What changed in this filing

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Item 1. Financial Statements

2025-05-12 compared with 2024-11-12 · 181 added, 401 removed, 358 unchanged (62% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

(in thousands, except share data)

March 31, 2025

December 31, 2024

Current assets

3 unchanged sentences

Prepaid expenses and other current assets

Current assets of discontinued operations

Total current assets

2 unchanged sentences

Investments in unconsolidated affiliates

Other assets of discontinued operations

LIABILITIES AND STOCKHOLDERS' EQUITY

5 unchanged sentences

Deferred revenues

Current liabilities of discontinued operations

Total current liabilities

2 unchanged sentences

Other long-term liabilities

Other liabilities of discontinued operations

Total liabilities

2 unchanged sentences

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

320,418,083 and 322,235,261 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

323,265,272 and 320,773,096 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively

Additional paid in capital

3 unchanged sentences

Treasury stock, at cost;

12,400,075 and 3,600,075 shares as of September 30, 2024 and December 31, 2023, respectively

Total equity attributable to stockholders of Advantage Solutions Inc.

Nonredeemable noncontrolling interest

12,894,517 and 12,400,075 shares as of March 31, 2025 and December 31, 2024, respectively

Total stockholders' equity

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands, except share and per share data)

1 unchanged sentence

Selling, general, and administrative expenses

Impairment of goodwill and indefinite-lived assets

Depreciation and amortization

Loss from equity method investments

(Income) loss from equity method investments

Total operating expenses

Operating (loss) income from continuing operations

Other expenses (income):

Operating loss from continuing operations

Other expenses:

Change in fair value of warrant liabilities

1 unchanged sentence

Total other expenses, net

Loss from continuing operations before income taxes

Benefit from income taxes from continuing operations

Loss from continuing operations before provision for (benefit from) income taxes

Provision for (benefit from) income taxes from continuing operations

Net loss from continuing operations

Net (loss) income from discontinued operations, net of tax

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

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

Net income from discontinued operations, net of tax

net income 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

Basic (loss) earnings per common share from discontinued operations

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

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

Diluted (loss) earnings per common share from discontinued operations

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

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:

Comprehensive Loss:

Comprehensive Income (Loss):

Net loss attributable to stockholders of Advantage Solutions Inc.

4 unchanged sentences

ADVANTAGE SOLUTIONS INC.

CONDENSED CONSOL IDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Treasury Stock

2 unchanged sentences

(in thousands, except share data)

Income (Loss)

Balance at July 1, 2024

Balance at January 1, 2025

Comprehensive loss

8 unchanged sentences

Stock-based compensation expense

Balance at September 30, 2024

Solutions Inc.

Treasury Stock

Comprehensive

Stockholders'

Noncontrolling

Stockholders'

(in thousands, except share data)

Income (Loss)

Balance at July 1, 2023

Comprehensive loss

Net (loss) income

Foreign currency translation adjustments

Total comprehensive loss

Interest on loans to Karman Topco L.P.

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 September 30, 2023

See Notes to the Condensed Consolidated Financial Statements.

Balance at March 31, 2025

Solutions Inc.

5 unchanged sentences

(in thousands, except share data)

Income (Loss)

Balance at January 1, 2024

2 unchanged sentences

Foreign currency translation adjustments

Total comprehensive (loss) income

Total comprehensive loss

Interest on loans to Karman Topco L.P.

4 unchanged sentences

Shares issued under 2020 Incentive Award Plan

Sale of a business

Stock-based compensation expense

Balance at September 30, 2024

Solutions Inc.

Treasury Stock

Comprehensive

Stockholders'

Noncontrolling

Stockholders'

(in thousands, except share data)

Income (Loss)

Balance at January 1, 2023

Comprehensive (loss) income

Net (loss) income

Foreign currency translation adjustments

Total comprehensive (loss) income

Interest on loans to Karman Topco L.P.

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

Stock-based compensation expense

Balance at September 30, 2023

Balance at March 31, 2024

See Notes to the Condensed Consolidated Financial Statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss) income from discontinued operations, net of tax

Net loss from continuing operations

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

Noncash interest income (expense)

Deferred financing fees related to repricing of long-term debt

Adjustments to reconcile net loss to net cash used in operating activities

Non-cash interest income

Amortization of deferred financing fees

Impairment of goodwill and indefinite-lived assets

Depreciation and amortization

4 unchanged sentences

Stock-based compensation

Loss from equity method investments

(Income) loss from equity method investments

Distribution received from equity method investments

8 unchanged sentences

Other accrued expenses and other liabilities

Net cash provided by operating activities from continuing operations

Net cash provided by operating activities from discontinued operations

Net cash provided by operating activities

Net cash used in operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

2 unchanged sentences

Proceeds from divestitures, net of cash

Proceeds from sale of investments in unconsolidated affiliates

Net cash provided by (used in) investing activities from continuing operations

Net cash used in investing activities from discontinued operations

Net cash provided by (used in) investing activities

Net cash (used in) provided by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Borrowings under lines of credit

