Q2 2024 Omnicom Group Inc Earnings Call

Good afternoon and welcome to the Omnicom Second Quarter 2024 Earnings Relief Conference Call. At this time, all participants are in the listen-only mode. Later, we will conduct a question-and-answer session.

Operator: At this time, all participants are in the listen-only mode.

Operator: At this time, all participants are in the listen-only mode. Later, we will conduct a question and answer session. If you would like to ask a question, please press star and 1 on your telephone keypad. If you need assistance during the call, please press star then zero.

Operator: Later, we will conduct the question-and-answer session. If you would like to ask a question, please press star and one on your telephone keypad. If you need assistance during the call, please press star, then zero.

If you would like to ask a question, please press star, then 1 on your telephone keypad. If you need assistance during the call, please press star, then 0.

Operator: As a reminder, this conference call is being recorded.

Operator: As a reminder, this conference call is being recorded. I will now turn the call over to your host, Gregory Lundberg, Senior Vice President, Investor Relations. You may begin.

Gregory Lundberg: I will now turn the call over to your host, Gregory Lundberg, and your Vice President, Investor Relations. You may begin. Thank you for joining us.

As a reminder, this conference call is being recorded. I will now turn the call over to your host, Gregory Lundberg, Senior Vice President, Investor Relations. You may begin.

Gregory H. Lundberg: Thank you for joining our second quarter 2024 earnings call. With me today are John Wren, Chairman and Chief Executive Officer, and Phil Angelastro, Executive Vice President and Chief Financial Officer. Please see our website, omnicomgroup.com, for more information. You'll find a press release and a presentation covering the information that we're going to review today, and archived webcasts will be available when today's call concludes. Before we start, I'd like to remind everyone to read the forward-looking statements and non-GAAP financial and other information that we've included at the end of our investor presentation.

John Wren: On our second quarter 2024 earnings call with me today are John Wren, Chairman and Chief Executive Officer, and Phil Angelastro, Executive Vice President and Chief Financial Officer. On our website OmnicomGroup.com, you'll find a press release and a presentation covering the information that we're going to review today. An archive webcast will be available on today's call concludes.

Gregory H. Lundberg: Thank you for joining our second quarter 2024 earnings call. With me today are John Wren, Chairman and Chief Executive Officer, and Phil Angelastro, Executive Vice President and Chief Financial Officer.

On our website, Omnicomgroup.com.

Speaker Change: You'll find a press release and a presentation covering the information that we're going to review today. An archived webcast will be available when today's call concludes.

John Wren: Before we start, I'd like to remind everyone to read the forward-looking statements and non-GAAP financial and other information that we've included at the end of our investor presentation. Certain of the statements made today may constitute forward-looking statements, and these statements are present expectations. Relevant factors that could cause actual results to differ materially are listed on earnings materials and in our SEC filings, including our 2023 410K. During the course of today's call, we will also discuss certain non-GAAP measures. You can find the reconciliation of these to the nearest comparable gap measures in the presentation materials.

Speaker Change: Before we start, I'd like to remind everyone to read the forward-looking statements and non-GAAP financial and other information that we've included at the end of our investor presentation.

Gregory H. Lundberg: Certain of the statements made today may constitute forward-looking statements, and these statements are our present expectations. Relevant factors that could cause actual results to differ materially are listed in our earnings materials and in our SEC filings, including our 2023 Form 10-K. During the course of today's call, we will also discuss certain non-GAAP measures. You can find the reconciliation of these to the nearest comparable gap measures in the presentation.

Speaker Change: Certain of the statements made today may constitute forward-looking statements, and these statements are our present expectations. Relevant factors that could cause actual results to differ materially are listed in our earnings materials and in our SEC filings, including our 2023 Form 10-K .

Speaker Change: During the course of today's call, we will also discuss certain non-GAAP measures.

Speaker Change: You can find the reconciliation of these to the nearest comparable GAAP measures in the presentation materials.

Gregory Lundberg: We will begin the call with an overview of our business from John, then Phil will review our financial results for the quarter, and after our prepared remarks, we will open the line for your questions.

Gregory H. Lundberg: We will begin the call with an overview of our business from John. Then Phil will review our financial results for the quarter. And after our prepared remarks, we will open the line for your questions. I'll now hand the call to John. Thank you, Greg. Good afternoon, everyone, and thank you for joining us today.

Speaker Change: We will begin the call with an overview of our business from John , then Phil will review our financial results for the quarter, and after our prepared remarks, we will open the line for your questions. I'll now hand the call to John .

John Wren: I'll now hand the call to John. Thank you, Greg. Good afternoon, everyone, and thank you for joining us today. We're pleased to share our second quarter results. Organic growth was very strong at 5.2% for the quarter. The US grew at 6.3%. Across our disciplines, advertising and media, as well as experiential, all had outstanding performances. Non-GAAP adjusted even off margin was 15.3% for the quarter, which excluded the effect of the severance cost related primarily to the formation of Omnicon production. Non-GAAP adjusted earnings per share, which excluded the after-tax effect of the amortization required in strategic platform intangibles and the severance cost I just discussed, was $1.95.

John D. Wren: Thank you, Greg. Good afternoon, everyone, and thank you for joining us today.

John D. Wren: We're pleased to share our second quarter results. Organic growth was very strong at 5.2% for the quarter, and the U.S. grew at 6.3%. Across our disciplines, advertising and media, as well as experiential, all had outstanding performance; non-GAAP adjusted EBITDA margin was 15.3% for the quarter, which excludes the effect of the severance costs related primarily to the formation of Omnicom production. Non-GAAP-adjusted earnings per share, which excludes the after-tax effect of the amortization of acquired and strategic platform intangibles and the severance costs Our cash flow continues to support our primary uses of cash.

John: We're pleased to share our second quarter results.

Phil: Organic growth was very strong at 5.2% for the quarter. The U.S. grew at 6.3%

Speaker Change: Across our disciplines, advertising and media, as well as experiential, all had outstanding performances.

Phil: non-GAAP adjusted EBITDA margin was 15.3% for the quarter, which excludes the effect of the severance costs related primarily to the formation of Omnicom production.

Phil: Non-GAAP-adjusted earnings per share, which excludes the after-tax effect of the amortization of acquired and strategic platform intangibles, and the severance costs I just discussed,

John Wren: A 4.8% versus the comfortable amount in 2020. Our cash flow continues to support our primary uses of cash: dividends, acquisitions, and sharing purchases, and our liquidity and balance sheet remain very strong. We're pleased with our financial results for the quarter and the first half and are maintaining our full year organic revenue growth target of between 4 and 5%. In full year, 2024, even off margin target of close to flat with 2023.

Phil: was $1.95, a 4.8% versus the comparable amount in 2023.

Phil: Our cash flow continues to support our primary uses of cash, dividends, acquisitions, and sharing purchases.

John D. Wren: Dividends, Acquisitions, and Share Purchases, and our liquidity and balance sheet remain very strong. We're pleased with our financial results for the quarter and the first half, and are maintaining our full-year organic revenue growth target of between 4 and 5 percent and full-year 2024 EBITDA margin target of close to flat with 2023. Phil will cover our results in more detail during his remarks.

Phil: And our liquidity and balance sheet remain very strong.

Phil: We're pleased with our financial results for the quarter and the first half, and are maintaining our full-year organic revenue growth target of between 4 and 5 percent.

Phil: In full year 2024, EBITDA margin target of close to flat with 2023.

John Wren: Total cover our results in more detail during his remarks. We made progress across several areas throughout the quarter. We expanded our end-to-end generative AI solution, grew our e-commerce offerings, launched a new production practice area, and secured numerous prominent climate winters.

John D. Wren: We made progress across several areas throughout the quarter. We expanded our end-to-end generative AI solution, grew our e-commerce offerings, launched a new production practice area, and secured numerous prominent client wins. Last year at Kahn, we unveiled Omni 3.0, the next generation of Omni powered by Gen AI.

Phil: Phil will cover our results in more detail during his remarks.

Philip J. Angelastro: We made progress across several areas throughout the quarter.

Philip J. Angelastro: We expanded our end-to-end generative AI solution.

Philip J. Angelastro: grew our e-commerce offerings, launched a new production practice area, and secured numerous prominent client wins.

John Wren: James. Last year at Cahn, we unveiled Omni 3.0, the next generation of Omni powered by Gen AI. We also announced first mover collaborations with Adobe, Amazon, Getty, Google, and Microsoft's Open AI, to gain early access to their large language models. Just over a year later, we're seeing these general AI platforms, tools, and partnerships being activated throughout every area of our business, from strategy to creative to production, media, and precision marketing. One example is TWA's loans of Collective AI, a suite of AI tools available to its employees and clients. Collective AI automates and drives efficiencies in basic tests and provides AI-driven insights, allowing our teams to dedicate more time to helping brands bring distinctive products, services, and experiences to market.

Kahn: Last year at Kahn, we unveiled Omni 3.0, the next generation of Omni-powered by Gen AI.

John D. Wren: We also announced first-mover collaborations with Adobe, Amazon, Getty, Google, and Microsoft's OpenAI to gain early access to their large language models. Just over a year later, we're seeing these generative AI platforms, tools, and partnerships being activated throughout every area of our business, from strategy to creative, to production, media, and precision marketing. One example is TBWA's launch of Collective AI, a suite of AI tools available to its employees and clients. Collective AI automates and drives efficiencies in basic tasks and provides AI-driven insights, allowing our teams to dedicate more time to helping brands bring distinctive products, services, and experiences to market. Collective AI includes custom applications, leverages TBWA's extensive archives using large language models, and is powered by Omni's first mover, Generative AI Partnership.

Kahn: We also announced first-mover collaborations with Adobe, Amazon, Getty, Google, and Microsoft's OpenAI to gain early access to their large-language models.

Kahn: Just over a year later, we're seeing these generative AI platforms, tools, and partnerships being activated throughout every area of our business, from strategy to creative to production, media, and precision marketing.

Kahn: One example is TBWA's launch of Collective AI, a suite of AI tools available to its employees and clients.

Speaker Change: Collective AI automates and drives efficiencies in basic tasks and provides AI driven insights, allowing our teams to dedicate more time to helping brands bring distinctive products, services, and experiences to market.

John Wren: Collective AI includes custom applications, leverages, TWA's extensive archives using large language models and is powered by Omni's first mover generated AI partnerships. Another example is the recent launch of ARKBOT AI, on challenging content orchestration platform. Leveraging models powered by Omni, ARKBOT AI assembles clients' digital assets to create and deliver high-quality personalized experiences to consumers at scale, maximizing the value of clients' creative content, as well as the precision and performance of their media investments. These developments highlight the success of our generative AI strategy, which is to provide our agencies omnicom-wide tools and capabilities that can be used to make our people more effective, in our operations more efficient, and to drive transformative outcomes for our clients.

Speaker Change: Collective AI includes custom applications, leverages TBWA's extensive archives using large language models, and is powered by Omni's first-mover generative AI partnerships.

John D. Wren: Another example is the recent launch of ArtBot AI, our intelligent content orchestration platform. Leveraging models powered by Omni, ArtBot AI assembles clients' digital assets to create and deliver high-quality personalized experiences to consumers at scale, maximizing the value of clients' creative content, as well as the precision and performance of their media investment. These developments highlight the success of our generative AI strategy, which is to provide our agencies with Omnicom-like tools and capabilities that can be used to make our people more effective and our operations more efficient, and to drive transformative outcomes for our clients.

Speaker Change: Another example is the recent launch of ArtBot AI, our intelligent content orchestration platform.

Speaker Change: Leveraging models powered by Omni, Artbox AI assembles client's digital assets to create and deliver high quality personalized experiences

Speaker Change: to consumers at scale, maximizing the value of clients' creative content, as well as the precision and performance of their media investments.

Speaker Change: These developments highlight the success of our generative AI strategy, which is to provide our agencies Omnicom-like tools and capabilities that can be used to make our people more effective and our operations more efficient, and to drive transformative outcomes for our clients.

John Wren: During the quarter, we also continue to execute our strategic plans to further expand our market-leading retail media and e-commerce capabilities following the acquisition of Flywheel. At CON, we announced a collaboration with Amazon as that enables our media teams to access Amazon's browsing, shopping, and streaming insights to directly tie linear and CQB investments to purchases made on Amazon. Essential to this partnership are Flywheel's products and trained directional signals, which are paired with Omni's audience and viewership data. This connection resulted in more effective marketing investments and increased ROI for our clients. Also, at CON, Flywheel is certified with TikTok Shop, enabling us to connect creator content to product sales so we can measure marketing performance.

John D. Wren: During the quarter, we also continued to execute our strategic plans to further expand our market-leading retail media and e-commerce capabilities following the acquisition of Flywheel. At Kahn, we announced a collaboration with Amazon ads that enables our media teams to access Amazon's browsing, shopping, and streaming insights to directly tie linear and CTV investments to purchases made on Amazon.

Speaker Change: During the quarter, we also continue to execute our strategic plans to further expand our market-leading retail media and e-commerce capabilities following the acquisition of Flywheel.

Kahn: At Cannes, we announced a collaboration with Amazon Ads that enables our media teams to access Amazon's browsing, shopping, and streaming insights to directly tie linear and CTV investments to purchases made on Amazon.

John D. Wren: Essential to this partnership are Flywheel's products and transactional signals, which are paired with Omni's audience and viewership data. This connection resulted in more effective marketing investments and increased ROI for our clients. Also, at Kong, Flywheel is certified with Tik Tok Shop, enabling us to connect creator content to product sales so we can measure marketing performance.

Kahn: Essential to this partnership are Flywheel's products and transactional signals which are paired with Omni's audience and viewership data.

Kahn: This connection resulted in more effective marketing investments and increased ROI for our clients.

Kahn: Also at Kong, Flywheel is certified with TikTok Shop, enabling us to connect creator content to product sales so we can measure marketing performance.

John D. Wren: These additions to our e-commerce offerings follow Omnicom's designation as a leader in the Q2 2024 Forrester wave for commerce services. Our prominent position in the market is a testament to the early success of our acquisition of Flywheel, aligned with the omni-channel capabilities of Omnicom Commerce Group and the MarTech consulting capabilities of Omnicom's Precision Marketing Group. In June, we announced the formation of Omnicom Production, a new practice area that combines our global production units. Omnicom Production provides best-in-class content production services throughout a network of studios powered by data-driven insights and the latest technology.

John Wren: These additions to our e-commerce offerings follow Omni's designation as a leader in the Q2 2020-24 Forested Wave for commerce services. Our prominent position in the market is a testament to the early success of our acquisition of Flywheel aligned with the Omni channel capabilities of Omni-Com Commerce Group and the market consulting capabilities of Omni-Comes Precision Marketing Group.

Kahn: These additions to our e-commerce offerings follow Omnicom's designation as a leader in the Q2 2024 Forrester Wave for Commerce Services.

Speaker Change: Our prominent position in the market is a testament to the early success of our acquisition of Flywheel, aligned with the omni-channel capabilities of Omnicom Commerce Group and the MarTech consulting capabilities of Omnicom's Precision Marketing Group.

John Wren: In June, we announced the formation of Omni-Com Production in new practice areas that combines our global production units. Omni-Com Production provides best-in-class content production services throughout a network of studios powered by data-driven insights and the latest technology. The central organization of our production agencies will improve how we deliver content to clients in a simpler, more integrated, and more effective way. More importantly, Omnicom Production now has the breadth of capabilities to pursue a significant amount of incremental production revenue growth as we can solidate investments in new technologies and products that will provide better, cheaper services to our clients.

Speaker Change: In June , we announced the formation of Omnicom Production, a new practice area that combines our global production units.

Speaker Change: Omnicom production provides best-in-class content production services throughout a network of studios powered by data-driven insights and the latest technologies.

