ManpowerGroup Inc.: Form 10-Q for the period ended Mar 31, 2025

in millions, except share and per share data

See the financial measures section on page 26 for further information on the Non-GAAP financial measures of constant currency and organic constant currency.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended, (each a "forward-looking statement"). Statements made in this quarterly report that are not statements of historical fact are forward-looking statements. In addition, from time to time, we and our representatives may make statements that are forward-looking. Forward-looking statements are based on management’s current assumptions and expectations and are subject to risks and uncertainties that are beyond our control and may cause actual results to differ materially from those contained in the forward-looking statements. Forward-looking statements can be identified by words such as “expect,” “anticipate,” “intend,” “plan,” “may,” “believe,” “seek,” “estimate,” and other similar expressions. Important factors that could cause our actual results to differ materially from those contained in the forward-looking statements include, among others, the risk factors discussed in Item 1A – Risk Factors in our annual report on Form 10-K for the year-ended December 31, 2024, which information is incorporated herein by reference. Such risks and uncertainties include, but are not limited to, volatile, negative or uncertain economic conditions, particularly in Europe and the United States, including inflation, global trade policies, geopolitical risk and uncertainty; changes in labor and tax legislation in places we do business; failure to implement strategic transformation initiatives and technology investments; and other factors that may be disclosed from time to time in our SEC filings or otherwise. We caution that any forward-looking statement reflects only our belief at the time the statement is made. We undertake no obligation to update any forward-looking statements to reflect subsequent events or circumstances.

Business Overview

Our business is cyclical in nature and is sensitive to macroeconomic conditions generally. Client demand for workforce solutions and services is dependent on the overall strength of the labor market and secular trends toward greater workforce flexibility within each of the segments where we operate. Improving economic growth typically results in increasing demand for labor, resulting in greater demand for our staffing services while demand for our outplacement services typically declines. During periods of decreased demand, as we continued to experience in the first quarter of 2025, our operating profit is generally impacted unfavorably as we experience a deleveraging of selling and administrative expenses, which may not decline at the same pace as revenues. By contrast, during periods of increased demand, we are generally able to improve our profitability and operating leverage as our cost base can support some increase in business without a similar increase in selling and administrative expenses.

In the first quarter of 2025, we observed the continuation of a challenging environment in Europe and North America, while demand for our services in Latin America and Asia Pacific increased during the quarter. Employers are continuing their cautious approach with many employers retaining their current workforce, delaying hiring decisions or reducing their demand for contingent labor as they remain focused on managing the macro-economic and geopolitical challenges impacting their businesses, including the impact of recent tariff announcements. We believe many employers are still hesitant to increase their spend and expand their workforce until they perceive a significant improvement in economic outlook and greater certainty in trade policy. As a result of these factors, we expect the business environment will continue to be challenging, which could further negatively impact our operations in future periods.

During the first quarter of 2025, the United States dollar strengthened, on average, relative to the currencies in most of our markets, and overall had an unfavorable impact on our reported results. The changes in the foreign currency exchange rates had a -2.5% unfavorable impact on revenues from services and an approximately $0.01 per share unfavorable impact on net earnings per share – diluted in the quarter. Substantially all of our subsidiaries derive revenues from services and incur expenses within the same local currency and generally do not have cross-currency transactions, and therefore, changes in foreign currency exchange rates primarily impact reported earnings and not our actual cash flow unless earnings are repatriated. To understand the performance of our underlying business, we utilize constant currency or organic constant currency variances for our consolidated and segment results.

During the first quarter of 2025 compared to the first quarter of 2024, we experienced a 2.0% revenue increase in the Americas, primarily driven by an increase in demand for our Manpower staffing services and an increase in demand for Talent Based Outsourcing (TBO), partially offset by the unfavorable impact of currency exchange rates and a decrease in demand for our Experis interim services. During the first quarter of 2025 compared to the first quarter of 2024, we experienced a -7.4% revenue decrease in Southern Europe, primarily due to a decrease in demand for our Manpower and Experis staffing/interim services, the unfavorable impact of currency exchange rates and a decrease in demand for our permanent recruitment services. During the first quarter of 2025 compared to the first quarter of 2024, we experienced a -16.0% revenue decrease in Northern Europe, primarily due to a decrease in demand for our Manpower and Experis staffing/interim services, the unfavorable impact of currency exchange rates, a decrease in demand for our Experis solutions services and a decrease in demand for our permanent recruitment services. We experienced an -11.0% revenue decrease in APME in the first quarter of 2025 compared to the first quarter of 2024 primarily due to the disposition of our Korea business in 2024 which contributed to the decrease in revenue for our Manpower staffing and TBO services and the unfavorable impact of currency exchange rates.

