Omnicom Reports First Quarter 2025 Results
Rhea-AI Summary
Omnicom (NYSE: OMC) reported Q1 2025 results with revenue of $3.7 billion, showing organic growth of 3.4%. The company posted net income of $287.7 million and diluted EPS of $1.45 ($1.70 Non-GAAP adjusted).
Key performance metrics include:
- Operating income of $452.6 million with 12.3% margin
- Media & Advertising led organic growth at 7.2%
- Strong regional performance in Latin America (14.8%) and Asia Pacific (6.0%)
The company noted $33.8 million in costs related to the pending Interpublic (IPG) acquisition, expected to close in H2 2025. Operating expenses increased by $86.2 million to $3,237.8 million, while the effective tax rate rose to 28.5% from 25.7% in Q1 2024.
Positive
- 3.4% organic revenue growth in Q1 2025
- Strong performance in Media & Advertising with 7.2% organic growth
- Robust regional growth in Latin America (14.8%) and Asia Pacific (6.0%)
- Non-GAAP Adjusted EPS increased 1.8% to $1.70
- Expected cost synergies from pending Interpublic acquisition
Negative
- Net income decreased 9.7% to $287.7 million
- Operating margin declined to 12.3% from 13.2%
- Operating income fell 5.5% to $452.6 million
- Higher effective tax rate of 28.5% vs 25.7% in Q1 2024
- Declines in Public Relations (-4.5%) and Healthcare (-3.2%) segments
Insights
Omnicom's Q1 2025 results reveal a complex financial picture with mixed signals for investors. The company reported
The headline metrics require careful unpacking. Operating income decreased
Performance varied significantly across business segments. Media & Advertising and Precision Marketing showed robust organic growth of
Management's commentary signals caution about economic conditions while highlighting the strategic potential of the Interpublic acquisition expected to close in H2 2025. This transaction represents a significant industry consolidation that could substantially strengthen Omnicom's competitive position, though integration challenges may emerge.
2025 First Quarter:
- Revenue of
, with organic growth of$3.7 billion 3.4% - Net income of
$287.7 million - Diluted earnings per share of
;$1.45 Non-GAAP adjusted$1.70 - Operating income of
; Non-GAAP Adj. EBITA of$452.6 million with$508.2 million 13.8% margin
"Organic revenue growth for the first quarter was
First Quarter 2025 Results
$ in millions, except per share amounts | Three Months Ended March 31, | |||||
2025 | 2024 | |||||
Revenue | $ 3,690.4 | $ 3,630.5 | ||||
452.6 | 478.9 | |||||
Operating Income Margin | 12.3 % | 13.2 % | ||||
Net Income1 | 287.7 | 318.6 | ||||
Net Income per Share - Diluted1 | $ 1.45 | $ 1.59 | ||||
Non-GAAP Measures:1 | ||||||
EBITA | 474.4 | 500.4 | ||||
EBITA Margin | 12.9 % | 13.8 % | ||||
Adjusted EBITA | 508.2 | 500.4 | ||||
Adjusted EBITA Margin | 13.8 % | 13.8 % | ||||
Non-GAAP Adjusted Net Income per Share - Diluted | $ 1.70 | $ 1.67 | ||||
1) See notes on page 10. | ||||||
Revenue
Revenue in the first quarter of 2025 increased
Organic growth by discipline in the first quarter of 2025 compared to the first quarter of 2024 was as follows:
Organic growth by region in the first quarter of 2025 compared to the first quarter of 2024 was as follows:
Expenses
Operating expenses increased
Salary and service costs increased
Occupancy and other costs, which are less directly linked to changes in revenue than salary and service costs, increased
SG&A expenses increased
Operating Income
Operating income decreased
Interest Expense, net
Net interest expense in the first quarter of 2025 increased
Income Taxes
Our effective tax rate for the first quarter of 2025 increased to
Net Income – Omnicom Group Inc. and Diluted Net Income per Share
Net income - Omnicom Group Inc. for the first quarter of 2025 decreased
EBITA
EBITA decreased
Risks and Uncertainties
Global economic conditions and disruptions, including geopolitical events, international hostilities, acts of terrorism, public health crises, inflation or stagflation, tariffs and other trade barriers, central bank interest rate policies in countries that comprise our major markets, labor and supply chain issues affecting the distribution of our clients' products, or a disruption in the credit markets could cause economic uncertainty and volatility. The impact of these issues on our business will vary by geographic market and discipline. We monitor economic conditions and disruptions closely, as well as client revenue levels and other factors. In response to reductions in revenue, we can take actions to align our cost structure with changes in client demand and manage our working capital. However, there can be no assurance as to the effectiveness of our efforts to mitigate any impact of the current and future adverse economic conditions and disruptions, reductions in client revenue, changes in client creditworthiness and other developments.
