ManpowerGroup Q2 2025 Earnings Report

ManpowerGroup EPS Results

• Actual EPS: $0.78
• Consensus EPS: $0.69
• Beat/Miss: Beat by +$0.09
• One Year Ago EPS: $1.30

ManpowerGroup Revenue Results

• Actual Revenue: $4.52 billion
• Expected Revenue: $4.34 billion
• Beat/Miss: Beat by +$174.56 million
• YoY Revenue Growth: -0.50%

ManpowerGroup Announcement Details

• Quarter: Q2 2025
• Date: 7/17/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, July 17, 2025
• Conference Call Time: 8:30AM ET

ManpowerGroup (NYSE:MAN) (NYSE: MAN) is a global leader in workforce solutions, specializing in recruitment, staffing, and talent management services. Since its founding in 1948 in Milwaukee, Wisconsin, the company has grown from a local employment agency into one of the world’s foremost providers of workforce solutions. Its core mission is to connect talented individuals with businesses of all sizes, helping both jobseekers and employers navigate the evolving labor market.

The company operates through several distinct service lines designed to address the full spectrum of workforce needs. Manpower provides temporary and permanent staffing for a wide range of industries, from administrative and industrial roles to specialized professional positions. Its Experis division focuses on IT, engineering, and finance professionals, offering project-based solutions and managed services. Talent Solutions offers recruitment process outsourcing (RPO), managed service provider (MSP) models, and talent-based outsourcing designed to optimize and streamline clients’ entire talent acquisition strategies.

ManpowerGroup has established a presence in more than 80 countries and territories, serving clients across the Americas, EMEA (Europe, Middle East, and Africa), and Asia-Pacific regions. Through a network of local offices and digital platforms, the company tailors its offerings to regional labor market dynamics, cultural nuances, and regulatory frameworks. This global reach allows ManpowerGroup to offer multinational corporations consistent service delivery while providing small and midsize enterprises with scalable workforce solutions.

Under the leadership of Chairman and Chief Executive Officer Jonas Prising, who has steered the company since 2014, ManpowerGroup continues to innovate in areas such as digital talent acquisition, skills assessment, and workforce analytics. The executive team emphasizes sustainable and inclusive employment practices, promoting diversity and upskilling initiatives. Through strategic partnerships and technology investments, ManpowerGroup aims to anticipate workforce trends and enable organizations and individuals to thrive in an increasingly dynamic employment landscape.

ManpowerGroup Q2 2025 Earnings Call Transcript

Key Takeaways

• Neutral Sentiment: Our recent Global Hiring Outlook survey of 40,000 employers showed a slight year-over-year uptick overall, with Latin America and Asia-Pacific performing well but continued caution in Europe, especially Northern Europe.
• Negative Sentiment: Second-quarter revenue was down 3% year over year in constant currency at $4.5 billion, adjusted EBITDA fell 25% to $89 million with a 2.0% margin, and adjusted EPS declined 43% to $0.78.
• Positive Sentiment: The Manpower brand in the U.S. grew revenue 9% on a days-adjusted basis, reflecting market share gains driven by a data-enabled AI sales targeting engine.
• Positive Sentiment: We implemented targeted cost and restructuring actions—especially in underperforming Northern Europe markets—to right-size operations and protect profitability.
• Positive Sentiment: Ongoing digital transformation via our PowerSuite platform and SoFi AI initiatives is enhancing recruiting productivity and positioning us for scalable, technology-driven growth.

Presentation

[Operator]

Welcome to ManpowerGroup's Second Quarter Earnings Results Conference Call. You will be put into 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 Prezeng. Sir, you may begin.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Welcome, and thank you for joining us for our second 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 second quarter results and guidance for the third quarter of twenty twenty five. 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, EVP & CFO at ManpowerGroup]

Good morning, everyone. This conference call includes forward looking statements, including statements concerning economic and geopolitical uncertainty, 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.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

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 measures.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

When we last reported our Q1 results in April, we spoke at a time of heightened uncertainty, particularly surrounding trade negotiations and their potential impact on the global economy. At that point, many organizations were choosing to pause or slow hiring plans as they waited for greater clarity. Since then, we've seen some of this uncertainty begin to ease.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Employers facing not only macroeconomic complexity, but also continued geopolitical tensions are proving resilient. What might once have been seen as black swan moments are now being absorbed with greater pragmatism and pace. Our most recent Manpower Group employment outlook survey of more than 40,000 employers across 42 countries also supports this view. The global hiring outlook is holding steady, up very slightly year over year and just one point lower than last quarter. The picture continues to be mixed globally though, with Latin America and Asia Pacific labor markets performing well.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

While we see cooling yet resilient hiring intent in North America. In Europe, employers continue to be more cautious, particularly Northern Europe, reflecting its greater exposure to economic and geopolitical headwinds. Turning to our results, we are pleased to see encouraging signs of stabilization in The US and parts of Europe and a return to revenue growth in our Manpower and Talent Solutions brands this quarter. System wide revenue, which includes our expanding franchise revenue base was $4,900,000,000 Reported revenue was $4,500,000,000 down 3% year over year in constant currency. Our reported EBITDA for the quarter was $72,000,000 Adjusting for restructuring costs, EBITDA was $89,000,000 representing a decrease of 25% in constant currency year over year.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Reported EBITDA margin was 1.6 and adjusted EBITDA margin was 2%. Earnings per basic share was a negative $1.44 on a reported basis, while earnings per diluted share was $0.78 on an adjusted basis. Adjusted earnings per share decreased 43% year over year in constant currency. The diversity of our vertical mix consumer goods, technology and industrials is proving to be a strength in the current environment. Leveraging our proprietary data, we continuously assess real time market dynamics to identify and act on growth opportunities.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

We're seeing solid momentum in consumer goods across both The US and Europe, alongside encouraging signals in aerospace and defense. At the same time, we're taking swift targeted actions to protect and optimize performance in sectors experiencing headwinds, such as automotive, ensuring we remain focused on profitable growth and long term resilience. We know client demand is reactive to many factors and we are staying closely connected to our clients, anticipating their evolving needs and ensuring we remain the strategic workforce partner of choice as technology transformation accelerates. We continue to build a strong enterprise sales pipeline, simplify organization and manage costs with discipline by prioritizing growth initiatives that would deliver the greatest value. I will now turn it over to Jack to take you through the results in more detail.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Thanks Jonas. US dollar reported revenues in the second quarter were impacted by foreign currency translation and after adjusting for currency impacts came in at the high end of our constant currency guidance range. Although conditions remain challenging in certain markets, our revenue trends demonstrate we continue to perform well in the market. Our revenues 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 just below the low end of our guidance range, driven by shifts within staffing, reflecting an increased mix of enterprise accounts.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