Payments on lines of credit

Principal payments on long-term debt

Repurchases of Senior Secured Notes and Term Loan Facility debt

Debt issuance costs

Proceeds from issuance of common stock

1 unchanged sentence

Contingent consideration payments

Holdback payments

Redemption of noncontrolling interest

Purchase of treasury stock

Net cash used in financing activities from continuing operations

Net cash (used in) provided by financing activities from discontinued operations

Net cash used in financing activities

Net effect of foreign currency changes on cash from continuing operations

Net effect of foreign currency changes on cash from discontinued operations

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

1 unchanged sentence

Cash, cash equivalents and restricted cash, end of period

Cash, cash equivalents and restricted cash of discontinued operations

Cash, cash equivalents and restricted cash, end of period

SUPPLEMENTAL CASH FLOW INFORMATION

Gain on divestitures from discontinued operations

Noncash consideration for purchases of investments in unconsolidated affiliates

Noncash proceeds from divestitures

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

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

See Notes to the Condensed Consolidated Financial Statements.

9 unchanged sentences

The Condensed Consolidated Balance Sheet at December 31, 2024 was derived from the audited Consolidated Balance Sheet at that date and does not include all the disclosures required by GAAP.

In the opinion of management, all adjustments which are of a normal recurring nature and necessary for a fair statement of the results as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023 have been reflected in the condensed consolidated financial statements.

In the opinion of management, all adjustments which are of a normal recurring nature and necessary for a fair statement of the results as of March 31, 2025 and for the three months ended March 31, 2025 and 2024 have been reflected in the condensed consolidated financial statements.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2024 and the related footnotes thereto.

Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period.

The Company has reorganized its portfolio of businesses into a new, simplified structure that more closely aligns its business capabilities with economic buyers.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected during the remainder of the current year or for any future period.

As of January 1, 2024, the Company reorganized its portfolio of businesses into a new, simplified structure that more closely aligns its business capabilities with economic buyers.

As a result of this reorganization, the Company revised its reportable segments and identified non-core businesses for disposition (“Divestiture plan”).

In the first quarter of 2024, the Company determined its Divestiture plan met the criteria for discontinued operations as it represented a strategic shift that had a major effect on the Company’s operations and financial results.

As such, the results of businesses meeting the criteria to be classified as held for sale or disposed of in the current or prior periods in accordance with the Company’s Divestiture plan have been reclassified to discontinued operations.

Refer to Note 2— Held for Sale, Divestitures and Discontinued Operations for additional information on the Company’s assets and liabilities classified as held for sale and the Company's discontinued operations.

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 condensed consolidated financial statements and accompanying notes.

In the first quarter of fiscal year 2024, the Company determined its Divestiture plan met the criteria for discontinued operations as it represented a strategic shift that had a major effect on the Company’s operations and financial results.

As such, the results of businesses meeting the criteria to be classified as held for sale or disposed of in accordance with the Company’s Divestiture plan were reclassified to discontinued operations.

Refer to Note 2— Discontinued Operations for additional information on the Company’s discontinued operations.

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

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

Refer to Note 8— Segments for additional information on the Company’s reportable segments.

Refer to Note 2— Held for Sale, Divestitures and Discontinued Operations for additional information on the Company’s discontinued operations.

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 Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations and Comprehensive Loss, Condensed Consolidated Statements of Stockholders' Equity and Condensed 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.

Refer to Note 8— Segments for additional information on the Company’s reportable segments.

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 condensed 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 which also meets the criteria for discontinued operations are segregated in the condensed consolidated balance sheets for the current and prior periods presented.

Cash flows for continuing and discontinued operations are segregated in the condensed consolidated 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.

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.

In connection with the Company’s reorganization and the associated change in operating segments, the Company reassessed its reporting units and concluded that it has five reporting units (Branded Services, Branded Agencies, Experiential Services, Merchandising and Retailer Agencies).

As a result, the Company performed the required impairment assessments directly before and immediately after the change in reporting units as of January 1, 2024.

The assets and liabilities were reassigned to the applicable reporting units and allocated goodwill using the relative fair value approach.

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

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

The market approach applies market multiples derived from historical earnings data of selected guideline publicly traded companies that are first screened by industry group and then further narrowed on the reporting units' business descriptions, markets served, competitors, EBITDA margins and revenue size.

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

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.

The uncertainty and volatility in the economic environment in which the Company operates could have an impact on the Company's future growth and could result in future impairment charges.

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 conjunction with the tests performed as of January 1, 2024, each of the fair values for the reporting units tested was 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 non-cash goodwill impairment charge of $ 99.7 million related to the Company's Branded Agencies reporting unit goodwill during the nine months ended September 30, 2024, which has been reflected in “Impairment of goodwill and indefinite-lived assets” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

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

Indefinite Lived Intangible Assets

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

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.

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 assets.

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

For the three and nine months ended September 30, 2024 , no events or circumstances were noted that would indicate a triggering event for the Company’s intangible assets with indefinite useful lives.

The uncertainty and volatility in the economic environment in which the Company operates could have an impact on the Company’s future growth and could result in future impairment charges.

There is no assurance that actual cash flows or other assumptions will not significantly decline from these projections.

Refer to Note 2— Discontinued Operations for additional information on the Company’s discontinued operations.

Revenue Recognition

4 unchanged sentences

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 international joint venture (prior to the deconsolidation during fiscal year 2023).

