Welcome to Manpower Group's first quarter earnings results conference call. You'll be put into listen-only mode until the question and answer time begins. We have a full queue today and ask that you please limit yourself to one question and re-queue if you'd like to ask a follow-up. As a reminder, this call is being recorded. If you care to drop off now, please do so. I would like to turn the call over to Manpower Group's Chair and CEO, Mr. Jonas Priesing. Sir, you may begin.

Good morning, and thank you for joining us for our first quarter 2026 conference call. Our Chief Financial Officer, Jack McGinnis, and our President and Chief Strategy Officer, Becky Frankowitz, are both with me today. For your convenience, our prepared remarks are available in the Investor Relations section of our website at manpowergroup.com. I'll begin with a brief overview of the quarter, including how we're seeing conditions evolve across our markets, and then I'll share a few updates on how we're positioning Manpower Group to win in any environment. Becky will then provide an update on how we are driving commercial excellence and the opportunities we're capturing with AI, followed by Jack, who will walk through the detailed financial results and our guidance for the second quarter of 2026. I'll close with a few comments before we open the line for Q&A. And Jack will now cover the safe harbor language.

Good morning, everyone. this conference call includes forward-looking statements including statements concerning economic and geopolitical uncertainty which are subject to known and unknown risks and uncertainties these statements are based on management's current expectations or beliefs actual results might differ materially from those projected in the forward-looking statements we assume no obligation to update or revise any forward-looking statements slide two of our earnings release presentation further identifies forward-looking statements made in this call and factors that may cause our actual results to differ materially and information regarding reconciliation of non-GAAP measures

thanks jack our q1 results reflect disciplined execution and continued stabilization of revenue trends across key markets in the first quarter we delivered reported revenues of 4.5 billion dollars representing an organic constant currency growth of three percent system-wide revenue which includes whose are expanding franchise revenue base, was $5 billion. Adjusted EBITDA margin of 1.4% reflects improving demand trends, as well as P&L leverage. We're also encouraged that top line growth exceeded our expectations, reflecting strong execution of our commercial initiative. We are expanding our new business pipeline, increasing client engagement, and continuing to win in the areas where growth is strongest and most resilient. At the same time, the manufacturing environment is strengthening, particularly across Europe. Taken together, this is enabling us to drive continued momentum across the portfolio with strong manpower performance among key markets, including France, U.S., and Italy. We're also seeing stable underlying trends in experience and solid performance in talent solutions, tap-in MSP, and right management, even as RPO remains more challenged. Our diversified portfolio, global scale, and specialized brand expertise continue to position as well to win in the marketplace. As we move down the P&L, we have continued our relentless focus on driving operating leverage. During Q1, we reduced SG&A, as adjusted, by 4% in constant currency, while delivering continued top-line growth, reflecting the impact of our ongoing efficiency efforts, something I'll share more detail on shortly. Finally, we're closely monitoring developments related to the conflict in the Middle East. While it is still too early to assess if there will be a broader impact, like many global companies, we have become accustomed to navigating a fast-changing environment that includes geopolitical developments alongside economic and labor market shifts. In the meantime, we've been focused on staying close to our clients and their evolving needs while managing the business with discipline. Against this backdrop, we're encouraged by the developing short-term momentum and equally excited by the long-term market opportunity. This is supported by improving business confidence in the US, as evidenced by the increase in CEO confidence reported by the conference board, rising manufacturing PMI in the US and Europe, and strong business resilience. As conditions improve, we expect sustainable organic revenue growth to build progressively. Our intent is to be the architects of our own future and to proactively take action that will position Manpower Group to lead the industry, win in any environment, and drive long-term value creation. We are transforming our business model to drive growth and expand margins over time. As part of this commitment, we are announcing a transformation initiative that will reimagine how we operate and deliver value to our clients and candidates and provide significant cost optimization. Over the past year, we have been doing significant planning to launch this work and we are pleased to share more details with you today. We have made targeted investments in automation and AI and built a modern global technology infrastructure, including our PowerSuite platform, which now serves as the backbone of our digitization strategy. With nearly 90% of our global business operating on this platform, we have created a unified technology stack with access to global data across all of our global businesses, enabling us to operate at a unique data scale, strengthen our insight, and be better partners to our clients. As a result of these investments, we are launching a strategic global transformation program that we expect will deliver $200 million in permanent cost savings in 2028. There are two major components to our plan. The first, which I've talked about before, is the complete redesign of our back office operation, which is progressing well. The second is taking best practices and key learnings from our back office transformation and executing a similar program for the front office. These redesign processes will be industry leading and enable us to execute more effectively and move faster to fill roles. In addition to reducing our cost structure, this transformation will improve both client and candidate experience, positioning our brands to win in market share and better serve clients in a highly fragmented marketplace. We have begun this work in North America, redesigning end-to-end processes, embedding automation in AI where it simplifies work, creating best-in-class local-world blueprints before extending globally. The goal is clear, connect more people to work by filling more orders to drive growth while structurally lowering our cost to serve. I am also pleased to announce that we have recently hired a dedicated Chief Enterprise Transformation Officer who has joined our executive leadership team to drive the execution of this plan across the enterprise. At the same time, we continue to thoughtfully review our global portfolio to ensure that we have the right mix of businesses and brands across key markets, prioritizing investments in core, higher return opportunities while evaluating opportunities to divest of non-core assets to strengthen our financial position and support our long-term growth and margin ambitions. Ultimately, these actions will accelerate our path back to our historical margin profile and create a structural cost basis to expand margins further over time. Now, before I hand it over to Becky, let me just say one more time how excited we are about the transformation underway to improve efficiency, reduce costs, and create capacity to invest in growth. Four elements of this transformation is building new capabilities that align with where the market is heading. And this includes evolving how we bring innovative service to market, particularly with AI. We're also encouraged by the immense opportunities AI is creating as it enables us to shape the future of our industry, including how it is influencing client behavior and how they buy workforce solutions. This shift creates a meaningful opportunity for us to evolve our business model so that AI becomes a sustainable tailwind by operating in new ways and developing new products for our clients. And with that context, let me turn it over to Becky to go deeper into our commercial initiatives and how we are leveraging AI. Thank you, Jonas. Last quarter,

