Name: TrueBlue, Inc. Q2 2025 Earnings Call
Start: 2025-08-04T21:00:00.000Z

Executive Summary

Q2 2025 revenue was $396.3M, flat year over year; adjusted EPS of -$0.07 beat consensus (-$0.10), while revenue slightly missed ($396.3M vs $400.5M) and adjusted EBITDA of $2.6M was below consensus ($5.6M). Management highlighted double‑digit growth in skilled businesses and expects company‑wide growth in Q3 . Estimates noted below are from S&P Global.*
Mix shift toward lower‑margin businesses and software depreciation in cost of services compressed gross margin to 23.6% (-280 bps YoY); SG&A fell 7% to $89.8M on disciplined cost management .
PeopleReady (-5% revenue) and PeopleSolutions (+20% headline; -20% organic) were soft on volumes, while PeopleManagement grew 2% with the commercial drivers business delivering its fourth consecutive quarter of double‑digit growth .
Liquidity remained solid: cash $21.9M, debt $53.8M, borrowing availability $79M (total liquidity $101M). Debt reduced $4M and working capital increased $14M during the quarter .
Q3 2025 guidance: revenue $400–$425M (+5% to +11% YoY), SG&A $93–$97M, gross margin down 240–280 bps YoY; FY25 CapEx $17–$21M; EBITDA adjustments of ~$3M in Q3 .

What Went Well and What Went Wrong

What Went Well

Double‑digit growth in skilled businesses; PeopleManagement’s commercial drivers delivered its fourth consecutive quarter of double‑digit growth. “Our skilled businesses delivered double-digit growth for the quarter” .
Cost discipline drove SG&A down 7% and expanded segment margins in PeopleReady (+50 bps) and PeopleManagement (+50 bps) despite soft volumes .
Clear, multi‑pronged strategy: accelerating digital transformation (JobStack pricing quotes accepted nearly 100% of the time), expanding in healthcare/energy, and sales function optimization. “Nearly 100% of the price quotes…have been accepted” (JobStack) ; strategic priorities reiterated .

What Went Wrong

Gross margin down 280 bps YoY to 23.6% on mix (lower margin PeopleManagement and renewable energy) and software depreciation in cost of services .
PeopleSolutions organic revenue down 20% (client hiring freezes, prior client loss impact) with margin contraction (-320 bps) on lower operating leverage .
Continued demand uncertainty and pricing pressure; management cited clients’ caution and evolving macro backdrop (tariffs reshoring tailwinds possible but uncertain) .

Financial Results

Core P&L and Margins vs Prior Periods and Estimates

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$386.0	$370.3	$396.3
GAAP Diluted EPS ($)	-$0.40	-$0.48	-$0.01
Adjusted Diluted EPS ($)	-$0.02	-$0.40	-$0.07
Adjusted EBITDA ($USD Millions)	$8.9	-$3.9	$2.6
Net Loss Margin (%)	-3.0%	-3.9%	0.0%
Adjusted EBITDA Margin (%)	2.3%	-1.1%	0.7%

Estimates Comparison (Q2 2025)	Consensus*	Actual
Revenue ($USD Millions)	$400.5*	$396.3
Primary EPS ($)	-$0.10*	-$0.07 (Adj EPS)
EBITDA ($USD Millions)	$5.6*	$2.6 (Adj EBITDA)

Notes: EPS/EBITDA comparisons use adjusted figures to align with consensus convention. S&P Global estimates marked with *.

Segment Breakdown (Q2 2025)

Segment	Revenue ($USD Millions)	YoY Change	Segment Profit ($USD Millions)	Segment Margin	Commentary
PeopleReady	$213.2	-5%	$1.5	0.7% (+50 bps)	Soft volumes broadly; skilled businesses grew double digits; margin expansion from cost actions
PeopleManagement	$133.9	+2%	$4.1	3.1% (+50 bps)	Commercial drivers strong (4th straight double‑digit growth); improved operating leverage
PeopleSolutions	$49.2	+20% (headline); -20% organic	$2.5	5.2% (-320 bps)	HSP contributed ~$16M; client hiring volumes subdued; prior client loss impact

KPIs and Balance Sheet

KPI	Q4 2024	Q1 2025	Q2 2025
Cash ($USD Millions)	$22.5	$23.1	$21.9
Long‑Term Debt ($USD Millions)	$7.6	$57.8	$53.8
Borrowing Availability ($USD Millions)	$119.0	$71.0	$79.0
Total Liquidity ($USD Millions)	$142.5 (cash+avail)	$94.0	$101.0
SG&A ($USD Millions)	$106.9	$94.6	$89.8

