Thank you for standing by, and welcome to the Kforce Q4 2023 earnings conference call. I would now like to welcome Joe Liberatore, President and CEO, to begin the call. Joe, over to you. Good afternoon. This call contains certain statements that are forward-looking, that are based upon certain assumptions and expectations and are subject to risks and uncertainties. Actual results may vary materially from the factors listed in Kforce's public filings and other reports and filings with the SEC. We cannot undertake any duty to update any 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 relation portion of our website. I am tremendously grateful for the extraordinary efforts of the Kforce team, who executed well in 2023 in an environment that proved to be more challenging than originally expected. Our results, driven by solid execution and a focused business model, also allowed us to continue allocating significant capital towards strategic investments in our people and tools. As a result, we enter 2024 well-positioned to take additional market share and create significant long-term returns for our shareholders. The investments we are making include a continuation of our efforts to transform the back office, implementing AI in certain areas to drive efficiency and productivity, while further institutionalizing our One Kforce organizational design and operating principles. During 2023, we selected Workday as our future state enterprise cloud application for our HCM and financials, which will complement our Microsoft front-end application and create a unified and streamlined technology suite for the firm once fully implemented over the next few years. We are incredibly fortunate to be partnering with Workday and Microsoft, two companies at the forefront of investing in AI, which puts us in an ideal position to take advantage of these technologies as they become available. The foundational transformation will be a meaningful contributor to us meeting one of our long-term financial objectives of generating at least 10% operating margins. Our decision to grow our business organically with a consistent, refined business model, tailored to provide highly skilled technology talent solutions to world-class companies in the domestic market, has been critical to our success over many years, and we remain confident that our firm is positioned well for improving market conditions. We experienced a decline in technology revenues in 2023 that closely resembled what we experienced in the Great Recession in 2009. We believe the decline that we experienced in 2023 was due to an acceleration of strategic technology investments made during 2021 and 2022 to address the implications of remote work and other digital transformation efforts, combined with the caution exercised by companies in a very uncertain environment. Companies remain cautious due to the continued economic and geopolitical uncertainties, and we are encouraged to have grown our technology revenues sequentially in the fourth quarter of 2023 on a billing day basis in this difficult environment. We are blessed to have a tenured executive leadership team who has been through multiple economic cycles together and can quickly adjust to the changing market conditions. Our message to our people in 2023 was simple, and frankly, it is no different as we begin 2024. There are many things that are uncontrollable. We must control what we can control, stay close to our internal associates, support our consultants, and continue listening to our clients while maintaining a long-term view in our decision-making. We made some difficult adjustments in July 2023 to reduce our structural cost, which mitigated the impact of lower revenues on the profitability levels. Our strategic position is solid, and our prospects are excellent. With that said, tremendous uncertainty still exists in the macro landscape, and there are conflicting views of economists on whether we will avert a recession, see a soft landing, or slip into a recession in the U.S. economy in 2024, following the aggressive monetary tightening by the Federal Reserve. The challenges in the geopolitical landscape continue to grow with the ongoing war in Ukraine, the effects across the region of the war in Israel, including the loss of American service members, with dozens injured in the drone attack on their base in Jordan, along with the 2024 U.S. election uncertainties and many others. We will continue to closely monitor our performance indicators and trends and are prepared to make the necessary adjustments to our business without jeopardizing investments in our long-term strategic priorities. The strength of the secular drivers of demand and technology accelerated significantly coming out of both the Great Recession, with the advancement of mobility, cloud computing, among others, and with the 2020 pandemic, with further digitization of businesses and the continued headlines around Gen AI technologies. I have seen a lot of economic cycles in my 35+ years in the business, and each one behaves a bit differently. What remains clear to us, though, is that the broad and strategic use of technology, including AI technologies, will continue to evolve and play an increasingly instrumental role in powering businesses. Over the long term, we believe that AI and other technologies will continue to drive demand for rather than replace technology resources, and that the pace of change will accelerate. We are ideally positioned to meet that demand. Our core competency is rooted in the ability to identify and provide critical resources, real-time, at scale, to help world-class companies solve complex business problems and help them competitively transform their businesses... Our operating model also allows us the flexibility in partnering with our clients to meet their needs across a broad spectrum of engagement forms, from direct hire, traditional staffing assignments, to managed team engagements and managed projects. While clients have been acting with restraint over the last 12+ months, the backlog of desired investments continues to grow. We expect these important technology investments to be high priorities once the macro uncertainties begin to clear. Technology investments are simply not optional in today's competitive and disruptive business climate. There is simply no other market we would want to be focused on other than the domestic technology talent solution space. We have built a solid foundation at Kforce. Our balance sheet is clean, which allowed us to be opportunistic