John D. Wren: The centralization of our production agencies will improve how we deliver content to clients in a simpler, more integrated, and more effective way. More importantly, Omnicom production now has the breadth of capabilities to pursue a significant amount of incremental production revenue growth as we consolidate investments in new technologies and products that will provide better, cheaper services to our clients. The group has over 3,000 people across major markets worldwide. Through the combination of Omnicom Content Studios, EG+, The Designery, Mother Tongue, Link9, and the production departments previously housed within our creative agency, Sergio Lopez, one of the industry's most awarded creative production leaders, is leading Omnicom production. We're thrilled to have him at the helm.

Speaker Change: The centralization of our production agencies will improve how we deliver content to clients in a simpler, more integrated, and more effective way.

Speaker Change: More importantly, Omnicom Production now has the breadth of capabilities to pursue a significant amount of incremental production revenue growth as we consolidate investments in new technologies and products that will provide better, cheaper services to our clients.

John Wren: The group has over 3,000 people across major markets worldwide. Three of the combination of Omnicom Content Studios, EG Plus, the Designer Mother Town, Link 9, and the Production Departments, previously housed within our creative agencies. Sergio Lopez, one of the industry's most awarded creative production leaders, is leading Omnicom Production with thrilled to have him at the helm. His centralized production capability, coupled with art bought AI powered by Omnic, provides the industry's most comprehensive and intelligent content solution that delivers on the promise of mass personalization at scale. From Gen AI to e-commerce to production, we are continuing to enhance our offerings to meet our clients' needs for better informed strategic insights using AI, creatively inspired content that can be personalized at scale, and investments in targeted media that can be measured through quantifiable outcomes, all delivered in the most efficient and effective manner.

Speaker Change: The group has over 3,000 people across major markets worldwide.

Speaker Change: through the combination of Omnicom Content Studios, EG+, The Designery, Mother Tongue, Link9, and the production departments previously housed within our creative agencies.

Sergio Lopez: Sergio Lopez, one of the industry's most awarded creative production leaders, is leading Omnicom production. We're thrilled to have him at the helm.

John D. Wren: This centralized production capability coupled with ArtBot AI powered by Omni provides the industry's most comprehensive and intelligent content solution that delivers on the promise of mass personalization at scale. From Gen AI to e-commerce to production, we're continuing to enhance our offerings to meet our clients' needs for better informed strategic insights using AI. Creatively inspired content that can be personalized at scale, and investments in targeted media that can be measured through quantifiable outcomes, all delivered in the most efficient and effective manner.

Sergio Lopez: This centralized production capability, coupled with ArtBot AI, powered by Omni, provides the industry's most comprehensive and intelligent content solution that delivers on the promise of mass personalization at scale.

Speaker Change: From Gen AI to e-commerce to production, we're continuing to enhance our offerings to meet our clients' needs for better informed strategic insights using AI,

Speaker Change: Creatively inspired content that can be personalized at scale.

Speaker Change: and investments in targeted media that can be measured through quantifiable outcomes.

John Wren: Our differentiated capabilities uniquely position us to serve our current and future client needs.

John D. Wren: Our differentiated capabilities uniquely position us to serve our current and future client needs. Our success is reflected in a series of recent client wins. Omnicom Precision Marketing Group won the consolidated CRM business from General Motors, and TBWA was awarded the creative account for Carnival.

Speaker Change: All delivered in the most efficient and effective manner.

Speaker Change: Our differentiated capabilities uniquely position us to serve our current and future client needs.

John Wren: Our success is reflected through a series of recent client wins. Omnicom Studio Marketing Group won the consolidated CRM business from General Motors. TBWA was awarded the creative account for Carnival. AstraZeneca appointed Omnicom as one of its primary oncology network partners. Flywheel has several account wins, including Canon, Carter's, Lipton, and Nestle. Omnicom Media Group won the media account for Gap. Ph.D. became Singapore Airlines and the Volkswagen accounts, and won David Yomens and Price Ones media business. Our Media Group's strong showing was underpinned by two of its agencies, OMD and Ph.D., being named the top two media agencies at Con Lines this year.

Speaker Change: Our success is reflected through a series of recent client wins.

Speaker Change: Omnicom Precision Marketing Group won the consolidated CRM business from General Motors. TBWA was awarded the creative account for Carnival. AstraZeneca appointed Omnicom as one of its primary oncology network partners.

John D. Wren: AstraZeneca appointed Omnicom as one of its primary oncology network partners. Flywheel had several account wins, including Cannon, Carters, Lipton, and Nestle. Omnicom Media Group won the media account for Gap, while PHD retained Singapore Airlines and the Volkswagen accounts and one David Yarman and Priceline's media business. Our media group's strong showing was underpinned by two of its agencies, OND and PHD, being named the top two media agencies at Con Lions this year. Congratulations to everybody who played a role in these client wins, as well as the award-winning work at Con.

Speaker Change: Flywheel had several account wins, including Cannon, Carters, Lifton, and Nestle. Omnicom Media Group won the media account for Gap. PHD retained Singapore Airlines and the Volkswagen accounts.

Speaker Change: and David Yarman's and Priceline's media business.

Speaker Change: Our media group, Strong Showing, was underpinned by two of its agencies, OND and PHD, being named the top two media agencies at Cannes Lions this year.

John Wren: Congratulations to everybody who played a role in these client wins, as well as the award-winning work at Con.

Speaker Change: Congratulations to everybody who played a role in these client wins as well as the award-winning work at Kahn. Overall we're pleased with our first half financial results and our progress on key strategic initiatives.

John Wren: Overall, we're pleased with our first half financial results and our progress on key strategic emissions. Looking ahead, we expect stronger second half results in line with our full-year organic growth and large intelligence. I'm confident we can meet these targets, even as we continue to monitor and adapt to changes in the macro-environment.

John D. Wren: Overall, we're pleased with our first half financial results and our progress on key strategic initiatives. Looking ahead, we expect stronger second half results in line with our full year organic growth and margin targets. I'm confident we can meet these targets, even as we continue to monitor and adapt to changes in the macro environment. I'll now turn the call over to Phil for a closer look at our financial results. Thanks, John.

Speaker Change: Looking ahead, we expect stronger second half results in line with our full year organic growth and margin targets.

Speaker Change: I'm confident we can meet these targets even as we continue to monitor and adapt to changes in the macro environment.

Phil Angelastro: I'll now turn the call over to Phil for a closer look at our financial results. Phil. Thanks, John. As you just heard, there are many exciting things underway at Omnicom, and our success is driven by the investments we've made and continue to make in leading tools, platforms, and capabilities needed. to serve our current and future clients in a rapidly changing marketplace. Strength more business models that we continue to make these investments while delivering solid financial results as we did in the second quarter.

Speaker Change: I'll now turn the call over to Phil for a closer look at our financial results. Phil?

Philip J. Angelastro: As you just heard, there are many exciting things underway at Omnicom, and our success is driven by the investments we've made and continue to make in leading the tools, platforms, and capabilities needed to serve our current and future clients in a rapidly changing market. Transcripts provided by Transcription Outsourcing, LLC, while delivering solid financial results as we did in the second quarter. Let's review our performance, beginning on slide four. Organic growth in the quarter was strong at 5.2%. However, the impact on revenue from foreign currency translation, as we expected, decreased reported revenue by 1%.

Philip J. Angelastro: Thanks, John .

Philip J. Angelastro: As you just heard, there are many exciting things underway at Omnicom.

Philip J. Angelastro: And our success is driven by the investments we've made and continue to make in leading tools, platforms, and capabilities needed.

Philip J. Angelastro: to serve our current and future clients in a rapidly changing marketplace.

Philip J. Angelastro: The strength of our business model is that we continue to make these investments.

Philip J. Angelastro: All delivering solid financial results, as we did in the second quarter.

Phil Angelastro: Let's review our performance beginning on slide four. Organic growth in the quarter was strong at 5.2%. The impact on revenue from foreign currency translation, as we expected, decreased reported revenue by 1%. If rates stay where they are currently, we estimate the impact of foreign currency translation will be negative 0.5% for Q3 2024 and for the full year 2024. The net impact of acquisition and disposition revenue on reported revenue was positive 2.6%. Due primarily to the acquisition of Flywheel this January, and partially all set by the cyclone of some smaller disposition. Based on transactions completed state, we expect the impact of acquisition and disposition revenue will approximate 1.5% for Q3 and for the full year.

Philip J. Angelastro: If rates stay where they are currently, we estimate the impact of foreign currency translation will be negative 0.5% for Q3 2024 and for the full year 2024. The Net Impact of Acquisition and Disposition Revenue on Reported Revenue will be positive 2.6%, due primarily to the acquisition of Flywheel this January and partially offset by the cycling of some smaller dispositions. Based on transactions completed to date, we expect the impact of acquisition and disposition revenue to approximate 1.5% for Q3 and for the full year. Now let's turn to slide 5 to review our Organic Revenue Growth by District. During the quarter, advertising and media growth was once again quite strong at 7.8%.

Philip J. Angelastro: Let's review our performance beginning on slide 4.

Philip J. Angelastro: Organic growth in the quarter was strong at 5.2 percent.

Philip J. Angelastro: The impact on revenue from foreign currency translation, as we expected, decreased reported revenue by 1%.

Philip J. Angelastro: If rates stay where they are currently, we estimate the impact of foreign currency translations will be negative 0.5% for Q3 2024 and for the full year 2024.

Philip J. Angelastro: The net impact of acquisition and disposition revenue on reported revenue was positive 2.6%.

Philip J. Angelastro: Due primarily to the acquisition of Flywheel this January .

Philip J. Angelastro: and partially offset by the cycling of some smaller dispositions.

Philip J. Angelastro: Based on transactions completed to date, we expect the impact of acquisition and disposition revenue will approximate 1.5% for Q3 and for the full year.

Phil Angelastro: Now let's turn to slide five to review our organic revenue growth by discipline. During the quarter, advertising and media growth was once again quite strong at 7.8%. Driven by improved performance in advertising and excellent performance on our global media businesses. Precision marketing grew 1.4%. While we saw strong doubles due to performance at flywheel, some of our project-based consulting agencies within precision marketing encountered delay in client spending the score. We do expect a strong performance starting later in the second half as new wins abroad online and project spend returns to a more normal level. Public relations returned to growth in the quarter and was up 1%.

Philip J. Angelastro: Now let's turn to slide 5 to review our Organic Revenue Growth by Discipline.

Philip J. Angelastro: During the quarter, advertising and media growth was once again quite strong at 7.8%, driven by improved performance in advertising and excellent performance on our global media businesses.

Philip J. Angelastro: Driven by improved performance in advertising and excellent performance in our global media business. Precision Marketing Group, 1.4 percent. While we saw strong double-digit performance at Flywheel, some of our project-based consulting agencies within Precision Marketing encountered delays in client spending this quarter. We do expect strong performance starting later in the second half, as new wins are brought online, and project spend returns to a more normal level. Public relations returned to growth in the quarter and was up 1%.

Philip J. Angelastro: Precision Marketing Group 1.4%

Philip J. Angelastro: While we saw strong double-digit performance at Flywheel, some of our project-based consulting agencies within Precision Marketing encountered delays in client spending this quarter.

Philip J. Angelastro: We do expect a strong performance starting later in the second half.

Philip J. Angelastro: As new wins are brought online, the project span returns to a more normal level.

Phil Angelastro: In the US, growth was approximately 4%, with a little more than half of that growth driven by US election and related work. Healthcare grew 2% during the quarter, with consistent performance for both our US and international agencies. Branding and retail commerce declined by 3.8% as the environment for a branding agency remains difficult. Experiencil grew a strong 17.6% driven primarily by client work related to the Olympics. An execution and support grew 1.2% strong performance by our fuel marketing business, which was offset by a merchandising business.

Philip J. Angelastro: Public relations returned to growth in the quarter and was up 1%. In the U.S., growth was approximately 4%, with a little more than half of that growth driven by U.S. election-related work.

Philip J. Angelastro: In the U.S., growth was approximately 4%, with a little more than half of that growth driven by U.S. election-related work. Healthcare grew 2% during the quarter, with consistent performance from both our U.S. and international agencies. Branding and retail commerce declined by 3.8% as the environment for our branding agencies remains difficult.

Philip J. Angelastro: Healthcare grew 2% during the quarter, with consistent performance from both our U.S. and international agencies.

Philip J. Angelastro: Branding and retail commerce declined by 3.8% as the environment for our branding agencies remains difficult.

Philip J. Angelastro: Experiential grew a strong 17.6%, driven primarily by client work related to the Olympics, and execution and support grew 1.2%. Strong performance by our field marketing business, which was offset by our merchandising. Turning to geographic growth on slide 6, we had a solid quarter across our region. Our largest market, the U.S., grew 6.3%. Europe and the UK also posted strong growth.

Philip J. Angelastro: Experiential grew a strong 17.6 percent driven primarily by client work related to the Olympics.

Philip J. Angelastro: And execution and support grew 1.2%.

Philip J. Angelastro: The strong performance by our field marketing business, which was offset by our merchandising business.

Phil Angelastro: Turning to geographic growth on slide 6, we had a solid quarter across our regions. Our largest market in the US grew 6.3%. Europe and the UK also posted strong growth. Asia Pacific, however, was flat on a challenging comparison to Q2 2023 at our experiential business in China, while Latin America continued its strong growth streak.

Philip J. Angelastro: Turning to geographic growth on slide 6, we had a solid quarter across our regions.

Philip J. Angelastro: Our largest market, the U.S., grew 6.3%.

Philip J. Angelastro: Asia-Pacific, however, was flat on a challenging comparison to Q2 2023 at our experiential business in China, while Latin America continued its strong growth streak. Slide seven is our revenue by industry sector for the quarter. Results here today were generally stable as usual.

Philip J. Angelastro: Europe and the UK also posted strong growth.

Philip J. Angelastro: Asia-Pacific, however, was flat on a challenging comparison to Q2 2023 at our experiential business in China, while Latin America continued its strong growth streak.

Phil Angelastro: Slide 7 is a revenue by industry sector for the quarter. Results year-to-year date were generally stable as usual. Looking at our larger categories, we saw an increase in food and beverage and consumer products that the percentage of the total, driven by fly mills client mix, which was not part of our prior year ribbon.

Philip J. Angelastro: Slide 7 is our revenue by industry sector for the quarter.

Philip J. Angelastro: Looking at our larger categories, we saw an increase in food and beverage and consumer products as a percentage of the total, driven by Flywheel's client mix, which was not part of our prior year revenue. Now, let's turn to slide 8 for a look at our expenses. In the first quarter, salary-related service costs grew with increased staffing levels, which primarily reflect our acquisition of Flywheel and Jenny.

Philip J. Angelastro: Results here date were generally stable as usual.

Philip J. Angelastro: Looking at our larger categories, we saw an increase in food and beverage and consumer products as a percentage of the total.

Philip J. Angelastro: Driven by Flywheel's client mix, which was not part of our prior year revenue.

Phil Angelastro: Now let's turn to fly date for a look at our expenses. In the first quarter, salary-related service costs grew with increased staffing levels, which primarily reflect our acquisition of Fly Mill in January. However, these costs were down over one point as a percentage of revenue year over year, reflecting ongoing strategic repositioning actions and changes in our global employee mix. Third-party service costs grew in connection with the growth in our revenue, especially in disciplines that have a higher level of these costs, such as media, experiential, and field marketing. Third-party incidental costs increased along with growth in our business, and related out-of-pocket costs filled directly to clients.

Philip J. Angelastro: Now let's turn to slide 8 for a look at our expenses.

Philip J. Angelastro: In the first quarter, salary-related service costs grew with increased staffing levels.