Revenues within the Branded Services segment are further disaggregated between brokerage services, branded merchandising services and omni-commerce marketing services.

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.

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.

6 unchanged sentences

Disaggregated revenues were as follows:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

3 unchanged sentences

Omni-commerce marketing services

International joint venture

Total Branded Services revenue

10 unchanged sentences

Deferred revenues are recognized as revenues when the related services are performed for the client.

Revenues recognized during the three and nine months ended September 30, 2024 that were included in Deferred revenues as of December 31, 2023 were $ 1.3 million and $ 18.1 million, respectively .

Revenues recognized during the three and nine months ended September 30, 2023 included in Deferred revenues as of December 31, 2022 were $ 3.4 million and $ 18.0 million, respectively.

Revenues recognized during the three months ended March 31, 2025 that were included in Deferred revenues as of December 31, 2024 were $ 10.7 million.

Revenues recognized during the three months ended March 31, 2024 included in Deferred revenues as of December 31, 2023 were $ 12.5 million.

Accounting Standards Recently Issued but Not Yet Adopted by the Company

1 unchanged sentence

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 standard is effective for the Company's annual report for fiscal year 2025.

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 December 2023, the FASB issued 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 and it will be applied retrospectively to all periods presented.

The Company is currently evaluating the impact of ASU 2023-07 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's fiscal year reporting beginning October 4, 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”), which 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 the Company beginning in fiscal year 2026 and interim periods within fiscal year 2027, with early adoption permitted.

Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in

January 2025, the FASB issued ASU 2025-01, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date (“ASU 2025-01”).

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.

ASU 2024-03, as clarified by ASU 2025-01, is effective for the Company beginning in fiscal year 2026 and interim periods within fiscal year 2027, with early adoption permitted.

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

1 unchanged sentence

Other new accounting pronouncements recently issued or newly effective were not applicable to the Company, did not have a material impact on the condensed consolidated financial statements or are not expected to have a material impact on the condensed consolidated financial statements.

Held for Sale, Divestitures and Discontinued Operations

Held for Sale

As of December 31, 2023, the Company classified certain assets and liabilities as held for sale in the Condensed Consolidated Balance Sheets, primarily related to assets and liabilities to be disposed of by sale (“disposal groups”).

The fair value of a disposal group, less any costs to sell, is assessed each reporting period it remains classified as held for sale and any remeasurement to the lower of carrying value or fair value less costs to sell is reported as an adjustment to the carrying value of the disposal group.

The assets and liabilities related to these businesses are included in the discontinued operations captions in the Condensed Consolidated Balance Sheets for all periods presented.

2023 Divestitures

In 2023, the Company entered into an agreement to sell certain assets and liabilities (collectively, the “2023 Divestitures”).

The Company determined that the disposal groups did not meet the criteria for classification as discontinued operations as of September 30, 2023.

During the three and nine months ended September 30, 2023 , the Company recorded a loss of $ 2.6 million and $ 20.2 million, respectively, on divestitures as a component of “Net income (loss) from discontinued operations, net of tax” in the Condensed Consolid ated Statements of Operations and Comprehensive Loss.

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 nine months ended September 30, 2024, the “2024 Divestitures” ).

On January 31, 2024, the Company sold a collection of foodservice businesses.

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 Condensed Consolidated Balance Sheets and an immaterial amount of equity income (loss) reported in “Income from equity method investments” on the Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2024.

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 flows.

The investment is reported in “Investments in unconsolidated affiliates” on the Condensed Consolidated Balance Sheets and equity income (loss) reported in “(Income) loss from equity method investments” on the Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2025 and 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 (collectively with the other businesses disposed during the nine months ended September 30, 2024, the “2024 Divestitures”) .

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

As of June 30, 2024, certain assets and liabilities of the Jun Group business were classified as held for sale.

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 to

the Company in two additional installments of $ 22.5 million ($ 27.5 million less $ 5 million estimated adjustments) and $ 27.5 million, 12 and 18 months , respectively, after the completion of the sale.

During the three and nine months ended September 30, 2024 , the Company recorded a gain from the 2024 Divestitures of $ 25.1 million and $ 95.3 million, respectively, as a component of “Net income (loss) from discontinued operations, net of tax” in the Condensed Consolid ated Statements of Operations and Comprehensive Loss.

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

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 the FASB Accounting Standards Codification (“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 Condensed Consolidated Statements of Operations and Comprehensive Loss, Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Cash Flows for all periods presented.

As part of the agreements for certain of the 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 Condensed Consolidated Statements of Operations and Comprehensive Loss.

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

As of September 30, 2024, all businesses that were previously classified as discontinued operations had been fully divested.

(in thousands)

December 31, 2023

Carrying amounts of major classes of assets

Cash and cash equivalents

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

Prepaid and other current 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

Accrued compensation and benefits

Other accrued expenses

Deferred revenues

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.

As part of the purchase agreement, the buyer has agreed to remit the remaining consideration to the Company in two additional installments of $22.5 million ($27.5 million less $5.0 million estimated adjustments) and $27.5 million, 12 and 18 months, respectively, after the completion of the sale.

