Financial Data and Key Metrics Changes - The company reported an organic revenue decrease of 3.5% for Q2 2025, consistent with earlier guidance [5][12] - Adjusted EBITDA was $393.7 million with a margin of 18.1%, reflecting significant structural cost reductions [7][19] - Diluted EPS was $0.44 as reported, while adjusted diluted EPS was $0.75 [8][12] - The company returned $98 million to shareholders through share repurchases, totaling $188 million year-to-date [9][12] Business Line Data and Key Metrics Changes - Media, Data and Engagement Solutions segment saw a 3.1% organic decrease, impacted by prior account activity [15] - Integrated Advertising and Creativity segment experienced a 6.3% organic decrease, largely due to a significant client loss in healthcare [15] - Specialized Communications and Experiential Solutions segment achieved 2.3% organic growth, driven by Octagon and Momentum [15] Market Data and Key Metrics Changes - U.S. market, accounting for 66% of net revenue, saw a 2.6% organic decrease [17] - International markets, representing 34% of net revenue, experienced a 5.4% organic decrease [19] Company Strategy and Development Direction - The company is focused on strategic transformation, enhancing service delivery, and leveraging technology for operational efficiencies [6][25] - The integration with Omnicom is expected to create significant value and strengthen offerings [6][32] - The Interact platform is central to the company's strategy, automating workflows and enhancing client engagement through AI [25][30] Management's Comments on Operating Environment and Future Outlook - The macro environment has been more volatile than anticipated, but client engagement remains constructive [9][10] - The company is on track for a full-year organic net revenue decrease of 1% to 2% and expects adjusted EBITDA margin to exceed previous guidance of 16.6% [10][41] - Management remains optimistic about the integration with Omnicom and the potential for enhanced capabilities and market position [32][44] Other Important Information - The company ended the quarter with $1.6 billion in cash and a gross financial debt to EBITDA ratio of 1.9 times [13][24] - Restructuring charges for the quarter were $118 million, with a significant non-cash portion [20][22] - The company has secured antitrust clearance in most jurisdictions for the acquisition by Omnicom, with completion expected in the second half of the year [42][43] Q&A Session Summary Question: Annualized savings and margin outlook - Management indicated that savings have been realized faster than expected, with a margin outlook now significantly ahead of 16.6% [46][48] Question: Organic growth segmentation - Management acknowledged the impact of account losses but noted underlying growth in other areas, particularly in media and healthcare [51][52] Question: Creative performance and outcome-based work - Management discussed the challenges in traditional creative sectors but emphasized the importance of data-driven approaches and outcome-based compensation models [56][58] Question: Cost savings run rate - Management confirmed that year-to-date savings are around $300 million, with expectations for ongoing structural savings beyond that [64][70] Question: Staffing and operational leverage - Management indicated that while growth may necessitate new hires, the focus will be on different roles that enhance operational efficiency [75][81]

Summary of Interpublic Group of Companies (IPG) FY Conference Call Company Overview - **Company**: Interpublic Group of Companies (IPG) - **Event**: FY Conference Call - **Date**: May 13, 2025 Key Points Merger with Omnicom - The merger with Omnicom is a significant focus, with a high level of conviction about the value it will unlock through enhanced capabilities and efficiencies [3][4] - There is strong interest from clients regarding the combined offerings post-merger, indicating potential for powerful synergies [4] - Integration of different agency cultures is expected to be smooth due to prior competition and talent flow between the two companies [6][7][8] - Concerns about client conflicts and talent retention have been deemed overblown, with a focus on client-centric operations [9][10][12] Regulatory Process - The regulatory review process is ongoing, with confidence that the deal will close in the latter half of the year, having received approvals from 7 out of 18 jurisdictions [14][15] Financial Performance and Growth - IPG has reiterated its organic growth guidance at -1% to -2% for the year, primarily due to account losses [16] - Current underlying growth, excluding recent losses, is estimated at +1% to +1.5% [20] - The media environment remains steady, with clients engaging in scenario planning rather than immediate spending changes [18][19] Acxiom's Role - Acxiom has been highlighted as a strong contributor to IPG's performance, providing long-term contracts and data management capabilities that enhance media offerings [30][31] - The integration of Acxiom's data capabilities is expected to improve client engagement and performance across various agencies [32][33] Healthcare Sector - The healthcare vertical remains a strong area for IPG, despite recent performance being affected by a single account loss. The long-term outlook is positive due to ongoing innovation and a rich drug pipeline [34][35][36] Creative Services and Technology Integration - The creative side of the business is evolving, with a focus on integrating technology and data to enhance content performance and attribution [39][40] - The merger with Omnicom is expected to provide additional resources for technological investments, benefiting creative services [40] Business Transformation Program - IPG has initiated a business transformation program aimed at improving operational efficiency and freeing up resources for higher-value services [41][42][43] - The program includes centralizing corporate functions and optimizing production and analytics capabilities [44] Additional Insights - The current economic environment is causing some marketers to slow down on RFP processes, but overall pitch activity remains average [27][28][29] - The focus on data-driven decision-making and sophisticated client engagement strategies is crucial for navigating market volatility [18][19] This summary encapsulates the key discussions and insights from the conference call, highlighting the strategic direction and operational focus of IPG amidst the ongoing merger with Omnicom and the broader market context.

