What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-03-07 compared with 2024-03-01 · 715 added, 692 removed, 986 unchanged (59% of the section changed)

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Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive (Loss) Income

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Stockholders’ Equity

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We have audited the accompanying consolidated balance sheets of Advantage Solutions Inc.

and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive (loss) income, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, of stockholders’ equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the "consolidated financial statements").

We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Annual Goodwill Impairment Assessments – sales and marketing reporting units

As described in Notes 1 and 3 to the consolidated financial statements, the Company’s goodwill balance was $855.4 million as of December 31, 2023, which is related to two reporting units, sales and marketing.

Management tests goodwill for impairment at the beginning of the fourth quarter and whenever events or changes in circumstances indicate that the carrying value of a reporting unit may exceed its fair value.

Interim and Annual Goodwill Impairment Assessments – Certain Reporting Units

As described in Notes 1 and 3 to the consolidated financial statements, the Company’s goodwill balance was $477.0 million as of December 31, 2024, the majority of which related to the Branded Agencies, Experiential Services, Branded Services, and Merchandising reporting units.

Management tests its goodwill for impairment at the beginning of the fourth quarter of a given fiscal year and whenever events or changes in circumstances indicate that the carrying value of a reporting unit may exceed its fair value.

When it is determined that a quantitative impairment test should be performed, if the fair value of the reporting unit is less than its carrying amount, goodwill is impaired and the excess of the reporting unit’s carrying value over the fair value is recognized as an impairment loss;

Management utilizes a combination of income and market approaches to estimate the fair value of the Company’s reporting units.

The income approach utilizes estimates of discounted cash flows of the reporting units, which requires assumptions for the reporting units’ revenue growth rates, EBITDA margins, terminal growth rate, discount rate, and incremental net working capital, all of which require significant management judgment.

The principal considerations for our determination that performing procedures relating to the annual goodwill impairment assessments of the sales and marketing reporting units is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the sales and marketing reporting units;

however, the loss recognized would not exceed the total amount of goodwill allocated to that reporting unit.

Management utilizes a combination of income and market approaches to estimate the fair value of its reporting units.

The income approach utilizes estimates of discounted cash flows of the reporting units, which requires assumptions for the reporting units' revenue growth rates, earnings before interest, taxes, depreciation, and amortization (EBITDA) margins, terminal growth rates, capital cost expenditures as a percentage of revenue, discount rates, and incremental net working capital, all of which require significant management judgment.

The market approach applies market multiples derived from the historical earnings data of selected guideline publicly-traded companies to the Company’s reporting units’ businesses and acquisition premiums of similar businesses involved in recent merger and acquisition transactions, which requires significant management judgment.

Effective January 1, 2024, the Company revised its reportable segments and performed an interim impairment assessment for its five reporting units’ goodwill, which did not result in an impairment charge.

During the second quarter of fiscal year 2024, management determined a triggering event occurred and an impairment assessment was warranted for the Branded Agencies reporting unit goodwill, resulting in a goodwill impairment charge of $99.7 million.

During the fourth quarter of fiscal year 2024, management determined a triggering event occurred and an impairment assessment was warranted for the Branded Services reporting unit goodwill, resulting in a goodwill impairment charge of $133.5 million.

The principal considerations for our determination that performing procedures relating to the interim goodwill impairment assessments for the Branded Agencies, Experiential Services, and Branded Services reporting units, and the annual goodwill impairment assessments for the Branded Services and Merchandising reporting units is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the reporting units;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, EBITDA margins, terminal growth rates, and discount rates used in the income approach and market multiples and acquisition premium used in the market approach, as applicable to the reporting unit;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessments, including controls over the valuation of the sales and marketing reporting units.

These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the sales and marketing reporting units;

(ii) evaluating the appropriateness of the income and market valuation approaches used by management, including utilizing a combination of the approaches to develop the fair value estimate of the sales and marketing reporting units;

(iii) testing the completeness and accuracy of underlying data used in the income and market valuation approaches;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, EBITDA margins, discount rate, and market multiples.

Evaluating management’s assumptions related to revenue growth rates and EBITDA margins involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the sales and marketing reporting units;

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessments, including controls over the valuation of the Branded Agencies, Experiential Services, Branded Services, and Merchandising reporting units.

These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the reporting units;

(ii) evaluating the appropriateness of the income and market approaches used by management;

(iii) testing the completeness and accuracy of underlying data used in the approaches;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, EBITDA margins, terminal growth rates, and discount rates used in the income approach and market multiples and acquisition premium used in the market approach, as applicable to the reporting unit.

(ii) the consistency with external market and industry data;

and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the income and market valuation approaches, including utilizing a combination of the approaches to develop the fair value estimate of the sales and marketing reporting units and (ii) the reasonableness of the discount rate and market multiples assumptions.

Annual and Interim Indefinite-Lived Intangible Assets Impairment Assessments – sales and marketing trade names

As described in Notes 1 and 3 to the consolidated financial statements, the Company’s indefinite-lived intangible assets balance was $651.5 million as of December 31, 2023, which is related to sales and marketing trade names.

Intangible assets with indefinite useful lives are not amortized but tested annually, at the beginning of the fourth quarter, for impairment or more often if evidence exists that triggering events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable.

Management tests the Company’s indefinite-lived intangible assets for impairment using a relief from royalty method by comparing the estimated fair values of the indefinite-lived intangible assets with the carrying values.

The estimates used in the determination of fair value are subjective in nature and involve the use of significant assumptions.

These estimates and assumptions include revenue growth rates, terminal growth rate, discount rates, and royalty rate, all of which require significant management judgment.

During the fourth quarter of 2023, management determined a triggering event occurred and an impairment assessment was warranted for the sales indefinite-lived trade name due to the deconsolidation of the Company’s European joint venture and the planned divestitures of a collection of foodservice businesses, which was determined to be held for sale.

Additionally, during the fourth quarter of 2023, management

determined a triggering event occurred and an impairment assessment was warranted for the marketing indefinite-lived trade name due to the planned divestitures of a collection of foodservice businesses.

As a result, the Company recognized non-cash intangible asset impairment charges of $43.5 million related to its indefinite-lived sales trade name.

The principal considerations for our determination that performing procedures relating to the annual and interim indefinite-lived intangible assets impairment assessments of the sales and marketing trade names is a critical audit matter are (i) the significant judgment by management when developing the fair value estimates of the sales and marketing trade names;

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s income and market approaches and (ii) the reasonableness of the terminal growth rates, discount rates, market multiples, and acquisition premium assumptions, as applicable to the reporting unit.

Interim and Annual Indefinite-Lived Intangible Asset Impairment Assessments

As described in Notes 1 and 3 to the consolidated financial statements, the Company’s indefinite-lived intangible asset balance was $609.5 million as of December 31, 2024, which relates to the Advantage trade name.

Intangible assets with indefinite useful lives are not amortized but tested annually, at the beginning of the fourth quarter, for impairment or more often if events occur or circumstances change that would create a triggering event.

Management tests its indefinite-lived intangible asset for impairment using a relief from royalty method by comparing the estimated fair value of the indefinite-lived intangible asset with the carrying value.

The estimates used in the determination of fair value involve the use of significant assumptions, including revenue growth rates, terminal growth rate, discount rate, and royalty rate, all of which require significant management judgment.

During the fourth quarter of fiscal year 2024, management determined a triggering event occurred and an impairment assessment was warranted, resulting in an intangible asset impairment charge of $42.0 million.

The principal considerations for our determination that performing procedures relating to the interim and annual indefinite-lived intangible asset impairment assessments is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the indefinite-lived intangible asset;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, discount rate, and royalty rate for the interim assessment, and discount rate and royalty rate for the annual assessment;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to management’s indefinite-lived intangible assets impairment assessments, including controls over the valuation of the sales and marketing trade names.

These procedures also included, among others (i) testing management’s process for developing the fair value estimates of the sales and marketing trade names;

These procedures included testing the effectiveness of controls relating to management’s indefinite-lived intangible asset impairment assessments.

These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the indefinite-lived intangible asset;

(ii) evaluating the appropriateness of the relief from royalty method used by management;

(iii) testing the completeness and accuracy of underlying data used in the relief from royalty method;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, discount rates, and royalty rate.

Evaluating management’s assumption related to revenue growth rates involved evaluating whether the assumption used by management was reasonable considering (i) the current and past performance of the sales and marketing brands;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, discount rates, and royalty rates.

Evaluating management’s assumptions related to revenue growth rates involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the brand;

(ii) the consistency with external market and industry data;

and (iii) whether the assumption was consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the relief from royalty method and (ii) the reasonableness of the discount rates and royalty rate assumptions.

and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the Company’s relief from royalty method and (ii) the reasonableness of the discount rate and royalty rate assumptions.

/s/ PricewaterhouseCoopers LLP

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Restricted cash

Accounts receivable, net of allowance for expected credit losses of

$ 34,807 and $ 22,752 , respectively

Accounts receivable, net of allowance for expected credit losses of $ 13,047 and $ 29,294 , respectively

Prepaid expenses and other current assets

Current assets of discontinued operations

Total current assets

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Investments in unconsolidated affiliates

Other assets of discontinued operations

LIABILITIES AND STOCKHOLDERS' EQUITY

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Deferred revenues

Current liabilities of discontinued operations

Total current liabilities

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Deferred income tax liabilities

Warrant liability

Other long-term liabilities

Other liabilities of discontinued operations

Total liabilities

Commitments and contingencies (Note 18)

Redeemable noncontrolling interest

Equity attributable to stockholders of Advantage Solutions Inc.

Preferred stock, no par value, 10,000,000 shares authorized;

and outstanding as of December 31, 2023 and 2022, respectively

none issued and outstanding as of December 31, 2024 and 2023, respectively

Common stock, $ 0.0001 par value, 3,290,000,000 shares authorized;

322,235,261 and 319,690,300 shares issued and outstanding as of

December 31, 2023 and 2022, respectively

320,773,096 and 322,235,261 shares issued and outstanding as of December 31, 2024 and 2023, respectively

Additional paid in capital

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Treasury stock, at cost;

3,600,075 and 1,610,014 shares as of

December 31, 2023 and 2022, respectively

12,400,075 and 3,600,075 shares as of December 31, 2024 and 2023, respectively

Total equity attributable to stockholders of Advantage Solutions Inc.

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Total stockholders' equity

Total liabilities, redeemable noncontrolling interest, and

stockholders’ equity

Total liabilities and stockholders' equity

See Notes to the Consolidated Financial Statements.

ADVANTAGE SOLUTIONS INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Year Ended December 31,

(in thousands, except share and per share data)

Cost of revenues (exclusive of depreciation and

amortization shown separately below)

Cost of revenues (exclusive of depreciation and amortization shown separately below)

Selling, general, and administrative expenses

Impairment of goodwill and indefinite-lived assets

Depreciation and amortization

Impairment of goodwill and indefinite-lived asset

Gain on deconsolidation of subsidiaries

Loss on divestitures

Income from unconsolidated investments

Depreciation and amortization

Income from equity method investments

Total operating expenses

Operating income (loss)

Operating (loss) income from continuing operations

Other (income) expenses:

Change in fair value of warrant liability

Change in fair value of warrant liabilities

Interest expense, net

Total other expenses

(Loss) income before income taxes

(Benefit from) provision for income taxes

Net (loss) income

net income attributable to

noncontrolling interest

Net (loss) income attributable to stockholders of

Advantage Solutions Inc.

Other comprehensive (loss) income, net of tax:

Foreign currency translation adjustments

Total comprehensive (loss) income attributable to

stockholders of Advantage Solutions Inc.

Net (loss) income per common share:

Total other expenses, net

Loss from continuing operations before income taxes

Benefit from income taxes from continuing operations

Net loss from continuing operations

Net income from discontinued operations, net of tax

net income from continuing operations attributable to noncontrolling interest, net of tax

net income (loss) from discontinued operations attributable to noncontrolling interest, net of tax

Net loss attributable to stockholders of Advantage Solutions Inc.

Net loss per common share:

Basic loss per common share from continuing operations attributable to stockholders of Advantage Solutions Inc.

Basic earnings per common share from discontinued operations attributable to stockholders of Advantage Solutions Inc.

Diluted net loss per share:

Diluted loss per common share from continuing operations attributable to stockholders of Advantage Solutions Inc.

Diluted earnings per common share from discontinued operations attributable to stockholders of Advantage Solutions Inc.

Weighted-average number of common shares:

Net loss attributable to stockholders of Advantage Solutions Inc.

Other comprehensive income (loss), net of tax:

Foreign currency translation adjustments

Total comprehensive loss attributable to stockholders of Advantage Solutions Inc.

See Notes to the Consolidated Financial Statements.

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Solutions Inc.

Nonredeemable

Treasury Stock

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Balance at January 1, 2022

Comprehensive income (loss)

Foreign currency translation adjustments

Total comprehensive income (loss)

Interest on loans to Karman Topco L.P.

Redemption of noncontrolling interest

Equity-based compensation of

Karman Topco L.P.

Purchase of treasury stock

( 1,610,014 )

Shares issued under 2020 Incentive

Shares issued under 2020 Employee

Stock Purchase Plan

Shares issued upon exercise of warrants

Stock-based compensation expense

Balance at December 31, 2021

Comprehensive income (loss)

Comprehensive loss

Net (loss) income

( 1,380,502 )

( 1,377,507 )

Foreign currency translation adjustments

Total comprehensive loss

( 1,394,872 )

( 1,396,403 )

Interest on loans to Karman Topco L.P.

Increase in noncontrolling interest

Equity-based compensation of

Karman Topco L.P.

Shares issued under 2020 Employee

Stock Purchase Plan

Shares issued under 2020 Incentive

Equity-based compensation of Karman Topco L.P.

Shares issued under 2020 Employee Stock Purchase Plan

Shares issued under 2020 Incentive Award Plan

Stock-based compensation expense

Balance at December 31, 2022

( 2,247,109 )

Comprehensive income (loss)

Comprehensive (loss) income

Net (loss) income

Foreign currency translation adjustments

Total comprehensive loss

Total comprehensive (loss) income

Interest on loans to Karman Topco L.P.

Purchase of treasury stock

( 4,164,010 )

Retirement of shares

( 2,173,949 )

Equity-based compensation of

Karman Topco L.P.

Shares issued under 2020 Employee

Stock Purchase Plan

Shares issued under 2020 Incentive

Award Plan and tax related to net

share settlement

Equity-based compensation of Karman Topco L.P.

Shares issued under 2020 Employee Stock Purchase Plan

Shares issued under 2020 Incentive Award Plan and tax related to net share settlement

Stock-based compensation expense

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Balance at December 31, 2023

( 2,314,650 )

Comprehensive (loss) income

Net (loss) income

Foreign currency translation adjustments

Total comprehensive (loss) income

Interest on loans to Karman Topco L.P.

Purchase of treasury stock

Equity-based compensation of Karman Topco L.P.

Shares issued under 2020 Employee Stock Purchase Plan

Payments for taxes related to net share settlement under 2020 Incentive Award Plan

Shares issued under 2020 Incentive Award Plan

Sale of a business

Stock-based compensation expense

Balance at December 31, 2024

See Notes to Consolidated Financial Statements.

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CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss) income

Adjustments to reconcile net (loss) income to net cash provided by

operating activities

Noncash interest income

Net loss from continuing operations

Adjustments to reconcile net loss to net cash provided by operating activities

Non-cash interest expense (income)

Deferred financing fees related to repricing of long-term debt

Amortization of deferred financing fees

Impairment of goodwill and indefinite-lived assets

Extinguishment costs related to repayment and repricing of long-term debt

Impairment of goodwill and indefinite-lived asset

Depreciation and amortization

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Stock-based compensation

Equity in earnings of unconsolidated affiliates

Distribution received from unconsolidated affiliates

Loss on disposal of property and equipment

Loss on divestitures

Income from equity method investments

Distribution received from equity method investments

Gain on deconsolidation of subsidiaries

Gain on repurchases from the Term Loan Facility and Senior Secured Notes debt

Changes in operating assets and liabilities, net of effects from

divestitures and purchases of businesses:

Gain on repurchases of Senior Secured Notes and Term Loan Facility debt

Loss on disposal of property and equipment

Loss on divestiture

Changes in operating assets and liabilities, net of effects from divestitures:

Accounts receivable, net

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Purchase of businesses, net of cash acquired

Purchase of investment in unconsolidated affiliates

Purchase of investments in unconsolidated affiliates

Purchase of property and equipment

Proceeds from divestitures

Deconsolidation of subsidiaries cash and

cash equivalents and restricted cash, net of proceeds

Proceeds from sale of investment in unconsolidated affiliates

Net cash used in investing activities

Purchase of capitalized software

Proceeds from divestitures, net of cash

Deconsolidation of subsidiaries cash and cash equivalents and restricted cash, net of proceeds

Proceeds from sale of investments in unconsolidated affiliates

Net cash provided by (used in) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

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Payments on lines of credit

Proceeds from government loans for COVID-19 relief

Principal payments on long-term debt

Repurchases of Term Loan Facility and Senior Secured Notes debt

Repurchases of Senior Secured Notes and Term Loan Facility debt

Debt issuance costs

Proceeds from issuance of common stock

Payments for taxes related to net share settlement

under 2020 Incentive Award Plan

Payments for taxes related to net share settlement under 2020 Incentive Award Plan

Contingent consideration payments

Holdback payments

Purchase of treasury stock

Financing fees paid

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Redemption of noncontrolling interest

Purchase of treasury stock

Net cash used in financing activities

Net effect of foreign currency changes on cash

Net effect of foreign currency changes on cash, cash equivalents and restricted cash

Net change in cash, cash equivalents and restricted cash

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Cash, cash equivalents and restricted cash, end of period

SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES

Exchange of ownership of SPV for fair value of GSH

Non-cash proceeds from divestitures

Purchase of property and equipment recorded in accounts payable and accrued expenses

SUPPLEMENTAL CASH FLOW INFORMATION

Cash payments for interest

Cash received from interest rate derivatives

Cash payments for income taxes, net

See Notes to the Consolidated Financial Statements.

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Organization and Significant Accounting Policies

On July 25, 2014, Advantage Solutions Inc.

(“ASI Intermediate”) acquired Advantage Sales & Marketing Inc.

(the “2014 Topco Acquisition”).

As a result of the 2014 Topco Acquisition, Advantage Sales & Marketing Inc.

became a wholly owned indirect subsidiary of ASI Intermediate and Karman Topco L.P.

(“Topco”) became the sole stockholder of ASI Intermediate.

The units of Topco are held by equity funds affiliated with or advised by CVC Capital Partners, Leonard Green & Partners, Juggernaut Capital Partners, Centerview Capital, L.P., and Bain Capital, as well as by current and former members of the Company’s management.

On September 7, 2020, ASI Intermediate entered into an agreement and plan of merger (as amended, modified, supplemented or waived, the “Merger Agreement”), with Conyers Park II Acquisition Corp., a Delaware corporation, now known as Advantage Solutions Inc.

(“Conyers Park”), CP II Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Conyers Park (“Merger Sub”), and Topco.

On October 28, 2020, Conyers Park consummated the merger pursuant to the Merger Agreement, by and among Merger Sub, ASI Intermediate, and Topco.

Pursuant to the Merger Agreement, Merger Sub was merged with and into Legacy Advantage with Legacy Advantage being the surviving company in the merger as a wholly owned subsidiary of Conyers Park (the “Merger”).

On October 28, 2020, Conyers Park changed its name to Advantage Solutions Inc.

(the “Company” or “Advantage”) and ASI Intermediate changed its name to ASI Intermediate Corp.

In connection with the entry into the Merger Agreement, Conyers Park also entered into subscription agreements with certain investors (the “PIPE Investors”), pursuant to which, among other things, Conyers Park agreed to issue and sell in a private placement shares of Conyers Park Class A common stock for a purchase price of $ 10.00 per share.

