Earnings call transcript: ManpowerGroup beats Q3 2025 earnings forecast

ManpowerGroup Inc. (MAN) reported its third-quarter 2025 earnings on October 16, showing a stronger-than-expected performance with adjusted earnings per share (EPS) of $0.83, surpassing the forecast of $0.81. This represents a 2.47% surprise. Revenue for the quarter reached $4.63 billion, slightly above the anticipated $4.6 billion. Despite these positive results, the company’s stock fell by 5.26% in pre-market trading, reflecting broader market concerns. According to InvestingPro analysis, the company currently trades at a market capitalization of $1.67 billion, with its shares near their 52-week low of $36.19.

Key Takeaways

• ManpowerGroup’s adjusted EPS of $0.83 exceeded expectations by 2.47%.
• Revenue slightly outperformed forecasts at $4.63 billion.
• Stock price fell 5.26% in pre-market trading despite earnings beat.
• The company reported a return to growth after 11 quarters of revenue decline.
• Launched an AI platform contributing to 30% of new client revenue.

Company Performance

ManpowerGroup’s Q3 2025 results marked a significant milestone as the company returned to growth after 11 consecutive quarters of organic constant currency revenue declines. The company’s strategic focus on technology and efficiency improvements appears to be paying off, with a particular emphasis on AI-driven innovations and streamlined operations in key regions like Northern Europe and Latin America. InvestingPro data shows the company maintains strong dividend credentials, having maintained dividend payments for 32 consecutive years, though recent financial metrics indicate challenges with profitability over the last twelve months.

Financial Highlights

• Revenue: $4.63 billion, slightly above the $4.6 billion forecast.
• Adjusted EPS: $0.83, beating the forecast of $0.81.
• Reported EBITDA: $74 million (adjusted to $96 million).
• EBITDA margin: 2.1% (adjusted).

Earnings vs. Forecast

ManpowerGroup’s adjusted EPS of $0.83 surpassed the forecast of $0.81, resulting in a 2.47% earnings surprise. This beat reflects the company’s successful cost management and revenue-generating initiatives. Revenue of $4.63 billion also slightly exceeded expectations, signaling a positive trajectory.

Market Reaction

Despite the earnings beat, ManpowerGroup’s stock fell by 5.26% in pre-market trading, closing at $38.02. This decline might be attributed to broader market concerns or investor caution regarding future growth prospects. The stock remains closer to its 52-week low of $35.80, indicating potential market skepticism. However, InvestingPro analysis suggests the stock may be undervalued at current levels, with additional insights available in the comprehensive Pro Research Report covering this prominent player in the Professional Services industry.

Outlook & Guidance

Looking ahead, ManpowerGroup provided Q4 2025 EPS guidance ranging from $0.78 to $0.88, with constant currency revenue expected to fluctuate between -2% and +2%. The company anticipates stabilization and potential growth in 2026, driven by continued investments in technology and operational efficiencies.

Executive Commentary

CEO Jonas Preysing highlighted the company’s return to growth, stating, "After eleven consecutive quarters of organic constant currency revenue declines, we crossed back over to growth during the third quarter." He also emphasized the commercial impact of AI, noting, "We are now increasingly moving from AI use cases to scaled commercial impact."

Risks and Challenges

• Economic Uncertainty: Fluctuating economic conditions in key markets such as Europe and North America could impact demand.
• Competitive Pressure: Increasing competition in the staffing and recruitment sector may affect market share.
• Currency Fluctuations: Exchange rate volatility could influence financial results.
• Technology Integration: Successful integration of AI and digital platforms is crucial for future growth.
• Regulatory Changes: Shifts in labor laws and regulations could pose challenges.

Q&A

During the earnings call, analysts inquired about the role of AI in driving sales and the company’s outlook on market recovery. Executives expressed cautious optimism, citing technology investments as a key factor in improving sales pipelines and win rates.

Full transcript - ManpowerGroup Inc (MAN) Q3 2025:

Conference Operator: Welcome to ManpowerGroup’s Third Quarter Earnings Results Conference Call.

Jonas Preysing, Chair and CEO, ManpowerGroup: You will be put

Conference Operator: in listen only mode until the question and answer time begins. This call is being recorded. If you care to drop off now, please do so. I would now like to turn the call over to ManpowerGroup’s Chair and CEO, Mr. Jonas Preysing.

Sir, you may begin.

Jonas Preysing, Chair and CEO, ManpowerGroup: Welcome, and thank you for joining us for our third quarter twenty twenty five conference call. Our Chief Financial Officer, Jack McGinnis, is with me today. For your convenience, we have included our prepared remarks within the Investor Relations section of our website at manpargroup.com. I will start by going through some of the highlights of the quarter, then Jack will go through the third quarter results and guidance for the 2025. I will then share some concluding thoughts before we start our Q and A session.

Jack will now cover the safe harbor language.

Jack McGinnis, Chief Financial Officer, ManpowerGroup: Good morning, everyone. This conference call includes forward looking statements, including statements concerning economic and geopolitical uncertainty, which are subject to known and unknown risks and uncertainties. These statements are based on management’s current expectations or beliefs. Actual results might differ materially from those projected in the forward looking statements. We assume no obligation to update or revise any forward looking statements.

Slide two of our earnings release presentation further identifies forward looking statements made in this call and factors that may cause our actual results to differ materially and information regarding reconciliation of non GAAP measures. When

Jonas Preysing, Chair and CEO, ManpowerGroup: we last reported earnings in July, we characterized the environment as one of continued uncertainty yet growing resilience, with employers hiring very cautiously and labor markets holding steady against the backdrop of geopolitical complexity and economic softening. Since then, these dynamics have largely persisted. Geopolitical tensions remain elevated, the race to invest in AI continues at pace, and employers are adapting to the fluctuating policy environment and cautious consumer sentiment in Europe and North America. Globally, conditions remain mixed. Strong momentum across Latin America and APME offset by softer trends in Europe and North America, where activity levels remain well below historical peaks, yet stable over recent quarters.

While hiring remains cautious, we continue to see gradual broad based signs of stabilization. Our most recent Manpower Group employment outlook survey covering over 40,000 employers across 42 countries reinforces this view. Hiring outlooks remained relatively steady year over year with ongoing stabilization and 45% of employers planning to maintain current workforce levels, the highest since early twenty twenty two as organizations balance capturing growth opportunities with mitigating economic uncertainty. Turning to our results. After eleven consecutive quarters of organic constant currency revenue declines, we crossed back over to growth during the third quarter.

