Advantage Solutions Inc.

Advantage Solutions Inc. operates as a prominent omni-commerce business solutions provider, primarily serving consumer packaged goods (CPG) manufacturers and retailers across North America ¹. The company's services are designed to support distribution, retail execution, shopper engagement, and private brand development in both physical and digital commerce environments ¹. Advantage Solutions serves over 4,000 clients across various channels, including grocery, mass, club, retail pharmacy, and convenience, in more than 100,000 retail locations ¹. The revenue model is based on commissions, fee-for-service arrangements, and cost-plus structures, with employee-related expenses being a significant cost component ¹.

The company's core business model revolves around generating demand for brands and retailers of all sizes by ensuring products are effectively placed on shelves, both physical and digital, and reach consumers through diverse shopping channels ¹. Revenue generation is a mix of commissions, fee-for-service, and cost-plus arrangements, depending on the specific engagement ¹. The primary customer segments are CPG manufacturers and retailers ¹.

The Branded Services segment, which accounted for approximately 32.9% of revenues in 2025 ² and 36.6% in 2024 ², provides sales, merchandising, and omni-commerce marketing support to branded CPG manufacturers ¹. This segment includes Brokerage Services, which represents manufacturer-clients in their commercial relationships with retailers, supporting business development, sales planning, distribution optimization, pricing and promotional strategies, and category recommendations ¹. Branded Merchandising involves field teams executing in-store merchandising activities such as shelf maintenance, promotional display installation, inventory checks, and distribution validation ¹. Omni-commerce Marketing Services develop and execute shopper-centric marketing programs across in-store, digital shelf, e-commerce platforms, social and influencer channels, and custom content programs, including national consumer promotion services ¹.

The Experiential Services segment generated approximately 40.5% of revenues in 2025 ² and 36.3% in 2024 ². This segment focuses on providing in-store and digital sampling programs, demonstrations, and experiential events for manufacturers and retailers, designed to drive trial, conversion, and sustained consumer engagement ¹. Revenues are generally earned on a fee-for-service or cost-plus basis ¹.

The Retailer Services segment contributed approximately 26.6% of revenues in 2025 ² and 27.1% in 2024 ². This segment offers solutions supporting retailers in in-store merchandising execution, private brand development, and retail-media and marketing initiatives ¹. Retailer Merchandising delivers reset services, category updates, space management support, audits, data collection, and in-store execution ¹. Advisory Services support retailers in private brand strategy, product development, sourcing, packaging, design, and program management ¹. Agency Services operate print and digital circular programs, manage merchandising and display platforms, and execute retail media and targeted advertising programs ¹.

For the fiscal year ended December 31, 2025, total revenues were $3,542,642 thousand ⁴, a decrease of $23,682 thousand ⁴ or 0.7% ⁴ compared to 2024. The company reported an operating loss from continuing operations of $126,466 thousand ⁴, an improvement from an operating loss of $294,983 thousand ⁴ in 2024. Net loss from continuing operations was $227,735 thousand ⁴, compared to a net loss of $378,404 thousand ⁴ in the prior year. Diluted EPS from continuing operations was a loss of $0.70 ⁵ in 2025, compared to a loss of $1.18 ⁵ in 2024. Adjusted Net Income was $61,578 thousand ⁴ in 2025, down from $75,712 thousand ⁴ in 2024. Adjusted EBITDA from continuing operations was $331,807 thousand ⁴ in 2025, a decrease from $356,014 thousand ⁴ in 2024. As of December 31, 2025, cash and cash equivalents were $240,850 thousand ⁶, and total long-term debt (net of current portion) was $1,660,611 thousand ⁶.

Year-over-year, Branded Services segment revenues decreased by $142,664 thousand ⁴, or 10.9% ⁴, primarily due to lower volumes, client losses, and reductions in scope of services, partially offset by new business wins ¹. Experiential Services segment revenues increased by $140,268 thousand ⁴, or 10.8% ⁴, driven by higher event volume, improved demand and execution, favorable client and service mix, and higher average pricing ¹. Retailer Services segment revenues decreased by $21,286 thousand ⁴, or 2.2% ⁴, mainly due to lower activity levels within the existing client base, partially offset by higher average pricing ¹. Cost of revenues as a percentage of revenues increased to 86.0% ⁴ in 2025 from 85.8% ⁴ in 2024, primarily due to an increase in variable labor costs ¹. Selling, general and administrative expenses as a percentage of revenues decreased to 7.8% ⁴ in 2025 from 9.1% ⁴ in 2024, reflecting lower restructuring and reorganization expenses, a $5.7 million ¹ reimbursement of COVID-19 eligible costs, and lower compensation expense ¹.

