Breaking Down Staffing 360 Solutions, Inc. (STAF) Financial Health: Key Insights for Investors

You're looking at Staffing 360 Solutions, Inc. (STAF) and seeing a complex picture, right? Honestly, the raw numbers from the last twelve months (TTM) show a company fighting gravity: revenue was around $176.82 million, but they still posted a net loss of -$23.42 million, which is a tough pill for any investor. But here's the game-changer you need to focus on: the definitive merger agreement with Atlantic International Corp. is set to transform this narrative, projecting a combined annual revenue of approximately $620 million and analysts are defintely banking on a turnaround, forecasting earnings per share (EPS) to jump to $0.38 per share next year. So, the question isn't about the past; it's whether a $2.65 million market cap company can successfully execute a merger that triples its top line and finally delivers on the promise of profitability.

Revenue Analysis

You need to know the core truth about Staffing 360 Solutions, Inc. (STAF)'s revenue: the business is now fundamentally a smaller, US-focused entity, and its top-line trend is facing significant headwind. The company's revenue streams have been aggressively streamlined following the divestiture of its UK operations in early 2024, but the US market is proving tough.

For a sense of the near-term picture, analysts had anticipated a quarterly revenue figure of around $56,574,300 for a 2025 reporting period, but the recent trend shows a contraction. For instance, the second quarter of 2024 revenue (which gives us the latest structural view) fell 9.1% year-over-year to $44.2 million, signaling a challenging operating environment that defintely carried into 2025.

Breakdown of Primary Revenue Sources and Segments

The company's revenue now flows almost entirely through two core US-based segments: Commercial Staffing and Professional Staffing. The sale of the UK business in February 2024 was a massive shift, meaning the old geographic breakdown is obsolete. Now, the focus is squarely on the US market and the mix of temporary (temp) versus permanent (perm) placements.

Here's the quick math on where the revenue is coming from, based on the last full-quarter breakdown (Q2 2024), which sets the stage for 2025:

• Professional Staffing (US): This segment is the largest contributor, making up roughly 54.4% of the total quarterly revenue. It includes temporary placements in specialized fields like IT, finance, and engineering.
• Commercial Staffing (US): This segment accounts for the remaining 45.6% of revenue, focusing on light industrial and office/clerical roles.

The true risk is visible in the permanent placement (perm) revenue, which is a bellwether for corporate hiring confidence. Perm revenue for both Commercial and Professional Staffing combined was less than $110 thousand in Q2 2024, showing a major slowdown in higher-margin, long-term hiring.

Year-over-Year Revenue Growth Rate and Segment Changes

The revenue growth rate has been negative in the near-term, which is the most critical risk for investors. The 9.1% year-over-year revenue decline in Q2 2024 was driven by weakness across the board, but especially in Commercial Staffing, which saw a 16.5% year-over-year drop. Professional Staffing saw a smaller, but still negative, 1.7% decline.

What this estimate hides is the impact of lower-margin employer-of-record (EOR) business, which grew to represent 38.6% of the first-half 2024 revenue, up from 32.1% in the prior year. This is a significant change in the revenue stream's quality, suggesting the company is taking on more volume at a thinner profit margin to keep the top line from falling further.

The table below illustrates the segment contributions and the recent trend, which is the current reality for Staffing 360 Solutions, Inc. as you consider the insights in this full post: Breaking Down Staffing 360 Solutions, Inc. (STAF) Financial Health: Key Insights for Investors.

The next step is to see how this revenue pressure is impacting the company's ability to generate cash and manage its debt.

Profitability Metrics

You need a clear picture of Staffing 360 Solutions, Inc.'s (STAF) financial performance, and the profitability margins from the Trailing Twelve Months (TTM) ending around November 2025 paint a challenging one. The company is currently operating at a significant loss, which is a major red flag for investors.

For the TTM period, Staffing 360 Solutions, Inc. reported total revenue of approximately $176.82 million, but this translated into a net loss of about -$23.42 million. This is the quick math that shows the core problem: the business model is not generating profit after all expenses are accounted for.