in repurchasing over $67 million of our stock in 2023, and we expect to continue to generate strong cash flows in 2024. Our board of directors recently approved an increase in our quarterly dividend and share repurchase authorization to support our ongoing objective in returning capital to our shareholders. Before transitioning the call to Dave, I wanted to reiterate how proud I am of the performance and resiliency of our collective Kforce team. Together, we fought through a challenging operating environment, made some difficult decisions, and met each and every challenge. We are blessed to have a high-performing team that is tenured, dedicated, and passionate at Kforce. I am excited about the future of Kforce as our team continues to advance our Office Occasional model in combination with our integrated strategy, resulting in an overall team's ability to operate even more consistently as one firm. Dave Kelly, our Chief Operating Officer, will now give greater insights into our performance and recent operating trends. Jeff Hackman, Kforce's Chief Financial Officer, will then provide additional detail on our financial results as well as our future financial expectations. Dave? Thank you, Joe. Revenue for the fourth quarter came in just above the midpoint of our guidance. We were encouraged to see overall revenues increase sequentially by 0.6%, led by sequential growth in our technology business. For fiscal 2023, overall revenues were down 10%, while flex revenues in our technology business were down approximately 7%. As a reminder, our technology business significantly outperformed the market in 2022 and 2021, growing 43.5% over that two-year period. The Q4 sequential growth in our technology business is reflective of the stability in the number of consultants on assignment we began to see beginning in mid-Q3, which was followed by a modest increase through the fourth quarter. As we look into early Q1 trends, year-end assignment ends in our technology business were slightly greater than prior year levels, as clients were generally slower than usual to approve 2024 IT budgets, which resulted in fewer redeployments of our consultants as projects were completed at year-end within existing clients. This also contributed to a slightly later start in the typical acceleration of new orders from our clients at the beginning of the year. With that said, over the last two weeks, we've seen an improvement in our leading indicators, and as a result, we believe that the level of new assignment starts could improve from current levels as we get later in the quarter. This suggests we may see a more traditional pattern of growth in the number of technology consultants on assignment, albeit beginning slightly later in the quarter than usual. Our clients recognize the need to retain the highly skilled talent that we provide while they await a point of increased confidence to address their increasing backlog of critical technology initiatives more aggressively. Overall, average bill rates in our technology business remained near record levels at approximately $90 per hour. While bill rates have been stable over the past few quarters, we expect them to increase over the longer term as highly skilled talent will remain in short supply as demand improves. In addition, we're continuing to benefit from an increased mix of managed teams and project engagements within our overall technology business, which carries an average higher bill rate. Our clients remain focused on critical technology initiatives in the areas of digital, UI/UX, cloud, data governance, data analytics, business intelligence, project and program management, and modernization efforts. This represents a continuation of recent trends and reflects some of the front-end work needed by companies to take advantage of planned AI-related investments. Flex margins of 25.4% in our technology business saw a seasonal decline of 10 basis points sequentially and 70 basis points year-over-year. As we've mentioned on prior calls, the year-over-year declines in technology flex margins that we've seen recently are typical of what we have seen in prior slowdowns, and we normally see margins recover as the macroeconomic environment stabilizes. As we look forward to Q1, we expect bill pay spreads in our technology business to continue to be stable, though overall flex margins will be lower due to seasonal payroll tax resets. We've continued to broaden our service offerings beyond traditional staffing to include managed teams and project solutions. Clients consider access to the right talent essential to their success and see our services as a cost-effective solution for their project requirements, as demonstrated by more than the 90% of managed teams and project solutions being executed within existing clients. Our integrated strategy capitalizes on the strong relationships we have with world-class companies by utilizing our existing sales, recruiters, and consultants.... to provide higher value teams and project solutions that effectively and cost-efficiently address our clients' challenges. Our client portfolio is diverse and includes large market-leading customers. Market leaders typically prioritize technology investments to maintain their competitive advantage. Our focus on addressing their needs continues to be critical in our ability to drive sustainable, long-term, above-market performance. While short-term disruption may occur within certain clients or industries, our diverse client base provides an outstanding platform for consistent, long-term growth. We experienced stabilization in some of our larger industry verticals in Q4, including financial services and technology services. Elsewhere, we saw quarter-over-quarter improvement in transportation and retail trade, and some headwinds in manufacturing. Looking forward to Q1, we expect technology revenue to decline between 10% and 12% year-over-year, which is consistent with Q4 2023. Our FA business grew approximately 2% sequentially, but declined 28% year-over-year, as the prior year period included a project to support hurricane relief efforts. The year-over-year decline also reflects the impact of business we are no longer supporting due to our repositioning efforts in a more challenging macro environment. We expect revenues to be down approximately 25% year-over-year. Our average bill rate has continued to exceed $50 per hour, reflecting our success in repositioning this business towards a higher skill set of business, which is more synergistic with our technology