As adjusted, EBITDA was 89,000,000 representing a 25% decrease in constant currency compared to the prior year period. As adjusted, EBITDA margin was 2% and came in at the high end of our guidance range, representing 50 basis points of decline year over year. Foreign currency translation drove a favorable impact to the flat US dollar reported revenue trend from the constant currency decrease of 3.5. Organic days adjusted constant currency revenue decreased 1% in the quarter, which was favorable to our midpoint guidance of a decrease of 2%. Turning to the EPS bridge, reported losses per share was $1.44 Adjusted EPS was $0.78 and came in $08 above our guidance midpoint.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Walking from our guidance midpoint of $0.70 our results included a stronger operational performance of $04 slightly lower weighted average shares due to share repurchases in the quarter, which had a positive impact of $01 A foreign currency impact that was $01 favorable to our guidance and interest and other expenses, was $02 favorable. Restructuring costs and disposition losses represented $0.43 and non cash goodwill and intangible impairment charges represented a $1.79 bringing reported losses per share to a $1.44 Next, let's review our revenue by business line. Year over year on an organic constant currency basis, the Manpower brand had growth of 1% in the quarter. The Experience brand declined by 9% and the Talent Solutions brand had growth of 1%. Within Talent Solutions, our RPO business experienced a slight year over year revenue decrease.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Our MSP business recorded strong revenue increase compared to the prior year, while Right Management experienced a year over year mid single digit percentage revenue decline in the quarter as outplacement activity continued to slow. Looking at our gross profit margin in detail, our gross margin came in at 16.9% for the quarter. Staffing margin contributed a 30 basis point reduction due to mix shifts towards enterprise accounts. Permanent recruitment was relatively stable at lower levels and contributed a 10 basis point reduction. Other items resulted in a 10 basis point margin decrease.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Moving on to our gross profit by business line. During the quarter, the Manpower brand comprised 62% of gross profit. Our experienced professional business comprised 22% and talent solutions comprised 16. During the quarter, our consolidated gross profit decreased by 5% on an organic constant currency basis year over year, representing a slight improvement from the 6% decline in the first quarter. Our Manpower brand reported flat organic constant currency gross profit year over year, an improvement from the 2% decrease in the first quarter.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Gross profit in our Experis brand decreased 14% in organic constant currency year over year, a step down from the 11% decrease in the first quarter, driven by the non recurrence of healthcare technology projects. Gross profit in Talent Solutions was flat in organic constant currency year over year, representing an improvement from the first quarter decrease of 5%. MSP and RPO experienced similar activity levels from the first quarter, while Right Management gross profit increased slightly. Reported SG and A expense in the quarter was $789,000,000 SG and A as adjusted was down 3% year over year on a constant currency basis and down 2% on an organic constant currency basis. The year over year SG and A decreases largely consisted of reductions in operational costs of $10,000,000 Corporate costs continue to include our back office transformation spend and these programs are progressing well with expected medium and long term efficiencies.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Dispositions represented a decrease of $8,000,000 while currency changes contributed to a $19,000,000 increase. Adjusted SG and A expenses as a percentage of revenue represented 15.2% in constant currency in the second quarter. Adjustments represented restructuring and disposition losses of 17,000,000 The goodwill and intangible impairment relates to Switzerland and The UK, which experienced further market declines in recent quarters. 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 23% of consolidated revenue.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Revenue in the quarter was $1,100,000,000 representing an increase of 2% year over year on a constant currency basis. OUP was $36,000,000 and OUP margin was 3.4%. The U. S. Is the largest country in the Americas segment, comprising 64% of segment revenues.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Revenue in The U. S. Was $674,000,000 during the quarter, representing a 3% days adjusted decrease compared to the prior year. This represents a decline from the 2% increase in the first quarter, as I will explain in the brand commentary. OUP for our U.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

S. Business was $20,000,000 in the quarter. OUP margin was 2.9%. Within The U. S, the Manpower brand comprised 26% of gross profit during the quarter.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Revenue for the Manpower brand in The U. S. Increased 9% on a days adjusted basis during the quarter, which represented strong market performance and an improvement from the 7% increase in the first quarter. The Experis brand in The US comprised 41% of gross profit in the quarter. Within Experis in The US, IT skills comprised approximately 90% of revenues.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Experis US revenues decreased 14% as expected on a days adjusted basis during the quarter, down from the 2% decline in the first quarter based on the non recurrence of healthcare technology projects. As the healthcare technology projects significantly impacted The US Q1 and Q2 trend, the six month trend of a decrease of 8% is more indicative of the underlying business activity. Account solutions in The US contributed 33% of gross profit and saw revenue increase of 13% in the quarter, an improvement from the 3% increase in the first quarter driven by RPO and Right Management. RPO experienced solid revenue growth in The U. S.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

During the quarter. Both The U. S. MSP and Right Management businesses executed well during the quarter, posting strong double digit revenue increases year over year. In the third quarter of twenty twenty five, we expect the overall U.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

S. Business to have a slightly improved low single digit percentage revenue decline compared to the second quarter. Southern Europe revenue comprised 47% of consolidated revenue in the quarter. Revenue in Southern Europe was $2,100,000,000 representing a 2% decrease in organic constant currency. As adjusted, OUP for the Southern Europe business was $75,000,000 in the quarter and OUP margin was 3.5%.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Restructuring charges of $2,000,000 represented actions in France. France revenue comprised 53% of the Southern Europe segment in the quarter and decreased 6% on a days adjusted constant currency basis. As adjusted, OUP for our France business was $34,000,000 in the quarter. Adjusted OUP margin was 3%. France revenue trends came in slightly better than expected during the second quarter, and we expect stable activity trends into the third quarter, representing a slightly improved rate of revenue decline.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Revenue in Italy equaled $476,000,000 in the second quarter, reflecting an increase of 4% on a days adjusted constant currency basis. OUP equaled $32,000,000 and OUP margin was 6.7%. Our Italy business is performing well and we estimate a similar to slightly improved constant currency revenue growth trend in the third quarter compared to the second quarter. Our Northern Europe segment comprised 18% of consolidated revenue in the quarter. Revenue of $794,000,000 represented a 10% decline in constant currency.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

