Summary of Key Points Core Viewpoint - Advantage Solutions (NASDAQ: ADV) is experiencing significant stock price pressure, with the stock recently hitting an all-time low of $1.09, reminiscent of its previous struggles in 2023 when it dipped to $1.15 in April [1]. Company Performance - The stock price of Advantage Solutions has shown volatility, testing the $1 mark again after previously reaching a low of $1.15 in April 2023 [1]. - The current all-time low of $1.09 indicates ongoing challenges for the company in maintaining investor confidence and market stability [1]. Historical Context - The company has a history of stock price fluctuations, with the recent decline reflecting a pattern observed over the past two years [1]. - The reference to the stock nearing $1 again suggests a potential trend that investors may need to monitor closely [1].

Core Points - Advantage Solutions Inc. is providing financial assistance and mobilizing employee volunteers to support recovery efforts after recent tornadoes in St. Louis [1][2] - The company is donating $25,000 to the Urban League of Metropolitan St. Louis for emergency relief efforts [2] - Advantage Solutions is committed to supporting its employees affected by the disaster through grants and access to an Employee Assistance Program [3] Company Initiatives - The support for the Urban League is part of a multi-year partnership that includes the Save Our Sisters Fund, which offers various services to empower women [4] - Advantage Solutions positions itself as a leading omnichannel retail solutions agency in North America, leveraging data and technology to assist brands and retailers [5] Urban League Overview - The Urban League of Metropolitan St. Louis aims to empower African Americans and others in the region, focusing on economic self-reliance and social equality [6]

