ADV

Image source: The Motley Fool. Wednesday, Aug. 5, 2026, at 8:30 a.m. ET Chief Executive Officer - Dave Peacock Chief Financial Officer - Chris Growe Operator: Welcome to Advantage Solutions Second Quarter Earnings Conference Call. Dave Peacock, Chief Executive Officer; and Chris Growe, Chief Financial Officer, are on the call today. Dave and Chris will provide their prepared remarks, after which, we will open the call for a question-and-answer session. During this call, management may make forward-looking statements within the meaning of the federal securities laws. Actual outcomes and results could differ materially due to several factors, including those described more fully in the company's annual report on Form 10-K filed with the SEC. All forward-looking statements are qualified in their entirety by such factors. Our remarks today include certain non-GAAP financial measures, which are reconciled to the most comparable GAAP measure in our earnings release. As a reminder, unless otherwise stated, the financial results discussed today will be from continuing operations, and revenues will exclude reimbursable expenses. And now I would like to turn the call over to Dave Peacock. David Peacock: Thanks, operator. Good morning, and thank you for joining us. First, I want to acknowledge our teammates. We have over 60,000 people who spend the majority of their days in service of our clients and customers, from our retail merchandising reps moving between stores to ensure our clients' products are on shelf, to samplers delighting our retail partners' customers with a pleasant experience and great products, to our key account managers calling on retailers in an effort to add a little more push behind the great brands that we represent. These and thousands of others work in pursuit of exceeding client expectations, and I appreciate the energy and effort they bring each day. Second quarter net revenues of $757 million were up 3% year-over-year and 4% excluding the effect of divestitures, while adjusted EBITDA of $76 million declined 12% and declined 9%, excluding divestitures, reflecting several onetime factors and mixed performance across our segments. Experiential Services delivered another very strong quarter and both demand signals and execution continue to improve across this business, giving us confidence in second half growth. Retailer Services revenues increased 3% year-over-year, but adjusted EBITDA was down approximately 25% year-over-year, reflecting project timing and costs associated with early-stage project work that we do not anticipate repeating. We expect growth in the second half of the year. In Branded Services, revenue declined 13% year-over-year and was down 11%, excluding divestitures, as the recovery is taking longer than expected, and we are impacted by the same persistent challenges as our CPG clients. Cash generation remains solid with $19 million in adjusted unlevered free cash flow despite an incremental working capital impact from our SAP final phase implementation. We ended the quarter with $102 million in cash. Turning to our growth initiatives. Clients continue to prioritize programs that can demonstrate clear ROI, support trial and discovery and convert demand into purchases. That trend aligns directly with the capabilities we have built across Advantage. Experiential Services is the clearest proof point. Demand for product demonstrations continues to exceed our expectations, with meaningful opportunities to expand event volume across existing customers and support growth with new customers. We are adding capacity where demand signals are strongest, and remain confident in our ability to recruit and staff as needed. We have seen strong growth across the spectrum of customers we serve, both in the U.S. and internationally, with even higher daily event volumes in our international regions. We believe this provides a useful blueprint for what can be achieved in the U.S. as programs mature and as we continue to improve labor readiness and execution. In our CPG-facing work, Branded Services merchandising projects were a relative bright spot. We are focused on scalable, high-return opportunities that can become durable long-term relationships as we deploy a highly trained and experienced team against what we see as recurring issues in out-of-stocks at retail. In addition, our Pulse selling system is improving visibility into on-shelf availability, item velocity and distribution gaps, allowing our teams to target resources more precisely and helping clients connect spending to measurable returns. Finally, we continue to develop our alert-based execution model, allowing Advantage to see out-of-stocks, distribution voids and missing displays in almost real time. Turning to our productivity initiatives. Our productivity agenda spans labor planning, process standardization, technology and operating visibility. Together, these initiatives are designed to manage costs prudently, improve execution quality and create capacity to support growth. Our centralized labor model continues to enhance labor planning and execution, which is critical as Experiential Services demand and Retailer Services project activity increase. Experiential execution rates of approximately 95% in the quarter demonstrate the efficacy of this model. We are also in the final stages of our enterprise technology transformation, and these new systems will help us support improved data integrity, process discipline and operating visibility. We plan to complete the heavy lifting of this transformation this year. And in 2027, we expect to fully leverage these platforms and realize the benefits of the investments we've made to drive better decision-making and efficiency. While many companies are grappling with the existential risks from AI, we are focused on the opportunities to enhance our physical network that was built over decades. We continue to prioritize integrating AI across Advantage in pursuit of better service levels, a better teammate experience and greater efficiency. We have established a governance structure, including a newly created Chief AI Officer role that is tightly aligned with our tech and data teams. We are prioritizing training and fluency across our organization and the deployment of the right tools to our teammates. We remain focused on empowering our people to opportunistically employ a wide variety of AI tools that best fit their respective use cases, and to find efficiencies in everything they do. We are making sure our teams are educated on the potential of these AI models, how to use them effectively and encouraging them to find opportunities for efficiency, speed or enhanced service quality. Our priorities range from personal productivity to enterprise-wide initiatives that deliver faster insight and more precise resource deployment. We have several pilots we have developed across our workforce operations that we expect to increase efficiency, including a new event manager compliance tool, photo verification tool, cartless automation and a supervisor intelligence dashboard. We continue to develop new AI-led opportunities to bring both efficiency and operational excellence to our business. Turning to the macro environment. The core consumer themes and K-shaped economy we discussed last quarter have persisted. Lower and middle-income households remain highly focused on value, with purchases increasingly planned around promotions and price points. Higher-income consumers continue to shift portions of their baskets toward healthier and better-for-you options, but they are also becoming more deliberate about the value they receive. Emerging brands continue to also gain share of the industry in many categories as consumers seek variety and gravitate to product discovery. Value-seeking behavior is broadening across income groups. We are also seeing greater price competition among large retailers seeking market share gains and traffic. These trends reinforce the need for highly measurable, cost-effective programs that can drive trial, discovery and conversion. Advantage is well positioned to help clients navigate this volatile operating environment by supporting their growth plans and helping them gain market share in as efficient a manner as possible. We have adapted our business accordingly by emphasizing execution quality, disciplined staffing and measurable ROI. As a scaled outsourced labor provider, we are well positioned to support clients seeking flexible capacity and greater efficiency. We continue to monitor energy prices, tariffs and geopolitical developments, which are affecting consumer behavior. Our outlook does not incorporate a major change in underlying consumer health. Now turning to our segment results. Experiential Services delivered another very strong quarter. Event volumes increased 18%, with strong incremental margins supported by healthy demand across existing customer relationships and new vendor activity. With revenue growing at a healthy rate, improving profitability remains a priority even as we invest in infrastructure to support higher long-term demand. We are focused on labor efficiencies, stronger training and safety protocols, consistent execution and a shift toward higher return demos. We expect continued momentum in the second half of the year. In Branded Services, the recovery is taking longer given constrained CPG spending, procurement-driven dynamics, client in-sourcing and select client losses. Our focus is on stabilizing the revenue base while protecting profitability. That means strengthening client retention and executive engagement, improving pipeline conversion, hiring and retaining the right talent and demonstrating measurable ROI through our data, analytics and execution capabilities. CPG merchandising projects performed well this quarter, and we are hopeful this is a leading indicator for the rest of the business. While we are not assuming a near-term inflection, we do expect modest improvement in the second half of 2026. Retailer Services had a softer quarter, primarily due to project timing, a difficult comparison with an unusually strong prior year period and higher execution costs on merchandising projects. We view these as factors as temporary and largely specific to the second quarter. We expect performance to improve sequentially through the second half as larger projects ramp up. The pipeline remains encouraging, and we expect project-related earnings volatility to moderate in the second half. Our priorities in Retailer Services are clear: align staffing with demand, improve execution discipline and operating consistency and better match costs with associated revenue streams. Cash generation remains a structural strength of our business and a core priority. We saw unlevered free cash flow of $19 million or 25% of adjusted EBITDA in the quarter. For the first half, unlevered free cash flow was 79% of adjusted EBITDA. We have seen some expected pressure on cash flow from working capital, which we believe will improve in the second half as we have moved past our final SAP implementation phase. Our capital allocation priorities remain unchanged. We intend to direct free cash flow primarily toward debt reduction, while maintaining the liquidity and strategic flexibility required to operate the business. Turning to our outlook. We are taking a balanced view of the remainder of the year. That view reflects 3 dynamics: continued strength in Experiential Services, improving Retailer Services performance with a more normalized earnings cadence in the second half and a more gradual recovery time line in Branded Services. We are reiterating our full year 2026 revenue and adjusted EBITDA guidance ranges, reflecting the successful execution of our growth initiatives and in consideration of the investments we are making into our business and our teammates. We are also reiterating full year guidance of adjusted unlevered free cash flow of $250 million to $275 million and net free cash flow conversion of 25%, excluding debt refinancing costs. We are encouraged by the strength of our Experiential Services demand and the progress across our growth agenda. At the same time, we are clear-eyed about the work required to stabilize Branded Services and reduce margin pressure driven by business mix. We remain focused on delivering for clients, generating cash and building a more durable and profitable Advantage. I'll now turn it over to Chris for more detail on our financial performance. Christopher Growe: Thank you, Dave, and welcome to everyone joining us today. I will review our second quarter performance by segment, discuss our cash flow and capital structure and provide additional detail on our outlook. I will outline our business results on a reported basis and also on an adjusted basis for divestitures, which weighed on our year-over-year performance. In the second quarter, businesses we have divested represented a year-over-year headwind of approximately $5 million to revenues and approximately $3 million to adjusted EBITDA. And for 2026, we still expect divestitures to represent a year-over-year headwind of approximately $20 million to revenues and over $10 million to adjusted EBITDA. So turning to our divisional performance and starting with Branded Services. In the second quarter, we generated $224 million of revenues and $22 million of adjusted EBITDA, down 13% and 36% year-over-year, respectively. Excluding divestitures, revenues were down 11% and adjusted EBITDA was down 30%. The segment continues to face pressure from ongoing client in-sourcing, softer CPG spending and client losses. However, we