Thank you for standing by. My name is [Greg], and I will be your conference operator today. At this time, I would like to welcome everyone to Kforce Q1 2025 earnings conference call. 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'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. Once again, star one. If you'd like to withdraw your question, simply press star one again. Thank you. I would now like to turn the call over to Joe Liberatore, President and CEO. Joe, please go ahead. Good afternoon, and thank you for your time today. This call contains certain statements that are forward-looking or based upon current assumptions and expectations and are subject to risk and uncertainties. Actual results may vary materially from the factors listed in Kforce's public filing and other reports and filing 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 the investor relation portion of our website. Like many others, we enter 2025 with a general sense of optimism for the U.S. economic growth, with the expected derivative benefit being a boost in our clients' confidence in accelerating investments in technology initiatives that have been deferred for the last several years. The signs of a slowing mid-Q1, followed by the announcement of significant tariffs for which the outcome and impact remain unclear, reintroduce many uncertainties into the U.S. economic outlook. The general tonality as we sit here today is that the earlier optimism has waned to a degree, and the macro uncertainties have increased, which may delay an acceleration of investment for many companies. With that said, the macro uncertainties have not resulted in a deterioration in our business. In fact, over the last six weeks, our consultants on assignments have improved, and our front-end KPIs have been elevated compared to first-quarter levels. We are cautiously optimistic about the level of demand we are seeing against this more uncertain backdrop. As to our first-quarter performance, it was generally consistent with our expectations. Regardless of the ultimate environment, we believe there remains an increasingly strong backlog of strategically imperative technology investments. We continue to be well-positioned to take additional market share, as we have been doing successfully for years, and continue laying the foundation to generate significant long-term returns for our shareholders. We are fortunate to have made the strategic decision more than five years ago to focus on the commercial space and divest our federal government business such that we no longer have any direct business with the federal government and limited indirect exposure through the support of our larger system integrator clients. As we look ahead to the second quarter and the remainder of 2025, as has been the case over the last few years, we will continue to stay close to our clients and monitor our key performance indicators and make any necessary adjustments to our business while continuing to invest in our long-term strategic priorities with a keen focus on the retention of our most productive associates. Our motto continues to be, "Control what we can control." Our teams have continued to persevere and make the necessary adjustments within the business, while we also have continued to make significant investments in critical initiatives that will provide a great foundation moving forward, positioning us to return higher levels of profitability as revenues inflect. We continue to make significant progress with the implementation of Workday as our future state enterprise cloud application for HCM and financials. The go-live of this technology platform is expected in early 2026, and we expect to begin to generate immediate efficiency gains that will continue to improve as we rationalize the new platform. We also continue to evolve our nearshore and offshore delivery capabilities with our India development center and further integrate all the firm's capabilities across the full spectrum of our service offerings as one Kforce. Each of these strategic initiatives are transformational in nature and will be meaningful contributors to us meeting our financial objectives. AI continues to dominate the headlines. As we have previously articulated, over the long term, we believe that AI and other innovative technologies will continue to play an increasing role in empowering businesses. We are ideally positioned to meet that demand and continue to see an increased focus of AI foundational readiness work in areas such as data, cloud, and modernization, along with AI projects in our consulting-oriented engagements. Internally, we expect to benefit from the future leverage of AI, and in that regard, we are extremely fortunate to have made the strategic decision to concentrate our platform technologies with Microsoft and Workday. We have accelerated our investments in these technologies by acquiring enterprise licensing of Office 365 Copilot and Sales Copilot from Microsoft. We are taking active steps within the firm to provide these important productivity-enhancing technologies to all of our associates and leaders. We have built a solid foundation at Kforce and will continue to make the necessary investments to transform our business. Our domestically focused organic growth strategy continues to benefit our organization by eliminating any unnecessary distractions for our people so that their full energy is directed to partnering with our clients to help them solve their most important business challenges. Before transitioning the call, I wanted to reiterate how proud I am of the performance and resiliency of the collective Kforce team. We are blessed to have a high-performing organization that is united, tenured, dedicated, and passionate. I could not be more excited about the future of Kforce. 