I shared that my remit is focused on driving commercial excellence, strengthening and expanding our core capabilities, and accelerating AI across the business. Today, I am pleased to share more on how we are embedding AI as a growth multiplier and will highlight where AI is already driving measurable value in three areas, unlocking effective commercial scale, creating new ways to deliver a best-in-class talent experience, and finally, monetizing new human plusogenic solutions for our clients through strategic AI partnerships. Let me start with how we are embedding AI into our processes to unlock effective commercial scale. Today in France, our proprietary AI-powered sales targeting engine has generated approximately $200 million in incremental revenue. It pinpoints the highest probability opportunities so our teams can focus on coverage where sales conversion and revenue impact are the highest. We expect this incremental revenue to increase significantly as we scale. Second, let me share how we are creating a differentiated talent experience, one that is critical to attracting and retaining the skilled associates and consultants our clients value most. To strengthen our talent experience, we recently announced an expansion of our PowerSuite technology platform to include our partnership with Hubert.ai to deliver AI-powered screening and interview experiences. In the past six months, we've completed over 25,000 AI-led interviews and reduced screening times by 67%. Automating early-stage interviews helps improve fill rates and time to hire and frees our recruiters and talent agents to focus on higher-value, relationship-driven work. At the same time, we are achieving 87% candidate satisfaction as more than half of this activity takes place outside of traditional working hours meeting talent when and where works for them these responsible transparent ai capabilities now support markets representing 40 percent of our global revenue with plans to scale to 70 percent by year end and third monetization i am delighted to share how we are bringing ai capabilities to market and creating a future where people can build more impactful careers and where companies can achieve greater profitable growth. Human plusogenic workforces are not a future concept. They are already here. In March, we announced a breakthrough partnership with SoundHound AI, a global leader in voice and conversational AI. Our experienced U.S. business is already helping companies across industries to review and redesign workflows and accelerate the adoption of AI and intelligent automation. This is the lead offering in our Accelerate AI Services suite built on a simple and powerful premise that humans and agents can deliver more when working side by side. This partnership expands our presence in the human plus AI space, which is central to our strategy. We are starting the U.S. to drive scale and market leadership and plans expand globally. Finally, we know we capture the impact of AI by ensuring that our teams are equipped to use it. We are pleased that tens of thousands of our employees around the world have completed AI fundamentals training and over 80 percent of our workforce is already using AI in their workflows. Our approach is is simple. Automate what should be automated, augment what should stay human, and create entirely new ways to deliver workforce solutions to our clients. We are in progress to capture the full value of these initiatives, and we expect AI to become an increasingly meaningful driver of growth, productivity, and differentiation over time. I look forward to continuing to update at you on our strategic progress and how we will move at PACE. I will now turn it back over to Jack.

