Executive Summary

Q4 revenue declined to $0.89B (-10.0% YoY) as Branded Services contracted, but Adjusted EBITDA rose to $94.6M (+8.9% YoY) with margin expansion to 10.6% on cost discipline; GAAP net loss widened to -$177.9M on a $175.5M non‑cash impairment .
2025 outlook: revenues and Adjusted EBITDA guided “up low single-digits,” Adj. Unlevered FCF conversion >50%, net interest expense $140–$150M, and capex $65–$75M; cadence expected to mirror 2024 with second-half weighted earnings .
Transformation is the core narrative: ERP go‑live phases, upgraded EPM, cloud data lake, and early AI use cases (staffing optimization, predictive analytics, route optimization) plus a new Chief of Workforce Operations to improve labor utilization; Dean General appointed to lead Branded Services .
Near‑term puts/takes: management cited ~2% revenue drag from intentional client exits, FX headwind on Q4 Adjusted EBITDA (~2%), and macro uncertainty (tariffs, GLP‑1 effects) offset by Experiential strength and retailer labor outsourcing demand .

What Went Well and What Went Wrong

What Went Well
- Adjusted EBITDA grew 8.9% YoY to $94.6M with margin to 10.6%, despite revenue down 10% YoY, reflecting execution and cost control; Branded and Retailer segments posted Q4 adj. EBITDA growth YoY (+12.3% and +7.1%, respectively) .
- Experiential Services delivered positive Q4 revenue growth (+5.4% YoY) and strong 2024 performance (events per day up, price realization, utilization gains); CEO: “we made solid progress on our multiyear transformation…positioning the business for sustainable growth” .
- Cash generation/discipline: FY24 Adj. Unlevered FCF ~$334.6M (89% of Adj. EBITDA), DSO improved to ~61 days, year‑end cash $205M; $158M voluntary debt repurchases and ~$34M share buybacks in 2024 .
What Went Wrong
- Branded Services revenue fell 25.0% YoY in Q4, and the segment recorded a large Q4 operating loss driven by a $175.5M impairment; consolidated GAAP net loss expanded accordingly .
- Macro headwinds: value‑seeking shoppers pressured channels where ADV is exposed; regional grocery softness and procurement pressure at CPGs weighed on growth; management also noted ~2% drag from intentional client exits and FX headwind on Q4 adjusted EBITDA .
- Experiential Q4 softness from a client loss and one‑time expenses (despite solid FY trends), and Retailer Services faced timing shifts from Q4 into Q3 .

Financial Results

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Billions)	$0.87	$0.94	$0.89
Net Income from Continuing Ops ($USD Millions)	-$113.0	-$37.3	-$177.9
Diluted EPS – Continuing Ops ($)	-$0.35	-$0.12	-$0.55
Adjusted EBITDA ($USD Millions)	$89.9	$100.9	$94.6
Adjusted EBITDA Margin (%)	10.3%	10.7%	10.6%

Segment revenues ($USD Millions):

Segment Revenues	Q2 2024	Q3 2024	Q4 2024
Branded Services	$322.3	$331.4	$323.6
Experiential Services	$319.5	$342.7	$325.4
Retailer Services	$231.5	$265.2	$243.3
Total	$873.4	$939.3	$892.3

Segment Adjusted EBITDA ($USD Millions):

Segment Adj. EBITDA	Q2 2024	Q3 2024	Q4 2024
Branded Services	$42.9	$48.8	$55.5
Experiential Services	$22.6	$23.3	$13.1
Retailer Services	$24.4	$28.8	$26.0
Total	$89.9	$100.9	$94.6

Liquidity and leverage (FY24 unless noted):

KPI	Value
Cash & Equivalents (12/31/24)	$205.2M
Total Debt / Net Debt (FY24)	$1,721.1M / $1,515.8M
Net Leverage (TTM)	4.0x
Adj. Unlevered FCF (FY24)	$334.6M (89.4% of Adj. EBITDA)
Capex (FY24)	~$55M
Share Repurchases (FY24)	~$34M (~9M shares)
Voluntary Debt Repurchases (FY24 face value)	~$158M

Notes: Management often references revenues excluding pass‑through costs; SEC/Q4 table values above reflect total reported revenues .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenues	FY 2025	N/A	Up low single‑digits	Introduced
Adjusted EBITDA	FY 2025	N/A	Up low single‑digits	Introduced
Adj. Unlevered FCF Conversion	FY 2025	N/A	>50% of Adjusted EBITDA	Introduced; tempered by one‑time items in 2025
Net Interest Expense	FY 2025	N/A	$140–$150M	Introduced; roughly flat vs FY24 actual $146.8M
Capex	FY 2025	N/A	$65–$75M	Introduced; above FY24 ~$55M to support IT/ERP

