KELLY SERVICES INC
For the period ended Jun 28, 2026. Filed Aug 6, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 28, 2026 · Filed Aug 6, 2026
KELYB$25.55-4.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-29; filed 2026-05-07.
0000055135-26-000115
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-28; filed 2026-08-06.
0000055135-26-000161
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 59 previous paragraphs and 74 current paragraphs.
26 unchanged; 29 reworded; 8 added; 4 removed; 0 previous and 11 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
In the second quarter, we delivered sequential improvement in each business across Kelly. The discrete impact of demand reductions among three large ETM customers and the U.S. federal government, which we initially disclosed in the second quarter of 2025, is lessening but remains visible in our results. Trends among these customers who continue to do business with Kelly remained stable on a sequential basis.
Current report
In ETM, staffing revenue excluding the discrete impacts returned to positive year-over-year growth driven by broad-based demand across customers and verticals, Business Process Outsourcing excluding contact center solutions also pivoted to growth in the quarter and Talent Solutions delivered another quarter of revenue growth as new customer wins came online and demand continued to increase. In SET, trends in each specialty vertical improved compared to the first quarter, with the Telecom specialty delivering another quarter of year-over-year growth. In Education, results improved modestly on a sequential basis while we continued to experience pressure from prior year delayed contract decisions and enrollment declines. In each business, we continued to align resources with demand and maintained a disciplined approach to expense management overall as part of our ongoing focus on efficiency.
Current report
Gross profit decreased 6.0% year-over-year, primarily driven by lower revenue volume. The gross profit rate decreased 10 basis points (“bps”) to 20.4%, primarily due to changes in business mix, partially offset by lower employee-related costs. The gross profit rate decreased in the SET and Education segments and increased in the ETM segment.
Current report
The gain on sale of EMEA staffing operations relates to the January 2024 sale. In the second quarter of 2025, we recognized a gain of $4.0 million upon the settlement of working capital and other adjustments.
Current report
Revenue from services June year-to-date 2026 decreased 8.3% year-over-year with decreases in the ETM, SET, and Education segments. Compared to the June year-to-date 2025, the decrease is primarily due to declines in revenue from staffing services and outcome-based services of 11.2% and 5.0%, respectively, partially offset by growth in revenue from talent solutions of 4.7%.
Current report
The gain on sale of EMEA staffing operations relates to the January 2024 sale. In the first six months of 2025, we recognized a gain of $4.0 million upon the settlement of working capital and other adjustments.
Current report
The SET gross profit decreased on lower revenue volume. The gross profit rate decreased by 40 bps primarily due to changes in business mix, partially offset by lower employee-related costs and higher permanent placement fees.
Current report
Gross profit for the ETM segment decreased on lower revenue volume. The gross profit rate decreased by 50 bps primarily due to higher employee-related costs.
Removed paragraphs (4)
Previous report
In the first quarter, we achieved results that were in line with our expectations, reflecting our ongoing focus on stabilizing the business. In ETM, revenue trends improved sequentially from the fourth quarter, driven by growth in Talent Solutions across the MSP, RPO, and PPO offerings. In SET, we delivered another quarter of year-over-year growth in our Telecom specialty, and Science & Clinical improved sequentially. In Education, we continued to experience pressure from delayed contract decisions, enrollment declines, and elevated weather-related school closures.
Previous report
Our results continue to 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. The impact of demand reductions among three large customers, which we disclosed in the second quarter of 2025, remains visible in the results of ETM. Staffing volumes in 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, were stable. Throughout the first quarter, we continued to align resources with demand to address these dynamics and maintained a disciplined approach to expense management overall as part of our ongoing focus on efficiency.
Previous report
With trends stabilizing across the enterprise, we continued to execute strategic initiatives designed to drive organic growth and margin expansion. These include the formation of a Growth Office which has collaborated across the enterprise to lay the foundation for an integrated commercial operating framework. This framework unifies our go-to-market strategy, bringing our full suite of solutions to customers and increasing share of wallet and revenue growth. We remained on track with our technology modernization initiative in the quarter, facilitating a smooth transition following the cutover of our acquisitions in SET from their legacy technology stack to the modernized platform we acquired through our acquisition of MRP. The learnings from the initial cutover are being applied to subsequent phases to ensure we fully realize the growth and efficiency benefits of the new technology stack.
