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ManpowerGroup Inc. (MAN)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue of $4.09B beat S&P Global consensus ($3.96B*) by ~3.4%, but adjusted EPS of $0.44 missed consensus ($0.50*) as permanent recruitment and Right Management outplacement softened; GAAP EPS was $0.12, with restructuring and French tax changes reducing EPS by $0.32 .
  • Gross margin was 17.1%, slightly below guidance, and operating margin compressed to 0.7% (1.1% adjusted); Northern Europe posted an operating loss, while APME and Americas showed relative strength .
  • Management guided Q2 2025 EPS to $0.65–$0.75 (including $0.03 FX tailwind) and raised the effective tax rate to 46.5% (vs. 36% at the start of the year), citing elevated uncertainty from trade policy; revenue expected down 3–7% in constant currency .
  • Tactical catalysts: ongoing restructuring savings (9-month payback), AI-enabled transformation benefits (front office >80% on PowerSuite), and strong MSP momentum; share repurchases of $25M in Q1 with net debt $677M and total debt $1.072B .

What Went Well and What Went Wrong

What Went Well

  • Demand strength in Latin America and APME; Japan grew 9% on days-adjusted constant currency and APME OUP margin was 4.2% .
  • Americas showed resilience: U.S. revenue up 2% days-adjusted; Manpower U.S. +7% driven by operational innovation (e.g., Walmart branches) and improved Experis health-care IT seasonality .
  • Strategic transformation progressing: “We are confident in our strategic plan to diversify, digitize and innovate… we’ll showcase AI and Agentic AI at VivaTech” — Jonas Prising .

What Went Wrong

  • Permanent recruitment down ~8% YoY in Q1, driving GP margin softness; Right Management outplacement also declined .
  • Northern Europe challenged: revenue down 14% CC; OUP loss of $18M (−2.5% margin as reported) with restructuring focused on Nordics, Belgium, U.K. .
  • Cash flow: free cash outflow of $167M in Q1 due to payables timing and typical first-half seasonality; GAAP EPS compressed by restructuring and higher French tax charges .

Financial Results

Quarterly performance (actuals)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Billions)$4.530 $4.400 $4.090
Diluted EPS (GAAP, $)$0.47 $0.47 $0.12
Adjusted EPS (Non-GAAP, $)$1.29 $1.02 $0.44
Gross Profit Margin (%)17.3% 17.2% 17.1%
Operating Profit ($USD Millions)$70.8 $68.2 $28.2
Operating Margin (%)1.6% 1.5% 0.7%

Actual vs S&P Global consensus

MetricQ3 2024Q4 2024Q1 2025
Revenue Actual ($USD Billions)$4.530 $4.400 $4.090
Revenue Consensus Mean ($USD Billions)*$4.49$4.43$3.96
Adjusted EPS Actual ($)$1.29 $1.02 $0.44
Primary EPS Consensus Mean ($)*$1.30$1.00$0.50

Values retrieved from S&P Global.*

  • Q1 2025: Revenue beat; adjusted EPS miss.
  • Q4 2024: Slight revenue miss; adjusted EPS modest beat.
  • Q3 2024: Revenue beat; adjusted EPS essentially in line/slight miss.

Segment breakdown (Q1 2025)

SegmentRevenue Q1 2024 ($M)Revenue Q1 2025 ($M)YoY Reported %OUP Q1 2024 ($M)OUP Q1 2025 ($M)
Americas1,036.4 1,056.7 +2.0% 26.1 25.5
Southern Europe1,981.3 1,834.0 −7.4% 69.9 50.2
Northern Europe870.3 730.8 −16.0% 0.0 −18.3
APME535.1 476.4 −11.0% 19.9 20.0

KPIs and balance sheet

MetricQ4 2024Q1 2025
Gross Profit ($M)755.1 698.3
Gross Margin (%)17.2% 17.1%
SG&A ($M)686.9 670.1
Operating Profit ($M)68.2 28.2
Cash From Operations ($M)247.0 (153.2)
Capex ($M)—13.7
Share Repurchases ($M)34.0 25.0
Cash and Equivalents ($M)509.4 395.0
Total Debt ($M)953.0 1,072.0
Net Debt ($M)—677.0

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
EPS ($)Q2 2025—$0.65–$0.75; includes +$0.03 FX New (set for Q2)
Revenue (YoY CC)Q2 2025—Down 3% to 7% CC (midpoint −5%) New
Gross Profit Margin (%)Q2 2025—17.0–17.2% New
EBITA Margin (%)Q2 2025—1.8–2.0% New
Operating Margin (%)Q2 2025—1.6–1.8% New
Effective Tax Rate (%)Q2 202536.0% (start-of-year) 46.5% (incl. French 1-year increase and mix) Raised
Q1 2025 Guidance (reference)Q1 2025EPS $0.47–$0.57; GP 17.2–17.4%; EBITA 1.4–1.6%; Op margin 1.1–1.3%; FX −$0.06 Actual EPS $0.12 (adj. $0.44); GP 17.1% Miss vs guide on margins/EPS

Notes: Regional Q2 guidance indicates Americas down 1–5% (CC −3% to +1%), Southern Europe down 2%/up 2% (CC −2% to −6%), Northern Europe down 6–10% (CC −9% to −13%), APME down 3–7% (CC −7% to −11%, OCC up 4–8%) .

