Professional staffing firm Kforce Inc. (NASDAQ: KFRC) reported third-quarter revenue rose 5.7% to $365.4 million, exceeding the high end of its forecast.
Growth at the Tampa, Florida-based firm was concentrated in its finance/accounting temporary staffing business line where revenue rose 51.6% year over year to $100.6 million, including $51.1 million related to its Covid-19 business.
Technology temporary staffing revenue fell 4.2%. Direct-hire revenue was down in both technology and finance/accounting.
“We believe it is becoming clearer each day that the Covid-19 pandemic has triggered a generational change in the shape and conduct of business,” said Chairman and CEO David Dunkel. “Prior to the pandemic, our society, and the business community at large, were rapidly digitalizing and driving productivity gains through technology investment. We believe the pandemic has exponentially accelerated the pace of this technological revolution.”
Dunkel also noted Kforce’s business footprint has largely insulated the firm from the consequences of severe economic disruption to date.
| (US$ thousands) | Q3 2020 | Q3 2019 | % change |
| Revenue | $365,424 | $345,558 | 5.7% |
| Gross profit | $103,878 | $102,811 | 1.0% |
| Gross margin percentage | 28.4% | 29.8% | |
| Net income | $18,763 | $14,940 | 25.6% |
Kforce’s temp staffing revenue was up 6.9% year over year in the third quarter while direct-hire revenue fell 26.6%.
Revenue by segments
| (US$ thousands) | Q3 2020 | Q3 2019 | % change |
| Total flex revenue | $356,687 | $333,652 | 6.9% |
| Total direct-hire revenue | $8,737 | $11,906 | -26.6% |
| Technology | |||
| Technology flex revenue | $256,118 | $267,304 | -4.2% |
| Technology direct-hire revenue | $4,133 | $4,695 | -12.0% |
| Total technology revenue | $260,251 | $271,999 | -4.3% |
| Finance & Accounting | |||
| Finance & Accounting flex revenue | $100,569 | $66,348 | 51.6% |
| Finance & Accounting direct-hire revenue | $4,604 | $7,211 | -36.2% |
| Total Finance & Accounting revenue | $105,173 | $73,559 | 43.0% |
Guidance
Kforce forecasts fourth-quarter revenue of between $337 million and $347 million, a year-over-year increase of between 0.2% and 3.2%.
Share price and market cap
Shares in Kforce were up 2.16% to $37.60 as of 11:53 a.m. Eastern time; they were 11.82% below their 52-week high. The company had a market cap of $761.58 million.