TrueBlue NYSE: TBI reported second-quarter revenue growth that exceeded its outlook, driven by continued strength in skilled labor verticals and a return to growth in its on-demand business.
Revenue rose 12% year over year to $443 million, Chief Financial Officer Carl Schweihs said, with results surpassing the company’s guidance range because of outperformance in its skilled businesses. Adjusted EBITDA increased to $11 million from $3 million a year earlier, while adjusted net income was $2 million, compared with an adjusted net loss of $2 million in the prior-year quarter.
The company reported a net loss of $3 million for the quarter, including a $3 million non-cash write-down of its Tacoma headquarters tied to commercial real estate market conditions. Schweihs said the write-down and a valuation allowance on U.S. deferred tax assets did not affect operations or liquidity.
Revenue Growth Led by Energy and Skilled Work
President and Chief Executive Officer Taryn Owen said TrueBlue’s strategy is centered on strengthening its sales model, expanding in attractive end markets and improving operating efficiency through technology and disciplined operations.
The company’s energy-sector revenue nearly doubled during the quarter, marking its fifth consecutive quarter of growth in that vertical. Its commercial driver business also posted its 10th consecutive quarter of growth.
Owen said the company sees further opportunity in adjacent sectors including data centers and energy-storage facilities. During the question-and-answer session, she said TrueBlue signed a new agreement during the week of the call with a large battery-storage provider through its PeopleScout business.
TrueBlue also cited government and healthcare as longer-term growth opportunities. Owen said the company is building momentum in government workforce solutions and is scaling its U.S. healthcare operations by drawing on recruitment capabilities and technology.
Segment Results and Margin Trends
PeopleReady revenue increased 23% from a year earlier, largely due to growth in energy work. The segment’s profit margin increased 260 basis points despite a favorable workers’ compensation adjustment in the prior-year period that did not recur this year.
PeopleManagement revenue was unchanged from the prior-year quarter. Growth in commercial driving services offset lower on-site client volumes. Schweihs said on-site volumes improved each month during the quarter and returned to growth in June as new business wins and client expansions gained traction. PeopleManagement’s profit margin rose 60 basis points.
PeopleSolutions revenue declined 5% as broader market conditions continued to limit hiring activity. However, management said it saw improving trends exiting the quarter, as well as new-client activity and expansion with existing customers in higher-skilled roles and end markets with long-term growth drivers. Segment profit margin returned to double digits, rising 510 basis points from the prior year.
Companywide gross margin was 20.7%, down from 23.6% a year earlier. Schweihs attributed the decline primarily to the absence of favorable workers’ compensation reserve development and a $3 million non-recurring government subsidy benefit recorded in the prior-year period. He also cited revenue mix, as energy work within PeopleReady includes pass-through travel costs that reduce reported gross margin.
At the same time, TrueBlue reduced selling, general and administrative expenses by 7% while revenue increased 12%. Management said the lower cost base and ongoing digital investments should support stronger incremental margins as demand improves.
Demand Environment and Sales Strategy
Management said demand trends improved broadly during the quarter. Owen said PeopleReady’s on-demand business returned to growth, with all four regions growing as the quarter ended and a majority of territories growing for the year.
Schweihs said the recovery had expanded beyond isolated markets seen earlier in the year. He pointed to strength in the West region and California, along with improvement in Florida and Texas. PeopleReady revenue growth accelerated from 16% at the end of the first quarter to 30% at the end of the second quarter, he said.
PeopleManagement trends also improved, moving from a 7% decline exiting the first quarter to 4% growth exiting the second quarter. July trends were similar to those at the end of the second quarter, according to Schweihs.
Owen said TrueBlue has shifted its on-demand operating model to a territory-based structure and increased sales resources to support localized sales efforts and client engagement. The company is also using strategic channel partnerships and cross-selling among its brands to broaden its reach.
Management said a partnership with a group purchasing organization is producing revenue from previously announced wins, while a British Armed Forces engagement is ramping and is expected to reach full value in 2027.
Third-Quarter Outlook and Liquidity
For the third quarter, TrueBlue forecast year-over-year revenue growth of 7% to 11%. Its outlook calls for PeopleReady revenue growth of 11% to 15%, PeopleManagement growth of 3% to 8%, and PeopleSolutions revenue ranging from a 6% decline to 3% growth.
The company expects sequential gross margin to remain steady and cost discipline to support improved profitability. Schweihs said the outlook incorporates the company’s typical seasonal revenue build during the third quarter.
TrueBlue ended the quarter with $23 million in cash, $82 million in debt and $56 million available under its borrowing base, for total liquidity of $79 million. Working capital increased by $22 million during the quarter as revenue growth exceeded expectations, while the company’s leverage ratio improved with higher profitability.
Owen said the company continues to deploy artificial intelligence across its JobStack, Affinix and Stafftrack platforms to reduce manual work and improve the speed and consistency of matching talent with client needs.
About TrueBlue (NYSE:TBI)
TrueBlue, Inc is a Tacoma, Washington–based workforce solutions provider specializing in temporary staffing, permanent placement and managed service solutions. Operating through its subsidiaries and brands, TrueBlue connects clients across manufacturing, logistics, retail, construction and public sector markets with skilled professionals for both short-term and long-term engagements. The company's offerings encompass on-demand blue-collar labor, specialized industrial staffing, recruitment process outsourcing (RPO) and contingent workforce management.
TrueBlue's primary service lines include PeopleReady, which supplies general labor for construction, hospitality and event services; PeopleManagement, which focuses on technical and industrial professionals; PeopleScout, a global RPO business offering end-to-end talent acquisition and consulting; and Staff Management | SMX, which delivers seasonal staffing for large-scale events, amusement parks and federal workforce contracts.
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