Q1 2025 Omnicom Group Inc Earnings Call
Hello, and welcome to the Omnicom first quarter 2025 earnings call all lines have been placed on mute to prevent any.
Background noise.
After the Speakers' remarks, there will be a question and answer session.
Speaker Change: I would like to ask a question. During this time. Please press star one on your telephone keypad.
Greg Lundberg: I would now like to turn the conference over to Greg Lundberg Investor Relations you may begin.
Unknown Executive: Thank you for joining our first quarter earnings call.
John Wren: Thank you for joining our first quarter earnings call with me today are John Wren, Chairman and Chief Executive Officer.
Unknown Executive: With me today are John Wren, Chairman and Chief Executive.
Unknown Executive: Phil Angelastro, Executive Vice President and Chief On our website, omnicomgroup.com, you will find a press release and a presentation covering the information that we'll An archived webcast will be available when today's call Before we start, I'd like to remind everyone to read the forward looking Non-GAAP financial and other information that we've included at the end of our investigation.
Phil Angela: And Phil Angela, Australia, Executive Vice President and Chief Financial Officer.
Phil Angela: On our website Omnicom group Dot Com, you will find a press release and the presentation covering the information that we'll review today.
Phil Angela: An archived webcast will be available when today's call concludes.
Phil Angela: Before we start I'd like to remind everyone to read the forward looking statements and non-GAAP financial and other information that we have included at the end of our Investor presentation.
Unknown Executive: Certain of the statements made today may constitute for the These represent our present. And relevant factors that could cause actual results to differ materially are listed in our earnings materials and in our SEC filings, including our 2024.
Phil Angela: Certain of the statements made today may constitute forward looking statements. These represent our present expectations and relevant factors that could cause actual results to differ materially are listed in our earnings materials and in our SEC filings, including our 2024 Form 10-K.
Unknown Executive: During the course of today's call, we will also discuss certain non-GAP You can find the reconciliation of these to the nearest comparable gap measures in the presentation.
Phil Angela: During the course of today's call. We will also discuss certain non-GAAP measures.
Phil Angela: You can find the reconciliation of these to the nearest comparable GAAP measures in the presentation materials.
Unknown Executive: We will begin the call with an overview of our business from John, then Phil will review our financial results, and after our prepared remarks, we'll open the lines up.
Phil Angela: We will begin the call with an overview of our business from John then Phil will review, our financial results and after our prepared remarks, we'll open the lines up for your questions I'll now hand, the call over to Jonathan Thank you Greg.
Gregory Lundberg: And I will now hand the call over to Greg.
John Wren: Thank you, Greg. Good afternoon, and thank you for joining us today for our first quarter 2025 resume.
Jonathan: Good afternoon, and thank you for joining us today for our first quarter 2025 results.
John Wren: I'll begin by covering our results and then provide an update on the progress we are making towards closing our proposed acquisition of Interpublic. I'm pleased to report that we've had a good start to the year. Organic revenue growth in the first quarter was in line with our expectations of 3.4%. with strong growth in our media and advertising and precision marketing. Adjusted EBITDA margin, which excludes amortization of acquired and strategic platform intangible as well as IPG acquisition-related costs was 13.8% for the quarter. Non-GAAP-adjusted earnings per share, which excludes the after-tax amortization of acquired and strategic platform intangibles.
Phil Angela: I'll begin by covering our results and then provide an update on the progress we are making towards closing our proposed acquisition of interpublic.
Jonathan: I am pleased to report that we've had a good start to the year.
Jonathan: Organic revenue growth in the first quarter was in line with our expectations of three 4% with strong growth in our media and advertising and precision marketing disciplines, adjusted EBITDA margin, which excludes amortization of acquired and strategic platform intangibles as well as IP.
Jonathan: G acquisition related costs was 13.8% for the quarter non-GAAP adjusted earnings per share, which excludes the after tax amortization of acquired and strategic platform intangibles.
John Wren: as well as IPG acquisition related costs was $1.70 up 1.8% versus the comparable number in Q1 2024. Our cash flow and balance sheet remain very strong and support our primary uses of cash, dividends, acquisitions, and share repurchase. For most of the first quarter, we were restricted from purchasing shares until after our shareholder vote on the acquisition of Interpublic on March 18th. We expect to continue our share repurchases consistent with our approach in prior years for the remainder of 2021.
Jonathan: As well as IPG acquisition related costs was $1 70.
Jonathan: Up one 8% versus the comparable number in Q1 2024.
Jonathan: Our cash flow and balance sheet remained very strong and support our primary uses of cash dividends acquisitions and share repurchases for most of the first quarter, we were restricted from purchasing shares until after our shareholder vote on the acquisition of Interpublic on March 18th we expect to continue our share repurchases.
Jonathan: Consistent with our approach in prior years, the remainder of 2025.
John Wren: Since our last call, as you're all keenly aware, there's been increased volatility in the economy and the markets. We're assessing the implication of these events to determine how they will affect our clients and our business. As in past periods of uncertainty, our clients must continue to compete for share in a dynamic marketplace by investing and leveraging the strength of their brands and increasing and actively expanding their connection with customers. Internally, our management teams are continuing to drive operational excellence, manage costs in line with revenue, and monitor changes in the macro environment.
Jonathan: Since our last call as you all keenly aware there has been increased volatility in the economy and the markets. We are assessing the implications of these events to determine how they will affect our clients and our business as in past periods of uncertainty our clients must continue to compete for share in a dynamic market.
Jonathan: Place by investing and leveraging the strength of their brands and increasing and actively expanding their connection with customers internally. Our management teams are continuing to drive operational excellence manage costs in line with revenue and monitor changes in the macro environment.
John Wren: Given the uncertainty of the current environment, we're expanding the range of full year 2025 organic growth to between 2.5 and 4.5% and maintaining our adjusted EBITDA margin guidance to 10 basis points higher than the 15.5% we achieved in 2024. Nothing about the current environment impacts our confidence in our business and strategy or our ability to create new services and win new On the technology front, AI is touching every aspect of how our people work. It augments our insights and creativity, increases the speed and volume of personalized content. raises the level of effectiveness in targeting customers.
Jonathan: Given the uncertainty of the current environment, we're expanding the range of full year 2025 organic growth to between two five and four 5% and maintaining our adjusted EBITDA margin guidance to 10 basis points higher than that 15, 5% we achieved.
Jonathan: In 2020 for.
Jonathan: Nothing about the current environment impacts our confidence in our business and strategy or our ability to create new services and win new business.
Jonathan: On the technology front AI is touching every aspect of how our people work it augments, our insights and creativity increases the speed and volume of personalized content raises the level of effectiveness and targeting customers expand their knowledge of our talent and makes our operations more efficient.
John Wren: This program expands the knowledge of our talent and makes our operations more efficient. All of this is driving transformative outcomes for our Much of this is enabled by Omni AI, our open source platform that leverages the industry's leading generative AI models for text, graphics, video, and audio trained for our agency-specific use cases in areas such as strategy, content, and creative. Thousands of our people use Omnicom AI and we expect to add more users with the goal of having it on the desktop of every client facing Omnicom employee by the end of the year. At this point, most advances are to provide state-of-the-art tools to our employees.
Jonathan: <unk>.
Jonathan: All of this is driving transformative outcomes for our clients much of this is enabled by omni AI are open source platform that leverages the fees.
Jonathan: Fees, leading generative AI models for tax graphics video and audio trained for our agency specific use cases in areas such as strategy content and creative.
Jonathan: Thousands of our people use omni AI and we expect to add more users with the goal of having it on the desktop of every client facing omnicom employees by the end of the year.
Jonathan: At this point most advances are to provide state of the art tools to our employees, we expect that as AI tools become more reliable.
John Wren: We expect that as AI tools become more reliable and are deployed to more clients, they will result in measurable efficiencies for our business.
Jonathan: Employed tomorrow clients. They will result in measurable efficiencies for our business.
John Wren: This work directly contributed to recent recognition. In March, we were named a leader in the Forrester wave for marketing, creative, and content services. Omnicom Precision Marketing Group and Omnicom Advertising Group were recognized for their strong strategic and current offering, respectively. This evaluation followed Omnicom being named a leader across two other recent Forrester evaluations, Media and Commerce. Omnicom is the only company named a leader in Forrester's wave reports for content, commerce, and media in 2024 and 2021.
Jonathan: This work directly contributed to recent recognition in March we renamed a leader in the Forrester wave for marketing creative and content services Omnicom precision marketing group and Omnicom advertising group were recognized for their strong strategic and current offering respectively. This evaluation follow.
Jonathan: The omnicom being named a leader across to other recent Forrester evaluations media and Commerce Omnicom is the only company named a leader in forest as wave reports for content Commerce and media in 2024 and 2025 several of our agency networks are also.
John Wren: Several of our agency networks are also recognized for their outstanding performance during the quarter. On AdAge's A-list, OMD was named Media Agency of the Year, and GSDNM was recognized as an agency standard. TBWA was named to Fast Company's Most Innovative Company list for the sixth time. PHD won Adweek's Global Media Agency of the Year for the second consecutive year after successfully defending $4 billion in business while re-engineering its strategy for an AI-powered future.
Speaker Change: That is fair it outstanding performance during the quarter.
Speaker Change: On AD Age's, a list OMD was named media agency of the year and G. S. D. N M was recognized as an agency standout.
Speaker Change: <unk> was named to fast company's most innovative company list for the sixth time Phd won <unk> Global Media agency of the year for the second consecutive year. After successfully defending $4 billion business, while reengineering its strategy for in AI powered future.
John Wren: I want to congratulate everybody on these achievements.
Speaker Change: I want to congratulate everybody on these achievements.