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

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

Three Months Ended

March 31, 2024

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

Selling, general, and administrative expenses

(Gain) loss on divestiture

Gain on divestitures

Depreciation and amortization

6 unchanged sentences

Provision for income taxes from discontinued operations

Net (loss) income from discontinued operations, net of tax

Net income from discontinued operations, net of tax

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

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

Goodwill and Intangible Assets

The following tables set forth information for goodwill by reportable segment:

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:

(in thousands)

Branded Services

Retailer Services

Experiential Services

Balance at December 31, 2023

Impairment charge

Foreign exchange translation effects

Balance at September 30, 2024

Accumulated impairment losses related to goodwill were $ 2.1 billion and $ 2.0 billion as of September 30, 2024 and December 31, 2023, respectively.

Three Months Ended

March 31, 2024

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

Goodwill and Intangible Assets

The carrying amount of goodwill as of March 31, 2025 and December 31, 2024 was $ 477.0 million.

Accumulated impairment losses related to goodwill were $ 2.3 billion of March 31, 2025 and December 31, 2024.

The following tables set forth information for intangible assets:

September 30, 2024

March 31, 2025

(amounts in thousands)

15 unchanged sentences

Total other intangible assets

Amortization of intangible assets was $ 44.5 million an d $ 46.9 million for the three months ended September 30, 2024 and 2023 , respectively, and $ 133.0 million and $ 140.9 million for the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, estimated future amortization expense of the Company’s finite-lived intangible assets are as follows:

Amortization of intangible assets was $ 42.9 million an d $ 44.3 million for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, estimated future amortization expense of the Company’s finite-lived intangible assets are as follows:

(in thousands)

1 unchanged sentence

Total amortization expense

September 30,

(in thousands)

March 31, 2025

December 31, 2024

Term Loan Facility

4 unchanged sentences

Long-term debt, net of current portion

As of September 30, 2024, the Company had $ 1.1 billion of debt outstanding under the Term Loan Facility (as defined below) and $ 615.1 million of debt outstanding under the Notes (both as defined in the Annual Report on Form 10-K filed March 1, 2024 for the year ended December 31, 2023 (the “2023 Annual Report”)) with maturity dates of October 28, 2027 and November 15, 2028 , respectively.

As of March 31, 2025, the Company had $ 1.1 billion of debt outstanding under a secured first lien term loan credit facility in an aggregate principal amount of $ 1.1 billion (as may be amended from time to time (the “Term Loan Facility”) and $ 595.1 million of debt outstanding 6.5 % Senior Secured Notes due 2028 (the “Notes”) with maturity dates of October 28, 2027 and November 15, 2028 , respectively.

In April 2024 (the “Third Lien Amendment Effective Date” ), the Company amended the Term Loan Facility 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;

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Interest on the Notes is payable semi-annually in arrears at a rate of 6.50 % per annum.

The Company was in compliance with all of its affirmative and negative covenants under the Term Loan Facility and Notes as of September 30, 2024 .

In addition, the Company is required to repay the principal under the Term Loan

Facility in the greater amount of its excess cash flow, as such term is defined in the agreement governing the Term Loan Facility, or $ 13.3 million, per annum, in quarterly payments.

The Company made the minimum quarterly principal payments of $ 3.3 million and $ 9.9 million during the three and nine months ended September 30, 2024 and 2023, respectively.

The Company was in compliance with all of its affirmative and negative covenants under the Term Loan Facility and Notes as of March 31, 2025 .

In addition, the Company is required to repay the principal under the Term Loan Facility in the greater amount of its excess cash flow, as such term is defined in the agreement governing the Term Loan Facility, or $ 13.3 million, per annum, in quarterly payments.

The Company made the minimum quarterly principal

payments of $ 3.3 million during the three months ended March 31, 2025 and 2024, respectively.

No payments under the excess cash flow calculation were required in such periods.

In May 2023 (the “Second Lien Amendment Effective Date”), the Company amended the Term Loan Facility to replace the U.S.

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

The Company voluntarily repurchased an aggregate of $ 50.4 million and $ 127.9 million principal amount of its Senior Secured Notes during the three and nine months ended September 30, 2024, respectively.

The Company recognized a gain on the repurchase of the Senior Secured Notes of $ 3.5 million and $ 8.6 million for the three and nine months ended September 30, 2024, respectively, as a component of “Interest expense, net” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

The Company voluntarily repurchased an aggregate of $ 29.8 million principal amount of its Term Loan Facility during the three and nine months ended September 30, 2024 .

The Company recognized a gain on the repurchases of $ 0.5 million for the three and nine months ended September 30, 2024 as a component of “Interest expense, net” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

The Company voluntarily repurchased an aggregate of $ 56.8 million and $ 111.2 million principal amount of its Term Loan Facility during the three and nine months ended September 30, 2023 , respectively.

The Company recognized a gain on the repurchases of an immaterial amount and $ 5.2 million for the three and nine months ended September 30, 2023, respectively, as a component of “Interest expense, net” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

As of September 30, 2024, the Company had no borrowings under its senior secured asset-based revolving credit facility in an aggregate principal amount of up to $ 500.0 million, subject to borrowing base capacity (as may be amended from time to time, the “Revolving Credit Facility”).

The Company voluntarily repurchased an aggregate of $ 20.0 million principal amount of the Notes during the three months ended March 31, 2025.