From a brand perspective, we experienced revenue decreases in Manpower, Experis and Talent Solutions in the first quarter of 2025 compared to the first quarter of 2024. In our Manpower brand, the revenue decrease was primarily due to decreased demand for staffing services. The revenue decrease in our Experis brand was primarily due to decreased demand for interim services, our Experis solutions services and our permanent recruitment services. On an overall basis, the revenue decrease in our Talent Solutions brand, which includes RPO, MSP and our Right Management offerings, was primarily due to a decrease in demand for our Right Management outplacement services.

In the first quarter of 2025, our gross profit margin decreased 20 basis points compared to the first quarter of 2024, primarily due to decreases in permanent recruitment, a decrease in staffing/interim margins, a decrease in Right Management outplacement activity, and the unfavorable effects of currency exchange rates, partially offset by the favorable impact from the wind down of our Proservia business in Germany in 2024.

Our operating profit decreased 57.2% in the first quarter of 2025 and our operating profit margin decreased 80 basis points compared to the first quarter of 2024. Operating profit margin decreased primarily due to a decrease in gross profit margin and an increase in restructuring expense taken in the first quarter of 2025.

Operating Results - Three Months Ended March 31, 2025 and 2024

The following table presents selected consolidated financial data for the three months ended March 31, 2025 as compared to 2024.

(in millions, except per share data)

The year-over-year decrease in revenues from services of -7.1% (-4.6% in constant currency and -2.4% in organic constant currency) was attributed to:

• a revenue increase in the Americas of 2.0% (5.3% in constant currency) primarily driven by a $70.5 increase in demand for our Manpower staffing services and a $4.4 increase in demand for TBO, partially offset by the $34.6 unfavorable impact of currency exchange rates and a $15.2 decrease in demand for our Experis interim services. The United States, our largest market in the Americas, experienced a revenue increase of 1.2% primarily driven by an $11.7 increase in demand for our Manpower and Experis staffing/interim services, partially offset by a $3.1 decrease in demand for our Right Management outplacement services.
• a revenue decrease in Southern Europe of -7.4% (-4.8% in constant currency and -4.0% in organic constant currency) primarily driven by a $97.5 decrease in demand for our Manpower and Experis staffing/interim services, the $52.1 unfavorable impact of currency exchange rates and a $4.2 decrease in demand for our permanent recruitment services. France, the largest market in Southern Europe, experienced a revenue decrease of -12.2% (-9.5% in constant currency) primarily driven by a $99.9 decrease in demand for our Manpower staffing services, the $29.5 unfavorable impact of currency exchange rates and a $3.2 decrease in demand for our permanent recruitment services. Italy, our second-largest market in Southern Europe, experienced a revenue decrease of -1.6% (increase of 1.4% in constant currency) primarily driven by the $12.1 unfavorable impact of currency exchange rates, partially offset by a $3.5 increase in demand for our Manpower and Experis consulting services and a $1.6 increase in demand for our Manpower and Experis staffing/interim services;
• a revenue decrease in Northern Europe of -16.0% (-14.3% in constant currency) primarily driven by a $109.5 decrease in demand for our Manpower and Experis staffing/interim services, the $15.1 unfavorable impact of currency exchange rates, a $9.6 decrease in demand for our Experis solutions services and a $6.6 decrease in demand for our permanent recruitment services. Within our Northern Europe segment, we experienced revenue decreases in the United Kingdom of $49.9, the Nordics of $28.8, Germany of $40.2, the Netherlands of $10.2 and Belgium of $5.9, which represented revenue decreases of -16.4%, -17.1%, -30.3%, -10.7% and -7.9%, respectively (-16.0%, -14.0%, -28.2%, -7.9% and -5.1%, respectively, in constant currency); and
• a revenue decrease in APME of -11.0% (-9.2% in constant currency and an increase of 7.3% in organic constant currency) primarily driven by the disposition and franchising of our Korea business in 2024 which contributed to the $27.5 decrease in revenues for our Manpower staffing services, a $26.0 decrease in revenues for TBO and the $9.4 unfavorable impact of currency exchange rates, partially offset by revenue increases in Japan of $11.5 and India of $5.5.

