Advantage Solutions 2025 Q3 Earnings Profitability Returns with 148.1% Net Income Surge

Advantage Solutions (ADV) delivered mixed third-quarter results, missing revenue estimates while returning to profitability. The company reported $915.01 million in revenue (down 2.6% year-over-year) and a net income of $20.57 million—a stark turnaround from a $42.78 million loss in 2024 Q3. Management trimmed full-year EBITDA guidance due to divestiture impacts and macroeconomic challenges, signaling cautious optimism for 2026.

Revenue

The total revenue of Advantage Solutions decreased by 2.6% to $915.01 million in 2025 Q3, down from $939.27 million in 2024 Q3. The decline was driven by underperformance in Branded Services and Retailer Services, partially offset by strong execution in Experiential Services. Experiential Services saw robust demand and over 90% project execution rates, while Branded Services faced macroeconomic headwinds. Retailer Services were impacted by project timing delays.

Earnings/Net Income

Advantage Solutions returned to profitability with EPS of $0.06 in 2025 Q3, reversing from a loss of $0.14 per share in 2024 Q3 (142.9% positive change). The company achieved a remarkable turnaround with net income of $20.57 million in 2025 Q3, representing a 148.1% positive swing from the net loss of $-42.78 million in 2024 Q3. This improvement was supported by cost reductions, a one-time divestiture gain, and strong cash flow generation.

Post-Earnings Price Action Review

The strategy of buying Advantage Solutions (ADV) shares on the date of its revenue raise and holding for 30 days yielded moderate returns, but underperformed the market. The 3-year CAGR was 2.5%, trailing the S&P 500's 8.6% CAGR. The maximum drawdown of -26.8% during the 2023 bear market highlighted its vulnerability. While the strategy capitalized on select quarters, such as Q1 2023 (+17.6%), it failed to recover fully from Q2 2023's -20.4% loss. The 30-day holding period provided some resilience but did not significantly enhance returns, suggesting a need for more robust risk management or a longer investment horizon.

CEO Commentary

CEO David Peacock highlighted the team’s ability to navigate macroeconomic volatility through cost controls and operational efficiency. He emphasized strong performance in Experiential Services, progress in IT transformation (including SAP and Oracle integration), and early success in the Instacart pilot. Peacock expressed cautious optimism for 2026, particularly in Branded Services, while acknowledging ongoing challenges in the Retailer Services segment.

Guidance

The company expects full-year 2025 revenue to decline by low single digits to flat, with adjusted EBITDA projected to fall by mid-single digits. Unlevered free cash flow is anticipated to exceed 50% of EBITDA, supported by working capital improvements and lower restructuring costs. Net interest expenses are forecasted between $140 million and $150 million.

Additional News

Advantage Solutions completed the divestiture of its 7.5% stake in Acxion Foodservice, boosting liquidity to $201.1 million. The company also advanced phase one of its IT transformation, integrating Pulse AI for operational insights. A partnership with Instacart to pilot in-store audit integration was announced, aligning with strategic goals to enhance retail execution capabilities.

Image suggestion: A graph showing the company’s net income swing from -$42.78 million to $20.57 million, juxtaposed with revenue trends over the past two years.

The stock price of Advantage Solutions has edged down 2.44% during the latest trading day, has dropped 7.34% during the most recent full trading week, and has plummeted 17.81% month-to-date.