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Jun 29, 2025
Kelly Services Q2 2025 Earnings Report
Kelly Services reported its second-quarter 2025 earnings, showing revenue growth driven by acquisitions, alongside a decline in adjusted EBITDA and adjusted EPS.
Key Takeaways
Kelly Services reported second-quarter 2025 revenue of $1.1 billion, a 4.2% increase year-over-year, primarily due to the acquisition of Motion Recruitment Partners, LLC. However, organic revenue declined by 3.3%. Operating earnings significantly increased to $22.2 million, while adjusted EBITDA decreased by 8.7% to $37.0 million, with the adjusted EBITDA margin falling to 3.4%. Diluted EPS was $0.52, and adjusted diluted EPS was $0.54.
Revenue for Q2 2025 increased by 4.2% year-over-year to $1.1 billion, primarily driven by the Motion Recruitment Partners acquisition.
Operating earnings saw a substantial increase to $22.2 million in Q2 2025, up from $12.2 million in the prior year.
Adjusted EBITDA decreased by 8.7% to $37.0 million, and the adjusted EBITDA margin declined by 40 basis points to 3.4%.
Diluted earnings per share were $0.52, with adjusted diluted earnings per share at $0.54 for the second quarter.
Revenue by Segment
Forward Guidance
Kelly Services anticipates a year-over-year revenue decline of 5% to 7% in Q3 2025, primarily due to reduced demand from U.S. federal contractors and certain large customers. However, the company expects adjusted EBITDA margin expansion of 80 to 90 basis points in Q3 and modest year-over-year margin improvement for the full year.
Positive Outlook
- Expected adjusted EBITDA margin expansion of 80 to 90 basis points in Q3.
- Anticipated modest year-over-year margin improvement for the full year.
- Continued growth in resilient markets such as K-12 staffing in Education.
- Growth in telecom and engineering solutions within the SET segment.
- Expansion in payroll process outsourcing in the ETM segment.
Challenges Ahead
- Expected year-over-year revenue decline of 5% to 7% in Q3.
- Reduced demand for U.S. federal government contractors.
- Reduced demand from certain large customers.
Revenue & Expenses
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Historical Earnings Impact
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Avg. Return Before/After Earnings
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