Kforce : 2023 Annual Report Annual Report

T O G E T H E R TO WA R D T O M O R R O W

A N N U A L R E P O R T 2 0 2 3

I AM TREMENDOUSLY GRATEFUL

TO OUR FELLOW SHAREHOLDERS, CLIENTS, CONSULTANTS AND EMPLOYEES:

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 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. Our results, driven by solid execution and a focused business model, allowed us to continue allocating significant capital towards our strategic priorities and in our people and tools.

As to our strategic priorities, we meaningfully advanced our integrated strategy, which 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. We also made significant progress in our multi-yearback-office transformation efforts with the selection of Workday as our future state enterprise cloud application

for HCM and financials and the selection of our implementation partner. Workday will complement our Microsoft front-end applications to 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 these two market-leading companies who are at the forefront of investing in artificial intelligence. As we look ahead to 2024, we expect to continue to make the necessary investments in our strategic priorities to sustain our long-term growth ambitions and achieve our financial objective of attaining double-digit operating margins at slightly greater than $2 billion in annual revenues.

FULL YEAR 2023 FINANCIAL HIGHLIGHTS

• Revenue for the year ended December 31, 2023, of $1.53 billion decreased 10.5% year-over-year (10.1% on a billing day basis).
• Technology revenue of $1.38 billion decreased 8.2% year-over- year (7.8% on a billing day basis).
• As reported, operating margins were 5.7% for the year ended December 31, 2023, which decreased 110 basis points year- over-year. As adjusted, operating margins of 6.2% for the year ended December 31, 2023, decreased 70 basis points from 6.9% for the year ended December 31, 2022.
• As reported, diluted earnings per share for the year ended December 31, 2023, were $3.13 per share, a decrease of 14.9% year-over-year. As adjusted, diluted earnings per share were $3.49 and $4.25 for the years ended December 31, 2023 and 2022, respectively, a decrease of 17.9%.

As we look ahead to 2024, we expect to continue to make the necessary investments in our strategic priorities to sustain our long-term growth ambitions and achieve our financial objective of attaining double-digit operating margins at slightly greater than $2 billion in annual revenues.

• We returned $94.7 million of capital to our shareholders through $67.1 million of share repurchases and $27.6 million in dividends during the year ended December 31, 2023, which exceeded 100% of operating cash flows.

We took action in July 2023 to reduce our structural costs to the lower revenues that we were experiencing and announced certain executive organizational changes in September 2023 consistent with our One Kforce organizational design and operating principles. While actions that affect our Kforce team are tremendously difficult to make and are never taken lightly, these changes allow us to navigate through the ongoing macroeconomic uncertainties and situate us well strategically for the future.

In February 2024, our Board of Directors (the "Board") approved an increase of 5.5% in our annual dividend from $1.44 per share to $1.52 per share, our fifth consecutive annual increase. Additionally, the Board approved an increase in our stock repurchase authorization, bringing the total to $100 million.

OUR SERVICE LINES

TECHNOLOGY

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. In 2023, we experienced a decline in flex revenues in our Technology business of approximately 7%, which closely resembled what we experienced in the Great Recession in 2008. As a reminder, our Technology business significantly outperformed the market in 2022 and 2021, growing 40% over that two-year period. After experiencing sequential billing day declines in the first three quarters of 2023,

KFORCE INC. AND SUBSIDIARIES | 1

importantly, our Technology business grew sequentially in the fourth quarter of 2023, which was reflective of the stability in the number of consultants on assignment we began to see beginning in mid-Q3 and the modest increase throughout the fourth quarter. Overall average bill rates in our technology business were stable in 2023, remaining near record levels at approximately $90 per hour, which was encouraging given the macro backdrop. In addition, we continued to benefit from an increased mix of managed teams and project engagements, which carries a higher average bill rate (and greater flex margin %). 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.

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 continued economic and geopolitical uncertainty. While clients have been acting with restraint over the last 12 plus 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 in other than the domestic technology talent solutions space.