Philip J. Angelastro: However, these costs were down over one point as a percentage of revenue year-over-year, reflecting ongoing strategic repositioning action and changes in our Global Employees. Third-party service costs grew in connection with the growth in our revenue, especially in disciplines that have a higher level of these costs, such as Media, Experiential, and Fieldmark. Third-party incidental costs increased along with the growth of our business, and related out-of-pocket costs billed directly to clients. Occupancy and other costs increased year-over-year, mostly due to the flywheel acquisition. However, our rent expense decreased, and although total occupancy and other costs increased, they were flat year-over-year as a percentage of revenue.

Philip J. Angelastro: which primarily reflect our acquisition of Flywheel in January .

Philip J. Angelastro: However, these costs were down over one point as a percentage of revenue year over year, reflecting ongoing strategic repositioning actions and changes in our global employee mix.

Philip J. Angelastro: Third-party service costs grew in connection with the growth in our revenue.

Philip J. Angelastro: Especially in disciplines that have a higher level of these costs, such as media, experiential, and field marketing.

Philip J. Angelastro: Third-party incidental costs increased along with growth in our business.

Phil Angelastro: Occupancy and other costs increased year over year, mostly due to the Fly Well acquisition. Our rent expense decreased, and although total occupancy and other costs increased, they were flat year over year as a percentage of revenues. S-DNA expenses increased year over year, primarily from increases in professional fees incurred in connection with our strategic initiatives. As a percentage of revenue and a constant fellow basis, however, S-DNA levels were only up slightly.

Philip J. Angelastro: and related out-of-pocket costs billed directly to clients.

Philip J. Angelastro: Occupancy and other costs increase year-over-year mostly due to the flywheel acquisition.

Speaker Change: Our rent expense decreased, and although total occupancy and other costs increased, they were flat year-over-year as a percentage of revenues.

Philip J. Angelastro: SG&A expenses increased year-over-year, primarily from increases in professional fees incurred in connection with our strategic initiatives. As a percentage of revenue on a constant dollar basis, however, SG&A levels were only up slightly. Now let's turn to slide nine and look at our income statement in more detail. In Q2, we took a repositioning charge of $57.8 million, which increased our operating expense.

Speaker Change: SG&A expenses increase year-over-year, primarily from increases in professional fees incurred in connection with our strategic initiatives.

Speaker Change: As a percentage of revenue on a constant dollar basis, however, SG&A levels were only up slightly.

Phil Angelastro: Now let's turn to slide nine and look at our income statement in more detail. To start, in Q2, we took a repositioning charge of 57.8 million, which increased our operating expenses. This primarily reflects severance relates to efficiency initiatives, including strategic agency consolidation in the smaller international markets of our advertising networks, the start of our centralized production strategy, and other efficiency efforts. These initiatives continue, and although we expect the additional steps to be taken in these areas in Q3, we expect them to be primarily self-liquidating. Table on this page shows the impact of this repositioning charge in the second quarter of 2024, as well as the net impact in Q2 of 2023, of the $72.3 million repositioning charge, as well as the gain of $78.8 million that were recorded in Q2 of last year.

Speaker Change: Now let's turn to slide 9 and look at our income statement in more detail.

Speaker Change: To start, in Q2 we took a repositioning charge of $57.8 million.

Philip J. Angelastro: This primarily reflects severance related to efficiency initiatives, including strategic agency consolidation in the smaller international markets over advertising networks, the start of our centralized production strategy, and other efficiency efforts. These initiatives continue, and although we expect some additional steps to be taken in these areas in Q3, we expect them to be primarily self-liquidation. The table on this page shows the impact of this repositioning charge in the second quarter of 2024, as well as the net impact in Q2 of 2023 of the $72.3 million repositioning charge, as well as the gain of $78.8 million that were recorded in Q2 of last year. On a non-gap-adjusted basis, EBITDA grew 5.5%, and the EBITDA margin was 15.3% versus the comparable 15.5% margin in the second quarter of last year.

Speaker Change: which increased our operating expenses.

Speaker Change: This primarily reflects severance related to efficiency initiatives.

Speaker Change: including strategic agency consolidation in the smaller international markets over advertising networks, the start of our centralized production strategy, and other efficiency efforts.

Speaker Change: These initiatives continue, and although we expect some additional steps to be taken in these areas in Q3, we expect them to be primarily self-liquidating.

Speaker Change: Table on this page shows the impact of this repositioning charge in the second quarter of 2024.

Speaker Change: as well as the net impact in Q2 of 2023 of the $72.3 million repositioning charge as well as the gain of $78.8 million that were recorded in Q2 of last year.

Phil Angelastro: On a non-gap adjusted basis, even our group 5.5%, and even our margin was 15.3% versus the comparable 15.5% margin in the second quarter of last year. As discussed last quarter, the relatively small decrease in margin includes the results of our flywheel acquisition, as well as the related integration costs. Similar to last quarter, even our reflects the $21.5 million addback to operating income, prioritization of acquired and tangible assets, and internally developed strategic platform and tangible assets. We expect similar levels of amortization in the second half of the year. We also continue to expect our full year 2024 adjusted even our margin.

Speaker Change: On a non-gap-adjusted basis, EBITDA grew 5.5% and EBITDA margin was 15.3% versus the comparable 15.5% margin in the second quarter of last year.

Philip J. Angelastro: As discussed last quarter, the relatively small decrease in margin includes the results of our flywheel acquisition, as well as the related integration costs. Similar to last quarter, EBITDA reflects the $21.5 million add-back to operating income for amortization of acquired intangible assets and internally developed strategic platform intangible assets. We expect similar levels of amortization in the second half of the year.

Speaker Change: As discussed last quarter, the relatively small decrease in margin includes the results of our flywheel acquisition, as well as the related integration costs.

Speaker Change: Similar to last quarter, EBITDA reflects the $21.5 million add back to operating income.

Speaker Change: Privatization of Acquired Intangible Assets and Internally Developed Strategic Platform Intangible Assets

Speaker Change: We expect similar levels of amortization in the second half of the year.

Speaker Change: We also continue to expect our full year 2024 adjusted, even on margins.

Phil Angelastro: to be closed to flat with our 2023 adjusted EBITDA margin of 15.6%. Moving down the income statement, net interest expense on the second quarter of 2024 increased 14.3 million to 41.7 million dollars. The change was driven by a $5.2 million increase in interest expense due to higher outstanding debt from the flywheel financing and a $9.1 million decrease in interest income due to lower average cash and short-term investment balances. Our income tax rate of 26% was closed to flat compared to Q2 of 2023. For the second half of 2024, we continue to expect our income tax rate to approximate 27%.

Speaker Change: To be close to flat with our 2023 adjusted EBITDA margin of 15.6%.

Philip J. Angelastro: We also continue to expect our full-year 2024 adjusted even on margin to be close to flat with our 2023 adjusted EBITDA margin of 15.6%. Moving down the income statement, net interest expense in the second quarter of 2024 increased $14.3 million to $41.7 million.

Speaker Change: Moving down the income statement, net interest expense in the second quarter of 2024 increased $14.3 million to $41.7 million.

Philip J. Angelastro: The change was driven by a $5.2 million increase in interest expense due to higher outstanding debt from the flywheel finance and a $9.1 million decrease in interest income due to lower average cash and short-term investment balance. Our income tax rate of 26% was close to flat compared to Q2 of 2023. For the second half of 2024, we continue to expect our income tax rate to approximate 27%. Higher income from equity investments was offset by higher expenses from earnings attributed to minority interests, and despite a reduced diluted share count, reported earnings per share declined due to the repositioning costs, but on a non-gap-adjusted basis, increased 4.8% to $1.95. Now please turn to slide 11. Pre-cash flow year-to-date is up 2.4% from last year. We define free cash flow as cash provided by operating activities.

Speaker Change: The change was driven by a $5.2 million increase in interest expense due to higher outstanding debt from the flywheel financing.

Speaker Change: and a $9.1 million decrease in interest income due to lower average cash and short-term investment balances.

Speaker Change: Our income tax rate of 26% was close to flat compared to Q2 of 2023.

Speaker Change: For the second half of 2024, we continue to expect our income tax rate to approximate 27%.

Phil Angelastro: Higher income from equity investments was offset by higher expense from earnings attributed to minority interest. The decided reduced deluded share count reported earnings per share declined due to the repositioning costs, but on a non-GAAP adjusted basis increased 4.8% to $1.95.

Speaker Change: Higher income from equity investments was offset by higher expense from earnings attributed to minority interests.

Speaker Change: And despite a reduced diluted share count, reported earnings per share declined due to the repositioning costs.

Speaker Change: but on a non-gap-adjusted basis.

Speaker Change: increased 4.8% to $1.95.

Phil Angelastro: Now please turn to slide 11. Free cash flow year-to-date is up 2.4% from last year. We define free cash flow as cash provided by operating activities, excluding changes of working capital. In Q2 2024, our working capital use followed its typical seasonal cycle and declined from Q1 to Q2. And our Q2 performance improved compared to Q2 of 2023 and the first half of 2023. We're making progress as expected, and we continue to work towards our historically neutral levels of working capital. Regarding our uses of cash, we use 279 million of cash to pay dividends to common shareholders, and another $34 million for dividends to non-controlling shareholders.

Speaker Change: Now please turn to slide 11.

Speaker Change: Pre-cash flow year-to-date is up 2.4% from last year.

Speaker Change: We define free cash flow as cash provided by operating activities.

Philip J. Angelastro: Excluding changes in working capital. In Q2 2024, our working capital use followed its typical seasonal cycle and declined from Q1 to Q2, and our Q2 performance improved compared to Q2 of 2023 and the first half of 2023. We're making progress as expected, and we continue to work towards our historically neutral levels of working capital. Regarding our uses of cash... We use $279 million of cash to pay dividends to common shareholders, and another $34 million for dividends and non-controlling interest shareholding.

Speaker Change: Excluding changes of working capital.

Speaker Change: In Q2 2024, our working capital use followed its typical seasonal cycle and declined from Q1 to Q2.

Speaker Change: And our Q2 performance improved compared to Q2 of 2023 and the first half of 2023.

Speaker Change: We're making progress as expected, and we continue to work towards our historically neutral levels of working capital.

Speaker Change: Regarding our uses of cash,

Speaker Change: We use $279 million of cash to pay dividends to common shareholders.

Speaker Change: and another $34 million for dividends and non-controlling it's for shareholders.

Phil Angelastro: Our capital expenditures increased to $62 million, which has been discussed on prior calls. We expect to be somewhat higher than last year as we continue to invest in flywheel and our strategic platform initiatives. Total acquisition payments were $829 million, which reflects the $845 million acquisition of Flywheel, net of cash required.

Philip J. Angelastro: Capital expenditures increased to $62 million, which, as discussed on prior calls, we expect to be somewhat higher than last year as we continue to invest in Flywheel and our strategic platform initiative. Total acquisition payments were $829 million, which reflects the $845 million acquisition of Flywheel, net of cash required. There were no acquisitions in the second quarter.

Speaker Change: Our capital expenditures increased to $62 million, which as discussed on prior calls.

Speaker Change: We expect to be somewhat higher than last year as we continue to invest in Flywheel and our strategic platform initiatives.

Speaker Change: Total acquisition payments were $829 million.

Speaker Change: which reflects the $845 million acquisition of Flywheel, net of cash required.

Phil Angelastro: There were no acquisitions in the second quarter. Finally, our stock will purchase activity net of proceeds with stock plans was $246 million year-to-date at $70 million in the quarter. Our expectations for the year are unchanged. The total repurchases reduced as a result of the flywheel acquisition to approximately half of our historical average of 600 million.

Speaker Change: There were no acquisitions in the second quarter.

Philip J. Angelastro: Finally, our stock of purchase activity, net of proceeds from stock plans. $246 million year-to-date. $70 million in the quarter. Our expectation for the year is unchanged, with total repurchases reduced as a result of the flywheel acquisition to approximately half of our historical average of $600 million.

Speaker Change: Finally, our stock of purchase activity, net of proceeds from stock plans.

Speaker Change: was $246 million year-to-date at $70 million in the quarter.

Speaker Change: Our expectation for the year is unchanged. The total repurchase is reduced as a result of the flywheel acquisition to approximately half of our historical average of $600 million.

Phil Angelastro: We continue to maintain our balanced approach to capital allocation with a competitive dividend, strategic acquisitions, share purchases, and an investment-grade balance sheet.

Philip J. Angelastro: We continue to maintain our balanced approach to capital allocation, with a competitive dividend, strategic acquisitions, Share Purchases, and an Investment Grade Balance Sheet. Slide 12 is a summary of our credits, liquidity, and debt maturity. At the end of the second quarter of 2024, the book value of our standing debt was $6.2 billion, up over $600 million, funding a portion of the flywheel acquisitions during Q1 of 2024. Cash equivalents and short-term investments as of June 30th were $2.7 billion, down slightly from last year.

Speaker Change: We continue to maintain our balanced approach to capital allocation with a competitive dividend, strategic acquisitions,

Speaker Change: Sharing Purchases and an Investment Grade Balance Sheet.

Phil Angelastro: Fly12 is the summary of our credit liquidity and deputurities. The end of the second quarter of 2024, the book value of our outstanding debt was $6.2 billion. It's up over $600 million from funding a portion of the Flywheel acquisition during Q1 of 2024. Cash equivalent to short-term investments at June 30th, with $2.7 billion, down slightly from last year. We also have an under-owned $2.5 billion evolving credit facility, which backstops our $2.0 billion U.S. commercial paper program. We continue to monitor the credit markets with regard to our $750 million of 3.65 percent senior notes that are due November 1st, 2024.

Speaker Change: Slide 12 is a summary of our credits, liquidity, and debt maturities.

Speaker Change: At the end of the second quarter of 2024, the book value of our outstanding debt was $6.2 billion, about over $600 million.

Speaker Change: for funding a portion of the flywheel acquisitions during Q1 of 2024.

Speaker Change: Cash equivalents of short-term investments of June 30th were $2.7 billion, down slightly from last year.

Philip J. Angelastro: We also have an undrawn $2.5 billion evolving credit facility, which backstops our $2 billion U.S. commercial paper program. We continue to monitor the credit markets with regard to our $750 million of 3.65% senior notes that are due November 1st, 2024. At this point, given where interest rates are and our financing activity early in 2024, and the anticipated refund, our current estimate compared to last year is that net interest expense will increase by approximately $7 million in Q3 and $16 million in Q4.

Speaker Change: We also have an undrawn $2.5 billion evolving credit facility, which backstops our $2 billion U.S. commercial paper program.

Speaker Change: We continue to monitor the credit markets with regard to our $750 million of 3.65% senior notes that are due November 1, 2024. At this point, given where interest rates are and our financing activity early in 2024,

Phil Angelastro: At this point, given where interest rates are, and our financing activity early in 2024, and the anticipated refinancing, our current estimate compared to last year is that net interest expense will increase by approximately $7 million in Q3 and $16 million in Q4.

Speaker Change: And the anticipated refinancing. Our current estimate compared to last year is that net interest expense will increase by approximately $7 million in Q3.

Phil Angelastro: Flight 13 presents our historical returns on two important performance metrics for the 12 months ended June 30th, 2024. Omnicom's return on the Vest capital is 20 percent, and return on equity is 43 percent, both of which consistently reflect our strong performance and solid balance sheet.

Speaker Change: and $16 million in Q4.

Speaker Change: Slide 13 presents our historical returns on two important performance metrics.

Speaker Change: for the 12 months ended June 30th, 2024.

Speaker Change: Omnicom's return on invested capital is 20%.

Speaker Change: And return on equity is 43%.

Speaker Change: Both of which consistently reflect our strong performance and solid balance sheet.

Operator: I will now ask the operator, please open the lines up for questions and answers. Thank you. We will now open the line for your questions. If you have dialed in and would like to ask a question, please press star followed by the number one on your telephone keypad to raise your hand and join the queue. To withdraw your question, please press star one a second time. If you have dialed in via loudspeaker on your device, please pick up your handset and ensure that your device is not on mute when asking your question. Again, that's star one to join the queue.