The PIPE Investors, other than the equity holders of Topco that participated in the PIPE Investment (the “ Advantage Sponsors”) and their affiliates, agreed to purchase an aggregate of 51,130,000 shares of Conyers Park Class A common stock.

Certain of the Advantage Sponsors or their affiliates agreed to purchase an aggregate of 34,410,000 shares of Conyers Park Class A common stock, and, at their sole discretion.

The shares of Conyers Park Class A common stock purchased by the PIPE Investors in the private placement are referred to as the “PIPE Shares” and the aggregate purchase price paid for the PIPE Shares is referred to as the “PIPE Investment.” On October 28, 2020, the PIPE Investment was consummated, and 85,540,000 shares of Class A common stock were issued for aggregate gross proceeds of $ 855.4 million.

The Company is headquartered in Irvine, California and is a business solutions provider to consumer goods manufacturers and retailers.

On July 25, 2014, Karman Topco L.P.

(“Topco”) completed the acquisition (the “2014 Topco Acquisition”) of Advantage Sales & Marketing Inc., which became a wholly owned indirect subsidiary of Topco.

The equity units of Topco are held by equity funds affiliated with or advised by CVC Capital Partners, Leonard Green & Partners, Juggernaut Capital Partners, Centerview Capital, L.P., and Bain Capital.

On September 7, 2020, Topco and one of its subsidiaries entered into an agreement and plan of merger (as amended, modified, supplemented or waived, the “Merger Agreement”), with Conyers Park II Acquisition Corp., a Delaware corporation, now known as Advantage Solutions Inc.

(“Conyers Park”), CP II Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Conyers Park.

On October 28, 2020, Conyers Park consummated the merger pursuant to the Merger Agreement, and became a majority-owned subsidiary of Topco and changed its name to Advantage Solutions Inc.

(the “Company” or “Advantage”).

The Company is headquartered in Clayton, Missouri, in the St.

Louis-metropolitan area, and is a business solutions provider to consumer goods companies and retailers.

The Company’s common stock and public warrants (as further described in Note 13 — Equity ) are listed on the Nasdaq Global Select Market under the symbol “ADV” and warrants to purchase the common stock at an exercise price of $ 11.50 per share are listed on the Nasdaq Global Select Market under the symbol “ADVWW”.

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The financial information set forth herein reflects:

(a) the consolidated statements of operations and comprehensive (loss) income, stockholders’ equity, and cash flows for the years ended December 31, 2023, 2022, and 2021 and (b) the consolidated balance sheets as of December 31, 2023 and 2022.

(a) the Consolidated Statements of Operations and Comprehensive Loss, Consolidated Statements of Stockholders’ Equity, and Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023, and 2022 and (b) the Consolidated Balance Sheets as of December 31, 2024 and 2023.

The consolidated financial statements for the years ended December 31, 2024, 2023 , and 2022 reflect Topco’s basis in the assets and liabilities of the Company, as a result of the 2014 Topco Acquisition.

The Company’s share in the earnings or losses for its investments in affiliates is reflected in “Investments in unconsolidated affiliates” and “Income from unconsolidated investments” in the Consolidated Balance Sheets and Consolidated Statements of Operations and Comprehensive (Loss) Income, respectively.

The Company’s share in the earnings or losses for its investments in affiliates is reflected in “Investments in unconsolidated affiliates” and “Income from equity method investments” in the Consolidated Balance Sheets and Consolidated Statements of Operations and Comprehensive Loss, respectively.

All intercompany balances and transactions have been eliminated upon consolidation.

Reclassifications of certain immaterial prior period amounts have been made to conform to the current period presentation that were combined in previous years.

On November 30, 2023 the Company reduced its equity interest in Advantage Smollan Limited ("ASL"), its European joint venture, from a majority interest of under 60 % to a minority interest of 49.6 % in exchange for $ 1.0 million in cash.

Discontinued Operations

The Company presents discontinued operations when there is a disposal of a component or a group of components that represents a strategic shift that will have a major effect on operations and financial results.

The results of discontinued operations are reported in net income (loss) from discontinued operations in the consolidated statements of operations for all periods presented, commencing in the period in which the business is either disposed of or is classified as held for sale, including any gain or loss recognized on closing or adjustment of the carrying amount to fair value less costs to sell.

Assets and liabilities related to a business classified as held for sale or meets the criteria for discontinued operations are segregated in the consolidated balance sheets for the current and prior periods presented.

Cash flows for continuing and discontinued operations are segregated in the consolidated statements of cash flows for the current and prior periods.

When proceeds are not utilized to paydown long-term debt, the assets and liabilities associated with discontinued operations in the current period balance sheet are classified as current.

Certain prior period balances related to the Company's reportable segments and discontinued operations have been reclassified to conform to the current presentation in the consolidated financial statements and accompanying notes.

The notes to the consolidated financial statements are presented on a continuing operations basis unless otherwise noted.

Refer to Note 17— Operating Segments and Geographic Information for additional information on the Company’s reportable segments.

Refer to Note 2— Discontinued Operations, Deconsolidation of European Joint Venture, Divestitures and Acquisitions for additional information on the Company’s discontinued operations.

Change in Reportable Segments

Effective January 1, 2024, Advantage Solutions Inc.

revised its reportable segments to align with the Company's business strategy, and the manner in which the Chief Executive Officer, the Company's chief operating decision maker (“CODM”), assesses performance and makes decisions regarding the allocation of resources for the Company.

The Company’s revised operating and reportable segments consist of Branded Services, Experiential Services, and Retailer Services.

This change had no impact on the Company’s Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive Loss, Consolidated Statements of Stockholders' Equity and Consolidated Statements of Cash Flows.

Prior period segment results have been reclassified to reflect the Company’s new reportable segments on a continuing operations basis.

When evaluating the Company’s financial performance, the CODM regularly reviews revenues, compensation and benefits, reimbursable expenses and other segment items.

Refer to Note 17— Operating Segments and Geographic Information for additional information on the Company’s reportable segments.

Deconsolidation of European Joint Venture

On November 30, 2023 the Company reduced its equity interest in Advantage Smollan Limited (“ASL” ), its European joint venture, from a majority interest to a minority interest of 49.6 %.

The Company also removed certain participating rights with ASL related to capital allocation and certain of the Company’s decision making rights, resulting in a loss of control.

Therefore, in accordance with Accounting Standards Codification 810 ("ASC 810"), Consolidation, ASL

was deconsolidated from the Company’s consolidated financial statements resulting in the recognition of a $ 58.9 million gain for the year ended December 31, 2023.

Effective December 1, 2023, the Company’s investment in ASL is accounted for under the equity method of accounting, with the investment reported in “ Investments in unconsolidated affiliates” on the Consolidated Balance Sheets and equity income (loss) reported in “Income from unconsolidated investments” on the Consolidated Statements of Operations and Comprehensive (Loss) Income.

Reportable Segments

The Company provides services across two segments — sales and marketing.

During the fourth quarter of 2023, certain organizational changes were announced that will impact the Company’s future internal reporting.

As a result of these changes, the Company expects to have three reportable segments.

The Company expects that any operational changes impacting the reportable segments will be effective in the first quarter of 2024.

Therefore, in accordance with Accounting Standards Codification 810 ( “ASC 810”), Consolidation , ASL was deconsolidated from the Company’s consolidated financial statements resulting in the recognition of a $ 58.9 million gain for the year ended December 31, 2023.

Effective December 1, 2023, the Company’s investment in ASL is accounted for under the equity method of accounting, with the investment reported in “Investments in unconsolidated affiliates” on the Consolidated Balance Sheets and equity income reported in “Income from equity method investments” on the Consolidated Statements of Operations and Comprehensive Loss.

Reclassifications

The Company has reclassified certain amounts on the consolidated balance sheets, consolidated statements of operations and comprehensive loss and consolidated statements of cash flows and in Note 17— Operating Segments and Geographic Information to conform to current period presentation.

Use of Estimates

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Actual results could differ from such estimates.

The most significant estimates include revenues, workers’ compensation and employee medical claim reserves, fair value of contingent consideration, leases, income taxes, equity-based compensation, derivative instruments and fair value considerations in applying purchase accounting and assessing goodwill and other asset impairments.

The Company’s estimates primarily include revenues, workers’ compensation and employee medical claim reserves, fair value of contingent consideration, leases, income taxes, derivative instruments and fair value considerations in applying purchase accounting and assessing goodwill and other asset impairments.

Foreign Currency

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Revenues and expenses for these subsidiaries are translated using rates that approximate those in effect during the period.

Gains and losses from these translations are included in “Accumulated other comprehensive (loss) income” in the Consolidated Statements of Stockholders’ Equity.

Gains and losses from these translations are included in “Accumulated other comprehensive loss” in the Consolidated Statements of Stockholders’ Equity.

Transactions in foreign currencies other than the entities’ functional currency are converted using the rate of exchange at the date of transaction.

The gains or losses arising from the revaluation of foreign currency transactions to functional currency are included in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

Unrealized foreign currency exchange gains and losses on certain intercompany transactions that are of a long-term investment nature ( i .

e ., settlement is not planned or anticipated in the foreseeable future) are also recorded in Accumulated other comprehensive (loss) income in stockholders’ equity.

The Company reports gains and losses from foreign exchange rate changes related to intercompany receivables and payables that are of a long-term investment nature, in “Other comprehensive (loss) income” in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

Unrealized foreign currency exchange gains and losses on certain intercompany transactions that are of a long-term investment nature (i.e., settlement is not planned or anticipated in the foreseeable future) are also recorded in Accumulated other comprehensive loss in stockholders’ equity.

The Company reports gains and losses from foreign exchange rate changes related to intercompany receivables and payables that are of a long-term investment nature, in “Other comprehensive loss” in the Consolidated Statements of Operations and Comprehensive Loss.

These items represented a net loss of $ 0.1 million, a gain of $ 0.1 million, and a gain of $ 7.6 million during the years ended December 31, 2024, 2023 , and 2022, respectively.

Cash and Cash Equivalents

Cash and Cash Equivalents and Restricted Cash

Cash and cash equivalents include cash on hand and highly liquid investments having an original maturity of three months or less.

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Total cash, cash equivalents and restricted cash

The following table provides supplemental disclosure of cash flow information:

Year Ended December 31,

(in thousands)

SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES

Exchange of ownership of Partnership SPV 1 Limited for fair value of GSH

Non-cash proceeds from divestitures

Purchases of property and equipment recorded in accounts payable and accrued expenses

Purchases of capitalized software recorded in accounts payable and accrued expenses

SUPPLEMENTAL CASH FLOW INFORMATION

Gain (loss) on divestitures from discontinued operations

Non-cash consideration for purchases of investments in unconsolidated affiliates

Cash payments for interest

Cash received from interest rate derivatives

Cash payments for income taxes, net

Accounts Receivable and Expected Credit Losses

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The Company uses financial instruments to hedge interest rate and foreign exchange risk.

Derivative instruments, used to hedge interest rates, consist of interest rate swaps and interest rate caps.

Derivative instruments, used to hedge interest rates, consist of interest rate swaps and interest rate collars and caps.

Interest rate swap contracts involve the exchange of floating rate interest payment obligations for fixed interest rate payments without the exchange of the underlying principal amounts.

Interest rate cap contracts limit the floating interest rate exposure to the indicative rate in the agreement.

Interest rate collar and cap contracts limit the floating interest rate exposure to the indicative rate in the agreement.

Derivatives are initially recognized at fair value on the date a contract is entered into and are subsequently re-measured at fair value.

The fair values of derivatives are measured using observable market prices or, where market prices are not available, by using discounted expected future cash flows at prevailing interest and exchange rates.

The Company does not designate these derivatives as hedges for accounting purposes, and as a result, all changes in the fair value of derivatives used to hedge interest rates and foreign exchange risk are recorded in “Interest expense” and in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive (Loss) Income, respectively.

The fair values of

derivatives are measured using observable market prices or, where market prices are not available, by using discounted expected future cash flows at prevailing interest and exchange rates.

The Company does not designate these derivatives as hedges for accounting purposes, and as a result, all changes in the fair value of derivatives used to hedge interest rates and foreign exchange risk are recorded in “Interest expense, net” and in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss, respectively.

Cash flows associated with such derivatives are reported in cash flows from operating activities in the Consolidated Statements of Cash Flows.

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Property and equipment are stated at cost, and the balances are presented net of accumulated depreciation.

Leasehold improvements are amortized on a straight-line basis over the shorter of their respective lease terms or their respective estimated useful lives.

The cost and accumulated depreciation of assets sold or otherwise disposed of are removed from the Consolidated Balance Sheets and the resulting gain or loss is reflected in the “Cost of revenues” and “Selling, general, administrative expenses” within the Consolidated Statements of Operations and Comprehensive Loss, depending on the nature of the assets.

Expenditures for maintenance and repairs are expensed as incurred, whereas expenditures for improvements and replacements are capitalized.

Depreciation expense is calculated using the straight-line method over the estimated useful lives of the assets.

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Computer hardware and other equipment

Internal-Use Software Development Costs

The Company capitalizes certain direct costs associated with the development and purchase of internal-use software within property and equipment.

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Maintenance and training costs are expensed as incurred.

Capitalized costs are amortized on a straight-line basis over the estimated useful lives of the software, generally not exceeding five years .

Capitalized costs are amortized on a straight-line basis over the estimated useful lives of the software, generally not exceeding seven years .

Maintenance and training costs are charged to expense as incurred and included in operating expenses.

The Company evaluates the useful lives of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.

There were no impairments to capitalized internal-use software for the years ended December 31, 2024 and 2023.

Leasehold improvements are amortized on a straight-line basis over the shorter of their respective lease terms or their respective estimated useful lives.

Expenditures for maintenance and repairs are expensed as incurred, whereas expenditures for improvements and replacements are capitalized.

Equity Method Investments

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The Company’s proportionate share of the net income or loss of equity method investments is included in the results of operations and any dividends received reduce the carrying value of the investment.

The excess of the cost of the Company’s investment over its proportionate share of the fair value of the net assets of the investee at the acquisition date is recognized as goodwill and included in the carrying amount of the investment.

Goodwill in the equity method investments is not amortized.

Gains and losses from changes in the Company’s ownership interests are recorded in results of operations until control is achieved.

In instances in which a change in the Company’s ownership interest results in obtaining control, the existing carrying value of the investment is remeasured to the acquisition date fair value and any gain or loss is recognized in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

Distributions received from unconsolidated entities that represent returns on the investor’s investment are reported as cash flows from operating activities in the Company’s Consolidated Statements of Cash Flows.

Distributions received from unconsolidated entities that represent returns on the Company’s investment are reported as cash flows from operating activities in the Company’s Consolidated Statements of Cash Flows.

Cash distributions from unconsolidated entities that represent returns of the Company’s investment are reported as cash flows from investing activities.

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The Company accounts for business combinations using the acquisition method.

Under this method, the purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition.

Under this method, the purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of

To the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets acquired and liabilities assumed, such excess is allocated to goodwill.

Factors giving rise to goodwill generally include assembled workforce, geographic presence, expertise, and synergies that are anticipated as a result of the business combination, including enhanced product and service offerings.

The Company determines the estimated fair values after review and consideration of relevant information, including discounted cash flows, quoted market prices and estimates made by management.

The Company determines the estimated fair values after review and consideration of relevant information, including discounted cash flows, quoted market prices and other estimates made by management.

The Company adjusts the preliminary purchase price allocation, as necessary, during the measurement period of up to one year after the acquisition closing date as the Company obtains more information as to facts and circumstances existing at the acquisition date impacting asset valuations and liabilities assumed.

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Acquisition-related costs are recognized separately from the acquisition and are expensed as incurred.

The Company nets the proceeds on the divestitures of businesses with the carrying amount of the related net assets and liabilities and records a gain or loss in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

The Company nets the proceeds from the divestitures of businesses with the carrying amount of the related net assets and liabilities and records a gain or loss in the Consolidated Statements of Operations and Comprehensive Loss.

Any contingent payments that are potentially due to the Company as a result of these divestitures are recorded when it is probable that a significant reversal of such consideration will not occur, or in the case of a business, when such payments are realizable.

For divestitures of businesses, the Company includes the relative fair value of goodwill associated with the businesses in the determination of the gain or loss on sale.

Held for Sale

Assets and liabilities to be disposed of by sale are classified as “held for sale” if their carrying amounts are expected to be recovered through a sale transaction rather than through continuing use.

The classification occurs when the disposal group is available for immediate sale and the sale is probable.

These criteria are generally met when management has committed to a plan to sell the assets within one year.

Components and businesses that meet accounting requirements to be classified as held for sale are presented as single asset and liability amounts in the Company's financial statements with a valuation allowance, if necessary, to recognize the net carrying amount at the lower of cost or fair value, less costs to sell.

The Company reviews its businesses and assets held for sale each reporting period to determine whether the existing carrying amounts are fully recoverable in comparison to estimated fair values.

When the net realizable value of a disposal group increases during a period, a gain can be recognized to the extent that it does not increase the value of the disposal group beyond its original carrying value when the disposal group was reclassified as held for sale.

Discontinued Operations

The Company classifies a business that has been disposed of or is classified as held for sale as a discontinued operation when the disposal represents a strategic shift that has (or will have) a major effect on the Company’s operations and financial results.

Assets and liabilities of discontinued operations are presented separately in the Consolidated Balance Sheets, and results of discontinued operations are reported as a separate component of net loss in the Consolidated Statements of Operations and Comprehensive Loss.

Goodwill represents the excess of the purchase price over the fair value of the net identifiable tangible and intangible assets acquired in an acquisition.

The Company tests for impairment of goodwill at the reporting unit level.

The Company generally combines components that have similar economic characteristics, nature of services, types of clients, distribution methods and

regulatory environment.

The Company has two reporting units, sales and marketing, which are also the Company’s operating segments.

The Company generally combines components that have similar economic characteristics, nature of services, types of clients, distribution methods and regulatory environment.

The Company has five reporting units, Branded Services, Branded Agencies, Experiential Services, Merchandising and Retailer Agencies.

The Company tests its goodwill for impairment at the beginning of the fourth quarter of a given fiscal year and whenever events or changes in circumstances indicate that the carrying value of a reporting unit may exceed its fair value.

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The Company utilizes a combination of income and market approaches to estimate the fair value of its reporting units.

The income approach utilizes estimates of discounted cash flows of the reporting units, which requires assumptions for the reporting units’ revenue growth rates, earnings before interest, taxes, depreciation, and amortization (“EBITDA”) margins, terminal growth rate, discount rate, and incremental net working capital, all of which require significant management judgment.

The income approach utilizes estimates of discounted cash flows of the reporting units, which requires assumptions for the reporting units’ revenue growth rates, earnings before interest, taxes, depreciation, and amortization (“EBITDA”) margins, terminal growth rates, capital cost expenditures as a percentage of revenue, discount rates, and incremental net working capital, all of which require significant management judgment.

The guideline companies are first screened by industry group and then further narrowed based on the reporting units’ business descriptions, markets served, competitors, EBITDA margins and revenue size.

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The Company based its fair value estimates on assumptions it believes to be reasonable but which are unpredictable and inherently uncertain.

A change in these underlying assumptions would cause a change in the results of the tests and, as such, could cause fair value to be less than the carrying amounts and result in an impairment of goodwill in the future.

A change in these underlying assumptions would cause a change in the results of the tests and,

as such, could cause fair value to be less than the carrying amounts and result in an impairment of goodwill in the future.

Additionally, if actual results are not consistent with the estimates and assumptions or if there are significant changes to the Company’s planned strategy, it may cause fair value to be less than the carrying amounts and result in an impairment of goodwill in the future.

In connection with the Company's annual quantitative impairment test effective as of October 1, 2023, the Company concluded that the goodwill was not impaired as of October 1, 2023.