The stabilization of demand in recent quarters in North America and Europe, despite ongoing tariff uncertainty, has been a key factor in the revenue trend improvements. We’re encouraged by this progress as well as a continuation of revenue growth in our largest brand, Manpower, with strength in North America, Latin America, Italy, Spain, Belgium, Poland and APME to name a few. Within Experis, we’re beginning to see early signs of stabilization in professional and IT hiring. Win rates have improved modestly and we have secured new enterprise programs in sectors such as financial services and life sciences. Our ongoing modernization of the Xperi’s offering, including enhanced consultant development and tighter integration of our PowerSuite AI tools is supporting margin improvement and future growth as client demand recovers.

The trends in Talent Solutions are also improving for our managed service provider offering, where win rates and demand stabilization is driving strong revenue growth, helping offset some weakness in recruitment process outsourcing and right management as labor markets remain somewhat frozen in terms of hiring and workforce reductions. Overall, for the quarter, reported revenue was $4,600,000,000 down 2% year over year in constant currency. System wide revenue, which includes our expanding franchise revenue base was $4,900,000,000 Our reported EBITDA for the quarter was $74,000,000 Adjusting for restructuring costs, EBITDA was $96,000,000 representing a decrease of 22% in constant currency year over year. Reported EBITDA margin was 1.6% and adjusted EBITDA margin was 2.1%. Earnings per diluted share was $0.38 on a reported basis, while earnings per diluted share was zero eight three dollars on an adjusted basis.

Adjusted earnings per share decreased 39% year over year in constant currency. As we look to the fourth quarter, we’re closely monitoring several leading indicators of demand, including activity among our largest enterprise clients, new assignment starts in priority verticals such as logistics and manufacturing and year end seasonal patterns. These metrics are helping us assess the depth and breadth of stabilization across our markets and inform our expectations as we plan for 2026. Looking closely at these indicators, we believe our demand in Europe and North America is holding steady and are confident that we’re well positioned for future growth. Our AI enabled data insights are increasingly instrumental in tracking, anticipating and predicting client demand.

This real time intelligence enables our teams to pivot quickly to sectors and regions where growth opportunities are emerging. Our enterprise pipeline continues to expand with most of the demand in this environment concentrated among global enterprise clients, although decision timelines across major markets remain extended. As a leadership team, we remain laser focused on managing the current environment while positioning our business for future growth. We continue to take decisive actions to contain costs, drive efficiencies at scale and simplify our organization, while accelerating the strategic initiatives that will strengthen our capabilities, expand our margins and deliver long term shareholder value. I’ll now hand it over to Jack for more details on the quarter’s financial results.

Jack McGinnis, Chief Financial Officer, ManpowerGroup: Thanks, Jonas. U. S. Dollar reported revenues in the third quarter were impacted by foreign currency translation and after adjusting for currency impacts came in at the midpoint of our constant currency guidance range. Our revenue trends demonstrate the continuation of largely stable activity levels across North America and Europe.

Our revenue from franchise offices are significant and are included within system wide revenues, which equaled $4,900,000,000 for the quarter. Gross profit margin came in below our guidance range, driven by shifts within staffing, reflecting an increased mix of enterprise accounts, lower permanent recruitment and lower outplacement. As adjusted, EBITDA was 96,000,000 representing a 22% decrease in constant currency compared to the prior year period. As adjusted, EBITDA margin was 2.1% and came in at the midpoint of our guidance range, representing a 50 basis points decline year over year. Foreign currency translation drove a favorable impact to the 2% U.

S. Dollar reported revenue increase from the constant currency decrease of 2%. Organic days adjusted constant currency revenue increased 0.5% in the quarter, which was slightly favorable to the midpoint guidance of flat. Turning to the EPS bridge, reported earnings per share was $0.38 Adjusted EPS was $0.83 and came in $01 above our guidance midpoint. Walking from our guidance midpoint of $0.82 our results included improved operational performance, representing a positive impact of $02 and a slightly higher tax rate, which had a negative impact of $01 Restructuring costs and other represented $0.45 bringing reported earnings per share to $0.38 Next, let’s review our revenue by business line.

Year over year, on an organic constant currency basis, the Manpower brand had growth of 3% in the quarter, the Experis brand declined by 7%, and the Talent Solutions brand declined by 8%. Within Talent Solutions, our RPO business experienced lower demand in select ongoing client programs year over year. Our MSP business continued their strong revenue growth performance, while Right Management experienced declining year over year revenues as our placement activity continued to slow. Looking at our gross profit margin in detail, our gross margin came in at 16.6% for the quarter. Staffing margin contributed a 40 basis point reduction due to mix shifts towards enterprise accounts.

Permanent recruitment activity was softer than expected and the lower contribution resulted in a 20 basis point decline. Lower career transition outplacement activity within Right Management resulted in a 10 basis point margin decrease. Moving on to our gross profit by business line. During the quarter, the Manpower brand comprised 63% of gross profit, our Experis Professional business comprised 21%, and Talent Solutions comprised 16%. During the quarter, our consolidated gross profit decreased by 4% on an organic constant currency basis year over year, representing a slight improvement from the 5% decline in the second quarter.

Our Manpower brand reported flat organic constant currency gross profit year over year, equal to the second quarter year over year trend. Gross profit in our Xperis brand decreased 10% in organic constant currency year over year, an improvement from the 14% decrease in the second quarter. Gross profit in Talent Solutions declined 13% in organic constant currency year over year, a decline from the flat results in the second quarter. MSP and RPO experienced similar activity levels from the second quarter, but RPO declined year over year as they anniversaried large growth in the third quarter a year ago in select client programs. Bright Management gross profit decreased on lower outplacement activity.

Reported SG and A expense in the quarter was $7.00 $2,000,000 SG and A as adjusted was down 2% on a constant currency basis and 1% on an organic constant currency basis. The year over year organic constant currency SG and A decreases largely consisted of reductions in operational costs of $5,000,000 partly driven by previous restructuring actions. Corporate costs continued to include our back office transformation spend, and these programs are progressing well with expected medium term efficiencies. Dispositions represented a decrease of $8,000,000 while currency changes contributed to a $20,000,000 increase. Adjusted SG and A expenses as a percentage of revenue represented 14.8% in constant currency in the third quarter.

Adjustments represented restructuring of $21,000,000 Balancing gross profit trends with strong cost actions to enhance EBITDA margin is one of our highest priorities, and we continue to analyze all aspects of our cost base for additional ongoing efficiency improvements. The Americas segment comprised 24% of consolidated revenue. Revenue in the quarter was $1,100,000,000 representing an increase of 6% year over year on a constant currency basis. As adjusted, OUP was $43,000,000 and OUP margin was 3.9%. Restructuring charges of $5,000,000 primarily represented actions in The U.

S. The U. S. Is the largest country in the Americas segment, comprising 63% of segment revenues. Revenue in The U.

S. Was $691,000,000 during the quarter, representing a 1% days adjusted decrease compared to the prior year. This represents an improvement from the 3% decrease in the second quarter. OUP as adjusted for our U. S.

