Kelly Services, Inc. (KELYA) Q1 2026 Earnings Report, Transcript and Summary

Good morning, and welcome to Kelly Services First Quarter Earnings Conference Call. [Operator Instructions] Today's call is being recorded at the request of Kelly Services. If anyone has any objections, you may disconnect at this time. I would now like to turn the meeting over to your host, Mr. Scott Thomas, Kelly's Head of Investor Relations. Please go ahead.

Good morning, and welcome to Kelly's first quarter conference call. With me today are Kelly's Chief Executive Officer; Chris Layden; and our Chief Financial Officer, Troy Anderson. Before we begin, I'll remind you that the comments made during today's call, including the Q&A session, may include forward-looking statements about our expectations for future performance. Actual results could differ materially from those suggested by our comments. We do not assume any obligation to update the statements made on this call. Please refer to our SEC filings for a description of the risk factors that could influence the company's actual future performance. In addition, we'll discuss certain data on a reported and on an adjusted basis. Discussion of items on an adjusted basis are non-GAAP financial measures designed to give insight into certain trends in our operations. For more information regarding non-GAAP measures and other required disclosures, please refer to our earnings press release, presentation and once filed, Form 10-Q. All of which can be accessed through our Investor Relations website at ir.kellyservices.com. With that, I'll turn the call over to Chris.

Thank you, Scott. Good morning, everyone. I'll begin with highlights from the first quarter. The macroeconomic environment remained dynamic over the first 3 months of 2026. Against this familiar backdrop, employers continue to take a cautious approach to hiring, contributing to a mixed labor market. That said, conditions through the quarter were stable, consistent with our expectations. This stability was reflected in our results as we executed on our strategic priorities. Total company revenue exceeded our expectations and adjusted EBITDA margin was in line with our expectations. In ETM, staffing and overall revenue trends improved sequentially from the fourth quarter, including growth in talent solutions across our technology-enabled and AI-powered MSP, RPO and PPO offerings. In SET, we delivered another quarter of year-over-year growth, our Telecom specialty and life sciences and engineering performance improved sequentially. In Education, we continue to experience pressure from delayed contract decisions and enrollment declines and to a lesser extent, weather-related closings. Across all 3 segments, we continue to align resources with demand and maintain a disciplined approach to expense management as part of our ongoing focus on efficiency. Contributing to stabilizing trends in our results, for new customer wins that were implemented and came online during the quarter. Among them is a significant MSP program with a leading global oil and gas company across its North American operations. Kelly was selected based on the differentiated value of our technology-enabled capabilities. This includes our Helix analytics platform and AI-enabled rate intelligence which provides the visibility benchmarking and cost optimization, large enterprise customers require of a contingent talent management program. With the initial implementation of this new MSP program complete, we have clear line of sight to additional expansion opportunities. This win underscores where our 1 Kelly go-to-market approach is capable of delivering. Leveraging technology in our experience, serving global customers to win in the market and grow. With momentum building across the enterprise, we remain focused on returning to organic growth and margin expansion. Paving the way towards this next horizon is our newly formed growth office. Since it was established in February, the growth office has been collaborating across the enterprise to lay the foundation for an integrated commercial operating framework. This framework will serve as the foundation of a unified 1 Kelly enterprise strategy that brings the full breadth of our portfolio to Kelly's current customers and prospects. Central to this effort is the migration of all commercial teams onto a new unified CRM system, a key component of our modernized tech stack, the CRM will provide enterprise-wide pipeline visibility, enable high conviction forecasting and support cross-selling across business units. We expect the migration to be complete by mid-year as part of our ongoing technology modernization initiatives. Reflecting more broadly on our technology modernization journey, we remain on track with our multi-phase approach. In the first quarter, our team was successful in ensuring a smooth transition following the cutover of our acquisitions in SET from their legacy technology stack to the modernized platform, Kelly acquired through our acquisition of MRP. Armed with the key learnings we gathered from the initial cutover, we're well positioned to execute on subsequent phases and realize the benefits of deeper data and insights, AI and automation and scale and enhanced productivity. As we executed on our strategic priorities through the quarter, we continue to evolve our leadership team. In March, we welcomed Joel Leege as President of SET. Joel is a proven industry leader with broad-based sector experience, having spent nearly 3 decades in staffing, talent solutions and managed services across technology, engineering and life sciences. He brings extensive experience leading complex transformations and integrations, enabling exceptional service delivery for customers and driving above-market growth. This experience is uniquely suited to further enhance SET's competitive positioning and take the business to the next level. I'm pleased to have him as part of Kelly, and I look forward to Joel leading the SET business to new heights of growth and profitability. I'm also reevaluating the leadership structure within the ETM business. This business is core to our strategy. And with this in mind, I'm taking time to assess what we need longer term to ensure we deliver on our growth objectives. In the interim, I will be closely involved in the management of ETM. I have great confidence in the team who have consistently demonstrated their commitment to customer centricity, visibility and accountability. These cultural pillars remain fundamental to how we'll achieve our ambitions and win in the market, both in ETM and across the enterprise. I was pleased to have the opportunity to see the strength of our culture on full display at our recent Impact 2026 Leadership Summit in March. This immersive experience brought together 200 of our leaders for 2 days of dialogue and collaboration focused on transforming Kelly into a more customer-centric, visible and accountable enterprise. Impact reflects our commitment to building on the strength of Kelly's culture from the leadership level down, positioning the company to execute more consistently as we target a return to revenue growth and margin expansion in the second half of the year. In a moment, I'll share more about our pathway toward a return to growth. First, I'll turn it over to Troy to provide more details on the results in the quarter. Troy?