John Wren: Turning now to our proposed acquisition of Interpublic, we made progress throughout the quarter. In March, along with Interpublic, we received overwhelming support from our respective stockholders when they voted to approve the proposed transaction. This strong support confirms the immense opportunity of having complementary assets come together to create an unmatched portfolio of talent, services, products, and platforms. We also made progress on the regulatory approval. In the last five weeks, we've received approval from five of the 18 jurisdictions under review. In the months ahead, we will continue to work on obtaining all the necessary regulatory approvals. We remain on track to close in the second half of 2021.
Turning now to our proposed acquisition of Interpublic, we made progress throughout the quarter in March along with Interpublic, we received overwhelming support from our respective stockholders when they voted to approve the proposed transaction.
Speaker Change: This strong support confirms the immense opportunity of having a complementary assets come together to create an unmatched portfolio of talent services products and platforms.
Speaker Change: We also made progress on the regulatory approval front.
Speaker Change: And the last five weeks, we have received approval from five of the 18 jurisdiction is under review in the months ahead, we will continue to work on obtaining all the necessary regulatory approvals, we remain on track to close in the second half of 2025.
John Wren: We continue to develop plans for integrating our businesses with Interpublic. We have successfully organized our portfolio at Omnicom by aligning our agencies into marketing disciplines or practices. to strengthen our depth of expertise and capabilities and to enhance collaboration across the group. This structure provides a seamless path for bringing together our operations with interpolation. adding deeper expertise and capabilities to each practice area following the closing of the acquisition.
Speaker Change: We continue to develop plans for integrating our businesses with Interpublic, we have successfully organized our portfolio omnicom by aligning our agencies into marketing disciplines or practice areas too.
Speaker Change: To strengthen our depth of expertise and capabilities and to enhance collaboration across the group. This structure provides a seamless path for bringing together our operations with interpublic, adding.
Speaker Change: Adding deeper expertise and capabilities to each practice area. Following the closing of the acquisition. Moreover across the board our practice areas will be underpinned by the best in class Tech and data platforms, including axiom, omni and flywheel commerce cloud a combination that will position.
John Wren: Moreover, across the board, our practice areas will be underpinned by the best-in-class tech and data platforms, including Appium, Omni, and Flywheel Commerce Cloud, a combination that will position us to thrive in an AI-driven Finally, we've made progress on our integration planning work, which will help us meet our targeted $750 million in run-rate cost synergies following the closing of the proposed transaction. As I've discussed in February, we have clearly identified areas of synergy opportunity, and our integration planning is well underway to ensure we achieve our targets.
Speaker Change: US to thrive in an AI driven future.
Speaker Change: Finally, we've made progress on our integration planning work, which will help us meet our targeted $750 million and run rate cost synergies. Following the closing of the proposed transaction.
Speaker Change: As I've discussed in February we have clearly identified areas of synergy opportunity in our integration planning is well underway to ensure we achieve our targets. We believe our multi year plan and the successful acquisition of Interpublic will create significant shareholder value in closing we had a good.
John Wren: We believe our multi-year plan and the successful acquisition of Interpublic will create significant shareholder value. In closing, we had a good start to the year and are focusing on servicing our clients in these unsettled times, and are on track to close the acquisition of Interpublic in the second half of the year.
Speaker Change: Start to the year and are focusing on servicing our clients in these unsettled times and are on track to close the acquisition of Interpublic in the second half of the year I'll now turn the call over to Phil for a closer look at our financial results Phil Thanks, John.
Philip Angelastro: I'll now turn the call over to Phil for a closer look at our financial results. Phil. Thanks, John. We delivered solid results. Including Organic Revenue. Growth and Adjusted EBITDA.
Speaker Change: We delivered solid results this quarter, including organic revenue growth growth in adjusted EBITDA and.
Philip Angelastro: Growth and Non-Gap Adjusted Diluted We believe that the diversification of our portfolio of agencies across geographies, industries, Let's begin with a brief overview of our earnings for the quarter on slide Reported Revenue Grew 2% Note, our total reported operating expenses include $33.8 million of IPG acquisition related costs in the first quarter. bottom of the slide. The non-GAAP measures remove these IPG acquisition related costs. just to deep it up. is also up. Related margin was flat with last year at $13.
Speaker Change: And growth in non-GAAP adjusted diluted EPS.
Speaker Change: We believe that the diversification of our portfolio of agencies across geographies industries and service offerings will help us in the uncertain environment ahead.
Speaker Change: Let's begin with a brief overview of our earnings for the quarter on slide three.
Speaker Change: Reported revenue grew 2% note.
Speaker Change: Our total reported operating expenses include $33 8 million of IPG acquisition related costs in the first quarter of 2025.
Speaker Change: At the bottom of the slide the non-GAAP measures remove these IPG acquisition related costs from.
Speaker Change: From adjusted EBITDA, which was also up 2% and the related margin was flat with last year at 13, 8%.
Philip Angelastro: Now let's go into a more detailed review of our Beginning with changes in revenue on slide. Organic growth in the quarter was 3.4%. The impact on revenue from foreign currency translation decreased reported revenue. 1.6%, a bit less than our original expectation for the quarter of 2.0 to 2.5%.
Speaker Change: Now, let's go into a more detailed review of our performance beginning with changes in revenue on slide four.
Speaker Change: Organic growth in the quarter was three 4% the.
Speaker Change: The impact on revenue from foreign currency translation decreased reported revenue by one 6% a bit less than our original expectation for the quarter of two point out of two 5% in the current environment is difficult to forecast the impact of FX rates on our future revenue for the rest of 2025.
Philip Angelastro: The current environment is difficult to forecast the impact of FX rates on our future revenue for the rest of the year. Freight stay where they were at quarter end. We estimate the impact of foreign currency translation on revenue. Negative 0.5% for Q2. Negative 1% for Q3 and flat. Results in a negative 1% reduction for the full year.
Speaker Change: Rates stay where they were at quarter end, we estimate the impact of foreign currency translation on revenue.
Speaker Change: Be negative <unk>, 5% for Q2 2025.
Speaker Change: Negative 1% for Q3.
Speaker Change: And flat in Q4, which would result in a negative 1% reduction for the full year 2025.
Philip Angelastro: The net impact of acquisitions and dispositions on reported revenue was negative zero. This time, we expect the impact of acquisitions and dispositions completed today. Minimals, Q2, and for the full year.
Speaker Change: The net impact of acquisitions and dispositions on our reported revenue was negative 0.1%.
Speaker Change: At this time, we expect the impact of acquisitions and dispositions completed to date will be minimal for Q2 and for the full year 2025.
Philip Angelastro: Turn to slide 5 and review the quarterly organic revenue growth trend.
Speaker Change: Let's turn to slide five and review of the quarterly organic revenue growth trends by discipline.
Philip Angelastro: First, however, I'd like to point out a change we made. Connection with the rollout of Omnicom Production and Omnicom Advertising. We've made some minor reclassifications of certain revenue related to changes in the agency group. Cross our Service Discipline. Find the revised Revenue by Discipline presentation. The reclassifications of the historical 2024 and 2020.
Speaker Change: First however, I'd like to point out a change we made for 2025.
Speaker Change: In connection with the rollout of Omnicom production and Omnicom advertising group.
Speaker Change: We've made some minor reclassifications of certain revenue related to changes in the agency groupings across our service disciplined categories.
Speaker Change: You can find the revised revenue by disciplined presentation.
Speaker Change: With the Reclassifications of the historical 'twenty, 'twenty, four and 2023 numbers.
Philip Angelastro: in the appendix on slides 21. Turning to the quarter, media and advertising was up 7%, driven by strong growth in our media businesses across our Precision Marketing Group Driven primarily by strong performance in the U.S., partially offset by mixed Growth reflects strength from the benefits of new business wins in our CRM agencies that began late last year. As well as continued good performance at home. Public relations declined 5% Due to certain client delays and reductions from certain government The year progresses, we expect benefits from public affairs. And we expect a difficult comp for the rest of 2025 related to the benefit in 2024 from U.S.
Speaker Change: In the appendix on slides 21 and 'twenty two.
Speaker Change: Turning to the quarter media and advertising was up 7% driven by strong growth in our media businesses across our geographies.
Speaker Change: And mixed performance across our advertising agencies, which were down a bit.
<unk> marketing grew 6% driven primarily by strong performance in the U S, partially offset by mixed performance in other geographies.
Speaker Change: Both reflect strength from the benefits of new business wins in our CRM agencies that began late last year as well as continued good performance that flywheel.
Speaker Change: Public relations declined 5% due to certain client delays and reductions from certain government clients as the year progresses, we expect benefits from public affairs activity in our specialty agencies.
Speaker Change: We expect a difficult comp for the rest of 2025 related to the benefit in 2024 from U S election related spend.
Philip Angelastro: elections. Execution and Support Group 2.0 driven by growth at our custom community. Offset by declines that are Driven by the Middle East. Partially offset by strong growth in the U.S., Europe, and Canada. We also expect a difficult comp in Q2 and Q3 related to the benefit in 2024 from Olympic Healthcare revenues were down 3%. slightly better than a decline Our health group manages through some delays. And as they complete cycling on a We expect improved growth in the second half as the Branding and Retail Commerce was down 10%. Most of the decline in our brand.
Speaker Change: Execution and support grew 2% driven by growth at our customer communications businesses offset by declines at our merchandising business.
Speaker Change: Experiential declined 1% driven.
Speaker Change: Driven by the Middle East and Asia Pacific, partially offset by strong growth in the U S Europe and the U K.
Speaker Change: We also expect a difficult comp in Q2, and Q3 related to the benefit in 'twenty 'twenty four from Olympics related spend.
Speaker Change: Health care revenues were down 3% as expected.