Previous report
Operating Results By Segment (continued)
Reworded paragraphs (29)
Previous wording
Our ability to stabilize the business while driving progress on our strategic initiatives in the first quarter reflects our enhanced focus on execution and operational discipline. As demand trends improve, our progress will position us to capitalize, driving profitable growth and long-term value creation.
Current wording
Our ability to deliver sequential improvement across the enterprise while driving progress on our strategic initiatives in the second quarter reflects our enhanced focus on execution and operational discipline. Our progress will position us to capitalize on improving demand trends, and driving profitable growth and long-term value creation.
Previous wording
Days sales outstanding (“DSO”) represents the number of days that sales remain unpaid for the period being reported. DSO is calculated by dividing average net sales per day (based on a rolling three-month period) into trade accounts receivable, net of allowances at period end. Although secondary supplier revenues are recorded on a net basis (net of secondary supplier expense), secondary supplier revenue is included in the daily sales calculation in order to properly reflect the gross revenue amounts billed to the customer.
Current wording
Days sales outstanding (“DSO”) represents the number of days that sales remain unpaid for the period being reported. DSO is calculated by dividing average net sales per day (based on a rolling three-month period) into trade accounts receivable, net of allowances at period end. Where secondary supplier revenues are recorded on a net basis (net of secondary supplier expense), secondary supplier revenue is included in the daily sales calculation in order to properly reflect the gross revenue amounts billed to the customer.
Previous wording
Revenue from services in the first quarter decreased 10.7% year-over-year with decreases in the ETM, SET, and Education segments. Compared to the first quarter of 2025, revenue from staffing services and outcome-based services decreased 12.9% and 9.7%, respectively. Revenue from talent solutions increased 3.0% and permanent placement revenue decreased 5.2% from the prior year.
Current wording
Revenue from services in the second quarter decreased 5.8% year-over-year with decreases in the ETM, SET, and Education segments. Compared to the second quarter of 2025, the decrease is primarily due to declines in revenue from staffing services of 9.5%, partially offset by increases in revenue from talent solutions of 6.3% from the prior year.
Previous wording
Total SG&A expenses decreased 11.7% year-over-year, primarily due to expense management actions to reduce volume-related costs and reflects the benefits of the ongoing structural actions including integration and realignment efforts. SG&A expenses in the first quarter of 2026 include $4.7 million of integration and realignment costs related to continuation of ongoing initiatives, $1.5 million of executive transition charges and $0.8 million of transaction costs primarily related to costs incurred in connection with our controlling shareholder change in the first quarter of 2026. Included in SG&A expenses in the first quarter of 2025 were $10.7 million of integration and realignment costs related to initiatives to integrate MRP and align our processes and $0.3 million of executive transition charges and $0.3 million of transaction-related costs arising from the sale of our EMEA staffing operations. Excluding integration and realignment, transaction, executive transition charges, and depreciation and amortization, SG&A expenses decreased 9.5% from the prior year.
Current wording
Total SG&A expenses decreased 5.5% year-over-year, primarily due to expense management actions to reduce volume-related costs, and reflects the benefits of the ongoing structural actions including integration and realignment efforts. SG&A expenses in the second quarter of 2026 include $2.9 million of integration and realignment costs related to continuation of ongoing initiatives and $0.3 million of executive transition charges. Included in SG&A expenses in the second quarter of 2025 were $6.0 million of integration and realignment costs related to initiatives to integrate MRP and align our processes, $0.2 million of executive transition charges, and $0.1 million of transaction-related costs arising from the sale of our EMEA staffing operations. Excluding integration and realignment, transaction, executive transition charges, and depreciation and amortization, SG&A expenses decreased 4.0% from the prior year.
Previous wording
Income tax benefit was $0.8 million for the first quarter of 2026 compared to income tax expense of $1.8 million for the first quarter of 2025, driven by changes in pretax income and the benefit of work opportunity tax credits in the first quarter of 2025.
Current wording
Income tax expense was $3.0 million for the second quarter of 2026 compared to income tax expense of $0.9 million for the second quarter of 2025, driven by changes in pretax income and the benefit of work opportunity tax credits in the second quarter of 2025.
Previous wording
Gross profit decreased 17.0% year-over-year, primarily driven by lower revenue volume. The gross profit rate decreased 1.4% to 18.9%, primarily due to higher employee-related costs in the beginning part of the year.