The Company recognized a gain on the repurchase of the Notes of $ 1.8 million for the three months ended March 31, 2025 , as a component of “Interest expense, net” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

The Company voluntarily repurchased an aggregate of $ 51.0 million principal amount of the Notes during the three months ended March 31, 2024.

The Company recognized a gain on the repurchase of the Notes of $ 2.7 million for the three months ended March 31, 2024, as a component of “Interest expense, net” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

As of March 31, 2025, the Company had no borrowings under its senior secured asset-based revolving credit facility in an aggregate principal amount of up to $ 500.0 million, subject to borrowing base capacity (as may be amended from time to time, the “Revolving Credit Facility”).

All borrowings under the Revolving Credit Facility are subject to the satisfaction of certain customary conditions.

Borrowings under the credit agreement bear interest at a floating rate, which at the option of the Company may be either (i) a base rate or Canadian Prime Rate plus an applicable margin of 0.75 %, 1.00 %, or 1.25 % per annum or (ii) Term SOFR or Alternative Currency Spread plus an applicable margin of 1.75 %, 2.00 % or 2.25 % per annum.

Borrowings under the Revolving Credit Facility bear interest at a floating rate, which at the option of the Company may be either (i) a base rate or Canadian Prime Rate plus an applicable margin of 0.75 %, 1.00 %, or 1.25 % per annum or (ii) Term SOFR or Alternative Currency Spread plus an applicable margin of 1.75 %, 2.00 % or 2.25 % per annum.

The Company is required to pay a commitment fee ranging from 0.250 % to 0.375 % per annum in respect of the average daily unused commitments under the Revolving Credit Facility.

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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.

September 30, 2024

March 31, 2025

(in thousands)

Assets measured at fair value

Derivative financial instruments

Total assets measured at fair value

Liabilities measured at fair value

Derivative financial instruments

Warrant liability

Total liabilities measured at fair value

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Total assets measured at fair value

Liabilities measured at fair value

Warrant liability

Contingent consideration liabilities

Total liabilities measured at fair value

Interest Rate Cap Agreements

The Company had interest rate cap and collar contracts with an aggregate notional value of principal of $ 1,350.0 million and $ 950.0 million as of September 30, 2024 and December 31, 2023, respectively, from various financial institutions to manage the Company’s exposure to interest rate movements on variable rate credit facilities.

The interest rate cap and collar contracts will mature on December 16, 2024 and April 5, 2026, respectively.

In July 2024, the Company entered into two interest rate collar contracts with a notional value of principal of $ 200.0 million each.

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

As of September 30, 2024, the fair value of the Company’s outstanding interest rate caps and collars of $4.1 million was included in “Prepaid expenses and other current assets” and “Other long-term liabilities” in the Condensed Consolidated Balance Sheet.

As of December 31, 2023 the fair value of the Company’s outstanding interest rate caps and collars of $ 26.3 million was included in “Prepaid expenses and other current assets” and “Other assets” in the Condensed Consolidated Balance Sheet.

Changes in fair value of the Company's outstanding interest rate caps and collars are recognized as a component of “Interest expense, net” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

During the three months ended September 30, 2024 and 2023, the Company recorded a loss o f $ 3.7 million and a gain of $ 3.2 million, respectively, within “ Interest expense , net, ” related to changes in the fair value of its derivative instruments.

During the nine months ended September 30, 2024 and 2023 , the Company recorded a gain of $ 1.7 million and $ 12.6 million, respectively, within “ Interest expense , ” net, related to changes in the fair value of its derivative instruments.

Contingent Consideration Liabilities

During each reporting period, the Company measures the fair value of its contingent consideration 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 Condensed Consolidated Statements of Operations and Comprehensive Loss.

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

September 30,

(in thousands)

Beginning of the period

Changes in fair value

End of the period

The Company had interest rate collar contracts with an aggregate notional value of principal of $ 700.0 million as of March 31, 2025, from various financial institutions to manage the Company’s exposure to interest rate movements on variable rate credit facilities.

The interest rate collar contracts will mature on April 5, 2026, 2027 and 2028.

As of March 31, 2025, the fair value of the Company’s outstanding interest collars of $ 0.8 million was included in “Other long-term liabilities” in the Condensed Consolidated Balance Sheets.

As of December 31, 2024 the fair value of the Company’s outstanding interest rate caps and collars of $ 0.8 million was included in “Other assets” in the Condensed Consolidated Balance Sheets.

Changes in fair value of the Company's outstanding interest rate caps and

collars are recognized as a component of “Interest expense, net” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

During the three months ended March 31, 2025 and 2024, the Company recorded a loss of $ 1.6 million and a gain of $ 4.2 million, respectively, within “ Interest expense , net, ” related to changes in the fair value of its derivative instruments.

Long-term Debt

2 unchanged sentences

Carrying Value

Balance at September 30, 2024

Balance at March 31, 2025

Term Loan Facility

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Related Party Transactions

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 $ 1.3 million and $ 1.2 million of revenues from such client during the three months ended September 30, 2024 and 2023, respectively.

The Company recognized $ 3.9 million and $ 3.2 million of revenues from such client during the nine months ended September 30, 2024 and 2023, respectively.

