Advantage Solutions Inc.: Form 10-Q for the period ended Jun 30, 2026

Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Quarterly Report”), including the section titled “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) including statements that are based on current expectations, estimates, forecasts and projections about us, our future performance, our business, our beliefs and our management’s assumptions. Such words as “expect,” “anticipate,” “outlook,” “could,” “target,” “project,” “intend,” “plan,” “believe,” “seek,” “estimate,” “should,” “may,” “assume” and “continue” as well as variations of such words and similar expressions are intended to identify such forward-looking statements, although not all forward-looking statements contain such terms. These statements are not guarantees of future performance and they involve certain risks, uncertainties and assumptions that are difficult to predict. We have based our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may differ materially from what is expressed, implied or forecasted by our forward-looking statements. More information regarding these risks and uncertainties and other important factors that could cause actual results to differ materially from those in the forward-looking statements is set forth in “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Annual Report”). Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. Except as required under the federal securities laws and the rules and regulations of the Securities and Exchange Commission (the “SEC”), we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions or otherwise.

Business Overview

We are a leading omni-commerce business solutions provider to CPG brands and retailers. We have a strong platform of essential, business critical services like headquarter sales, retail merchandising, in-store sampling, digital commerce, and shopper marketing. We generate demand for brands and retailers of all sizes, helping get the right products on the shelf, whether physical or digital, and into the hands of consumers in every way they shop. We use a scaled platform to innovate as a trusted partner with our clients, solving problems to increase their efficiency and effectiveness across a broad range of channels.

We report financial results for the following three reportable segments. Through our Branded Services segment, which generated approximately 28.0% and 34.5% of our revenues in the six months ended June 30, 2026 and 2025, respectively, we provide services to CPG brands through three main categories: brokerage, branded merchandising and omni-commerce marketing services. Through our Experiential Services segment, which generated approximately 45.6% and 39.0% of our revenues in the six months ended June 30, 2026 and 2025, respectively, we help brands and retailers reach consumers and convert shoppers into buyers through in-store and online sampling and demonstrations. Through our Retailer Services segment, which generated approximately 26.4% and 26.5% of our revenues in the six months ended June 30, 2026 and 2025, respectively, we provide end-to-end advisory, retailer merchandising and agency services to retailers.

Our quarterly results are seasonal in nature, with the fourth fiscal quarter typically generating a higher proportion of our revenues than other fiscal quarters, as a result of higher consumer spending. We generally record slightly lower revenues in the first fiscal quarter of each year, as our clients begin to roll out new programs for the year, and consumer spending generally is less in the first fiscal quarter than other quarters. The timing of our clients’ marketing expenses, associated with marketing campaigns and new product launches, can also result in fluctuations from one quarter to another.

Recent Developments

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

Services segment delivered strong second-quarter performance, supported by continued favorable demand and execution. The Retailer Services segment reported modest revenue growth, although operating income declined, reflecting higher costs associated with upfront investments in a larger project. Branded Services results remained under pressure, reflecting lower volumes, client losses and reduced scope of services as consumer brands and retailers navigate an uncertain macroeconomic environment that continues to weigh on consumer spending. On a consolidated basis, operating income was $1.7 million in the second quarter of 2026, a decline of $8.3 million year-over-year. The decrease reflected declines of $13.5 million in Branded Services and $2.7 million in Retailer Services, partially offset by $7.9 million of operating income growth in Experiential Services.

Our second quarter of 2026 net loss of $62.7 million was negatively impacted by $21.8 million of income tax expense as compared to $4.6 million for the same period in the prior year. The increase in tax expense was attributable to an increase in the valuation allowance against deferred tax assets related to interest expense limitation carryforwards. Restructuring and reorganization charges associated with our transformation strategy were $9.6 million in the second quarter of 2026 as compared to $16.4 million for the same period in the prior year.

Adjusted EBITDA, a non-GAAP financial measure, was $75.8 million in the second quarter of 2026, a decrease of $10.6 million as compared to $86.4 million for the same period in the prior year. An $8.3 million improvement in Experiential Services Adjusted EBITDA was more than offset by declines of $12.3 million in Branded Services and $6.6 million in Retailer Services.