Current wording
Gross profit decreased 11.6%, largely driven by lower revenue volume. The gross profit rate decreased 80 bps to 19.6%, primarily due to higher employee-related costs in the beginning part of the year.
Previous wording
The decrease in ETM revenue from services of 13.2% was primarily driven by a decrease of 16.9% in staffing services resulting from lower hours volume primarily at certain large customers and a decrease of 19.8% from outcome-based services primarily due to the relationship exit of a large contact-center customer that ended as of the third quarter of 2025. Permanent placement fees decreased 21.7%, reflecting lower market demand. These decreases were partially offset by an increase of 3.0% in talent solutions driven by new customer wins and volume increases.
Current wording
The decrease in ETM revenue from services of 6.0% was primarily driven by a decrease of 10.0% in staffing services resulting from lower hours volume primarily at certain large customers and a decrease of 9.3% from outcome-based services primarily due to the relationship exit of a large contact-center customer that ended as of the third quarter of 2025. Permanent placement fees decreased 41.4%, reflecting lower market demand. These decreases were partially offset by an increase of 6.3% in talent solutions driven by new customer wins and volume increases.
Previous wording
The decrease in SET revenue from services of 11.6% was primarily driven by declines in hours volume in our staffing specialties, largely from changes in demand related to U.S. federal government contractors and IT services, partially offset by an increase in permanent placement fees.
Current wording
The decrease in SET revenue from services of 6.1% was primarily driven by declines in hours volume in our staffing specialties, largely from changes in demand related to U.S. federal government contractors and IT services, partially offset by an increase in permanent placement fees.
Previous wording
The decrease in Education revenue from services of 4.8% was driven primarily by the impact of delayed contract decisions, weather-related school closures and a reduction in demand in key markets due to declines in student enrollment.
Current wording
The decrease in Education revenue from services of 4.6% was driven primarily by the impact of prior year delayed contract decisions, weather-related school closures and a reduction in demand in key markets due to declines in student enrollment.
Previous wording
Gross profit for ETM decreased on lower revenue volume. The gross profit rate decreased by 1.7% primarily due to higher employee-related costs and lower permanent placement fees, partially offset by favorable changes in business mix.
Current wording
Gross profit for ETM decreased on lower revenue volume. The gross profit rate increased by 50 bps primarily due to lower employee-related costs, partially offset by lower permanent placement fees.
Previous wording
Gross profit for the Education segment decreased on lower revenue volume. The gross profit rate decreased by 1.7%, primarily due to higher employee-related costs as well as reductions due to changes in business mix and lower permanent placement fees.
Current wording
Gross profit for the Education segment decreased on lower revenue volume. The gross profit rate decreased by 50 bps, primarily due to higher employee-related costs and lower permanent placement fees.
Previous wording
The SET gross profit decreased on lower revenue volume. The gross profit rate decreased by 0.6% primarily due to higher employee-related costs, partially offset by higher permanent placement fees.
Current wording
The SET gross profit decreased on lower revenue volume. The gross profit rate decreased by 50 bps primarily due to changes in business mix and higher employee-related costs, partially offset by higher permanent placement fees.
Previous wording
The 0.7% decrease in Education SG&A expenses excluding depreciation and amortization primarily related to lower performance-based incentive compensation.
Current wording
The 0.8% decrease in Education SG&A expenses excluding depreciation and amortization primarily related to lower performance-based incentive compensation.
Previous wording
The 14.0% decrease in ETM SG&A expenses excluding depreciation and amortization was primarily due to lower salary-related costs, lower performance-based incentive compensation, and lower shared service costs as a result of operating efficiencies and expense management actions in response to lower revenue volume compared to the prior year.
Current wording
The 9.4% decrease in ETM SG&A expenses excluding depreciation and amortization was primarily due to lower salary-related costs and lower shared service costs as a result of operating efficiencies and expense management actions in response to lower revenue volume compared to the prior year.
Previous wording
The 16.6% decrease in SET SG&A expenses excluding depreciation and amortization was primarily due to lower salary-related costs and performance-based incentive compensation as a result of operating efficiencies and expense management actions in response to lower revenue volume compared to the prior year.
Current wording
The 12.4% decrease in SET SG&A expenses excluding depreciation and amortization was primarily due to lower salary-related costs and performance-based incentive compensation as a result of operating efficiencies and expense management actions in response to lower revenue volume compared to the prior year.
