Good day and welcome to the Kforce second quarter 2022 earnings conference call. Today's call is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad. If you would like to withdraw your question, you may press star one again. I would now like to turn the conference over to Joe Liberatore, President and Chief Executive Officer. Please go ahead. Good afternoon. This call may contain certain statements that are forward-looking. These statements are based upon current assumptions and expectations and are subject to risk and uncertainties. Actual results may vary materially from factors listed in Kforce's public filings and other reports and filings with the Securities and Exchange Commission. We cannot undertake any duty to update forward-looking statements. You can find additional information about our results in our earnings release and our SEC filings. In addition, we have published our prepared remarks within our investor relations portion of our website. I'm pleased with our solid overall performance in the second quarter, which was fueled again by significant sequential and year-over-year growth in our technology business. There is no doubt that the macro environment has become a bit cloudier over the last several months with persistent historically elevated levels of inflation, which has been at least partially fueled by stimulus activities throughout the pandemic and the continued crisis in Ukraine, significantly rising interest rates, and ongoing supply chain challenges. These and other factors have raised concern as to the pace of overall economic growth. We believe that we are ideally positioned heading into this uncertain macro landscape however it ultimately plays out. Our confidence is grounded in our strategic position with nearly 90% of our business concentrated in providing high-end technology talent solutions to a diversified set of world-class companies in attractive end markets, a debt-free balance sheet, and improved profitability levels that gives us the flexibility to continue investing in our business. To that end, it's important to remember that flex revenues in our technology business, which comprised roughly 50% of overall revenues at the time, was only down 7% during the 2008-2009 financial crisis. In 2020, comprised 75% of overall revenues and was virtually flat when economic growth abruptly contracted. The growing strength in the secular drivers of the demand in technology, which the pandemic has only accelerated further, gives us confidence that we are relatively insulated during adverse economic times. Technology remains core to all business strategies regardless of industry, and we don't see that changing. A recent CIO survey conducted by JP Morgan released in June indicated that companies continue to expect to invest in their technology initiatives in 2023 and, in fact, may look to accelerate investment. Those companies projected to outperform in their respective sectors are dominating digital transformation efforts, which aligns very well with our business and the clients that we serve. While there may be pockets of softening in select industry or clients, on the whole, we remain confident. Our second quarter performance in technology indicates that we are continuing to capture significant market share. Despite some moderate slowing in our activity levels in the second quarter compared to the historically high demand we were experiencing in 2021 and early 2022, activity levels are largely outpacing pre-pandemic levels. My sincere thanks go out to our leadership team and associates for continuing to stay true to our strategic vision and for their relentless execution, even as they are confronted personally with some of the macroeconomic instability. Our team continues to have a meaningful impact on all the lives we serve. The war for technology talent is real, with far more open jobs than available skilled talent. Our recruiting core competency, focused service offerings, and freedom from the distraction of acquisition integration or any non-complementary business has been a true differentiator to our consistent outperformance over the past few years. Our plans continue with the implementing of our hybrid office model that we call Office Occasional with the opening of all our field offices in Q2. Our unique environment provides our people with maximum flexibility and choice in designing their workday that is grounded in our trust in them and supported by technology. We're an industry leader in the technology talent solution space, delivering superior financial results and offering maximum flexibility supported by state-of-the-art technologies to current and future top talent in designing their workdays. We believe these factors, among others, will position Kforce as a destination for top talent. The strategic decision coming out of the financial crisis to accelerate our focus on technologies has continued to position Kforce as a top performer. Our path forward is clear, and we remain consistent with the principles under which we've been operating so successfully. In servicing our customers, there is simply no other market we want to be focused on other than the domestic technology talent solution space that has, in our view, the greatest prospect for sustained growth. We have the right team in place to capture additional market share within what we believe will be a continued strong demand environment for our services. Kye Mitchell, our Chief Operations Officer, will now give greater insights into our performance and recent operating trends. David Kelly, Kforce's Chief Financial Officer, will