Advantage Solutions (ADV) Canaccord Genuity’s 45th Annual Growth Conference summary

Business overview and strategy

• Provides sales, merchandising, and experiential marketing services to CPG and grocery retail sectors, acting as a key intermediary between manufacturers and retailers.

• Underwent a strategic refocus on core markets and divested non-core businesses, unifying into an interconnected service platform.

• Experiential marketing, especially in-store sampling and brand activation, is a major growth engine, driven by post-COVID innovation and private label expansion.

• Partnerships with emerging brands and data providers like Instacart enhance service offerings and scalability.

• Actively explores new product extensions and market expansion, especially in episodic in-store tasks and merchandising.

Operational transformation and technology

• Invested heavily in technology, consolidating shared services, upgrading ERP systems, and implementing Workday by 2026.

• Built an industry-leading data lake, leveraging AI for labor scheduling, assortment optimization, and improved retention.

• AI-driven scheduling and task optimization have increased workforce retention and productivity, reducing talent acquisition costs.

• Retired about 25% of legacy systems, reducing IT maintenance costs and improving efficiency.

• Ongoing tech investments are expected to lower CapEx and IT expenses beyond 2026.

Financial performance and outlook

• Achieved sequential improvement in Q2 after a challenging Q1, with high execution rates and improved labor staffing.

• CapEx for the year is lower than expected due to AI efficiencies; transformation expenses are declining and will be halved year-over-year.

• Cash flow is expected to improve as transformation investments trail off, with CapEx returning to near-historic levels.

• ERP implementation temporarily increased DSOs, but improvements are expected in the second half and into 2026.

• Confident in meeting guidance, with a strong pipeline and positive cash generation outlook for the second half.