The company's core profitability ratios highlight where the pressure points are:

• Gross Profit Margin: 13.37%
• Operating Profit Margin: -7.03%
• Net Profit Margin: -13.25%

Trends in Profitability and Operational Efficiency

The trend in profitability is one of deterioration, not improvement. The Operating Margin, which shows how much profit a company makes from its core business operations before interest and taxes, has been deeply negative. For context, the Operating Margin was -5.90% at the end of 2023, but has since worsened to -11.13% as of November 2025 (TTM), according to one measure. This negative trend signals that the company's cost structure is not sustainable relative to its revenue.

Operational efficiency is measured by how effectively the company manages its costs. The low Gross Profit Margin of 13.37% is typical for a staffing firm, as the cost of services (primarily wages for temporary staff) is very high. However, the plunge into a negative Operating Margin of -7.03% means that the company's Selling, General, and Administrative (SG&A) expenses are far too high for the gross profit it generates. This is a critical cost management issue.

Comparison with Industry Averages

When you compare Staffing 360 Solutions, Inc.'s margins to the broader industry, the financial distress becomes even clearer. While the industry average for Gross Margin is reported as high as 63.5%, that figure likely includes higher-margin professional services firms. A more direct comparison for a large, publicly traded staffing peer like ManpowerGroup shows an Operating Margin of 1.43%. This is a firm that is actually profitable in its core operations.

The stark difference shows the gap Staffing 360 Solutions, Inc. must close:

The company's negative margins are defintely a serious deviation from the peer group, indicating deep-seated issues in either pricing power, cost control, or both. For more on the company's strategic goals, you can review its Mission Statement, Vision, & Core Values of Staffing 360 Solutions, Inc. (STAF).

Debt vs. Equity Structure

You need a clear picture of how Staffing 360 Solutions, Inc. (STAF) is funding its operations, and the answer is simple: they are heavily reliant on debt, and the equity side is in a precarious position. The company's financing structure is currently defined by significant leverage and a negative equity balance, which is a major red flag for investors.

As of early 2025, the company's total debt stood at approximately $41.32 million, a substantial burden given their scale. This debt load is what drove the company's recent, critical financial restructuring efforts. The breakdown of this debt shows a significant amount is classified as current, meaning it's due within the next year, which is a key liquidity concern. For instance, in the most recent reported quarter (MRQ), the long-term debt to equity ratio was a deeply negative -117.94%, reflecting a balance sheet under acute stress. That's a tough spot to be in.

A Debt-Heavy Balance Sheet

The core issue is that Staffing 360 Solutions, Inc. has negative shareholders' equity, meaning its total liabilities exceed its total assets. This is why the debt-to-equity (D/E) ratio is a negative figure, cited at approximately -282.36% in the most recent quarter (MRQ). This ratio is essentially uninterpretable in the traditional sense, but it confirms the extreme leverage and financial distress.

To put this in perspective, the average debt-to-equity ratio for the Human Resource & Employment Services industry is around 0.5184 as of January 2025. A number like 0.5 means the company uses about 52 cents of debt for every dollar of equity financing. Staffing 360 Solutions, Inc.'s situation is a world away from this healthy industry standard. The high debt-to-capital ratio of 89% further underscores this reliance on borrowed money over shareholder capital.

• Total Debt (Early 2025): $41.32 million.
• MRQ Total Debt-to-Equity: -282.36%.
• Industry D/E Standard: Approximately 0.52.

Recent Refinancing and Conversion Activity

The company has been in constant motion to manage its obligations, which is a clear sign of near-term risk. They have been extending maturity dates on key agreements. In January 2025, for example, the commitment expiry date on their credit agreement with MidCap Funding IV Trust was extended to February 1, 2025, and notes with Jackson Investment Group, LLC were extended to February 15, 2025. These are short-term fixes, not long-term solutions.