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 details on our financial results as well as our future financial expectations. Dave? Thank you, Joe. Total revenues of $330 million declined 4.7% year- over- year on a billing day basis. Revenues in our technology business declined 5.2% sequentially and declined 3.5% year- over- year per billing day. We did not see a typical recovery in the first quarter. Normally, consultants on assignment decrease in January as year-end projects are wrapped up and then gradually increase during the last two months of the quarter. This year, we actually saw slight declines mid-quarter due to higher-than-expected assignment attrition, which mirrored the tempering of economic expectations. Headcount levels did begin to increase in late March, and that improvement continued into mid-April. Though uncertainty remains, mission-critical initiatives continue to be prioritized by our clients. However, given the macroeconomic uncertainty, clients appear to be awaiting a period of increased confidence before more aggressively adding resources to address the significant backlog of other important technology initiatives. Our technology service offering has significantly evolved over the years, expanding beyond traditional staffing assignments to encompass more consulting-oriented engagements. Clients continue to prioritize cost-efficient access to highly skilled talent and view our services as an effective solution to meet their technology project requirements, leveraging our superior delivery capabilities. The demand for our consulting-oriented offerings has continued to significantly contribute to our results. This growth underscores our ability to adapt and meet the evolving needs of our clients. While our traditional staffing business has experienced year-over-year revenue declines, growth in solutions-oriented assignments highlights our strategic shift in the increasing value clients place on our consulting capabilities. Our integrated strategy leverages all aspects of the firm's capabilities to meet the needs of the world-class companies we serve. An increasingly important aspect of providing cost-effective solutions is our ability to source highly skilled talents from outside the U.S. Our development center in Pune, India, positions Kforce well to compete for client opportunities that were previously unavailable to us. This development center, combined with our robust U.S. sales and delivery capabilities and a high-quality vendor network, allows us to comprehensively address the evolving needs of our clients, whether onshore, nearshore, or offshore. Overall, average bill rates in our technology business of $90 grew slightly sequentially and on a year-over-year basis, continuing a trend of stability that has persisted for nearly three years. The consistent demand for highly skilled talent in both traditional staffing assignments and consulting-oriented engagements has played a crucial role in maintaining stable bill and pay rates. This demand is driven by clients' need for expertise in specialized areas such as AI and machine learning, application engineering, cloud, digital data, and cybersecurity. Our ability to source and provide top-tier professionals who can address complex technological challenges has ensured that our services remain indispensable even as overall industry trends have slowed. Our core competency lies in sourcing quality talent at scale for our clients, adapting to the evolving demand for various skill sets. We anticipate this trend to continue as clients increasingly rely on us to provide data and digital resources to support their data rationalization and cleanup activities, which are critical to their AI investments. We have relationships with the largest providers in the space, including Microsoft, and continue to strengthen our partnership models with these companies. As technology has evolved over the decades, we've efficiently adapted to the changing skill set demands of our clients, ensuring we remain a trusted partner in their technological advancements. Our client portfolio is diverse and is predominantly comprised of large market-leading companies. Our focus on addressing their needs continues to be critical to our ability to drive sustainable, long-term, above-market performance. The retail and transportation industries outperformed sequentially in Q1, while we experienced downward pressure in the relatively modest footprint with large consulting companies supporting the federal government as well as in financial services. Our footprint is focused on supporting very large clients, all of whom have differing needs. As a result, it's typical to see both increases and decreases in revenue for clients within the same industry vertical, which has been the case in financial services. Given our size and scale, it's difficult to extrapolate our performance with overall industry trends. Looking forward to Q2, we expect modest sequential growth in our technology business. Flex revenues in our FA business, currently 6.1% of our revenues, declined 22% year- over- year on a billing day basis. Our average bill rate of approximately $52 per hour improved slightly sequentially year- over- year and is reflective of the highly skilled areas we are pursuing. We expect Q2 revenues in F&A to be down sequentially on a billing day basis in the mid-single digits. An area where we have seen a more significant impact from the economic uncertainty is in our direct hire business, which represents approximately 2% of overall revenues. After a reasonably strong first quarter, activity slowed in early April, and we now expect direct hire to decline sequentially in Q2 in what is typically its strongest quarter. We continue to make adjustments to associate staffing levels based on productivity expectations, focusing on retaining our most productive associates and making targeted investments to ensure we are well-prepared to capitalize on market demand when it accelerates. Over the past three years, we've selectively invested in our sales teams while rationalizing our delivery resources, which