Workforce solutions provider ManpowerGroup (NYSE: MAN) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 7.1% year on year to $4.71 billion. Its GAAP profit of $0.64 per share was 21.7% below analysts’ consensus estimates.

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StockStory’s Take

ManpowerGroup’s fourth quarter results for 2025 were received positively by the market, as revenue growth outpaced expectations despite ongoing profit pressure. Management attributed the quarter’s improvement to increased enterprise client demand, especially in key markets like the US, France, and Italy, along with strengthened cost discipline. CEO Jonas Prising emphasized that operational changes, such as structural cost reductions and digitization efforts, contributed to sequential improvements, noting, “We are seeing clear sequential improvement in key demand indicators, including Manpower associates on assignments in key markets.” While gross margins remained under pressure due to mix shifts toward enterprise clients and softer permanent recruitment activities, the company reported progress in stabilizing overall trends.

Looking to the next quarter and beyond, ManpowerGroup’s guidance hinges on continued stabilization in major markets and further efficiency gains through technology and AI adoption. Management highlighted that investments in its PowerSuite platform and AI recruiter toolkits are expected to drive productivity and margin expansion. CFO Jack McGinnis stated, “Even in a modest recovery scenario, you should expect EBITDA margin improvement year over year,” underscoring a focus on operational leverage as demand improves. However, management remains cautious about the pace of recovery, citing variability by geography and ongoing macroeconomic uncertainties, but believes its diversified portfolio and digital transformation position the company for gradual improvement.

Key Insights from Management’s Remarks

Management pointed to enterprise demand, geographic resilience, and cost controls as the main factors shaping Q4 performance, while citing AI integration and evolving client needs as areas of ongoing focus.

• Enterprise client momentum: Large enterprise clients drove most of the demand in Q4, particularly in the US and France, resulting in more stable activity levels. Management noted that this shift impacted gross profit margins, but the effect has now largely worked through the numbers, as pricing has remained rational and competitive.
• Geographic performance varied: Italy and Spain showed clear growth and margin outperformance, while France demonstrated resilience despite political and budget uncertainty. In contrast, Northern Europe returned to profitability after focused cost actions, and Germany remained challenging with ongoing revenue declines.
• Cost discipline and transformation: Structural cost reductions, including permanent changes to back-office and technology infrastructure, continued to deliver SG&A improvements. The company reported a 4% constant currency reduction in SG&A while driving organic growth, with further cost optimization planned in North America.
• AI and digital platform scaling: ManpowerGroup’s PowerSuite technology and AI recruiter toolkit were credited with tangible productivity gains, including a 7% increase in placement rates and improved recruiter efficiency. These digital tools are now deployed in over 12 markets and are expected to support higher-margin work.
• Product mix and margin pressure: A shift in business mix toward enterprise accounts and lower permanent recruitment activity, especially in Europe, contributed to gross margin declines. Management believes a rebound in permanent and professional staffing, along with growth in higher-margin segments, will be necessary for future margin recovery.

Drivers of Future Performance

Management’s outlook centers on further digital transformation, stabilization in core markets, and the gradual rebound of higher-margin business lines.

• Continued AI and tech investment: The company expects that scaling its PowerSuite platform and proprietary AI tools will enhance recruiter productivity, enable faster client delivery, and support cost efficiency. Management believes these initiatives are key to delivering incremental margin improvement even if revenue growth remains modest.
• Mix shift and market recovery: A return to growth in permanent recruitment, professional staffing, and higher-margin solutions is seen as essential for gross margin and EBITDA improvement. Management is monitoring sector-specific recovery, particularly in technology staffing, where project demand remains subdued but is showing early signs of stabilization.
• Risks and uncertainties: While management is optimistic about sequential improvements, they remain cautious due to geopolitical and macroeconomic uncertainties, as well as variability in recovery pace across regions. Pricing discipline and cash flow management are ongoing priorities to navigate these uncertainties.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will closely watch (1) the pace of permanent recruitment and professional staffing recovery, (2) the measurable impact of AI-enabled productivity tools on margin and win rates, and (3) ongoing momentum in key geographies like France, Italy, and the US. The progress of cost discipline initiatives and client demand for flexible workforce models will also be key signposts for future performance.

ManpowerGroup currently trades at $32.96, up from $28.96 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).

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