The most telling move on the debt-to-equity balance was the January 2025 conversion agreement with Jackson Investment Group, LLC. This was a forced equity funding event, not a strategic choice. The company converted the outstanding principal of the 12% Senior Secured Notes-the Jackson Notes-into approximately 5.6 million shares of newly designated Series I Preferred Stock. This move reduced debt but significantly increased the preferred equity, effectively exchanging one form of liability for another to avoid default and facilitate a planned merger. This is the definition of a defensive move to manage a severe capital structure problem.

The ultimate consequence of this capital structure was the NASDAQ delisting in February 2025, which was triggered by the company's failure to meet the minimum stockholders' equity requirement of $2.5 million. That's the hard limit of what this estimate hides: a capital structure that failed to meet basic listing standards. You can read more about the company's challenges in Breaking Down Staffing 360 Solutions, Inc. (STAF) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You need a clear picture of Staffing 360 Solutions, Inc. (STAF)'s ability to meet its near-term obligations, and honestly, the numbers show significant financial stress. The most critical data point for the 2025 fiscal year is the company's voluntary petition for reorganization under Chapter 11 on May 5, 2025, which is the ultimate signal of a severe liquidity crisis and insolvency.

Assessing Staffing 360 Solutions, Inc.'s Liquidity

When I look at a staffing company, I focus heavily on the current and quick ratios-these tell me if they can pay their bills as they come due. For Staffing 360 Solutions, Inc., the liquidity position as of the most recent quarterly data (September 28, 2024) is extremely weak, which directly foreshadowed the 2025 Chapter 11 filing. Here's the quick math on their liquidity positions:

• Current Ratio: The ratio of current assets ($22.76 million) to total current liabilities ($71.58 million) is approximately 0.32.
• Quick Ratio (Acid-Test): This ratio, which excludes less-liquid assets like inventory, is even lower at roughly 0.29.

A healthy company usually has a Current Ratio of 2.0 or higher, and a Quick Ratio above 1.0. Staffing 360 Solutions, Inc.'s ratios mean the company has only about 32 cents of liquid assets for every dollar of short-term debt. That's a defintely precarious position to be in.

Working Capital Trends and Cash Flow Overview

The trend in working capital (current assets minus current liabilities) confirms the severe liquidity crunch. As of September 2024, Staffing 360 Solutions, Inc. had a working capital deficit of approximately -$48.82 million. This negative figure is a clear red flag, indicating that the company's short-term debts far exceed the assets it can quickly convert to cash to pay those debts. The consistent need to manage this deficit is what drives companies toward restructuring.

Looking at the cash flow statement, the general trend for a company facing this level of distress is often a struggle to generate positive cash flow from operations, especially when coupled with the need for ongoing financing activities to simply stay afloat.

Potential Liquidity Concerns and Strengths

The primary liquidity concern is not potential-it is actual. The Chapter 11 filing in May 2025 is the clear outcome of the unsustainable liquidity profile. This action allows the company to continue operating while it reorganizes its finances and attempts to address its debt load, which includes a significant portion of short-term debt.

The only meaningful strength in this context is the company's ability to generate revenue (forecasted annual revenue for 2025 was $387 million before the Chapter 11 filing) and the fact that its core business-staffing services-is not capital-intensive. However, the high debt load and negative working capital have made the business model financially unviable in its current structure. You can find more on the company's core mission here: Mission Statement, Vision, & Core Values of Staffing 360 Solutions, Inc. (STAF).

Actionable Next Step: For any current or prospective investor, the focus must shift from traditional valuation to the outcome of the Chapter 11 reorganization plan and the terms of any debt-to-equity conversions.

Valuation Analysis

You're looking for a clear-eyed view on whether Staffing 360 Solutions, Inc. (STAF) is overvalued or undervalued, and the simple answer is that its valuation metrics are highly complex and point to significant risk, not a traditional value or growth play. The non-standard valuation ratios reflect the company's current financial distress and extreme stock price volatility.

