Kelly Services, Inc. · NASDAQ:KELYA
Kelly Services — Q1 2025 Earnings Presentation
26 slides from Kelly Services's earnings presentation, May 2025
Slide 1: Q1 2025 Investor Presentation
Q1 2025 Investor Presentation May 2025 © 2025 Kelly Services, Inc. All rights reserved.
Slide 2: Kelly is a leading global specialty talent solutions provider
Kelly is a leading global specialty talent solutions provider 78 $4.3 billion 3.3% years of industry leadership of revenue in 2024, reflecting adjusted EBITDA margin in 2024, organic growth that significantly up 100 basis points over 2023 outperformed the market 3 400,000 #1 specialized, market-lead
Slide 3: We are well positioned to create long-term value for all our stakeholders
We are well positioned to create long-term value for all our stakeholders Industry-leading brand and businesses delivering differentiated solutions to blue-chip customers Streamlined operating model organized around specialty portfolio in attractive higher-margin, higher-growth markets Transforming
Slide 4: There is a significant shareholder value creation opportunity at Kelly's present valuation
There is a significant shareholder value creation opportunity at Kelly’s present valuation The value of our individual businesses and our valuation multiple relative to peers imply considerable upside potential, which we are well positioned to capture through our specialty growth strategy and transf
Slide 5: A streamlined operating model designed to accelerate growth
A streamlined operating model designed to accelerate growth Implemented in 2020 and realigned in 2025(1), our portfolio of specialty businesses positions Kelly to compete and win. Kelly Enterprise Talent Kelly Science, Engineering Kelly Education (EDU) Management (ETM) & Telecom (SET) GP Margin(2) 2
Slide 6: We have driven significant progress on our Specialty Growth Journey
We have driven significant progress on our Specialty Growth Journey Revenue Mix Launched streamlined operating model in 2020 to INTL(1) EDU sharpen focus on higher-margin, higher-growth 22% 22% specialties P&I 41% EDU 6% 2020 2024 ETM(2) 51% Unlocked nearly $500 million by monetizing non- OCG core a
Slide 7: We are delivering differentiated solutions to meet the evolving needs of clients and talent
We are delivering differentiated solutions to meet the evolving needs of clients and talent Since 2020, we have shifted our revenue mix toward higher-margin outcome-based, MSP, and RPO solutions. 15% 21% 8% 1% 2020 2024 11% 66% 1% 76% Temporary Staffing Solutions Outcome-Based Solutions Talent Solut
Slide 8: Our transformation has delivered significant profitability improvement
Our transformation has delivered significant profitability improvement Through targeted growth and efficiency initiatives, we have more than doubled adjusted EBITDA(1) margin since 2020 and are laser-focused on delivering continued incremental margin expansion. $160 4% $143 $145 $140 $120 3.3% 3.3%
Slide 9: Propelled by momentum from our recent achievements, our near-term priorities are clear
Propelled by momentum from our recent achievements, our near-term priorities are clear Deliver above-market growth Further optimize operating Drive incremental EBITDA by increasing scale in chosen specialties model margin expansion • Realign SET into growth • Continue to build out go-to- • Further e
Slide 10: Our capital allocation strategy is focused on driving long-term shareholder value
Our capital allocation strategy is focused on driving long-term shareholder value With a strong balance sheet underpinned by healthy free cash flow generation and available debt capacity, we are well positioned to deliver on our priorities. Capital Deployment: 2020-2024(1) Disciplined organic invest
Slide 11: Business Unit Overview
Business Unit Overview 11
Slide 12: Enterprise Talent Management Segment Overview
Enterprise Talent Management(1) Segment Overview 2024 ETM Revenue Mix $2,220.0 $2,214.4 21.2% 1% $2,210.0 $2,206.0 21.0% 21.0% $2,196.1 22% $2,200.0 20.8% $2,190.0 20.6% $2,180.0 20.4% 53% $2,170.0 20.3% 20.3% 20.2% 24% $2,160.0 20.0% $2,150.0 19.8% (2) 2023 2024 Trailing 12 Months Temp Staffing Out