then provide additional detail on our financial results as well as future financial expectations. Kye? Thank you, Joe. Our results in the second quarter show continued success as overall revenues grew 8.2% year-over-year. Our planned COVID-related runoff negatively impacted our year-over-year growth rate. Excluding that decline, our overall revenues would have grown 18% year-over-year. Technology continues to be the key driver to our success. We grew our technology business approximately 7% sequentially and 24% year-over-year off increasingly difficult prior year comps. We have continued to drive high levels of compounded growth in our technology business. Our technology business has grown organically almost 50% over the last two years. This was on top of the revenue stability we experienced throughout the pandemic. As Joe mentioned, our business not only performed exceptionally well leading up to and throughout the 2020 pandemic, but also during the 2008, 2009 Great Recession. We believe this demonstrates a stronger correlation of the secular demand drivers in technology to our business than fluctuations in the macroeconomic environment. Our technology growth has exceeded the industry growth benchmarks for over 15 years and has been consistently near or at the top of our industry since the pandemic. Our clients are reluctant to lose key resources even during challenging macroeconomic environments because of the mission-critical nature of the projects and the consultants. 2021 and early 2022 proved to be the strongest demand environment I have seen in my 30-year career in the technology space. Accordingly, our activity levels and trends were also at historically high levels. While our recent operating trends and activity levels have moderated to a degree, demand remains strong and still largely above pre-pandemic levels. We experienced continued acceleration in our average bill rates, which grew 2.4% sequentially and just over 8% year-over-year to approximately $87 per hour. The elevated bill rates have not impacted the demand environment for highly skilled talent, which we believe supports how critical these resources are to our clients' strategic priorities. With less geographic constraints, our talent pool of candidates continues to increase. We continue to see acceleration of critical technology initiatives with our clients in areas such as cloud, digital, UI/UX, data analytics, project and program management. Our conversations suggest that clients must and will continue to make significant technology investments to remain competitive. We continue to see solid demand for our managed teams and Project Solution's capabilities and expect to make continued investments in this strategic offering. As we exited the second quarter and into the third, we saw continued strength in virtually all industries we support. We have a very diverse client portfolio servicing 70% of the Fortune 500 and have no significant concentration in any one particular industry. While we may be susceptible to short-term disruption with specific clients within our portfolio or industry-specific dynamics, we expect our diversification to serve our shareholders well over the long term. We expect third quarter revenues into our technology business may grow in the mid-teen range on a year-over-year basis on more difficult comps. Overall, our FA business declined 44% year-over-year. The growth rate was negatively impacted, as expected, by declines in COVID-19 revenues. These revenues contributed a trivial amount of revenue in the second quarter of 2022 and nearly $35 million in the second quarter of 2021. Excluding this impact, our overall FA business declined 10.7% year-over-year, largely due to our repositioning efforts. While new assignment starts were down in the second quarter as we continued to reposition the business, we saw an 8% sequential increase and 25% year-over-year increase in our bill rates to over $47 per hour. Due to our continued focus on investments in our technology business, we expect overall FA revenues to decline in the low double digits sequentially and may be down 35% year-over-year in the third quarter. As a reminder, the third quarter of 2021 included $7.5 million of COVID project revenue. We continue to support our FA business and improve its alignment with our technology business. However, our near-term expectation is for continued revenue declines in FA. The investments we continue to make in our strategic priorities, along with process improvements to increase productivity levels in our tenured associates, provide capacity to grow. We have supported and retained our best people, and as Joe mentioned, we have made significant changes to give our employees flexibility and choice in our new Office Occasional work environment. This is reflected in our top-ranked Glassdoor score, which includes the highest scores amongst our competitors across all seven measurement categories, including areas like diversity and inclusion and culture. I am grateful for the trust our clients, consultants, and candidates have in Kforce. I would like to thank our amazing people who continue to deliver our great results. They are the backbone of our success. I will now turn the call over to Dave Kelly, Kforce's Chief Financial Officer. Dave? Thank you, Kye. Second quarter revenues of $436.5 million grew 8.2% year-over-year. Earnings per share was $1.30, which included a $0.14 gain recognized as a result of the termination of our outstanding interest rate swaps and reflects an increase of 30% year-over-year. Gross margins increased 50 basis points year-over-year