As adjusted, OUP equaled a $6,000,000 loss. The restructuring charges of $12,000,000 represented actions in The Nordics, The Netherlands, and Germany. Our largest market in the Northern Europe segment is The UK, which represented 33% of segment revenues in the quarter. During the quarter, UK revenues decreased 13% on a days adjusted constant currency basis. The UK market continues to be challenging and we expect the rate of revenue decline to improve into the third quarter compared to the second quarter.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

In Germany, revenues decreased 22% on a days adjusted constant currency basis in the quarter. Germany automotive manufacturing trends continued to be weak. In the third quarter, we are expecting a slightly improved year over year revenue decline compared to the second quarter trend. The Nordics continued to experience difficult market conditions with revenues decreasing 9% in days adjusted constant currency in the quarter. The Asia Pacific Middle East segment comprises 12% of total company revenue.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

In the quarter, revenues equaled $525,000,000 representing an increase of 8% in organic constant currency. Adjusted OUP was $27,000,000 and adjusted OUP margin was 5.1. Our largest market in the APME segment is Japan, which represented 61% of segment revenues in the quarter. Revenue in Japan grew 7% 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 third quarter.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

I'll now turn to cash flow and balance sheet. In the second quarter, free cash flow represented an outflow of $2.00 $7,000,000 compared to an outflow of $150,000,000 in the prior year. As in the prior year, timing of payables impacted the level of outflow in the second quarter. Outflows of free cash flow in the first half of the year are typically followed by strong free cash flow in the second half. Free cash flow in the 2025 included outflows for a large tax transition payment, technology prepayments, and the impacts of timing of MSP program payments, which typically are not large factors in the second half of the year.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

At quarter end, day sales outstanding increased by about a day to fifty six days. During the second quarter, capital expenditures represented 18,000,000 During the second quarter, we repurchased 230,000 shares of stock for $12,000,000 As of June 30, we have 2,000,000 shares remaining for repurchase under the share program approved in August. Our balance sheet ended the quarter with cash of $290,000,000 and total debt of $1,290,000,000 Net debt equaled $996,000,000 at quarter end. Our net debt levels peak at June 30 and historically improve in the second half of the year. Our debt ratios at quarter end reflect total gross debt to trailing twelve months adjusted EBITDA of 3.2 and total debt to total capitalization at 39%.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Our debt and credit facility arrangements and related updates are included in the appendix of the presentation. Next, I'll review our outlook for the third quarter of twenty twenty five. Based on trends in the second quarter and July 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 third quarter to be in the range of $0.77 to $0.87 The guidance range also includes a favorable foreign currency impact of $03 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 flat and 4% decrease and at the midpoint is a 2% decrease.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Considering the impact of a slight increase in business days and dispositions, our organic days adjusted constant currency revenue increase represents a flat revenue trend at the midpoint. EBITDA margin for the third quarter is projected to be down 50 basis points at the midpoint compared to the prior year. We estimate that the effective tax rate for the full year on an adjusted basis to continue to be 46.5% and the third quarter will be slightly higher at 48%. This incorporates the previously disclosed French tax change for the one year period of 2025. In addition, as usual, our guidance does not incorporate restructuring charges or additional share repurchases, and we estimate our weighted average shares to be 47,000,000. I will now turn it back to Jonas.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Thank you, Jack. We know from our clients that companies are navigating the here and now, while also investing in the mid to long term. GenAI continues to emerge as a powerful catalyst, with an eye on productivity gains, as well as the opportunity to unleash human potential, allowing people to focus on more value added tasks. At this stage, most organizations are focused on driving adoption and exploring possibilities.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

And outside of some specific areas, we are not seeing any structural impact to labor markets at this time. Yet the lag from exploration to impact has the potential to be shorter than any tech advancement in history. Our research underscores this stage of development too. 58% of employers are now investing in AI, but only 26% believe their workforce is ready to use it. This proprietary data is sourced from our work intelligence lab launched in May.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

An innovative new platform that brings together our real time labor market insights and predictive research to deliver deep workforce intelligence, enabling our advisory and consulting services for our clients across sectors. We showcased this data in our humans first digital always perspective at Viva Tech, the world's leading tech conference held in Paris in June, where we joined tech leaders and policymakers alongside more than 200 clients and prospects. It is clear that the AI readiness gap represents a significant opportunity for us, supporting companies to find new talent and augmenting their skills to be AI ready. We continue to execute our diversification, digitization and innovation strategy at Pace. At the core of this is accelerating the adoption of new technologies to better support the evolving needs of both our clients and candidates, all positioning us to drive greater productivity and unlock more profitable, sustainable growth in the quarters ahead.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

For over five years, we have been investing in and building our digital core, PowerSuite. PowerSuite is our foundational tech stack that we believe is unravel on a global scale in the industry and has enabled the pace of our digital transformation and the rapid development and deployment of our AI capability. As an example, the strength of PowerSuite is enabling the build out of SoFi AI, our enterprise wide AI platform, where our AI solutions are being developed, refined and incorporated into our operational workflows to further enhance our capabilities. SoFi is already being deployed by our talent solutions brand, and we are moving quickly to scale so we can continue to take AI infused products, solutions, and insights into the market across our strong and distinct brands, supporting our clients wherever they are in their transformation journey. Our commitment to transformation extends beyond the technology.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

It is embedded in how we operate as a responsible, sustainable business, and it's being recognized. In the second quarter, we were proud to receive multiple global accolades. We received Forbes America's number one rating as the best temp staffing firm. Talent Solutions was again recognized by Everest Group as a global leader in RPO. And were also named two times world's most sustainable companies for the fifteenth consecutive year.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Congratulations and thank you to all our teams for these honors, which are evidence of the trust placed in us by our clients, candidates, and stakeholders around the world. Operator, please open the line for our Q and A.

[Operator]

Thank you. Our first question comes from Jeff Silber with BMO Capital Markets. Your line is open.

[Ryan Griffin, Senior Equity Research Associate at BMO Capital Markets]

Hey, this is Ryan on for Jeff. You called out in the press release you remain focused on market share gains. I was just wondering who you're getting share from and what is your share gain strategy there?

