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Item 2. Management’s Discussion and Analysis

2026-08-05 compared with 2026-05-06 · 230 added, 160 removed, 150 unchanged (72% of the section changed)

11 unchanged sentences

Business Overview

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

We are a leading omni-commerce business solutions provider to CPG brands 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.

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We report financial results for the following three reportable segments.

Through our Branded Services segment, which generated approximately 29.6% and 35.3% of our revenues in the three months ended March 31, 2026 and 2025, respectively, we provide services to branded consumer goods manufacturers through three main categories:

Through our Branded Services segment, which generated approximately 28.0% and 34.5% of our revenues in the six months ended June 30, 2026 and 2025, respectively, we provide services to CPG brands through three main categories:

brokerage, branded merchandising and omni-commerce marketing services.

Through our Experiential Services segment, which generated approximately 44.3% and 38.2% of our revenues in the three months ended March 31, 2026 and 2025, respectively, we help brands and retailers reach consumers and convert shoppers into buyers through in-store and online sampling and demonstrations.

Through our Retailer Services segment, which generated approximately 26.1% and 26.5% of our revenues in the three months ended March 31, 2026 and 2025, respectively, we provide end-to-end advisory, retailer merchandising and agency services to retailers.

Through our Experiential Service s segment, which generated approximately 45.6% and 39.0% of our revenues in the six months ended June 30, 2026 and 2025, respectively, we help brands and retailers reach consumers and convert shoppers into buyers through in-store and online sampling and demonstrations.

Through our Retailer Services segment, which generated approximately 26.4% and 26.5% of our revenues in the six months ended June 30, 2026 and 2025, respectively, we provide end-to-end advisory, retailer merchandising and agency services to retailers.

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.

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Recent Developments

Refinancing .

During the first quarter of 2026, we completed a refinancing designed to extend maturities, enhance liquidity, and simplify our capital structure.

The transaction was effected through a series of interrelated financing actions, comprising (i) an exchange offer and consent solicitation with respect to our outstanding senior secured notes,

(ii) a refinancing and amendment of our term loan facility, and (iii) amendments to our asset‑based revolving credit facility.

Collectively, these actions extended the weighted-average maturity of our term debt, senior secured notes, and revolving credit facility by approximately two years and were accompanied by a $131.3 million principal paydown during the quarter, reflecting our ongoing commitment to deleveraging the balance sheet.

See Note 4– Debt – Refinancing in the Notes to the Company’s condensed consolidated financial statements.

Divestitures .

Consistent with our strategy to focus the portfolio on markets where we have differentiated capabilities, we entered into a series of agreements to reduce our ownership interest in our European joint venture.

Under those agreements, we sold a portion of our interest in the joint venture for total consideration of £20 million (approximately $28 million), comprised of £10 million (approximately $14 million) received in cash at closing and £10 million of deferred consideration.

The Company retained a minority interest of 49.6% in the remaining portion of its ownership interest in the European joint venture.

Year-over-year comparisons are affected by divestitures completed after the first quarter of 2025.

The divested businesses contributed approximately $5 million of revenues and $3 million of adjusted EBITDA to our first quarter 2025 results, which are not reflected in the first quarter of 2026.

Transformation .

Also during the first quarter of 2026, we advanced our transformation strategy by initiating a restructuring of our Branded Services segment and transitioning certain back-office functions to a third-party service provider.

These actions resulted in $2.2 million of restructuring charges in the quarter.

The transition of services to the third-party provider is expected to be completed in 2027.

For the second quarter of 2026, we reported revenues of $889.5 million and a net loss of $62.7 million, compared to revenues of $873.7 million and a net loss of $30.4 million in the same period of the prior year.

Our Experiential

Services segment delivered strong second-quarter performance, supported by continued favorable demand and execution.

The Retailer Services segment reported modest revenue growth, although operating income declined, reflecting higher costs associated with upfront investments in a larger project.

Branded Services results remained under pressure, reflecting lower volumes, client losses and reduced scope of services as consumer brands and retailers navigate an uncertain macroeconomic environment that continues to weigh on consumer spending.

On a consolidated basis, operating income was $1.7 million in the second quarter of 2026, a decline of $8.3 million year-over-year.

The decrease reflected declines of $13.5 million in Branded Services and $2.7 million in Retailer Services, partially offset by $7.9 million of operating income growth in Experiential Services.

Our second quarter of 2026 net loss of $62.7 million was negatively impacted by $21.8 million of income tax expense as compared to $4.6 million for the same period in the prior year.

The increase in tax expense was attributable to an increase in the valuation allowance against deferred tax assets related to interest expense limitation carryforwards.

Restructuring and reorganization charges associated with our transformation strategy were $9.6 million in the second quarter of 2026 as compared to $16.4 million for the same period in the prior year.

Adjusted EBITDA, a non-GAAP financial measure, was $75.8 million in the second quarter of 2026, a decrease of $10.6 million as compared to $86.4 million for the same period in the prior year.

An $8.3 million improvement in Experiential Services Adjusted EBITDA was more than offset by declines of $12.3 million in Branded Services and $6.6 million in Retailer Services.

Year-over-year comparisons are affected by divestitures completed after the second quarter of 2025.

The divested businesses contributed approximately $4.9 million and $9.8 million of revenues and $2.9 million and $5.6 million of Adjusted EBITDA to our three and six months ending June 30, 2025 results, respectively, which are not reflected in the same periods of 2026.