Financial Data and Key Metrics Changes - In Q1 2025, net sales were $629 million, a decrease of 2% compared to Q1 2024, excluding the divestiture of European operations [23] - Adjusted EBITDA was $46 million in Q1 2025, down from $51 million in Q1 2024, with the adjusted EBITDA margin declining from 7.7% to 7.2% [24] - Adjusted diluted earnings per share doubled to $0.20 in Q1 2025 from $0.10 in Q1 2024, primarily due to higher net earnings and lower interest expense [26] - Free cash flow was negative $100 million in Q1 2025, compared to negative $70 million in Q1 2024, mainly due to timing of working capital [26] Business Line Data and Key Metrics Changes - Organic net sales decline was primarily due to lower paper, logistics, and agency solution sales, including the loss of a large grocery client [23] - Revenue as a percentage of total sales increased by 3% in Latin America and 2% in targeted print offerings, offset by a 4% decrease in large scale print offerings [23] Market Data and Key Metrics Changes - The company is closely monitoring the impacts of tariffs and recessionary pressures on clients' businesses, with tariffs affecting less than 11% of procurement spend [6][7] - The U.S. Postal Service announced a 10% increase in postage costs expected to take effect on July 13, which may impact many mailing clients [8] Company Strategy and Development Direction - The company is focused on becoming a marketing experience (MX) company, integrating creative production and media across digital and physical channels [5] - Strategic investments are being made in innovative solutions and talent while managing economic uncertainties [5] - The acquisition of Enru's co-mail assets aims to enhance postal optimization solutions and increase co-mail volumes [10] Management's Comments on Operating Environment and Future Outlook - Management noted that while there are signs of dislocation in the market due to tariffs, there hasn't been a significant pullback in client marketing plans [40][41] - The company expects organic net sales to decline by 2% to 6% in 2025, with adjusted EBITDA anticipated to be between $180 million and $220 million [31][34] - Management is optimistic about the potential for new client acquisitions and the effectiveness of integrated marketing solutions [47][48] Other Important Information - The company completed the sale of its European operations for approximately $42 million [28] - The company has increased its dividend by 50% from 2024 and has repurchased 1.2 million shares of Class A common stock year-to-date in 2025 [29] Q&A Session Summary Question: How has the external environment impacted demand outlook? - Management indicated that while there are some adjustments in marketing plans due to tariffs, there hasn't been a significant pullback in demand [40][41] Question: What are the implications of the upcoming postal rate increase? - Management noted that clients have built the 10% increase into their plans, and there is potential for opportunities to offset this increase through testing of price elasticity [43][46] Question: Can you elaborate on the acquisition of Enru and its benefits? - The acquisition brings additional capabilities in high-density mailing and equipment upgrades, enhancing the company's co-mailing solutions [50][51] Question: What is the current status of in-store connect clients? - The company has expanded its in-store connect presence to over 45 stores, with plans for further growth in the mid-market grocery space [52][53] Question: How is the company leveraging AI in its marketing efforts? - The rollout of Audience Builder 2.0 is enhancing the ability to utilize the data stack for targeted marketing, showing strong performance in responsiveness [68][70]

