Kforce revenue rises 5% in Q4; tech revenue up, finance/accounting gets boost from Covid contracts
February 09, 2021
Kforce Inc. (NASD: KFRC) reported fourth-quarter revenue rose 5.3%. The Tampa, Florida-based professional staffing firm pointed out that finance/accounting temporary staffing revenue rose by 43.4% with a boost from several large Covid-related contracts. Technology temporary staffing rose by 0.8% year over year.
“Our technology and [finance/accounting] businesses continued to experience an increase in consultant assignment growth, which only strengthened as we progressed through the fourth quarter,” Kforce President Joseph Liberatore said. “Encouragingly, we also experienced the lowest level of technology assignment ends at year end that we have on record, which we believe speaks to the strength in technology demand.”
| (US$ thousands) | Q4 2020 | Q4 2019 | % change |
| Revenue | $354,048 | $336,230 | 5.3% |
| Gross profit | $100,461 | $98,025 | 2.5% |
| Gross margin percentage | 28.4% | 29.2% | |
| Net income | $18,285 | $14,208 | 28.7% |
Revenue was above the top end of guidance of $347 million.
Revenue by segments
| (US$ thousands) | Q4 2020 | Q4 2019 | % change |
| Total flex revenue | $344,884 | $325,700 | 5.9% |
| Total direct-hire revenue | $9,164 | $10,530 | -13.0% |
| Technology | |||
| Technology flex revenue | $262,266 | $260,153 | 0.8% |
| Technology direct-hire revenue | $4,577 | $4,759 | -3.8% |
| Total technology revenue | $266,843 | $264,912 | 0.7% |
| Finance & Accounting | |||
| Finance & Accounting flex revenue | $82,618 | $65,547 | 26.0% |
| Finance & Accounting direct-hire revenue | $4,587 | $5,771 | -20.5% |
| Total Finance & Accounting revenue | $87,205 | $71,318 | 22.3% |
Kforce reported it received large contracts to support government-sponsored initiatives related to Covid-19. Its finance/accounting temporary staffing business recorded nearly $28.5 million in Covid-related revenue from the contracts during the fourth quarter.
Full-year results
| (US$ thousands) | FY 2020 | FY 2019 | % change |
| Revenue | $1,397,700 | $1,347,387 | 3.7% |
| Gross profit | $396,224 | $395,038 | 0.3% |
| Gross margin percentage | 28.3% | 29.3% | |
| Net income | $56,039 | $130,862 | -57.2% |
2020 had one more billing day than 2019.
Guidance
Kforce forecast first-quarter revenue of between $354 million and $364 million, which would represent a year-over-year increase of between 5.6% to 8.6%. There will be 63 billing days in the first quarter of 2021 compared to 64 in the first quarter of 2020.
Share price and market cap
Shares in Kforce were down 3.88% to $45.33 as of 12:25 p.m. Eastern time; they were 4.39% below their 52-week high, according to FT.com. Kforce had a market cap of $1.04 billion.