Debt reduction is one of our primary capital allocation priorities.

As such, during the six months ended June 30, 2026, we repaid $137.8 million of long-term debt in connection with scheduled principal repayments and a debt refinancing, compared to $24.9 million in the prior year.

Separately, we repurchased 562,263 shares of our common stock for approximately $17.0 million, compared to 19,778 shares for $0.9 million in the prior year.

During the six months ended June 30, 2026, we advanced our transformation strategy through a successful extension of our global instance of SAP, initially implemented in 2025, to support our private brands business, completing our large-scale SAP implementation and shifting internal focus toward optimization.

Together, these large-scale transformation projects, along with numerous supporting IT initiatives, have enabled us to sunset a number of disparate systems and allowed our team members to work in a more collaborative and efficient manner.

As previously discussed, we are currently implementing a modernized HCM platform that, upon completion, we expect will represent the substantial completion of our IT transformation.

Executive Summary

Three Months Ended March 31,

Three Months Ended June 30,

Change Reported

Six Months Ended

Change Reported

(amounts in thousands)

Operating income (loss)

Adjusted Net Loss (1)

Adjusted Net (Loss) Income (1)

Adjusted EBITDA (1)

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Adjusted EBITDA

(1) Adjusted Net Loss and Adjusted EBITDA are financial measures that are not calculated in accordance with GAAP.

For a discussion of our presentation of Adjusted Net Loss and Adjusted EBITDA and reconciliations of Net loss to Adjusted Net Loss and Adjusted EBITDA, see “ Non-GAAP Financial Measures .”

In the first quarter of 2026, revenues were $869.6 million, which represented a $47.8 million or 5.8% increase as compared to the same period last year.

Reimbursable expenses accounted for $20.0 million or 2.4% of the increase with the remaining increase driven by growth in Experiential and Retailer services of $49.4 million and $8.1 million, respectively, partially offset by declines in Branded of $30.7 million.

We reported a net loss of $71.8 million in the first quarter of 2026, compared to a net loss of $56.1 million during the same period last year.

The $15.7 million increase in net loss occurred despite a year-over-year improvement in operating performance, and was driven by two non-operating items:

$20.4 million of third-party debt issuance costs related to the refinancing completed during the quarter, and a $16.2 million increase in income tax expense.

We generated operating income of $18.8 million in the first quarter of 2026, compared to an operating loss in the prior year period.

The improvement reflected stronger results in Experiential Services, improvement in Retailer Services, and lower reorganization and restructuring costs, partially offset by weaker performance in Branded Services driven by lower revenues.

Adjusted EBITDA was $67.7 million for the first quarter of 2026 as compared to $58.2 million for the first quarter of 2025, reflecting an increase compared to the same period in 2025.

The year‑over‑year increase was driven primarily by strong performance in our Experiential Services segment, reflecting continued client demand and effective execution, as well as the timing of certain holidays during the first quarter of 2026 relative to the prior‑year period in our Retailer Services segment.

These improvements were partially offset by macroeconomic headwinds and client losses that impacted our Branded Services segment.

Results of Operations for the Three Months Ended March 31, 2026 and 2025

The following table sets forth items derived from the Company’s consolidated statements of operations for the three months ended March 31, 2026 and 2025 in dollars and as a percentage of total revenues.

Three Months Ended March 31,

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

For a discussion of our presentation of Adjusted Net (Loss) Income and Adjusted EBITDA and reconciliations of Net loss to Adjusted Net (Loss) Income and Adjusted EBITDA, see “ Non-GAAP Financial Measures .”

(2) NMF- Not meaningful

Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025

The following table sets forth items derived from the Company’s consolidated statements of operations for the three and six months ended June 30, 2026 and 2025 in dollars and as a percentage of total revenues.

Three Months Ended June 30,

Six Months Ended June 30,

(amounts in thousands)

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Depreciation and amortization

Gain on divestiture and income from investments in European joint venture

Loss on divestiture

Income from investments in European joint venture

Total operating expenses

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Other Financial Data

Adjusted Net Loss (1)

Adjusted Net (Loss) Income (1)

Adjusted EBITDA (1)

Comparison of the Three Months Ended March 31, 2026 and 2025

Three Months Ended March 31,

Comparison of the Three Months Ended June 30, 2026 and 2025

Three Months Ended June 30,

(amounts in thousands)

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Total revenues

Branded Services segment revenues decreased $32.8 million for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

Branded Services segment revenues decreased $59.2 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025.

The decrease includes a $27.0 million reduction in revenues from reimbursable expenses.

Excluding the impact of reimbursable expenses, the decline was primarily attributable to lower volumes, client losses experienced in 2025 and reductions in scope of services, which exceeded new business wins.

Excluding the impact of reimbursable expenses, the remaining decrease of $32.2 million was primarily attributable to lower volumes, client losses and reductions in scope of services, including the carryover effect of losses that occurred during 2025, 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 $71.5 million during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

The increase includes $22.1 million of additional revenues from

reimbursable expenses.

Excluding the impact of reimbursable expenses, the remaining increase was primarily driven by higher event volume on improved demand and higher average pricing, reflecting continued recovery and growth in client activation activity.

Retailer Services segment revenues increased $9.2 million during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

The increase was driven primarily by higher product volumes due, in part, to the timing of certain holidays during the first quarter of 2026 relative to the prior‑year period.