Financial Performance - Revenues decreased by $39.6 million, or 4.6%, to $821.8 million for the three months ended March 31, 2025 compared to the same period in 2024[95] - Operating loss from continuing operations decreased by $15.3 million to $14.6 million[95] - Net loss from continuing operations increased by $6.0 million to $56.1 million[95] - Adjusted Net Income decreased by $25.3 million, or 274.5%, to $16.1 million[95] - Adjusted EBITDA from Continuing Operations decreased by $12.5 million or 17.6%, to $58.2 million[95] - Total revenues decreased by $39.6 million, or 4.6%, to $821.8 million for the three months ended March 31, 2025, compared to $861.4 million for the same period in 2024[119] - Net loss from continuing operations for Q1 2025 was $(56,130) thousand, compared to $(50,133) thousand in Q1 2024, indicating a worsening financial performance[144] - Adjusted EBITDA from Continuing Operations for Q1 2025 was $58,181 thousand, down from $70,639 thousand in Q1 2024, showing a decline of approximately 17.6%[144] - The Branded Services segment reported an Adjusted EBITDA of $27,945 thousand in Q1 2025, down from $34,334 thousand in Q1 2024, a decrease of about 18.5%[146] - The Experiential Services segment's Adjusted EBITDA decreased to $12,069 thousand in Q1 2025 from $16,692 thousand in Q1 2024, representing a decline of approximately 27.6%[146] - The Retailer Services segment achieved an Adjusted EBITDA of $18,167 thousand in Q1 2025, slightly down from $19,613 thousand in Q1 2024, a decrease of about 7.4%[146] Segment Performance - Branded Services segment generated approximately 35.3% of revenues in Q1 2025, down from 38.2% in Q1 2024[90] - Experiential Services segment generated approximately 38.2% of revenues in Q1 2025, up from 35.7% in Q1 2024[91] - Retailer Services segment generated approximately 26.5% of revenues in Q1 2025, slightly up from 26.1% in Q1 2024[92] - The Branded Services segment revenues decreased by $39.2 million, or 11.9%, primarily due to a weaker economic environment and an intentional client resignation[120] - The Experiential Services segment revenues increased by $6.7 million, or 2.2%, driven by an increase in events per day volume[121] - The Retailer Services segment revenues decreased by $7.1 million, or 3.1%, primarily due to staffing challenges[122] Cost Management and Restructuring - Selling, general, and administrative expenses decreased to 7.9% of revenues, down from 10.3% in the prior year, due to a $22.8 million reduction in internal reorganization costs[124] - The company announced a restructuring plan in July 2024 to improve cost structure and operational efficiency, with substantial completion expected by the end of fiscal year 2024[113] - Restructuring expenses for Q1 2025 amounted to $931 thousand, compared to no such expenses in Q1 2024, indicating increased costs related to operational adjustments[144] Cash Flow and Liquidity - Net cash used in operating activities for Q1 2025 was $39.6 million, compared to $9.4 million in Q1 2024, reflecting a significant increase in accounts receivable[150] - Net cash used in investing activities in Q1 2025 was $18.4 million, primarily due to the purchase of property and equipment related to the enterprise resource planning initiative[152] - Net cash used in financing activities for Q1 2025 was $22.1 million, primarily related to repurchases of Notes totaling $18.2 million[153] - The company’s cash flow from operating activities was negatively impacted by an increase in accounts receivable in Q1 2025 compared to a decrease in Q1 2024[151] - The company’s principal sources of liquidity include cash receipts for services performed and borrowings under the Revolving Credit Facility[149] - As of March 31, 2025, the company held $67.5 million in cash and cash equivalents outside the United States, an increase from $65.0 million as of December 31, 2024[180] Debt and Interest Management - The Revolving Credit Facility has an aggregate principal amount of up to $500 million, with $451 million available as of March 31, 2025[156] - The Term Loan Facility has an aggregate principal amount of $1.1 billion, with borrowings amortizing at 1% per annum of the original issued amount[163] - The company recognized a gain of $1.8 million on the repurchase of Notes during Q1 2025, classified under interest expense[171] - The company may refinance existing debt or enter into additional interest rate cap agreements to manage interest rate risk in the future[197] - The company has interest rate collar contracts with an aggregate notional value of $700.0 million as of March 31, 2025, to manage interest rate exposure[195] - The company has entered into interest rate collar agreements to manage exposure to potential interest rate increases, with a net liability of $0.8 million as of March 31, 2025[195] Legal and Compliance - Litigation expenses increased to $523 thousand in Q1 2025 from $284 thousand in Q1 2024, indicating rising legal costs[137] - The company recorded a deferred tax liability of approximately $0.6 million for unremitted earnings in Canada, indicating a need for tax planning regarding foreign earnings[181] - The company is evaluating the impact of new accounting standards on its consolidated financial statements, including ASU 2023-09 and ASU 2024-03[186][188] - The company has no off-balance sheet financing arrangements or liabilities, ensuring transparency in its financial position[182] - The company has no majority-owned subsidiaries excluded from consolidated financial statements, ensuring comprehensive financial reporting[182] Other Financial Metrics - Interest expense decreased by $1.4 million, or 3.9%, to $34.4 million for the three months ended March 31, 2025, primarily due to a lower debt balance[130] - Equity-based compensation of Karman Topco L.P. was $(1,524) thousand in Q1 2025, a significant change from $390 thousand in Q1 2024, reflecting a shift in compensation strategy[137] - The company reported a fair value adjustment related to contingent consideration of $0 in Q1 2025, down from $778 thousand in Q1 2024, suggesting changes in acquisition-related liabilities[144] - A 10% unfavorable change in foreign exchange rates could have decreased the company's consolidated loss before taxes by approximately $0.8 million for the three months ended March 31, 2025[192] - The company expects existing domestic cash and cash flows to be sufficient to fund operations and cash commitments for at least the next 12 months[181]

Company Performance - Advantage Solutions Inc. reported a quarterly loss of $0.12 per share, missing the Zacks Consensus Estimate of $0.06, and showing an improvement from a loss of $0.16 per share a year ago, resulting in an earnings surprise of -300% [1] - The company posted revenues of $821.79 million for the quarter ended March 2025, which was 3.96% below the Zacks Consensus Estimate and a decrease from year-ago revenues of $879 million [2] - Over the last four quarters, Advantage Solutions has not surpassed consensus EPS estimates and has topped consensus revenue estimates only once [2] Stock Performance - Advantage Solutions shares have declined approximately 49.7% since the beginning of the year, contrasting with the S&P 500's decline of -3.8% [3] - The current Zacks Rank for Advantage Solutions is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.10 on revenues of $886.99 million, and for the current fiscal year, it is $0.42 on revenues of $3.61 billion [7] - The estimate revisions trend for Advantage Solutions is mixed, and future changes in estimates will be closely monitored following the recent earnings report [6][7] Industry Context - The Consumer Products - Discretionary industry, to which Advantage Solutions belongs, is currently ranked in the bottom 44% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]