Operator: Slide 13 presents our historical returns on two important performance metrics for the 12 months ended June 30, 2024. Omnicom's return on invested capital is 20%, and return on equity is 43%, both of which consistently reflect our strong performance and solid balance sheet. I will now ask the operator to please open the lines up for questions and answers. Thank you. We will now open the line for your questions. If you have dialed in and would like to ask a question, please press star followed by the number one on your telephone keypad to raise your hand and join the queue.

Speaker Change: I will now ask the operator to please open the lines up for questions and answers.

Speaker Change: Thank you. We will now open the line for your questions.

Speaker Change: If you have dialed in and would like to ask a question, please press star followed by the number one on your telephone keypad to raise your hand and join the queue.

Operator: To withdraw your question, please press star 1 a second time. If you have dialed in via the loudspeaker on your device, please pick up your handset and ensure that your device is not on mute when asking your question.

Speaker Change: To withdraw your question, please press star 1 a second time.

Speaker Change: If you have dialed in via loudspeaker on your device, please pick up your handset and ensure that your device is not on mute when asking your question.

Operator: Again, that's Star 1 to join the queue. Our first question comes from the line of Cameron McVeigh with Morgan Stanley. Please go ahead. Hey, John and Phil, thanks for taking my questions. I just had a couple.

Cameron McVeigh: Our first question comes from the line of Cameron McVeigh with Morgan Stanley. Please go ahead. Hey, John and Phil. Thanks for taking my questions. Just had a couple. Advertising in media growth was strong. Again, this quarter with a lot of talk around Generative AI.

Speaker Change: Again, that's star 1 to join the queue.

Speaker Change: Our first question comes from the line of Cameron McVeigh with Morgan Stanley . Please go ahead.

Cameron Alan McVeigh: Advertising and media growth was strong again this quarter, with a lot of talk around generative AI. I was curious if you could help us parse out how creative is growing within that segment. And on that point, curious if you've seen customers start to experiment with any text-to-video platforms recently, and if that has impacted client ad spend at all. Thanks.

Cameron Alan McVeigh: Hey John and Phil, thanks for taking my questions. I just had a couple. Advertising and media growth was strong again this quarter.

John Wren: I was curious if you could help us parse out how creative is growing within that segment. And on that point, curious if you have seen customers start to experiment with any successive video platforms recently. And if that has impacted client ads, spend it all. Thanks. Sure. Creativity really is the core of everything that we do. You can take the most sophisticated AI-enabling tools. And if you give them to everybody, you'd still be at parity. And you need creative insights and thought in order to differentiate and to beat your competitor in effect. So the method and the activities that we go through, which get attributed historically to advertising versus media versus CRM, they shift within the share of wallet.

Cameron Alan McVeigh: with a lot of talk around generative AI. I was curious if you could help us parse out how creative is growing within that segment. And on that point, curious if you've seen customers start to experiment with any text-to-video platforms recently, and if that has impacted client ad spend at all.

Cameron Alan McVeigh: Thanks.

John D. Wren: Sure. Creativity really is at the core of everything that we do. You can take the most sophisticated AI-enabling tools, and if you gave them to everybody, you'd still be at parity, and you need creative insights and thoughts in order to differentiate and beat your competitors.

Cameron Alan McVeigh: Sure.

Speaker Change: Creativity really is at the core.

Speaker Change: of everything that we do.

Speaker Change: You can take the most sophisticated AI-enabling tools, and if you gave them to everybody, you'd still be at parity, and you need creative insights and thought in order to differentiate and to beat your competitor, in effect.

John D. Wren: So the method and the activity that we go through, which get attributed historically to advertising versus media versus CRM, they shift within the share of wallet. But the concept of advertising thought of from a creative point of view will continue to grow and prosper even as these tools develop. And that's why we look at a true share of the wallet when we're, We're reporting the numbers to you because it'd be very, inequitable to, Thank you. Thank you. Thank you.

Speaker Change: So, the method and the activities...

Speaker Change: that we go through, which get attributed.

Speaker Change: Historically to advertising versus media versus CRM they shift within the share of wallet but the concept of advertising thought of from a creative point of view will continue to grow and prosper even as these tools develop.

John Wren: But the concept of advertising, thought of from a creative point of view, will continue to grow in prosper even as these tools develop. And that's why we look at truly share of wallet when we're reporting the numbers to you because it'd be very... inequitable to parse them any further.

Speaker Change: And that's why we look at, truly, share of wallet when we're...

Speaker Change: We're reporting the numbers to you because it'd be very inequitable to

John Wren: In terms of some specifics, though, ultimately the majority of the growth and the advertising media discipline is from the strong performance of the media business, but the creative agencies within that overall grew this quarter not at the same pace, but they grew relative to last year. Okay, thank you.

John D. Wren: In terms of some specifics, though, ultimately, the majority of the growth in the advertising media, disappointing us from Page PAGE of NUMPAGES www.verbalink.com Page PAGE of NUMPAGES, The creative agencies within that overall grew this quarter. You know, not at the same pace, but they grew relative to last year. [inaudible] Could you discuss a bit further your recently announced production initiatives? I'm curious how you're framing both the growth and cost impacts there. Thank you. Sure. I'd be happy to.

Speaker Change: to parse them any further.

Speaker Change: In terms of some specifics, though, ultimately the majority of the growth in the advertising and media discipline is from the strong performance of the media business.

Speaker Change: The creative agencies within that overall grew this quarter.

Speaker Change: Yeah, not at the same pace, but they grew relative to last year.

Speaker Change: Got it. Um, ok.

John Wren: Secondly, could you discuss a bit further your recently announced production initiative? Curious how you're framing both the growth and cost impacts there. Thank you. Sure, I'll be happy to. This is something we've been planning since late last year, and the gentleman that I mentioned in my prepare remarks, Sergio Lopez, comes from a very successful in this area, but we had to wait six months before he could join us, so our plans were kind of frozen until he came on board in June.

Speaker Change: Thank you. Secondly,

Speaker Change: Could you discuss a bit further your recently announced production initiatives? I'm curious how you're framing both the growth and cost impacts there. Thank you. Sure. I'd be happy to. This is something we've been planning since late last year.

John D. Wren: This is something we've been planning since late last year. The gentleman that I mentioned in my prepared remarks, Sergio Lopez, comes from a competitor who was very successful in this area, but we had to wait six months before he could join us, so our plans were kind of frozen until he came on board in June. This has more to do with revenue possibilities and growth in the future than the cost deficiencies that we went through in taking the charge that we took to reorganize our people.

Speaker Change: The gentleman that I mentioned in my prepared remarks, Sergio Lopez, comes from a very suc- a competitor who is very successful in this area. But we had to wait six months before he could join us, so our plans were kind of frozen until he came on board in June .

John Wren: This is more to do with revenue possibilities and growth in the future than the cost efficiencies that we're going, we went through and taking the charge that we took to reorganize our people. When I compare Omnicom's production, revenue and performance, I would say that at least two of my competitors are two to three times in their reported numbers, so you have to look at everything from the top down; are two to three times the size that we are, what we've worked today. We decided that the only way that we were going to efficiently and effectively grow, especially in this AI environment, which is going to change those legacy production businesses, was in fact to centralize it, centralize it with somebody's terribly experienced in centralization of these types of activities, having done it for two competitors in the past.

Speaker Change: This is more to do with revenue possibilities and growth in the future than the cost deficiencies that we went through in taking the charge that we took to reorganize our people.

John D. Wren: When I compare Omnicom's Production, Revenue, and Performance, I would say that at least two of my competitors are two to three times larger in their reported numbers. So you have to look at everything from the top down. They are two to three times the size that we are or we were today. We decided that the only way that we were going to efficiently and effectively grow, especially in this AI environment, which is going to change those legacy production businesses, was, in fact, to centralize it. Centralize it with somebody terribly experienced in centralizing these types of activities, having done it for two competitors in the past.

Speaker Change: When I compare...

Speaker Change: Omnicom's production, revenue, performance, I would say that at least two of my competitors are two to three times in their reported numbers, so you have to look at everything from the top down, are two to three times the size that we are or we were today.

Speaker Change: We decided that the only way that we were going to efficiently and effectively grow, especially in this AI environment, which is going to change those legacy production businesses,

Speaker Change: was in fact to centralize it, centralize it with somebody terribly experienced in centralization of these types of activities, having done it for two competitors in the past.

John D. Wren: And our expectations are that we'll finish. The, and the basic changes that have to go on throughout. We'll tweak them for the next quarter or two. And that we fully expect to be where I'd rank us right now in that particular discipline.

John Wren: Our expectations are that we'll finish the moves and the basic changes that have to go on throughout; we'll tweak them to the next quarter or two, and that we fully expect to be what I'd rank us right now in that particular discipline out of the top five. The expectation is that within the next 30 to 36 months, we'll be in the top three. So this had more to do with the revenue opportunity and what it offers, and it also sits very well with the Arcbot AI tool that we just generated, and plus others that we have in the pipeline, which we'll be introducing as this thing rolls out and we gain more and more clients.

Speaker Change: And our expectations are that we'll finish

Speaker Change: The

Speaker Change: and the basic changes that have to go on throughout. We'll tweak them for the next quarter or two. And that we fully expect to be

Speaker Change: What I'd rank us right now in that particular discipline...

John D. Wren: Out of the top five, and the expectation is that within the next... 30 to 36 months, it will be in the top three. So this has more to do with the revenue opportunity and what it offers. And it also fits very well with

Speaker Change: Out of the top five, and the expectation is that within the next

Speaker Change: 30 to 36 months will be in the top three. So this had more to do with the revenue opportunity and what it offers and it also fits very well with

John D. Wren: The ArtBot AI tool that we just generated and plus others that we have in the pipeline, which we'll be introducing as this thing rolls out and we gain more and more clients. Great, thank you. Our next question comes from the line of David Karnovsky with J.P. Morgan. Please go ahead. Hi, thank you.

Speaker Change: The ArtBot AI tool that we just generated and plus others that we have in the pipeline, which we'll be introducing as this thing rolls out and we gain more and more clients.

David Karnovsky: All right, thank you. Our next question comes from the line of David Karnowski with JP Morgan. Please go ahead. Hi, thank you. I'm the organic God.

Speaker Change: Great, thank you.

Speaker Change: Our next question comes from the line of David Karnovsky with J.P. Morgan. Please go ahead.

David Karnovsky: On the organic guide, maybe, can you speak to the decision to leave the outlook unchanged following a 4.6% year to date? You know, a question we've gotten is, why not adjust here or raise the low end, especially, John, if, as you said, you're expecting better second half results or getting the benefit of some cyclical events as well? My confidence is built upon

John Wren: Maybe it can be speak to the decision to leave the outlook on change following the 4.6% year-to-date. Question we've gotten is why not adjust here or raise the low end, especially John. If, as you said, you're expecting better second-half results or getting the benefit of some cyclical events as well. My confidence is built upon my conversation with clients in the business that we have today.

David Karnofsky: Hi, thank you. On the organic guide, maybe, can you speak to the decision to leave the Outlook unchanged following the

David Karnofsky: 4.6% year-to-date. You know, a question we've gotten is why not adjust here or raise the low end, especially, John , if, as you said, you're expecting better second-half results or getting the benefit of some cyclical events as well.

John D. Wren: In my conversation with clients in the business that we have today, I really don't control macroeconomics, items, or the election or whatever those impacts are. And I think you'll all recall me having said this for the last 20-odd years, that the fourth quarter is always a project environment. So rather than change our forecasts every day. And every 90 days is the equivalent of every 90, every day.

John D. Wren: My confidence is built upon my conversation with clients in the business that we have today. I really don't control macroeconomics.

John Wren: I really don't control macroeconomic items or the election or whatever those impacts are, and I think you'll all recall me having said this for the last all 20 odd years that the fourth quarter is always a project environment. So rather than change our forecast every day, and every 90 days is the equivalent to every 90 every day, we're very comfortable with the forecast that we've given you. We're just slightly below the top end, having completed six months, and when we get evidence that the fourth quarter post the election is going to be a stable period of time, we may elect at that point to review what kinds we've given you, but it's not our habit to be that flighty.

John D. Wren: items or the election or whatever those impacts are and I think you'll all recall me having said this for the last

Speaker Change: all 20-odd years, that the fourth quarter is always a project environment, so rather than

Speaker Change: Change Our Forecasts Every Day.

Speaker Change: And every 90 days is the equivalent to every day.

John D. Wren: We're very comfortable with the podcast that we've given you, slightly below the top end, having completed six months. And when we get evidence that the fourth quarter post the election is going to be a stable period of time, we may elect at that point to review what guidance we've given you, but it's not our habit to be that flighty. We want you to believe what we say, and so we don't change what we say until we're confident.

Speaker Change: podcast that we've given you where

Speaker Change: Just slightly below the top end.

Speaker Change: having completed six months.

Speaker Change: And when we get evidence...

Speaker Change: That the fourth quarter post the election is going to be a stable period of time. We may elect at that point to review what guidance we've given you. But...

John Wren: We want you to believe what we say, and so therefore we don't change what we say until we're confident about it.

Speaker Change: But it's not our habit to be that flighty. We want you to believe what we say, and so therefore we don't change what we say until we're confident about it.

John Wren: Understand and then John, you talked a little bit recently about a need or desire to partly shift agency compensation models, maybe to a performative or licensing aspect, which had a potentially as a catalyst for that. I'm curious what the reception has been among your clients for this so far, and do you think it's realistic for a sizable portion of the industry to make this kind of a change? Thank you.

John D. Wren: And then, John, you talked a little bit recently about a need or desire to partly shift agency compensation models, maybe to a performative or licensing aspect, which NAI potentially is a catalyst for. I'm curious what the reception has been among your clients for this so far, and do you think it's realistic for a sizable portion of the industry to make this kind of a change? Thank you. I'm not prepared to talk about the business of others, only my own. Actually, that comment, and I have made that comment, and that is my point of view, is a business cycle.

Speaker Change: Understood. And then, John , you talked a little bit recently about a need or desire to partly shift agency compensation models maybe to a performative or

John D. Wren: Licensing aspect, which NAI potentially is the catalyst for that. I'm curious what the reception has been.

Speaker Change: Among your clients for this so far, and do you think it's realistic for a sizable portion of the industry to make this kind of a change? Thank you.

John Wren: I'm not prepared to talk to the business of others, only to my own. Actually, that comment and that did I have made that comment and that is my point of view is a business cycle comment. Nothing changes overnight, and what it has to do with is with the enhancement of tools, the improvement of our algorithms to prove an ROI on a specific dollar spent, and then getting clients to be able to articulate measurable KPIs in terms of what they're hiring us to do. That's the journey that we're on. This journey isn't going to happen in 180 days or 360 days.

Speaker Change: I'm not prepared to talk to the business of others, only to my own.

Speaker Change: actually that comment and that did I have made that comment and that is my point of view is a

John D. Wren: Nothing changes overnight. And what it has to do with the enhancement of tools. The improvement of our algorithms to prove an ROI on a specific dollar spent, and then getting clients to be able to articulate measurable KPIs in terms of what they're hiring us to do. That's the journey that we're on. This journey isn't going to happen in 180 days or 360 days.

Speaker Change: business cycle comment nothing changes overnight and what it has to do with is with the enhancement of tools

Speaker Change: Improvement of our algorithms to prove an ROI on a specific dollar spent.

Speaker Change: and then getting clients to be able to articulate.

Speaker Change: measurable KPIs in terms of what they're hiring us to do.

Speaker Change: That's the journey that we're on. This journey isn't going to happen in...