saw encouraging activity in CPG merchandising projects, which contributed positively to results in the quarter. Our focus remains on stabilizing the revenue base, improving pipeline conversion, client retention and maintaining disciplined cost management. We continue to expect gradual improvement through the balance of the year. Turning to Experiential Services. We generated $296 million of revenues and $34 million of adjusted EBITDA, up 19% and 32% year-over-year, respectively. Results were driven by accelerating demand for product demonstrations, higher event volumes and strong operational execution. Demand remained healthy across both existing and new customers, and we continue to see opportunities to further increase event volumes in the second half of the year. We are confident in our ability to recruit and staff to meet this increased demand. Finally, in Retailer Services, we generated $237 million of revenues and $20 million of adjusted EBITDA, up 3% and down approximately 25% year-over-year, respectively. Performance was impacted by project timing, a difficult comparison with unusually high project activity in the prior year and higher costs related to execution issues on a new project in the quarter. We view these as unique and temporary factors and expect sequential improvement in the second half versus the first half performance. We also have a stronger project pipeline in the second half and expect project-related earnings volatility to moderate as these programs ramp. Offsetting some of these headwinds, our private label business delivered a solid quarter as the industry backdrop became more favorable and the channel mix drag eased again modestly. Our focus remains on execution, staffing alignment and operational discipline to better align costs with project activity and drive more consistent earnings growth. From a cost perspective, during the quarter, we saw more favorable health insurance cost trends, which have been a meaningful pressure point over the last year. Moving to the balance sheet and liquidity. We ended the quarter with $102 million in cash, reflecting our continued focus on disciplined capital management and strong cash generation. Our net debt level stood at approximately 4.5x trailing EBITDA. Turning to cash flow and working capital. Cash generation remains a core strength of the business, and we view it, along with working capital discipline, as important long-term shareholder value creation drivers. Our days sales outstanding, or DSO, remained elevated during the second quarter, primarily due to the impact of our final SAP implementation and customer payment timing, both of which we continue to view as temporary. We expect DSOs to improve steadily through the remainder of the year, including in the third quarter, supporting strong full year cash flow generation. Adjusted unlevered free cash flow was $19 million in the second quarter, with a conversion rate of 25%. The performance this quarter was negatively affected by an increase in DSO, as expected. We expect strong working capital improvement in the second half, which will contribute to free cash flow generation and support our cash flow outlook. Moving on to capital allocation. This year, we have focused on debt reduction, particularly during the first quarter around our refinancing. In the second quarter, we repurchased approximately $15 million of our shares. These repurchases were primarily intended to help offset dilution from stock grants and exercises. As we look ahead, free cash flow will primarily be directed toward debt reduction. Finally, turning to our outlook. We are encouraged by our second quarter performance and continue to maintain a balanced outlook for the remainder of the year. We are reiterating our full year 2026 revenues and adjusted EBITDA guidance ranges given a solid first half of the year. However, we've updated our guidance for interest expense and capital expenditures, which are now slightly lower than previously forecasted. Our free cash flow outlook remains unchanged. From a business perspective, we continue to see strength in Experiential Services, sequential improvement in growth in Retailer Services and a more gradual recovery in Branded Services on its path towards stabilization. Key factors influencing our outlook include Experiential Services demand and execution, Retailer Services project timing and second half project ramps and the pace of recovery in Branded Services. Overall, we've taken a prudent view of the second half of the year. Regarding quarterly cadence, given a stronger first half performance, our guidance implies that second half adjusted EBITDA will represent approximately 53% of the full year total. We expect fourth quarter adjusted EBITDA to be higher than third quarter adjusted EBITDA. Our focus remains on improving execution, raising profitability and delivering consistent cash generation. Thank you for your time. I'll now turn it back over to Dave. David Peacock: Thanks, Chris. We remain encouraged by the momentum in the Experiential Services and the expected improvement in Retailer Services as larger projects are ramping up. At the same time, we continue to focus on stabilizing Branded Services while protecting profitability. We are also advancing our productivity initiatives across labor planning, process standardization, technology and operating visibility while integrating AI to support stronger service levels, a better teammate experience and greater efficiency. Together with our focus on disciplined capital allocation and strong cash generation, we believe these efforts position Advantage to build a more durable and profitable business over the long term. I want to thank everybody for joining us today, and we look forward to speaking with you again next quarter. Operator, we're now ready for questions. Operator: [Operator Instructions] Your first question comes from the line of Greg Parrish with Morgan Stanley. Gregory Parrish: Maybe just on Branded, I know you called out maybe a more gradual recovery in second half. But thinking ahead to 2027 and beyond, in your view, what's the catalyst that really gets this business stabilized? David Peacock: I think if you think about it, Greg, we're coming off a few kind of larger client losses, and there's various reasons for those. But as we move into '27 -- and let's talk about Branded Services first, we're seeing parts of that business demonstrate growth, which is kind of giving us some optimism. And then you're lapping, like I said, if you go back in 3 years, we had some resignations we talked about and then a couple of key client losses, which has actually put us in a position to have a more kind of balanced, and I'll call it, more fragmented client base. And if I look at our top 25, 30 clients, year-over-year, they're growing. And so all these things are signs to us that things are moving towards stabilization. It's just in a long lead contracted business. You have to get through kind of these quarterly cycles until you can realize that shift or that pivot. And then you just heard our results in Retailer, which really are driven primarily by a tough comp. We had a pretty large, what I'll call, onetime project in the second quarter of last year that did not repeat this year, but the underlying business remains strong. And we're never going to turn away significant project work and we get it from time to time. But that business has been kind of a consistent low -- slower grower than Experiential, but consistent growing business for us. And we see opportunity with new lines of service that we can bring to our retail partners to give us optimism. And then Experiential, the demand signals continue to be very strong, both from large clients, but also new business acquisition that we've been working on and we've realized as recently as the second quarter. So all of those things give us optimism as we look at '27. Gregory Parrish: Great. That's helpful. And then maybe just on the other side of the coin, just Experiential. Obviously, a lot of strength, 3 quarters in a row here, 20% growth. I feel like we sort of talked about this a lot, but there's new demand, you had some new clients come on board, better labor availability. I'm not sure if I missed anything there. But maybe zooming out, thinking about next year beyond, I mean, how durable is this outsized strength that you've been seeing in Experiential? David Peacock: I think it's very durable. Like I mentioned, that the demand signals are very strong from our clients, but also -- and think of it too, from a macro standpoint. I mean the growth of emerging brands in the industry and the growth of innovation and new products, even from more established or larger brands, is not slowing down. And so that stimulates the need for sampling and trial. And I think retailers, justifiably so, are realizing that sampling and experiential and in-store demo and retail payment, all those things are really important for the customer as they come into the store. And so they compete on that level and that works to support that business. And I want to give our team a shout out because they've done a really good job on the execution front. And if I think about when we are deploying AI, and I know it's a buzzy term and everybody wants to talk about it, we only really do so when we think there's real tangible benefits and where we see AI as an enabler to the business. I'd say Experiential is a good example of that, where we're really speeding up our time between application and when they actually are working at a [ cart ]. We're compressing that. So we're getting people through the funnel much quicker. Photo verification, which is important in this business. We found ways to really streamline that process. I rattled off with you in the prepared remarks. Those are just a few of the things that we're doing that -- where AI is bringing real advantage. And when you put it all together, it's just driving better execution rates and efficiency. Christopher Growe: Greg, I would just add to that, that we talked about this really at the start of the year and after last quarter as well, just the investments we're making in that business to sustain the growth. So you're seeing that here in Q2, you'll see it in the second half of the year. Really proud of the team to be able to put up nearly 20% revenue growth and that degree of incremental margin improvement. But I think -- I will make sure we just reiterate that we're preparing and getting the business in a place where we can continue to sustain this rate of growth, do it in a very high-quality way. And as you saw this quarter, we hit that 95% execution. So it puts us in a great place to be able to really grow in the second half of the year and into 2027. Gregory Parrish: Yes. Okay. Great. Congrats on the quarter. I'll pass it on. Operator: Your next question comes from the line of Luke Morison with Canaccord. Lucas Morison: So I think you called out CPG merchandising projects as a relative bright spot, possibly a leading indicator for the rest of Branded. Can you just help me understand sort of like the underlying mix there? Is client spend rotating within that segment? Are you seeing mix shift? Like help me understand what's happening with that comment? David Peacock: So if you think about that business, 2 of the big drivers within Branded Services are kind of headquarter selling or where we represent a client at headquarters and then retail merchandising, where we are sending folks in to execute in-store. And you're seeing persistent challenges with in-stock in a lot of category, not every category, but probably a majority of categories across the store, and there's a lot of reasons for that at retail. And you're not going to sell them if it's not on the shelf, and I think our clients understand that. So you're seeing an increase in project work so that you've got contracted continuity work. And if you look back maybe a year ago, projects were, call it, maybe 15% of our total work in this space in the first half. Now they're close to a little under 25%. And so we saw a pretty nice lift in project work of a little over 20% year-over-year, which is telling us that sort of unplanned need and/or opportunity to either get more the display space on the floor or remediate out of stocks. And we see -- as we look forward and have conversations with clients in both current and prospective, we see an opportunity to lean into this business. And it's a syndicated business. We have some direct teams, but obviously, we can see realized pretty decent margins when you're utilizing an existing force out there against multiple clients to solve problems. And then we've also put some investment into this area in becoming more alert-based and more, how do I say, just bring more efficacy to the work. These folks were typically allocated by time. So going into stores every week, every 2 weeks, every 4 weeks on behalf of clients. We're starting to pilot and realize great results in making it more alert based, where we get a scan or a read from a store and we actually just go and address whatever that issue is, a drawn-down display, out of stocks, whatever that might be. So that's allowing us to deploy resources more efficiently as well. And it's a great labor force. I mean it's a team of roughly 5,000 folks, average tenure with the organization over 9 years, a lot of dedicated folks that both sell and remediate problems for our clients in stores. Lucas Morison: Yes. Yes. Okay. Super helpful. And maybe just a follow-up. You've said reducing mix-driven margin pressure is obviously a priority here. As I look at Experiential, it's both your fastest grower and your lowest margin segment. So help me just think through like what closes that gap? Is it labor efficiency? Is it event mix? Is it pricing? Is it -- is there something else there? Christopher Growe: Yes. Luke, it's Chris. Just to kind of address that in a couple of different ways. Overall, when you have this, call it, mix modeling that's occurring this year, with Branded Services down and Experiential up, you're going to have that kind of weight on the margin profile of the business. We couldn't help but reinvest back in the business this year as well. So you're seeing a little less incremental margin in Experiential this quarter, but it's all deliberate. And I would just say, again, puts us in a great place to be able to sustain the growth going forward. As I look ahead, we talk about a path towards stabilization for Branded Services. So that's what we -- we still see us on that path. Just maybe it's a little a little slower. But I think you're going to see that slow and gradual improvement in the rate of decline there. You're seeing really good growth in Experiential. And then Retailer, we talked about that being able to grow in the second half of the year. So you've got -- you're going to have some equalization, if I can say it that way, of the margin across the businesses as one grows and one declines, and you're going to have -- you've got investments that are influencing that. And then you've got the benefit of the stabilization of Branded Services that will allow us to achieve that kind of margin stability, and hopefully, margin growth next year. Operator: There are no further questions at this time. I will now turn the call back to Dave for closing remarks. David Peacock: We want to thank everybody for joining, and we look forward to connecting with this group next quarter. Operator: This concludes today's call. Thank you for attending. You may now disconnect. 