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Date
Thursday, Oct. 16, 2025 at 8:30 a.m. ET
Call participants
Chairman & Chief Executive Officer — Jonas Prising
Executive Vice President & Chief Financial Officer — John Thomas McGinnis
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Takeaways
Reported revenue -- Reported revenue was $4.6 billion for fiscal Q3 2025 (period ended Sept. 30, 2025), reflecting a 2% decrease in constant currency year-over-year and system-wide revenue of $4.9 billion including franchising.
Gross profit margin -- 16.6% for the third quarter of 2025, with mix shifts toward enterprise accounts and lower permanent recruitment reducing margin by 40 and 20 basis points, respectively.
Adjusted EBITDA -- Adjusted EBITDA was $96 million for fiscal Q3 2025, down 22% in constant currency compared to the prior-year period, with an adjusted EBITDA margin of 2.1% at the midpoint of guidance for the third quarter of 2025, a 50 basis point decline year-over-year.
Adjusted earnings per share -- $0.83 adjusted earnings per diluted share for fiscal Q3 2025, a 39% decrease in constant currency compared to the prior-year period, with reported EPS at $0.38 in the third quarter of 2025; restructuring costs and other adjustments accounted for a $0.45 decrease from adjusted EPS.
Brand-level revenue performance -- Manpower brand grew 3% organically in constant currency in fiscal Q3 2025, Experis declined 7% year-over-year on an organic constant currency basis, and Talent Solutions declined 8% compared to the prior-year period.
Regional segment performance -- Southern Europe fell 1% in organic constant currency, Northern Europe declined 6% in constant currency, and Asia Pacific Middle East increased 8% organically.
Free cash flow -- $45 million in free cash flow in the third quarter of 2025, down from $67 million in the third quarter of 2024, but positive after earlier declines in the year; capex was $15 million.
Debt and liquidity -- $275 million in cash at quarter-end and $1.2 billion in total debt at quarter-end, with net debt at $941 million at Sept. 30, 2025, and a gross debt/TTM adjusted EBITDA ratio of 3.16 as of Sept. 30, 2025.
Fourth quarter guidance -- EPS projected at $0.78-$0.88, constant currency revenue guidance ranging from down 2% to up 2%, and anticipated flat EBITDA margin at midpoint versus prior year.
AI and digital initiatives -- Deployment of SoFi AI platform contributed to approximately 30% of new client revenue in the largest market, with technology investments noted as a differentiator in recent RPO and MSP client wins.
Summary
ManpowerGroup (MAN -4.46%) reported that revenue returned to growth after eleven quarters of organic constant currency declines in fiscal Q3 2025, while market dynamics remained mixed across regions. Margin pressures were attributed to shifts in business mix, specifically increased enterprise accounts and lower outplacement and permanent recruitment activities. Strategic actions focused on cost control, modernization, and digital transformation supported client win rates and operational integration, as explicitly stated by management.
Gross profit share by business line in fiscal Q3 2025 was 63% Manpower, 21% Experis Professional, and 16% Talent Solutions, with consolidated organic gross profit down 4% year-over-year and business line trends diverging in performance.
Southern Europe saw 53% of its revenues from France in fiscal Q3 2025, where business improved toward the end of the quarter, and Italy delivered a 4% organic constant currency increase and higher margins.
Northern Europe saw improvements in operating losses on an adjusted basis compared to the prior quarter due to ongoing cost reduction measures, but Germany and the UK continued to experience double-digit revenue declines.
Management indicated renewed stability in employment outlooks; 45% of global employers intend to maintain workforce levels based on the company's most recent ManpowerGroup Employment Outlook Survey, marking the highest rate since early 2022.
Day sales outstanding increased by 1 day to 59, reflecting a higher mix of enterprise clients, and the company ended the quarter with 2 million shares remaining in its repurchase authorization as of Sept. 30.
Industry glossary
RPO (Recruitment Process Outsourcing): End-to-end outsourcing of a client's hiring process to a third-party workforce solutions provider.
