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ManpowerGroup Inc. (MAN)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $4.52B, flat YoY as reported (-3% CC, -1% organic CC); adjusted diluted EPS was $0.78, above the company’s prior guidance midpoint by $0.08, while reported diluted EPS was -$1.44 due to $88.7M non-cash impairments and other special items (EPS impact -$2.22) .
  • Wall Street (S&P Global) consensus for Q2 was $4.36B revenue and $0.69 EPS; MAN delivered a revenue and EPS beat on an adjusted basis (see Estimates Context) [Values retrieved from S&P Global]*.
  • Gross profit margin was 16.9%, down ~20 bps vs Q1, driven by staffing mix shift toward enterprise accounts; Experis declined on non-recurrence of U.S. healthcare tech projects, while Manpower and Talent Solutions returned to growth .
  • Management guided Q3 EPS to $0.77–$0.87, GPM 16.8–17.0%, EBITA margin 2.0–2.2%, and operating margin 1.8–2.0%; tax rate expected at 48% in Q3, reflecting the French tax change .
  • Strategic catalysts: AI-driven sales targeting and recruiter productivity (PowerSuite, Sophie AI; Carv partnership), plus stabilization in the U.S./parts of Europe; near-term overhangs include Northern Europe softness and recent dividend reset to $0.72 (semi-annual) .

What Went Well and What Went Wrong

What Went Well

  • Manpower and Talent Solutions crossed back to revenue growth; systemwide revenue reached $4.9B including franchises, highlighting market share gains initiatives .
  • AI adoption accelerating: “Our sales targeting engine…identify leads…to the tune of 50% higher revenue than when we do this through human intervention only” — Jonas Prising; Sophie AI virtual recruiter is yielding 2–3x producer productivity improvements .
  • Americas constant-currency revenue grew 2%; APME constant-currency revenue +8% with Japan +7% CC, supporting mix diversification and pockets of strength .

What Went Wrong

  • Northern Europe was weak: segment revenue -10% CC and an adjusted OUP loss of -$6M, with restructuring focused on Nordics, Netherlands, Germany; U.K. -13% CC, Germany -22% CC .
  • Gross margin compression to 16.9% (down vs Q1) driven by enterprise account mix in staffing and lower perm; Experis GP down 14% CC YoY on U.S. healthcare tech project non-recurrence .
  • Non-cash impairments ($88.7M) in Switzerland/UK and disposition losses dragged reported EPS to -$1.44; free cash flow outflow (-$207M) in Q2 on timing of payables, tech prepayments, MSP program timing .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Billions)$4.400 $4.090 $4.519
Gross Profit Margin %17.2% 17.1% 16.9%
Operating Profit (Loss) ($USD Millions)$68.2 $28.2 -$25.3
Diluted EPS (Reported) ($USD)$0.47 $0.12 -$1.44
Adjusted Diluted EPS ($USD)$1.02 $0.44 $0.78

Notes:

  • Q2 adjusted EPS excludes impairment, restructuring, and disposition losses (total EPS impact -$2.22) .

Segment revenue and profitability (YoY comparison):

SegmentQ2 2024 Revenue ($MM)Q2 2025 Revenue ($MM)YoY CC %Q2 2025 OUP ($MM)Q2 2025 OUP Margin %
Americas$1,064.4 $1,060.0 +2.0% $36.1 3.4%
Southern Europe$2,098.0 $2,149.3 -2.8% $73.3 3.4% (3.5% as adjusted)
Northern Europe$837.3 $794.4 -10.4% -$9.0 -1.1% (-0.8% as adjusted)
APME$541.4 $525.3 -8.0% $26.4 5.0% (5.1% as adjusted)

KPIs and balance sheet/cash flow:

KPIQ2 2025
Systemwide Revenue ($USD Billions)$4.9
Free Cash Flow (Q2) Outflow ($USD Millions)-$207
DSO (Days)~56
Cash ($USD Millions)$289.8
Total Debt ($USD Millions)$1,286 (detail by facility in appendix)
Net Debt ($USD Millions)$996
Total Debt / Total Capitalization (%)39%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
EPS (Diluted)Q2 2025$0.65–$0.75; +$0.03 FX; 46.5% ETR Actual adjusted EPS: $0.78 Beat midpoint by $0.08; better ops/FX/interest
EPS (Diluted)Q3 2025N/A$0.77–$0.87; +$0.03 FX New
Gross Profit MarginQ3 2025N/A16.8–17.0% New
EBITA MarginQ3 2025N/A2.0–2.2% New
Operating Profit MarginQ3 2025N/A1.8–2.0% New
Tax Rate (ETR)Q3 2025Full-year adjusted ~46.5% Q3 at ~48% (French tax change) Raised vs full-year run-rate
Revenue (Total CC)Q3 2025N/AFlat to -4% CC (midpoint -2%) New
Americas Revenue (CC)Q3 2025N/A+1–5% CC New
Southern Europe Revenue (CC)Q3 2025N/A-4% to flat CC New
Northern Europe Revenue (CC)Q3 2025N/A-3–7% CC New
APME Revenue (CC)Q3 2025N/A-6–10% CC New
Dividend (Semi-annual)2025Prior year higher (unspecified); reset$0.72 per share; year-over-year reduction Lowered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Macro/Regional SetupQ4: Challenging Europe & North America; good demand APAC/LATAM . Q1: Increased caution from trade policy; LATAM/APAC good .Stabilization in U.S. and parts of Europe; LATAM/APME strong; Northern Europe cautious .Improving in U.S./Southern Europe; Northern Europe still under pressure.
AI/Technology InitiativesQ4/Q1: Ongoing global transformation agenda .PowerSuite + Sophie AI driving sales targeting (+50% revenue per lead), virtual recruiter (2–3x producer productivity); Carv partnership to embed agentic AI in RPO .Accelerating deployment and impact.
Tariffs/Trade PolicyQ1: Demand outlook less clear due to trade policy developments .Clients taking pragmatic approach; reshoring interest; expecting tariffs settled without material macro impact .Stabilizing sentiment; cautious optimism.
Perm RecruitmentQ4: Perm stable at lower levels . Q1: Slightly weaker perm .Consolidated perm stable; ~15.3% of GP; U.S. flattish; Europe slight YoY decline .Stabilized at lower levels.
RPO/MSP/Right ManagementQ1: Not specifically quantified.MSP strong; RPO slight YoY revenue decrease; Right Management mid-single-digit decline; U.S. MSP/Right Mgmt double-digit growth .MSP strength; RPO/Right Mgmt mixed, U.S. improving.
Northern Europe ActionsQ4/Q1: Restructuring in challenging markets .Majority of Q2 restructuring in NE; expected profitability improvement from savings; bench model amplifies deleverage in downturns .Continued cost actions; aiming for margin normalization.
Tax/RegulatoryQ1: France tax legislation impacted Q1 EPS .Q3 ETR ~48% (French change); full-year adjusted ~46.5% .Elevated near term; moderates over full year.