to 30% in the second quarter, primarily due to a greater mix of direct hire revenues as flex gross profit margins were generally stable. We also saw a sequential improvement in overall gross profit margins due to strength in direct hire revenues and flex margins due to seasonally lower payroll taxes. While direct hire revenues, which constitute less than 4% of total revenues, are not expected to continue growing at this pace, we believe our nearly 90% concentration in technology revenues is notable and provides significant margin stability due to the desire by our clients to increasingly engage us for projects critical to their ongoing success. Flex margins in our technology business have essentially been unchanged over the past year. Top technology talent remains scarce, and we've continued to see wage increases. We've been able to pass through these increases in our bill rates due to the critical work our consultants perform. We're also benefiting from a lower percentage of overall payroll taxes than we've seen historically due to technology being a higher percentage of overall revenues. Our ability to derive more revenues on average from each billable consultant through higher bill rates and longer assignment duration contributes to the reduced percentage of these costs and results in a structurally higher quality revenue stream that we expect to continue going forward. Flex margins in our FA business expanded 210 basis points year-over-year due to a decline in the lower margin COVID project work and our repositioning efforts. As we look forward to Q3, overall gross margins are expected to decline due to typical seasonal declines in direct hire revenues and slightly lower technology flex margins. In 2021, and in the first half of 2022, we experienced historically high level of average hours worked by our technology consultants. In the third quarter, we expect to experience a slight decrease in average hours worked due to high utilization of paid time off during the summer period. Overall, SG&A expenses increased as a percentage of revenue by 100 basis points year-over-year due to a 50 basis point gain recorded in the prior year as a result of the sale of our corporate headquarters. Higher levels of performance-based compensation as a result of strong financial performance, as well as continued high levels of technology investments to support our business going forward. We expect SG&A expenses as a percent of revenue to be fairly stable sequentially and year-over-year. Our second quarter operating margin was 7.8%, which was slightly improved over the prior year after normalizing for the 50 basis point gain on the sale of our corporate headquarters last year. Our effective tax rate in the second quarter was 26.3%. Our business continues to generate significant operating cash flows, which were $32 million in the second quarter, and our accounts receivable portfolio continues to perform exceptionally well. We continue to prioritize the return of capital to our shareholders. During the quarter, we paid $6.1 million in dividends and repurchased $9.3 million in Kforce stock. Our return on invested capital was approximately 48% in the second quarter. The strength in our balance sheet and availability under our $200 million credit facility allows us to be opportunistic in returning significant additional capital to our shareholders while continuing to evaluate potential tuck-in acquisitions. With that said, our belief is, and our results suggest, that a focus on organic growth provides us the best opportunity for long-term success. Given our confidence in our future prospects, we expect to remain active in repurchasing our shares. With respect to guidance, the third quarter has 64 billing days, which is the same as the second quarter of 2022 and the third quarter of 2021. We expect Q3 revenues to be in the range of $430 million-$438 million, and earnings per share to be between $1.03 and $1.11. Our guidance does not consider the potential impact of unusual or non-recurring items that may occur. We continue to be excited about our future prospects and believe we're well-situated for the short and long term. Our financial performance has put us in an ideal position to continue to make incremental investments in our business, both in terms of technology and our people, both of which we believe benefit our shareholders in the long term. During our Q4 2021 earnings release, we indicated that we expected that 2022 revenues would be at least $1.7 billion and that earnings per share would be at least $4.20. Should the demand environment remain strong and full year trends remain stable with second quarter levels, we would expect to meet or exceed those levels for the full year. Overall, we believe our strategy has put us in an exceptional place, even with the ongoing macroeconomic uncertainties. We believe the strategic decision to focus our business in providing domestic technology talent solutions is paying huge dividends. Our shareholders continue to benefit from our strong performance and efficient capital allocation. On behalf of our entire management team, I'd like to extend a sincere thank you to our teams for their efforts in continuing to outperform market expectations. Operator, we'd now like to turn the call over for questions. Thank you. As a reminder everyone, that is star one on your telephone keypad to ask a question. We'll take our first question from Tim Mulrooney with William Blair. Hey, this is Sam Kusswurm. I'm on for Tim. Thanks for taking our questions here. Just have a few questions tied more to your guidance and