Financial Data and Key Metrics Changes - The company's first quarter revenues were $696 million, down 5% year-over-year, and adjusted EBITDA was $58 million, down 18% year-over-year [4][5] - The decline in adjusted EBITDA was primarily due to intentional client exits and transformation-related investments [5][6] - The company is lowering its revenue and adjusted EBITDA outlook to flat to down low single digits for the year [16] Business Line Data and Key Metrics Changes - In Branded Services, revenues were $257 million and adjusted EBITDA was $28 million, down 9% year-over-year [18] - In Experiential Services, revenues were $221 million and adjusted EBITDA was $12 million, down 12% year-over-year [19] - In Retailer Services, revenues were $218 million and adjusted EBITDA was $18 million, down 3% and 7% year-over-year, respectively [19] Market Data and Key Metrics Changes - Consumer confidence has waned, leading to lower than expected consumer purchases and a reevaluation of spending levels by clients [5][6] - Retailers have been destocking inventory, impacting order volumes across many consumer packaged goods (CPG) categories [5][50] - The company noted a shift towards private label products, particularly among larger retailers [50] Company Strategy and Development Direction - The company is focused on modernizing its tech infrastructure and enhancing analytics capabilities to drive efficiency [12][13] - A task force has been mobilized to improve labor utilization and address staffing challenges [14] - The company aims to be a cost-leading solutions partner to CPGs and retailers despite a softer growth environment [15] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the future, citing a track record of performing well through recessionary environments [8] - The first quarter was impacted by a challenging labor market, but improvements in staffing and execution rates are expected in Q2 [9][10] - The company is confident in its long-term earnings power and cash generation potential despite near-term challenges [16] Other Important Information - The company ended the quarter with $121 million in cash and a net leverage ratio of approximately 4.4x adjusted EBITDA [20][22] - The ERP implementation is expected to yield greater cash flow benefits as the year progresses [25] Q&A Session Summary Question: Any notable changes in the macro environment compared to Q1? - Management noted improvements in hiring rates and a smoothing out of labor challenges in Q2 [32][34] Question: Have labor costs increased due to staffing issues? - Management indicated that labor cost inflation is in line with the macro market, and staffing issues were more related to talent acquisition strategies [39][40] Question: What was the nature of the debt repurchase in the quarter? - The company repurchased bonds during the quarter and is focused on balancing cash for debt reduction and share repurchases [42][44] Question: What is the impact of destocking on orders? - Destocking improved as the quarter progressed, but management has not yet seen April data to confirm if it has completely stopped [69][70] Question: What is the breakdown of consumer products versus food companies? - Approximately 70% of the company's portfolio is in food, with strong presence in personal care and household goods [73]

Financial Data and Key Metrics Changes - The company's first quarter revenues were $696 million, down 5% year-over-year, and adjusted EBITDA was $58 million, down 18% year-over-year [5][18] - The decline in adjusted EBITDA was primarily due to intentional client exits and transformation-related investments [6][18] Business Line Data and Key Metrics Changes - In Branded Services, revenues were $257 million and adjusted EBITDA was $28 million, down 9% year-over-year [20] - In Experiential Services, revenues were $221 million and adjusted EBITDA was $12 million, down 12% year-over-year [21] - In Retailer Services, revenues were $218 million and adjusted EBITDA was $18 million, down 3% and 7% year-over-year, respectively [21] Market Data and Key Metrics Changes - Consumer confidence declined, leading to lower than expected consumer purchases and a reevaluation of spending levels by clients [6][18] - Retailers experienced destocking trends, impacting overall order volumes [56] Company Strategy and Development Direction - The company is focused on modernizing its tech infrastructure and enhancing analytics capabilities to drive efficiency [13][14] - A task force has been mobilized to improve labor utilization and address staffing challenges [15][17] - The company is committed to being a cost-leading solutions partner to CPGs and retailers despite a softer growth environment [17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging labor market impacting event staffing and project execution [9][10] - Despite near-term challenges, management remains optimistic about long-term earnings potential and cash generation [18][28] Other Important Information - The company is lowering its revenue and adjusted EBITDA outlook to flat to down low single digits for the year [18] - The ERP implementation is expected to yield greater cash flow benefits as systems are better utilized [26] Q&A Session Summary Question: Any notable changes in the macro environment? - Management noted improvements in hiring rates and smoothing out of labor challenges in Q2 [33][35] Question: Have labor costs increased? - Management indicated that labor cost inflation is in line with the macro market, not a significant factor in staffing issues [41][42] Question: What type of debt was repurchased? - The company repurchased bonds during the quarter [46] Question: What is the impact of destocking on orders? - Destocking improved as the quarter progressed, but data for April was not yet available [72] Question: Breakdown of consumer products versus food companies? - Approximately 70% of the portfolio is in food, with strong presence in personal care and household goods [76]

