Adecco Group Reports Strong Q1 2026 Growth as Revenue Beats Forecasts and Hiring Demand Improves
Adecco Group Reports Strong Q1 2026 Growth as Revenue Beats Forecasts and Hiring Demand Improves
Adecco Group AG delivered a strong start to 2026, reporting higher revenue, improved profitability, and continued market share gains in the first quarter. The Swiss staffing and workforce solutions company said revenue rose to €5.66 billion, supported by solid demand across several major regions and stronger momentum in flexible staffing. The company’s Q1 2026 earnings call was held on May 13, 2026, with CEO Denis Machuel and CFO Valentina Ficaio presenting the results.
Revenue Growth Beats Market Expectations
Adecco reported 5.3% organic revenue growth on a trading-days-adjusted basis year over year. This marked the company’s fourth consecutive quarter of growth and showed that its recovery trend continued into 2026. Revenue also came in above analyst expectations, with Reuters reporting that analysts had expected about €5.56 billion.
The growth was led mainly by the Adecco staffing business, which expanded across all regions. The company highlighted strong performance in the Americas, Asia-Pacific, Iberia, the Nordics, North America, Latin America, and Asia. This suggests that employers are still hiring, but many are choosing temporary or flexible workers instead of permanent roles because of economic uncertainty.
Profitability Improves Despite Margin Pressure
Adecco’s EBITA excluding one-off items reached €148 million, up 24% year over year. The EBITA margin excluding one-offs improved to 2.6%, rising 20 basis points from the previous year. The company said the improvement came from higher volumes, better pricing, productivity gains, and strict cost control.
However, the gross margin slipped to 18.8%, down 40 basis points year over year. Management explained that this reflected the current business mix, as temporary staffing continued to grow faster than permanent recruitment. Flexible staffing usually carries a different margin profile than permanent placement services.
Net Income and EPS Show Strong Gains
The company reported operating income of €127 million, up 28% from the same period last year. Net income rose 41% to €69 million. Basic earnings per share increased 40% to €0.41, while adjusted EPS reached €0.50, up 6% year over year.
These figures show that Adecco is not only growing revenue but also converting that growth into stronger earnings. The company’s productivity improved by 4% year over year, showing that cost discipline remains a key part of management’s strategy.
Adecco Segment Leads the Group
The core Adecco business grew 7% year over year. Growth was strongest in the Americas, where revenue increased 15%. Asia-Pacific rose 8%, while EMEA excluding France grew 7%. France returned to growth with a 1% increase, helped by stronger activity in autos and manufacturing.
In EMEA excluding France, Italy grew 6%, Iberia rose 16%, the UK and Ireland returned to growth with a 5% increase, and the Nordics advanced 13%. The company said demand was supported by sectors such as logistics, financial services, technology, autos, aerospace and defense, food and beverages, and consumer goods.
Akkodis Stabilizes While LHH Improves Profitability
Akkodis, Adecco’s engineering and technology consulting business, reported a 1% organic revenue decline, but management said the business is stabilizing. Demand in consulting and solutions benefited from strong aerospace and defense activity. Akkodis also improved profitability, with its EBITA margin excluding one-offs rising year over year.
LHH, Adecco’s talent advisory and career transition division, also posted a 1% organic revenue decline, but profitability improved sharply. The company said LHH achieved a double-digit EBITA margin, supported by strong growth in Career Transition and Ezra.
Temporary Staffing Outpaces Permanent Hiring
One of the clearest trends from the quarter was the strength of flexible work compared with permanent hiring. Reuters reported that permanent recruitment fell by around 7% across Adecco and LHH. CEO Denis Machuel linked this trend to uncertainty, as companies still need workers but remain cautious about long-term hiring commitments.
This trend is important for the staffing industry. When businesses are unsure about the economy, they often use temporary workers to stay flexible. That can benefit staffing companies like Adecco, especially when they have broad global coverage and strong client relationships.
Cash Flow Reflects Seasonal Working Capital Needs
Adecco reported operating cash flow of negative €178 million for the quarter. The company said this reflected working capital absorption caused by stronger revenue growth and normal seasonal patterns. Its last-12-month cash conversion remained strong at 94%.
The company also said its net debt-to-EBITDA ratio was 0.2 times lower year over year, consistent with its deleveraging progress at the end of 2025. This suggests that the balance sheet remains controlled even as the company invests in growth.
Market Reaction Turns Negative
Despite stronger-than-expected revenue, Adecco shares fell sharply after the results. Investing.com reported that the stock dropped more than 13% as investors focused on gross margin pressure, weaker cash flow, and the company’s Q2 outlook for slightly lower gross margin and slightly higher operating expenses.
This reaction shows that investors were encouraged by revenue growth but still cautious about profitability. For staffing companies, even small margin changes can matter because the business is highly sensitive to economic cycles, wages, pricing, and hiring confidence.
Outlook for Q2 2026
Looking ahead, Adecco said it has seen continued positive volume momentum so far in the second quarter. However, management expects the Q2 gross margin to be slightly lower because of seasonality and business mix. Operating expenses, excluding one-off items, are expected to be slightly higher.
Overall, Adecco’s Q1 2026 results show a company gaining share, improving earnings, and benefiting from flexible staffing demand. Still, margin pressure and investor concerns about the next quarter remain key issues to watch.
Conclusion
Adecco Group’s first-quarter 2026 results were broadly positive. Revenue beat expectations, organic growth accelerated, net income rose strongly, and the company continued to gain market share. The main challenge is that growth is being driven more by flexible staffing than permanent recruitment, which can pressure margins. For now, Adecco appears to be executing well in a mixed labor market, but investors will closely watch whether the company can protect profitability while maintaining growth through the rest of 2026.
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