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View All NewsKforce third-quarter revenue edges up; flex revenue up 1.7%
Kforce Inc. (NASD: KFRC) reported third-quarter revenue rose 1.4%, within the firm’s guidance. Flex revenue rose 1.7% in the third quarter at the Tampa, Fla.-based professional staffing provider, but direct-hire revenue fell 6.4%.
| (US$ thousands) | Q3 2017 | Q3 2016 | % change |
| Revenue | $341,053 | $336,460 | 1.4% |
| Gross profit | $104,375 | $105,380 | -1.0% |
| Gross margin percentage | 30.6% | 31.3% | |
| Net income | $10,099 | $9,020 | 12.0% |
In technology, the company’s largest segment, revenue rose 1.7%. And in the second-largest segment, finance & accounting, revenue rose 1.3% in the third quarter.
Government solutions revenue fell 1.0%. However, the company reported two prime contract wins in the third quarter from the US Department of Veterans Affairs with a contract value of nearly $100 million that the company expects to be realized over five years and will be incremental to its current revenue base.
Kforce also noted that Hurricanes Harvey and Irma negatively impacted revenue by approximately $1.0 million, and the company reported it contributed $1.0 million to disaster relief efforts.
Revenue by function and segment
| (US$ thousands) | Q3 2017 | Q3 2016 | % change |
| Total flex revenue | $328,904 | $323,484 | 1.7% |
| Total direct-hire revenue | $12,149 | $12,976 | -6.4% |
| Technology | |||
| Technology flex revenue | $224,148 | $220,376 | 1.7% |
| Technology direct-hire revenue | $5,133 | $5,148 | -0.3% |
| Total technology revenue | $229,281 | $225,524 | 1.7% |
| Finance & Accounting | |||
| Finance & Accounting flex revenue | $78,209 | $76,290 | 2.5% |
| Finance & Accounting direct-hire revenue | $7,016 | $7,828 | -10.4% |
| Total Finance & Accounting revenue | $85,225 | $84,118 | 1.3% |
| Government Solutions flex revenue | $26,547 | $26,818 | -1.0% |
Gross margin by segment
| Q3 2017 | Q3 2016 | |
| Technology flex | 27.0% | 27.2% |
| Finance & Accounting flex | 29.0% | 29.6% |
| Government solutions flex | 34.3% | 36.4% |
Quote
“We are particularly pleased with the performance of our largest business, Tech Flex, as revenues grew 3.3% on a year-over-year billing day basis, or 3.6% as adjusted for the hurricane impact,” Chairman and CEO David Dunkel said. “Our results in the third quarter continue to reinforce our belief in the strength of the demand environment in Tech, where our clients now have to keep their customer-facing technologies current in addition to leveraging technology to enhance internal operating efficiencies.”
Guidance
Kforce forecast fourth-quarter revenue of $338 million to $342 million. Gross margin is expected to be between 30.1% to 30.3%.
Share price and market cap
Kforce shares rose 8.11% in early afternoon trading today to $22.65. The company had a market cap of $572.82 million, according to Yahoo.