Advantage Solutions Inc. Class A Common Stock Canaccord Genuity's 46th Annual Growth Conference
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Awesome. Okay. I think we're ready to go. Thank you all for being here. I am Luke Morrison, one of Canaccord's analysts covering software and IT services. With me here I have Advantage Solutions. I have Dave Peacock, the CEO, Chris Growe, CFO. Guys, thank you for coming.
Thank you. Thank you. Maybe just to kick things off, I'm sure there's a mix of investors in here, some that own the stock, some that are newer to the story.
Maybe just to open the room, talk about what Advantage does. What are you doing for your customers? What are your customers doing? Just a broad overview, and then we can dig on the details.
Yeah. Easy to do. We are the largest sales, marketing, and merchandising firm in North America. We are serving clients across three business segments: Branded Services, which is everything we do for CPG; Retailer Services, which is most of what we do for retailers; and then Experiential Services, which really touches both. We run the gamut as it relates to services from making sure products are in stock. We make sure that joint business plans, sales plans are executed. They are tracked, followed, adjusted when need to be based on market conditions. Then we make sure products are available for sampling and discovery by customers or consumers.
Awesome. Excellent. You guys just reported a week ago.
Maybe just discuss briefly what stood out in the quarter. What are you guys seeing in the market today? Just general trends. Yeah, absolutely.
Look, we had a good quarter. We beat consensus. We reiterated guidance, even with some of the uncertainty that we face, with consumer confidence, which definitely affects our business.
Yep. The inflation report, at least for us, was good because you saw grocery deflation for the first time in a while.
It just came out today, which is beneficial hopefully for shoppers, because you are seeing kind of different impacts with our shopper base, which ultimately affects our CPG clients and our retail customers. We're a cash-driven business. We're very asset light. Given the low capital intensity, we're encouraged about both the cash flow the business is generating now, but also with the cash flow that we know will be coming forward in 2027, 2028 and beyond.
I would just add that we had, this quarter in particular, and really for the first half of the year, growth initiatives that are working. We're seeing some of the new services, some of the areas that we've really invested in, lead to growth. We saw revenue growth again.
Yep. We had higher costs.
We have a bit of a business mix that caused EBITDA to be a little softer. But I think overall, it was better than we thought, and I think a reiteration of the guidance should give investors a lot of confidence in the model and the growth initiatives working.
Yep. Maybe we can just dig in on, you talked a little bit about the consumer and the health of the consumer. I think for a few quarters you've been talking about sort of this K-shaped economy dynamic and there's increasing value-seeking behavior broadening across just the broader consumer base. Just maybe give us a general sense of the trend and the backdrop, how that affects your customers, and then how that flows through to you guys.
There are kind of tailwinds and headwinds associated with it. When you have what's happening in the market, lower income consumers are being challenged, so they're looking for deals, they're looking for value. Where that plays out as it relates to our business, we are the largest private label agency, if you will, in the country. We sit between scores of retailers and over 6,000 contract manufacturers in enabling those programs. Having been in retail grocery myself, it's really hard to develop and roll out 6,000 SKUs across multiple categories unless you have someone like us who can do it Yep in a syndicated manner.
That business is performing well. You have assortment changes in the store because of how people are shopping. You're going to see more value-based items available, more multi-pack items available. That plays into our reset business very well as a tailwind. Then you've got also people on kind of the higher end that are changing their portfolio of purchases based on health and wellness, whether it's GLP-1 or just general health and wellness trends. That's bringing a lot of discovery and new products into the industry. That supports our Experiential Services business. I think some of the headwinds are more around, especially around CPG spending and budgets. A lot of the consumer products companies are under some pressure for lots of reasons. It can be tariffs. It can be, just general inflation, depending on what the makeup is of their products.
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