The year-over-year 20 basis point decrease in gross profit margin was primarily attributed to:

• a 10 basis point unfavorable impact from decreases in permanent recruitment, including Talent Solutions RPO, as permanent hiring activity in the first quarter decreased year over year;
• a 10 basis point unfavorable impact from the decrease in staffing/interim margins, mix shifts and lower bench utilization in select countries while pricing remained stable;
• a 10 basis point unfavorable impact from Right Management career transition within Talent Solutions as outplacement activity decreased year over year; and
• a 10 basis point unfavorable impact due to decreases in our TBO business; partially offset by
• a 20 basis point favorable increase due to the impact of the wind down of our Proservia business in Germany.

The -4.0% decrease in selling and administrative expenses in the first quarter of 2025 (-1.9% in constant currency and -0.6% in organic constant currency) was primarily attributed to:

• a $19.3, or -6.5% decrease (-4.2% in constant currency and -3.2% in organic constant currency) in personnel costs primarily due to a $7.9 decrease in bonuses and sales commission costs and a $6.3 decrease in salaries as we saw the effects of restructuring actions taken in 2024 and 2023;
• a $14.8, or -1.2% decrease due to the impact of changes in currency exchange rates; and
• a $5.3, or -5.2% decrease (-2.8% in constant currency and -1.0% in organic constant currency) in non-personnel costs primarily due to a $3.3 reduction in other office related costs as well as broader cost-cutting measures implemented during the quarter which impacted multiple expense streams; partially offset by
• $15.8 of restructuring costs, incurred in the first quarter of 2025 compared to zero in the first quarter of 2024.

Selling and administrative expenses as a percent of revenues increased 50 basis points in the first quarter of 2025 compared to the first quarter of 2024 due primarily to:

• a 40 basis point unfavorable impact as a result of the increase in restructuring costs incurred in the first quarter of 2025 compared to the first quarter of 2024; and
• a 10 basis point unfavorable impact as personnel costs increased as a percent of revenues primarily due to salaries.

Interest and other expenses, net is comprised of interest, foreign exchange gains and losses and other miscellaneous non-operating income and expenses, including those associated with noncontrolling interests. Interest expense, net was $15.6 in the first quarter of 2025 compared to $12.3 in the first quarter of 2024 primarily due to increased revolver and other short-term borrowings during the period. Foreign exchange loss, net was $0.9 in the first quarter of 2025 compared to $2.4 in the first quarter of 2024 primarily due to a reduction in foreign currency exchange losses year over year. Miscellaneous income, net was $5.0 in the first quarter of 2025 compared to $6.3 in the first quarter of 2024.

We recorded income tax expense at an effective rate of 66.8% for the three months ended March 31, 2025, as compared to an effective rate of 31.0% for the three months ended March 31, 2024. The 2025 rate was unfavorably impacted by the lower level and overall mix of earnings, restructuring costs recorded in the quarter, and the 2025 enacted one-time French exceptional corporate income tax surcharge. The 66.8% effective tax rate for the three months ended March 31, 2025 was higher than the United States Federal statutory rate of 21% primarily due to the overall mix of earnings, tax losses in certain countries for which we did not recognize a corresponding tax benefit due to valuation allowances, the French exceptional corporate income tax surcharge, and the French business tax.

Net earnings per share - diluted was $0.12 in the first quarter of 2025 compared to $0.81 in the first quarter of 2024. Restructuring costs unfavorably impacted net earnings per share - diluted by approximately $0.26, net of tax, in the first quarter of 2025. The 2025 enacted one-time French exceptional corporate income tax surcharge and overall mix of earnings unfavorably impacted net earnings per share - diluted by $0.04 and $0.02, respectively, in the first quarter of 2025.

