Financial Performance - Q2 2025 organic revenue grew by 30%[9] - Q2 Non-GAAP Adj EBITA increased by 41% to $6138 million with a 153% margin[10] - Q2 Non-GAAP adjusted diluted EPS increased by 51% to $205[10] - The company repurchased $142 million in shares in Q2 and $223 million year-to-date[10] Revenue Breakdown - Media & Advertising and Precision Marketing accounted for 68% of total revenue with combined organic growth exceeding 7%[9] - Total revenue for the second quarter was $40156 million a 42% increase[11] - Year-to-date revenue reached $77060 million a 30% increase[11] Strategic Initiatives - The Interpublic (IPG) Transaction cleared antitrust review by the US Federal Trade Commission in late June 2025 with closing expected in the second half of 2025[9] - The company achieved a $250 million year-to-date improvement in the use of operating capital[10]

[Second Quarter 2025 Financial Highlights](index=1&type=section&id=OMNICOM%20REPORTS%20SECOND%20QUARTER%202025%20RESULTS) [Overview of Q2 2025 Performance](index=1&type=section&id=Second%20Quarter%202025%20Results) Omnicom reported Q2 2025 revenue of **$4.02 billion**, a **4.2%** increase year-over-year, driven by **3.0%** organic growth, while GAAP net income and EPS declined due to acquisition and repositioning costs, with non-GAAP adjusted EPS rising **5.1%** Q2 2025 Key Financial Metrics vs. Q2 2024 | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $4,015.6 M | $3,853.8 M | +4.2% | | Organic Growth | 3.0% | N/A | N/A | | Operating Income | $439.2 M | $510.3 M | -13.9% | | Operating Income Margin | 10.9% | 13.2% | -2.3 p.p. | | Net Income | $257.6 M | $328.1 M | -21.5% | | Diluted EPS | $1.31 | $1.65 | -20.6% | | Adjusted EBITA | $613.8 M | $589.6 M | +4.1% | | Adjusted EBITA Margin | 15.3% | 15.3% | 0.0 p.p. | | Non-GAAP Adjusted Diluted EPS | $2.05 | $1.95 | +5.1% | [CEO Statement](index=1&type=section&id=CEO%20Statement) CEO John Wren highlighted the company's resilience and **3.0%** organic growth, attributing it to the Omni platform, and noted the U.S. antitrust clearance for the Interpublic (IPG) acquisition as a key strategic milestone - Achieved solid **3.0%** organic revenue growth despite ongoing macroeconomic and geopolitical uncertainty[4](index=4&type=chunk) - Continued investment in the Omni operating platform is driving client outcomes and enhancing operational efficiency[4](index=4&type=chunk) - The transformational acquisition of Interpublic (IPG) successfully cleared U.S. antitrust review, with an expected close later in the year[4](index=4&type=chunk) [Detailed Financial Analysis](index=1&type=section&id=Detailed%20Financial%20Analysis) [Revenue Analysis](index=1&type=section&id=Revenue%20Analysis) Total revenue for Q2 2025 increased **4.2%** to **$4,015.6 million**, driven by **3.0%** organic growth, with Media & Advertising and Latin America showing strong performance, while Public Relations and Healthcare declined Q2 2025 Revenue Growth Components (vs. Q2 2024) | Component | Impact on Revenue | Percentage Change | | :--- | :--- | :--- | | Organic Growth | +$116.8 M | +3.0% | | Foreign Currency Translation | +$42.4 M | +1.1% | | Acquisitions, net of dispositions | +$2.6 M | +0.1% | | **Total Revenue Increase** | **+$161.8 M** | **+4.2%** | Q2 2025 Organic Growth by Discipline (vs. Q2 2024) | Discipline | Organic Growth | | :--- | :--- | | Media & Advertising | +8.2% | | Precision Marketing | +5.0% | | Experiential | +2.9% | | Execution & Support | +1.5% | | Healthcare | -4.9% | | Public Relations | -9.3% | | Branding & Retail Commerce | -16.9% | Q2 2025 Organic Growth by Region (vs. Q2 2024) | Region | Organic Growth | | :--- | :--- | | Latin America | +18.0% | | Asia Pacific | +6.5% | | United States | +3.0% | | Euro Markets & Other Europe | +2.5% | | Other North America | +2.4% | | Middle East & Africa | +0.9% | | United Kingdom | -2.5% | [Expense Analysis](index=2&type=section&id=Expense%20Analysis) Operating expenses increased **7.0%** to **$3,576.4 million** due to **$66.0 million** in IPG acquisition costs and **$88.8 million** in repositioning costs, while salary and service costs rose **4.7%** - Operating expenses increased **7.0%** YoY to **$3,576.4 million**[10](index=10&type=chunk) - Q2 2025 expenses