Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2025

Summary of Significant Accounting Policies

Note A - Summary of Significant Accounting Policies

Unless otherwise noted below, there have been no material changes to the accounting policies presented in Note 1 - “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements, included in Item 8. Financial Statements and Supplementary Data of our 2024 Annual Report on Form 10-K.

Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting. Accordingly, certain information and footnotes normally required by GAAP for complete financial statements have been condensed or omitted pursuant to those rules and regulations, although management believes that the disclosures made are adequate to make the information not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2024 Annual Report on Form 10-K. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments considered necessary for a fair presentation. The Unaudited Condensed Consolidated Balance Sheet at December 31, 2024, was derived from our audited Consolidated Balance Sheet at December 31, 2024, as presented in our 2024 Annual Report on Form 10-K.

Our quarterly operating results are affected by the seasonality of our clients’ businesses and changes in holiday and vacation days taken. In addition, we typically experience higher costs in the first quarter of each fiscal year as a result of certain U.S. state and federal employment tax resets, which adversely affects our gross profit and overall profitability relative to the remainder of the fiscal year. As such, the results of operations for any interim period may be impacted by these factors, among others, and are not necessarily indicative of, nor comparable to, the results of operations for a full year.

Principles of Consolidation

The unaudited condensed consolidated financial statements include the accounts of Kforce Inc. and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. References in this document to “Kforce,” the “Company,” the “Firm,” “management,” “we,” “our” or “us” refer to Kforce Inc. and its subsidiaries, except where the context indicates otherwise.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most critical of these estimates and assumptions include income taxes and the evaluation of goodwill for impairment. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates.

Income Taxes

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The OBBBA legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We have incorporated the OBBBA legislative changes into the Company's effective tax rate for the three months ended September 30, 2025, and these changes did not have a material impact on our consolidated financial statements. We will continue to evaluate the full impact of these legislative changes as additional guidance becomes available.

Earnings per Share

Basic earnings per share is computed as net income divided by the weighted-average number of common shares outstanding (“WASO”) during the period. WASO excludes unvested shares of restricted stock. Diluted earnings per share is computed by dividing net income by diluted WASO. Diluted WASO includes the effect of potentially dilutive securities, such as unvested shares of restricted stock using the treasury stock method, except where the effect of including potential common shares would be anti-dilutive.

The following table provides information on potentially dilutive securities:


(shares in thousands)	2025	2024
Three Months Ended September 30,
Common stock equivalents	56	245
Anti-dilutive shares	670	4
Nine Months Ended September 30,
Common stock equivalents	65	212
Anti-dilutive shares	650	4

Treasury Stock

The Board of Directors has approved a stock repurchase program, which has been amended several times to increase the aggregate amount of the stock repurchase authorization. During the nine months ended September 30, 2025, Kforce repurchased approximately 950 thousand shares of common stock on the open market at a total cost of approximately $41.1 million under this repurchase program. During the nine months ended September 30, 2024, Kforce repurchased approximately 324 thousand shares of common stock on the open market at a total cost of approximately $20.3 million under this repurchase program. In October 2025, the Board approved an increase in the stock repurchase authorization, bringing the total authorization to $100.0 million for the stock repurchase program.

New Accounting Standards

Recently Adopted Accounting Standards

In December 2023, the FASB issued guidance for disclosure improvements for income taxes. These amendments require the disclosure of specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. This new guidance is effective for Kforce for our annual disclosures for the year ending December 31, 2025. This new guidance will modify our disclosures, but we do not expect this standard to have a material effect on our consolidated financial statements.

Accounting Standards Not Yet Adopted

In September 2025, the FASB issued guidance that provides targeted improvements for the accounting for internal-use software. This standard replaces the development stage framework with a more judgment-based framework and adds considerations to evaluate whether the probable-to-complete recognition threshold has been met. This guidance is effective for annual periods beginning after December 15, 2027, including interim periods within those annual periods. Early adoption of this guidance is permitted and may be applied using a prospective, modified or retrospective approach. We are evaluating this new guidance and the potential impact on our consolidated financial statements.