Research News and Market Data on KELYA
November 5, 2026
TROY, Mich., Nov. 05, 2026 (GLOBE NEWSWIRE) — Kelly (Nasdaq: KELYA, KELYB), a leading specialty talent solutions provider, today announced results for the third quarter of 2026.
- Q3 revenue of $0.9 billion, down 0.8% year-over-year, an improvement of 500 basis points (“bps”) versus the prior quarter; underlying revenue, which excludes previously disclosed discrete impacts, grew 2.3% year-over-year
- ETM underlying revenue grew 7.7% (2.4% reported) while SET underlying revenue decreased 0.8% (2.0% reported). The underlying performance for ETM and SET improved 460 bps and 220 bps versus the prior quarter, respectively
- Q3 operating earnings of $0.6 million; $6.1 million of operating earnings on an adjusted basis
- Adjusted EBITDA of $21.3 million and adjusted EBITDA margin of 2.3%, which expanded 50 bps on a year-over-year basis resulting from improved gross profit rate and continued SG&A discipline
Chris Layden, chief executive officer, said, “In the third quarter, we delivered results above the midpoint of our guidance, driven by meaningful progress on our growth and efficiency initiatives along with increasingly constructive demand trends. Year-over-year revenue improved sequentially for a third consecutive quarter, and we drove adjusted EBITDA margin expansion over the prior year period. Our performance reflects positive operational momentum across much of our portfolio, as ETM pivoted to positive year-over-year revenue growth in the quarter and SET delivered another quarter of sequential revenue improvement. We remain well positioned to capitalize on increasing demand while continuing to drive margin expansion and long-term value creation.”
Financial Results for the 13-week period ended September 27, 2026:
Revenue of $0.9 billion, a 0.8% decrease compared to the corresponding quarter of 2025 and an improvement of 500 bps versus the prior quarter. Discrete impacts associated with the previously disclosed reduced demand for U.S. federal government contractors in the SET segment and from three large commercial customers in the ETM segment totaled approximately 3.1%, resulting in an underlying revenue increase of approximately 2.3%. Underlying revenue performance includes overall growth from improved demand and new business in the ETM segment, including growth in staffing and each of the talent solutions specialties. Offsetting the growth were declines in SET, which showed continued sequential improvement, and Education segments. Within the SET segment, the Science and Engineering specialties grew year-over-year, while the Technology specialty continued to strengthen sequentially. The Education segment continues to be impacted by declines in demand primarily driven by reduced student enrollment in key markets.
Operating earnings of $0.6 million, compared to a loss of $102.1 million reported in the third quarter of 2025. Prior year operating loss reflected a non-cash goodwill impairment charge totaling $102.0 million. Adjusted operating earnings1 were $6.1 million in the third quarter of 2026 and $4.3 million in the third quarter of 2025. Adjusted EBITDA1 of $21.3 million, an increase of 29.1% versus the prior year period. Adjusted EBITDA margin of 2.3%, an increase of 50 bps versus the prior year, reflects 20 bps higher gross margin and volume-related and structural expense management actions including benefits from our acquisition integration and technology modernization efforts. ETM and SET showed year-over-year improvement in their adjusted EBITDA margin while Education was negative due to the school year seasonality. Both ETM and SET improved their adjusted EBITDA margins measurably versus the prior quarter.
Income tax expense of $1.2 million, compared to income tax expense of $46.4 million reported in the third quarter of 2025, with the change primarily driven by the valuation allowance and goodwill impairment charges in the prior year. On an adjusted basis1, income tax expense of $2.6 million, compared to income tax benefit of $3.8 million in the third quarter of 2025.
Loss per share was $0.05 compared to loss per share of $4.26 in the third quarter of 2025, and reflects the impact of the valuation allowance and goodwill impairment charges in the prior year. On an adjusted basis1, earnings per share was $0.07 in the third quarter of 2026 compared to $0.17 per share in the corresponding quarter of 2025.
Financial Results for the 39-week period ended September 27, 2026:
Revenue of $3.0 billion, a 6.1% decrease compared to the corresponding period in 2025. Discrete impacts associated with the reduced demand for U.S. federal government contractors in the SET segment and from three large commercial customers in the ETM segment totaled approximately 5.4%, resulting in an underlying revenue decline of approximately 0.7%. Underlying revenue performance includes overall growth from improved demand in the ETM segment, including growth in each of the talent solutions specialties, along with growth in the Telecom specialty and improved performance in the Science and Engineering specialties within the SET segment. Offsetting this growth was continued lower demand in the other specialties within the SET segment, largely the Technology specialty, along with a decline in the Education segment driven by delayed prior year contract decisions and declines in demand primarily driven by reduced student enrollment in key markets.