MSP (Managed Service Provider): Provider managing a company's contingent labor program and related suppliers, often spanning multiple geographies and job categories.
OUP (Operating Unit Profit): Segment-level operating profit before certain corporate and non-recurring items.
SoFi AI: ManpowerGroup's proprietary enterprise-wide artificial intelligence platform used for client prospecting and internal operations.
PowerSuite: ManpowerGroup's technology platform integrating front and back office processes.
Full Conference Call Transcript
When we last reported earnings in July, we characterized the environment as one of continued uncertainty yet growing resilience. Employers are hiring very cautiously, and labor markets are holding steady against the backdrop of geopolitical complexity and economic softening. Since then, these dynamics have largely persisted. Geopolitical tensions remain elevated. The race to invest in AI continues at pace. Employers are adapting to the fluctuating policy environment and consumer sentiment in Europe and North America. Globally, conditions remain mixed. We see strong momentum across Latin America and APME, offset by softer trends in Europe and North America. Activities remain well below historical peaks yet stable over recent quarters.
While hiring remains cautious, we continue to see gradual broad-based signs of stabilization. Our most recent ManpowerGroup Employment Outlook Survey, covering over 40,000 employers across 42 countries, reinforces this view. Hiring outlooks remained relatively steady year-over-year, with ongoing stabilization and 45% of employers planning to maintain current workforce levels. This is the highest since early 2022, as organizations balance capturing growth opportunities with mitigating economic uncertainty.
Turning to our results. After eleven consecutive quarters of organic constant currency revenue declines, we crossed back over to growth during the third quarter. The stabilization of demand in recent quarters in North America and Europe, despite ongoing tariff uncertainty, has been a key factor in the revenue trend improvements. We are encouraged by this progress and the continuation of revenue growth in our largest brand, Manpower. We strengthened our presence in North America, Latin America, Italy, Spain, Belgium, Poland, and APME, to name a few. Within Xperis, we are beginning to see early signs of stabilization in professional and IT hiring.
Win rates have improved modestly, and we have secured new enterprise programs in sectors such as financial services and life sciences. Our ongoing modernization of the Experis offering, including enhanced consultant development and tighter integration of our PowerSuite AI tools, is supporting margin improvement and future growth as client demand recovers. The trends in Talent Solutions are also improving for our managed service provider offering, where win rates and demand stabilization are driving strong revenue growth. This helps offset some weakness in recruitment process outsourcing and right management, as labor markets remain somewhat frozen in terms of hiring and workforce reductions.
Overall, for the quarter, reported revenue was $4.6 billion, down 2% year-over-year in constant currency. System-wide revenue, which includes our expanding franchise revenue base, was $4.9 billion. Our reported EBITDA for the quarter was $74 million. Adjusting for restructuring costs, EBITDA was $96 million, representing a decrease of 22% in constant currency year-over-year. Reported EBITDA margin was 1.6%, and adjusted EBITDA margin was 2.1%. Earnings per diluted share were $0.38 on a reported basis, while earnings per diluted share were $0.83 on an adjusted basis. Adjusted earnings per share decreased by 39% year-over-year in constant currency.
As we look to the fourth quarter, we closely monitor several leading indicators of demand, including activity among our largest enterprise clients, new assignment starts, and priority verticals such as logistics and manufacturing, and year-end seasonal patterns. These metrics help us assess the depth and breadth of stabilization across our markets and inform our expectations as we plan for 2026.
Looking closely at these indicators, we believe our demand in Europe and North America is holding steady, and we are confident that we are well positioned for future growth. Our AI-enabled data insights are increasingly instrumental in tracking, anticipating, and predicting client demand. This real-time intelligence enables our teams to pivot quickly to sectors and regions where growth opportunities are emerging. Our enterprise pipeline continues to expand with most of the demand in this environment concentrated among global enterprise clients, although decision timelines across major markets remain extended. As a leadership team, we remain laser-focused on managing the current environment while positioning our business for future growth.