We have continued to broaden our technology service offerings beyond traditional professional staffing to include managed teams and project solutions. Clients consider access to the right talent, at the right time, essential to their success and see our services as a cost-effective solution for their project requirements as demonstrated by more than 90% of our managed teams and project solutions being executed with existing clients. Our integrated strategy capitalizes on the strong relationships built over the past 60 plus years within 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 market-leading customers, which are the largest consumers for the services we provide. Market leaders across all industries typically prioritize technology investments to maintain their competitive advantage. Our focus on addressing their strategic needs continues to be critical in our ability to drive sustainable, long-termabove-market performance. While short-term disruption may occur with certain clients or industries, our diverse client base provides

an outstanding platform for consistent, long-term growth.

FINANCE AND ACCOUNTING

Our FA business declined approximately 28% year-over-year as a result of the impact of business we strategically are no longer supporting due to our repositioning efforts and a

more challenging macro-environment. Our average bill rate has continued to exceed $50 per hour, which has improved 37% from $37 per hour pre-pandemic and our Flex margins have improved 140 basis points over that same time period, which is reflective of our success in repositioning this business towards higher-skilled roles.

Our core competency is rooted in the ability to identify and provide

critical resources, real-time and at scale, to help world-class companies solve complex problems and competitively transform their businesses.

ALIGNING FOR THE FUTURE

Our strategic position is solid, and our prospects are excellent. With that said, tremendous uncertainties still exist in the macro landscape and there are conflicting views of economists on whether we 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 affects across the region of the war in Israel along with 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.

AS WE LOOK AHEAD TO 2024

The strength of the secular drivers of demand in technology accelerated significantly coming out of both the 2008 Great Recession, with advancements in mobility, cloud computing, among many others, and the 2020 Pandemic, with further digitalization of businesses and the continued headlines around GenAI technologies. I have seen a lot of economic cycles in

my 35 plus years in this business and each one behaves a bit differently. What remains clear to us though is that the broad and strategic uses 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 and at scale, to help world- class companies solve complex problems and competitively transform their businesses. Our operating model also allows us to be flexible in partnering with our clients to meet their needs across a broad spectrum of engagement forms, from direct hire, traditional professional staffing assignments to managed teams'

2 | KFORCE INC. AND SUBSIDIARIES

engagements and managed projects. 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 plus year operating history, and we continue to carry the highest overall Glassdoor rating within our peer group.

We have taken necessary and thoughtful measures to strike a balance between associate productivity and our revenue expectations. As we have 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.

ESG AND STEWARDSHIP

Our 2023 Sustainability Report, which was published in February 2024, outlines the considerable progress we made in our overall ESG efforts in 2023. We continued to prioritize investing in our people as our number one priority and strengthened our governance and environmental processes-starting with the formal inclusion of ESG oversight and governance in the board committee charters. We also calculated our value chain emissions for 2023, which have declined 55% over our 2019 baseline, primarily as a result of our intentional focus on reducing our real estate footprint to align with our Office Occasional® work environment. There is always more to be done, and our desire to learn and evolve has us eager to discover the next best steps in our ESG journey. Our goals for 2024 have us pushing for even greater equity and inclusion throughout the Firm.

STEWARDSHIP AND COMMUNITY ENGAGEMENT

Our goal is to leave a lasting, positive impact on the world. Our hope is that by partnering with charitable organizations, connecting with diverse associations and engaging in projects that have meaningful impacts, we will empower our employees to empower others each and every day.

Under our guiding principle, Empowering People Through Knowledge SharingSM, we focus on programs that help people develop skills, gain knowledge and pursue meaningful careers. Our employees lead the way in our community engagement efforts. Their passion for education, community development and human services guides our community engagement strategy.

We bring a unified approach to philanthropy with special emphasis on our Firm's four corporate-sponsored charities: Best Buddies, Feeding America, Junior Achievement and Special Operations Warrior Foundation. In addition to supporting

our Firm-sponsored charities, we encourage our people to

participate in causes and organizations they are passionate about. For example, this year we donated about 400 laptops to organizations in need. Below are a few examples of the many other initiatives we host and charities we partner with.

