Kforce, Inc.

Ladies and gentlemen, thank you for joining us and welcome to the KFOR's third quarter 2026 earnings conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Joe Liberatore, President and CEO. Please go ahead, sir.

Good afternoon and thank you for your time today. This call contains certain statements that are forward-looking, are based upon current assumptions, and expectations that are subject to risk and uncertainties. Actual results may vary materially from the factors listed in K-Force's public filing and other reports and filings with the SEC. We cannot undertake any duty to update any forward looking statements. You can find additional information about our results in our earnings release and our SEC filings. In addition, we have published our prepared remarks within the investor relation portion of our website. We are extremely pleased to deliver a quarter of accelerating revenue and earnings growth. Revenues which exceeded the high end of our guidance reflect the continued build of momentum that began in the second half of 2025 as evidenced by another quarter of sequential growth and further accentuated with year-over-year growth rate in our technology business of nearly 8% that is roughly equivalent to our pre-pandemic compounded annual growth rate. If Jeff Hackman will cover in more detail, this momentum is continued into the fourth quarter where we're expected to deliver another quarter of strong sequential billion-day growth. During the challenging years of 2023 to 2025, we didn't hang our heads. We spent considerable time selectively and responsibly investing in our people. strengthening our service offerings and evolving our brand and go-to-market strategy supported by our integrated strategy efforts and fine-tuning our world-class client portfolio. We also weren't unnerved when the dramatic evolution of technology that occurred with AI in the fall of 2022 because across K-Force's 64-year history, we have navigated and helped our clients navigate several defining periods of technological change from mainframe and personal computing and the Internet to mobile technology and cloud computing. We witnessed that each transition reshaped the labor market, yet it also created new opportunities as workers, particularly technology professionals, developed new skills and adapted to the evolving demands. Over time, these cycles ultimately expanded the number and breadth of technology-related roles. In fact, there is some recent evidence supporting our historical experience with technological changes playing out with AI. Recent research and labor market data continues to reinforce the durability of technology talent demand, even as AI automates a significant amount of coding activity. Indeed data showed U.S. software development jobs postings have increased nearly 15% since February 2025. With that growth significantly concentrated in senior roles, which aligns well with where we have historically focused. Longer term, the U.S. Bureau of Labor Statistics projects employment for software developers and related roles to grow approximately 10% through 2035, much faster than the average for all occupations. Our approach to AI remains deliberate and balanced, both within KForce and how we support our clients. Internally, we are examining our core processes and introducing AI-enabled capabilities where they can meaningfully improve the quality and speed of the associate and client experience, resulting in improved productivity and operating leverage. Externally, we are continuing to build fluency across our sales team and leadership while expanding the specialized AI expertise within our consulting solutions organization. We believe that enterprise adoption of AI is still at the early stage and will likely develop over time, much like other major technology transitions. The greatest opportunity will extend beyond the technology itself to the thoughtful and secure integration of AI into business processes and operating models. Capturing that value will require organizations to bring together strategy, talent, data, We therefore expect growing demand for highly skilled professionals and teams capable of designing, implementing and scaling AI, data and broader digital transformation initiatives. We believe clients will progressively turn to outside expertise to redesign business to be AI native. A recent example of a major US financial institution bringing in 1,000 technology consultants to help align their internal systems with recently acquired AI tools is indicative of how outside expertise can be leveraged. With our technology talent solutions and consulting capabilities, K-Force is well positioned to help clients modernize their operations, translate technology investments into business value, and build competitive advantage. No matter the pace of innovation, organizations will continue to need experienced professionals who can connect emerging technologies with practical execution. We believe that need supports the long-term demand for technology talent and consulting solutions that is at the center of our strategy. The demand for flexible technology talent is broadly based and extends beyond AI. The labor environment remains a bit mixed, with IT unemployment rates remaining relatively low at approximately 2.9%, indicative of a tight market for technology talent. At the same time, recent BLS data indicates modest job declines in the information and professional services sector. This is an environment where many companies remain hesitant to add full-time staff while the project-based nature of technology work may further incentivize clients to leverage flexible talent solutions. Organizations are also increasingly turning to flexible talent models to advance large backlogs of high-priority technology initiatives. Broader uncertainty including geopolitical tensions, rising interest rates, and related volatility in the global energy markets has further reinforced the need for agility. We believe these dynamics highlight the value of flexible workforce solutions as clients adapt to near-term uncertainty while assessing the longer-term implications of emerging technologies on their business and talent strategies. As a result, we remain encouraged that our operating trends and revenue improvements since late 2025 are consistent with a more typical cyclical demand recovery. Our business model is intentionally simple, organically driven, and intensely focused. By limiting inorganic growth within our existing service areas, we protect our teams from unnecessary complexities and distractions. That focus allows our people to do what they do best, build deep relationships, and partner with clients to solve their most critical business challenges. Our strategy has been thoughtfully refined over time, not overhauled because it has proven durable. That focus, combined with a unified and resilient culture, is a real differentiator for us and central to our consistent market outperformance. I am incredibly proud of the determination of our people and deeply appreciative of the trust our world-class clients continue to place in K-Force. The way our teams collaborate, serve our clients, and move our strategic priorities forward is creating meaningful momentum across K-Force and clear evidence to me that our people are operating more fully as one K-Force. With that, I will turn the call over to Dave Kelly, our Chief Operating Officer, for additional perspective on our performance and operating trends. Jeff Hackman, our Chief Financial Officer, will then review our financial results and outlook in greater detail. Dave? Thank you, Joe.