Business was $24,000,000 in the quarter. OUP margin as adjusted was 3.5%. Within The U. S, the Manpower brand comprised 28% of gross profit during the quarter. Revenue for the Manpower brand in The U.

S. Increased 8% on a days adjusted basis during the quarter, which represented strong market performance and a slight decrease from the 9% increase in the second quarter. The Xperis brand in The U. S. Comprised 39% of gross profit in the quarter.

Within Xperis in The U. S, IT skills comprised approximately 90% of revenues. Experis U. S. Revenue decreased 9% on a days adjusted basis during the quarter, an improvement from the 14% decline in the second quarter.

Account Solutions in The U. S. Contributed 33% of gross profit and saw a flat revenue trend year over year in the quarter, a decrease from the 13% increase in the second quarter driven by lower RPO activity from select ongoing client programs and lower right management outplacement activity. The MSP business executed well during the quarter, again, posting strong double digit revenue increases year over year. In the 2025, we expect the overall U.

S. Business to have a similar to slightly further revenue decline compared to the third quarter, largely due to higher seasonal Experis Healthcare projects in the prior year period. Southern Europe revenue comprised 47% of consolidated revenue in the quarter. Revenue in Southern Europe was $2,200,000,000 representing a 1% decrease in organic constant currency. As adjusted, OUP for our Southern Europe business was $70,000,000 in the quarter and OUP margin was 3.2%.

Restructuring charges of $4,000,000 represent actions in Spain and France. France revenue equaled $1,200,000,000 and comprised 53% of the Southern Europe segment in the quarter and decreased 5% on adjusted constant currency basis. As adjusted, OUP for our France business was $31,000,000 in the quarter. Adjusted OUP margin was 2.7%. France revenue trends improved slightly during the course of the third quarter despite the government uncertainty in September, and we expect a slightly improved rate of revenue decline into the fourth quarter, reflecting the third quarter exit rate.

Revenue in Italy equaled $463,000,000 in the third quarter, reflecting an increase of 4% on a days adjusted constant currency basis. OUP as adjusted equaled $27,000,000 and OUP margin was 5.8%. Our Italy business is performing well and we estimate a slightly improved constant currency revenue growth trend in the fourth quarter compared to the third quarter. Our Northern Europe segment comprised 18% of the consolidated revenue in the quarter. Revenue of $817,000,000 represented a 6% decline in constant currency.

As adjusted, OUP equaled a $1,000,000 loss. This represents an improvement from the $6,000,000 loss in the second quarter and reflects the impact of cost reduction actions. The restructuring charges of $14,000,000 primarily represented actions in Germany and The UK. Our largest market in the Northern Europe segment is The UK, which represented 32% of segment revenues in the quarter. During the quarter, UK revenues decreased 13% on a days adjusted constant currency basis.

We expect the rate of revenue decline in The UK to improve into the fourth quarter compared to the third quarter. In Germany, revenues decreased 23% on a days adjusted constant currency basis in the quarter. Germany automotive manufacturing trends continued to be weak. In the fourth quarter, we are expecting a similar year over year revenue decline compared to the third quarter trend. The Nordics continue to experience difficult market conditions with revenues decreasing 4% in days adjusted constant currency in the quarter.

The Asia Pacific Middle East segment comprises 11% of total company revenue. In the quarter, revenues equaled $521,000,000 representing an increase of 8% in organic constant currency. OUP was $27,000,000 and OUP margin was 5.1%. Our largest market in the APME segment is Japan, which represented 60% of segment revenues in the quarter. Revenue in Japan grew 6% on a days adjusted constant currency basis.

We remain very pleased with the consistent performance of our Japan business, and we expect continued strong revenue growth in the fourth quarter. I’ll now turn to cash flow and balance sheet. In the third quarter, free cash flow was $45,000,000 compared to $67,000,000 in the prior year. Following a trend of declining earnings and large outflows for tax and technology license payments through the first half of the year, free cash flow was positive during the third quarter. Earnings have also been stabilizing in recent quarters, which will improve the trend of free cash flow going forward.

The fourth quarter is typically a strong quarter for free cash flow as we look ahead. At quarter end, day sales outstanding increased one days point to fifty nine days as enterprise client mix has increased. During the third quarter, capital expenditures represented 15,000,000 During the third quarter, we did not repurchase any shares. And at September 30, we have 2,000,000 shares remaining for repurchase under the share program approved in August 2023. Our balance sheet ended the quarter with cash of $275,000,000 and total debt of $1,200,000,000 Net debt equaled $941,000,000 at September 30, reflecting an improvement from June 30.

Our debt ratios at quarter end reflect total gross debt to trailing 12 adjusted EBITDA of 3.16 and a total debt to total capitalization at 38%. Detail of our debt and credit facility arrangements are included in the appendix of the presentation. Next, I’ll review our outlook for the 2025. Based on trends in the third quarter and October activity to date, our forecast anticipates ongoing stability in the majority of our markets and a continuation of existing trends. With that said, we are forecasting earnings per share for the fourth quarter to be in the range of $0.78 to $0.88 The guidance range also includes a favorable foreign currency impact of $08 per share, and our foreign currency translation rate estimates are disclosed at the bottom of the guidance slide.

Our constant currency revenue guidance range is between a 2% decrease and a 2% increase, and at the midpoint is a flat revenue trend. Business days are stable year over year. And considering the impact of dispositions, our organic days adjusted constant currency revenue increase represents slight growth, which rounds down to a flat revenue trend at the midpoint. EBITDA margin for the fourth quarter is projected to be flat at the midpoint compared to the prior year. We estimate that the effective tax rate for the fourth quarter will be 46.5%.

In addition, as usual, our guidance does not incorporate restructuring charges or additional share repurchases, and we estimate our weighted average shares to be 47,100,000.0. I will now turn it back to Jonas.

Jonas Preysing, Chair and CEO, ManpowerGroup: Thanks, Jack. In parallel with our disciplined cost control, we continue to advance our digitization and standardization agenda across both the back and front office. We are pleased with the strong progress of our global business services initiatives, which are streamlining operations, aligning processes and improving speed and quality while reducing costs. I recently visited our new hub in Porto, Portugal, where our finance and technology teams have standardized and centralized back office functions across Europe. These advancements are providing a blueprint for how we will continue to evolve our operating model, standardizing our processes and leveraging our scale advantage across countries and regions.

We’re now preparing to apply the same disciplined approach to the front office, optimizing recruitments and sales processes on our Global PowerSuite front office platform to identify similar opportunities for client and candidate service excellence, process standardization and productivity gains. By simplifying workflows and integrating technology, we’re empowering our teams and building a business that will be leaner, more agile and well positioned for long term growth. We are confident that our combination of operational rigor, strategic investment and disciplined execution will ensure ManpowerGroup continues to strengthen our value to clients and candidates in a fast changing external environment. This confidence in our value reinforced by the consistent recognition of three strong and distinct brands received for their market leadership and capabilities. Last quarter, Everest Group recognized Manpower, Experis and Talent Solutions as industry leaders across multiple categories, reflecting the strength of our strategy, technology and people.