Weighted average shares - diluted decreased to 47.3 million in the first quarter of 2025 from 48.9 million in the first quarter of 2024. This decrease was due to the impact of share repurchases completed since the first quarter of 2024, partially offset by grants of share-based awards.

Segment Operating Results

Americas

In the Americas, revenues from services increased 2.0% (5.3% in constant currency) in the first quarter of 2025 compared to the first quarter of 2024. In the United States (which represents 65% of the Americas' revenues), revenues from services increased 1.2% in the first quarter of 2025 compared to the first quarter of 2024, primarily driven by a $16.0 increase in demand for our Manpower staffing services, partially offset by a $3.1 decrease in demand for our Right Management outplacement services. In Other Americas, revenues from services increased 3.3% (13.1% in constant currency) in the first quarter of 2025 compared to the first quarter of 2024, primarily driven by a $47.0 increase in demand for our Manpower and Experis staffing/interim services and a $4.4 increase in demand for TBO, partially offset by the $34.6 unfavorable impact of foreign currency exchange rates. The constant currency increase in Other Americas was primarily due to inflation in Argentina. Within our Other Americas segment, we experienced an increase in Argentina of $9.3, or 33.9% (69.5% in constant currency), partially offset by decreases in Canada and Mexico of $11.3, or -14.6%, and $11.6, or -17.6%, respectively (-9.2% and -0.9%, respectively, in constant currency).

Gross profit margin decreased 160 basis points in the first quarter of 2025 compared to the first quarter of 2024. This decrease was primarily due to decreased margins in our Experis interim services, which contributed 110 basis points to the decrease, decreased activity in our Right Management outplacement business, which contributed 30 basis points to the decrease, and decreased activity in our permanent recruitment business, which contributed 20 basis points to the decrease.

Selling and administrative expenses decreased -5.2% (-2.9% in constant currency) in the first quarter of 2025 compared to the first quarter of 2024, primarily driven by the $4.9 favorable impact of currency exchange rates and a $3.6 decrease in bonuses and sales commissions.

Operating Unit Profit (“OUP”) decreased -2.4% (increase of 2.0% in constant currency) in the first quarter of 2025, which represents a 2.4% OUP margin, a decrease from 2.5% in the first quarter of 2024. This OUP decrease was primarily due to decreased profitability in our United States business of $0.6, which experienced decreased demand in our higher-margin Experis interim services. In the United States, OUP margin decreased to 1.6% in the first quarter of 2025 from 1.8% in the first quarter of 2024 primarily due to decreased margins in our staffing/interim business, partially offset by a decrease in our selling and administrative expenses as a percent of revenue. Other Americas OUP margin decreased to 3.9% in the first quarter of 2025 from 4.0% in the first quarter of 2024 primarily due to a decrease in our selling and administrative expenses as a percent of revenue, partially offset by decreased activity in our higher-margin permanent recruitment business.

Southern Europe

In Southern Europe, revenues from services decreased -7.4% ( -4.8% in constant currency and -4.0% in organic constant currency) in the first quarter of 2025 compared to the first quarter of 2024. In France (which represents 53% of Southern Europe’s revenues), revenues from services decreased -12.2% (-9.5% in constant currency) in the first quarter of 2025 compared to the first quarter of 2024, primarily driven by a $99.9 decrease in demand for our Manpower staffing services, the $29.5 unfavorable impact of currency exchange rates and a $3.2 decrease in demand for our permanent recruitment services. In Italy (which represents 22% of Southern Europe’s revenues), revenues from services decreased -1.6% (increase of 1.4% in constant currency) in the first quarter of 2025 compared to the first quarter of 2024, primarily driven by the $12.1 unfavorable impact of currency exchange rates, partially offset by a $3.5 increase in demand for our Manpower and Experis consulting services, and a $1.6 increase in demand for our Manpower and Experis staffing/interim services. In Other Southern Europe, revenues from services decreased -1.5% (increase of 0.7% in constant currency and 4.1% in organic constant currency) in the first quarter of 2025 compared to the first quarter of 2024, primarily due to the $10.4 unfavorable impact of currency exchange rates and a $2.5 decrease in demand for our Experis interim services, partially offset by a $4.4 increase in demand for our Manpower staffing services. Within our Other Southern Europe segment, we experienced a revenue increase in Spain of $12.8, or 11.6% (15.1% in constant currency), partially offset by a revenue decrease in Switzerland of $20.8, or -19.3% (-17.1% in constant currency).

