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 Relations portion of our website. I'm 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, 2 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…

Thank you, Joe. Revenue for the fourth quarter came in just above the midpoint of our guidance. We were encouraged to see overall revenues increased 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 2-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 the 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 2 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…

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 health care 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…

[Operator Instructions] Our first question comes from the line of Mark Marcon with Baird.

I'm wondering with regards to the Tech Flex, you did note that there was a little bit of a slower start. But in the last couple of weeks, things have picked up. And if I take a look at 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 what -- is there any particular vertical or area where you're starting to see a rebound with regards to the assignments picking up?

Yes, 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 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 seem to be some delay in some budgetary approvals. And so that led to maybe a bit greater follow-up. But in the last 2 weeks, really, we've seen a lot of our key performance indicators, our job orders, our interviews, send-outs really returned to late Q3 levels. If you remember and obviously, we made it as a point in the remarks, we saw a sequential growth for 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 as we -- 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, as we always say, there are certain clients and projects that we might win in 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 that we saw in early Q4, stable with some positive signs for potential improvement. So I feel pretty good about where we sit.

Great. And 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 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 the margin profile for Tech Flex for the coming year? Do you feel confident that we can stabilize those gross margins?

Yes. Mark, this is Dave again. Maybe I'll put a little bit finer point. And obviously, we all know 2023 was a tough year in the 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 0.5%. 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 a mix 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, we really have seen and we had mentioned we don't expect any spread changes other than payroll tax resets in Q1. We said that we've seen that in the last couple of 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, 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 margins. 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.

And 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 in 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 sit here today, certainly, 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, we 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 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 there -- are you anticipating any big jumps in terms 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. 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 2, 2.5 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 road map that we're going under. And in 2024, Mark, I mean, we're continuing to invest at about the pace that we have been in '23 heading into '24. So I think from an SG&A standpoint, I wouldn't expect anything significant in '24 related to our Gemini program. So I think that's the short of it, Mark, I think, from that standpoint.

Great. And then last one for me. I'm encouraged to hear you talk about 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 the SG&A as a percentage of revenue. I'm assuming we're going to get more efficiency with regards to the SG&A and you mentioned the 100 bps but wondering if you could put just a finer point as we think about that $2 billion double-digit mark.

Yes. 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. Certainly, Mark, you would expect the benefits. I know we've talked about 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. I did mention in my prepared remarks that a significant contributing factor to our financial objective 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 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 we feel pretty confident there. The last component, I would say, we've been after for a number of years which is constantly getting after our structural fixed costs and things like real estate, et cetera. We've been driving that for a number of years. And in '24 and '25, we've got a bit of work left to do there, Mark. But hopefully, that helps a bit.

Yes. Just maybe just to add, Mark, right. So this is a path that we've been on for a long time, right, simplifying our business this is an increasing view of the confidence in being able to get there, right? We have built a, 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 the continuation of the plan we put in place years ago that we've been executing on and expect to continue to execute on.

Yes, 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 dotcom, 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 is capable of doing that with that shift. And then even, as we move past the dotcom, when we made strategic decisions to divest of those units that weren't going to be able to compete for dollars, investment dollars because of our focus on IT and shedding those -- 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 and what Jeff spoke about, that as we get into that $2 billion range, we'll be able to achieve those double-digit operating margins.

Our next question comes from Trevor Romeo with William Blair.

First one, Yes, I know you talked about clients being slower to improve 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?

Yes, 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 have 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 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 such as us to really go after this hybrid type work in a more efficient with staffing and solutions and servicing it through multiple means there. So nothing's really changed from that standpoint. I do believe, 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 with -- throw Gen AI on top of that and everybody's desire is there, 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 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 get -- become greater visibility, more predictable, I think we'll see things loosen up.

Okay, great. That's helpful. 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 to improve a little bit throughout the quarter as you described could happen, or would that be kind of more upside to the guidance that it happens?

Yes. I think, Trevor, 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 improve. So 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 the quarter. So we're not expecting a great lift in the first quarter. It's really the momentum as we move forward.

Our next question comes from the line of Kartik Mehta with Northcoast Research.

Joe, can you talked about 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 some inquiries to final sales. How is that progressing or what changes have you seen?

Yes, I would say in terms of those indicators, no, we haven't really seen anything change with the sales cycle. The sales cycle has been elongated for -- really since the back half of 2022, when uncertainty started to creep in. So no material changes there. I would say, you had asked about conversions, we've actually, over the course of the last 4 or 5 quarters, we've seen our conversions come down rather significantly as in comparison to where we were. And again, I think that's what 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 the 35 years in multiple recessionary periods and tough periods of time where the first thing they do is exit consultants. The second thing, they rightsize 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 FTEs. 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 6 to 12 months?

