The big picture: Kelly Services reported a 5.8% year-over-year revenue decline in Q2 FY26 but significantly improved its adjusted EBITDA margin to 3.0% through efficiency gains.

Why it matters: This performance highlights how major staffing firms are navigating a challenging revenue environment by focusing on cost optimization and higher-value service offerings.

Between the lines:

• Revenue of $1.04 billion beat guidance, while adjusted EBITDA margin improved 150 bps sequentially.
• Outcome-based solutions now comprise 40% of Specialty Staffing (SET) revenue, up from one-third.
• The company reduced debt by $52.4 million and expects a return to year-over-year revenue growth in H2 2026.

Staffing & HR impact: Margin expansion through SG&A management and a shift to outcome-based solutions demonstrates a strategic pivot for staffing firms to maintain profitability. This focus on efficiency and higher-value services can influence recruiter mobility and compensation structures.

The bottom line: Kelly's strategic investments in AI-powered CRM and product leadership signal a future-focused approach to talent solutions, emphasizing technology and specialized services.