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Item 7. Management’s Discussion and Analysis

2026-03-03 compared with 2025-03-07 · 257 added, 403 removed, 354 unchanged (65% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and related notes thereto included in Item 8 “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.

This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.

Discussions of 2023 items and year-to-year comparisons between 2023 and 2022 are not included in this Form 10-K, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on March 1, 2024.

This section of this Annual Report generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.

Discussions of 2024 items and year-to-year comparisons between 2024 and 2023 are not included in this Annual Report, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on March 7, 2025.

Executive Overview

We are a leading business solutions provider to consumer goods manufacturers and retailers.

We have a strong platform of essential, business critical services like headquarter sales, retail merchandising, in-store sampling and private brand development.

We are a leading omni-commerce business solutions provider to CPG manufacturers and retailers.

We have a strong platform of essential, business critical services like headquarter sales, retail merchandising, in-store sampling, digital commerce and shopper marketing.

We generate demand for brands and retailers of all sizes, helping get the right products on the shelf, whether physical or digital, and into the hands of consumers in every way they shop.

We use a scaled platform to innovate as a trusted partner with our clients, solving problems to increase their efficiency and effectiveness across a broad range of channels.

Effective January 1, 2024, we revised our reportable segments to align our business strategy, and the manner in which the Chief Executive Officer, our chief operating decision maker, manages and assesses the performance and makes decisions regarding the allocation of resources for us.

Our revised reportable segments consist of Branded Services, Experiential Services and Retailer Services.

We have reorganized our portfolio of businesses into a new, simplified structure that more closely aligns our business capabilities with economic buyers.

As a result of this reorganization, we have formally disposed of certain business units.

We have determined that the business units disposed of met the discontinued operations accounting criteria as their dispositions represent a strategic shift that has had a major effect on our operations and financial results.

Refer to Note 2— Discontinued Operations, Deconsolidation of European Joint Venture, Divestitures and Acquisitions .

We continue to evaluate opportunities to further simplify our operations so we can focus more resources on our core businesses.

Through our Branded Services segment, which generated approximately 36.6% and 45.1% of our revenues in the years ended December 31, 2024 and 2023, respectively, we provide services to branded consumer goods manufacturers through three main categories:

Beginning in fiscal year 2024, we reported our results under three segments, Branded Services, Experiential Services and Retailer Services, reflecting the organizational realignment implemented on January 1, 2024.

The prior‑period segment information has been recast to conform to the new structure, and no further changes were made to our reportable segments during fiscal year 2025.

We continued to execute the portfolio simplification strategy initiated in 2024, including the disposition of certain non‑core businesses that met the discontinued operations criteria and the associated reclassification of prior‑period results.

Additional details regarding discontinued operations, divestitures and the deconsolidation of our European joint venture are provided in Note 2— Discontinued Operations, Divestitures and Deconsolidation of European Joint Venture.

Through our Branded Services segment, which generated approximately 32.9% and 36.6% of our revenues in the years ended December 31, 2025 and 2024, respectively, we provide services to branded CPG manufacturers through three main categories:

brokerage, branded merchandising and omni-commerce marketing services.

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

Additionally, we lead with insights to execute branded merchandising strategies for branded consumer goods manufacturers related to merchandising in-store and online to drive product sales.

Brokerage services is primarily an outsourced sales and services agency for branded CPG manufacturers at retailer headquarters, in-store and online.

Additionally, we lead with insights to execute branded merchandising strategies for branded CPG manufacturers related to merchandising in-store and online to drive product sales.

Our omni-commerce marketing services primarily relate to digital and field marketing services, including shopper marketing, targeted advertising, interactive design and development, inventory management, application development and content management solutions.

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Agency services primarily consist of providing marketing strategies within retail locations, including retail media networks, and analyzing shopper behavior to offer planning, execution and measurement of insight-based, retailer-specific promotions that target retailers’ specific shopper base to drive product sales.

Our financial performance from continuing operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023 includes:

• Revenues decreased by $333.8 million, or 8.6%, to $3,566.3 million;

• Operating income decreased by $341.6 million to $295.0 million of operating loss;

• Net loss increased by $297.2 million to $378.4 million;

• Adjusted Net Income decreased by $3.1 million, or 3.9%, to $75.7 million;

• Adjusted EBITDA increased by $3.8 million, or 1.1%, to $356.0 million.

Executive Summary

Year Ended December 31,

Change Reported

(amounts in thousands)

Operating loss from continuing operations

Net loss from continuing operations

Adjusted Net Income (1)

Adjusted EBITDA (1)

Branded Services

Experiential Services

Retailer Services

Adjusted EBITDA from Continuing Operations

(1) Adjusted Net Income and Adjusted EBITDA from continuing operations are financial measures that are not calculated in accordance with GAAP.

For a discussion of our presentation of Adjusted Net Income and Adjusted EBITDA from continuing operations and reconciliations of net loss to Adjusted Net Income and Adjusted EBITDA, see “— Non-GAAP Financial Measures .”

We reported a net loss of $227.7 million during fiscal year 2025, compared to a net loss of $378.4 million in the prior year.

The year-over-year improvements reflect strong performance in our Experiential Services segment driven by increased demand and effective execution, lower selling, general and administrative expenses, and significantly lower non‑cash goodwill and intangible asset impairments compared to 2024.

Results also benefited from one‑time gains related to divestitures and recoveries associated with the Take 5 Matter.

These positive drivers were partially offset by declines in our Branded Services and Retailer Services segments.

Adjusted EBITDA was $331.8 million for the fiscal year 2025 compared to $356.0 million in the prior year.

While Experiential Services delivered meaningful growth supported by higher demand and solid operating execution, broader macroeconomic headwinds and softer client activity in our Branded Services and Retailer Services segments more than offset this growth.

Factors Affecting Our Business and Financial Reporting

There are a number of factors, in addition to certain prior period balances related to our reportable segments and discontinued operations that have been reclassified to conform to the current presentation, that affect the performance of our business and the comparability of our results from period to period including:

• Organic Growth.

Part of our strategy is to generate organic growth by expanding our existing client relationships, continuing to win new clients, pursuing channel expansion, enhancing our service offerings, digital technology solutions, developing our international platform, delivering operational efficiencies and expanding into logical adjacencies.

We believe that by pursuing these organic growth opportunities we will be able to continue to enhance our value proposition to our clients and thereby grow our business.

There are a number of factors that affect the performance of our business and the comparability of our results from period to period including:

• Acquisitions and Divestitures.

We have grown our business in part by acquiring businesses, both domestic and international.

Many of our acquisition agreements include contingent consideration arrangements, which are further described below.

We have completed acquisitions at what we believe are attractive purchase prices and have regularly structured our agreements to result in the generation of long-lived tax assets, which have in turn reduced our effective purchase prices when incorporating the value of those tax assets.

We continue to look for strategic acquisitions that can be completed at attractive purchase prices.

We also continue to evaluate potential opportunities to refine our focus on our core business of converting shoppers into buyers for consumer goods companies and retailers, including divesting certain businesses.

As part of the sales agreements for certain divestitures, we have agreed to provide certain transitional services as defined within the respective transition services agreements for a period of time after sale.

We continue to evaluate opportunities to further simplify our operations so we can focus more resources on our core businesses.

• Contingent Consideration.

Many of our acquisition agreements include contingent consideration arrangements, which are generally based on the achievement of financial performance thresholds by the operations attributable to the acquired businesses.

The contingent consideration arrangements are based upon our valuations of the acquired businesses and are intended to share the investment risk with the sellers of such businesses if projected financial results are not achieved.

The fair values of these contingent consideration arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates.

For each transaction, we estimate the fair value of contingent consideration payments as part of the initial purchase price.

We review and assess the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could differ materially from our initial estimates.

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

• Depreciation and Amortization.

We have historically grown our business in part through acquisitions, some of which included contingent consideration arrangements based on the future financial performance of the acquired operations.

Changes in the estimated fair value of these arrangements, which reflect updated unobservable inputs, are recognized in “Selling, general and administrative expenses” in our Consolidated Statements of Operations and Comprehensive Loss.

Although our acquisition activity has declined, we continue to evaluate selective opportunities, as well as potential divestitures, to align our portfolio with our core service offerings.

Since January 2023, we have completed the divestitures of ten businesses.

Certain divestitures include transition services for a limited period as specified in the related agreements.

• Amortization of Intangible Assets.

As a result of the acquisition of our business by Topco on July 25, 2014 (the “2014 Topco Acquisition”), we acquired significant intangible assets, the value of which is amortized, on a straight-line basis, over 15 years from the date of the 2014 Topco Acquisition, unless determined to be indefinite-lived.

The amortization of such intangible assets recorded in our consolidated financial statements has a significant impact on our operating (loss) income and net loss.

Our historical acquisitions have increased, and future acquisitions likely will increase, our intangible assets.

Our historical acquisitions have increased, and any future acquisitions likely would increase, our intangible assets.

We do not believe the amortization expense associated with the intangible assets created from our purchase accounting adjustments reflect a material economic cost to our business.

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We recognized goodwill and intangible asset impairment charges of $36.6 million and $167.1 million, respectively during the year ended December 31, 2025.

We recognized an

intangible asset impairment charge of $43.5 million related to our indefinite-lived trade name during the year ended December 31, 2023.

We recognized goodwill impairment charges of $1,367.5 million for the year ended December 31, 2022.

We recognized an intangible asset impairment charge of $205.0 million related to our indefinite-lived trade name during the year ended December 31, 2022.

We recognized goodwill and intangible asset impairment charges of $233.2 million and $42.0 million, respectively, during the year ended December 31, 2024.

We recognized an intangible asset impairment charge of $43.5 million related to our indefinite-lived

trade name during the year ended December 31, 2023.

The impairment charges have been reflected in “Impairment of goodwill and indefinite-lived asset” in our Consolidated Statements of Operations and Comprehensive Loss.

• Foreign Exchange Fluctuations.

Our financial results are affected by fluctuations in the exchange rate between the U.S.

dollar and other currencies, primarily the Canadian dollar due to our operations in such foreign jurisdictions.

We operate in multiple foreign jurisdictions, and our results are subject to fluctuations in foreign currency exchange rates, primarily related to the Canadian dollar.

