ManpowerGroup Inc. (MAN) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed sentiment. While AI integration and expansion in Japan and Italy are positive, the guidance for revenue is flat, and EBITA margin improvements are long-term. The Q&A highlights optimism in cost management and AI impact but lacks clarity on growth timelines and market recovery. The stable demand and market conditions in key regions offer some support, but the lack of strong growth indicators and cautious guidance suggest a neutral outlook. Given the company's mid-sized market cap, a neutral stock price movement (-2% to 2%) is expected.
Key Financial Performance
Reported Revenues (Q4 2025) $4.7 billion, representing organic constant currency growth of 2%. The growth was driven by stabilization in enterprise demand and disciplined execution.
System-wide Revenue (Q4 2025) $5.1 billion, includes expanding franchise revenue base.
Adjusted EBITA Margin (Q4 2025) 2.1%, reflecting improving demand trends across core markets and P&L leverage.
SG&A Reduction (Q4 2025) 4% constant currency reduction, achieved through structural cost reductions and tighter discretionary spending.
Gross Profit Margin (Q4 2025) 16.3%, slightly below guidance due to lower permanent recruitment in Europe.
Adjusted EBITA (Q4 2025) $100 million, a 2% decrease in constant currency compared to the prior year.
Reported Revenues (Full Year 2025) $18 billion, a 2% decrease in constant currency.
System-wide Revenues (Full Year 2025) $19.5 billion.
Adjusted EBITA (Full Year 2025) $337 million, a 20% constant currency decrease year-over-year.
Free Cash Flow (Full Year 2025) Outflow of $161 million, compared to an inflow of $258 million in the prior year, impacted by timing of items that benefited 2024.
Days Sales Outstanding (Year-end 2025) Increased to 55 days, up from 52 days in the prior year, due to increased enterprise client mix.
Capital Expenditures (Q4 2025) $11 million.
Net Debt (Year-end 2025) $806 million.
Manpower Brand Revenue Growth (Q4 2025) 5% year-over-year on an organic constant currency basis, an improvement from 3% growth in Q3.
Experis Brand Revenue Decline (Q4 2025) 6% year-over-year on an organic constant currency basis, an improvement from 7% decline in Q3.
Talent Solutions Brand Revenue Decline (Q4 2025) 4% year-over-year on an organic constant currency basis, an improvement from 8% decline in Q3.
Gross Profit (Q4 2025) Decreased by 3% on an organic constant currency basis year-over-year, an improvement from 4% decline in Q3.
France Revenue (Q4 2025) $1.2 billion, decreased 3% on a days adjusted constant currency basis, but showed 4 consecutive months of revenue trend improvement.
Italy Revenue (Q4 2025) $486 million, increased 7% on a days adjusted constant currency basis.
Northern Europe Revenue (Q4 2025) $819 million, a 1% decline in constant currency.
Asia Pacific Middle East Revenue (Q4 2025) $520 million, a 6% increase in organic constant currency.
Japan Revenue Growth (Q4 2025) 7% on a days adjusted constant currency basis.
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Operating Highlights
AI recruiter toolkit: Scaled to more than 12 markets, improving recruiter precision and productivity, enhancing candidate experience, and increasing placement rates by 7%.
Agentic AI coding assistant: Scaled across Experis in the U.S., delivering faster, higher quality, and cost-efficient solutions for clients.
Geographic performance: Key markets like the U.S. and France performed better than expected, with Italy and Spain showing stabilization and growth. Italy stood out with strong growth and margin performance.
Regional trends: Northern Europe showed sequential improvement in profitability, while Japan continued strong revenue growth. Germany remains challenging but is expected to improve.
Cost optimization: Achieved a 4% constant currency reduction in SG&A while driving organic growth. Accelerated cost actions in corporate functions and select geographies.
Digitization and AI integration: PowerSuite technology operates across 90% of the business, enabling faster innovation and productivity gains. AI tools are being embedded to enhance efficiency and support higher-margin growth.
AI and workforce transformation: Focused on integrating AI with human expertise to unlock productivity and growth. Research and client engagement highlight flexibility and AI's role in workforce composition.
Portfolio diversification: Multi-brand portfolio supports earnings durability and positions the company to capture market share and improve margins.
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Risk or Challenges
Economic and geopolitical uncertainty: The company acknowledges economic and geopolitical uncertainty as a risk factor that could materially impact results. This includes macroeconomic conditions and political instability in key markets like France.
