Kforce (KFRC) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01The U.S. professional staffing and solutions industry in which we operate is significantly affected by fluctuations in general economic and employment conditions
2. 02Significant declines in business or a loss of a significant client could have a material adverse effect on our revenues and financial results
3. 03Kforce’s current market share may decrease as a result of limited barriers to entry for new competitors and discontinuation of clients looking to outside providers to support their talent needs
4. 04New business initiatives and strategic changes may divert management’s attention from normal business operations or may not be successful, which could have an adverse effect on our performance
5. 05Our planned nearshore and offshore strategies expose us to additional business, financial, regulatory, geopolitical and other related risks, which may have a material adverse effect on our business
6. 06Kforce may not be able to recruit and retain qualified consultants and candidates
7. 07Kforce faces significant employment-related legal risk
8. 08Kforce may not be able to utilize the services of our third-party suppliers
9. 09Kforce may be adversely affected by utilizing third-party software providers
10. 10Kforce may be exposed to unforeseeable negative acts by our personnel that could have a material adverse effect on our business
11. 11Kforce’s success depends upon retaining the services of its management team and key operating employees

Risk Related to Cybersecurity and Technology

1. 12Cybersecurity risks and cyber incidents could adversely affect our business and disrupt operations
2. 13Kforce depends on the proper functioning of its information systems
3. 14Use of AI may result in operational challenges, legal liability, reputational and privacy concerns, and competitive risks

Risks Related to Legal, Compliance and Regulatory Matters

1. 15Kforce may be adversely affected by immigration restrictions and reform
2. 16Reclassification of our independent contractors by tax or regulatory authorities could have a material adverse effect on our business model and/or could require us to pay significant retroactive wages, taxes and penalties
3. 17Significant increases in wages or payroll-related costs could have a material adverse effect on our financial results
4. 18Adverse results in tax audits or interpretations of tax laws could have an adverse impact on our business
5. 19Kforce may be adversely affected by government regulation of our business and of the workplace
6. 20Significant loss or suspension of our facility security clearances with the federal government could lead to a reduction in our revenues, cash flows and operating results
7. 21Failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting
8. 22Provisions in Kforce’s articles and bylaws and Florida law may have certain anti-takeover effects
9. 23Our business could be negatively affected as a result of activist shareholders
10. 24Kforce’s stock price may be volatile
11. 25Increased scrutiny and changing expectations from stakeholders with respect to ESG practices and the impacts of climate change may result in additional costs or risks
12. 26Kforce may maintain levels of debt that exposes us to interest rate risk and contains restrictive covenants that could trigger prepayment of obligations or additional costs
13. 27Adverse changes in credit markets, including increases in interest rates, could increase our cost of borrowing and/or make it more difficult to refinance our existing indebtedness, if necessary