Thanks, Becky. I'll quickly first touch on the headline quarterly results, and I'm excited to give more details on our expanded transformation savings Jonas announced at the beginning of the call. In the first quarter, we delivered reported revenues of 4.5 billion. System-wide revenue, including franchises, was 5 billion. Our first quarter revenue results represented constant currency growth of 3%. U.S. dollar reported revenues after adjusting for currency impacts came in at the top of our constant currency guidance range. I will talk more about the revenue trend drivers in the business and geographic segment summaries. Gross profit margin came in below the low end of our guidance range, driven by lower bench utilization in Europe and mixed shifts impacting staffing margin, while permanent recruitment came in as expected with sequential improvement. As adjusted, EBITDA was $61 million, representing a 5% increase in constant currency compared to the prior year period. As adjusted, EBITDA margin was 1.4%, up 10 basis points year over year, and came in at the midpoint of our guidance range. Organic days adjusted constant currency revenue increased 3% in the quarter, which was favorable to our midpoint guidance range of 1% growth. Coming back to our transformation programs, that Jonas referenced, we are excited to announce our path to expected savings of $200 million in 2028. We have previously discussed the implementation of our leading cloud-enabled PowerSuite front and back-office technology platforms. These platforms are now being complemented with best-in-class, end-to-end processes. We started with back-office processes and are flipping to run rate savings in IT and finance costs during 2026, which built through 2028 representing 25 percent of the total cost savings the strategic transformation will expand to the rest of the world in 2027 to drive expected net savings in 2028 the front office transformation like the back office will include standardized processes infused with leading automation and agentic ai across all major businesses driving significant structural savings we will continue to break out restructuring and strategic transformation program charges as we progress the program we expect the ongoing 2026 run rate of these charges to be lower than the first quarter amount and estimate a range of 10 to 15 million on average per quarter through the end of the year moving to the eps bridge reported earnings per share for the quarter was five cents adjusted eps was 51 cents and came in just above our guidance midpoint walking from our guidance midpoint of 50 cents our results included a slightly lower operational performance of two cents a slightly lower tax rate which had a positive one cent impact a foreign currency impact it was one cent worse and improved interest and other expenses which was three cents better than our guidance restructuring costs and strategic transformation program costs represented 46 cents Next, let's review our revenue by business line. Year-over-year, on an organic constant currency basis, the Manpower brand had strong growth of 6% in the quarter, up sequentially from the 5% growth in the fourth quarter. The Experience brand declined by 9%, an expected decrease from the 6% decline in the fourth quarter, largely driven by the timing of healthcare IT projects in the U.S. The Town Solutions brand declined by 1%, an improvement from the fourth quarter decline of 4%. Within Town Solutions, our RPO business continues to experience a sluggish permanent hiring environment but did see sequential revenue trend improvement. Our MSP business saw continued revenue growth and right management also grew during the quarter. Looking at our gross profit margin in detail, our gross margin came in at 16% for the quarter. margin contributed a 70 basis point reduction due to mixed shifts and bench utilization in the first quarter. Permanent recruitment activity resulted in a 20 basis point decline. Other services resulted in a 20 basis point margin decrease. Moving on to our gross profit by business line, during the quarter, the Manpower brand comprised 62% of gross profit, our experienced professional business comprised 21%, and Talent Solutions comprised 17%. During the quarter, our consolidated gross profit decreased by 3% on an organic constant currency basis year-over-year, stable from the 3% decline in the fourth quarter. Our manpower brand was flat in organic constant currency gross profit year-over-year, relatively stable considering rounding from the 1% growth in the fourth quarter year-over-year trend. Gross profit in our experience brand decreased 11% in organic constant currency year-over-year, a decline from the 5% decrease in the fourth quarter, largely driven by the timing of healthcare IT projects in the U.S. Gross profit and talent solutions declined five percent in organic constant currency year-over-year which was an improvement from the 12 percent decrease in the fourth quarter. The improvement in trend was driven by RPO as the rate of decline narrowed significantly. MSP trends also improved from the fourth quarter and right management had solid gross profit growth in the quarter on increased outplacement activity. Reported SG&A expense in the quarter was $695 million. SG&A, as adjusted, was down 4% on a constant currency basis. The year-over-year constant currency SG&A decreases largely consisted of reductions in operational costs of $23 million. Dispositions were very minor and represented a decrease of $1 million, while currency changes contributed to a $38 million increase. Adjusted SG&A expenses as a percentage of revenue represented 15% in constant currency in the first quarter. Adjustments representing restructuring and strategic transformation program charges were $26 million. Balancing gross profit trends with strong cost actions while funding ongoing transformation to enhance EBITDA margin in both the short and long-term remains one of our highest priorities. The America segment comprised 25% of consolidated revenue. Revenue in the quarter was $1.1 billion, representing an increase of 4% year-over-year on a constant currency basis as adjusted OUP was 26 million and OUP margin was 2.3 percent restructuring charges of 7 million largely represented actions in the u.s the u.s is the largest country in the america segment comprising 59 percent of segment revenues revenue in the u.s was 655 million during the quarter representing a five percent days adjusted decrease compared to the prior year. OUP as adjusted for our U.S. business was $9 million in the quarter. OUP margin as adjusted was 1.3%. Within the U.S., the Manpower brand comprised 26% of gross profit during the quarter. Revenue for the Manpower brand in the U.S. increased 5% on a day's adjusted basis during the quarter, which represented strong market performance with seven consecutive quarters of growth and a slight change from the 7% increase in the fourth quarter as we anniversary strong growth in the prior year. The Xperis brand in the U.S. comprised 39 percent of gross profit in the quarter. Within Xperis in the U.S., IT skills comprised approximately 90 percent of revenues. Xperis U.S. revenue decreased 15 percent on a day's adjusted basis during the quarter, down from the 10 percent decline in the fourth quarter as the business anniversary strong healthcare IT projects in the prior year. Excluding the impact of healthcare IT project volumes in prior year experienced U.S. revenue decrease 9% on a day's adjusted basis during the quarter, largely in line with the fourth quarter trend. Talent Solutions in the U.S. contributed 35% of gross profit and saw a 2% decrease in revenue year-over-year in the quarter, compared to a 2% increase in the fourth quarter, driven by lower sequential MSP activity. This was partially offset by strong growth in right management outplacement activity and improving RPO year-over-year trends. We expect the U.S. business to flip to low single-digit percentage revenue growth in the second quarter on an improved experience revenue trend. Southern Europe revenue comprised 47 percent of consolidated revenue in the quarter. Revenue in Southern Europe was 2.1 billion, representing 3 percent growth in constant currency during the first quarter. As adjusted, OUP for our Southern Europe business was 58 million in the quarter and OUP margin was 2.8 percent. Restructuring charges of 4 million represented actions in France. France revenue equaled 1.1 billion and comprised 51 percent of the Southern Europe segment in the quarter and was flat on a constant currency basis. As adjusted OUP for our France business was 21 million in the quarter. Adjusted OUP margin was 2 percent. France revenue trends improved during the first quarter and we expect a similar rate of revenue trend of flat to slight growth in the second quarter. Revenue in Italy equaled $475 million in the first quarter, reflecting an increase of 8% on a days-adjusted currency basis. OUP as adjusted equaled $29 million and OUP margin was 6%. Our Italy business is executing well and we estimate mid-single-digit percentage revenue growth in the second quarter. Our Northern Europe segment comprised 17 percent of consolidated revenue in the quarter. Revenue of 790 million represented a 1 percent decline in organic constant currency. As adjusted, OUP was negative 3 million in the quarter. This represents year-over-year OUP improvement during the last two quarters, reflecting cost actions taken to date. The restructuring charges of 5 million primarily represent actions in the Nordics and the UK. Our largest market in the Northern Europe segment is the UK, which represents 34 percent of segment revenues in the quarter. During the quarter, UK revenues decreased 2 percent on a day's adjusted constant currency basis, representing ongoing stabilization. The remaining countries in the region progressed, as expected, with largely stable to improving revenue trends. The Asia-Pacific Middle East segment comprises 11 percent of total company revenue. In the quarter, revenues equaled 510 million, representing an increase of 8% in constant currency. As adjusted, OUP was 22 million, and OUP margin was 4.3%. Our largest market in the APME segment is Japan, which represented 57% of segment revenues in the quarter. Revenue in Japan grew 4% on a day's adjusted constant currency basis. We remain pleased with the consistent performance of our Japan business, and we expect continued solid revenue growth in the second quarter. I'll now turn the cash flow and balance sheet. In the first quarter, free cash flow represented an outflow of 135 million compared to an outflow of 167 million in the prior year. The cash outflow was negatively impacted by the end of the first quarter payment timing involving our MSP business and to a lesser extent, some isolated working capital utilization. And we expect these items to reverse in the second quarter. We expect free cash flow to be negative in the first half of 2026, which will be offset by strong free cash flow during the second half. At quarter end, day sales outstanding was 59 days, up four days from the prior year, reflecting enterprise mix shifts and isolated quarter end timing on certain receivables. During the first quarter, capital expenditures represented 9 million and we did not repurchase any shares. Our balance sheet ended the quarter with cash of $225 million and total debt of $1.1 billion. Net debt equaled $922 million at quarter end, an increase from year end, reflecting first quarter seasonality. Our adjusted debt ratios at quarter end reflect total gross debt to trailing 12 months adjusted EBITDA of 2.86 and total debt to total capitalization at 36%. Detail of our debt and credit facility arrangements are included in the appendix of the presentation. Next, I'll review our outlook for the second quarter of 2026. Our forecast anticipates a continuation of existing trends. With that said, we are forecasting earnings per share for the second quarter to be in the range of $0.91 to $1.01. Guidance range also includes favorable foreign currency impact of $0.05 per share, and our foreign currency translation rate estimates are disclosed at the bottom of the guidance slide. Our constant currency revenue guidance range is between a 1% increase and a 5% increase, and at the midpoint is a 3% increase. Considering business days are equal year-over-year and the impact of dispositions is very small, our organic days-adjusted constant currency revenue increase also represents 3% growth at the midpoint. Even a margin for the second quarter is projected to be up 10 basis points at the midpoint compared to the prior year. We estimate that the effective tax rate for the second quarter will be 43%. I will continue to carve out any restructuring and global strategic transformation program costs incurred, and they are not included in the underlying guidance. In addition, we estimate our weighted average shares to be $47.7 million. I will now turn it back to Jonas. Thanks, Jack.