Speaker Change: Slightly better than a decline in Q4 as our health group manages through some delays in client product launches.
Speaker Change: And as they complete cycling on a client loss.
Speaker Change: We expect improved growth in the second half as the year progresses.
Speaker Change: Branding and retail commerce was down 10% with most of the decline in our branding business.
Philip Angelastro: Due to uncertain market conditions impacting both new brand Rebranding Projects. as well as the continued slowdown from M&A.
Speaker Change: Which was due to uncertain market conditions impacting both new brand launches and rebranding projects.
Speaker Change: As well as the continued slowdown from M&A activity.
Philip Angelastro: Returning to organic revenue growth by geography on slide 6, our largest market, the U.S., had organic growth of 5%. In Latin America grew a strong Europe Experience Growth next by and Asia Pacific also posts. All set by declines in the UK and the Middle East. If we look at the global trade on... We expect our geographic diversification to provide balance. The U.S. remains approximately half of our revenue, and it's worth noting.
Speaker Change: Turning to organic revenue growth by geography on slide six our largest market. The U S had organic growth of 5%.
Speaker Change: And Latin America grew a strong 15%.
Speaker Change: Europe experienced growth, but it was mixed by market and Asia Pacific also posted growth offset by declines in the U K and the Middle East and Africa.
Speaker Change: We look at the global trade uncertainty, we expect our geographic diversification to provide balance to our results.
Speaker Change: The U S remains approximately half of our revenue and it's worth noting that in fiscal year 'twenty 'twenty four China was only 2% of our total revenue.
Philip Angelastro: School Year 2024, China was only 2% of our Slide seven is our revenue by industry sector. There were no notable changes.
Speaker Change: Slide seven is our revenue by industry sector for the quarter.
Speaker Change: There were no notable changes to discuss.
Philip Angelastro: Now let's move down the income statement and look at our expenses on slide 8. ¼. Salary-related service costs were down on both the reported and constant dollar Driven by our continued efficient and ongoing changes in our global.
Speaker Change: Now, let's move down the income statement and look at our expenses on slide eight.
Speaker Change: In the quarter salary related service costs were down on both a reported and constant dollar basis, driven by our continued efficiency initiatives and ongoing changes in our global employee mix.
Philip Angelastro: Q1 2025 Employee Baseline. Third-party service costs grew in connection with the growth in our revenue, primarily in the median. Third-party incidental costs, which are out-of-pocket costs billed back to clients at our cost, also go up. Occupancy and Other Costs Include office rent, other occupancy technology.
Speaker Change: Our Q1 2025 employee base is down from Q1 of 2024.
Speaker Change: Third party service costs grew in connection with the growth in our revenue primarily in the media and advertising discipline.
Speaker Change: Third party incidental costs, which are out of pocket costs build back to clients at our cost also grew in connection with the revenue growth.
Speaker Change: Occupancy and other costs were flat. These include office rent other occupancy technology and general office expenses.
Philip Angelastro: SG&A expenses increased due to the $33.8 million of IPG acquisition. © The Bulletproof Executive 2013 All Rights Reserved.
Speaker Change: SG&A expenses increased due to the $33 8 million of IPG acquisition related costs in the first quarter of 2025 <unk>.
Philip Angelastro: Excluding these costs, reported SG&A Please turn to slide 9 to look at our income statement.
Speaker Change: Excluding these costs reported SG&A expenses declined by about 1%.
Speaker Change: Please turn to slide nine to look at our income statement in more detail.
Philip Angelastro: Excluding the acquisition-related costs from the first quarter. Non-Gap Adjusted EBITDA Group 1.0 related margin was flat at Foreign Exchange Translation, Reduced EBITDA by Approximation. Moving down the Net interest expense in the first quarter of 2025 increased $2.6 million to $29 million.
Speaker Change: Excluding the acquisition related costs from the first quarter of 2025 non.
Speaker Change: non-GAAP adjusted EBITDA grew one 6% and the related margin was flat at 13, 8% compared to last year.
Speaker Change: Foreign exchange translation reduced EBITDA by approximately 1.5%.
Speaker Change: Moving down the income statement net interest expense in the first quarter of 2025 increased $2 6 million to $29.4 million.
Philip Angelastro: This increase is the result of having a full quarter of Q1 2020.
Speaker Change: This increase is the result of having a full quarter of interest expense in Q1 2025.
Philip Angelastro: that we issued in early March 2024.
Speaker Change: From the debt we issued in early March 2024 in connection with the flywheel acquisition.
Philip Angelastro: Connection with the fly. The increase in expense was partially offset by an increase in... higher average Our income tax rate was 28.5%. compared to 25.7% in the prior year. He increases primarily due to the non-deductibility.
Speaker Change: The increase in expense was partially offset by an increase in interest income due to higher average cash balances.
Speaker Change: Our income tax rate was 28, 5% in Q1 of 2025.
Speaker Change: There to 25, 7% in the prior year.
Speaker Change: The increase was primarily due to the non deductibility of certain acquisition related costs in 2025.
Philip Angelastro: Excluding a tax impact on these calls. Q1 2025 rate was up a bit. Full year 25, we expect the rate...
Speaker Change: <unk> a tax impact on these costs. Our Q1 2025 rate was up a bit from Q1 2024 of 26, 7%.
Speaker Change: For full year 'twenty five we expect the rate to be between 26, five and 27.
Philip Angelastro: 26-5. Average diluted shares outstanding were down 1% from Q1. due primarily to repurchase activity. Afforded to Looted Earnings Per Share was down $8.
Average diluted shares outstanding were down 1% from Q1 of <unk>.
Speaker Change: One of 2024, due primarily to repurchase activity last year reported.
Speaker Change: Reported diluted earnings per share was down eight 8% due to the after tax acquisition related costs.
Philip Angelastro: Unadjusted. Diluted earnings per share increased 2% to $1. The effects of foreign currency translation reduce dilutivity.
Speaker Change: On an adjusted basis diluted earnings per share increased 2% to $1 70.
Speaker Change: The effects of foreign currency translation reduced diluted EPS by two cents.
Philip Angelastro: Now please turn to slide 10 for a look at free cash flow. The year-over-year decline in the quarter was driven primarily by a reduction in net Includes the impact.
Speaker Change: Now please turn to slide 10 for a look at free cash flow for the first quarter.
Speaker Change: Year over year decline in the quarter was driven primarily by a reduction in net income which includes the impact of the acquisition related costs.
Philip Angelastro: However, for the 12 months ending March 31st, 2025. Free Cash Flow Increase 3.0 Free cash flow definition excludes Our working capital followed its normal seasonal pattern.
Speaker Change: However for the 12 months ending March 31 2025.
Speaker Change: Our free cash flow increased three 5% driven primarily by improved operating income and net income.
Speaker Change: Our free cash flow definition excludes changes in working capital now.
Speaker Change: Our working capital followed its normal seasonal pattern in the first quarter and over time, we expect to trend back towards our historical annual level, that's close to neutral regarding our primary uses of free cash flow for the three months ended March 31st.
Philip Angelastro: We expect to trend back towards our historical annual level. Regarding our primary uses of free cash flow for the three We used $138 million of cash to pay for dividends to common Capital expenditures were $30 million. As expected.
Speaker Change: We used $138 million of cash to pay for dividends to common shareholders and another $13 million for dividends to noncontrolling interest shareholders.
Speaker Change: Capital expenditures were $30 million as expected the spend was a bit higher this period, reflecting ongoing investments in our strategic technology platform initiatives.
Philip Angelastro: Spend was a bit hard. Collecting Ongoing Investments Total Acquisition Included earn out payments and the acquisition of additional non-controlling interest were $4 million.
Speaker Change: Total acquisition payments, which include earn out payments and the acquisition of additional Noncontrolling interests were $4 million as a reminder, in the first quarter of last year, we closed on the acquisition of flywheel for $845 million net of cash acquired.
Philip Angelastro: And as a reminder, in the first quarter of last... Closed on the acquisition of Flywheel for $845,000.
Philip Angelastro: Finally, our Share Purchase Act. Excluding Proceeds from Stock Plans of $12 . Full year 2025, we still expect to return. Annual Purchase Level of Proximity.
Speaker Change: Finally, our share repurchase activity was $81 million, excluding proceeds from stock plans of $12 million.
Speaker Change: For full year 2025, we still expect to return to an annual repurchase level of approximately $600 million.
Philip Angelastro: We resumed our activities subsequent to the success.
Speaker Change: And we resumed our activities subsequent to the successful March 18th stockholder vote on the ITG acquisition.
Philip Angelastro: Slide 11 is a summary of our credit, liquidity, and debt.
Speaker Change: Slide 11 is a summary of our credit liquidity and debt maturities at.
Philip Angelastro: The end of Q1 2025. Book Value of Our Outstanding Debt. We have no maturities in 2025.
Speaker Change: At the end of Q1 'twenty 'twenty five.
Speaker Change: Book value of our outstanding debt was $6 1 billion flat.
Speaker Change: Flat with the same prior year period.
Speaker Change: We have no maturities in 2025 and expect to address our April 2026 maturities. After the expected closing of the ITG acquisition in the second half of 2025.
Philip Angelastro: Thank you.
Philip Angelastro: After the expected closing of the IPG acquisition in the second We estimate that net interest expense will increase by $2 to $5 million in Q2 compared to Q2. by $15 to $20 million for the full year. related to lower estimates of Cash Equivalents and Short-Term Investments. The end of the quarter with 3.4. Continue to maintain an undrawn $2.5 billion revolving credit. backstops are $2 billion U.S.
Speaker Change: We estimate that net interest expense will increase by $2 million to $5 million in Q2 compared to Q2 of 2024.
Speaker Change: And by $15 million to $20 million for the full year related to lower estimates of interest income in the second half.