Experiential Services segment revenues increased $68.6 million during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025.

The increase includes $21.5 million of additional revenues from reimbursable expenses.

Excluding the impact of reimbursable expenses, the remaining increase of $47.1 million was primarily driven by higher event volume on improved demand and higher average pricing, reflecting continued recovery and growth in client activation activity.

Retailer Services segment revenues increased $6.4 million during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025 driven primarily by a higher volume of retail merchandising project engagements.

Cost of Revenues

Cost of revenues as a percentage of revenues for the three months ended March 31, 2026 was 87.6%, as compared to 87.9% for the three months ended March 31, 2025.

The decrease was driven primarily by lower fixed labor costs resulting from restructuring actions implemented in prior periods, as well as reduced discretionary bonus and professional services expenses.

These favorable impacts were partially offset by higher variable labor and employee benefits costs

Cost of revenues as a percentage of revenues for the three months ended June 30, 2026 was 88.1%, as compared to 85.5% for the three months ended June 30, 2025.

The increase as a percentage of revenues was driven primarily by higher direct labor costs and transformation-related expenses, partially offset by lower reimbursable expenses, lower fixed labor costs and lower employee benefit expenses.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses as a percentage of revenues for the three months ended March 31, 2026 was 6.1%, compared to 7.9% for the three months ended March 31, 2025.

The decrease as a percentage of revenue was primarily driven by lower compensation costs and lower stock-based compensation expense.

Selling, general, and administrative expenses as a percentage of revenues for the three months ended June 30, 2026 was 5.7%, compared to 7.9% for the three months ended June 30, 2025.

The decrease as a percentage of revenues was primarily driven by lower transformation-related expenses, and lower compensation costs.

Depreciation and Amortization Expense

Depreciation and amortization expense was $51.6 million for the three months ended March 31, 2026 compared to $50.4 million for the three months ended March 31, 2025.

The net increase was primarily due to a $1.8 million increase in depreciation expense as a result of an increase in software amortization on increased investment in software, primarily due to the implementation of our new global enterprise resource planning system, partially offset by a $0.6 million decrease in intangible asset amortization expense.

Depreciation and amortization expense was $51.3 million for the three months ended June 30, 2026 compared to $50.7 million for the three months ended June 30, 2025.

The net increase was primarily due to a $1.2 million increase in depreciation expense as a result of an increase in IT-related investments, partially offset by a $0.6 million decrease in intangible asset amortization expense driven by prior period impairment charges.

Operating Income (Loss)

Three Months Ended March 31,

Three Months Ended June 30,

(amounts in thousands)

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Total operating income (loss)

In the Branded Services segment, the increase in operating loss during the three months ended March 31, 2026 as compared to the same period in the prior year was primarily due to lower revenues, as discussed above, partially offset by lower operating costs, primarily due to lower stock-based compensation expense, lower restructuring and reorganization expense, and a decrease in expected credit loss expense.

In the Experiential Services segment, the improvement from operating loss to operating income during the three months ended March 31, 2026 as compared to the same period in the prior year was primarily due to the increase in revenues as discussed above, as well as lower restructuring and reorganization costs and lower stock-based compensation expense.

In the Retailer Services segment, the increase in operating income during the three months ended March 31, 2026 as compared to the same period in the prior year was primarily due to the increase in revenues as discussed above, as well as lower restructuring and reorganization costs and lower stock-based compensation expense.

In the Branded Services segment, the increase in operating loss during the three months ended June 30, 2026, as compared to the same period in the prior year was primarily due to lower revenues, as discussed above, partially offset by lower cost of revenues of $37.6 million, lower selling, general and administrative expenses of $12 million.

Cost of revenues decreased on lower reimbursable expenses of $27.0 million, lower compensation costs, including lower direct labor, fixed labor and benefit costs, partially offset by higher reorganization and transformation-related expenses and IT-related expenses.

Selling, general and administrative expenses decreased on lower transformation-related expenses.

Also impacting year-over-year comparison is the recognition of equity earnings in our European joint venture of $2.6 million in operating income during the three months ended June 30, 2025, and zero in the current period.

In the Experiential Services segment, the increase in operating income during the three months ended June 30, 2026, as compared to the same period in the prior year was primarily due to higher revenues, as discussed above, partially offset by higher cost of revenues of $60.3 million.

Cost of revenues increased on higher compensation expenses, including higher direct labor and benefit costs, and higher reimbursable expenses.

Selling, general and administrative expenses were effectively unchanged.

In the Retailer Services segment, the decrease in operating income during the three months ended June 30, 2026, as compared to the same period in the prior year was primarily due to an increase in cost of revenues of $14.2 million, partially offset by higher revenues, as discussed above, and lower selling, general and administrative expenses of $5.6 million.

Cost of revenues increased on higher compensation expenses, including higher direct labor, benefit costs and third-party labor costs, and higher travel expenses.

Selling, general and administrative expenses decreased on lower reorganization and transformation-related expenses.

Interest Expense, net

Interest expense, net increased by $0.4 million, or 1.3%, to $34.8 million for the three months ended March 31, 2026, from $34.4 million for the three months ended March 31, 2025.

The increase was driven primarily by higher interest rates associated with the refinancing completed during the first quarter of 2026, partially offset by lower average principal balances resulting from principal payments made in connection with the refinancing.