The fair value of the sales and marketing reporting units exceeded their carrying value by 19.1 % and 6.8 %, re spectively, as of October 1, 2023.

The Company determined that no additional goodwill impairment occurred through December 31, 2023.

In connection with the Company's annual quantitative impairment test effective as of October 1, 2022, the Company’s sales and marketing reporting units were written down to their respective fair values, resulting in zero excess fair value over their carrying values.

The Company recognized $ 1,275.7 million and $ 91.8 million impairment charges in the sales and marketing reporting units, respectively, for the year ended December 31, 2022, which has been reflected in “Impairment of goodwill and indefinite-lived assets” in the Company’s Consolidated Statements of Comprehensive (Loss) Income.

While there was no single determinative event or factor, the consideration of the weight of evidence of several factors that culminated during the fourth quarter of 2022 led the Company to conclude that it was more likely than not that the fair value of the sales and marketing reporting units were below their carrying values.

Effective January 1, 2024, the Company performed an interim impairment assessment for its five reporting units’ goodwill.

E ach of the fair values for the reporting units tested were in excess of its carrying amount.

The fair values of the Branded Agencies and Experiential Services reporting units exceeded their respective carrying values by less than 20 %.

During the second quarter of fiscal year 2024, the Company determined a triggering event occurred and an impairment assessment was warranted for the Branded Agencies reporting unit goodwill due to the pending sale of one of the businesses that comprised a substantial portion of the assets, liabilities and prospective cash flows of the Branded Agencies reporting unit.

As a result of the impairment test performed, the Company recognized a goodwill impairment charge of $ 99.7 million related to the Company's Branded Agencies reporting unit goodwill for the year ended December 31, 2024, which has been reflected in “Impairment of goodwill and indefinite-lived asset” in the Consolidated Statements of Operations and Comprehensive Loss.

As a result of this charge, an immaterial amount of goodwill remains in this reporting unit.

In connection with the Company’s annual quantitative impairment test as of October 1, 2024, the Company concluded that the goodwill was not impaired as of October 1, 2024.

Additionally, no triggering events were identified for the Branded Agencies, Experiential Services, Merchandising and Retailer Agencies reporting units through December 31, 2024.

The fair values of the Branded Services, Branded Agencies and Merchandising reporting units exceeded their respective carrying values by less than 20 %.

During the fourth quarter of fiscal year 2024, the Company identified a triggering event that required an impairment assessment of goodwill for the Branded Services reporting unit.

The triggering event was due to the loss of clients and a reduction in the scope of client services as the Company’s clients implemented internal cost reduction initiatives in response to challenges in the broader markets in which they operate.

As a result of the goodwill impairment test, the Company recognized a goodwill impairment charge of $ 133.5 million related to the Branded Services reporting unit during the year ended December 31, 2024.

This charge is reflected in “Impairment of goodwill and indefinite-lived asset” in the Consolidated Statements of Operations and Comprehensive Loss.

In connection with the Company's annual quantitative impairment test as of October 1, 2023, the Company concluded that the goodwill was not impaired as of October 1, 2023.

The Company determined that no additional goodwill triggering events occurred through December 31, 2023.

In connection with the Company's annual quantitative impairment test as of October 1, 2022, the Company recognized $722.7 million, $308.2 million and $336.6 million in impairment charges in the Branded Services, Experiential Services and Retailer Services segments, respectively, for the year ended December 31, 2022, which has been reflected in “Impairment of goodwill and indefinite-lived asset” in the Company’s Consolidated Statements of Operations and Comprehensive Loss.

These factors included:

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There is no assurance that actual future earnings, cash flows or other assumptions for the reporting units will not significantly decline from these projections.

In connection with the Company's annual quantitative impairment test effective as of October 1, 2021, the Company concluded that the goodwill was not impaired for the year ended December 31, 2021.

The fair value of the sales and marketing reporting units exceeded their carrying value by 23.8 % and 41.6 %, respectively, as of October 1, 2021.

Indefinite Lived Intangible Assets

The Company’s indefinite-lived intangible assets are its sales and marketing trade names.

Intangible assets with indefinite useful lives are not amortized but tested annually, at the beginning of the fourth quarter, for impairment or more often if events occur or

circumstances change that would create a triggering event.

Indefinite Lived Intangible Asset

The Company’s indefinite-lived intangible asset is the Advantage Trade Name.

Prior to the segment change, the Company went to market with the Advantage Trade Name being specifically used and assessed for impairment in the Sales and Marketing businesses.

As a result of the change in the Company's reportable segments effective as of January 1, 2024, the Company determined, based on the change in the planned use of the Advantage Trade Name intangible asset, that the Advantage Trade Name should be considered an entity-wide asset for reporting and impairment testing purposes.

The Company has the option to perform a qualitative assessment of whether it is more likely than not that the indefinite-lived intangible asset’s fair value is less than its carrying value before performing a quantitative impairment test.

The Company tests its indefinite-lived intangible assets for impairment using a relief from royalty method by comparing the estimated fair values of the indefinite-lived intangible assets with the carrying values.

The Company tests its indefinite-lived intangible assets for impairment using a relief from royalty method by comparing the estimated fair value of the indefinite-lived intangible asset with the carrying value.

The estimates used in the determination of fair value are subjective in nature and involve the use of significant assumptions.

These estimates and assumptions include revenue growth rates, terminal growth rate, discount rates and royalty rate, all of which require significant management judgment.

These estimates and assumptions include revenue growth rates,

terminal growth rate, discount rate and royalty rate, all of which require significant management judgment.

The assumptions are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy.

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Actual future results may differ from the estimates.

In connection with the Company’s annual quantitative impairment test effective as of October 1, 2023, the Company concluded that the indefinite-lived intangible assets were not impaired as of October 1, 2023.

The fair value of the indefinite-lived intangible assets related to the sales trade name exceeded its carrying value by 23.2 % as of October 1, 2023.

The fair value of the indefinite-lived intangible asset related to the marketing trade name exceeded its carrying value by 6.9 % as of October 1, 2023.

During the fourth quarter of 2023, the Company determined a triggering event occurred and an impairment assessment was warranted for the sales indefinite-lived trade name due to the deconsolidation of the Company’s European joint venture and the planned divestitures of a collection of foodservice businesses, which was determined to be held for sale.

Additionally, during the fourth quarter of 2023, the Company determined a triggering event occurred and an impairment assessment was warranted for the marketing indefinite-lived trade name due to the planned divestitures of a collection of foodservice businesses.

As a result, the Company recognized a non-cash intangible asset impairment charge of $ 43.5 million related to its indefinite-lived sales trade name during the year ended December 31, 2023, which has been reflected in “Impairment of goodwill and indefinite-lived assets” in the Consolidated Statements of Comprehensive (Loss) Income .

The fair value of the indefinite-lived intangible assets related to sales and marketing trade names exceeded their carrying value by 0.0 % and 17.0 %, respectively, for the year ended December 31, 2023.

In connection with the Company's annual quantitative impairment test effective as of October 1, 2022, the Company concluded the carrying value of the indefinite-lived trade names in the sales and marketing reporting units exceeded their estimated fair values.

As a result, the Company recognized non-cash intangible asset impairment charges of $ 146.0 million and $ 59.0 million related to the Company’s indefinite-lived sales and marketing trade names, respectively, which has been reflected in “Impairment of goodwill and indefinite-lived assets” in the Company’s Consolidated Statements of Comprehensive (Loss) Income.

While there was no single determinative event or factor, the factors that led to the impairment were the same circumstances outlined in the goodwill impairment discussion above.

In connection with the Company's annual quantitative impairment test effective as of October 1, 2021, the Company concluded that the indefinite-lived intangible assets were not impaired.

The fair value of the indefinite-lived intangible assets related to sales and marketing trade names exceeded their carrying value by 65.0 % and 33.3 %, respectively.

As of January 1, 2024, the Company concluded there was a triggering event for an interim impairment assessment due to the change in unit of account of the indefinite-lived intangible asset.

Based on the interim impairment assessment, the estimated fair value exceeded the carrying value by approximately 6 %, thus no impairment was recorded.

In connection with the Company’s annual quantitative impairment test as of October 1, 2024, the Company concluded that the indefinite-lived intangible asset was not impaired.

During the fourth quarter of fiscal year 2024, the Company recognized an intangible asset impairment charge of $42.0 million as a result of the triggering event for the Branded Services reporting unit.

In connection with the Company’s annual quantitative impairment test as of October 1, 2023, the Company concluded that the indefinite-lived intangible asset was not impaired.

During the fourth quarter of 2023, the Company determined a triggering event occurred and an impairment assessment was warranted due to the deconsolidation of the Company’s European joint venture and the planned divestitures of a collection of foodservice businesses, which was determined to be held for sale.

As a result, the Company recognized an intangible asset impairment charge of $ 43.5 million related to the Advantage Trade Name during the year ended December 31, 2023, which has been reflected in “Impairment of goodwill and indefinite-lived asset” in the Consolidated Statements of Operations and Comprehensive Loss.

In connection with the Company's annual quantitative impairment test as of October 1, 2022, the Company concluded the carrying value of the Advantage Trade Name exceeded its estimated fair value.

As a result, the Company recognized an intangible asset impairment charge of $ 205.0 million related to the Company’s indefinite-lived trade name, which has been reflected in “Impairment of goodwill and indefinite-lived asset” in the Company’s Consolidated Statements of Operations and Comprehensive Loss.

While there was no single determinative event or factor, the factors that led to the impairment were the same circumstances outlined in the goodwill fiscal year 2022 impairment discussion above.

Long-Lived Assets

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The discount rate used in any estimate of discounted cash flows would be the rate required for a similar investment of like risk.

No impairment related to the Company’s long-lived assets were recorded during the years ended December 31, 2023, 2022, and 2021.

No impairment related to the Company’s long-lived assets was recorded during the years ended December 31, 2024, 2023 , and 2022.

Contingent Consideration

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If it is determined the contingent consideration arrangements are not compensatory, the fair values of these contingent consideration arrangements are included as part of the purchase price of the acquisitions or divestitures on their respective transaction dates.

divestitures as an asset in “Other Assets” or related to purchases of businesses as a liability in “Other accrued expenses” or “Other long-term liabilities” in the Consolidated Balance Sheets.

For each transaction, the Company estimates the fair value of contingent consideration payments as part of the initial purchase price and records the estimated fair value of contingent consideration related to proceeds from divestitures as an asset in “Other assets” or related to purchases of businesses as a liability in “Other accrued expenses” or “Other long-term liabilities” in the Consolidated Balance Sheets.

The Company reviews and assesses the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could differ materially from these initial estimates.

Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

The portion of the cash settlement up to the acquisition date fair value of the contingent consideration is classified as “Contingent consideration payments” in cash flows from financing activities, and amounts paid in excess of the acquisition date fair value are classified as “Other accrued expenses and other liabilities” in cash flows from operating activities in the Consolidated Statements of Cash Flows.

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As of December 31, 2024, the Company's finance leases were not material.

See Note 8, Leases , for further information regarding the Company’s operating leases.

Refer to Note 9— Leases , for further information regarding the Company’s operating leases.

Self-Insurance Liability

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The Company’s estimated liabilities are not discounted and are based on information provided by third party administrators, combined with management’s judgment regarding a number of assumptions and factors, including the frequency and severity of claims, claims development history, case jurisdiction, applicable legislation and claims settlement practices.

Restructuring

The Company's restructuring charges consist of employee severance, one-time termination benefits and ongoing benefits related to the reduction of its workforce, and other exit and disposal costs.

One-time termination benefits are expensed at the date the Company notifies the employee, unless the employee must provide future service beyond a minimum retention period, in which case the benefits are expensed ratably over the future service period.

Ongoing benefits are expensed when restructuring activities are probable and the benefit amounts are estimable.

During fiscal year 2024, the Company implemented restructuring plans including a Voluntary Early Retirement Program (“VERP”) and a cost savings program to improve operational performance and align cost structures consistent with revenue levels associated with business changes, which includes special termination benefits associated with a reduction-in-force (“2024 RIF”).

The Company’s restructuring charges consist of settlement charges and special termination benefits associated with the VERP and 2024 RIF.

One-time termination benefits are expensed at the time the VERP participants accept the offer or the Company notifies the 2024 RIF participants, and the amounts can be reasonably estimated.

Liabilities for costs associated with the restructuring activities are measured at fair value and are recognized when the liability is incurred.

See to Note 7— Restructuring , for further information regarding the Company’s restructuring activities.

Revenue Recognition

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Substantially all of the Company’s contracts with clients involve the transfer of a service to the client, which represents a performance obligation that is satisfied over time because the client simultaneously receives and consumes the benefits of the services provided.

In most cases, the contracts consist of a performance obligation that is comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer ( i .

e ., distinct days of service).

In most cases, the contracts consist of a performance obligation that is comprised of a series of distinct services that are substantially the same and that have the same pattern of transfer (i.e., distinct days of service).

For these contracts, the Company allocates the ratable portion of the consideration based on the services provided in each period of service to such period.

Revenues related to the sales segment are primarily recognized in the form of commissions, fee-for-service, or on a cost-plus basis for providing headquarter relationship management, analytics, insights and intelligence services, administrative services, retail services, retailer client relationships and in-store media programs, and digital technology solutions (which include business intelligence solutions, e-commerce services, and content services).

Marketing segment revenues are primarily recognized in the form of fee-for-service (including retainer fees, fees charged to clients based on hours incurred, project-based fees, or fees for executing in-person consumer engagements or experiences, which engagements or experiences the Company refers to as “events”), commissions, or on a cost-plus basis for providing experiential marketing, shopper and consumer marketing services, private label development and digital, social, and media services.

The Company disaggregates revenues from contracts with clients by reportable segment.

Revenues within each segment are further disaggregated between brand-centric services and retail-centric services.

Brand-centric services are centered on providing

solutions to support manufacturers’ sales and marketing strategies.

Retail-centric services are centered on providing solutions to retailers.

Revenues related to the Branded Services segment are primarily recognized in the form of commissions, fee-for-service and cost-plus fees for providing headquarter relationship management, execution of merchandising strategies and omni-commerce marketing services.

Revenues within the Branded Services segment are further disaggregated between brokerage services, branded merchandising services, omni-commerce marketing services, and revenues related to the Company's European joint venture (prior to the deconsolidation during fiscal year 2023).

Brokerage services revenues are primarily outsourced sales and services for branded consumer goods manufacturers at retailer headquarters, in-store and online.

Branded merchandising services relate to merchandising in-store and online for branded consumer goods manufacturers.

Omni-commerce marketing services primarily relate to digital and field marketing services.

Experiential Services segment revenues are primarily recognized in the form of fee-for-service and cost-plus fees for providing in-store, digital sampling and demonstrations, where the Company manages highly customized, large-scale sampling programs for leading brands and retailers.

Retailer Services segment revenues are primarily recognized in the form of commissions, fee-for-service and cost-plus fees for providing consulting services related to private brand development, the execution of merchandising strategies and marketing strategies within retailer locations, including retail media networks and analyzing shopper behavior.

Revenues within the Retailer Services segment are further disaggregated between advisory services, retailer merchandising services and agency services to retailers.

Advisory services primarily consist of consulting services related to private brand development.

Retailer merchandising services primarily relate to the execution of merchandising strategies.

Agency services primarily consist of providing marketing strategies within retail locations.

Disaggregated revenues were as follows:

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(in thousands)

Sales brand-centric services

Sales retail-centric services

Total sales revenues

Marketing brand-centric services

Marketing retail-centric services

Total marketing revenues

Branded Services

Brokerage services

Branded merchandising services

Omni-commerce marketing services

European joint venture

Total Branded Services revenue

Experiential Services

Experiential services

Total Experiential Services revenue

Retailer Services

Retail merchandising services

Advisory services

Agency services

Total Retailer Services revenue

Total revenues

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Estimates are based on historical experience and current facts known during the reporting period.

The Company only recognizes revenues related to variable consideration if it is probable that a significant reversal of revenues recognized will not occur when the uncertainty associated with the variable consideration is resolved.

Company only recognizes revenues related to variable consideration if it is probable that a significant reversal of revenues recognized will not occur when the uncertainty associated with the variable consideration is resolved.

When such probable threshold is not satisfied, the Company will constrain some or all of the variable consideration and the constrained variable consideration will not be recognized as revenues.

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The Company determined that the input method represents a reasonable method to measure the satisfaction of the performance obligation to the client.

For contracts with a fixed monthly fee, revenues are recognized using a time-based measure resulting in a straight-line revenue recognition.

For contracts with a fixed monthly fee, revenues are recognized using a time-based measure resulting in straight-line revenue recognition.

A time-based measure was determined to represent a reasonable method to measure the satisfaction of the performance obligation to the client because the Company has a stand ready obligation to make itself available to provide services upon the client’s request or the client receives the benefit from the Company’s services evenly over the contract period.

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While the Company primarily acts as a principal in its arrangements and reports revenues on a gross basis, the Company will occasionally act as an agent and accordingly presents revenues on a net basis.

example, for certain advertising arrangements, the Company’s clients purchase media content in advance, and the Company does not take on any risk of recovering its cost to acquire the media content.

As a result, the Company determined it acts as the agent in these arrangements and records revenues and their related costs on a net basis.

However, in cases where media content is not purchased in advance by its clients, the Company records such revenues and its related costs on a gross basis, as it bears the risk of recovering the costs to acquire the revenues related to such media content and it is responsible for fulfillment of the services thereunder.

Substantially all of the Company’s contracts with its clients either have a contract term that is less than one year with options for renewal and/or can be canceled by either party upon 30 to 120 days’ notice.

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A valuation allowance for deferred tax assets is recorded to the extent that the ultimate realization of the deferred tax assets is not considered more likely than not.

The Company believes its deferred tax assets are more likely than not to be realized based on historical and projected future results, or a valuation allowance is established.

Realization of the Company’s deferred tax assets is principally dependent upon its achievement of future taxable income, the estimation of which requires significant management judgment.

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The cost is recognized over the requisite service period.

The Company’s equity-based compensation is based on grant date fair value determined utilizing the Backsolve Option Pricing Method (“OPM”) for the Topco Common Series C Units and a combination of the OPM and Monte Carlo valuation model for the Topco Common Series C-2 Units.

The Company’s equity-based compensation is based on grant date fair value.

Stock-based Compensation

Stock-based compensation costs related to stock options granted to employees are measured at the date of grant based on the estimated fair value of the award.

The Company estimates the grant date fair value, and the resulting stock-based compensation expense, using the Black-Scholes option-pricing model.

The fair value for stock-settled restricted stock units (“RSUs”) and performance stock units (“PSUs”) are based on the Company’s stock price on the date of grant.

The Black-Scholes option-pricing model requires the use of highly subjective assumptions which determine the fair value of stock-based awards.

The assumptions used in the Company's option-pricing model represent management’s best estimates.

These estimates are complex, involve a number of variables, uncertainties and assumptions and the application of management’s judgment, so that they are inherently subjective.

If factors change and different assumptions are used, the Company's stock-based compensation expense could be materially different in the future.

These assumptions are estimated as follows:

Fair Value of Common Stock .

Represents the publicly quoted price as the fair value of ADV common stock.

Risk-Free Interest Rate .

The Company based the risk-free interest rate used in the Black-Scholes option-pricing model on the implied yield available on U.S.

Treasury zero-coupon issues with an equivalent term of options for each option group.

Expected Term .

The expected term represents the period that the stock-based awards are expected to be outstanding.

Because of the limitations on the sale or transfer or the Company's common stock as a previously privately held company, the Company does not believe its historical exercise pattern for similar awards is indicative of the pattern the Company will experience as a publicly traded company.

For option grants that are considered to be “plain vanilla,” the Company determines the expected term using the simplified method.

The simplified method deems the term to be the average of the time-to-vesting and the contractual life of the options.

Management determined the price volatility factor based on the historical volatilities of a relevant peer group as the Company did not have a sufficient trading history of common stock.