Speaker Change: Our cash equivalents and short term investments at the end of the quarter were $3 $4 billion.
Continue to maintain an undrawn $2 5 billion revolving credit facility, which backstops, our $2 billion of U S commercial paper program.
Philip Angelastro: We will assess our revolver capacity in connection with the closing of the proposed IP.
Speaker Change: We will assess our revolver capacity in connection with the closing of the proposed IPG acquisition.
Philip Angelastro: Slide 12 presents our historical returns on two 12 Months Ended.
Speaker Change: Slide 12 presents our historical returns on two important performance metrics for the 12 months ended March 31 2025.
Philip Angelastro: Omnicom is a return on invested capital. both of which reflect our strong year-over-year change. is driven by the IPG acquisition-related costs incurred in the 12-month period.
Speaker Change: On the company's return on invested capital was 20%.
Speaker Change: Our return on equity was 37%.
Speaker Change: Of which reflect our strong performance and strong balance sheet.
Speaker Change: The year over year change is driven by the IPG acquisition related costs incurred in the 12 months ended March 31 2025.
Unknown Executive: I will now ask the operator to please open the lines up for questions and answers. Thank you.
Speaker Change: I'll now ask the operator, please open the lines up for <unk>.
Speaker Change: <unk> and answers thank you.
Speaker Change: Thank you.
Unknown Executive: If you would like to ask a question, please press star 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again. Please ensure that you are not on speakerphone and that your phone is not on mute when called upon. Thank you.
Speaker Change: To ask a question. Please press star one on your telephone keypad. If you would like to withdraw your question simply press Star one again.
Please ensure that you are not on speaker phone and that your phone is not on mute when called upon.
Speaker Change: Yeah.
Speaker Change: First question.
Speaker Change: Adam Berlin from UBS Your line is open.
Speaker Change: Okay.
Unknown Executive: Hi, good evening. And thank you for taking the question. Can you just say a little bit more about your decision to lower the bottom end of the guidance range for 2025 to 2.5%? Is that because you've actually seen some advertisers do that? Yes.
Speaker Change: Hi, good evening and thank you for taking the question can.
Speaker Change: Can you just say a little bit more about your decision to lower the bottom end of the guidance range for 2025 to two 5% is that because you've actually seen some advertisers.
Speaker Change: Start to talk to you about cutting their spend.
Unknown Executive: Unknown Executive, Adrien Hilaire, David Karnovsky, Philip Angelastro, Julien Roch, Craig Huber, Krakowsky, Philip Angelastro, Julien Roch, Craig Huber, David Karnovsky, Philippe Krakowsky, Unknown Executive, Adrien Hilaire, David Karnovsky, Philip Angelastro, Julien Roch, Craig Huber, and that would be quite helpful.
Speaker Change: Or is that just something that could.
Speaker Change: Could happen based on what Youre hearing about the broader macro.
Speaker Change: That would be quite helpful and any trends about how Q2 has started in the first couple of weeks would be very helpful as well. Thanks.
John Wren: And any trends about how Q2 has started in the first couple of weeks would be very helpful as well. Adam, it's the latter. We're being conservative in lowering the bottom end. And you have to look at our business when it gets This type of an environment, our advertising media and CRM businesses remain strong. We didn't change the forecast on those where, where if we had doubts, it was really more in the events business as companies probably get a little bit more conservative. And we're up against one because of, as Phil mentioned, the Olympics. There might be fewer projects.
Speaker Change: Adam its the ladder, we're being conservative.
Speaker Change: In <unk> and lowering.
Speaker Change: The bottom end.
Speaker Change: And.
Speaker Change: You have to look at our business.
Speaker Change: When it gets.
Speaker Change: This type of environment.
Speaker Change: Advertising media and CRM businesses remained strong we didn't change the forecast on those where were if we had doubts it was really more in the events business as companies, probably get a little bit more conservative.
Speaker Change: We are up against.
Speaker Change: One because of.
Speaker Change: Bill mentioned the Olympics.
Speaker Change: There might be fewer projects and also in the latter part of the year because this is annual guidance.
John Wren: And also, in the latter part of the year, because this is annual guidance, we had the elections last year, which we don't have again this year. It's that's the segments of the business in terms of how we looked at it to be conservative. We're striving to get to the top end always. And we're still.
Speaker Change: We had the elections last year, which.
Speaker Change: We don't have again this year so it's big.
Speaker Change: It's that's the segments of the business in terms of how we looked at it to be conservative.
We're striving to get to the top end always.
Speaker Change:
Speaker Change: And we're still.
John Wren: There's still some confusion. There's still confusion in the marketplace. As we look at the, especially the next 90 days, and how some of these Tariffs and other moves get negotiated, or do they stay in place? So it's that uncertainty where we didn't want to surprise anybody later in the year that we chose to be conservative. Yeah, and it doesn't, as John said, reflect any specific client actions taken to date.
Speaker Change: There's still some confusion out there is still confusion in the marketplace.
Speaker Change: As we look at the especially in the next 90 days and how some of these.
Speaker Change: Tariffs and other moves get negotiated.
Speaker Change: Or do they stay in place so.
Speaker Change: Is that uncertainty, where we didn't want to surprise anybody later in the year.
John Wren: We chose to be conservative, yes, it does and it doesn't but as John said reflect any specific client actions taken to date.
Speaker Change: Yeah.
Unknown Executive: Okay, thank you very much.
Speaker Change: Okay. Thank you very much.
Speaker Change: Okay.
Speaker Change: Next question comes from David Karnofsky with J P. Morgan Your line is open.
Unknown Executive: Hey, thanks. Just kind of going back to something Phil had said, it sounded like for PR, there were some delays in government spend. I don't know if you could dig into that a bit. Is that for the U.S. or other regions? And then for branding and commerce, you know, this is an area that was already lagging last year. Curious how much of the delays you're seeing there is new.
Speaker Change: Hey, Thanks, I'm, just kind of going back as have been fill it said.
Speaker Change: It sounded like for PR or there were some delays in government spend I don't know if you could dig into that a bit is that fair to U S or other regions and then for branding and commerce.
Speaker Change: This is an area that was already lagging last year I'm curious how much of the delays youre seeing there is new.
Unknown Executive: And then specifically for Phil, just as you consider the uncertainty and possibility of clients adjusting their spend, how are you thinking about your own cost base and what's your confidence in holding margin in some of the more adverse scenarios you might see?
Speaker Change: And then specifically for Phil just as you consider the uncertainty impossibility of clients adjusting their spend how are you thinking about your own cost base and what's your confidence in holding margin.
Speaker Change: And some of the more adverse scenarios you might say.
John Wren: Okay, I'll leave the first part of your question to Phil, although I can tell her. We are constantly, and I think we have a very solid track record in this, in looking at our business and adjusting, because we have a very flexible cost basis, adjusting our cost basis so as to stay in line with whatever the revenue trends are. God knows never tested the same twice but we've been tested quite a bit over the years and if you look back across that We have a very, very competent management way below the corporate management, looking and concerning ourselves with that all the time.
Speaker Change: Okay.
Speaker Change: The first part of your question there Phil.
Speaker Change: I can cover.
Speaker Change: Okay.
Speaker Change: We are constantly and I think we have a very solid track record in this.
Speaker Change: In.
Speaker Change: Looking at our business and adjusting because we have a very flexible cost basis.
Speaker Change: Testing our cost basis, so as to stay in line with whatever the revenue trends are.
Speaker Change: And.
Speaker Change: God knows never test into the same twice, but we've invested quite a bit over the years and if you look back across that.
Speaker Change: We have a very very competent management way below the corporate management.
Speaker Change: And concerning themselves without all the time.
John Wren: So that would be one answer.
Speaker Change: So that would be one answer.
Speaker Change: Yes.
John Wren: The one PR. The event was something in the U.S., it was, was it FDA related? Yeah, there's a, there's a, yeah, there was, I would say, not a large trend that, that we're concerned about going forward. But there's just a minor year over year comparison difference in terms of some projects then that didn't happen in Q1 that was there the year before in the PR business. I think you're not going to see the impact. of the year-over-year comps related to election spend until probably a little bit in Q2 and then PR was especially strong in that area in Q3 and Q4.
Speaker Change: One P R.
Speaker Change: Event was something in the U S.
Speaker Change: What was it FDA related yeah.
Speaker Change: Yeah.
Speaker Change: They're there.
Speaker Change: Yeah, there was I would say not a large trend that that we're concerned about going forward, but then there's just the minor year over year comparison difference.
Speaker Change: In terms of some project spend that didn't happen in Q1 that was there.
Speaker Change: The year before and the PR business.
Speaker Change: I think youre.
Speaker Change: Youre not going to see the impact.
Speaker Change: The year over year comps related to election spend.
Speaker Change: Until probably a little bit in Q2 and then.
Speaker Change: PR was especially strong in that area in Q3 and Q4. So we do have a difficult comp in Q3 and Q4.
John Wren: So we do have a difficult comp in Q3 and Q4. To your specific question on the cost base and margins, you know, John just referred to this, but certainly we are always very focused on making sure we take the appropriate actions to rationalize and adjust. The flexible cost base that we have to our current Unknown Executive, Adrien Hilaire, David Karnovsky, Philip Angelastro, Julien Roch, Gregory Lundberg, Tim Nollen, Omnicom Group Inc, Unknown Executive, Adrien Hilaire, David Karnovsky, Philip Angelastro, Tim Nollen, Omnicom Group Inc, Unknown Executive, Adrien Hilaire, David Karnovsky, Philip Angelastro, You know, very carefully and aggressively, if need be, to make sure that we're not out ahead of it from a cost-based perspective.
Speaker Change: To your to your specific question on the cost base and margins.
