Core Insights - TrueBlue reported Q2 FY2025 results showing improved profitability despite flat revenue and ongoing demand softness, with a non-GAAP loss per share of $(0.07), better than the $(0.10) consensus estimate [1][2] - GAAP revenue was $396 million, slightly below the expected $400.52 million, indicating stabilization compared to the previous year, but organic growth remains challenging [1][2] - The quarter's profitability was supported by cost management, a government subsidy, and contributions from the recent acquisition of Healthcare Staffing Professionals [1] Financial Performance - Non-GAAP EPS improved by 79.9% year-over-year from $(0.35) in Q2 2024 to $(0.07) in Q2 2025 [2] - Adjusted EBITDA more than doubled to $2.6 million, representing 0.7% of revenue, with adjusted SG&A expenses reduced by 11.6% to $88.9 million [2][7] - Revenue from the PeopleReady segment was $213.2 million, down 4.6% year-over-year, while PeopleManagement's revenue increased by 1.6% to $133.9 million [5][6] Business Overview and Strategy - TrueBlue operates through three main segments: PeopleReady, PeopleManagement, and PeopleSolutions, focusing on connecting businesses with temporary and contract workers [3] - The company is prioritizing the expansion of digital platforms, scaling in high-growth sectors like healthcare, and enhancing operational efficiency [4] - Technology investments, particularly in the JobStack app, are crucial for growth, allowing for quick onboarding and job acceptance [8] Future Outlook - Management anticipates a return to growth in Q3 FY2025, with sales expected to range from a decline of 1% to an increase of 5%, particularly in the PeopleSolutions segment [10] - Despite expected growth, organic sales in PeopleSolutions are projected to decline, and PeopleReady is anticipated to remain under pressure [10][11] - Leaders noted potential for margin expansion if demand recovers, but emphasized the importance of underlying demand recovery [11]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $396 million, flat compared to the prior year, near the low end of the outlook range, with a 4% growth contribution from the acquisition of HSP [17][18] - Gross margin decreased to 23.6%, down 280 basis points, primarily due to changes in revenue mix and certain software depreciation now reported in cost of services [18][19] - The company reported a net loss of $200,000 for the quarter, including a noncash intangible asset impairment charge of $200,000 [20] - Adjusted net loss was $2 million, while adjusted EBITDA was $3 million [20] Business Line Data and Key Metrics Changes - PeopleReady revenue declined by 5%, driven by reduced client volumes across most verticals and geographies, but skilled businesses delivered double-digit growth [21][22] - PeopleManagement grew for the second consecutive quarter with revenue up 2%, supported by strong results from the commercial drivers business [22][23] - People Solutions revenue grew by 20%, with HSP contributing 40 percentage points of inorganic growth, offsetting a 20% organic decline [23][24] Market Data and Key Metrics Changes - Improved on-demand trends were noted in California and Florida, indicating growing momentum as the quarter ended [22] - The company is expanding its presence in the energy sector, with ongoing infrastructure investment fueling sustained demand for skilled labor [12][55] Company Strategy and Development Direction - The company is focused on accelerating digital transformation, growing market share in high-growth end markets, and optimizing sales functions to capture demand [8][9] - Strategic partnerships, such as with Omnia Partners, are aimed at unlocking new client acquisition channels and deepening enterprise client relationships [11] - The company has simplified its organizational structure and implemented targeted cost reductions, achieving approximately $90 million in permanent SG&A savings [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the positive momentum and signs of stabilization, expecting a return to company-wide growth in Q3 [15][26] - The outlook for Q3 includes expected revenue growth of 5% to 11% year-over-year, reflecting current market trends [26] Other Important Information - The company has strategically invested to position itself ahead of secular tailwinds while maintaining a strong balance sheet [10][12] - The digital transformation includes embedding AI-powered job matching and predictive analytics to enhance workforce solutions [14][15] Q&A Session Summary Question: Monthly trends and green shoots - Management noted double-digit growth in skilled businesses and signs of stabilization, with a return to company-wide growth expected in Q3 [32][34] Question: Unsolicited buyout offer from HireQuest - The board rejected the offer, focusing on maximizing shareholder value and positioning the company to take advantage of market drivers [36][37] Question: Sustainability of revenue growth - Management is encouraged by momentum and stabilization, with clients beginning to experience positive trends [41][42] Question: Pricing competition trends - Pay rates increased by 1.2% and bill rates by 1.8%, leading to a slight margin improvement despite ongoing pricing pressure [44][45] Question: Renewable energy business performance - The renewable pipeline remains strong, with multiple new deals signed, and the company is focused on expanding into additional energy end markets [55][57]

Financial Data and Key Metrics Changes - Total revenue for the quarter was $370 million, a decline of 8% year-over-year, but at the high end of the outlook range [13][4] - Gross margin was 23.3%, down 140 basis points, with lower workers' compensation costs contributing to a 130 basis point expansion [14] - The company reported a net loss of $14 million for the quarter, with adjusted net loss at $12 million and adjusted EBITDA at minus $4 million [16][18] Business Line Data and Key Metrics Changes - The People Solutions segment, which includes PeopleScout and the newly acquired HSP business, saw revenue decline by 2%, with HSP contributing 24 percentage points of inorganic growth [18] - PeopleReady revenue declined by 15%, including a 1% decline from the sale of the on-demand business in Canada [19] - PeopleManagement returned to growth with a 1% increase in revenue, driven by strong results from the commercial drivers business [20] Market Data and Key Metrics Changes - Client volumes continued to decline across most verticals, with the largest declines in hospitality and manufacturing [20] - Positive trends were observed in transportation, retail, and professional services, particularly driven by the centerline business [51] Company Strategy and Development Direction - The company is focusing on expanding its presence in high-growth and underpenetrated markets, particularly in healthcare staffing [6] - Strategic partnerships, such as with Omnia Partners, are being pursued to enhance growth opportunities [10] - The company is investing in digital transformation and proprietary technologies to improve user experience and operational efficiencies [9] Management's Comments on Operating Environment and Future Outlook - Management noted that evolving governmental policies have hindered business confidence, impacting the staffing industry [5] - Despite economic uncertainty, the long-term staffing outlook remains positive, with confidence in capturing market share and enhancing profitability [11][12] - The company expects revenue for the second quarter to range from a decline of 1% to an increase of 5% year-over-year [22] Other Important Information - The company finished the quarter with $23 million in cash and $58 million in debt, maintaining a total liquidity of $94 million [21] - The company is on track to increase its field sales representatives by 50% by the end of Q2 [10] Q&A Session Summary Question: How did each month look in the quarter? - Management indicated that PeopleManagement returned to growth in Q1, with positive trends continuing into April [25][26] Question: Any signs of how new field sales reps are performing? - The new PeopleReady field sales reps are performing better than the rest of the business, with sales enabled territories showing stronger performance [29][31] Question: How did HSP perform in Q1? - HSP's financial results were in line with expectations, delivering about $11 million in revenue for the quarter [38][42] Question: What are the trends in candidate availability? - The company is seeing expansions in fill rates, with rates reaching 90% in Q1 [64] Question: Are there any pricing pressures? - Pricing pressures are consistent with current market conditions, but the company is maintaining pricing discipline [65] Question: What is the outlook for revenue guidance across segments? - The midpoint for PeopleReady is minus 3%, PeopleManagement is plus 3%, and People Solutions is plus 29%, excluding HSP [56]