service offering. Flex margins in our FA business decreased 70 basis points sequentially due to a lower margin project with a strategic client, but have improved 330 basis points since the first half of 2020, as our mix of business has significantly improved. We expect bill pay spreads to remain fairly stable at these levels now that the significant majority of business that we are no longer pursuing has run off. However, overall FA margins will decrease sequentially due to seasonal payroll tax resets. We've taken the necessary and thoughtful measures to strike a balance between associate productivity and our revenue expectations. As we've done in prior economic downturns, we are focused on retaining our most productive associates and making targeted investments in the business to ensure that we are well-prepared to capitalize on the market demand when it accelerates. We continue to invest in our managed teams and project solutions capabilities and the integration of those offerings within the firm, which is progressing well. We are fortunate to have one of the most recognized brands in the market for providing technology talent solutions. Our reputation has been established over our 60+ year operating history, and we continue to carry the highest overall Glassdoor rating within our peer group. I'm tremendously excited about our strategic position and the ability to continue delivering above-market performance. The success that we have as an organization doesn't happen without the unwavering trust that our clients, candidates, and consultants place in us, and I appreciate the dedication, creativity, and resilience displayed by our incredible team. I'll now turn the call over to Jeff Hackman, Kforce's Chief Financial Officer. Thank you, Dave. In my commentary, I will discuss certain non-GAAP items. The non-GAAP financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. They are included as additional clarifying items to aid investors in further understanding the impact of these costs on our financial results. Our press release provides the reconciliation of differences between GAAP and non-GAAP financial measures. Overall, revenues in 2023 of $1.53 billion decreased approximately 10% year-over-year. GAAP earnings per share in 2023 was $3.13, which declined 15% year-over-year. As adjusted for the third quarter charges associated with actions to reduce our structural costs and the settlement of outstanding legal matters, EPS was $3.49 in 2023. This represents a decrease of 18% over the prior year period, as adjusted for a fourth quarter 2022 impairment charge related to a previous joint venture. Fourth quarter revenues of $363.4 million declined 13.4% year-over-year, while earnings per share of $0.82 was at the top end of guidance due to lower-than-expected SG&A costs. Overall, gross margins declined 40 basis points sequentially and declined 120 basis points year-over-year to 27.3% in the fourth quarter due to a combination of a lower mix of direct hire revenue and a decline in flex margins. Overall, SG&A expenses as a percentage of revenue was 21%, which is a decrease of 150 basis points year-over-year, or a decrease of 100 basis points after normalizing for the joint venture impairment charge. SG&A costs were lower than anticipated in the fourth quarter of 2023 due to lower performance-based compensation, lower healthcare costs, and lower professional fees stemming from the settlement of outstanding litigation. We also continue to exercise greater discretionary spend control in this macro environment and generate leverage from our real estate portfolio, given our Office Occasional work environment. Our operating margin of 6% exceeded the high end of our expectations of 5.8%. Our effective tax rate in the fourth quarter was 26.6%, which was 160 basis points higher than we anticipated due to adjustments to certain tax credits. Operating cash flows were $22 million, and our return on invested capital was approximately 40% in the fourth quarter. We generated $116 million in EBITDA in 2023. Operating cash flows were $91.5 million for 2023, and we returned nearly $95 million in capital, in excess of 100% of operating cash flows to our shareholders via dividends and open market repurchases. We have prudently managed our business by driving solid organic growth over many years that has resulted in consistently strong results and a pristine balance sheet with minimal debt. As Joe indicated in his opening remarks, our board of directors approved an increase to our dividend, the fifth consecutive annual increase, and an increase in our share repurchase authorization to $100 million. These actions again demonstrate our financial strength and continued confidence in our business. Our pattern of returning significant capital to our shareholders has been consistent over many years, not just in this operating environment. In fact, since we initiated our dividend in 2014, we have increased it nearly 400%, and since 2007, we have reduced our weighted average shares outstanding from 42.3 million - 19.5 million. All in, we have returned slightly more than $900 million in capital to our shareholders since 2007, which has represented approximately 75% of the cash generated, while significantly growing our business and improving profitability levels. We remain committed to returning capital regardless of the economic climate, and our threshold for any prospective acquisition remains high. Our strong balance sheet and the flexibility we have under our credit facility provides us with the opportunity to get more aggressive in repurchasing our stock if there is a dislocation between expected future financial performance and the valuation of our shares. The first quarter has 64 billing days, which is three more than the fourth quarter of 2023, and the same as the first quarter of 2023. We expect Q1 revenues to be in the range of $351 million-$359 million, and earnings per share to be between $0.54 and $0.62. Our guidance does not consider the potential impact of any other unusual or non-recurring items that may occur. Looking beyond what we expect may be short-term macroeconomic uncertainties, we remain extremely excited about our strategic position and prospects for continuing to deliver above-market growth while continuing to make the necessary investments in our integrated strategy and the ongoing transformation of our back office that will help drive long-term growth and profitability improvements. Joe mentioned our longer-term financial objective of obtaining double-digit