have decreased by close to 40% over that time. Despite these reductions, we believe we have ample capacity to absorb several quarters of increased demand without adding significant resources. Additionally, we continue to invest in our consulting solutions business. Our performance in the first quarter continued to outpace that of our competitors. We remain tremendously excited about our strategic position and our ability to continue delivering above-market performance in our technology business as we have for well over a decade. The success we achieve as an organization is a testament to the unwavering trust that our clients, candidates, and consultants place in us. I'll now turn the call over to Jeff Hackman, Kforce's Chief Financial Officer. Thank you, Dave. First quarter revenue of $330 million was at the low end of guidance, and earnings per share of $0.45 was slightly above the low end of guidance. Overall gross margins decreased 30 basis points sequentially to 26.7% due to a seasonal decline in flex margins of 50 basis points resulting from usual payroll tax resets, which was partially offset by a higher mix of direct hire revenues. On a year-over-year basis, overall spread and business mix have been stable, though gross margins declined 40 basis points due to higher healthcare costs. Flex margins in our technology business decreased 40 basis points sequentially due to seasonal payroll tax resets. Flex margins in technology declined 40 basis points year- over- year as higher healthcare costs were partially offset by a slight improvement in bill pay spreads. This spread increase of 10 basis points is attributable to the continued demand for highly skilled talent and a higher mix of consulting-oriented work. As we forward to Q2, we expect flex margins to increase sequentially due to the alleviation of seasonal payroll tax resets while remaining stable otherwise. Overall SG&A expenses as a percentage of revenue of 22.8% were within the range of our expectations as we have continued to manage productivity and profitability levels well. While we experienced higher healthcare costs in the first quarter, those costs were offset by leverage gained from continued refinements in our headcount and lower performance-based compensation given slightly lower financial performance. We are continuing to make targeted investments in our sales capabilities while tightly scrutinizing spend in all other areas of our business. We also continue to advance our enterprise initiatives, including the implementation of Workday, the maturation of our India development center, and further integration of our solutions offering, all of which are expected to significantly contribute to our longer-term financial objectives and prepare us well for when companies more aggressively invest in their technology initiatives. We expect 2025 to be the final year of significant net investment in these initiatives and for them each to begin providing meaningful and growing returns as we move into 2026 and beyond. Our operating margin was 3.5%, and our effective tax rate in the first quarter was 26.4%. During the quarter, we accelerated our share repurchase activity, returning an aggregate of $28.3 million in capital to our shareholders through dividends of roughly $7 million and share repurchases of approximately $21 million. Given the level of repurchase activity, outstanding debt at the end of the first quarter was $65.5 million. We continue to carry a very solid balance sheet and historically conservative leverage against trailing 12-month EBITDA levels. We have continued to be active in repurchasing our shares in April and have significant remaining availability under our credit facility. Operating cash flows were $0.2 million, which were lower than usual primarily due to timing of payments from our clients and an allowable deferral by the IRS of our 2024 federal income tax payment into the first quarter. Our return on equity continues to exceed 30%. We continue to execute our organically driven business well, and we believe our industry-leading relative performance is a result of our intense focus in technology staffing and solutions in the U.S., augmented by our nearshore and offshore capabilities. We continue to carry a pristine balance sheet with conservative debt levels and return significant capital to our shareholders. This consistent repurchase activity continues to be strongly accretive to earnings. We have returned approximately $1 billion 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. Our balance sheet and cash flows allow us to remain committed to investing in our business while aggressively returning capital regardless of the economic climate. Our threshold for any prospective acquisition remains very high. The second quarter has 64 billing days, which is one more day than the first quarter and the same as the second quarter of 2024. We expect Q2 revenues to be in the range of $332 million-$340 million and earnings per share to be between $0.57 and $0.65. Our guidance is based upon the assumption of the continuation of a stable environment and does not consider the potential impact of any other unusual or non-recurring items that may occur. We remain excited about our strategic position and prospects for continuing to deliver above-market results while continuing to make the necessary investments to help drive long-term growth and enable us to achieve our longer-term objective of attaining double-digit operating margins. As we mentioned previously, we expect operating margins to approximate 8% when we return to $1.7 billion in annual revenues, which is more than 100 basis points higher than when that revenue level was achieved in 2022. This improvement is being driven by the expected benefits derived from investments in our strategic priorities, which will drive down operating costs. Though we have seen recent slight improvement in bill pay spreads, our profitability expectations are not