Previous wording
The 3.1% increase in Corporate expenses was primarily driven by investment in the Growth Office and other corporate initiatives and increases in our nonqualified compensation plan expense, partially offset by lower integration, realignment, and restructuring charges and performance-based incentive compensation in the first quarter of 2026 as compared to the prior year.
Current wording
The 3.4% decrease in Corporate expenses was primarily driven by lower integration, realignment, and restructuring charges, partially offset by investment in the Growth Office and other corporate initiatives in the first six months of 2026 as compared to the prior year.
Previous wording
ETM reported a loss of $1.3 million compared to profit of $6.3 million in the prior year. SET and Education reported profit of $12.0 million and $12.3 million, respectively, which decreased compared to the prior year. Declines in business unit profit (loss) are primarily due to lower revenue and gross profit, partially offset by lower SG&A expenses.
Current wording
ETM business unit profit increased compared to the prior year due to lower SG&A expenses. SET and Education business unit profit decreased compared to the prior year primarily due to lower revenue and gross profit, partially offset by lower SG&A expenses.
Previous wording
Historically, we have financed our operations through cash generated by operating activities and access to credit markets. Our working capital requirements are primarily generated from temporary employee payroll, which is generally paid weekly, and customer accounts receivable, which is generally outstanding for longer periods. Since receipts from customers lag payroll to temporary employees, working capital requirements increase substantially in periods of growth. Conversely, when economic activity slows, working capital requirements may substantially decrease. This may result in an increase in our operating cash flows; however, any such increase would not be sustainable in the event that an economic downturn continued for an extended period.
Current wording
Historically, we have financed our operations through cash generated by operating activities and access to credit markets. Our working capital requirements are primarily generated from temporary employee payroll, which is generally paid weekly, and customer accounts receivable, which is generally outstanding for longer periods. Since receipts from customers lag payroll to temporary employees, working capital requirements increase substantially in periods of growth. Conversely, when economic activity slows, working capital requirements may substantially decrease. This may result in an increase in our operating cash flows; however, any such increase would not be sustainable in the event that an economic downturn continued for an extended period. We also experience material seasonal fluctuations in working capital in our Education segment due to schools being mostly out of session during the summer.
Previous wording
Cash, cash equivalents and restricted cash totaled $29.5 million at the end of the first quarter of 2026 and $37.7 million at year-end 2025. As further described below, we used $25.4 million of cash for operating activities, used $1.2 million of cash for investing activities and generated $24.2 million of cash from financing activities.
Current wording
Cash, cash equivalents and restricted cash totaled $28.0 million at the end of the second quarter of 2026 and $37.7 million at year-end 2025. As further described below, we generated $23.8 million of cash from operating activities, generated $0.2 million of cash from investing activities and used $31.2 million of cash for financing activities.
Previous wording
In the first three months of 2026, we used $25.4 million of net cash for operating activities, as compared to generating $23.9 million in the first three months of 2025, primarily due to increased working capital requirements as compared to the same period of the prior year.
Current wording
In the first six months of 2026, we generated $23.8 million of net cash from operating activities, as compared to generating $119.3 million in the first six months of 2025. The decrease was primarily due to higher working capital requirements as compared to the same period of the prior year.
Previous wording
Trade accounts receivable totaled $1.2 billion at the end of the first quarter of 2026. Global DSO was 64 days for the first quarter of 2026 and 61 days at year-end 2025.
Current wording
Trade accounts receivable totaled $1.2 billion at the end of the second quarter of 2026. Global DSO was 61 days at both second quarter-end 2026 and year-end 2025.
Previous wording
Our working capital position (total current assets less total current liabilities) was $480.2 million at the end of the first quarter of 2026, an increase of $33.7 million from year-end 2025. The current ratio (total current assets divided by total current liabilities) was 1.6 at the end of the first quarter of 2026 and 1.5 at year-end 2025.
Current wording
Our working capital position (total current assets less total current liabilities) was $429.9 million at the end of the second quarter of 2026, a decrease of $16.6 million from year-end 2025. The current ratio (total current assets divided by total current liabilities) was 1.5 at the end of the second quarter of 2026 and 1.5 at year-end 2025.