Thank you, Chris, and good morning, everybody. I'm pleased to report that we started the year with solid execution and results on a number of fronts. For the first quarter of 2026, revenue totaled $1 billion, which was down 10.7% overall versus Q1 of last year, is favorable to our guidance. Excluding the previously disclosed discrete impacts, driven by reduced demand from the federal government and 3 top ETM customers, revenue was down 3.3% on an underlying basis, which was improved 60 basis points versus last quarter. As a reminder, a brief update regarding these impacts. Federal government demand largely stabilized in Q3 of last year with a slight sequential increase this quarter mainly from the government shutdown and seasonal impacts in Q4. For the 3 top ETM customers, 1 stabilized at the current reduced demand levels beginning in Q3, 1 fully ran off in Q3, and the largest 1 remains one of our top customers and has stabilized across Q4 and Q1. At the segment level, underlying ETM declined 0.4% versus the prior year quarter, which is measurably improved versus last quarter and exceeded our expectations. Each Talent Solutions specialty grew versus the prior year quarter. In staffing, we saw a net underlying decline of just 1.2% in the quarter and year-over-year growth across February and March. Overall underlying ETM revenue has been relatively stable across the last 5 quarters. Education decreased 4.8% year-over-year in the quarter, reflecting the prior year delayed new contract decisions, elevated weather-related school closures, and overall reduced demand in key markets due to enrollment declines. We expect education to deliver sequential year-over-year improvement throughout the remainder of 2026 and a return to growth in the second half of the year as a result of new business wins, successfully defending several key renewals and continued penetration of our therapy offering into new and existing clients. SET's underlying revenue declined 6% in the quarter led primarily by near-term demand pressure within the technology specialty. Consistent with ETM and education, we are confident we will see sequential year-over-year improvement each quarter in 2026 with science, engineering and technology contributing most strongly in Q2. Reported gross profit was $196.4 million, down 17% versus the prior year quarter reflecting the lower revenue volume, along with employee-related costs and business mix changes. The gross profit rate was 18.9%, a decrease of 140 basis points compared to the prior year quarter. Approximately 50 basis points of the decline is timing related, which we expect to normalize over the course of the year. Our overall gross profit rate improved 10 basis points relative to Q4 and the year-over-year decline improved similarly. Versus Q4, both ETM and SET saw improvement in their gross profit rates and year-over-year declines. While Education saw rate pressure in light of the revenue decline, cost timing and mix. We expect to see gross profit rate improvement overall and in each BU in Q2 and over the remainder of the year. We continue to make significant progress improving our SG&A expense profile with reported SG&A expenses of $199.3 million, a decrease of 11.7%. On an adjusted basis, SG&A expenses decreased 10.3% year-over-year, reflecting the continued momentum with our structural and volume-related cost optimization efforts. Over the last 3 quarters, the year-over-year decline has averaged over 10%. Additionally, core adjusted SG&A expenses, which exclude depreciation and amortization and incentives, have declined sequentially each quarter since Q1 of 2025. In the quarter, adjusted SG&A expenses decreased across all the segments as we continue to drive durable and sustainable efficiencies in our operating model, through technology enhancements and process efficiencies, including leveraging AI. We also continue seeing benefits from realignments within the ETM segment and integration of MRP and other acquisitions within SET. All of which are progressing well. For the year, we're projecting a net year-over-year decline of approximately $25 million in core SG&A expenses despite investments being made in technology to growth office in other areas. The structural and durable changes we are making will allow us to scale more efficiently as we pivot to growth, thus supporting our expected return to margin expansion in the second half of the year and beyond. Our reported loss per share was $0.17 for the quarter. On an adjusted basis, we delivered earnings per share of $0.03 compared to $0.39 in the prior year. For our adjusted results, in connection with our various efforts. We recognized $9.2 million of charges in the quarter. Integration, technology modernization, organizational realignment and restructuring drove $5.2 million of the charges. The balance is related to costs associated with our controlling shareholder change, executive transitions and initial steps we have taken in our real estate rationalization efforts. We expect to continue incurring various charges throughout 2026 and as we progress on our technology modernization journey, reduce our fixed cost structure, including real estate costs and expand upon our various optimization efforts. Adjusted EBITDA was $15.8 million, with an adjusted EBITDA margin of 1.5%, which was down 150 basis points versus the prior year quarter and in line with our expectations. The year-over-year decline improved 20 basis points relative to Q4. The revenue and gross profit declines drove the decrease versus the prior year with the significant SG&A reductions partially offsetting. At a segment level, similar to the gross profit rate, both ETM and SET improved their margins and year-over-year performance versus Q4, while Education saw pressure in light of the revenue and gross profit declines. We expect each BU to show sequential improvement in their adjusted SG&A margins in Q2 and on a year-over-year basis as we progress through the year. Moving to the balance sheet and cash flow. We utilized $25.4 million of cash from operations this quarter due to the timing of working capital requirements. Total available liquidity as of the end of the quarter was $252 million, comprising $26 million in cash and $226 million available on our credit facilities, providing us with ample capital allocation flexibility. Total borrowings of $130.5 million increased versus the prior year-end, reflecting the working capital needs during the quarter. Our debt-to-EBITDA leverage remained near 1 at the end of the fiscal quarter. During Q1, we maintained our quarterly dividend of $0.075 per share. We remain confident in Kelly's strategy and cash flow generation capabilities and are committed to opportunistically deploying capital in pursuit of attractive returns for shareholders. As we turn to the outlook for the remainder of 2026, our expectations are unchanged relative to the initial view we established in February. Our expectations assume no material change in the macroeconomic or industry dynamics in the coming quarters. For Q2, we expect to show year-over-year improvement relative to Q1 with an overall revenue decline of 7% to 9%, which includes at least 100 basis points of improvement in the underlying decline. For adjusted EBITDA margin, we expect at least 2.5% representing at least 100 basis points improvement relative to Q1 and a significant reduction in the year-over-year decline relative to the past 2 quarters. As we progress through the balance of the year, assuming no new material impacts, we expect to see relative improvement in our year-over-year performance, each successive quarter for both revenue and adjusted EBITDA margin. That should translate to modest revenue growth in the second half of the year in a roughly mid-single-digit decline on a full year basis. For adjusted EBITDA margin, we expect to see measurable year-over-year margin expansion in the second half of the year and a modest increase on a full year basis. We are excited about the momentum we are building and the opportunities that lie ahead in 2026. I'm grateful to all the Kelly team members for their unwavering commitment and resilience as we position the company for growth and enhance profitability over the long-term. I'll now turn the call back to Chris for his closing remarks.