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Interested in Advantage Solutions Inc.? Here are five stocks we like better. Second-quarter revenue rose 3% to $757 million, or 4% excluding divestitures, while adjusted EBITDA fell 12% to $76 million. Management reiterated its full-year 2026 revenue, EBITDA and cash-flow guidance. Experiential Services was the key growth driver, with revenue up 19% and adjusted EBITDA up 32%, supported by higher event volumes and demand for product demonstrations. Retailer Services is expected to improve in the second half, while Branded Services’ recovery remains gradual. Adjusted unlevered free cash flow was $19 million in the quarter, and the company plans to prioritize debt reduction while maintaining its $250 million–$275 million full-year cash-flow target. Advantage also continues investing in technology and AI initiatives expected to deliver greater benefits in 2027. 7 Short Squeeze Stocks to Look Into for Your Portfolio Advantage Solutions (NASDAQ:ADV) reported second-quarter net revenue of $757 million, up 3% from a year earlier and up 4% excluding divestitures, while adjusted EBITDA declined 12% to $76 million. The company said divestitures created an approximately $5 million year-over-year revenue headwind and a roughly $3 million adjusted EBITDA headwind during the quarter. Management reiterated its full-year 2026 revenue, adjusted EBITDA and cash-flow guidance, citing continued momentum in Experiential Services, an anticipated second-half improvement in Retailer Services and a more gradual recovery in Branded Services. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Experiential Services was the company’s strongest segment in the quarter. Revenue rose 19% year over year to $296 million, while adjusted EBITDA increased 32% to $34 million. Event volumes grew 18%, supported by demand for product demonstrations from existing clients and new vendors. The company said it continues to see opportunities to expand event volumes in the second half and expressed confidence in its ability to recruit and staff workers to meet demand. Experiential execution rates were approximately 95% during the quarter, aided by its centralized labor model. → 3 Drone Stocks That Should Soar After the Summer Slump Management said consumer demand for product trial and discovery, along with retailers’ focus on in-store experiences and retail media, supports the segment’s outlook. It also cited investments in labor efficiency, training, safety protocols and higher-return demonstrations. During the question-and-answer session, management described the strength in Experiential Services as durable, pointing to growth in emerging brands, innovation from larger brands and retailer demand for sampling and in-store demonstrations. Chris Growe, CFO of Advantage Solutions, said the company has been investing in the business to support continued growth while maintaining execution quality. → The Bitcoin Comeback May Already Be Underway—2 ETFs for Exposure Branded Services generated second-quarter revenue of $224 million and adjusted EBITDA of $22 million, down 13% and 36%, respectively, from the prior-year period. Excluding divestitures, revenue declined 11% and adjusted EBITDA declined 30%. The company attributed the pressure to client insourcing, softer spending among consumer packaged goods clients, procurement-driven dynamics and select client losses. Management said it is focused on stabilizing the revenue base, improving client retention and pipeline conversion, maintaining cost discipline, and demonstrating measurable returns through data, analytics and execution capabilities. CPG merchandising projects were a relative bright spot. Management said project work represented close to 25% of total work in this area during the first half, compared with roughly 15% a year earlier, and project work increased by more than 20% year over year. The company linked the activity to retail out-of-stocks and opportunities to add display space. Advantage Solutions is also piloting an alert-based model that directs merchandising resources toward specific issues, such as out-of-stocks, distribution gaps and missing displays, rather than relying solely on fixed store-visit schedules. Management said the approach is intended to improve resource deployment and the effectiveness of in-store work. Looking into 2027, management said growth among its top 25 to 30 clients and a more balanced customer base are signs that Branded Services is moving toward stabilization. Still, the company does not expect a near-term inflection and forecast modest improvement during the second half of 2026. Retailer Services posted revenue of $237 million, up 3% year over year, but adjusted EBITDA fell about 25% to $20 million. The company said results reflected project timing, a difficult comparison with unusually high project activity in the prior-year period, and higher execution costs related to a new merchandising project. Management characterized those issues as temporary and specific to the second quarter. It expects sequential performance improvement through the second half as larger projects ramp up and project-related earnings volatility moderates. The company said its private-label business delivered a solid quarter as the industry backdrop improved and channel-mix pressure eased modestly. Retailer Services priorities include better staffing alignment, stronger execution discipline and closer matching of costs with revenue streams. Adjusted unlevered free cash flow was $19 million in the second quarter, equal to 25% of adjusted EBITDA. For the first half, adjusted unlevered free cash flow represented 79% of adjusted EBITDA. The company ended the quarter with $102 million in cash and net debt of approximately 4.5 times trailing adjusted EBITDA. Management said working capital and Days Sales Outstanding remained elevated because of the final phase of the company’s SAP implementation and customer payment timing. It expects DSO to improve during the remainder of the year, including in the third quarter, helping support second-half cash generation. Advantage Solutions said free cash flow will primarily be directed toward debt reduction, although it repurchased approximately $15 million of shares during the second quarter, mainly to offset dilution from stock grants and exercises. The company reiterated full-year adjusted unlevered free-cash-flow guidance of $250 million to $275 million and net free-cash-flow conversion guidance of 25%, excluding debt refinancing costs. Growe said the company lowered its forecasts for interest expense and capital expenditures slightly, while leaving its cash-flow outlook unchanged. Management also highlighted technology and AI initiatives, including pilots involving event-manager compliance, photo verification, cart-list automation and a supervisor intelligence dashboard. The company expects to complete the major work of its enterprise technology transformation in 2026 and to more fully realize the benefits of those platforms in 2027. Advantage Solutions is a leading sales and marketing agency that provides outsourced solutions to consumer packaged goods companies. The firm's offerings include field sales execution, retail merchandising, in-store and shopper marketing, e-commerce activation and data-driven analytics. By deploying dedicated sales teams alongside proprietary technology, Advantage Solutions helps brands optimize shelf placement, ensure compliance with promotional programs and strengthen consumer engagement. The company's service portfolio spans field sales and marketing, retail execution, brand ambassador programs, digital and experiential promotions, and shopper insights. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Advantage Solutions Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Solid revenue growth driven by Experiential and Retailer Services Reiterates full-year Revenues and Adjusted EBITDA guidance ranges Ended the quarter with $102.3M of cash ST. LOUIS, Aug. 05, 2026 (GLOBE NEWSWIRE) -- Advantage Solutions Inc. (NASDAQ: ADV) (“Advantage,” “Advantage Solutions,” the “Company,” “we,” or “our”), a leading business solutions provider to consumer-packaged goods (CPG) brands and retailers, today reported financial results for the three and six months ended June 30, 2026. Revenues for the three months ended June 30, 2026 were $889.5 million compared with $873.7 million, and net loss was $62.7 million compared with a net loss of $30.4 million. “Clients continue to prioritize programs that deliver measurable returns, and our second consecutive quarter of revenue growth, together with accelerating demand in Experiential Services, underscores the value of the capabilities we have built across Advantage,” said Advantage CEO Dave Peacock. “As we manage temporary timing and execution pressures in Retailer Services and a more gradual recovery in Branded Services, we are reiterating full-year guidance ranges for revenues, Adjusted EBITDA, and free cash flow. We remain focused on disciplined execution, investing in data and analytics, generating free cash flow, and building a more durable, profitable Advantage.” Q2'26 Segment Highlights Investor Contact: [email protected] Media Contact: [email protected] NMF = Not Meaningful(1) Net leverage ratio is defined as Net Debt divided by LTM Adjusted EBITDA. (2) 2026 revenue outlook excludes reimbursable expenses.(3) Net free cash flow is defined as cash flow from operations, less capital expenditures. Net FCF conversion of 25% is excluding incremental debt refinancing costs. ADV-EARNS About Advantage Solutions Advantage Solutions is the leading omnichannel retail solutions agency in North America, uniquely positioned at the intersection of consumer-packaged goods (CPG) brands and retailers. With its data- and technology-powered services, Advantage leverages its unparalleled insights, expertise and scale to help brands and retailers of all sizes generate demand and get products into the hands of consumers, wherever they shop. Whether it’s creating meaningful moments and experiences in-store and online, optimizing assortment and merchandising, or accelerating e-commerce and digital capabilities, Advantage is the trusted partner that keeps commerce and life moving. Advantage has offices throughout North America and strategic investments and owned operations in select international markets. For more information, please visit YourADV.com. Included with this press release are the Company’s consolidated and condensed financial statements as of and for the three months ended June 30, 2026. These financial statements should be read in conjunction with the information contained in the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (the "SEC") on August 5, 2026. Forward-Looking Statements Certain statements in this press release may be considered forward-looking statements within the meaning of the federal securities laws, including statements regarding the expected future performance of Advantage's business and projected financial results. Forward-looking statements generally relate to future events or Advantage’s future financial or operating performance. These forward-looking statements generally are identified by the words “may”, “should”, “expect”, “intend”, “will”, “would”, “could”, “estimate”, “anticipate”, “believe”, “predict”, “confident”, “potential” or “continue”, or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks, uncertainties and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Advantage and its management at the time of such statements, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, market-driven wage changes or changes to labor laws