Yes. 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 of 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, 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 [indiscernible] to manage 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 the 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.

Yes. 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 to 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 step of which is a much lower expense type model to get involved with.

Our next question comes from the line of Josh Chan with UBS.

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 get back on to the pace? Or do slower start years usually suggest kind of a slower year overall?

Yes. I mean, I think every year is a little bit different, right? So Josh, so 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 we -- 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 [indiscernible], 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 of weeks, what we probably would have seen a week or 2 earlier in a given year. So it's more than, more -- 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.

Yes. And what I would add to that, 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 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, we are not necessarily hearing those types of things. So I think this is more of just a delay and pause. So it's kind of the equation of looking through that windshield. It was really cloudy in 2023. The windshield looks pretty clear at this point in time. And I think everybody is just a matter of 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 is still in a little bit of wait and see. But overall, I'd say a lot more optimism than what we were experiencing in the beginning of 2023.

Okay. That's really helpful color. Thanks for that characterization, Joe. I guess if we look at the long-term goal, thanks for the goalpost that 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?

Yes. 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, certainly, that is going to be leveraging our existing infrastructure at its leisured pace. When you think about the back office transformation program which we've been driving for a number of years now. But yes, that gives us the benefit of scale. Yes, that gives us better predictability of SG&A. The gross margin tie into that, when you think about Joe and Dave's comments earlier, gross margins were down, call it, year-over-year, about 120 basis points. As the economic skies start to clear to a degree, we would expect to recapture some of that gross margin. Obviously, in times where you've got a little bit more certainty in the U.S. GDP, certainly positive. Our direct hire mix would improve. Obviously, 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 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.

Yes. I would add, so as a planning mechanism, right, stable margins is how we're thinking about it. And that's the plan we've been executing on opportunities, as 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 a potential opportunity. That's not part of the -- what we're counting on.

Our next question comes from the line of Marc Riddick with Sidoti & Company.

So 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 you touch a little bit on that and maybe share your thoughts on CapEx for the year.

Yes, 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, as you should expect in 2024, very similar to what we have been doing, we've been at repurchasing shares for a long time. Actually before it was in vogue to be repurchasing shares in the face of a more difficult macro environment. We believe in our ability to generate significant long-term shareholder appreciation. I 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 I think we've had this for quite a while, Marc. We gave the quote earlier on having 42 million shares in 2007 and about 19.5 million shares as we sit here today. 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 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, increase that share repurchase authorization to $100 million which I'll remind you, we also did last Q1 this time. So if you look at that, Marc and you look over the long term of what we 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?

Yes. I think CapEx, Marc, I would imagine somewhere between $6 million and $8 million in total for CapEx, it's about what we've been running at. We've obviously got our back office transformation program which we talked about here 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 '24. So I'd look at it as relatively flat with '23.

[Operator Instructions] Our next question comes from the line of Tobey Sommer with Truist Securities.

I was wondering if you could give us some color about how you're managing your sales people sort of account manager head count here after a couple of slow years. And what your recruiter head count looks like 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 occur?

Yes. Tobey, this is Dave. So I would -- I'll start off 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, as 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 salespeople 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 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.

Yes. Tobey, 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, as you well know, relationships take time to build. So we're in that build process playing for the other side because of what David mentioned, all the investments we've made 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 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 we can feed them, that they can make the appropriate levels of income. So it's typically how we handle this point in the cycle, 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 and those types of things, we can quickly ramp up. We have a great internal recruitment function. Our leaders are locked and loaded. We know we can turn that down very quickly.

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 maybe a little bit more volatile than some other industry verticals.

Yes. I guess, Tobey, I would start out by saying as a barometer to strength in any particular industry, it's tough to gauge, obviously, from our sequential success quarter-to-quarter because a lot of the drivers are specific to things that we do at a client level. But having said that, I made commentary, we actually have had success sequentially in financial services, right? We had a couple of nice projects there. In technology services as well, energy, manufacturing alternatively was a little weaker for us. Retail was also a good industry vertical for us in the fourth quarter. So it's -- 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 it end.

Okay. And last one for 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?

Yes. Just obviously, just to reiterate, obviously, we've seen a nice uptick in the last couple of weeks generally. 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 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 as a calendar thing, that is a general trend that we're seeing, though. So -- and that much has changed, obviously since we last talked.

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.