operating margins. We believe the key contributors are increased scale, productivity improvements, including through our back office transformation program and advancements in AI technologies, driving a greater mix of managed teams and solutions business, and further reducing our fixed costs, such as real estate. As a point of reference, in 2022, our operating margin was approximately 7% at $1.7 billion in revenue. As we look forward, the anticipated benefits associated with our back office transformation program are about 100 basis points compared to the current level of investment. When you combine this benefit with the benefit of scale, we believe a reasonable revenue level for us to attain double-digit operating margins is slightly more than $2 billion in annual revenues. We offer this data point as our confidence in achieving these profitability levels has further increased due to the returns we have seen in our front office technology investments and our progress with our transformation efforts. On behalf of our entire management team, I'd like to extend a sincere thank you to our teams for their efforts. We would now like to turn the call over for questions. The floor is now open for your questions. To ask a question at this time, simply press the star followed by the number one on your telephone keypad. Again, to ask a question at this time, simply press the star followed by the number one on your telephone keypad. We'll now take a moment to compile our roster. Our first question comes from the line of Mark Marcon with Baird. Please go ahead. Hey, good afternoon. Thanks for taking my questions. I'm wondering, with regards to the, to Tech F lex, you know, you did note that there was, you know, a little bit of a, of a slower start, but in the last couple of weeks, things have picked up. And if I take a look at this, the year-over-year trends, it looks like they've actually improved in the fourth quarter. So I'm wondering, can you talk a little bit about your level of confidence and, and what... Is there any particular vertical or area where you're starting to see a rebound with regards to the assignments picking up? Yeah, Mark, this is Dave Kelly. So I think I'd start by saying, obviously, there's a lot happening, and I mean, obviously, always a bit of uncertainty, but just to kind of put a little clarity on some of the comments that I made. So you're right. It was a little bit- ... greater amount of ends that we had seen at the end of the year, there seemed to be some delay in some budgetary approvals, and so that led to maybe a bit greater follow-up. But in the last two weeks, really, we've seen a lot of our key performance indicators, our job orders, our interview send-outs, really return to late Q3 levels. If you remember, and obviously we made it out as a point in the remarks, we saw sequential growth from Q3 to Q4 in our technology business as a result of increased activity. So we think that the levels that we've seen in the last couple of weeks and what we continue to hear anecdotally from our clients about the backlog of technology investments are positive indicators. So I think, and I wouldn't say, by the way, you asked about industry, that there's a particular industry that's driving it. It is pretty broadly based, broadly based, as we always say, there are certain clients and projects that we might win and/or new activities, but it's not industry specific. So if I were to characterize it, I think, overall, I'd say, that we characterize the environment really, as we sit here today, pretty similar to we saw in early Q4, stable, with some positive signs for potential improvement. So feel pretty good about where we sit. Great. Then, can you talk just a little bit about the bill rates? So, in Q4, on the tech side, they were down a little bit both sequentially and year-over-year. And that coincided with, you know, the Flex gross margin declining a little bit sequentially and year-over-year. I'm wondering, is that, was that specific to any one particular client, or was that broad-based as well? And how should we think about, you know, the margin profile for Tech Flex for the coming year? Do you feel confident that we can, you know, stabilize those gross margins? Yeah, Mark, this is Dave again. Maybe I'll put a little bit finer point. Obviously, we all know 2023 was a tough year in the- Sure ... technology space, right? So clients, obviously, putting pressure on, bill rates as well. But, you mentioned the decline, to be precise, I think the bill rate declined in technology 0.2%, so less than half a percent. So when we talk about relatively stable at $90, it is essentially stable, so there is no specific driver to that 0.2%, right? It could be a project, it could be, you know, a mixed, item, but it is really a nominal change anyway, so I don't think we think about it, as a difference year-over-year in bill rates. In terms of the margin expectations that we've got going forward, you know, we, we really have seen, and we've mentioned, we don't expect any spread changes other than payroll tax resets in Q1. We said that, we've seen that the last couple quarters, so, we look to margins in technology, in flexible, technology flex, to be stable at these levels. In the near term, I would say as in the, in the longer term, obviously, when some of this uncertainty clears up and maybe we see some positive inflection in the revenue trends, we would also typically see expansion in margin. So this is pretty historical. I mean, this looks pretty much like we've seen historically, so we feel like we're kind of following, just as we have, from a revenue perspective, from a margin perspective, a pretty traditional pattern here. Mark, this is Jeff. Add on one comment to where Dave went. And Dave touched on this, but I think we've seen after the earlier declines that we saw in our flex margin profile and our technology business in the first half of 2023, we've seen really good stability in Q3 and Q4. The tick down that you mentioned in the fourth quarter has more to do with some of the seasonal impacts that we traditionally see Q3 to Q4. And Dave's right. I think as we, you know, sit here today, you know, certainly as the economic skies clear up a bit, I would expect to recapture some of that lost margin earlier in the year, but in the near term, expect good stability in our technology business. That's great. And then you did a really nice job in terms of managing the discretionary SG&A, and showing more efficiency. You also mentioned, you know, that you've got