Advantage Solutions (NASDAQ:ADV) reported second-quarter net revenue of $757 million, up 3% from a year earlier and up 4% excluding divestitures, while adjusted EBITDA declined 12% to $76 million. The company said divestitures created an approximately $5 million year-over-year revenue headwind and a roughly $3 million adjusted EBITDA headwind during the quarter.
Management reiterated its full-year 2026 revenue, adjusted EBITDA and cash-flow guidance, citing continued momentum in Experiential Services, an anticipated second-half improvement in Retailer Services and a more gradual recovery in Branded Services.
Experiential Services Leads Growth
The company said it continues to see opportunities to expand event volumes in the second half and expressed confidence in its ability to recruit and staff workers to meet demand. Experiential execution rates were approximately 95% during the quarter, aided by its centralized labor model.
Management said consumer demand for product trial and discovery, along with retailers’ focus on in-store experiences and retail media, supports the segment’s outlook. It also cited investments in labor efficiency, training, safety protocols and higher-return demonstrations.
During the question-and-answer session, management described the strength in Experiential Services as durable, pointing to growth in emerging brands, innovation from larger brands and retailer demand for sampling and in-store demonstrations. Chris Growe, CFO of Advantage Solutions, said the company has been investing in the business to support continued growth while maintaining execution quality.
Branded Services Recovery Remains Gradual
Branded Services generated second-quarter revenue of $224 million and adjusted EBITDA of $22 million, down 13% and 36%, respectively, from the prior-year period. Excluding divestitures, revenue declined 11% and adjusted EBITDA declined 30%.
The company attributed the pressure to client insourcing, softer spending among consumer packaged goods clients, procurement-driven dynamics and select client losses. Management said it is focused on stabilizing the revenue base, improving client retention and pipeline conversion, maintaining cost discipline, and demonstrating measurable returns through data, analytics and execution capabilities.
CPG merchandising projects were a relative bright spot. Management said project work represented close to 25% of total work in this area during the first half, compared with roughly 15% a year earlier, and project work increased by more than 20% year over year. The company linked the activity to retail out-of-stocks and opportunities to add display space.
Advantage Solutions is also piloting an alert-based model that directs merchandising resources toward specific issues, such as out-of-stocks, distribution gaps and missing displays, rather than relying solely on fixed store-visit schedules. Management said the approach is intended to improve resource deployment and the effectiveness of in-store work.
Looking into 2027, management said growth among its top 25 to 30 clients and a more balanced customer base are signs that Branded Services is moving toward stabilization. Still, the company does not expect a near-term inflection and forecast modest improvement during the second half of 2026.
Retailer Services Affected by Project Timing and Costs
Retailer Services posted revenue of $237 million, up 3% year over year, but adjusted EBITDA fell about 25% to $20 million. The company said results reflected project timing, a difficult comparison with unusually high project activity in the prior-year period, and higher execution costs related to a new merchandising project.
Management characterized those issues as temporary and specific to the second quarter. It expects sequential performance improvement through the second half as larger projects ramp up and project-related earnings volatility moderates.
The company said its private-label business delivered a solid quarter as the industry backdrop improved and channel-mix pressure eased modestly. Retailer Services priorities include better staffing alignment, stronger execution discipline and closer matching of costs with revenue streams.
Cash Flow, Debt Reduction and Technology Investments
Adjusted unlevered free cash flow was $19 million in the second quarter, equal to 25% of adjusted EBITDA. For the first half, adjusted unlevered free cash flow represented 79% of adjusted EBITDA. The company ended the quarter with $102 million in cash and net debt of approximately 4.5 times trailing adjusted EBITDA.
Management said working capital and Days Sales Outstanding remained elevated because of the final phase of the company’s SAP implementation and customer payment timing. It expects DSO to improve during the remainder of the year, including in the third quarter, helping support second-half cash generation.
Advantage Solutions said free cash flow will primarily be directed toward debt reduction, although it repurchased approximately $15 million of shares during the second quarter, mainly to offset dilution from stock grants and exercises.
The company reiterated full-year adjusted unlevered free-cash-flow guidance of $250 million to $275 million and net free-cash-flow conversion guidance of 25%, excluding debt refinancing costs. Growe said the company lowered its forecasts for interest expense and capital expenditures slightly, while leaving its cash-flow outlook unchanged.
Management also highlighted technology and AI initiatives, including pilots involving event-manager compliance, photo verification, cart-list automation and a supervisor intelligence dashboard. The company expects to complete the major work of its enterprise technology transformation in 2026 and to more fully realize the benefits of those platforms in 2027.
About Advantage Solutions (NASDAQ:ADV)
Advantage Solutions is a leading sales and marketing agency that provides outsourced solutions to consumer packaged goods companies. The firm’s offerings include field sales execution, retail merchandising, in-store and shopper marketing, e-commerce activation and data-driven analytics. By deploying dedicated sales teams alongside proprietary technology, Advantage Solutions helps brands optimize shelf placement, ensure compliance with promotional programs and strengthen consumer engagement.
The company’s service portfolio spans field sales and marketing, retail execution, brand ambassador programs, digital and experiential promotions, and shopper insights.
