Advantage Solutions Inc. Q4 FY2025 earnings call

• Moved towards refinancing debt with over 99% acceptance, extending maturities to 2030, planned paydown of ~$90M debt. - Divested three non-core businesses, ended 2025 with $241M cash and strengthened balance sheet. - Upcoming reverse stock split for broader institutional accessibility. - Fourth quarter net revenues up ~3% YOY, adjusted EBITDA $88M, strong cash flow generation in second half 2025. - Streamlined portfolio with small divestitures in early 2026, generating ~$55M proceeds. - External consumer behavior impacts business, internal IT transformation concluded in 2025, rationalizing applications. - Focus on improving productivity via centralized labor models, technology investments including SAP and Oracle systems, AI integration. - Partnerships like with Instacart, leveraging data investments through Pulse system

Branded services: Q4 2025 revenues ~$259M, adjusted EBITDA ~$39M, down 9% and 29% YOY; Full year 2025 revenues $1B, adjusted EBITDA $143M, down 9% and 21% YOY. Experiential services: Q4 2025 revenues ~$280M, adjusted EBITDA ~$28M, up 19% and 115% YOY; Full year 2025 revenues $1B, adjusted EBITDA $101M, up 8% and 34% YOY. Retailer services: Q4 2025 revenues $246M, adjusted EBITDA $20M, up 1% and down 22% YOY; Full year 2025 revenues $944M, adjusted EBITDA $87M, down 2% and 12% YOY

• 2026 revenue expected flat to up low single digits excluding divestitures, driven by experiential services momentum, stable retailer services, and branded services stabilization. - Adjusted EBITDA expected flat to down mid-single digits excluding divestitures, due to macro uncertainty and mixed shifts to lower-margin services. - Unlevered free cash flow expected ~$250 - $275M for 2026, net free cash flow conversion at least 25% of adjusted EBITDA excluding incremental debt refinancing costs. - 2026 is final year of elevated IT spending, expect operating benefits from investments to flow through results

• Consumer caution and value-seeking affecting shopping behavior, leading to lower commission revenue, CPG and retailer P&Ls challenges, pullback in traditional marketing. - Cyclical nature of some challenges in branded services, including insourcing and CPG spending softness. - Retailer services impacted by channel mix shifts, project timing, and cautious retail spending. - Higher labor-related costs such as workers' compensation and medical benefits in various segments

Q: About debt exchange, specifically rate step-up and path to sub-3.5 times leverage.

A: Incremental cost of rate step-up, but extended debt to 2030 provides certainty and ability to invest.

Q: Spread between revenue and EBITDA growth, structural cost base and path to convergence.

A: Unusually high labor costs in benefits area, mixed business mix, technology adoption potential for efficiencies.

Q: Revenue guide flat to up single digits, which segments improving.

A: Experiential services growth, retailer segment growth, branded services stabilization.

Q: Catalyst for branded services in second half 2026.

A: Lapping client losses, new leadership focus, renewed execution focus, strong new business pipeline.

Q: Size of divestitures impact on revenue.

A: ~$20M revenue impact from small divestitures in 2025