Total revenues exceeded guidance on the strength of our technology revenue growth of 7.8% year-over-year and 2.5% on a sequential billing day basis. While there has been considerable debate about whether AI tools and technologies will constrain demand across our sector, over the last four quarters, we've seen buying patterns improve and have delivered revenue growth that is at or above pre-pandemic norms. Both consulting and traditional staff augmentation revenues are growing, and our consulting solutions business has been growing in excess of 10% annually for the last few years. Our client portfolio is exceptional, our go-to-market and integrated strategy efforts are gaining traction, and our culture is unmatched. Clients remain measured in their technology spending, though our recent acceleration in revenue growth and leading indicators suggest that more projects are being greenlighted and demand for our services is increasing. Our results and operating trends indicate that clients are prioritizing critical initiatives in data, digital, and the platforms that support AI strategies and other critical projects that may have been deferred. Our growth rates provide concrete evidence that we are gaining share with our clients and across the broader market. Importantly, the improvement in our business has been broad-based, with positive trends evident across a wide range of industries and skill sets within our client portfolio. We continue to see growth in AI-related data, digital, and cloud projects, while also experiencing a ramp in demand for platform engineering roles and projects. It seems increasingly clear that the demand for flexible talent with high-end skill sets and technology is strengthening despite overall technology job growth being tepid, which further validates our focus on delivering high-end solutions to clients. Overall technology demand by industry remains broad. but with particular strength in financial services, wholesale, trade, and in professional and business services. As part of delivering innovative solutions to our clients, we continue to make targeted organic investments that deepen our consulting expertise, assist our clients in translating business problems within AI use cases, and more rapidly developing potential technology solutions. These investments include an increase in our innovation capabilities and increasing the depth and size of our team of domestically based technology experts and ensuring they are engaging in tandem with our talented sales associates to assist with early stage client exploration and use case advancement. During the third quarter, our consulting solutions business achieved record levels of new contract award value and converted the highest percentage of pipeline opportunities in its history. Our fully integrated sales and delivery model combines onshore, nearshore, and offshore talent from our Pune Delivery Center to give clients a unified experience across consulting, project-based work, and traditional staffing needs, spanning a broad range of technologies and skill sets. Demand is strengthening across our service portfolio, with clients increasingly open to discussing new opportunities. After a relatively slower start to the quarter in July, which is fairly typical during the summer, we saw front-end activity levels and conversion ratios meaningfully improve in August, and we've seen continued strength in September and October. These elevated activity levels and improving conversion ratios are translating into increasing project wins and accelerating revenue growth. Assignment attrition also performed better than expected in the third quarter, which speaks to the overall health and sustainability of the operating environment. We continue to outperform broader industry trends and momentum in the business is clearly strengthened as reflected in our Q4 guidance. We've maintained a stable to slightly improving average bill rate in technology over the past four years, which is encouraging and reflective of our higher quality, higher margin revenue stream. Our average bill rate in Q3 was $91 per hour. This reflects the growing mix of consulting-oriented engagements, which command higher bill rates and stronger margin profiles, as well as disciplined management of wage inflation and core technology skill sets. Together, these factors have effectively offset the bill rate pressure associated with a greater mix of consultants based outside the U.S. We expect to continue seeing a stable to slightly improving average bill rate as technology labor continues to upskill in the face of advancements in AI. Demand remains strong across our core practice areas, including data in AI, digital, platform engineering, and cloud. The number of opportunities in our consulting solutions offering continues to expand and will be a key driver for our sequential growth in Q4. These disciplines are foundational to the development and deployment of AI solutions, and we believe organizations will increasingly require specialized talent to execute their strategies. Looking forward to Q4, we expect overall revenues to improve sequentially in the low single digits on a billing day basis, and for year-over-year growth to be stable with third quarter levels, even against a more difficult prior year comp. Over the last several years, we've made responsible adjustments to align headcount with revenue levels and productivity expectations. We've selectively added headcount in the third quarter given our exceptional operating trends. We expect the productivity improvements that we are driving, particularly the greater efficiencies expected from AI-enabled solutions, to generate additional leverage as we grow. At the same time, we've continued to invest in our consulting solutions business and other strategic initiatives that we believe will support long-term revenue and profitability growth. We remain energized by the opportunities ahead and confident in our ability to sustain recent momentum while continuing to deliver strong results that exceed overall market averages. Our success is grounded in the deep trust and long-standing partnerships we've built with our clients, candidates, and consultants. These relationships remain the foundation of our growth, innovation, and long-term success. I'll now turn the call over to Jeff Hackman, K-Force's Chief Financial Officer.