Thank you, Troy. As we look ahead, we remain firmly committed to executing on the priorities we outlined in February. Rooted in the strategic pillars I shared shortly after joining Kelly, these priorities will continue to guide our actions and progress on the pathway toward an inflection point in our results. Growth remains our top priority. The growth office is taking shape and beginning to enhance how we go to market as 1 Kelly enterprise. With the leadership transition in SET complete and organic growth drivers gaining traction in each of our businesses. We have a clear path to improve top line performance as we move through the year. The strength of our pipeline and the steady stream of new wins coming online reinforce our confidence that our go-to-market approach is working, that our ability to convert opportunities is accelerating. On efficiency, we'll continue to align resources with demand while reengineering our cost base to drive structural efficiencies and enhance profitability. Our technology modernization initiative remains on track and our enterprise AI strategy continues to unlock productivity across the business. In our culture, the energy and alignment our team demonstrated at our recent Impact Leadership Summit reinforce what I've known since I joined Kelly. Our people are deeply committed to the success of our company, our clients and the talent we place. We'll continue to build on the momentum with an emphasis on customer centricity, visibility and accountability across everything that we do. We remain on track to deliver our commitments and achieve revenue growth and margin expansion in the second half of the year. There's much work ahead, but I'm confident in our plan, our team and our ability to execute. We look forward to capitalizing on the positive momentum we're building together and unlocking Kelly's full potential for the benefit of all of our stakeholders. Operator, you can now open the call to questions.