the Workday implementation that you're putting in place. The guidance for Q1 is relatively clear. How should we think about that unfolding as the year goes through? Are you anticipating any big jumps in terms of, of your internal SG&A, just due to, project starts for your internal initiatives or anything that we should be aware of from that perspective? No, I think, Mark, and thank you for your comments on the SG&A control going into the year. You know, Joe said it, controlling what we can control. I think as it relates to our back office transformation program, we mentioned in our prepared remarks the selection of Workday. Mark, that's been a program we've made comments on our earnings call historically. We've been after this for probably the last, you know, two and a half years. And the selection of Workday in the second half of 2023, I think is meant to convey some increased kind of confidence in the roadmap that we're going under. And in 2024, Mark, I mean, we're, you know, continuing to invest at about the pace that we have been in 2023, heading into 2024. So, I think from an SG&A standpoint, I wouldn't expect anything significant in 2024 related to our Gemini program. So I think that's, that's the short of it, Mark, I think from that standpoint. ... Great. And then last one for me, encouraged to hear you talk about, you know, when we get to $2 billion, getting to double-digit operating margins. How are you thinking about, just in broad strokes, the gross margin for the company and, and, and the SG&A as a percentage of, of revenue? I'm assuming we're going to get more efficiency with regards to the SG&A, and you mentioned 100 basis points, but wondering if you can put it just a finer point as we think about that $2 billion double-digit, mark. Yeah, I think, Mark, there's a number of components to getting from where we were at the end of 2022, which was about the 7%, to double-digit operating margin. I covered those in the prepared remarks. You know, certainly, Mark, you would expect the benefits, and we've talked about, you know, to what degree is this linear versus a bit of a step function. But, I think certainly you would expect the benefits of scale as we continue to grow. Revenue would be more linear. I think it's also fair to assume that some of the linear progression that we've been after for quite a number of years as we invest in technology to drive both front office and back office improvements for that to largely be linear. You know, I did mention in my prepared remarks that a significant contributing factor to our financial objectives is our back office transformation program. Certainly compared, Mark, to what our current investment run rate is to the benefits, we anticipate that being about 100 basis points. As you call out, we've got a, you know, several years left in that program. I would expect us to step into some of those savings versus a kind of pure linear progression from a math standpoint. So, you know, we feel pretty confident there. The last component I would say we've been after for a number of years, which is, you know, constantly getting after our structural fixed costs and things like real estate, et cetera. We've been, you know, driving that for a number of years, and in 2024 and 2025, we've got a bit of work left to do there, Mark, but hopefully, that helps a bit. Yeah, just maybe to add, Mark, right? So this is a path that we've been on for a long time, right? We have built, relatively speaking, a very focused model with a focus on improving productivity. We've done that over the last number of years, had significant improvements in operating margins. So this is really just a continuation of a plan we put in place years ago that we've been executing on and expect to continue to execute on. Yeah, Mark, this is Joe. I would say as the most tenured person in the room, this has been a 20-year journey. I mean, you can go all the way back to the dot-com and coming out of the dot-com, we made strategic decisions in and around taking down our percentage of focus within direct hire for a variety of reasons, which we were never going to get back to operating margin. When that happened, we've proven the firm's capable of doing that with that shift. And then even as we moved past the dot-com, when we made strategic decisions to divest of, you know, those units that weren't going to be able to compete for dollars, investment dollars, because of our focus on IT and shedding that revenue and replacing it with healthy tech revenue. So, long, long strategic plan to get us where we are today. We are highly confident in what Jeff spoke about that as we, you know, get into that $2 billion range, we'll be able to achieve those double-digit operating margins. That's great. Thank you very much. Sure. Thanks. Our next question comes from Trevor Romeo with William Blair. Please go ahead. Hi, good afternoon. Thanks for taking the questions. First one, yeah, I know you talked about clients being slower to approve their budgets this year, but I kind of had a question about the size of the IT budgets you're seeing relative to last year. I think maybe last quarter you talked about potentially flat to slightly up versus 2023. Is that kind of still your expectation? And then if we do happen to see an increase in macro confidence later this year, how quickly do you think those clients can adjust and potentially increase project spending? Yeah, I would say, nothing's really changed at this point in time. I mean, in general, we are hearing flat to slightly increasing budgets over 2023. Again, with that emphasis on projects focused to gain efficiencies, both internally and externally. But I think as, I might even mentioned, last quarter, needless to say, I mean, there are industry and specific, client drivers which we believe play to our favor in terms of the quality and diversity of our overall, portfolio. I mean, we are seeing also that the budgets, as they're being discussed, I mean, they are being allocated a little bit differently than in prior years. There's really a focus on stretching the dollar to get more out of it. I think the good news for us is that's opening up more opportunities as clients are no longer exclusively looking at just traditional consulting firms to do their very high cost type work, which provides us an opening for firms you know such as us to really go after this hybrid type work in a more efficient you know with staffing and solutions and servicing it through multiple means there. So nothing's really changed from that