Management color: 2025 free cash flow conversion limited by a 53‑week payroll timing (~$50M working capital drag), timing of collections on new wins, and temporary DSO impact from SAP go‑live; these are expected to normalize in 2026 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2–Q3 2024)	Current Period (Q4 2024)	Trend
Technology/ERP & AI	Lowered multi‑year IT capex to $140–$150M (2024–2026); transformation and divestitures progressed	ERP phased go‑live underway; upgraded EPM; building cloud data lake; early AI for staffing, predictive analytics, route optimization	Scaling execution
Labor utilization	Emphasis on price realization and talent deployment; Experiential and Retailer improved utilization	New Chief of Workforce Operations; geographic talent‑sharing pilot aims to lift hours per teammate by up to 50% and reduce third‑party labor	Positive
Macro/tariffs/GLP‑1	Dynamic consumer; grocery softness; wage inflation; reaffirmed 2024 guide	Tariff uncertainty could impact categories and supply chains; GLP‑1 adoption may shift food spend; management positioning services to benefit in disruptions	Mixed risk
Experiential demand	Avg. events/day up ~11% YoY in Q3; strong price/mix	FY demand solid; Q4 included a client loss and one‑time costs	Normalizing
Retailer/private brands/media	Retailer Services leveraged execution and price discipline; timing shift aided Q3	Expanding private brands and retail media with partners (e.g., Swiftly); labor outsourcing tailwinds	Expansion
Capital allocation	Debt and share repurchases; net leverage 4.1x (Q2) → 3.9x (Q3)	Year‑end cash $205M; FY24 adj. UFCF 89% of Adj. EBITDA; net leverage ~4.0x	Balanced deleveraging

Management Commentary

“In 2024, we made solid progress on our multiyear transformation…positioning the business for sustainable growth.”
“2025 is the year we implement systems, infrastructure and processes to enhance decision‑making and client service delivery,” including ERP phases, cloud data lake, and AI programs .
“We are targeting low single‑digit revenue and adjusted EBITDA growth in 2025…Despite [transformation costs], our increased focus on labor efficiency and technology will help offset temporal increases in costs.”
“Excluding [2025 one‑time items], we’d see unlevered free cash flow closer to 90% and net free cash flow around 25%.”
Leadership: Dean General appointed to lead Branded Services effective March 24 to drive commercial momentum .

Q&A Highlights

Macro/tariffs: Management flagged tariff uncertainty; potential impacts include category demand shifts and supply chain disruption, with some offset from commission‑based revenues and merchandiser demand when supply chains are stressed .
New logos and services: Healthy pipeline with new leadership/process in BD; opportunities to provide cost‑efficient services to retailers amid tight labor markets; expansion beyond in‑store sampling in Experiential .
Guidance framing: 2025 guide set with current headwinds in view; absent elevated tech/data investments, growth would be mid‑single‑digit, underscoring underlying momentum .
Client exits: No additional intentional client exits anticipated in 2025; lapping effects continue early in Q1’25 .
Cash flow and leverage: 2025 UFCF conversion >50% due to one‑time items (53‑week payroll, new business collection timing, SAP DSO) that should abate in 2026; net interest guided to $140–$150M; capex $65–$75M; leverage expected modestly higher in 2025 before trending to <3.5x target in 2026 .

Estimates Context

S&P Global consensus for Q4 2024 was not retrievable at this time due to an SPGI daily request limit; as a result, we cannot show versus‑consensus comparisons for revenue/EPS/EBITDA. We attempted to pull “Primary EPS Consensus Mean,” “Revenue Consensus Mean,” “EBITDA Consensus Mean,” and estimate counts for Q2–Q4 2024, but the request was blocked (Daily Request Limit Exceeded). No estimate comparisons are included as a result.

Key Takeaways for Investors

Mix of resilience and transition: Despite a 10% YoY revenue decline in Q4, Adjusted EBITDA rose 8.9% on execution and cost controls; impairment‑driven GAAP loss masks underlying profitability improvements .
2025 is an execution year: ERP/AI and workforce optimization initiatives are near‑term cost headwinds but are poised to improve DSO, utilization, and scalability into 2026+ .
Segment dynamics: Experiential remains a growth driver (events per day, price/mix), Retailer benefits from retailers’ labor constraints and private brand/media trends, while Branded is being rightsized and retooled under new leadership .
Cash and leverage: FY24 Adj. UFCF of ~$335M (89% of Adj. EBITDA) and $205M cash provide flexibility; management remains opportunistic on deleveraging while investing in core platforms .
Watch catalysts: ERP milestones and AI pilots proving out, stabilization in Branded under new COO, retailer media/private brands expansion, and any tariff resolution could shift sentiment and estimates higher .
Risks: Prolonged consumer softness in regional grocery, tariff/GLP‑1 uncertainty, and FX can weigh on volumes/mix; 2025 free cash flow conversion is constrained by identifiable one‑time items .

Additional Documents Reviewed (Q4 2024)

8‑K Item 2.02 (Financial Results), including press release and presentation: revenues $892.3M, net loss -$177.9M, Adjusted EBITDA $94.6M; FY24 Adj. EBITDA $356.0M; 2025 outlook provided .
Earnings call transcripts (full): transformation, guidance cadence, macro/tariffs, labor utilization, and cash flow/working capital details .
Relevant press releases: Q4/FY24 results (same figures as 8‑K) and appointment of Dean General to lead Branded Services .

Advantage Solutions Inc. (ADV)·Q4 2024 Earnings Summary