included **$66.0 million** in costs related to the pending IPG acquisition and **$88.8 million** in repositioning costs, primarily for severance[10](index=10&type=chunk) Change in Salary and Service Costs (Q2 2025 vs Q2 2024) | Cost Component | Q2 2025 | Change (YoY) | | :--- | :--- | :--- | | Salary and related costs | $1,827.8 M | -0.5% | | Third-party service costs | $918.4 M | +13.2% | | Third-party incidental costs | $186.4 M | +22.6% | | **Total Salary and service costs** | **$2,932.6 M** | **+4.7%** | - SG&A expenses increased **53.5%** to **$170.4 million**, primarily due to the **$66.0 million** in acquisition-related costs[13](index=13&type=chunk) [Profitability Analysis](index=2&type=section&id=Profitability%20Analysis) GAAP operating income fell **13.9%** to **$439.2 million** and net income decreased **21.5%** to **$257.6 million**, primarily due to acquisition and repositioning costs, which also increased the effective tax rate to **30.2%** Operating Income and Margin (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Operating Income | $439.2 M | $510.3 M | | Operating Margin | 10.9% | 13.2% | - Acquisition-related costs and repositioning costs decreased the operating margin by **3.9 percentage points** in Q2 2025[14](index=14&type=chunk) Net Income and Diluted EPS (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Income | $257.6 M | $328.1 M | | Diluted EPS | $1.31 | $1.65 | - The effective tax rate increased to **30.2%** in Q2 2025 from **26.4%** in Q2 2024, primarily due to the non-deductibility of certain acquisition-related costs[16](index=16&type=chunk) [Non-GAAP Performance Measures](index=3&type=section&id=Non-GAAP%20Performance%20Measures) Non-GAAP Adjusted EBITA increased **4.1%** to **$613.8 million** with a stable **15.3%** margin, and Non-GAAP Adjusted Diluted EPS grew **5.1%** to **$2.05**, reflecting underlying business performance excluding specific one-time costs EBITA and Adjusted EBITA (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | EBITA | $459.0 M | $531.8 M | -13.7% | | EBITA Margin | 11.4% | 13.8% | -2.4 p.p. | | Adjusted EBITA | $613.8 M | $589.6 M | +4.1% | | Adjusted EBITA Margin | 15.3% | 15.3% | 0.0 p.p. | GAAP vs Non-GAAP Adjusted Diluted EPS (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | GAAP Diluted EPS | $1.31 | $1.65 | -20.6% | | Non-GAAP Adjusted Diluted EPS | $2.05 | $1.95 | +5.1% | [Key Disclosures and Company Information](index=3&type=section&id=Key%20Disclosures%20and%20Company%20Information) [Risks and Forward-Looking Statements](index=3&type=section&id=Risks%20and%20Forward-Looking%20Statements) The company faces significant risks from the pending IPG merger, including completion and integration challenges, alongside broader risks from global economic conditions, client spending reductions, cybersecurity threats, and AI technology management - Significant risks are related to the pending IPG merger, including potential for the merger not to be completed, regulatory delays or restrictions, loss of key employees, and failure to realize anticipated benefits[30](index=30&type=chunk) - The company faces risks from global economic conditions, geopolitical events, inflation, and changes in central bank interest rate policies[19](index=19&type=chunk)[30](index=30&type=chunk) - Other noted risks include reductions in client spending, cybersecurity incidents, and the effective management of risks and efficiencies related to Artificial Intelligence (AI) technologies[30](index=30&type=chunk) [Definitions and Non-GAAP Measures](index=3&type=section&id=Definitions%20and%20Non-GAAP%20Measures) The report defines key revenue components and explains the use of Non-GAAP measures like EBITA and adjusted metrics to enhance performance comparability by excluding specific non-recurring or non-cash items - Organic growth is calculated by subtracting the foreign exchange rate impact and the net acquisition/disposition revenue component from total revenue growth[23](index=23&type=chunk) - EBITA is defined as earnings before interest, taxes, and amortization of acquired intangible assets and internally developed strategic platform assets[28](index=28&type=chunk)[45](index=45&type=chunk) - Non-GAAP measures are presented because management