Q3 2025 Earnings Supplemental Materials | | | Q3 | | | --- | --- | --- | --- | | | 2025 | | 2024 | | Results Operating | | | | | Revenues | $ 1,011.4 | $ | 1,031.0 | | Gross Profit | | 296.9 | 300.4 | | Net Income | | 38.1 | 47.5 | | Adjusted Net Income | | 57.3 | 64.3 | | Adjusted EBITDA | | 112.6 | 116.9 | | Margins | | | | | Gross | | 29.4% | 29.1% | | EBITDA Adjusted | | 11.1% | 11.3% | | Earnings per Share - Diluted | | | | | Income per Share | $ | 0.87 $ | 1.06 | | Net Income Adjusted | $ | 1.31 $ | 1 ...

Core Insights - Staffing and recruiting firm Kelly Services is reducing its corporate workforce by approximately 2%, affecting around 100 employees [1][2] - The layoffs are part of a "targeted reduction" aimed at streamlining the organizational structure to better meet client needs [1][2] - The reductions occur under the new CEO Chris Layden, who started in September, amidst a slowing US labor market [2][3] Company Performance - Kelly Services reported a revenue of $4.3 billion in 2024 and places over 400,000 workers annually across various sectors including science, tech, education, manufacturing, retail, and finance [3] - The company's shares experienced a decline of less than 1% during afternoon trading on the day of the announcement [3] Industry Context - As of September, US employers' hiring plans were at their lowest year-to-date level since 2009, indicating a potential slowdown in the labor market [3] - Despite overall layoffs remaining low, many job seekers are facing challenges in securing corporate roles [2]

Core Insights - The company has experienced a modest improvement in win rates and secured new enterprise programs in sectors like financial services and life sciences, contributing to margin improvement and future growth as client demand recovers [1] - After eleven consecutive quarters of organic constant currency revenue declines, the company returned to growth in the third quarter, driven by stabilization of demand in North America and Europe [2][4] - The ManpowerGroup Employment Outlook Survey indicates a steady hiring outlook, with 45% of employers planning to maintain current workforce levels, the highest since early 2022 [3] Financial Performance - Reported revenue for the quarter was $4.6 billion, down 2% year-over-year in constant currency, while system-wide revenue was $4.9 billion [5][10] - Reported EBITDA was $74 million, with an adjusted EBITDA of $96 million, representing a 22% decrease in constant currency year-over-year [5][11] - Earnings per diluted share were $0.38 on a reported basis and $0.83 on an adjusted basis, with adjusted earnings per share decreasing by 39% year-over-year in constant currency [5][12] Market Trends - Gradual signs of stabilization in hiring are observed, with employers adapting to economic uncertainty and geopolitical complexities [4][6] - The company is seeing strong momentum in Latin America and APME, while Europe and North America show softer trends [4][7] - The demand in Europe and North America is holding steady, with an expanding enterprise pipeline concentrated among global enterprise clients [7] Business Segment Performance - The Manpower brand reported a 3% growth in organic constant currency, while Experis and Talent Solutions brands declined by 7% and 8% respectively [13] - The Americas segment revenue increased by 6% year-over-year on a constant currency basis, while Southern Europe revenue decreased by 1% [18][21] - The Asia Pacific Middle East segment saw an 8% increase in organic constant currency revenue, with Japan's revenue growing by 6% [25] Cost Management and Efficiency - The company is focused on cost containment and driving efficiencies, with adjusted SG&A expenses down 2% on a constant currency basis [16][17] - Capital expenditures for the quarter were $15 million, and free cash flow was $45 million, reflecting a positive trend despite previous declines [26][27] - The company is advancing digitization and standardization initiatives to streamline operations and improve efficiency [31][32] Future Outlook - The company forecasts ongoing stability in most markets, with earnings per share for the fourth quarter expected to be in the range of $0.78 to $0.88 [29] - The guidance includes a favorable foreign currency impact and anticipates a flat revenue trend at the midpoint [30] - Employers are becoming more resilient to policy fluctuations, with improved visibility for planning into 2026 [41]