recent trends. I was hoping you could share first more detail on the types of activity you saw slow down or moderate in the second quarter, maybe if there are any specific projects or client groups attached to that activity. Second, could you share what kind of macro environment is contemplated in your third quarter guidance and how you compare that to the second quarter? Hi, it's Kye. I'll start with the industry question first. We saw growth in every one of the industries we support except for one. We had a tiny dip sequentially in healthcare, but healthcare was pretty much client-specific. We had a client that we had a little bit of decline in, but other than that, we still saw strong growth in each of the industries we support. From the macro environment, we're still seeing strong trends. You know, we're still above where we were pre-pandemic. We still see strong demand, especially in the areas that we're focused on, like digital, cloud, big data, good demand in all those spaces. We feel good about where we're going in the macroeconomic environment. Yeah. Sam, the other thing that I would add to that, as Kye said, we expect as we move into the third quarter, certainly we've seen it, now that we're a month into the third quarter, a very good demand environment, particularly technology. If I had to differentiate it a little bit, I would say the last year or so obviously has been a demand environment probably better than we had ever seen. Things certainly are not at those really heightened levels, but as Kye mentioned, they continue to be very strong and better than they were prior to the pandemic. Just to put a little finer point on what you said. Yeah. When you look at it, we're still up 50% over the last two years in technology, which I think is incredible. I'm really proud of the team for those results they've delivered. We think so as well, and that's definitely helpful commentary. Maybe just more specifically then, for some of your more partner clients where you provide a lot more of those long-term project support, how have recent conversations gone? Are there any that are considering pausing or maybe even scaling back some of their IT projects? Is it still just a full steam ahead? The project space is still going strong. It's still accelerating at a faster pace than any of our other business. We feel really good about where it's going, demand in all of our verticals, and again, focused in those tech stacks we support. Project Solutions is moving very quickly. Yeah. I'd say it's even beyond, this is Joe, beyond Project Solution, the overall business as a whole, to date, we really haven't seen any shift in demand across the board. It's not just on projects or solutions-oriented business, it's on the core staffing business as well. Our client sentiment still remains very positive. I mean, as we've stated before, these initiatives that they're focused on, they're mission critical. They're not optional. They're necessary for competitive purposes. We're seeing the clients continue to move forward in driving all their technology initiatives. Excellent. Appreciate it, guys. Thank you, Sam. Thank you. We'll take our next question from Kartik Mehta with Northcoast Research. Hi, good afternoon. I was just, you know, wondering about wage inflation. I know, you know, you've had a good year-over-year growth rate and bill rate, and I'm wondering what you're seeing, if you anticipate some moderation or the trend to continue. Yeah. I would say what we've seen from a wage inflation standpoint is, you know, 2021 and the early part of 2022 were probably the highest levels of wage inflation that I've seen in, you know, my 34 years in this industry. I think we just got an ISI report earlier this week. I mean, even if you go back to 1985. What we started to see is more moderation there. While wages are still continuing to inflate, they're not inflating at the same pace that we were seeing. I, you know, I mean, even when I look back to the dot-com era, which was probably the highest wage inflation environment that we had experienced from that point, and really we've never seen anything comparable to the dot-com era. You know, what we experienced these last, probably 18 months were even unlike anything we experienced there. We do see more moderation coming into play at this point in time. Yeah. I would say, I apologize, just to follow on to Joe's point. As we think about our flex ible margins as it relates to wages, right? We've had very stable, in particular in technology, flex ible margins. I guess as I think about it, if we see a further slowing, if we see a further acceleration, right? Margins have been very stable. As we think about the prospects on a move forward basis, our ability to continue to work with our clients to make sure that we're adjusting as necessary has put us in a really an excellent environment to look forward and expect to execute and continue to do so in this margin profile. Yeah. Just, one last question. Just ability to find people, I know that's been an issue for everybody, and I'm wondering if you're seeing any easing in that or just the industry you're in, it just continues to be difficult. I mean, in the technology business, it's still extremely competitive. We are seeing a little bit of ease in it, but it's extremely competitive. There's still negative unemployment in the technology space. I think we're gonna continue because there is such a robust pipeline in the areas that we support. You're gonna continue to see some candidate challenges there. What I would add to that is, over the better part of probably