In closing, as the market continues to stabilize, we're operating well, staying focused, and executing with discipline. Our team remains hyper-focused on delivering for the now, while a dedicated group advances our transformation initiatives to position us for future opportunities. I look forward to keeping you updated on our continued execution as we build on the progress we've made and capture the momentum ahead. As always, thank you to our talented team for their relentless focus and to our candidates and clients for your continued trust. Operator, please open the line for questions.

Thank you. If you'd like to ask a question, please press star 11. If your question hasn't answered and you'd like to remove yourself from the queue, please press star 11 again. As a reminder, we ask that you please limit yourself to one question, and if you'd like to ask a follow-up, please requeue. Our first question comes from Andrew Steinerman with J.P. Morgan. Your line is open.

Hi. So it's good to be back to growth here. And, you know, thinking about the guide of organic constant currency, same day basis of 3%, it's pretty similar to the first quarter. So would you call Manpower's business in a, you know, recovery mode, like leaning towards acceleration here, or do more call it at a point of stable growth?

Good morning, Andrew. Yeah, no, I think we're very pleased with the improving momentum in the Manpower business. You saw an acceleration between Q4 into Q1. We're now anniversaring strong growth again. And as Jack said, we've had seven quarters of growth in Manpower in the U.S., four quarters globally. So it's really nice to see the Manpower business performing better and with momentum. And it's great to notice that despite all of the uncertainty and the volatility in the markets, the underlying economic activity is resilient, yet uncertain. And that is, as we know, a good opportunity for us to provide our services and workforce solutions

to our clients under the Manpower brand. Can I just ask a follow-up to that, Yuna? So, Obviously, moving forward in a still uncertain environment leans towards flexible labor solutions. One of the things I heard about when I presented at the Staffing Industry Analyst Conference is that companies are unsure of their medium-term plans for their workforce because of AI, and that might lean currently towards more flexible solutions as that's figured out. Do you think that's just a theory, or do you think that's happening in the marketplace and, you know, kind of part of the growth leaning forwards for manpower?

You know, for manpower, that would not really be a factor because it's very, you know, resilient to any AI impact. And I'm sure we'll talk later on around, you know, the impact in other areas and the opportunities above all that we see with AI. You know, I think it's basically an uncertainty related to the economic environment and outlook. Employers are getting buffeted by geopolitical events, tariffs, you know, wars that are ongoing or started, and that clearly drives employer hesitation. So in our mind, the client hesitation is more related to those events than any particular concerns or possible impact of AI into their workforce.