Financial Data and Key Metrics Changes - The company's first quarter revenues were $696 million, down 5% year-over-year, and adjusted EBITDA was $58 million, down 18% year-over-year [4][5][15] - The decline in adjusted EBITDA was primarily due to intentional client exits and transformation-related investments [5][15] Business Line Data and Key Metrics Changes - In Branded Services, revenues were $257 million and adjusted EBITDA was $28 million, down 9% year-over-year [18] - Experiential Services generated $221 million in revenues and $12 million in adjusted EBITDA, down 12% year-over-year [19] - Retailer Services had revenues of $218 million and adjusted EBITDA of $18 million, down 3% and 7% year-over-year, respectively [19] Market Data and Key Metrics Changes - Consumer confidence declined, leading to lower consumer purchases and reevaluation of spending by clients [5][6] - Retailers experienced destocking trends, impacting overall order volumes [50][53] Company Strategy and Development Direction - The company is focused on modernizing its tech infrastructure and enhancing analytics capabilities to drive efficiency [11][12] - A task force has been mobilized to improve labor utilization and address staffing challenges [13][14] - The company is committed to being a cost-leading solutions partner to CPGs and retailers despite a softer growth environment [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging labor market affecting event staffing and project execution [7][10] - Despite near-term challenges, the company remains optimistic about future performance and has a robust new business pipeline [6][7] - The revenue and adjusted EBITDA outlook has been lowered to flat to down low single digits due to macroeconomic factors [15][16] Other Important Information - The company ended the quarter with $121 million in cash and a net leverage ratio of approximately 4.4x adjusted EBITDA [20][26] - The ERP implementation is expected to yield greater cash flow benefits as systems are better utilized [25][26] Q&A Session Summary Question: Any notable changes in the macro environment? - Management noted improvements in hiring rates and smoother staffing challenges in Q2 compared to Q1 [32][33] Question: Have labor costs increased due to staffing issues? - Management indicated that labor cost inflation is in line with the macro market, and staffing issues were more related to talent acquisition strategies [39][40] Question: What is the impact of staffing shortages on EBITDA? - The majority of the decline in EBITDA was attributed to staffing shortages [68] Question: Is destocking continuing into Q2? - Destocking improved as Q1 progressed, but data for April was not yet available to confirm if it had completely stopped [70] Question: Breakdown of consumer products versus food companies? - Approximately 70% of the portfolio is in food, with strong presence in personal care and household goods [73]

Q1 2025 Performance - Revenues net of pass-through costs decreased by 5% year-over-year to $696 million[17] - Adjusted EBITDA decreased by 18% year-over-year to $58 million[17] - Adjusted Unlevered Free Cash Flow was $(7) million[17] - Net Leverage Ratio was 44x[17] Segment Performance - Branded Services revenues decreased by 9% year-over-year[49] Adjusted EBITDA decreased by 19% year-over-year[49] - Experiential Services revenues increased by 2% year-over-year[53] Adjusted EBITDA decreased by 28% year-over-year[53] - Retailer Services revenues decreased by 3% year-over-year to $2179 million[57] Adjusted EBITDA decreased by 7% year-over-year[58] 2025 Guidance - Revenues are expected to range from down low single digits to flat compared to the prior year[43] - Adjusted EBITDA is expected to range from down low single digits to flat compared to the prior year[43] - Adjusted UFCF Conversion is expected to be >50% of Adjusted EBITDA[68] Financial Position - Total Net Debt was $1577 billion as of March 31 2025[61]