Interest expense, net increased by $4.1 million, to $40.0 million for the three months ended June 30, 2026, from $35.8 million for the three months ended June 30, 2025.

The increase was driven primarily by a higher average borrowing rate during the second quarter of 2026 as compared to the same period in the prior year, partially offset by a

lower average debt balance outstanding, both of which are significantly driven by the refinancing of our outstanding debt in the first quarter of 2026.

Additional information regarding the debt refinancing is included in “ Liquidity and Capital Resources—Credit Facilities.

Provision for Income Taxes

The Company recognized provision for income taxes of $23.3 million and $7.1 million for the three months ended March 31, 2026 and 2025, respectively.

We recognized provision for income taxes of $21.8 million and $4.6 million for the three months ended June 30, 2026 and 2025, respectively.

The year‑over‑year change primarily reflects an increase in the valuation allowance recorded against deferred tax asset related to interest expense limitation carryforwards during the 2026 period.

Comparison of the Six Months Ended June 30, 2026 and 2025

Six Months Ended June 30,

(amounts in thousands)

Branded Services

Experiential Services

Retailer Services

Total revenues

Branded Services segment revenues decreased $92.1 million for the six months ended June 30, 2026, as compared to six months ended June 30, 2025.

The decrease includes a $29.1 million reduction in revenues from reimbursable expenses.

Excluding the impact of reimbursable expenses, the remaining decrease of $63.0 million was primarily attributable to lower volumes, client losses and reductions in scope of services, including the carryover effect of losses that occurred during 2025, 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 $140.1 million during the six months ended June 30, 2026, as compared to six months ended June 30, 2025.

The increase includes $43.6 million of additional revenues from reimbursable expenses.

Excluding the impact of reimbursable expenses, the remaining increase of $96.5 million was primarily driven by higher event volume on improved demand and higher average pricing, reflecting continued recovery and growth in client activation activity.

Retailer Services segment revenues increased $15.6 million during the six months ended June 30, 2026, as compared to six months ended June 30, 2025.

The increase was driven primarily by higher volume of retail merchandise project engagements and higher product sales.

Cost of Revenues

Cost of revenues as a percentage of revenues for the six months ended June 30, 2026 was 87.9%, as compared to 86.7% for the same period in the prior year.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses as a percentage of revenues for the six months ended June 30, 2026 was 5.9%, compared to 7.9% for the six months ended June 30, 2025.

The decrease as a percentage of revenues was primarily driven by lower transformation-related expenses and lower compensation costs.

Depreciation and Amortization Expense

Depreciation and amortization expense was $102.8 million for the six months ended June 30, 2026 compared to $101.1 million for the six months ended June 30, 2025.

The net increase was primarily due to a $3.0 million increase in depreciation expense as a result of an increase in IT-related investments, partially offset by a $1.2 million decrease in

intangible asset amortization expense driven by prior period impairment charges.

Operating Income (Loss)

Six Months Ended June 30,

(amounts in thousands)

Branded Services

Experiential Services

Retailer Services

Total operating income (loss)

In the Branded Services segment, the increase in operating loss during the six months ended June 30, 2026, as compared to the same period in the prior year was primarily due to lower revenues, as discussed above, partially offset by lower cost of revenues of $64.4 million, lower selling, general and administrative expenses of $17.6 million.

Cost of revenues decreased on lower reimbursable expenses of $29.1 million, lower compensation costs, including lower direct labor, fixed labor and benefit costs, partially offset by higher reorganization and transformation-related expenses and IT-related expenses.

Selling, general and administrative expenses decreased on lower reorganization and transformation-related expenses, and lower bad debt expense.

Also impacting year-over-year comparison is the recognition of equity earnings in our European joint venture of $4.2 million in operating income during the six months ended June 30, 2025, and zero in the current period.

In the Experiential Services segment, the increase in operating income during the six months ended June 30, 2026 as compared to the same period in the prior year was primarily due to higher revenues, as discussed above, partially offset by higher cost of revenues of $117.7 million.

Cost of revenues increased on higher direct labor expenses, including higher benefit costs, and higher reimbursable expenses.

Selling, general and administrative expenses decreased $1.8 million on lower reorganization and transformation-related expenses.

In the Retailer Services segment, the increase in operating income during the six months ended June 30, 2026 as compared to the same period in the prior year was primarily due to lower selling, general and administrative expenses of $9.7 million, higher revenues, as discussed above, partially offset by higher cost of revenues of $22.4 million.

Selling, general and administrative costs decreased predominantly on lower reorganization and transformation-related expenses.

Cost of revenues increased on higher direct labor expenses, including higher benefit costs and third-party labor costs, and higher travel expenses.

Interest Expense, net

Interest expense, net increased by $4.6 million to $74.8 million for the six months ended June 30, 2026, from $70.2 million for the same period in the prior year.

The increase was driven primarily by a higher average borrowing rate during the six months ended June 30, 2026 as compared to the same period in the prior year, partially offset by a lower average debt balance outstanding, both of which are significantly driven by the refinancing of our outstanding debt in the first quarter of 2026.

Additional information regarding the debt refinancing is included in “ Liquidity and Capital Resources—Credit Facilities ”

Provision for Income Taxes

We recognized provision for income taxes of $45.1 million and $11.8 million for the six months ended June 30, 2026 and 2025, respectively.