factoring in any additional meaningful benefit from further improvement in gross margin. On behalf of our entire management team, I'd like to extend a sincere thank you to our teams for their efforts. We'd now like to turn the call over for questions. All right. Thank you. At this time, I would like to remind everyone in order to ask a question, press star, then the number one on your telephone keypad. Once again, star one. We will pause just a moment to compile the Q&A roster. Okay. Looks like our first question today comes from the line of Mark Marcon with Baird. Mark, please go ahead. Hey, good afternoon, everybody. Thanks for taking my questions. Joe and David, you mentioned the monthly trends that you were seeing, particularly on the tech flex side, and really appreciate that. I was wondering if you could just give us just a little bit more color with regards to what you're hearing from clients. Obviously, it's an uncertain environment, but I'm wondering, are you hearing a very firm commitment to sticking with existing projects and just basically delaying those that haven't started, or are you starting to see any contemplation at all of potentially ending some already underway projects? Yeah. I appreciate the question, Mark. This is Dave. Yeah, to reiterate what we said, we did see some growth in the consultants on assignment in March and then through mid-April. Joe also alluded to some of our front, our leading indicators, our KPIs continue to be strong. I'd also mentioned bill rates. We're seeing some spread improvement. I think, generally speaking, stable activity, stable environments, discussions, and things that we're hearing from our clients. I would contrast this significantly to maybe slower periods in recessionary periods. We are not seeing clients canceling projects on us. It's very steady, as I think we articulated in the prepared remarks. Certainly, we are winning some new business, so you're seeing that. You're seeing some natural project ends. You're just not seeing robust acceleration in a lot of new initiatives, as we've been saying for a number of quarters. We see that pipeline. We continue to hear an eagerness to spend, but obviously, I think there's a fair amount of caution due to the uncertainty in the environment for clients to say, "I'm going to go full board and spend." More of what we saw last quarter. Okay. It seems relatively clear, but just want to 100% absolutely confirm this. It sounds like the guidance that you're basically providing would basically suggest relatively stable sequential trends on a go-forward basis through the remainder of the quarter and doesn't really contemplate maybe the environment gets worse and some clients decide that they need to cut back a little bit more sharply. Is that correct? Yeah. Mark, this is Jeff. Good to talk to you again this quarter here. I think Dave made a couple of points. I know we touched on this in his remarks, but mid-quarter in the February timeframe, attrition levels ran a little bit higher than we had anticipated. The new assignments that we saw during the quarter were actually fairly consistent with what we expected. I think it was in both Joe and Dave's scripts over the last four to six weeks. As we closed out the first quarter and started April, we actually grew our consultants on assignment during that period. That gives us a point, Mark, for guidance where, yes, from the remaining-to-go period for the quarter, we expect stability from here on out. The growth that we saw in late March and April put us in a position where at the midpoint of our guide, our technology business is up sequentially a little bit less than 1%. Yes, you are correct, Mark, that the assumption at the midpoint of the guide is stability for the remaining-to-go period of the second quarter here. Obviously, nobody knows exactly what's going to happen because nobody knows exactly where tariffs are going to end, and we don't know where other countries are going to respond. If things do get worse, what are some of the levers that you could pull on, or how would you react if we started seeing some pullbacks in terms of existing projects? Yeah. I think, Mark, hopefully, you can appreciate over the last couple of years, obviously, in 2023 and 2024, revenues were declining in our technology business just given the macro headwinds. We've been making, as an overall organization, the necessary adjustments. I think it was mentioned in Dave Kelly's prepared remarks that when you look at our overall delivery headcount over the last several years, it's down close to 40%. We've been investing in our business from a sales role standpoint. I think, Mark, we're going to take a good hard look, as we always do, at our operating trends. We'll assess what we're seeing in terms of client visits, in terms of job orders, and continue to make the necessary adjustments in the business just as we've done over the last couple of years to make sure that we're returning a responsible level of profitability. Yeah. I'd just add to that. This is Dave. A couple of things, right? Jeff's obviously talking about the sales and delivery folks. We have always managed the business quantitatively and have expectations for those people. That's part of the reason why those percentages that Jeff quoted are where they are. Obviously, from a cost perspective, SG&A, we're always being prudent, making sure we're not unnecessarily spending money. I think we've been very prudent on that. The one thing I would continue to stress, based upon where we are today and the strong cash that we're generating, we think about this business not just in the near term, but certainly in the long term and the long-term benefits. We touched on the work, the implementation, critical for us to continue to invest to make sure that we bring that to fruition because I think Jeff has said in prior calls, we're looking at probably about a 1% improvement in operating margin after that goes live. We