Year-over-year comparisons are affected by divestitures completed after the second quarter of 2025. The divested businesses contributed approximately $4.9 million and $9.8 million of revenues and $2.9 million and $5.6 million of Adjusted EBITDA to our three and six months ending June 30, 2025 results, respectively, which are not reflected in the same periods of 2026.

Debt reduction is one of our primary capital allocation priorities. As such, during the six months ended June 30, 2026, we repaid $137.8 million of long-term debt in connection with scheduled principal repayments and a debt refinancing, compared to $24.9 million in the prior year. Separately, we repurchased 562,263 shares of our common stock for approximately $17.0 million, compared to 19,778 shares for $0.9 million in the prior year.

During the six months ended June 30, 2026, we advanced our transformation strategy through a successful extension of our global instance of SAP, initially implemented in 2025, to support our private brands business, completing our large-scale SAP implementation and shifting internal focus toward optimization. Together, these large-scale transformation projects, along with numerous supporting IT initiatives, have enabled us to sunset a number of disparate systems and allowed our team members to work in a more collaborative and efficient manner. As previously discussed, we are currently implementing a modernized HCM platform that, upon completion, we expect will represent the substantial completion of our IT transformation.

Executive Summary

(amounts in thousands)

(1) Adjusted Net (Loss) Income and Adjusted EBITDA are financial measures that are not calculated in accordance with GAAP. For a discussion of our presentation of Adjusted Net (Loss) Income and Adjusted EBITDA and reconciliations of Net loss to Adjusted Net (Loss) Income and Adjusted EBITDA, see “Non-GAAP Financial Measures.”

(2) NMF- Not meaningful

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

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

(amounts in thousands)

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

Revenues

(amounts in thousands)

Branded Services segment revenues decreased $59.2 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The decrease includes a $27.0 million reduction in revenues from reimbursable expenses. Excluding the impact of reimbursable expenses, the remaining decrease of $32.2 million was primarily attributable to lower volumes, client losses and reductions in scope of services, including the carryover effect of losses that occurred during 2025, which more than offset new business wins. These trends reflect continued macroeconomic uncertainty, as clients continue to manage their brand support spending with heightened scrutiny during the period.

Experiential Services segment revenues increased $68.6 million during the three months ended June 30, 2026, as compared to the three months ended June 30, 2025. The increase includes $21.5 million of additional revenues from reimbursable expenses. Excluding the impact of reimbursable expenses, the remaining increase of $47.1 million was primarily driven by higher event volume on improved demand and higher average pricing, reflecting continued recovery and growth in client activation activity.

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

Cost of Revenues

Cost of revenues as a percentage of revenues for the three months ended June 30, 2026 was 88.1%, as compared to 85.5% for the three months ended June 30, 2025. The increase as a percentage of revenues was driven primarily by higher direct labor costs and transformation-related expenses, partially offset by lower reimbursable expenses, lower fixed labor costs and lower employee benefit expenses.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses as a percentage of revenues for the three months ended June 30, 2026 was 5.7%, compared to 7.9% for the three months ended June 30, 2025. The decrease as a percentage of revenues was primarily driven by lower transformation-related expenses, and lower compensation costs.

Depreciation and Amortization Expense

Depreciation and amortization expense was $51.3 million for the three months ended June 30, 2026 compared to $50.7 million for the three months ended June 30, 2025. The net increase was primarily due to a $1.2 million increase in depreciation expense as a result of an increase in IT-related investments, partially offset by a $0.6 million decrease in intangible asset amortization expense driven by prior period impairment charges.

Operating Income (Loss)

(amounts in thousands)

In the Branded Services segment, the increase in operating loss during the three months ended June 30, 2026, as compared to the same period in the prior year was primarily due to lower revenues, as discussed above, partially offset by lower cost of revenues of $37.6 million, lower selling, general and administrative expenses of $12 million. Cost of revenues decreased on lower reimbursable expenses of $27.0 million, lower compensation costs, including lower direct labor, fixed labor and benefit costs, partially offset by higher reorganization and transformation-related expenses and IT-related expenses. Selling, general and administrative expenses decreased on lower transformation-related expenses. Also impacting year-over-year comparison is the recognition of equity earnings in our European joint venture of $2.6 million in operating income during the three months ended June 30, 2025, and zero in the current period.