Movements in exchange rates can affect revenues, expenses, and the translation of monetary assets and liabilities.

See also “ —Quantitative and Qualitative Disclosure of Market Risk—Foreign Currency Risk.

• Seasonality.

Our quarterly results are seasonal in nature, with the fourth fiscal quarter typically generating a higher proportion of our revenues than other fiscal quarters, as a result of higher consumer spending.

We generally record slightly lower revenues in the first fiscal quarter of each year, as our clients begin to roll out new programs for the year, and consumer spending generally is less in the first fiscal quarter than other quarters.

The timing of our clients’ marketing expenses, associated with marketing campaigns and new product launches, can also result in fluctuations from one quarter to another.

Our business is seasonal, with the fourth fiscal quarter typically generating a higher proportion of our revenues due to increased consumer spending.

Revenues in the first fiscal quarter are generally lower, reflecting the timing of client program launches and seasonal consumer purchasing patterns.

Variability in the timing of client marketing initiatives, including promotional spending, new product introductions, and merchandising resets, can also affect comparability between periods.

How We Assess the Performance of Our Business

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.

Branded Services segment revenues 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.

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.

We analyze our financial performance, in part, by measuring revenue performance in two ways—revenue growth attributable to organic activities and revenue growth and declines attributable to acquisitions and divestitures, which we refer to as organic revenues and acquired revenues, respectively.

We define organic revenues as any revenues that are not acquired revenues.

Our organic revenues exclude the impacts of acquisitions and divestitures, when applicable, which improves comparability of our results from period to period.

In general, when we acquire a business, the acquisition includes a contingent consideration arrangement ( e.g.

, an earnout provision) and, accordingly, we separately track the financial performance of the acquired business.

In such cases, we consider revenues generated by such a business during the 12 months following its acquisition to be acquired revenues.

For example, if we completed an acquisition on September 30, 2023 for a business that included a contingent consideration arrangement, we would consider revenues from the acquired business from October 1, 2023 to September 30, 2024 to be acquired revenues.

We generally consider growth attributable to the financial performance of an acquired business after the 12-month anniversary of the date of acquisition to be organic.

If an acquisition of an acquired business does not include a contingent consideration arrangement, or we otherwise do not separately track the financial performance of the acquired business due to operational integration, we consider the revenues that the business generated in the 12 months prior to its acquisition to be our acquired revenues for the 12 months following its acquisition, and any differences in revenues actually generated during the 12 months after its acquisition to be organic.

For example, if we completed an acquisition on September 30, 2024 for a business that did not include a contingent consideration arrangement, we would consider the amount of revenues from the acquired business from October 1, 2023 to September 30, 2024 to be acquired revenues during the period from October 1, 2024 to September 30, 2025, with any differences from that amount actually generated during the latter period to be organic revenues.

All revenues generated by our acquired businesses are considered to be organic revenues after the 12-month anniversary of the date of acquisition.

When we divest a business, unless otherwise presented as discontinued operations, we consider the revenues that the divested business generated in the 12 months prior to its divestiture to be subtracted from acquired revenues for the 12 months following its divestiture.

For example, if we completed a divestiture on October 1, 2024 for a business, we would consider the amount of revenues from the divested business from October 1, 2023 to September 30, 2024 to be subtracted from organic revenues during the period from October 1, 2024 to September 30, 2025.

We measure organic revenue growth and acquired revenue growth by comparing the organic revenues or acquired revenues, respectively, period over period, net of any divestitures.

Cost of Revenues

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Selling, General and Administrative Expenses

Selling, general and administrative expenses consist primarily of salaries, payroll taxes and benefits for corporate personnel.

Selling, general and administrative expenses consist primarily of salaries, payroll taxes and benefits for corporate and shared-service personnel.

Other overhead costs include information technology, professional services fees, including accounting and legal services, and other general corporate expenses.

We also incur expenses operating as a public company, including expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as higher expenses for general and director and officer insurance, investor relations, and related professional services.

Additionally, included in selling, general and administrative expenses are costs associated with the changes in fair value of the contingent consideration of acquisitions and other costs related to our internal reorganization activities, including our restructuring plan, acquisition and divestiture transactions.

These transaction-related costs are comprised of fees related to change of equity ownership, professional fees, due diligence and integration or divestiture activities.

As a public company, we incur additional expenses associated with compliance and reporting obligations, including costs related to the requirements of a publicly traded company.

These costs include director and officer insurance, investor relations activities, audit and external reporting costs, and other governance‑related professional services.

Selling, general and administrative expenses also reflects expenses associated with our internal reorganization and transformation initiatives, including severance, professional services related to process redesign, system implementation support, and other non‑recurring items tied to organizational changes.

Impairment of Goodwill

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The estimated fair values of the underlying reporting units were 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 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.

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Other (Income) Expenses

Change in Fair Value of Warrant Liability

Change in fair value of warrant liability represents a non-cash (income) expense resulting from a fair value adjustment to warrant liability with respect to the private placement warrants.

Based on the availability of sufficient observable information, we

determine 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.

Interest Expense

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Depreciation Expense

Depreciation expense relates to the property and equipment that we own, which represented less than 1% of our total assets at December 31, 2024 and 2023.

Income tax expense and our effective tax rates can be affected by many factors, including state apportionment factors, our acquisition and divestiture strategy, tax incentives and credits available to us, changes in judgment regarding our ability to realize our deferred tax assets, changes in our worldwide mix of pre-tax losses or earnings, changes in existing tax laws and our assessment of uncertain tax positions.

We have positive cash flow characteristics, as described below, due to the limited required capital investment in the fixed assets and working capital needs to operate our business in the normal course.

See “ —Liquidity and Capital Resources.

Our principal sources of liquidity are cash flows from operations, borrowings under the Revolving Credit Facility (as defined below), divestitures and other debt.

Our principal uses of cash are operating expenses, working capital requirements, investments in our technology platforms, acquisitions, repayment of debt and share repurchases.

During the year ended December 31, 2024, we sold five businesses.

We expect to use the divestiture proceeds to invest in our business, reduce debt, create financial flexibility for opportunistic share repurchases or potential future acquisitions.

Adjusted Net Income

Adjusted Net Income is a non-GAAP financial measure.

Adjusted Net Income means net loss from continuing operations before (i) net income attributable to noncontrolling interest, (ii) impairment of goodwill and indefinite-lived asset, (iii) gain on deconsolidation of subsidiaries, (iv) equity-based compensation of Karman Topco L.P., (v) changes in fair value of warrant liability, (vi) fair value adjustments of contingent consideration related to acquisitions, (vii) acquisition and divestiture related expenses, (viii) restructuring expenses, (ix) reorganization expenses, (x) litigation expenses, (xi) amortization of intangible assets, (xii) costs associated with COVID-19, net of benefits received, (xiii) gain on repurchases of Term Loan Facility and Senior Secured Notes debt, (xiv) costs associated with (recovery from) the Take 5 Matter, (xv) other adjustments that management believes are helpful in evaluating our operating performance, and (xvi) related tax adjustments.

We present Adjusted Net Income because we use it as a supplemental measure to evaluate the performance of our business in a way that also considers our ability to generate profit without the impact of items that we do not believe are indicative of our operating performance or are unusual or infrequent in nature and aid in the comparability of our performance from period to period.

Net Income should not be considered as an alternative for Net loss from continuing operations, our most directly comparable measure presented on a GAAP basis.

Adjusted EBITDA from Continuing Operations, Adjusted EBITDA from Discontinued Operations and Adjusted EBITDA by Segment

Adjusted EBITDA from Continuing Operations, Adjusted EBITDA from Discontinued Operations and Adjusted EBITDA by Segment are supplemental non-GAAP financial measures of our operating performance.

Adjusted EBITDA from Continuing Operations and Adjusted EBITDA from Discontinued Operations means net income before (i) interest expense (net), (ii) provision for (benefit from) income taxes, (iii) depreciation, (iv) amortization of intangible assets, (v) impairment of goodwill, (vi) changes in fair value of warrant liability, (vii) stock-based compensation expense, (viii) equity-based compensation of Karman Topco L.P., (ix) fair value adjustments of contingent consideration related to acquisitions, (x) acquisition and divestiture related expenses, (xi) (gain) loss on divestitures, (xii) restructuring expenses, (xiii) reorganization expenses, (xiv) litigation expenses (recovery), (xv) costs associated with COVID-19, net of benefits received, (xvi) costs associated with (recovery from) the Take 5 Matter, (xvii) EBITDA for economic interests in investments and (xviii) other adjustments that management believes are helpful in evaluating our operating performance.

Adjusted EBITDA by Segment means, with respect to each segment, operating (loss) income from continuing operations before (i) depreciation, (ii) amortization of intangible assets, (iii) impairment of goodwill, (iv) stock based compensation expense, (v) equity-based compensation of Karman Topco L.P., (vi) fair value adjustments of contingent consideration related to acquisitions, (vii) acquisition and divestiture related expenses, (viii) restructuring expenses, (ix) reorganization expenses, (x) litigation expenses (recovery), (xi) costs associated with COVID-19, net of benefits received, (xii) costs associated with (recovery from) the Take 5 Matter, (xiii) EBITDA for economic interests in investments and (xiv) other adjustments that management believes are helpful in evaluating our operating performance, in each case, attributable to such segment.

We present Adjusted EBITDA from Continuing Operations, Adjusted EBITDA from Discontinued Operations and Adjusted EBITDA by Segment because they are key operating measures used by us to assess our financial performance.

These measures adjust for items that we believe do not reflect the ongoing operating performance of our business, such as certain non-cash items, unusual or infrequent items or items that change from period to period without any material relevance to our operating performance.

We evaluate these measures in conjunction with our results according to GAAP because we believe they provide a more complete understanding of factors and trends affecting our business than GAAP measures alone.

Furthermore, the agreements governing our indebtedness contain covenants and other tests based on measures substantially similar to Adjusted EBITDA from Continuing Operations and Adjusted EBITDA from Discontinued Operations.

None of Adjusted EBITDA from Continuing Operations, Adjusted EBITDA from Discontinued Operations nor Adjusted EBITDA by Segment should be considered as an alternative for Net loss or operating (loss) income, our most directly comparable measures presented on a GAAP basis.

