Professional staffing firm Kforce (NYSE: KFRC) met Wall Street’s revenue expectations in Q2 CY2026, with sales up 4.5% year on year to $349.3 million. The company expects next quarter’s revenue to be around $353 million, coming in 1.4% above analysts’ estimates. Its GAAP profit of $0.73 per share was 3.7% above analysts’ consensus estimates.

Is now the time to buy Kforce? Find out by accessing our full research report, it’s free.

Joseph J. Liberatore, President and Chief Executive Officer, said, "We are extremely pleased to have successfully delivered results in the second quarter that again exceeded our expectations from both a revenue and profitability perspective. Overall revenues positively inflected in the first quarter of 2026, meaningfully expanded in the second quarter, and our guidance for the third quarter contemplates continued sequential improvement. There has been a lot of discussion about whether we and the broader sector can continue to deliver revenue growth given the much-speculated negative demand impact of AI tools and technologies. We believe that the need for high-quality talent remains essential in virtually all technology initiatives, including AI-related investments. Encouragingly, we have been successful at delivering three consecutive quarters of revenue growth that has returned to pre-pandemic, and thus pre-AI advancement, averages while generating operating margins that are meaningfully higher than those achieved at comparable historical levels.

Company Overview

With nearly 60 years of matching skilled professionals with the right opportunities, Kforce (NYSE: KFRC) is a professional staffing company that specializes in placing technology and finance experts with businesses on both temporary and permanent bases.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years.

With $1.34 billion in revenue over the past 12 months, Kforce is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale.

As you can see below, Kforce’s revenue declined by 2% per year over the last five years, a poor baseline for our analysis.

Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. Kforce’s recent performance shows its demand remained suppressed as its revenue has declined by 3.5% annually over the last two years.

This quarter, Kforce grew its revenue by 4.5% year on year, and its $349.3 million of revenue was in line with Wall Street’s estimates. Company management is currently guiding for a 6.1% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 3.6% over the next 12 months. Although this projection suggests its newer products and services will spur better top-line performance, it is still below average for the sector.

ONE MORE THING: The $21 AI Application Stock Wall Street Forgot. While Wall Street obsesses over who’s building AI, one company is already using it to print money. And nobody’s paying attention.

AI chip stocks trade at ridiculous valuations. This company processes a trillion consumer signals monthly using AI and trades at a third of the price. The gap won’t last. The institutions will figure it out. You need to see this first. Read the FREE Report Before They Notice.

Adjusted Operating Margin

Adjusted operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies because it excludes non-recurring expenses, interest on debt, and taxes.

Kforce was profitable over the last five years but held back by its large cost base. Its average adjusted operating margin of 5.7% was weak for a business services business.

Looking at the trend in its profitability, Kforce’s adjusted operating margin decreased by 2.4 percentage points over the last five years. Kforce’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

In Q2, Kforce generated an adjusted operating margin profit margin of 6.4%, up 2 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for Kforce, its EPS declined by 8.8% annually over the last five years, more than its revenue. This tells us the company struggled because its fixed cost base made it difficult to adjust to shrinking demand.

We can take a deeper look into Kforce’s earnings to better understand the drivers of its performance. As we mentioned earlier, Kforce’s adjusted operating margin expanded this quarter but declined by 2.4 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Kforce, its two-year annual EPS declines of 11.3% show it’s continued to underperform. These results were bad no matter how you slice the data.

In Q2, Kforce reported EPS of $0.73, up from $0.59 in the same quarter last year. This print beat analysts’ estimates by 3.7%. Over the next 12 months, Wall Street expects Kforce’s full-year EPS to grow 25.7% from $2.11 to $2.66.

Key Takeaways from Kforce’s Q2 Results

We were impressed by how significantly Kforce blew past analysts’ EPS guidance for next quarter expectations this quarter. We were also glad its revenue guidance for next quarter slightly exceeded Wall Street’s estimates. Overall, we think this was a decent quarter with some key metrics above expectations. 

Big picture, is Kforce a buy here and now? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).