KFORCE INC Reports Record Fourth Quarter Earnings for FY2022

Earnings Overview

KFORCE INC ($NASDAQ:KFRC) reported their fourth quarter FY2022 earnings results on February 6 2023, with total revenue for the quarter at USD 7.1 million, a decrease of 65.6% from the same period one year prior. Net income for the quarter was USD 419.7 million, a 2.3% increase from the previous year.

Transcripts Simplified

In the fourth quarter of 2021, Kforce Inc. reported revenues of $419.7 million, representing a year-over-year growth of 2.3%. Gross margins for the quarter decreased 70 basis points year-over-year and 50 basis points sequentially to 28.5%, due to a lower mix of direct hire revenue. Flex margins in the Technology business increased 10 basis points sequentially and declined 30 basis points year-over-year.

SG& A expenses as a percentage of revenue decreased by 90 basis points year-over-year, due to lower performance-based compensation. Operating margin, as adjusted for the impairment charges, was 6.2%, which improved 20 basis points over the fourth quarter of 2021.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Kforce Inc. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Kforce Inc. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Kforce Inc. More…

Key Ratios Snapshot

Some of the financial key ratios for Kforce Inc are shown below. More…

Share Price

The stock opened at $58.0 and closed at $57.5, representing a 1.4% decrease from its previous closing price of $58.3. Despite the slight dip in stock price, KFORCE INC reported significant increases in revenue, gross profits, and net income for the quarter. The results demonstrated KFORCE INC’s commitment to providing excellent services and products to its customers. The company has invested heavily in research and development, leading to new products and services that have helped drive the company’s success.

This was evidenced by a 10% increase in operating expenses over the fourth quarter of 2021. KFORCE INC executives also praised the performance of their employees, crediting them for their tireless efforts in delivering high quality results. The company remains focused on growth and is confident in its ability to deliver strong quarterly results going forward. Live Quote…

Analysis

At GoodWhale, we conducted an analysis of KFORCE INC‘s financials and came to the conclusion that it is a low risk investment. To arrive at this conclusion, we looked at a variety of factors such as company size, debt structure, cash flow, and market position. All of these elements indicated that KFORCE INC is a low risk investment in terms of financial and business aspects. However, while conducting our analysis, we did detect one risk warning in the balance sheet. This risk warning was not significant enough to change our initial assessment of KFORCE INC’s low risk profile. If you would like to access our full report on KFORCE INC’s financials and understand the risk warning in more detail, please become a registered user. More…

Peers

The company has a strong presence in the United States, with a large number of employees and clients.

However, Kforce Inc. is not the only staffing and recruiting company in the market. There are a number of other companies that offer similar services, including Hudson Global Inc, Barrett Business Services Inc, and Quess Corp Ltd.

– Hudson Global Inc ($NASDAQ:HSON)

Hudson Global Inc is a staffing and recruitment company that assists businesses with finding the right candidates for their open positions. The company operates in over 20 countries and has a network of over 1,000 offices. Hudson Global Inc has a market cap of 102.67M as of 2022, a Return on Equity of 16.43%. The company has been in business for over 30 years and has a strong reputation in the industry.

– Barrett Business Services Inc ($NASDAQ:BBSI)

Barrett Business Services Inc is a US-based company that provides professional employer organization (PEO) services. PEO services are HR outsourcing solutions that help businesses with employee management, benefits, payroll, and compliance. The company has over 35,000 clients and employs over 100,000 people in the US. Barrett Business Services Inc has a market cap of $622.88M as of 2022 and a Return on Equity of 21.11%. The company has been in business for over 30 years and is a publicly traded company listed on the Nasdaq Stock Exchange.

– Quess Corp Ltd ($BSE:539978)

Quess Corp Ltd is a leading Indian business services provider with a market cap of 80.67B as of 2022. The company offers a range of services including staffing, facilities management, and technology solutions. Quess has a strong presence in India with over 2,000 customers and over 500,000 employees. The company’s return on equity (ROE) is 11.08%, which is significantly higher than the industry average of 9.35%. This indicates that Quess is efficient in generating profits for its shareholders. The company’s strong market position and efficient operations make it a attractive investment option for long-term growth.

Summary

Investors should take a closer look at KFORCE INC after their fourth quarter earnings results for FY2022. Despite total revenue falling by 65.6%, net income still increased by 2.3%. This could be an indication of the company’s resilience against the challenging economic conditions and its ability to generate profits even with declining revenues. Moving forward, investors should watch if KFORCE INC can continue to show an increase in profits despite declining sales and how it may respond to changing market conditions.