In the Experiential Services segment, the increase in operating income during the three months ended June 30, 2026, as compared to the same period in the prior year was primarily due to higher revenues, as discussed above, partially offset by higher cost of revenues of $60.3 million. Cost of revenues increased on higher compensation expenses, including higher direct labor and benefit costs, and higher reimbursable expenses. Selling, general and administrative expenses were effectively unchanged.

In the Retailer Services segment, the decrease in operating income during the three months ended June 30, 2026, as compared to the same period in the prior year was primarily due to an increase in cost of revenues of $14.2 million, partially offset by higher revenues, as discussed above, and lower selling, general and administrative expenses of $5.6 million. Cost of revenues increased on higher compensation expenses, including higher direct labor, benefit costs and third-party labor costs, and higher travel expenses. Selling, general and administrative expenses decreased on lower reorganization and transformation-related expenses.

Interest Expense, net

Interest expense, net increased by $4.1 million, to $40.0 million for the three months ended June 30, 2026, from $35.8 million for the three months ended June 30, 2025. The increase was driven primarily by a higher average borrowing rate during the second quarter of 2026 as compared to the same period in the prior year, partially offset by a lower average debt balance outstanding, both of which are significantly driven by the refinancing of our outstanding debt in the first quarter of 2026. Additional information regarding the debt refinancing is included in “Liquidity and Capital Resources—Credit Facilities.”

Provision for Income Taxes

We recognized provision for income taxes of $21.8 million and $4.6 million for the three months ended June 30, 2026 and 2025, respectively. The year‑over‑year change primarily reflects an increase in the valuation allowance recorded against deferred tax asset related to interest expense limitation carryforwards during the 2026 period.

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

Revenues

(amounts in thousands)

Branded Services segment revenues decreased $92.1 million for the six months ended June 30, 2026, as compared to six months ended June 30, 2025. The decrease includes a $29.1 million reduction in revenues from reimbursable expenses. Excluding the impact of reimbursable expenses, the remaining decrease of $63.0 million was primarily attributable to lower volumes, client losses and reductions in scope of services, including the carryover effect of losses that occurred during 2025, which more than offset new business wins. These trends reflect continued macroeconomic uncertainty, as clients continue to manage their brand support spending with heightened scrutiny during the period.

Experiential Services segment revenues increased $140.1 million during the six months ended June 30, 2026, as compared to six months ended June 30, 2025. The increase includes $43.6 million of additional revenues from reimbursable expenses. Excluding the impact of reimbursable expenses, the remaining increase of $96.5 million was primarily driven by higher event volume on improved demand and higher average pricing, reflecting continued recovery and growth in client activation activity.

Retailer Services segment revenues increased $15.6 million during the six months ended June 30, 2026, as compared to six months ended June 30, 2025. The increase was driven primarily by higher volume of retail merchandise project engagements and higher product sales.

Cost of Revenues

Cost of revenues as a percentage of revenues for the six months ended June 30, 2026 was 87.9%, as compared to 86.7% for the same period in the prior year. The increase as a percentage of revenues was driven primarily by higher direct labor costs and transformation-related expenses, partially offset by lower reimbursable expenses, and lower fixed labor costs.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses as a percentage of revenues for the six months ended June 30, 2026 was 5.9%, compared to 7.9% for the six months ended June 30, 2025. The decrease as a percentage of revenues was primarily driven by lower transformation-related expenses and lower compensation costs.

Depreciation and Amortization Expense

Depreciation and amortization expense was $102.8 million for the six months ended June 30, 2026 compared to $101.1 million for the six months ended June 30, 2025. The net increase was primarily due to a $3.0 million increase in depreciation expense as a result of an increase in IT-related investments, partially offset by a $1.2 million decrease in intangible asset amortization expense driven by prior period impairment charges.

Operating Income (Loss)

(amounts in thousands)

In the Branded Services segment, the increase in operating loss during the six months ended June 30, 2026, as compared to the same period in the prior year was primarily due to lower revenues, as discussed above, partially offset by lower cost of revenues of $64.4 million, lower selling, general and administrative expenses of $17.6 million. Cost of revenues decreased on lower reimbursable expenses of $29.1 million, lower compensation costs, including lower direct labor, fixed labor and benefit costs, partially offset by higher reorganization and transformation-related expenses and IT-related expenses. Selling, general and administrative expenses decreased on lower reorganization and transformation-related expenses, and lower bad debt expense. Also impacting year-over-year comparison is the recognition of equity earnings in our European joint venture of $4.2 million in operating income during the six months ended June 30, 2025, and zero in the current period.

