Kelly Services, Inc.

Good day and thank you for standing by. Welcome to the Kelly Services Second Quarter Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star, 1-1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star, 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, Scott Thomas, Head of Investor Relations. Please go ahead.

Good morning and welcome to Kelly's Second 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 10Q, all of which can be accessed through our investor relations website at .KellyServices.com. With that, I'll turn the call over to Kelly's President and Chief Executive Officer, Peter Quigley. Thank you,

Scott, and good morning, everyone. Before I share my reflections on our second quarter results, I'll discuss the CEO transition update that we announced earlier this morning. Following a rigorous search process with the full engagement of Kelly's board of directors, including myself, Chris Layden has been selected to serve as the next president and CEO of Kelly. Chris will formally join Kelly and step into the role on September 2nd. I will remain with the company as a strategic advisor to Chris and the board to ensure a smooth transition. Chris is a dynamic industry leader with extensive experience leading organizations through transformations to advance -to-market initiatives and accelerate profitable growth. He joins Kelly from Workforce Solutions provider ProLink, where he served as chief operating officer and oversaw a period of rapid growth. Prior to ProLink, Chris spent nearly two decades at Manpower Group, where he served in a range of senior roles spanning general management, regional leadership, corporate strategy, and sales. After many conversations with Chris, it was clear that his skills and experience are uniquely suited for this moment in Kelly's strategic evolution. He brings a track record of executing enterprise scale transformations and driving commercial excellence, as well as visionary leadership that aligns well with our commitment to accelerate profitable growth and value creation. Under Chris's leadership, I'm confident that Kelly will build upon the strong foundation we've established and reach new heights of profitability and growth. I look forward to formally welcoming him to Kelly when he joins us next month and introducing him to our talent, customers, and shareholders. With that, let's review the highlights from our second quarter earnings. In the second quarter, we saw the benefits of our focus on more resilient markets to drive growth with each business unit delivering strategic contributions to Kelly's results. Our education business achieved another quarter of revenue growth as we maintained strong fill rates in the K-12 staffing business. In SET, we capitalized on solid demand within the engineering and telecom verticals. Payroll process outsourcing remained a source of strength within the ETM segment and delivered robust revenue growth over the prior year. Across both SET and ETM, outcome-based offerings, excluding our contact center business, sustained positive momentum with customers as we continue to shift our business mix toward higher margin, higher growth solutions. Results were impacted by acute demand reductions with certain large customers. These reductions were largely the result of cost controls implemented by these customers in response to the increasingly dynamic trade and geopolitical landscape. More broadly, the current environment continued to drive employers in some sectors to take a more measured approach to hiring. As such, demand for staffing services decelerated in ETM. Volumes within our U.S. federal government business declined at the outset of the quarter but leveled off in May and June. This was in line with our expectations which we previously revised in light of reduced demand for federal contractors in the first quarter. As market conditions evolved, we doubled down on our commitment to operational discipline and took decisive action to align resource levels with demand. Our differentiated capabilities and agility in adapting to changing market conditions enabled Kelly to pursue attractive new business opportunities. Our unique solutions provide employers with a flexible, scalable approach to bridge the transition to an AI-enabled workforce in a way that unlocks the combined power of people and technology. They also position Kelly to harness the potential of AI and turn it into an opportunity to drive profitable growth for our customers and our shareholders. We'll continue to leverage our position as the partner of choice as employers increasingly integrate AI into their operations to drive efficiency and growth. While delivering near-term results, we're also laser-focused on executing our growth and efficiency initiatives to position Kelly for the future. We advanced our efforts to integrate MRP's portfolio of businesses with our existing SET businesses, completing the realignment of sales, recruiting, and functional teams as part of our redefined -to-market strategy organized by specialty. We're also making excellent progress on the implementation of modernized front and back office systems with inset that will leverage MRP's leading technology stack and consolidate disparate systems to reduce complexity and drive efficiencies across the organization. Our progress in the second quarter reflects our agility in both seizing and creating opportunities in any operating environment while accelerating profitable growth over the long term. We're deliberate about staying close to our customers, evolving workforce needs, and leveraging our differentiated capabilities to provide them with innovative solutions. The decisive actions we took earlier in the year to improve efficiencies and drive simplicity in our operating model have positioned us to better serve our customers and execute on our near-term and position Kelly to compete and win over the long term. For more details on our results in the quarter, I'll turn the call over to our Chief Financial Officer, Troy Anderson.