Accounts receivable from this client were $ 0.8 million and $ 0.6 million as of September 30, 2024 and December 31, 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 three and nine months ended September 30, 2024.

The Company did no t owe any amounts to this consultant as of September 30, 2024 and December 31, 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 $ 2.0 million and $ 5.9 million of revenues from such client during the three and nine months ended September 30, 2024 , respectively.

The Company recognized $ 4.0 million of revenues from such client during the three and nine months ended September 30, 2023.

Accounts receivable from this client were $ 0.1 million and $ 0.5 million as of September 30, 2024 and December 31, 2023, respectively.

An officer of the Company serves as a member of the board of directors of a client of the Company.

The Company recognized $1.3 million revenues from such client during the three months ended March 31, 2025 and 2024.

Accounts receivable from this client were $0.7 million and $0.4 million as of March 31, 2025 and December 31, 2024, respectively.

Prior to April 1, 2025, a member of the board of directors of the Company served as an officer of a client of the Company.

The Company recognized $2.2 million and $ 1.6 million of revenues from such client during the three months ended March 31, 2025 and 2024, respectively.

Accounts receivable from this client were $0.5 million and $ 0.2 million as of March 31, 2025 and December 31, 2024, respectively.

Unconsolidated Affiliates

During the three months ended September 30, 2024 and 2023 , the Company recognized revenues of $ 2.7 million and $ 6.9 million, respectively, from unconsolidated affiliates.

During the nine months ended September 30, 2024 and 2023 , the Company recognized revenues of $ 14.0 million and $ 15.2 million, respectively, from transactions with unconsolidated affiliates.

Accounts receivable from transactions with unconsolidated affiliates were $ 1.3 million and $ 3.7 million as of September 30, 2024 and December 31, 2023 , respectively.

The Company’s effective tax rates were 11.5 % and 18.2 % for the three months ended September 30, 2024 and 2023 , respectively.

The effective tax rate is based upon the estimated income or loss before taxes for the year, by jurisdiction, and adjusted for estimated permanent tax adjustments.

The fluctuation in the Company’s effective tax rate was primarily due to $ 2.6 million of tax expense resulting from return to provision adjustments during the three months ended September 30, 2024 and a difference in the stock-based compensation shortfall of $ 0.3 million for the three months ended September 30, 2024, as compared to a $ 1.0 million shortfall for the three months ended September 30, 2023.

The Company’s effective tax rates were 15.9 % and 16.9 % for the nine months ended September 30, 2024 and 2023 , respectively.

The effective tax rate is based upon the estimated income or loss before taxes for the year, by jurisdiction, and adjusted for estimated permanent tax adjustments.

The fluctuation in the Company’s effective tax rate was primarily due to additional tax expense during the nine months ended September 30, 2024 due to a goodwill impairment which the Company treated as nondeductible, $ 2.6 million of tax expense resulting from return to provision adjustments during the nine months ended September 30, 2024, a difference in the windfall of $ 0.8 million of stock-based compensation for the nine months ended September 30, 2024, as compared to a $ 4.1 million shortfall for the nine months ended September 30, 2023, and the release of the valuation allowance of $ 1.1 million on deferred tax assets that were determined to be realizable for the nine months ended September 30, 2024.

Income tax expense from discontinued operations was $ 29.5 million and $ 2.3 million for the three months ended September 30, 2024 and 2023, respectively.

Income tax expense for the three months ended September 30, 2024 and 2023 was impacted primarily by the sale of the divested entities and changes in the income (loss) before income taxes from discontinued operations.

Income tax expense from discontinued operations was $ 41.4 million and $ 3.6 million for the nine months ended September 30, 2024 and 2023, respectively.

Income tax expense for the nine months ended September 30, 2024 and 2023 was impacted primarily by the sale of the divested entities and changes in the income (loss) before income taxes from discontinued operations.

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 and for which segment results are evaluated regularly by the CODM in deciding how to allocate resources and in assessing performance.

During the three months ended March 31, 2025 and 2024 , the Company recognized revenues of $ 2.6 million and $ 6.5 million, respectively, from its investment in unconsolidated affiliates.

Accounts receivable from transactions with unconsolidated affiliates were $1.9 million and $0.9 million as of March 31, 2025 and December 31, 2024 , respectively.

The Company’s effective tax rates were ( 14.6 )% and 24.0 % for the three months ended March 31, 2025 and 2024 , respectively.

The effective tax rate is calculated upon the forecasted pretax loss for the year, by jurisdiction, and adjusted for estimated permanent tax adjustments.

The fluctuation in the Company’s effective tax rate was primarily related to an additional valuation allowance established on interest expense limitation carryforward for the three months ended March 31, 2025.

The Company’s 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 and for which segment results are evaluated regularly by the Company's Chief operating decision maker ( “CODM” ) in deciding how to allocate resources and in assessing performance.

Through the Company's Branded Services segment, the Company offers capabilities in brokerage, branded merchandising and omni-commerce marketing services to consumer goods manufacturers.

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therefore, no additional information is produced or included herein.

The Company and its CODM evaluate performance based on revenues and operating (loss) income.

Discontinued operations are not included in the applicable reportable segments.

Refer to Note 2— Held for Sale, Divestitures and Discontinued Operations.

