Kelly Services, Inc. (KELYB): BCG Matrix [Dec-2025 Updated]

You're looking for a clear-eyed view of where Kelly Services, Inc. (KELYB) is placing its bets as of 2025, so let's map their core business segments onto the BCG Matrix. The Science, Engineering & Technology (SET) unit, powered by the $425 million Motion Recruitment Partners deal, is clearly a Star, boasting 19.4% revenue growth and the top 25.6% gross margin, demanding capital for that high-growth play. Conversely, Kelly Education and KellyOCG are the dependable Cash Cows, generating stable cash with a 4.5% EBITDA margin, requiring less investment now. Honestly, the traditional Enterprise Talent Management (ETM) segment is a Dog, shrinking 5.1% organically in a mature market, while the organic side of SET and the U.S. federal business are risky Question Marks, showing organic declines of 8.5% and 1.4% respectively, needing tough decisions on investment.

Background of Kelly Services, Inc. (KELYB)

You're looking at Kelly Services, Inc. (KELYB), a major player in the specialty talent solutions space, headquartered right in Troy, Michigan. This company connects a massive number of people-over 400,000 annually-with work through its global network of partners. To give you a sense of scale, Kelly Services posted revenues of about $4.3 billion back in 2024, showing its significant footprint in the staffing industry.

Kelly Services operates through specialized business units designed to meet specific market demands. The core areas you need to track are the Education segment, the Science, Engineering & Technology (SET) segment, and the Enterprise Talent Management (ETM) segment. The company has been actively pursuing a specialty growth strategy, which has involved acquisitions like Motion Recruitment Partners, LLC ("MRP") in 2024, which boosted reported revenue figures in early 2025.

Looking at the most recent data as of late 2025, the operating environment has presented some headwinds. For the third quarter of 2025, Kelly Services reported total revenue of $935.0 million, which was a year-over-year decline of 9.9%. Honestly, the underlying revenue decline, stripping out discrete impacts from certain large customers and U.S. federal government contractors, was closer to 2.0% for that quarter.

The performance across the segments tells a mixed story, which is key for our matrix analysis. The Education segment proved to be the bright spot, showing modest year-over-year growth of about 0.9% in Q3 2025, as the company focuses on resilient markets like K-12 staffing. Conversely, the other two major areas saw declines: the ETM segment experienced the steepest drop at 13.1%, and the SET segment fell by 9.0% in the same period.

Financially, Q3 2025 also included a significant $102.0 million non-cash goodwill impairment charge, leading to a reported operating loss of $102.1 million. Still, management is signaling confidence in its strategic direction by planning to engage in Class A share repurchases in the fourth quarter. The focus now is definitely on driving structural efficiencies and capturing growth in those higher-margin areas that are proving more stable.

Kelly Services, Inc. (KELYB) - BCG Matrix: Stars

You're looking at the Science, Engineering & Technology (SET) segment, and right now, it's definitely positioned as a Star for Kelly Services, Inc. (KELYB). It's a high-growth area, but it demands serious capital to keep that momentum going.

The reported revenue for the SET segment in Q2 2025 shot up 19.4% year-over-year. That big jump is almost entirely thanks to the Motion Recruitment Partners (MRP) acquisition, which closed in May 2024. To be fair, the organic revenue for SET was actually down 8.5% in the quarter, which tells you the market is tough outside of the strategic acquisitions. Still, the reported growth puts it in the high-growth category for the Matrix.

This segment is also carrying the highest profitability torch. Kelly Services, Inc. reported the SET segment's gross profit margin at 25.6% for Q2 2025, making it the leader among the company's divisions. That high margin is exactly why the company is pouring resources here; it's where the future cash cow potential lies, but only if you keep investing heavily.

The strategic move to acquire MRP for $425 million in cash, plus up to $60 million in potential earnouts, was a high-investment play designed to make Kelly Services, Inc. a top-tier IT staffing provider in the U.S. This is the classic Star strategy: spend big now to secure market share leadership in a growing specialty space.