Industry peers consist of several public companies that provide similar services with comparable characteristics including enterprise value, risk profiles and position within the industry.

The Company intends to continue to consistently apply this process using the same or similar public companies until a sufficient amount of historical information regarding the volatility of the Company's own common stock share price becomes available, or unless circumstances change such that the identified companies are no longer similar, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation.

Dividend Yield .

The expected dividend assumption is based on expectations about the Company's anticipated dividend policy.

The Company currently does not expect to issue any dividends.

The Company recognizes compensation costs for awards with service vesting conditions on an accelerated method under the graded vesting method over the requisite service period of the award, which is generally the vesting term of three years.

Stock-based compensation expense is included in “Selling, general and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss.

Warrant Liability

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity and ASC 815, Derivatives and Hedging .

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in the Financial Accounting Standards Board (“FASB”) ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging .

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s Common Stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification.

This assessment,

which requires the use of professional judgment, is conducted at the time of warrant issuance and on the date of issuance and remeasured to fair value at each balance sheet date thereafter.

This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and on the date of issuance and for liability-classified awards, remeasured to fair value at each balance sheet date thereafter.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance.

For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance and remeasured to fair value at each balance sheet date thereafter.

Changes in the estimated fair value of the warrants are recognized in “Changes in fair value of warrant liability” in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

For issued or modified warrants that do not meet all the criteria for

equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance and remeasured to fair value at each balance sheet date thereafter.

Changes in the estimated fair value of the warrants are recognized in “Change in fair value of warrant liabilities” in the Consolidated Statements of Operations and Comprehensive Loss.

Based on the availability of sufficient observable information, the Company determines the fair value of the liability classified private placement warrants by approximating the value with the price of the public warrants at the respective period end, which is inherently less subjective and judgmental given it is based on observable inputs.

Other Comprehensive (Loss) Income

The Company’s comprehensive (loss) income includes net income (loss) as well as foreign currency translation adjustments, net of tax.

Unrealized foreign currency exchange gains and losses on certain intercompany transactions that are of a long-term investment nature (i.e., settlement is not planned or anticipated in the foreseeable future) are also recorded in accumulated other comprehensive (loss) income in stockholders’ equity.

Other Comprehensive Loss

The Company’s comprehensive loss includes net income (loss) as well as foreign currency translation adjustments, net of tax.

Unrealized foreign currency exchange gains and losses on certain intercompany transactions that are of a long-term investment nature (i.e., settlement is not planned or anticipated in the foreseeable future) are also recorded in accumulated other comprehensive loss in stockholders’ equity.

Fair Value Measurements

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Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.

The valuation techniques used to measure the fair value of all other financial instruments, all of which have counterparties with high credit ratings, were valued based on quoted market prices or model driven valuations using significant inputs derived from or corroborated by observable market data.

Variable Interest Entities and Investments

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The Company also uses its quantitative and qualitative analyses to determine if it is the primary beneficiary of the VIE, and if such determination is made, it includes the accounts of the VIE in its consolidated financial statements.

Impact of the War in Ukraine

The Company recorded pretax charges of $ 2.8 million in the first quarter of 2022, primarily consisting of its proportionate share of the net investment in an indirect interest in Russian agencies in “Loss on divestitures” in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

This relates to the Company’s minority-interest holding in a European joint venture that has a minority interest in a European company that has majority-ownership interests in local agencies in Russia.

As of December 31, 2023,

the European joint venture has completely written off its investment in this European company and no amounts pertaining to this European company remain on the Company’s Consolidated Balance Sheets.

Recent Accounting Pronouncements

Recent Accounting Standards Adopted by the Company

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires entities to disclose incremental segment information on an annual and interim basis, including significant segment expenses and measures of profit or loss that are regularly provided to the CODM.

The standard is effective for the Company beginning in fiscal year 2024 and interim periods within fiscal year 2025, with early adoption permitted.

The Company adopted the standard retrospectively.

Refer to Note 17— Operating Segments and Geographic Information for additional information on the Company’s reportable segments.

Accounting Standards Recently Issued but Not Yet Adopted by the Company

In December 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which requires entities to expand their existing income tax disclosures, specifically related to the rate reconciliation and income taxes paid.

The standard is effective for the Company beginning in fiscal year 2025, with early adoption permitted.

The new standard is

expected to be applied prospectively, but retrospective application is permitted.

The Company is currently evaluating the impact of ASU 2023-09 on the consolidated financial statements and related disclosures.

In March 2024, the Securities and Exchange Commission (“SEC”) adopted final climate-related disclosure rules under SEC Release Nos.

33-11275 and 34-99678, The Enhancement and Standardization of Climate-Related Disclosures for Investors .

The rules require disclosure of governance, risk management and strategy related to material climate-related risks as well as disclosure of material greenhouse gas emissions in registration statements and annual reports.

In addition, the rules require presentation of certain material climate-related disclosures in the annual consolidated financial statements.

On April 4, 2024, the SEC voluntarily stayed the effective date of the final rules pending completion of judicial review following legal challenges.

The disclosure requirements will apply to the Company beginning with fiscal year 2025, pending resolution of the stay.

The Company is currently evaluating the impact of the rules on the consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses (“ASU 2024-03”).

Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03.

ASU 2024-03 requires public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis.

The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

The new standard is expected to be applied prospectively, but retrospective application is permitted.

The Company is currently evaluating the impact of ASU 2024-03 on the consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

The standard is effective for the Company beginning in fiscal year 2024 and interim periods within fiscal year 2025, with early adoption permitted.

The Company is currently evaluating the impact of ASU 2023-07 on the consolidated financial statements and related disclosures and expects to adopt the new standard using a retrospective approach.

All other new accounting pronouncements issued, but not yet effective or adopted have been deemed to be not relevant to the Company and, accordingly, are not expected to have a material impact once adopted.

Acquisitions, Divestitures and Deconsolidation

2023 Foodservice Businesses Held for Sale

The Company has included businesses classified as held for sale within its continuing operations as their dispositions do not represent a strategic shift that will have a major effect on the Company’s operations and financial results.

As of December 31, 2023, certain assets and liabilities of a collection of foodservice businesses were classified as held for sale in “Prepaid expenses and other current assets” and “Other accrued expenses” on the Company's Consolidated Balance Sheet.

The collection of foodservice businesses were sold during the first quarter of 2024.

As part of the sale, the foodservice businesses were combined with an entity owned by the buyer, with the Company receiving approximately $ 91.0 million, less estimated working capital adjustments and an ongoing 7.5 % stake in the entity with which the foodservice businesses will be combined.

The following table presents the carrying amounts of the major classes of the disposal group's assets and liabilities as of December 31, 2023:

Discontinued Operations, Deconsolidation of European Joint Venture, Divestitures and Acquisitions

Discontinued Operations

The Company classifies a business that has been disposed of or is classified as held for sale as a discontinued operation when the criteria prescribed by FASB ASC 205, Presentation of Financial Statements are met.

While the 2023 Divestitures did not previously qualify for presentation as discontinued operations, the Company concluded that, in the aggregate, the sales of these businesses along with the 2024 Divestitures (collectively, the “discontinued operations” that are all part of the divestiture plan) met the criteria for discontinued operations presentation as their dispositions represent a strategic shift that has had a major effect on the Company's operations and financial results.

As a result, each of these businesses has been reclassified to discontinued operations in the Consolidated Statements of Operations and Comprehensive Loss, Consolidated Balance Sheets and Consolidated Statements of Cash Flows for all periods presented.

As part of the agreements for certain divestitures, the Company has agreed to provide certain transitional services as detailed within respective transition services agreements for a period of time after sale.

Income and expenses related to these transitional services are immaterial and are reported in “Net loss from continuing operations” on the Consolidated Statements of Operations and Comprehensive Loss.

The following table presents the summarized balance sheet of discontinued operations.

As of December 31, 2024, all businesses that were previously classified as discontinued operations had been fully divested.

(in thousands)

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Carrying amounts of major classes of assets

Accounts receivable

Cash and cash equivalents

Accounts receivable, net of allowance for expected credit losses of $ 2,834

Prepaid and other current assets

Total current assets

Property and equipment

Other intangibles

Other noncurrent assets

Property and equipment, net

Other intangible assets, net

Investments in unconsolidated affiliates

Total assets of discontinued operations (1)

Carrying amounts of major classes of liabilities

Current portion of long-term debt

Accounts payable

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Deferred revenues

Other noncurrent liabilities

Total liabilities

Total net assets of the disposal group classified as held for sale

Long-term debt, net of current portion

Other liabilities

Total liabilities of discontinued operations (1)

Total net assets of the disposal group classified as discontinued operations

(1) Certain assets and liabilities from discontinued operations are classified as noncurrent at December 31, 2023 as they did not previously meet the held-for-sale criteria at that date.

The following table presents the summarized statements of operations of discontinued operations.

Year Ended December 31,

(in thousands)

Cost of revenues (exclusive of depreciation and amortization shown separately below)

Selling, general, and administrative expenses

(Gain) loss on divestitures

Depreciation and amortization

Total operating expenses

Operating income from discontinued operations

Other expenses:

Interest expense

Total other expenses

Income before income taxes from discontinued operations

Provision for income taxes from discontinued operations

Net income from discontinued operations, net of tax

net income (loss) from discontinued operations attributable to noncontrolling interest, net of tax

Net income from discontinued operations attributable to stockholders of Advantage Solutions Inc.

The following table provides a summary of the cash flows from discontinued operations:

Year Ended December 31,

(in thousands)

Net cash provided by operating activities from discontinued operations

Net cash used in investing activities from discontinued operations

Net cash used in financing activities from discontinued operations

Net effect of foreign currency changes on cash from discontinued operations

Net change in cash, cash equivalents and restricted cash from discontinued operations

2024 Divestitures

On January 31, 2024, the Company sold a collection of foodservice businesses, previously classified as held for sale (as current assets) as of December 31, 2023 (collectively with the other businesses disposed during the twelve months ended December 31, 2024, the “2024 Divestitures”).

As part of the sale, the foodservice businesses were combined with an entity owned by the buyer, with the Company receiving approximately $ 91.0 million, subject to working capital adjustments and an ongoing 7.5 % interest in the combined business.

The ongoing ownership interest represents a continuing involvement which the Company has determined represents an equity method investment.

Upon the close of the transaction, the retained 7.5 % interest was recognized at fair value of $ 8.4 million, valued using unobservable inputs (i.e., Level 3 inputs), primarily discounted cash flow.

The investment is reported in “Investments in unconsolidated affiliates” on the Consolidated Balance Sheets and an immaterial amount of equity income (loss) reported in “Income from equity method investments” on the Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2024.

Transactions between the Company and the combined foodservice entity are considered to be related-party transactions subsequent to the divesture.

During the second quarter of 2024, the Company sold two agencies in the Branded Services segment, one agency in the Experiential Services segment and one agency in the Retailer Services segment.

The Company received $ 65.2 million including estimated working capital adjustments.

On July 31, 2024, the Company completed the sale of the Jun Group business in exchange for proceeds of approximately $ 185.0 million less any adjustments.

The Company received approximately $ 130.0 million in cash upon completion of the sale.

As part of the purchase agreement, the buyer has agreed to remit the remaining consideration of $ 27.5 million (less $ 5.0 million estimated adjustments) and $ 27.5 million, 12 and 18 months , respectively, after the completion of the sale.

During the year ended December 31, 2024 , the Company recorded a gain from the 2024 Divestitures of $ 95.1 million as a component of “Net income from discontinued operations, net of tax” in the Consolidated Statements of Operations and Comprehensive Loss.

Proceeds from the sales were classified as cash provided by investing activities from continuing operations in the Consolidated Statements of Cash Flows.

2023 Deconsolidation of ASL

On November 30, 2023 the Company reduced its equity interest in Advantage Smollan Limited (“ASL”), its European joint venture, from a majority interest of under 60 % to a minority interest of 49.6 % in exchange for $ 1.0 million in cash.

On November 30, 2023 the Company reduced its equity interest in Advantage Smollan Limited (“ASL”), its European joint venture, from a majority interest to a minority interest of 49.6 %.

The Company also removed certain participating rights with ASL related to capital allocation and certain of the Company’s decision making rights, resulting in a loss of control.

Therefore, in accordance with Accounting Standards Codification 810 ("ASC 810"), Consolidation , ASL was deconsolidated from the Company’s consolidated financial statements.

Effective December 1, 2023, the Company’s investment in ASL is accounted for under the equity method of accounting, with the investment reported in “Investments in unconsolidated affiliates” on the Consolidated Balance Sheets and equity income (loss) reported in “Income from unconsolidated investments” on the Consolidated Statements of Operations and Other Comprehensive (Loss) Income.

Therefore, in accordance with ASC 810, ASL was deconsolidated from the Company’s consolidated financial statements.

Effective December 1, 2023, the Company’s investment in ASL is accounted for under the equity method of accounting, with the investment reported in “ Investments in unconsolidated affiliates” on the Consolidated Balance Sheets and equity income (loss) reported in “Income from equity method investments” on the Consolidated Statements of Operations and Other Comprehensive Loss.

Transactions between the Company and ASL are considered to be related-party transactions from the date of deconsolidation.

The fair value of the Company's continuing investment in ASL of $ 91.9 million was determined at the date of deconsolidation, recorded within “Investments in unconsolidated subsidiaries” on the Consolidated Balance Sheets and is assessed for impairment at each reporting period.

The fair value of the Company's continuing investment in ASL of $ 91.9 million was determined at the date of deconsolidation, recorded within “Investments in unconsolidated affiliates” on the Consolidated Balance Sheets and is assessed for impairment at each reporting period.

The estimated fair value of the underlying business was determined based on a combination of the income and market approaches.

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The Company compared a weighted average of the output from the income and market approaches to compute the fair value of ASL.

The assumptions in the income and market approach are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy (described in Note 1.) The difference between the carrying value of the assets and liabilities of ASL that were deconsolidated and the fair value of the continuing investment, as determined at the date of deconsolidation, was $ 58.9 million, before tax, and this gain on deconsolidation is reflected within the Company’s Consolidated Statements of Operations and Other Comprehensive (Loss) Income for the year ended December 31, 2023.

As a result of the ASL deconsolidation, the Company determined a triggering event occurred for the sales indefinite-lived trade name and a non-cash intangible asset impairment charge of $43.5 million was recorded.

As part of the Company derecognizing ASL, the Company attributed $18.2 million of the Sales reporting unit goodwill to that business, which was derecognized and reflected in the calculated gain on sale.

The Company determined that the remaining Sales reporting unit goodwill was not impaired.

ASL is party to transactions with the Company and its consolidated subsidiaries entered into in the normal course of business;

these transactions include corporate expenses for services benefiting ASL.

Up to the date of the deconsolidation, these transactions were eliminated on consolidation and had no impact on the Company’s Consolidated Statements of Operations and Comprehensive (Loss) Income.

The assumptions in the income and market approach are based on significant inputs not

observable in the market and thus represent Level 3 measurements within the fair value hierarchy (described in Note 1—O rganization and Significant Accounting Policies ).

The difference between the carrying value of the assets and liabilities of ASL that were deconsolidated and the fair value of the continuing investment, as determined at the date of deconsolidation, was $ 58.9 million, before tax, and this gain on deconsolidation is reflected within the Company’s Consolidated Statements of Operations and Other Comprehensive Loss for the year ended December 31, 2023.

As a result of the ASL deconsolidation, the Company determined a triggering event occurred for the sales indefinite-lived trade name and an intangible asset impairment charge of $ 43.5 million was recorded.

As part of the Company derecognizing ASL, the Company attributed $ 18.2 million of the former Sales reporting unit goodwill to that business, which was derecognized and reflected in the calculated gain on sale.

The Company determined that the remaining former Sales reporting unit goodwill was not impaired.

ASL is party to transactions with the Company and its consolidated subsidiaries entered into in the normal course of business and these transactions include corporate expenses for services benefiting ASL.

Up to the date of the deconsolidation, these transactions were eliminated on consolidation and had no impact on the Company’s Consolidated Statements of Operations and Comprehensive Loss.

After deconsolidating ASL, these transactions are treated as third-party transactions in the Company’s financial statements.

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2023 Divestitures

During the year ended December 31, 2023, the Company recognized a loss on the sale of businesses of $ 19.1 million, as a component of “Loss on divestitures” in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

The Company determined the sale of the businesses did not meet the criteria for classification as discontinued operations.

The Company received $ 21.1 million of proceeds, which are net of transaction fees and holdbacks.

During the year ended December 31, 2023, the Company recognized a loss on the sale of businesses of $ 19.1 million, as a component of “Net income from discontinued operations, net of tax” in the Consolidated Statements of Operations and Comprehensive Loss.

The Company received $ 21.1 million of proceeds, net of transaction fees and holdbacks.

2022 Acquisitions

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The excess of the purchase consideration over the estimated fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill.

The results of operations of each acquired business has been included in the Consolidated Statements of Operations and Comprehensive (Loss) Income since its respective date of acquisition.

The results of operations of each acquired business has been included in the Consolidated Statements of Operations and Comprehensive Loss since its respective date of acquisition.

The aggregate purchase price for the acquisitions referenced above was $ 75.5 million, which includes $ 74.2 million paid in cash, $ 0.5 million recorded as contingent consideration liabilities, and $ 0.8 million recorded as holdback amounts.

Contingent consideration payments are determined based on future financial performance and payment obligations (as defined in the applicable purchase agreement) and are recorded at fair value.

The maximum potential payment outcome related to the acquisitions is $ 1.6 million.

Holdback amounts are used to withhold a portion of the initial purchase price payment until certain post-closing conditions are satisfied and are typically settled within 24 months of the acquisition.

The goodwill related to the acquisitions represented the

value paid for the assembled workforce, geographic presence, and expertise.

The maximum potential payment outcome related to the acquisitions was $ 1.6 million.

The goodwill related to the acquisitions represented the value paid for the assembled workforce, geographic presence, and expertise.

Of the resulting goodwill relating to these acquisitions, $ 1.0 million is deductible for tax purposes.

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(in thousands)

Client relationships

Total identifiable intangible assets

The operating results of the businesses acquired during the year ended December 31, 2022 contributed total revenues of $ 35.2 million during the year ended December 31, 2022.

The Company has determined that the presentation of net income (loss) from the date of acquisition is impracticable due to the integration of the operations upon acquisition.

During the year ended December 31, 2022, the Company incurred $ 0.8 million in transaction costs related to the acquisitions described above.

These costs have been included in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

2021 Acquisitions

The Company acquired six businesses during the year ended December 31, 2021.

The acquisitions were accounted for under the acquisition method of accounting.

As such, the purchase consideration for each acquired business was allocated to the acquired tangible and intangible assets and liabilities assumed based upon their respective fair values.

Assets acquired and liabilities assumed in the business combination were recorded on the Company’s financial statements as of the acquisition date based upon the estimated fair value at such date.

The excess of the purchase consideration over the estimated fair value of the net tangible and identifiable intangible assets acquired was recorded as goodwill.

The allocation of the excess purchase price was based upon preliminary estimates and assumptions.

The results of operations of each acquired business has been included in the Consolidated Statements of Operations and Comprehensive (Loss) Income since its respective date of acquisition.

The aggregate purchase price for the acquisitions referenced above was $ 76.0 million, which includes $ 42.7 million paid in cash, $ 19.8 million recorded as contingent consideration liabilities, and $ 13.5 million recorded as holdback amounts.

Contingent consideration payments are determined based on future financial performance and payment obligations (as defined in the applicable purchase agreement) and are recorded at fair value.

The maximum potential payment outcome related to the acquisitions is $ 71.4 million.

The goodwill related to the acquisitions represented the value paid for the assembled workforce, geographic presence, and expertise.

Of the resulting goodwill relating to these acquisitions, $ 14.3 million is deductible for tax purposes.

