Kelly Services Q1 revenue falls on lower government, commercial demand

Kelly Services

07/05/2026 12:44

Overview

US talent solutions provider's Q1 revenue fell 10.7% yr/yr; underlying revenue down 3.3%

Adjusted EPS for Q1 missed analyst expectations

Company attributes revenue decline to lower demand from government and large commercial customers

Outlook

Kelly expects Q2 revenue to decline 7% to 9% year-over-year

Company sees Q2 adjusted EBITDA margin of at least 2.5%

Kelly expects modest revenue growth and margin expansion in second half of 2026

Result Drivers

DISCRETE CUSTOMER IMPACTS - Revenue decline driven by reduced demand from U.S. federal government contractors and three large commercial customers, resulting in a 7.4% negative impact

SEGMENT PERFORMANCE - Sequential improvement in ETM and pockets of growth in SET, including Telecom and Science and Engineering specialties, partially offset overall declines

EXPENSE MANAGEMENT - Adjusted SG&A expenses declined 10.3% year-over-year due to ongoing structural and demand-driven optimization initiatives

Company press release: ID:nGNX2bNHll

Key Details

Metric
Beat/Miss
Actual
Consensus Estimate
Q1 Revenue
$1 bln
Q1 Adjusted EPS
Miss
$0.03
$0.07 (3 Analysts)
Q1 EPS
-$0.17
Q1 Operating Income
-$5.10 mln


Analyst Coverage

The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

The average consensus recommendation for the employment services peer group is "buy"

Wall Street's median 12-month price target for Kelly Services Inc is $17.00, about 73.6% above its May 6 closing price of $9.79

The stock recently traded at 7 times the next 12-month earnings vs. a P/E of 6 three months ago

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)