Non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures.

Additionally, other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore our non-GAAP measures may not be directly comparable to similarly titled measures of other companies.

For a reconciliation of Adjusted EBITDA to net loss and Adjusted EBITDA by segment to operating (loss) income from continuing operations, see “ —Non-GAAP Financial Measures.

Depreciation expense relates to property and equipment used in our operations, including leasehold improvements, furniture and fixtures, computer hardware, and internally developed and capitalized software.

Although property and equipment represent a modest portion of our total asset base, depreciation expense has increased in recent periods due to higher levels of investment in information technology and capitalized software, including expenditures associated with the implementation of our new ERP system.

These technology‑related investments are depreciated over their estimated useful lives and contribute to period‑to‑period variability in depreciation expense.

Income tax expense and our effective tax rates can be affected by many factors, including state apportionment factors, our acquisitions and divestitures, tax incentives and credits available to us, changes in judgment regarding our ability to realize our deferred tax assets, changes in our worldwide mix of pre-tax losses or earnings, changes in existing tax laws and our assessment of uncertain tax positions.

We generate cash primarily through the receipt of fees for services performed, which generally require limited working capital and modest levels of capital expenditure relative to our overall scale.

As a result, our operating model has historically produced positive operating cash flows, subject to fluctuations in client program timing, incentive compensation, and changes in working capital.

Our principal sources of liquidity include cash flows from operations, availability under our Revolving Credit Facility, and, when applicable, proceeds from divestitures.

Our primary uses of cash are operating expenses, working capital requirements, interest payments on our indebtedness, and scheduled or opportunistic repayments of debt.

Investing activities generally reflect capital expenditures related to technology and infrastructure.

Recent investing activity has been driven by our ERP initiative and related modernization efforts, including capitalized software development and upgrades to our information systems.

These investments are intended to enhance scalability, improve operating efficiency, and strengthen financial and operational controls

Transformation Strategy

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During the year ended December 31, 2025, we incurred $62.9 million in reorganization expenses related to various internal reorganization activities, including professional fees, lease exit costs, severance, and nonrecurring compensation costs, compared to $88.8 million during the year ended December 31, 2024.

These amounts were recognized in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and

Comprehensive Loss.

The reorganization plan was designed to simplify the organization that supports the new segments after the divestitures and related transitions.

These amounts were recognized in “Selling, general, and administrative expenses” in the Consolidated Statements of Operations and Comprehensive Loss.

Restructuring expenses

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

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

During the year ended December 31, 2024, we 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.

In connection with our reorganization initiatives, in September 2024, we announced 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”) and other optimization initiatives.

During the year ended December 31, 2024, we 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.

In the third quarter of fiscal year 2024, we initiated restructuring actions as part of our broader reorganization.

These actions included offering a Voluntary Early Retirement Program (“VERP”) to certain eligible U.S.-based employees, resulting in $0.6 million and $9.9 million of settlement charges and special termination benefits recognized in “Selling, general and administrative expenses” during the years ended December 31, 2025 and 2024, respectively.

In September 2024, we also launched a cost‑savings program to improve operational performance and align our cost structure with current revenue levels.

This program included special termination benefits associated with a reduction‑in‑force (“2024 RIF”) and other optimization initiatives.

During the years ended December 31, 2025 and 2024, we recorded $0.4 million and $20.1 million, respectively, of related settlement charges and special termination benefits in “Selling, general and administrative expenses.”

Non-GAAP Financial Measures

In the accompanying analysis of financial results, we include certain financial measures that are not presented in accordance with U.S.

generally accepted accounting principles (“GAAP”).

These non-GAAP (“Non-GAAP”) financial measures are derived from our consolidated and segment financial information but exclude or adjust for certain items that are included in the most directly comparable GAAP measures.

We believe these Non-GAAP financial measures provide investors with additional insight into our operating performance, underlying business trends, and period-over-period comparability.

However, these measures are not in accordance with GAAP, and should not be considered in isolation or as a substitute for the most directly comparable GAAP measures.

A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP measure is provided below:

• Adjusted Net Income

• Adjusted EBITDA from Continuing Operations

• Adjusted EBITDA by Segment

We define Adjusted Net Income, which is a Non-GAAP financial measure, as net (loss) income before (i) net income attributable to noncontrolling interest, (ii) impairment of goodwill and indefinite-lived assets, (iii) gain on deconsolidation of subsidiaries, (iv) equity-based compensation of Karman Topco L.P., (v) changes in fair value of warrant liability, (vi) fair value adjustments of contingent consideration related to acquisitions, (vii) acquisition and divestiture related expenses, (viii) restructuring expenses, (ix) reorganization expenses, (x) litigation expenses, (xi) amortization of intangible assets, (xii) gain on repurchases of Term Loan Facility and Notes (as such terms are defined below) debt, (xiii) COVID-19 benefits received, (xiv) costs associated with (recovery from) the Take 5 Matter, (xv) other adjustments that management believes are helpful in evaluating our operating performance, and (xvi) related tax adjustments.

do not believe are indicative of our operating performance or are unusual or infrequent in nature and aid in the comparability of our performance from period to period.

Adjusted Net Income should not be considered as an alternative for Net loss, our most directly comparable measure presented on a GAAP basis.

Adjusted EBITDA from Continuing Operations and Adjusted EBITDA by Segment are supplemental Non-GAAP financial measures of our operating performance.

Adjusted EBITDA from Continuing Operations means net loss before (i) interest expense (net), (ii) provision for (benefit from) income taxes, (iii) depreciation, (iv) amortization of intangible assets, (v) impairment of goodwill, (vi) changes in fair value of warrant liability, (vii) stock-based compensation expense, (viii) equity-based compensation of Karman Topco L.P., (ix) fair value adjustments of contingent consideration related to acquisitions, (x) acquisition and divestiture related expenses, (xi) (gain) loss on divestiture, (xii) restructuring expenses, (xiii) reorganization expenses, (xiv) litigation expenses (recovery), (xv) COVID-19 benefits received, (xvi) costs associated with (recovery from) the Take 5 Matter, (xvii) EBITDA for economic interests in investments and (xviii) other adjustments that management believes are helpful in evaluating our operating performance.

Adjusted EBITDA by Segment means, with respect to each segment, operating income (loss) from continuing operations before (i) depreciation, (ii) amortization of intangible assets, (iii) impairment of goodwill, (iv) stock based compensation expense, (v) equity-based compensation of Karman Topco L.P., (vi) fair value adjustments of contingent consideration related to acquisitions, (vii) acquisition and divestiture related expenses, (viii) restructuring expenses, (ix) reorganization expenses, (x) litigation expenses (recovery), (xi) COVID-19 benefits received, (xii) costs associated with (recovery from) the Take 5 Matter, (xiii) EBITDA for economic interests in investments and (xiv) other adjustments that management believes are helpful in evaluating our operating performance, in each case, attributable to such segment.

We present Adjusted EBITDA from Continuing Operations and Adjusted EBITDA by Segment because they are key operating measures used by us to assess our financial performance.

Furthermore, the agreements governing our indebtedness contain covenants and other tests based on measures substantially similar to Adjusted EBITDA from Continuing Operations.

Neither Adjusted EBITDA from Continuing Operations nor Adjusted EBITDA by Segment should be considered as an alternative for Net (loss) income or operating income (loss), our most directly comparable measures presented on a GAAP basis.

Additionally, other companies may calculate Non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore our Non-GAAP measures may not be directly comparable to similarly titled measures of other companies.

For a reconciliation of Adjusted EBITDA to net loss and Adjusted EBITDA by segment to operating (loss) income from continuing operations, see “ —Reconciliation of Non-GAAP Financial Measures.

Results of Operations for the Years Ended December 31, 2025 and 2024

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Impairment of goodwill and indefinite-lived asset

Gain on deconsolidation of subsidiaries

Depreciation and amortization

Loss from equity method investments

Income from investment in European joint venture and other

Gain on legal matters

Gain on divestitures

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 liability

1 unchanged sentence

Total other expenses

Loss from continuing operations before income taxes

Loss from continuing operations before benefit from 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 from discontinued operations attributable to noncontrolling interest, net of tax

Net loss attributable to stockholders of Advantage Solutions Inc.

Other Financial Data

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Total revenues

Total revenues decreased by $333.8 million, or 8.6%, during the year ended December 31, 2024, as compared to the year ended December 31, 2023.

Excluding $374.4 million revenues during the year ended December 31, 2023 prior to the deconsolidation of our European joint venture, revenues increased 1%.

The Branded Services segment revenues decreased $452.1 million during the year ended December 31, 2024 as compared to the year ended December 31, 2023.

Excluding $374.4 million revenues during the year ended December 31, 2023 prior to the

deconsolidation of our European joint venture, the segment experienced a decrease of $77.7 million in revenues primarily due to an intentional client resignation and a weaker economic environment for our consumer package goods clients.

The Experiential Services segment revenues increased $135.6 million during the year ended December 31, 2024 as compared to the year ended December 31, 2023.

The increase in revenues was primarily due to an increase in our events per day volume.

The Retailer Services segment revenues decreased $17.3 million during the year ended December 31, 2024 as compared to the year ended December 31, 2023.

The decrease in revenues was primarily due to reductions in the scope of services from our retailer clients as retailers respond to challenges in the broader markets in which they operate including increased commodity prices and wages.

Branded Services segment revenues decreased $142.7 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024.

The decrease includes a $38.4 million reduction in revenues from reimbursable expenses.

Excluding the impact of reimbursable expenses, the decline was primarily attributable to lower volumes, client losses and reductions in scope of services, which more than offset new business wins.

These trends reflect continued macroeconomic uncertainty, as clients continue to manage their brand support spending with heightened scrutiny during the period.

Experiential Services segment revenues increased $140.3 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024.

The increase includes $61.7 million of additional revenues from reimbursable expenses.

Excluding the impact of reimbursable expenses, the remaining growth was primarily driven by higher event volume on improved demand and execution, as well as favorable client and service mix, and higher average pricing.

These results reflect the continued recovery and expansion of in‑store and experiential activation activity across our client base.

Retailer Services segment revenues decreased $21.3 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024.