The fair values of the identifiable assets and liabilities of the acquisitions completed during the year ended December 31, 2021, at the respective acquisition dates, are as follows:

(in thousands)

Consideration

Fair value of contingent consideration

Total consideration

Recognized amounts of identifiable assets acquired and liabilities assumed:

Accounts receivable

Property and equipment

Identifiable intangible assets

Total liabilities

Redeemable noncontrolling interest

Total identifiable net assets

Goodwill arising from acquisitions

The identifiable intangible assets are amortized on a straight-line basis over their estimated useful lives.

The fair value and estimated useful lives of the intangible assets acquired are as follows:

(in thousands)

Weighted Average Useful Life

Client relationships

Developed technology

Total identifiable intangible assets

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During the year ended December 31, 2022, the Company incurred $ 0.8 million in transaction costs related to the acquisitions described above.

These costs have been included in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

These costs have been included in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss.

Goodwill and Intangible Assets

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(in thousands)

Gross carrying amount as of January 1, 2022

Branded Services

Experiential Services

Retailer Services

Gross carrying amount as of December 31, 2022

Accumulated impairment charge

1 unchanged sentence

Measurement period adjustments

Impairment charge

Foreign exchange translation effects

Balance at December 31, 2022

Measurement period adjustments

Foodservice businesses held for sale

Deconsolidation of subsidiaries

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Balance at December 31, 2023

During the fiscal year ended December 31, 2022, the Company recognized non-cash goodwill impairment charges of $ 1,275.7 million and $ 91.8 million related to the Company’s sales and marketing reporting units, respectively, as a result of the Company’s annual evaluation of goodwill impairment test (as further described in Note 1 above).

Accumulated impairment losses to goodwill were $ 2,019.5 million as of December 31, 2023 and 2022.

Impairment charge

Balance at December 31, 2024

As a result of the impairment test performed, the Company recognized a goodwill impairment charge of $ 99.7 million related to the Company's Branded Agencies reporting unit goodwill during the year ended December 31, 2024, which has been reflected in “Impairment of goodwill and indefinite-lived asset” in the Consolidated Statements of Operations and Comprehensive Loss.

As a result of this charge, an immaterial amount of goodwill remains in this reporting unit.

During the fourth quarter of fiscal year 2024, the Company identified a triggering event that required an impairment assessment of goodwill for the Branded Services reporting unit.

This charge is reflected in “Impairment of goodwill and indefinite-lived asset” in the Consolidated Statements of Operations and Comprehensive Loss.

As a result of this charge, the Branded Services segment had accumulated impairment losses to goodwill of $ 955.8 million as of December 31, 2024.

During the fiscal year ended December 31, 2022, the Company recognized goodwill impairment charges of $ 1,367.5 million as a result of the Company’s annual evaluation of goodwill impairment test (as further described in Note 1 —O rganization and Significant Accounting Policies ).

Accumulated impairment losses to goodwill were $ 2,252.7 million and $ 2,019.5 million as of December 31, 2024 and 2023, respectively.

The following tables set forth information for intangible assets:

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Weighted Average Useful Life

Gross Carrying

Impairment Charges

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Client relationships

Developed technology

Total finite-lived intangible assets

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Weighted Average Useful Life

Gross Carrying

Impairment Charges

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Client relationships

Developed technology

Total finite-lived intangible assets

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This method relies on the premise that, in lieu of ownership, a company would be willing to pay a royalty to obtain access to the use and benefits of the trade names.

The Company has considered its sales and marketing trade names related to the 2014 Topco Acquisition to be indefinite, as there is no foreseeable limit on the period of time over which such trade names are expected to contribute to the cash flows of the reporting entity.

Further, the Company evaluated legal, regulatory, contractual, competitive, economic and other factors in determining the useful life.

In connection with the acquisitions during the year ended December 31, 2022, the Company recorded intangible assets of $ 25.6 million.

Amortization expenses included in the Consolidated Statements of Operations and Comprehensive (Loss) Income for the years ended December 31, 2023, 2022 and 2021 were $ 196.4 million, $ 200.8 million, and $ 198.9 million, respectively.

During the year ended December 31, 2023, the Company recognized a non-cash intangible asset impairment charge of $ 43.5 million related to the Company's indefinite-lived sales trade name, in connection with the Company’s deconsolidation of its European joint venture and planned disposition of its foodservice businesses (as further described in Notes 1 and 2 above).

During the year ended December 31, 2022, the Company recognized non-cash intangible asset impairment charges of $ 146.0 million and $ 59.0 million related to the Company's indefinite-lived sales and marketing trade names, respectively, in connection with the Company’s annual intangible asset impairment test on October 1, 2022 (as further described in Note 1 above).

No impairment related to the Company’s intangible assets was recorded for the year ended December 31, 2021.

The Company has considered its trade name related to the 2014 Topco Acquisition to be indefinite, as there is no foreseeable limit on the period of time over which such trade names are expected to contribute to the cash flows of the reporting entity.

Amortization expenses included in the Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2024 , 2023 and 2022 were $ 177.3 million, $ 186.8 million, and $ 189.1 million, respectively.

During the fourth quarter of December 31, 2024, the Company recognized an intangible asset impairment charge of $ 42.0 million as a result of the triggering event for the Branded Services reporting unit.

During the year ended December 31, 2023, the Company recognized an intangible asset impairment charge of $ 43.5 million related to the Company's indefinite-lived trade name, in connection with the Company’s deconsolidation of its European joint venture and planned disposition of its foodservice businesses (as further described in Note 1 —O rganization and Significant Accounting Policies and Note 2— Discontinued Operations, Deconsolidation of European Joint Venture, Divestitures and Acquisitions ).

During the year ended December 31, 2022, the Company recognized intangible asset impairment charges of $ 205.0 million related to the Company's indefinite-lived trade name in connection with the Company’s annual intangible asset impairment test on October 1, 2022 (as further described in Note 1 —O rganization and Significant Accounting Policies ).

During fiscal year 2022, the Company concluded the impact of challenges in the labor market and continued inflationary pressures was an indicator that impairment may exist related to its client relationship intangible assets and as a result, the Company performed a recoverability test and determined that there was no impairment.

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(in thousands)

Assets held for sale

Prepaid expenses

Inventory and supplies

Interest rate caps

Other receivables

Prepaid expenses

Interest rate collars and caps

Prepaid income taxes

Other receivables

Consideration receivable from divestitures

Other current assets

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Operating lease right-of-use assets

Interest rate caps

Workers' compensation receivable

Consideration receivable from divestitures

Other long-term assets

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Other accrued expenses consist of the following:

Year Ended December 31,

(in thousands)

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Operating lease liabilities

Accrued income taxes

General liability insurance reserve

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Rebates due to retailers

Client refunds related to the Take 5 Matter

Liabilities related to the Take 5 Matter

Employee medical self-insurance reserves

Liabilities held for sale

Accrued restructuring and reorganization

Other accrued expenses

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Workers' compensation

Contingent consideration

Other long-term liabilities

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As of December 31, 2023 , $ 28.0 million and $ 35.0 million of this liability was included in the “Accrued compensation and benefits” and “Other long-term liabilities” in the Consolidated Balance Sheets, respectively.

In connection with its deductible limits, the Company has standby letters-of-credit in the amount of $ 44.1 million and $ 44.5 million as of December 31, 2023 and 2022, respectively, and $ 16.0 million surety bond as of such years supporting the estimated unpaid claim liabilities.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) (as further described in Note 15, Income Taxes ) provides for deferred payment of the employer portion of social security taxes between March 27, 2020 and December 31, 2020, with 50% of the deferred amount due December 31, 2021 and the remaining 50% due December 31, 2022.

The Company began deferring payment of the employer share of the social security taxes in April 2020.

The Company repaid $ 23.8 million and $ 24.0 million during the years ended December 31, 2022 and December 31, 2021, respectively, and as a result of such payments, no payments were made during the year ended December 31, 2023 and no amounts were owed as of December 31, 2023 .

In connection with its deductible limits, the Company has standby letters-of-credit in the amount of $ 44.1 million as of December 31, 2024 and 2023, respectively, and $ 15.0 million and $ 16.0 million surety bond as of such years supporting the estimated unpaid claim liabilities.

Contingent Consideration Liabilities

Each reporting period, the Company measures the fair value of its contingent liabilities by evaluating the significant unobservable inputs and probability weightings using Monte Carlo simulations.

Any resulting decreases or increases in the fair value result in a corresponding gain or loss reported in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

The Company has reassessed the fair value of contingent consideration based on the achievement of performance targets as defined in the respective purchase agreements and it resulted in a fair value adjustment of a $ 10.4 million loss that was included in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

As of December 31, 2023, the maximum potential payment outcomes were $ 50.9 million.

The Company has reassessed the fair value of contingent consideration based on the achievement of performance targets as defined in the respective purchase agreements and it resulted in fair value adjustments of $ 1.7 million and $ 11.2 million losses that are included in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss during the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024 , there were no contingent consideration liabilities outstanding.

The following table summarizes the changes in the carrying value of the contingent consideration liabilities:

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Beginning of the period

Fair value of acquisitions

Changes in fair value

Foreign exchange translation effects

End of the period

Restructuring

During fiscal year 2024, the Company implemented restructuring plans as a result of the overall reorganization.

Voluntary Early Retirement Program (“VERP”)

During fiscal year 2024, the Company offered a VERP to certain eligible U.S.-based employees.

During the year ended December 31, 2024, the Company recorded $ 20.1 million of settlement charges and special termination benefits in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss.

2024 Restructuring Program (“2024 RIF”)

In September 2024, the Company announced a cost savings program to improve operational performance and align cost structures consistent with revenue levels associated with business changes, which includes termination benefits associated with a reduction-in-force substantially completed in fiscal year 2024.

During the year ended December 31, 2024, the Company recorded $ 9.9 million of settlement charges and special termination benefits in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss.

As of December 31, 2024, $ 14.1 million of the Company’s restructuring charges were included in “Other accrued expenses” in the Consolidated Balance Sheets.

The following table summarizes the Company’s restructuring activity:

(in thousands)

Balance at January 1, 2024

Cash payments

Balance at December 31, 2024

The following table summarizes the Company’s restructuring expense by segment:

(in thousands)

December 31, 2024

Branded Services

Experiential Services

Retailer Services

Total restructuring expenses

(in thousands)

Term Loan Facility

Senior Secured Notes

Government loans for COVID-19 relief and other

Total long-term debt

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Senior Secured Credit Facilities

Effective October 28, 2020, Advantage Sales & Marketing Inc., an indirect wholly-owned subsidiary of the Company (the “Borrower”), entered into (i) a senior secured asset-based revolving credit facility in an aggregate principal amount of up to $ 400.0 million, subject to borrowing base capacity (as amended and/or restated from time to time, the “Revolving Credit Facility”) and (ii) a secured first lien term loan credit facility in an aggregate principal amount of $ 1.325 billion (as amended and/or/restated from time to time, the “Term Loan Facility” and together with the Revolving Credit Facility, the “Senior Secured Credit Facilities”).

Effective October 28, 2020, Advantage Sales & Marketing Inc., an indirect wholly-owned subsidiary of the Company (the “Borrower”), entered into (i) a senior secured asset-based revolving credit facility (“ABL Revolving Credit Agreement”) in an aggregate principal amount of up to $ 400.0 million, subject to borrowing base capacity (as amended and/or restated from time to time, the “Revolving Credit Facility”) and (ii) a secured first lien term loan credit facility (“First Lien Credit Agreement”) in an aggregate

principal amount of $ 1.325 billion (as amended and/or/restated from time to time, the “Term Loan Facility” and together with the Revolving Credit Facility, the “Senior Secured Credit Facilities”).

Revolving Credit Facility

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Such events of default include payment defaults to the lenders thereunder, material inaccuracies of representations and warranties, covenant defaults, cross-defaults to other material indebtedness, voluntary and involuntary bankruptcy, insolvency, corporate arrangement, winding-up, liquidation or similar proceedings, material money judgments, material pension-plan events, certain change of control events and other customary events of default.

On October 28, 2021, the Borrower and Holdings also entered into the First Amendment to ABL Revolving Credit Agreement (the “ABL Amendment”), which amended the ABL Revolving Credit Agreement, dated October 28, 2020, by and among the Borrower, Holdings, the lenders from time-to-time party thereto and Bank of America, as administrative agent.

The ABL Amendment was entered into by the Borrower to amend certain terms and provisions, including (i) reducing the interest rate floor for Eurocurrency rate loans from 0.50 % to 0.00 % and base rate loans from 1.50 % to 1.00 %, and (ii) updating the provisions by which U.S.

On October 28, 2021, the Borrower and Holdings also entered into the First Amendment to the ABL Revolving Credit Agreement (the “ABL Amendment”), which amended the ABL Revolving Credit Agreement, dated October 28, 2020, by and among the Borrower, Holdings, the lenders from time-to-time party thereto and Bank of America, as administrative agent.

Dollar LIBOR will eventually be replaced with SOFR or another interest rate benchmark to reflect the most recent standards and practices used in the industry.

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and (iv) extending the scheduled maturity date of the borrowings to December 2, 2027.

As of December 31, 2024 and 2023, there were no amounts due under the Revolving Credit Facility.

During the fiscal year ended December 31, 2024, the Company had no borrowings or repayments under the Revolving Credit Facility.

During the fiscal year ended December 31, 2023, the Company had borrowings and repayments under the Revolving Credit Facility of $ 40.0 million each.

During the fiscal year ended December 31, 2022, the Company had borrowings and repayments under the Revolving Credit Facility of $ 280.0 million each.

Term Loan Facility

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Borrowings will bear interest at a floating rate of Term SOFR plus an applicable margin of 4.25 % per annum, subject to additional spread adjustment on SOFR ranging from 0.11 % to 0.26 %.

The Term Loan Facility matures on October 28, 2027 .

The Borrower may voluntarily prepay loans or reduce commitments under the Term Loan Facility, in whole or in part, subject to minimum amounts, with prior notice but without premium or penalty.

The Company voluntarily repurchased an aggregate of $ 29.8 million principal amount of its Term Loan Facility during the year ended December 31, 2024 .

The Company recognized a gain on the repurchase of $ 7.7 million for the year ended December 31, 2023, as a component of “Interest expense, net” in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

The Company recognized a gain on the repurchase of $ 0.9 million for the year ended December 31, 2024, as a component of “Interest expense, net” in the Consolidated Statements of Operations and Comprehensive Loss.

The Borrower will be required to prepay the Term Loan Facility with 100 % of the net cash proceeds of certain asset sales (such percentage subject to reduction based on the achievement of specific first lien net leverage ratios) and subject to certain reinvestment rights, 100 % of the net cash proceeds of certain debt issuances and 50 % of excess cash flow (such percentage subject to reduction based on the achievement of specific first lien net leverage ratios).

The Borrower was not required to make any excess cash flow payment for the year ended December 31, 2023, and the Borrower did not make any other mandatory or voluntary prepayments of the Term Loan Facility for the years ended December 31, 2023 and 2022.

The Borrower was not required to make any excess cash flow payments for the years ended December 31, 2024 and 2023, and the Borrower did not make any other mandatory or voluntary prepayments of the Term Loan Facility for the years ended December 31, 2024 and 2023.

The Borrower’s obligations under the Term Loan Facility are guaranteed by Holdings and the Guarantors.

The Term Loan Facility is secured by a lien on substantially all of Holdings’, the Borrower’s and the Guarantors’ assets (subject to certain permitted exceptions).

The Term Loan Facility has a first- priority lien on the fixed asset collateral (equal in priority with the liens securing the

Notes) and a second-priority lien on the current asset collateral (second in priority to the liens securing the Revolving Credit Facility), in each case, subject to other permitted liens.

The Term Loan Facility has a first-priority lien on the fixed asset collateral (equal in priority with the liens securing the Notes) and a second-priority lien on the current asset collateral (second in priority to the liens securing the Revolving Credit Facility), in each case, subject to other permitted liens.

The Term Loan Facility contains certain customary negative covenants, including, but not limited to, restrictions on the Borrower’s ability and that of its restricted subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, pay dividends or make other restricted payments, sell or otherwise transfer assets or enter into transactions with affiliates.

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1 to the First Lien Credit Agreement (the “First Lien Amendment”), which amended the Term Loan Facility, dated October 28, 2020, by and among the Borrower, Holdings, Bank of America, as administrative agent and collateral agent, each lender party from time to time thereto, and the other parties thereto.

The First Lien Amendment was entered into by the Borrower to reduce the applicable interest rate on the term loan to 5.25 % per annum.

The First Lien Amendment was entered into by the Borrower to reduce the applicable interest rate on the term loan from 5.25 % to 4.50 % per annum.

Additional terms and provisions amended include (i) resetting the period for six months following October 28, 2021 in which a 1.00 % prepayment premium shall apply to any prepayment of the term loan in connection with certain repricing events, and (ii) updating the provisions by which U.S.

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Th e First Lien Amendment was deemed to be a modification of the Term Loan Facility for accounting purposes.

In connection with the First Lien Amendment, the Company incurred $ 2.3 million of third-party fees and expenses and recognized $ 1.5 million of non-cash expense on the extinguishment of debt from write off of unamortized debt issuance costs which were recorded in " Interest expense, net” in the Consolidated Statements of Operations and Comprehensive (Loss) Income during the year ended December 31, 2021.

In May 2023, the Company amended the Term Loan Facility to replace the U.S.

Dollar LIBOR provisions with SOFR, effective June 30, 2023.

In April 2024 (the “Third Lien Amendment Effective Date”), the Company amended the Term Loan Facility (the “Third Lien Amendment”) to (i) reduce the applicable interest rate margin (a) from 4.50 % to 4.25 % for SOFR loans or (b) from 3.50 % to 3.25 % for base rate loans;

and (ii) reset the period for six months following the Third Lien Amendment Effective Date in which a 1.00 % prepayment premium shall apply to any prepayment of the term loans in connection with a Repricing Event (as defined in the amended First Lien Credit Agreement).

The First Lien Amendment and Third Lien Amendment were deemed to be modifications of the Term Loan Facility for accounting purposes.

Senior Secured Notes

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The Notes are redeemable on or after November 15, 2023 at the applicable redemption prices specified in the Indenture plus accrued and unpaid interest.

The Notes were also redeemable at any time prior to November 15, 2023 at a redemption price equal to 100 % of the aggregate principal amount of such Notes to be redeemed plus a “make-whole” premium, plus accrued and unpaid interest.

In addition, the Issuer could have redeemed up to 40 % of the original aggregate principal amount of Notes before November 15, 2023 with the net cash proceeds of certain equity offerings at a redemption price equal to 106.5 % of the aggregate principal amount of such Notes to be redeemed, plus accrued and unpaid interest.

Furthermore, prior to November 15, 2023, the Issuer could have redeemed during each calendar year up to 10 % of the original aggregate principal amount of the Notes at a redemption price equal to 103 % of the aggregate principal amount of such Notes to be redeemed, plus accrued and unpaid interest.

If the Issuer or its restricted subsidiaries sell certain of their respective assets or experience specific kinds of changes of control, subject to certain exceptions, the Issuer must offer to purchase the Notes at par.

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During the year ended December 31, 2024 , the Borrower repurchased Notes with a par value of $ 127.9 million for $ 118.3 million.

The Company recognized a gain on the repurchase of the Notes of $ 9.6 million for the year ended December 31, 2024, as a component of “Interest expense, net” in the Consolidated Statements of Operations and Comprehensive Loss.

The Company recognized a gain on the repurchase of the Notes of $ 4.0 million for the year ended December 31, 2023, as a component of “Interest expense, net” in the Consolidated Statements of Operations and Comprehensive Loss.

Restrictive covenants

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enter into agreements restricting the Issuer’s subsidiaries’ ability to pay dividends;

and consolidate, merge or sell all or substantially all of the Issuer’s assets.

and consolidate, merge or sell all or substantially all of the Issuer’s assets, except as permitted under the terms of the Notes.

