• Fourth-Quarter Revenue: $762 million, down 3% year-over-year.
• Fourth-Quarter Adjusted EBITDA: $95 million, up 9% year-over-year.
• Full-Year 2024 Revenue: $3 billion, flat compared to the prior year.
• Full-Year 2024 Adjusted EBITDA: $356 million, up 1% year-over-year.
• Branded Services Revenue: $1.1 billion, down 4% year-over-year.
• Branded Services Adjusted EBITDA: $181 million, down 11% year-over-year.
• Experiential Services Revenue: $945 million, up 11% year-over-year.
• Experiential Services Adjusted EBITDA: $76 million, up 43% year-over-year.
• Retailer Services Revenue: $965 million, down 2% year-over-year.
• Retailer Services Adjusted EBITDA: $99 million, up 3% year-over-year.
• Net Leverage Ratio: Approximately 4.0 times adjusted EBITDA.
• Interest Expense: $147 million for the year.
• Adjusted Unlevered Free Cash Flow: $335 million, nearly 90% of adjusted EBITDA.
• Cash on Hand: $205 million at the end of 2024.

• Warning! GuruFocus has detected 5 Warning Signs with ADV.

Release Date: March 07, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Advantage Solutions Inc (NASDAQ:ADV) achieved a 9% increase in adjusted EBITDA for the fourth quarter of 2024, demonstrating improved cost discipline and efficiency.
• The company successfully completed several divestitures to focus on core capabilities, enhancing business alignment and transparency.
• Experiential Services delivered strong results with an 11% increase in full-year revenues and a 43% increase in adjusted EBITDA, driven by improved execution and labor optimization.
• Advantage Solutions Inc (NASDAQ:ADV) retained over 95% of its key clients, showcasing strong client relationships and service reliability.
• The company is making significant investments in technology and data architecture, including ERP and cloud-based systems, to enhance operational efficiency and decision-making.

Negative Points

• Fourth-quarter revenues declined by 3% compared to the prior year, indicating challenges in revenue growth.
• Branded Services faced market headwinds, resulting in a 4% decline in revenues and an 11% decrease in adjusted EBITDA for 2024.
• The macroeconomic environment remains uncertain, with rising consumer debt levels and potential impacts from tariffs affecting spending behavior.
• The company anticipates low single-digit revenue and adjusted EBITDA growth in 2025, reflecting subdued market conditions and ongoing transformation-related investments.
• Cash flow in 2025 is expected to be impacted by onetime items, including an extra payroll shift and delayed collections from new business wins.

Q & A Highlights

Q: Can you provide more insights into the current macro environment and its impact on your business? A: David Peacock, Chief Executive Officer: The macro environment is generating uncertainty, particularly with the on-again, off-again nature of tariffs. This uncertainty affects companies and categories we work with, potentially impacting consumer costs by $1,200 to $2,000 annually. For us, this could mean increased commissions if pricing flows through, but also potential volume declines and supply chain disruptions, which could increase demand for our retail merchandising services.

Q: Is the current environment conducive to winning new clients, or is that more likely in a growth environment? A: David Peacock, Chief Executive Officer: We are actively pursuing new client wins with an aggressive business development effort. Despite the challenging environment, there are opportunities, especially in Retailer Services, where we can offer cost-effective solutions in a constrained labor market. Additionally, in Experiential Services, we are expanding beyond traditional in-store sampling to meet demand.

Q: How should we think about the 2025 outlook for Branded Services given current market headwinds? A: David Peacock, Chief Executive Officer: While we don't guide by segment, the Branded Services segment faces a challenging environment with uncertainties like tariffs and the impact of GLP-1 drugs on consumer spending. However, we are optimistic about generating new business and providing cost efficiencies to clients, which should help us navigate these headwinds.

Q: How conservative is your 2025 guidance, and does it account for potential market improvements? A: David Peacock, Chief Executive Officer: Our guidance considers the current environment, with tariffs being the most unpredictable factor. We are making significant progress on our transformation, and excluding technology and data investments, we would see mid-single-digit growth. We are confident in our ability to meet growth opportunities as the market stabilizes.

Q: Do you anticipate any further intentional client exits in 2025? A: David Peacock, Chief Executive Officer: No, we do not anticipate any further intentional client exits in 2025. We have addressed unique circumstances from the past and do not foresee similar actions moving forward.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.