We continue to take decisive actions to contain costs, drive efficiencies at scale, and simplify our organization while accelerating the strategic initiatives that will strengthen our capabilities, expand our margins, and deliver long-term shareholder value. I will now hand it over to Jack McGinnis for more details on the quarter's financial results.
John Thomas McGinnis: Thanks, Jonas. U.S. dollar-reported revenues in the third quarter were impacted by foreign currency translation. After adjusting for currency impacts, they came in at the midpoint of our constant currency guidance range. Our revenue trends demonstrate the continuation of largely stable activity levels across North America and Europe. Revenue from franchise offices is significant and is included within system-wide revenues, which equaled $4.9 billion for the quarter. Gross profit margin came in below our guidance range, driven by shifts within staffing, reflecting an increased mix of enterprise accounts, lower permanent recruitment, and lower outplacement. As adjusted, EBITDA was $96 million representing a 22% decrease constant currency compared to the prior-year period.
As adjusted, EBITDA margin was 2.1%, and came in at the midpoint of our guidance range, representing a 50 basis points decline year over year. Foreign currency translation drove a favorable impact to the 2% U.S. dollar-reported revenue increase from the constant currency decrease of 2%. Organic days adjusted constant currency revenue increased 0.5% in the quarter which was slightly favorable to the midpoint guidance of flat.
Turning to the EPS bridge. Reported earnings per share was $0.38; adjusted EPS was $0.83, and came in $0.01 above our guidance midpoint. Walking from our guidance midpoint of $0.82, our results included improved operational performance, representing a positive impact of $0.02 and a slightly higher tax rate, which had a negative impact of $0.01. Restructuring costs and other represented $0.45, bringing reported earnings per share to $0.38.
Next, let's review our revenue by business line. Year-over-year, on an organic constant currency basis, the Manpower brand had growth of 3% in the quarter; the Experis brand declined by 7%, and the Talent Solutions brand declined by 8%. Within Talent Solutions, our RPO business experienced lower demand in select ongoing client programs year-over-year. Our MSP business continued its strong revenue growth performance, while Right Management experienced declining year-over-year revenues as outplacement activity continued to slow. Looking at our gross profit margin in detail, our gross margin came in at 16.6% for the quarter. Staffing margin contributed a 40 basis point reduction due to mix shifts towards enterprise accounts.
Permanent recruitment activity was softer than expected, and the lower contribution resulted in a 20 basis point decline. Lower career transition outplacement activity within Right Management resulted in a 10 basis point margin decrease. Moving on to our gross profit by business line, during the quarter, the Manpower brand comprised 63% of gross profit, our Experis Professional business comprised 21%, and Talent Solutions comprised 16%. During the quarter, our consolidated gross profit decreased by 4% on an organic constant currency basis year-over-year, representing a slight improvement from the 5% decline in the second quarter.
Our Manpower brand reported flat organic constant currency gross profit year-over-year, equal to the second quarter year-over-year trend. Gross profit in our Experis brand decreased 10% in organic currency year-over-year, an improvement from the 14% decrease in the second quarter. Gross profit in Talent Solutions declined 13% in organic currency year-over-year, a decline from the flat results in the second quarter. MSP and RPO experienced similar activity levels from the second quarter, but RPO declined year-over-year as they anniversaried large growth in the third quarter a year ago in select client programs. Right Management gross profit decreased on lower outplacement activity. Reported SG&A expense in the quarter was $72 million.
SG&A as adjusted was down 2% on a constant currency basis and 1% on an organic constant currency basis. The year-over-year organic constant currency SG&A decrease largely consisted of reductions in operational costs of $5 million, partly driven by previous restructuring actions. Corporate costs continued to include our back-office transformation spend, and these programs are progressing well with expected medium-term efficiencies. Dispositions represented a decrease of $8 million, while currency changes contributed to a $20 million increase. Adjusted SG&A expenses as a percentage of revenue represented 14.8% in constant currency in the third quarter. Adjustments represented restructuring of $21 million.
Balancing gross profit trends with strong cost actions to enhance EBITDA margin is one of our highest priorities, and we continue to analyze all aspects of our cost base for additional ongoing efficiency improvements.