Gross profit margin decreased 20 basis points in the first quarter of 2025 compared to the first quarter of 2024. This decrease was primarily due to decreased activity in our higher margin Experis interim services, which contributed 20 basis points to the decrease, and a decrease of activity in our permanent recruitment services, which contributed 10 basis points to the decrease. These decreases were partially offset by increased demand in our higher-margin Manpower consulting services, which had a 10 basis point impact.

Selling and administrative expenses decreased -2.7% (increase of 0.1% in constant currency and 1.1% in organic constant currency) during the first quarter of 2025 compared to the first quarter of 2024, primarily due to the $6.2 favorable impact of currency exchange rates and a decrease of $4.7 to bonuses and sales commissions and other personnel costs, partially offset by the $3.5 of restructuring costs incurred in the first quarter of 2025.

OUP decreased -28.2% (-26.4% in constant currency and -26.9% in organic constant currency), in the first quarter of 2025, which represents a 2.7% OUP margin, a decrease from 3.5% in the first quarter of 2024. This OUP decrease was primarily due to decreased profitability in the France reporting unit of $11.7. In France, the OUP margin decreased to 2.2% for the first quarter of 2025 compared to 3.0% for the first quarter of 2024, primarily driven by increases to selling and administrative expenses as a percent of revenue. In Italy, the OUP margin decreased to 6.2% for the first quarter of 2025 compared to 6.8% for the first quarter of 2024 primarily due to a decrease in gross profit margin as we saw decreased activity in our higher-margin permanent recruitment services. In Other Southern Europe, the OUP margin decreased to 1.0% for the first quarter of 2025 from 2.1% for the first quarter of 2024 primarily due to decreased activity in higher-margin permanent recruitment services, as noted above, and an increase in our selling and administrative expenses as a percent of revenue.

Northern Europe

In Northern Europe, the largest country operations include the United Kingdom, the Nordics, Germany, the Netherlands and Belgium (comprising 35%, 19%, 13%, 12% and 9%, respectively, of Northern Europe’s revenues). In the Northern Europe region, revenues from services decreased -16.0% (-14.3% in constant currency) in the first quarter of 2025 compared to the first quarter of 2024, primarily driven by a $109.5 decrease in demand for our Manpower and Experis staffing/interim services, the $15.1 unfavorable impact of currency exchange rates, a $9.6 decrease in demand for our Experis solutions services and a $6.6 decrease in demand for our permanent recruitment services. Within our Northern Europe segment, we experienced revenue decreases in the United Kingdom of $49.9, the Nordics of $28.8, Germany of $40.2, the Netherlands of $10.2 and Belgium of $5.9, which represented revenue decreases of -16.4%, -17.1%, -30.3%, -10.7% and -7.9%, respectively (-16.0%, -14.0%, -28.2%, -7.9% and -5.1%, respectively, in constant currency)

Gross profit margin increased by 10 basis points in the first quarter of 2025 compared to the first quarter of 2024. The increase was primarily due to a shift in business mix towards our higher-margin Right Management outplacement and MSP services, which contributed 50 basis points to the increase and increased margins in our Experis solutions services, which contributed 30 basis points to the increase. These contributions were partially offset by a decrease in our staffing/interim margins, which had a 50 basis point impact and decreased activity in our higher-margin permanent recruitment business, which had a 20 basis point impact.

Selling and administrative expenses decreased -3.5% (-1.5% in constant currency) in the first quarter of 2025 compared to the first quarter of 2024. The decrease is primarily driven by a $7.9 decrease in salary-related costs as we experience the impacts of significant restructuring actions taken in 2024 and 2023. This decrease was partially offset by $12.3 in restructuring costs incurred in the first quarter of 2025.

