Advantage Solutions Inc.

Greetings and welcome to the Advantage Solutions third quarter 2025 earnings call. All lines have been placed on mute to prevent any backward noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again, press the star one. As a reminder, this conference is being recorded. It is now my pleasure to introduce Vic Mohan. Thank you. And Vic, you may begin.

Thank you, operator. Welcome to Advantage Solutions' third quarter 2025 earnings conference call. Dave Peacock, Chief Executive Officer, and Chris Grawi, Chief Financial Officer, are on the call today. Dave and Chris will provide their prepared remarks, after which we will open the call for a question and answer session. During this call, management will make forward-looking statements within the meeting of the federal securities laws. Actual outcomes and results could differ materially due to several factors. including those described more fully in the company's annual report on Form 10-K filed with the SEC. All forward-looking statements are qualified in their entirety by such factors. Our remarks today include certain non-GAAP financial measures, which are reconciled to the most comparable GAAP measure in our earnings release. As a reminder, unless otherwise stated, the financial results discussed today will be from continuing operations, and revenues will exclude pass-through costs. And now, I would like to turn the call over to Dave Peacock.

Thanks, Vic. Good morning, everyone, and thank you for joining us. Before we begin, I want to acknowledge the continued focus and dedication of our teammates. You are Advantage, and your commitment to delivering for our clients and customers, especially as they navigate a complex consumer environment, remains central to our success. Starting with our third quarter results, revenues of $781 million were down 2.6% versus prior year. Adjusted EBITDA was $99.6 million, a decline of 1.4% versus prior year, a sequential improvement from the second quarter. This was the result of a strong performance in our experiential segment, where demand remains robust. This partially offsets softer trends in branded services and anticipated declines in retailer services due, in part, to timing shifts. We generated strong cash flow driven by our marked improvement in working capital, resulting in adjusted unlevered free cash flow of $98 million, or nearly 100% of EBITDA. As a result of the strong cash flow generation, we ended the quarter with over $200 million in cash, including the proceeds from the sale of our 7.5% equity stake in Action Food Service. During the quarter, we leveraged the benefits of our structurally diversified platforms, pulling levers in real time across our high-volume labor business and retailer and experiential. We meaningfully increased hiring activity to meet growing customer demand, enabling the business to execute more events in in-store retail work, which drove strong incremental margins. Our ability to respond to rapidly changing dynamics with the right data, systems, and talent provides resilience in the near term, While longer term, we remain well positioned for an improving environment across our network businesses, primarily in branded services. As we move into the acceleration phase of our IT transformation and modernization effort, having implemented our new ERP and enterprise data infrastructure, with phase one of our SAP and our Oracle EPM environment in place, we are beginning to leverage these systems to drive efficiency gains, improve workforce optimization, increase cash flow, accelerate data integration, and sharpen visibility into performance. These actions enable us to operate as a truly insights-driven organization even as we continue the remaining phases of our SAP and Workday implementations over the next 15 months. We remain committed to establishing a leading data architecture and system foundation to yield operational savings and better data-driven services for our clients and customers. We're advancing the development of our new Pulse system, an AI-enabled end-to-end decision engine designed to elevate the speed, precision, and impact of our commercial decision-making across sales and merchandising. This next-generation platform will seamlessly integrate Advantage's data intelligence, including unique retail data with dynamic, real-time capabilities, augmenting our team's ability to anticipate demand, prioritize actions, and drive efficiency and effectiveness across client workflows. At the same time, we are deepening key strategic partnerships that enhance our technology capabilities and operational reach, most recently through our expanded collaboration with Instacart. By combining their live in-store audit capabilities with Advantages Retail Execution Network, we are building an alert-based retail model that allows CPG brands to quickly identify and correct on-shelf availability, pricing, and display issues in real time. This approach leverages Instacart's network of more than 600,000 shoppers alongside our execution expertise to reduce out-of-stocks, improve compliance, and drive stronger ROI for our customers. We close over 6 million distribution voids in out-of-stocks each year, and this new partnership will enable us to do more of this and do it faster than anyone in the industry. The early results of our 200-store pilot have been encouraging, and the partnership will scale into additional markets in 2026. The partnership reinforces our commitment to data-driven execution and technology-enabled growth. We also continue to roll out our centralized labor model, which we believe