Reconciliation of Non-GAAP Financial Measures

Non-GAAP Financial Measures

We manage and assess our performance through various means including the use of the financial measures of Adjusted Net Loss, Adjusted EBITDA and Adjusted EBITDA by Segment.

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

We manage and assess our performance through various means including the use of the financial measures of Adjusted Net (Loss) Income, Adjusted EBITDA and Adjusted EBITDA by Segment.

A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP measure is provided elsewhere in this document.

These financial measures are not presented in accordance with U.S.

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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.

We define Adjusted Net Loss, 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) equity-based compensation of Karman Topco L.P., (iv) changes in fair value of warrant liability, (v) acquisition and divestiture related expenses, (vi) restructuring expenses, (vii) reorganization expenses, (viii) litigation expenses, (ix) amortization of intangible assets, (x) gain on repurchases of senior secured notes and Term Loan Facility, (xi) costs associated with (recovery from) with collection efforts involving Take 5 Media Group, (xii) other adjustments that management believes are helpful in evaluating our operating performance, and (xiii) related tax adjustments.

We present Adjusted Net Loss 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.

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

Adjusted EBITDA and Adjusted EBITDA by Segment are supplemental non-GAAP financial measures of our operating performance.

Adjusted EBITDA means net loss before (i) interest expense, net, (ii) income tax expense, (iii) depreciation and amortization of capitalized software, (iv) amortization of intangible assets, (v) changes in fair value of warrant liability, (vi) stock-based compensation expense, (vii) equity-based compensation of Karman Topco L.P., (viii) acquisition and divestiture related expenses, (ix) (gain) loss on divestiture, (x) restructuring expenses, (xi) reorganization expenses, (xii) litigation expenses, (xiii) costs associated with (recovery from) with collection efforts involving Take 5 Media Group, (xiv) EBITDA for economic interests in investments and (xv) 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) before (i) depreciation and amortization of capitalized software, (ii) amortization of intangible assets, (iii) impairment of goodwill, (iv) stock based compensation expense, (v) equity-based compensation of Karman Topco L.P., (vi) acquisition and divestiture related expenses, (vii) restructuring expenses, (viii) reorganization expenses, (ix) litigation expenses, (x) costs associated with (recovery from) with collection efforts involving Take 5 Media Group, (xi) EBITDA for economic interests in investments and (xii) other adjustments that management believes are helpful in evaluating our operating performance, in each case, attributable to such segment.

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

We define Adjusted Net (Loss) Income, as net loss adjusted for (i) non-operating income or expense and (ii) the impact of certain non-cash, nonrecurring or other items included in net (loss) income that we do not consider indicative of our ongoing operating performance, which may include acquisition and divestiture related expenses, gains and losses;

gains and losses on extinguishments of debt;

litigation expenses, net of recoveries on matters not representative of our ongoing business;

impairment charges on goodwill, intangible assets and non-marketable securities;

incremental expenses on restructuring and reorganization activities associated with certain transformation programs;

further adjusted for the related income tax impact associated with these items.

A full listing of adjustments to net loss are provided elsewhere in this document.

Adjusted EBITDA consists of net loss before interest, taxes, depreciation and amortization, further adjusted for (i) non-operating income or expense and (ii) the impact of certain non-cash, nonrecurring or other items included in net (loss) income that we do not consider indicative of our ongoing operating performance, which may include acquisition and divestiture related expenses, gains and losses;

gains and losses on extinguishments of debt;

litigation expenses, net of recoveries on matters not representative of our ongoing business;

impairment charges on goodwill, intangible assets and non-marketable securities;

incremental expenses on restructuring and reorganization activities associated with certain transformation programs;

further adjusted for the related income tax impact associated with these items.

A full listing of adjustments to net loss are provided elsewhere in this document.

Adjusted EBITDA by Segment consists of operating (loss) income by segment before interest, taxes, depreciation and amortization, further adjusted for the impact of certain non-cash, nonrecurring or other items included in net (loss) income that we do not consider indicative of our ongoing operating performance, which may include acquisition and divestiture related expenses, gains and losses;

gains and losses on extinguishments of debt;

litigation expenses, net of recoveries on matters not representative of our ongoing business;

impairment charges on goodwill, intangible assets and non-marketable securities;

incremental expenses on restructuring and reorganization activities associated with certain transformation programs;

further adjusted for the related income tax impact associated with these items.

A full listing of adjustments to operating income (loss) are provided elsewhere in this document.

We present Adjusted Net (Loss) Income, Adjusted EBITDA 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.

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

Neither Adjusted EBITDA 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.

Neither Adjusted Net (Loss) Income, Adjusted EBITDA 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.

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.

Adjusted Net Loss

A reconciliation of Adjusted Net Loss to Net loss is provided in the following table:

Three Months Ended March 31,

Adjusted Net (Loss) Income

A reconciliation of Adjusted Net (Loss) Income to Net loss is provided in the following table:

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

Financing costs for debt modification

Gain on divestiture from investments in European joint venture

Debt financing costs (a)

Impairment of non-marketable equity securities (f)

Equity-based compensation of Karman Topco L.P.

Divestiture related expenses (b)

Restructuring expenses (c)

Reorganization expenses (d)

Litigation expenses (e)

Amortization of intangible assets (f)

Gain on repurchases of senior secured notes and Term Loan Facility (g)

Tax adjustments related to non-GAAP adjustments (h)

Adjusted Net Loss

Represents expenses related to equity-based compensation expense associated with grants of Common Series D Units of Karman Topco L.P.

made to one of the Company's private equity sponsors.