or wage or job classification regulations, including minimum wage; developments with respect to retailers that are out of our control; the impact from tariffs; future potential pandemics or health epidemics; Advantage’s ability to continue to generate significant operating cash flow; client procurement strategies and consolidation of Advantage’s clients’ industries creating pressure on the nature and pricing of its services; consumer goods manufacturers and retailers reviewing and changing their sales, retail, marketing and technology programs and relationships; Advantage’s ability to successfully develop and maintain relevant omni-channel services for our clients in an evolving industry and to otherwise adapt to significant technological change; Advantage’s ability to maintain proper and effective internal control over financial reporting in the future; Advantage’s substantial indebtedness and our ability to refinance at favorable rates; and other risks and uncertainties set forth in the section titled “Risk Factors” in the Annual Report on Form 10-K filed by the Company with the SEC on March 3, 2026, and in its other filings made from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Advantage assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Non-GAAP Financial Measures and Related Information This press release includes certain financial measures not presented in accordance with generally accepted accounting principles (“GAAP”), including Adjusted EBITDA, Adjusted EBITDA by Segment, Adjusted Unlevered Free Cash Flow and Net Debt. These are not measures of financial performance calculated in accordance with GAAP and may exclude items that are significant in understanding and assessing Advantage’s financial results. Therefore, the measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP, and should not be considered in isolation or as an alternative to net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. You should be aware that Advantage’s presentation of these measures may not be comparable to similarly titled measures used by other companies. Reconciliations of historical non-GAAP measures to their most directly comparable GAAP counterparts are included below. Advantage believes these non-GAAP measures provide useful information to management and investors regarding certain financial and business trends relating to Advantage’s financial condition and results of operations. Advantage believes that the use of Adjusted, Adjusted EBITDA by Segment, Adjusted Unlevered Free Cash Flow, and Net Debt provide an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing Advantage’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. Non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. Additionally, other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore Advantage’s non-GAAP measures may not be directly comparable to similarly titled measures of other companies. Adjusted EBITDA consists of net loss before interest, taxes, depreciation and amortization, further adjusted for (i) non-operating income or expense and (ii) the impact of certain non-cash, nonrecurring or other items included in net (loss) income that we do not consider indicative of our ongoing operating performance, which may include acquisition and divestiture related expenses, gains and losses; gains and losses on extinguishments of debt; litigation expenses, net of recoveries on matters not representative of our ongoing business; impairment charges on goodwill, intangible assets and non-marketable securities; incremental expenses on restructuring and reorganization activities associated with certain transformation programs; further adjusted for the related income tax impact associated with these items. A full list of adjustments to net loss are provided in the reconciliations presented below. Adjusted EBITDA by Segment consists of operating (loss) income by segment before interest, taxes, depreciation and amortization, further adjusted for the impact of certain non-cash, nonrecurring or other items included in net (loss) income that we do not consider indicative of our ongoing operating performance, which may include acquisition and divestiture related expenses, gains and losses; gains and losses on extinguishments of debt; litigation expenses, net of recoveries on matters not representative of our ongoing business; impairment charges on goodwill, intangible assets and non-marketable securities; incremental expenses on restructuring and reorganization activities associated with certain transformation programs; further adjusted for the related income tax impact associated with these items. A full list of adjustments to operating income (loss) are provided in the reconciliations presented below. Adjusted EBITDA Margin means Adjusted EBITDA divided by total revenues. Adjusted Unlevered Free Cash Flow represents net cash provided by (used in) operating activities less purchase of property and equipment as disclosed in the Statements of Cash Flows further adjusted by (i) cash payments for interest, (ii) cash received from interest rate derivatives, (iii) cash paid for income taxes; (iv) cash paid for acquisition and divestiture related expenses, (v) cash paid for restructuring expenses, (vi) cash paid for reorganization expenses, (vii) cash paid for contingent earnout payments included in operating cash flow, (viii) COVID-19 benefits received, (ix) net effect of foreign currency fluctuations on cash, and (x) other adjustments that management believes are helpful in evaluating our operating performance. Adjusted Unlevered Free Cash Flow as a percentage of Adjusted EBITDA means Adjusted Unlevered Free Cash Flow divided by Adjusted EBITDA. Net Debt represents the sum of current portion of long-term debt and long-term debt, less cash and cash equivalents. With respect to Net Debt, cash and cash equivalents are subtracted from the GAAP measure, total debt, because they could be used to reduce the debt obligations. We present Net Debt because we believe this non-GAAP measure provides useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and to evaluate changes to the Company's capital structure and credit quality assessment.

The consumer-packaged goods services provider posted a second consecutive quarter of revenue growth but saw earnings decline as weakness in Branded Services and execution challenges in Retailer Services offset strong momentum in Experiential Services. Advantage Solutions (NASDAQ:ADV) increased second-quarter revenue 1.8% to $889.5 million, marking its second consecutive quarter of top-line growth. Adjusted EBITDA declined 12.2% to $75.8 million, while the company reported a wider net loss of $62.7 million. Experiential Services remained the strongest business, with revenue rising 19.7% as event demand continued to expand. Management reaffirmed its full-year 2026 guidance despite near-term execution headwinds in Retailer Services and a slower recovery in Branded Services. The company generated $18.7 million in adjusted unlevered free cash flow and ended the quarter with $102.3 million in cash. Advantage Solutions (NASDAQ:ADV) reported second-quarter 2026 revenue of $889.5 million, up 1.8% from $873.7 million a year earlier. For the first six months of the year, revenue increased 3.7% to $1.76 billion. Despite higher revenue, profitability weakened. Adjusted EBITDA fell 12.2% to $75.8 million, reducing adjusted EBITDA margin to 8.5% from 9.9% a year earlier. Net loss widened to $62.7 million compared with a loss of $30.4 million in the prior-year quarter. Performance varied across business segments. Experiential Services delivered the strongest results, with revenue climbing 19.7% and adjusted EBITDA increasing 32.0%, supported by higher event volumes and continued demand for product demonstrations. Branded Services remained under pressure, with revenue falling 20.1% as constrained consumer-packaged goods spending, client insourcing, and selected customer losses weighed on performance. Retailer Services revenue increased 2.8%, although earnings were affected by temporary project timing and higher execution costs. The company generated $18.7 million in adjusted unlevered free cash flow during the quarter, held $102.3 million in cash, and reported a net leverage ratio of 4.5 times. Management reiterated its fiscal 2026 outlook, maintaining expectations for revenue ranging from flat to low-single-digit growth, adjusted EBITDA ranging from flat to down mid-single digits, and adjusted unlevered free cash flow of $250 million to $275 million. The quarter highlights a business experiencing uneven performance across its operating segments. Experiential Services continues to provide a meaningful source of growth, benefiting from stronger customer demand and expanding event activity. However, persistent weakness in Branded Services and temporary operational challenges in Retailer Services continue to weigh on overall profitability. By maintaining its full-year guidance, management is signaling confidence that project activity and operating performance will improve during the second half of the year. Whether those improvements materialize could play a significant role in determining if revenue growth can translate into stronger earnings. The company’s focus on disciplined execution, data analytics, and free cash flow generation may also be important as it manages leverage and seeks to improve margins. Investors will likely monitor: Whether Retailer Services delivers the expected sequential improvement during the second half of 2026. Signs of stabilization in the Branded Services business following client losses and weaker CPG spending. Continued growth in Experiential Services and its contribution to overall profitability. Progress toward achieving full-year adjusted EBITDA and free cash flow guidance. Advantage Solutions stock price

This article first appeared on GuruFocus. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Experiential Services delivered another very strong quarter with event volumes up 18% and revenue growth of 19%, driven by robust demand for product demonstrations. The company is reiterating its full-year 2026 revenue and adjusted EBITDA guidance, reflecting confidence in its growth initiatives. Cash generation remains solid, with adjusted unlevered free cash flow of $19 million in Q2 and a strong first-half conversion rate of 79% of adjusted EBITDA. The company is making progress on its AI integration, with several pilots aimed at improving efficiency and execution, such as photo verification and event manager compliance tools. CPG merchandising projects in branded services showed encouraging growth, with project work increasing to nearly 25% of total work in the first half, up from 15% a year ago. Branded Services revenue declined 13% year-over-year, with adjusted EBITDA down 36%, as the recovery is taking longer than expected due to constrained CPG spending and client insourcing. Retailer Services adjusted EBITDA decreased approximately 25% year-over-year, impacted by project timing, a difficult comparison, and higher execution costs on new projects. Overall adjusted EBITDA declined 12% year-over-year, reflecting one-time factors and mixed performance across segments. Net debt levels remain elevated at approximately 4.5 times trailing EBITDA, indicating a high leverage position. The company faces ongoing margin pressure due to business mix, with faster-growing Experiential Services having lower margins, which is expected to continue impacting profitability. Warning! GuruFocus has detected 4 Warning Signs with ADV. Is ADV fairly valued? Test your thesis with our free DCF calculator. Q: What is the catalyst that gets the branded services business stabilized, looking ahead to 2027 and beyond?A: Dave Peacock, CEO: We are coming off a few larger client losses, but parts of that business are demonstrating growth, which gives us optimism. We are lapping prior resignations and key client losses, which has led to a more balanced and fragmented client base. Our top 25-30 clients are growing year-over-year. In a long lead contracted business, you have to get through quarterly cycles to realize the shift. We see opportunity in retailer services with new lines of service, and experiential services demand signals remain very strong from both large clients and new business acquisition. Q: How durable is the outsized strength in experiential services, and can it continue into next year and beyond?A: Dave Peacock, CEO: The demand is very durable. The growth of emerging brands and innovation from established brands is not slowing down, stimulating the need for sampling and trial. Retailers are realizing that in-store demos and retailtainment are important for the customer experience. Our team has done a great job on execution, and we are using AI to speed up the time between application and working at a cart, compressing the funnel. Photo verification and other AI tools are driving better execution rates and efficiency. Chris Grohe, CFO, added that the investments being made in the business will sustain growth, with nearly 20% revenue growth and strong incremental margin improvement, positioning the company to grow through the second half and into 2027. Q: Can you help me understand the underlying mix in branded services, specifically the comment about CPG merchandising projects being a bright spot and a possible leading indicator?A: Dave Peacock, CEO: Two big drivers in branded services are headquarters selling and retail merchandising. We are seeing persistent out-of-stock challenges across most categories, and clients understand you can't sell if