The stock has experienced a brutal run, with the 52-week price range spanning from a high of $3.85 to a low of $0.0001. As of November 19, 2025, the stock price sits near the low end at $0.0100 per share, representing a -42.63% decline over the last 52 weeks. This kind of price action is a major red flag, indicating a severe loss of market confidence or a series of dilutive corporate actions, which is defintely something you need to understand deeply.

Key Valuation Multiples

When a company is losing money, standard valuation metrics like the Price-to-Earnings (P/E) ratio become unhelpful, or even meaningless. Here's the quick math on the key multiples, based on the latest available Trailing Twelve Months (TTM) data, which is the closest proxy for the 2025 fiscal year:

• Price-to-Earnings (P/E) Ratio: The TTM P/E is listed as 'n/a' or -0.00. This is because the company reported a TTM Net Loss of -$23.42 million, or a loss per share of -$31.16. You can't value a loss with a P/E ratio.
• Forward P/E Ratio: A more telling figure is the Forward P/E of 6.21. This suggests analysts (or the market) expect a sharp return to profitability, which is an aggressive forecast given the current TTM loss.
• Price-to-Book (P/B) Ratio: This is also listed as 'n/a', which usually happens when the company's book value (assets minus liabilities) is negative or negligible, a sign of balance sheet weakness.
• Enterprise Value-to-EBITDA (EV/EBITDA): The ratio is not a meaningful metric here because the TTM Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is negative, estimated around -$14.66 million (based on TTM EBITDA per share of -$8.94 and 1.64 million shares outstanding). The Enterprise Value (EV) is substantial at $42.48 million, significantly higher than the Market Cap of $2.65 million, which points to a heavy debt load that is driving the company's valuation.

Dividend Policy and Analyst Outlook

Don't expect shareholder payouts here. Staffing 360 Solutions, Inc. has a TTM Dividend Yield of 0.00% as of October 23, 2025. The company has been noted as having been delisted and will not pay dividends anymore. The last dividend payment was back in 2019, so dividends are not a factor in this investment thesis.

Analyst consensus is difficult to pin down given the stock's status, but the average one-year price target is a highly optimistic $6.12, with a range up to $6.30. This price target is likely a legacy figure from before a major corporate action, like a reverse stock split, and is not aligned with the current market price of $0.0100. You must treat this target with extreme caution; it's an outlier that doesn't change your immediate decision. The lack of a clear, recent 'Buy,' 'Hold,' or 'Sell' consensus rating from major firms underscores the high-risk, low-visibility nature of this stock.

To get a full picture of the company's operational reality, you should look at the full financial breakdown in the main article: Breaking Down Staffing 360 Solutions, Inc. (STAF) Financial Health: Key Insights for Investors.

Risk Factors

You need to understand the stark reality for Staffing 360 Solutions, Inc. (STAF): the most significant risk is the company's financial distress, which culminated in a Chapter 11 bankruptcy filing in 2025. This isn't a theoretical risk; it's a concrete action that fundamentally changes the investment profile and equity value.

The company filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Eastern District of North Carolina on May 5, 2025. This move is the ultimate mitigation strategy for a crushing debt load, but it also signals that the company's liabilities far outpaced its ability to generate cash and service debt. The stock price reflects this, trading at around $0.0100 per share as of late November 2025.

Operational and Financial Risks: The Liquidity Crisis

The Chapter 11 filing stems directly from a severe liquidity crisis and a negative equity position. Looking at the latest available full-year data, the financial foundation was already shaky. Here's the quick math on the balance sheet that drove the strategic risk:

• Total Assets: $62.22 million
• Total Liabilities: $76.86 million
• Common Equity: -$14.64 million

A negative common equity of -$14.64 million means the company was technically insolvent before the 2025 filing, with debts exceeding assets. Plus, the company reported a net loss of -$26.04 million on $190.88 million in revenue in 2023, showing a persistent inability to turn sales into profit. That's a huge red flag for any turnaround. The Chapter 11 process is now the primary operational risk, as the company must successfully reorganize its debt and operations under court supervision to survive.