Speaker Change: Yes, John just referred to this but but certainly.
Speaker Change: We are always.
Speaker Change: Very focused on making sure we take the appropriate actions to rationalize and adjust.
Speaker Change: The flexible cost base that we have to our.
Speaker Change: Current <unk>.
Speaker Change: <unk> revenues.
Speaker Change: To the extent that there is a pause or clients.
Speaker Change: Decide to delay projects band or delay spend in some way.
Speaker Change: Depending on how some of this tariff uncertainty gets resolved.
Speaker Change: We're going to be very active in making sure we take the appropriate actions.
As opposed to kind of keep our fingers crossed and hope.
Speaker Change: Yeah. The best scenarios are the ones that come forward. So we're certainly going to be planning.
Speaker Change: Hum.
Yes very.
Speaker Change: <unk> carefully and aggressively if need be.
Speaker Change: To make sure that we're not out ahead of it from a cost base perspective. So we're comfortable certainly based on everything we know today.
John Wren: So we're comfortable, certainly based on everything we know today, that we'll hit our expectations as far as operating earnings and our margin targets. But there is still quite a bit of uncertainty out there as far as tariffs and what's going to happen to the top line. But we haven't seen any specific actions by clients that have happened yet. We're just being cautious, as we mentioned earlier, in answer to Adam's question. Sure.
Speaker Change: That will hit.
Speaker Change: Our expectations as far as.
Speaker Change: Operating earnings and our margin targets, but.
Speaker Change: There is still quite a bit of uncertainty out there as far as tariffs and what's going to happen to the top line.
Speaker Change: But we haven't we haven't seen any specific actions by clients.
Speaker Change: That are happened yet, we're just being cautious as we mentioned earlier in answer to Adam's question sure.
John Wren: One other little tidbit, because... This is early in the cycle. A lot of our larger clients don't come out with quarterly reports until later in the month, which we'll all learn a little bit more. But with the sensible delay of 90 days in the car. I think it gives many of our clients the opportunity to. People who acquire more inventory at reasonable prices and tend to frontload or look to frontload sales in the first half of the year. It's in the... The uncertainty really comes in later on in the third, fourth quarter. And hopefully that will get...
Speaker Change: One of that little tidbit, there it goes.
Speaker Change: This is early in the cycle a lot of our larger clients don't come out with quarterly reports until later in the month, which we'll all learn a little bit more.
Speaker Change: But with the sensible delay of 90 days in the cars.
Speaker Change: I think it gives us so many of our clients the opportunity.
Speaker Change: Two.
Speaker Change: Require more inventory at reasonable prices.
Speaker Change: Tend to Frontload or look to frontload sales in the first half of the year.
Speaker Change: Assumed.
Speaker Change: Uncertainty really comes in.
Speaker Change: Later on EMEA third fourth quarter, and hopefully that'll get we'll get more clarity as we.
John Wren: We'll get more clarity as we... As we continue. Sorry to be clear, I think you said that you haven't seen clients, you know, take action on anything yet. But I thought with branding, for instance, you had mentioned some on branding and yeah, no, yeah, brand branding is a category, but it's such a small category within the overall Omnicom. There's It's really. It's really three very, very well-known boutiques who are the leaders in branding and when they tend to prosper in years where there's a lot of M&A going on and a lot of changes, you know, that people, corporations who are considering maybe rebranding their corporations or getting swept up in a merger.
Speaker Change: As we continue.
Speaker Change: Okay.
Speaker Change: I'm sorry to be clear I think you said you haven't seen clients.
Speaker Change: Take action on anything yet.
Speaker Change: I thought with branding for instance, you had mentioned.
Speaker Change: The Moss landing is yes, yes, yes.
Speaker Change: Yeah, Brian brand names that category, but it's such a small category within the overall omnicom theirs.
Speaker Change: It's really.
Speaker Change: It's it's really three.
Speaker Change: Very well very well known boutiques, who are the leaders in branding.
Speaker Change: And when they tend to prosper in years, where there was a lot of M&A going on and a lot of changes.
Speaker Change: And people cooperations.
Speaker Change: <unk>, maybe changing rebranding their corporations.
Speaker Change: Giving swept up in a merger.
John Wren: And in periods like this, where there's been a pause in a lot of that activity, naturally, we fully expect... that revenue is going to be off a bit. But it's, yeah, in total, it's about 2% or less than 2% of our total revenues. And it's had challenges all throughout 2024, for pretty much similar reasons to what I indicated in my prepared remarks. We unfortunately see that continuing through, you know, the first two, if not three quarters of this year, as it kind of writes itself and continues to pursue new opportunities, but that's a unique business that's managing through some Unique challenges in its industry right now, and specifically, and not to beat this to death, but I started off by saying advertising, media, and CRM remain strong.
Speaker Change: And in periods like this where there's been a pause and a lot of that activity naturally we fully expect.
Speaker Change: The revenue is going to be off a bit.
Speaker Change: But it's yes in total its inaugural year.
Speaker Change: I know, 2% or less than 2% of our total revenues.
Speaker Change: And it has had challenges all throughout 2024.
Speaker Change: Or pretty much similar reasons to what I indicated in my prepared remarks.
Speaker Change: We unfortunately see that.
Speaker Change: Continuing through.
Speaker Change: Yes, the first two if not three quarters of this year.
Speaker Change: As it had been.
Speaker Change: Writes itself and continues to pursue.
Speaker Change: New opportunities, but that's a unique that's unique business, that's that's managing through some <unk>.
Speaker Change: Unique challenges in its industry right now.
Speaker Change: Specifically and not to beat this to death, but.
Speaker Change: I started off by saying advertising media and <unk>.
Speaker Change: Remains strong also in those categories. Specifically there are some very positive potential new business that were not really defending but we're on the offense.
John Wren: Also in those categories specifically, there's some very positive potential new business that we're not really defending, but we're on the offense. And if we continue to win our fair share, that'll contribute to us getting to the closer Closer to the top end alert. of our forecast.
Speaker Change: We continue to win our fair share that'll contribute to us getting to the closer.
Speaker Change: And to the top end of our.
Speaker Change: Our forecast.
Unknown Executive: Oh, Paul, thank you.
Speaker Change: Helpful. Thank you.
Speaker Change: The next question comes from Jason Bazinet with Citi. Your line is open.
Unknown Executive: I know everyone is so focused on the macro in 25, but I would just like to ask a question about 2026, actually. It let's let's assume that the IPG transaction closes. When when do you think the street will have evidence or you will have evidence that the market has embraced? Pro Forma. to win business as opposed to the bears. © The Bulletproof Executive 2013 Is that something that will become evident, do you think, in 26, or do you think we won't really see it in the...
Speaker Change: I know everyone is so focused on the.
Speaker Change: The macro on 25, but I would just like to ask a question about 2026 actually.
Speaker Change: Tom.
Speaker Change: Let's let's assume that the IPG transaction closes.
Speaker Change: Yeah.
Speaker Change: When do you think the street will have evidence or you will have evidence that the market has embraced your notion that the pro forma firm will be in a better position.
Speaker Change: To win business as opposed to the bearish argument, which is you.
Speaker Change: You might lose some accounts because of the transaction is that is that something that will become evident do you think in 2006 or do you think it really we won't really see it in the organic numbers until 'twenty seven or be.
Speaker Change: Uh huh.
John Wren: My personal opinion, specific to that question, we have not had any any client of any significance that we're in fear of losing because of the transaction. and especially in environments like this. I doubt.
Speaker Change: My personal opinion specific to that question.
Speaker Change: We have not had any.
Speaker Change: Any client of any significance.
Speaker Change: We are in fear of losing because of the transaction.
Speaker Change: And especially in an environment like this.
Speaker Change:
Speaker Change: I doubt.
John Wren: that many There's always going to be some, there is some every single year, but if you're running a company right now, unless you're going to get some great efficiency by putting your advertising and marketing into review, you're not going to proactively disrupt your own organization. So I think, and I'm not sure I know you, Jason, but I think what what you're What you're asking the question about is certainly a valid question, but that's just nonsense fed by my competitors to the trade regs, all right, that I'm going to lose people and I'm going to lose accounts and I'm going to lose this, that, and the other thing.
Speaker Change: That many.
Speaker Change: There's always going to be some lose there is every single year, but if you're running a company right now unless youre going to get some great efficiency by putting your advertising and marketing into review you are not going to proactively to shore up your own organization.
Speaker Change: So I think.
Speaker Change: I'm not sure I know you Jason but.
Speaker Change: I think what.
Speaker Change: Richard.
Speaker Change: Whereas you're asking the question about is certainly a valid question, but that's just nonsense fed by my competitors to the trade rags.
Speaker Change: Alright that youre going to lose people and I'm going to lose accounts and I'm going to lose this that not.
John Wren: Not true.
Speaker Change: Not true.
John Wren: Yes, just to add, it's very disruptive. for the client to make a change. And especially in this environment. Yeah, there will have had to be some Some underlying, you know, strategic reasons why they would go ahead and do that beyond the ones that had started that process already. And I think this is also part of your question, Jason. We can go back. We have much clearer sight on the synergies we promised today, and we continue to have many work streams where we're actively planning to achieve those synergies. Understood.
Speaker Change: Oh, yes.
Speaker Change: Just to add it's very disruptive.
Speaker Change: So the client to make a change and especially in this environment.
Yes, they will have had to be some.
Speaker Change: Some underlying.
Strategic reasons why they would go ahead and do that beyond the ones that had started that process already.
Speaker Change: And.
Jason Bazinet: I think I think this is also part of your question Jason When you can go back.
Well.
Jason Bazinet: Much clearer site on the synergies we promised today and we continue to have many work streams, where we're actively planning to achieve those synergies.
