Advantage Solutions (ADV) risk factors, FY2025 10-K

Other

1. 01Summary of Principal Risks Associated with Our Business28% rewritten

Risks Related to the Company’s Business and Industry

1. 02Market-driven wage increases and changes to wage or job classification regulations, including minimum wages could adversely affect our business, financial condition or results of operations
2. 03An inability to hire, timely train and retain talented individuals for our workforce could adversely impact our ability to operate our business
3. 04Our business and results of operations are affected by developments with and policies of retailers that are out of our control
4. 05Consolidation in the industries we serve could put pressure on the pricing of our services, which could adversely affect our business, financial condition or results of operations
5. 06CPG manufacturers and retailers may periodically review and change their sales, retail, marketing and technology programs and relationships to our detriment
6. 07Our largest clients generate a significant portion of our revenues
7. 08The retail industry is evolving, and if we do not successfully develop and maintain relevant omni-channel services for our clients, our business, financial condition or results of operations could be adversely impacted
8. 09Interruption of supply chains and tariffs, retaliations or other governmental restrictions could adversely affect our business and our profitability
9. 10We may be unable to adapt to significant technological change, which could adversely affect our business, financial condition or results of operations
10. 11Our ability to maintain our competitive position depends on our ability to attract and retain talented executives
11. 12Client procurement practices could put additional operational and financial pressure on our services or negatively impact our relationships, business, financial condition or results of operations
12. 13If we fail to offer high-quality customer service, our business and reputation may suffer63% rewritten
13. 14We may be adversely affected if clients reduce their outsourcing of sales and marketing functions
14. 15Divestitures or other dispositions could negatively impact our business, financial condition or results of operations
15. 16Divestitures or other dispositions could have significant accounting and tax implications that could negatively impact our business, financial condition or results of operations
16. 17Our corporate culture is a significant factor to our long-term success and, if we are unable to promote the key aspects of our culture across our organization as we transform, our business, operating results and financial condition could be harmed
17. 18Acquiring new clients and retaining existing clients depends on our ability to avoid or manage business conflicts among competing brands
18. 19Business decisions involving our joint ventures and minority investments may adversely affect our growth and results of operations40% rewritten
19. 20Our international operations and investments expose us to risks that could impede growth in the future, and our attempts to grow our business internationally may not be successful
20. 21the risks of a natural disaster, public health crisis (including the occurrence of a contagious disease or illness, such as the coronavirus), an outbreak of war, the escalation of hostilities and acts of terrorism in the jurisdictions in which we operate
21. 22If we are unable to identify attractive acquisition targets, acquire them at attractive prices or successfully integrate the acquired businesses, we may be unsuccessful in growing our business
22. 23We may encounter significant difficulties integrating acquired businesses
23. 24Many of these factors are outside of our control, and any one of them could result in increased costs, decreased expected revenues and diversion of management time and energy, all of which could adversely impact our business and results of operations
24. 25We may be subject to unionization, work stoppages, slowdowns or increased labor costs39% rewritten
25. 26If goodwill or other intangible assets in connection with our acquisitions become impaired, we could take significant charges against earnings57% rewritten
26. 27Security incidents involving our technology or infrastructure could damage our reputation and substantially harm our business and results of operations98% rewritten
27. 28We expect such attacks and incidents to continue in varying degrees and cannot assure that future cyber incidents will not occur or that our IT Systems or data will not be targeted or breached in the futureNew
28. 29evidence. As a result, we may be unable to detect, investigate, remediate or recover from future attacks or incidents, or to avoid a material adverse impact to our IT Systems, Confidential Information or businessNew
29. 30Failure to comply with federal, state, and foreign laws and regulations relating to privacy and data protection could adversely affect our business and our financial conditionNew
30. 31We use AI, machine learning, and automated decision-making technologies (collectively, “AI Technologies”) throughout our business, and are making investments in this areaNew
31. 32Complications with the further implementation of our new enterprise resource planning system could adversely impact our business and operations42% rewritten
32. 33Our business is seasonal in nature and quarterly operating results can fluctuate
33. 34Our business is competitive, and increased competition could adversely affect our business and results of operations
34. 35Our business is subject to risks associated with climate change
35. 36Failure to meet environmental, social and governance (“ESG”) expectations or standards could adversely affect our business, results of operations, financial condition, or stock price22% rewritten
36. 37Damage to our reputation could negatively impact our business, financial condition and results of operations
37. 38We have outsourced certain functions to third-party service providers, and any service failures or disruptions related to these outsourcing arrangements could adversely affect our businessNew
38. 39We rely on third parties to provide certain data in connection with the provision of our services26% rewritten
39. 40We may be unable to timely and effectively respond to changes in digital practices and policies, which could adversely affect our business, financial condition or results of operations
40. 41Future pandemics may have an adverse effect on our business, results of operations, financial condition and liquidity28% rewritten
41. 42We may not be able to adequately protect our intellectual property, which, in turn, could harm the value of our brands and adversely affect our business
42. 43We are dependent on technology licensed from others. If we lose our licenses, we may not be able to continue developing our products
43. 44Consumer goods manufacturers and retailers, including some of our clients, are subject to extensive governmental regulation and we and they may be subject to enforcement in the event of noncompliance with applicable requirements
44. 45We may be subject to claims for products for which we are the vendor of record or may otherwise be in the chain of title46% rewritten
45. 46these claims could be costly and time consuming and may require our management to spend time defending the claims rather than operating our businessNew
46. 47We generate revenues and incur expenses throughout the world that are subject to exchange rate fluctuations, and our results of operations may suffer due to currency translations
47. 48Fluctuations in our tax obligations and effective tax rate and realization of our deferred tax assets may result in volatility of our operating results
48. 49future earnings being lower than anticipated in jurisdictions where we have lower statutory tax rates and higher than anticipated earnings in jurisdictions where we have higher statutory tax rates