John Wren: This is a journey that I've cast the organization to look at three years out and to start testing, discussing, improving our measurement tools. Hopefully, when we haven't done this as fully as fast as I would want, developing products which clients will be attracted to, which will be based primarily on outcomes. So it's going to be a very long story. Your question is going to be an excellent question for the next 36 months, at least. And we're started on that. Great.

Speaker Change: 180 days or 360 days. This is a journey that I've tasked the organization to look at.

John D. Wren: This is a journey that I've tasked the organization to look at three years out and to start, testing, discussing, improving our measurement tools. Hopefully, and we haven't done this as fully as, or as fast as I would want, developing products which clients will be attracted to, which will be based primarily on outcomes. So, it's going to be a very long story that your question is going to be an excellent question for the next 36 months, at least where we're started. Thank you. Our next question comes from the line of Adam Berlin with UBS. Please go ahead. Hi, good afternoon.

Speaker Change: three years out and to start testing, discussing, improving our measurement tools.

Speaker Change: Hopefully, we haven't done this as fully as...

Speaker Change: Or as fast as I would want, developing products which clients will be attracted to, which will be based primarily on outcomes.

Speaker Change: So it's going to be a very long story. Your question is going to be an excellent question for the next 36 months at least. And we're started on that.

Adam Berlin: Thank you. Our next question comes from the line of Adam Berlin with UBS. Please go ahead. Hi, good afternoon. Thanks for taking a few questions, if I can. The first question is in precision marketing. You talked about some project work being delayed.

Speaker Change: Thank you.

Speaker Change: Our next question comes from the line of Adam Berlin with UBS. Please go ahead.

Adam Ian Berlin: Thanks for taking a few questions, if I can. The first question is, in precision marketing, you talked about some project work being delayed. Can you just talk a little bit about the environment of project-based work and how confident are you that those delays will result in work in the second half of the year? Is that kind of confirmed by the clients that it's going to happen later, or is it more something you're hoping will happen later? Sure. Well, I'll comment now and ask Phil to fill in what I don't cover. I would characterize the headwind on several things.

Adam Ian Berlin: Hi, good afternoon. Thanks for taking a few questions if I can. The first question is in Precision Marketing, you talked about some project work being delayed.

John Wren: Can you just talk a little bit about the environment, the project base work, and how confident are you that those delays will result in work in the second half of the year? Is that trying to kind of confirm by the response is going to happen later, or is it more something you're hoping will happen? Sure. Well, I'll comment now, and I have to fill in what I don't cover. I would characterize the headwind on several things. One is there was a client lost in the quarter, which we will have cycled through before we get to the end of the year.

Adam Ian Berlin: Can you just talk a little bit about the environment for project-based work and how confident are you that those delays will result in work in the second half of the year? Is that kind of confirmed by the clients that it's going to happen later or is it more something you're hoping will happen?

Adam Ian Berlin: Sure, well I'll comment and then I'm going to ask Phil to fill in what I don't cover.

Philip J. Angelastro: I would characterize the headwind.

John D. Wren: One is that there was a client loss in the quarter, which we will have cycled through before we get to the end of the year. What an impactful... In the UK, where we have a consulting business, some of those projects were delayed because of the election that was called. And the good news is, even though it's not reflected in the quarterly numbers, we've gotten confidence that with the new labor government. Those projects are back on track, and they're going to be executed. So it was a temporary delay caused by something we couldn't affect, somebody calling an election, and everybody turning their attention to it.

Philip J. Angelastro: on several things. One is...

Philip J. Angelastro: There was a client loss in the quarter, which we will have cycled through before we get to the end of the year.

John Wren: So that's an impactful in the UK where we have a consulting business. Some of those projects would be delayed because of the election that was called. And the good news is, even though it's not reflected in the quarter's numbers, we've gotten confidence that with the new Labor government. Those projects are back on track, and they're going to be executed. So it was the temporary delay caused by something we couldn't affect, somebody calling an election and everybody turning their attention to it. And the third thing is actually just projects from here to there. Since we've reported the second quarter numbers in precision alone, one, the election is done.

Adam Ian Berlin: [inaudible]

Philip J. Angelastro: We've gotten confidence that with the new labor government, those projects are back on track and they're going to be executed. So it was a temporary delay caused by something we couldn't affect, somebody calling an election and everybody turning their attention to it.

John D. Wren: And the third thing is actually just projections from here to there. Since we reported the third quarter and second quarter numbers, in precision alone, when the election's done, that headwind diminishes. The headwind associated with the loss will only last for another four months.

Philip J. Angelastro: And the third thing is actually just projects from here to there.

Adam Ian Berlin: Since we reported the third quarter, second quarter numbers, in precision alone, when the election is done, that headwind diminishes. The headwind associated with the loss will only last for another four months.

John Wren: That headwind diminishes the headwind associated with the loss loan last for another four months. More importantly, though, we won a significant piece of business from a US auto manufacturer just these last two weeks. And typically, when you win an account like that, there is at least a six-month delay before you start to enjoy revenue. In this particular instance, we're starting to get paid in August and beyond because of the activity and the nature of the work. And that will only build as we go out throughout the bounds of the year.

John D. Wren: More importantly, though, we want a significant piece of business from a US auto manufacturer, and just these last two weeks. And typically, when you win an account like that, There is at least a six month delay before you start to enjoy revenue. In this particular instance, we're starting to get paid in August and beyond because of the activity and the nature of the work. And that will only build as we go out throughout the balance of the year. Like what you've seen in precision barking.

Adam Ian Berlin: More importantly, though, we won a significant piece of business from a U.S. auto manufacturer in just these last two weeks, and typically, when you win an account like that,

Adam Ian Berlin: There is at least a six-month delay before you start to enjoy revenue.

Adam Ian Berlin: In this particular instance, we're starting to get paid.

Adam Ian Berlin: In August , and beyond, because of the activity and the nature of the work. And that will only build as we go out throughout the balance of the year. So...

Phil Angelastro: So what you've seen in precision marking, we're hopeful and we have some confidence. You know, we have confidence given the factors of what impacted us up from now, that you'll see a reversal of that and improvement in organic growth in the third and in the fourth quarter and then as we get into next year. I'll defer to Phil, for example, that that was pretty comprehensive. Yeah, that was that was really helpful. Thank you.

Speaker Change: The End The End The End The End

John D. Wren: We're hopeful. And we have some confidence, you know. We have confidence, given the factors that have impacted us up to now, that you'll see a reversal of that and improvement in organic growth in the third and the fourth quarter and then as we get into next year. I'll defer to Phil for anything I left out. That was pretty comprehensive.

Speaker Change: What you've seen in Brazilian market, we're hopeful.

Speaker Change: And we have some confidence, you know, we have confidence, given the factors of what impacted us up to now, that you'll see...

Speaker Change: A reversal of that and improvement in organic growth in the third and in the fourth quarter and then as we get into next year. I'll defer to Phil for anything I left out. That was pretty comprehensive.

Philip J. Angelastro: Yeah, that was really helpful. Thank you. And my last question is just on cash. The working capital outflow didn't improve in the first half; do you think it will improve in the second half? And related to cash as well, the repositioning charge of $58 million, is that cash that's going to impact H2 or is it non-cash? Most of the repositioning is going to be cash. The timing will vary, but I'd say certainly the majority of it is going to be in the second half, yes, and we'll work through that as we normally do.

Phil Angelastro: And my last question is just on cat. The work in capital outflow didn't improve in the first half. Do you think it will in the second half and relate the cash as well? The repositioning charge of the $58 million is that cash that's going to impact the H2, or is it non-cash? Most of the repositioning is going to be cash. The timing will vary, but most of it, or I'd say certainly the majority of it, is going to be in the second half, yes. And we'll work through that as we normally do. Working capital performance actually improved in the quarter year on year.

Speaker Change: Yeah, that was really helpful. Thank you. And my last question is just on cash.

Speaker Change: The working capital outflow didn't improve in the first half. Do you think it will in the second half? And related to cash as well, the repositioning charge of the $58 million, is that cash that's going to impact H2 or is it non-cash?

Speaker Change: For most of the repositioning is going to be cash. The timing will vary, but...

Speaker Change: Yeah, most of it.

Speaker Change: Or I'd say certainly the majority of it is going to be in the second half, yes. And we'll work through that as we normally do. Working capital performance actually improved in the quarter, year on year.

Philip J. Angelastro: Oregon capital performance actually improved in the quarter, year on year. And as you remember, working capital year on year in the first quarter. The change in working capital was negative relative to last year, but through the six months, the change is now positive. So our working capital performance improved in the quarter. The net number is still negative. 400 million or so, which is about half, sorry, that's the annual.

Phil Angelastro: And as you remember, working capital year on year in the first quarter was negative. The change in working capital was negative relative to last year; through the six months, the change is now positive. So our working capital performance improved in the quarter. The net number is still negative 400 million or so, which is about half. Sorry, that's the annual number. Last year's number improved by a little more than 50% versus 2022. And I think our expectation is we're going to continue to make progress as we go through the rest of this year. But it's going to take some time for us to get back to neutral, given the rate environment and where it is.

Speaker Change: And as you remember, working capital year-on-year in the first quarter was negative. The change in working capital was negative relative to last year.

Speaker Change: Through the six months, the change is now positive. So our working capital performance improved in the quarter. The net number is still negative $400 million or so, which is about half. Sorry, that's the annual number.

Philip J. Angelastro: Last year's number improved by a little more than 50% versus 2022. And I think, you know, our expectation is we're going to continue to make progress as we go through the rest of this year, but it's going to take some time for us to get back to neutral. Um, given the rate environment and where it is. If and as that changes in the future, certainly we'd expect it to, but it hasn't yet.

Speaker Change: Last year's number improved by a little more than 50% versus 2022.

Speaker Change: And I think, you know, our expectation is we're going to continue to make progress as we go through the rest of this year, but it's going to take some time for us to get back to neutral, given the rate environment and where it is.

Phil Angelastro: If and as that changes in the future, certainly we'd expect to improve and get closer to neutral as that environment improves. It hasn't yet. The expectation is that it will. But certainly, with the cost of money, the last couple of years, frankly, clients have held on to more cash for longer.

Speaker Change: If and as that changes in the future, certainly we'd expect.

Speaker Change: to improve and get closer to neutral as that environment improves. It hasn't yet. The expectation is that it will. But certainly, with the cost of money, the last...

Philip J. Angelastro: The expectation is that it will. But certainly, with the cost of money, the last couple of years, clients held on to more cash for longer. You know, we've certainly held on to cash and paid our vendors. But we expect that environment to improve over time as we go back to new. Alright, thank you very much for your answers.

Speaker Change: You know, a couple years, frankly, clients held on to more cash.

Phil Angelastro: We certainly held on to cash and paying our vendors, but we expect that environment to improve over time as we go to get back to neutral. But it isn't something that's going to happen overnight. Oh, I thank you very much for your answers.

Speaker Change: but we expect that environment to improve over time as we go to get back to neutral but it isn't something that's going to happen overnight.

Stephen K. Hall: Appreciate it. Our next question comes from Stephen K. Hall with Wells Fargo. Please go ahead. Thank you. I was wondering if you could expand a little bit on the media business. You won a lot of media business over the last 12 to 18 months. You've defended some businesses successfully. And then we've also seen some of your peers who struggle a little bit on the media side. So I think what we're trying to understand is what structural and media buying that's benefiting your strategy or the way you're going to market. You know, we sometimes see this where holding companies go through what seem like strings of wins and strings of losses, but they're often not always sustainable.

Speaker Change: All right. Thank you very much for your answers. Appreciate it. Sure.

Philip J. Angelastro: I appreciate it. Sure. Our next question comes from Steven Cahall with Wells Fargo. Please go ahead.

Speaker Change: Our next question comes from Steven Cahall with Wells Fargo. Please go ahead.

Steven Lee Cahall: Thank you. I was wondering if you could expand a little bit on the media business. You've run a lot of media businesses over the last 12 to 18 months. You've defended some businesses successfully. And then we've also seen some of your peers who struggled a little bit on the media side.

Steven Lee Cahall: Thank you. I was wondering if you could expand a little bit on the media business. You run a lot of media business over the last...

Speaker Change: 12 to 18 months, you've defended some business successfully.

John D. Wren: So I think what we're trying to understand is what's structural in media buying that's benefiting your strategy or the way you're going to market. You know, we sometimes see this where holding companies go through what seem like strings of wins and strings of losses, but they're often not always sustainable. So really trying to understand what's structural here and if the habits or behaviors of the clients have changed in a way that's better for OMD or your platform.

Steven Lee Cahall: And then we've also seen some of your peers who struggle a little bit on the media side. So I think what we're trying to understand is what's structural in media buying that's benefiting your strategy or the way you're going to market.

Speaker Change: You know, we sometimes see this where...

Speaker Change: Holding companies go through what seemed like

John Wren: So really trying to understand what structural here. And if the habits or behaviors of the clients have changed in a way that's better for OMD or your platform. And then also on Omnicom Productions. Could you give us any more insight as to what kind of margin you think you can generate in a business like that? And as you grow this business, is this going to have a material impact on the difference maybe between gross revenue and net revenue, or how much of that delta is in the production business currently that you can look to capture through this initiative.

Speaker Change: strings of wins and strings of losses, but they're often not always sustainable.

Speaker Change: So really trying to understand what's structural here and if the habits or behaviors of the clients have changed in a way.

John D. Wren: And then also on Omnicom Productions, could you give us any more insight as to what kind of margin you think you can generate in a business like that? And as you grow this business, is this going to have a material impact on the difference, maybe, between gross revenue and net revenue or how much of that delta is in the production business currently that you can look to capture through this initiative? Thank you. Okay. The first question is a terribly important one because...

Speaker Change: That's better for OMD or your platform.

Speaker Change: And then also on Omnicom Productions, could you give us any more insight as to what kind of margin you think you can generate in a business like that? And as you grow this business, is this going to have a material impact on the difference maybe between gross revenue and net revenue or how much of that delta is in the production business currently that you can look to capture through this initiative? Thank you.

John Wren: Thank you. Okay.

John Wren: The first question is a terribly important one because I think the behavior that you've seen over the last 18 to 24 months with who's been winning business and who has not is structural as well as other elements coming into play in our particular case. I think the key differentiator, which in addition to having excellent people deployed, has been the decade-long investment and the progress that we've made in Omni. And that was only; it was doubled in terms of its capabilities and the information that we gathered to provide insights with the acquisition of the transactional information that we got.

Speaker Change: Thank you.

Speaker Change: Okay, the first question is a terribly important one because...

John D. Wren: I think the behavior that you've seen over the last few with who's been winning business and who has not is other elements coming into play in our particular case. I think the key differentiator, in addition to having excellent people, has been the decade-long investment and the progress that we've made in Omnicom. That was only doubled in terms of its capabilities and the information that we gather to provide insights with the acquisition of the transactional information that we got when we purchased Flywheel's Commerce Cloud earlier this year.

Speaker Change: I think the behavior that you've seen over the last

Speaker Change: 18 to 24 months

Speaker Change: with who's been winning business and who has not.

Speaker Change: is structural as well as...

Speaker Change: Other elements coming into play. In our particular case...

Speaker Change: I think the key differentiator, which in addition to having excellent people deployed, has been the decade-long investment and the progress that we've made in Omni.

Speaker Change: And that was only...

Speaker Change: It was doubled in terms of its capabilities and the information that

Speaker Change: We gather to provide insights with the acquisition of the transactional information that we got when we purchased Flywheel's Commerce Cloud earlier this year.

John Wren: When we purchased Flywheels Commerce Cloud earlier this year. So that is a key differentiator when compared to what the competitive set was and how we did business three years ago and how all of us did business three years ago. Also now the improvement that we have in how we measure the effect of this media, coupled with the content production tools that we've now automated and also then get included in some cases as modules that are compatible with the information that Omni generates, is a key factor in why we have, I think, been batting well above 600.