Financial Data and Key Metrics Changes - In Q1 2025, net sales were $629 million, a decrease of 2% compared to Q1 2024, excluding the divestiture of European operations [23] - Adjusted EBITDA was $46 million in Q1 2025, down from $51 million in Q1 2024, with the adjusted EBITDA margin declining from 7.7% to 7.2% [24] - Adjusted diluted earnings per share doubled to $0.20 in Q1 2025 from $0.10 in Q1 2024, primarily due to higher net earnings and lower interest expenses [25] - Free cash flow was negative $100 million in Q1 2025, compared to negative $70 million in Q1 2024, mainly due to timing of working capital [25] Business Line Data and Key Metrics Changes - Organic net sales decline was primarily due to lower paper, logistics, and agency solution sales, including the loss of a large grocery client [23] - Revenue as a percentage of total sales increased by 3% in Latin America and 2% in targeted print offerings, offset by a 4% decrease in large scale print offerings [23] Market Data and Key Metrics Changes - The company is closely monitoring the impacts of tariffs and recessionary pressures on clients' businesses, with tariffs affecting less than 11% of procurement spend [6][7] - The U.S. Postal Service announced a 10% increase in postage costs expected to take effect on July 13, which may impact many mailing clients [8] Company Strategy and Development Direction - The company is committed to growing its offerings through strategic investments in innovative solutions and superior talent while managing economic uncertainties [5] - Quad's focus on generative AI and partnerships with Google Cloud aims to enhance marketing effectiveness and personalization at scale [12][34] - The acquisition of Enru's co-mail assets is intended to expand postal optimization solutions and increase co-mail volumes [11][49] Management's Comments on Operating Environment and Future Outlook - Management noted that while there are indications of dislocation in demand due to tariffs, there has not been a significant pullback in client marketing plans [41] - The company expects organic net sales to decline by 2% to 6% in 2025, with adjusted EBITDA anticipated to be between $180 million and $220 million [31][32] - Management remains cautious about potential economic slowdowns and is prepared to adapt to changing demand environments [32] Other Important Information - The company completed the sale of its European operations for approximately $42 million and is progressing with the sale of additional properties [28] - The company increased its dividend by 50% from 2024 and has repurchased 1.2 million shares of Class A common stock year-to-date in 2025 [29] Q&A Session Summary Question: How has the external environment impacted demand outlook? - Management indicated that while there are some adjustments in marketing plans due to tariffs, there hasn't been a significant trend of pullback in demand [41][42] Question: What are the implications of the upcoming postal rate increase? - Management noted that clients have built the 10% increase into their plans, and there is potential for opportunities if the postal service adjusts its pricing strategy [46] Question: Can you elaborate on the acquisition of Enru and its benefits? - The acquisition brings additional capabilities in high-density mailing and equipment upgrades, enhancing the company's co-mailing solutions [49][50] Question: What is the current status of in-store connect clients? - The company has expanded its in-store connect offering to over 45 stores, with plans for further growth in the mid-market grocery space [52][53] Question: How is the company leveraging AI in its marketing efforts? - The rollout of Audience Builder 2.0 is enhancing the ability to utilize the data stack for targeted marketing, showing strong performance in responsiveness [68][69]

April 30, 2025 Chairman, President & Chief Executive Officer Chief Financial Officer This communication contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding, among other things, our current expectations about the Company's future results, financial condition, sales, earnings, free cash flow, margins, objectives, goals, strategies, beliefs, intentions, plans, estimates, prospects, proj ...

Core Insights - Quad/Graphics, Inc. reaffirmed its full-year 2025 financial guidance while reporting first-quarter results that met expectations [1][6][11] - The company continues to focus on strategic investments in innovative solutions and talent to navigate economic uncertainties [3][6] Recent Highlights - Quad reported net sales of $629 million in Q1 2025, a 4% decline from $655 million in Q1 2024, with a 2% decline on an organic basis excluding the divestiture of European operations [8][9] - Net earnings improved to $6 million or $0.11 diluted earnings per share in Q1 2025, compared to a net loss of $28 million or $0.60 diluted loss per share in Q1 2024 [8][9] - The company achieved non-GAAP adjusted EBITDA of $46 million in Q1 2025, down from $51 million in Q1 2024 [8][9] Financial Performance - The decline in net sales was attributed to lower paper, logistics, and agency solutions sales, including the loss of a significant grocery client [9] - The company repurchased 1.2 million shares year-to-date for $6.7 million, totaling 7.2 million shares repurchased since 2022, representing approximately 13% of outstanding shares as of March 31, 2022 [6][8] - Free cash flow was negative $100 million in Q1 2025, compared to negative $70 million in Q1 2024, primarily due to working capital timing [18][33] Strategic Initiatives - Quad's In-Store Connect retail media network is gaining traction, particularly among mid-market grocers, with two new grocery clients added [4][6] - The company is focused on optimizing print and marketing efficiencies, including expanding postage savings opportunities through the acquisition of Enru's co-mailing assets [6][8] 2025 Guidance - The full-year 2025 financial guidance remains unchanged, projecting an organic annual net sales change of a 2% to 6% decline, adjusted EBITDA of $180 million to $220 million, and free cash flow of $40 million to $60 million [11][12]