also obviously want to continue to invest in those other strategic priorities that we have, building our offshore capability, etc. We are thinking about this certainly being prudent in the near term, but making sure that we maintain focus on what the big long-term benefits we think that we need to generate to our long-term objectives. Hey, Mark. Now this is Joe. I'll add one piece because I think both Jeff and Dave kind of gave a good backdrop of how we look at this managing the business internally. I want to shift a little bit to the external, to the client front. The majority of the work that we're focused on in our model today is what I would call strategically critical projects that organizations don't turn off, they can't turn off. I mean, obviously, they could turn them off, but I'll tell you, things would have to get pretty bad. We would be in a whole different world, and I think how Kforce is performing would be the least of anybody's worries. My main point with that, we have not seen projects being cut short. We've seen projects come to completion. We're not seeing a lot of trimming in and around the strategic projects. I think that that's an important piece. My main reason for sharing that is we would see probably less initiation of new projects, which gives us time to prepare and react to those situations. I don't think we get blindsided by anything. I just wanted to give that part of the story as well. I appreciate that, Joe. One last one from me, and then I'll jump back in the queue. Just in terms of the gross margins, they're holding in relatively steady. What are you seeing in terms of price competition just with regards to the traditional IT flex staffing, not the consulting, but just IT flex staffing? Yeah. I think, Mark, this is Jeff. I'll take part one, and then Dave can add some color here. I think, Mark, as you look at our flex margin spreads, specifically in technology, after the earlier declines that we saw in 2023, our spreads have been actually quite stable since that period of time. I think Dave mentioned in an earlier answer to a question on the average bill rate also being stable as well at roughly $90. I think you look across that, Mark, I think we've been stable from an average bill rate standpoint now for the better part of three years. The margins have been very steady for the last couple of years as well. Of course, in the fourth quarter and again, in the first quarter, we saw a little bit higher health insurance costs. I think that distorts the flex margin lines a little bit. I think encouraging for us that we continue to see the operational spread stability. Of course, we've talked about the continued progress that we're making in our more solutions-oriented work. That work continues to have a margin profile that's 400 basis points or higher. Of course, as we continue to benefit from a higher mix of business in that space, that's also benefiting the overall margin profile for us. Yeah. And then just to add a little further, it kind of goes to where Joe went a minute ago about us seeing projects come to their natural conclusion. We are not seeing any extraordinary difference from that type of typical environment, right? We obviously, when we are talking about more of the traditional staffing engagements, we deal with a lot of large companies still looking from time to time to consolidate their lists of vendors, looking for some concessions, still seeing that. We are not seeing any wholesale, "Hey, you need to cut prices if you are going to keep business because we are under pressure, we being our clients, to save money." I think that is, to me, a reflection of what Joe said. These guys are doing critical work. They need to have it continue to be done. We are still in an environment where high-quality technology talent is important to find and needs to be paid for. They recognize that. We have seen stable bill rates, to Jeff's point, we have seen stable pay rates. I think a very typical environment. We are not seeing any rash decisions that companies are making. Really appreciate the color. I'll jump back in line. Thank you. Thanks, Mark. Our next question comes from the line of Kartik Mehta with Northcoast Research. Kartik, please go ahead. Thank you. I wanted to ask a little bit about capacity. Obviously, you've made cuts, and obviously, you had to kind of restructure the organization for the current environment. I am wondering, where you stand in capacity, and if things get better rather than worse, how much business could you do without having to increase personnel? Yeah. Kartik, this is Dave. Good question. Maybe helpful to kind of pre-characterize what we've done. I think Jeff had mentioned that delivery resources are down, certainly. I think important to note, as we kind of look at where we are today, the folks that we have on the sales side of the business, actually, from a number of people, is actually slightly greater than it was back when we were doing $1.7 billion in business. Obviously, those folks are in critical roles that are very relationship-driven with their clients. Tenure is very important. Frankly, that population in our organization is more tenured, really, than it's ever been. Those people, obviously, because of the criticality of those relationships, are harder to ramp, right? We've made comments in the past that is not necessarily the case in the delivery side of the equation. There is opportunity, and we've taken it to refine the number of resources we have there. We've enhanced the tools that they have to work with. That population typically can ramp very quickly. When you think about it, really, the determinant as to what capacity is, is the sales capacity, right? The fact that we've got the same number, and they're doing a lot more to get a sale today, as you would expect, than they were during a very robust time. That would necessarily likely happen again if you just kind of do the simple math. We probably have