The Americas segment comprised 24% of consolidated revenue. Revenue in the quarter was $1.1 billion, representing an increase of 6% year-over-year on a constant currency basis. As adjusted, OUP was $43 million, and OUP margin was 3.9%. Restructuring charges of $5 million primarily represented actions in the U.S. The U.S. is the largest country in the Americas segment, comprising 63% of segment revenues. Revenue in the U.S. was $691 million during the quarter, representing a 1% days-adjusted decrease compared to the prior year. This represents an improvement from the 3% decrease in the second quarter. OUP as adjusted for our U.S. business was $24 million in the quarter, and OUP margin as adjusted was 3.5%.
Within the U.S., the Manpower brand comprised 28% of gross profit during the quarter. Revenue for the Manpower brand in the U.S. increased 8% on a days-adjusted basis during the quarter, which represented strong market performance and a slight decrease from the 9% increase in the second quarter. The Experis brand in the U.S. comprised 39% of gross profit in the quarter. Within Experis in the U.S., IT skills comprised approximately 90% of revenues. Experis U.S. revenue decreased 9% on a days-adjusted basis during the quarter, an improvement from the 14% decline in the second quarter. Talent Solutions in the U.S. contributed 33% of gross profit and saw a flat revenue trend year-over-year in the quarter.
A decrease from the 13% increase in the second quarter driven by lower RPO activity from select ongoing client programs and lower Right Management outplacement activity. The MSP business executed well during the quarter again, posting strong double-digit revenue increases year over year. In 2025, we expect the overall U.S. business to have a similar to slightly further revenue decline compared to the third quarter, largely due to higher seasonal Experis Healthcare projects in the prior year period.
Southern Europe revenue comprised 47% of consolidated revenue in the quarter. Revenue in Southern Europe was $2.2 billion, representing a 1% decrease in organic constant currency. As adjusted, OUP for our Southern Europe business was $70 million in the quarter, and OUP margin was 3.2%. Restructuring charges of $4 million represent actions in Spain and France. France revenue equaled $1.2 billion and comprised 53% of the Southern Europe segment in the quarter and decreased 5% on a days-adjusted constant currency basis. As adjusted, OUP for our French business was $31 million in the quarter. Adjusted OUP margin was 2.7%.
France revenue trends improved slightly during the course of the third quarter despite the government uncertainty in September, and we expect a slightly improved rate of revenue decline into the fourth quarter reflecting the third-quarter exit rate. Revenue in Italy equaled $463 million in the third quarter, reflecting an increase of 4% on a days-adjusted constant currency basis. OUP as adjusted equaled $27 million, and OUP margin was 5.8%. Our Italian business is performing well, and we estimate a slightly improved constant currency revenue growth trend in the fourth quarter compared to the third quarter.
Our Northern Europe segment comprised 18% of consolidated revenue in the quarter. Revenue of $817 million represented a 6% decline in constant currency. As adjusted, OUP equaled a $1 million loss. This represents an improvement from the $6 million loss in the second quarter and reflects the impact of cost reduction actions. The restructuring charges of $14 million primarily represented actions in Germany and the UK. Our largest market in the Northern Europe segment is the UK, which represented 32% of segment revenues in the quarter. During the quarter, UK revenues decreased 13% on a days-adjusted constant currency basis. We expect the rate of revenue decline in the UK to improve into the fourth quarter compared to the third quarter.
In Germany, revenues decreased 23% on a days-adjusted constant currency basis in the quarter. German automotive manufacturing trends continued to be weak. In the fourth quarter, we are expecting a similar year-over-year revenue decline compared to the third-quarter trend. The Nordics continue to experience difficult market conditions with revenues decreasing 4% in days-adjusted constant currency in the quarter.
The Asia Pacific Middle East segment comprises 11% of total company revenue. In the quarter, revenues equaled $521 million, representing an increase of 8% in organic constant currency. OUP was $27 million, and OUP margin was 5.1%. Our largest market in the APME segment is Japan, which represented 60% of segment revenues in the quarter. Revenue in Japan grew 6% on a days-adjusted constant currency basis. We remain very pleased with the consistent performance of our Japanese business and expect continued strong revenue growth in the fourth quarter.