Previous wording
In the first three months of 2026, we used $1.2 million of cash for investing activities, as compared to generating $3.2 million in the first three months of 2025. Cash used in investing activities in the first three months of 2026 is primarily driven by $1.1 million of capital expenditures. Included in the cash generated for investing activities in the first three months of 2025 is $6.4 million of cash from the sale of PersolKelly investment, partially offset by $2.5 million of cash used for capital expenditures.
Current wording
In the first six months of 2026, we generated $0.2 million of cash from investing activities, as compared to generating $24.7 million in the first six months of 2025. Cash generated by investing activities in the first six months of 2026 is primarily driven by $2.7 million of proceeds from company-owned life insurance, partially offset by $2.6 million of capital expenditures. Included in the cash generated by investing activities in the first six months of 2025 is $21.8 million of proceeds from the sale of our EMEA staffing operations, $6.4 million of cash from the sale of the PersolKelly investment and $1.6 million of proceeds from company-owned life insurance, partially offset by $4.5 million of cash used for capital expenditures.
Previous wording
We generated $24.2 million of cash from financing activities in the first three months of 2026, as compared to using $39.5 million in the first three months of 2025. The change in cash generated from financing activities was primarily driven by net proceeds of $28.6 million on our credit facilities in 2026 compared to net repayments of $34.8 million on our credit facilities in 2025. Dividends paid per common share were $0.075 in each of the first quarters of 2026 and 2025.
Current wording
We used $31.2 million of cash for financing activities in the first six months of 2026, as compared to using $172.7 million in the first six months of 2025. The change in cash used from financing activities was primarily driven by lower net repayments of $23.8 million on our credit facilities in 2026 compared to net repayments of $165.1 million on our credit facilities in 2025. Dividends paid per common share were $0.075 in each of the first two quarters of 2026 and 2025.
Previous wording
Debt-to-total capital (total debt reported in the consolidated balance sheet divided by total debt plus stockholders’ equity) is a common ratio to measure the relative capital structure and leverage of the Company. Our ratio of debt-to-total capital was 11.9% at the end of the first quarter of 2026 and 9.4% at year-end 2025.
Current wording
Debt-to-total capital (total debt reported in the consolidated balance sheet divided by total debt plus stockholders’ equity) is a common ratio to measure the relative capital structure and leverage of the Company. Our ratio of debt-to-total capital was 7.4% at the end of the second quarter of 2026 and 9.4% at year-end 2025.
Previous wording
As of first quarter-end 2026, we had $150.0 million of available capacity on our $150.0 million revolving credit facility and $76.9 million of available capacity on our $250.0 million securitization facility. The revolving credit facility carried no long-term borrowings on the floating or term benchmark lines of credit. The securitization facility carried $130.5 million of long-term borrowings and $42.6 million of standby letters of credit related to workers’ compensation. The credit facilities also include an accordion feature to increase our combined borrowing capacity by $250.0 million.
Current wording
As of second quarter-end 2026, we had $150.0 million of available capacity on our $150.0 million revolving credit facility and $129.3 million of available capacity on our $250.0 million securitization facility. The revolving credit facility carried no long-term borrowings on the floating or term benchmark lines of credit. The securitization facility carried $78.1 million of long-term borrowings and $42.6 million of standby letters of credit related to workers’ compensation. The credit facilities also include provisions that would allow for expansion of our combined borrowing capacity by $250.0 million.
Previous wording
Together, the revolving credit and securitization facilities provide us with committed funding capacity that may be used for general corporate purposes subject to financial covenants and restrictions. We believe our cash flow from operations, the availability of liquidity under our credit facilities, including the accordion feature which allows us to increase our borrowing capacity and our ability to access capital from financial markets will be sufficient to meet our anticipated cash requirements, while maintaining sufficient liquidity for normal operating purposes. As of first quarter-end 2026, we met the debt covenants related to our revolving credit facility and securitization facility.
Current wording
Together, the revolving credit and securitization facilities provide us with committed funding capacity that may be used for general corporate purposes subject to financial covenants and restrictions. We believe our cash flow from operations, the availability of liquidity under our credit facilities, including the expansion provisions which allows us to increase our borrowing capacity and our ability to access capital from financial markets will be sufficient to meet our anticipated cash requirements, while maintaining sufficient liquidity for normal operating purposes. As of second quarter-end 2026, we met the debt covenants related to our revolving credit facility and securitization facility.
