Omnicom Reports Third Quarter 2025 Results

Core Insights - Omnicom reported a revenue increase of $154.5 million, or 4.0%, for Q3 2025, reaching $4,037.1 million compared to Q3 2024, driven by organic revenue growth of $102.4 million, or 2.6% [3][4][14] - The company is set to close the acquisition of Interpublic Group next month, which is expected to enhance growth through strategic advantages in various areas [2] - Operating income decreased by $70.0 million, or 11.7%, to $530.1 million, with an operating income margin of 13.1%, down from 15.5% [9][14] Financial Performance - Revenue: $4,037.1 million in Q3 2025, up from $3,882.6 million in Q3 2024 [3][14] - Operating Income: $530.1 million, down from $600.1 million in the previous year [9][14] - Net Income: $341.3 million, a decrease of $44.6 million, or 11.6%, from $385.9 million [12][14] - Diluted Earnings per Share: $1.75, down from $1.95 [12][14] Growth Metrics - Organic Growth: - By discipline: Media & Advertising (9.1%), Execution & Support (2.0%), Precision Marketing (0.8%), with declines in Healthcare (1.9%), Public Relations (7.5%), Experiential (17.7%), and Branding & Retail Commerce (16.9%) [4] - By region: United States (4.6%), Latin America (27.3%), United Kingdom (3.7%), Middle East & Africa (5.9%), with declines in Other North America (0.2%), Asia Pacific (3.7%), and Euro Markets & Other Europe (3.1%) [5] Expense Analysis - Operating Expenses: Increased by $224.5 million, or 6.8%, to $3,507.0 million, including $60.8 million in acquisition-related costs for the pending acquisition of IPG [6][8] - Salary and Service Costs: Increased by $125.5 million, or 4.5%, to $2,921.5 million, with third-party service costs rising significantly [7][30] - SG&A Expenses: Increased by $64.0 million, or 64.3%, to $163.5 million, primarily due to acquisition-related costs [8][30] Non-GAAP Measures - EBITA: Decreased by $70.7 million, or 11.4%, to $551.6 million, with an EBITA margin of 13.7% [13][14] - Adjusted EBITA: Increased by $28.7 million, or 4.6%, to $651.0 million, with an adjusted EBITA margin of 16.1% [13][14] Tax and Interest - Effective Tax Rate: Increased to 27.2% from 26.8% due to non-deductibility of certain acquisition-related costs [11] - Net Interest Expense: Increased by $2.8 million to $43.2 million, with interest income decreasing due to lower average cash balances [10]