Our remarks today include certain non-GAAP financial measures, which are reconciled to the most comparable GAAP measure in our earnings release. 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. 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 Acxion Foodservice. 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. 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. Accordingly, CPG companies and retailers alike are remaining increasingly cautious and sharply focused on stronger ROI on every dollar deployed.

In Branded Services, we faced uncertain market conditions as tariffs, channel shifts, and a softening growth environment continued to influence spending. While the decline in revenues and EBITDA eased sequentially, the business continued 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. However, we are encouraged with a larger pipeline of new business opportunities as we close out the year.

What went well
  • Experiential Services was a standout, with revenue up 8% to $274 million and adjusted EBITDA up 52% to $35 million; demo event volume rose ~7% on an underlying basis, execution reached ~91%, and EBITDA margin improved 370 basis points year over year.
  • Strong cash generation: adjusted unlevered free cash flow of $98 million at nearly 100% conversion, DSO improved eight days to ~62, and the company ended the quarter with over $201 million in cash (up from $103 million in Q2).
  • Adjusted EBITDA of $99.6 million improved sequentially versus the second quarter, and net leverage was reduced to 4.4x adjusted EBITDA.
  • Continued portfolio streamlining: monetized its 7.5% stake in Acxion Foodservice for $19 million in cash and collected a $22.5 million first deferred installment tied to the Jun Group sale.
  • Transformation progress with SAP and Oracle EPM phase-one live, development of the AI-enabled Pulse decision engine, and an expanded Instacart partnership whose 200-store pilot showed encouraging early results.
  • Shared service costs declined year over year, benefiting profitability across all three segments.
What went wrong
  • Total revenues declined 2.6% year over year to $781 million and adjusted EBITDA declined 1.4%.
  • Branded Services revenue fell 9% to $258 million and adjusted EBITDA fell 15% to $42 million, pressured by softness in the sales brokerage and omnicommerce marketing businesses and continued client insourcing.
  • Retailer Services revenue was down 6% to $249 million and adjusted EBITDA down 22% to $23 million on a difficult year-over-year comparison, project-timing shifts, channel mix toward club and mass, and cautious retailer spending.
  • Management lowered full-year adjusted EBITDA guidance to a mid-single-digit decline to reflect the Acxion Foodservice divestiture and a more challenging macro environment, especially in Branded Services.
  • A cautious, value-seeking consumer alongside tariffs and channel shifts continued to curb demand across the platform.

More on Advantage Solutions Inc.

Reported 2025-11-06 · figures from the Advantage Solutions Inc. Q3 2025 earnings call.

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