OUP in Northern Europe decreased $18.3 (reported and constant currency variances are not meaningful) in the first quarter of 2025, which represents a -2.5% OUP margin, a decrease from 0.0% in the first quarter of 2024. This OUP decrease was primarily driven by an OUP decrease in United Kingdom of $10.4. The OUP margin decrease was primarily driven by an increase in selling and administrative expenses as a percent of revenue.

APME

Revenues from services decreased -11.0% (-9.2% in constant currency and an increase of 7.3% in organic constant currency) in the first quarter of 2025 compared to the first quarter of 2024 primarily driven by the Korea disposition and franchising. In Japan (which represents 60% of APME’s revenues), revenues from services increased 4.2% (6.9% in constant currency), primarily driven by a $16.0 increase in demand for our Manpower and Experis staffing/interim services, partially offset by the $7.2 unfavorable impact of currency exchange rates. In India (which represents 14% of APME’s revenues), revenues from services increased 9.2% (13.8% in constant currency), primarily driven by a $7.4 increase in demand for our Manpower and Experis staffing/interim services, partially offset by the $2.8 unfavorable impact of currency exchange rates.

Gross profit margin increased by 120 basis points in the first quarter of 2025 compared to the first quarter of 2024, primarily due to increased margins for our staffing/interim services, which contributed 140 basis points to the increase, and franchise fees, which contributed 20 basis points to the increase. The increase was partially offset by decreased activity in our Right Management outplacement business, which decreased 40 basis points.

Selling and administrative expenses decreased -5.5% (-3.5% in constant currency and an increase of 7.1% in organic constant currency) in the first quarter of 2025 compared to the first quarter of 2024. The decrease is primarily due to a $1.6 reduction in other office related costs and the $1.3 favorable impact of currency exchange rates.

OUP in APME increased 1.0% (2.9% in constant currency and 14.1% in organic constant currency) in the first quarter of 2025, which represents a 4.2% OUP margin, an increase from 3.7% in the first quarter of 2024. This OUP margin increase was primarily driven by increased activity and gross profit margin improvements in our staffing/interim services, as noted above, partially offset by an increase in selling and administrative expenses as percent of revenue.

Financial Measures

Constant Currency and Organic Constant Currency Reconciliation

Changes in our financial results include the impact of changes in foreign currency exchange rates, acquisitions, and dispositions. We provide “constant currency” and “organic constant currency” calculations in this report to remove the impact of these items. We express year-over-year variances that are calculated in constant currency and organic constant currency as a percentage.

When we use the term “constant currency,” it means that we have translated financial data for a period into United States dollars using the same foreign currency exchange rates that we used to translate financial data for the previous period. We believe that this calculation is a useful measure, indicating the actual growth or decline of our operations. We use constant currency results in our analysis of subsidiary or segment performance, including Argentina which operates in a hyperinflationary economy. We also use constant currency when analyzing our performance against that of our competitors. Substantially all of our subsidiaries derive revenues and incur expenses within a single country and, consequently, do not generally incur currency risks in connection with the conduct of their normal business operations. Changes in foreign currency exchange rates primarily impact reported earnings and not our actual cash flow unless earnings are repatriated.

When we use the term “organic constant currency,” it means that we have further removed the impact of acquisitions in the current period and dispositions from the prior period from our constant currency calculation. We believe that this calculation is useful because it allows us to show the actual growth or decline of our ongoing business.

The constant currency and organic constant currency financial measures are used to supplement those measures that are in accordance with United States Generally Accepted Accounting Principles (“GAAP”). These Non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in our industry, as other companies may calculate such financial results differently. These Non-GAAP financial measures are not measurements of financial performance under GAAP, and should not be considered as alternatives to measures presented in accordance with GAAP.

Constant currency and organic constant currency percent variances, along with a reconciliation of these amounts to certain of our reported results, are provided below:

Liquidity and Capital Resources

Cash used to fund our operations is primarily generated through operating activities and provided by our existing credit facilities. We believe our available cash and existing credit facilities are sufficient to cover our cash needs for the foreseeable future. We assess and monitor our liquidity and capital resources globally. We use a global cash pooling arrangement, intercompany borrowing, and some local credit lines to meet funding needs and allocate our capital resources among our various entities. As of March 31, 2025, we had $295.8 of cash held by foreign subsidiaries. We have historically made and anticipate future cash repatriations to the United States from certain foreign subsidiaries to fund domestic operations.

