligning resources with demand and took a disciplined approach to expense management to address these dynamics.

As Kelly navigated a dynamic environment in the third quarter, the Company remained focused on positioning itself for the future. Kelly continued to refine its go-to-market strategy with large enterprise customers and within SET, enhancing service delivery to improve the customer experience. The Company also made further progress toward modernizing its front- and back-office systems within SET, leveraging MRP’s leading technology stack to consolidate disparate platforms, reduce complexity, and drive efficiency.

Kelly’s ability to capture growth in more resilient markets in the third quarter reflects the Company’s diversified portfolio of specialty businesses, each with industry leading positions and differentiated offerings. As the demand environment continues to evolve, the Company will remain agile in pursuit of profitable growth and committed to long-term value creation.

Financial Measures 

Reported percentage changes were computed based on actual amounts in thousands of dollars.

EBITDA (earnings before interest, taxes, depreciation and amortization) and EBITDA margin (EBITDA divided by revenue from services) are measures used for understanding our ability to generate cash flow and for judging overall operating performance.  EBITDA measures are non-GAAP (U.S. Generally Accepted Accounting Principles) measures and are used to supplement measures in accordance with GAAP.  Our non-GAAP measures may be calculated differently from those provided