Represents fees and costs associated with activities related to our 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.

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.

Represents the amortization of intangible assets recorded in connection with acquisitions.

Represents a gain associated with the repurchases of senior secured notes and Term Loan Facility, net of deferred financing fees.

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

Acquisition and divestiture expenses, net of (gains) losses (d)

Restructuring expenses (b)

Reorganization and transformation-related expenses (c)

Litigation expenses, net of recoveries (e)

Amortization of intangible assets

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

Tax adjustments related to non-GAAP adjustments (j)

Adjusted Net (Loss) Income

Adjusted EBITDA

Reconciliations of Adjusted EBITDA to Net loss are provided in the following table:

Three Months Ended March 31,

Three Months Ended

Six Months Ended

(in thousands)

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Depreciation and amortization

Gain on divestiture of Investments in European Joint Venture

Other expense, including debt fees

Stock-based compensation expense (a)

Stock-based compensation expense

Debt financing costs (a)

Restructuring expenses (b)

Reorganization and transformation-related expenses (c)

Acquisition and divestiture expenses, net of (gains) losses (d)

Litigation expenses, net of recoveries (e)

Impairment of non-marketable equity securities (f)

COVID-19 government relief payments received

Equity-based compensation of Karman Topco L.P.

Divestiture related expenses (c)

Restructuring expenses (d)

Reorganization expenses (e)

Litigation expenses (f)

EBITDA for economic interests in investments (g)

EBITDA from economic interests in investments (h)

Adjusted EBITDA

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Branded Services segment

Three Months Ended March 31,

Three Months Ended

Six Months Ended

(in thousands)

1 unchanged sentence

Depreciation and amortization

Gain on divestiture of Investments in European Joint Venture

Stock-based compensation expense (a)

Stock-based compensation expense

Restructuring expenses (b)

Reorganization and transformation-related expenses (c)

Acquisition and divestiture expenses, net of (gains) losses (d)

Litigation expenses, net of recoveries (e)

COVID-19 government relief payments received

Equity-based compensation of Karman Topco L.P.

Divestiture related expenses (c)

Restructuring expenses (d)

Reorganization expenses (e)

Litigation expenses (f)

EBITDA for economic interests in investments (g)

EBITDA for economic interests in investments (h)

Branded Services segment Adjusted EBITDA

Experiential Services segment

Three Months Ended March 31,

Three Months Ended

Six Months Ended

(in thousands)

Operating income (loss)

Operating income

Depreciation and amortization

Stock-based compensation expense (a)

Stock-based compensation expense

Restructuring expenses (b)

Reorganization and transformation-related expenses (c)

Acquisition and divestiture expenses, net of (gains) losses (d)

Litigation expenses, net of recoveries (e)

COVID-19 government relief payments received

Equity-based compensation of Karman Topco L.P.

Divestiture related expenses (c)

Restructuring expenses (d)

Reorganization expenses (e)

Litigation expenses (f)

Experiential Services segment Adjusted EBITDA

Retailer Services segment

Three Months Ended March 31,

Three Months Ended

Six Months Ended

(in thousands)

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Depreciation and amortization

Stock-based compensation expense (a)

Stock-based compensation expense

Restructuring expenses (b)

Reorganization and transformation-related expenses (c)

Acquisition and divestiture expenses, net of (gains) losses (d)

Litigation expenses, net of recoveries (e)

COVID-19 government relief payments received

Equity-based compensation of Karman Topco L.P.

Divestiture related expenses (c)

Restructuring expenses (d)

Reorganization expenses (e)

Litigation expenses (f)

Retailer Services segment Adjusted EBITDA

Represents non-cash compensation expense related to performance stock units, restricted stock units, and stock options under the 2020 Advantage Solutions Incentive Award Plan and the Advantage Solutions 2020 Employee Stock Purchase Plan.

Represents expenses related to equity-based compensation expense associated with grants of Common Series D Units of Karman Topco L.P.

made to one of the Company's private equity sponsors.

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

Represents costs associated with the Company’s Digital Operating Model Restructuring Initiative, primarily related to workforce transition activities, including employee rebadging, retention‑related compensation, and other qualifying exit or disposal costs.

Represents costs associated with the Company’s Transformation Strategy, including non‑routine, one‑time expenses incurred in connection with internal reorganization and transformation activities.

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

Represents adjustments to reflect the Company’s proportional share of Adjusted EBITDA related to its equity method investments.

For these investments, the adjustment reflects the Company’s proportional share of Adjusted EBITDA rather than reported earnings, consistent with how management evaluates operating performance.

Debt financing costs, of which $1.2 million is reported as "Interest expense, net" and $20.4 million is reported as "Other income (expense)" in the Condensed Consolidated Statements of Operations and Comprehensive Loss, represent the portion of debt financing costs incurred in connection with the refinancing of our 2030 Notes and 2030 Term Loan Facility.

Restructuring expenses consist primarily of employee termination costs, contract termination fees, and workforce transition costs, including employee rebadging to a third-party service provider.