In the Experiential Services segment, the increase in operating income during the six months ended June 30, 2026 as compared to the same period in the prior year was primarily due to higher revenues, as discussed above, partially offset by higher cost of revenues of $117.7 million. Cost of revenues increased on higher direct labor expenses, including higher benefit costs, and higher reimbursable expenses. Selling, general and administrative expenses decreased $1.8 million on lower reorganization and transformation-related expenses.

In the Retailer Services segment, the increase in operating income during the six months ended June 30, 2026 as compared to the same period in the prior year was primarily due to lower selling, general and administrative expenses of $9.7 million, higher revenues, as discussed above, partially offset by higher cost of revenues of $22.4 million. Selling, general and administrative costs decreased predominantly on lower reorganization and transformation-related expenses. Cost of revenues increased on higher direct labor expenses, including higher benefit costs and third-party labor costs, and higher travel expenses.

Interest Expense, net

Interest expense, net increased by $4.6 million to $74.8 million for the six months ended June 30, 2026, from $70.2 million for the same period in the prior year. The increase was driven primarily by a higher average borrowing rate during the six months ended June 30, 2026 as compared to the same period in the prior year, partially offset by a lower average debt balance outstanding, both of which are significantly driven by the refinancing of our outstanding debt in the first quarter of 2026. Additional information regarding the debt refinancing is included in “Liquidity and Capital Resources—Credit Facilities”

Provision for Income Taxes

We recognized provision for income taxes of $45.1 million and $11.8 million for the six months ended June 30, 2026 and 2025, respectively. The year‑over‑year change primarily reflects an increase in the valuation allowance recorded against deferred tax asset related to interest expense limitation carryforwards during the 2026 period.

Reconciliation of Non-GAAP Financial Measures

Non-GAAP Financial Measures

We manage and assess our performance through various means including the use of the financial measures of Adjusted Net (Loss) Income, Adjusted EBITDA and Adjusted EBITDA by Segment. A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP measure is provided elsewhere in this document. These financial measures are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”). These non-GAAP financial measures are derived from our consolidated and segment financial information but exclude or adjust for certain items that are included in the most directly comparable GAAP measures. We believe these non-GAAP (“Non-GAAP”) financial measures provide investors with additional insight into our operating performance, underlying business trends, and period-over-period comparability. However, these measures are not in accordance with GAAP, and should not be considered in isolation or as a substitute for the most directly comparable GAAP measures.

We define Adjusted Net (Loss) Income, as net loss adjusted for (i) non-operating income or expense and (ii) the impact of certain non-cash, nonrecurring or other items included in net (loss) income that we do not consider indicative of our ongoing operating performance, which may include acquisition and divestiture related expenses, gains and losses; gains and losses on extinguishments of debt; litigation expenses, net of recoveries on matters not representative of our ongoing business; impairment charges on goodwill, intangible assets and non-marketable securities; incremental expenses on restructuring and reorganization activities associated with certain transformation programs; further adjusted for the related income tax impact associated with these items. A full listing of adjustments to net loss are provided elsewhere in this document.

Adjusted EBITDA consists of net loss before interest, taxes, depreciation and amortization, further adjusted for (i) non-operating income or expense and (ii) the impact of certain non-cash, nonrecurring or other items included in net (loss) income that we do not consider indicative of our ongoing operating performance, which may include acquisition and divestiture related expenses, gains and losses; gains and losses on extinguishments of debt; litigation expenses, net of recoveries on matters not representative of our ongoing business; impairment charges on goodwill, intangible assets and non-marketable securities; incremental expenses on restructuring and reorganization activities associated with certain transformation programs; further adjusted for the related income tax impact associated with these items. A full listing of adjustments to net loss are provided elsewhere in this document.