believes they are useful for evaluating the impact of certain items on operating performance and allow for better comparability between reporting periods[28](index=28&type=chunk) [Company and Investor Information](index=4&type=section&id=Company%20and%20Investor%20Information) Omnicom, a leading global marketing and communications company serving over **5,000** clients in more than **70** countries, will host a conference call on July 15, 2025, to discuss its financial results - Omnicom is a leading provider of data-inspired, creative marketing and sales solutions, serving over **5,000** clients in more than **70** countries[26](index=26&type=chunk) - A conference call to review the financial results is scheduled for Tuesday, July 15, 2025, at 4:30 p.m. Eastern Time[24](index=24&type=chunk) [Consolidated Financial Statements (Unaudited)](index=7&type=section&id=Consolidated%20Financial%20Statements%20%28Unaudited%29) [Consolidated Statements of Income](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME) The unaudited Consolidated Statements of Income detail financial performance for Q2 2025, showing revenue of **$4,015.6 million** and net income of **$257.6 million**, and for the six-month period, revenue of **$7,706.0 million** and net income of **$545.3 million** Consolidated Statements of Income (Three Months Ended June 30) | ($ in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | $4,015.6 | $3,853.8 | | Total Operating Expenses | $3,576.4 | $3,343.5 | | Operating Income | $439.2 | $510.3 | | Net Income - Omnicom Group Inc. | $257.6 | $328.1 | Consolidated Statements of Income (Six Months Ended June 30) | ($ in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | $7,706.0 | $7,484.3 | | Total Operating Expenses | $6,814.2 | $6,495.1 | | Operating Income | $891.8 | $989.2 | | Net Income - Omnicom Group Inc. | $545.3 | $646.7 | [Detail of Operating Expenses](index=9&type=section&id=DETAIL%20OF%20OPERATING%20EXPENSES) This statement details operating expense components for Q2 2025, showing total operating expenses of **$3,576.4 million**, with **$2,932.6 million** in salary and service costs and **$170.4 million** in SG&A, including acquisition-related costs Detail of Operating Expenses (Three Months Ended June 30) | ($ in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Total salary and service costs | $2,932.6 | $2,800.1 | | Occupancy and other costs | $325.9 | $314.2 | | Repositioning costs | $88.8 | $57.8 | | Selling, general and administrative expenses | $170.4 | $111.0 | | Depreciation and amortization | $58.7 | $60.4 | | **Total operating expenses** | **$3,576.4** | **$3,343.5** | [Reconciliation of Non-GAAP Financial Measures](index=10&type=section&id=RECONCILIATION%20OF%20NON-GAAP%20FINANCIAL%20MEASURES) This section provides detailed reconciliations of GAAP to Non-GAAP measures, including Net Income to EBITA and Adjusted EBITA, and adjustments to Operating Income, Net Income, and EPS, detailing the impact of repositioning, acquisition costs, and amortization Reconciliation of Operating Income to Adjusted EBITA (Q2 2025) | ($ in millions) | Amount | | :--- | :--- | | Operating Income (GAAP) | $439.2 | | Add back: amortization | $19.8 | | **EBITA** | **$459.0** | | Add back: Repositioning costs | $88.8 | | Add back: Acquisition related costs | $66.0 | | **EBITA - Adjusted (Non-GAAP)** | **$613.8** | Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income (Q2 2025) | ($ in millions) | Amount | | :--- | :--- | | Net Income - Reported (GAAP) | $257.6 | | Add: Repositioning costs (after-tax) | $67.2 | | Add: Acquisition related costs (after-tax) | $61.6 | | Add: Amortization (after-tax) | $14.7 | | **Non-GAAP Net Income - Adjusted** | **$401.1** |