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q3 2025	n/a	$400M–$425M (+5% to +11% YoY; ~+4 pts inorganic from HSP)	New
Gross Margin YoY	Q3 2025	n/a	-280 to -240 bps YoY; mix and prior WC reserve adjustments	New
SG&A	Q3 2025	n/a	$93M–$97M (-7% to -3% YoY)	New
EBITDA Adjustments	Q3 2025	n/a	~$3M (SaaS amortization $1M SG&A; software dep $1M CoS; other SG&A $1M)	New
Shares (WASO basic)	Q3 2025	n/a	~29.9M	New
CapEx	FY 2025	n/a	$17M–$21M	New
Depreciation	FY 2025	n/a	$24M–$28M (incl. $4M software dep in CoS)	New
Income Tax Expense	FY 2025	n/a	$0M–$4M (valuation allowance in effect)	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024)	Previous Mentions (Q1 2025)	Current Period (Q2 2025)	Trend
AI/Technology (JobStack, Affinix, Outthink Index)	Accelerate digital transformation and enhance UX	Outthink Index launched; AI embedded in platforms; sales enablement roll‑out	JobStack pricing quotes accepted ~100%; AI and behavioral data for personalization	Strengthening adoption; measurable sales ops impact
Sales Function Optimization	Simplifying structure, optimizing model	Territory model; +50% field sales reps; territories outperform	Continued optimization; Salesforce CRM deployment; partnership program	Scaling into H2
Macro/Tariffs/Reshoring	Challenging demand backdrop	Clients cautious; tariff uncertainty; southern border state strength	Caution persists; reshoring could be tailwind; stabilization signs	Stabilizing; watch policy impacts
Energy/Renewables	Energy/industrial strength noted	Pipeline building; skilled trades focus	Strong renewable pipeline (multi‑year wins); expanding into non‑renewables; IRA incentive sunset by 2027 noted	Broadening beyond renewables
Healthcare (HSP)	HSP announced (Jan 31, 2025)	HSP in line; flat; mid‑single‑digit margins; state/local cycle	Contributed ~$16M; PeopleSolutions organic -20%; integration on track	Integration progressing; volume headwinds
Pricing	Cost discipline; SG&A reductions	Pricing pressure; discipline maintained	Bill rate +1.8% vs pay rate +1.2%; ~10 bps margin lift	Improving spread
Regional Trends	n/a	1/3 of states returned to growth; TX/AZ/NV strength	Improved trends in CA, FL, TX; July return to growth at PeopleReady	Improving
Activist/Corporate Actions	n/a	Unsolicited offers referenced later	Board rejected HireQuest $7.50 proposal; adopted rights plan	Defensive measures in place

Management Commentary

“We are encouraged to see positive momentum with double-digit growth for our skilled businesses, overall signs of stabilization and a return to company-wide growth expected in the third quarter.” — Taryn Owen, President & CEO .
“Gross margin was 23.6%…decline was due to changes in revenue mix…and software depreciation in cost of services…non‑cash and excluded from EBITDA.” — Carl Schweihs, CFO .
“Nearly 100% of the price quotes…offered through [JobStack] have been accepted and ultimately resulted in an order since the launch of this feature.” — Taryn Owen .
“PeopleSolutions revenue grew 20% with HSP…offsetting the segment’s organic decline of 20%…segment profit margin was down 320 bps due to lower operating leverage.” — Carl Schweihs .
“We finished the quarter with $22M in cash, $54M of debt and $79M of borrowing availability…total liquidity of $101M.” — Carl Schweihs .

Q&A Highlights

Monthly/sequential trends: PeopleReady improved from -8% in April to -3% exiting Q2; returned to growth in July, consistent with Q3 outlook .
Pricing dynamics: Bill rates +1.8% vs pay rates +1.2%, ~10 bps margin lift; discipline maintained amid typical cycle pressures .
Regional trends: Improved in California and Florida; Texas doing better than segment average .
Energy mix: Strong renewable pipeline despite IRA incentive sunset by 2027; expanding into non‑renewables (oil & gas); energy ~10% of portfolio .
HSP performance: In line with expectations; mid‑single‑digit EBITDA margins; seasonality tied to state/local fiscal calendars .
Corporate actions: Board rejected HireQuest’s unsolicited offer; rights plan adopted to protect shareholder interests .

Estimates Context

Q2 2025: Adjusted EPS -$0.07 vs consensus -$0.10 (beat); Revenue $396.3M vs $400.5M (slight miss); Adjusted EBITDA $2.6M vs $5.6M (miss). S&P Global consensus; estimates marked with * above.*
Q3 2025: Consensus revenue $409.0M* sits within company guidance range ($400–$425M); execution on skilled/energy and sales function will drive whether performance skews toward upper end. S&P Global consensus; estimates marked with .

Values retrieved from S&P Global.*

Key Takeaways for Investors

Mix‑driven margin compression offset by SG&A discipline and improving pricing spread; watch gross margin trajectory as mix shifts toward higher‑value roles over H2 .
Near‑term catalysts: Q3 revenue growth guidance (+5% to +11% YoY), PeopleReady July return to growth, continued outperformance in commercial drivers; potential for sequential margin improvement with operating leverage .
Strategic diversification (HSP, energy) is progressing; organic PeopleSolutions headwinds should ease as past client loss laps exiting Q2 .
Corporate defense (rights plan) reduces takeover risk at opportunistic levels; monitor activist developments and capital allocation (buybacks paused YTD) .
Watch macro sensitivity: client caution persists; reshoring could benefit manufacturing volumes; renewable pipeline strong but IRA incentive sunset looms—TrueBlue expanding into broader energy end‑markets .
Execution priorities: scaling sales function, CRM and digital features (JobStack pricing quotes acceptance) should support share gains as demand normalizes .
Liquidity adequate for cycle navigation and selective investment; debt reduced and working capital improved; emphasize balance sheet flexibility through H2 .

TrueBlue, Inc. (TBI)·Q2 2025 Earnings Summary