Definitions - Components of Revenue Change
We use certain terms in describing the components of the change in revenue above.
Foreign exchange rate impact: calculated by translating the current period's local currency revenue using the prior period average exchange rates to derive current period constant currency revenue. The foreign exchange rate impact is the difference between the current period revenue in
Acquisition revenue, net of disposition revenue: Acquisition revenue is calculated as if the acquisition occurred twelve months prior to the acquisition date by aggregating the comparable prior period revenue of acquisitions through the acquisition date. As a result, acquisition revenue excludes the positive or negative difference between our current period revenue subsequent to the acquisition date, and the comparable prior period revenue and the positive or negative growth after the acquisition date is attributed to organic growth. Disposition revenue is calculated as if the disposition occurred twelve months prior to the disposition date by aggregating the comparable prior period revenue of disposals through such date. The acquisition revenue and disposition revenue amounts are netted in the description above.
Organic growth: calculated by subtracting the foreign exchange rate impact component and the acquisition revenue, net of disposition revenue component from total revenue growth.
Conference Call
Omnicom will host a conference call to review its financial results on Tuesday, April 15, 2025, starting at 4:30 p.m. Eastern Time. A live webcast of the call, along with the related slide presentation, will be available at Omnicom's investor relations website, investor.omnicomgroup.com, and a webcast replay will be made available after the call concludes.
Corporate Responsibility
At Omnicom, we are committed to promoting responsible practices and making positive contributions to society around the globe. Please explore our website (omnicomgroup.com/corporate-responsibility) for highlights of our progress across the areas on which we focus: Empower People, Protect Our Planet, Lead Responsibly.
About Omnicom
Omnicom (NYSE: OMC) is a leading provider of data-inspired, creative marketing and sales solutions. Omnicom's iconic agency brands are home to the industry's most innovative communications specialists who are focused on driving intelligent business outcomes for their clients. The company offers a wide range of services in advertising, strategic media planning and buying, precision marketing, retail and digital commerce, branding, experiential, public relations, healthcare marketing and other specialty marketing services to over 5,000 clients in more than 70 countries. For more information, visit www.omnicomgroup.com.
Non-GAAP Financial Measures
We present financial measures determined in accordance with generally accepted accounting principles in
Forward-Looking Statements
Certain statements in this document contain forward-looking statements, including statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, from time to time, the Company or its representatives have made, or may make, forward-looking statements, orally or in writing. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs of the Company's management as well as assumptions made by, and information currently available to, the Company's management. Forward-looking statements may be accompanied by words such as "aim," "anticipate," "believe," "plan," "could," "should," "would," "estimate," "expect," "forecast," "future," "guidance," "intend," "may," "will," "possible," "potential," "predict," "project" or similar words, phrases or expressions. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company's control. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include:
- risks relating to the pending merger (the "merger") with The Interpublic Group of Companies, Inc. ("IPG"), including: that the merger may not be completed in a timely manner or at all; delays, unanticipated costs or restrictions resulting from regulatory review of the merger, including the risk that Omnicom or IPG may be unable to obtain governmental and regulatory approvals required for the merger, or that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the merger; uncertainties associated with the merger may cause a loss of both companies' management personnel and other key employees, and cause disruptions to both companies' business relationships; the merger agreement subjects the Company and IPG to restrictions on business activities prior to the effective time of the merger; the Company and IPG are expected to incur significant costs in connection with the merger and integration; litigation risks relating to the merger; the business and operations of both companies may not be integrated successfully in the expected time frame; the merger may result in a loss of both companies' clients, service providers, vendors, joint venture participants and other business counterparties; and the combined company may fail to realize all of the anticipated benefits of the merger or fail to effectively manage its expanded operations;
- adverse economic conditions and disruptions, including geopolitical events, international hostilities, acts of terrorism, public health crises, inflation or stagflation, tariffs and other trade barriers, central bank interest rate policies in countries that comprise our major markets, labor and supply chain issues affecting the distribution of our clients' products, or a disruption in the credit markets;
- international, national or local economic conditions that could adversely affect the Company or its clients;
- losses on media purchases and production costs incurred on behalf of clients;
- reductions in client spending, a slowdown in client payments or a deterioration or disruption in the credit markets;
- the ability to attract new clients and retain existing clients in the manner anticipated;
- changes in client marketing and communications services requirements;
- failure to manage potential conflicts of interest between or among clients;
- unanticipated changes related to competitive factors in the marketing and communications services industries;
- unanticipated changes to, or the ability to hire and retain, key personnel;
- currency exchange rate fluctuations;
- reliance on information technology systems and risks related to cybersecurity incidents;
- effective management of the risks, challenges and efficiencies presented by utilizing Artificial Intelligence (AI) technologies and related partnerships in our business;
- changes in legislation or governmental regulations affecting the Company or its clients;
- risks associated with assumptions the Company makes in connection with its acquisitions, critical accounting estimates and legal proceedings;
- the Company's international operations, which are subject to the risks of currency repatriation restrictions, social or political conditions, and an evolving regulatory environment in high-growth markets and developing countries; and
- risks related to our environmental, social and governance goals and initiatives, including impacts from regulators and other stakeholders, and the impact of factors outside of our control on such goals and initiatives.