Financial Performance - Revenues for Q1 2025 were $822 million, a decline of 5% from $861 million in Q1 2024[3] - Net loss for Q1 2025 was $56 million, compared to a net loss of $50 million in the same period last year, representing a 12% increase in losses[3] - Adjusted EBITDA decreased by 18% to $58 million, with an adjusted EBITDA margin of 7.1%, down from 8.2% in Q1 2024[5][6] - Revenues for Q1 2025 were $821,792, a decrease of 4.6% compared to $861,412 in Q1 2024[34] - Operating loss from continuing operations was $14,621, improved from a loss of $29,950 in Q1 2024[34] - Net loss from continuing operations was $56,130, compared to a loss of $50,133 in the same period last year[34] - Adjusted EBITDA from continuing operations decreased to $58,181, down 17.6% from $70,639 in Q1 2024[41] - Basic loss per common share from continuing operations was $(0.17), compared to $(0.16) in Q1 2024[34] - The company reported a net loss of $377,785,000 for the twelve months ended March 31, 2025[53] Revenue Breakdown - Branded Services revenue fell by 11.9% to $289.8 million, while Experiential Services revenue increased by 2.2% to $314 million[10] - Branded Services segment Adjusted EBITDA for Q1 2025 was $27,945,000, down 18.4% from $34,334,000 in Q1 2024[44] - Experiential Services segment Adjusted EBITDA for Q1 2025 was $12,069,000, a decrease of 27.5% compared to $16,692,000 in Q1 2024[44] - Retailer Services segment reported an operating income of $4,205,000 in Q1 2025, a significant improvement from an operating loss of $4,190,000 in Q1 2024[44] Cash Flow and Liquidity - Cash and cash equivalents decreased to $121,149 from $205,233 at the end of 2024, a decline of 41%[36] - Net cash used in operating activities was $39,627, compared to $9,376 in Q1 2024, indicating increased cash outflow[39] - The company reported a net cash used in financing activities of $22,139, compared to $66,882 in Q1 2024, showing a significant reduction in cash outflow[39] - Adjusted Unlevered Free Cash Flow for Q1 2025 was $(7,071,000), with Adjusted EBITDA from Continuing and Discontinued Operations at $58,181,000[50] Debt and Capital Expenditures - The company reported a gross debt of approximately $1.698 billion and cash and cash equivalents of around $121 million[12] - The net leverage ratio stood at 4.4x as of March 31, 2025[12] - Total Net Debt as of March 31, 2025, was $1,557,381,000, with a Net Debt to LTM Adjusted EBITDA ratio of 4.4x[50] - Total debt as of March 31, 2025, was $1,678,530,000, after accounting for debt issuance costs[50] - Capital expenditures for Q1 2025 were approximately $15 million, with voluntary share repurchases totaling about $1 million[12] - The company is focused on disciplined capital allocation, including voluntary debt repurchases of approximately $20 million[7] Guidance and Future Outlook - The company plans to lower its fiscal year 2025 revenue guidance to a low single-digit decline or flat, down from a prior expectation of low single-digit growth[14] - The decline in revenues was attributed to intentional client exits, transformation spending, and labor shortages affecting order volumes[7] Asset and Liability Changes - Total assets decreased to $3,013,353 from $3,106,517, reflecting a reduction of 3%[36] - Total liabilities decreased to $2,317,778 from $2,357,782, a reduction of 1.7%[36] Other Expenses - Cash payments for restructuring expenses in Q1 2025 totaled $7,496,000[50] - The company incurred $3,473,000 in acquisition and divestiture related expenses for the twelve months ended March 31, 2025[53] - Depreciation and amortization for the Branded Services segment was $31,462,000 in Q1 2025, slightly down from $31,987,000 in Q1 2024[44]

Core Insights - Advantage Solutions Inc. reported a decline in revenues and an increase in net loss for Q1 2025, reflecting a challenging operating environment and heightened market uncertainty [2][4][7] Financial Performance - Total revenues for the three months ended March 31, 2025, were $822 million, down from $861 million in the same period last year, representing a decrease of 4.6% [2][7] - The net loss increased to $56 million compared to a net loss of $50 million in Q1 2024, marking a 12% increase in losses [2][7] - Adjusted EBITDA fell to $58 million, down 17.6% from $70.6 million in the prior year, with an adjusted EBITDA margin of 7.1% compared to 8.2% [2][7] Operational Challenges - The decline in financial performance was attributed to intentional client exits, anticipated transformation spending, labor shortages in certain regions, and a decrease in retail inventory leading to lower order volumes [7] - Despite these challenges, the company remains focused on transformation initiatives aimed at driving efficiency and enhancing growth and cash flow in the future [4][7] Strategic Focus - The company is committed to disciplined capital allocation, including voluntary debt repurchases and share buybacks totaling approximately $20 million and $1 million, respectively [7] - Management has lowered guidance due to macroeconomic uncertainties but remains optimistic about developments in the new business pipeline [4][7]