The decrease in revenues was primarily driven by lower activity levels within our existing client base, partially offset by higher average pricing.

Cost of Revenues

Cost of revenues as a percentage of revenues for the year ended December 31, 2025 was 86.0%, as compared to 85.8% for the year ended December 31, 2024.

The decrease as a percentage of revenues was largely attributable to the change in the revenue mix of our services primarily related to the deconsolidation of our European joint venture, one time litigation expense in the prior year with recovery in the current year and decreased incentive compensation expense.

The net increase as a percentage of revenues was primarily attributable to an increase in variable labor costs, including market‑driven wage pressure.

These increases were partially offset by lower fixed labor costs resulting from prior period restructuring actions, improved workforce alignment, and lower discretionary incentive compensation.

Selling, General and Administrative Expenses

Selling, general and administrative expenses as a percentage of revenues for the year ended December 31, 2025 was 7.8%, as compared to 9.1% for the year ended December 31, 2024.

The increase as a percentage of revenues was primarily due to a $62.7 million increase in costs associated with our internal reorganization activities, largely related to professional fees, voluntary early retirement benefits and severance and the continued investment in our support services including our technology solutions.

The year‑over‑year decrease as a percentage of revenues reflects lower restructuring and reorganization expenses, the reimbursement of $5.7 million of previously incurred COVID‑19 eligible costs, and lower compensation expense, including discretionary bonuses.

These favorable impacts were partially offset by higher technology‑related spending associated with ongoing modernization initiatives and an increase in bad debt expense.

Impairment of Goodwill and Indefinite-lived Asset

During the second quarter of fiscal year 2024, we 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, we recognized a goodwill impairment charge of $99.7 million related to our 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, we 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 our 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, we 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 assets” in the Consolidated Statements of Operations and Comprehensive Loss.

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

We recognized a $43.5 million trade name intangible asset impairment charge during the year ended December 31, 2023 due to the deconsolidation of our European joint venture and intended sale of the foodservice businesses.

During the fourth quarter of fiscal year 2025, we completed our annual impairment assessment and recognized goodwill impairment charges of $13.1 million and $23.5 million for the Branded Services and Merchandising reporting units, respectively.

These impairments primarily reflected higher discount rates, lower market valuation multiples for comparable companies, and updated prospective financial information reflecting revised expectations for revenue growth, margin performance, and operating cost trends.

After these impairments, there was no goodwill remaining in either reporting unit.

As part of the same annual impairment assessment, we recorded an indefinite‑lived intangible asset impairment charge of $167.1 million, driven by updated long-term financial projections that indicated lower expected revenue growth for the underlying asset group.

During fiscal year 2024, we recorded impairment charges in response to triggering events.

In the second quarter of 2024, we recognized a $99.7 million goodwill impairment charge for the Branded Agencies reporting unit following the announced sale of a significant business within the unit.

After this impairment, an immaterial amount of goodwill remained in the reporting unit.

In the fourth quarter of 2024, we recognized a $133.5 million goodwill impairment charge and a $42.0 million intangible asset impairment charge for the Branded Services reporting unit, driven by client losses and reductions in scope of services as clients implemented cost‑reduction initiatives in response to broader market conditions.

Depreciation and Amortization Expense

Depreciation and amortization expense was $204.6 million for the year ended December 31, 2024 as compared to $208.9 for the year ended December 31, 2023, which was primarily due to a decrease in software amortization expenses and intangible assets amortization expense.

Income from Equity Method Investments

Income from equity method investments decreased by $3.1 million for the year ended December 31, 2024 due to the net income attributable from our investments in unconsolidated affiliates.

For additional information see Item 8.

Financial Statements and Supplementary Data — Note 11—Investments in Unconsolidated Affiliates.

Depreciation and amortization expense was $202.3 million for the year ended December 31, 2025 as compared to $204.6 million for the year ended December 31, 2024.

The decrease is primarily due to a $5.7 million decrease in amortization expense resulting from definite-lived intangible assets that had become fully amortized, partially offset by a $3.4 million increase in depreciation expense due to higher amortization recognized on recent software investments, primarily due to the implementation of our new global enterprise resource planning system.

Operating (Loss) Income from Continuing Operations

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Retailer Services

Total operating (loss) income from continuing operations

In the Branded Services segment, the decrease in operating income to an operating loss for the year ended December 31, 2024 was primarily due to the goodwill impairments and the decrease in revenue noted above and an increase in costs associated with our internal reorganization activities combined with continued investment in our support services, including our technology solutions.

In the Experiential Services segment, the decrease in operating income for the year ended December 31, 2024 was due to an increase in costs associated with our internal reorganization activities combined with continued investment in our support services, including our technology solutions, partially offset by the increase in revenues as described above.

In the Retailer Services segment, the increase in operating income year ended December 31, 2024 was due to improved margins in our services partially offset by an increase in costs associated with our internal reorganization activities and continued investment in our support services, including our technology solutions.

Change in Fair Value of Warrant Liability

Change in fair value of warrant liability represents $0.6 million and $0.3 million of non-cash income resulting from fair value adjustments to the warrant liability for the private placement warrants for the years ended December 31, 2024 and 2023, respectively.

Total operating loss from continuing operations

Operating loss from continuing operations was $126.5 million for the year ended December 31, 2025, compared to $295.0 million for the year ended December 31, 2024.

The year‑over‑year improvement was driven primarily but significantly lower

non-cash impairment charges, gains on divestitures, reduced reorganization and restructuring costs, and lower compensation expense.

These favorable impacts were partially offset by the revenue trends described above, driven by declines in Branded Services and Retailer Services.

Branded Services

Operating loss in the Branded Services segment improved to $64.3 million for the year ended December 31, 2025 from $318.6 million for the year ended December 31, 2024.

The improvement primarily reflects lower goodwill and intangible asset impairment charges, gains from divestitures, recoveries related to the Take 5 Matter, lower reorganization and restructuring costs, and lower compensation expense.

These benefits were partially offset by lower revenue levels, as noted previously.

Experiential Services

Experiential Services reported an operating loss of $17.2 million for the year ended December 31, 2025 compared to operating income of $0.3 million for the year ended December 31, 2024.

The shift primarily reflects higher intangible asset impairment charges recognized in 2025, partially offset by strong revenue growth, as noted previously, and lower reorganization and restructuring costs.

Excluding impairment, underlying operating performance improved meaningfully year over year.

Retailer Services

Operating results for the Retailer Services segment declined to a loss of $45.0 million for the year ended December 31, 2025 from operating income of $23.3 million for the year ended December 31, 2024.

The change was primarily driven by higher intangible asset impairment charges, partially offset by lower compensation expense, and lower reorganization and restructuring costs.

Interest Expense, Net

Interest expense, net decreased $7.9 million, or 5.4%, to $138.9 million for the year ended December 31, 2025, from $146.8 million for the year ended December 31, 2024.

The decrease in interest expense, net was primarily due to lower debt balances as a result of repurchases of Term Loan Facility and Senior Secured Notes as further described in “ Liquidity and Capital Resources—Description of Credit Facilities—Senior Secured Notes ”, partially offset by changes in the fair value of our derivative instruments during the year ended December 31, 2024.

Benefit from Income Taxes from Continuing Operations

The decrease was primarily driven by lower interest rates and a reduced outstanding debt balance resulting from repurchases of debt under the Term Loan Facility and Notes, as described in “Liquidity and Capital Resources— Description of Credit Facilities .” The decrease was partially offset by lower gains recognized on the repurchase of Notes and a reduction in non‑cash interest income related to fair value adjustments on our derivative financial instruments.

Benefit from Income Taxes

Benefit from income taxes was $37.6 million for the year ended December 31, 2025 as compared to a benefit from income taxes of $62.8 million for the year ended December 31, 2024.

The fluctuation was primarily attributable to a larger pre-tax loss during the year ended December 31, 2024 compared to a smaller pre-tax loss during the year ended December 31, 2023.

Also contributing to the variance was the goodwill impairments during the year ended December 31, 2024 and the deconsolidation of our European joint venture during the year ended December 31, 2023.

The provision for income taxes from discontinued operations was $41.3 million for the year ended December 31, 2024, while the provision for income taxes from discontinued operations was $8.6 million for the year ended December 31, 2023.

Income tax expense for the year ended December 31, 2024 and 2023 was impacted primarily by the result of pre-tax income from discontinued operations and divested entities.

The decrease in the income tax benefit was primarily driven by a lower pre‑tax loss in 2025 relative to 2024.

The reduction in the income tax benefit was a result of an increase in the valuation allowance related to interest expense carryforwards in 2025.

Net Loss from Continuing Operations

Net loss from continuing operations was $227.7 million for the year ended December 31, 2025, compared to net loss from continuing operations of $378.4 million for the year ended December 31, 2024.

The increase in net loss from continuing operations was primarily driven by goodwill and intangible asset impairment charges of $275.2 million during the year ended December 31, 2024, a

$62.7 million increase in costs associated with our internal reorganization and restructuring activities, largely related to professional fees and severance, partially offset by an $18.9 million decrease in interest expense and a $25.1 million increase in the benefit from income taxes.

Net Income from Discontinued Operations

Net income from discontinued operations was $53.6 million for the year ended December 31, 2024, compared to net income from discontinued operations of $20.8 million for the year ended December 31, 2023.

Adjusted Net Income

The decrease in Adjusted Net Income for the year ended December 31, 2024 was attributable to the increase in Adjusted EBITDA as described below coupled with the decrease in interest expense.

For a reconciliation of Adjusted Net Income to Net loss from continuing operations, see “ —Non-GAAP Financial Measures ”.

Adjusted EBITDA from Continuing Operations and Adjusted EBITDA by Segment

Year Ended December 31,

(amounts in thousands)

Branded Services

Experiential Services

Retailer Services

Total Adjusted EBITDA from Continuing Operations

Adjusted EBITDA from Continuing Operations was $356.0 million for the year ended December 31, 2024, compared to $352.2 million for the year ended December 31, 2023.

The increase in Adjusted EBITDA was primarily attributable to an increase in the Experiential Services segment.

In the Branded Services segment, the decrease was primarily attributable to the decline in revenues partially offset by the decline in cost of revenues as described above.