Here's a quick look at the hard numbers for the SET segment in Q2 2025:

The focus for this Star is clear, you need to keep funding the expansion into higher-margin, outcome-based solutions. Kelly Services, Inc. is targeting high-demand sectors like semiconductor and renewables to solidify this leadership. That means continued capital deployment is necessary to fend off competitors and convert this high-growth market share into a stable Cash Cow when the overall market growth inevitably slows down.

• Acquisition cost for MRP: $425 million cash.
• SET Segment Gross Profit Margin (Q2 2025): 25.6%.
• Reported SET Revenue Growth (Q2 2025): 19.4%.
• Organic SET Revenue Decline (Q2 2025): 8.5%.
• Strategic goal: Top 10 U.S. tech talent provider.

Finance: draft the Q3 2025 capital allocation plan prioritizing SET integration costs by next Wednesday.

Kelly Services, Inc. (KELYB) - BCG Matrix: Cash Cows

Cash Cows are the business units that lead their markets and generate more cash than they consume, funding the rest of the portfolio. For Kelly Services, Inc., the Kelly Education segment and the KellyOCG (Outsourcing & Consulting Group) function as these stable, high-share pillars.

The Kelly Education segment is a prime example of a unit generating consistent returns in a mature market. You see this stability reflected in its recent performance. For the thirteen-week period ended June 29, 2025, this segment delivered organic revenue growth of 5.6% year-over-year. This growth is achieved while requiring relatively lower promotional investment because of its established market position. This unit maintains a solid adjusted EBITDA margin of 4.5% in Q2 2025, which is a strong indicator of its ability to convert revenue into cash flow with minimal incremental support needed. Honestly, this is exactly what you want from a Cash Cow; it keeps the lights on and funds riskier ventures.

KellyOCG, the outsourcing and consulting group, is another core component fitting this profile. This business unit is recognized as the No. 1 provider of Total Workforce Solutions in 2024 by HRO Today's Baker's Dozen Customer Satisfaction Ratings. This high-share position in the Managed Service Provider (MSP) and Recruitment Process Outsourcing (RPO) space makes it a stable, high-margin business supporting the specialty strategy. While the overall Kelly Services adjusted EBITDA margin for Q2 2025 was 3.4% on revenues of $1.1 billion, the high-margin nature of the KellyOCG business, which combines MSP and RPO services, is crucial for maintaining corporate overhead and debt servicing.

Here's a quick look at the financial profile of the segment most clearly fitting the Cash Cow description:

The strategy here is to invest just enough to maintain this market leadership and efficiency, not to aggressively chase low-return growth. Investments should focus on supporting infrastructure that drives efficiency, like technology platforms, to further improve that 4.5% margin and maximize cash extraction. You are looking to 'milk' the gains passively from this segment.

The key characteristics supporting the Cash Cow categorization for these units include:

• Kelly Education segment organic revenue growth of 5.6% in Q2 2025.
• Kelly Education segment generating a solid adjusted EBITDA margin of 4.5% in Q2 2025.
• KellyOCG holding the No. 1 market position for Total Workforce Solutions in 2024.
• These units provide the necessary cash to cover corporate administrative costs.

Finance: draft 13-week cash view by Friday.

Kelly Services, Inc. (KELYB) - BCG Matrix: Dogs

You're looking at the Enterprise Talent Management (ETM) segment, which houses the traditional industrial and clerical staffing operations for Kelly Services, Inc. This area fits the Dog profile because it operates in a mature, low-growth market and has demonstrated persistent weakness in its revenue trajectory.

For the second quarter of 2025, the ETM segment reported revenue of $520.20 million. This figure reflected a year-over-year decline of 3.9% on a reported basis, and more critically, an organic revenue decline of 5.1% in that period. That organic drop signals the core business within ETM is shrinking in the current environment.