The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that may affect the Company's business, including those described in Item 1A, "Risk Factors" and Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K and in other documents filed from time to time with the Securities and Exchange Commission. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements.
OMNICOM GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In millions, except per share amounts) | ||||
Three Months Ended March 31, | ||||
2025 | 2024 | |||
Revenue | $ 3,690.4 | $ 3,630.5 | ||
Operating Expenses: | ||||
Salary and service costs | 2,746.3 | 2,692.6 | ||
Occupancy and other costs | 314.6 | 314.1 | ||
Cost of services | 3,060.9 | 3,006.7 | ||
Selling, general and administrative expenses1 | 117.9 | 85.3 | ||
Depreciation and amortization | 59.0 | 59.6 | ||
Total operating expenses1 | 3,237.8 | 3,151.6 | ||
Operating Income | 452.6 | 478.9 | ||
Interest Expense | 59.1 | 53.8 | ||
Interest Income | 29.7 | 27.0 | ||
Income Before Income Taxes and Income From Equity Method Investments | 423.2 | 452.1 | ||
Income Tax Expense1 | 120.7 | 116.0 | ||
Income From Equity Method Investments | 0.9 | 0.9 | ||
Net Income1 | 303.4 | 337.0 | ||
Net Income Attributed To Noncontrolling Interests | 15.7 | 18.4 | ||
Net Income - Omnicom Group Inc.1 | $ 287.7 | $ 318.6 | ||
Net Income Per Share - Omnicom Group Inc.:1 | ||||
Basic | $ 1.46 | $ 1.61 | ||
Diluted | $ 1.45 | $ 1.59 | ||
Dividends Declared Per Common Share | $ 0.70 | $ 0.70 | ||
Operating income margin | 12.3 % | 13.2 % | ||
Non-GAAP Measures:4 | ||||
EBITA2 | $ 474.4 | $ 500.4 | ||
EBITA Margin2 | 12.9 % | 13.8 % | ||
EBITA - Adjusted1,2 | $ 508.2 | $ 500.4 | ||
EBITA Margin - Adjusted1,2 | 13.8 % | 13.8 % | ||
Non-GAAP Adjusted Net Income Per Share - Omnicom Group Inc. - Diluted1,3 | $ 1.70 | $ 1.67 | ||
1) | See Note 3 on page 10. |
2) | See Note 4 on page 10 for the definition of EBITA. |
3) | Adjusted Net Income per Share - Diluted excludes after-tax amortization of acquired intangible assets and internally developed strategic platform assets and also excludes, for the three months ended March 31, 2025, after-tax acquisition related costs. We believe these measures are useful in evaluating the impact of these items on operating performance and allows for comparability between reporting periods. |
4) | See Non-GAAP reconciliations starting on page 9. |
OMNICOM GROUP INC. AND SUBSIDIARIES DETAIL OF OPERATING EXPENSES (Unaudited) (In millions) | |||
Three Months Ended March 31, | |||
2025 | 2024 | ||
Revenue | $ 3,690.4 | $ 3,630.5 | |
Operating Expenses: | |||
Salary and service costs: | |||
Salary and related costs | 1,780.5 | 1,847.3 | |
Third-party service costs1 | 796.8 | 698.2 | |
Third-party incidental costs2 | 169.0 | 147.1 | |
Total salary and service costs | 2,746.3 | 2,692.6 | |
Occupancy and other costs | 314.6 | 314.1 | |
Cost of services | 3,060.9 | 3,006.7 | |
Selling, general and administrative expenses | 117.9 | 85.3 | |
Depreciation and amortization | 59.0 | 59.6 | |
Total operating expenses3 | 3,237.8 | 3,151.6 | |
Operating Income | $ 452.6 | $ 478.9 | |
1) | Third-party service costs include third-party supplier costs when we act as principal in providing services to our clients. |
2) | Third-party incidental costs primarily consist of client-related travel and incidental out-of-pocket costs, which we bill back to the client directly at our cost and which we are required to include in revenue. |
3) | See Note 3 on page 10. |
OMNICOM GROUP INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) (In millions) | |||
Three Months Ended March 31, | |||
2025 | 2024 | ||
Net Income - Omnicom Group Inc. | $ 287.7 | $ 318.6 | |