Refer to Note 2— Discontinued Operations.

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 revenues included in the CODM packages are net of these expenses.

Revenues and significant expenses by segment are as follows:

Three Months Ended March 31, 2025

(in thousands)

2 unchanged sentences

Retailer Services

Three Months Ended September 30, 2024

Depreciation and amortization

Loss from equity method investments

Operating (loss) income from continuing operations

Three Months Ended September 30, 2023

Total Company

Compensation and benefits

Reimbursable expenses

Other segment items 1

Depreciation and amortization

Operating (loss) income from continuing operations

Income from equity method investments

Total segment operating expenses from continuing operations

Total segment operating (loss) income from continuing operations

Three Months Ended March 31, 2024

(in thousands)

2 unchanged sentences

Retailer Services

Nine Months Ended September 30, 2024

Impairment of goodwill and indefinite-lived assets

Total Company

Compensation and benefits

Reimbursable expenses

Other segment items 1

Depreciation and amortization

Loss from equity method investments

Operating (loss) income from continuing operations

Nine Months Ended September 30, 2023

Depreciation and amortization

Operating income from continuing operations

Restructuring

In the third quarter of 2024, the Company implemented restructuring plans as a result of the overall reorganization.

Voluntary Early Retirement Program

During the third quarter of fiscal year 2024, the Company offered a Voluntary Early Retirement Program (“VERP”) to certain eligible U.S.-based associates.

During the three and nine months ended September 30, 2024, the Company recorded $ 20.5 million of settlement charges and special termination benefits in “Selling, general, and administrative expenses” in the Condensed 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 employee termination benefits associated with a reduction-in-force expected to be completed in fiscal year 2024.

During the three and nine months ended September 30, 2024, the Company recorded $ 3.6 million of settlement charges and special termination benefits in “Selling, general, and administrative expenses” in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

As of September 30, 2024 , $ 21.1 million of the Company’s restructuring charges were included in “Other accrued expenses” in the Condensed Consolidated Balance Sheets.

(in thousands)

Three and Nine Months Ended September 30, 2024

Restructuring expenses:

Total restructuring expenses

The following table summarizes the Company’s restructuring activity:

(in thousands)

Balance at January 1, 2024

Cash payments

Balance at September 30, 2024

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

(in thousands)

Three and Nine Months Ended September 30, 2024

Branded Services

Experiential Services

Retailer Services

Total restructuring expenses

Total segment operating expenses from continuing operations

Total segment operating loss from continuing operations

(1) 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.

Commitments and Contingencies

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There can be no assurance, however, that these accruals will be sufficient to cover such matters or other legal matters or that such matters or other legal matters will not materially or adversely affect the Company’s financial position, liquidity, or results of operations.

The Company is involved in various litigation and arbitration matters, including purported class or representative actions with respect to matters arising under the California Labor Code and Private Attorneys General Act, and commercial disputes with clients, vendors and third-party sellers of businesses.

The Company is involved in various litigation, including purported class or representative actions with respect to matters arising under the California Labor Code and Private Attorneys General Act.

The Company has also been involved in various litigation matters and arbitrations with respect to commercial matters arising with clients, vendors and third-party sellers of business.

In April 2018, the Company acquired the business of Take 5 Media Group (“Take 5”).

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In October 2022, an arbitrator made a final award in favor of the Company.

The Company is actively pursuing the collection of this award in state court in Florida.

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.

The Company is currently unable to determine the amount of any potential liability, costs or expenses (above the amounts previously 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.

Although the Company has insurance covering certain liabilities, the Company cannot be certain that the insurance will be sufficient to cover any potential liability or expenses associated with the Take 5 Matter.

In the ordinary course of business, the Company is required to provide financial commitments in the form of surety bonds to third parties as a guarantee of its performance on and its compliance with certain obligations.

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 benefits of $ 15.0 million as of March 31, 2025 and December 31, 2024 .

Stock-Based Compensation

The Company has issued nonqualified stock options, restricted stock units (“RSUs”), and performance restricted stock units (“PSUs”) under the Advantage Solutions Inc.

2020 Incentive Award Plan (the “Plan”).

2020 Incentive Award Plan, as amended and restated (the “Plan”).

The Company’s restricted stock units and performance restricted stock units, as described below, 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.

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands)

2 unchanged sentences

Total stock-based compensation before tax

Total stock-based compensation expense included in net income

Total stock-based compensation expense included in net loss

Performance Restricted Stock Units

PSUs granted in 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 2024, 2025 and 2026, and an annual achievement percentage will be determined.

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

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 over the fiscal years in which the award was granted, and an annual achievement percentage will be determined.

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.

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

PSUs granted in 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.

PSUs granted in fiscal years 2023 and 2022 are subject to achievement of certain performance conditions based on the Company’s revenues and Adjusted 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.

The number of PSUs earned shall be adjusted to be proportional to the partial performance between the Threshold Goals, Target Goals and Maximum Goals.

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

The number of PSUs earned shall be adjusted to be proportional to the partial performance between the Threshold, Target and Maximum as defined in the award agreements.

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

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

The maximum potential expense if the Maximum Goals were met for these awards has been provided in the table below.

The maximum potential expense if the Maximum were met for these awards has been provided in the table below.