Management Commentary

  • “We are beginning to see positive signs of stabilization in the US and parts of Europe. We remain focused on achieving market share gains while we make further adjustments to our cost base.” — Jonas Prising .
  • “Adjusted EPS was $0.78 and came in $0.08 above our guidance midpoint… stronger operational performance (+$0.04), FX (+$0.01), shares (+$0.01), interest/other (+$0.02).” — Jack McGinnis .
  • “Our sales targeting engine…identify leads…50% higher revenue than…human intervention only… virtual recruiter assistant… 2–3x more effective time used by our producers.” — Jonas Prising .
  • “We estimate the effective tax rate…full year…46.5% and the third quarter…48%. This incorporates the previously disclosed French tax change.” — Jack McGinnis .

Q&A Highlights

  • Market share and AI: Management emphasized AI-augmented sales targeting and data-driven vertical focus as drivers of share gains; pipeline strength across major markets .
  • U.S. mix: Manpower U.S. +9% (days-adjusted), Talent Solutions +13% (double-digit MSP/Right Mgmt growth), Experis U.S. -14% (non-recurrence of healthcare tech projects) .
  • Northern Europe: Significant restructuring in Nordics/Netherlands/Germany; bench model regulatory environment drives deleverage in downturns; profitability expected to improve on savings .
  • Perm: Stable activity at lower levels; ~15.3% of GP; flattish U.S., slight decline in Europe; projecting stability into Q3 .
  • Free cash flow seasonality: Q2 outflows typical post-pandemic; expect strong H2 FCF as MSP/tax timing normalizes .
  • Dividend policy: Reset to reflect current environment; increases expected when operating backdrop improves .

Estimates Context

Q2 2025 actuals vs S&P Global consensus:

MetricConsensusActual
Revenue ($USD Billions)$4.36*$4.52
Diluted EPS (Adjusted) ($USD)$0.69*$0.78
EBITDA ($USD Millions)$95.9*$100.0*

Notes:

  • Values marked with * retrieved from S&P Global.
  • Company materials primarily discuss EBITA ($72M reported; $89M as adjusted), defined as Operating Profit before amortization and goodwill impairment. S&P’s “EBITDA actual” ($100M*) may not be directly comparable to company’s EBITA; management commentary references “EBITDA” in the call, but slides define and report “EBITA” (disclosure discrepancy) .

Where estimates may adjust:

  • Experis weakness (healthcare tech non-recurrence) and Northern Europe softness could constrain margin expectations; however, stabilization in U.S./parts of Europe and MSP strength may support modest upward tweaks to revenue/adjusted EPS near-term, within guidance ranges .

Key Takeaways for Investors

  • Q2 delivered an adjusted EPS and revenue beat versus consensus, aided by better-than-expected operations and FX; reported EPS loss reflects non-cash impairments and dispositions .
  • Mix shift toward enterprise accounts and low perm weighed on gross margin; expect GPM 16.8–17.0% in Q3 per guidance .
  • Geographic divergence persists: U.S./Italy/Japan stable to improving; Northern Europe remains challenged but undergoing restructuring for margin recovery .
  • AI execution is tangible: sales targeting engine and virtual recruiter are boosting win rates and productivity; Carv partnership should accelerate recruiter efficiency at scale .
  • Cash flow seasonality and MSP/tax timing drove Q2 outflows; management expects stronger H2 FCF as these effects normalize .
  • Q3 setup: Organic days-adjusted revenue guide is flat at midpoint; EPS $0.77–$0.87 with elevated tax rate; stabilization narrative is a potential sentiment catalyst if borne out in monthly trends .
  • Dividend reset signals prudence in current environment; potential to re-raise with sustained top-line/margin improvement .

Appendices and Additional Data Points

  • Impairments: Switzerland ($55.3M) and U.K. ($33.4M) contributed to total $88.7M impairments in Q2 .
  • Interest and other expenses: Q2 net $16.5M (interest expense $26.0M; interest income -$8.2M; FX loss $1.3M; misc income -$2.6M) .
  • Leverage and liquidity: Revolver $600M facility, leverage covenant ≤3.5x; as of 6/30/25 net debt/EBITDA 3.22x; fixed charge coverage 2.80x .

Discrepancies/clarifications:

  • Slides define/report EBITA; call references “EBITDA” at comparable magnitudes. For valuation and margin trend analysis, use reported EBITA and operating profit as primary comparables .