The nature of our operations is such that our most significant current asset is accounts receivable and our most significant current liabilities are payroll-related costs, which are generally paid either weekly or monthly. As the demand for our services increases, we generally experience an increase in our working capital needs, as we continue to pay our associates on a weekly or monthly basis while the related accounts receivable are outstanding for much longer, which may result in a decline in operating cash flows.

Conversely, as the demand for our services declines, we generally experience a decrease in our working capital needs, as the existing accounts receivable are collected and not replaced at the same level, resulting in a decline of our accounts receivable balance, with less of an effect on current liabilities due to the shorter cycle time of the payroll related items. While this may result in an increase in our operating cash flows, longer payment terms and timing of payroll, tax and supplier-related payments significantly impact our cash position and cash flows each period. Any increase in operating cash flows from an economic slowdown would not be sustained in the event that a downturn continues for an extended period, as we are seeing in the current economic cycle.

Cash used in operating activities was $153.2 during the three months ended March 31, 2025, as compared to $116.0 provided during the three months ended March 31, 2024. Changes in operating assets and liabilities utilized $196.4 of cash during the three months ended March 31, 2025 and generated $37.1 of cash during the three months ended March 31, 2024. These changes were primarily attributable to the timing of collections and payments. Accounts receivable decreased to $4,168.8 as of March 31, 2025 from $4,297.2 as of December 31, 2024 primarily due to the revenue decline and the impact of changes in currency exchange rates. Days Sales Outstanding ("DSO") increased by two days from December 31, 2024 to 54 days as of March 31, 2025.

Cash used in investing activities was $14.6 and $9.7 for the three months ended March 31, 2025, and 2024, respectively. Capital expenditures were $13.7 for the three months ended March 31, 2025 compared to $11.8 for the three months ended March 31, 2024. These expenditures were primarily comprised of purchases of computer equipment, office furniture and other costs related to office openings and refurbishments, as well as capitalized software costs. From time to time, we acquire and invest in companies throughout the world, including franchises. Total cash consideration paid for acquisitions, net of cash acquired, was $1.0 and $1.1 for the three months ended March 31, 2025 and 2024, respectively.

Cash provided by financing activities was $45.7 for the three months ended March 31, 2025 compared to $57.5 used in the three months ended March 31, 2024. Net debt borrowings were $76.6 and $3.5 in the three months ended March 31, 2025 and 2024, respectively. The larger borrowings in 2025 were due to our working capital needs.

Our €500.0 notes and €400.0 notes are due June 2026 and June 2027, respectively. When those notes mature, we plan to either repay the amounts with available cash or borrowings under our $600.0 revolving credit facility or a new borrowing. The credit terms, including interest rate and facility fees, of any replacement borrowings will be dependent upon the condition of the credit markets at that time. We currently do not anticipate any problems accessing the credit markets for replacement of those notes.

Our $600.0 revolving credit agreement requires that we comply with a leverage ratio (Net Debt-to-Net Earnings before interest and other expenses, provision for income taxes, intangible asset amortization expense, depreciation and amortization expense ("EBITDA")) of not greater than 3.5 to 1 and a fixed charge coverage ratio of not less than 1.5 to 1. As defined in the agreement, we had a Net Debt-to-EBITDA ratio of 2.68 to 1 and a fixed charge coverage ratio of 3.05 to 1 as of March 31, 2025. Based on our current forecast, we expect to be in compliance with our financial covenants for the next 12 months.

As of March 31, 2025, we had letters of credit of $0.4 issued under our $600.0 revolving credit facility, as well as $45.0 drawn under our $150.0 uncommitted credit facilities. Additional borrowings of $599.6 and $105.0 were available to us under our $600.0 revolving credit facility and $150.0 uncommitted credit facilities, respectively, as of March 31, 2025.