• Season of Impact: What began as an annual day of giving evolved into a Season of Impact-where Kforce employees are encouraged to give their time, talent and treasure to organizations of their choice throughout the holiday season.
• Junior Achievement: Kforce is sponsoring a new 3DE program at a local educational institution, which is a program that reimagines education by linking school districts with the business community so students can problem-solvereal-world challenges. 3DE schools provide access to in-demand careers, fostering stability and building a culture of inclusionary instruction and individual value. In 2023, Kforce sponsored and participated in the inaugural program.
• Best Buddies: Kforce participated in the 2023 Best Buddies Champion of the Year Gala and Friendship Walk. Kforce is also a proud participant of the Best Buddies' Jobs Program, which gives individuals with intellectual and developmental disabilities opportunities for meaningful and fulfilling work.

IN SUMMARY

We have built a solid foundation at Kforce to advance our Mission Uniting professionals to achieve success through lasting personal relationships® and Vision To have a meaningful impact on all the lives we serve®. Our balance sheet is clean, which allowed us to deliver predictable dividends for our shareholders and to be opportunistic in repurchasing our stock in 2023, and we expect to continue to generate strong cash flows in 2024.

I want to reiterate how proud I am of the performance and resiliency of our collective Kforce team through their daily actions living out our tagline We Love What We Do. We Love Who We Serve®. Together, we fought through a challenging operating environment, made some difficult decisions and met each challenge. We are blessed to have a tenured Executive Leadership team who has been through multiple economic cycles together and can quickly adjust to changing market conditions. We will continue to invest in our strategic priorities that will help drive long-term growth and achieve our longer-term financial objective of attaining double- digit operating margins. We believe the key contributors achieving double-digit operating margins 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. We enter 2024 well positioned to take additional market share and continue creating significant long-term returns for our shareholders.

Joseph J. Liberatore

President and Chief Executive Officer

Director

KFORCE INC. AND SUBSIDIARIES | 3

TECHNOLOGY

Kforce is a leading technology staffing and solutions firm in the U.S. with a proven history of evolving to meet

our customers' needs. We provide the right professionals, teams and methodologies to deliver great results. Our experts help our clients seize opportunities and solve their greatest challenges.

Our four areas of focus are:

• APPLICATION ENGINEERING

We create and deploy comprehensive full-stack solutions

across the entire digital ecosystem, including software,

web and mobile development, to enhance user experience

and deliver impactful outcomes.

• CLOUD

We empower our clients with cloud-native solutions

customized to the right platform for their journey and

fast-track their use of cloud computing.

• DATA AND ANALYTICS

We serve our clients throughout the full data lifecycle:

from describing past performance and understanding

current progress to predicting future outcomes

and prescribing next steps to improve efficiency and

grow revenue.

• DIGITAL EXPERIENCE

We take a human-centered,design-inspired approach

to craft simple, personalized and differentiating digital

solutions that drive revenue growth, brand loyalty and

customer satisfaction.

Our CONSULTING SOLUTIONS team helps companies

achieve their vision through digital transformation and

modernization. We do so by combining our deep technical

expertise in core practice areas with a multi-industry

focus, including technology, financial services, insurance,

telecommunications, healthcare, retail and energy.

From strategy through implementation, we provide the

FINANCE AND ACCOUNTING

As a top provider of finance and accounting services in the U.S., we provide highly skilled analytics and decision support in the following areas:

STRATEGIC

We support senior-level decision making, ranging from financial, risk, and mergers and acquisitions to business intelligence and data science.

OPERATIONAL AND TECHNICAL

We execute day-to-day accounting and staffing analysis, such as directing, controlling and planning.

TRANSACTIONAL

We perform essential functions, including accounts receivable, accounts payable and payroll.

Our total shareholder return (TSR) since going public in August 1995 has been approximately 2,300%, roughly 4 times greater than the Russell 2000 over the same period.

2,400%

KFRC

knowledge and leadership our clients rely on to accelerate

their business.

