Advantage Solutions Inc. Q2 FY2024 earnings call

• The company has refined its portfolio, completed most divestitures (including the Jun Group sale), and is midway through corporate transformation to an integrated enterprise. - Advanced initiatives like upgrading technology data platforms and launching an AI core competency center. - Focus on culture with 95% retention among top 100 clients. - New reporting segments (branded, retailer, experiential services) provide a clear picture of business drivers.

The company's segments include branded services, retailer services, and experiential services. Branded services serve as an extension of CPG sales and marketing teams, with investments in technology and AI to drive insights. Retailer services offer end-to-end solutions from private brand strategy to retail media network support, with strategic collaborations. Experiential services directly connect shoppers with brands through sampling and events, with event counts up 11% year-over-year and execution rate exceeding 92%. Organic revenues excluding pass-through costs were approximately $750 million, and adjusted EBITDA was $90 million with margins of 12%.

• Expect improved performance in the second half with low single-digit revenue growth on a continuing operations basis. - Lapping of investments and new business wins contributing in the second half. - Seasonality favoring the second half, and pricing actions to offset wage inflation. - CapEx reduced due to efficient IT work and timing, with plan to lower net leverage ratio to 3.5x or less long term.

• Economic uncertainties impacting consumer spending. - Wage inflation as a headwind despite pricing actions. - Market competition and execution risks related to transformation initiatives.

Q: Greg Parrish asked about consumer shopping activity and EBITDA sequential step up.

A: Dave Peacock discussed economic ripples from COVID, channel shifts, and seasonality; Chris Growe unpacked EBITDA drivers like retailer timing, experiential execution, and branded sequential improvement.

Q: Joseph Vafi inquired about employee utilization optimization.

A: Dave Peacock mentioned tracking productivity, increased productivity in experiential with event count growth, and focus on labor utilization across business lines.

Q: Faiza Alwy asked about cost side, transformation timeline, and IT CapEx.

A: Chris Growe talked about pricing balancing inflation, Dave Peacock discussed IT CapEx reduction through efficient work and OpEx lapping of investments.

Q: Tyler Pierce questioned share repurchases and divestiture cash use.

A: Chris Growe explained share repurchases for employee incentive dilution, and focus on debt reduction with divestiture proceeds mostly for debt pay down