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Thanks, Ryan. Yeah. No. We've been very pleased to see the progress in how we are competing. We've built a very strong pipeline.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

And with the available data, we are now able to target our faster growing industry verticals in a much more precise way. So we are very quickly able to determine which industry verticals are moving forward and are growing, which are lagging a bit. And we talked about that in our prepared remarks. And we're very pleased with the outcomes of what we're seeing there. We're also able to deploy AI in what we call our sales targeting engine, which is now able to much better identify leads that are highly likely to generate orders and higher revenue to the tune of 50% higher revenue than when we do this through human intervention only.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

So it's really augmenting human capabilities with the eye. And all of this said, in many of our major markets, we are competing very well from a revenue perspective. And you could also see that in our performance in the second quarter as it relates to where we ended up compared to our initial guide as we looked ahead into the second quarter.

[Ryan Griffin, Senior Equity Research Associate at BMO Capital Markets]

Great. Thank you. I appreciate that. And then just for my follow-up, you sold a couple of businesses and are moving them to franchise models during the quarter. I imagine those were relatively small in the broader P and L.

[Ryan Griffin, Senior Equity Research Associate at BMO Capital Markets]

I was just wondering if you see yourself moving anything else selectively to a franchise model down the road? Or do you think there are any other geographies where it might make sense? Thank you.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

You know, this is something that we've been working on for a number of years and we've talked about this in the past. There are some markets, big and small in some cases, where we really feel a more local approach might be beneficial to grow faster with our brands, but it doesn't have to be a wholly owned subsidiary that executes on that strategy. So yes, you saw us move out of some smaller markets this quarter. We've had some bigger markets in prior quarters. And we're constantly looking at both existing markets, but also new markets in new parts of the world where we think this model could be really beneficial to help us deploy our brands and serve our clients as we look at where the demographic labor market growth is the strongest.

[Operator]

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

[Princy Thomas, AVP - Equity Research at Barclays]

Hi, good morning. This is Prinsley Thomas on for Manav. Thank you for taking my question. Just wanted to see if you could talk about U. S.

[Princy Thomas, AVP - Equity Research at Barclays]

Trends and moving pieces, what the true underlying organic growth would be and what you're seeing for outlook?

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Sure, Princi. Thanks for the question. This is Jack. I'd be happy to talk about The US trends. So you can see on an overall basis, The US business came in at minus 3% for the quarter.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Actually, better than what we expected when we gave the guide. We did know that a lot of that Xperis Healthcare technology project work was not going to recur back into the second quarter. So that incorporated that and we still did a bit better. That was the over performance I would say was driven by the Manpower brand, which came in at plus nine percent in the quarter. So very strong performance.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Jonas talked about our market trends earlier. Manpower US is clearly one of the businesses where we do believe we're leading the market. And I'd say the Experis business, as expected, you heard me talk about the minus 14 in the quarter was really a reflection of the very large go live work we had in the year ago period. But if you average, if you look at the first six months overall year over year, we're running about minus 8%, pretty much in line with what you're seeing in the professional staffing industry in The US as it continues to be a bit sluggish. We do anticipate that that's going to improve sequentially into the third quarter a bit as well.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

So I'd say those those are the main trends. Know, in terms of Talent Solutions, we saw good growth in Talent Solutions in the quarter as well in The US. And so, I'd say, you know, all, you know, Talent Solutions and Manpower really both had very good positive growth. And Talent Solutions was was pretty was pretty significant double digit growth, as well on an overall basis in The US. Thanks.

[Princy Thomas, AVP - Equity Research at Barclays]

Thanks. And as a follow-up, can you remind us of seasonality expectations for 3Q and for the second half of the year typically, and how that stacks up compared to the first July?

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Yeah. So I'd say, in terms of seasonality from Q2 to Q3, we typically do see a bit of an improvement in margin, in EBITDA margin sequentially. And you can see in my guide, we have margin improving 10 basis points from the two point o we just posted to the 2.1. And I'd say that has generally happened in recent years. Not every year.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

If in a period where we're seeing significant declines, and of course, then maybe that's not the case. But this year as we continue to see some momentum, and you saw my organic days adjusted guide for flat for the third quarter. So with that moving from negative to flat, we are seeing a little momentum, which is helping keep that plus 10 basis points from 2q to 3q. So I'd say that's one thing to consider. Of course, we always have holidays that impact the August period in some of our European markets, but nothing's really different this year in that regard.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

I think the only other thing in terms of seasonality, and I covered this in my prepared remarks, is when you think about free cash flow. So we we do see negative free cash flow typically in the first half of the year over the last four years, and that's followed by typically very strong free cash flow in the second half of the year. So that would be the other consideration as you think about seasonality. Thanks.

[Princy Thomas, AVP - Equity Research at Barclays]

Thanks, Jack.

[Operator]

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

[Mark Marcon, Senior Research Analyst at Robert W. Baird & Co]

Good morning and thanks for taking my questions. First question has to do just with Northern Europe. You mentioned Jonas in the early part of your comments that in Europe, employers continue to be more cautious, reflecting the greater exposure to economic and geopolitical headwinds. I'm wondering, what do you think it will take to see some improvement in terms of the revenue trends in Northern Europe? Number one.

[Mark Marcon, Senior Research Analyst at Robert W. Baird & Co]

And number two, you know, how should we think about the profitability and what are your long term aspirations for profitability in Northern Europe?

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Thanks Mark. Yeah, and I think as you correctly point out, and we also talk about in the prepared remarks, it's really Northern Europe that is having a very tough time. And if you look at the economic performance of some of the main engines, notably Germany, which is in a recessionary environment. And you look at many of the other countries that are also struggling with headwinds. Although, that is really what's driving the performance of our industry and the operations that we have in those markets.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Now we believe that this continues to be areas where demand eventually will come back. And, you know, to have that happen, it will help when the economic environment improves. And when some of the geopolitical uncertainties that are largely impacting some of those markets heavier than what we've seen in Southern Europe, such as energy costs and others. They start to subside if there is a resolution to the war in Ukraine. So those are some of the elements that from an external factor, we think could help Northern Europe improve.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

But as you've seen over time, and we have taken significant actions to right size our business in Northern Europe. And taken some very significant restructuring actions to make sure that we are rightsizing the business to the demand as we see it today and in the near term. Longer term, we still feel good about Northern Europe and the ability for those markets to come back. One of the areas that make Northern Europe stick out from a profitability perspective is that most of these markets are using a bench model as part of the legislative environment that we are operating in from a staffing perspective. And that's different from what we have from a legislative framework in Southern Europe.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