standpoint. I do believe you know if we do see the interest rates start to step down and we see a positive reaction, I think clients could move very quickly because their backlog is just incredible. I mean, they're not able to get done what they need to get done, in terms of staying competitive and with disruptive factors that are out there. And then throw GenAI on top of that and everybody's desires there, you know, because we are seeing the majority of the clients that we work with, I would say, that are non-technology specific from an industry standpoint, they're very much in the early innings. I mean, they're getting after rationalizing their data, organizing their data to position their, their opportunities. So while they're making investments there, I'm sure no different than here at Kforce. I wish we had more SG&A dollars to accelerate certain things. So there's a balance there, and I think that's, we're just a microcosm of what we're experiencing with our clients. But as things start to become greater visibility, more predictable, I think we'll see things loosen up. Mm-hmm. Okay, great. Thanks, Joe. That's, that's helpful. Sure. And then I guess just following up on some of the improvement you've seen in the leading project indicators lately. Does the Q1 guidance assume that, I guess, assignment starts improve a little bit throughout the quarter, as you described could happen, or, would that be, you know, kind of more upside to the guidance if it happens? Yeah, I think, Trevor, you know, there's obviously a lag as these indicators start to become more robust. So, the improvement that we might see in the first quarter is pretty mild. But the trajectory as we look into the second quarter and beyond for the year will, will improve. So, you know, as we sit here on the fifth of February, we've seen improvements and it takes a few weeks, right? So you only have a few weeks left in the quarter to see revenue improvement in, in the quarter. So we're not expecting great lift in the first quarter. It's really the momentum as we move forward. Okay. Got it, Dave. Thank you. Our next question comes from the line of Kartik Mehta with North Coast Research. Please go ahead. Yeah. Joe, you talked about the leading indicators, and I just wanted to understand, are these resulting in conversion? Has there been a change in the sales cycle? I guess ultimately getting from, you know, some inquiries to final sales, you know, how is that progressing or what changes have you seen? Yeah, I would say, in terms of those indicators, now, we haven't, we haven't really seen anything change with the sales cycle. The sales cycle has been elongated, you know, for really since the back half of 2022, when uncertainty started to creep in. So no material changes there. I would say you'd asked about conversions, we've actually, over the course of the last four or five quarters, we've seen our conversions come down rather significantly, as in comparison to where we were. And again, I think the, the, that's where the clients are looking for a little bit more flexibility, so they're holding on to the consultants longer versus converting them into FTEs, which again, this goes back to what I've discussed on prior calls. It's the normal cycle that I've seen for 35 years in multiple recessionary periods and tough periods of time, you know, where the first thing they do is exit consultants. The second thing, they right-size their internal resources, and then the third thing they do is they start bringing consultants back on, and then the fourth phase is when they start to really start to bring on back FTE. So I think that's all we're seeing is that traditional cycle playing out. And then, you obviously talked about companies wanting to stretch their dollars, which makes a lot of sense. I'm wondering, is this resulting in any changes from your competition or maybe more competition than you've seen in the past six to 12 months? Yeah, I would actually say from a competitive standpoint, all the traditional competitors we deal with are still viable competitors. One of the things that typically happens as we go through these cycles is you do see those organizations that were not well prepared, didn't have good balance sheets, maybe had a high customer concentration, and they see a receivable go bad. So I don't think we're seeing anything different this cycle than we've historically seen in tougher times. If anything, we see the overall competitive landscape shrinking, but it's really more the smaller players that are exiting the marketplace, and we don't see as many new competitors coming in. But in terms of those that we typically see day in and day out, you know, the larger or mid-tier providers, whether they're professional staffing or they're on the solution side, nothing's really changed materially with that landscape. The thing I would add, and Joe touched on it in the last sentence, right? So the larger players, the suite of services that they could offer from traditional staff augmentation to managed teams, is really an important differentiator. So part of the reason why we can do what we can do is because we've got long-standing relationships with a lot of significant clients who have trust in our ability to deliver across a spectrum of services, and that's what, frankly, they're looking for in the competitive landscape. And the winners are going to be those companies that can do that across the spectrum. Yeah, and that's why we're seeing the larger players are making those investments because they can afford to. The smaller entities, they can't afford to bring on the resources that bring those credentials to the table, to get them in front of the organization because it's an expensive proposition. So I would say that's another strategic dynamic that is evolving in the marketplace, versus if you're just in a traditional staff aug, which is a much lower expense, type model to get involved with. Perfect. Thank you very much. I really appreciate it. Thank you. Our next question comes from the line of Josh Chan with UBS. Please go ahead. Hi, good afternoon. Thanks for taking my questions. You mentioned the slower ramp-up this year, so I was wondering, in the past years that have been slower to ramp up, do you see or expect kind of a catch-up where, you know, you get back onto the pace, or do slower start years usually suggest kind of a slower year overall? Yeah, I mean, I think every year is a little bit different, right? So, Josh, I think the way that we characterize this year is obviously 2023 