Core Insights - Omnicom reported a solid organic revenue growth of 3.0% in Q2 2025, despite macroeconomic and geopolitical uncertainties, highlighting the resilience of its business model [2][4] - The company is optimistic about growth opportunities stemming from its transformational acquisition of Interpublic, which has successfully cleared U.S. antitrust review [2][3] Financial Performance - Revenue for Q2 2025 increased by $161.8 million, or 4.2%, reaching $4,015.6 million compared to $3,853.8 million in Q2 2024 [3][4] - Operating income decreased by $71.1 million, or 13.9%, to $439.2 million, with an operating income margin of 10.9%, down from 13.2% in the previous year [11][30] - Net income for Q2 2025 was $257.6 million, a decrease of $70.5 million, or 21.5%, from $328.1 million in Q2 2024, resulting in diluted earnings per share of $1.31 [15][28] Revenue Breakdown - Organic revenue growth by discipline included 8.2% for Media & Advertising, 5.0% for Precision Marketing, while declines were noted in Public Relations (9.3%) and Healthcare (4.9%) [5] - Regional organic growth rates were 3.0% in the U.S., 18.0% in Latin America, and a decline of 2.5% in the U.K. [6] Expense Analysis - Operating expenses rose by $232.9 million, or 7.0%, to $3,576.4 million, influenced by acquisition-related costs and repositioning costs [7][8] - Salary and service costs increased by $132.5 million, or 4.7%, primarily due to organic growth in Media & Advertising and Precision Marketing [8][9] Non-GAAP Measures - Adjusted EBITA for Q2 2025 was $613.8 million, an increase of $24.2 million, or 4.1%, with a margin of 15.3% [16][30] - Non-GAAP adjusted net income per share increased by $0.10, or 5.1%, to $2.05 compared to $1.95 in Q2 2024 [15][39] Tax and Interest - The effective tax rate increased to 30.2% in Q2 2025 from 26.4% in Q2 2024, primarily due to non-deductible acquisition-related costs [14] - Net interest expense decreased slightly to $40.7 million, with interest income rising to $21.9 million due to higher average cash balances [12]

Core Insights - Colin Selikow, Chief Creative Officer of DDB Chicago, has been named to Campaign US's 2025 40 Over 40 list, recognizing executives in advertising, marketing, media, technology, and communications [1] - Under Selikow's leadership, DDB Chicago has achieved significant accolades, including being named Campaign US' 2024 Creative Breakthrough Agency and winning over 300 international awards [4] Company Achievements - DDB Chicago has earned the title of Campaign US' 2024 Creative Breakthrough Agency, reflecting its innovative approach and successful campaigns [4] - The agency has received over 300 international awards, including 49 Cannes Lions, 31 D&AD Pencils, and 46 One Show Pencils, showcasing its creative excellence [4] Leadership and Impact - Colin Selikow is recognized as the 1 Most Awarded Executive Creative Director in the World by The Drum in 2024 and The One Club in 2023, highlighting his influence in the industry [2] - Selikow's leadership has fostered a culture of creativity and mentorship at DDB Chicago, contributing to the agency's growth and success [3] Notable Campaigns - Selikow led the creation of the "Apologize the Rainbow" campaign for Skittles, which won a 2025 Global Grand Effie, marking it as one of the most awarded campaigns of 2023 [4] - DDB Chicago recently secured the global creative and strategy assignment for Bimbo Global, demonstrating its competitive edge in the market [3] Industry Recognition - The judges for the Campaign US 40 Over 40 Awards are established professionals, ensuring that the winners represent the pinnacle of creativity and leadership in the industry [5] - DDB Worldwide has been recognized as the 1 Most Awarded Agency Network in the 2024 Effie Global Best of the Best and has received multiple accolades from Cannes Lions and D&AD [8]

Company Overview - Omnicom is one of the largest advertising, marketing, and corporate communications companies globally, offering a comprehensive suite of services across various disciplines including Media & Advertising, Precision Marketing, Public Relations, Healthcare, Branding & Retail Commerce, Experiential, and Execution & Support [11]. Investment Ratings - Omnicom holds a 2 (Buy) rating on the Zacks Rank, indicating a favorable investment outlook [12]. - The company has a VGM Score of B, suggesting a balanced assessment of value, growth, and momentum [12]. Performance Metrics - Omnicom's Momentum Style Score is rated A, with shares increasing by 4.7% over the past four weeks [12]. - Two analysts have revised their earnings estimates higher for fiscal 2025, with the Zacks Consensus Estimate rising by $0.01 to $8.33 per share [12]. - The company has an average earnings surprise of +3.7%, indicating a history of exceeding earnings expectations [12]. Investment Considerations - With a solid Zacks Rank and top-tier Momentum and VGM Style Scores, Omnicom is recommended for investors looking for potential growth opportunities [13].