In addition to the previously mentioned facilities, we maintain separate bank credit lines with financial institutions to meet the working capital needs of our subsidiary operations. As of March 31, 2025, such uncommitted credit lines totaled $298.6, of which $268.2 was unused. Under the revolving credit agreement, total subsidiary borrowings cannot exceed $300.0 in the first, second and fourth quarters, and $600.0 in the third quarter of each year.

We have assessed our liquidity position as of March 31, 2025 and for the near future. As of March 31, 2025, our cash and cash equivalents balance was $395.0. We also have access to the previously mentioned revolving credit facility that could have immediately provided us with up to $600.0 of additional cash, less any outstanding borrowings and letters of credit, and we have an option to request an increase to the total availability under the revolving credit facility by an additional $300.0 and each lender may participate in the requested increase at their discretion. In addition, we have access to the previously mentioned credit lines to meet the working capital needs of our subsidiaries, of which $268.2 was available to use as of March 31, 2025. Our €500.0 ($540.0) notes mature in June 2026, and our €400.0 ($430.6) notes mature in June 2027. Based on the above, we believe we have sufficient liquidity and capital resources to satisfy future requirements and meet our obligations currently and in the near future.

The Board of Directors declared a semi-annual dividend of $0.72 and $1.54 per share on May 2, 2025 and May 3, 2024, respectively. The 2025 dividends are payable on June 16, 2025 to shareholders of record as of June 2, 2025. The 2024 dividends were paid on June 14, 2024 to shareholders of record as of June 3, 2024.

In August 2023, the Board of Directors authorized the repurchase of 5.0 million shares of our common stock. We conduct share repurchases from time to time through a variety of methods, including open market purchases, block transactions, privately negotiated transactions or similar facilities. During the three months ended March 31, 2025, we repurchased 0.4 million shares under the 2023 authorization at a cost of $25.0. During the three months ended March 31, 2024, we repurchased 0.7 million shares under the 2023 authorization at a cost of $50.0. As of March 31, 2025, there were 2.2 million shares remaining authorized for repurchase under the 2023 authorization.

We had aggregate commitments of $2,404.9 as of March 31, 2025 related to debt, operating leases, severance and office closure costs, transition tax resulting from the Tax Act and certain other commitments compared to $2,279.6 as of December 31, 2024.

We also have entered into guarantee contracts and stand-by letters of credit totaling $600.9 and $571.0 as of March 31, 2025 and December 31, 2024, respectively ($554.1 and $524.2 for guarantees as of March 31, 2025 and December 31, 2024, respectively, and $46.8 for stand-by letters of credit as of both dates). The guarantees primarily relate to staffing license requirements, operating leases and indebtedness. The stand-by letters of credit mainly relate to workers’ compensation in the United States. If certain conditions were met under these arrangements, we would be required to satisfy our obligations in cash. Due to the nature of these arrangements and our historical experience, we do not expect any significant payments under these arrangements. Therefore, they have been excluded from our aggregate commitments. The cost of these guarantees and letters of credit were $0.4 for both of the three months ended March 31, 2025 and 2024.

During the three months ended March 31, 2025, we recorded $15.8 in restructuring costs. During the three months ended March 31, 2024, we did not record any restructuring costs. Payments made from the restructuring reserve were $12.3 during the three months ended March 31, 2025. We use our restructuring reserve for severance, office closures, office consolidations, and professional and other fees related to restructuring in multiple countries and territories. We expect a majority of the remaining $49.0 reserve will be paid by the end of 2025.

Recently Issued Accounting Standards

See Note 2 to the Consolidated Financial Statements.

Our 2024 Annual Report on Form 10-K contains certain disclosures about market risks affecting us. There have been no material changes to the information provided which would require additional disclosures as of the date of this filing.

We maintain a set of disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports filed by us under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management of the company, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding timely disclosure. We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures at a reasonable assurance level pursuant to Rule 13a-15 of the Exchange Act. Based on that evaluation, our Chief Executive Officer and our Executive Vice President and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective at the reasonable assurance level.

There have been no changes in our internal control over financial reporting identified in connection with the evaluation discussed above that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

As of the date of this filing, the Company and its operations continue to be subject to the risk factors previously disclosed in the “Risk Factors” sections contained in the 2024 Annual Report on Form 10-K.