In the Experiential Services segment, the increase was driven largely by the growth in revenues from the in-store sampling and demonstration services offset by continued investment in our support services including our technology solutions.

In the Retailer Services segment, the increase was primarily attributable to increase in margins driven by price discipline.

For a reconciliation of Adjusted EBITDA from Continuing Operations to Net loss from continuing operations, see “—Non-GAAP Financial Measures.”

Non-GAAP Financial Measures

Adjusted Net Income is a non-GAAP financial measure.

Adjusted Net Income should not be considered as an alternative for our net loss from continuing operations, our most directly comparable measure presented on a GAAP basis.

The improvement was primarily driven by lower goodwill and intangible asset impairment charges, gains on divestitures, reduced costs associated with our internal reorganization and restructuring activities, and a $7.9 million decrease in interest expense.

The year‑over‑year comparison also reflects a benefit from income taxes of $37.6 million for the year ended December 31, 2025, compared to a benefit of $62.8 million for the year ended December 31, 2024.

Reconciliation of Non-GAAP Financial Measures

Adjusted Net Income from Continuing Operations

A reconciliation of Adjusted Net Income from Continuing Operations to Net loss is provided in the following table:

A reconciliation of Adjusted Net Income from Continuing Operations to Net loss from continuing operations is provided in the following table:

Year Ended December 31,

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Impairment of goodwill and indefinite-lived asset

Gain on deconsolidation of subsidiaries

Gain on divestitures and deconsolidation of subsidiaries

Equity-based compensation of Karman Topco L.P.

Changes in fair value of warrant liability

Change in fair value of warrant liabilities

Fair value adjustments related to contingent consideration related to acquisitions (b)

Acquisition and divestiture related expenses (c)

Acquisition and divestiture related expenses (gains) (c)

Restructuring expenses (d)

Reorganization expenses (e)

Litigation expenses (recovery) (f)

Loss of disposal of assets

Litigation expenses (recoveries) (f)

Amortization of intangible assets (g)

Costs associated with COVID-19, net of benefits received (h)

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

Costs associated with the Take 5 Matter, net of (recoveries) (j)

Gain on repurchases of Term Loan Facility and Notes (i)

(Recovery from) costs associated with the Take 5 Matter (j)

Tax adjustments related to non-GAAP adjustments (k)

Adjusted Net Income from Continuing Operations

Represents expenses related to (i) equity-based compensation expense associated with grants of Common Series D Units of Topco made to one of the Advantage Sponsors and (ii) equity-based compensation expense associated with the Common Series C Units of Topco.

Represents expenses related to (i) equity-based compensation expense associated with grants of Common Series D Units of Karman Topco made to one of the Advantage Sponsors and (ii) equity-based compensation expense associated with the Common Series C Units of Karman Topco.

Represents adjustments to the estimated fair value of our contingent consideration liabilities related to our acquisitions, for the applicable periods.

Represents fees and costs associated with activities related to our acquisitions, divestitures, and related activities, including professional fees, due diligence, and integration activities.

Represents fees and costs associated with activities related to our acquisitions, divestitures, and related reorganization activities, including professional fees, due diligence, and integration activities.

Restructuring charges, including programs designed to integrate and reduce costs intended to further improve efficiencies in operational activities and align cost structures consistent with revenue levels associated with business changes.

Restructuring expenses include costs associated with the VERP and special termination benefits associated with the 2024 RIF and other optimization initiatives.

Represents fees and costs associated with various internal reorganization activities, including professional fees, lease exit costs, severance, and nonrecurring compensation costs.

Restructuring expenses include costs associated with the Voluntary Early Retirement Program, special termination benefits associated with the reduction-in-force that occurred in 2024, and other optimization initiatives.

Represents fees and costs associated with various internal reorganization and transformational activities, including professional fees, lease and other contract exit costs, severance, and nonrecurring compensation costs.

Represents legal settlements, reserves, and expenses that are unusual or infrequent costs associated with our operating activities.

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and (ii) benefits received from government grants for COVID-19 relief.

Represents gains associated with the repurchases of Term Loan Facility and Senior Secured Notes, net of deferred financing fees related to repricing of Term Loan Facility.

For additional information, refer to Note 8— Debt to our consolidated financial statements for the years ended December 31, 2024 and 2023.

Represents cash receipts from an insurance policy for claims related to the Take 5 Matter and costs associated with investigation and remediation activities related to the Take 5 Matter, primarily professional fees and other related costs.

Represents the tax benefit associated with the adjustments above, taking into account the Company’s applicable tax rates, after excluding adjustments related to items that do not have a related tax impact.

Represents a gain associated with the repurchases of Notes and Term Loan Facility debt, net of deferred financing fees related to repricing of Term Loan Facility.

For additional information, refer to Note 8—Debt to our audited financial statements for the year ended December 31, 2025.

Represents recoveries related to the Take 5 Matter, including cash received from an insurance policy and amounts collected from parties responsible for the underlying misconduct, as well as costs associated with investigation and remediation activities, primarily professional fees and other related expenses.

Represents the tax provision or benefit associated with the adjustments above, taking into account our applicable tax rates, after excluding adjustments related to items that do not have a related tax impact

Adjusted EBITDA

Adjusted EBITDA from Continuing Operations, Adjusted EBITDA from Discontinued Operations and Adjusted EBITDA by Segment are supplemental non-GAAP financial measures of our operating performance.

Adjusted EBITDA from Continuing Operations and Adjusted EBITDA from Discontinued Operations mean net loss from continuing operations before (i) interest expense (net), (ii) provision for (benefit from) income taxes, (iii) depreciation, (iv) amortization of intangible assets, (v) impairment of goodwill, (vi) changes in fair value of warrant liability, (vii) stock-based compensation expense, (viii) equity-based compensation of Karman Topco L.P., (ix) fair value adjustments of contingent consideration related to acquisitions, (x) acquisition and divestiture related expenses, (xi) (gain) loss on divestitures, (xii) restructuring expenses, (xiii) reorganization expenses, (xiv) litigation expenses (recovery), (xv) costs associated with COVID-19, net of benefits received, (xvi) costs associated with (recovery from) the Take 5 Matter, (xvii) EBITDA for economic interests in investments and (xviii) other adjustments that management believes are helpful in evaluating our operating performance.

Adjusted EBITDA by Segment means, with respect to each segment, operating income (loss) from continuing operations before (i) depreciation, (ii) amortization of intangible assets, (iii) impairment of goodwill, (iv) stock-based compensation expense, (v) equity-based compensation of Karman Topco L.P., (vi) fair value adjustments of contingent consideration related to acquisitions, (vii) acquisition and divestiture related expenses, (viii) restructuring expenses, (ix) reorganization expenses, (x) litigation expenses (recovery), (xi) costs associated with COVID-19, net of benefits received, (xii) costs associated with (recovery from) the Take 5 Matter, (xiii) EBITDA for economic interests in investments and (xiv) other adjustments that management believes are helpful in evaluating our operating performance, in each case, attributable to such segment.

Unallocated shared costs associated with discontinued operations from certain shared administrative functions, through the close of the discontinued operations;

excluded from income from discontinued operations as they are not a direct cost of the discontinued business but a result of indirect allocations, including but not limited to, information technology, human resources, finance and accounting, supply chain, and commercial operations.

Subsequent to the close of the divestitures, amounts attributable to unallocated shared costs would be mitigated through income from transition services agreements, subsequent strategic or restructuring initiatives, elimination of extraneous costs, or re-allocations or absorption of existing continuing operations.

See Note 2— Discontinued Operations, Deconsolidation of European Joint Venture, Divestitures and Acquisitions in Notes to the Consolidated Financial Statements, included elsewhere in this Annual Report for further details.

None of Adjusted EBITDA from Continuing Operations, Adjusted EBITDA from Discontinued Operations nor Adjusted EBITDA by Segment should be considered as an alternative for our Net income from discontinued operations, our most directly comparable measure presented on a GAAP basis.

Reconciliation of Adjusted EBITDA from Continuing Operations to Net loss from continuing operations is provided in the following table:

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Impairment of goodwill and indefinite-lived asset

Gain on deconsolidation of subsidiaries

Loss on divestitures

Gain on divestiture and deconsolidation of subsidiaries

Changes in fair value of warrant liability

1 unchanged sentence

Equity-based compensation of Karman Topco L.P.

Fair value adjustments related to contingent consideration related to acquisitions (c)

Acquisition and divestiture related expenses (d)

Fair value adjustments related to contingent consideration (c)

Acquisition and divestiture related expenses (gains) (d)

Restructuring expenses (e)

Reorganization expenses (f)

Litigation (recovery) expenses (g)

Costs associated with COVID-19, net of benefits received (h)

Costs associated with the Take 5 Matter, net of (recoveries) (i)

Litigation expenses (recovery) (g)

COVID-19 related (benefits received) costs (h)

(Recovery from) costs associated with the Take 5 Matter (i)

EBITDA for economic interests in investments (j)

Adjusted EBITDA from Continuing Operations

Reconciliations of Adjusted EBITDA from Discontinued Operations to Net income from discontinued operations is provided in the following table:

Discontinued Operations

Year Ended December 31,

(in thousands)

Net income from discontinued operations, net of tax

Interest expense, net

Provision for income taxes from discontinued operations

Depreciation and amortization

(Gain) loss on divestitures (k)

Stock-based compensation expense (a)

Fair value adjustments related to contingent consideration related to acquisitions (c)

Acquisition and divestiture related expenses (d)

Reorganization expenses (f)

EBITDA for economic interests in investments (j)

Adjusted EBITDA from Discontinued Operations

Financial information by segment, including a reconciliation of Adjusted EBITDA by Segment to operating (loss) income is provided in the following table:

Financial information by segment, including a reconciliation of Adjusted EBITDA by Segment to operating (loss) income is provided in the following tables:

Branded Services segment

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Impairment of goodwill and indefinite-lived asset

Gain on deconsolidation of subsidiaries

Loss on divestitures

Gain on divestiture and deconsolidation of subsidiaries

Stock-based compensation expense (a)

Equity-based compensation of Karman Topco L.P.