it's not on the shelf. Project work has increased from about 15% of total work a year ago to just under 25% in the first half, with project work up over 20% year-over-year. This indicates unplanned needs for display space or out-of-stock remediation. We are investing in an alert-based execution model, moving from time-based allocations to addressing specific issues like drawn-down displays or out-of-stocks, allowing us to employ resources more efficiently with our team of roughly 5,000 folks with an average tenure of over nine years. Q: Experiential is your fastest grower but lowest margin segment. What closes the margin gaplabor efficiency, event mix, pricing, or something else?A: Chris Grohe, CFO: The mix modeling this year, with branded services down and experiential up, weighs on the overall margin profile. We are deliberately reinvesting in the business, which is why you see a little less incremental margin in experiential this quarter, but it positions us to sustain growth. As branded services stabilizes, you will see a slow and gradual improvement in its rate of decline. With experiential growing and retailer services growing in the second half, you will see an equalization of margins across the businesses, allowing for margin stability and hopefully margin growth next year. Q: What were the key drivers of the second quarter financial results, and how do they impact the full-year outlook?A: Dave Peacock, CEO: Second quarter net revenues were $757 million, up 3% year-over-year (4% excluding divestitures), while adjusted EBITDA declined 12% (9% excluding divestitures) due to one-time factors and mixed segment performance. Experiential Services delivered another strong quarter with event volumes up 18%, while Retailer Services revenue grew 3% but EBITDA fell 25% due to project timing and early-stage project costs. Branded Services revenue declined 13% as recovery takes longer than expected. Chris Grohe, CFO, noted that divestitures represented a headwind of approximately $5 million to revenues and $3 million to adjusted EBITDA in the quarter. The company is reiterating full-year 2026 revenue and adjusted EBITDA guidance, with second-half EBITDA expected to represent approximately 53% of the full-year total. Q: Can you provide more detail on the cash flow performance and the impact of the SAP implementation on working capital?A: Chris Grohe, CFO: Cash generation remains a structural strength, with adjusted unlevered free cash flow of $19 million in the quarter, a 25% conversion rate. For the first half, unlevered free cash flow was 79% of adjusted EBITDA. DSO remained elevated due to the final SAP implementation phase and customer payment timing, both of which are temporary. We expect DSOs to improve steadily through the remainder of the year, supporting strong full-year cash flow generation. The company is reiterating full-year guidance of adjusted unlevered free cash flow of $250 million to $275 million and net free cash flow conversion of 25% excluding debt refinancing costs. Q: What is the company's capital allocation strategy, and how are share repurchases being utilized?A: Chris Grohe, CFO: Capital allocation priorities remain unchanged. Free cash flow will primarily be directed toward debt reduction while maintaining liquidity and strategic flexibility. In the second quarter, the company repurchased approximately $15 million of shares, primarily intended to offset dilution from stock grants and exercises. The company ended the quarter with $102 million in cash, and net debt levels stood at approximately 4.5 times trailing EBITDA. Q: How is the company integrating AI across its operations, and what specific benefits are being realized?A: Dave Peacock, CEO: We are focused on opportunities to enhance our physical network, prioritizing AI integration to improve service levels, teammate experience, and efficiency. We have established a governance structure with a newly created Chief AI Officer role. We are prioritizing training and fluency across the organization and deploying the right tools. Several pilots are underway, including an event manager compliance tool, photo verification tool, cart list automation, and a supervisor intelligence dashboard. In experiential services, AI is speeding up the time between application and working at a cart, compressing the funnel, and streamlining photo verification, driving better execution rates and efficiency. Q: What are the current macro trends affecting consumer behavior, and how is Advantage positioned to navigate them?A: Dave Peacock, CEO: The K-shaped economy persists, with lower and middle-income households focused on value and planning purchases around promotions, while higher-income consumers are becoming more deliberate about value. Emerging brands continue to gain share as consumers seek variety and product discovery. Value-seeking behavior is broadening across For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Experiential Services delivered 18% event volume growth, driven by strong demand for product demonstrations and improved labor execution rates of approximately 95%. Branded Services recovery is taking longer than anticipated due to constrained CPG spending, client in-sourcing, and the impact of previous client losses. Retailer Services experienced temporary margin pressure from project timing and execution costs on early-stage projects that management does not expect to repeat. Management is pivoting toward an alert-based execution model, using real-time data to address out-of-stocks and distribution voids rather than relying on fixed-time store visits. The company is integrating AI through a new Chief AI Officer to streamline workforce operations, including faster applicant-to-work cycles and automated photo verification. Value-seeking behavior is broadening across all income groups, increasing the strategic importance of in-store sampling and measurable ROI-driven programs. Full-year 2026 guidance assumes second-half adjusted EBITDA will represent approximately 53% of the annual total, with Q4 expected to exceed Q3. Management expects Retailer Services performance to improve sequentially in the second half as larger projects ramp up and earnings volatility moderates. The enterprise technology transformation is expected to complete its 'heavy lifting' in 2026, with full efficiency benefits and improved data integrity realized by 2027. Free cash flow is primarily earmarked for debt reduction, following a period of share repurchases intended to offset dilution from stock grants. Guidance assumes no major change in underlying consumer health despite persistent macro volatility and K-shaped economic trends. Divestitures represent a full-year headwind of approximately $20 million to revenues and over $10 million to adjusted EBITDA. Working capital was pressured by the final phase of an SAP implementation, though management expects DSOs to improve steadily through the remainder of the year. Health insurance cost trends became more favorable in Q2, easing a significant pressure point that had impacted the business over the prior year. Branded Services is shifting toward a more fragmented client base to reduce concentration risk following the loss of several large legacy clients. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted they are lapping previous client losses and resignations, leading to a more balanced and fragmented client base where the top 30 clients are currently growing. The business is shifting toward a project-based model, which has grown from 15% to nearly 25% of the work in this space over the last year. Growth is viewed as highly durable due to the rise of emerging brands and innovation from established players, both of which require sampling to drive trial. Efficiency gains from AI tools in recruiting and execution are helping to sustain high growth rates while maintaining a 95% execution rate. Management acknowledged that the rapid growth of the lower-margin Experiential segment relative to Branded Services creates a 'mix weight' on overall margins. Margin stability is expected to improve as Branded Services stabilizes and Retailer Services performance improves sequentially through the second half of the year as larger projects ramp up.

The investors in Advantage Solutions Inc.'s (NASDAQ:ADV) will be rubbing their hands together with glee today, after the share price leapt 30% to US$44.43 in the week following its quarterly results. The results don't look great, especially considering that statutory losses grew 47% toUS$5.49 per share. Revenues of US$870m did beat expectations by 4.5%, but it looks like a bit of a cold comfort. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. Taking into account the latest results, Advantage Solutions' two analysts currently expect revenues in 2026 to be US$3.58b, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 46% to US$9.98. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$3.53b and losses of US$7.53 per share in 2026. So it's pretty clear the analysts have mixed opinions on Advantage Solutions even after this update; although they reconfirmed their revenue numbers, it came at the cost of a considerable increase to per-share losses. View our latest analysis for Advantage Solutions Despite expectations of heavier losses next year,the analysts have lifted their price target 51% to US$42.50, perhaps implying these losses are not expected to be recurring over the long term. These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Advantage Solutions' past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.5% by the end of 2026. This indicates a significant reduction from annual growth of 0.5% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.5% annually for the foreseeable future. It's pretty clear that Advantage Solutions' revenues are expected to perform substantially worse than the wider industry. The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Advantage Solutions' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving. Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2028, which can be seen for free on our platform here. Even so, be aware that Advantage Solutions is showing 2 warning signs in our investment analysis , you should know about... Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Performance was driven by strong growth in Experiential Services and improvements in Retailer Services, which helped offset persistent headwinds in the Branded Services segment. The centralized labor model (CLM) is benefiting execution in the Experiential segment, and while the company is focused on converting demand into sustained margin improvement, it expects EBITDA growth to be broadly in line with revenue growth for the year due to ongoing investments. Management attributed the Branded Services decline to a challenging macro environment, select client losses, and an unfavorable mix shift that cost discipline could not fully offset. Market dynamics reflect extreme consumer focus on value and record-low sentiment, though the company's heavy exposure to stable food categories provides a degree of resilience. Technology investments, including the data lake and AI-enabled staffing tools, are accelerating hiring speeds and improving labor utilization across the platform. Strategic positioning is expanding beyond grocery retail into non-food sectors to capture episodic labor demand, while the 'Supply Chain as a Service' model within the Branded segment is helping retailers manage slower-moving items and limited-time specials. Full year guidance assumes flat to low single-digit revenue growth, with EBITDA expected to be flat to down mid-single digits due to a mix shift toward lower-margin businesses. The enterprise technology transformation, including SAP and Oracle migrations, is expected to be mostly complete by year-end, with the Workday implementation scheduled for next year to enable full efficiency benefits in 2027. DSOs are expected to remain elevated in the near term due to system implementation timing before improving toward the end of the year. Management expects Branded Services to move toward stabilization as the year progresses by lapping client turnover and converting a disciplined pipeline of higher-quality opportunities. The Workday implementation scheduled for next year is expected to further enhance talent management, employee engagement, and training efficacy for the 70,000-person workforce. Divestitures of a small business and an equity stake reduced first quarter net revenues and EBITDA by approximately $5 million and $3 million, respectively. The company completed a debt maturity extension to 2030, establishing a largely fixed and hedged rate structure to improve financial flexibility. A meaningful debt paydown of approximately $130 million was executed in March, contributing to a net leverage reduction to 4.2x adjusted EBITDA. Restructuring costs for the full year are projected to be approximately half of the levels seen in the prior year. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is in active discussions with non-food retailers to provide augmented labor for episodic tasks and Supply Chain as a Service for limited-time specials. The shift is driven by a realization that labor shortages and the need for in-store execution are affecting retailers across all categories, not just grocery. While early in the process, these non-food opportunities are expected to be potential contributors to growth heading into 2027. Growth was partially due to lapping a difficult prior-year period where hiring issues constrained labor supply. Improved labor readiness and faster 'hire-to-start' timelines have led to higher retention and better fixed-cost coverage. The segment is seeing strong demand from new retail partners launching programs, not just expansion within the existing core client base. The partnership is currently in an expanded pilot phase, focusing on real-time signal-based merchandising and data transference. Management noted high client interest in these new capabilities, though meaningful financial benefits are more likely to materialize in 2027. The collaboration aims to use proprietary data to deploy retail representatives more effectively to high-yielding in-store opportunities. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

