ManpowerGroup Inc. (ManpowerGroup (MAN)) had a day Thursday that short sellers probably didn't see coming. The workforce solutions company reported second-quarter results that beat Wall Street estimates and issued third-quarter guidance above expectations, sending shares up more than 35%.

But the move wasn't just about the numbers. With nearly 20% of the company's public float sold short — about 6.75 million shares — there was a lot of bearish positioning that needed to be unwound in a hurry. When good news hits a heavily shorted stock, you get a squeeze, and that's exactly what happened here.

The Numbers That Started It All

ManpowerGroup reported adjusted earnings of $0.99 per share, beating the $0.95 consensus estimate. Revenue came in at $4.86 billion, up 8% year over year (6% in constant currency) and ahead of the $4.72 billion analysts were expecting. On a GAAP basis, the company earned $1.13 per diluted share, a sharp turnaround from a loss of $1.44 per share a year earlier.

Adjusted EBITDA rose 15% year over year on a constant-currency basis to $103 million, with margin expanding 10 basis points to 2.1%. The company credited stronger client demand, better operating leverage, disciplined cost controls, and improved execution across its brands and regions.

Net earnings improved to $53.5 million from a loss of $67.1 million in the prior-year quarter. Operating profit hit $112 million, compared with an operating loss of $25.3 million a year earlier, while selling and administrative expenses fell 15.3% to $668.3 million.

The company ended the quarter with $180.6 million in cash and $1.04 billion in total debt, including $567.3 million of long-term debt. Net debt stood at $863 million. Year-to-date operating cash outflow improved to $129 million from $343 million in the prior-year period.

Chair and CEO Jonas Prising said the company benefited from "good execution across our brands and markets, continued cost discipline and improving demand," adding that ManpowerGroup continued to advance its strategic transformation program and expand AI capabilities.

Brand and Regional Performance

The Manpower brand posted its fifth consecutive quarter of growth, with constant-currency revenue rising 8%, supported by demand across manufacturing, automotive, aerospace, logistics, and retail.

Experis revenue declined 2% from a year earlier, but that was an improvement from a 9% decline in the first quarter, as demand strengthened for cloud, migration, application development, data, and artificial intelligence capabilities.

Talent Solutions revenue was flat year over year, an improvement from the prior quarter, supported by stronger client pipelines and growth in recruitment process outsourcing (RPO) and managed service provider (MSP) offerings.

The U.S. business remained a key growth driver, with total organic days-adjusted revenue rising 8%. Within the market, the Manpower brand grew 16% and posted its eighth consecutive quarter of growth.

By geography, revenue in the Americas increased 14.4% to $1.21 billion, including 6% growth in the United States and 29% growth in Other Americas. Southern Europe revenue rose 7.4%, while Northern Europe increased 3.9%. Asia Pacific Middle East (APME) revenue declined 1.2% on a reported basis but rose 5% in constant currency.

During the quarter, the company completed the sale of its Jefferson Wells U.S. business to sharpen its focus on higher-return operations. Management also expanded the use of AI across recruiting and sales operations, including partnerships with SoundHound and IBM watsonx, to improve productivity and support future growth.

What's Next

For the third quarter, ManpowerGroup forecast diluted earnings of $0.96 to $1.06 per share, including an estimated $0.02 unfavorable currency impact. That compares with analysts' consensus estimate of $0.88 per share. The company expects approximately 6% organic, days-adjusted constant-currency revenue growth and an effective tax rate of about 44%.

Gross profit margin is projected at about 16%, reflecting changes in business mix and the Jefferson Wells divestiture. Adjusted EBITDA margin is expected to improve by 10 basis points from a year earlier.

The company also expanded its Global Strategic Transformation Program, targeting $200 million in permanent cost savings by 2028 through productivity improvements, cost optimization, and organizational changes.

Price Action

ManpowerGroup shares were up 35.24% at $52.77 at the time of publication on Thursday, hitting a new 52-week high. For a stock that had been heavily shorted, it was a painful day for bears and a profitable one for anyone who saw the earnings beat coming.