Net Income Attributed To Noncontrolling Interests | 15.7 | 18.4 | |
Net Income | 303.4 | 337.0 | |
Income From Equity Method Investments | 0.9 | 0.9 | |
Income Tax Expense | 120.7 | 116.0 | |
Income Before Income Taxes and Income From Equity Method Investments | 423.2 | 452.1 | |
Interest Expense | 59.1 | 53.8 | |
Interest Income | 29.7 | 27.0 | |
Operating Income | 452.6 | 478.9 | |
Add back: amortization of acquired intangible assets and internally developed strategic | 21.8 | 21.5 | |
Earnings before interest, taxes and amortization of intangible assets ("EBITA")1 | $ 474.4 | $ 500.4 | |
Amortization of other purchased and internally developed software | 4.0 | 4.3 | |
Depreciation | 33.2 | 33.8 | |
EBITDA | $ 511.6 | $ 538.5 | |
EBITA1 | $ 474.4 | $ 500.4 | |
Acquisition related costs2 | 33.8 | — | |
EBITA - Adjusted1,2 | $ 508.2 | $ 500.4 | |
Revenue | $ 3,690.4 | $ 3,630.5 | |
Non-GAAP Measures: | |||
EBITA1 | $ 474.4 | $ 500.4 | |
EBITA Margin1 | 12.9 % | 13.8 % | |
EBITA - Adjusted1,2 | $ 508.2 | $ 500.4 | |
EBITA Margin - Adjusted1,2 | 13.8 % | 13.8 % | |
1) | See Note 4 on page 10 for the definition of EBITA. |
2) | See Note 3 on page 10. |
The above table reconciles the |
OMNICOM GROUP INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) (In millions) | ||||||||||||
Three Months Ended March 31, | ||||||||||||
Reported | Non- | Non- | Reported | Non- | Non- | |||||||
Revenue | $ — | $ — | ||||||||||
Operating Expenses1 | 3,237.8 | (33.8) | 3,204.0 | 3,151.6 | — | 3,151.6 | ||||||
Operating Income | 452.6 | 33.8 | 486.4 | 478.9 | — | 478.9 | ||||||
Operating Income Margin | 12.3 % | 13.2 % | 13.2 % | 13.2 % | ||||||||
Three Months Ended March 31, | |||||
2025 | 2024 | ||||
Net | Net Income | Net | Net Income | ||
Net Income - Omnicom Group Inc. - Reported | $ 287.7 | $ 1.45 | $ 318.6 | $ 1.59 | |
Acquisition related costs (after-tax)1,2 | 32.7 | 0.17 | — | — | |
Amortization of acquired intangible assets and internally developed strategic | 16.1 | 0.08 | 15.9 | 0.08 | |
Non-GAAP Net Income - Omnicom Group Inc. - Adjusted2,3 | $ 336.5 | $ 1.70 | $ 334.5 | $ 1.67 | |
1) | See Note 3 on page 10. |
2) | Adjusted Net Income per Share - Diluted excludes after-tax amortization of acquired intangible assets and internally developed strategic platform assets and also excludes, for the three months ended March 31, 2025, after-tax acquisition related costs. We believe these measures are useful in evaluating the impact of these items on operating performance and allows for comparability between reporting periods. |
3) | Weighted-average diluted shares for the three months ended March 31, 2025 and 2024 were 198.3 million and 200.1 million, respectively. The above tables reconcile the GAAP financial measures of Operating Income, Net Income - Omnicom Group Inc., and Net Income per Share - Diluted to adjusted Non-GAAP financial measures of Non-GAAP Operating Income - Adjusted, Non-GAAP Net Income-Omnicom Group Inc. - Adjusted and Non-GAAP Adjusted Net Income per Share - Diluted. Management believes these Non-GAAP measures are useful for investors to evaluate the comparability of the performance of our business year to year. |
NOTES: | |
1) | Net Income and Net Income per Share for Omnicom Group Inc. |
2) | See non-GAAP reconciliations starting on page 9. |
3) | Included in selling, general and administrative expenses for the three months ended March 31, 2025 are acquisition related costs of |
4) | We define EBITA as earnings before interest, taxes and amortization of acquired intangible assets and internally developed strategic platform assets. |
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SOURCE Omnicom Group Inc.