Image source: The Motley Fool. Wednesday, May 6, 2026 at 8:30 a.m. ET Chief Executive Officer — David Peacock Chief Financial Officer — Christopher Growe David Peacock: Thanks, operator. Good morning, and thank you for joining us. I want to first acknowledge our team for a solid start to the year. We have a lot of work ahead of us, but I am grateful for the resilience our people are showing in this uncertain time. Our first quarter was solid and ahead of our internal expectations, reflecting strong growth in Experiential Services, improvement in Retailer Services and continued headwinds affecting Branded Services. In the first quarter, total company net revenues of $723 million were up 4% year-over-year and up 4.7% on a pro forma basis, excluding divestitures. Adjusted EBITDA of $68 million was up over 16% and up 22% on a pro forma basis, excluding divestitures, driven by strong incremental margins in Experiential Services and improved profitability in Retailer Services. Our results reflect continued progress on the growth and productivity initiatives outlined last quarter, especially our centralized labor model, which is driving improved retail execution and profitability. Our technology investments also continue to enhance our workforce productivity and improve our ability to drive sales for clients. We are still in the early stages of realizing the benefits of these initiatives. We recently launched the last phase of our SAP implementation, and we continue to advance the rollout of our human capital management system. First quarter cash flow was strong. We generated $74 million in adjusted unlevered free cash flow and ended the quarter with $144 million in cash after a meaningful debt paydown in March. While we remain focused on cash generation and productivity, we have increased our efforts to drive growth across our platform. Technology will enable this push. Faster insights to action using AI built on top of our data lake will enable us to better meet increasing demand for Experiential and other in-store services and drive demand for clients' brands through a better understanding of product level performance. In Experiential, Retailer Services, we are using AI tools integrated with legacy systems as well as process redesign to increase our hiring speed to better meet in-store labor needs. Our Branded Services team continues to advance our analytic architecture, driving faster action, increasing the likelihood of accelerating brand performance and driving in-store brand merchandisers dynamically. We leveraged partnerships like our alliance with Instacart to help drive better retail pricing and assortment decisions on behalf of clients. We're collaborating to leverage proprietary data and an alert-based model to more effectively deploy retail reps to the highest yielding in-store opportunities. Our retail pilot with Instacart is expanding and initial results have been positive. We're also expanding into new markets and services and see a meaningful opportunity to expand beyond grocery retail. We are in active discussions with several non-food retailers to perform similar services that we've been doing with grocers and in other food channels for years. While growth is our focus, we continue to pursue several productivity initiatives. First, our centralized labor model is improving service quality and supporting long-term margin expansion, particularly in Experiential Services. We also see an opportunity to extend some of these capabilities into our Retailer Services segment as we execute product resets and store remodel work in approximately 80% of the U.S. grocery channel. Second, we are in the final stages of our enterprise technology transformation. Our SAP and Oracle platforms have strengthened our data integrity, improved our reporting capability, reduced duplicative systems and are improving our ability to deliver insight-driven services while our Workday implementation will further improve our talent management. The heavy lifting of this transformation will be mostly complete by year-end. Beginning in 2027, we expect to more fully realize the efficiency benefits of these investments. Finally, we are integrating AI across our operations. Today, AI-enabled staffing and scheduling tools are already improving our speed and labor utilization. We're leveraging AI to drive further efficiency across our businesses and expect it to play a large role in improving execution, forecasting and labor productivity. This includes a use case-based approach to AI tool selection and development and accelerating the fidelity and maturity of our data to ensure accuracy. I am proud of our execution in the quarter, controlling what we can amid ongoing consumer softness. Several enduring trends impacted our business and the consumer sector more broadly. Lower and middle-income consumers remain highly focused on value, while higher income consumers are shifting spending towards healthier options and also beginning to look for savings opportunities. Rising gas prices are constraining consumer spending and have contributed to the lowest consumer sentiment since tracking began in 1952. We do not expect these dynamics to change in the near term, but we are adapting our business accordingly and helping our manufacturing clients and retailer customers also adjust their strategies. Additionally, our exposure to the fast-turning consumer packaged goods sector provides less volatility in this environment compared to other sectors and our heavier focus on the food category, which represents the majority of Branded Services revenues, provides a degree of built-in resilience as consumption patterns in food tend to be relatively stable or shift more slowly over time. Finally, as a scaled outsourced labor provider, we are well positioned to support clients as they seek greater efficiency and return on their investment at retail. Hiring remains competitive, but it is consistent with recent quarters, and we are investing in our workforce and training to support the durable demand growth we are seeing. As I stated at the outset of this call, our segment results were mixed. Experiential Services delivered very strong first quarter results. Events grew over 19% and execution rates improved on both an annual and sequential basis. As we build top line momentum, we are focused on increasing profitability by advancing the centralized labor model rollout, enhancing training and safety protocols and driving a favorable mix shift toward higher-margin events. Branded Services continues to navigate a challenging environment, resulting in some client turnover that we will continue to lap through the year. Our focus is on stabilizing the revenue base with strengthened client retention efforts, executive engagement and targeted growth opportunities with existing clients. We are already seeing progress with several existing clients have shifted retail account coverage to us earlier this year. New business development remains active with a disciplined focus on higher-quality opportunities. While still under pressure, we believe the business will move towards stabilization as the initiatives take hold. Retailer Services delivered a solid quarter of positive revenue and EBITDA growth despite a timing-related benefit in the quarter. We are encouraged by improving activity, pricing and the more moderate impact of channel mix shifts. Pipeline momentum is strong, and we are converting our pipeline of new customers and new service offerings, which should continue to support growth in this segment. We have seen strong conversion in our retail merchandising business in particular. Finally, we remain focused on revenue and cost alignment and improving execution discipline. Cash generation remains a core strength of our business. Strong cash flow performance continued in the quarter, supported by disciplined working capital management, though the timing of some new system implementations contributed to a slight sequential increase in DSOs. We expect DSOs to be elevated in the near term before improving later in the year. Our capital spending is on pace with our full year expectation, and we paid down roughly $130 million of debt in the quarter. Overall, enhanced liquidity is supporting our operations and strategic flexibility. While we are pleased with our results, we are maintaining a prudent outlook reflecting the continued uncertainty that I mentioned earlier. We expect strength in Experiential Services and improved growth performance in Retailer Services and progress toward achieving stabilization in Branded Services throughout the year. We are reiterating our full year guidance of flat to low single-digit revenue growth, adjusted EBITDA that is flat to down mid-single digits as our revenue growth is weighted towards lower-margin businesses in our portfolio. Adjusted unlevered free cash flow of $250 million to $275 million and net free cash flow conversion of 25% of adjusted EBITDA, excluding the incremental costs related to the recent debt refinancing. We are encouraged by our progress and remain focused on executing our strategy and driving long-term profitable growth. I'll now turn it over to Chris for more detail on our financial performance. Christopher Growe: Thank you, Dave, and welcome to everyone joining us today. I will review our first quarter performance by segment, discuss our cash flow and capital structure and provide additional detail on our outlook. As noted last quarter, we recently divested a small business, an equity stake and a portion of our European joint venture that collectively accounted for approximately $20 million in revenues and over $10 million of EBITDA in 2025. As a result of these divestitures, first quarter net revenues and EBITDA were adjusted down by approximately $5 million and $3 million, respectively. These businesses were all contained within our Branded Services segment, and we will call this out for comparability in our discussion of the quarter. Starting with Branded Services. In the first quarter, we generated $226 million of revenues and $21 million of adjusted EBITDA, down 12% and 25% year-over-year, respectively. As noted, on a pro forma basis, excluding divestitures, revenue was down 10% and EBITDA was down 17%. This segment remains under pressure due to a challenging macro environment, select client losses and an unfavorable mix shift. While we maintain cost discipline in this segment, we are not able to fully offset these impacts. That said, we are taking targeted actions to improve performance, including expanding our customer footprint, accelerating cross-sell across our existing client base, leaning into newer, higher-value services and converting a solid pipeline of opportunities. We are also leveraging technology to drive greater efficiency and enhance ROI for our clients. While near-term conditions remain challenging, we believe the business will move toward a more stable baseline as the year progresses. In Experiential Services, we generated $270 million of revenue and $26 million of adjusted EBITDA, up 22% and 116% year-over-year, respectively, driven by higher event volumes, strong execution and an easier comparison to the prior year period. We saw growth from both existing clients and new retail partners launching programs, reflecting continued strong demand. Operationally, we benefited from improved alignment between demand and labor availability, supporting higher event execution rates and increased volumes as well as price optimization, partially offset by higher variable labor and wage costs. We remain focused on converting strong demand into sustained margin improvement through better labor utilization and mix, supported by our CLM initiatives as well as onboarding and retention improvements. The CLM initiative is already benefiting execution in Experiential Services. Our hiring initiatives accelerated in the first quarter with a significant increase in net hires. Retention remained consistent with the prior year, positioning us well to support strong execution in Q2. In addition to supporting growth, we're seeing improved efficiencies in our hiring processes, reflected in a meaningful reduction in cost per hire during the first quarter. We continue to hire to support growth, including frontline associates, event managers and shift supervisors. We are investing in our teammates in 2026 to elevate service levels for our customers. As a result, in Experiential Services, we expect strong revenue growth for the year with adjusted EBITDA growth broadly in line with the revenue growth due to these investments. In Retailer Services, we generated $227 million of revenues and $21 million of adjusted EBITDA, up 4% and 14% year-over-year, respectively. Performance was supported by new business wins, pricing, the continued ramp of key client programs and project timing. We are pleased that the Retailer Services segment returned to adjusted EBITDA growth during the quarter. In