Understood. Thanks, Jonas.

Thanks, Andrew.

Thank you. Our next question comes from Jeff Silber with BMO. Your line is open.

Thank you so much. I wanted to shift gears and focus on some of the transformation savings that you talked about. Is it possible to give us a bit more color either by geographic regions where we might see more of those transformation services and also the timing by geographic regions? Are there certain regions we're going to see it ahead of others?

Thanks, Jeff. Good morning. Yeah, let me just before I hand it over to Jack to provide some more of the details, maybe take a step back and provide a bit of context around this global strategic transformation program. As we've talked about over a number of quarters, we've been investing very heavily in a digitization strategy that impacts all of our operations. So we're deploying global applications across our operations. We have also engaged in a significant back office transformation program. And based on those investments and the experience and capabilities that we're accumulating, and as Becky mentioned in the prepared remarks, the increased confidence that we see in the role that AI can play in improving our operations and delivering better services and solutions to our clients and candidates, We have been planning for a year now to really broaden this transformation program to also include our front office and really redesign our processes in a way that leads the industry and enables us to do things and drive our business in a very different way in the future. But so maybe, Jack, you could now give a little bit more detail around the announcement we made this morning.

Yeah. And specific to your question, Jeff, on geography impact. So I think the way I talk about it, as you see, this is both the back office, excuse me, the back office program, which we've progressed nicely. And as Jonas said, building on that, moving that to the front office processes. So you see in the charts that we provided on slide seven that the initial savings are coming through the back office. So that majority of the savings is coming from the European region, where we started a lot of our back office processes first. And that's both finance and IT coming through in terms of the standardization and centralization we've seen there on the technology, of course, that we've been talking about for quite some time. And as we move forward now with the front office, we're actually starting in North America. And so as you see the geography impacts and you see the green in that bar chart moving to front office savings, you'll see North America come through first in 2027. We're doing all that work now in 2026, and it's launched very well, and we're very excited about the progress so far. And then as we go to the rest of the world in 2027, following that blueprint from North America, you'll see more broader savings in the rest of the regions coming through in 2028. And that's on the front office side. On the back office side, as I mentioned, starting in Europe, we're actually in the process of doing North America and wrapping up North America on the back office process now. And so that will contribute to some of those additional savings on the blue component of that bar chart into 2020. That's really helpful. Thanks so much.

Thanks. Thank you. Our next question comes from Karthik Mehta with North Coast Research.

Your line is open. Hey, good morning. Jack, if you just look at the gross margin trends, you know, you talked about maybe the impact staffing is having on it. And I'm wondering how much of that is just mixed? Is it just enterprise demand versus SMB demand that you've seen in the past? Or is pricing having an impact now? Yes. Thanks, Kartik. So let me talk to that. You know, I guess what I'd take you back to is the second half of 2025. And at that time, we were seeing enterprise mix shift continue to have an average in and have an impact on the overall staffing margin. And when we show the staffing margin walk year over year, you can see that having an impact. And as we went from the third quarter to the fourth quarter, we actually saw that stabilize. The level of staffing margin decrease from the enterprise mix kind of held steady. And the issue at that time was more PERM. PERM was coming in softer and was driving a bit of that GP margin decrease, further decrease year over year. And so as we walk into the first quarter here, I think the story is PERM actually has stabilized. PERM actually came in a little bit better sequentially than the fourth quarter. So that really wasn't the driver. Getting back to the staffing, really what happened in the first quarter, and the first quarter is traditionally when you will start to see maybe some of the bench impacts from the bench countries. And that's where absenteeism and sickness has a bit of a role. And we saw an outsized impact on that in the first quarter. So that went against us on the staffing line. That drove roughly somewhere 10 to 20 bits of additional headwinds. And, you know, as Jonas said, our growth was very strong. So that growth is predominantly enterprise. And so that growth came in a bit stronger and drove a little bit more pressure on just the averaging of the midship. But I'd say that's really what's happening and that's what we're seeing right now. Enterprise continues to be the strongest part of the demand and that's how I characterize what we're seeing. I do, as you do see in my guide going from Q1 to Q2, we do see it strengthening and that is after we, you know, remove the drag associated with the bench issues in the first quarter, which are traditionally more of a winter phenomena as we move into the second quarter.

So then, Jack, just to make sure, so you don't think it's a structural issue right now? It's just more of a timing issue and maybe seasonality issue because of the bench countries?

That's correct. That's correct, Kartik. At this point, you know, pricing is always very competitive, but at this point, we continue to think pricing is rational. it's predominantly a mixed shift with enterprise being the strongest demand at the current time.

Thank you very much.

Thank you. Our next question comes from Mark Marcon with Baird. Your line is open.

Good morning. Jonas, you know, early in your remarks, you talked about the strengthening that you're seeing in Europe. And I'm wondering if you could just provide a little bit more color and also, you know, what you're hearing from your European colleagues with regards to, you know, any concerns around the impact of the war and whether, you know, you think, you know, that continued, that strengthening can continue. And then I've got a follow-up on the restructuring.