The segment's performance is clearly a drag on the consolidated results. Management's focus here is on expense management to try and offset these negative revenue trends. To give you the context of the overall company performance that ETM contributes to, the full-year 2024 total revenue for Kelly Services, Inc. was $4.3 billion. This segment's headwinds contributed to the company's Q3 2025 outlook, which projected a total revenue decline of between 5% and 7% year-over-year.

Here's a quick look at how the ETM segment's recent performance stacks up against the total company's reported Q3 2025 results:

The ETM unit includes the core, high-volume, but low-growth staffing areas. When you look at the composition, you see the units that are typically associated with commodity staffing services:

• Traditional industrial staffing.
• Clerical staffing.
• Payroll process outsourcing.
• MSP (Managed Service Provider) services.

The challenges are expected to persist, as the company's Q4 2025 outlook projects a total year-over-year revenue decline of 12% to 14%. This suggests that the pressure on the ETM unit, which saw a 36.7% decrease in Adjusted EBITDA in Q3 2025 compared to the prior year period, will continue to weigh on near-term results.

For you, the analyst, the ETM segment represents a cash trap candidate; money is tied up supporting operations that aren't generating meaningful growth. The strategy here is clearly minimization, as expensive turn-around plans are generally not effective in low-growth markets where share is already low. The focus on expense optimization across the business, including in ETM, is the only logical near-term action to stop the bleeding.

Finance: Review the capital allocation plan to ensure no new significant investment is earmarked for ETM modernization before Q1 2026.

Kelly Services, Inc. (KELYB) - BCG Matrix: Question Marks

These Question Marks represent business areas within Kelly Services, Inc. (KELYB) operating in high-growth markets but currently holding a low relative market share. They are cash-consuming units that require strategic decisions regarding investment or divestiture to prevent them from becoming Dogs.

The Science, Engineering & Technology (SET) segment exemplifies this quadrant. While bolstered by the Motion Recruitment Partners (MRP) acquisition, the organic performance showed significant contraction. For the second quarter of fiscal year 2025, the organic revenue decline for the SET segment was 8.5%. This decline occurred despite the reported revenue growth of 19.4% for the segment, which was primarily acquisition-driven.

A specific drag on overall organic performance was the U.S. federal government contractor business. Reduced demand in this area contributed a 1.4% negative impact to the total company organic revenue decline of 3.3% in Q2 2025. To isolate the core business health, excluding the government impact, the SET segment's organic revenue decline was 3.2%. The forward outlook suggests this volatility persists, with an expected 8.0% negative impact in Q3 2025 due to reduced federal contractor demand.

This high-risk, high-reward area requires significant investment to win large contracts, but has volatile and uncertain growth. The Enterprise Talent Management (ETM) segment also experienced pressure, with organic revenue declining 5.1% year-over-year in Q2 2025, driven partly by federal contractor reductions and demand drops from a few large customers.

The remaining International operations are positioned as Question Marks following the strategic divestiture. Kelly Services, Inc. completed the sale of its European staffing business to Gi Group Holdings S.P.A. on January 3, 2024. This move was intended to sharpen focus on higher-margin areas, but the remaining international footprint, primarily KellyOCG's MSP, RPO, and FSP services in EMEA, represents a low share in the global market where scaling remains an open question without the legacy staffing base.

Here's a quick look at the Q2 2025 segment performance that informs this categorization:

The strategy for these units involves heavy investment to quickly capture market share, especially in areas like the SET segment excluding the federal drag, which saw an organic decline of only 3.2%. Otherwise, these units will continue to consume cash without delivering commensurate returns.

The following operational factors define the current state of these Question Marks:

• SET segment organic revenue decline in Q2 2025 was 8.5%.
• Federal contractor demand reduction caused a 1.4% drag on total Q2 2025 organic revenue.
• ETM segment organic revenue declined 5.1% in Q2 2025.
• Q3 2025 outlook anticipates a 5.0% to 7.0% total revenue decline, including the federal impact.
• The European staffing business was sold in early 2024.

Finance: draft 13-week cash view by Friday.