John D. Wren: So that is a key differentiator when compared to what the competitive set was, and how we did business three years ago, and how all of us. Also now, the improvement that we have in how we measure the effectiveness of media, coupled with content production tools that we've now automated and also then get included. In some cases, it's modules that are compatible with the information that Omni generates, is a key factor.

Speaker Change: So that is a key differentiator.

Speaker Change: When compared to what the competitive set was, and how we did business three years ago, and how all of us did business three years ago.

Speaker Change: Also now, the...

Speaker Change: Improvement that we have in how we measure the effectiveness of media coupled with

Speaker Change: The content production tools that we've now automated and also then get

Speaker Change: included in some cases as modules that are compatible with the information that Omni generates is a key factor in in why we have

John D. Wren: I think you've been bad. You see that reflected in the media, wins and lost charges that seemed to get published or updated daily, but..., if you go back and look at that, you'll see that that has been the consistent pattern. It's also. That activity, even though I don't..., wouldn't attribute.

Speaker Change: I think have been batting well above 600 and you see that reflected in the media.

John Wren: And you see that reflected in the media wins in loss charts that seem to get published or updated daily. But if you go back and look at that information, you'll see that that has been the consistent pattern. It's also that activity, even though I wouldn't attribute too much revenue yet to it, also further enables us to get closer to that longer project I referred to where we're looking to outcomes and proving client ROI, but that's more to come on that. But if you were looking for an immediate answer, that would probably be at the heart of it.

Speaker Change: wins and loss charts that seem to get published or updated daily but if you go back and look at that information you'll you'll see that that has been the consistent pattern.

Speaker Change: It's also...

Speaker Change: That activity, even though I wouldn't attribute...

John D. Wren: Too much revenue yet to come on that. Also, it further enables us to get closer to that longer project I referred to, where we're looking at outcomes and improving client ROI. But that's more to come on that. But if you're looking for an immediate answer, that would probably be at the heart of it. I think even some of my competitors are on it.

Speaker Change: Too much revenue yet to it.

Speaker Change: Also,

Speaker Change: It further enables us to get closer to that longer project I referred to, where we're looking to outcomes and improving client ROI, but that's more to come on that. But if you're looking for an immediate answer,

Speaker Change: That would probably be at the heart of it. I think even some of my competitors who are on...

John Wren: I think even some of my competitors are on the other side of this transaction truly understand the differentiation and the full capability that we have versus others. And it's gotten reflected in some technical reports when you look at what forest it did in the second quarter and delve into some research that we haven't necessarily promoted. But it points out these different years. questions.

John D. Wren: The other side of this transaction truly understands the differentiation and the full capability that we have versus others, and it's gotten reflected in some technical reports when you look at what Forrester did in the second quarter and delve into some research that we haven't necessarily promoted, but it points out these differentiations. Having said that, I've now forgotten the second and third part of your question, so could I ask you to... Unknown Speaker Yeah, that.

Speaker Change: The other side of this transaction.

Speaker Change: I truly understand the differentiation in the full capabilities that we have versus others.

Speaker Change: and it's gotten reflected in some technical reports when you look at what Forrester did in the second quarter and delve into some research that we haven't necessarily promoted but it points out these differentiations.

John Wren: I mean, said that, I've now forgotten the second and third part of your question, so could I ask you to? Yeah, that, sure, just about Omnicom Productions, what kind of margins could that business generate and maybe how big that could become from a revenue perspective, or if you could help us size within some of the gross revenue, how much of that might be up for grabs for the production company? Sure. I don't think gross revenue comes into play with respect to production in the way that you might think of it. It's an assignment, and you're, and you're deploying assets or people against it.

Speaker Change: Having said that, I've now forgotten the second and third part of your question, so could I ask you to...

John D. Wren: Sure, just about Omnicom Productions: what kind of margins could that business generate? And maybe how big that could become from a revenue perspective? Or if you could help us size up some of the gross revenue, how much of that might be up for grabs for the production company? Sure, but I don't think gross revenue comes into play with respect to production in the way that you might think of it. It's an assignment, and you're deploying assets or people against it. I said that we were. Some of my immediate surroundings are as much as three times larger than we are.

Speaker Change: Yeah, that...

Speaker Change: Sure, just about Omnicom Productions, what kind of margins could that business generate and maybe how big that could become from a revenue perspective, or if you could help us size within some of the gross revenue, how much of that might be up for grabs for the production company.

John Wren: I said that we were; some of my immediate competitors are as much as three times larger than we are, and we are below $1 billion in what I call production revenue. I'm not being specific, so below can be anywhere from $500 to $1 billion, and my competitors are, at least the two that have been successful at this, on a legacy basis, are at least two to three times larger than us. If you take, if you back and look at investor days from some of our competitors as to their largest clients are, and who our largest clients are, we've been with Apple since 1984.

Speaker Change: I said that we were...

Speaker Change: Some of my immediate competitors.

Speaker Change: are as much as three times larger than we are.

John D. Wren: We are below a billion dollars in what I call production revenue. I'm not being specific; below can mean anywhere from 500 to a billion, and my competitors are at least that. The two that have been successful at this, on a legacy basis, are at least two to three times larger than, If you go back and look at Investor Days from some of our competitors, as to who their largest clients are and who our largest clients are. We've been with Apple since 1984; it's a very significant client of one of my other competitors, and I think they list it in their top five. And they're not the biggest in the air.

Speaker Change: We are below a billion dollars in what I'd call production revenue.

Speaker Change: I'm not being specific, so...

Speaker Change: below can mean anywhere from 500 to a billion and my competitors

Speaker Change: are at least...

Speaker Change: Did the chaser have been successful at this?

Speaker Change: on a legacy basis are at least two to three times larger than us.

Speaker Change: If you'd take...

Speaker Change: If you go back and look at investor days from some of our competitors as to who their largest clients are and who our largest clients are.

John Wren: It's a very significant client of one of my other competitors, and I think they listed in their top five. That's, and they're not the biggest in the area. Now, I don't expect to take that business away overnight, but that's the level of revenue that's available out there. When you centralize these teams, when you make important focused investments in the types of tools and services that you're going to be providing to clients, and we had left it on a decentralized basis until this year. And since the beginning of the year, since our plans last year, we've had very detailed plans of bringing it all together, except for we did not want to take that action until the leader, the person who was going to take us to that level, was free and available to join us.

Speaker Change: We've been with Apple since 1984. It's a very significant client of one of my other competitors.

Speaker Change: I think they listed in their top five. And they're not the biggest in the area. Now, I don't expect to take that business away overnight, but that's the level of revenue that's available out there. When you centralize these teams, when you make...

John D. Wren: Now, I don't expect to take that business away overnight, but that's the level of revenue that's available out there. When you centralize these teams, when you make important, focused investments in the types of tools and services that you're going to be providing to clients, and we had left it on a decentralized basis until this year. And since the beginning of the year, since our plans last year, we've had very detailed plans for bringing it all together, except for.

Speaker Change: important focused investments in the types of tools

Speaker Change: and and services that you're going to be providing to clients and we had left it on a decentralized basis.

Speaker Change: until this year. And since the beginning of the year, since our plans last year, we've had very detailed plans of bringing it all together.

John D. Wren: We did not want to take that action until the leader, the person who is going to take us to that level, was free and available to join us. And because of restrictions he had in his prior employment arrangements, he could not join us until June. And as soon as he got here, we've been moving relatively fast.

Speaker Change: Except for...

Speaker Change: We did not want to take that action until the leader, the person who is going to take us to that level.

John Wren: And because of restrictions he had in his prior employment arrangements, he could not join us until June. And as soon as he got here, we've been moving relatively fast. And that pace will only accelerate as we go through the end of this year, and then certainly into next year. In terms of margins, it will contribute to the overall healthy growth of the company. The one wonderful thing about Amicom is no particular area that we focus on as a permanent impact on the health of Amicom, or the lack of health. So this we see as it can I guess I'd probably characterize it as another leg onto the table.

Speaker Change: was free and available to join us.

Speaker Change: And because of restrictions he had in his prior employment arrangements, he could not join us until June .

Speaker Change: And as soon as we got here, we've been moving relatively fast.

John D. Wren: And that pace will only accelerate as we go through the end of this year and then certainly into next year. In terms of margins, It will contribute to the overall healthy growth of the company. The one wonderful thing about Omnicom is that no particular area that we focus on has a permanent impact on the health of Omnicom or The Lack of Health. So this, we see is a. I guess I'd probably characterize it as another leg under the table.

Speaker Change: And that pace will only accelerate as we go through the end of this year and then certainly into next year.

Speaker Change: In terms of margins.

Speaker Change: It will contribute to the overall healthy growth.

Speaker Change: of the company, the one wonderful thing about Omnicom,

Speaker Change: is no particular area that we focus on.

Speaker Change: has a permanent impact on the health of Omnicom or the lack of health at Omnicom. So this we see is a kink.

Speaker Change: I guess I'd probably characterize it as another leg under the table.

John Wren: Thank you.

Michael Nathanson: Sure. Our next question comes from Michael Nathanson with Moffat Nathanson. Please go ahead. Thanks. Hey, John. The question for you on art bought AI. One of the concerns on the street is that generally the AI is going to make creative content much more efficient. And the article that was sent around by the H&T's use of art bought AI. The client is saying, look, this is incredibly efficient from the time spent in and people require standpoints. I wondered, what are you seeing in terms of it is efficient. But what's the net impact to a creative agency from using this?

Speaker Change: Thank you.

John D. Wren: Thank you. Our next question comes from Michael Nathanson with Moffitt Nathanson. Please go ahead. Thanks. Hey, John, I have a question for you on ArtBot AI.

Speaker Change: Sure.

Speaker Change: Our next question comes from Michael Nathanson with Moffitt Nathanson.

Michael Brian Nathanson: Hey John , I have a question for you on ArtBotAI.

Michael Brian Nathanson: One of the concerns on the street is that general AI is going to make creative content much more efficient, and the article that was sent around about AT&T's use of ARTBOT AI. The client is saying, look, this is incredibly efficient from the time spent and people required standpoint. So I wondered, what are you seeing in terms of? It's efficient, but what's the net impact to a creative agency from using these tools on a revenue basis? That's what we're all trying to figure out. You have a pretty good example here with ArtBot, AI, and A2.

Michael Brian Nathanson: One of the concerns on the street is that generally the AI is going to make creative content much more efficient and the article that was sent around about AT&T's use of ArtBot AI

Speaker Change: The client is saying, look, this is incredibly efficient from the time spent, and people require it standpoint. So I wonder, what are you seeing in terms of...

Speaker Change: is efficient, but what's the net impact to a creative agency from using these tools on a revenue basis? That's what we're all trying to figure out, and you have a pretty good example here with ArtBot, AI, and AT&T.

John Wren: What are these tools on revenue basis? That's a role to figure out. You have a pretty good example here with art bought AI and H&T. Sure. I think the one thing maybe this is you have to take on faith, but it's been true. I've only been in the seat for close to 30 years. And God knows how many quarterly calls like this.

John D. Wren: Sure, I think the one thing, maybe this is, you have to take on faith, but it's been true. I've only been in this seat for close to 30 years, and God knows how many quarterly calls like this, where we've been able to make the client's dollar work more efficiently. I would say in, nothing's 100% nothing, not nothing.

Speaker Change: Sure, I think the one thing, maybe this is, you have to take on faith, but it's been true.

Speaker Change: And I've only been in this seat for...

Speaker Change: close to 30 years and God knows how many quarterly calls like this. Wherever we've been able...

John Wren: Wherever we've been able to make the client's dollar work more efficiently, I would say in nothing is 100% nothing, nothing, nothing. I would say a significant portion of that dollar saved or proven gets reinvested by that client because they understand the impact. And they're not fearful of investing in things that they can measure because they have objectives and they meet their KPIs; they invest it. So art bought AI is just an amazing tool in that the creative work that goes into concepts and the insights of developing a campaign; they still take those geniuses that we'll remember.

Speaker Change: To make the client's dollar work more efficiently,

Speaker Change: I would say in

Speaker Change: nothing's a hundred percent nothing not nothing I would say

John D. Wren: I would say A significant portion of that dollar saved or proven gets reinvested by that client because they understand the impact and they're not fearful of investing in things that they can measure because they have objectives and they meet their KPIs. They invest. So, Art by AI is just an amazing tool.

Speaker Change: A significant portion of that dollar saved or proven gets reinvested by that client because they understand the impact and they're not fearful.

Speaker Change: of investing in things that they can measure.

Speaker Change: because they have objectives and they and they if they meet their KPIs

Speaker Change: They invested. So... Thank you.

Speaker Change: Art by AI is just an amazing tool.

John D. Wren: In that, Creative work that goes into concepts and the insights of developing a campaign. They still need those geniuses, those little Rembrandts that we have. I think we get more than our fair share of us in Omnicom. But, historically, and this is what you're afraid of, there were dollars involved in the trafficking of that information or the reconfiguration of that information for different types of media in the past. That now, with ARTBOT, if the campaign is properly tagged when created, it is done instantaneously.

Speaker Change: in that

Speaker Change: the

Speaker Change: Creative work that goes into concepts and the insights of developing a campaign.

John Wren: I think more than our fair share of it's an omnicom. But historically, and this was your freedom, the word dollars involved in the trafficking of that information or the reconfiguring of that information for different types of media in the past. That now with art pot, if the campaign is properly tagged when created, is done instantaneously. So that one boring work that was kind of mundane for the people doing it, which did generate revenue, kind of blurred the lines of how much of this money we're spending are we getting a return on. Now, with things like art pot, we can reduce the cost; we can do something better, cheaper, and faster.

Speaker Change: They still take those geniuses, that little Rembrandts that we have, I think, more than our fair share of within Omnicom.

Speaker Change: But historically, and this is what you're afraid of, there were dollars involved in the trafficking of that information or the reconfiguring of that information for different types of media in the past.

Speaker Change: That now, with ArtBot, if the campaign is properly tagged when created, is done instantaneously.

John D. Wren: So, that boring work that was kind of mundane for the people doing it, which did generate revenue, kind of blurred the lines of how much of this money we're spending are we getting a return on? Now, with things like RPOT, we can reduce the cost; we can do something better, cheaper, and faster. And through Omni and the optimization tools that we have, we can measure the effectiveness of it. The point is, a dollar saved becomes 95% of incremental dollars invested in the client. So, I think your fear is really not well placed, and I think we have enough history.

Speaker Change: So, that one boring work.

Speaker Change: that was kind of mundane for the people doing it, which did generate revenue.

Speaker Change: Kind of blurred the lines of how much of this money we're spending, are we getting a return on?

Speaker Change: Now with things like RPOT, we can reduce the cost. We can do something better, cheaper, and faster. And through Omni and the optimization tools that we have, we can measure the effectiveness of it.

John Wren: And through army and the optimization tools that we have, we can measure the effectiveness of.

John Wren: The point being, a dollar saved becomes 95% incremental dollars invested in the clients. So I think your fear is really not well placed, and I think we have enough history because this business has evolved quite a bit during my tenure to at least believe in the fact that if you can measure your accurate and it's beneficial to your activities, you're going to spend more of it until it's no longer beneficial to your activities. Thanks, John. Can I ask you one more about your questions? No, the question I had is we talk about the gold to get more pay for performance.

Speaker Change: The point being, a dollar saved becomes 95% incremental dollars invested in the clients.

Speaker Change: So, I think your fear...

Speaker Change: is

Speaker Change: really not well-placed and I think we have enough history. This business has evolved quite a bit.

John D. Wren: This business has evolved quite a bit during my tenure to at least believe in the fact that if you can measure it, and it's beneficial to your activities, you're going to spend more of it until it's no longer beneficial to your activities.

Speaker Change: During my tenure?

Speaker Change: to at least believe in the fact that if you can measure it...