the last five years, as we cranked up all of our innovation strategies. I mean, this is an area where we've invested tens of millions of dollars, where we're continuing to invest in tools, processes, and technologies to equip our people so that we can leverage everything that's evolving in the marketplace so that our people have the most sophisticated tools to be able to get after candidates quickly, how they leverage the different platforms and tools that we're bringing on board. This is an area that we really emphasize, because we view that this is an area where automation and technologies can really fuel a lot in driving productivity and performance of our people. This is front and center, it's core to what we do. People ask me all the time, you know, if you were to say, what is Kforce's number one core competency? It's recruitment. It's at the heart of what we do. It's what differentiates us from the big solutions providers out there, which is why, you know, a lot of the big solution providers actually leverage Kforce as a third party to help them find talent because, you know, to find the just in time talent in the marketplace, that's what we do for a living, and it's what our people are just absolutely phenomenal at. Even against that backdrop that Kye was talking about, we feel very confident in our ability to continue to attract and identify top talent in the marketplace. Thank you very much. I really appreciate it. We'll take our next question from Marc Riddick with Sidoti & Company. Good afternoon, everyone. Good afternoon. I wanted to touch a little bit on if you could talk a bit about the visibility that you're seeing. I think in the prepared remarks, there was a comment around the duration, the assignment duration. I was wondering if you could talk a little bit more about that, maybe what you're seeing and maybe what that mix is looking like or how has that been sort of evolving? We continue to see our technology assignment duration continue to expand. What our people do is so critical to our clients that they wanna hang on to that talent, and we have not seen much of a change in that. Once we get them in there, they wanna keep them, they wanna keep that intellectual capability and they continue to hang on to our people. I don't see that changing anytime soon. We're really supporting mission-critical systems. People are still investing in digital transformation. They still have to move to cloud. As we've gone throughout the year, we're continuing to see our assignments lengthen as our focus is there on tech. 90% of business in tech, we continue to see that duration. Mark, I would add to what. This is David Kelly. I'd add to what Kye said. Really over the last five years, that length of assignment is really doubled, right? I think it's a reflection of some of the comments that Joe has made, and as has Kye, as to the scarcity of talent. Clients are looking for firms such as Kforce to meet the solutions that they require to drive their business and digital transformation initiatives and across many other areas as well. They understand our competency, as Joe said, in finding those people, and once they have them on site, they don't wanna lose them because they're hard to find. For us, we look at the average length of assignment here, having increased is something that's probably here to stay. I would add on to that as well, because I think this is a key point that that Dave and Kye didn't touch upon, is we are continuing to see our clients convert our consultants. And again, you know, I've stated this for years now, I think there's no greater compliment to our team's performance than when we put somebody on a contract assignment and that person converts into full-time because that means we've really made a great match. You know, our conversions are up 37% year-over-year. I had commented on this, I believe, in our last earnings call, where we saw that we had kind of moved back to pre-pandemic levels. We're operating at higher than pre-pandemic levels right now. I think that also is indicative of where the client confidence is in terms of the technology initiatives that they're investing within. You know, these growth rates that we're throwing up are even in spite of those high volumes of consultants that are converting. I think that also gives us a feel for what the demand environment and how robust the overall needs are within the marketplace. Okay. That's very helpful. Thank you so much, everyone. I wanted to shift gears. I know that you've got quite a bit on your plate and a lot to take advantage of going forward internally. I did wanna touch on maybe what your thoughts were as to the current views on a potential for acquisitions and maybe what that acquisition pipeline looks like, whether that's commentary on pricing and maybe some of the competition for assets, things of that nature, and how that maybe has evolved through the year or maybe what you're seeing there. Thank you. Yeah. Yeah, Mark, David Kelly again. I guess I'd start by pointing out that we actually haven't made an acquisition in over a dozen years. That is, to us, a reflection of, you know, we've actually spent quite a bit of time focusing on building an organically growing machine focused in technology and have been quite successful at it. As you might expect with those types of results, I think Joe touched on it, right, 50% growth like Kye did over the last two years, and exceptional performance of our teams, it makes it very difficult to think about an acquisition that you might do, that might be additive to that type of performance. Typically, acquisitions