Financial Data and Key Metrics Changes - Reported revenue for the quarter was $4.6 billion, down 2% year-over-year in constant currency, while system-wide revenue was $4.9 billion [7][11] - Reported EBITDA for the quarter was $74 million, with adjusted EBITDA at $96 million, representing a decrease of 22% in constant currency year-over-year [7][8] - Adjusted earnings per share decreased by 39% year-over-year in constant currency, with reported EPS at $0.38 and adjusted EPS at $0.83 [8][12] Business Line Data and Key Metrics Changes - The Manpower brand experienced a 3% growth year-over-year on an organic constant currency basis, while Experis declined by 7% and Talent Solutions declined by 8% [14] - Gross profit margin for the quarter was 16.6%, with staffing margin contributing a 40 basis point reduction due to a shift towards enterprise accounts [14][16] - The consolidated gross profit decreased by 4% on an organic constant currency basis year-over-year, with Manpower brand reporting flat gross profit [15] Market Data and Key Metrics Changes - Revenue in the Americas segment was $1.1 billion, representing a 6% year-over-year increase on a constant currency basis [17] - Southern Europe revenue was $2.2 billion, reflecting a 1% decrease in organic constant currency [20] - The Asia-Pacific Middle East segment saw revenues of $521 million, representing an 8% increase in organic constant currency [23] Company Strategy and Development Direction - The company is focused on digitization and standardization across operations, with significant progress in global business services initiatives [28][29] - The implementation of AI, particularly the Sophie AI platform, is expected to enhance operational efficiency and client outcomes [30][56] - The company aims to balance cost containment with strategic investments to strengthen capabilities and expand margins [9][29] Management's Comments on Operating Environment and Future Outlook - Management noted a cautious hiring environment with stabilization signs, particularly in North America and Europe, despite geopolitical tensions [4][9] - The outlook for the fourth quarter anticipates ongoing stability in most markets, with EPS guidance in the range of $0.78 - $0.88 [26] - There is cautious optimism for improved economic conditions in 2026, particularly in Europe and North America [46] Other Important Information - Free cash flow for the quarter was $45 million, down from $67 million in the prior year, with capital expenditures at $15 million [24][25] - The company ended the quarter with cash of $275 million and total debt of $1.2 billion, reflecting an improvement in net debt [25] Q&A Session Summary Question: When business confidence improves, would there be an early cycle pickup in flexible staffing volumes? - Management indicated that the current labor market is "frozen," with little hiring or workforce reductions, but there are signs of stabilization and potential growth if employer confidence returns [33][34] Question: Can you discuss the trends seen in the quarter and any volatility due to economic conditions? - Management noted improvements in France and Italy, with stable performance in the U.S., although some volatility was observed due to previous large RPO volumes [38][40] Question: Are there any price pressures or mix issues impacting gross profit? - Management confirmed that the primary driver of staffing margin pressure is the mix shift towards enterprise clients, with no significant pricing changes observed [42][43] Question: How is political turmoil in France impacting business sentiment? - Management acknowledged that while political uncertainty is not helpful, clients are navigating the environment pragmatically and focusing on talent investments [71][73] Question: What are the drivers of blue-collar staffing outperforming white-collar staffing? - Management attributed the outperformance of the Manpower brand to improving PMI and employer resilience, while noting that the Experis brand is impacted by slower traditional IT project investments [79][81]

Financial Performance - Revenue was $4.6 billion, with system-wide revenue reaching $4.9 billion[5] - Gross margin stood at 16.6%[5] - EBITA was $74 million ($96 million as adjusted), resulting in an EBITA margin of 1.6% (2.1% as adjusted)[5] - EPS was $0.38 ($0.83 as adjusted)[5] Business Line Performance - Manpower organic constant currency revenue increased slightly from the Q2 trend of 1% year over year[10] - Talent Solutions organic constant currency revenues declined from the Q2 trend of 1% year over year[10] - Experis organic constant currency revenue trend improved from the Q2 trend of -9% year over year[10] Segment Performance - Americas revenue was $1.1 billion, with an operating unit profit (OUP) of $38 million (3.5% OUP margin)[19] - Southern Europe revenue was $2.2 billion, with an OUP of $66 million (3.0% OUP margin)[23] - Northern Europe revenue was $817 million, with an OUP of -$15 million (-1.8% OUP margin)[26] - APME (Asia Pacific Middle East) revenue was $521 million, with an OUP of $27 million (5.1% OUP margin)[30] Cash Flow - Free cash flow was $45 million for the quarter[33] - Net earnings were $18 million[33] Outlook - Fourth quarter 2025 total revenue is expected to be up 3-7% (down 2% / up 2% CC)[37] - EPS is projected to be $0.78 – $0.88 (favorable $0.08 currency)[37]

Core Insights - Robert Half has been recognized by Forbes as one of the World's Best Employers for 2025, highlighting its commitment to providing an outstanding workplace environment and exceptional opportunities for employees globally [1][2]. Company Recognition - The Forbes' World's Best Employers list is based on an independent survey of over 300,000 employees across 50 countries, focusing on satisfaction, culture, and reputation, with emphasis on well-being, inclusivity, career growth, and work-life balance [2]. - Robert Half's CEO, M. Keith Waddell, emphasized the company's dedication to creating an environment where employees can thrive both professionally and personally [3]. Employee Experience - Robert Half invests in programs and initiatives that promote connection, career development, and well-being, contributing to its recognition as a top employer [3]. - The company has also been acknowledged as one of Fortune's Most Admired Companies and one of Forbes' Best Employers for Company Culture [3][4]. Company Overview - Robert Half is the world's first and largest specialized talent solutions and business consulting firm, providing contract talent and permanent placement solutions across various fields including finance, technology, marketing, legal, and customer support [4]. - The company is the parent of Protiviti, a global consulting firm that offers internal audit, risk, and business consulting solutions [4].

