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TI

TrueBlue, Inc. (TBI)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered a clear upside vs expectations: revenue increased 13% year over year to $431.3M, with organic growth of 9% and an improved net loss of $1.9M; adjusted EPS was $0.03 and adjusted EBITDA rose to $10.6M .
  • Against S&P Global consensus, TBI posted a beat on revenue ($431.3M vs $409.0M*), a significant beat on EPS ($0.03 vs -$0.0825*), and an EBITDA outperformance ($10.6M adjusted vs $3.9M*), driven by outsized growth in energy-related skilled staffing and ongoing SG&A discipline . Values retrieved from S&P Global.
  • Mix-driven gross margin compression to 22.7% (vs 26.2% YoY) reflected strong growth in lower-margin renewable energy work and the absence of last year’s workers’ compensation reserve favorability; SG&A declined 8% to $91.7M despite double-digit revenue growth .
  • Q4 2025 guidance points to continued momentum: revenue $399M–$424M (+4% to +10% YoY), SG&A $91M–$95M (-15% to -11% YoY), and EBITDA adjustments of ~$3M; FY25 guidance tightened (CapEx cut to $17M–$19M; depreciation set at $25M–$27M; tax expense $1M–$3M) .
  • Near-term stock reaction catalysts: broad-based beats vs consensus, accelerating adjusted EBITDA, continued segment momentum (energy and commercial drivers), and Q4 revenue growth outlook, offset by margin mix headwinds and auto supplier disruptions in on-site volumes .

What Went Well and What Went Wrong

What Went Well

  • Energy vertical revenue more than doubled within PeopleReady; commercial driver services posted a fifth consecutive quarter of double-digit growth, underscoring competitive share gains in skilled offerings .
  • Cost discipline: SG&A cut 8% YoY to $91.7M while revenue rose 13%, expanding adjusted EBITDA to $10.6M and adjusted net income to $1.1M .
  • Management emphasized digital progress and sales optimization: JobStack’s price estimate feature drove transparency and workflow efficiency; expanded local sales capacity (+50%) is improving sequential trends at state/regional levels. “Advancing our digital ecosystem remains a priority… positioning us to meet the evolving needs of employers and talent” .

What Went Wrong

  • Gross margin fell 350 bps YoY to 22.7% due to revenue mix (renewable energy’s pass-through travel cost structure) and the lack of last year’s workers’ compensation reserve benefits; software depreciation in cost of services also weighed on margin .
  • PeopleSolutions saw an 11% organic revenue decline (offset by HSP’s contribution), reflecting subdued client hiring volumes and uncertainty around workforce needs .
  • Macro and category headwinds: retail softness persisted; Q4 outlook factors typical weather impacts on skilled work and site shutdowns in automotive due to supplier disruptions (about two points impact), tempering near-term trajectory .

Financial Results

Sequential Trend (Q1 → Q3 2025)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$370.3 $396.3 $431.3
Gross Margin (%)23.3% 23.6% 22.7%
SG&A ($USD Millions)$94.6 $89.8 $91.7
Net Loss ($USD Millions)-$14.3 -$0.16 -$1.92
Diluted EPS ($USD)-$0.48 -$0.01 -$0.06
Adjusted EBITDA ($USD Millions)-$3.9 $2.6 $10.6
Adjusted EPS ($USD)-$0.40 -$0.07 $0.03

Year-over-Year (Q3 2024 vs Q3 2025)

MetricQ3 2024Q3 2025
Revenue ($USD Millions)$382.4 $431.3
Gross Margin (%)26.2% 22.7%
SG&A ($USD Millions)$100.0 $91.7
Net Loss ($USD Millions)-$7.64 -$1.92
Diluted EPS ($USD)-$0.26 -$0.06
Adjusted EBITDA ($USD Millions)$4.7 $10.6
Adjusted EPS ($USD)-$0.11 $0.03

Segment Breakdown (Q3 2025 vs Q3 2024)

SegmentRevenue Q3’24 ($MM)Revenue Q3’25 ($MM)YoY %Segment Profit Q3’24 ($MM)Segment Profit Q3’25 ($MM)Margin Q3’25
PeopleReady$214.8 $251.4 +17% $3.04 $8.10 3.2%
PeopleManagement$130.9 $132.9 +2% $3.28 $4.55 3.4%
PeopleSolutions$36.7 $47.0 +28% $2.54 $4.19 8.9%

KPIs and Balance Sheet

KPIQ1 2025Q2 2025Q3 2025
Cash ($MM)$23.1 $21.9 $19.9
Debt ($MM, LT)$57.8 $53.8 $68.2
Borrowing Availability ($MM)$71 $79 $75
Working Capital Change ($MM)—+$14 +$19
Total Liquidity ($MM)$94 $101 $95