1,800%

1,200%

600%

0

RUSSELL 2000

Kforce TSR vs. Russell 2000 Index stock performance from 8/15/95 (IPO) to 12/31/23

4 | KFORCE INC. AND SUBSIDIARIES

SELECTED FINANCIAL DATA

The information set forth below is not necessarily indicative of the results of future operations and should be read in conjunction with Kforce's Consolidated Financial Statements and the related notes thereto ("Consolidated Financial Statements") incorporated into this Annual Report.

Years Ended December 31,		2023		2022		2021		2020		2019
(In thousands, except per share amounts)
Revenue	$ 1,531,756	$1,710,765	$1,579,922	$1,397,700	$1,347,387
Gross profit		427,066		501,107		456,864		396,224		395,038
Selling, general and administrative expenses		334,933		379,815		345,721		310,713		314,167
Depreciation and amortization		5,012		4,427		4,500		5,255		6,050
Other expense, net		1,871		14,423		7,376		5,044		3,425
Income from continuing operations,		85,250
before income taxes			102,442		99,267		75,212		71,396
Income tax expense		24,175		27,011		24,090		19,173		16,830
Income from continuing operations		61,075		75,431		75,177		56,039		54,566
Income from discontinued operations,		-
net of tax			-		-		-		76,296
Net income	$	61,075	$	75,431	$	75,177	$	56,039	$	130,862
Earnings per share - basic, continuing operations		$3.18		$3.76		$3.65		$2.67		$2.35
Earnings per share - diluted, continuing operations		$3.13		$3.68		$3.54		$2.62		$2.29
Weighted average shares outstanding - basic		19,188		20,054		20,579		20,983		23,186
Weighted average shares outstanding - diluted		19,507		20,503		21,212		21,395		23,772
Dividends declared per share		$1.44		$1.20		$0.98		$0.80		$0.72
As of December 31,		2023		2022		2021		2020		2019
(In thousands)
Cash and cash equivalents	$	119	$	121	$	96,989	$	103,486	$	19,831
Working capital	$	141,484	$	146,327	$	211,680	$	230,726	$	160,271
Total assets	$	357,979	$	392,004	$	503,401	$	479,049	$	381,125
Total outstanding borrowings on credit facility	$	41,600	$	25,600	$	100,000	$	100,000	$	65,000
Total long-term liabilities	$	95,924	$	78,373	$	154,564	$	190,948	$	128,898
Stockholders' equity	$	159,080	$	182,198	$	188,406	$	179,935	$	167,263

KFORCE INC. AND SUBSIDIARIES | 5

STOCK PRICE PERFORMANCE

The following graph compares the cumulative five-year total return on our common stock, the NASDAQ Stock Market (U.S.) Index and our Peer Group using the value of an investment of $100 on December 31, 2018 with dividends fully reinvested. All returns are weighted based on market capitalization at the end of each discrete measurement period. Historical stock prices of our common stock are not necessarily indicative of future stock price performance.

Index	2018	2019	2020	2021	2022	2023
Kforce Inc.	100.0	131	142	258	192	236
NASDAQ Stock Market (Composite)	100.0	135	194	236	158	226
2023 Peer Group (1)	100.0	128	126	192	148	170
2022 Peer Group (2)	100.0	123	123	187	149	162

The Compensation Committee ("Committee") reviews the composition of the peer group on an annual basis with the assistance of Pay Governance. Consistent with the recommendation of Pay Governance, the Committee approved the removal of AMN Healthcare Services Inc. and Cross Country Health Inc. from our peer group in 2023 due to their predominant focus in healthcare staffing, which is not a focus for Kforce. The Committee also approved the addition of ICF International, Inc. and Perficient Inc. who are more focused on providing technology services and solutions. The changes to our 2023 peer group further align our peer group with our business mix, which is 90% concentrated in providing technology talent and solutions to world-class clients.