Good morning, Mark. Yeah, no, we've been very encouraged with the improvement that we've seen in a number of our countries in Europe. And largely, you could say that, you know, Southern Europe continues to be very strong in a number of markets. You've seen our results in Italy. Again, the market leading very strong growth. It's our third biggest market globally. So we're very pleased with that, but also other countries and very pleased also to see France come back to flat. And Northern Europe continued to improve. Still a lot of work to do for us in Northern Europe, but we're encouraged with the progress that we're making. And I think as you see our guide into the second quarter, you see we expect that improvement to continue. And a lot of that is underpinned by what we briefly mentioned earlier, which is this economic resilience, the labor market resilience, the improvement in PMIs. In all of our major markets today, PMI is above the expansionary level, so above 50, which has been a long time coming, and we can see that. So despite the uncertainty, despite the volatility that companies are experiencing, they have become adept to be agile in this environment. They are interested and believe that this volatility and these uncertainties will subside, and they need to continue to move their business forward, and we're very pleased to see that they're doing that with us to a greater degree in the first quarter as well, and looking good also into the second quarter. As it relates to the events in the Middle East this time, you know, it's really too early to assess if there will be a broader impact. Today, we don't see an effect on customers, and we've been really encouraged by the resilience and adaptation to the rapidly changing environment more broadly. So companies have gotten used to a volatile environment, and they are looking past the noise to the signals, what they need to achieve as a business, and they are moving forward. So, so far, as you can tell from our guide, we're not seeing and including any other effects, which, of course, we're monitoring. and should anything happen, of course, we will take the actions that you've seen us take in the past. We have an experienced management team. We are used to managing in this environment. And as you can see from our results, we're executing with discipline and adjusting to any changes

that we see happen. But you had a follow-up question for Jack? Yeah, or for you. In terms of just the restructuring, you mentioned the charges that you're anticipating through the end of this year. Do you foresee further restructuring charges going into 27 and 28? How should investors think about the cash flow impacts of those restructuring charges and the timing of those. And then as it relates to the savings, from a timing perspective, when we talk about the $200 million, would that basically be kind of a run rate savings toward the end of 28, or could we expect all of those savings to actually hit in 28? and what percentage of that would you actually expect, you know, to drop down to the EBITDA line as opposed to being, you know, potentially being redeployed for other uses?

Hey, Mark, that is definitely a Jack question. You managed to work in five questions into that slot. So, Jack.

Take it from here. Mark, no, thanks for the question, Mark. And so, obviously, this is a big program for us, so I understand the questions on the charges. So, the way I would answer it is, if you look at that split that I provided for 2026, yes, there is severance and restructuring in the mix. A part of it, and a big part of it, is the program transformation costs, right, as well. So as we look at the rest of 2026, it's basically one-third restructuring and two-thirds program. And as I mentioned, that's lower than the run rate in the first quarter. The first quarter, we had a bit more restructuring. That included Europe, of course, and some other things. As you think ahead to 2027, I would say in terms of the program cost, that will continue, maybe even be a bit slightly higher. Restructuring at this stage is a little too early to tell, and I'll give further guidance on that as we get through 2026. There's a couple different variables there. So if the environment stays very static and stable as it is today, then you should expect restructuring will increase. If we start to see some good recovery trends, then it could be very different as we redeploy people into higher growth processes. So that could reduce restructuring as we go to the rest of the world after 2026. So a bit too early, but with all of that kind of getting at the heart of your question, we're managing this very carefully based on cash and resources. and we will continue to do that. So we, you know, we continue to be very focused on improved free cash flow for the full year and we're going to balance that. And as I said in the prepared remarks, the ongoing cost reduction savings are going a long way to fund these activities and that's going to continue to be our playbook as we go forward. So a very careful balance.

I guess getting to the heart of the question, like where would, let's say we're in a constant run rate by the end of 28 with these programs being put in place how should investors think about like what's a reasonable EBITDA margin target for 28 obviously you're not giving guidance but just if we're just taking a look at this program how theoretically how should we think

about it yeah and good point I meant to answer that part of the question as well Mark so thanks the reminder so to answer your question we uh we anticipate the full 200 million coming in in 2028 so not not run rate in the fourth quarter of 28 for the full year based on the work we're doing this year and next year that will flip to a 200 million um run rate savings in 2028 and as i mentioned a little too early to anticipate you know if there's additional restructuring um that runs into 2028. We'll give updates on that in the future, but as we think about the impact of the program, that is what we anticipate to be the benefit to the cost structure. So, you know, in terms of, you know, the guide on, I guess, the financial target that we continue to be firmly committed to, the four and a half to five percent, as we've said in the past, You can do the math on this, but if you just apply the $200 million to where we've been the last four quarters on a run rate basis, basically that adds 110 basis points to our EBITDA margin in isolation. So right away, you know, running, if I look at last year, we're running at about 2% adjusted EBITDA margin at 110 basis points to that just in this environment, in this current environment. If we get operational leverage on a stronger recovery, our track record shows that if we start to get a strong recovery, we get very, very good additional operational leverage. And we saw that going from 20 to 21 where EBITDA margin expanded 90 basis points and then expanded another 40 basis points the year after as the recovery took hold. So that's the operational leverage additional part of it. But in isolation, this will go a long way into accelerating our path towards that EBITDA margin commitment.

Terrific.

Thank you. Our next question comes from George Tong with Goldman Sachs. Your line is open.

Hi, thanks. I wanted to touch on the manufacturing environment specifically. You highlighted how manufacturing is strengthening, particularly across Europe. Can you provide country-specific details on the manufacturing landscape and drivers of the improvement in those countries?

