Revenue beat: system-wide revenue, including franchises, of $5.3 billion against a $4.86 billion API Ninjas estimate; reported revenue was $4.8 billion, up 6% organic days adjusted in constant currency.
EPS in line: adjusted EPS of $1.01 matched the $1.01 guidance midpoint; reported EPS was $0.71.
Q4 guide: EPS of $1.03-$1.13, constant currency revenue growth of 3% to 7% (4% organic days adjusted at the midpoint), and EBITDA margin up 20 basis points year-over-year.
The one thing that matters: Q4 guides organic growth down to 4% from 6% while EBITDA margin expansion doubles to 20 basis points from 10, so near-term earnings growth now rests on cost cuts rather than revenue acceleration. Management says Experis and perm will lift growth above 6% but gives no timing.
Guidance & KPIs
Item
New guidance
Prior guidance
Q4 2026 EPS
$1.03-$1.13
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Q4 2026 constant currency revenue growth
between a 3% increase and a 7% increase, midpoint 5%
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Q4 2026 organic days adjusted constant currency revenue growth
4% at the midpoint
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Q4 2026 gross profit margin
15.9% at the midpoint
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Q4 2026 EBITDA margin
up 20 basis points year-over-year at the midpoint
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Management commentary
President and Chief Strategy Officer Becky Frankiewicz becomes CEO on January 1, 2027, and Jonas Prising becomes Executive Chair. Frankiewicz said she was "Fully committed" to the 110 basis points of margin improvement set out in April.
The $200 million permanent cost savings target for 2028 is on track. The front-office redesign is moving from the U.S. into the U.K.
U.S. Experis returned to growth at 4% organic days adjusted, up from flat in Q2, as clients spend on AI infrastructure and data projects.
France was weakest in July, when manufacturing PMI dipped just below 50, and improved in September and early October. That improvement is the basis for the Q4 outlook.
No shares were repurchased, and none are expected in the very immediate future while the balance sheet is strengthened. Net debt was $870 million.
Quality of earnings
Reported earnings carry a heavy transformation bill. Reported EPS of $0.71 sits $0.30 below adjusted $1.01: restructuring and transformation costs of $0.27 plus a $0.03 charge tied to the U.S. Jefferson Wells sale.
Margin gains come from costs, not gross profit. Adjusted SG&A fell 2% in constant currency while consolidated gross profit grew only 1% organically. Staffing margin was down 50 basis points year-over-year, and perm and Right Management cost another 10 basis points each.
Cash flow went negative on timing. The free cash outflow of $17 million compares with a $45 million inflow a year earlier. Excluding quarter-end MSP payment timing, it would have been a $75 million inflow, which management expects to reverse in Q4.
Gotchas & watch items
The revenue beat uses system-wide revenue of $5.3 billion, which includes franchise revenue. Reported revenue was $4.8 billion.
France, 51% of Southern Europe at $1.1 billion, fell 2% in constant currency. The Q4 guide assumes only a slightly better trend despite political and budget uncertainty, including the unresolved large-business surtax.
Right Management is turning into a headwind: outplacement declines cost 10 basis points of gross margin and deepened from Q2.
U.S. growth is guided to mid-single digits in Q4, down from 9% in Q3. Management says this reflects tougher comparisons against strong prior-year growth.