Adjusted EBITDA by Segment consists of operating (loss) income by segment before interest, taxes, depreciation and amortization, further adjusted for the impact of certain non-cash, nonrecurring or other items included in net (loss) income that we do not consider indicative of our ongoing operating performance, which may include acquisition and divestiture related expenses, gains and losses; gains and losses on extinguishments of debt; litigation expenses, net of recoveries on matters not representative of our ongoing business; impairment charges on goodwill, intangible assets and non-marketable securities; incremental expenses on restructuring and reorganization activities associated with certain transformation programs; further adjusted for the related income tax impact associated with these items. A full listing of adjustments to operating income (loss) are provided elsewhere in this document.

We present Adjusted Net (Loss) Income, Adjusted EBITDA and Adjusted EBITDA by Segment because they are key operating measures used by us to assess our financial performance. These measures adjust for items that we believe do not reflect the ongoing operating performance of our business, such as certain non-cash items, unusual or infrequent items or items that change from period to period without any material relevance to our operating performance. We evaluate these measures in conjunction with our results according to GAAP because we believe they provide a more complete understanding of factors and trends affecting our business than GAAP measures alone. Furthermore, the agreements governing our indebtedness contain covenants and other tests based on measures substantially similar to Adjusted EBITDA. Neither Adjusted Net (Loss) Income, Adjusted EBITDA nor Adjusted EBITDA by Segment should be considered as an alternative for Net (loss) income or operating income (loss), our most directly comparable measures presented on a GAAP basis.

Non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. Additionally, other companies may calculate non-GAAP measures differently, or may use other measures to calculate their financial performance, and therefore our non-GAAP measures may not be directly comparable to similarly titled measures of other companies.

Adjusted Net (Loss) Income

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

(in thousands)

Adjusted EBITDA

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

(in thousands)

Financial information by segment, including a reconciliation of Adjusted EBITDA by Segment to operating income (loss), the closest GAAP financial measure, is provided in the following table:

(in thousands)

(in thousands)

(in thousands)

30

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

(b) Restructuring expenses consist primarily of employee termination costs, contract termination fees, and workforce transition costs, including employee rebadging to a third-party service provider. In the three months ended June 30, 2026, $3.0 million of these expenses were charged to "Cost of revenues" in the Condensed Consolidated Statements of Operations and Comprehensive Loss. For all other periods presented, the remaining restructuring expenses were reported in "Selling, general and administrative expenses" in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

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

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

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

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

(g) Equity-based compensation of Karman Topco L.P. represents non-cash changes in the estimated value of certain stock units due to investors of Advantage Solutions, Inc.

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

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

(j) Represents the tax provision or benefit associated with the adjustments above, taking into account the Company’s applicable tax rates, after excluding adjustments related to items that do not have a related tax impact.

31

Liquidity and Capital Resources

Operating cash flow, as supplemented by the divestiture of non-core businesses identified over our transformation period, provides the primary source of cash to fund operating needs and capital expenditures. Excess cash is used to fund debt repurchases and share repurchases.

Our working capital as of June 30, 2026, included $102.3 million of cash and cash equivalents and $634.9 million of accounts receivable, net of allowance for expected credit losses, both of which will be a significant source of ongoing liquidity. Additionally, as of June 30, 2026, we had the ability to borrow up to $399.5 million under our 2030 ABL after consideration of the borrowing base limitations and outstanding letters of credit.

We believe our cash on hand, cash flows from operations and current and possible future credit facilities will be sufficient to satisfy our working capital requirements, purchase commitments, interest payments, transformation initiatives, capital expenditures, and other financing requirements for the foreseeable future.

Cash Flows

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

(in thousands)

Net Cash Provided by (Used in) Operating Activities

Cash provided by operating activities during the six months ended June 30, 2026 was $17.2 million compared to cash used in operating activities of $47.7 million during the six months ended June 30, 2025, representing an increase of $65.0 million. The increase primarily reflects favorable movements in working capital, predominantly improved management of accounts receivable, and lower prepaid expenses, partially offset by lower deferred revenue and accrued liabilities.

Net Cash Provided by (Used in) Investing Activities

Net cash provided by investing activities during the six months ended June 30, 2026 primarily consisted of $27.5 million in deferred proceeds from the sale of Jun Group completed in 2024 and $13.4 million cash received for the partial sale of an equity method investment joint venture. These cash inflows were partially offset by purchases of property and equipment of $20.8 million, primarily driven by investments in software, including our enterprise resource planning systems, and purchases of investments in unconsolidated affiliates of $2.1 million.