[Operator Instructions] Our first question is going to come from the line of Marc Riddick with Sidoti.

So I wanted to start with some of the cost improvements that you've been working on? And maybe you could talk a little bit about the -- the -- I believe it was $25 million in core SG&A reduction is expected. Maybe you could sort of touch a little bit about some of those efforts and maybe the timing that we might expect there?

Yes. Thanks, Marc. Look, I'm really pleased with the progress that you're seeing as we really look at driving expense reductions across the enterprise. This is one of the priorities that I outlined right as I joined Kelly, our focus on reengineering our cost base, matching resources with demand. And you're seeing us come through and really delivering on that commitment in the first quarter through that disciplined execution. We saw that in the 1.5% margin -- EBITDA margin as well, which was in line with our expectations. It improved 20 basis points year-over-year in comparison to our Q4 trajectory. And as you've heard us talk about and Troy reemphasize, we're going to continue to see that sequential incremental improvement on the EBITDA margin side as we go throughout the rest of the year. Maybe ask Troy, if you want to comment any further on the specific $25 million impact for the rest of the year.

Yes, sure. Thanks for the question, Marc. We began taking actions, as Chris noted, throughout last year and really accelerated in the latter part of the year in response to some of the elevated revenue pressure but also just with the integration efforts that really with the acquisitions, the cutover to the new technology platform, where we consolidated all the acquisitions in December. So it's really the manifestation of some of the realignments that we did last year and then the integration efforts as we progress into this year and just continue looking at both durable structural changes as well as volume-related changes so that as we pivot to growth, we can scale much more efficiently and really drive that EBITDA margin expansion.

Great. And then actually, I guess, maybe picking up on that part of the commentary there. Can you talk a little bit about the -- I guess, the timing and milestones that you're looking for, for the remainder of the year on the technology activity as well as, I guess, maybe timing of ERP that we might see going forward?

Yes. We have another phase expected in the beginning of the fourth quarter of this year, where we'll migrate the platform now to sort of a broader enterprise platform. Right now, again, we have the acquisitions, MRP and the prior SET acquisitions all consolidated on the platform. But that was designed really for those smaller entities. And so we've made some foundational changes in the platform that, then we'll migrate all of those onto that, that now, we'll call it the enterprise platform. We're migrating our enterprise human capital management. So all of our FTEs will now be on the platform and we have some other smaller changes, migrating some customers on a prototype sample basis, just to go through some of the Kelly platform migrations and then -- and we're going to continue working on some of our solutions billing capabilities. So that's some of the more complex, right, non-staffing related capabilities and then work that we're going to be doing to bring the majority of the SET business onto the platform early in '27.