So we continue to improve our positioning in the short term and preparing for better times in the long term. And in the meantime, we're taking the actions that we need both to drive greater pipeline growth, as well as to make sure that we have the appropriate cost structures for the environment that we're anticipating.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

That mean we Mark, I'm I was just going to add just a little bit more color on in terms of the restructuring we took this quarter. So you've seen us take significant actions in Northern Europe, and we took additional actions this quarter. The majority of the restructuring was focused on Northern Europe.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

We do expect to start to see an improvement in that profitability trend as we go forward based on the savings we're gonna be getting from those restructuring actions. So I did wanna mention that. I think to your point on the longer term margin, you know, I think the reality is based on what Jonas mentioned with the regulatory model in many of the countries and the large enterprise market in The UK is in periods where it's stable to slightly downward pressure. We'll see Northern Europe be below the average for the company. But with that being said, when Northern Europe grows, Northern Europe definitely has the opportunity to be in line with the company overall profitability average, and it's about getting them back in position to be in a position for growth for the future.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

So that's what we continue to work on and just wanted to add that additional flavor.

[Mark Marcon, Senior Research Analyst at Robert W. Baird & Co]

Great. Thank you. And then in France, can you talk a little bit about the competitive dynamics? I was looking at the constant currency revenue trends and comparing that to the PRISM data. And I was just wondering if there's any commentary there.

[Mark Marcon, Senior Research Analyst at Robert W. Baird & Co]

And it sounds like you're expecting things to improve slightly. Was wondering, now that it seems like tariffs are at least getting people are getting used to it, you know, should we see some further improvement in France?

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Yeah, Mark, I think it's a very good point. You know, my guide does incorporate some sequential improvement in that rate of decline. And, you know, to your point, we've seen that from q one to q two. Pretty big improvement from a constant currency perspective coming in at minus 6%. And as we said in our prepared remarks, slightly better than we expected.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

So, the way I would characterize it is it's largely stabilized, now as we exit the quarter. I think the run rate we see in our guide for q three is stable trends, through the third quarter. And with that, you know, we will walk into a slightly improved rate of decline. But I would agree with your comments, you know, regarding the business environment overall. And as long as it continues to stay relatively stable, I think that's the trend we would expect to continue to see going forward.

[Mark Marcon, Senior Research Analyst at Robert W. Baird & Co]

Great. Thank you.

[Operator]

Thank you. Our next question comes from Andrew Steinerman with JPMorgan. Your line is open.

[Andrew Steinerman, Equity Research Analyst - Business & Info Services at JP Morgan]

Hi. I want to hop back to the Manpower brand in The U. S. That saw 9% days adjusted growth acceleration from 7% in the first quarter. Percent I have a few questions on that.

[Andrew Steinerman, Equity Research Analyst - Business & Info Services at JP Morgan]

One, the Manpower brand is both Light Industrial and Clerical. Could you just tell us if there was a divergence between how Light Industrial and Clerical did in second quarter? The second question is, with the acceleration of the Manpower brand, do you think that marketplace is picking up? Or do you think that this is just share gains from manpower? And if it is share gains, how did that get accomplished?

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Thanks, Andrew. Yeah, I'd say that we're seeing the ability to fulfill and create demand to be a little bit stronger on the manufacturing side. I think you could look at PMI in The US and you can see the gradual improvement we've seen there as well. But in terms of the share gains, I think a lot of this is down to our ability to target the industry verticals and the opportunities in a much more granular and accurate way in real time. A lot of that driven by access to data that we now have in The US as well as globally, thanks to the power suite ability to really predict where demand should be stronger.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

And that is part of it. I do sense though that the market appears to be improving and market demand is stable to slightly more positive, which we of course see as a very positive indicator of a market that is slowly healing from what has been a long period of tough market headwinds. So, the team is doing a great job. We are taking share, but we also sense that the market is starting to improve.

[Andrew Steinerman, Equity Research Analyst - Business & Info Services at JP Morgan]

All said, thank you.

[Operator]

Thank you. Our next question comes from Andy Grobler with BNP. Your line is open.

[Andy Grobler, Financial Analyst at BNP Paribas]

Hi, good morning. A couple from me, if I may. Firstly, just going back to Northern Europe where conditions are clearly very tough. There is some fiscal spending coming in in Germany at some stage. Are you seeing any change in sentiment or kind of longer term planning from your larger clients in Germany?

[Andy Grobler, Financial Analyst at BNP Paribas]

And then secondly, on a slightly different topic, there's been lots of changes in kind of back office and front office systems. Are you still on track for those to complete and to begin to see improvements both in cost efficiency through 2026? Thank you.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Yeah. Thanks, Andy. I'd say in conversations with clients in Germany, they largely still have a defensive posture in terms of the economic conditions that they are seeing. They would say that they are optimistic on the outlook, yet waiting to see these increased funds and the investments into various sectors come through. With the expectation that they're not really going to see any material change during 2025, but they're hoping to see a better operating environment in 2026.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

So, and beyond. And that is sort of the sentiment from a German employer perspective. So they amongst all employers in Europe are one of the most conservative and cautious employer base that we speak with, because they are fully aware of the difficulties that are cyclical in nature, structural in terms of all of the former growth engines of Germany that are now stuttering, be it automotive, be it their export engine to China, and are expecting to see an improved environment, but are not really seeing it in the near term. And of course, that's reflected in how we are seeing the market evolve as well in our own performance. And Jack, maybe you could give, you know, some comments around the progress on our transformation efforts.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Yep. No, I'd be happy to. Andy, thanks for the question. I think the short answer is yes. We are tracking very well.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

I think particularly on the back office transformation project, now on PowerSuite back office, we have almost 65% of our revenues going through that platform. And as we've talked about before, that's really enabling us to make some real progress in our shared service centers and our global business centers. So we have 10 countries now moved in, more in flight. So we're definitely tracking to crossing over in the '26 as we've talked about. So we feel really good about the progress we've been making on the transformation.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

And on the front, Andy, we have now 90% of our revenues running through the PowerSuite front office with the same global platform. We have over 40 websites, so 80% of our website traffic is now also being managed through one global platform. So we're making excellent progress overall with our core technology stack. And we're very excited about what that opportunity could give us today, as well as into the future.