Core Viewpoint - Omnicom (OMC) is expected to report quarterly earnings of $2.02 per share, a 3.6% increase year-over-year, with revenues projected at $3.96 billion, reflecting a 2.6% increase compared to the same period last year [1] Earnings Estimates - The consensus EPS estimate has remained unchanged over the last 30 days, indicating a collective reevaluation by analysts [1][2] Revenue Projections - Revenue from 'Commerce & Branding' is estimated at $183.23 million, down 8.1% year-over-year [4] - 'Execution & Support' revenue is projected at $209.10 million, a decrease of 1.1% from the prior year [4] - 'Healthcare' revenue is expected to reach $303.04 million, reflecting a 14.2% decline year-over-year [4] - 'Public Relations' revenue is forecasted at $425.11 million, indicating a 1.7% increase from the previous year [5] - 'Revenue by Geography - Asia Pacific' is estimated at $459.25 million, up 6.4% year-over-year [5] - 'Revenue by Geography - North America' is projected at $2.20 billion, a 2.4% increase from the prior year [5] - 'Revenue by Geography - Middle East and Africa' is expected to be $72.30 million, reflecting a 10.2% increase year-over-year [6] - 'Revenue by Geography - Europe' is forecasted at $1.12 billion, a 1.2% increase from the previous year [6] Organic Revenue Growth - Total Organic Revenue Growth is expected to be 3.3%, down from 5.2% reported in the same quarter last year [6] - 'Organic Revenue Growth - Experiential' is estimated at 0.1%, significantly lower than the previous year's 17.6% [7] - 'Organic Revenue Growth - Advertising & Media' is projected at 7.3%, slightly down from 7.8% year-over-year [7] - 'Organic Revenue Growth by Geography - Latin America' is expected to be 9.5%, down from 24.5% reported in the same quarter last year [8] Stock Performance - Omnicom shares have returned +3.2% over the past month, compared to the Zacks S&P 500 composite's +4.1% change [8]

Group 1 - Omnicom will release its second quarter 2025 financial results on July 15, 2025, after the market closes [1] - A conference call to discuss the financial results will take place on the same day at 4:30 p.m. Eastern Time, with a live webcast available [1] - The webcast replay will be accessible after the call concludes, along with the earnings press release and slide presentation [1] Group 2 - Omnicom is a leading provider of data-inspired, creative marketing and sales solutions, serving over 5,000 clients in more than 70 countries [2] - The company offers a diverse range of services including advertising, strategic media planning and buying, precision marketing, and public relations [2] - Omnicom's agency brands are known for their innovative communications specialists focused on driving intelligent business outcomes [2]

Core Viewpoint - Omnicom (OMC) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which are a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is primarily driven by changes in a company's earnings picture, with the Zacks Consensus Estimate reflecting EPS estimates from sell-side analysts [1][2]. - Changes in future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements, particularly due to institutional investors' reliance on these estimates for valuation [4][5]. Recent Performance and Projections - Omnicom is projected to earn $8.32 per share for the fiscal year ending December 2025, showing no year-over-year change, but the Zacks Consensus Estimate has increased by 0.1% over the past three months [8]. - The upgrade to Zacks Rank 2 places Omnicom in the top 20% of Zacks-covered stocks, suggesting a favorable position for potential market-beating returns in the near term [10]. Zacks Rank System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a historical track record showing that Zacks Rank 1 stocks have generated an average annual return of +25% since 1988 [7]. - The system maintains a balanced distribution of "buy" and "sell" ratings across its universe of over 4,000 stocks, ensuring that only the top 5% receive a "Strong Buy" rating [9].