Yes. And Marc, just maybe 1 thing to add on our CRM. The most important near-term milestone in the second quarter which is on track, is the deployment of our HubSpot CRM. It's the consolidation of our CRMs across the business units. We're going to migrate all of our commercial sellers onto the CRM by mid-year. And now having the growth office and Pat's leadership to be able to go and drive that, it gives us the enterprise-wide pipeline visibility and allows us to go and do some of the go-to-market and growth objectives we've been outlining since we started.

That's very helpful. And then last one for me, just maybe touch a little bit on the demand drivers that you're seeing from customers, particularly the technology demands. Maybe you could talk a little bit about sort of how that sort of pace through the quarter and maybe just what you're seeing overall as far as whether the data center impacts, AI impacts, things like that, what you're seeing now versus maybe the beginning of the year and sort of how that's been progressing?

Yes, sure. I mean, first, some of the near-term pressures you're seeing do reflect some difficulty in our year-over-year comps particularly within SET, as we look at 2025, which is why, as we've talked about across the business, we continue to make sure we've got resources aligned with demand and now under Joel's leadership, we'll be very focused on getting back to market growth. Now that being said, we're actually seeing some encouraging signals, including a net positive consultant count improvement in March. As we exited the quarter, we also are seeing that April is tracking quite similarly. So some positive momentum there. And we also saw some sequential improvement in some of the businesses that we mentioned in our prepared remarks, we're really pleased with the progress we're making in the telecom space. That is being driven by outsized demand in the data center space that we have differentiated capability and we are going to continue to see that demand play out in the market where we have customers across the supply chain who need total talent management solution and the technical solution to support the investment that's happening in the United States and around the world.

Yes. Marc, this is Troy. I would just add, across the business, we saw improvement as we progressed through the quarter. Again, in Education, we had some weather-related impact that was largely concentrated in January. That was maybe half the decline in the quarter specific to that. And in an ETM, I commented in the prepared remarks about pivoting to growth in the underlying staffing business as we exited the quarter. So we feel good about the trends heading into Q2, which is reflected in the expectation there where we'll see our call for down 7% to 9% overall and at least 100 basis points improvement in the underlying decline.

[Operator Instructions]. Our next question will come from the line of Kartik Mehta with Northcoast Research.

Maybe taking a bigger picture look at Kelly today versus prior downturns. Can you just discuss maybe how you think structurally, the company is different today than it was before? Maybe in terms of customer mix, customer relationships? And obviously, in terms of how the company has changed in terms of business mix as you've gone more into SET and higher-margin businesses?

Yes. Sure, Kartik. Good to have you with us. I guess, as I step back and think a little bit about what differentiates Kelly in the market and maybe how that's evolved, all of the steps we took over the last few years to get scale and to get capability in higher specialized areas were all the right steps to take. We have the scale and the breadth of capability to go and compete now in all of the end segments that we're in. We didn't have that a few years ago in areas like technology, as an example, in that we do. We also have a much more robust RPO offering through the -- through some of the inorganic activity with our acquisition of Sevenstep. And we have a leading total talent management solution with the combination of the strength of our MSP offering and RPO offering together. As I think though about what needs to differentiate, Kelly, going forward, it really is, it has to be our focus on our customer and making sure that we're bringing all of that capability to our customer. And we're doing that in large part through better execution, the operating framework that we outlined right away focusing on not only our go-to-market, but also the way that we show up more holistically as an enterprise, Kelly enterprise to all of our customers. The establishment in the first quarter of the growth office was the next step in that journey, driving the operating framework within account management, within how we sell and within how we deliver across these large customers is really important. That is an area of focus that we're going to continue to come back. And we're seeing the roots of that already playing out with some large customer wins, and that focus is going to continue to be what will differentiate Kelly, for many years to come.