Speaker Change: Understood. Thank you Bob.
Unknown Executive: Thank you both. Thank you.
Jason Bazinet: Thank you.
Speaker Change: The next question comes from Cameron <unk> of Morgan Stanley. Your line is open.
Unknown Executive: Thank you John. Thanks Phil.
Speaker Change: Hey, John Hey, Phil.
Unknown Executive: I just wanted to ask if you're able to provide Marketing Growth, X, Y.
Speaker Change: Alright.
Speaker Change: Wanted to.
Speaker Change: As.
Speaker Change: We were able to provide the precision marketing growth ex flywheel.
Unknown Executive: And secondly, curious of any update to the regulatory review of the IPG deal, timing of integration, potential client conflicts that may have arisen.
Speaker Change: And then secondly, curious any update to the regulatory review of the IPG deal.
Speaker Change: Timing of integration potential client conflicts that may have arisen.
Philip Angelastro: I'll take the precision question. I, you know, in the first quarter, I would say. You know, Flywheel grew, its smallest quarter is always the first quarter, its growth was fine, but it was lower than the average in the overall category, and the rest of the CRM precision group probably grew faster than the average in the category. And today... Out of 18 requests from governments, regulators for approval, we've received five. Actually, the most recent one, which we got just a couple of days ago, was China.
Speaker Change: I'll take the the precision question.
Speaker Change: In the first quarter I would say.
Speaker Change:
Speaker Change: Plot flywheel grew at its smallest quarter is always the first quarter growth is fine.
Speaker Change: But it was lower than the average and in the overall category and the rest of the CRM precision group probably grew faster than the average.
Speaker Change: In the category.
Speaker Change: And today.
Speaker Change: How does 2018.
Requests from governments regulators for approval.
Speaker Change: <unk> received five actually the most recent one which we got just a couple of days ago was China and you know on the call will remember this but.
Philip Angelastro: And you, no one on the call will remember this, but... 10 or 11 years ago when we were trying to do publicist, the place that we had trouble getting approval was China, and we've already received that. in this process already. So we are very confident. Advisors and attorneys who are guiding us through that process as we speak.
Speaker Change: 10, or 11 years ago, when we were trying to do a publicist.
Place, though we had trouble getting approval was China and we've already received that.
Speaker Change: And this process already so we are very confident.
Speaker Change: Advisors and attorneys.
Speaker Change: Who are guiding us through that process as we speak.
Unknown Executive: Great, thanks.
Speaker Change: Great. Thanks.
Steven Cahall: The next question comes from Steven Cahall. Thank you.
Speaker Change: The next question comes from Steven Cahall with Wells Fargo. Your line is open.
Steven Cahall: Thank you John I was wondering if you could spend a little time talking specifically about trends in pharma and health I think that's your biggest industry vertical and in health care has its own discipline within the revenues. There just wondering if you see this area as having.
Steven Cahall: John, I was wondering if you could spend a little time talking specifically about trends in pharma and health. I think that's your biggest industry vertical, and healthcare is its own discipline within the revenues. So just wondering if you see this area as having less risk on some of these concerns than the rest of the portfolio, or a little more risk, now that we're dealing with some of this extra uncertainty in 2025.
Steven Cahall: Less risk on some of these concerns and the rest of the portfolio are a little more risk.
Steven Cahall: Now that were dealing some of the extra uncertainty and in 2025.
Steven Cahall: And then also, I just wanted to dig a little more into media and advertising. You've had a number of quarters where your third-party expense growth remains healthily in the teens. So I'm guessing media continues to grow really well. Is creative also growing really healthily within that? I've sensed from some peers that it might be under a little bit of pressure. So just wanted to know if you're seeing any pressure on creative or it's still really solid, just not as...
Speaker Change: And then also I just wanted to dig a little more in the media and advertising or you've got a number of quarters, where your third party expense growth remain healthily in the teens. So I'm guessing media continues to grow really well.
Speaker Change: His creative also growing really healthily within that I've sensed from some peers that it might be under a little bit of pressure, but I. Just wanted to know if you're seeing any pressure on creative or it's still really solid just not as good as media given a lot of your account one thank you.
John Wren: So first, health care. Health care. I think the decline of what you saw in the first quarter was us just working through the loss of Pfizer and one or two other minor accounts, and we're phasing through that as we get into the beginning of 2025. It's still a very strong business. Our businesses in healthcare go all the way. are dedicated to different aspects of Creating a drug, bringing a drug to market, getting the appropriate approvals from the The stronger regulatory bodies around the world, which are principally, you know, the U.S., also Germany is very strong, too, in terms of its procedures, what is not a big part of our business is.
Speaker Change: So first health care.
Speaker Change: Healthcare.
Speaker Change: As.
Speaker Change: I think the decline or what you saw in the first quarter was us just working through the loss of Pfizer.
Speaker Change: And one or two other minor accounts and we're phasing through that as we get into the beginning of 2025.
Speaker Change: It's still a very strong business.
Speaker Change: Our businesses in health care and go all the way.
Speaker Change: Our dedicated and different aspects of.
Speaker Change: Creating a drug bringing a drug to market getting the appropriate approvals from the.
Speaker Change: The stronger regular regulatory bodies around the world, which are principally.
Speaker Change: The U S.
Speaker Change: Germany is very strong too in terms of its procedures.
Speaker Change: One.
Speaker Change: It is not a big part of our business is.
John Wren: The stuff you'll see on the 6 o'clock news like biosympathetic and, you know, here's a mom, a dad, and a cat, and somebody needs to lose weight because they have diabetes. That's not a very large part of that segment for us. It's more specific, very high science. The employees that we have in those categories are extremely well-educated and very specifically educated in terms of medicine. So I see it as. As I look forward, I see healthcare as being a very important segment in what we do.
Speaker Change: This stuff he will stay on the six o'clock news biocentric in.
Speaker Change: Yeah.
Speaker Change: My mom and dad in the cat and some of them used to lose weight because they have diabetes, that's not a very large part of.
Speaker Change: That segment first as more specific very high science.
Speaker Change: The employees that we have in those categories are extremely well educated and very specifically educated and in terms of medicine.
Speaker Change: So.
Speaker Change: I see it is.
Okay.
Speaker Change: Look forward I see health care as being a very important segment.
Speaker Change: And what we do.
John Wren: and and I apologize you asked some other part of a question and you want if you might get it. Sure, the second part was just within media and advertising, sort of comparing and contrasting. https://www.youtube.com.au Yeah, well, media by far is very strong and continues to be very strong. And last year, I think we topped the leagues in terms of new business wins and retention. As a matter of fact, If you've never Some of IBG's losses against our wins. We'd still be number one from last year. And that continues.
Speaker Change: And I apologize you asked some other part of your question then.
Speaker Change: Yes.
Sure. The second part was just within media and advertising sort of comparing and contrasting.
Speaker Change: Strong growth I think it's been quiet in media with how.
Speaker Change: How youre seeing the trend in creative.
Speaker Change: Sure.
Speaker Change: Immediate but by far is very strong and continues to be very strong and last year I think retard the leagues in terms of new business wins and retention.
Speaker Change: Matter of fact.
Speaker Change: If you netted.
Speaker Change: <unk> losses against our wins, we'd still be number one from last year and that continues.
John Wren: Advertising? Advertising really needs to be separated into two different areas. Both are being very highly affected by... technology, but creative is our IP. That's always going to be at the center of what Omnicom does. And it's terribly important to our clients and to the creation of differentiation, especially as these tools become more democratic, right? If everybody had the same generative AI tools on their desk, what would make a difference? Well, what would make a difference would be a brilliant, creative idea. So now is that business going through some adjustments because technology has has created efficiencies within that business which allow us to have less effort in some instances?
Speaker Change: Advertising.
Speaker Change: Advertising.
Speaker Change: Really needs to be separated into two different areas, both at being very highly affected by.
Speaker Change: Technology.
Speaker Change: Creative is our IP.
Speaker Change: That's always going to be at the center.
Speaker Change: What omnicom does.
Speaker Change: And it's terribly important to our clients and to the creation of differentiation, especially as these tools.
Speaker Change: More Democratic right.
Speaker Change: If everybody had the same.
Speaker Change: Generally the AI tools on their desk.
Speaker Change: What would make a difference what would make a difference would be brilliant creative idea.
Speaker Change: Now is that business going through some adjustments because technology.
Speaker Change: Has.
Speaker Change: As created efficiencies within that business, which allow.
Speaker Change: I was too.
Speaker Change: I have less effort.
Speaker Change: Some instances, yes, no question, but.
John Wren: Yes, no question. But But it remains a very key part of our organization.
Speaker Change: But.
Speaker Change: But it remains a very key part of our organization.
John Wren: I look back at 24. It probably makes up something closer to 17 or 18% of our total business that that balance may increase a bit as we complete the transaction with IPG, but it's still The core of what we do, as I said, the IP. In terms of the other component, production is certainly a fast-growing component of the solutions we provide to clients, and there's more and more activity in that area, and opportunity in that area, especially as you look at ArtBot, our content automation platform, which has been quite successful recently. So, you know, overall, Creative has grown, you know, low single digits last year.
Speaker Change: If I look back at 24.
Speaker Change: It probably makes up something closer to <unk>.
Speaker Change: 17, or 18% of our total business.
Speaker Change: That balance may increase a bit as we complete the transaction with IPG, but it's still.
Speaker Change: The core of what we do.
Speaker Change: As I said the IP.
Speaker Change: So if anybody else wants to answer in terms of the other component production is certainly of a fast growing component of the solutions, we provide to clients.
Speaker Change: And there is more and more activity in that area.
Speaker Change: An opportunity in that area, especially.
Speaker Change: As you look at.
Speaker Change: Art bought R. R.
