ManpowerGroup forecasts Q4 2025 EPS of $0.78–$0.88 as AI-driven strategies show early impact

Earnings Call Insights: ManpowerGroup Inc. (MAN) Q3 2025

MANAGEMENT VIEW

* CEO Jonas Prising reported that "after 11 consecutive quarters of organic constant currency revenue declines we crossed back over to growth during the third quarter." He highlighted that stabilization in demand across North America and Europe was a key factor in this improvement. Prising noted, "we continue to see gradual broad-based signs of stabilization," with strong momentum in Latin America and APME, while Europe and North America remained below historical peaks yet stable.
* Prising referenced the ManpowerGroup Employment Outlook Survey, which found "45% of employers planning to maintain current workforce levels, the highest since early 2022." He also stated that Manpower, the largest brand, showed revenue growth in diverse markets, and Experis began to see "early signs of stabilization in professional and IT hiring." The company also made progress in modernizing the Experis offering and integrating PowerSuite AI tools.
* Prising added, "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." He pointed to improved win rates and new enterprise programs in sectors such as financial services and life sciences.
* CFO John McGinnis stated, "U.S. dollar reported revenues in the third quarter were impacted by foreign currency translation. And after adjusting for currency impacts, came in at the midpoint of our constant currency guidance range." He explained that system-wide revenue was $4.9 billion and reported EBITDA for the quarter was $74 million, with adjusted EBITDA at $96 million. McGinnis noted, "adjusted EBITDA margin was 2.1%."

OUTLOOK

* Prising said the company is monitoring "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."
* McGinnis provided guidance for Q4 2025: "we are forecasting earnings per share for the fourth quarter to be in the range of $0.78 to $0.88." The revenue guidance range is "between a 2% decrease and a 2% increase and at the midpoint is a flat revenue trend." The guidance includes a favorable foreign currency impact of $0.08 per share and projects EBITDA margin to be flat at the midpoint compared to the prior year.

FINANCIAL RESULTS

* Prising reported "revenue was $4.6 billion, down 2% year-over-year in constant currency. System-wide revenue...was $4.9 billion." Reported EBITDA was $74 million, adjusted to $96 million excluding restructuring costs.
* McGinnis said, "earnings per diluted share was $0.38 on a reported basis, while earnings per diluted share was $0.83 on an adjusted basis. Adjusted earnings per share decreased 39% year-over-year in constant currency."
* Gross profit margin for the quarter was 16.6%. McGinnis detailed, "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."
* The Manpower brand grew 3% in organic constant currency, Experis declined 7%, and Talent Solutions declined 8% year-over-year. In the Americas, revenue increased 6% year-over-year in constant currency. Southern Europe saw a 1% decrease, Northern Europe a 6% decline, and APME an 8% increase. Free cash flow was $45 million for the quarter.

Q&A

* Andrew Steinerman, JPMorgan: Asked about early-cycle pickup in staffing volumes and gross margin dynamics. Prising replied, "it's like a frozen labor market. There's very little hiring going on, and there's very little workforce reductions going on...we're starting to see a distinct stabilization and growth in Manpower." McGinnis confirmed that gross margin pressure is "primarily mix shift towards enterprise clients."
* Kartik Mehta, Northcoast Research: Inquired about volatility in major markets and gross margin drivers. McGinnis explained, "France...saw improvement in the trend during the course of the third quarter...Italy...saw an improving trend." On gross margin, he said enterprise mix "is the main driver of what's happening on the staffing side."
* John Ronan Kennedy, Barclays: Asked about demand indicators and AI implementation. Prising indicated stabilization is strongest in Europe and the U.S., with AI "now driving measurable gains with approximately 30% of new client revenue derived from AI rated probability."
* Mark Marcon, Robert W. Baird: Questioned gross margin in key markets and ability to stimulate convenience market. Prising replied, "business mix shift being the main driver of the staffing margin, not any price competition."
* Trevor Romeo, William Blair: Asked about France's business tax and blue-collar vs. white-collar staffing. McGinnis called it "too early to tell" on business tax. Prising tied Experis softness to client investment in AI over traditional IT.

SENTIMENT ANALYSIS

* Analysts exhibited a neutral to slightly negative tone, pressing on margin pressure, market volatility, and the impact of political and economic uncertainty, but responded positively to stabilization and AI-driven progress.
* Management's tone during prepared remarks was cautiously optimistic, emphasizing stabilization, signs of growth, and strategic progress. In Q&A, responses were measured, with confidence expressed in operational improvements and technology investments, but some defensiveness when questioned about margin and market risks ("As I said before..." and "we believe...").
* Compared to the previous quarter, both analysts and management showed slightly more confidence due to early signs of stabilization and growth, but concerns about macroeconomic uncertainty and margin persisted.

QUARTER-OVER-QUARTER COMPARISON

* Guidance for Q4 EPS was raised to $0.78–$0.88 compared to the Q3 guidance range of $0.77–$0.87 in the previous quarter, with revenue guidance shifting from a possible 4% decrease to a range of -2% to +2%.
* Management highlighted crossing back to organic constant currency revenue growth after 11 quarters of decline, a notable shift from the prior focus on stabilization.
* Margin pressures intensified due to enterprise client mix, while AI impact and operational efficiency initiatives gained prominence.
* Analysts maintained focus on margin, market volatility, and macro trends, but also probed deeper into AI-driven growth and digital transformation.
* Management's confidence in technology investments and signs of stabilization increased relative to the previous quarter.

RISKS AND CONCERNS

* Management cited ongoing macroeconomic and geopolitical uncertainty, particularly in Europe and North America, as key risks.
* Margin pressure from enterprise client mix and softer permanent recruitment was highlighted.
* Analysts flagged volatility in key markets, political uncertainty in France, and the possibility of continued business tax surcharges.
* Management is mitigating risks through cost containment, organizational simplification, and accelerated technology and AI initiatives.

FINAL TAKEAWAY

ManpowerGroup leadership presented a cautiously optimistic outlook, citing a return to organic constant currency revenue growth, ongoing stabilization in North America and Europe, and early measurable impact from AI investments. Despite ongoing margin pressures and macroeconomic uncertainties, the company is prioritizing operational efficiency, digital transformation, and targeted growth initiatives. Guidance for Q4 2025 EPS was set at $0.78–$0.88, with revenue expected to stabilize or modestly increase, as management aims to leverage its AI-enabled platform for future margin expansion and market share gains.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/man/earnings/transcripts]

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