Thanks, George. Yeah, as you heard me say earlier, you know, you can see the manufacturing environment improving across both the U.S. and Europe by looking at the PMI. And we've really seen that be a positive evolution over the last three months or so. So I think that gives you an idea that, you know, there are different sectors, of course, that are stronger than others. One sector that we feel very, very good about is the aerospace and defense, where we have a very strong position in Europe. And we expect that this is going to grow in terms of the share of our business with the increased spending on defense. So you can see a number of areas that are doing better. There are a number of industries that are struggling a bit, like automotive. Logistics has been a bit weak in some of the markets across Europe. But more broadly speaking, the economy is resilient, the labor markets are resilient, and PMI, from a manufacturing perspective, is improving both in Europe and in the United States.

George, you asked about geographies a little bit. Maybe I'll just give a really quick some color on the geography. So if I just look at our manpower business, which obviously is very tied to manufacturing, as we talked about, the U.S. was up 5% in the quarter. Actually, a bit impacted by weather. Extreme weather in the quarter probably was about a 1% drag, so it would have been about 6%. So the punchline there is continued strong progress, momentum on manufacturing sector. France, as we mentioned, moved predominantly manpower business, moved to flat. Italy, very strong manufacturing concentration, up 8%. And Spain, you know, very, very strong growth. You see the double-digit growth that we had in Spain as well. So, I'd say pretty broad-based, as Jonas said, from a geography standpoint as well. And that's what's really contributing to that, you know, that global manpower business 6% growth in the quarter overall. Got it. Very helpful. Thank

you. Thank you. Our next question comes from Manav Patnik with Barclays. Your line is open.

Hi. Good morning. This is Ronan Kennedy. I'm from Manav. Thank you for taking my question.

If not mistaken, you referenced $200 million of incremental revenue in France from AI-powered sales. How scalable is this globally, and which markets represent the next largest opportunity? And then beyond that top-line contribution, how is AI changing win rates, pricing discipline, customer lifetime values, and when can we expect to see this reflected in margins?

Thanks, Jorona, and this is Becky, and I'll take that for you. First, to France specifically. So we launched an AI-powered sales targeting engine that basically says what's happening in the market in real time, where do we have strengths and our capabilities? We match the two, and that's what has demonstrated our revenue growth there. We will scale to 50% roughly of our markets by year end. So you'll see that sequence come out as we have future earnings calls. To your next question around how AI overall, as you heard in my prepared remarks, we are very active in that space. in two parts. One, internally applying it to our processes, as you heard me talk about with very new strategic partnerships in the AI space with Hubert.ai embedded in our power suite and our recruiting processes, sales targeting, but also how we apply AI externally to create net new products. And so the SoundHound partnership I talked about that's focused on experience in the U.S. is really breakthrough in our industry. So we're leveraging the fact I mentioned on the last earnings call, that we have limited exposure to coders, which is a place that has been impacted. We are shifting that limited exposure to a tailwind for AI in our business by bringing agents and humans together to deliver value for our clients. And so we're active on a two-part view with AI in our business and for our clients for new products.

That's very helpful, Becky. Thank you. And then may I confirm the element of question on

expectation for margin implications? Yes, thank you, Ronan. I meant to answer that for you. Yeah, it's early, Ronan. So, early days for us, we're very encouraged, one, by our capabilities to bring these tools in quickly to form strategic partnerships in the AI space. We're encouraged by the margin potential that our early deals have shown, but early days, and we expect this to be able to scale, and I'll keep you updated as it does. Thank you, Becky. Appreciate it.

Thank you. Our next question comes from Toby Sommer with Truist. Your line is open.

Thanks. I wanted to ask you a relative question on your AI targeting tool as well as your systems, investments, and reimagining. Where do you think this puts you in terms of market share and, you know, let's say the lead on reimagining versus others after three or four years of declining market, there are probably a lot of boards and management teams in front of a white board trying to reimagine. And where do you think you are relative to their visions of the future

and actions? Well, thanks, Toby. So as we talked about, we started this journey of creating a global data infrastructure, really clearing our technological debt and replacing it with modern cloud-based SaaS platforms that we have now deployed globally, covering 90% of our revenues and 80% of our back office transformation. That is unique in our industry at our scale because we're doing this on single platforms. We have a global data lake that is covering 100 billion data points and all of our applications are putting the data into the same data lake. And that has opened up this opportunity for us to really think about our business and how we run our business in a very different way. We have built experience and capability, of course, going through the back office transformation and re-engineering processes there. As Becky will talk more about in a minute, how we're now starting to see AI have a bigger impact, both in terms of how we interact with clients, how we interact with the talent, the kind of insights that we can now bring to our clients that provides added value is what's really, really exciting to us. And that's what's given us the confidence to say that this is something that we think can really reshape our industry, can drive faster and higher fill rates, and also drive further efficiencies. So, Becky, if you take it from there.

Yeah, thanks, Toby. So I laughed a little bit in how you asked the question about whiteboards because I've spent a lot of time on whiteboards lately. reimagining how this business can run in a totally different way. So the question is, how do we do what we do in a totally different way and add more value to our candidates and our talent and our clients? And so we are looking at AI as a growth and productivity multiplier. We need that two-party equation. We're looking to automate what we can and should and keep human what we know our clients and our candidates want to keep human with a very heavy dose of governance on top of it to make sure that we meet the needs and demands of our clients and our candidates. And so we're encouraged. You asked about where we are in leadership. Obviously, we're not privy to what everyone is doing, but we feel very good that we are moving with speed in months versus years, and we've been doing this for a horizon.