Maybe Troy, just on that point, you've done a good job of taking cost out. The company seems more efficient. And I'm wondering how you think about the incremental earnings power when we get back to kind of -- to a growth in this industry?

Yes. It's a good question. And that cost reduction from the earlier question, and I noted this in the prepared remarks, was net even of some investments that we're making in the growth office and some other areas. So you'll see some of that cost moderate -- declines moderate as we go through the year and pivot to growth, but we'll be able to scale more efficiently. Look, we're expecting to achieve our expectations for the year. Margins would be back above 3% in the back half of the year, which is where we were in the last half of '24 and the first half '25. And then, of course, as we continue to grow more, we would expect to expand further from there in a very efficient and effective way.

[Operator Instructions] Our next question comes from the line of Kevin Steinke with Barrington Research Associates.

Great. I wanted to just follow up on the discussion about the core SG&A expenses to make sure I'm understanding correctly, I guess with core SG&A, I believe you're equating that with the adjusted SG&A. And if it's down $25 million year-over-year in 2026, if I'm doing my math correctly, it appears that the adjusted SG&A expense on a quarterly basis will kind of flatten out for the rest of the year at about that $192 million level that you saw in the first quarter. Is that -- am I thinking about that correctly?

Yes. So that's right, that's total -- yes, so $192 million, yes, roughly flatten out. And the reason why I went to this core, which is not something that we've talked about really previously was just, we had a lot of movement with incentives last year with the challenging environment we were operating in. Of course, there was a reduction to performance incentives throughout the year. And of course, this year, we're expecting to perform measurably better and we would expect to return to some of those incentives. So if you strip that out and really just focus on that underlying wages and facilities and some of those things that are more stable and some of those things that we're focused on from the durable and structural reduction perspective, that should flatten out as we progress through the year and we get the year-over-year benefit of the actions taken both last year and this year. And again, that's net of investments that we'll be making as we pivot to growth.

Okay. Right. How material is the change in incentive comp that you're expecting in 2026 versus 2025?

It's probably $20 million to $25 million swing in total SG&A between the years, something in that ballpark. Again, it will be subject to ultimate performance. And of course, each business unit has different -- has incentives tied to their specific performance so you can get some variability in that just based on how individual business units perform.

Right. Okay. That makes sense. Yes. So just following up on that, then I think you commented that you expect gross margin improvement throughout the year, I believe. And what would be driving that? And it sounds like a lot of the adjusted EBITDA margin improvement that you're expecting would kind of hinge on the improved gross margins. Is that correct?

Yes, that's generally correct. I mean, again, we'll continue driving -- I mean, with the -- as we pivot to growth, we'll get some lift there on a relatively, again, flattish expense base on a run rate basis and then with the gross margin improvement. A little bit of timing, I commented on that, just how some of the expenses we're seeing, how they'll play out this year versus how they played out last year particularly in the employee-related expenses, which we saw some pressure on exiting last year. And then we were again up 10 basis points quarter-over-quarter on gross margin despite some of that timing pressure. And then as we benefit from mix, again, as we grow, pivot to growth and some of the areas that we're expecting growth are the higher-margin areas that will benefit us as we get into the back half of the year. We are also, by the way, again, back to an earlier comment about just growth and where we're seeing opportunities. We are seeing a little bit of movement on perm fees. I mean it's still 1% of revenue, but we did see a little bit of benefit from that and particularly in SET in the first quarter. And of course, that helps gross margins and ultimately EBITDA as well.

Okay. Yes, that's helpful. Just a couple more. You called out lower student enrollment in the Education segment. Just wondering how meaningful that is or how broad based that is as you look across your various school district clients?