Most of these covenants will be suspended on the Notes when they have investment grade ratings from both Moody’s Investors Service, Inc.

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and lack of perfection of liens on a material portion of the collateral, in each case subject to applicable grace periods.

Government Loans for COVID-19 Relief

On May 25, 2020, a majority owned subsidiary of the Company operating in Japan entered into two loan agreements with a bank lender pursuant to a local government loan program.

Subsequently, one of the loans was refinanced on October 26, 2020.

The loans, bear interest rates of 1.82 % and 1.83 % per annum with maturity dates of May 27, 2029 and October 27, 2029 , respectively, and the amounts under the loans will be repayable to the lender in monthly installments.

On December 28, 2021, the same subsidiary entered into a loan agreement from the bank lender pursuant to a local government loan program.

The purpose of the loan is to use the borrowed funds for working capital and to fund the anticipated recovery of business operations from the COVID-19 pandemic.

The loan bears an interest rate of 0.35 % per annum until December 24, 2024 , at which time the loan will bear an interest rate of 1.25 % until the maturity date of December 31, 2036 .

On April 18, 2023, the same subsidiary entered into a loan agreement from the bank lender pursuant to a local government loan program.

The purpose of the loan is to use the borrowed funds for working capital and to fund the anticipated recovery of business

operations from the COVID-19 pandemic.

Half of the loan bears an interest rate of 1.70 % per annum until the maturity date of April 30, 2043 .

The remainder of the loan bears an interest rate of 0.80 % per annum until April 18, 2026 , at which time the loan will bear an interest rate of 1.70 % until the maturity date of April 30, 2043 .

As of December 31, 2023 and 2022, the Company had aggregate principal amounts of $ 5.3 million and $ 4.5 million borrowings outstanding, respectively, associated with government loan programs for relief associated with the COVID-19 pandemic.

Debt Maturities

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The Company’s lease agreements do not contain any material residual guarantees or material restrictive covenants.

All operating lease expenses are recognized on a straight-line basis over the lease term as a component of “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

Payments under the Company’s lease arrangements are primarily fixed.

However, certain lease agreements contain variable costs, which are expensed as incurred and not included in the calculation of the Company’s right-of-use assets and related liabilities for those leases.

However, certain lease agreements contain variable costs, which are expensed as incurred and

not included in the calculation of the Company’s right-of-use assets and related liabilities for those leases.

These costs typically include real estate taxes, common area maintenance and utilities for which the Company is obligated to pay under the terms of those leases.

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Based on the present value of the lease payments for the remaining lease term of the Company’s existing leases, the Company’s right-of-use assets and lease liabilities for operating leases as of December 31, 2024 and 2023 were as follows:

(in thousands)

Classification

(in thousands)

Operating lease right-of-use assets

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Year Ended December 31,

(in thousands)

(amounts in thousands)

Cash paid for operating lease liabilities

Right-of-use assets obtained in exchange for new

operating lease obligations

Right-of-use assets obtained in exchange for new operating lease obligations

Weighted-average remaining lease term

Weighted-average discount rate

Maturities of lease liabilities as of December 31, 2023 were as follows:

Maturities of lea se liabilities as of December 31, 2024 were as follows:

(in thousands)

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These models use discounted cash flows that utilize market-based forward swap curves commensurate with the terms of the underlying instruments.

As of December 31, 2023, and 2022, the contingent consideration liabilities are Level 3 liabilities with the related fair values based on the significant unobservable inputs and probability weightings in using the income approach.

As of December 31, 2023, the contingent consideration liabilities are Level 3 liabilities with the related fair values based on significant unobservable inputs and probability weightings in using the income approach.

The following table sets forth the Company’s financial assets and liabilities measured on a recurring basis at fair value, categorized by input level within the fair value hierarchy.

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Warrant liability

Contingent consideration liabilities

Total liabilities measured at fair value

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Total liabilities measured at fair value

Interest Rate Cap Agreements

The Company had interest rate cap and interest rate collar contracts with an aggregate notional value of principals of $ 650.0 million as of December 31, 2023 and 2022 from various financial institutions to manage the Company’s exposure to interest rate movements on variable rate credit facilities.

On April 3, 2023, the Company entered into two interest rate collar contracts in an aggregate notional amount of $ 300.0 million with a maturity date of April 5, 2026 to manage the Company's exposure to potential interest rate increases that may result from fluctuation in SOFR.

The fair value of the Company's outstanding interest rate caps and collars of $ 26.3 million and $ 47.5 million were included in “Prepaid expenses and other current assets” and “Other assets” in the Consolidated Balance Sheets as of December 31, 2023 and 2022, respectively, with changes in fair value recognized as a component of “Interest expense, net” in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

Interest Rate Collar and Agreements

The Company had interest rate collar and cap contracts with an aggregate notional value of principals of $ 850.0 million and $ 950.0 million as of December 31, 2024 and 2023 , respectively, from various financial institutions to manage the Company’s exposure to interest rate movements on variable rate credit facilities.

In July 2024, the Company entered into two interest rate collar contracts with a notional value of principal of $ 200.0 million each to manage the Company's exposure to potential interest rate increases that may result from fluctuation in SOFR.

The interest rate collar contracts were effective December 16, 2024 and will mature on April 5, 2027 and 2028.

In April 2023, the Company entered into two interest rate collar contracts in an aggregate notional amount of $300.0 million with a maturity date of April 5, 2026 to manage the Company's exposure to potential interest rate increases that may result from fluctuation in SOFR.

The fair value of the Company's outstanding interest rate collars and caps of $ 0.8 million and $ 26.3 million were included in “Prepaid expenses and other current assets” and “Other assets” in the Consolidated Balance Sheets as of December 31, 2024 and 2023, respectively, with changes in fair value recognized as a component of “Interest expense, net” in the Consolidated Statements of Operations and Comprehensive Loss.

During the years ended December 31, 2024 , 2023, and 2022, the Company recognized interest income of $ 5.3 million, $ 7.7 million and $ 43.8 million, respectively, related to changes in the fair value of its derivative instruments.

Warrant Liability

The estimated fair value of the liability is recorded using sufficient observable information and is therefore classified as a Level 2 financial instrument.

The warrant liability is stated at fair value at each reporting period with the change in fair value recorded on the Consolidated Statement of Operations and Comprehensive (Loss) Income until the warrants are exercised, expire or other facts and circumstances lead the warrant liability to be reclassified as an equity instrument.

The warrant liability is stated at fair value at each reporting period with the change in fair value recorded on the Consolidated Statement of Operations and Comprehensive Loss until the warrants are exercised, expire or other facts and circumstances lead the warrant liability to be reclassified as an equity instrument.

The private placement warrants are classified as Level 2 based on the availability of sufficient observable information using the price of the public warrants as an indirectly observable quoted price in active markets to measure the fair value of the private placement warrants, which is inherently less subjective and judgmental given it is based on observable inputs.

On October 28, 2020, the Company recorded the initial warrant liability of the private placement warrants of $ 7.9 million.

Subsequently, the warrant liability was remeasured to fair value resulting in a gain of $ 0.3 million, a gain of $ 21.2 million and a loss of $ 1.0 million reflected in “Change in fair value of warrant liability” in the Consolidated Statements of Operations and Comprehensive (Loss) Income during the years ended December 31, 2023, 2022 and 2021, respectively.

Subsequently, the warrant liability was remeasured to fair value resulting in gains of $ 0.6 million, $ 0.3 million and $ 21.2 million

reflected in “Change in fair value of warrant liabilities” in the Consolidated Statements of Operations and Comprehensive Loss during the years ended December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2024 , and 2023, 7,333,333 private placement warrants remained outstanding at a fair value of $ 0.1 million and $ 0.7 million, respectively.

The Company previously valued its private placement warrants using a Black-Scholes Model.

The private placement warrants were classified as Level 3 at the initial measurement date due to the use of unobservable inputs.

Beginning in the first quarter of 2022, they are classified as Level 2 based on the availability of sufficient observable information using the price of the public warrants as an indirectly observable quoted price in active markets to measure the fair value of the private placement warrants, which is inherently less subjective and judgmental given it is based on observable inputs.

Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period in which a change in valuation technique or methodology occurs.

Long-term Debt

4 unchanged sentences

Term Loan Facility

Government loans for COVID-19 relief and other

Senior Secured Notes

Total long-term debt

3 unchanged sentences

Term Loan Facility

Government loans for COVID-19 relief and other

Senior Secured Notes

Total long-term debt

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The Company believes that the carrying value of its other borrowings, including amounts outstanding, if any, for the Revolving Credit Facility, approximate fair market value based on maturities for debt of similar terms.

Investments in Unconsolidated Subsidiaries

Investments in Unconsolidated Affiliates

The carrying value of the Company’s investments in unconsolidated affiliates accounted for under the equity method was $ 226.5 million and $ 210.8 million as of December 31, 2024 and 2023, respectively.

The investment as of December 31, 2023 comprised the Company’s investment in ASL and Global Smollan Holdings (“GSH”).

The investment as of December 31, 2022 comprised of the Company’s investment in GSH, Smollan Holdings Proprietary Limited (“SH”), Ceuta Holdings Limited (“Ceuta”), and Partnership SPV 1 Limited (“SPV”).

Income from the Company’s unconsolidated investments was $ 5.3 million for the year ended December 31, 2023.

Income from the Company’s unconsolidated investments was not material for the years ended December 31, 2022 and 2021.

The investments as of December 31, 2024 and 2023 included the Company’s investment in ASL and Global Smollan Holdings (“GSH”).

The Company’s proportionate share in their net assets at December 31, 2024, and 2023 were $ 212.6 million and $ 205.0 million, respectively.

1 unchanged sentence

therefore, no summarized financial information for the Company’s unconsolidated subsidiaries have been presented.

Contribution of Equity Method Investment in Smollan Holdings Proprietary Limited

In May 2023, the Company entered into a transaction in which it contributed its 25 % ownership in the common stock of SH to GSH.

Subsequent to this contribution, the Company holds a 25 % non-voting equity investment in SH that provides the Company with preferred rights to non-cumulative dividends declared by SH with specified annual maximum dividends (“SH Dividend Shares”).

Other than the preferred non-cumulative dividend rights, the equity investment in SH has no other economic rights and the Company does not have any significant influence over SH through its non-voting equity investments.

As a result of this contribution, the Company no longer has significant influence in SH and ceased to account for its investment in SH under the equity method of accounting at the time of the contribution.

In regard to the accounting for the SH Dividend Shares, the Company elected the measurement alternative to value this equity investment without a readily determinable fair value.

The Company will continue to apply the alternative measurement guidance until this investment does not qualify to be so measured.

The carrying value of the investment was not material as of December 31, 2023.

Ceuta Holdings Limited

In November 2023, the Company entered into an agreement and sold all of its 8.8 % investment in Ceuta.

The Company recognized a loss on sale of investment of $ 4.2 million, as a component of “Loss on divestitures” in the Consolidated Statements of Operations and Comprehensive (Loss) Income during the year ended December 31, 2023.

The Company received $ 4.3 million of its common stock in exchange for its investment.

ASL Transaction

On November 30, 2023, the Company reduced its equity interest in ASL, its European joint venture, from a majority interest of under 60 % to a minority interest of 49.6 % in exchange for $ 1.0 million in cash (“ASL Transaction”).

European Joint Venture and Smollan Holdings (“SH”)

On November 30, 2023, the Company reduced its equity interest in ASL, its European joint venture, from a majority interest to a minority interest of 49.6% (“ASL Transaction”).

As part of the ASL Transaction, the Company ceased to have a controlling financial interest in ASL.

The Company reassessed the VIE and voting interest models and concluded the Company no longer has control.

Therefore, in accordance with ASC 810, ASL was deconsolidated and the Company recorded a gain on deconsolidation of $ 58.9 million that has been included in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

Therefore, in accordance with ASC 810, ASL was deconsolidated and the Company recorded a gain on deconsolidation of $58.9 million that has been included in the Consolidated Statements of Operations and Comprehensive Loss.

Subsequent to the ASL Transaction, the Company retained significant influence over ASL, and the investment in ASL is accounted for under the equity method of accounting.

The Company’s equity method investment in ASL was recognized at its fair value totaling $ 91.9 million.

In conjunction with the ASL Transaction, the Company sold its 12.5 % interest in SPV in exchange for a non-voting interest in GSH, resulting in an insignificant impact on the consolidated financial statements as a result of this transaction.

As a result of the above transactions, as of December 31, 2023, the Company’s investments in unconsolidated affiliates accounted for under the equity method consist of GSH ( 25.4 %) and ASL ( 49.6 %).

The Company’s equity method investment in ASL was recognized at its fair value totaling $91.9 million on November 30, 2023.

In conjunction with the ASL Transaction, the Company sold its 12.5% interest in Partnership SPV 1 Limited in exchange for a non-voting interest in GSH, resulting in an insignificant impact on the consolidated financial statements as a result of this transaction.

In May 2023, the Company entered into a transaction in which it contributed its 25 % ownership in the common stock of SH to GSH.

The carrying value of the investment was not material as of December 31, 2024 and 2023.

ATV Investment

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The carrying value of the investment was $ 5.2 million and $ 5.8 million as of December 31, 2024 and 2023, respectively.

Ceuta Holdings Limited

In November 2023, the Company entered into an agreement and sold all of its 8.8% investment in Ceuta Holdings Limited.

The Company recognized a loss on sale of investment of $4.2 million, as a component of “Income from equity method investments” in the Consolidated Statements of Operations and Comprehensive Loss during the year ended December 31, 2023.

The Company received $4.3 million of its common stock in exchange for its investment.

Other Investments

As part of the sale of the foodservice businesses during the year ended December 31, 2024, the foodservice businesses were combined with an entity owned by the buyer, with the Company receiving an ongoing 7.5% interest in the combined business.

The ongoing ownership interest represents a continuing involvement which the Company has determined represents an equity method investment.

Upon the close of the transaction, the retained 7.5% interest was recognized at fair value of $8.4 million.

The carrying value of the investment was $9.0 million as of December 31, 2024 .

Stock-Based Compensation and Other Benefit Plans

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The Company’s RSUs and PSUs are expensed based on the fair value at the grant date .

The Company recognized stock-based compensation expense and equity-based compensation expense associated with the Common Series C Units of Karman Topco L.P.

The Company recognized stock-based compensation expense and equity-based compensation expense as follows:

Year Ended December 31,

(in thousands)

Restricted share-based unit awards

Restricted stock-based unit awards

Other share-based awards

Total share-based compensation before tax

Total share-based compensation expense included in

net (loss) income

Total stock-based compensation before tax

Total stock-based compensation expense included in net loss

Performance Restricted Stock Units

Performance restricted stock units are subject to the achievement of certain performance conditions based on the Company’s revenues (“PSU Revenues”) and Adjusted EBITDA (“PSU EBITDA”) targets in the respective measurement period and the recipient’s continued service to the Company.

PSUs granted in fiscal year 2024 are subject to achievement of certain performance conditions based on measurements of the Company’s Adjusted EBITDA margin and cash earnings.

The Company’s Adjusted EBITDA margin and cash earnings relative to specified targets will be measured each year over the three-year period of fiscal years 2024, 2025 and 2026, and an annual achievement percentage will be determined.

The annual achievement percentages for each of fiscal years 2024, 2025 and 2026 will be averaged following the completion of the three-year performance period to determine the final achievement percentage.

In addition, the earned PSUs are subject to further adjustment depending on the Company’s performance against a specified peer group for total stockholder return during the three-year performance period.

This adjustment can either put a floor or a cap on the calculation of the final PSUs value.

Subject to certain termination events, these PSUs are scheduled to cliff-vest on the third-year anniversary of the date of grant and may vest from 0 % to 200 % of the “target” number of PSUs specified in the table below.

PSUs are subject to the recipient's continued service to the Company.

PSUs granted in fiscal years 2023, 2022 and 2021 are subject to achievement of certain performance conditions based on the Company’s revenues (“PSU Revenues”) and Adjusted EBITDA (“PSU EBITDA”) targets in the respective measurement period and the recipient’s continued service to the Company.

The measurement period is based on the twelve months of the respective fiscal year.

The PSUs are scheduled to vest over a three-year period from the date of grant and may vest from 0 % to 150 % of the number of shares set forth in the table below.

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Details for each aforementioned defined term for each grant have been provided in the table below.

During the first quarter of 2024, the Compensation Committee determined that the achievement of the performance objectives applicable to the PSU EBITDA 2023 and PSU Revenues 2023 objectives were 150.0 % of Target Goals.

The value of these PSU awards above the Target Goals remain subject to additional performance requirements (i.e., the above target performance must be maintained in 2024 and 2025) and service-based vesting conditions.

The performance period for those PSU awards up to the Target Goals ended on December 31, 2023, but remain subject to service-based vesting conditions.

During the first quarter of 2023, the Compensation Committee determined that the achievement of the performance objective applicable to the PSU EBITDA 2022 objective did not meet the minimum threshold and the achievement of the performance objective applicable to the PSU Revenues 2022 objective was 83.2 % of Target Goals.

The performance period for those awards ended on December 31, 2022 but remain subject to service-based vesting conditions.

During the first quarter of 2022, the Compensation Committee determined that the achievement of the performance objective applicable to the PSU EBITDA 2021 objective was 64.6 % of target and the achievement of the performance objective applicable to the PSU Revenues 2021 objective was 126.2 % of target.

In the first quarter of 2022, the Compensation Committee determined that the PSU Revenues and PSU EBITDA metrics will be measured separately when determining whether above-target performance has been maintained for future year performance.

Such determination is applicable to the PSUs grants made in 2021 and in 2022.

As a result, the 26.2 % above-target performance on PSU Revenues for 2021 must be maintained in 2022 and 2023 in order for the corresponding above-target PSUs to vest in January 2024.

During the first quarter of 2024, the Compensation Committee determined that there was

no decline in performance with respect to PSU Revenues in 2022 and 2023 and as a result, an amount equal to approximately 9.2 % of the target number of PSUs granted in January 2021 that were still outstanding in 2024 vested in January 2024.

Under the provision of ASC 718, Compensation—Stock Compensation , the Company determined that 2021 PSUs granted were modified as of March 11, 2022 related to 205,834 above-target PSU Revenues metrics.

The stock-based compensation expense for such modification was accounted for as a cancellation of the original award and the issuance of a new award using the fair value of the award on the date of modification.

The fair value of PSU grants was equal to the closing price of the Company's stock on the date of the applicable grant.

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Measurement Period

Weighted Average Grant Date Fair Value Per Share

Maximum Remaining Unrecognized Compensation Expense

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Outstanding at December 31, 2024 (1)

(1) PSU award activity is presented at Target until the period in which the Human Capital Committee approves the achievement percentages, at which point the awards are adjusted accordingly, subject to additional performance requirements and service-based vesting conditions.

During the first quarter of fiscal year 2025, the Human Capital Committee determined the annual achievement percentage for PSUs granted in fiscal year 2024 to be 128.3 % .

The value of these PSU awards remain subject to additional performance requirements (i.e.

the annual achievement percentages for fiscal years 2025 and 2026 and the Company’s performance against a specified peer group for total stockholder return during the three-year performance period) and service-based vesting conditions.

During the first quarter of fiscal year 2024, the Human Capital Committee determined that the achievement of the performance objectives applicable to the PSU EBITDA 2023 and PSU Revenues 2023 objectives were 150 % of Target Goals.

The performance period for those PSU awards up to the Target Goals ended on December 31, 2023, but remain subject to service-based vesting conditions.

During the first quarter of fiscal year 2023, the Human Capital Committee determined that the achievement of the performance objective applicable to the PSU EBITDA 2022 objective did not meet the minimum threshold and the achievement of the performance objective applicable to the PSU Revenues 2022 objective was 83.2 % of Target Goals.