I'll now turn to cash flow and balance sheet. In the third quarter, free cash flow was $45 million compared to $67 million in the prior year. Following a trend of declining earnings and large outflows for tax and technology license payments through the first half of the year, free cash flow was positive during the third quarter. Earnings have also been stabilizing in recent quarters, which will improve the trend of free cash flow going forward. The fourth quarter is typically a strong quarter for free cash flow as we look ahead. At quarter-end, day sales outstanding increased by 1 point to 59 days as the enterprise client mix has increased.
During the third quarter, capital expenditures represented $15 million. During the third quarter, we did not repurchase any shares. As of September 30, we have 2 million shares remaining for repurchase under the share program approved in August 2023. Our balance sheet ended the quarter with cash of $275 million and total debt of $1.2 billion. Net debt equaled $941 million at September 30, reflecting an improvement from June 30. Our debt ratios at quarter-end reflect total gross debt to trailing twelve months adjusted EBITDA of 3.16 and a total debt to total capitalization of 38%. Details of our debt and credit facility arrangements are included in the appendix of the presentation.
Next, I'll review our outlook for 2025. Based on trends in the third quarter and October activity to date, our forecast anticipates ongoing stability in the majority of our markets and a continuation of existing trends. With that said, we are forecasting earnings per share for the fourth quarter to be in the range of $0.78 to $0.88. The guidance range also includes a favorable foreign currency impact of $0.08 per share and our foreign currency translation rate estimates are disclosed at the bottom of the guidance slide. Our constant currency revenue guidance range is between a 2% decrease and a 2% increase, and at the midpoint is a flat revenue trend.
Business days are stable year-over-year, and considering the impact of dispositions, our organic days-adjusted constant currency revenue increase represents slight growth, which rounds down to a flat revenue trend at the midpoint. EBITDA margin for the fourth quarter is projected to be flat at the midpoint compared to the prior year. We estimate that the effective tax rate for the fourth quarter will be 46.5%. In addition, as usual, our guidance does not incorporate restructuring charges or additional share repurchases, and we estimate our weighted average shares to be 47.1 million. I will now turn it back to Jonas.
Jonas Prising: Thanks, Jack. In parallel with our disciplined cost control, we continue to advance our digitization and standardization agenda across both the back and front office. We are pleased with the strong progress of our global business service initiatives, which are streamlining operations, aligning processes, and improving speed and quality while reducing costs. I recently visited our new hub in Porto, Portugal, where our finance and technology teams have standardized and centralized back-office functions across Europe. These advancements are providing a blueprint for how we will continue to evolve our operating model, standardizing our processes and leveraging our scale advantage in countries and regions.
We are now preparing to apply the same disciplined approach to the front office, optimizing recruitment and sales processes on our Global PowerSuite front office platform to identify similar opportunities for client and candidate service excellence, process standardization, and productivity gains. By simplifying workflows and integrating technology, we are empowering our teams and building a business that will be leaner, more agile, and well-positioned for long-term growth. We are confident that our combination of operational rigor, strategic investment, and disciplined execution will ensure ManpowerGroup Inc. continues to strengthen our value to clients and candidates in a fast-changing external environment.
This confidence in our value is reinforced by the consistent recognition of three strong and distinct brands received for their market leadership and capabilities. Last quarter, Everest Group recognized Manpower, Experis, and Talent Solutions as industry leaders across multiple categories, reflecting the strength of our strategy, technology, and people. Each recognition highlights SoFi AI, our enterprise-wide AI platform we introduced last quarter, where our AI solutions are being developed, refined, and incorporated into our operational workflows to further enhance our capabilities and help clients make smarter, faster talent decisions. We are now increasingly moving from AI use cases to scaled commercial impact.