is an uncertain year. Companies looking at their IT budgets are being very thoughtful about it, and they took longer, right? So this is a phenomenon that we've seen in 2023. You haven't heard us say this in years past. ... What we've seen is, as they've sorted through that, it's taken them a little bit longer, and now they've finally said, "Okay, I've got these things approved, and I know what I'm going to do. Now I need to go find the people to do the work that I need to do." So we've seen literally over the course of the last couple weeks, what we probably would have seen a week or two earlier in a given year. So it's not a different model. It's just probably from our perspective, at least from what we've seen so far, a bit of a lag in getting things started. And what I would add to that, if you know, if we were to compare the beginning of 2023 to the beginning of 2024, probably the most material difference is we're hearing more optimism from our clients here in 2024 at the beginning of the year, even albeit that, you know, the years have started out very similar. Whereas in 2023, there was a lot of concern with the customers. There were a lot of internal things going on within organizations about holding back, about getting prepared to cut back. You know, we are not necessarily hearing those types of things, so I think this is more of a just a delay and pause. So it's kind of the equation of, you know, looking through that windshield. It was really cloudy in 2023. The windshield looks pretty clear at this point in time, and I think everybody, it's just a matter of, you know, where perception is of the overall economy, what's going to be happening with the Fed and rate cuts and all those dynamics. So I think everybody's still in a little bit wait and see, but overall, I'd say a lot more optimism than what we were experiencing in the beginning of 2023. Okay, that, that's really helpful color. Thanks for that characterization, Joe. Sure. I guess, if we look at the long-term goal, thanks for the goalpost that you, you've kind of put up today. Am I reading it right that to get to the 10% margin from the current profile, it sounds like most of the drivers are SG&A related, meaning that gross margins could be flattish at the current levels, and then you're looking to take SG&A down to get to 10%. Is that the right read? Yeah, I think, Josh, this is Jeff. Good to speak with you. I think for the most part, Josh, when you look at the components of the benefit of scale, you know, certainly that is going to be, you know, leveraging our existing infrastructure at a lesser, you know, pace. When you think about the, you know, back office transformation program, which we've been driving for a number of years now, yes, that gives us the benefit of scale. Yes, that gives us, you know, better predictability of SG&A. You know, the gross margin tie into that, when you think about Joe and Dave's comments earlier, gross margins are down, call it year-over-year, about 120 basis points. You know, as the economic skies start to clear to a degree, we would expect to recapture some of that gross margin. Obviously, you know, in times where you've got a little bit more certainty in you know, U.S. GDP, certainly positive, our direct hire mix would improve. Obviously, you know, right now it's a little bit depressed at about 2.5%, but historically, we've been roughly 3.5%. So I think as the economy starts to you know, become more clear for our clients, we would expect to recapture some of the gross margin that we've lost. But to your point, Josh, SG&A is a primary driver for us. Yeah, I would add, so as a planning mechanism, right? Stable margins is, are how we're thinking about it, and that's the plan, we've been executing on. Opportunities, Jeff mentioned direct hire. Obviously, we continue to have success in the managed teams and project solutions space that typically carries a higher gross margin. So there's opportunity there, but that is not part of it. Our - when we're talking about today, the path, to improve profitability, that is, we look at that as potential opportunity. That's not part of the, what we're counting on. All right. Thanks, yeah, thanks. That's really helpful. Thank you for the color, and thanks for your time. Thank you. Thank you. Our next question comes from the line of Marc Riddick with Sidoti & Company. Please go ahead. Hi, good evening. Good evening. Hi, Marc. Hey, Marc. A lot of my questions have already been answered. I was wondering if you could just touch a little bit on the cash usage, the announcement of the dividend boost and the share repurchase authorization. Maybe touch a little bit on that and maybe share your thoughts on CapEx for the year. Thank you. Yeah. Yeah, and Marc, good to chat with you. I know we put this in some of the prepared remarks, but I think it's worth reiterating. I think the short answer on the capital side is you should expect in 2024 very similar to what we have been doing. You know, we've been repurchasing shares for a long time, before it was in vogue to be repurchasing shares in the face of a more difficult macro environment. You know, we believe in our ability to generate significant long-term shareholder appreciation, believe that organic revenue growth is naturally for us where to go. You avoid the disruptions that can tend to come from acquisitions in a human capital-centric business. So, you know, I think we, we've been at this for quite a while, Marc. We gave the quote earlier on, you know, having 42 million shares in 2007 and about 19.5 million shares as we sit here today. You know, when you take all in since 2007, we've returned slightly more than $900 million in capital through our dividend program and our share repurchases. That's significant. And, you know, yet again, our board of directors continues to support that deployment of capital by raising our dividend 5.5%. ... which was our fifth consecutive year, and also at the same time, increased that share repurchase authorization to $100 million, which I'll remind you, we also did last Q1 this time. So, you look at that, Marc, and you look over the long term of what we've bought back, and we're probably in the high teens to low $20 range. So I think from a shareholder perspective, it's been very friendly and, for us, has been generating significant returns. Excellent. And then, any thoughts on, maybe ballpark range as far as CapEx for the year? Yeah, I think CapEx, Marc, I would imagine somewhere between, you know, $6 million and $8 million in total for