will significantly strengthen our high-volume labor businesses and our retailer and experiential segments over time through increased utilization, which will drive higher retention and ultimately stronger execution for clients and customers. We see this as providing some benefit in the fourth quarter with acceleration in 2026. Our teams remain laser-focused on the fundamentals, deepening customer relationships, elevating our technology platform, and driving better labor utilization in our highest-volume service lines. These actions are helping us operate with more consistency and improved execution in the market, which leads to a better experience for our customers. Turning to a review of our segments, we are adapting as we continue to operate in a dynamic macro environment. Inflationary pressures and a cautious consumer continue to curb demand. Last quarter, we noted that higher-income shoppers remained more resilient while value-oriented consumers were becoming more selective, and we saw the trend persist in the third quarter. Accordingly, CPG companies and retailers alike are remaining increasingly cautious and sharply focused on stronger ROI on every dollar deployed. Our platform, with its ability to drive efficient execution, inform decisions with data, and improve commercial outcomes, positions us well to help our customers compete and win. In branded services, we face uncertain market conditions as tariffs, channel shifts, and a softening growth environment continue to influence spending. While the decline in revenues and EBITDA ease sequentially, the business continues to face headwinds. The result was a reduction in commission-based revenues through scope and customer retention that was not fully offset by new customer wins and growth in incremental services within our existing client base. While the environment remains challenging, we continue to focus on investing back into this business, strengthening our value proposition and pursuing customers that can benefit from our core offerings both near and long-term. We expect branded services revenues in EBITDA to remain under pressure. However, we are encouraged with a larger pipeline of new business opportunities as we close out the year. Turning to experiential services, we had a very strong quarter with solid growth in revenues in EBITDA. Demand for events continued to rise, and we responded with increased staffing levels resulting in higher revenues and incremental margin. Demo event volume grew strongly in the quarter, up 7% on an underlying basis, and execution reached 91%. We continue to see strong demand signals in this business, and we expect improving execution in the fourth quarter as we enhance our talent acquisition processes even more. Retailer services was down year-over-year in revenues and EBITDA. As we indicated in our last earnings call, this reflected a difficult year-over-year comparison and a shift in the timing of some project activity out of the third quarter. We also experienced a negative impact from ongoing channel shift toward club and mass stores as well as some pressure from more cautious retailer spending. We remain focused on the controllables. The staffing levels and execution rates continue to improve through the quarter, enabling stronger coverage and an ability to satisfy demand for projects. We view the staffing improvements along with the healthy project pipeline as leading indicators of stabilization and recovery and are well positioned for improving revenues in EBITDA in the fourth quarter and beyond. While consumer behavior remains challenging, effective execution, transformation-enabled technology, a solid project pipeline, and accelerating customer demand gives us confidence in the long-term trajectory of the business. Our diversified business model, which includes high-volume labor businesses, creates operating leverage and the disciplined execution we can redeploy teams and flex staffing to meet customer demand, creating outsized incremental margin growth in the business. We also continue to improve our productivity through AI initiatives, which are accelerating efficiencies in our back office as well as sales tools and data analysis, while engaging with vendors to build platforms and applications at scale. Taking into account our expectations for the fourth quarter, we are reiterating our revenue growth guidance of flat to down low single digits for the year, We are updating our EBITDA guidance for the year to include the action food service divestiture, as well as the challenging macro environment, especially affecting our branded services segment, and now expect mid-single-digit decline. We continue to expect unlevered free cash flow to be greater than 50% of EBITDA. We are encouraged by this strong cash flow performance, despite the negative impact from a timing shift of our payroll period weighing on the working capital in the fourth quarter. We expect cash flow generation to remain strong, driven by continued working capital improvements, lower capex, and benefits from our labor and efficiency initiatives. Our business is built to generate consistent cash flow, and as the transformation investments taper and our modernization work takes hold, we continue to expect strong cash conversion going forward. We are confident in the trajectory of the business and are taking the right long-term actions to strengthen our position and restore growth. We continue to focus on discipline execution while improving our systems, technology, and labor capabilities. I'll now pass it over to Chris for more details on our performance and guidance.