2. Discontinued Operations, Divestitures and Deconsolidation of European Joint Venture

The Company classifies a business that has been disposed of or is classified as held for sale as a discontinued operation when the criteria prescribed by FASB ASC 205, Presentation of Financial Statements are met. The 2023 Divestitures (as described below) along with the 2024 Divestitures (as described below) (collectively, the “discontinued operations” that are all part of the divestiture plan) met the criteria for discontinued operations presentation as their dispositions represent a strategic shift that has had a major effect on the Company's operations and financial results.

As part of the agreements for certain divestitures, the Company has agreed to provide certain transitional services as detailed within respective transition services agreements for a period of time after sale. Income and expenses related to these transitional services are immaterial and are reported in “Net loss from continuing operations” on the Consolidated Statements of Operations and Comprehensive Loss.

As of December 31, 2024, all businesses that were previously classified as discontinued operations had been fully divested.

The following table presents the summarized statements of operations of discontinued operations.


	Year Ended December 31,
(in thousands)	2024			2023
Revenues	$	80,017		$	324,720
Cost of revenues (exclusive of depreciation and amortization shown separately below)		59,605			245,420
Selling, general, and administrative expenses		15,816			14,855
(Gain) loss on divestitures		(95,099	)		19,068
Depreciation and amortization		4,695			15,841
Total operating expenses		(14,983	)		295,184
Operating income from discontinued operations		95,000			29,536
Other expenses:
Interest expense		48			68
Total other expenses		48			68
Income before income taxes from discontinued operations		94,952			29,468
Provision for income taxes from discontinued operations		41,318			8,639
Net income from discontinued operations, net of tax		53,634			20,829
Less: net income from discontinued operations attributable to noncontrolling interest, net of tax		2,192			594
Net income from discontinued operations attributable to stockholders of Advantage Solutions Inc.	$	51,442		$	20,235

The following table provides a summary of the cash flows from continuing and discontinued operations:


	Year Ended December 31,
(in thousands)	2024			2023
Net cash provided by operating activities from continuing operations	$	93,095		$	228,492
Net cash provided by operating activities from discontinued operations		6,437			10,513
Net cash provided by operating activities		99,532			239,005

Net cash provided by (used in) investing activities from continuing operations		206,446			(50,515	)
Net cash used in investing activities from discontinued operations		(7,304	)		(4,708	)
Net cash provided by (used in) investing activities		199,142			(55,223	)

Net cash used in financing activities from continuing operations		(211,417	)		(178,396	)
Net cash used in financing activities from discontinued operations		(4,362	)		(2,942	)
Net cash used in financing activities		(215,779	)		(181,338	)

Net effect of foreign currency changes on cash from continuing operations		(4,575	)		1,800
Net effect of foreign currency changes on cash from discontinued operations		(412	)		76
Net effect of foreign currency changes on cash		(4,987	)		1,876

Net change in cash, cash equivalents and restricted cash from continuing operations		83,549			1,381
Net change in cash, cash equivalents and restricted cash from discontinued operations		(5,641	)		2,939
Net change in cash, cash equivalents and restricted cash	$	77,908		$	4,320

On December 17, 2025, the Company sold its digital user‑experience design and prototyping business, which operated within the Company’s Branded Agencies reporting unit. As part of the divestiture, the Company received $22.0 million in cash proceeds at closing, subject to working capital adjustments. In addition, the Company is eligible to receive contingent consideration of up to $4.0 million in the aggregate based on the achievement of specified gross profit thresholds for the 2026 and 2027 performance periods. The estimated fair value of the contingent consideration as of the transaction date was $2.0 million, determined using Level 3 inputs, primarily discounted cash flow assumptions. The Company recognized a gain on the divestiture of $19.0 million during the year ended December 31, 2025. The disposed business did not represent a strategic shift that would have a major effect on the Company’s operations or financial results and therefore remains classified within continuing operations.

On January 31, 2024, the Company sold a collection of foodservice businesses, previously classified as held for sale (as current assets) as of December 31, 2023 (collectively with the other businesses disposed during the year ended December 31, 2024, the “2024 Divestitures”). As part of the sale, the foodservice businesses were combined with an entity owned by the buyer, with the Company receiving approximately $91.0 million, subject to working capital adjustments and an ongoing 7.5% interest in the combined business. The ongoing ownership interest represents a continuing involvement which the Company has determined represents an equity method investment. Upon the close of the transaction, the retained 7.5% interest was recognized at fair value of $8.4 million, valued using unobservable inputs (i.e., Level 3 inputs), primarily discounted cash flow.

During the year ended December 31, 2025, the Company sold its remaining 7.5% ownership interest in the combined foodservice business for $18.6 million in cash proceeds, resulting in a gain of $8.5 million. The sale of the remaining ownership interest did not represent a strategic shift that would have a major effect on the Company’s operations or financial results. Accordingly, the related results and gain on sale are presented as a component of continuing operations, with the gain recognized in “Gain on divestiture” within the Consolidated Statements of Operations and Comprehensive Income (Loss).

The investment was reported in “Investments in unconsolidated affiliates” on the Consolidated Balance Sheets and an immaterial amount of equity income (loss) reported in “Income from equity method investments” on the Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2024 and 2025. Transactions between the Company and the combined foodservice entity are considered to be related-party transactions subsequent to the divesture.