Risks Related to Ownership of Our Common Stock

1. 50We are controlled by Topco, the Advantage Sponsors, and the CP Sponsor, whose economic and other interests in our business may be different from yours
2. 51The anti-takeover provisions of our certificate of incorporation and bylaws could prevent or delay a change in control of us, even if such change in control would be beneficial to our stockholders
3. 52establishing advance notice requirements for nominations for election to the board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings
4. 53Subject to certain exceptions, an “interested stockholder” is a person who, together with that person’s affiliates and associates, owns, or within the previous three years owned, 15% or more of our outstanding voting stock
5. 54The provisions of our certificate of incorporation and bylaws requiring exclusive venue in the Court of Chancery in the State of Delaware or the federal district courts of the United States of America for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers
6. 55Because we have no current plans to pay cash dividends on our Class A common stock, you may not receive any return on investment unless you sell your Class A common stock for a price greater than that which you paid for it
7. 56On January 7, 2026, we received a letter from Nasdaq stating that the closing bid price for our common stock over the prior 30 days was below the minimum required share price for continued listing on Nasdaq (the “Minimum Bid Price Requirement”)New
8. 57An active, liquid trading market for our Class A common stock may not be available
9. 58The trading price of our Class A common stock may be volatile or may decline regardless of our operating performance
10. 59the realization of any risks described in this Annual Report under “Risk Factors.”
11. 60We cannot provide any guaranty that we will continue to repurchase our common stock pursuant to our stock repurchase program

Risks Related to Indebtedness

1. 61We need to continue to generate significant operating cash flow in order to fund our internal investments and acquisitions and to service our debt
2. 62Our substantial indebtedness could adversely affect our financial health, restrict our activities, and affect our ability to meet our obligations
3. 63Our recent debt transactions may not achieve their anticipated benefitsNew
4. 64Despite current indebtedness levels, we and our subsidiaries may still be able to incur additional indebtedness, which could increase the risks associated with our indebtedness26% rewritten
5. 65Failure to maintain our credit ratings could adversely affect our liquidity, capital position, ability to hedge certain financial risks, borrowing costs, and access to capital markets
6. 66Our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly
7. 67Our business and financial results may be affected by various litigation and regulatory proceedings
8. 68We are subject to many federal, state, local and international laws with which compliance is both costly and complex
9. 69Our insurance may not provide adequate levels of coverage against claims
10. 70If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our common stock, the price of our Class A common stock could decline
11. 71Substantial future sales of our Class A common stock, or the perception in the public markets that these sales may occur, may depress our stock price33% rewritten