In the three months ended June 30, 2026, $3.0 million of these expenses were charged to "Cost of revenues" in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

For all other periods presented, the remaining restructuring expenses were reported in "Selling, general and administrative expenses" in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

Reorganization and transformation-related expenses represent professional fees associated internal reorganization activities, incremental and nonrecurring implementation costs associated with our multi-year global ERP transformation, and setup costs associated with transitioning certain support activities to third-party outsourcing providers.

Acquisition and divestiture expenses, net of (gains) losses on disposal represent fees and other expenses associated with activities related to acquisitions and divestitures, including (gains) or losses on business sales along with adjustments to the estimated fair value of contingent consideration or adjustments to working capital.

Litigation expenses, net of recoveries represent legal expenses, including costs associated with investigation and remediation activities, and estimated settlement reserves, net of recoveries from responsible parties and/or insurance providers that are not representative of our ongoing business operations.

Impairment of non-marketable equity securities, as reported in "Other income (expense)" in the Condensed Consolidated Statements of Operations and Comprehensive Loss, represents a non-cash fair value adjustment associated with a minority investment in a technology-enabled retail support company.

Equity-based compensation of Karman Topco L.P.

represents non-cash changes in the estimated value of certain stock units due to investors of Advantage Solutions, Inc.

EBITDA for economic interests in investments represents additions to reflect our proportional share of Adjusted EBITDA related to our equity method investments.

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

Represents the tax provision or 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.

Liquidity and Capital Resources

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

Our working capital as of March 31, 2026, included $143.9 million of cash and cash equivalents and $572.6 million of accounts receivable, net of allowance for expected credit losses, both of which will be a significant source of ongoing liquidity.

Additionally, as of March 31, 2026, we had the ability to borrow up to $385.8 million under our 2030 ABL after consideration of the borrowing base limitations and outstanding letters of credit.

We believe our cash on hand, cashflows 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 .

Our working capital as of June 30, 2026, included $102.3 million of cash and cash equivalents and $634.9 million of accounts receivable, net of allowance for expected credit losses, both of which will be a significant source of ongoing liquidity.

Additionally, as of June 30, 2026, we had the ability to borrow up to $399.5 million under our 2030 ABL after consideration of the borrowing base limitations and outstanding letters of credit.

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 .

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

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands)

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Net Cash Provided by (Used in) Operating Activities

Cash provided by operating activities during the three months ended March 31, 2026 was $23.7 million compared to cash used in operating activities of $39.6 million during the three months ended March 31, 2025, representing an increase of $63.4 million.

The increase primarily reflects favorable movements in working capital, including lower prepaid expenses and other current assets and a smaller decrease in accrued compensation and benefits.

Operating cash flows for the three months ended March 31, 2026 also benefited from increased collections of accounts receivable on higher sales.

These increases were partially offset by unfavorable changes in our working capital balances, including a larger increase in accounts payable, a decrease in deferred revenue and a decrease in other accrued expenses, which was primarily driven by a decrease in accrued interest payable due to the timing of interest payments at the end of the first quarter of 2026 compared with the fourth quarter of 2025.

Cash provided by operating activities during the six months ended June 30, 2026 was $17.2 million compared to cash used in operating activities of $47.7 million during the six months ended June 30, 2025, representing an increase of $65.0 million.

The increase primarily reflects favorable movements in working capital, predominantly improved management of accounts receivable, and lower prepaid expenses, partially offset by lower deferred revenue and accrued liabilities.

Net Cash Provided by (Used in) Investing Activities

Net cash provided by investing activities during the three months ended March 31, 2026 primarily consisted of $27.5 million in deferred proceeds from the sale of Jun Group completed in 2025 and $13.4 million cash received for the partial sale of an equity method investment joint venture.

Net cash provided by investing activities during the six months ended June 30, 2026 primarily consisted of $27.5 million in deferred proceeds from the sale of Jun Group completed in 2024 and $13.4 million cash received for the partial sale of an equity method investment joint venture.

These cash inflows were partially offset by purchases of property and equipment of $20.8 million, primarily driven by investments in software, including our enterprise resource planning systems, and purchases of investments in unconsolidated affiliates of $2.1 million.

Net cash used in investing activities during the three months ended March 31, 2025 primarily consisted of the purchase of property and equipment of $15.1 million, primarily driven by investments in software, including our enterprise resource planning systems, which includes upgrading our information system platform, and the purchase of investments in unconsolidated affiliates of $3.3 million.

Net cash used in investing activities during the six months ended June 30, 2025 primarily consisted of the purchase of property and equipment of $17.2 million, primarily driven by investments in software, including our enterprise resource planning systems, which includes upgrading our information system platform, and the purchase of investments in unconsolidated affiliates of $3.5 million.

Net Cash Used in Financing Activities

Cash flows used in financing activities during the three months ended March 31, 2026 were primarily related to $124.9 million for repayment of the 6.5% Senior Secured Notes (as defined below) and First Term Loan Facility (as

defined below) debt in connection with the Refinancing (as defined below), $13.7 million payment of deferred financing fees in connection with the Refinancing (as defined below), $6.5 million quarterly principal payment for the 2026 Term Loan Facility (as defined below), and $2.3 million for payments related to the share repurchase program.

Cash flows used in financing activities during the three months ended March 31, 2025 were primarily related to repurchases of Notes of $18.2 million, repayment of principal on our Term Loan Facility of $3.3 million, payments for taxes related to net share settlement of $0.7 million, payments for taxes related to share settlement under the 2020 Incentive Award Plan and payments related to the share repurchase program of $0.9 million.