During the second quarter of 2024, the Company sold two agencies in the Branded Services segment, one agency in the Experiential Services segment and one agency in the Retailer Services segment. The Company received $65.2 million including estimated working capital adjustments.

On July 31, 2024, the Company completed the sale of the Jun Group business in exchange for proceeds of approximately $185.0 million less any adjustments. The Company received approximately $130.0 million in cash upon completion of the sale. As part of the purchase agreement, the buyer has agreed to remit the remaining consideration of $27.5 million (less $5.0 million estimated adjustments) and $27.5 million, 12 and 18 months, respectively, after the completion of the sale. During the third fiscal quarter of 2025, the Company received approximately $22.5 million in cash related to the first installment. Subsequent to December 31, 2025, the Company received the second installment of approximately $27.5 million. The second installment is reflected within ‘Prepaid expenses and other current assets’ in the Consolidated Balance Sheets as of December 31, 2025.

The portion of the cash settlement up to the acquisition date fair value of the contingent consideration is classified as “'Proceeds from divestitures” in cash flows from investing activities in the Consolidated Statements of Cash Flows.

During the fourth quarter of 2025, the Company identified an immaterial misstatement in the presentation of the deferred proceeds received, from the buyer, related to the sale of Jun Group that were presented as cash inflows from financing activities in the condensed consolidated statement of cash flows for the nine months ended September 30, 2025. Upon further review, the Company determined that these proceeds in the amount of $22.5 million should have been presented as cash inflows from investing activities, which has been corrected in the accompanying consolidated statement of cash flows for the year ended December 31, 2025. The Company evaluated the materiality of the misstatement and concluded that it was immaterial to the previously issued interim financial statements taken as a whole. Although the Company has determined that this misstatement was not material, the Company is revising the previously issued interim financial statements to correct the presentation, which revision will be effected in connection with its future filing of Form 10-Q in 2026.

During the year ended December 31, 2024, the Company recorded a gain from the 2024 Divestitures of $95.1 million as a component of “Net income from discontinued operations, net of tax” in the Consolidated Statements of Operations and Comprehensive Loss. Proceeds from the sales were classified as cash provided by investing activities from continuing operations in the Consolidated Statements of Cash Flows.

On November 30, 2023 the Company reduced its equity interest in Advantage Smollan Limited (“ASL”), its European joint venture, from a majority interest to a minority interest of 49.6%. The Company also removed certain participating rights with ASL related to capital allocation and certain of the Company’s decision making rights, resulting in a loss of control. Therefore, in accordance with ASC 810, ASL was deconsolidated from the Company’s consolidated financial statements. Effective December 1, 2023, the Company’s investment in ASL is accounted for under the equity method of accounting, with the investment reported in “Investments in unconsolidated affiliates” on the Consolidated Balance Sheets and equity income (loss) reported in “Income from equity method investments” on the Consolidated Statements of Operations and Other Comprehensive Loss. Transactions between the Company and ASL are considered to be related-party transactions from the date of deconsolidation.

The fair value of the Company's continuing investment in ASL of $91.9 million was determined at the date of deconsolidation, recorded within “Investments in unconsolidated affiliates” on the Consolidated Balance Sheets and is assessed for impairment at each reporting period. The estimated fair value of the underlying business was determined based on a combination of the income and market approaches. The income approach utilizes estimates of discounted cash flows for the underlying business, which requires assumptions for growth rates, EBITDA margins, terminal growth rate, discount rate, and incremental net working capital, all of which require significant management judgment. The market approach applies market multiples derived from historical earnings data of selected guideline publicly traded companies. The Company compared a weighted average of the output from the income and market approaches to compute the fair value of ASL. The assumptions in the income and market approach are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy (described in Note 1—Organization and Significant Accounting Policies). The difference between the carrying value of the assets and liabilities of ASL that were deconsolidated and the fair value of the continuing investment, as determined at the date of deconsolidation, was $58.9 million, before tax, and this gain on deconsolidation is reflected within the Company’s Consolidated Statements of Operations and Other Comprehensive Loss for the year ended December 31, 2023. As a result of the ASL deconsolidation, the Company determined a triggering event occurred for the sales indefinite-lived trade name and an intangible asset impairment charge of $43.5 million was recorded. As part of the Company derecognizing ASL, the Company attributed $18.2 million of the former Sales reporting unit

goodwill to that business, which was derecognized and reflected in the calculated gain on sale. The Company determined that the remaining former Sales reporting unit goodwill was not impaired.

ASL is party to transactions with the Company and its consolidated subsidiaries entered into in the normal course of business and these transactions include corporate expenses for services benefiting ASL. Up to the date of the deconsolidation, these transactions were eliminated on consolidation and had no impact on the Company’s Consolidated Statements of Operations and Comprehensive Loss. After deconsolidating ASL, these transactions are treated as third-party transactions in the Company’s financial statements. The amount of these related-party transactions is included within Note 15—Related Parties.

During the year ended December 31, 2023, the Company recognized a loss on the sale of businesses of $19.1 million, as a component of “Net income from discontinued operations, net of tax” in the Consolidated Statements of Operations and Comprehensive Loss. The Company received $21.1 million of proceeds, net of transaction fees and holdbacks.