Speaker Change: And it's beneficial to your activities, you're going to spend more of it until it's no longer beneficial to your activities.

John D. Wren: Thanks, John. Can I ask you one more about your... I'm going to let Phil answer a question in case nobody answers his call. Go ahead. Okay. The question I had is, we talk about, you know, the goal to get more pay for performance. Does it necessarily mean that you need both sides, the media side and the creative side?

Speaker Change: Thanks, John . Can I ask you one more about your...

Speaker Change: I'm going to let Phil answer a question in case nobody answers his call. Go ahead.

Philip J. Angelastro: No, the question I had is, we talk about, you know, the goal to get more paid for performance.

John Wren: There's necessarily a need that you need both sides, the media side and the creative side because how the clients tease out the effectiveness of the creative versus effectiveness of the media planning and buying, right? So how do you think about a golden market to get paid for both sides of at least two sides of the transaction, the creativity and the optimization part? Well, you know, if I'm repeating myself a little bit, I think I might have mentioned earlier, you could have the most sophisticated tools in the entire world and take two retailers in the geographic location trying to attract customers or two car companies.

Speaker Change: Does it necessarily mean that you need both sides, the media side and the creative side? Because how do clients tease out the effectiveness of the creative versus the effectiveness of the media planning and buying, right? So how do you think about going to market to get paid for both sides of...

John D. Wren: Because how do clients tease out the effectiveness of the creative versus the effectiveness of the media planning and buying, right? So how do you think about going to market to get paid for both sides of the transaction, the creativity and the optimization. Well, yeah. And forgive me if I...

Speaker Change: I guess at least two sides of the transaction, the creativity and the optimization part.

Speaker Change: Well, yeah, um...

John D. Wren: I'm repeating myself a little bit. As I mentioned earlier, you could have the most sophisticated tools in the entire world and two retailers in the geographic location trying to attract customers or two car companies. If the tools gave them the most optimal way of spending X number of dollars, there would be nothing. Unless there was creativity, there would be nothing to distinguish one from the other and from a competitive set.

Speaker Change: I think I might have mentioned earlier, you could have the most sophisticated tools.

Philip J. Angelastro: in the entire world.

Philip J. Angelastro: and take two retailers in a geographic location trying to attract customers or two car companies.

John Wren: If the tools gave them the most optimal way of spending X number dollars, there would be nothing; unless there was creativity, there would be nothing to distinguish, you know, one from the other and from a competitive set. It can still be in the historic equivalent of hunters, you know, the buffalo pass by my village today. It's those creative people; it's the sophistication and the timeliness of the insights that tech platforms like Ami and Flywheel Commons Cloud create. They give us the information to act at speed to create relative at scale to kind of create campaigns which will attract customers and actually distinguish the differences between our products and why a client or a potential buyer should be attracted to that client.

Philip J. Angelastro: If the tools give them...

Philip J. Angelastro: The most optimal way of spending X number of dollars.

Philip J. Angelastro: There would be nothing...

Philip J. Angelastro: Unless there was creativity, there would be nothing to distinguish.

Speaker Change: You know, um...

Speaker Change: one from the other and from a competitive set.

John D. Wren: Can it still be in... The historic equivalent of hunters, you know, you know, did the buffalo pass by my village? It's those creative people, it's the sophistication and the timeliness of the insights that our tech platforms like Omni and Flywheel Commerce Cloud create that give us the information to act at speed, to create relative at scale to kind of create campaigns that will attract customers and actually distinguish the differences between our products and why a client or a potential buyer should be attracted to that.

Speaker Change: It kind of still be in the historic equivalent of...

Speaker Change: Hunters, you know, did the buffalo pass by my village today?

Speaker Change: It's those creative people, it's the sophistication and the timeliness of the insights.

Speaker Change: that our tech platforms like Omni and Flywheel Commerce Cloud create that give us the information to act at speed.

Speaker Change: to create relative...

Speaker Change: at scale to kind of create campaigns which will attract

Speaker Change: customers.

Speaker Change: and actually distinguish the differences between our products.

John Wren: So what's happening is the historic lines, which might have been clearer to delineate between where technology optimization information ends and where creativity begins, they've been blended more. And I think that's more the future rather than one side of the house versus another side.

Speaker Change: and why a client or a potential buyer should be attracted to that client.

John D. Wren: So what's happening? the historic lines, which might have been clearer to delineate between where technology, optimization, information ends and where creativity begins. They've been blen- And I think that's more the future rather than, We have one side of the house versus another side of the house. And that's what We're driving in terms of behavior and the culture within the company, that knowledge that one is not more important than the other, both are equally important, and both, when working in tandem with each other, are really unassailable. Thanks, John. Sorry, Phil.

Speaker Change: So, what's happening?

Speaker Change: is the historic

Speaker Change: lines which might have been clearer to delineate between

Speaker Change: Where technology, optimization, information ends and where creativity begins, they've been blended more.

Speaker Change: And I think that's more the future rather than...

Phil Angelastro: And that's what we're driving in terms of the behavior and the culture within the company: that knowledge, that one is not more important than the other; both are equally important, and both, when working in tandem with each other, are really unassailable. Thanks, Todd. Sorry, Phil. No worries. I'll throw them a question, please. I'm going to talk them to them.

Speaker Change: We have one side of the house versus another side of the house.

Speaker Change: and that's what

Speaker Change: We're driving, in terms of the behavior and the culture within the company, that knowledge that one is not more important than the other, both are equally important.

Speaker Change: And both, when working in tandem with each other, are really unassailable.

Philip J. Angelastro: Thanks, John . Sorry, Phil.

John D. Wren: No worries. I'll throw him a question. Please, I've been talking too long. Our next question comes from the line of Jason Bazinet with Citigroup. Please go ahead. Maybe I'm wrong about this.

Philip J. Angelastro: No worries.

Jason Bazinet: Our next question comes from the line of Jason Bazinet with Citigroup. Please go ahead.

Speaker Change: Our next question comes from the line of Jason Bazinet with Citigroup. Please go ahead.

John Wren: Maybe I'm wrong about this, but when I look at your firm, it feels like the magnitude of adjustments you've made over the last couple of years, whether it's on the decentralized production of the flywheel acquisition. But the magnitude of changes or adjustments are more significant than they've been in the past. And I guess my first question is, do you agree with that statement?

Jason Boisvert Bazinet: But when I look at your firm, it feels like the magnitude of adjustments you've made over the last couple of years, whether it's Omni, you're centralizing production of the flywheel acquisition, that the magnitude of changes or adjustments are more significant than they've been in the past. And I guess my first question is, do you agree with that statement? And then second, are there any capabilities or skills?

Jason Boisvert Bazinet: Maybe I'm wrong about this but um when I look at when I look at your firm it feels like the magnitude of adjustments you've made over the last couple years whether it's

Speaker Change: Omni, you're centralizing production at the Flywheel Acquisition.

Speaker Change: But the magnitude of changes or adjustments are more significant than they've been in the past. And I guess my first question is, do you agree with that statement? And then second, are there any capabilities or skills that you feel like you're lacking today?

John Wren: And then second, are there any capabilities or skills that you feel like you're lacking today that wouldn't allow you to go one in the marketplace to be your competitor? Well, I probably shouldn't do this on a conference call, but I claim the right haven't been as CEO for 30 years and having built what was there from a legacy point of view. I have the right to change it at will, if that's what's most appropriate for us to be successful. So it's not just me, it's my entire team. And the information we gather from what the consumer and the customer wants, as well as whatever tech improvements are out there, which are far more rapid and changing.

John D. Wren: that you feel like you're lacking today, that wouldn't allow you to win in the marketplace vis-a-vis. Well, probably shouldn't do this on a conference call, but I claim the right, having been the CEO for 30 years and having built what was there from a legacy point of view, I have the right to change it at will if that's what's most appropriate for us to be successful. So it's not just me

Speaker Change: that wouldn't allow you to go win in the marketplace vis-a-vis your competitors.

Speaker Change: [inaudible]

Speaker Change: probably shouldn't do this on a conference call, but I claim the right having been this CEO for 30 years and having built what was there from a legacy point of view, I have the right to change it at will if that's what's most appropriate for us to be successful.

John D. Wren: This is my entire team, and the information we gathered, from what the consumer and the customer wants, as well as whatever tech improvements are out there, which are far more rapid and changing. So you're correcting your conclusion that there's been a lot of change. Some probably very precious little by comparison, from Acquisition, and most for a very long time.

Speaker Change: So, it's not just me, it's my entire team and the information we gather.

Speaker Change: From what the consumer and the customer wants as well as whatever tech improvements are out there, which are far more rapid and changing. So you're correcting your conclusion that there's been a lot of change. Some, probably precious little by comparison,

John Wren: So you're correcting your conclusion that there's been a lot of change. Some probably precious little by comparison from acquisition. And most to a very long haul committed spending of internal resources to build and develop the type of tools and information and hire the people that we need in order to execute against it. So, having said that, my team would definitely do this. I mean, never satisfied. And the team, and the team knows that we're never done because. And one of the real benefits of having is many creative people we have in as many geographies as we have them.

Speaker Change: from Acquisition, and most to a very long...

John D. Wren: Spending Internal Resources to build and develop the type of information and hire the people that we need in order to execute against it. Having said that... The team would definitely agree with this. I'm never satisfied.

Speaker Change: whole committed

Speaker Change: Spending of internal resources to build and develop the type of

Speaker Change: tools, and

Speaker Change: information and hire the people that we need in order to execute against it. So

Speaker Change: Having said that...

John D. Wren: And the team knows that we're never done because... And one of the real benefits of having so many creative people we have in as many geographies as we have, with the appropriate access to all the new things that are getting developed. There are trials and programs that we're running with clients, clients who have agreed to take the risk with us that things are gonna break, and then we'll put them back together and fix them.

Speaker Change: My team would definitely agree with this, I'm never satisfied.

Speaker Change: And the team knows that we're never done, because...

Speaker Change: And one of the real benefits...

Speaker Change: of having

Phil Angelastro: And with appropriate access to all the new things that are getting developed, is there are trials and programs that we're basering with clients, clients who have agreed to take the risk with us. That things are going to break, and then we'll put them back together and fix it. Then we turn them into products, which are more easily deployed to a larger group of people. And then we have things that we learn about after the fact where our creative or our are really smart strategies out there, are playing with and toying with new tools and capabilities that they become aware of, and when they become significant, that information kind of bubbles to the top pretty quickly, and I have a pretty astute group of folks, there are always on the outlook for that, as well as the formal things we do for a Mamicom, you know, we see it in, it's kind of buried in some of the announcements that you made, I talked about what QBWA has done, and I talked about what other parts of the company have done.

Speaker Change: As many creative people we have in as many geographies as we have them.

Speaker Change: with the appropriate access to all the new things that are getting developed is...

Speaker Change: There are trials and programs that we're batering with clients, clients who have agreed to take the risk with us that things are going to break and then we'll put them back together and fix them. Then we turn them into products which are more easily deployed to a larger group of people.

John D. Wren: Then we turn them into products that are more easily deployed to a larger group of people. And then we have things that we learn about after the fact where our creative or our really smart strategists out there are playing with and toying with new tools and capabilities that they become aware of. And when they become significant, that information kind of bubbles to the top pretty quickly, and I have a pretty good idea.

Speaker Change: And then we have things that we learn about after the fact, where our creative or our

Speaker Change: I'm a really smart strategist out there, are playing with and toying with new tools and capabilities that they become aware of. And when they become significant, that information kind of bubbles to the top pretty quickly. And I have a pretty...

John D. Wren: Two groups of folks that are always on the lookout for that, as well as the formal things we do from Omnicom. You know, we see it, and it's kind of buried in some of the announcements that we make. I talked about it, what TWA has done, and I talked about what other parts of the company. They're all things that they've vetted, and tested, and proven that, gee, this is a skill that or a product that we can white label for the benefit of all of our clients.

Speaker Change: astute group of folks. They're always on the outlook for that as well as the formal things we do for Omnicom.

Speaker Change: You know, we see it and it's kind of buried in some of the announcements that we made. I talked about...

Speaker Change: What GBWA has done, and I've talked about what other parts of the company have done.

John Wren: There are all things that they've baited and tested, improving that, gee, this is a skill that, or a product that we can white label for the benefit of all of our clients, and that's the constant process that's going on. So are there more things that we could do? Yes, are there more things we're going to do? Absolutely, and I've satisfied that I believe we're appropriately ready for today, yes, and what the client requirements are today, yes, but I don't think that is a stationary target. I don't think you can rest on those capabilities; they're in constant, improved states of improvement.

Speaker Change: They're all things that they've baited.

Speaker Change: and tested and proven that gee this is a skill that or a product that we can white label for the benefit of all of our clients.

John D. Wren: And that's the constant process that's going on, so, Are there more things that we could do? I believe we're appropriately ready for today? Yes, and what the current requirements are today, yes. But I don't think that is a stationary target. I don't think you can rest on it.

Speaker Change: And that's the constant process that's going on. So, are there more things that we could do? Yes. Are there more things we're going to do? Absolutely. Am I satisfied that...

Speaker Change: I believe we're appropriately...

Speaker Change: Ready for today? Yes.

Speaker Change: And what the current requirements are today, yes,

John D. Wren: Those capabilities are in constant improved states of improved. Perfect. Yeah, I would just kind of concur and add, yeah, the pace of change certainly has accelerated in the last few years in the marketplace. Media landscapes have changed dramatically, the way consumers interact with brands.

Speaker Change: a stationary target. I don't think you can rest on those capabilities. They're in constant states of improvement.

Phil Angelastro: Perfect. Yeah, I would just kind of concur and add, you know, the pace of change certainly has accelerated the last few years in the marketplace. You know, media landscapes change dramatically; the way consumers interact with brands and, frankly, buy stuff has changed pretty dramatically. And we continue to make the investments necessary so that we can stay ahead of that and provide our clients with, you know, the innovation that they need. Certainly, from our perspective, these things aren't necessarily choices of whether we want to do them or not; we make those investments so that we can keep pace and stay ahead, and that will continue certainly so that we can service our client's needs and what we anticipate there needs to be in the future.

Speaker Change: Perfect. Yeah, I would just kind of concur and add, yeah, the pace of change certainly...

Speaker Change: has accelerated the last few years in the marketplace. Media landscapes change dramatically. The way consumers interact with brands and, frankly, buy stuff has changed.

Philip J. Angelastro: And frankly, buying stuff has changed. Um.., and we continue to make the investments necessary so that we can stay ahead of that and provide our clients with, you know, the innovation that they need, certainly from our perspective. These things aren't necessarily choices of whether we want to do them or not.

Speaker Change: We continue to make the investments necessary so that we can stay ahead of that and provide our clients with the best services they need.

Speaker Change: You know the innovation that they need Certainly from our perspective

Speaker Change: These things aren't necessarily choices of whether we want to do them or not. We make those investments so that we can keep pace and stay ahead. And that will continue, certainly, so that we can service our clients' needs and what we anticipate there needs to be in the future.

Philip J. Angelastro: We make those investments so that we can keep pace and stay ahead. And that will certainly continue, so that we can service our clients' needs and what we anticipate their needs. Just one little final point on that.

John Wren: Just one little final point on that, as much as we make those investments and we support them from a top-down point of view, that innovation is bubbling up from the entire, all of our colleagues throughout the world. And, you know, we learn from our clients. When we learn from the people who don't have that lofty management positions to sit on calls like this, and where it works, we double-down.

Philip J. Angelastro: As much as we make those investments and we support them from a top-down point of view, that innovation is bubbling up from all of our colleagues throughout the world. Yeah, we learn from our clients, and we learn from the people who don't have those lofty management positions to sit on calls like, Where it works, we double down. Very helpful answer. Our next question comes from the line of Tim Nollen with Macquarie Group. Please go ahead.

