Kforce Inc. (NASDAQ:KFRC) Q4 2022 Earnings Conference Call February 6, 2023 5:00 PM ET

Company Participants

Joseph Liberatore - President and CEO

Kye Mitchell - COO

David Kelly - CFO

Conference Call Participants

Mark Marcon - Baird

Sam Kusswurm - William Blair

Tobey Sommer - Truist Securities

Kartik Mehta - Northcoast Research

Marc Riddick - Sidoti

Operator

Hello and thank you for standing by. My name is Regina and I will be your conference operator today. At this time, I would like to welcome everyone to the Kforce Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to Joe Liberatore, President and CEO. Please go ahead.

Joseph Liberatore

Good afternoon. This call contains certain statements that are forward-looking. These statements are based upon current assumptions and expectations and are subject to risks and uncertainties. Actual results may vary materially from the factors listed in Kforce's public filings and other reports and filings with the Securities and Exchange Commission. We cannot undertake

any duty to update any forward-looking statements. You can find additional information about our results in our earnings release and our SEC filings. In addition, we have published our prepared remarks within the Investor Relations portion of our

website.

On this call, we will discuss certain non-GAAP items. The non-GAAP financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. They are included as additional clarifying items to aid investors in further understanding the impact these items and events have on the financial results. Our earnings press release provides the reconciliation of differences between GAAP and non-GAAP financial measures.

Let me begin by offering some commentary about the current operating environment, which is informed by our internal metrics and discussions with clients and our associates. As we have mentioned on prior earnings calls, we experienced unprecedented demand in our technology business beginning in 2021 and continuing largely for the first half of 2022 driven by our clients’

acceleration of their digital spend and transformation efforts geared towards employee engagement in a more remote-centric environment and their customer experiences. The unprecedented demand fueled the two-year growth rate in our Technology business of approximately 44%, which yet again significantly exceeded the market benchmarks.

We had previously noted a slowdown in demand during the second half of the year and more recently have seen a higher level of project scrutiny being exercised by our clients given the macroeconomic uncertainty. However, technology spend on critical technology initiatives