Speaker Change: Content automation platform.
Speaker Change: Which has been quite successful.
Speaker Change: Recently, so overall.
Speaker Change: Overall creative has grown.
Speaker Change: Low single digits last year.
Speaker Change: First the first part of this year, we expect that to be close to flat a little bit down.
Speaker Change: In the first quarter, and we expect that to pick up in the second half.
John Wren: And as John said, Yes media has been quite strong we expect that to continue to be very strong.
Speaker Change: And.
Speaker Change: Yes together.
John Wren: Together, those are two key components of the overall product mix that is very key and very strategic to the business going forward.
Speaker Change: Those are two key components of the overall the overall product mix.
Speaker Change: That is very key and very strategic to the business going forward.
Unknown Executive: Great, thank you.
Speaker Change: Great. Thank you.
Speaker Change: Sure.
Speaker Change: The next question comes from Michael Nathanson of Moffett Nathanson. Your line is open.
Unknown Executive: Thanks, one for John, one for Phil. Hey, John, you touched on it earlier that you guys are feeling pretty good about the new business potential. Can you talk a bit about the volume of new business pitches? Is it normal or do you think people are kind of holding back? as a scale of volume until maybe the uncertainty is lifted. And then on that point, how do people deal with the fact that you'll be merging with Interpublic, right? So is that part of the conversation when people are asking you about the future prospects of Omnicom Media?
Michael Nathanson: Thanks, one for Jonathan fulfill Hey, John you touched on it earlier that you guys are feeling pretty good about the new business potential can you talk a bit about the volume of new business pitches.
Speaker Change: Is it normal or do you think people are kind of holding back in terms of the scale of volume until maybe the uncertainty is lifted and then on that point, how do people deal with the fact that you have.
Speaker Change: Emerging interpublic right. So is that part of the conversation and people are asking you about the future prospects of Omnicom media. So anything you can talk about there would be helpful. And then fulfill third party service cost are pretty and total costs were up double digits. This year. When you think about your guidance on organic revenue for the year.
Unknown Executive: So anything you talk about there would be helpful.
John Wren: And then for Phil, third-party service costs, third-party intellectual costs were up double digits this year. When you think about your guidance on organic revenue for the year, Is it normal to expect this type of growth in third party costs? Or is anything unusual about the first quarter of this year and third? Um, you know, in the first part of your question, the new business reviews, um, I have to admit, I haven't tried to track them year over year. I do expect that unless a client... has some proactive reason to put their account in review. I'm expecting it to not be as robust as it was, say, last year.
Speaker Change: Is it is it <unk>.
Speaker Change: Normal to expect this type of growth in third party costs or is there anything unusual about the first quarter of this year and third party.
Speaker Change: Okay.
Speaker Change: And the first part of your question the new business reviews.
Speaker Change: I have to admit I haven't tried to track them year over year.
Speaker Change: I do expect you'll expect that unless.
Speaker Change: Client.
Speaker Change: Has some proactive reason to put their account review I'm expecting it to not be as robust as it was say last year.
John Wren: But having said that in the first quarter, There are clients who thankfully were on the offense, not the defense, where their accounts are currently being reviewed, and I won't use their names, so as to not insult them. And, you know, you had the... move, which benefited publicists of the coke business earlier in the quarter. So there are things going on. There's a lot of conversations going on. But I can't tell you, are we 10% up or 10% down from this exact moment last year. In terms of What goes on in terms of IPG and the acquisition, we are extremely cautious because there are very strict rules in terms of What we can do, we can...
Speaker Change: But having said that in the first quarter.
Speaker Change: No.
Speaker Change: There are clients, who had thankfully we're on the offense not defense where their accounts are currently being reviewed and I wont use their names than that.
Speaker Change:
Speaker Change: And you had the <unk>.
Speaker Change: Move.
Speaker Change: Which benefited public <unk> of the Coke business earlier in the quarter. So there are things going on there was a lot of conversations going on.
Speaker Change: But I can tell you.
Speaker Change: 10% up from 10% down from this exact moment last year in terms of.
Speaker Change: What goes on in terms of IPG and the acquisition.
Speaker Change: We are extremely cautious because there are very strict rules in terms of.
Speaker Change: What we can do we can.
Philip Angelastro: Collectively, each plan for when the transaction is approved, but we're not able to go to market in any way, and so we don't. we don't and and you know. That's just us behaving in accordance with. What's expected of us in this kind of a process. On the on the specific question, Michael, that third party, you know, service cost growth, certainly, we're happy to get the growth wherever, wherever we can get it. The reason the reason we have that business and the reason it's growing is because clients want it, and it provides valuable benefits to the clients.
Speaker Change: Collectively each plan for when the transactions improve but were not able to go to market in any way.
Speaker Change: And so we don't we.
Speaker Change: We don't.
Speaker Change: <unk>.
Speaker Change: No.
Speaker Change: That's just us behaving in accordance with <unk>.
Speaker Change: What is expected of us in this kind of a process.
Michael Nathanson: On the on the specific question Michael about third party.
Speaker Change: Service cost growth certainly.
Speaker Change: We're happy to get the growth wherever wherever we can get us. The reason the reason we have that business and the reason it's growing is because clients want it and it provides valuable benefits to the clients ultimately it didn't provide benefits and it wasn't a key part of what clients' expectations were.
Philip Angelastro: Ultimately, if it didn't provide benefits, and it wasn't a key part of what clients expectations were, you wouldn't see the results that we've seen in it. We don't think our numbers, frankly, are any different than our competitors. That business is growing throughout the industry. Again, because clients like the benefits of that particular service offering. You just, you just can't see it outside of, you know, our reported results.
Speaker Change: You wouldn't see the results that we've seen in it we don't think our numbers frankly are any different than.
Speaker Change: Our competitors.
Speaker Change: That business is growing throughout the industry.
Again because clients.
Speaker Change: Like the benefits of that particular service offering.
Speaker Change: You just you just can't see it.
Speaker Change: Outside of yeah.
Speaker Change: Our reported results.
Alright, okay. Thanks, Phil.
Unknown Executive: Okay, thanks, Phil.
Craig Huber: Sure. The next question is from Craig Huber of Huber Research Partners. Thank you.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: The next question is from Craig Huber Huber Research partners. Your line is open.
John Wren: My first set of questions has to do with the potential closing acquisition. I think you mentioned five of the eight. Transaction, including China. Can you share with us if it's possible the other four? Sean, I think when you originally. brought forth and talked publicly. What's your position of interpublic? You talked about if you run into any issues with any of the regulators out there, that you would be open to potentially selling, divesting any related assets in various jurisdictions. Is that still your case here?
Craig Huber: Thank you my first set of questions has to do with the potential closing the acquisition I think you mentioned five of the 18th jurisdictions.
Craig Huber: If approved the transaction, including China can you share with us as possible at the other four or and then also wanted to ask.
John I think when you originally bought.
Craig Huber: <unk> talked publicly about this.
Craig Huber: Acquisition of Interpublic, you've talked about if you run into any issues with any of the regulators out there.
Craig Huber: Would be open to potentially selling.
Craig Huber: Divesting any any related assets in various jurisdictions is that still your case here.
Craig Huber: Wow.
John Wren: I'd probably answer the question a little differently, in that we are 100, unless you go higher in percentages, committed to the completion of this transaction. I think that various regulators have requested information from us because they that they are trying to understand our business before some of them are approved. Sitting here today based on very competent advice from our attorneys, and I would, I would go as far as to say I haven't heard anything from the very competent attorneys that IBG has either, that we expect that we're in violation of any Antitrust Rules. And, you know, you being us all being here in America, all you gotta do is look at Google's results, Meta's results.
I'd, probably answer that question a little differently.
Craig Huber: And that we are 100, unless you go higher in percentages committed to the completion of this transaction.
Craig Huber: I think that.
Speaker Change: Various regulators.
Craig Huber: Our requested information from us because they.
Craig Huber: They are trying to understand our business before some of them are approved.
Craig Huber: Sitting here today based on very competent advice from.
Craig Huber: Our attorneys.
Craig Huber: I would.
Speaker Change: I would go as far as to say I haven't heard anything from a very competent attorneys that IPG has either.
Speaker Change: We expect that were in violation of any.
Speaker Change: Antitrust rules.
Speaker Change: Using us all being here in America or are you going to do is look at Google's results <unk> results.
John Wren: And, you know, in terms of Who are we really competing against and where are consumers spending their money? We're a very strong player, but... They are extremely strong. So I think And I'm not knowledgeable enough with the rules, as the lawyers will continue to point out to me every day when I ask a question. And I think I know the answer. I don't. I don't think we're... I don't think we're, I don't think this merger drives us into a position in almost any market around the world where we would have difficulty after we go through whatever their required process is.
Speaker Change: In terms of.
Speaker Change: Who we really competing against and where consumers are spending their money.
Speaker Change: We are.
Speaker Change: We are very strong player but.
Speaker Change: They are extremely strong so.
Speaker Change: I would think.
Speaker Change: And I'm not knowledgeable enough the rules as the lawyers will continue to pointed out to me every day when I ask the question.
Speaker Change: And I think I know the answer.
Speaker Change: I don't think we are.
Speaker Change: I don't think we are I don't think theres merger drives us into.
Speaker Change: A position.
Speaker Change: Position in almost any market around the world.
Speaker Change: Where.
Speaker Change: Where we would have difficulty after we go through whatever their required processes.
John Wren: But if there was the odd thing or two, and it would be small, if it even existed, would we It wouldn't change our view that we will close this transaction and we are dedicated to closing this transaction. But there's nothing material. Otherwise... There's certainly enough. Legal firm is working on this. Globally, locally, to have highlighted Anything that would be in that category which would rise to the level of being a concern.