got, just from that perspective, about 40% capacity. We are in no way in a place where we would fall short in meeting the needs of any of our clients from a sales perspective anytime soon. Feel very good about where we are. Yeah. The only thing that I would add to Dave's comments is, as I mentioned in my opening remarks, we are making some investments relative to Office 365 Copilot and Sales Copilot, being that we're a dynamic shop and we can integrate these things. We're not baking in any assumptions in terms of any productivity lifts from the investments that we're making in these tools that we'll be providing our people as well. Just a follow-up, just on visibility. Obviously, visibility today is a lot lower than it was. If you try to compare it to when things were a little bit more normal and you look at kind of visibility from a revenue standpoint or project standpoint, how would you characterize, or is there a way to look like you feel comfortable with about 60% of the revenue, whatever KPIs you're looking at in terms of visibility? Yeah. I would say, having been through multiple cycles, we're always monitoring similar KPIs, which are really our front-end indicators. They give us a good sense on what's to come. During uncertain times, during recessionary periods, during robust times, it's really balancing those things and monitoring those KPIs. We also monitor the ratios because the ratios are really what start to move when you go into tougher times or when you go into more robust times, right? Your ratios typically improve during the good times, and then during the tougher times, those ratios start to expand a little bit. We've spent years building out our internal dashboards. Again, we leverage a lot of Microsoft products on this front. Our people have access to real-time information, and that's how we stay on top of and run the business. I think Kartik just added a couple of points. I think the average assignment length in our technology business has not moved significantly. I know we have not talked about that maybe recently, but that is still about 10 months. To Joe's point, very metric-driven. Certainly, through these times where you have got a little bit more of the macro to pay attention to, we rely heavily on our field leaders and field associates to keep in tune with the clients and kind of drive us on what they are seeing in those conversations. I think Joe and Dave both mentioned it. We are not seeing clients take proactive measures to restrict or delay or cancel. In that regard, I think the visibility still is reasonably clear to us in that regard. Thank you. I appreciate that. Thank you. Thank you. Our next question comes from the line of To bey Sommer with Truist. Toby, please go ahead. Thank you. With respect to your own internal initiatives, like the Workday, your capacity in India, is the timeline for those projects—how would you characterize it? On schedule, in line, behind schedule? How are you managing the completion of those efforts? Yeah. You mentioned those two. Those are probably the most visible here. Tobey, this is Dave. Certainly, with respect to the Workday implementation, we refer to it internally as Gemini. That has, as we've mentioned, been a multi-year project. The go-live that we're talking about in the first quarter of 2026 is an on-time delivery of that. We've been kind of foreshadowing the expectations of what we would see with that and looking to 2026. I feel very good about where we are. The team has been intensively working, has done an exceptional job, and I've got all the confidence in the world in the team. I feel very good about that program. As As it relates to our facility in Pune, India, actually, more than on time, that's operational, right? We went live with that facility at the beginning of this year. We're about four months in. Very pleased. As we had mentioned before, that is built strategically to support our domestic footprint. We've already won a couple of projects there, and things are going quite well. We built it with a reasonable degree of variable cost, but it can scale. Although we don't have a specific target of how quickly it'll grow because it'll obviously be dependent upon how it supports the U.S. business, again, that was a very well-executed project by a lot of people on the team here. Again, couldn't be more proud of them as well. Things are going quite well on all these key initiatives for us. Thanks. You mentioned healthcare a little bit higher in the quarter in impacting gross margin. Is that utilization generally running high, or is there something discrete in the first quarter that occurred? What are you seeing so far in Q2? Yeah. I don't think it's anything. Tobey, this is Jeff. Good to hear your voice here. I think healthcare, you remember from the fourth quarter and the first quarter of this year, Tobey, healthcare costs ran a little bit higher. That's more of a claim severity than it is a volume-driven dynamic. You can look across the space with some of the healthcare providers as well, just a general increase in healthcare costs in addition to the severity. Nothing that we would say is pervasive within the health insurance offerings themselves. That makes sense. You mentioned the indirect exposure that Kforce has to DC large system integrators. Could you discuss that a little bit more? I don't know, size the exposure, which I think is relatively small, and what you're seeing there. Also maybe talk about financial services as a vertical. Sure. Sure. Yeah. I could start by saying I wish I could give you some perspective on those industries, per se. Our exposure, relatively speaking, is small. I'll start with our exposure to government. I think Joe mentioned it. We obviously, I know you know this, divested of our prime government contracting business, KGS, about five years ago. I am pleased, obviously, in this environment, certainly to have done that and have that well in our rearview mirror. I