During 2025, the company continued its portfolio simplification strategy, including the divestiture of certain non-core businesses ¹. On December 17, 2025, the company sold its digital user-experience design and prototyping business for $22.0 million ⁷ in cash proceeds at closing, with potential contingent consideration of up to $4.0 million ^{7 8}. The company also sold its remaining 7.5% ⁹ ownership interest in a combined foodservice business for $18.6 million ⁹ in cash proceeds, resulting in a gain of $8.5 million ⁹. In the fourth quarter of 2025, the company recognized goodwill impairment charges of $13.1 million ⁴ for the Branded Services reporting unit and $23.5 million ⁴ for the Merchandising reporting unit, and an indefinite-lived intangible asset impairment charge of $167.1 million ⁴ related to the Advantage Trade Name ¹. The company incurred $62.9 million ⁴ in reorganization expenses and $0.9 million ⁴ in restructuring expenses during 2025 ¹.

The company's strategic priorities include strengthening its core service offerings, improving operational efficiency, enhancing technology and data capabilities that support decision-making, and aligning its cost structure with the current scale of the business ¹. Management continues to evaluate opportunities for portfolio simplification and targeted investment in capabilities that support omni-commerce execution ¹.

A major growth vector for the company is the continued recovery and expansion of in-store and experiential activation activity across its client base, as evidenced by the Experiential Services segment's revenue increase of $140.3 million ⁴ in 2025 ¹. This growth was driven by higher event volume, improved demand and execution, favorable client and service mix, and higher average pricing ¹. The company aims to further develop effective omni-channel solutions for its clients that support both e-commerce and traditional retail needs ¹.

Operationally, the company is focused on improving its cost structure and operating efficiency through initiatives like the restructuring plan substantially completed at the end of fiscal year 2024 ¹. Reorganization expenses decreased to $62.9 million ⁴ in 2025 from $88.8 million ⁴ in 2024, and restructuring expenses decreased to $0.9 million ⁴ in 2025 from $30.1 million ⁴ in 2024 ¹. These efforts are intended to simplify the organization and generate operational efficiencies ¹. The company is also investing in technology and infrastructure, including expenditures associated with the implementation of its new enterprise resource planning (ERP) system and related modernization efforts, to enhance scalability, improve operating efficiency, and strengthen financial and operational controls ¹.

Planned capital allocation includes funding internal investments and acquisitions to grow the business, and servicing its substantial indebtedness ¹. The company's primary uses of cash are operating expenses, working capital requirements, interest payments on indebtedness, and scheduled or opportunistic repayments of debt ¹. As of December 31, 2025, there remained $46.2 million ¹⁰ of share repurchase availability under the 2021 Share Repurchase Program ¹.

Management explicitly flagged several structural headwinds and execution risks. These include market-driven wage changes or changes to labor laws, the ability to hire, train, and retain talented individuals, developments with retailers that are out of the company's control, consolidation within the client industries creating pressure on service pricing, and the need to successfully develop and maintain relevant omni-channel services in an evolving industry ¹. The company also noted risks related to the interruption of supply chains, client procurement strategies, and the ability to avoid or manage business conflicts among competing brands ¹.

Geographic, regulatory, and macro factors identified as constraints include exposure to foreign currency exchange rate fluctuations and risks related to international operations, the need to comply with various federal, state, local, and foreign regulatory agencies, and the potential adverse effects of future pandemics ¹. The company also highlighted risks associated with its substantial indebtedness and the ability to refinance at favorable rates, as well as complications with the implementation of additional aspects of its new ERP system ¹.

The company faces several material risks, including market-driven wage increases and changes to labor laws, which could adversely affect its financial condition ¹. Consolidation within the CPG and retail industries could reduce demand for services and pressure pricing ¹. The company's ability to adapt to significant technological change, including the development of omni-channel services and the use of AI, is critical, as failure could adversely impact its business and reputation ¹. Security incidents involving technology or infrastructure pose a continuous threat, potentially leading to financial performance reduction, brand damage, and significant legal and financial exposure ¹. Non-compliance with federal, state, and foreign privacy and data protection laws, such as the CCPA, could result in fines, investigations, and reputational harm, with potential civil penalties of approximately $2,700 ¹¹ per violation or approximately $8,000 ¹¹ per intentional violation of any CCPA requirement ¹. The company's substantial indebtedness of $1.7 billion ¹² as of December 31, 2025, excluding debt issuance costs, subjects it to interest rate risk, with each one-eighth percentage point change in interest rates potentially resulting in an approximately $2.0 million ¹³ change in annual interest expense on variable rate indebtedness ¹.

Management's message to shareholders emphasizes a focus on strengthening core service offerings, improving operational efficiency, and enhancing technology and data capabilities to support decision-making, while also aligning the cost structure with the current business scale ¹. They are actively evaluating opportunities for portfolio simplification and targeted investments in omni-commerce execution capabilities ¹. The company has engaged in a series of transactions designed to extend debt maturities and reduce indebtedness, with an agreement entered into on February 6, 2026, with holders of approximately 59.2% ¹⁴ of outstanding senior secured notes and lenders holding approximately 54.3% ¹⁴ of outstanding term loans ¹. These transactions are expected to be completed by March 26, 2026 ¹⁵. Key strategic priorities include the continued execution of the portfolio simplification strategy, as evidenced by the divestiture of non-core businesses, and the advancement of enterprise systems modernization to align capabilities with market needs and improve operating efficiency ¹.