Each recognition highlights sofi.ai, our enterprise wide AI platform we introduced last quarter, where our AI solutions are being developed, refined and incorporated into our operational workflows to further enhance our capabilities and help clients make smarter, faster talent decisions. We are now increasingly moving from AI use cases to scaled commercial impact. In our largest market, SoFi AI is now driving measurable gains with approximately 30% of new client revenue derived from AI rated probability. We also see that when prospects are identified as high probability by AI, the potential value is notably higher than prospects identified by human insight alone. With this new technology deployed across 14 key markets and scaling further, we expect to see significant value realization across our global footprint.

The RPO and MSP, several recent client wins directly cite our AI powered insights as differentiators in their selection process. These proof points reinforce how our technology investments are enhancing client outcomes. And as we look ahead, we do so with cautious optimism. While near term conditions remain challenging in North America and Europe, our teams continue to execute our current priorities with discipline, serving our clients, supporting millions of associates and meaningful work and building the foundation for future profitable growth. I want to close by thanking our people around the world for their unwavering dedication and commitment to helping our clients win and our associates succeed.

Operator, please open the line for Q and A.

Conference Operator: Thank you. Our first question comes from Andrew Steinerman with JPMorgan. Your line is open.

Andrew Steinerman, Analyst, JPMorgan: Hi, everybody. My first question is about when business confidence improves, so this is like beyond what you just guided for fourth quarter twenty twenty five, would you expect kind of more of an early cycle pickup in flexible staffing volumes? And then also Jack, if you just comment on the gross margins that you talked about in the prepared remarks, like is it this kind of an odd time where we’re seeing softer outplacement and softer perm at the same time?

Jonas Preysing, Chair and CEO, ManpowerGroup: Good morning, Andrew. And yes, no, it is a bit of a strange time in many labor markets in Europe and North America. As you heard me characterize it in our call, it’s like a frozen labor market. There’s very little hiring going on, and there’s very little workforce reductions going on. And we see that, of course, reflected in both our perm and RPO numbers, as well as in the right management business also.

But what’s been very encouraging to us though is that despite this and despite PMI still being below 50 in many of our major markets, we’re starting to see a distinct stabilization and growth in manpower, which, you know, is what we would hope to see when the markets bottom out. And to your question, if employer confidence returns, you know, we are hopeful that that then would mean that we see a return to industry dynamics where we expect to see better manpower growth and the rest of the brands also benefiting from that improved environment. Thanks, Yaronis.

Conference Operator: Thank you. Our next question comes from Kartik Mehta with Northcoast Research. Your line is open.

Kartik Mehta, Analyst, Northcoast Research: Maybe Jack, if you just talk about the trends you saw in the quarter and I guess I’m wondering if the quarter was even throughout or if you saw any volatility because of kind of what’s happening in the economy?

Jack McGinnis, Chief Financial Officer, ManpowerGroup: Sure, Kartik. I’d be happy to talk to that. So I think if we look across our major markets, probably starting with the biggest one being France, in line with what I referenced in my prepared remarks. We actually saw improvement in the trend during the course of the third quarter in France where you see on an overall basis the revenue at that minus 5%. But as we exited, it was minus 4%.

So we did see it start to improve in the month of September. You actually saw that in some of the industry data that was published as well. And that’s a positive sign. And I would say as we look at October data, it continues to hold in that space as well. So slightly improving trend from where we started the third quarter here into the fourth quarter.

And I’d say similar with Italy as well. I think Italy, we saw an improving trend in the month of September as well as we went through the course of the quarter. And as we look to the fourth quarter, we would expect that rate of revenue growth to improve in Italy as we go forward. And then I’d say in The U. S, I’d say there was probably a little more stable.

I think there’s a little bit more volatility in The U. S. Just due to some of the year over year we had. As I’ve talked about previously, we had some very large RPO volumes from select projects, from select clients in the year ago period that completed. So that created a little bit of volatility in the year over year.

But overall basis, I’d say The U. S. The Manpower business grew very steadily during the entire quarter. And I’d say the Experis business was more stable ish in terms of activity levels during the quarter. I’d say those are the big ones that I’d refer to and they kind of reflect what we saw on an overall basis in terms of the overall revenue trends.

Kartik Mehta, Analyst, Northcoast Research: And then Jeff, if we could just go back to the gross margin issue. As you look at the fourth quarter and kind of look at gross margin, are you seeing any price pressure? Or is there any mix issue that is impacting gross profit? Beyond the mix of I realize perm is still kind of in a recessionary standpoint. But just beyond there, is there anything else that you’d say is impacting the gross profit margin?

Jack McGinnis, Chief Financial Officer, ManpowerGroup: No, I’d say Kartik, we look at the staffing margin, it’s primarily mix shift towards enterprise clients. And in this environment, enterprise clients continue to be the bigger part of the spend and the demand, and that’s averaging in. And that’s been a trend we’ve been seeing over the course of the year. So what that means is the the larger enterprise mix is putting pressure on the consolidated margin as they continue to average in. We would expect that to start to reverse when convenience comes back and that market starts to come back.

But in the current environment, it’s the enterprise clients that are spending the most and have the greatest demand. And that’s the main driver of what’s happening on the staffing side. Pricing’s always competitive, but we have not seen any dramatic changes in pricing on an overall basis. And to your point in terms of the rest of the GP margin, yeah, we did acknowledge that perm came in a bit softer than we expected. That put a little more pressure on the GP margin this quarter.

And outplacement volumes as we talked about previously was a bit lower as well, which was the other piece of the GP margin bridge year over year. But I would say it’s primarily driven by mix shift.

Kartik Mehta, Analyst, Northcoast Research: And just one last question, Jonas. As you talk to customers, and I’m not sure how you measure this, but are you sensing any more or less amount of uncertainty? Because it seems like uncertainty has been kind of the word for the whole year. And as you speak with them, is there if there’s any level of difference in your opinion?

Jonas Preysing, Chair and CEO, ManpowerGroup: I would say that the clients that we speak with are increasingly resilient to the fluctuating policy environment. So they’re considering this not to be a bug, but rather a feature. And as they then plan for their businesses to be successful, they are moving their businesses forward and thinking about the investments that they need to make. Now, you know, as the year has gone on, even though there are a lot of oscillations, you know, the environment in terms of tariffs appears to be gradually settling down. And as I say this, I’m sure that that’ll change this afternoon.

