Professional staffing firm Kforce (NYSE: KFRC) reported revenue ahead of Wall Streets expectations in Q4 CY2025, but sales fell by 3.4% year on year to $332 million. Guidance for next quarter’s revenue was better than expected at $328 million at the midpoint, 2% above analysts’ estimates. Its GAAP profit of $0.30 per share was 35.6% below analysts’ consensus estimates.
Is now the time to buy Kforce? Find out by accessing our full research report, it’s free.
Kforce (KFRC) Q4 CY2025 Highlights:
- Revenue: $332 million vs analyst estimates of $329.3 million (3.4% year-on-year decline, 0.8% beat)
- EPS (GAAP): $0.30 vs analyst expectations of $0.47 (35.6% miss)
- Adjusted EBITDA: $16.75 million vs analyst estimates of $17.93 million (5% margin, 6.6% miss)
- Revenue Guidance for Q1 CY2026 is $328 million at the midpoint, above analyst estimates of $321.7 million
- EPS (GAAP) guidance for Q1 CY2026 is $0.41 at the midpoint, beating analyst estimates by 1.7%
- Operating Margin: 2.6%, down from 4.5% in the same quarter last year
- Free Cash Flow Margin: 1.5%, down from 6.6% in the same quarter last year
- Market Capitalization: $609.2 million
Company Overview
With nearly 60 years of matching skilled professionals with the right opportunities, Kforce (NYSE: KFRC) is a professional staffing company that specializes in placing technology and finance experts with businesses on both temporary and permanent bases.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years.
With $1.33 billion in revenue over the past 12 months, Kforce is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale.
As you can see below, Kforce struggled to generate demand over the last five years. Its sales dropped by 1% annually, a poor baseline for our analysis.
Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. Kforce’s recent performance shows its demand remained suppressed as its revenue has declined by 6.9% annually over the last two years. 
This quarter, Kforce’s revenue fell by 3.4% year on year to $332 million but beat Wall Street’s estimates by 0.8%. Company management is currently guiding for flat sales next quarter.
Looking further ahead, sell-side analysts expect revenue to remain flat over the next 12 months. While this projection indicates its newer products and services will catalyze better top-line performance, it is still below average for the sector.
Software is eating the world and there is virtually no industry left that has been untouched by it. That drives increasing demand for tools helping software developers do their jobs, whether it be monitoring critical cloud infrastructure, integrating audio and video functionality, or ensuring smooth content streaming. Click here to access a free report on our 3 favorite stocks to play this generational megatrend.
Operating Margin
Kforce was profitable over the last five years but held back by its large cost base. Its average operating margin of 5.7% was weak for a business services business.
Looking at the trend in its profitability, Kforce’s operating margin decreased by 3 percentage points over the last five years. Kforce’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.
This quarter, Kforce generated an operating margin profit margin of 2.6%, down 2 percentage points year on year. This reduction is quite minuscule and indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Sadly for Kforce, its EPS declined by 5.7% annually over the last five years, more than its revenue. This tells us the company struggled because its fixed cost base made it difficult to adjust to shrinking demand.
Diving into the nuances of Kforce’s earnings can give us a better understanding of its performance. As we mentioned earlier, Kforce’s operating margin declined by 3 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
For Kforce, its two-year annual EPS declines of 20.8% show it’s continued to underperform. These results were bad no matter how you slice the data.
In Q4, Kforce reported EPS of $0.30, down from $0.60 in the same quarter last year. This print missed analysts’ estimates. Over the next 12 months, Wall Street expects Kforce’s full-year EPS of $1.96 to grow 17.7%.
Key Takeaways from Kforce’s Q4 Results
Revenue beat slightly, but EBITDA and EPS both missed meaningfully. While Q1 guidance was solid, it wasn't enough to overcome the EBITDA and EPS misses in the quarter. Zooming out, we think this was a mixed quarter. Investors were likely hoping for more, and shares traded down 11.7% to $32.36 immediately following the results.
Big picture, is Kforce a buy here and now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