(1) 2023 Peer Group:
ASGN Incorporated	Huron Consulting Group Inc.	Perficient Inc.
Barrett Business Services, Inc.	ICF International, Inc.	Resources Connection, Inc.
CBIZ, Inc.	Kelly Services, Inc.	Robert Half International Inc.
The Hackett Group, Inc.	Korn Ferry	True Blue, Inc.
Heidrick & Struggles International Inc.	ManpowerGroup, Inc.
(2) 2022 Peer Group:
AMN Healthcare Services, Inc.	The Hackett Group, Inc.	ManpowerGroup, Inc.
ASGN Incorporated	Heidrick & Struggles International Inc.	Resources Connection, Inc.
Barrett Business Services, Inc.	Huron Consulting Group Inc.	Robert Half International Inc.
CBIZ, Inc.	Kelly Services, Inc.	True Blue, Inc.
Cross Country Healthcare Inc.	Korn Ferry

6 | KFORCE INC. AND SUBSIDIARIES

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

The Committee uses a peer group of companies as a source for executive compensation benchmarking data and comparisons to Kforce's executive compensation levels; insight into external compensation practices; and assistance with determining specific financial objectives for our performance-based compensation. Additionally, our peer group is used to determine annual equity LTI compensation levels based on our relative TSR performance.

The Committee focuses on selecting peers that are publicly-traded professional staffing, technology solutions providers and human capital centric companies, including certain companies we consider to be our direct business competitors. The Committee also selects peers that are similar in terms of size (as measured by revenue and market capitalization) that are in adjacent staffing markets but may not be considered a competitor. The Committee matches the median size of the peer group to Kforce by balancing a selection of both larger and smaller companies. The primary criteria for selection include customers, revenue footprint, geographical/domestic presence, talent, complexity of operating model and direct competitors.

MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Holders of Common Stock

Our common stock trades on the NASDAQ using the ticker symbol "KFRC." As of February 20, 2024, there were 138 holders of record.

Purchases of Equity Securities by the Issuer

In February 2024, the Board approved an increase in our stock repurchase authorization, bringing the total authorization from $41.7 million to $100.0 million. Purchases of common stock under the Plan are subject to certain price, market, volume and timing constraints, which are specified in the plan.

The following table presents information with respect to our repurchases of Kforce common stock during the three months ended December 31, 2023:

			Total Number of	Approximate Dollar
			Shares Purchased	Value of Shares
	Total Number of		as Part of	That May Yet Be
	Shares Purchased	Average Price	Publicly Announced	Purchased Under the
Period	(1)(2)(3)	Paid Per Share	Plans or Programs	Plans or Programs
October 1, 2023 to October 31, 2023	5,124	$59.23	-	$66,822,516
November 1, 2023 to November 30, 2023	221,392	$65.38	219,473	$52,472,901
December 1, 2023 to December 31, 2023	253,855	$68.56	155,722	$41,731,977
Total	480,371	$66.99	375,195	$41,731,977

1. Includes 5,124 shares of stock received upon vesting of restricted stock to satisfy tax withholding requirements for the period October 1, 2023 to October 31, 2023.
2. Includes 1,919 shares of stock received upon vesting of restricted stock to satisfy tax withholding requirements for the period November 1, 2023 to November 30, 2023.
3. Includes 98,133 shares of stock received upon vesting of restricted stock to satisfy tax withholding requirements for the period December 1, 2023 to December 31, 2023.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In addition to the inherent operational risks, Kforce is exposed to certain market risks, primarily related to changes in interest rates. As of December 31, 2023, we had $41.6 million outstanding under the Amended and Restated Credit Facility. A hypothetical 10% increase in interest rates in effect at December 31, 2023 would increase Kforce's annual interest expense by less than $0.4 million. Refer to Note 13 - "Credit Facility" in the Notes to Consolidated Financial Statements, included in this Annual Report, for further details on

the Amended and Restated Credit Facility.