Fair value adjustments related to contingent consideration related to acquisitions (c)

Fair value adjustments related to contingent consideration (c)

Acquisition and divestiture related expenses (d)

2 unchanged sentences

Litigation expenses (g)

Costs associated with COVID-19, net of benefits received (h)

Costs associated with the Take 5 Matter, net of (recoveries) (i)

COVID-19 benefits received (h)

(Recovery from) costs associated with the Take 5 Matter (i)

EBITDA for economic interests in investments (j)

3 unchanged sentences

(in thousands)

Operating income (loss)

Operating (loss) income

Depreciation and amortization

Impairment of goodwill and indefinite-lived asset

Impairment of indefinite-lived asset

Stock-based compensation expense (a)

Equity-based compensation of Karman Topco L.P.

Fair value adjustments related to contingent consideration related to acquisitions (c)

Acquisition and divestiture related expenses (d)

1 unchanged sentence

Reorganization expenses (f)

Litigation expenses (recoveries) (g)

Costs associated with COVID-19, net of benefits received (h)

Litigation expenses (g)

COVID-19 related (benefits received) costs (h)

Experiential Services segment Adjusted EBITDA

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Equity-based compensation of Karman Topco L.P.

Fair value adjustments related to contingent consideration related to acquisitions (c)

Acquisition and divestiture related expenses (d)

Acquisition and divestiture related expenses (gains) (d)

Restructuring expenses (e)

Reorganization expenses (f)

Litigation (recovery) expenses (g)

Costs associated with COVID-19, net of benefits received (h)

EBITDA for economic interests in investments (j)

Litigation expenses (recovery) (g)

COVID-19 related (benefits received) costs (h)

Retailer Services segment Adjusted EBITDA

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and (ii) benefits received from government grants for COVID-19 relief.

Represents additions to reflect our proportional share of Adjusted EBITDA related to our equity method investments and reductions to remove the Adjusted EBITDA related to the minority ownership percentage of the entities that we fully consolidate in our financial statements.

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Liquidity and Capital Resources

Our principal sources of liquidity are cash flows from operations, borrowings under the Revolving Credit Facility, and other debt.

Our principal uses of cash are operating expenses, working capital requirements, acquisitions, interest on debt, repayment of debt and share repurchases.

Principal uses of cash used in investing activities includes our enterprise resource planning initiative, which includes upgrading our information system platform.

Operating cash flow, as supplemented by the divestiture of non-core businesses identified over our transformation period, provides the primary source of cash to fund operating needs and capital expenditures.

Excess cash is used to fund debt repurchases and share repurchases.

We believe our cash on hand, cash flows from operations and current and possible future credit facilities will be sufficient to satisfy our working capital requirements, purchase commitments, interest payments, transformation initiatives, capital expenditures, and other financing requirements for the foreseeable future.

Share Repurchase Program

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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 we are under no obligation to repurchase any specific number of shares.

During the year ended December 31, 2024, we executed open market purchases of $34.1 million of our Class A common stock under the 2021 Share Repurchase Program.

As of December 31, 2025, there remained $46.2 million of share repurchase availability under the 2021 Share Repurchase Program.

In December 2023, we 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 April 24, 2024, we purchased 4.8 million shares of our Class A common stock.

In June 2024, we 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, we purchased 4.0 million shares of our Class A common stock.

We anticipate that our cash from operations, together with our current borrowing capacity, will be sufficient to fund purchases of our Class A common stock pursuant to the 2021 Share Repurchase Program and pay principal and interest as it comes due under our debt arrangements.

A summary of cash provided by or used in our operating, investing and financing activities from continuing operations are shown in the following table:

A summary of cash provided by or used in our operating, investing and financing activities are shown in the following table:

Year Ended December 31,

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Net cash provided by operating activities

Net cash provided by (used in) investing activities

Net cash (used in) provided by investing activities

Net cash used in financing activities

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Net Cash Provided by Operating Activities

Net cash provided by operating activities from continuing operations for the year ended December 31, 2024 consisted of net loss from continuing operations of $378.4 million adjusted for certain non-cash items, including impairment of goodwill and indefinite-lived asset of $275.2 million, gain on repurchases of Senior Secured Notes and Term Loan Facility, net of cost of extinguishments of $9.1 million, depreciation and amortization of $204.6 million, stock-based compensation of $31.0 million and effects of changes in working capital.

Net cash provided by operating activities from continuing operations during the year ended December 31, 2023, consisted of net loss of $81.2 million adjusted for certain non-cash items, including depreciation and amortization of $208.9 million, impairment charges of $43.5 million, gain on deconsolidation of subsidiaries of $58.9 million, stock-based compensation of $38.9 million, fair value adjustments related to contingent consideration of $11.2 million, gain on repurchases of Term Loan Facility and Senior Secured Notes debt of $8.7 million and effects of changes in working capital.

Net cash provided by operating activities from discontinued operations during the year ended December 31, 2024, consisted of net income of $53.7 million adjusted for certain non-cash items, including gain on divestitures of $95.3 million and effects of changes in working capital.

Net cash provided by operating activities from discontinued operations during the year ended December 31, 2023, consisted of net income of $20.9 million adjusted for certain non-cash items, including depreciation and amortization of $15.8 million, loss on divestitures of $19.1 million and effects of changes in working capital.

Net Cash Used in Investing Activities

Net cash provided by investing activities from continuing operations for the year ended December 31, 2024 primarily consisted of the proceeds from divestitures of $275.7 million, partially offset by the purchase of property and equipment and capitalized software of $55.3 million, primarily related to our ERP initiative, which includes upgrading our information system platform, and the purchase of investments in unconsolidated affiliates of $13.9 million.

Net cash provided by investing activities from continuing operations for the year ended December 31, 2023 included the deconsolidation of subsidiaries, net of proceeds of $31.5 million and purchases of property and equipment of $41.6 million, partially offset by proceeds from divestitures of $21.1 million.

Net cash used in investing activities from discontinued operations for the year ended December 31, 2024 consisted of purchases of property and equipment of $2.5 million and divestitures of cash and cash equivalents and restricted cash of $4.8 million.

Net cash used in investing activities from discontinued operations for the year ended December 31, 2023 consisted of purchases of property and equipment of $4.7 million.

Net cash provided operating activities during the year ended December 31, 2025 was $61.5 million, representing a decrease of $31.6 million, as compared to the same period in 2024.

The year‑over‑year change primarily reflects less favorable movements in working capital, including higher prepaid expenses and other current assets and lower benefits from changes in accrued compensation and other liabilities.

Operating cash flows in 2024 also benefited from elevated collections of accounts receivable driven by targeted pre‑ERP collection initiatives.

These impacts were partially offset by higher deferred revenue balances and more favorable changes in accounts payable in 2025.

Net Cash (Used in) Provided by Investing Activities

Net cash used in investing activities during the year ended December 31, 2025 was $3.8 million, as compared to cash provided by investing activities of $206.4 million during the same period in 2024.

The change was primarily driven by a $215.2 million decrease in proceeds from divestitures, partially offset by lower purchases of investments in unconsolidated affiliates.

The change also reflects the receipt of $22.5 million in deferred proceeds from the sale of Jun Group during 2025.

Net Cash Used in Financing Activities

We primarily finance our business initiatives through cash flows from operations, however, we also incur long-term debt or borrow under lines of credit when necessary to execute acquisitions.

Cash flows from financing activities consisted of borrowings related to these lines of credit and subsequent payments of principal and financing fees.

Additionally, many of our acquisition agreements include contingent consideration arrangements, which are generally based on the achievement of future financial performance by the operations attributable to the acquired companies.

The portion of the cash payment up to the acquisition date fair value of the contingent consideration liability are classified as financing outflows, and amounts paid in excess of the acquisition date fair value of that liability are classified as operating outflows.

From time to time, we may voluntarily repurchase our long-term debt to deploy capital that deleverages our balance sheet while generating a favorable rate of return.

Cash flows used in financing activities from continuing operations during the year ended December 31, 2024 were primarily related to repurchases of Senior Secured Notes and Term Loan Facility of $147.1 million, repayment of principal on our Term Loan Facility of $13.1 million, payments for taxes related to net share settlement of $12.8 million, payments of contingent consideration of $5.7 million and payments related to the share repurchase program of $34.1 million.

Cash flows used in financing activities from continuing operations during the year ended December 31, 2023 were primarily related to repurchases of Term Loan Facility and Senior Secured Notes debt of $156.6 million, repayment of principal on our Term Loan Facility of $13.5 million, payments of contingent consideration and holdback payments of $5.8 million, and open market purchases of $6.4 million of our Class A common stock under the 2021 Share Repurchase Program.

This was partially offset by $2.2 million related to proceeds from shares issued under the 2020 Employee Stock Purchase Plan.

Cash flows used in financing activities from discontinued operations during the year ended December 31, 2024 were primarily related to contingent consideration payments of $4.4 million.

Cash flows provided by financing activities from discontinued operations during the year ended December 31, 2023 were primarily related to proceeds from government loans for COVID-19 relief, partially offset by principal payments on long-term debt and holdback payments.

Net cash used in financing activities during the year ended December 31, 2025 was $36.2 million during the year ended December 31, 2025, representing a decrease of $175.2 million, as compared to the same period in 2024.

The decrease was primarily driven by lower repurchases of Term Loan Facility and Notes, reduced share repurchases, lower payments for taxes related to net share settlement under the Advantage Solutions Inc.

2020 Incentive Award Plan (the “Plan”), and a decrease in contingent consideration payments.

Description of Credit Facilities

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Advantage Sales & Marketing Inc.

(the “Borrower”), our indirect wholly-owned subsidiary of the Company, has (i) a 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”) and (ii) 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 together with the Revolving Credit Facility, the “Senior Secured Credit Facilities”).

(the “Borrower”), our indirect wholly-owned subsidiary, has (i) a 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”) and (ii) 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 together with the Revolving Credit Facility, the “Senior Secured Credit Facilities”).

Revolving Credit Facility

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Borrowings under the Revolving Credit Facility are limited by borrowing base calculations based on the sum of specified percentages of eligible accounts receivable plus specified percentages of qualified cash, minus the amount of any applicable reserves.

Borrowings will bear interest at a floating rate, which can be either an adjusted Term SOFR or Alternative Currency Spread rate plus an applicable margin or, at the Borrower’s option, a base rate or Canadian Prime Rate plus an applicable margin.