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

Net Cash Used in Financing Activities

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

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

Credit Facilities

During the first quarter of 2026, we completed, through our indirect wholly-owned subsidiary, Advantage Sales & Marketing Inc. (the “Borrower”), a refinancing transaction (the “Refinancing”) designed to extend maturities and modify our capital structure, which is more fully described in Note 4—Debt to the condensed consolidated financial statements. As of June 30, 2026, we had $399.5 million of unused availability under the revolving credit facility after giving effect to borrowing base limitations and $62.0 million of outstanding letters of credit.

From time to time, the Borrower may repurchase portions of its outstanding indebtedness under the 2030 Term Loan Facility and 2030 Notes. Such repurchases, if any, will depend upon prevailing market conditions, our liquidity and capital position, contractual limitations and other factors. The amounts and timing of any such repurchases will be at our discretion and we are under no obligation to repurchase any specific amount of indebtedness.

Share Repurchases

On November 9, 2021, we announced that our board of directors authorized a share repurchase program (the “2021 Share Repurchase Program”) pursuant to which we may repurchase up to $100.0 million of our Class A common stock.

The 2021 Share Repurchase Program does not have an expiration date, but provides for suspension or discontinuation at any time. The 2021 Share Repurchase Program permits the repurchase of our Class A common stock on the open market and by other means from time to time. The timing and amount of any share repurchase is subject to prevailing market conditions, relevant securities laws and other considerations, and we are under no obligation to repurchase any specific number of shares.

During the three and six months ended June 30, 2026, we purchased through the open market and in a private transaction approximately $15.0 million and $17.0 million, respectively, of our Class A common stock under the 2021 Share Repurchase Program. During the six months ended June 30, 2026, we retired 566,408 treasury shares that had been previously purchased under the 2021 Share Repurchase Program. As of June 30, 2026, there remained $29.1 million of share repurchase availability under the 2021 Share Repurchase Program.

Future Cash Requirement

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

Cash and Cash Equivalents Held Outside the United States

As of June 30, 2026 and December 31, 2025, $31.9 million and $14.0 million, respectively, of our cash and cash equivalents were held by foreign subsidiaries. As of June 30, 2026, and December 31, 2025, $43.3 million and $37.9 million, respectively, of our cash and cash equivalents were held by foreign branches.

We expect existing domestic cash and cash flows from operations to continue to be sufficient to fund our domestic operating activities and cash commitments for investing and financing activities, such as debt repayment and capital expenditures, for at least the next 12 months and thereafter for the foreseeable future. Nonetheless, we assessed our determination as to our indefinite reinvestment intent for certain of our foreign subsidiaries and branches and recorded a deferred tax liability of approximately $1.4 million of withholding tax as of June 30, 2026 for unremitted earnings in Canada. We continue to assert indefinite reinvestment on earnings of our foreign operations, other than Canada and the United Kingdom. No deferred tax liability is required for the United Kingdom unremitted earnings. However, we may change our assertion if we identify a higher return on this capital in the U.S. and we are able to repatriate the income in a tax-efficient means.

Off-Balance Sheet Arrangements

We do not have any off‑balance‑sheet financing arrangements or liabilities, including guarantee contracts, retained or contingent interests in transferred assets, or obligations arising from material variable interests in unconsolidated entities that would require disclosure under applicable accounting guidance. We do not have any majority‑owned subsidiaries that are not included in its condensed consolidated financial statements and does not have material interests in, or relationships with, special‑purpose entities.

Critical Accounting Policies and Estimates

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

Recently Issued Accounting Pronouncements

Accounting Standards Recently Issued but Not Yet Adopted by the Company

In November 2024, the FASB issued ASU 2024-03, *Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“*ASU 2024-03”), and in January 2025, the FASB issued ASU 2025-01, *Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“*ASU 2025-01”). ASU 2024-03 requires public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted on a prospective or retrospective basis. The Company is currently evaluating the impact of ASU 2024-03 on the consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, *Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“*ASU 2025-06”), which modernizes the accounting for internal-use software costs to reflect incremental and iterative development methods. The amendments remove prescriptive development stages and require capitalization of software costs once management has authorized and committed to funding the project and it is probable the project will be completed and the software will be used as intended. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027, including interim periods within those years, with early adoption permitted and application on a prospective, modified retrospective, or retrospective basis. The Company is currently evaluating the impact of ASU 2025-06 on the consolidated financial statements and related disclosures.

