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View All NewsKforce Q4 revenue up 5%; temp revenue up as direct-hire revenue falls
Kforce Inc. (NASD: KFRC) reported fourth-quarter revenue rose 5.1%, exceeding the firm’s guidance with growth coming in the firm’s largest single segment, technology flex revenue and in government solutions flex revenue. Finance & Accounting flex revenue edge up. However, direct-hire revenue fell at the Tampa, Fla.-based professional staffing provider.
| (US$ thousands) | Q4 2017 | Q4 2016 | % change |
| Revenue | $342,586 | $325,998 | 5.1% |
| Gross profit | $102,627 | $99,648 | 3.0% |
| Gross margin percentage | 30.0% | 30.6% | |
| Net income | $6,140 | $9,239 | -33.5% |
Net income fell to $6.1 million from $10.1 million in the year-ago quarter. The company reported the Tax Cuts and Jobs Act resulted in a re-measurement of its net deferred tax assets, which negatively impacted fourth-quarter net income by $5.4 million.
Revenue by function and segment
| (US$ thousands) | Q4 2017 | Q4 2016 | % change |
| Total flex revenue | $332,416 | $314,714 | 5.6% |
| Total direct-hire revenue | $10,170 | $11,284 | -9.9% |
| Technology | |||
| Technology flex revenue | $223,897 | $212,437 | 5.4% |
| Technology direct-hire revenue | $3,919 | $4,370 | -10.3% |
| Total technology revenue | $227,816 | $216,807 | 5.1% |
| Finance & Accounting | |||
| Finance & Accounting flex revenue | $79,098 | $78,880 | 0.3% |
| Finance & Accounting direct-hire revenue | $6,251 | $6,914 | -9.6% |
| Total Finance & Accounting revenue | $85,349 | $85,794 | -0.5% |
| Government Solutions flex revenue | $29,421 | $23,397 | 25.7% |
Gross margin by segment
| Q4 2017 | Q4 2016 | |
| Technology flex | 27.2% | 27.5% |
| Finance & Accounting flex | 28.5% | 29.1% |
| Government solutions flex | 30.3% | 30.3% |
Full-year results
| (US$ thousands) | 2017 | 2016 | % change |
| Revenue | $1,357,940 | $1,319,706 | 2.9% |
| Gross profit | $408,056 | $408,499 | -0.1% |
| Gross margin percentage | 30.0% | 31.0% | -3.2% |
| Net income | $33,285 | $32,773 | 1.6% |
Quote
“The demand environment for our services, particularly in Tech Flex, appears very strong as companies continue to invest in technology to more effectively and efficiently meet the needs of their customers and are seeking flexible resources for a portion of their human capital needs,” Chairman and CEO David Dunkel said.
Guidance
Kforce forecast first-quarter revenue of $343 million to $347 million. Gross margin is expected to be between 29.0% to 29.2%.
Share price and market cap
Shares in Kforce rose 5.90% to $25.57 as of 12:42 p.m. Eastern time. The company had a market cap of $645.46 million.