The performance period for those awards ended on December 31, 2022 but remain subject to service-based vesting conditions.

During the first quarter of fiscal year 2022, the Human Capital Committee determined that the achievement of the performance objective applicable to the PSU EBITDA 2021 objective was 64.6 % of target and the achievement of the performance objective applicable to the PSU Revenues 2021 objective was 126.2 % of target.

In the first quarter of fiscal year 2022, the Human Capital Committee determined that the PSU Revenues and PSU EBITDA metrics will be measured separately when determining whether above-target performance has been maintained for future year performance.

Such determination is applicable to the PSU grants made in fiscal years 2021 and in 2022.

As a result, the 26.2 % above-target performance on PSU Revenues for fiscal year 2021 must have been maintained in fiscal years 2022 and 2023 in order for the corresponding above-target PSUs to vest in January 2024.

During the first quarter of fiscal year 2024, the Human Capital Committee determined that there was no decline in performance with respect to PSU Revenues in fiscal years 2022 and 2023 and as a result, an amount equal to approximately 9.2 % of the target number of PSUs granted in January 2021 that were still outstanding vested in January 2024.

Under the provision of ASC 718, Compensation—Stock Compensation , the Company determined that the 2021 PSUs were modified as of March 11, 2022 related to 205,834 above-target PSU Revenues metrics.

Restricted Stock Units

Restricted stock units are subject to the recipient’s continued service to the Company.

The RSUs are generally scheduled to vest over three years and are subject to the provisions of the agreement under the Plan.

RSUs are generally scheduled to vest over three years and are subject to the provisions of the agreement under the Plan.

During the year ended December 31, 2024, the following activities involving RSUs occurred under the Plan:

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As of December 31, 2024 , the total remaining unrecognized compensation cost related to RSUs amounted to $ 15.8 million, which will be amortized over the weighted-average remaining requisite service periods of 2.0 years.

Common Series C Units and C-2 Units

The Limited Partnership Agreement allows profits interests in Topco to be granted to directors, officers, employees, and consultants of Topco and its subsidiaries.

The performance-based profits interests (“Common Series C Units”) are subject to certain vesting requirements, as described below.

Common Series C Units were granted at no cost to employees of the Company.

As the result of an amendment and restatement of the Limited Partnership Agreement, on March 15, 2018, 75 % of all Common Series C Units awards are subject to vesting over four fiscal years from their respective issuance date.

The remaining 25 % of the units were forfeited.

To the extent the Common Series C Units vest, such units may still be forfeited as a result of termination of the employment of the applicable holders or upon a non-qualifying exit event.

Certain awards vest over the remaining initial four-year term, subject to the employee’s continued employment.

In addition, Topco issued certain Common Series C Units in connection with the 2017 acquisition of Daymon Worldwide Inc.

(“Daymon”) to certain Daymon employees, certain of which were deemed to have vested upon issuance, and certain of which vested in four annual installments, subject to such employee’s continued employment with the Company.

The Limited Partnership Agreement also authorizes Topco to issue 35,000 Common Series C-2 Units to employees of the Company, which are deemed to be vested upon issuance and subject to substantially similar forfeiture provisions as the Common Series C Units, including forfeiture upon certain terminations of employment with the Company of the applicable holders or a non-qualifying exit event.

Topco has the option to repurchase Common Series C Units for cash.

The following table summarizes the activity in the Common Series C Units and Common Series C-2 Units for the year ended December 31, 2023:

Common Series C

Common Series C-2

Outstanding at January 1, 2023

Outstanding at December 31, 2023

Common Series D Units

In 2014, Topco issued the Company 30,000 time-vested profit interests (“Common Series D Units”), which vested on a monthly basis over a five-year vesting period, to entities affiliated with one equity sponsor of Topco.

The Company measured the fair value of the Common Series D Units quarterly throughout the five-year vesting period and recognized this cost ratably over the vesting period.

There were no grants during the years ended December 31, 2023, 2022, and 2021.

The OPM was used to estimate the Common Series D Units fair value of $ 300 as of the grant date.

The expected share price volatility is based on the average of the historical volatility of comparable public companies.

The risk-free rate is based on U.S.

Treasury yields in effect at the time of grant over the expected term.

The Company did not use a dividend yield as it has not historically paid distributions.

The fair value of these units at the end of each measurement period were $ 46 , $ 5 , and $ 143 per unit as of December 31, 2023, 2022, and 2021.

Since the Common Series D Units that were issued under the Limited Partnership Agreement were for interests in Topco, which is outside of the consolidated group, the value of the profit interests were marked to market at each of the Company’s reporting periods.

The following assumptions were used in determining the fair value of Common Series D Units for the year ended December 31, 2023:

Grant date fair value

Dividend yield

Expected volatility

Risk-free interest rate

Lack of marketability discount

Expected term

On December 31, 2023, there were 30,000 Common Series D Units outstanding.

During the years ended December 31, 2023, 2022, and 2021, the Company recorded equity-based compensation expense of $ 1.1 million, gain of $ 4.1 million, and gain of $ 15.0 million, respectively, included in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive (Loss) Income.

Stock Options

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Weighted Average Exercise Price

Weighted Average Remaining Contractual Life

Aggregate Intrinsic Value

Outstanding at January 1, 2024

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Outstanding at December 31, 2024

Stock-based compensation costs related to stock options granted to employees are measured at the date of grant based on the estimated fair value of the award, net of estimated forfeitures.

The Company estimates the grant date fair value, and the resulting stock-based compensation expense, using the Black-Scholes option-pricing model.

The Black-Scholes option-pricing model requires the use of highly subjective assumptions which determine the fair value of stock-based awards.

The assumptions used in the Company's option-pricing model represent management’s best estimates.

These estimates are complex, involve a number of variables, uncertainties and assumptions and the application of management’s judgment, so that they are inherently subjective.

If factors change and different assumptions are used, the Company's stock-based compensation expense could be materially different in the future.

These assumptions are estimated as follows:

Fair Value of Common Stock .

Represents the publicly quoted price as the fair value of ADV common stock.

Risk-Free Interest Rate .

The Company based the risk-free interest rate used in the Black-Scholes option-pricing model on the implied yield available on U.S.

Treasury zero-coupon issues with an equivalent remaining term of the options for each option group.

Expected Term .

The expected term represents the period that the stock-based awards are expected to be outstanding.

The Company has consequently used the Staff Accounting Bulletin, or SAB 110, Simplified Method to calculate the expected term, which is the mid-point between the vesting period and the contractual term for each vesting-tranche.

The Company plans to continue to use the SAB 110 Simplified Method until the Company has sufficient trading history as a publicly traded company.

Management determined the price volatility factor based on the historical volatilities of a relevant peer group as the Company did not have a sufficient trading history of common stock.

Industry peers consist of several public companies that provide similar services with comparable characteristics including enterprise value, risk profiles and position within the industry.

Dividend Yield .

The expected dividend assumption is based on expectations about the Company's anticipated dividend policy.

The Company currently does not expect to issue any dividends.

In addition to assumptions used in the Black-Scholes option-pricing model, the Company must also estimate a forfeiture rate to calculate the stock-based compensation for the Company's awards.

The Company will continue to use judgment in evaluating the assumptions related to the Company's stock-based compensation on a prospective basis.

As the Company continues to accumulate additional data, the Company may have refinements to the Company's estimates, which could materially impact the Company's future stock-based compensation expense.

The fair value of the employee stock options was estimated using the following assumptions for the year ended December 31, 2023:

Exercisable at December 31, 2024

The fair value of the employee stock options was estimated using the following weighted average assumptions:

Year Ended December 31,

Dividend yield

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The intrinsic value of all outstanding options as of December 31, 2024 was $ 3.2 million based on the market price of the Company's common stock of $ 2.92 per share.

The total intrinsic value of stock options exercised during the year ended December 31, 2023 was $ 0.1 million.

As of December 31, 2023, there were no stock options that were exercisable.

As of December 31, 2024 , there were 3.6 million stock options that were exercisable.

Employee Stock Purchase Plan

The Company provides compensation benefits to employees under the amended 2020 Employee Stock Purchase Plan, (the “ESPP”).

Employees, may have to satisfy one or more of the following service requirements before participating in the ESPP, as determined by the administrator:

(a) customary employment with the Company for more than 20 hours per week and more than five months per calendar year, or (b) continuous employment with the Company for a minimum period of time, not to exceed two years, prior to the first date of an offering.

An employee may not be granted rights to purchase stock under the ESPP if such employee (x) immediately after the grant would own stock possessing five percent or more of the total combined voting power or value of the common stock, or (y) would purchase in excess of $ 25,000 of fair market value of such stock in an offering period.

Additionally, “highly compensated employees” may not be granted rights to purchase stock under the ESPP.

This includes individuals with compensation above a specified level, who is an officer and/or is subject to the disclosure requirements of Section 16(a) of the Exchange Act.

Employees have to satisfy one or more requirements before participating in the ESPP and not be subject to certain restrictions (e.g., “highly compensated employees” may not be granted rights to purchase stock under the ESPP).

The administrator may approve offerings with a duration of not more than 27 months and may specify one or more shorter purchase periods within each offering (“Offering Period”).

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The administrator, in its discretion, will determine the terms of offerings under the ESPP.

The ESPP permits participants to purchase shares of the common stock through payroll deductions with up to 15 % of their earnings.

The purchase price of the shares will not be less than 85 % of the lower of the fair market value of the common stock on the first day of an offering or on the date of purchase.

Payroll deductions shall be equal to at least one percent ( 1 %) of the participant’s compensation as of each payday of the Offering Period following the Enrollment Date, but not more than the lesser of fifteen percent ( 15 %) of the participant’s compensation as of each payday of the Offering Period following the Enrollment Date or $ 25,000 per offering period.

Beginning with the July 1, 2024 purchase period, the ESPP permits participants to purchase shares of the common stock through payroll deductions with up to 10 % of their earnings.

The purchase price of the shares will not be less than 90 % of the fair market value

of the common stock on the date of purchase.

Payroll deductions shall be equal to at least one percent ( 1 %) of the participant’s compensation as of each payday of the Offering Period following the first date of each Offering Period (the “Enrollment Date”), but not more than the lesser of fifteen percent ( 15 %) of the participant’s compensation as of each payday of the Offering Period following the Enrollment Date or $ 10,000 per calendar year.

For purchase periods prior to July 1, 2024, the ESPP permitted participants to purchase shares of the common stock through payroll deductions with up to 15 % of their earnings.

The purchase price of the shares would not be less than 85 % of the lower of the fair market value of the common stock on the first day of an offering or on the date of purchase.

Payroll deductions were equal to at least one percent ( 1 %) of the participant’s compensation as of each payday of the Offering Period following the Enrollment Date, but not more than the lesser of fifteen percent ( 15 %) of the participant’s compensation as of each payday of the Offering Period following the Enrollment Date or $ 25,000 per offering period.

A participant may not transfer purchase rights under the ESPP other than by will, the laws of descent and distribution or as otherwise provided under the ESPP.

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At December 31, 2023, there were 322,235,261 shares of Class A common stock legally issued and outstanding.

Preferred stock —The Company is authorized to issue 10,000,000 shares of preferred stock with no par value of $0.0001 per share.

At December 31, 2023 and 2022, there is no preferred stock issued or outstanding.

Common stock held in treasury, at cost — On November 9, 2021, the Company announced that the board of directors authorized a new share repurchase program (the “2021 Share Repurchase Program”) pursuant to which the Company may repurchase up to $ 100 million of the Company’s Class A common stock.

Preferred stock —The Company is authorized to issue 10,000,000 shares of preferred stock with no par value.

At December 31, 2024 and 2023, there was no preferred stock issued or outstanding.

Common stock held in treasury, at cost — On November 9, 2021, the Company announced that the board of directors authorized a share repurchase program (the “2021 Share Repurchase Program”) pursuant to which the Company may repurchase up to $ 100.0 million of the Company’s Class A common stock.

The 2021 Share Repurchase Program does not have an expiration date, but provides for suspension or discontinuation at any time.

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The timing and amount of any share repurchase is subject to prevailing market conditions, relevant securities laws and other considerations, and the Company is under no obligation to repurchase any specific number of shares.

During the year ended December 31, 2023 and 2021, the Company executed open market purchases of $ 6.4 million and $ 12.6 million of the Company ’ s Class A common stock under the 2021 Share Repurchase Program.

The Company did not make any repurchases during the year ended December 31, 2022.

As a result of repurchases during the year ended December 31, 2023, there remains $ 81.1 million of share repurchase availability under the 2021 Share Repurchase Program as of December 31, 2023 and 2022.

During the years ended December 31, 2024 and 2023 , the Company executed open market purchases of $ 34.1 million and $ 6.4 million, respectively, of the Company ’ s Class A common stock under the 2021 Share Repurchase Program.

The Company did no t make any repurchases during the year ended December 31, 2022.

As of December 31, 2024 , there remains $ 47.1 million of share repurchase availability under the 2021 Share Repurchase Program.

In December 2023, the Company entered into a trading plan under Rule 10b5-1 of the Exchange Act authorizing the repurchase of shares of the Company’s Class A common stock.

No stock repurchases were made pursuant to this plan for the year ended December 31, 2023.

From January 2, 2024 to April 24, 2024, the Company purchased 4.8 million shares of Class A common stock.

In June 2024, the Company entered into another trading plan under Rule 10b5-1 of the Exchange

Act authorizing the repurchase of shares of the Company’s Class A common stock.

From June 26, 2024 to August 13, 2024, the Company purchased 4.0 million shares of Class A common stock.

Warrants —As of December 31, 2024 and 2023, 11,244,988 public warrants were outstanding.

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Warrants may only be exercised for a whole number of shares of Class A common stock.

No fractional warrants will be issued upon separation of the units and only whole warrants will trade.

The warrants became exercisable on November 27, 2020 and will expire on October 28, 2025, or earlier upon redemption or liquidation.

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Additionally, in no event will the Company be required to net cash settle the warrants shares.

Noncontrolling interests

Deconsolidation of ASL — On November 30, 2023 the Company reduced its equity interest in ASL, its European joint venture, from a majority interest of under 60 % to a minority interest of 49.6 % in exchange for $ 1.0 million in cash.

The Company also removed certain participating rights with ASL related to capital allocation and certain of the Company’s decision making rights, resulting in a loss of control.

Therefore, in accordance with ASC 810, ASL was deconsolidated from the Company’s consolidated financial statements.

As part of the deconsolidation, the $108.9 million noncontrolling interest was derecognized as reflected in the Consolidated Statements of Stockholders’ Equity.

Deconsolidation of ASL — As part of the deconsolidation of ASL, the $ 108.9 million noncontrolling interest was derecognized as reflected in the Consolidated Statements of Stockholders’ Equity.

Purchase of Interests —During the year ended December 31, 2022, the Company acquired a majority stake in an acquisition and received contributions from noncontrolling interest of $ 5.2 million.

The fair value of the noncontrolling interest of the acquisition was $ 1.0 million.

The Company did not purchase any additional minority interests held in a subsidiary during the year ended December 31, 2022.

The fair value of the noncontrolling interest was $ 1.0 million.

Dividend to noncontrolling interest —Certain of the Company’s subsidiaries may, from time to time, declare dividends.

There were no dividends related to the Company’s minority interests during the years ended December 31, 2023, 2022 and 2021, respectively.

There were no dividends related to the Company’s minority interests during the years ended December 31, 2024 , 2023 and 2022.

Earnings Per Share

The Company calculates earnings per share using a dual presentation of basic and diluted earnings per share.

Basic earnings per share is calculated by dividing net income by the weighted-average shares of common stock outstanding without the consideration for potential dilutive shares of common stock.

Basic earnings per share is calculated by dividing net loss by the weighted-average shares of common stock outstanding without the consideration for potential dilutive shares of common stock.

Diluted earnings per share represents basic earnings per share adjusted to include the potentially dilutive effect of outstanding performance stock units, restricted stock units, public and private placement warrants, the employee stock purchase plan and stock options.

Diluted earnings per share is computed by dividing the net income by the weighted-average number of common share equivalents outstanding for the period determined using the treasury stock method and if-converted method, as applicable.

Diluted earnings per share is computed by dividing net income by the weighted-average number of shares of common stock outstanding and the potential dilutive shares of common stock for the period determined using the treasury stock method.

During periods of net loss, diluted loss per share is equal to basic loss per share because the antidilutive effect of potential common shares is disregarded.

The following is a reconciliation of basic and diluted net (loss) income per common share:

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Basic earnings per share computation:

Net (loss) income attributable to stockholders of

Advantage Solutions Inc.

Net loss from continuing operations

net income from continuing operations attributable to noncontrolling interest

Net loss from continuing operations attributable to stockholders of Advantage Solutions Inc.

Net income from discontinued operations, net of tax

net income (loss) from discontinued operations attributable to noncontrolling interest

Net income from discontinued operations attributable to stockholders of Advantage Solutions Inc.

Weighted average common shares - basic

Basic (loss) earnings per common share

Basic loss per common share from continuing operations attributable to stockholders of Advantage Solutions Inc.

Basic earnings per common share from discontinued operations attributable to stockholders of Advantage Solutions Inc.

Diluted earnings per share computation:

Net (loss) income attributable to stockholders of

Advantage Solutions Inc.

Weighted average common shares outstanding

Performance Stock Units

Restricted Stock Units

Employee stock purchase plan and stock options

Net loss from continuing operations

net income from continuing operations attributable to noncontrolling interest

Net loss from continuing operations attributable to stockholders of Advantage Solutions Inc.

Net income from discontinued operations, net of tax

net income (loss) from discontinued operations attributable to noncontrolling interest

Net income from discontinued operations attributable to stockholders of Advantage Solutions Inc.

Weighted average common shares - diluted

Diluted (loss) earnings per common share

During periods of net loss, diluted loss per share is equal to basic loss per share because the antidilutive effect of potential common shares is disregarded.

The Company had 11,244,988 of public warrants and 7,333,333 of private placement warrants held by the CP Sponsor (as defined below), to purchase Class A common stock at $ 11.50 per share, which remain outstanding at December 31, 2023 and 2022.

See Note 12 — Equity for additional information regarding the terms of public and private placement warrants.

In accordance with the treasury method the weighted average shares outstanding assuming dilution include the incremental effect of stock-based awards, except when such effect would be antidilutive.

Stock-based awards in accordance with the treasury stock method were 6.9 million shares during the year ended December 31, 2023, but were not included in the computation of diluted loss per common share, because the net loss position of the Company made them antidilutive.

Stock-based awards in accordance with the treasury stock method were 0.8 million shares during the year ended December 31, 2022, but were not included in the computation of diluted loss per common share, because the net loss position of the Company made them antidilutive.

Diluted loss per common share from continuing operations attributable to stockholders of Advantage Solutions Inc.

Diluted earnings per common share from discontinued operations attributable to stockholders of Advantage Solutions Inc.

In accordance with the treasury stock method the weighted average shares outstanding assuming dilution include the incremental effect of stock-based awards, except when such effect would be antidilutive.

Stock-based awards of 15.6 million, 6.9 million and 0.8 million weighted-average shares were outstanding for the years ended December 31, 2024 , 2023 and 2022, respectively, but were not included in the computation of diluted (loss) earnings per common share because the net loss position of the Company made them antidilutive.

Related Parties

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Investment in Unconsolidated Affiliates

Following the deconsolidation of ASL, the Company recorded the continuing investment in ASL at fair value of $ 91.9 million at the date of deconsolidation, within “Investments in unconsolidated affiliates.” For further details, see Note 2.

Acquisitions, Divestitures and Deconsolidation.

Transactions between the Company and ASL are considered to be related-party transactions from the date of deconsolidation.

Subsequent to the deconsolidation of ASL, the Company recognized immaterial revenues, from ASL and as of December 31, 2023, Accounts receivables from ASL were immaterial.