Yes. Thanks. Well, we -- first, I mean we remain really confident in this Education business. It has really significant differentiation. We're #1 in the market. And we continue to see really historic fill rates across the U.S. where we're serving 9,000 schools. Some of the impact, the convergence of factors that really came together are temporary in nature. And so we don't see these as structural as we mentioned in the prepared remarks, there were some weather-related closures. We also saw some budget constraints stemming from enrollment declines. And where that had the biggest impact for us was in Florida, we serve some of the largest school districts in the United States, some larger school districts in Florida. And that concentration was a onetime hit and that demand has now stabilized. And so where we're focused is the 70% of the market that is still not benefiting from an outsourced K-12 substitute management relationship with Kelly. And we are selling around the country. We're very -- as we hinted that, we feel very good about some of the large renewals that have been opened this year, and we're going to continue to sell more districts around the United States. And we're also going to continue focus on bringing in more therapy, more therapy services across that K-12 footprint, not only in Florida but around the United States. So we feel really good about where that business -- what the opportunity is in the Education business and where that business is going to be as we go throughout the rest of the year.

Okay. That's helpful commentary. And just lastly, I want to ask about the organic growth drivers. You mentioned organic growth drivers gaining traction. If you could provide a little more color on that? And then related to that. You mentioned the strength of the pipeline. And can you maybe talk about how broad-based that strength is across your various businesses?

Yes, sure. So first, the growth office has been moving quickly. And it's a foundational quarter for us as we begin to put in this integrated commercial operating framework. There is some work we've been doing aligning incentives, obviously, the commercial team, some of the account management teams, putting more rigor around our pipeline management and account planning is all in motion. We will move, as I mentioned earlier, all of our commercial teams to this new CRM platform. And that will give us the visibility that we need to continue to drive the business forward and make sure we've got resources in the right places, not only to go close deals, but also to go and make sure that we're delivering and providing excellent service. The strength in the pipeline continues -- we continue to see a lot of demand for customers looking for total talent management solutions, the robustness of our MSP pipeline is very strong right now. You saw that in the big oil and gas win we had in the quarter. And interestingly, that was not a price-based win. This was a differentiation around our tech stack, our reach and the differentiation of our core -- of our core offering. And we continue to see more and more large global customers coming to Kelly for those total talent management solutions. We hinted earlier our telecom and engineering pipelines continue to be very strong in SET, and we're going to likely continue to see that. We have an opportunity to continue to drive more pipe in our technology business. In our K-12 staffing pipeline continues to be very strong for net new -- net new school districts, and we've seen a nice jump in the amount of therapy opportunities that we're seeing tied to some of our larger school districts. So at a high level, that's how I'd characterize some of the momentum that we're seeing, and Pat in the growth office are going to continue to drive as we go through the remainder of the year.

Okay. That's good to hear. Thank you for the comments.

Thanks Kevin.

[Operator Instructions] Our next question is going to come from the line of Joe Gomes with NOBLE Capital.

This is George [ Pres. ] I'm filling in for Joe Gomes this morning. So first question I have for you. What have the Hunt companies brought to the table so far?

Yes. Great. Well, as you would have seen a few weeks ago in our filing, we -- later today, we'll be in our annual meeting. The Board has nominated 11 individuals for election to the Board, 3 new members will be joining. Really excited about the extensive experience that the Board brings. Some of our new Board members are bringing to really help with our strategic execution, our long-term value creation, and I'm personally really excited to work with the new Board. As the Hunt's have shared, they continue to express their support of our management team, the strategic direction that we've outlined. And there's been no change, right, to our business strategy, our client relationships, our operational approach, and we're all focused on driving shareholder value. And that's -- and we're excited to bring in this new slate of directors later today.

All right. Great. And the early days of your new Chief Growth Officer, Pat McCall, how have they been?

You know really well. And we talked a little bit about this in terms of setting some of the foundation for the commercial operating framework. There's a lot of opportunity for Kelly to show up as one global enterprise. 1 Kelly enterprise to all of our large customers. And so we're putting in the foundation right now, stronger account planning, more rigorous pipeline management, all of the things that will contribute to our growth, and we're really excited about what this will mean to our future.

Thank you. And I'm showing no further questions. And I would like to hand the conference back over to Chris Layden for closing remarks.

Great. Thank you all. We'll see you next quarter.

This concludes today's teleconference. Thank you for participating, and you may now disconnect. Everyone, have a great day.