[Andy Grobler, Financial Analyst at BNP Paribas]

Excellent, thank you very much.

[Operator]

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

[Kartik Mehta, Executive Managing Director & Director - Research at Northcoast Research Partners LLC]

Hey, good morning. Jack, maybe just to get your thoughts on how the quarter trended, if you saw any differences, as the quarter progressed?

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Thanks, Kartik. You know, I I'd say it's, the second quarter is always from a trend perspective influenced by holidays, in the month of, May, which kind of trends tends to make that a little a little different just when you see the holiday impact from a days adjusted basis. But with with that being said, when we look at some of our major markets, I'd say, you know, US once you adjust for the go live volatility year over year, as I mentioned, we had a lot of go live activity, I'd say we saw kind of steady, very steady trends and when, you know, I'd say improving during the course of the quarter for the manpower business, which is really good to see. Otherwise, I'd say relatively steady. I'd say France, similar.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

I'd say relatively steady, a bit of progress as we move through the quarter. And as we look at July activity, I think as I mentioned before, we we see stability into the third quarter. And then I'd say, you know, the third biggest business for us, Italy, very strong continued progress during the course of the quarter. So we saw an improvement in the rate of growth as we exit. And we expect Italy to continue to be very strong in the third quarter.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

And we believe we are leading the market in Italy today based on those growth trends in the first half of this year. So I'd say those in terms of the big ones, I'd say that that's kind of the trends we've seen over the course of the quarter.

[Kartik Mehta, Executive Managing Director & Director - Research at Northcoast Research Partners LLC]

I know you've talked a lot about Northern Europe and UK, and I'm wondering, is there any structural issue that you're witnessing in the country for temporary staffing as to why maybe the results haven't been as good as they have been in the past? Or is this just a reflection of where the economy is and once the economy improves, the business should improve?

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Yeah. Thanks, Kartik. We still believe that, you know, this is largely due to the economic cycle. And so it's a cyclical evolution. Now, any cycle that has been going on for a long time, of course, ultimately will also have elements of structural change in demand.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Because companies are hiring different and new skills. So we still at this point think this is a minor issue from that regional perspective. This is all to do with a very tough operating environment due to economic and geopolitical headwinds. That is also then impacting the countries that have the bench model. And with the bench model, just as Jack talked about earlier, comes the drawback that when headwinds are hitting those markets in our operations, we deleverage much faster and harder in those markets than we do in other parts of the world.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

So we would expect those markets to come back once the economy turns around. And in the meantime, of course, we are from our business perspective, taking all the actions that we need to shore up both top line in areas where we can see growth, as well as manage the costs, so that we are bringing them back to profitability. And just as Jack says, with our latest actions here, we are anticipating an improvement in our performance into the third quarter also in this region.

[Kartik Mehta, Executive Managing Director & Director - Research at Northcoast Research Partners LLC]

Thank you very much, I appreciate it.

[Operator]

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

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Hey, Trevor. We can't really hear you. So can you Oh, I'm sorry. You try again?

[Trevor Romeo, Research Analyst at William Blair]

Sorry, Giannis. Can you hear me now?

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Can hear you better now.

[Trevor Romeo, Research Analyst at William Blair]

That's better.

[Trevor Romeo, Research Analyst at William Blair]

Okay. Sorry about that. Appreciate you taking the questions. I think I just hit on the the German fiscal stimulus. I wanted to add more broadly about Europe with the defense and infrastructure spending in it versus NATO agreement.

[Trevor Romeo, Research Analyst at William Blair]

I think your direct expense exposure to defense is pretty low, but I guess wanted to ask for your thoughts on what the flow through could be to industrial manufacturing and other verticals. Any way to think about what that benefit could be like and how long that could take to materialize?

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Yeah, thanks, Trevor. So overall, broadly speaking, the investment in defense and infrastructure into Europe, we feel will have a good effect into the broader economy as well. So not only in those industry verticals, but also into manufacturing where we of course have a very strong presence. And actually in defense, we have a very strong presence in Europe. In particular in France and in Italy and Israel and other parts, we are very strongly represented.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

It is in the lower single digit revenue numbers as far as our global exposure is concerned. But for Europe, we see our ability to really benefit from these investments and have a material impact to us in Europe when the funds come through to be promising. And that's what the teams are working on. So we think these are great industry verticals for us. We're positioning our teams to ensure that we are taking share and continue to be very well represented in those sectors going forward.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

But there is a delay in terms of when the funds will actually start to flow through in manufacturing activity that will be noticeable. But when we look at how our business, for instance, in Sweden is seeing an increase in demand, how we're seeing an increase in demand in France, we can start to see the beginnings of something which we think will be a great opportunity for our teams.

[Trevor Romeo, Research Analyst at William Blair]

Great, thanks for that Jonas. And then for a follow-up, just wanted to ask back to The U. S. Manufacturing. How are you thinking about the opportunity for reshoring, I guess, three months out from the tariff rollout?

[Trevor Romeo, Research Analyst at William Blair]

Just curious if you're hearing any clients kind of saying that they're increasing confidence or maybe starting to want to increase manufacturing activity more in The US.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Well, think Trevor, more broadly what company clients are telling us is that they're, or what we're seeing in their behavior as well, is that they're starting to sift through the noise from the signal and the trend that they believe is underlying these tariff negotiations. And we talked about that in our prepared remarks, that clients are taking a much more pragmatic approach. They believe that tariffs will eventually be settled and negotiated in a way that is not going to materially impact the economy. And as part of that, they are looking at the best place to conduct their business and The US is considered to be a very positive business environment. So they are, many of them thinking about expanding their manufacturing base, here in The US, which of course from our perspective, could be very beneficial here in The US and from the manpower business perspective as well.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Now the kinds of jobs that are coming back and the volume of jobs is yet to be determined. Because of course the jobs that are being brought in, in many cases are skilled jobs that are leveraging automated manufacturing processes. So in terms of the number of jobs that are coming in, that still remains to be seen. But generally speaking, companies are talking about investing in The US and adding manufacturing capacity, and we feel that's going to be very beneficial to our Manpower business and to our Xperis business, as well as our Talent Solutions business here in The US as well.

[Trevor Romeo, Research Analyst at William Blair]

Great, thank you very much, I really appreciate it.