During the years ended December 31, 2024 and 2023, revenues from ASL were not material and as of December 31, 2023, accounts receivable from ASL were not material.

During the years ended December 31, 2024 , 2023, and 2022, the Company recognized revenues of $ 9.3 million , $ 22.2 million, and $ 14.3 million, respectively, from the parent company of an investment in unconsolidated affiliates.

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Advantage Sales & Marketing Inc., an indirect wholly-owned subsidiary of the Company, entered into loan agreements with Topco, pursuant to which Topco has borrowed various amounts totaling $ 6.0 million from Advantage Sales & Marketing Inc.

to facilitate the payment to certain former associates for their equity interests in Topco.

to facilitate the payment to certain former employees for their equity interests in Topco.

On September 1, 2020, Advantage Sales & Marketing Inc.

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This loan matured on December 31, 2023 and was pre-payable at any time without penalty.

During the first quarter of 2024, the parties entered into a new loan agreement for $6.3 million to refinance the matured loan.

During the first quarter of fiscal year 2024, the parties entered into a new loan agreement for $ 6.3 million to refinance the matured loan.

The loan bears interest at a rate of 10.09 % per annum and matures on December 31, 2026 .

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Beginning February 2023, an officer of the Company has served as a member of the board of directors of a client of the Company.

The Company recognized revenues from such client of $ 4.4 million during the year ended December 31, 2023.

Accounts receivable from this client were $ 0.6 million as of December 31, 2023.

The Company recognized revenues from such client of $ 4.9 million and $ 4.4 million during the years ended December 31, 2024 and 2023, respectively.

Accounts receivable from this client were $ 0.4 million and $ 0.6 million as of December 31, 2024 and 2023, respectively.

Beginning February 2023, an officer of the Company has served as a member of the board of directors of a consultant of the Company.

The Company recognized $ 0.2 million of expense from such consultant during the year ended December 31, 2024 .

The Company did no t recognize any expense from such consultant during the year ended December 31, 2023.

The Company did no t owe any amounts to this consultant as of December 31, 2024 and 2023.

Beginning July 2023, a member of the board of directors of the Company has served as an officer of a client of the Company.

The Company recognized $3 .3 million of revenues from such client during the year ended December 31, 2023.

Accounts receivable from this client were $0 .5 million as of December 31, 2023.

The (benefit from) provision for income taxes is as follows:

The Company recognized $ 7.9 million and $ 3.3 million of revenues from such client during the years ended December 31, 2024 and 2023 , respectively.

Accounts receivable from this client were $ 0.2 million and $ 0.5 million as of December 31, 2024 and 2023 , respectively.

The benefit from income taxes is as follows:

Year Ended December 31,

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Total current tax expense

Deferred tax (benefit) expense

Deferred tax benefit

Total deferred tax benefit

Total (benefit from) provision for income taxes

Total benefit from income taxes

A reconciliation of the Company's effective income tax rate as compared to the federal statutory income tax rate is as follows:

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Foreign tax, net of federal tax benefit

Deconsolidation of ASL

Deconsolidation of subsidiaries

Goodwill impairment

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Contingent consideration fair value adjustment

Fair value of warrant liability

Fair value adjustment of warrant liability

Effective tax rate

The geographic components of (loss) income before income taxes are as follows:

The geographic components of loss before income taxes are as follows:

Year Ended December 31,

(in thousands)

(Loss) income before income taxes

Loss from continuing operations before income taxes

Net deferred tax liabilities consist of the following:

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Net operating losses

Transaction expenses

Acquisition and divestiture related expenses

Capitalized research and development costs

Contingent liabilities

Contingent consideration

Insurance reserves

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Acquired intangible assets, including goodwill

Interest rate caps

Interest rate collars and caps

Right-of-use assets

Debt issuance costs

Restructuring expenses

Reorganization expenses

Total deferred tax liabilities

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Net deferred tax liabilities

The CARES Act allows employers to defer payment of a portion of payroll taxes otherwise due on wages paid between the enactment date and December 31, 2020 and remit the deferred payroll taxes in equal amounts on December 31, 2022 and 2021.

Under this provision of the CARES Act, the Company has recorded the tax impact of $ 6.4 million as a deferred tax asset as of December 31, 2021 and no remaining balance as of December 31, 2022.

Income tax expense from discontinued operations was $ 41.3 million, $ 8.6 million and $ 13.1 million for the fiscal years ended December 31, 2024, 2023 and 2022, respectively.

Income tax expense for the fiscal years ended December 31, 2024, 2023 and 2022 was impacted primarily by the sale of the divested entities and changes in the income before income taxes from discontinued operations.

On August 16, 2022, the U.S.

government enacted the Inflation Reduction Act (“IRA”), which, among other things, imposes a new corporate alternative minimum tax and an excise tax on stock buybacks.

government enacted the Inflation Reduction Act, which, among other things, imposes a new corporate alternative minimum tax and an excise tax on stock buybacks.

As of December 31, 2024, the Company has determined that the Act had no tax impacts on its consolidated financial statements.

The Organization for Economic Co-operation and Development (“OECD”) published its model rules “Tax Challenges Arising From the Digitalization of the Economy - Global Anti-Base Erosion Model Rules (Pillar Two)” which established a global minimum corporate tax rate of 15 % for certain multinational enterprises.

Many countries have implemented or are in the process of implementing the Pillar Two legislation, which will apply to the Company.

While the Company does not currently estimate a material impact to the consolidated financial statements, the Company continues to monitor the impact as countries implement legislation and the OECD provides additional guidance.

The Company held cash and cash equivalents in foreign subsidiaries of $ 65.0 million and $ 44.0 million as of December 31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, the undistributed earnings of the Company’s foreign subsidiaries was $ 130.7 million and $ 125.1 million, respectively.

The Company has not recorded a deferred tax liability related to undistributed earnings of its foreign subsidiaries as of December 31, 2023, except for a $ 0.4 million of deferred tax liability recorded as of December 31, 2023 for unremitted earnings in Canada with respect to which the Company no longer has an indefinite reinvestment assertion.

The Company has not recorded a deferred tax liability related to undistributed earnings of its foreign subsidiaries as of December 31, 2024 , except for a $ 0.6 million deferred tax liability for unremitted earnings in Canada with respect to which the

Company no longer has an indefinite reinvestment assertion.

Taxes have not been provided on the remaining $ 114.2 million of undistributed foreign earnings.

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Deferred tax assets are only recorded to the extent that they are realizable based upon past and future income.

As a result of the evaluation, the Company established a valuation allowance of $ 3.5 million, $ 5.4 million and $ 6.9 million on its deferred tax assets as of December 31, 2023, 2022 and 2021, respectively.

The Company’s valuation allowances on its deferred tax assets as of December 31, 2024 , 2023 and 2022 were $ 3.2 million, $ 3.5 million and $ 3.6 million, respectively.

As of December 31, 2024 , the Company had $ 3.6 million of United States Federal Net Operating Losses (“NOL”), $ 30.1 million state NOL, and $ 3.9 million foreign NOL.

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These amounts were $ 1.4 million, $ 0.9 million and $ 0.2 million for the years ended December 31, 2024 , 2023 and 2022, respectively.

Segments and Geographic Information

The Company’s operations are organized into two reportable segments:

sales and marketing.

The operating segments reported below are the segments of the Company for which separate financial information is available and for which segment results are evaluated regularly by the chief operating decision maker (the chief executive officer) in deciding how to allocate resources and in assessing performance.

Through the Company’s sales segment, the Company serves as a strategic intermediary between consumer goods manufacturers and retailer partners and performs critical merchandising services on behalf of both consumer goods manufacturers and retail partners.

Through the Company’s marketing segment, the Company develops and executes marketing programs for manufacturers and retailers.

These reportable segments are organized by the types of services provided, similar economic characteristics, and how the Company manages its business.

Operating Segments and Geographic Information

Effective January 1, 2024, the Company revised its reportable segments to align with the Company’s business strategy, and the manner in which the Chief Executive Officer, the Company's CODM , assesses the performance and makes decisions regarding the allocation of resources for the Company.

The Company’s revised reportable segments consist of Branded Services, Experiential Services, and Retailer Services.

The reportable segments reported below are the segments of the Company for which separate financial information is available.

Through the Company's Branded Services segment, the Company offers capabilities in brokerage, branded merchandising and omni-commerce marketing services to consumer goods manufacturers.

Through the Company's Experiential Services segment, the Company expands the reach of consumer brands and retailer products to convert shoppers into buyers through sampling and product demonstration programs executed in-store and online.

Through the Company's Retailer Services segment, the Company provides retailers with end-to-end advisory, retailer merchandising, and agency expertise to drive sales.

The assets and liabilities of the Company are managed centrally and are reported internally in the same manner as the consolidated financial statements;

therefore, no additional information is produced or included herein.

The Company and its chief operating decision maker evaluate performance based on revenues and operating (loss) income.

(in thousands)

Segment operating income is the measure utilized by the CODM to assess performance and allocate resources.

When evaluating the Company’s financial performance, the CODM regularly reviews revenues, compensation and benefits, reimbursable expenses and other segment items.

Compensation costs are key metrics reviewed by the CODM when allocating resources and assessing performance as the Company depends significantly on human capital to deliver services to its clients.

Reimbursable expenses are also

reviewed regularly by the CODM as revenue included in the CODM packages are net of these expenses.

The accounting policies for the segments are consistent with those described Note 1— Organization and Significant Accounting Policies.

Revenues and significant expenses by segment are as follows:

Year Ended December 31, 2024

(in thousands)

Branded Services

Experiential Services

Retailer Services

Total Company

Compensation and benefits

Reimbursable expenses

Other segment items 1

Impairment of goodwill and indefinite-lived asset

Depreciation and amortization

Income from unconsolidated investments

Operating income

Income from equity method investments

Total segment operating expenses from continuing operations

Total segment operating (loss) income from continuing operations

Year Ended December 31, 2023

(in thousands)

Branded Services

Experiential Services

Retailer Services

Total Company

Compensation and benefits

Reimbursable expenses

Other segment items 1

Impairment of goodwill and indefinite-lived asset

Depreciation and amortization

Operating loss

Deconsolidation of European joint venture

Total segment operating expenses from continuing operations

Total segment operating income from continuing operations

Year Ended December 31, 2022

(in thousands)

Branded Services

Experiential Services

Retailer Services

Total Company

Compensation and benefits

Reimbursable expenses

Other segment items 1

Impairment of goodwill and indefinite-lived asset

Depreciation and amortization

Operating income

Revenues and long-lived assets by services provided in geographic region are as follows:

Loss on divestiture

Total segment operating expenses from continuing operations

Total segment operating loss from continuing operations

The “other segment items” category primarily consists of costs incurred in the execution of service obligations, including supplies, technology, and other direct expenses such as travel.

These costs align with the segment-level information regularly provided to the CODM and represent the difference between revenue and the significant expense categories above in determining segment profitability.

Revenues by geographic region are as follows:

Year Ended December 31,

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North America

International

Total revenues

(in thousands)

Long-Lived Assets

North America

International

Total long-lived assets

European Joint Venture (1)

Total revenue

The Company’s European joint venture was deconsolidated during fiscal year 2023.

For further details, see Note 2 — Discontinued Operations, Deconsolidation of European Joint Venture, Divestitures and Acquisitions.

North American revenues were primarily services provided in the U.S.

representing revenues of $ 3.1 billion, $ 3.2 billion, and $ 3.0 billion during the years ended December 31, 2024, 2023, and 2022, respectively.

The majority of the Company’s long-lived assets are primarily located in North America.

Long-lived assets located in all other geographic regions as of December 31, 2024 and 2023 are not material.

North American long-lived assets were primarily in the U.S.

representing long-lived assets of $ 97.1 million and $ 64.1 million as of December 31, 2024 and 2023, respectively.

The classification “International” primarily includes the Company’s operations in the U.K., Germany, the Netherlands and Japan.

Redeemable Noncontrolling Interests

The Company was an indirect party to a put and call option agreement with respect to the common securities that represent the remaining noncontrolling interest from a then majority-owned subsidiary, which was established through a then majority-owned international joint venture during the year ended December 31, 2021.

The put and call option agreement representing 20 % of the total outstanding noncontrolling equity interest of that subsidiary may be exercised at the discretion of the noncontrolling interest holder by providing written notice to the Company beginning in 2026 and expiring in 2028 .

The redemption value of the put and call option agreement is based on a multiple of the majority-owned subsidiary’s earnings before interest, taxes, depreciation and amortization subject to certain adjustments.

The noncontrolling interest is subject to a put option that is outside of the Company’s control and is presented as redeemable noncontrolling interest in the temporary equity section of the Consolidated Balance Sheets.

The Company recorded its redeemable noncontrolling interest at fair value on the date of the related business combination transaction and recognizes changes in the redemption value at the end of each reporting period.

As part of the ASL Transaction, the Company no longer has a carrying value of the redeemable noncontrolling interest as of December 31, 2023.

Changes in redeemable noncontrolling interest for the years ended December 31, 2023 and 2022, are as follows:

(in thousands)

Balance at January 1, 2022

Fair value at acquisition

Net income attributable to redeemable noncontrolling interests

Dividend distribution

Foreign currency translation adjustment

Balance at December 31, 2022

Net income attributable to redeemable noncontrolling interests

Dividend distribution

Deconsolidation of subsidiaries

Foreign currency translation adjustment

Balance at December 31, 2023

During the year ended December 31, 2022, the Company, through its then majority owned international joint venture, acquired one sales business which included a put option exercisable by the 20 % shareholder that allowed such shareholder to sell its 20 % noncontrolling interest to the Company for a multiple of the acquired subsidiary’s adjusted earnings.

As the put option was outside of the Company’s control, the estimated value of the 20 % noncontrolling interest was presented as a redeemable noncontrolling interest outside of permanent equity on the Consolidated Balance Sheets.

The fair value of the redeemable noncontrolling interest and put option at the acquisition date was valued based on a mix of the income approach for determining the value of the redeemable noncontrolling interest and market approach for determining the most advantageous redemption point for the put option using a Monte Carlo simulation method.

The fair value assigned to this interest was estimated using Level 3 inputs based on unobservable inputs.

As part of the ASL Transaction, the Company no longer has a carrying value of the redeemable noncontrolling interest as of December 31, 2023.

The classification of “Asia Pacific” primarily includes the Company’s operations in Japan, South Korea and Taiwan.

The classification of “Europe” primarily includes the Company’s operations in Spain, France and Sweden.

The Company does not disclose total assets by segment as it is not provided to the CODM.

Commitments and Contingencies

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At this time, the Company cannot predict the ultimate outcome of any investigation related to the Take 5 Matter and is unable to estimate the potential impact such an investigation may have on the Company.

In August 2019, as a result of the Take 5 Matter, the Company provided a written indemnification claim notice to the sellers of Take 5 (the “Take 5 Sellers”) seeking monetary damages (including interest, fees and costs) based on allegations of breach of the asset purchase agreement (the “Take 5 APA”), as well as fraud.

The Company and the Take 5 Sellers engaged in arbitration proceedings.

In October 2022, the arbitrator made a final award in the Company’s favor.

The Company is actively pursuing the collection of this award in state court in Florida.

The Company is currently unable to estimate if or when it will be able to collect any amounts associated with this arbitration.

The Take 5 Matter may result in additional litigation against the Company, including lawsuits from clients, or governmental investigations, which may expose the Company to potential

liability in excess of the amounts being offered by the Company as refunds to Take 5 clients.

The Company is actively pursuing the collection of this award.

The Company is currently unable to estimate if or when it will be able to collect any amounts

associated with this arbitration.

The Take 5 Matter may result in additional litigation against the Company, including lawsuits from clients, or governmental investigations, which may expose the Company to potential liability in excess of the amounts being offered by the Company as refunds to Take 5 clients.

The Company is currently unable to determine the amount of any potential liability, costs or expenses (above the amounts already being offered as refunds) that may result from any lawsuits or investigations associated with the Take 5 Matter or determine whether any such issues will have any future material adverse effect on the Company’s financial position, liquidity, or results of operations.

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If the Company were to fail to perform or comply with these obligations, any draws upon surety bonds issued on its behalf would then trigger the Company’s payment obligation to the surety bond issuer.

The Company has outstanding surety bonds issued for its benefit of $ 16.0 million as of December 31, 2023, and 2022.

Subsequent Events

In January 2024, the Company entered into an agreement and sold its collection of foodservice businesses, most notably Wayp oint.

The Company received approximately $ 91.0 million in cash proceeds, less estimated working capital adjustments and an ongoing 7.5 % stake in the entity with which the foodservice businesses were combined.

The Company is currently in the process of finalizing the accounting for this transaction and has determined that the gain or loss related to this sale is impractical to report as of the date of this filing.

In December 2023, the Company entered into a trading plan under Rule 10b5-1 of the Exchange Act authorizing the repurchase of shares of the Company’s Class A common stock.

From January 2, 2024 to February 29, 2024, the Company purchased 3.0 million shares of Class A common stock.

No stock repurchases were made pursuant to this plan for the year ended December 31, 2023.

The Company has outstanding surety bonds issued for its benefit of $ 15.0 million and $ 16.0 million as of December 31, 2024 and 2023, respectively.

ADVANTAGE SOLUTIONS INC.

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Common stock, $ 0.0001 par value, 3,290,000,000 shares authorized;

322,235,261 and 319,690,300 shares issued and outstanding as of

December 31, 2023 and 2022, respectively

320,773,096 and 322,235,261 shares issued and outstanding as of December 31, 2024 and 2023, respectively

Additional paid-in capital

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Accumulated other comprehensive loss

Common stock in treasury, at cost;

3,600,075 and 1,610,014 shares as of

December 31, 2023 and 2022, respectively

Treasury stock, at cost;

12,400,075 and 3,600,075 shares as of December 31, 2024 and 2023, respectively

Total equity attributable to stockholders of Advantage Solutions Inc.

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(in thousands)

Cost of revenues

Cost of revenues (exclusive of depreciation and amortization shown separately below)

Selling, general, and administrative expenses

Impairment of goodwill and indefinite-lived assets

Depreciation and amortization

Impairment of goodwill and indefinite-lived asset

Gain on deconsolidation of subsidiaries

Loss on divestitures

Income from unconsolidated investments

Total expenses

Depreciation and amortization

Income from equity method investments

Total operating expenses

Operating income

Other (income) expenses:

Change in fair value of warrant liability

Other income:

Change in fair value of warrant liabilities

Interest expense, net

Total other (income) expenses

Income (loss) before income taxes and equity in net income of subsidiaries

Total other income

Income before income taxes and equity in net income of subsidiaries

Provision for income taxes

Net income (loss) before equity in net income of subsidiaries

Equity in net (loss) income of subsidiaries

Net (loss) income attributable to subsidiaries

Other comprehensive (loss) income, net of tax equity in

comprehensive (loss) income of subsidiaries

Total comprehensive (loss) income

Net income before equity in net income of subsidiaries

Equity in net loss of subsidiaries

Net loss attributable to subsidiaries

Other comprehensive (loss) income, net of tax equity in comprehensive (loss) income of subsidiaries

Total comprehensive loss

See Notes to Condensed Registrant Only Financial Statements

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(“Holdings”) and all of the Borrower’s direct and indirect wholly owned material U.S.

subsidiaries (subject to certain permitted exceptions) and Canadian subsidiaries (subject to certain permitted exceptions, including exceptions based on immateriality thresholds of aggregate assets and revenues of Canadian subsidiaries) (the “Guarantors”).

subsidiaries (as defined, subject to certain permitted exceptions) and Canadian subsidiaries (subject to certain permitted exceptions, including exceptions based on immateriality thresholds of aggregate assets and revenues of Canadian subsidiaries) (the “Guarantors”).

The Term Loan Facility is secured by a lien on substantially all of Holdings’, the Borrower’s and the Guarantors’ assets (subject to certain permitted exceptions).

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data