Recognition of expense associated with performance-based stock is not permitted until achievement of the performance targets are probable of occurring.

Measurement Period

Weighted Average Grant Date Fair Value Per Share

Maximum Remaining Unrecognized Compensation Expense

Weighted-average remaining requisite service periods

(in thousands, except share and per share data)

The following table summarizes the PSU activity for the nine months ended September 30, 2024:

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.

The following table summarizes the PSU activity for the three months ended March 31, 2025:

Performance Share Units

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PSU performance adjustment (1)

Outstanding at September 30, 2024

Outstanding at March 31, 2025 (2)

(1) The number of PSUs outstanding was adjusted during the first quarter of fiscal year 2025, to reflect the 128.3 % achievement level approved by the Human Capital Committee for fiscal year 2024.

(2) 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.

Restricted Stock Units

1 unchanged sentence

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

During the nine months ended September 30, 2024, the following activities involving RSUs occurred under the Plan:

During the three months ended March 31, 2025, the following activities involving RSUs occurred under the Plan:

Number of RSUs

2 unchanged sentences

Outstanding at January 1, 2025

Outstanding at September 30, 2024

As of September 30, 2024 , the total remaining unrecognized compensation cost related to RSUs amounted to $ 23.1 million, which is expected to be amortized over the weighted-average remaining requisite service periods of 2.2 years.

Outstanding at March 31, 2025

As of March 31, 2025, the total remaining unrecognized compensation cost related to RSUs amounted to $ 10.4 million, which is expected to be amortized over the weighted-average remaining requisite service periods of 1.8 years .

Stock Options

During the nine months ended September 30, 2024, the following activities involving stock options occurred under the Plan:

During the three months ended March 31, 2025, the following activities involving stock options occurred under the Plan:

Stock Options

4 unchanged sentences

Cancelled/Expired

Outstanding at September 30, 2024

Exercisable at September 30, 2024

As of September 30, 2024 , the Company had approximately $ 8.0 million of total unrecognized compensation expense related to stock options, net of forfeitures, which the Company expects to recognize over a weighted-average period of approximately 2.5 years.

There were no options exercised during the nine months ended September 30, 2024 and 2023.

Outstanding at March 31, 2025

Exercisable at March 31, 2025

As of March 31, 2025, the Company had approximately $ 5.1 million of total unrecognized compensation expense related to stock options, net of forfeitures, which the Company expects to recognize over a weighted-average period of approximately 2.2 years .

There were no options exercised during the three months ended March 31, 2025 and 2024.

In April 2025, the Company granted 19.4 million RSUs, 4.0 million PSUs and 7.2 million of stock options.

PSUs granted in fiscal years 2025 are subject to achievement of certain performance conditions based on measurements of the Company’s Adjusted EBITDA margin and cash earnings.

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 above.

Earnings Per Share

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The following is a reconciliation of basic and diluted net earnings per common share:

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands, except share and earnings per share data)

Basic earnings per share computation:

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 from discontinued operations attributable to noncontrolling interest

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

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

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

Weighted average common shares - basic

Basic loss per common share from continuing operations

Basic earnings (loss) per common share from discontinued operations

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

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

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 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 from discontinued operations attributable to noncontrolling interest

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

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

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

Weighted average common shares - diluted

Diluted loss per common share from continuing operations

Diluted earnings (loss) per common share from discontinued operations

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

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

The Company had 18,578,321 warrants to purchase Class A common stock at $ 11.50 per share outstanding at September 30, 2024 and 2023, which have been excluded from the calculation of diluted earnings per common share, as

the weighted average market price of the common stock during the three and nine months ended September 30, 2024 and 2023 did not exceed the exercise price of the warrants.

Diluted earnings per common share from discontinued operations

The Company had 18,578,321 warrants to purchase Class A common stock at $ 11.50 per share outstanding at March 31, 2025 and 2024, which have been excluded from the calculation of diluted earnings per common share, as the weighted average market price of the common stock during the three months ended March 31, 2025 and 2024 did not exceed the exercise price of the warrants.

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 13.9 million and 16.6 million weighted-average shares were outstanding for the three and nine months ended September 30, 2024, 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.

Stock-based awards of 8.7 million and 4.0 million weighted-average shares were outstanding for the three and nine months ended September 30, 2023, respectively, but were not included in the computation of diluted loss per common share because the net loss position of the Company made them antidilutive.

In addition, PSUs related to 6.0 million shares assuming achievement of the target level performance were outstanding for the nine months ended September 30, 2024, but were not included in the computation of diluted loss per common share, as the performance targets were not yet met during the nine months ended September 30, 2024.

In addition, PSUs related to 7.3 million shares assuming achievement of the Target Goals were outstanding for the nine months ended September 30, 2023 , but were not included in the computation of diluted (loss) earnings per common share, as the performance targets were not yet met during the nine months ended September 30, 2023 .

Stock-based awards of 9.6 million weighted-average shares were outstanding for the three months ended March 31, 2025 , 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.

Stock-based awards of 20.2 million weighted-average shares were outstanding for the three months ended March 31, 2024 , but were not included in the computation of diluted loss per common share because the net loss position of the Company made them antidilutive.

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-Q

Item 1. Financial Statements