the first quarter, we lapped a client loss from the prior year period, while the timing of certain project work also provided a benefit. We also saw a reduced impact from channel mix shift, resulting in a lower drag on growth in the quarter. Additionally, we expect the combination of new projects, new service lines and new clients onboarded during the first quarter to support overall growth in 2026 with year-over-year comparison factors affecting the quarterly cadence. Our focus remains on execution, staffing alignment and operational discipline to convert pipeline strength into more consistent earnings. We are encouraged by the current pipeline momentum. First quarter shared service costs were lower year-over-year, reflecting reduced labor and professional services spend. We expect shared services costs to be stable in 2026 versus the prior year, even as we continue investing in growth and transformation with operating efficiencies helping to fund those investments. Moving to the balance sheet and liquidity. We ended the quarter with $144 million in cash, down from the fourth quarter as we utilize our strong cash position to reduce debt, but up from $121 million in the prior year period, reflecting disciplined capital management. As mentioned on our last earnings call, we completed an extension of our debt maturities to 2030 during the first quarter, improving our liquidity profile and overall financial flexibility. We also now have a largely fixed and hedged rate structure. At quarter end, our net leverage ratio was 4.2x adjusted EBITDA, down from 4.4x at the end of the fourth quarter, and we expect to end the year around this level. We are executing against a clear plan to further reduce leverage and achieve our long-term target of 3.5x or below. Turning to cash flow and working capital. Cash generation remains a core strength of the business, and we continue to prioritize it through disciplined cost management, lower restructuring costs and a focus on working capital improvements. DSO increased slightly in the first quarter and is expected to remain elevated over the next few months, primarily due to the temporary impact of ongoing systems implementations and upgrades, including the final phase of our SAP implementation, which is going live this week. We expect disciplined management of DSO as the year progresses. While it will remain elevated midyear, we expect year-end levels to be below the prior year, supporting strong full year cash flow generation. Adjusted unlevered free cash flow was $74 million in the quarter with a conversion rate of 110%. Restructuring costs were lower in the first quarter, and we continue to expect full year restructuring costs to be approximately half of the prior year level. Finally, turning to our outlook. We are encouraged by our first quarter results; we are maintaining a prudent outlook in light of ongoing macro uncertainty and unfavorable margin mix shift resulting from strong growth in lower-margin business segments. Additionally, a portion of the outperformance in the quarter reflects timing-related benefits that may normalize over the balance of the year. As Dave mentioned, we are reiterating our prior 2026 guidance, including flat to low single-digit revenue growth, adjusted EBITDA flat to down mid-single digits, adjusted unlevered free cash flow of $250 million to $275 million and net free cash flow conversion of approximately 25% of adjusted EBITDA, excluding incremental costs related to our debt extension. From a cadence perspective, we now expect the first half to represent in the low 40% range of full year adjusted EBITDA. Key factors influencing our outlook include labor and benefit costs, mix dynamics and our ability to convert pipeline into revenue, particularly within Branded Services. Overall, we remain focused on execution, cost discipline and positioning the business for consistent and sustainable performance. Thank you for your time. I will now turn it back over to Dave. David Peacock: Thanks, Chris. The first quarter reflected solid progress against our strategic priorities with strong performance in Experiential Services, improving results in Retailer Services and disciplined execution across the business. Looking ahead, we believe our growth and productivity initiatives, including our centralized labor model, technology transformation and AI investments position us well to navigate the current environment. At the same time, we are building on this momentum while taking the necessary actions to stabilize Branded Services. We remain focused on executing our strategy and generating strong cash flow over time as we position advantage for long-term profitable growth. Unknown Executive: I want to thank everybody for joining, and we look forward to connecting with this group next quarter. Operator: Thank you. we'll now begin the Q&A session. [Operator Instructions] And your first question comes from the line of Greg Parrish with Morgan Stanley. Gregory Parrish: Dave, you mentioned opportunity to expand beyond grocery retail. I think you said you're in active discussions with a few nonfood retailers. Can you give us maybe some flavor there? I mean, what verticals are we talking about? And then, I mean, I guess, what was different about these markets historically? And then why are you able to attack them today? And then I mean, do you think this might be a contributor going into 2027? David Peacock: Yes. Thanks for the question. So I'd say, one, if you think about our business over the last several years, it evolved, right? I mean we acquired Daymon, which significantly changed our business in 2018, integrated that business and then COVID hit. And that had a lot of impacts on our business from the Experiential business all the kind of drying up and the grocery headquarter business really taking off. And then you have been the reverse of that. So I think we were so focused on managing through a lot of uncertainty and change that we didn't have the time to really focus on these other retailers, number one. Number two, I think you're seeing what we've now known as a business that was really began and focused on grocery retail to kind of lift our eyes up and see that a lot of the same impacts are affecting other retailers. We've had business with other but we feel there's opportunity to do more. If you think about what they deal with as far as labor shortages and the augmented labor that we provide for episodic tasks in store is one example. And Supply Chain as a Service within our branded segment has an opportunity to help retailers with either slower-moving items or what we kind of call limited time specials, what have you. So it's very early process, and we're having good dialogue and probably a much higher level of willingness to explore opportunities, but it will take some time because we're cultivating those relationships as we speak. Christopher Growe: Can I add to that, Greg, that just one consideration here would be that this is actually occurring across each of the segments. So Dave talked about Supply Chain as a Service, which is something we have in our Branded Services segment, but we're seeing this opportunity in Retailer and Experiential as well to move beyond the typical grocery store client and customer that we have across our business. Gregory Parrish: Yes. Okay. That's very helpful. And then maybe as a follow-up, I just want to dive into Experiential a little bit. You had great growth there for years and maybe slowed a little bit and then now you've just sort of exploded here. Maybe just help us unpack this. I mean is a lot of it -- all that HR system work you did last year? Is it that? A lot of the work that you do is just one big Retailer. So is this -- are you just doing more work in store than you used to? And then we're going at a 20% clip here. So how do we think about the rest of the year in Experiential? David Peacock: Well, I'd say a couple of things. And let's go back because I think sometimes because we do these quarterly, we forget maybe what happened a year ago. In the first quarter last year, we talked pretty openly that we had some issues on just the hiring side, right, and supplying labor to our business. And that had a little more of a profound impact on the Experiential segment. So we are lapping that, which contributed to the kind of significant lift you saw this quarter. And then obviously, as we're able to supply labor as we were able -- as we did this quarter, you just get better fixed cost coverage that improves your margins. And I would argue our labor readiness has improved, meaning both the caliber training and just readiness of the labor force that comes in is better because of a lot of the initiatives that our workforce operations team has embarked upon a year ago. So that is built to sustain a pretty robust growth rate for the Experiential segment, our Retailer segment where we've got our SAS division that does resets and remodels and then even within our branded segment where you've got our branded merchandising. It's an important part of our business and one that there's increasing demand for. So I really think it's those things. It's a lot of initiatives around training, hiring, get -- shortening the time in which people from when they're hired to when they actually start is another thing that we've been focused on. And what that does is leads to higher retention rates because you have to remember when you hire an hourly worker, they really need the job right away typically. And when it gets started right away. So we've been focused on that as well as improving the employee experience. Christopher Growe: Greg, I'll just add a couple of points on to Dave's perspective there. Dave mentioned the easier comparison, but we had really strong 2-year growth as well in that business. And we've been tracking at, call it, that 30-plus percent incremental margin, and you saw about that same level this quarter. And when you have nearly 20%, call it, 19.5% execution -- I'm sorry, demand growth and then you have execution accelerate sequentially, those are the things that lead to not just the growth overall, but in the strong margin performance as well. I also want to note, though, that we've seen an expansion with -- we've added some new customers there. So it goes beyond just the core business. We've actually had some new customers come in as well, which I think is just an encouraging sign for the continuation. But we -- just one final comment. We said in the release -- I'm sorry, I think in the script would be that we do expect solid revenue growth there this year. We expect EBITDA to be mostly in line with the revenue growth. So this is an area that we're investing in. We see the opportunity for very strong incremental returns on that investment. So just be aware that as the year goes on, we want to try to invest back here as well to support the growth going forward. Operator: Your next question comes from the line of Luke Morison with Canaccord. Lucas Morison: So maybe we can just start on some of the -- just double-clicking on some of the efficiency benefits you're seeing from the SAP and the Oracle and the Workday implementation. It sounds like we're finally at the point where that's starting to really bear fruit and be more fully realized. Maybe you can just speak to sort of like the timing and the cadence of how that's going to flow into the model. I know you said we're going to see most of it in 2027, but maybe just frame like when we can expect to see that and then also just the magnitude of that? Like are we talking tens of basis points of margin uplift? Are we talking hundreds? Just help us think through that. Christopher Growe: Yes. I think this is Chris Growe, obviously, and I'll have Dave, I'm sure, follow my comments here. But this is -- so we talk about this transformation phase for the company largely being completed by the end of this year. And just to be sure, and we said this in our script, we are going live with another instance of SAP today. So it will be our last kind of major business going on to SAP. And there's always going to be refinements and work to that going forward. But I want to just give you a perspective that we're not done yet. We still are investing. There still are some -- a heavy amount of work from our teams to get this over the line, but we've really been in a good place on that. Oracle is in place and then Workday goes in place next year. So I just want to be sure I level set us on kind of where we are today. And I think therefore, we made a comment that '27 is when a lot of the efficiencies occur. The groundwork for all that's happening right now. So meaning that we're not -- there's not just the systems being in place, but all the work to now really harness the value of these systems. There is AI built into these systems. There's efficiencies that come from having all of our -- I'll call it the better data integrity across our business. We're really utilizing the data lake. I know that's a word you've heard us talk about. But in reality, that's going to lead to significant efficiency and again, integrity in the way we manage the data. I think the key you're going to see here is efficiency across the business and the performance of -- in the value of the margin of the business, no doubt, and I'm not going to quantify that for you, but that should be beneficial, especially in '27. And then we also talked about, for example, DSO. So like our cash flow benefits coming from this should be quite significant as well. So I think that's the way I would look at it. Again, I can't give you a number necessarily, but look at