come with integration. Acquisitions come with the use of cash. You know, we've been very consistent in our capital allocation strategy. We've increased our dividends, I think four or five times over the last couple of years. We've been very consistent on buying our stock. We think that has been a great investment for us. The bar is extremely high. Certainly we're looking at opportunities, but I think just the fact that we have been in an environment where we haven't done anything in years speaks volumes as to where we think the best use of our cash is. I don't have any expectation in the near term that that's gonna change. Okay, great. Last thing for me, I wanted to just touch on the commentary around what you're seeing with the Office Occasional and what's taking place there, and maybe if you could sort of give some thoughts or views as to how that's evolved, whether that's been in line with what your expectations have been or maybe what you're seeing as far as activity. Because I would imagine it would probably vary a bit, but maybe you could talk a little bit about what you're seeing there as to how folks are utilizing that. Thank you. Yeah. I would say that our Office Occasional strategy, which again, we've been after since really May 2020. We went right forward with this, and that was based upon feedback that we were hearing from our people in terms of what their desire was on a move forward basis. Even although there was still a lot of noise, but then we kind of surveyed throughout the pandemic. I would say Office Occasional at this point in time has exceeded our expectations when we look at how our teams have embraced it. All the technology initiatives that were associated with our Office Occasional model have really rolled out in a flawless manner. You know, we are a Microsoft shop and very centric with Microsoft, so we kinda had a philosophy as we went through that process that if technology we were looking at, if Microsoft could accommodate 80% of what our outcome we were looking for, we would stay with Microsoft and in the Microsoft ecosystem. I'm telling you, there's a great video that just I think hit the web last week, Microsoft CEO talking about, in essence, what they're really doing is doubling down on Teams and everything integrating into Teams and third-party partners that they're bringing onto their platform. You know, part by strategy and part by faith, we find ourselves in just such a great spot in terms of where we are with the technology, where we are with our people's attitudes and embracing, where the trust level is within Kforce. Then a big part of this as well is adjusting all of our processes and how we apply the technologies to our processes to really make it seamless that people can communicate and integrate, whether they're in office or whether they're working from the beach or whether they're working from their kitchen table, wherever they might be, and our people have embraced it. I'll tell you today, we were interviewing. I personally was interviewing a very high-level technologist for an opportunity that we have, and this was an area where he had great interest in understanding where we were and what we were doing. There's no question, directionally, this is where the marketplace has gone. This is what the employees have expressed their desires are, and we've embraced it. I think that's really put us in a really unique spot at this point in time. Excellent. Thank you very much. Sure. As a reminder, everyone, that is star one to ask a question. We'll take our next question from Tobey Sommer with Truist Securities. Hey, good afternoon. This is actually Jasper Bibb on for Tobey. Maybe just following up on Sam's questions from earlier with financial services being the largest vertical, could you just comment on how you expect demand in that segment to trend over the balance of the year? We've seen good growth in financial services and don't have any reason to see that changing. Demand's still strong. We're still growing there. Financial services is going well. You know, I think in the FA space, there's a little bit of change with just the mortgage industry, but fortunately, we're so focused in on technology, it hasn't had an impact at all on us. Yeah, I would say, when you look at the financial services space, you really have a couple of factors going in there, right? There's so much happening within fintech. And then you have the larger financial entities that are having to invest substantial into their technology platforms to combat what's taking place within fintech. I think when you put all that together, you really have positive drivers on really the innovation side within financial services, even the legacy side of what organizations are having to do. I mean, as we all know, it's not just the largest segment for Kforce. I mean, financial services is the largest segment from a professional staffing and solution standpoint from a demand out of any industry that's in the marketplace. We feel very good, and that's one of the areas where we have really depth and breadth of long-standing relationships. Our teams have done a great job on forging those relationships and really working with organizations to understand where their priorities are and where their investments are necessary and aligning in and around those opportunities. Got it. I just wanted to ask about the repositioning of FA Flex. Based on your guidance, looks like it's gonna be down pretty steeply in the third quarter and sounds like again in 4Q. Are you expecting that kind of rate of decline to level off in 2023, or would