The applicable margins for the Revolving Credit Facility are 1.75%, 2.00% or 2.25%, with respect to Term SOFR or Alternative Currency Spread rate borrowings and 0.75%, 1.00%, or 1.25%, with respect to base rate or Canadian Prime Rate borrowings, in each case depending on average excess availability under the Revolving Credit Facility.

The Borrower’s ability to draw under the Revolving Credit Facility or

issue letters of credit thereunder will be conditioned upon, among other things, the Borrower’s delivery of prior written notice of a borrowing or issuance, as applicable, the Borrower’s ability to reaffirm the representations and warranties contained in the credit agreement governing the Revolving Credit Facility and the absence of any default or event of default thereunder.

The Borrower’s obligations under the Revolving Credit Facility are guaranteed by Karman Intermediate Corp.

(“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”).

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

The Borrower’s Revolving Credit Facility has a first-priority lien on the current asset collateral and a second-priority lien on security interests in the fixed asset collateral (second in priority to the liens securing the Notes and the Term Loan Facility discussed below), in each case, subject to other permitted liens.

The Revolving Credit Facility has the following fees:

(i) an unused line fee of 0.375% or 0.250% per annum of the unused portion of the Revolving Credit Facility, depending on average excess availability under the Revolving Credit Facility;

(ii) a letter of credit participation fee on the aggregate stated amount of each letter of credit equal to the applicable margin for adjusted Eurodollar rate loans, as applicable;

and (iii) certain other customary fees and expenses of the lenders and agents thereunder.

As of December 31, 2025, we had the ability to borrow up to $438.0 million under our Revolving Credit Facility after consideration of the borrowing base limitations and outstanding letters of credit.

The Revolving Credit Facility contains customary covenants, including, but not limited to, restrictions on the Borrower’s ability and that of our subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, pay dividends, sell or otherwise transfer assets, optionally prepay or modify terms of any junior indebtedness, enter into transactions with affiliates or change our line of business.

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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 entered into the First Amendment to ABL Revolving Credit Agreement, 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 “Prior Revolving Credit Facility”).

This 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.

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.

On December 2, 2022, Borrower, Holdings and certain of the Borrower’s subsidiaries, entered into the Second Amendment to ABL Revolving Credit Agreement (the “Second Amendment”), which amends the ABL Revolving Credit Agreement, by and among the Borrower, Holdings, the lenders from time to time party thereto and Bank of America, as administrative agent, and the other parties thereto.

The Second Amendment was entered into by the Borrower to amend certain terms and provisions of the ABL Revolving Credit Agreement, including, among other things:

(i) increasing the aggregate amount of maximum revolving commitments available from $400.0 million to $500.0 million;

(ii) replacing the Eurocurrency Rate interest rate metric with a metric based on Term SOFR (as defined in the Second Amendment), whereby applicable borrowings in United States dollars will bear interest at a floating rate based on Term SOFR plus an applicable margin;

(iii) reducing each applicable interest rate pricing tier based on the Average Historical Excess Availability (as defined therein) with respect to Term SOFR borrowings, Alternative Currency borrowings, base rate borrowings and Canadian Prime Rate borrowings, in each case for each pricing tier by 0.25% per annum;

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

We were in compliance with all covenants during the fiscal year.

Term Loan Facility

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dollars in an aggregate principal amount of $1.093 billion.

Borrowings under the Term Loan Facility amortize in equal quarterly installments in an amount equal to 1.00% per

annum of the principal amount.

Borrowings under the Term Loan Facility amortize in equal quarterly installments in an amount equal to 1.00% per annum of the principal amount.

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

Our 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 security interests in 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 matures on October 28, 2027.

We 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.

We 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 Term Loan Facility contains certain customary negative covenants, including, but not limited to, restrictions on the Borrower’s ability and that of our 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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Such events of default will 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, change of control and other customary events of default.

On October 28, 2021, the Borrower, Holdings, and certain of the Borrower’s subsidiaries, entered into Amendment No.

1 to the First Lien Credit Agreement (the “First Lien Amendment”), which amended the First Lien Credit Agreement, 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 from 5.25% to 4.50% per annum, resulting in estimated interest savings of approximately $9.9 million or $7.3 million, net of tax, 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.

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 and by Bank of America.

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 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).

We were in compliance with all debt covenants during the fiscal year.

Senior Secured Notes

Effective as of October 28, 2020, Advantage Solutions FinCo LLC (“Finco”) issued $775.0 million aggregate principal amount of 6.50% Senior Secured Notes due 2028 (the “Notes”).

Substantially concurrently with the issuance, Finco merged with and into Advantage Sales & Marketing Inc.

(the “Issuer”), with the Issuer continuing as the surviving entity and assuming the obligations of Finco.

The Notes were sold to certain financial institutions that then resold the Notes to certain non-U.S.

persons pursuant to Regulation S under the Securities Act, and to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act at a purchase price equal to 100% of their principal amount.

The terms of the Notes are governed by an Indenture, dated as of October 28, 2020 (the “Indenture”), among Finco, the Issuer, the guarantors named therein (the “Notes Guarantors”) and Wilmington Trust, National Association, as trustee and collateral agent.

Interest and maturity

As of December 31, 2025, the Borrower had outstanding $595.1 million aggregate principal amount of 6.50% Senior Secured Notes due 2028 (the “Notes”).

Interest on the Notes is payable semi-annually in arrears on May 15 and November 15 at a rate of 6.50% per annum, commencing on May 15, 2021.

The Notes will mature on November 15, 2028.

The Notes are guaranteed by Holdings and each of the Issuer’s direct and indirect wholly owned material U.S.

Security and ranking

The Notes and the related guarantees are the general, senior secured obligations of the Issuer and the Notes Guarantors, are secured on a first-priority pari passu basis by security interests on the fixed asset collateral (equal in priority with liens securing the Term Loan Facility), and are secured on a second-priority basis by security interests on the current asset collateral (second in priority to the liens securing the Revolving Credit Facility and equal in priority with liens securing the Term Loan Facility), in each case, subject to certain limitations and exceptions and permitted liens.

The Notes and related guarantees rank (i) equally in right of payment with all of the Issuer’s and the Guarantors’ senior indebtedness, without giving effect to collateral arrangements (including the Senior Secured Credit Facilities) and effectively equal to all of the Issuer’s and the Guarantors’ senior indebtedness secured on the same priority basis as the Notes, including the Term Loan Facility, (ii) effectively subordinated to any of the Issuer’s and the Guarantors’ indebtedness that is secured by assets that do not constitute collateral for the Notes to the extent of the value of the assets securing such indebtedness and to indebtedness that is secured by a senior-priority lien, including the Revolving Credit Facility to the extent of the value of the current asset collateral and (iii) structurally subordinated to the liabilities of the Issuer’s non-Guarantor subsidiaries.

Optional redemption for the Notes

The Notes are redeemable at the applicable redemption prices specified in the Indenture 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.

In connection with any offer to purchase all Notes, if holders of no less than 90% of the aggregate principal amount of Notes validly tender their Notes, the Issuer is entitled to redeem any remaining Notes at the price offered to each holder.

The Issuer may voluntarily prepay loans or reduce commitments under the Notes, in whole or in part without premium or penalty.

Restrictive covenants

The Notes are subject to covenants that, among other things limit the Issuer’s ability and its restricted subsidiaries’ ability to:

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

In connection with any offer to purchase all Notes, if holders of no less than 90% of the aggregate principal amount of Notes validly tender their Notes, we are entitled to redeem any remaining Notes at the price offered to each holder.

We may voluntarily prepay loans or reduce commitments under the Notes, in whole or in part without premium or penalty.

The Notes are subject to covenants that, among other things limit our ability and our restricted subsidiaries’ ability to:

incur additional indebtedness or guarantee indebtedness;

pay dividends or make other distributions in respect of, or repurchase or redeem, the Issuer’s or a parent entity’s capital stock;

pay dividends or make other distributions in respect of, or repurchase or redeem, our capital stock;

prepay, redeem or repurchase certain indebtedness;

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enter into transactions with affiliates;

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.

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

and S&P Global Ratings and so long as no default or event of default under the Indenture has occurred and is continuing.

Events of default

enter into agreements restricting our subsidiaries’ ability to pay dividends;

and consolidate, merge or sell all or substantially all of our assets.

The following constitute events of default under the Notes, among others:

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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.

Events After Period End

In February 2026, we entered into an agreement with a group of lenders and noteholders representing a majority of our outstanding senior secured notes and term loans to support a set of coordinated transactions designed to extend the maturities of a substantial portion of our debt.

Under this agreement, we expect to seek consents from holders of our senior secured notes to amend the existing indenture and offer eligible noteholders the opportunity to exchange their notes for new debt with later maturities and a modest cash component.

We also expect to seek similar consents from lenders under our first lien term loan facility and provide participating lenders with an option to receive a combination of cash and new term loans that extend the maturity of their existing loans.

The supporting creditors have agreed to work with us to initiate these transactions in February and target completion in March 2026.

In addition, we and these creditors intend to collaborate on potential amendments to, and an extension of, our revolving credit facility, although completing that extension is not required for the broader maturity extension effort.

The agreement includes customary conditions and termination rights, including an automatic termination in late March 2026 unless extended by mutual agreement, and reflects representations and commitments that were negotiated solely among the parties and may not reflect conditions after the date they were made.

Contractual Obligations

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Unpaid claims (4)

Restructuring and reorganization (5)

Accrued contractual termination benefits

Total contractual obligations

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(2) Represents payments collected from our clients, primarily, associated with market development funds that arise out of our business.

(3) We have an aggregate principal amount of $1.106 billion borrowing on the Term Loan Facility, which bears the applicable interest rate of 4.25% per annum, and $615.1 million in Senior Secured Notes, which is subject to a fixed interest rate of 6.5%.

(3) We have an aggregate principal amount of $1.093 billion borrowing on the Term Loan Facility, which bears the applicable interest rate at a floating rate of Term SOFR plus 4.25% per annum, and $595.1 million in Senior Secured Notes, which is subject to a fixed interest rate of 6.5%.

Refer to Note 8— Debt of our audited consolidated financial statements for the year ended December 31, 2025 for additional information regarding the maturities of debt principal.