But most many of the major countries and regions now have trade agreements that companies can project into 2026. And we would expect that to continue towards the end of this year and the beginning of next year. So, the operating environment in terms of visibility for many employers should improve coming into 2026. I should also note that from an economic perspective, as economists look at 2026, the expectations at this point at least is for an improved economic environment both in Europe, as well as in North America with Asia Pacific and Latin America continuing on the current good path. So there’s reasons to be optimistic, but of course, we’re managing the business as we see it today and to give guidance into the quarter.

But employers are I think getting more and more resilient to the noise and are really trying to understand the signal of where this is heading. And as the year goes on, there’s more stability in that outlook I believe.

Kartik Mehta, Analyst, Northcoast Research: Thank you very much. Appreciate it.

Conference Operator: Thank you. Our next question comes from Manav Patnaik with Barclays. Your line is open.

Ronen Kennedy, Analyst, Barclays: Hi, good morning. This is Ronen Kennedy on for Manav. Thank you for taking my questions. This was touched on to a certain extent in responses to both Andrew and Karthik’s questions. But could I reconfirm the leading indicators of demand that you are seeing that is informing the assessment, the stabilization beyond, I think, largest enterprise clients, the new assignment starts, anything to note in respective regions and or brands there from those leading indicators?

Jonas Preysing, Chair and CEO, ManpowerGroup: Well, as we mentioned in our prepared remarks, if you look at APME in Latin America, we continue to see good growth. So the notion of stabilization really mostly applies to some of the markets in Europe as well as The US and Canada. And yes, those are the indicators amongst others that we look at. We also look at the trends that we’ve now seen over a number of quarters with markets firming up. And despite a labor market that in some senses is a bit frozen between permanent hiring and workforce reductions, what’s clear if you look at our performance from a Manpower brand perspective that we’re starting to see demand coming through and giving us growth opportunities.

And over time as the market and the demand improves, we would expect to see the same trends play out also in our other brands.

Ronen Kennedy, Analyst, Barclays: Thank you. Appreciate it. And then a follow-up question Jonas on the Sofia AI implementation. I think you indicated there are measurable results, 30% new client revenue deployment across 14 key markets. Can you just help us think about what the current global coverage is, the timeline for deployment as I think you move from back office enhancement to front office?

And then any other metrics to note or improved KPIs, whether it’s producer time, higher revenue, time to fill, etcetera, and how we should think about implementation and benefits?

Jonas Preysing, Chair and CEO, ManpowerGroup: Well, first of all, let me say that we believe that AI could have a really positive impact on our business. And as you know, we’ve spoken over quite some time now over to our significant investment into our digital core. So, the end of this year, 90% of our revenues will be covered by a common global front office platform. 60% of our back office transactions will be handled by a global platform moving to 80 or 90% towards the end of the year. So, all of that says that we now have a global digital core that gives us the opportunity to leverage our scale by standardizing processes, centralizing across countries and regions in completely different ways.

It also gives us the opportunity of course to deploy AI in a scalable way as we have been doing in a number of instances. Like many companies, we’ve been working with use cases and really trying to understand where the opportunities lie. And I’d say we are still in the early innings of exploring what it can be. But the example that I cited in our prepared remarks really shows the strength of what can happen when you apply AI into your lead generation and prospecting database. Now we have the opportunity to really combine human insight with AI generated insights.

And the results that we’re seeing in terms of the improvement in win rates as well as in value generation are very, very promising. So whilst I can’t give you a timeline for a global rollout on AI, I would say that we feel very good about our digital core and being able to deploy AI and more efficient processes enabled by AI across our network and across our global operations.

Ronen Kennedy, Analyst, Barclays: Thank you very much. Very comprehensive answer. Certainly appreciate it. May I just sneak in a quick follow-up? Can you you talked about AI enabling real time AI intelligence enabling quick pivots to sectors and regions for growth opportunities.

Can you highlight some examples of that where you have pivoted or even potentially exited based on that data?

Jack McGinnis, Chief Financial Officer, ManpowerGroup: I think it’s really around the pipeline management management that Jonas was referring to where we’ve seen significant impact in terms of probability weighted assessment of our revenue opportunities, Ronen. And so when we look at that, that impacts across all industries. I wouldn’t say it’s one specific vertical that has benefited from AI. I’d say it’s multiple verticals, verticals that we deliver into. And it’s been a big benefit to the way we focus our sales teams, focus their time on opportunities.

I think in this environment, we’ve talked a lot about in the past about delayed decisions by clients. So having that type of technology has been a big improvement for us to make sure we’re focusing our time on the best opportunities. And that’s been working quite well. But I wouldn’t say it’s a specific industry. It’s very broad across all of our industries.

Jonas Preysing, Chair and CEO, ManpowerGroup: And as I mentioned in my prepared remarks, you can see that our SoFi AI platform has really helped us distinguish ourselves in the markets in terms of the accolades and the recognitions we’ve received. And we’re very pleased with that initial recognition, but of course we’re counting on continuing to deploy this and applying commercial scale everywhere where we operate over time.

Ronen Kennedy, Analyst, Barclays: Thank you both. Appreciate it.

Conference Operator: Thank you. Our next question comes from Mark Marcon with Robert W. Baird. Your line is open.

Mark Marcon, Analyst, Robert W. Baird: Good morning. Wondering with I don’t want to harp on the gross margin, but I just want to understand it a little bit better. On the enterprise side, within countries on a like for like basis, are the gross margins holding steady? Like if we take a look at your most important markets like France, Italy, UK and The U. S?

Jonas Preysing, Chair and CEO, ManpowerGroup: Hey, good morning, Mark. I would say that just as Jack explained, most of the changes that we would see within country are really the same as we see on a consolidated basis, which is it’s on a country basis, it’s also related to business mix. So enterprise in the markets where that’s growing, we can see growing more than the convenience side. That’s where we’re seeing the business mix shift. And this is not unusual for us to think to see this effect in markets that are challenged.

And I would also concur with Jack that pricing is always competitive, but that we’re not seeing any major moves in any particular market of scale either. So it’s really business mix at this point. And as you look at the labor markets and being frozen, what’s important to note though is that they’re solid labor markets both in Europe and in North America. So unemployment, whilst the markets have been softening a bit here in The U. S.

For instance, unemployment is still at a reasonably and historically low level. And the same is true for Europe. So, finding and accessing talent when companies are looking for talent might be slightly easier today, but it is still a challenge in many areas and for distinct and specialized skill sets. So we’ve really seen the business mix shift being the main driver of the staffing margin, not any price competition.

Jack McGinnis, Chief Financial Officer, ManpowerGroup: Yes. And I would just add Mark, it’s not broad brush in every market. We improved staffing margin in Japan in the third quarter year over year. As we anniversary very difficult environment in The Nordics from a year ago, we improved staffing margin there as well. We improved staffing margin in Canada.