[Operator]

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

[George Tong, Senior Research Analyst - Equity Research & Business Services at Goldman Sachs]

Hi, thanks. Good morning. You talked about taking significant actions to right size the business in The UK from a cost perspective. Are these cost takeouts focused on frontline revenue generators or are they more back office overhead functions?

[Jack McGinnis, EVP & CFO at ManpowerGroup]

George, I'd be happy to talk to that. And actually, this quarter was really more focused on France, Netherlands, Germany, and The Nordics. So really Netherlands, Nordics, and Germany within Northern Europe. UK was a focus last quarter as well. But but to your question, regardless, it's it's been a mix candidly.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

I think there has been parts of the business where we've needed to right size producers to the current demand environment. We've been doing that very carefully, particularly when it comes to any sales professionals. We've been extremely cautious. But the reality is where demand has been down, you know, we have adjusted some recruiter levels in some of those key markets. We are doing a lot in terms of, you know, overall back office in those markets as well.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

You can see that in our national head office. So outside of the business, all the real support functions, we've we've done some pretty significant cost actions to make those businesses more efficient. And you'll see that come through as we talked about in terms of some of the Northern Europe trends overall as we go into the next quarter. But I'd say it continues to be a balance, we've been very careful on the producer side.

[George Tong, Senior Research Analyst - Equity Research & Business Services at Goldman Sachs]

Got it. That's helpful. And then with respect to AI, you mentioned not seeing any structural impact to the labor markets at this time, but that the lag from from expiration to to impact could be shorter than other tech advancements. In the business, where would you expect to see impact if there were to be one and what percentage of revenue could be affected?

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Well, right now George, what we're doing as many other companies are doing is exploring really the possibilities of how we can augment human capability. And the results so far have been very, very encouraging. I mentioned earlier our sales targeting engine, which we're deploying across Europe right now. It improves our accuracy and determining which prospects are likely to give better revenue opportunities and higher likelihood of generating an order. That's being very helpful.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

We've deployed through our SoFi AI technology, the ability to have a virtual recruiter assistant that automates the candidate screening, shortlist and ranks the candidates through a chatbot interview, providing great user experiences for the candidates. More than half of the candidates are fulfilling their candidate interview requirements off working hours and their own time. And we see great productivity improvements there as well to the tune of two to three times more effective time used by our producers. And then we have our own assistant in terms of generating and enhancing job description, candidate submittals and things like that, that is really deployed across the world today. And what we're seeing are point to point improvements in recruiter tasks.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

But just as you're seeing it with many other companies, whilst we see excellent opportunities in specific tasks that recruiters do, the impact really to have full effect on productivity needs to come through process transformation and leveraging agentic AI and automating various steps. And I would say we're in early process of that, now that we're really seeing some very good progress on the individual tasks and what the impact can be. The last thing I would say though, George, is that we're really starting to see tangible impact in terms of leveraging our data. And we have a database of tens of billions of data points that we're starting to generate insights for our clients and our candidates and our own internal sales and recruitment team members, so that we can generate much better outcomes for our clients. And we're early on in that journey, but we are very encouraged by the progress that we're seeing and the reaction that we're getting from the clients, especially in an environment that's moving very, very quickly.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

George, I would just add to your point on, in terms of impact on revenues and so forth from AI. Still very, very early days. I think as Jonas has talked about, we do know that coding at very basic levels is more exposed. I think the important thing for us is we do not run a bench in terms of those skill sets. So the key for us is pivoting our recruiters to recruit the IT skills that are in demand from our clients.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

And I would say that's not an overly significant part of our revenues today to begin with. But as we move forward, I think that is going to be the way we look at recruiting for technology skills going forward.

[George Tong, Senior Research Analyst - Equity Research & Business Services at Goldman Sachs]

That's helpful. And just a quick follow-up there. Would you see the clerical part of your business as potentially exposed? So administrative support or clerical from a white collar perspective and how big of the business is that?

[Jonas Prising, Chairman & CEO at ManpowerGroup]

You know, George, largely our view is that AI will augment human capability and clerical roles have evolved over decades and become more productive with the help of technology tools like the time, the PC, the advent of the PC from a typewriter and Microsoft tools that really improve productivity in terms of Excel and other things. So we would see this much in the same light. The key from our business perspective is to understand where are we today? Where are the skills of the future? What are our client needs?

[Jonas Prising, Chairman & CEO at ManpowerGroup]

And then be sure that we pivot in terms of being able to provide and create those skills, so that we can help the companies navigate this rapidly changing environment. As well as helping people find meaningful and sustainable employment in the areas that are growing faster. So this is what our business is all about. We're now being helped with data and insights to a degree and scale that we've never seen before. And just as we said in our prepared remarks, this is a very, very promising evolution for our business.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

And we think there's some great opportunities for us going forward in this area as well.

[George Tong, Senior Research Analyst - Equity Research & Business Services at Goldman Sachs]

Very helpful. Thank you.

[Operator]

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

[Stephanie Moore, SVP - Equity Research at Jefferies]

Yes. Hi, good morning. I was hoping you could talk a bit about how perm activity trended as actually the quarter progressed, if there were any meaningful changes, particularly in The U. S, just given ongoing tariff conversations? And then in the same vein, what your expectations are for perm as you look to the third quarter? Thank you.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Thanks, Stephanie, and I'd be happy to take that. So the way I would say is perm was relatively stable overall on a consolidated basis. I think if you look at our revenues in GP for perm, slightly higher in q two than it was in q one. I think as we exited q one, I was asked what do we think the mix of perm will be in terms of total GP for q two, and I said about 15.5. And we came in right in that range.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

We actually came in at 15.3% of our GP. And we see that 15.5 mark is relatively stable now, these trends that we've seen. As we talked about last quarter, we saw a bit of an adjustment in Q1. But now that that's done, it actually has been quite stable. In terms of key markets, to your question on The US, US actually saw, kind of flattish perm on an overall basis, very, very slight growth.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

So that's a sign of stabilization as well. And I'd say in Europe, kind of in line with what we expected. We've stable levels, and and that's still walking into a slight year over year decline in many of those markets. But I think the key point is from activity levels, relatively stable. So a bit of the reset was in q one, slightly lower.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

And from that level, we've actually seen it be quite stable. And as we look at q three, we're kind of projecting more of the same. We're not we're not anticipating that it's going to change dramatically, but we are anticipating stability at these lower levels into the third quarter, and that's what you see in our guide.

[Stephanie Moore, SVP - Equity Research at Jefferies]

Very helpful. Thank you.