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(4) Represents $66.6 million of an estimated liability under our workers’ compensation programs for claims incurred but unpaid and $9.0 million of employee insurance reserves as of December 31, 2025.

(5) Refer to Note 7— Restructuring of our audited consolidated financial statements for the year ended December 31, 2024 for additional information regarding our restructuring and reorganization activities.

Cash and Cash Equivalents Held Outside the United States

As of December 31, 2024, and 2023, $65.0 million and $44.0 million, respectively, of our cash and cash equivalents were held by foreign subsidiaries.

The increase in cash and cash equivalents held by foreign subsidiaries during the year ended December 31, 2024 was primarily due to an increase in cash held by our Canadian subsidiary.

As of December 31, 2024 and 2023, $18.5 million and $24.6 million, respectively, of our cash and cash equivalents were held by foreign branches.

We assessed our determination as to our indefinite reinvestment intent for certain of our foreign subsidiaries and recorded a deferred tax liability of approximately $0.6 million of withholding tax as of December 31, 2024 for unremitted earnings in Canada with respect to which we do not have an indefinite reinvestment assertion.

We will continue to evaluate our cash needs, however we currently do not intend, nor do we foresee a need, to repatriate funds from the foreign subsidiaries except for Canada.

We have continued to assert indefinite reinvestment on all other earnings as it is necessary for continuing operations and to grow the business.

If at a point in the future our assertion changes, we will evaluate tax-efficient means to repatriate the earnings.

In addition, we expect existing domestic cash and cash flows from operations to continue to be sufficient to fund our domestic operating activities and cash commitments for investing and financing activities, such as debt repayment and capital expenditures, for at least the next 12 months and thereafter for the foreseeable future.

If we should require more capital in the United States than is generated by our domestic operations, for example, to fund significant discretionary activities such as business acquisitions or to settle debt, we could elect to repatriate future earnings from foreign jurisdictions.

These alternatives could result in higher income tax expense or increased interest expense.

Excluding Canada, we consider the remaining undistributed earnings of our foreign subsidiaries, as of December 31, 2024, to be indefinitely reinvested and, accordingly, no provision has been made for taxes in excess of the $0.6 million noted above.

As of December 31, 2025, $14.0 million of our cash and cash equivalents were held by foreign subsidiaries.

As of December 31, 2025, $37.9 million of our cash and cash equivalents were held by foreign branches.

We expect existing domestic cash and cash flows from operations to continue to be sufficient to fund our domestic operating activities and cash commitments for investing and financing activities, such as debt repayment and capital expenditures, for at least the next 12 months and thereafter for the foreseeable future.

Nonetheless, we assessed our determination as to our indefinite reinvestment intent for certain of our foreign subsidiaries and branches and recorded a deferred tax liability of approximately $1.0 million of withholding tax as of December 31, 2025 for unremitted earnings in Canada.

We continue to assert indefinite reinvestment on earnings of our foreign operations, other than Canada and the United Kingdom.

No deferred tax liability is required for the United Kingdom unremitted earnings.

However, we may change our assertion if we identify a higher return on this capital in the U.S.

and we are able to repatriate the income in a tax-efficient means.

Off-Balance Sheet Arrangements

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

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

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

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

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Commission revenues are generally earned upon performance of headquarter relationship management, analytics, insights and intelligence, e-commerce, administration and retail services arrangements.

As part of these arrangements, we provide a variety of services to consumer goods manufacturers in order to improve the manufacturer’s sales to retailers.

As part of these arrangements, we provide a variety of services to CPG manufacturers in order to improve the manufacturer’s sales to retailers.

This includes primarily outsourced sales, business development, category and space management, relationship management and in-store sales strategy services.

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We recognize revenue related to variable consideration if it is probable that a significant reversal of revenue recognized will not occur.

When such probable

threshold is not satisfied, we will constrain some or all of the variable consideration, and such constrained amount will not be recognized as revenue until the probable threshold is met or the uncertainty is resolved and the final amount is known.

When such probable threshold is not satisfied, we will constrain some or all of the variable consideration, and such constrained amount will not be recognized as revenue until the probable threshold is met or the uncertainty is resolved and the final amount is known.

We record an adjustment to revenue for differences between estimated revenues and the amounts ultimately invoiced to the client.

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For contracts with a fee per project, revenue is recognized over time using an input method such as hours worked that reasonably depicts our performance in transferring control of the services to the client.

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

We 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, revenue is recognized using a time-based measure resulting in a straight-line revenue recognition.

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We generally combine components that have similar economic characteristics, nature of services, types of client, 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.

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, we 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.

Additionally, during the fourth quarter of fiscal year 2024, we determined a triggering event occurred and an impairment assessment was warranted for the Branded Services reporting unit goodwill due to the loss of clients and a reduction in the scope of client services as our clients implemented internal cost reduction initiatives in response to challenges in the broader markets in which they operate.

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

We utilize a combination of income and market approaches to estimate the fair value of our reporting units.

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

As a result of the impairment test performed, we 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.

The following table represents a sensitivity analysis on the goodwill impairment charge (under the income approach without consideration to the market approach) for the Branded Agencies reporting unit depicting the percent increase in the $99.7 million charge had the fair value been estimated with a 0.5% increase in the discount rate used, a 1.0% decrease in the long-term growth rate and a 1.0% increase in the net working capital assumptions used at May 31, 2024.

Assumption Change

% Increase in Impairment Charge

0.5% increase in discount rate

1.0% decrease in long-term growth rate

1.0% increase in incremental working capital

In connection with the annual quantitative impairment test as of October 1, 2024, we 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.

The following table represents a sensitivity analysis on the goodwill impairment charge (under the income approach without consideration to the market approach) for the Branded Services reporting unit depicting the percent increase in the $133.5 million charge had the fair value been estimated with a 0.1% increase in the discount rate used, a 0.1% decrease in the long-term growth rate and a 1.0% increase in the net working capital assumptions used at December 31, 2024.

Under each of the sensitivity scenarios presented, the resulting impairment charge would fully reduce the goodwill balance of the Branded Services reporting unit to zero as of December 31, 2024.

Assumption Change

% Increase in Impairment Charge

0.1% increase in discount rate

0.1% decrease in long-term growth rate

1.0% increase in incremental working capital

During the fourth quarter of fiscal year 2025, in connection with our annual impairment assessment, we recognized goodwill impairment charges of $13.1 million and $23.5 million for the Branded Services and Merchandising reporting units, respectively.

The decline in estimated fair value of the Branded Services and Merchandising reporting units primarily reflect higher discount rates driven by increases in market-based inputs, including risk-free rates and equity risk premiums, as well as updated valuation multiples for comparable publicly traded companies.

The assessment also incorporated revised prospective financial information reflecting current expectations for revenue growth, margin performance, and operating cost trends.

As a result of the impairment charges incurred during the fourth quarter of fiscal year 2025, there remains no goodwill in either the Branded Services or Merchandising reporting units.

The uncertainty and volatility in the economic environment which we operate could have an impact on our future growth and could result in future impairment charges.

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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, which requires significant management judgment.

These estimates and assumptions include revenue growth rates, terminal growth

rate, discount rates and royalty rate, which requires 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 our annual quantitative impairment tests as of October 1, 2024 and 2023, we concluded that our indefinite-lived intangible asset was not impaired.

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

The following table represents a sensitivity analysis on the indefinite-lived trade name intangible asset depicting the percent increase in the $42.0 million charge related to the indefinite-lived trade name had the fair value been estimated with a 0.1% increase in the discount rate used and a 0.1% decrease in the royalty rate used at December 31, 2024.

During the fourth quarter of fiscal year 2025, we recognized an intangible asset impairment charge of $167.1 million in connection with the annual impairment assessment, primarily as a result of revised prospective financial information reflecting current expectations for revenue growth.

The following table represents a sensitivity analysis on the indefinite-lived trade name intangible asset depicting the percent increase in the $167.1 million charge related to the indefinite-lived trade name had the fair value been estimated with a 0.5% increase in the discount rate used and a 0.1% decrease in the royalty rate used at October 1, 2025.

Assumption Change

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0.5% increase in discount rate

0.1% increase in royalty rate

During the fourth quarter of fiscal year 2023, we determined a triggering event occurred and an impairment assessment was warranted for our indefinite-lived trade name due to the deconsolidation of our European joint venture and the planned divestitures of a collection of foodservice businesses.

As a result, we recognized an intangible asset impairment charge of $43.5 million related to our indefinite-lived 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.

0.1% decrease in royalty rate

Stock-Based Compensation

Performance restricted stock units (“PSUs”) are subject to the achievement of certain performance conditions based on measurements of our Adjusted EBITDA margin and cash earnings in the respective measurement period and the recipient’s continued service to us.

The PSUs are scheduled to vest over a three-year period from the date of grant and may vest from 0% to 200% of the number of shares.

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

Restricted stock units (“RSUs”) are subject to the recipient’s continued service to us.

The RSUs are generally scheduled to vest in increments of one-third over a three year period and are subject to the provisions of the RSU agreement under the Advantage Solutions.

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

We grant performance restricted stock units (“PSUs”) and restricted stock units (“RSUs”) under the Plan.

PSUs vest based on the achievement of specified performance conditions, including Adjusted EBITDA margin and cash earnings targets over the applicable measurement period, in addition to the participant’s continued service.

PSU awards may vest from 0% to 200% of the target number of units, and the grant‑date fair value is measured using the closing price of our Class A common stock on the date of grant.

Expense recognition for PSUs requires significant judgment, as we assess the probability of achieving the performance conditions each reporting period.

Changes in these probability assessments may result in adjustments to expense in future periods.

RSUs vest based solely on continued service and generally vest ratably over three years.

The grant‑date fair value is measured using the closing price of our Class A common stock on the date of grant, and compensation expense is recognized using graded vesting over the respective vesting periods.

Stock‑based compensation expense is recognized based on the grant‑date fair value of awards that are expected to vest, and we reverse previously recognized expense when awards are forfeited prior to vesting.

Refer to Note 12— Stock Based Compensation and Other Benefit Plans to our audited consolidated financial statements included elsewhere in this Annual Report for details regarding stock-based compensation plans.

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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 7. Management’s Discussion and Analysis