Revenue of $4,840.0 million was a narrow miss against the API Ninjas estimate of $4,856.0 million, up 4.4% as reported and 5.2% in constant currency.
Adjusted earnings of $1.01 per diluted share were in line with the $1.01 API Ninjas estimate; reported earnings were $0.71 per diluted share against $0.38 a year ago, after $0.30 of restructuring, strategic transformation, business sale and Argentina currency charges.
Fourth-quarter guidance is $1.03 to $1.13 per diluted share on a 44% effective tax rate, a range that brackets the $1.01 just delivered.
Becky Frankiewicz becomes chief executive on January 1, 2027, with Jonas Prising moving to executive chair.
The one thing that matters: the profit improvement is cost, not demand. Revenue rose 4.4% to $4,840.0 million while gross profit fell 0.2% to $767.3 million, so the whole step up in operating profit came from SG&A down 2.5% to $685.0 million. The inflection management describes still rests on the cost program rather than on recovering spreads.
Key metrics
Metric
Reported
Prior year
Change
Revenues from services
$4,840.0 million
$4,634.4 million
4.4%
Gross profit
$767.3 million
$768.9 million
-0.2%
Selling and administrative expenses
$685.0 million
$702.3 million
-2.5%
Operating profit
$82.3 million
$66.6 million
23.7%
Earnings per share excluding items
$1.01 per diluted share
—
+24% in constant currency
Northern Europe Operating Unit Profit (Loss)
$7.5 million
$(14.9) million
N/A
Guidance changes
Item
New guidance
Prior guidance
Fourth quarter diluted earnings per share
between $1.03 and $1.13
—
Fourth quarter effective tax rate
44%
—
Quality of earnings
Volume is growing, the spread on it is not. Revenue of $4,840.0 million grew 4.4% while gross profit of $767.3 million fell 0.2% from $768.9 million, and operating profit still rose to $82.3 million from $66.6 million because SG&A fell to $685.0 million from $702.3 million.
Tax is working against the adjusted number, not for it. The provision was $33.9 million on $68.0 million of pretax earnings, barely below the prior year's $34.9 million on $52.9 million, and the fourth quarter is guided at a 44% effective rate.
Reported and adjusted diverge by $0.30 a share, $0.71 against $1.01, on restructuring, strategic transformation program costs, a business sale adjustment and Argentina hyperinflationary non-cash currency translation losses; the same items cost $0.62 across the nine months.
Gotchas & watch items
France is still the hole: revenue down 3.5% to $1,132.9 million and operating unit profit down 26.9% to $22.4 million from $30.6 million.
Other Americas revenue growth of 27.0% as reported drops to 21.7% in constant currency, and the region carries the Argentina hyperinflationary translation losses sitting inside the $0.30 of excluded charges.
Corporate expenses of $54.1 million against $40.9 million absorbed nearly half of the improvement in combined operating unit profit, $143.4 million against $115.4 million.
Cash used in operating activities was $137.0 million over the nine months, and cash fell to $233.1 million from $871.0 million at year-end after $585.9 million of long-term debt repayments.