you expect that business to kinda continue to be in decline over the medium term? Yeah. This is David Kelly. I would say this. You know, this has been actually for us a really important part of our story, especially as it relates to modifying and repositioning that, what it's done to help our technology business. As we look at our strategy moving forward, we had alluded to the fact that we, as you point out, would expect to see declines in the third quarter. For us to continue to fortify our efforts in technology while at the same time supporting the clients that we have in finance and accounting, I think just reflective of the success that we're having in growing our technology business, it stands to reason that strategy is something that we should continue. I think as I look at the trajectory of the business as a whole, placing our bets and making sure they're investing in technology, I think we're growing and continue to grow at double market rates there, in some respects because of the focused investment there, and sometimes at the expense of Finance and Accounting has been a good decision. Yeah, I think I would tell you, obviously, that lack of investment has resulted in some of these trends, and I don't know that they would necessarily change from current state right now. Yeah. What I would add to Dave's comment is, you know, our strategy, as we've conveyed, in prior quarters, is to continue to reposition our FA business, and really migrate it towards that higher skill roles that are more synergistic with our technology business. We believe that really diverting our resources away from the transactional space, which is more susceptible to automation and much more economic sensitive, will really pay dividends for us in the long term. I mean, I think the team has done a really nice job. We've experienced good progress, albeit not at the pace to offset the runoff of that legacy FA footprint. I mean, our average bill rate in FA is now approaching $50 an hour, which is up significantly, both sequentially and on a year-over-year basis. I think we're also benefiting from a higher Flex gross profit margin, you know, which increased, I think it was 210 basis points year-over-year as a result of our repositioning. I think our team has done a really nice job. But again, we're playing for the long game here on, not on a quarter-by-quarter basis, and we're gonna continue to make the right strategic calls to move our business forward. Okay. Appreciate the color there. Thanks, everyone. We'll take our next question from Mark Marcon with Baird. Hey, this is Andre Childress on for Mark. Thank you for taking our questions, and I'm sorry if any of these questions have been asked already because I hopped on late. You gave some, you know, great numbers in terms of how IT flex has held up during prior recessions. I was wondering if you could give some commentary about how you would think the repositioned F&A business would hold up, you know, in a recession, and kind of how far are you on that reposition journey? At what point do you think that will inflect back to growth? Yeah, I would say, again, this goes back to where we're migrating. Our FA footprint is very synergistic with our technology footprint, more specific on the data side of the equation. You know, I think when everything that we hear from our end customers and everything that I'm reading, whether it's McKinsey or it's Gartner or anybody else, I mean, the area of how people are looking to leverage their data, understand their data, even in a more difficult environment, those needs probably don't go away. In fact, they probably become more critical on driving intelligent business decisions. Again, this was a big part of why we went after the repositioning of our business to get away from what historically had been a more transactional business for us, which is highly susceptible to economic times and economic cycles. Great. Thank you. Just, I guess one little follow-up there, just following up on that question is, I guess when do you expect that business to kind of just inflect back to growth? Kinda how far do you think you are along with that transformation journey, and how is that resonating within the client base? Well, I think to answer your last questions first, I think it's resonating well. We talked about average bill rates of $50 an hour. As Joe, I think, just mentioned, it is much more synergistic with our technology business. It's quite frankly, certainly from our perspective, more less, I would say, economically sensitive, so certainly resonating with our clients. So that business in and of itself is doing, you know, I think well. I mean, we had indicated in the third quarter that the trends at F&A are gonna decline because of the investments we're continuing to make in technology. We expect that to continue. Could it go down further from where it is in Q3? Sure. That's not gonna be a bad investment for us because we think it'll be additive to our technology business. Great. Thank you so much. That concludes the question and answer session. I'd like to turn the call back over to Joe Liberatore for any additional or closing remarks. Well, thank you for your interest in Kforce and support of our firm. I'd like to say thank you to every Kforcer for your extraordinary efforts and to our consultants and clients for your trust in Kforce and partnering with you and allowing us the privilege to serve you. We look forward to talking with you again after our third quarter of 2022. That does conclude today's presentation. Thank you for your participation. You may now disconnect.