Other new accounting pronouncements recently issued or newly effective were not applicable to the Company, did not have a material impact on the condensed consolidated financial statements or are not expected to have a material impact on the condensed consolidated financial statements.

Foreign Currency Risk

Our exposure to foreign currency exchange rate fluctuations is primarily the result of foreign subsidiaries and foreign branches primarily domiciled in Canada. We use financial derivative instruments to hedge foreign currency exchange rate risks associated with our Canadian operations.

The assets and liabilities of our foreign subsidiaries and foreign branches, whose functional currencies are primarily Canadian dollars, are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at the average exchange rates prevailing during the period. The cumulative translation effects for subsidiaries using a functional currency other than the U.S. dollar are included in accumulated other comprehensive loss as a separate component of stockholders’ equity. We estimate that had the exchange rate in each country unfavorably changed by ten percent relative to the U.S. dollar, our consolidated loss before taxes would have decreased by approximately $2.5 million for the six months ended June 30, 2026.

Interest Rate Risk

Interest rate exposure relates primarily to the effect of interest rate changes on borrowings outstanding under the 2030 Term Loan Facility, the 2030 ABL and 2030 Notes.

We manage our interest rate risk through the use of derivative financial instruments. Specifically, we have entered into interest rate collar agreements to manage our exposure to potential interest rate increases that may result from fluctuations in SOFR. We do not designate these derivatives as hedges for accounting purposes, and as a result, all changes in the fair value of derivatives, used to hedge interest rates, are recorded in “Interest expense, net” in our Condensed Consolidated Statements of Operations and Comprehensive Loss.

We have interest rate collar contracts with an aggregate notional value of principal of $500.0 million as of June 30, 2026, from various financial institutions to manage our exposure to interest rate movements on variable rate credit facilities. Interest rate collar contracts with notional value of principal of $300.0 million matured on April 5, 2026. In April 2026, we entered into one interest rate collar contract with a notional value of principal of $100.0 million. This interest rate collar will mature on April 8, 2029. In July 2024, we entered into two interest rate collar contracts with a notional value of principal of $200.0 million each. The interest rate collar contracts are effective December 16, 2024 and will mature on April 5, 2027 and 2028. The aggregate fair value of our interest rate collars represented an outstanding net asset of $0.4 million as of June 30, 2026.

Holding other variables constant, a change of one-eighth percentage point in the weighted average interest rate above the floor of 0.75% on the 2030 Term Loan Facility and 2030 ABL would have resulted in an increase of $0.9 million in interest expense, net of gains from interest rate caps and collars, for the six months ended June 30, 2026.

In the future, in order to manage our interest rate risk, we may refinance our existing debt, enter into additional interest rate cap agreements or modify our existing interest rate cap agreement. However, we do not intend or expect to enter into derivative or interest rate cap transactions for speculative purposes.

Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of June 30, 2026, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and (2) accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Changes in Internal Control Over Financial Reporting

During the quarter ended June 30, 2026, the Company continued enhancements related to the phased implementation of its global enterprise resource planning (“ERP”) system. These activities primarily related to ongoing configuration, integration, and preparatory work in advance of future phases of deployment. The initial deployment was completed in fiscal year 2025, with additional phases completed in the second quarter of 2026. Enhancements to support more complex transaction flows and reporting requirements are expected to continue during fiscal year 2026.

The Company evaluated the impact of these activities as part of its ongoing assessment of internal control over financial reporting and will continue to monitor the design and operating effectiveness of relevant controls as additional phases of the ERP system are implemented. Except for the foregoing, there were no changes in the Company’s internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

There have been no material changes to the risk factors disclosed under Part I, Item 1A “Risk Factors” in the 2025 Annual Report, the current effects of which are discussed in more detail in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q. These risks are not the only risks that may affect us. Additional risks that we are not aware of or do not believe are material at the time of this filing may also become important factors that adversely affect our business.