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($MM)Q4 2025—$399–$424 New
Gross Margin (YoY bps)Q4 2025—-410 to -370 New
SG&A ($MM)Q4 2025—$91–$95 New
EBITDA Adjustments ($MM)Q4 2025—~$3 New
Shares (Basic W.A.)Q4 2025—~29.9M New
CapEx ($MM)FY 2025$17–$21 $17–$19 Narrowed/Lowered
Depreciation ($MM)FY 2025$24–$28 $25–$27 (incl. $4M in COS) Narrowed
Income Tax Expense ($MM)FY 2025$0–$4 $1–$3 Narrowed/Raised floor

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1–Q2 2025)Current Period (Q3 2025)Trend
Digital initiatives (JobStack, Affinix, Stafftrack)Ongoing digital transformation and investment priorities JobStack price estimate feature launched; strong user reception; continued platform enhancements to drive efficiency Improving
Sales optimizationFocus on sales expansion and optimized go-to-market Local sales capacity +50%; stronger sequential performance in sales-enabled territories and regions Improving
Skilled staffing (energy, drivers)Skilled growth noted; commercial drivers resilient Energy revenue more than doubled; commercial drivers delivered a fifth consecutive quarter of double-digit growth Accelerating
Macro/verticals (retail softness)Subdued demand; retail pressure Retail remains soft; East region returned to YoY growth in September; sequential trends improved Mixed but improving
Regulatory/legal (immigration, compliance)Compliance strengths highlighted; industry uncertainty Mixed tailwinds/headwinds from ICE activity; longer-term demand for compliant staffing solutions Neutral-to-positive
Cost discipline & SG&A leverageSG&A reductions YoY SG&A down 8% YoY in Q3 despite revenue growth; >20% incremental margins discussed Improving
Supply chain/AutomotiveNot highlighted earlierAuto supplier disruption causes Q4 site shutdowns (~2 pts impact) Worsening (near-term)

Management Commentary

  • “Our third quarter performance exceeded expectations as business trends continued to stabilize and we gained traction with our strategic focus… energy sector revenue more than doubled and our commercial driver business delivered its fifth consecutive quarter of double-digit growth.” — Taryn Owen, CEO .
  • “Gross margin was 22.7%… primarily due to the changes in revenue mix and less favorability in prior-year workers’ compensation reserve adjustments… software depreciation now being reported in cost of services also contributed.” — Carl Schweihs, CFO .
  • “By reorganizing our sales model, we have been able to expand our sales capacity in the field by 50%… driving favorable progress… improving sequential trends at both the state and regional level.” — Taryn Owen .

Q&A Highlights

  • On-demand improvement drivers: stronger performance in local business vs national accounts tied to sales investments; East region achieved YoY growth in September, with multiple markets posting double-digit gains .
  • Commercial driver services: fifth consecutive quarter of double-digit growth, driven by share gains in managed offerings despite a challenging transportation environment .
  • Client sentiment: cautious but showing early signs of momentum; customers signal inflection when staffing needs pick up .
  • Immigration/ICE: mixed impact—new customers focused on compliance alongside higher absenteeism in certain regions; longer-term demand for compliant solutions expected .
  • Incremental margins: management targeting >20% incremental margins with optimized fixed cost base even as it invests in sales to drive top line .

Estimates Context

MetricConsensus*Actual
Revenue ($USD Millions)$409.0*$431.3
Primary EPS ($USD)-$0.0825*$0.03 (Adjusted)
EBITDA ($USD Millions)$3.9*$10.6 (Adjusted EBITDA)
  • Consensus vs actual shows broad beats: revenue beat of ~$22.3M; EPS beat vs negative consensus; EBITDA beat vs Street. Values retrieved from S&P Global.
  • Note: Reported GAAP diluted EPS was -$0.06, while adjusted EPS was $0.03; Street “Primary EPS” appears to align with adjusted/normalized figures this quarter .

Key Takeaways for Investors

  • Momentum in skilled staffing (energy, commercial drivers) is a central growth engine; expect continued tailwinds into Q4 and 2026 as customers’ hiring volumes normalize .
  • Mix-driven margin pressure is likely to persist near term (renewable energy work, software depreciation in cost of services), but SG&A discipline and operating leverage counterbalance, expanding adjusted EBITDA .
  • Q4 revenue guidance (+4% to +10% YoY) and tightened FY25 guidance (lower CapEx; defined depreciation/tax) signal operational visibility and tighter execution .
  • Watch auto supplier disruptions (on-site shutdowns, ~2 pts impact) and typical Q4 weather effects on skilled businesses—potentially tempering sequential performance in PeopleReady .
  • Liquidity remains solid ($95M total; $75M availability), with working capital up $19M in Q3—enabling continued investment in growth and digital capabilities .
  • Near-term trading: beats vs consensus and Q4 growth outlook are positive catalysts; monitor margin mix commentary and retail vertical softness for sustainability signals .
  • Medium-term thesis: diversified portfolio with digital enablement, optimized fixed cost base, and targeted expansion (healthcare via HSP, engineering/technology RPO) supports improving profitability as demand rebounds .