would also mention, obviously, we've got a very diversified commercial portfolio, right? To your point, Tobey, in the government space, providing services to these integrators is certainly in the mid-single digits as in the entire portfolio. When you think about the percentage of the business that might be impacted by government spending cuts, it's even a fraction of that. Really, for us, the impact is nominal. As I've mentioned, in terms of an industry bellwether as to what we're seeing, as I'm going to tell you in the financial services business, it is client by client. There are not huge amounts of clients. I would be giving you information that's only partially informed to give you an opinion about the industry, but clearly a small amount of business impact for us there. As it relates to the financial services vertical, we've said in the past, this is our largest vertical. I think I'd mentioned—I know I'd mentioned in my prepared remarks that that was off a little bit from Q4 to Q1. By the way, I'd mentioned that's after two quarters of sequential growth. As I have said in the past, obviously, we do business with very large institutions. I can tell you, just looking at the portfolio, we had some actually that grew revenue for us. We had some certainly that had declines as well. On balance, the total dollars were down a little bit. Again, I do not think we are a bellwether, and I would not hang your hat on what industry trends are in financial services by our performance. Again, it could change quarter to quarter based upon project by project and client by client. Thank you. Thank you. Thanks, Tobey. Our next question comes from the line of Trevor Romeo with William Blair. Trevor, please go ahead. Hey, good evening, guys. Thanks so much for taking the questions. One I had was you've talked about the success of the consulting-focused offerings, I think, even in this software type of demand environment broadly. I guess, are there any common themes among the type of project work that clients are kind of still demanding to a large degree for your consulting-type offerings? Maybe asked differently, are there any specific types of projects you think Kforce in particular has kind of carved out a unique offering that's really resonated well? Yeah. Trevor, yeah, I mean, we've organized this offering in a couple of different areas. Frankly, and we get quarterly updates from our team here, we've had pretty broad success. Even in the application engineering space, we're continuing to see growth, obviously. That is at the heart of a lot of our development work that we're doing. We're seeing advancements in the digital space. Obviously, clearly, there's a ton of data and data rationalization work that's being done, obviously, in advance of a lot of companies' AI efforts. I think we're certainly seeing growing pipelines, in particular, in those last two areas. Frankly, across all of the KCS engagements in our cloud, the cloud is also a big area of focus. Those places where the engagement with the end customer, the use of the cloud is really important as well as, as I've mentioned, all very strong. We're proud of that business as well, right? As we've mentioned, we've had good growth. That has been really the driver of our outperformance, I think, generally speaking, over the last few quarters, certainly. Got it. Thanks, Dave. That's helpful. I guess I wanted to ask sort of an AI-related question. I know the long term view you have and generally agree that new use cases from AI will ultimately spur more demand. Just in terms of the near term, I guess maybe there's some negative impact on certain roles. Maybe there's some new roles being created. I guess, are the new opportunities you're seeing now offsetting any of that near-term disruption, or do you think one side of that is kind of moving faster than the other at this point? Yeah. I would say from what we're seeing, realizing who makes up our customer base, which are enterprise, Fortune 1000 organizations, what we're seeing pretty much across the board within that client set is AI readiness. A lot of energy being spent around data, around migrating systems to the cloud or preparing to migrate them to the cloud, in and around digitizing the various systems so that they're prepared as they start to build out their use cases. They have to have the foundation in place and the infrastructure. That's where we're seeing a lot of the energy. Yes, are we seeing roles that are being created? I would say they're reshaping of existing roles where data scientists now are becoming AI engineer-oriented or architect-related roles. We're seeing the AI tied to a lot of roles versus what I would say is purely newly created roles. That is just providing more opportunity for us to tap into those high-demand skill set areas. Really, the work that we are seeing coming through the pipe specific to AI is in and around the readiness versus major implementations of a use case, especially within these Fortune 1000 organizations where data governance and a lot of other things have to be locked down, and they have to be in good shape to be able to execute, per se, the implementation of a large use case. All right. Super helpful. Thank you. Sure. Thank you, Trevor. Thank you, Trevor. Our next question comes from the line of Josh Chan with UBS. Josh, please go ahead. Hi. Good afternoon, Joe, Dave, Jeff. Maybe to quickly clarify on your comments about the environment, you mentioned leading indicators improving through April. I think it typically improves around this time of the year. I guess, are you interpreting this improvement as fairly normal from a seasonal perspective, just from a magnitude angle? Yeah, Josh. Yeah. Just to kind of clarify what I said. I tried to give some color in terms of what happened in the first quarter, right? Typically, in the first quarter, as I'd mentioned, we'd see growth in the second two months of the quarter. We actually didn't see