Earnings Call Themes & Trends

TopicQ3 2024 (prior two quarters)Q4 2024 (prior quarter)Q1 2025 (current)Trend
Tariffs/MacroCautious environment; restructuring underway Stable activity at lower levels in NA/EU Elevated uncertainty post U.S. trade policy announcements; guide excludes additional tariff impact More cautious
Permanent recruitmentStable at lower levels Stable at lower levels Weaker than expected; −8% YoY perm GP; France most impacted Deteriorated
MSP/RPOMSP solid; RPO improved sequentially MSP strong double-digit; RPO turned to growth MSP strong; RPO modest U.S. increase; Right Mgmt down MSP strength sustained; RPO moderating
Regional mixAPME/LATAM good; NA/EU cautious Similar dynamic LatAm/APME good; NA/EU challenging; Northern Europe loss Mixed, EU weak
AI/TechnologyDigitization agenda; Experis Academy focus Continued transformation “Diversify, digitize & innovate”; AI and Agentic AI roadmap; VivaTech showcase Execution progressing
Cost actionsRestructuring, portfolio optimization Additional cost actions; Austria sale Further restructuring (Nordics, BE, UK); 9-month payback Accelerating

Management Commentary

  • “Revenue was $4.1 billion, down 5% year-over-year in constant currency… adjusted EBITDA margin was 1.3%… adjusted EPS was $0.44” — Jonas Prising .
  • “Gross margin came in at 17.1%… permanent recruitment was weaker than expected… Right Management career transition contributed a 10 bps reduction” — Jack McGinnis .
  • “We anticipate diluted earnings per share in the second quarter will be between $0.65 and $0.75… and a 46.5% effective tax rate” — Jonas Prising .
  • “We will share more detail on… implementing AI and Agentic AI… partnering with best-in-class platforms… at VivaTech in Paris in May” — Jonas Prising .
  • Recognition: Named World’s Most Ethical Company for the 16th time .

Q&A Highlights

  • Tariff resolution scenario: Management expects employer confidence could rebound quickly if negotiated outcomes are reasonable; current guide intentionally excludes potential incremental tariff impacts .
  • Permanent hiring: Weakness concentrated in lower-skilled roles; specialized/technical perm demand holding relatively better .
  • Restructuring: ~$15.8M Q1 charges, majority in Nordics, Belgium, U.K.; typical payback ~9 months, with sequential profitability expected to improve in Northern Europe .
  • Cash flow: First-half seasonality and MSP payables timing drove Q1 outflow; expect rebound in second half .
  • U.S. Manpower drivers: Innovation (Walmart branches), AI-enabled workforce analytics, and stronger Manpower/Talent Solutions performance; Experis benefited from seasonal healthcare IT projects in Q1 .

Estimates Context

  • Q1 2025 actual vs consensus: Revenue $4.09B vs $3.96B* (beat); adjusted EPS $0.44 vs $0.50* (miss). Q4 2024: revenue slight miss, adjusted EPS beat; Q3 2024: revenue beat, adjusted EPS roughly in line .
  • Expect estimate revisions reflecting: raised tax rate to 46.5% depressing EPS, continued EU softness (Northern Europe), MSP strength and APME resilience, and caution around tariff impacts .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Mixed print: clear top-line outperformance but margin/EPS pressured by perm softness and elevated tax charges; Northern Europe remains the swing factor .
  • Guidance prudent: Q2 EPS $0.65–$0.75 with higher tax rate; revenue −3% to −7% CC and margins still subdued — any tariff clarity could shift sentiment quickly .
  • Structural levers: AI-enabled PowerSuite rollout (>80% front office), shared services expansion, and 9-month restructuring paybacks should expand margins into 2026 as operational leverage returns .
  • Business mix positioning: MSP secular strength and APME/Japan growth provide ballast while EU cyclicality normalizes; focus on Italy and U.S. Manpower pipeline .
  • Capital allocation: continued buybacks ($25M in Q1) with net debt $677M and ample liquidity on revolver/notes; covenant headroom intact .
  • Watchlist catalysts: tariff developments, perm hiring trajectories in France/U.K./Germany, MSP momentum, and transformation milestones (AI showcases at VivaTech) .
  • Trading setup: revenue beats vs cautious EPS guide plus tax reset can cap near-term upside; positive inflection likely tied to EU demand stabilization and visible transformation savings ramp .