KFORCE INC. AND SUBSIDIARIES | 7

BUSINESS OVERVIEW

COMPANY OVERVIEW

Kforce Inc., along with its subsidiaries (collectively, "Kforce"), is a solutions firm specializing in technology and finance and accounting professional staffing services. Our KNOWLEDGEforce® empowers industry-leading companies to achieve their digital transformation goals. We curate teams of technical experts who build solutions custom-tailored to each client's needs. These scalable, flexible outcomes are shaped by deep market knowledge, thought leadership and our multi-industry expertise. Our integrated approach is rooted in 60 years of proven success deploying highly skilled professionals on a temporary ("Flex") and permanent ("Direct Hire") basis.

Kforce serves clients across a diverse set of industries and organizations of all sizes, but we place a particular focus on serving Fortune 500 and other large companies. Each year, over 20,000 talented consultants provide services to a significant majority of the Fortune 500. Together, we deliver Great Results Through Strategic Partnership and Knowledge Sharing®.

Over the last decade, we have driven significant, strategic change at Kforce, including but not limited to, streamlining the focus of our business on providing technology talent solutions. In alignment with this goal, since 2008, we have completed various divestitures of businesses that did not relate to our core business.

Our Technology and Finance and Accounting ("FA") businesses represent our two operating segments. Our Technology business comprises 90% of our overall revenues, and the remainder is generated by our FA business. For our Flex services, we provide our clients with qualified individuals ("consultants"), or teams of consultants, on a finite basis when the consultant's set of skills and experience is the right match for our clients. For our Direct Hire services, we identify qualified individuals ("candidates") for permanent placement with our clients. We further describe our two operating segments below.

Our operating results can be affected by:

• the number of billing days;
• the seasonality of our clients' businesses;
• changes in holidays and vacation days taken, which is usually highest in the fourth quarter of each calendar year; and
• increased costs as a result of certain annual U.S. state and federal employment tax resets that occur at the beginning of each calendar year, which negatively impact our gross profit and overall profitability in the first fiscal quarter of each calendar year.

Our Technology Business

We provide talent solutions to our clients in highly skilled areas including, but not limited to, systems/applications architecture and development (mobility and/or web); data management and analytics; cloud architects and engineers; business and artificial intelligence ("AI"); machine learning; project and program management; and network architecture and security.

We provide services to clients across virtually every industry with a diversified footprint in, among others, financial and business services, communications, insurance, retail and technology.

We have continued to broaden our service offerings beyond traditional staffing to include managed teams and project solutions. We believe our clients consider access to the right talent to be essential to their success and see our services as a cost-effective solution for their project requirements as demonstrated by more than 90% of our managed teams and project solutions being executed within existing clients. Kforce has been successfully winning more complex engagements due to the strong, long-standing partnerships we have built with our clients, our capability in identifying quality technology talent, and our reputation for delivering quality services. We are continuing to further integrate this capability into our Technology business.

The September 2023 report published by Staffing Industry Analysts ("SIA") stated that temporary technology staffing was forecasted to decline by 3% in 2023 and grow by 5% in 2024. Technology, as a discipline, continues to be project driven, even amidst generational changes like AI. There are a multitude of technology projects that need to be addressed to remain competitive, irrespective of economic performance.

Our Technology revenues declined 8.2% year-over-year (7.8% per billing day), to $1.4 billion in 2023. Although we experienced a decline in 2023, our Technology business grew 18% in 2022 on a year-over- year billing day basis after growing more than 22% in 2021 on a year- over-year billing day basis. The average bill rate in the fourth quarter of 2023 was approximately $90 per hour, which remained stable as compared to the fourth quarter of 2022. Our average assignment duration has been steadily increasing over the last several years and is currently 10 months.

The strength of the secular drivers of demand in technology accelerated significantly coming out of both the Great Recession, with advancements in mobility and cloud computing, among many others, and the 2020 COVID-19 Pandemic, with further digitalization of businesses and the continued headlines around Generative AI technologies. What remains clear to us is that the broad and strategic uses 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.

While our Technology business is not immune to economic turbulence, we believe there is a critical need for innovation to support business strategies and sustain relevancy in today's rapidly changing marketplace.

8 | KFORCE INC. AND SUBSIDIARIES