Kelly Services, Inc.

Good morning, and welcome to Kelly Services' first quarter 2025 earnings conference call. All parties will be on listen only until the question and answer portion of the presentation. Today's call is being recorded at the request of Kelly Services. If anyone has any objections, you may disconnect at this time. I would now like to turn the meeting over to your host, Mr. Scott Thomas, Kelly's head of investor relations. Please go ahead.

Good morning. and welcome to Kelly's first quarter conference call. With me today are Kelly's President and Chief Executive Officer, Peter Quigley, and our Chief Financial Officer, Troy Anderson. Before we begin, I'll remind you that the comments made during today's call, including the Q&A session, may include forward-looking statements about our expectations for future performance. Actual results could differ materially from those suggested by our comments. We do not assume any obligation to update the statements made on this call. please refer to our SEC filings for a description of the risk factors that could influence the company's actual future performance. In addition, we'll discuss certain data on a reported and on an adjusted basis. Discussion of items on an adjusted basis are non-GAAP financial measures designed to give insight into certain trends in our operations. For more information regarding non-GAAP measures and other required disclosures, please refer to our earnings press release, presentation, and once filed, Form 10-Q. all of which can be accessed through our investor relations website at ir.kellyservices.com. I will now turn the call over to Kelly's President and Chief Executive Officer, Peter Quigley.

Thank you, Scott, and good morning, everyone. I'll begin with some reflections on the first quarter. Kelly delivered organic revenue growth that was in line with our expectations, and once again, we outperformed the market. Our operating model demonstrated its resilience with each of our businesses making strategic contributions in the quarter, notwithstanding changes in demand among our U.S. federal government business. Our education business remained a source of strength, as our K-12 business maintained excellent fill rates on existing business while capturing a steady stream of net new customer wins. Demand for our higher margin outcome-based solutions also remained robust, particularly within the semiconductor and renewable sectors. We delivered these results by focusing on what we can control and through disciplined execution. As anticipation of global trade policy shifts increased throughout the quarter, we remained agile and ready to respond to changing external dynamics while keeping our sights set on our priorities. We stayed close with our customers as their workforce needs changed offering our full range of flexible solutions paired with nearly 80 years of experience helping employers navigate through dynamic economic environments. This approach enabled us to uncover higher margin opportunities with multiple customers for whom we tailored solutions to bolster the efficiency and adaptability of their workforce. We remained laser focused on driving organizational efficiency and effectiveness. To this end, we implemented targeted actions in the quarter to deliver additional structural improvements to our cost base. These actions will contribute to incremental EBITDA margin expansion later this year and beyond and underscore our commitment to enhancing Kelly's profitability over the long term. In parts of our portfolio where customers are taking a more measured approach to hiring, we took swift action to align resources with demand. This reflects our ability to anticipate and adjust in real time to changing trends across our businesses, a key element of Kelly's recently improved operational discipline. We continue to optimize Kelly's operating model, completing the unification of our OCG and P&I business units. We've already begun to see the benefits of this change, which is resonating well with both customers and talent. This streamlined structure builds upon the enterprise account growth initiative we implemented in 2023, further enhancing our ability to deliver the full suite of Kelly offerings to our largest customers and increasing our share of wallet. Through this more customer and talent-centric go-to-market approach, we're poised to unlock new value-creating opportunities within attractive sectors, among them financial services, technology, healthcare, and energy. We've consolidated these businesses into a single reportable segment, Enterprise Talent Management, or ETM, which Troy will provide more details on shortly. We also accelerated the integration of Motion Recruitment Partners, or MRP, with the conclusion of the earn-out period at the end of the quarter, enabling us to ramp up our pursuit of synergies. For SET, in addition to realigning the segments into distinct and unified business lines, as we discussed last quarter, we initiated the implementation of a strategy to modernize SET's front and back office systems that leverage MRP's leading technology stack. This will create a scalable, efficient, and integrated technology platform within SET that significantly reduces complexity. It will also enhance agility across the business by enabling the rapid integration of AI as new solutions and use cases emerge. Longer term, our vision is to implement this technology stack across Kelly. By taking a thoughtful, phased approach to implementation, we'll minimize disruption to the business while realizing the full value from these tools. Within ETM, we launched an integrated permanent hiring solutions business line by bringing together our Global Recruitment Process Outsourcing Specialty, or RPO, and MRP's Talent Acquisition Solutions brand, Seventh Step. This combination creates a leading talent solutions offering that ranks among the top five globally differentiated by innovative technology, including a proprietary talent data integration and predictive analytics platform driven by AI. We're encouraged by the positive market reaction following the launch in February, which has translated to a notable increase in new business opportunities. Together, our accomplishments in the first quarter reflect Kelly's enhanced operational fitness, resulting from our ongoing focus on efficiency and our team's ability to execute in any environment. For more details on our results in the quarter, I'll turn the call over to our Chief Financial Officer, Troy Anderson.