Previous wording
As of first quarter-end of 2026, we had additional unsecured, uncommitted short-term local credit facilities totaling $3.1 million, under which we had no borrowings. Details of our debt facilities are contained in the Debt footnote in the notes to our consolidated financial statements.
Current wording
As of second quarter-end of 2026, we had additional unsecured, uncommitted short-term local credit facilities totaling $3.1 million, under which we had no borrowings. Details of our debt facilities are contained in the Debt footnote in the notes to our consolidated financial statements.
Previous wording
Actual events and results may differ materially from those expressed or implied by forward-looking statements due to a number of factors. The principal risk factors that could cause our actual performance and future events and actions to differ materially from such forward-looking statements 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 report and in our other filings with the Securities and Exchange Commission, including those discussed under “Risk Factors” in Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 28, 2025. Actual results may differ materially from any forward-looking statements contained herein, 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.
Current wording
Actual events and results may differ materially from those expressed or implied by forward-looking statements due to a number of factors. The principal risk factors that could cause our actual performance and future events and actions to differ materially from such forward-looking statements 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 report and in our other filings with the Securities and Exchange Commission, including those discussed under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 28, 2025. Actual results may differ materially from any forward-looking statements contained herein, 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.
Rearranged current paragraphs (11)
Current report — wording carried from elsewhere
Total SG&A expenses decreased 8.7%, primarily due to expense management actions to reduce volume-related costs and reflects the benefits of the ongoing structural actions including integration and realignment efforts. SG&A expenses in the first six months of 2026 include $7.6 million of integration and realignment costs related to continuation of ongoing initiatives, $1.8 million of executive transition charges and $0.8 million of transaction costs primarily related to costs incurred in connection with our controlling shareholder change in the first quarter of 2026. Included in SG&A expenses in the first six months of 2025 were $16.7 million of integration costs related to initiatives to integrate MRP and align our processes, $0.5 million of executive transition charges and $0.4 million of transaction costs related to the sale of our EMEA staffing operations.
Current report — wording carried from elsewhere
Income tax expense was $2.2 million for the first six months of 2026 compared to income tax expense of $2.7 million for the first six months of 2025, with the change primarily driven by changes in pretax income and the benefit of work opportunity tax credits in the first six months of 2025.
Current report — wording carried from elsewhere
The decrease in Education revenue from services of 4.4% was driven primarily by a reduction in demand in key markets due to declines in student enrollment.
Current report — wording carried from elsewhere
The decrease in ETM revenue from services of 9.6% was primarily driven by a decrease of 13.5% in staffing services resulting from lower hours volume primarily at certain large customers and a decrease of 14.8% from outcome-based services primarily due to the relationship exit of a large contact-center customer that ended as of the third quarter of 2025. Permanent placement fees decreased 32.7%, reflecting lower market demand. These decreases were partially offset by an increase of 4.7% in talent solutions driven by new customer wins and volume increases.
Current report — wording carried from elsewhere
The decrease in SET revenue from services of 8.9% was primarily driven by declines in hours volume in our staffing specialties, largely from changes in demand related to U.S. federal government contractors and IT services, partially offset by an increase in permanent placement fees.
Current report — wording carried from elsewhere
Gross profit for the Education segment decreased on lower revenue volume. The gross profit rate decreased by 120 bps primarily due to higher employee-related costs and lower permanent placement fees.
Current report — wording carried from elsewhere
The 4.4% decrease in ETM SG&A expenses excluding depreciation and amortization was primarily due to lower salary-related costs as a result of operating efficiencies and expense management actions in response to lower revenue volume compared to the prior year.
Current report — wording carried from elsewhere
The 7.8% decrease in SET SG&A expenses excluding depreciation and amortization was primarily due to lower salary-related costs as a result of operating efficiencies and expense management actions in response to lower revenue volume compared to the prior year.
Current report — wording carried from elsewhere
The 11.3% decrease in Corporate expenses was primarily driven by lower integration, realignment, and restructuring charges in the second quarter of 2026 as compared to the prior year.
Current report — wording carried from elsewhere
The 0.8% decrease in Education SG&A expenses excluding depreciation and amortization primarily related to lower performance-based incentive compensation.
Current report — wording carried from elsewhere
ETM, SET, and Education business unit profit decreased compared to the prior year primarily due to lower revenue and gross profit, partially offset by lower SG&A expenses.