Speaker Change: Just one little final point on that. As much as we make those investments and we support them from a top-down point of view,

Speaker Change: That innovation is bubbling up from all of our colleagues throughout the world.

Speaker Change: Yeah, we learn from our clients and we learn from the people who don't have that lofty management positions to sit on calls like this, and where it works, we double down.

Unknown Executive: Very helpful, I'd say.

Tim Noland: Thank you. Our next question comes from the line of Tim Noland with McCory Group. Please go ahead. Oh, thanks. I just had one more question on the current production operation that you just laid out.

Speaker Change: Very helpful answer. Thank you.

Speaker Change: Our next question comes from the line of Tim Nollen with Macquarie Group. Please go ahead.

Tim Nollen: Thanks. I just had one more question on the Omnicom production operation that you just laid out. Now, just operationally, I'm just wondering if this is a kind of a consolidated skill center that the agencies will draw upon. As in, you're taking activities out of agencies, creating a common sort of a service center. And if I'm understanding it right, is it a complex process to set this up?

Tim Nollen: I just had one more question on the Omnicom production operation that you've just laid out now. Just operationally, I'm just wondering, is this a kind of a consolidated skill center that the agencies will draw upon?

John Wren: Now, this operation, I'm just wondering, is this a kind of a consolidated skill center that the agencies will draw upon as in you're taking, you're taking activities out of agencies, creating a common sort of service center. And, if I'm understanding it right, is it a complex process to set this up, and then will there be further repositioning costs in the coming course? Thanks.

Speaker Change #101: as in you're taking this you're taking activities out of agencies creating a common sort of a service center and if I'm understanding it right is it a complex process to set this up and then relatedly will there be further repositioning costs in the coming quarters?

John D. Wren: And then, relatedly, will there be further repositioning costs in the coming quarters? Thanks. I'll answer the last part of your question first. At this moment, based upon having made a very significant plan and the information that we have. We think that any future adjustments to the architecture and the plan that we put in place will be self-liquidating in a quarter, so we don't think there's any... Transcribed by https://otter.ai, taking to bring this to the next level.

John Wren: Well, that's sort of the last party question first. At this moment, based upon having done a very significant plan and the information that we have, we think that any future adjustments to the architecture and the plan that we put in place will be self-liquidating in a quarter. So, we don't think there's any bold action that you're going to see us, based on what we know right now, taking to bring this to the next level. It's a change certainly in that production is far more tech, far more; their improvements, their happening, which haven't even been rolled out yet, in terms of production, how you do it, what makes it better, cheaper, faster.

Speaker Change #102: I'll answer the last part of your question first.

Speaker Change #103: At this moment, based upon having done a very significant plan and the information that we have, we think that any future adjustments to

Speaker Change #104: the architecture and the plan that we put in place will be self-liquidating in a quarter. So we don't think there's any bold action that you're gonna see us, based upon what we know right now.

Speaker Change #104: taking to bring this to the to the next level.

John D. Wren: It's a change certainly in that production is, far more tech, far more... There are improvements that are happening, which haven't even been rolled out yet, in terms of production, how you do it, what makes it better, cheaper, faster. ARTBOT AI is just one thing we introduced this quarter.

Speaker Change #105: It's a change, certainly, in that production is...

Speaker Change #105: Far more tech, far more...

Speaker Change #105: There are improvements that are happening, which haven't even been rolled out yet, in terms of production, how you do it, what makes it better, cheaper, faster. ArtBot AI is just one thing we introduced this quarter. So in the past...

John Wren: Our thought AI is just one thing we introduced this quarter. So, in the past, when these were simply departments of the agency or the company working on a very limited number of clients, they focused their attention and the tools that they needed to adjust what those clients and agency requirements were. By centralizing it, we free that up to where we can continue to service those specific client requirements and then broaden our capabilities to offer to significant other clients. And there are benefits to scale because, with scale, you make better investments. You have more assets to deploy against a particular assignment.

John D. Wren: So in the past, when these were simply departments of the agency or the company working on a very limited number of clients, they focused their attention and the tools that they needed to adjust what those client and agency requirements were.

Speaker Change #105: When these were simply departments...

Speaker Change #105: of

Speaker Change #105: The agency or the company working on a very limited number of clients.

Speaker Change #105: They focused their attention and the tools that they needed to adjust what those client and agency requirements were. By centralizing it,

John D. Wren: By centralizing it, we free that up so that we can continue to serve as the specific client requirements and then broaden our capabilities to offer to significant other clients. There are benefits to scale, because with scale, you make better investments. You have more assets to deploy against a particular assignment. And, you should be able, and we will be able, to do things better, cheaper, and faster for our clients, which again contributes to client savings. Measurable ROIs, all the other things which TUSS touches. The continuum of services that we... Our next question comes from Craig Huber with Huber Research Partners. Please go ahead.

Speaker Change #105: We free that up to where we can continue to service.

Speaker Change #105: those specific client requirements, and then broaden our capabilities.

Speaker Change #105: to offer to significant other clients.

Speaker Change #106: There are benefits to scale because with scale you can make better investments.

Speaker Change #106: You have more assets to deploy against.

John Wren: And you should be able, and we will be able to do things better, cheaper, and faster for our clients, which again contribute to client savings, measurable ROI, all the other things which touch the continuum of services that we are increasingly offering.

Speaker Change #106: Particular assignment and

Speaker Change #106: You should be able, and we will be able, to do things better, cheaper, and faster for our clients, which again, contribute to client savings.

Speaker Change #106: measurable ROIs, all the other things which touch the continuum of services that we are increasingly offering.

John Wren: Thanks, John.

Craig Hubert: Our next question comes from the line of Craig Hubert with Hubert Research Partners. Please go ahead. Thank you, just a matter of time. I have one question, guys. Can you talk about your technology clients? I know this is 7% of your revenues here in the first quarter, first half. Are you feeling like the worst is behind you there in terms of the growth rates year over year, and it might start turning positive. I say the fourth quarter will go into next year. How do you feel about the technology part of your clients? Thank you. I think just in terms of numbers first, you know, I think the numbers for us all throughout last year was about 8% of total revenue. You know, the 7 in the quarter in the first half is not really much of a change driven by a reduction in spend.

Speaker Change #106: Our next question comes from the line of Craig Huber with Huber Research Partners. Please go ahead.

Craig Anthony Huber: It's just a matter of time. I have one question, guys. Can you talk about your technology clients?

Craig Anthony Huber: Thank you. Just a matter of time here. I have one question. Guys, can you talk about your technology clients?

Philip J. Angelastro: I know this is 7% of your revenues here in the first quarter, first half. Are you feeling like the worst is behind you there in terms of the growth rates year over year, and it might start turning positive by, say, the fourth quarter or going into next year? How do you feel about the technology part of your clients?

Craig Anthony Huber: I noticed that 7% of your revenue is here in the first quarter, first half. Are you feeling like the worst is behind you there in terms of the growth rates year over year and it might start turning positive by say the fourth quarter or going into next year? How do you feel about the technology part of your clients?

Philip J. Angelastro: Thank you. I think just in terms of numbers first. Yeah, I think the numbers for us all throughout last year were about 8% of total revenue, you know, the seven in the quarter in the first half, not really much of a change driven by a reduction. I think that's more of a, You know, we're probably a little more heavily weighted because of Flywheel in 2024, which is adding it, slightly different percentage of the total.

Speaker Change #109: I think just in terms of numbers, first,

Speaker Change #111: Yeah, I think the numbers for us all throughout last year was about 8% of total revenue.

Speaker Change #108: You know, the seven in the quarter or in the first half is not really much of a change.

Phil Angelastro: And I think that's more of, you know, we're probably a little more heavily weighted because of Flywheel in 2024. to consumer products and some of their client base, just adding a slightly different percentage of the total. So we haven't seen a significant drop-off that's really meaningful in the spend of our tech clients. There have been some pluses and minuses, certainly, no question last year and the first part of this year. But, you know, I don't think the numbers have really impacted us overall on a consolidated basis that significantly.

Speaker Change #108: driven by a reduction in spend. I think that's more of, you know, we're probably a little more heavily weighted because of Flywheel in 2024.

Speaker Change #108: to consumer products and some of their client base.

Speaker Change #108: Just adding a slightly different percentage of the total, so we haven't seen a significant drop off.

Philip J. Angelastro: So we haven't seen a significant drop off that's really meaningful across, you know, the span of our tech lines. There have been some pluses and minuses, certainly, no question, last year and the first part of this year. But I, you know, I don't think the numbers have really impacted us overall on a consolidated basis that significantly. Okay, thank you.

Speaker Change #108: But I, you know, I don't think the numbers have really impacted us overall on a consolidated basis that significantly.

Phil Angelastro: Okay, thank you.

Adrien Hilaire: Sure. Our final question comes from the line of Adrien, DeSaint Hilaire, with Bank of America. Please go ahead. Thank you. I'll just take to one question, please. There's been a bit of a deterioration in some macro indicators of late in the US, and I know John, you said you don't control macro, but I would still be curious if you've seen or you've felt in your recent conversation with clients that there is perhaps a desire to pull back, maybe on that spending towards the second half, on the back of those weaker data points. Thank you.

Speaker Change #110: Okay, thank you.

Philip J. Angelastro: Sure. Our final question comes from the line of Adrienne de Saint Hilaire with Bank of America. Please go ahead.

Speaker Change #108: Sure.

Speaker Change #112: Our final question comes from the line of Adrian de Saint-Hilaire with Bank of America. Please go ahead.

Adrien de Saint Hilaire: Thank you. I'll just stick to one question, please. There's been a bit of a deterioration in some macroindicators. U.S. And I know, John, you said you don't control macro, but I would still be curious if... Page PAGE of NUMPAGES www.verbalink.com Page PAGE of NUMPAGES, I would not go as far as to say.

Speaker Change #113: Thank you. I'll just stick to one question, please. There's been a bit of a deterioration in some

Speaker Change #115: Macro indicators of late in the US and I know John you said you don't control macro but I would still be curious if you've seen or you felt in your recent conversation with clients that there is perhaps a desire to pull back maybe on that spending towards the second half on the on the back of those weaker data points. Thank you.

John Wren: I would not go as far as to say, pull back. I think that the level of optimism that we kind of went into the year with expecting bed cuts and other macro actions to the third, which all got delayed. Until the first one happens, people are electing to be, wouldn't say pessimistic, but conservative in forecasting what's going on, because again, we entered January, which wasn't that long ago, expecting four cuts. Here we are in almost August, and we're hoping for one cut. And that, irrespective of the political elections, actually have more of a longer term impact on the way CEOs or the ones I deal with, think about investments that they're going to make in their business and what they're doing.

John D. Wren: and John Wren.

John D. Wren: I would not go as far as to say...

John D. Wren: Pull back. I think that the level of optimism. I kind of went into the year expecting bed cuts.

John D. Wren: Pulled back.

John D. Wren: I think that

Speaker Change #114: The level of optimism that we kind of went into the year with, expecting bed cuts and other macro actions to have occurred, which all got delayed.

John D. Wren: Other macro actions were to have occurred, but all got delayed until the first one happened.

John D. Wren: People are electing to be, I wouldn't say pessimistic but conservative, forecasting what's going on because, Again, we entered January, which wasn't that long ago, expecting forecasts. Here we are in almost August, and we're hoping for one cut and that.

Speaker Change #114: Until the first one happens, people are electing to be...

Speaker Change #116: I wouldn't say pessimistic, but conservative.

Speaker Change #116: in forecasting what's going on because, again, we entered January , which wasn't that long ago, expecting floor cuts.

Speaker Change #116: Here we are in almost August .

Speaker Change #116: And we're hoping for one cut.

John D. Wren: Irrespective of the political election, the political election actually has more of a longer-term impact on the way CEOs, or the ones I deal with, think about investments that they're going to make in their business and what they're doing. There's also a question that gets raised, or rises. In terms of, there's a pretty stark difference in this country between whether there's a Republican-controlled government or a Democratic-controlled government, and there'll be implications. Both positive and negative if you position yourself correctly, in terms of where the dollars are.

Speaker Change #116: that

Speaker Change #116: Actually, I have more of a...

Speaker Change #116: Longer term.

Speaker Change #116: Impact on the way CEOs or the ones I deal with think about investments that they're going to make in their business and what they're doing.

John Wren: There's also a question that gets risen or rises in terms of, there's a pretty stark difference in this country between whether there's a Republican-controlled government or a Democratic-controlled government, and there'll be implications, both positive and negative, as you position yourself correctly for them, in terms of where the dollars are going to flow. So, all that leads to is no one's euphoric. People, I think, are cautiously optimistic. And the ones who last December January were bullish, because they were expecting moves by the government, have moved from that to the cautiously optimistic part of the equation. So...

Speaker Change #116: There's also a question which gets risen, or rises, in terms of

Speaker Change #117: There's a pretty stark difference in this country between whether there's a Republican-controlled government or a Democratic-controlled government.

Speaker Change #117: and there will be implications.

Speaker Change #117: Well, it's positive and negative if you position yourself correctly for them.

John D. Wren: So, all that leads to is... No one's euphoric, people. I think they're cautiously optimistic, who last December and January were bullish because they were expecting. The Ultimate Parody Site-Limited Company, LLC. All rights reserved have moved from that. This is a cautiously optimistic... part of the equation. And that's simply the United States. You also have wars going on. You had the snap election and a complete change in direction in the UK.

Speaker Change #117: In terms of where the dollars are going to flow.

Speaker Change #117: So, all that leads to is...

Speaker Change #118: No one's euphoric. People, I think, are cautiously optimistic and the ones

Speaker Change #118: who last December , January were bullish because they were expecting

Speaker Change #119: You know, moves by the government have moved from that

Speaker Change #119: to the cautiously optimistic.

John Wren: So, you know, and that's simply the United States. You also have wars going on. You had a snap election and a complete change in direction in the UK. You have, you know, a snap French election, which has led to parallelization. So, I mean, we're not sitting here. We are a global company. So all these things kind of go into the stew, if you would. But we think we've been able; we think we're close enough contact with our clients that we share what challenges they have. And we adjust with them to those challenges. And we're still pretty; we're still confident.

Speaker Change #119: Part of the equation. So...

Speaker Change #119: And that's simply the United States. You also have wars going on.

John D. Wren: You have, you know, a snap French election which has led to paralyzation. So, I mean, we're not sitting here; we are a global company. So all these things kind of go into the, two, if you would.

Speaker Change #119: You had a snap election and a complete change in direction in the UK. You have, you know, a snap French election, which has led to paralyzation. So I mean, we're not sitting here, we are a global company. So all these things kind of go into the...

John D. Wren: But we think we've been able. We think we're in close enough contact with our clients that we share what challenges they have, and we adjust with them to those challenges. And we're still pretty, we're still confident. I'm not very confident, but I'm still confident, that what we said we could do, we will, in fact, do.

Stu: Stu, if you would.

Stu: But we think we've been able...

Stu: We think we're in close enough contact with our clients.

Stu: that we share what challenges they have and we adjust with them to those challenges.

John Wren: I'm not pretty confident. I'm still confident that what we said we can do, we will, in fact, deliver. Thank you.

Stu: And we're still pretty, we're still confident, I'm not pretty confident, I'm still confident that what we said we can do, we will in fact deliver.

Operator: Thank you. Thank you for joining us so late, Adrian. There are no further questions at this time. This will conclude today's call. Thank you all for your participation. You may now disconnect.

Operator: Thanks for joining us. So, so late, Agent, sure.

Stu: Thanks for joining us so late, Adrian.

Operator: There are no further questions at this time.

Stu: and John D'Amico. Thank you. Thank you.

Operator: This will conclude today's call. Thank you all for your participation.

Speaker Change #121: There are no further questions at this time. This will conclude today's call. Thank you all for your participation. You may now disconnect.

Operator: You may now disconnect.