that to be more of a '27 opportunity, and it goes beyond just the margin performance, but also the cash flow. David Peacock: Yes. And I'm going to pile on. We're really excited about what Workday can mean to our business. I mean when you've got almost 70,000 folks and 70 million labor hours, I've seen in a smaller setting when I worked at the regional grocer, what Workday can do as far as employee experience, employee engagement and just ease of operation and actually enhancement around training. I mean you can't underemphasize how important training is to delivering a superior both client experience, but customer experience for our clients. But right now, we're seeing a lot of benefits, as Chris said, with the data lake and cloud migration that we went through that's enabling us to leverage machine learning and AI, and I know that's a buzz term right now, but a little more profoundly in our business. And some of the cases are in our workforce operations where it's helping us streamline the hiring process, and we're working on projects right now that are breaking down the process for that time between when you're hired and when you start with us. And a lot of companies have gone through this. They're in the high-volume labor businesses. But it's exciting to see because when you think about large language models, this type of volume of data and then the positive impact it can have with employee experience retention, hopefully lowering hiring costs over time. We're seeing some of the seeds of that, but we're excited about where that can go in the future. Lucas Morison: Yes. Super helpful. And then maybe just a follow-up, double-clicking on Pulse and Instacart. Those continue to be highlighted. They continue to be topics of conversation. Maybe just help us think about like at this point, are you seeing them being cited in new business wins? Are they generating meaningful revenue or value for customers at this stage? Are they still kind of in the investment or ramping phase? Just help us think through that. David Peacock: Yes, it's more in the ramping phase. We -- our partnership with Instacart, and we'll acknowledge them for a great first quarter we saw today, is early stages, and we've expanded our pilot. The pilot has been successful in what we were trying to accomplish as it relates to a more kind of real-time signal-based processes in our merchandising businesses. And the data efficacy that we get and that transference of data between the 2 companies has been very successful. So we're bullish on what that can mean. And I think we are able to provide value to each other and to the benefit of our clients and customers. So early days, and we're not sharing details because the pilot, I could say, is so early, but as it expands, and we are finding a lot of client interest and willingness to join us in the journey of testing these new capabilities. But I think you'll see more of the benefits of that in 2027. Operator: There are no further questions at this time. I will now turn the call back over to Dave Peacock for closing comments. David Peacock: Thank you. We appreciate everybody joining the call. We look forward to our second quarter call later this summer, and have a good day. Appreciate it. Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. Before you buy stock in Advantage Solutions, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Advantage Solutions wasn’t one of them. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Advantage Solutions (ADV) Q1 2026 Earnings Transcript was originally published by The Motley Fool

Strong Experiential Services performance and improved Retailer Services profitability drove Adjusted EBITDA growth Centralized labor model implementation continues to enhance execution, productivity, and margins Reaffirming 2026 guidance for Revenues, Adjusted EBITDA and Cash Flow ST. LOUIS, May 06, 2026 (GLOBE NEWSWIRE) -- Advantage Solutions Inc. (NASDAQ: ADV) (“Advantage,” “Advantage Solutions,” the “Company,” “we,” or “our”), a leading business solutions provider to consumer goods manufacturers and retailers, today reported financial results for the three months ended March 31, 2026. Revenues for the three months ended March 31, 2026 were $869.6 million compared with $821.8 million, and net loss was $71.8 million compared with a net loss of $56.1 million. “Advantage delivered a solid start to the year, highlighted by strong growth in Experiential Services and disciplined execution across the business,” said Advantage CEO Dave Peacock. “While the environment remains uncertain, we are making meaningful progress on our growth and productivity initiatives, including our centralized labor model and technology transformation. We remain focused on driving efficiency, generating strong cash flow, and positioning the Company for sustainable, profitable growth.” Q1'26 Segment Highlights Cash Flow and Balance Sheet Highlights (Amounts in Millions) Fiscal Year 2026 Outlook (Amounts in Millions) 2026 revenue outlook excludes reimbursable expenses. 2026 guidance excludes the effect of recently announced divestitures. Investor Contact: [email protected] Media Contact: [email protected] NMF = Not Meaningful (1) Net leverage ratio is defined as Net Debt divided by LTM Adjusted EBITDA. (2) Net free cash flow is defined as cash flow from operations, less capital expenditures. Net FCF conversion of 25% is excluding incremental debt refinancing costs. ADV-EARNS About Advantage Solutions Advantage Solutions is the leading omnichannel retail solutions agency in North America, uniquely positioned at the intersection of consumer-packaged goods (CPG) brands and retailers. With its data- and technology-powered services, Advantage leverages its unparalleled insights, expertise and scale to help brands and retailers of all sizes generate demand and get products into the hands of consumers, wherever they shop. Whether it’s creating meaningful moments and experiences in-store and online, optimizing assortment and merchandising, or accelerating e-commerce and digital capabilities, Advantage is the trusted partner that keeps commerce and life moving. Advantage has offices throughout North America and strategic investments and owned operations in select international markets. For more information, please visit YourADV.com. Included with this press release are the Company’s consolidated and condensed financial statements as of and for the three months ended March 31, 2026. These financial statements should be read in conjunction with the information contained in the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (the "SEC") on May 6, 2026. Forward-Looking Statements Certain statements in this press release may be considered forward-looking statements within the meaning of the federal securities laws, including statements regarding the expected future performance of Advantage's business and projected financial results. Forward-looking statements generally relate to future events or Advantage’s future financial or operating performance. These forward-looking statements generally are identified by the words “may”, “should”, “expect”, “intend”, “will”, “would”, “could”, “estimate”, “anticipate”, “believe”, “predict”, “confident”, “potential” or “continue”, or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks, uncertainties and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Advantage and its management at the time of such statements, are inherently uncertain. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, market-driven wage changes or changes to labor laws or wage or job classification regulations, including minimum wage; developments with respect to retailers that are out of our control; the impact from tariffs; future potential pandemics or health epidemics; Advantage’s ability to continue to generate significant operating cash flow; client procurement strategies and consolidation of Advantage’s clients’ industries creating pressure on the nature and pricing of its services; consumer goods manufacturers and retailers reviewing and changing their sales, retail, marketing and technology programs and relationships; Advantage’s ability to successfully develop and maintain relevant omni-channel services for our clients in an evolving industry and to otherwise adapt to significant technological change; Advantage’s ability to maintain proper and effective internal control over financial reporting in the future; Advantage’s substantial indebtedness and our ability to refinance at favorable rates; and other risks and uncertainties set forth in the section titled “Risk Factors” in the Annual Report on Form 10-K filed by the Company with the SEC on March 3, 2026, and in its other filings made from time to time with the SEC. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Advantage assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Non-GAAP Financial Measures and Related Information This press release includes certain financial measures not presented in accordance with generally accepted accounting principles (“GAAP”), including Adjusted EBITDA, Adjusted EBITDA by Segment, Adjusted Unlevered Free Cash Flow and Net Debt. These are not measures of financial performance calculated in accordance with GAAP and may exclude items that are significant in understanding and assessing Advantage’s financial results. Therefore, the measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP, and should not be considered in isolation or as an alternative to net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. You should be aware that Advantage’s presentation of these measures may not be comparable to similarly titled measures used by other companies. Reconciliations of historical non-GAAP measures to their most directly comparable GAAP counterparts are included below. Advantage believes these non-GAAP measures provide useful information to management and investors regarding certain financial and business trends relating to Advantage’s financial condition and results of operations. Advantage believes that the use of Adjusted, Adjusted EBITDA by Segment, Adjusted Unlevered Free Cash Flow, and Net Debt provide an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing Advantage’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. Non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. Additionally, other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore Advantage’s non-GAAP measures may not be directly comparable to similarly titled measures of other companies. Adjusted EBITDA and Adjusted EBITDA by Segment are supplemental non-GAAP financial measures of our operating performance. Adjusted EBITDA means net loss before (i) interest expense (net), (ii) provision for (benefit from) income taxes, (iii) depreciation, (iv) amortization of intangible assets, (v) impairment of goodwill, (vi) changes in fair value of warrant liability, (vii) stock based compensation expense, (viii) equity-based compensation of Karman Topco L.P., (ix) fair value adjustments of contingent consideration related to acquisitions, (x) acquisition and divestiture related expenses, (xi) (gain) loss on divestitures, (xii) restructuring expenses, (xiii) reorganization expenses, (xiv) litigation expenses (recovery), (xv) COVID-19 benefits received, (xvi) EBITDA for economic interests in investments and (xvii) other adjustments that management believes are helpful in evaluating our operating performance. Adjusted EBITDA by Segment means, with respect to each segment, operating income (loss) before (i) depreciation, (ii) amortization of intangible assets, (iii) impairment of goodwill, (iv) stock based compensation expense, (v) equity-based compensation of Karman Topco L.P., (vi) fair value adjustments of contingent consideration related to acquisitions, (vii) acquisition and divestiture related expenses, (viii) restructuring expenses, (ix) reorganization expenses, (x) litigation expenses (recovery), (xi) COVID-19 benefits received, (xii) EBITDA for economic interests in investments and (xiii) other adjustments that management believes are helpful in evaluating our operating performance, in each case, attributable to such segment. Adjusted EBITDA Margin means Adjusted EBITDA divided by total revenues. Adjusted Unlevered Free Cash Flow represents net cash provided by (used in) operating activities less purchase of property and equipment as disclosed in the Statements of Cash Flows further adjusted by (i) cash payments for interest, (ii) cash received from interest rate derivatives, (iii) cash paid for income taxes; (iv) cash paid for acquisition and divestiture related expenses, (v) cash paid for restructuring expenses, (vi) cash paid for reorganization expenses, (vii) cash paid for contingent earnout payments included in operating cash flow, (viii) COVID-19 benefits received, (ix) net effect of foreign currency fluctuations on cash, and (x) other adjustments that management believes are helpful in evaluating our operating performance. Adjusted Unlevered Free Cash Flow as a percentage of Adjusted EBITDA means Adjusted Unlevered Free Cash Flow divided by Adjusted EBITDA. Net Debt represents the sum of current portion of long-term debt and long-term debt, less cash and cash equivalents. With respect to Net Debt, cash and cash equivalents are subtracted from the GAAP measure, total debt, because they could be used to reduce the debt obligations. We present Net Debt because we believe this non-GAAP measure provides useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and to evaluate changes to the Company's capital structure and credit quality assessment. ________________________