In our largest market, SoFi AI is now driving measurable gains with approximately 30% of new client revenue derived from AI-rated probability. We also see that when prospects are identified as high probability by AI, the potential value is notably higher than prospects identified by human insight alone. With this new technology deployed across 14 key markets and scaling further, we expect to see significant value realization across our global footprint. In the RPO and MSP, several recent client wins directly cite our AI-powered insights as differentiators in their selection process. These proof points reinforce how our technology investments are enhancing client outcomes.
As we look ahead, we do so with cautious optimism. While near-term conditions remain challenging in North America and Europe, our teams continue to execute on our current priorities with discipline, serving our clients, supporting millions of associates in meaningful work, and building the foundation for future profitable growth. I want to close by thanking our people around the world for their unwavering dedication and commitment to helping our clients win and our associates succeed. Operator, please open the line for our Q&A.
Operator: Thank you. If your question has been answered, and you would like to remove yourself from the queue, please press 11 again. Our first question comes from Andrew Charles Steinerman with JPMorgan. Your line is open.
Andrew Charles Steinerman: Hi, everybody. My first question is about when business competition improves, so this is beyond what you just guided for the fourth quarter of 2025. Would you expect kind of more of an early cycle pickup in flexible staffing volumes? And then also, Jack, if you could comment on the gross margin that you talked about in the prepared remarks. Is it this kind of an odd time where we are seeing softer outplacement and softer perm at the same time?
John Thomas McGinnis: Good morning, Andrew. Yes, it is a bit of a strange time in many labor markets in Europe and North America. As you heard me characterize it in our call, it is like a frozen labor market. There is very little hiring going on and very few workforce reductions going on. This reflects in both our perm and RPO numbers as well as in Right Management. What has been very encouraging to us, though, is that despite this and despite PMI still being below 50 in many of our major markets, we are starting to see distinct stabilization and growth in Manpower, which is what we would hope to see when the markets bottom out.
To your question, if employer confidence returns, we are hopeful that this would mean we see a return to industry dynamics where we expect to see better Manpower growth and other brands also benefiting from an improved environment.
Operator: Thank you. Our next question comes from Kartik Mehta with Northcoast Research. Your line is open.
Kartik Mehta: Maybe, Jack, could you talk about the trends you saw during the quarter and if it was even throughout or if there were any changes due to what's happening in the economy?
John Thomas McGinnis: Sure, Kartik. I'd be happy to discuss that. If we look across our major markets, starting with France, we actually saw improvements in trends during the third quarter. We see overall revenue at that minus 5%, but exiting it was minus 4%, showing improvement in September. We saw that in industry data that was published as well, and it has continued into October. Similarly, in Italy, we saw an improving trend in September and expect improvement into the fourth quarter. In the US, there was a little more stability but some volatility due to large RPO volumes from select clients in the year-ago period that completed.
Overall, Manpower grew steadily during the quarter, and Experis was more stable regarding activity levels.
Kartik Mehta: Regarding the gross margin, as you look at the fourth quarter, are you seeing any price pressure or mix issues impacting profit beyond the staffing margin or perm still being in a recessionary standpoint?
John Thomas McGinnis: I would say that pricing is always competitive, but we have not seen any dramatic changes on an overall basis. It's primarily a mix shift towards enterprise clients. When the convenience market comes back, we would expect some reversal, but currently, the demand from enterprise clients dominates. On the gross profit, perm came in softer than expected, putting additional pressure, along with lower outplacement volumes on gross profit. Primarily, the shift impacts the margin.
Kartik Mehta: Thank you. Just a last question, Jonas. When talking to customers, is there any more or less uncertainty perceived? Uncertainty has defined the year, but is there any change in your view?
Jonas Prising: Clients we speak with are increasingly resilient to the policy environment, viewing it as part of the landscape. This policy fluctuation is settling down over the year, allowing countries and regions to project into 2026. Many employers are preparing for planning into the future with improved visibility, given the projected improved economic environment in Europe and North America in 2026. Employers are cautious, but resilient and I believe are starting to gain stability in their outlook.
Kartik Mehta: Thank you very much. Appreciate it.
Operator: Our next question comes from Manav Patnaik with Barclays.