Kforce (KFRC) risk factors, FY2025 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. 02Our business depends on client demand for our solutions and services, including evolving our solutions and services in response to continued changes in technologyNew
3. 03Significant declines in business or a loss of a significant client could have a material adverse effect on our revenues and financial results
4. 04Kforce’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
5. 05New 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 performance29% rewritten
6. 06Our 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
7. 07Kforce may not be able to recruit and retain qualified consultants and candidates24% rewritten
8. 08Kforce faces significant employment-related legal risk
9. 09Kforce may not be able to utilize the services of our third-party suppliers
10. 10Kforce may be adversely affected by utilizing third-party software providers
11. 11Kforce may be exposed to unforeseeable negative acts by our personnel that could have a material adverse effect on our business
12. 12Kforce’s success depends upon retaining the services of its management team and key operating employees

Risks Related to Cybersecurity and Technology

1. 13Cybersecurity risks and cyber incidents could adversely affect our business and disrupt operations
2. 14Kforce depends on the proper functioning of its information systems
3. 15Use 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. 16Kforce may be adversely affected by immigration restrictions and reform
2. 17Reclassification 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. 18Significant increases in wages or payroll-related costs could have a material adverse effect on our financial results
4. 19Adverse results in tax audits or interpretations of tax laws could have an adverse impact on our business37% rewritten
5. 20Kforce may be adversely affected by government regulation of our business and of the workplace
6. 21Significant 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. 22Failure to maintain adequate financial and management processes and controls could lead to errors in our financial reporting
8. 23Provisions in Kforce’s articles and bylaws and Florida law may have certain anti-takeover effects
9. 24Our business could be negatively affected as a result of activist shareholders
10. 25Kforce’s stock price may be volatile
11. 26Increased 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. 27Kforce 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. 28Adverse 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