ManpowerGroup 2026 Q3 Earnings Call

Sir, you may begin. Good morning, everyone, and thank you for joining us for our third quarter 2026 conference call.

Our Chief Financial Officer, Jack McGinnis, and our President and Chief Strategy Officer, Becky Frankiewicz, are both with me today. For your convenience, our prepared remarks are available in the investor relations section of our website at manpowergroup.com. I will begin with the leadership news we announced this morning, followed by a brief overview of the quarter. Becky will then discuss our results in more detail, provide an update on our transformation, and highlight the opportunities we are capturing with AI. Jack will then walk through the detailed financial results and our guidance for the fourth quarter of 2026. I will close with a few comments before we open the line for Q&A. Turning to Jack, who will cover the safe harbor language.

Morning, everyone. This conference call includes forward-looking statements, including statements concerning economic and geopolitical uncertainty, which are subject to known and unknown risks and uncertainties. These statements are based on management's current expectations or beliefs. Actual results might differ materially from those projected in the forward-looking statements. We assume no obligation to update or revise any forward-looking statements. Slide 2 of our earnings release presentation further identifies forward-looking statements made in this call and factors that may cause our actual results to differ materially in information regarding reconciliation of non-GAAP measures.

Thank you, Jack. Before we turn to today's results, I would like to begin with the leadership transition we announced this morning. I am delighted to share that as part of the board's long-term succession planning, Becky Frankiewicz will become our next Chief Executive Officer and join ManpowerGroup's Board of Directors effective January 1, 2027. At that time, I will transition to the role of Executive Chair. This transition reflects our commitment to leadership development, building world-class talent from within, and the strength of our executive team. Becky and I have worked closely together on ManpowerGroup's ongoing transformation, and I have seen firsthand the exceptional leadership, strategic perspective, and deep commitment that she brings to our company. Becky knows our business inside and out.

Through her leadership of our North America region and oversight of our global strategy and commercial performance, she has helped position ManpowerGroup for its next era of transformation, innovation, and profitable growth. At the same time, her broad leadership experience brings a fresh perspective that will continue to strengthen the company's future direction. I am confident Becky brings the experience, judgment, and enterprise perspective to lead ManpowerGroup into its next chapter, and I look forward to working closely with her to ensure a seamless transition and supporting her in my role as Executive Chair. Now, with that, let's turn to the quarter. We delivered yet another quarter of solid performance, reflecting the strong traction we're building and representing another important step forward.

The progress we have made reinforces our confidence that 2026 is an inflection point for the business, both as we realize the benefits of the strategic actions that we've taken over the last several years, and as demand continues to improve. Three key areas of strength stand out this quarter. The Manpower brand continues to deliver very strong results and gain share, particularly in the U.S. The Experis and Talent Solutions brands performance both improved from the previous quarter. Alongside that commercial momentum, we are making meaningful progress on our transformation agenda and remain confident in our commitment to deliver $200 million in permanent cost savings in 2028. I will now cover the consolidated performance before Becky goes deeper into our brand performance, regional highlights, and provides an update on our transformation and commercial strategy.

We continued to see top-line momentum in the quarter, delivering reported revenues of $4.8 billion, representing organic constant currency growth of 6%. System-wide revenue, including our expanded franchise revenue base, was $5.3 billion. We know where we focus, we win. We continue to leverage our scale and global footprint and have focused on commercial efforts in the markets, verticals, and opportunities where demand is strongest and where we have a clear opportunity to win and capture profitable share. Adjusted EBITDA margin was 2.2%. Continued revenue growth together with disciplined capacity management and continued SG&A optimization resulted in improved operating leverage with 10 basis points of year-over-year margin expansion on a constant currency basis. Gross margin in the quarter reflected stable staffing margin from the previous quarter and a slightly softer permanent recruitment trend, notably in France, as well as lower Right Management outplacements volumes as layoff activity slowed in Q3.