And then if I could ask, if you feel like you're in a good spot relative to speed and sort of the pace in which you're executing against your own vision. Who's losing if you,

in fact, are winning? Yeah, so I would say, again, I don't quite know how to answer that question directly, because what we focus on is our winning versus other people losing. And winning to us is actually delivering more value to our clients and keeping our candidates central to our efforts. At the same time, making sure our employees are prepared for this new horizon. So you heard me say in our prepared remarks, we've invested significantly internally in time and of our people to make sure they're trained on using AI tools. You've not heard a number from us on 80% of our workforce is now using AI on a regular basis. And so I would say

to us, that feels like winning. Okay. Thank you. Thank you. Our next question comes from Trevor

Romeo with William Blair. Your line is open. Thanks for taking the questions. Just one quick one for me. I was wondering if you could talk about what you think is going to be in the U.S.?

Hey, Trevor, sorry. We could not hear any of that questions. Could you please repeat the question? You were breaking up. Can you hear me now? No, we can't hear you. I'm sorry about that.

Is that from here?

A little better.

Sorry about that. Hopefully this is better. Thank you for taking the question. I was trying to ask about the overall environment for experience in the U.S. It sounds like you're expecting things to get up a little bit.

I'm very good.

Yeah, so Trevor, this is Becky. Unfortunately, you dropped out again after a very strong few words. but I believe you're asking about the environment for experience in the U.S., and so I'll answer that, and you might try to move to a better place so we can hear you better. For experience in the U.S., you know, first let me take a step back on, you know, the question that's top of mind, which is impact of AI on that business. So overall for AI, we feel continued encouragement by the resilience of our manpower business, as you heard both Jack and Jonas refer to in the face of a lot of AI conversations. For our tech clients, they are cautious on AI spend. You know, they're being careful about where, or on their project spend, they're being careful about where they're investing their money, and thoughtful and cautious and a little slow to say yes. But for Xperia, specifically to your question, we've been very encouraged. We have seen our pipeline grow specifically in healthcare, in life sciences over the quarter. So we exit the quarter with a robust pipeline. We have seen our clients turn to us for advisory. And again, as mentioned, when we talked about the partnership with SoundHound, we're turning AI into a tailwind for us. So we are actually in a product now. We are selling a product that is agents plus humans. And so that is the future that we serve for experience here in the U.S.

All right. Thank you, Becky. I think that was basically the spirit of my question. Hopefully, you can hear me better now. Maybe just to very quickly. Thank you. Maybe just to very quickly follow up. It sounds like you're expecting the U.S. to go back to positive year over year. Are you also expecting experience to go back to positive year over year, or would that still be slightly down? Thank you, too.

Yeah, no, Trevor, great question. So you're right. In the guide, I have the U.S., I said, going to positive growth, and so that is definitely part of the America's revenue growth that we're seeing. Experience, we see getting very close to flattish. so a revenue trend in Q2 overall. And as I mentioned, what's really happening there is you see the healthcare project work, those go-lives. I've created a lot of bumpiness year over year. That pretty much works its way through as we go into the second quarter. And as I mentioned, on an underlying basis, the business actually has been quite stable. So we start to anniversary some of that and move closer to a flattish type result in Q2. So, we have seen some good stability in the business. Looking at the weeklies, we're encouraged by some of the consultant headcount increases, and we're taking that into Q2. Okay. Thank you very much.

Thank you. Our next question comes from Josh Chan with UBS. Your line is open.

Hi, good morning, Jonas, Becky, Jack. Thanks for taking my question. So on the savings, could you just give more color in terms of what is actually being saved to result in the dollar savings? And then relatedly, kind of conceptually, why would the savings be higher in the front office and the back office? Thank you.

Yeah, so happy to talk about that. I think if you think about the savings, it's going to really follow a lot of what we've already done on the back office. So the way to think about it, Josh, is if we had separate streams and workflow activities in every major business in terms of some of the historical back office processes, and then we move into global business service centers like we've talked about with our Porto Center in Europe for our European locations, what we're able to do is centralize a lot of work into those hubs. And that is reducing a lot of the infrastructure that we need in-country. And it's going to continue to be that model on the back office applied to the front office processes. So on the back office, it's been the finance and IT-related functions that have improved their efficiency as a result of this centralization and standardization. And on the front office side, it's going to be recruiting. it's going to be sales, it's going to be service delivery. And when you look at the size of those functions, they're bigger. I mean, it's one of the biggest parts of the business, right, as we think about the front office opportunity. So that's what's going to drive it. And so you're going to hear us talk a lot more about, you've heard us talk a lot about our back office, global business service centers. You're going to hear us talk more and more. That's going to be a really critical, important part of our centralization and standardization going forward. And that's going to benefit our efficiency in our major businesses going forward. So that's the way to think about it. It's continuing what we've already done on the back office through similar themes and applying that to big populations of the front office. And of course, underlying all of that, as you heard from Jonas and Becky, will be automation. Automation is a key element of all this, and the opportunity of agentic AI being infused, and that is going to be a real efficiency driver on top of that. So all of that is how we get to those significant front office costs that

you've seen broken out. Great. Thank you for the call, Jack. Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to Jonas Priesing for closing remarks.

Thanks, Michelle, and thanks, everyone, for participating in our earnings call this morning. We look forward to speaking with you again at our Q2 earnings call in July. And until then, thanks very much. Look forward to speaking with all of you again soon.

Thank you for your participation. You may now disconnect. Everyone, have a great day.