Group 1 - Omnicom (OMC) shares have increased by 3.2% over the past four weeks, closing at $73.84, with a mean price target of $95.56 indicating a potential upside of 29.4% [1] - The mean estimate consists of nine short-term price targets with a standard deviation of $13.94, where the lowest estimate is $80.00 (8.3% increase) and the highest is $120.00 (62.5% increase) [2] - Analysts show strong agreement on OMC's ability to report better earnings than previously predicted, which supports the view of potential upside [4][11] Group 2 - Recent revisions in earnings estimates have been positive, with one estimate moving higher in the last 30 days, leading to a 0.1% increase in the Zacks Consensus Estimate [12] - OMC holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, indicating strong potential for upside [13] - While consensus price targets may not be reliable for quantifying gains, they can provide a directional guide for price movement [14]

Core Viewpoint - The approval of the merger between Omnicom and IPG by the FTC signifies a significant consolidation in the U.S. advertising industry, positioning it as a global leader in the sector [1] Group 1: Global Advertising Landscape - The largest advertising holding groups globally include Omnicom and IPG in the U.S., Dentsu in Japan, WPP in the UK, and Publicis and Havas in France [1] - Germany's advertising market is substantial, with a projected size of $27.3 billion in 2024, ranking fifth globally [1] Group 2: Historical Context of Advertising Mergers - The expansion of advertising groups in the 1970s and 1980s was characterized by aggressive acquisitions, exemplified by Saatchi & Saatchi's purchase of Compton Advertising and Ted Bates [2] - Martin Sorrell's strategies at WPP involved leveraging high debt to finance acquisitions, significantly increasing revenue [4][8] Group 3: Financial Environment and Regulations - The deregulation of the London Stock Exchange in 1986 facilitated a surge in leveraged buyouts (LBOs), allowing advertising firms to access substantial financing [6][8] - The German financial system, dominated by banks, has historically limited the growth of advertising groups due to a preference for tangible assets over intangible ones like creativity [10][12] Group 4: Market Demand and Client Structure - The Mittelstand, a unique type of family-owned business in Germany, typically does not require extensive marketing services, relying instead on internal marketing departments [14][17] - A significant portion of German multinational companies (66%) have in-house creative or media departments, limiting the demand for large advertising agencies [17] Group 5: Legal and Regulatory Framework - Germany's legal environment is more restrictive regarding mergers and acquisitions compared to the U.S. and UK, focusing on maintaining market order and stability [23][24] - The stringent privacy laws in Germany, including GDPR, create additional challenges for digital advertising, limiting the ability to utilize data for targeted marketing [25][27] Group 6: Conclusion on Advertising Industry Dynamics - The current state of the German advertising industry reflects a unique ecosystem that prioritizes tangible economic contributions, strict regulations, and a conservative capital approach, resulting in a fragmented yet stable advertising network [29][30]