Kelly Q1 revenue drops after sale of European business

MICHIGAN, UNITED STATES — Talent solutions provider Kelly recently announced its financial results for the first quarter of 2024, showcasing significant improvements in operating earnings and adjusted EBITDA margins despite a decline in revenue.

Financial highlights

Despite a 17.6% decrease in revenue to $1.05 billion, primarily due to the sale of the company’s European staffing operations, the company managed a notable increase in profitability. 

Kelly’s first-quarter operating earnings reached $26.8 million, marking a substantial increase from $10.7 million in the same quarter of the previous year. This improvement reflects a 34% rise on an adjusted basis. 

Adjusted EBITDA margins also grew by 110 basis points to 3.2%, driven by a meaningful reduction in operating expenses and the strategic sale of European operations.

Strategic developments and future outlook

Kelly President and CEO Peter Quigley commented on the company’s strategic moves, stating, “In the first quarter, we continued making progress on our journey to accelerate profitable growth, notwithstanding continued macroeconomic uncertainty and industry headwinds.” 

He highlighted the company’s transformation initiatives which have streamlined operations and improved profitability.

Looking ahead, Kelly expects further expansion of its EBITDA margin, particularly with the planned acquisition of Motion Recruitment Partners (MRP) in the second quarter of the year. This acquisition is anticipated to significantly enhance Kelly’s market share and capabilities, creating new opportunities for revenue growth and further margin improvements.

Dividend announcement

Further solidifying its financial stability, Kelly’s board of directors declared a dividend of $0.075 per share, payable on June 4, 2024, to stockholders of record as of May 20, 2024. This move reflects the company’s confidence in its financial health and commitment to returning value to its shareholders.

Quigley expressed optimism about the future, noting the company’s more streamlined and profitable business portfolio. 

“Our ongoing growth and efficiency initiatives increased Kelly’s adjusted EBITDA margin to 3.2% – a significant improvement of 110 basis points over the prior year and well above the company’s recent average,” he said. 

The upcoming acquisition of MRP is expected to be a transformational step for Kelly, poised to bring additional benefits from these strategic actions