Kforce Inc. returned to year-over-year revenue growth in the first quarter, as demand for technology and professional staffing begins to stabilize after several years of decline.
The Tampa-based firm reported revenue of $330.4 million for the quarter ended March 31, a slight increase from the same period last year and its first annual gain in several years. Earnings exceeded expectations, with diluted earnings per share of $0.46, driven by improved spreads and lower healthcare costs.
Kforce’s results carry broader weight because the firm places thousands of consultants with corporate clients each year, giving it a view into how companies are spending on technology, finance and project-based talent. Companies often adjust contract staffing before making full-time hiring decisions, so those trends tend to appear first in firms like Kforce before they show up in broader employment data.
Chief Executive Officer Joseph Liberatore said momentum continued into the second quarter. “The momentum that we carried into the beginning of the year has continued to increase, resulting in year-over-year revenue growth for the first time in several years,” he said, adding that early second-quarter performance supports expectations for mid-single-digit revenue growth.
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The return follows years of slower hiring, tighter budgets and shifting demand tied to economic uncertainty and changes in how companies use contract labor. During that stretch, many companies reduced reliance on outside staffing or delayed projects, particularly in technology, where hiring pulled back after a period of rapid expansion.
Kforce’s results show modest gains rather than a sharp rebound, but they indicate that demand has stopped contracting and begun to improve, a shift that often appears first in staffing firms before it reaches full-time hiring trends.
Growth came from both core segments, although gains remained uneven. Technology Flex revenue, which makes up the majority of the business, rose slightly from a year ago, while finance and accounting Flex revenue posted stronger growth. Direct-hire activity remained limited as companies continued to rely more on flexible staffing than permanent placements.
Margins improved as the company tightened pricing and managed costs, with gross profit margin reaching 27.3%, up from a year earlier, while Flex margins also expanded. Selling, general and administrative expenses increased as a share of revenue, driven in part by higher performance-based compensation tied to improved results.
Looking ahead, Kforce expects revenue between $344 million and $352 million in the second quarter, along with earnings per share ranging from $0.67 to $0.75. The outlook reflects an additional billing day and improving demand, although guidance points to steady growth rather than a rapid acceleration.
In addition, the company returned $18.6 million to shareholders during the quarter through share repurchases and dividends and approved a second-quarter dividend of $0.40 per share.
The broader picture remains a gradual recovery, with companies continuing to manage hiring carefully and demand for staffing services still below prior peak levels. Kforce’s return to growth shows that corporate spending on talent, particularly in technology and project-based work, has begun to stabilize, even as the pace of recovery will depend on hiring and technology investment through the rest of the year.
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