The call in brief

ManpowerGroup delivered a strong second quarter of 2026 that management framed as a meaningful step-change in organic growth. Reported revenue was $4.9 billion, up 7.5% year-over-year and 6% on an organic days-adjusted constant-currency basis, well above the 3% guidance midpoint, driven by the Manpower brand's 8% constant-currency growth (its fifth consecutive quarter of growth, with the U.S. up 16%). Adjusted EBITDA rose 15% in constant currency to $103 million with margin up 10 basis points to 2.1%, and adjusted EPS of $0.99 beat the $0.96 midpoint; reported GAAP diluted EPS was $1.13, boosted by a $0.37 gain on the sale of the U.S. Jefferson Wells business and a discontinued-business liquidation, net of $0.23 of restructuring and transformation costs (operating profit was $112.0 million, a ~2.3% margin). Beyond Manpower, Experis (-2%) and Talent Solutions (flat) both improved sequentially, permanent recruitment crossed to flat, Northern Europe returned to profit, and the U.K. returned to growth. The softer points were still-negative Experis and free cash flow (a $9 million outflow, though much improved from -$207 million a year ago), a thin 2.1% EBITDA margin, a 60-basis-point year-over-year staffing gross-margin decline (mix plus the higher-margin Jefferson Wells sale), no share repurchases, and a high 44% Q3 tax rate. Management is executing a strategic transformation program targeting $200 million of permanent cost savings by 2028 (~$20 million back-office this year, ~$80 million in 2027), leaning heavily into AI as both an effectiveness lever (a sales-targeting engine scaling to ~70% of revenue and screening tools cutting time-to-fill 67%) and a commercial growth multiplier via partnerships (SoundHound AI, IBM watsonx, Accenture, SAP, Microsoft) targeting $50-$100 million of partnership revenue this year. Guidance calls for continued ~6% organic constant-currency revenue growth and $0.96-$1.06 EPS in Q3, with management now characterizing Manpower as having moved from stabilization into recovery.

What went well
  • Revenue of $4.9 billion beat expectations, with organic days-adjusted constant-currency growth of 6%, well above the 3% midpoint guide, marking a meaningful step-change in organic growth.
  • The Manpower brand grew 8% in constant currency (its fifth consecutive quarter of growth), with the U.S. up 16% (eight straight quarters) on strong commercial staffing demand.
  • Adjusted EBITDA rose 15% in constant currency to $103 million with margin up 10 basis points to 2.1%, and adjusted EPS of $0.99 came in above the $0.96 guidance midpoint.
  • Experis (-2%) and Talent Solutions (flat) both improved sequentially from Q1 (-9% and -1%), while permanent recruitment crossed to flat and Northern Europe returned to profit with the U.K. back to growth.
  • The strategic transformation program (targeting $200 million of permanent cost savings by 2028) is tracking well, and the sale of the U.S. Jefferson Wells business advanced portfolio optimization.
  • AI initiatives gained traction: a sales-targeting engine scaling to ~70% of revenue by year-end, AI screening cutting time-to-fill 67%, and partnerships (SoundHound AI, IBM watsonx) driving $50-$100 million of new partnership revenue with ~100 qualified leads.
What went wrong
  • Experis revenue still declined 2% in constant currency and Talent Solutions was flat, so the recovery beyond the Manpower brand remains at a stabilization rather than growth stage.
  • Adjusted EBITDA margin remained thin at 2.1%, and gross profit margin of 16.1% reflected a 60-basis-point year-over-year staffing-margin decline on mix shifts and the sale of the higher-margin U.S. Jefferson Wells business.
  • Free cash flow was still an outflow of $9 million in the quarter (though much improved from a $207 million outflow a year ago), and no shares were repurchased.
  • Restructuring and strategic-transformation charges were $13 million in the quarter (a $0.23 EPS impact) and are expected to run $10-$15 million per quarter through year-end.
  • Right Management declined on lower outplacement activity, France was flat, and the Q3 guide carries a high 44% effective tax rate and a $0.02 FX headwind.

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