Speaker Change: But if there was the odd thing or two and it would be small.
Speaker Change: If if it even existed.
Speaker Change: Would we.
Speaker Change: It wouldn't change our view that we will close this transaction and we are dedicated to closing this transaction.
Speaker Change: But theres nothing material.
Speaker Change: Although otherwise.
Speaker Change: Okay.
Speaker Change: Certainly enough.
Speaker Change: Legal firms working on this.
Speaker Change: Globally locally.
Speaker Change: To have highlighted.
Speaker Change: Anything that would be in that category, which would rise to the level of being a concern.
John Wren: and we haven't had that.
Speaker Change: We haven't had them.
Speaker Change: And then can you maybe touch on just what the other foreign jurisdictions relative proved it so far.
John Wren: Can you maybe touch on just what the other Um, yeah, I can, I can list them for you, Jason. So, in addition to China, it's Colombia, Brazil, Saudi Arabia, and Egypt. They're all relatively small for our combined businesses, but certainly it's progress. You know, we've tried not to issue a press release every time we get an approval, but certainly it's good progress so far. But the process has been quite thorough in all the markets that have done the work to review the transaction, and we wouldn't expect anything else.
Speaker Change: But you're allowed.
Speaker Change: Yeah.
Speaker Change: I can't I can list them for you Jason.
Speaker Change: <unk>.
Speaker Change: Got it.
Speaker Change: Sorry, Craig.
Speaker Change: Alright, sorry about that.
James: James Your name. So so in addition to China, It's Colombia, Brazil, Saudi Arabia and Egypt.
Speaker Change: Yes.
Speaker Change: They're all relatively small but for our combined businesses.
Speaker Change: But certainly its progress and.
Speaker Change: We've tried not to.
Speaker Change: Yeah issue a press release every time, we get an approval but.
Speaker Change: Certainly it's good progress so far but the process has been quite thorough.
Speaker Change: In all the markets that haven't done the work to review the transaction and we wouldn't expect anything else.
John Wren: My last question, guys, is can you just talk a little bit further about... Tone of business, what you're hearing from executives out there in two areas. Autos, and Consumer Pap. Unknown Speaker. has it materially. Um, wow. With respect to tariffs, I think that still an open question because I think the tariffs or the potential for tariffs that the administration has spoken to, they've except for in very specific markets. They made it clear that they're in. Conversations with many of those governments to resolve any issues. that the tariffs may.
Speaker Change: And then my last question guys is can you just talk a little bit further.
Speaker Change: The <unk>.
Speaker Change: Tone of business, what you're hearing from me consecutive sell through two areas specific Q autos and consumer.
Speaker Change: Consumer packaged good areas. So just given that this issue with tariffs uncertainty out there and so forth what is the tone that you're hearing from what your company that you work with in those areas. Please has it materially change for the negative I guess, what I'm trying to get to.
Speaker Change:
Speaker Change: Hello.
Speaker Change: With respect to tariffs.
Speaker Change: I think that's right.
Speaker Change: It's still an open question because.
Speaker Change: I think the tariffs or the potential for tariffs.
Speaker Change: Got it.
Speaker Change: The administration has spoken to.
Speaker Change: They are.
Speaker Change: Except for very specific markets.
Speaker Change: We made it clear that.
Speaker Change: Therein.
Speaker Change: Conversations with many of those governments to resolve any issues.
Speaker Change: The tariffs may.
Speaker Change: Bring to do before.
John Wren: Unknown Executive, Youtube facultiers, Awesome thank you Kathy and a I'm not any more knowledgeable than you, but... It's kind of confirming that the pause that we're in. You know, it's probably driven because of people approaching the administration with things that are of interest to them. But again, I don't have any firsthand knowledge of that, but it's all, you know, it all bodes. better than had they just simply gone into effect. So We were planning for a glass that could be half empty, but we're personally striving for what we really believe and have believed for a long time, that we're optimistic that it will wind up half full.
Speaker Change: And.
Speaker Change: I'm not any more knowledgeable than you but.
Speaker Change: Okay.
Speaker Change: It's kind of confirming that the pause that we're in.
Speaker Change: It was probably driven because of people approaching an administration with things that are of interest to them.
Speaker Change: But again I don't have any firsthand knowledge of that.
Speaker Change: But it's all.
Speaker Change: It all bodes.
Speaker Change: Better than today.
Speaker Change: Just simply gone into effect.
Speaker Change: So.
Speaker Change: We're planning for glass could be half empty, but we're personally striving for what we really believe and have believed for a long time that we're optimistic that it'll wind up handful.
John Wren: Certainly those. Yeah, I'm sorry. Go ahead. John, are you trying to suggest that you're not quite sure? You know, we've, I don't think we know its certainty. All right, we haven't heard any disastrous or had any disastrous reports specifically from clients. We've taken advice from very knowledgeable people and specifically in the auto industry not related to the advertising business in terms of what they believe car companies globally are expecting. And again, that leaves us in a position where These are terribly important long-term clients where we have multi-year contracts with in almost every single case of a car company, which gives us some comfort.
Speaker Change: But certainly those yes, I'm sorry go ahead.
Speaker Change: John are you trying to suggest and youre not quite sure what the spending levels or the auto companies out there in CPG for example, how they may or may not adjust that its too early to tell.
Speaker Change:
Speaker Change: Yes.
Speaker Change: Right.
Speaker Change: I don't think we know what certainty alright, we haven't heard any disasters or had any disastrous reports specifically from clients.
Speaker Change: Taken advice from very knowledgeable people in <unk> and specifically in the auto industry and not related to the advertising business in terms of.
Speaker Change: What they believe car companies globally are expecting.
Speaker Change: And again that leaves us in a position where.
Speaker Change: These are terribly important long term clients, where we have multi year contracts with.
Speaker Change: In almost every single case of a car company.
Speaker Change: Which gives us some comfort and as a good partner because they have difficulty will work with them as best we can.
John Wren: And as a good partner, if they have difficulty, we'll work with them as best we can to help us all get through whatever the process is. So the good news is none of those accounts are under threat because of the multi-year contracts. And yes, as good partners, we will work with our partners to get to a good outcome. In terms of CPG, I haven't really had as... dug in as deeply into CPG, as I have say into the auto sector. And And I kind of await some of their quarterly reports as they come out through the rest of this month to find out if there's more specific information which would require us to adjust ourselves.
Speaker Change: To help us all get through whatever the processes.
Speaker Change: The good news is there is none of those are accounts are under threat.
Speaker Change: Some of the multi year contracts.
Speaker Change: And yes as good partners, we will work with our partners to get to a good outcome in terms of CPG I haven't really had.
Speaker Change: As.
Speaker Change: I haven't.
Speaker Change: Doug and as deeply into CPG as I have say into the auto sector.
Speaker Change: And.
Speaker Change: And I kind of a wait.
Speaker Change: Are there quarterly.
Speaker Change: Reports as they come out through the rest of this month to find out if theres more specific information, which would require us to adjust ourselves.
John Wren: Finally, on that point, unlike our competitors, CPG is not a huge percentage of our business. So whatever adjustments need to be made will in fact get made. I'd even go as far as to say companies, CPG companies are probably taking the lead on in housing things. And they're going to find themselves in a very uncomfortable position if they have to adjust. how they deal with those in-housing efforts as opposed to if they had a third-party vendor which would be easier to get concessions from. That's all speculation, so. You know, it doesn't count for anything.
Speaker Change: Finally on that point.
Speaker Change: Unlike our competitors CPG is not.
Speaker Change: A huge percentage of our business.
Speaker Change: So whatever adjustments need to be made we will in fact get made.
Speaker Change: I would even go as far as to say.
Speaker Change: Company's CPG companies will probably be taking the lead on.
Speaker Change: In housing things and Theyre going to find themselves in a very uncomfortable position if they have to adjust.
How they.
Speaker Change: They deal with those in housing efforts as opposed to if that a third party vendor, which would be easier to get concessions from but.
Speaker Change: That's all speculation so.
Speaker Change: Yes, it doesn't count for anything I think we're going to all learn a lot more in the next two three weeks.
John Wren: I think we're going to all learn a lot more in the next two, three weeks. Yeah, certainly clients across industries are, you know, they're looking for more clarity. They want flexibility at this point in time, but they're looking for clarity. And, you know, ultimately, they need to defend and grow their brands, so, you know, the type of marketing spend may change, but we've got a diverse portfolio. We can help them in many different ways. And, you know, I think this is going to evolve, and we're going to know more in the near future, and we'll adjust accordingly.
Speaker Change: Yes, certainly clients across industries are there.
Speaker Change: Looking for more clarity.
Speaker Change: They want flexibility at this point in time.
Speaker Change: But they are looking for clarity and ultimately they.
Speaker Change: They need to defend and grow their brands.
Speaker Change: So the type of marketing spend.
Speaker Change: They change.
Speaker Change: But we've got a diverse portfolio, we can help them in many different ways.
Speaker Change: And I.
Speaker Change: I think this is going to this is going to evolve and we're going to know more.
Speaker Change: In the near future and we'll adjust accordingly, and I think.
John Wren: And I think, you know, we have a track record that shows that, you know, we can and will adjust, depending on what the market brings.
Speaker Change: We have a track record that shows that.
Speaker Change: We can and will adjust.
Speaker Change: Spending on on what the market brings.
Speaker Change: Yeah.
Unknown Executive: Great, thank you both. Thank you.
Great. Thank you both.
Speaker Change: Thank you.
Speaker Change: Okay.
Unknown Executive: There are no further questions at this time.
Speaker Change: There are no further questions at this time. This concludes today's conference call. Thank you for joining you may now disconnect.
Unknown Executive: This concludes today's conference call.