CapEx. That's about what we've been running at. You know, we've obviously got our back office transformation program, which we've talked about here. You know, that could tend to lift CapEx to a degree. But the other thing is we've been rationalizing our real estate footprint over time. Leasehold improvements is another area of our CapEx that historically has been part of that, less so as we sit here moving into 2024. So I think it's got a netting effect as we move into 2024. So, I'd look at it as relatively flat with 2023. Great. Thank you very much. Thank you. Again, as a reminder, the floor is now open for your questions. To ask a question at this time, simply press the star followed by the number one on your telephone keypad. Our next question comes from the line of Tobey Sommer with Truist Securities. Please go ahead. Thanks. I was wondering if you could give us some color about how you're managing your sales people, sort of account manager headcount here after a couple of slow years, and what your recruiter headcount looks like, you know, either sequentially or year-over-year, so that we can get a sense for what kind of capacity you would have to absorb and deal with an increase in demand should it occur? Yeah. Hi, Tobey, this is Dave. So, I'll start out by saying we've got more than enough capacity to meet current needs and as things accelerate, to meet those needs. As you, I think, know, obviously, our intention with a lot of the investments that we've made over the years and continue to make are to improve the capabilities of our sales and delivery capabilities and allow them to generate more activity, and that is continuing to add to our capacity. And that is continuing as part of the investment cycle as well as we look forward. So in terms of our thought process, Joe had mentioned earlier, obviously, there's been a bit of an elongation. There's more activity in the sales cycle. While we've seen, I think, year-over-year, relatively stable, slight decline in the entire sales and recruiting force, obviously, we always look at where the right allocation is. And, net, net, we've added to the number of sales people that we have relative to the recruiters, because a lot of our technology investments have been focused on making sure our recruiters can become increasingly productive in sourcing candidates. So, so, you know, we're always looking at that. We're always making sure that we're thinking about not just the short term as well, right? We're not focused on ensuring we maintain maximum profitability levels in slower periods. We are always playing for the long term and continue to do so, and feel like we're in a very good place as we move forward. Yeah, Tobey, you know, we're, we're playing for the other side, to Dave's point, which is why we've actually netted up, people on the sales side, because as you well know, relationships take time to build. So we're in that build process, playing for the other side. Because of what Dave had mentioned, all the investments we've made on the, on the delivery side, the recruitment side, with technologies, and we're also exploring other technologies, we have a pretty good model that we can ramp up recruiters very quickly. So we have, we have great capacity right now. We also have to balance those things to make sure that we have enough requirements that our people can survive and, and we can feed them, you know, that they can make the appropriate levels of income. So it's typically how we handle this point in the cycle. You know, start ramping up on the sales side to prepare for the other side, balance the recruitment side, and then as we start to see, job orders start to spike up in those types of things, we can quickly ramp up. We have a great internal, recruitment function. Our leaders are locked and loaded, so we know we can turn that dial very quickly. Thanks. So I was wondering if you could give some color from an industry vertical standpoint for your customers, which ones are sort of relatively strong or relatively weak? And include in there, if you could, financial services, which I know tends to kind of be a maybe a little bit more volatile than some other industry verticals. Yeah, I guess, Tobey, I'd start out by saying, as a barometer to strengthen any particular industry, it's tough to gauge, obviously, from our sequential success, quarter to quarter, you know, because a lot of the drivers are specific to things that we do at a client level. But having said that, I made commentary, you know, we actually have had success sequentially in financial services, right? Had a couple of nice projects there, you know, in technology services as well. Energy, you know, manufacturing, alternatively, was a little weaker for us. You know, retail was also a good industry vertical for us in the fourth quarter. So it's... You know, I mean, I think if I go back and look quarter to quarter, it seems to me that there are different industries each quarter that are better or worse. So, I guess, my start of the comment with caution is where I'd end. ... Okay, and last one from me. Any discernible difference in the cadence of demand exiting the fourth quarter and then here in the early part of the first quarter between kind of the staffing business and managed services? Anything you'd call out as better or worse in one of those areas? Yeah, just, obviously, just to reiterate, obviously, we've seen a nice uptick in the last couple of weeks. Generally, you know, when I look at the contributors to our business, we've continued to have, relatively speaking, more success in this period in the cycle in our managed services business. So that is a, relatively speaking, bright spot. And we've talked about, you know, in an integrated fashion, making sure that we can meet the needs of our clients across the spectrum. They're increasingly looking to us for that. I mean, I don't know that I would say that is a calendar thing. That is a general trend that we're seeing now, so. And not much has changed, obviously, since we last talked. Thank you very much. Thank you. I would now like to turn the call over to Joe Liberatore for closing remarks. Well, thank you for your interest in and support of Kforce. I'd like to say thank you to every Kforcer for your efforts, to our consultants and our clients for your trust in Kforce, and partnering with you, and allowing us the privilege of serving you. We look forward to talking with you again after the first quarter of 2024. Have a great evening. This concludes today's call. You may now disconnect.