Client hiring behavior: Clients remain deliberate in their hiring due to the macroeconomic backdrop, which could limit demand for the company's services.
Regulatory and tax changes: The extension of the corporate tax surcharge in France and the uncertainty around the U.S. Workers' Opportunity Tax Credit (WOTC) could negatively impact financial performance.
Supply chain and operational costs: The company has faced challenges in aligning capacity with demand, requiring cost optimization and restructuring actions in regions like Northern Europe and North America.
Permanent recruitment challenges: The permanent recruitment business continues to face a challenging environment, particularly in Europe, which has impacted gross profit margins.
Technology and AI integration: While AI and technology adoption are seen as opportunities, the company faces challenges in scaling these technologies effectively and ensuring workforce readiness.
Market-specific performance: Certain markets like Germany and France are underperforming, with Germany experiencing a 22% revenue decline and France facing political and budget uncertainties.
Seasonal and project-based revenue fluctuations: The company anticipates uneven project volumes, particularly in the U.S. Experis Healthcare IT projects, which could lead to revenue volatility.
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Guidance & Outlook
Revenue Guidance for Q1 2026: Forecasted earnings per share for Q1 2026 to be in the range of $0.45 to $0.55. Constant currency revenue guidance range is between a 1% decrease and a 3% increase, with a midpoint of 1% increase.
EBITA Margin Projection: EBITA margin for Q1 2026 is projected to be up 10 basis points at the midpoint compared to the prior year.
Tax Rate Guidance: Estimated full-year global tax rate for 2026 is 45%, with potential reduction to 43.5%-44% if the U.S. workers' opportunity tax credit (WOTC) is enacted retroactively.
Regional Revenue Trends: France revenue trends are expected to show sequential improvement into Q1 2026. Italy is projected to maintain a similar constant currency revenue growth trend as Q4 2025. Germany is expected to see an improvement in the rate of year-over-year revenue decline in Q1 2026 compared to Q4 2025. Japan is anticipated to continue strong revenue growth in Q1 2026.
U.S. Business Outlook: The U.S. business is expected to have an increased rate of revenue decline in Q1 2026 compared to Q4 2025, primarily due to lower Healthcare IT project volumes. Excluding Healthcare IT, the year-over-year revenue trend in Q1 will align with Q4 trends.
AI and Technology Integration: ManpowerGroup is scaling AI tools, such as the AI recruiter toolkit and agentic AI coding assistant, to enhance productivity, improve placement rates, and deliver higher-margin work. These initiatives are expected to drive revenue growth and cost efficiency in 2026.
Cost Management and Transformation: Ongoing cost optimization actions, including back-office and front-office transformation programs, are expected to enhance EBITA margin in 2026. These programs aim to create industry-leading processes and efficiencies.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:What are the long-term aspirations for margins with the implementation of PowerSuite and AI?
A:The management is optimistic about achieving a 4.5% to 5% EBITA margin over time, even in a moderate recovery scenario. They are focusing on productivity, growth, and structural cost efficiency through centralization and standardization. They expect year-over-year EBITA margin improvement over the next 4 years.
Q:What is the expected level of sustainable organic revenue growth once the staffing market improves?
A:Management finds it difficult to predict the market's improvement but is encouraged by positive trends in key markets like the U.S., France, and Japan. They are focusing on driving efficiencies, rightsizing the business, and investing in demand-generating activities to capture growth opportunities.
Q:What is the impact of enterprise demand on margins and cash conversion?
A:Enterprise demand has stabilized revenue but has impacted gross profit (GP) margins due to averaging effects. Pricing remains rational, and actions are in place to mitigate longer payment terms from enterprise clients. Cash flow has been balanced, with strong results in Q4 due to enterprise client payments.
Q:How have revenue trends progressed in key markets like France, Italy, and the U.S.?
A:France has shown sequential improvement, moving from -4% in September to -2% in December. Italy has strong momentum, ending Q4 at +7% days adjusted. The U.S. has been stable, with Manpower brand growth at +7% to +8% in the second half of the year.
Q:Is the company expanding its workforce in any regions?
A:Yes, the company is expanding in countries like Japan and Italy, focusing on demand-driving roles. They are also leveraging PowerSuite to improve recruiter productivity and enhance client and candidate experiences.
Q:What are the leading indicators for a broad-based recovery?
A:Indicators include increased client conversations about pent-up project demand, RFPs and RFIs, and targeted growth in verticals like aerospace and defense. Broad-based recovery will be evident when inflection points appear across multiple countries.
