GET DAILY SIGNALSKelly Services (KELYA) Q3 2026 Earnings: Underlying Revenue Growth of 2.3% Emerges
Key Takeaways
- Kelly Services reported third-quarter 2026 revenue of $927.2 million, down 0.8% year-over-year but within the company's guidance of flat to down 2%.
- Adjusted earnings per share (EPS) came in at $0.07, matching consensus, while GAAP diluted loss per share was $0.05 versus a $4.26 loss a year earlier.
- Adjusted EBITDA climbed 29.1% to $21.3 million, with margin expanding 50 basis points to 2.3%.
- Underlying revenue, which excludes reduced demand from the federal government and three large ETM clients, grew 2.3%, ahead of guidance.
- Education revenue fell 6.4% on enrollment declines, and management trimmed its fourth-quarter revenue outlook to flat to up 1%.
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Earnings Context and Why It Matters
Kelly Services operates as a specialty talent solutions provider across three main segments: Enterprise Talent Management (ETM), Science, Engineering & Technology (SET), and Education. The third-quarter 2026 results provide a useful test of whether the long-promised revenue inflection is taking hold after multiple quarters of declines. Management highlighted that underlying revenue returned to growth and that adjusted EBITDA margin expanded year-over-year for the first time in at least four quarters. This could mark a potential turning point, even as softer federal government demand and pressure from several large ETM clients remain in the picture.
Reported Results
For the 13 weeks ended September 27, 2026, Kelly Services posted revenue from services of $927.2 million, down 0.8% from $935.0 million in the prior year and inside the flat-to-down-2% guidance range. Gross profit held steady at $194.4 million, with the gross profit rate improving 20 basis points to 21.0%.
On a GAAP basis the company recorded a diluted loss per share of $0.05, compared with a $4.26 loss in the year-ago quarter that included a $102.0 million goodwill impairment and a deferred-tax valuation allowance. Adjusted EPS of $0.07 matched the consensus estimate. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Adjusted EBITDA rose 29.1% to $21.3 million and the margin widened 50 basis points to 2.3%. Underlying revenue advanced 2.3%, exceeding the 1%-2% guidance, supported by a 7.7% increase in ETM underlying revenue and 11.6% growth in Talent Solutions, including double-digit gains in MSP and RPO. Education revenue declined 6.4%, while SET revenue fell 2.0%.
Market Reaction and Investor Sentiment
Sentiment had improved ahead of the release, yet the trimmed fourth-quarter outlook tempered enthusiasm. KELYA closed at $16.91 before the report, roughly 34% above its 200-day moving average. Shares pulled back afterward as investors balanced the stronger underlying trend against the softer guide and ongoing Education segment pressure. The move highlighted a central tension: the recovery appears genuine, but its pace is slower than some had hoped following the second quarter.
Forward Outlook and Key Factors to Monitor
Kelly Services now expects fourth-quarter revenue between flat and up 1% year-over-year, a range that includes about three points from an extra fiscal week and therefore implies an underlying decline. Management still anticipates Education returning to growth “in the coming quarters,” though the pace is now described as more gradual.
Investors will want to watch whether ETM can sustain its underlying growth and whether pressure from a large customer eases. Education trends also merit close attention given the impact of K-12 enrollment declines and classroom consolidation on substitute-teacher demand. Margin trends remain positive: the company raised its core SG&A savings target to $25-$30 million for the year and guided fourth-quarter adjusted EBITDA margin to 3.8%-4.0%. Cash-flow dynamics and days sales outstanding, which rose to 68, will also be important to track alongside balance-sheet stability and customer concentration.
Using Tickeron’s AI Tools for Ongoing Research
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
KELYA in upward trend: 10-day moving average moved above 50-day moving average on October 30, 2026
The 10-day moving average for KELYA crossed bullishly above the 50-day moving average on October 30, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 16 of 21 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 76%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 20, 2026. You may want to consider a long position or call options on KELYA as a result. In 60 of 91 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 66%.
The Moving Average Convergence Divergence (MACD) for KELYA just turned positive on October 21, 2026. Looking at past instances where KELYA's MACD turned positive, the stock continued to rise in 27 of 41 cases over the following month. The odds of a continued upward trend are 66%.
KELYA moved above its 50-day moving average on October 30, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +3.57% 3-day Advance, the price is estimated to grow further. Considering data from situations where KELYA advanced for three days, in 212 of 317 cases, the price rose further within the following month. The odds of a continued upward trend are 67%.
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 42 of 62 cases where KELYA's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 68%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where KELYA declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 71%.
KELYA broke above its upper Bollinger Band on October 21, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for KELYA entered a downward trend on October 13, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 25 (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.497) is normal, around the industry mean (4.783). P/E Ratio (-1.808) is within average values for comparable stocks, (1.574). Projected Growth (PEG Ratio) (0.680) is also within normal values, averaging (1.448). Dividend Yield (0.021) settles around the average of (1.469) among similar stocks. P/S Ratio (0.140) is also within normal values, averaging (0.884).
The Tickeron Price Growth Rating for this company is 37 (best 1 - 100 worst), indicating steady price growth. KELYA’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron PE Growth Rating for this company is 60 (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron SMR rating for this company is 96 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. KELYA’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 95, placing this stock worse than average.
Industry description
Market Cap
High and low price notable news
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
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General Information
a provider of workforce solutions
Industry OtherConsumerServices
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