We continue to actively shape our business toward higher value opportunities where we are most differentiated. Our leadership team remains focused on executing against the current demand environment while positioning the company for the opportunities ahead. Simultaneously, our transformation remains on track against the objectives we laid out earlier this year. The path forward for ManpowerGroup is clear. We believe that the inflection point we predicted is evident in our performance. As we build momentum across the business with continued strength in Manpower, further recovery in Experis and Talent Solutions, and meaningful progress on our transformation, including cost reduction initiatives, we are very well-positioned to deliver incremental growth and greater operating leverage over time. Now, let me turn it over to Becky.

Thank you, Jonas. I want to start by thanking you for your leadership and the partnership we have shared. I appreciate the confidence you and the board have placed in me. It is a privilege to take this organization forward to our next chapter. ManpowerGroup has a strong legacy and a clear purpose. This is what drew me to this company and remains the foundation for our future. We see significant opportunities to accelerate our human first, digital always approach to deliver our strategy, expand our AI capabilities, and create even greater value for our clients, our candidates, and our shareholders. As I prepare to step into the role of Chief Executive Officer, we will continue to turn strategic vision to action, driving strong performance and positioning the company for even greater long-term success. Now, turning to our third quarter performance.

We are successfully executing our strategy, which is unlocking commercial momentum. Growth is broadening across our brands and geographies, while our expanded digital capabilities are helping us win new clients and deepen existing relationships. Together, these drivers are strengthening our competitive position and reinforcing our confidence in the long-term opportunity ahead. Within our Manpower brand, we delivered another very strong quarter, with ongoing revenue growth as demand conditions continued to strengthen. Commercial staffing remained very positive, while professional staffing returned to growth during the quarter, providing another indicator of momentum across the business. In the U.S., Manpower gained market share through new logos and expansion of wallet within existing clients, delivering our ninth consecutive quarter of growth with double-digit revenue growth and improved profitability.

We saw continued solid demand across consumer goods, notably food manufacturing and logistics, as well as opportunities tied to automation and reshoring, which are driving demand for specialized technical talent. Outside the U.S., we saw encouraging performance across several of our European markets. Northern Europe accelerated from the previous quarter, led by strong growth in the U.K. and double-digit growth in Germany, driving significant year-over-year improvement in regional profitability, while Italy continued to execute well and maintain market leadership. Experis, our technology, talent, and services business, saw improving trends globally, with U.S. Experis crossing to growth in the quarter. This marks an important inflection in performance, and we are encouraged by improved conditions in activity across financial services, healthcare, and energy as clients continue to invest in data governance, AI implementation, and cloud optimization.

Our human plus AI strategy is also gaining commercial traction, contributing to pipeline growth, deal wins, and higher margin opportunity. This marks an important inflection in performance, and we are encouraged with the improvement we are seeing. In Talent Solutions, the revenue trend improved from the second quarter. We continue to sharpen our focus across all our Talent Solutions lines of business, Right Management, TAPFIN-MSP, and RPO, responding to the growing needs of global clients by further strengthening how we serve multinational accounts, creating a more seamless and consistent experience across markets. This is already creating the conditions to expand share of wallet with global clients by delivering greater business impact and stronger workforce outcomes. Our momentum is not only being driven by improved demand, it is also being fueled by the actions we have taken to transform the business and position ourselves for long-term growth.

We remain on track to deliver on our target of permanent annual cost savings in 2028. Our recent efforts have been focused on the front office at delivering greater speed and driving efficiencies through scale. In the U.S., the program is advancing in line with our expectations as we continue to redesign our sales and recruitment processes. We are now taking the next step by extending the program to the U.K. on our path to scaling to the rest of the world. As we scale, our focus remains on creating a more efficient operating model, lowering our cost to serve, and improving productivity while giving our teams both the tools and greater capacity to delight clients, candidates, and capture new growth. Across all three brands, we are increasingly using AI to improve internal efficiency and to create differentiated value for clients and candidates while unlocking new growth opportunities.