Cash flows used in financing activities during the six months ended June 30, 2026 were primarily related to $124.9 million for repayment of the 6.5% Senior Secured Notes and the Term Loan Facility debt and $13.7 million payment of deferred financing fees in connection with the Refinancing (as defined below), $13.0 million for two quarterly principal payments for the 2030 Term Loan Facility, and $17.0 million for payments related to the share repurchase program (as defined below).

Cash flows used in financing activities during the six months ended June 30, 2025 were primarily related to $18.2 million of repurchases of 6.5% Senior Secured Notes, repayment of principal on the Term Loan Facility of $6.6 million, payments for taxes related to net share settlement of $3.6 million.

Credit Facilities

During the first quarter of 2026, we completed a refinancing transaction (the “Refinancing”) designed to extend maturities and modify our capital structure, which is more fully described in Note 4— Debt to the condensed consolidated financial statements.

As of March 31, 2026, we had $385.8 million of unused availability under the revolving credit facility after giving effect to borrowing base limitations and $62.0 million of outstanding letters of credit.

From time to time, we may repurchase portions of our outstanding indebtedness under the 2030 Term Loan Facility and 2030 Notes.

During the first quarter of 2026, we completed, through our indirect wholly-owned subsidiary, Advantage Sales & Marketing Inc.

(the “Borrower”), a refinancing transaction (the “Refinancing”) designed to extend maturities and modify our capital structure, which is more fully described in Note 4— Debt to the condensed consolidated financial statements.

As of June 30, 2026, we had $399.5 million of unused availability under the revolving credit facility after giving effect to borrowing base limitations and $62.0 million of outstanding letters of credit.

From time to time, the Borrower may repurchase portions of its outstanding indebtedness under the 2030 Term Loan Facility and 2030 Notes.

Such repurchases, if any, will depend upon prevailing market conditions, our liquidity and capital position, contractual limitations and other factors.

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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 three months ended March 31, 2026, we executed open market purchases of $2.3 million of our Class A common stock under the 2021 Share Repurchase Program.

During the three months ended March 31, 2026, we retired 566,408 treasury shares that had been previously purchased under the 2021 Share Repurchase Program.

As of March 31, 2026, there remained $43.8 million of share repurchase availability under the 2021 Share Repurchase Program.

During the three and six months ended June 30, 2026, we purchased through the open market and in a private transaction approximately $15.0 million and $17.0 million, respectively, of our Class A common stock under the 2021 Share Repurchase Program.

During the six months ended June 30, 2026, we retired 566,408 treasury shares that had been previously purchased under the 2021 Share Repurchase Program.

As of June 30, 2026, there remained $29.1 million of share repurchase availability under the 2021 Share Repurchase Program.

Future Cash Requirement

Other than the extension of debt maturities resulting from the Refinancing and an increase in required quarterly principal payments under the 2030 Term Loan Facility to approximately $6.5 million from $3.3 million under the First Term Loan Facility, there were no material changes to our contractual future cash requirements from those disclosed in our 2025 Annual Report.

Other than the extension of debt maturities resulting from the Refinancing and an increase in required quarterly principal payments under the 2030 Term Loan Facility to approximately $6.5 million from $3.3 million under the previous terms of the Borrower's term loan facility, there were no material changes to our contractual future cash requirements from those disclosed in our 2025 Annual Report.

Cash and Cash Equivalents Held Outside the United States

As of March 31, 2026 and December 31, 2025, $2.2 million and $14.0 million, respectively, of our cash and cash equivalents were held by foreign subsidiaries.

As of March 31, 2026, and December 31, 2025, $68.1 million and $37.9 million, respectively, of our cash and cash equivalents were held by foreign branches.

As of June 30, 2026 and December 31, 2025, $31.9 million and $14.0 million, respectively, of our cash and cash equivalents were held by foreign subsidiaries.

As of June 30, 2026, and December 31, 2025, $43.3 million and $37.9 million, respectively, 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 $1.7 million of withholding tax as of March 31, 2026 for unremitted earnings in

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 $1.4 million of withholding tax as of June 30, 2026 for unremitted earnings in Canada.

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

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Off-Balance Sheet Arrangements

The Company does not have any off‑balance‑sheet financing arrangements or liabilities, including guarantee contracts, retained or contingent interests in transferred assets, or obligations arising from material variable interests in unconsolidated entities that would require disclosure under applicable accounting guidance.

The Company does not have any majority‑owned subsidiaries that are not included in its condensed consolidated financial statements and does not have material interests in, or relationships with, special‑purpose entities.

We do not have any off‑balance‑sheet financing arrangements or liabilities, including guarantee contracts, retained or contingent interests in transferred assets, or obligations arising from material variable interests in unconsolidated entities that would require disclosure under applicable accounting guidance.

We do not have any majority‑owned subsidiaries that are not included in its condensed consolidated financial statements and does not have material interests in, or relationships with, special‑purpose entities.

Critical Accounting Policies and Estimates

Our critical accounting policies and estimates are included in our 2025 Annual Report and did not materially change during the three months ended March 31, 2026.

Our critical accounting policies and estimates are included in our 2025 Annual Report and did not materially change during the six months ended June 30, 2026.

Recently Issued Accounting Pronouncements

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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-Q

Item 2. Management’s Discussion and Analysis