But as Jonas said, in the markets where we have very large enterprise client bases, we have seen a shift on the mix. So as enterprise becomes a bigger part of the pie, that’s averaging it and putting pressure on in those other large markets. And of course, that would include France and The U. S. And Italy.

Thanks.

Mark Marcon, Analyst, Robert W. Baird: Are there things that you could do to stimulate the convenience side of the market? I mean, like within The U. S, when we take a look at small business employment relative to large enterprise employment, on a macro scale, it doesn’t seem like there’s a huge difference. Although I imagine that small businesses are a little bit more concerned about managing costs. But I’m wondering are there things that you can do in order to tilt things a little bit on the convenience side?

Jonas Preysing, Chair and CEO, ManpowerGroup: Well, our efforts around building stronger pipelines enabled by technology and I mentioned earlier our help of getting AI to target prospect lists both for enterprise as well for convenience clients should help us get some traction. But what’s not unusual at times like this is that enterprise demand is just higher because they have greater ability to absorb the uncertainty. And they’re cautioned is balanced across multiple geographies and multiple businesses as well. So we continue to believe that the convenience market is strong. We believe we have great opportunities to continue to improve our positioning and market share also in that market.

But what we’re seeing right now at this point in the cycle in Europe and in North America is that enterprise demand is slightly higher than what we’re seeing from the convenience. But those things once employer confidence shifts can change quite quickly. So we expect to see the margin business mix to rebalance the way it has done in the past.

Jack McGinnis, Chief Financial Officer, ManpowerGroup: And I would just add, Mark, we do have significant convenience initiatives in place in markets like Italy and in France. That’s one of the reasons we believe Italy is leading the market currently, our business. Our growth is, yes, there’s a lot of enterprise growth, but there’s very good convenience growth in our Italy business. And it’s a key initiative in US manpower and experience as well. But we see significant growth in convenience in markets like Italy.

And those initiatives are happening in all of our largest markets. It’s just having a much bigger impact at the moment in Italy.

Mark Marcon, Analyst, Robert W. Baird: Great. And then can I just ask about RPO? It sounds like you’re starting to see some wins from Sofie. Are those new wins, those new RPO wins enough to offset the frozen market? Or would you expect RPO to continue to primarily be driven by the macro?

Jonas Preysing, Chair and CEO, ManpowerGroup: I think it can help us drive better win rates. But what’s clear is that both the size of the deals in the market today and the length the extended time of implementation means that we’re anticipating RPO to still be feeling the headwinds at least looking towards the near term. The fact that companies are less interested in hiring permanently means that from RPO, which is a recruitment process outsourcing offering essentially an outsourced perm hiring engine to bring in lots of talent into organizations. The companies are slower to act on those kinds of initiatives. And when they’re planning for those initiatives, the timeline for implementation tends to be longer and the initial volumes tend to be lower.

So we think RPO the RPO business model as well as the value that it presents for clients remains extremely strong. And especially if you think about the future where we are going to be demographically constrained, taking our RPO operations into any company looking to find talent at scale across geographies and nations is going to be extremely valuable. But right now what we’re seeing is that companies are less focused on that. So that’s why we’re expecting it to continue to face some headwinds in the near term.

Mark Marcon, Analyst, Robert W. Baird: Okay. Can I sneak one more in please? Jonas, just want to you’ve got a great perspective with regards to what’s going on internationally, particularly in Europe. We all see what’s going on in France from a political perspective. How is that impacting decision makers on the ground?

Is it are businesses feeling any less certain about stability just given the turmoil that we’re seeing from a political perspective over there?

Jonas Preysing, Chair and CEO, ManpowerGroup: Yes. Thanks, Mark. I just came back from France last week and spent quite some time with our teams being in various markets as well. And clearly the political turmoil in France is not helpful to the sentiment of employers. Having said that though, if you look at the various elements of the political factions, no one disagrees that France needs to go through a budget process that helps reduce the deficit.

So, the degrees of how much that would relate to. So, that’s where the pensions lie. As you might have seen this morning, the government has survived two no confidence votes. And we would expect that to continue. But what’s coming next is the discussion around the actual budget, which needs to be concluded before the end of the year.

And so there’s still a lot of uncertainty in terms of what’s going to happen. But from a company perspective, what our clients are doing is looking at their business and navigating through this environment responding to the demand that they’re seeing in various markets. And as Jack alluded to and as you’ve seen from our numbers, French PMI has improved. The outlook for Europe has improved somewhat into 2026 as well. So companies are preparing and that’s what we’re also seeing in our business that we’re navigating this and companies are resilient and they need to take care of their business first.

And what’s very important to their business is to find the right talent to execute their plans. And in a labor market that is regulated as France, our offerings are extremely attractive to fuel those talent investments in environments like these. So to conclude, the environment in France right now with the political uncertainty is not helpful for sure. But at the same time, most of our clients are very pragmatic and are responding to the demand that they are seeing. And in turn that gives us the opportunity to provide talent into their operations and make sure that they are successful.

Mark Marcon, Analyst, Robert W. Baird: Thank you.

Jonas Preysing, Chair and CEO, ManpowerGroup: Thanks, Mark.

Conference Operator: Thank you. Our next question comes from Trevor Romeo with William Blair. Your line is open.

Trevor Romeo, Analyst, William Blair: Hi, good morning guys. Thanks for taking the questions. If I could maybe just follow-up very quickly on that last question with France. Just quickly, is there any change to your expectations or your confidence level at this point that the additional business tax from this year won’t recur beyond 2025 at this point based on everything that’s going on there?

Jack McGinnis, Chief Financial Officer, ManpowerGroup: Trevor, this is Jack. I’d say it’s too early to tell candidly at this stage. There were some discussions just this week on that. But we’re monitoring the situation. I’ll give a better update on that at year end, as Jonas said, once the budget is presented and passed.

I think at this stage, there is there has been some discussion within the French budget of perhaps continuing the surcharge, but at a lower level than the current year into one additional year into 2026. But as I said, it’s too early to tell. So I think from this perspective, we would expect our effective tax rate to decrease next year as the surcharge comes down. We’ll see where it ends up as the budget continues to be debated and discussed within Parliament. But I’d say at this stage, it’s a bit too early to give any firm guidance on that, Trevor.

Trevor Romeo, Analyst, William Blair: Okay. Thanks, Jack. That is helpful. Then, I guess, kind of a broader question. I think for several quarters now of the Manpower brand outperforming Experis.

So from kind of a macro perspective, I guess, do you think are the drivers of blue collar staffing outperforming white collar staffing? Is AI playing a role there? Is it kind of more labor hoarding in those white collar areas and the frozen labor markets you talked about Jonas? Anything you could say on that topic?