growth in the second month of the first quarter. We did see some growth in March. That would be typical into mid-April specifically. That growth trajectory has flattened a little bit. I would say a traditional, in a strong growth environment, you would see continuation of growth through the quarter, right? Part of the reason why is, as we've mentioned, obviously, the uncertainty that we're seeing and our guidance contemplates flat consultants on assignment from here through the rest of the quarter. As we're thinking about where we are in this cycle relative to what we would see typically in a strong growth environment, we haven't suggested that we're looking at a continuation of that. Okay. Yeah. That's really helpful. Thank you, Dave. On the healthcare costs, I guess, are you guys thinking of those as relatively random or unexpected events? At what point do you try to price through those healthcare costs into your bids to have that not be as big of an impact? Thank you. Yeah. Josh, this is Jeff. I think from a healthcare standpoint, I had mentioned that this is the second quarter that the costs have been a bit higher than we anticipated. That was preceded probably by three or four quarters where the costs were either consistent or a bit below what we had expected. Naturally, Josh, as you can imagine, healthcare costs are a bit difficult to predict. Of course, every year, we take a look at what the healthcare cost trends are and price it accordingly. Some quarters, you get a little bit, I'll say, unexpected surprise by some of the more severe claims that you just can't predict. We do price in kind of an annual healthcare cost trend. Hopefully that helps, Josh. Yeah. Thanks, Jeff. Thank you, everybody, for the call and the time. Thank you, Josh. One last reminder, if you would like to ask a question, press star, then the number one on your telephone keypad. Once again, star one. Our next question comes from the line of Marc Riddick with Sidoti. Marc, please go ahead. Hi. Good evening, everyone. I want to thank you for all the color that you've already provided. You've already answered pretty much most of my questions. One of the things I was sort of curious about is maybe you could share some thoughts as to what you're seeing on candidate availability and whether or not that has changed much over the last few months, or if there are any particular areas where you're beginning to see things loosen up a bit, and maybe how you see things sort of playing out there. Yeah. Marc, I think the simple answer is, in terms of candidate availability, it really hasn't changed materially at all over the course of, I would say, more than the last couple of months, right? Over the course of the last, I would say, certainly nine months to a year, certainly, right? I think maybe reflective of that is we're looking at stability in pay rates, right? No, I think the other thing I would say is this is what we do well, right? We are excellent, I think, at identifying the right candidates for the roles, right? Frankly, an ongoing question in good times and bad, how do you find the consultants? It's a lot to do with our people. It's a lot to do with our processes. It is not something that keeps us up at night, but no, we have not seen any material change at all in candidate availability. Okay. Great. Last one for me, and you touched on this certainly during your prepared remarks as far as the share repurchase activity during the quarter. I guess it seemed to hint a little bit into April, which kind of lends toward the share count guide for 2Q. Maybe you could sort of share some thoughts there. I mean, obviously, it makes a lot of sense to take advantage of where the shares are, but maybe you could talk a little bit about that as well. Yeah. Marc, this is Jeff. It's a good question that you asked. I think what you saw certainly from the first quarter is we got a little bit more aggressive with our share repurchase activity. Of course, the first quarter is traditionally the lower quarter of operating cash flows when you look across the full year. Because of that, we typically have a lighter amount of share buyback activity in the first quarter. As we looked across the space and certainly given the volatility that we were seeing and where we expect and the confidence that we have moving forward as a firm, we got a bit more aggressive in the first quarter and wanted to be transparent with that activity continuing into April. I think when you look across, Marc, and I did mention this in some of the prepared remarks, but since 2007, we've, through dividends and share buybacks, returned about $1 billion in capital to shareholders. You look across that, and that's about 75% of the cash that we've generated. The consistency that we've shown over a long period of time as a firm in getting aggressive and being consistent with our return of capital. I think I mentioned maybe last quarter that we've been returning capital and buying back stock before it was voted to do this. We're serious about it. As we look forward, don't see us changing course in this regard. Joe and Dave have given commentary about the organic growth strategy. That is the strategy that we believe is best for Kforce. Fortunately, we came into the year with a very strong balance sheet, and we're using it. Excellent. Thank you very much. Thanks, Mark. That looks to be all the questions we have today. I will now turn it back over to Joe for closing remarks. Joe? Thank you for your interest and support of Kforce. I would like to express my gratitude to every Kforcer for your efforts and to our consultants and clients for your trust and faith in partnering with Kforce and allowing us the privilege of serving you. We look forward to talking with you again after second quarter of 2025. Have a great evening. Thanks, Joe. Ladies and gentlemen, that does conclude today's call. Again, thank you for joining, and you may now disconnect. Have a great evening.