Operating earnings of $11.6 million, compared to a loss of $69.1 million reported over the same period in 2025. Prior year operating loss reflected a non-cash goodwill impairment charge totaling $102.0 million. Adjusted operating earnings1 were $29.5 million in the first nine months of 2026 and $51.0 million in the corresponding period of 2025. Adjusted EBITDA1 of $68.2 million, a decrease of 22.9% versus the prior year period. Adjusted EBITDA margin of 2.3%, a decrease of 50 bps, reflects near-term margin pressure in ETM, Education, and SET driven by lower gross margins and timing of revenue trends, partially offset by volume-related and structural expense management actions including benefits from our acquisition integration and technology modernization efforts.
Income tax expense of $3.4 million, compared to income tax expense of $49.1 million reported over the same period in 2025, with the change primarily driven by the valuation allowance and goodwill impairment charges in the prior year. On an adjusted basis1, income tax expense of $7.9 million, compared to income tax expense of $3.4 million in the corresponding period of 2025.
Earnings per share was $0.10, compared to loss per share of $3.56 in the same period of 2025, and reflects the impact of the valuation allowance and goodwill impairment charges in the prior year. On an adjusted basis1, earnings per share was $0.46 for the first nine months of 2026 compared to $1.10 per share in the corresponding period of 2025.
1 Adjusted measures represent non-GAAP financial measures. Refer to our reconciliation of non-GAAP financial measures to the most closely related GAAP measure included in this document.
Financial Outlook for Fiscal Fourth Quarter 2026
The Company’s financial outlook assumes no material change in the macroeconomic environment relative to the third quarter, and is consistent with the full year expectations set in February of this year. For the fourth quarter, expectations for revenue growth and adjusted EBITDA margin have been adjusted relative to our prior view largely due to the delayed return to growth in our Education business and near-term incremental demand pressure from one discrete ETM customer, and are as follows:
- Fourth Quarter of 2026 – Expect revenue to be flat to up 1% on a year-over-year basis and adjusted EBITDA margin expansion of 180 to 200 bps year-over-year resulting in a margin of 3.8% to 4.0%.
- Outlook includes the impact of an extra fiscal week in the fourth quarter, which benefits revenue growth by approximately 3 points in the fourth quarter, but negatively impacts adjusted EBITDA.
- Full Year 2026 – On a full year basis, expect a mid-single digit total revenue decline and adjusted EBITDA margin of 2.6% to 2.7%, reflecting flat to 10 bps of year-over-year improvement.
Quarterly Cash Dividend and Share Repurchase Renewal and Extension:
Kelly also reported that on November 4, 2026, its board of directors declared a dividend of $0.075 per share. The dividend is payable on December 2, 2026 to stockholders of record as of the close of business on November 18, 2026.
On November 4, 2026, the board of directors approved the renewal and extension of the Company’s share repurchase program without an expiration date, which authorized the repurchase of up to $50.0 million of Class A common stock. The new authorization is inclusive of the amount that remained available under the prior authorization, which was superseded and replaced.
In conjunction with its earnings release, Kelly has published a financial presentation and will host a live webcast of a conference call at 9 a.m. ET on November 5 to review the financial and operational results from the quarter. The presentation and a link to the live webcast will be accessible through the Company’s public website on the Investor Relations page under Events & Presentations. The webcast will be recorded, and a replay will be available within one hour of completion of the event through the same link as the live webcast.
Forward-Looking Statements:
This release contains statements that are forward-looking in nature and, accordingly, are subject to risks and uncertainties. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about Kelly’s financial expectations, are forward-looking statements. Factors that could cause actual results to differ materially from those contained in this release include, but are not limited to, (i) changing market and economic conditions, (ii) disruption in the labor market and weakened demand for human capital resulting from technological advances, competitive pressures and pricing, loss of large corporate customers and government contractor requirements, (iii) the impact of laws and regulations (including federal, state and international tax laws), (iv) unexpected changes in claim trends on workers’ compensation, unemployment, disability and medical benefit plans, (v) litigation and other legal liabilities (including tax liabilities) in excess of our estimates, (vi) our ability to achieve our business’s anticipated growth strategies, (vii) our future business development, results of operations and financial condition, (viii) damage to our brands, (ix) dependence on third parties for the execution of critical functions, (x) conducting business in foreign countries, including foreign currency fluctuations, (xi) availability of temporary workers with appropriate skills required by customers, (xii) cyberattacks or other breaches of network or information technology security, and (xiii) other risks, uncertainties and factors discussed in this release and in the Company’s filings with the Securities and Exchange Commission. In some cases, forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “target,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. All information provided in this press release is as of the date of this press release and we undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.
About Kelly®
Kelly Services, Inc. (Nasdaq: KELYA, KELYB) helps companies recruit and manage skilled workers and helps job seekers find great work. Since inventing the staffing industry in 1946, we have become experts in the many industries and local and global markets we serve. With a network of suppliers and partners around the world, we connect approximately 375,000 people with work every year. Our suite of outsourcing and consulting services and solutions ensures companies have the people they need, when and where they are needed most. Headquartered in Troy, Michigan, we empower businesses and individuals to access limitless opportunities in industries such as science, engineering, technology, education, manufacturing, retail, finance, and energy. Revenue in 2025 was $4.3 billion. Learn more at kellyservices.com.
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