[Operator]

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

[Josh Chan, Executive Director & Equity Research Analyst at UBS Group]

Hi, good morning Jonas and Jack. I guess my first question is on your tone. Sounds like you feel better about the trajectory of the business. I guess at the same time the macro clarity probably hasn't improved very much. So I'm trying to triangulate, see if you can reconcile those two and where you see the trajectory going from here, kind of after this stabilization period that you called. Thank you.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Well, thanks Josh. And yes, as you can tell, whenever we can think of a moment and in our guide of a flat organic days adjusted outlook, that is a change from what we've had to guide to for quite some time now. So we are feeling better about this, but mostly it is based on what we're hearing from our clients. And we've talked in the past about how important employer confidence is in terms of their hiring intentions.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

And from our internal data, we can tell that clients are looking through the noise and are more interested in the signals of what is changing. I also believe that they are getting used to an environment of high levels of noise and new noise on a very regular basis. But that that doesn't necessarily translate into a reality in the market. So therefore, their confidence into the future appears to be stabilizing. And of course, stabilization as long as things stay the same and no actual major changes are occurring is of course followed by a period of hopefully some more positive demand environment.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

And we then look at markets like The US, where we're starting to see that occur in manpower. We're driving a lot of that our Broadly speaking, we're seeing it in Manpower, we're seeing it in Talent Solutions. We have strong performance in parts of Southern Europe like Italy and Spain. We see Asia Pacific, as well as LatAm continuing to have strong environment. It gives us a sense, an increased sense of optimism that we could be heading in the right direction.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

And to be clear, we're not calling the inflection point. Think that's a fool's errand. We'll see what the market does, but I think you can tell from what we're hearing from our clients, their level of confidence is improving. And that's the reason and the underlying foundational element as to why we're believing the market is stabilizing in many cases at lower levels. But that's a starting point.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

That's the foundation for future opportunities of growth, we hope into the future.

[Josh Chan, Executive Director & Equity Research Analyst at UBS Group]

That's great color. Thank you. And then my follow-up quickly on free cash flow. I know Jack that free cash flow is usually negative in the first half.

[Josh Chan, Executive Director & Equity Research Analyst at UBS Group]

But I guess, could you talk to the magnitude of negativity in this first half? And relatedly, do you expect to recoup some of that in the second half? Or do we expect the second half to be relatively normal, so to speak?

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Yeah. No.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Thanks for the question, Josh. Yeah. You know, when you look at the second quarter particularly, second quarter has had very large outflows over the last four years. And every year, I think over the last three years, it's been somewhere in the range of 150 to what you see here in the current quarter, just above 200. So that has been post pandemic a little bit of the trend that we have been seeing with larger outflows in the second quarter.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

I think this year, you know, as we talked about last quarter, the first quarter was influenced a bit by the timing of the MSP program. You know, we have one of the largest MSP programs in the world, and that does cause some volatility, specifically, and we saw that from q four into q one. With all that being said, we had very strong free cash flow in the second half of last year. We would expect similar dynamics again this year. I think the MSP program usually works itself out over the course of a year, so we'd expect to see that in the second half work itself out as well.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

So that's the way I would think about free cash flow in the second half.

[Josh Chan, Executive Director & Equity Research Analyst at UBS Group]

Great. Thank you both for the color and the time.

[Operator]

Thank you. We have time for one last question. And that question comes from Tobey Sommer with Truist. Your line is open.

[Tyler Barishaw, Equity Research Associate at Truist Securities]

Good morning. This is Tyler Baruch on for Tobey. Can you discuss the implications of a ceasefire for the end of the Russia Ukraine war and any other events in Europe that we that could be sources of upside for you?

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Well, thanks, Tyler. I think it's hard to tell exactly what the consequences would be, but, of course, having a war going on in Europe is causing great consternation and uncertainty for employers. It is also having negative economic impacts in terms of the price of energy and the ability thus of manufacturing to absorb those costs. So we think a ceasefire on the European continent and in particular on Ukraine would be very beneficial in terms of providing greater confidence for employers in terms of how the European economy can start to show a bit more momentum.

[Tyler Barishaw, Equity Research Associate at Truist Securities]

Got it. And then just one final one. On the recent cuts of the dividend, what would be conditions that could raise, lead to the dividend being raised again? Thanks.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

Yeah. On that, I think we we talked a little bit about this in the past as well. So, you know, the dividend was reset as we as we announced back in May to the current environment. But we're very proud of our track record of increases in the dividend in a stable to improving environment. So really, that's it.

[Jack McGinnis, EVP & CFO at ManpowerGroup]

I think as as we see the environment improve, then you should expect we would lean in and start to increase the dividend again like we have in the past. And it's really just a matter of time as we continue to see that play out. But, you know, as Jonas said, one step at a time. We're guiding to flat currently. And if we continue to see positive momentum going forward, you should expect that would be the case in terms of dividend plans as well. Thank you.

[Tyler Barishaw, Equity Research Associate at Truist Securities]

Thank you.

[Operator]

Thank you. I'd like to turn the call back over to Jonas Breising for any closing remarks.

[Jonas Prising, Chairman & CEO at ManpowerGroup]

Thanks everyone for participating in this earnings call. We hope you continue to enjoy a nice summer wherever you are and look forward to speaking with you again on our next earnings call. Thanks everyone.

[Operator]

Thank you for your participation. This does conclude the program. You may now disconnect. Everyone have a great day.

Participants

Executives

• Jonas Prising, Chairman & CEO
• Jack McGinnis, EVP & CFO

Analysts

• Ryan Griffin, Senior Equity Research Associate at BMO Capital Markets
• Princy Thomas, AVP - Equity Research at Barclays
• Mark Marcon, Senior Research Analyst at Robert W. Baird & Co
• Andrew Steinerman, Equity Research Analyst - Business & Info Services at JP Morgan
• Andy Grobler, Financial Analyst at BNP Paribas
• Kartik Mehta, Executive Managing Director & Director - Research at Northcoast Research Partners LLC
• Trevor Romeo, Research Analyst at William Blair
• George Tong, Senior Research Analyst - Equity Research & Business Services at Goldman Sachs
• Stephanie Moore, SVP - Equity Research at Jefferies
• Josh Chan, Executive Director & Equity Research Analyst at UBS Group
• Tyler Barishaw, Equity Research Associate at Truist Securities