Slide 13: Science, Engineering & Technology Segment Overview
Science, Engineering & Technology(1) Segment Overview 2024 SET Revenue Mix $1,600.0 28.0% $1,400.0 $1,256.5 27.5% 2% 2% $1,165.7 $1,200.0 27.0% $970.6 $1,000.0 26.5% $800.0 26.0% 30% $600.0 25.5% 25.7% 25.6% $400.0 25.4% 25.0% 66% $200.0 24.5% $0.0 24.0% (2) 2023 2024 Trailing 12 Months Temp Staffin
Slide 14: Education Segment Overview
Education Segment Overview 2024 EDU Revenue Mix $1,200.0 24.0% 1% $972.3 $991.4 $1,000.0 22.0% $841.9 $800.0 20.0% $636.2 $600.0 18.0% $416.5 $400.0 $286.9 16.0% 15.6% 15.8% 15.3% $200.0 14.7% 14.0% 14.4% 14.5% 99% $0.0 12.0% (1) 2020 2021 2022 2023 2024 Trailing 12 Temp Staffing Perm Placement Mont
Slide 15: Financial Appendix
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Slide 16: Q2 2025 Outlook
Q2 2025 Outlook Our Q2 2025 Outlook Second Quarter 2025: assumes macro and staffing market • Revenue – total Company year-over-year revenue growth of 6.0% to 7.0% conditions consistent o Includes inorganic growth from MRP acquisition through the May 31 with those at the end of anniversary date of th
Slide 17: Our Financial Journey: Revenue
Our Financial Journey: Revenue $5.2 50% $5.0 $5.0 40% $4.9 $4.8 $4.8 30% $4.6 20% $4.5 $4.5 $4.4 10% $4.3 $4.2 0% $4.0 -10% $3.8 -20% (1) 2020 2021 2022 2023 2024 Trailing 12 Months (2) (3) Kelly Revenue (billions) YoY Kelly Organic Revenue Growth % YoY Industry Growth % (1) Trailing 12 months inclu
Slide 18: Our Financial Journey: Gross Profit
Our Financial Journey: Gross Profit $1,200 23% $1,012 $1,000 $961 22% $919 $913 $883 $828 $800 21% 20.4% 20.5% $600 20.4% 20% 19.9% $400 19% 18.7% $200 18.3% 18% $0 17% (1) 2020 2021 2022 2023 2024 Trailing 12 Months Gross Profit (millions) Gross Profit % © 2025 Kelly Services, Inc. All rights reser
Slide 19: Our Financial Journey: Free Cash Flow
Our Financial Journey: Free Cash Flow(1) $200 $171 $150 $100 $74 $61 $66 $50 $16 $0 CAGR: 2.3%(2) ($50) ($100) ($88) ($150) (2) (2) (3) 2020 2021 2022 2023 2024 Trailing 12 Months Free Cash Flow (millions) (1) Free cash flow is defined as net cash from operating activities minus capital expenditures
Slide 20: Recast Segment Results: 2023-2024
Recast Segment Results: 2023-2024(1) $ in millions 2023 2024 2023 2024 Revenue Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY FY Enterprise Talent Management (ETM) 574.6 559.7 546.7 533.4 524.1 541.2 561.6 569.2 2,214.4 2,196.1 Science, Engineering & Technology (SET) 249.0 246.2 241.1 234.3 231.6 265.7 335.0 333.4 970.
Slide 21: Adjusted EBITDA Non-GAAP Reconciliation
Adjusted EBITDA(1) Non-GAAP Reconciliation $ in millions Trailing 12 2020 2021 2022 2023 2024 Months(2) Net earnings (loss) ($72.0) $156.1 ($62.5) $36.4 ($0.6) ($20.8) Other (income) expense, net (3.4) 3.6 (1.6) (4.2) 3.3 8.3 Income tax expense (benefit) (34.0) 35.1 (7.9) (11.5) (21.3) (23.1) Deprec
Slide 22: Adjusted EBITDA Non-GAAP Reconciliation Footnotes
Adjusted EBITDA Non-GAAP Reconciliation Footnotes (1) 2022 loss on investment in Persol Holdings includes losses of $67.2 million on the sale of Persol Holdings in Q1 2022, $52.4 million of which related to changes in fair value up to the date of the transaction. Gain on investment in Persol Holding
Slide 23: Cautionary Statements and Contacts
Cautionary Statements and Contacts 23
Slide 24: Non-GAAP Measures
Non-GAAP Measures Management believes that the non-GAAP (Generally Accepted Accounting Principles) information excluding the 2025 integration and realignment costs, the 2025 and 2024 transaction costs, the 2025 executive transition costs, the 2024 gain on the sale of our EMEA staffing operations, th
Slide 25: Safe Harbor Statement
Safe Harbor Statement This presentation contains statements that are forward looking in nature and, accordingly, are subject to risks and uncertainties. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not
Slide 26: Investor Contacts
Investor Contacts Peter Quigley Troy Anderson Scott Thomas President & CEO EVP & CFO Head of Investor Relations Peter.Quigley@kellyservices.com Troy.Anderson@kellyservices.com Scott.Thomas@kellyservices.com © 2025 Kelly Services, Inc. All rights reserved. 26