Core Insights - ManpowerGroup Inc. (NYSE: MAN) is set to release its Q3 2025 earnings results soon, with the stock having declined approximately 11% recently [1] Company Overview - ManpowerGroup focuses on workforce solutions and has a significant presence in the employment services industry [1] - The company is known for its strong fundamentals and potential for growth, particularly in sectors like technology, infrastructure, and internet services [1] Market Context - The stock's recent decline may indicate market concerns or reactions to broader economic conditions affecting the employment sector [1]

Core Insights - ManpowerGroup released its 2024-2025 Sustainability Report titled "Working to Change the World: A Human-First, Just Transition," highlighting progress in sustainability across three pillars: Planet, People & Prosperity, and Principles of Governance [1][2]. Group 1: Planet - The company reduced direct (scope 1 & 2) emissions by 32% since 2019 and by 9% year-over-year [6]. - Renewable energy usage increased by 18% in 2024, with France and the U.S. jointly procuring almost 13,000 MWh in renewable electricity [6]. - An electric vehicle fleet expansion included the addition of 100 EVs while removing 200 gas-powered vehicles [6]. Group 2: People & Prosperity - The Manpower MyPath program scaled to over 301,000 associates, enhancing employability and providing career pathways [6]. - The company is on track to upskill 170,000 individuals through Experis Academy in Europe, focusing on AI skills and providing intensive training [6]. - Partnerships with clients enabled over 400,000 individuals globally to enhance their digital skills to meet new market demands [6]. Group 3: Principles of Governance - ManpowerGroup was recognized by Ethisphere for the 16th time as one of the World's Most Ethical Companies, the highest in the industry [6]. - A comprehensive Double Materiality Assessment (DMA) was completed to align with the EU Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS) [6]. - The company founded an AI New Projects Review Committee to create guidelines for ethical and responsible AI use [6].

Group 1 - Employers are becoming cautious in their hiring outlook, focusing more on retention rather than new hiring, with an emphasis on selective hiring to maintain organizational resilience [3][4] - Nearly half of employers surveyed identified attracting qualified applicants and retention as their biggest challenges, with AI talent remaining in demand despite hiring slowdowns in other areas [3] - Two-thirds of HR managers have implemented hiring freezes, and nearly half plan to pause recruitment for at least the next 12 months, leading to a focus on reskilling and internal mobility [4] Group 2 - The global hiring market is becoming more measured due to economic uncertainty, with 45% of employers intending to maintain current workforce levels in Q4 2025, the highest since early 2022 [6] - Less than 40% of employers plan to add staff in Q4, while 15% expect to reduce their workforce, indicating a cautious approach to hiring [6] - Employers that do intend to hire are focusing on specific capabilities, particularly in technological advancement [6]

Financial Performance Overview - Total revenue remained flat at $396 million compared to Q2 2024[5,8] - Organic revenue decreased by 4%[7,8] - Net loss was $0 million, a significant improvement from a net loss of $104.7 million in Q2 2024[5,8] - Adjusted EBITDA increased by 147% to $26 million from $11 million in Q2 2024[7,8] - Gross margin decreased by 3 percentage points due to changes in business mix[7] - SG&A expenses improved by 7% due to disciplined cost management[7] Segment Performance - PeopleReady revenue was $213 million, a decrease of 5%[12] - PeopleManagement revenue was $134 million, an increase of 2%[12] - PeopleSolutions revenue was $49 million, a 20% increase, including $16 million from HSP, but decreased 20% on an organic basis[12] Liquidity and Capital Allocation - The company has a solid liquidity position with $22 million in cash, $54 million in debt, and $79 million of borrowing availability, totaling $101 million in liquidity[7] - Debt was reduced by $4 million, and working capital increased by $14 million[7] Outlook for Q3 2025 - Revenue is projected to be between $400 million and $425 million, representing a 5% to 11% increase compared to the prior year, including a 4 percentage point contribution from the HSP acquisition[18] - SG&A is expected to be between $93 million and $97 million, a decrease of 7% to 3% compared to the prior year[18]