Advantage Solutions Inc. Q1 FY2026 earnings call

Good morning acknowledgment of team resilience. First quarter total company net revenues $723 million up 4% YOY and 4.7% pro forma. Adjusted EBITDA $68M up over 16% pro forma. Progress on growth and productivity initiatives like centralized labor model and technology investments. Leveraging AI for workforce productivity and client sales. Experiential services strong growth, retailer services improvement, branded services challenges. Technology initiatives like SAP implementation and HCM system rollout. Collaboration with Instacart for retail pricing and assortment. Expansion into new markets and services

Branded services: Q1 revenues $226M, down 12% year-over-year; adjusted EBITDA $21M, down 25% year-over-year. On a pro forma basis, excluding divestitures, revenue was down 10% and EBITDA was down 17%. Experiential services: Generated $270 million of revenue and $26 million adjusted EBITDA, up 22% and 116% year-over-year respectively. Retailer services: Generated $227 million of revenues and $21 million of adjusted EBITDA, up 4% and 14% year over year, respectively

Reiterating full-year guidance: flat to low single-digit revenue growth, adjusted EBITDA flat to down mid-single digits, adjusted unlevered free cash flow $250 to $275 million, net free cash flow conversion of 25% of adjusted EBITDA, excluding the incremental costs related to the recent debt refinancing

Ongoing consumer softness, lower and middle-income consumer focus on value, higher-income spending shifts, rising gas prices affecting sentiment. Branded services client turnover risk. Labor and benefit cost impacts. Mixed dynamics affecting margins

Q: Dave, opportunity to expand beyond grocery retail?

A: Very early process, active discussions with non-food retailers, similar labor shortages and supply chain issues for other retailers.

Q: Experiential growth unpacking?

A: Lapping prior year hiring issues, labor readiness improvements, new customers, solid revenue growth expected.

Q: SAP, Oracle, Workday efficiencies?

A: Transformation mostly complete by end 2026, efficiencies realized in 2027, Workday benefits for employee experience, data lake enabling AI.

Q: Pulse and Instacart partnership?

A: Early ramping phase, pilot successful, client interest, benefits expected in 2027