External and Industry Headwinds

Even if the company manages its internal debt, it still faces brutal external risks common to the staffing industry. The sector is highly competitive and sensitive to economic cycles. A near-term economic slowdown-a real possibility given elevated interest rates and geopolitical uncertainty in 2025-would immediately reduce demand for temporary contractors and permanent placements, which is STAF's core business.

The general market risks are magnified for a company in reorganization:

• Industry Competition: Fierce competition from larger, better-capitalized staffing firms, which can offer lower rates or more sophisticated technology platforms.
• Regulatory Changes: Changes in labor laws, minimum wage requirements, or tax policy (like the potential expiration of the Tax Cuts and Jobs Act (TCJA) at the end of 2025) could increase operating costs and reduce profit margins.
• Cybersecurity Threats: As a human capital management provider, the company holds sensitive client and employee data. A major cybersecurity breach is an ever-present operational and reputational risk in 2025.

The Chapter 11 filing itself is the ultimate mitigation strategy for the debt, but it also creates new risks, including the potential for a complete liquidation if the reorganization plan is not approved or is unsuccessful. For a deeper dive into the company's history leading up to this point, you can read our full analysis here: Breaking Down Staffing 360 Solutions, Inc. (STAF) Financial Health: Key Insights for Investors.

Growth Opportunities

You need to know the core opportunity for Staffing 360 Solutions, Inc. (STAF) is its strategic pivot to the US market, but this is happening under the enormous shadow of its September 2025 Nasdaq delisting. The company's growth is now entirely reliant on its specialized US segments and its ability to execute a disciplined acquisition strategy while navigating the financial and operational constraints of trading on the over-the-counter (OTC) market.

Analysis of Key Growth Drivers

The biggest driver is the exclusive focus on the US staffing market, a strategic shift announced in early 2024 that involved divesting the UK operations. This move concentrates resources on what the company calls the world's largest and most dynamic staffing market, which is projected to grow by a strong 12.7% between 2022 and 2030. STAF's core business is in high-demand, specialized professional staffing services, which acts as a natural competitive shield.

• Technology Staffing: IT professional placement.
• Finance Staffing: Financial services talent acquisition.
• Healthcare Staffing: Medical staffing and recruitment.

Honestly, this specialization gives them a leg up. It's harder for a generalist firm to compete for a niche cybersecurity or financial accounting role.

Future Projections and Earnings Estimates

Despite the operational challenges and the delisting, analysts see a path to profitability for the 2025 fiscal year, ending December 31. The growth is projected to come from the US segment's performance, but you must remember these are estimates made before or during a period of significant corporate distress. Here's the quick math:

What this estimate hides is the potential impact of the Nasdaq delisting in September 2025 and the terminated merger on client confidence and capital access. The market is defintely more volatile now for STAF.

Strategic Initiatives and Competitive Advantages

STAF's core strategy remains 'buy-integrate-build,' focusing on acquiring and integrating complementary staffing businesses. They have a proven track record, having completed 5 complementary acquisitions since 2020 with a reported 87% average integration success rate. However, the most recent acquisition was in May 2022, suggesting the pace has slowed considerably, likely due to financial constraints. The company's competitive edge is also bolstered by the management team's deep knowledge, with an average industry experience of 18.5 years.

To be fair, the biggest strategic risk is the failed merger. The definitive agreement for Atlantic International Corp. to acquire STAF for approximately $25 million, announced in late 2024, was terminated in February 2025. That event removes a clear exit path for shareholders and puts the burden of financial stability back squarely on the current management team. You can read more about the company's financial context in Breaking Down Staffing 360 Solutions, Inc. (STAF) Financial Health: Key Insights for Investors.

Next Step: Investment Committee: Review the Q3 2025 10-Q filing immediately upon release to assess actual revenue performance against the $387 million projection and determine the true cost of the delisting and terminated merger.