Q:What is the outlook for Experis in the U.S. and its end markets?
A:Experis is seeing sequential improvements but still faces headwinds. Clients are focused on AI-related projects and are getting closer to executing pent-up project demand. Management expects stable trends into Q1 and is optimistic about long-term growth opportunities.
Q:What is the long-term view on AI's impact on staffing and pricing?
A:AI is expected to enhance human capabilities rather than replace them, with blue-collar roles being more resilient. Clients are interested in both hiring AI-skilled workers and training existing staff. AI tools like Sophie AI are creating higher-value offerings, potentially maintaining or increasing margins.
Q:What is the progress on SG&A leverage and gross margins?
A:SG&A costs have decreased by 4% in Q4 due to restructuring and cost control. Gross margins are impacted by enterprise demand and low perm levels but are expected to improve as higher-margin businesses rebound and perm levels recover.
Q:What are the implications of geopolitical shifts on business momentum in Europe?
A:Geopolitical turbulence has not significantly impacted the business. Employers are focusing on flexibility and are becoming more confident about the future, which aligns with the company's core offerings.
Q:What is the characterization of the labor and hiring markets?
A:The labor market is stabilizing, particularly in the U.S., with employers showing more confidence and readiness to proceed with business activities.
Q:What is required to achieve the long-term EBITA margin goal of 4.5%?
A:Achieving the goal requires a rebound in higher-margin businesses like Experis and Talent Solutions, normalization of perm levels, and continued structural cost improvements. The pace of recovery in these areas will determine the timeline.
Q:Review of Unclear Management Responses
A:Management avoided providing specific numerical targets for sustainable organic revenue growth and the exact timing of a broad-based recovery. They also did not give detailed insights into the potential depth and breadth of demand dynamics or the exact impact of geopolitical shifts on business momentum.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
EBITA margin
EUR note
Germany market
Healthcare project
Manpower brand
Outplacement
President Chief
SGA
WOTC
automation
backdrop
behavior
brand improvement
capacity
client program
core market
cost discipline
cost structure
decline Talent
delivery
excellence
flexibility
gain
human
improvement rate
increase midpoint
leverage
macro
margin trend
market insight
midpoint currency
model
offering
office technology
path
portfolio
priority
profitability improvement
project volume
research
surcharge tax
theme
MAN Transcript
ManpowerGroup Inc. (MAN) Q4 2025 Earnings Call Transcript
Unknown1-29
The earnings call presents a mixed sentiment. While AI integration and expansion in Japan and Italy are positive, the guidance for revenue is flat, and EBITA margin improvements are long-term. The Q&A highlights optimism in cost management and AI impact but lacks clarity on growth timelines and market recovery. The stable demand and market conditions in key regions offer some support, but the lack of strong growth indicators and cautious guidance suggest a neutral outlook. Given the company's mid-sized market cap, a neutral stock price movement (-2% to 2%) is expected.
ManpowerGroup Inc. (MAN) Q3 2025 Earnings Call Transcript
Unknown10-16
The earnings call summary and Q&A reveal several concerns: declining EBITDA margins, slightly negative revenue guidance, political and economic uncertainties in key markets like France and the U.S., and restructuring efforts in Northern Europe. Despite AI advancements and stable free cash flow expectations, these negative factors overshadow potential positives. The company's market cap suggests it may react moderately, leading to a likely negative stock movement of -2% to -8% over the next two weeks.
ManpowerGroup Inc. (MAN) Q2 2025 Earnings Call Transcript
Unknown7-17
Despite some positive elements, such as growth in the U.S. Manpower brand and AI advancements, the overall sentiment is negative due to weak financial guidance, including a projected revenue decline and decreased EBITDA margins. Additionally, high tax rates and geopolitical uncertainties in Northern Europe contribute to a negative outlook. The Q&A session highlighted concerns about economic conditions and restructuring, which further dampen sentiment.
ManpowerGroup Inc. (NYSE:MAN) Q1 2025 Earnings Call Transcript
Unknown4-18
The earnings call reveals several challenges: a revenue decline, decreased EBITDA, and lower EPS, compounded by geopolitical risks and regulatory changes. Despite a share repurchase program, the negative financial metrics and cautious market outlook weigh heavily. The Q&A section reflects uncertainty in market conditions and management's cautious stance. The guidance of declining revenue and margins further exacerbates concerns. The market cap suggests moderate volatility, but overall, the sentiment leans negative due to the combination of financial underperformance and external uncertainties.
MAN Report
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