Jonas Preysing, Chair and CEO, ManpowerGroup: Well, we’ve been very pleased to see how Manpower has rebounded into growth for a number of quarters now and projected to do so again into the fourth quarter. But that evolution of course is tied to a number of different things. You’ve seen PMI start to improve. I talked about the resilience of employers that are getting used to a more fluctuating environment and have to run their business and make the talent investments going forward. So, I think those are things that we are looking at.

And of course, we’ve also been able to pivot to areas that are growing faster and targeting industry verticals that we feel are going to give us more opportunity for growth. If you think about Experis, clearly it’s unusual from an industry perspective, our own industry perspective to see that there is that disconnect. But really there’s been a lot of things that have been different in this post pandemic era. And what we believe is happening from our experience perspective is that companies are really focused in investing into the AI boom. And they are really moving much slower on the traditional IT project.

And that’s what we think is happening and impacting the demand for many of our big clients. They have shifted their priorities into AI investments. And whilst we are participating in those skill sets as well, The volumes that we have in different areas is really something that is being impacted at this point in time. Now we believe demand for more traditional digital project is going to come back with many of those same clients. But we think it’s a moment in time and that’s why you’re seeing this difference between white collar staffing in our cases our Xperis business as well as our Manpower business that is moving forward and is doing very well.

Trevor Romeo, Analyst, William Blair: Very interesting. All right. Thank you both. That’s very helpful.

Conference Operator: Thank you. Our next question comes from George Tong with Goldman Sachs. Your line is open.

George Tong, Analyst, Goldman Sachs: Hi, thanks. Good morning. Going back to your comments on labor markets being frozen in terms of hiring and more force reductions, can you parse out which markets are more frozen than others and in which markets you’re starting to see some thawing?

Jonas Preysing, Chair and CEO, ManpowerGroup: I would say the industry verticals George that we see are starting to pick up a bit are related to financial services in some markets logistics, some of that is seasonality. That’s coming back. There’s a lot of activity also in the defense sector, especially in Europe that we feel could be very beneficial to us. On the flip side, we are still seeing sluggishness around auto that we’ve talked about. Construction is still sluggish in many parts of Europe as well where we are in that business.

So we can see a number of sectors that are more sluggish than others. But I would say that the nature of how employers are holding on to their workforce, we believe is really the memory of the post pandemic surge in demand for talent that had been dislocated in various countries. And employers are very keen not to relive their experience. They believe the workforces they have in place today are largely the workforces they will need going forward. And they’re holding on to their workforce to a greater degree today than we have experienced in past economic slowdowns and periods of uncertainty of this kind.

Because we think employers are informed and cautioned by that experience. And as long as they believe in a recovery, they will hold on to their workforces longer. And I think that’s what we’re seeing, especially here in The U. S. That’s what the mindset is.

Now the good news on that part is of course that once they are seeing tangible signs of an improvement in economic outlook and maybe also greater certainty from a policy perspective, they’re ready to move forward bringing talent back on so that they can meet the growing demand. And of course, that’s what we are preparing for and working with them on being ready to capture the future growth opportunities as things improve for them.

George Tong, Analyst, Goldman Sachs: Got it. That’s helpful. You talked about accelerated initiatives to remove structural costs from the organization. Which regions are seeing the most amount of restructuring and headcount reductions?

Jack McGinnis, Chief Financial Officer, ManpowerGroup: Yes. Thanks for that question, George. I’d say in the third quarter, we continue to be very focused on Northern Europe. Germany was at the top of the list in terms of the restructuring of $11,000,000 But also, we did some work in Spain, The UK and The U. S.

As well. But I would say if I just step back and look at 2025 overall, the most impact and most of the actions have been around Northern Europe. And we see that in the improvement in the trend from Q2 to Q3. So that minus $6,000,000 moving to minus $1,000,000 is actually showing the results of a lot of the hard work we’ve been doing in Northern Europe. We have more work to do, to be clear, but we are making progress.

As we go forward, I think as we talked about in the prepared remarks, we are looking at structural costs everywhere in the organization. So as Jonas talked about, we have a lot going on in the back office. He referred to our global business service center in Europe that is driving reduced costs going forward for us. And we’re looking very, very closely at the front office and elements of all of our largest businesses where there could be other opportunities to do similar things in terms of standardization and centralization. And that continues to be an opportunity for us that you’ll hear us talk about in the future.

George Tong, Analyst, Goldman Sachs: Very helpful. Thank you.

Conference Operator: Thank you. Our next question comes from Stephanie Moore with Jefferies. Your line is open.

Stephanie Moore, Analyst, Jefferies: Hi, good morning. Thank you. Just a follow-up question. You talked a lot this morning about just the technology advancements and investments, whether it’s AI or others that you’ve made over really the last several years here. When the underlying environment unfreezes or starts to be a bit more constructive, do you believe that your technology advancements will enable you to capture some of that market growth or just that recovery with effectively less people and ultimately kind of seeing greater operating leverage and greater torque to the model than it impacts upswing?

Thanks.

Jonas Preysing, Chair and CEO, ManpowerGroup: Thanks, Stephanie. Yes, and the investments we’re making, first of all, I believe positions us very uniquely in our industry with our scale having 90% of our revenues flow through a common global front office platform, mobile apps that are being deployed across many of our countries addressing both our associates, so the people that are working for us, and our candidates, people that are applying for jobs. And then combining that with our back office technologies also at a global level gives us an opportunity to standardize, centralize, and reimagine our processes in a completely different way. And clearly what we’re aiming to do is to leverage our scale not only across countries, but across regions as well. And when we look at our operations in Latin America, all 15 countries in which we operate and lead the market in across that region are handled from a back office perspective centrally.

Our payrolling is handled centrally. And you’ve seen the progress that we have made across Latin America over the time. We’re very pleased with that performance and the improved productivity that we’re seeing there. And we aim to drive similar kinds of effects both from a growth perspective being able to deliver faster to our clients at a higher quality, but also working on streamlining our processes in the back office and in the middle office so that we can gain productivity and efficiency there as well. And on top of all of that of course, the impact of AI and what we can do through further automation enabled by AI or just automation is of course another aspect that we’re looking at very, very closely.

Conference Operator: Thank you. Thank you. Our next question comes from Josh Chan with UBS. Your line is open.

Jonas Preysing, Chair and CEO, ManpowerGroup0: Hi, good morning Jonas and Jack. Just two quick ones here. So I wanted to ask about SG and A leverage because in Q4, you’re guiding to some margin compression on the gross margin line, but not much EBIT margin compression. So that obviously implies improving SG and A leverage. And I was just wondering what’s driving that and whether you think you’re at a point where SG and A can start potentially levering positively?

Thank you.

Jack McGinnis, Chief Financial Officer, ManpowerGroup: Thanks, Josh. No, you’re absolutely right. The guide does anticipate that SG and A will be a big part of the equation in terms of falling gross profit dollars down to the EBITDA line. So with that guide, you basically see a relatively stable level of EBITDA from Q3 into Q4. And we talked about crossing over to organic growth.

Well, that’s a big step to hold our margin flat year over year. It’s been a while since we were able to do that. And with all the actions we’ve taken, we’re starting to bend the curve on SG and A as well and that’s going to have a meaningful impact in the fourth quarter and you can see that incorporated into the guide. So you’re absolutely right that that is going to be a bigger impact in the overall equation in terms of holding that EBITDA. But I would say in terms of the GP, with that guide, it is just a modest change from Q3.

So it’s really just that effect that we’ve talked about with perm being a little bit softer while we have a bit more enterprise in the mix. So just about 10 basis points sequentially as that continues to average in. But that’s really the main impact there. But you’re right, on SG and A that is going to start to have a big impact on the EBITDA line. And that really is a reflection of all the work that we’ve talked about over the course of the year with the actions we’ve taken.

And I talked about Northern Europe, that’s one example of it, but we’re seeing it in other markets as well in terms of improvement in bottom line profitability.

Jonas Preysing, Chair and CEO, ManpowerGroup0: Great. That’s good to see. And then I guess Jack, I wonder if there’s a way for you to ballpark for us how good free cash flow could be in Q4? And maybe relatedly, could you talk about sort of the negative free cash flow in the first half and whether how unusual that is as we kind of think about what a normal cash flow should be kind of going forward?

Jack McGinnis, Chief Financial Officer, ManpowerGroup: Yes. No, sure, Josh. As I talked about last call, we had a big outflow in the first half of the year. And part of that was due to our very large market leading MSP program. That does create some timing issues.

We saw that at the end of last year into the first quarter of this year, where we had some very significant prepayments from some very large MSP clients at the very end of the quarter, and those payables went out at the very beginning of the following quarter. Usually, it’s neutral, but sometimes if there’s large prepayments that could create a little bit of volatility from a quarter over quarter. And we did see that flatter the fourth quarter. We had a very strong free cash flow in the fourth quarter last year. It was flattered somewhat by that.

But even putting that aside, it was still a very, very strong free cash flow for us in the fourth quarter of last year. But that did depress the first quarter outflow. We typically, as I’ve mentioned, over the last four years, we’ve had negative outflows in the first half of the year and very strong positive free cash flows in the second half of the year. And we started that here in the third quarter. The fourth quarter typically is a very strong free cash flow.

And we would expect that to be the case again this year where the fourth quarter will be a strong free cash flow at this stage. So that’s what I would add to add a little more color. The other item in the first quarter outside of the MSP program was we did have some very large one time payments. We had the Tax Act from 2017 that had multiyear transition payments go out. We had the last one of those in the first quarter, which is one of the biggest payments.

So that goes away going forward. And as I mentioned, a lot of our technology license costs are all loaded into the first half of the year, and we don’t have that in the second half of the year. So that’s why typically the second half is much stronger. And that would be the outlook. The last point I’d make is now here we are about three quarters of stabilized EBITDA.

That is going to work into more favorable free cash flow trends as we go forward. Now that trailing twelve months EBITDA is stabilizing here with the guide for nine months as we finish 2025. And that will be a positive impact because one of the other factors, of course, is trailing twelve months EBITDA had been decreasing with the downturn that we talked about that eleven quarters. And now that’s shifting and we stabilized. So that will be a positive factor in terms of free cash flow as we go forward as well.

Jonas Preysing, Chair and CEO, ManpowerGroup0: Yes, that’s great color.

Jonas Preysing, Chair and CEO, ManpowerGroup: Thank you for the time and good luck in Q4.

Jack McGinnis, Chief Financial Officer, ManpowerGroup: Thank you.

Conference Operator: Thank you. Our next question comes from Tobey Sommer with Truist. Your line is open.

Jonas Preysing, Chair and CEO, ManpowerGroup1: Yes. I wanted to ask a question about gross margin. If we do see employers sort of become a little bit more forward leaning and optimistic, how would the social costs that typically reinflate gross margin after a period of decline perform in this context where unemployment rates didn’t really rise a ton?

Jonas Preysing, Chair and CEO, ManpowerGroup: The changes that we’ve seen in the gross margin so far Tobey are all related to business mix. And to your point, there hasn’t been a real decline in employment that’s significant. And so whatever social burdens are carried today and I’m sure that you’re referring mostly here to The U. S, we would expect to carry on and be stable into the future because there’s no need there’s to re up those burdens to a level that had been depleted. And that’s what we would expect to see.

So from that perspective, we don’t think that social costs will have a major impact barring changing legislations of course. But just from an employment perspective, changes in social costs and aside from any pension related costs in other countries that might go up or not, we don’t really expect that to be a main factor in driving our gross profit margin differences. But of course, what we are very keenly focused on is when employers feel more confident in the economy that we will see permanent recruitment go up to more normalized levels. That will have an overall very positive effect on our gross profit overall.

Jonas Preysing, Chair and CEO, ManpowerGroup1: Understood. And from IT perspective, internally within the firm, you’ve been pushing process improvement, global standardization, etcetera. Where do you think you said from a competitive perspective? Because globally for the largest enterprise customers you compete with a relatively narrow set of firms. Are you ahead, on par, trailing?

Where do you see yourself competitively from that perspective?

Jonas Preysing, Chair and CEO, ManpowerGroup: Well, of course, it’s hard to say Toby, but I don’t know that many of our competitors national or global certainly have 90% of their revenues flowing through one common office platform. We also have an extensive data lake that captures all of the data of our actions through our various digital channels. So, I think we’re very, very well positioned from a competitive perspective. But we’re also clear that this is a race, and that it’s all about enabling the company to shift the value to where it matters most, which is the human interactions with our clients, our candidates, and our associates and render all the transactional activity as efficient as possible through automation, leveraging AI when appropriate, and making our processes as efficient as possible. The true value that we create is in the last mile delivery with our clients and our associates.

And that’s what we’re aiming firmly towards, making sure that that moment of truth is where we spend most of our time and that we enable our organization to be as efficient and as productive as we can leveraging this global platform to the greatest degree possible.

Jonas Preysing, Chair and CEO, ManpowerGroup1: Thank you very much.

Jonas Preysing, Chair and CEO, ManpowerGroup: Thanks, Toby.

Conference Operator: Thank you. That concludes our earnings call. And I will hand it over to Jonas to end the call.

Jonas Preysing, Chair and CEO, ManpowerGroup: Thank you very much, Michelle, and thanks everyone for participating in today’s earnings call. We look forward to speaking with you again on our Q4 call in January. Thanks everyone. Have a great rest of the week.

Conference Operator: Thank you for your participation. You may now disconnect. Good day.

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