Q2 2025 The Interpublic Group of Companies Inc Earnings Call
Operator: Second Quarter 2025 Conference Call. All parties are in a listen-only mode until the question and answer portion At that time, if you would like to ask a question, you may press star 1. This conference is being recorded.
Good morning and welcome to the interpublic group. Second quarter 2025 conference call.
All parties are in a listen-only mode into the question and answer portion.
Operator: If you have any objections, you may disconnect at this time.
Jerry Leshne: I would now like to introduce Mr. Jerry Leshne, Senior Vice President of Investor Relations. Sir, you may begin. Good morning. Thank you for joining us. This morning, we are joined by our CEO, Philippe Krakowski, and by Ellen Johnson, our CFO. We have posted our earnings release and our slide presentation on our website, interpublic.com. We will begin with prepared remarks to be followed by Q&A. We plan to conclude before market open at 9.30 Eastern time. During this call, we will refer to forward-looking statements about our company. These are subject to the uncertainties and the cautionary statement that are included in our earnings release.
At that time. If you would like to ask a question, you may press star 1. This conference is being recorded if you have any objections, you may disconnect at this time.
Speaker Change: Senior vice president of investor relations.
Sir, you may begin.
Speaker Change: Good morning. Thank you for joining us this morning. We are joined by our CEO Philippe Koozie, and by Ellen Johnson, our CFO.
Speaker Change: We have posted our earnings release and our slide presentation on our website, interpublic.com.
We will begin with prepared remarks to be followed by Q&A. We plan to conclude before Market open at 9:30. Eastern time. During this call, we will refer to forward-looking statements about our company.
Jerry Leshne: and the slide presentation. These are further details in our 10-Q and other filings with the SEC. We will also refer to certain non-GAAP measures. We believe that these measures provide useful supplemental data that, while not a substitute for gap measures, Allow for greater transparency in the review of financial and operational performance.
Speaker Change: These are subject to the uncertainties and the cautionary statement that are included in our earnings release.
Speaker Change: And the slide presentation.
Speaker Change: These are further details in our 10 q and other filings with the SEC.
We will also refer to certain non-gaap measures.
Speaker Change: We believe that these measures provide useful supplemental data that while not a substitute for gaap measures.
Allow for greater transparency, in the review of Financial and operational performance.
Philippe Krakowsky: At this point, it is my pleasure to turn things over to Philippe Krakowsky. Thank you all for joining us. This morning, I'll begin with a high-level view of the quarter and the strong progress we're making on our program of strategic transformation. Ellen will then add details on our performance, and I'll conclude with an update on the tone of the business and where our clients are focused. as well as on the status of our acquisition by Omnicom and the significant value the combination will drive for all of our stakeholders.
At this point, it is my pleasure to turn things over to Philippe koozie.
Philippe Koozie: Thanks Jerry.
Philippe: Thank you all for joining us.
This morning, I'll begin with a high-level view of the quarter and the strong progress. We're making on our program of strategic transformation.
Ellen will then add details in our performance. And I'll conclude with an update on the tone of the business and where our clients are focused.
Philippe: As well as on the status of our acquisition, by Omnicom and this significant value, the combination will drive for all of our stakeholders.
Philippe Krakowsky: Starting with revenue in the quarter, our organic decrease was 3.5%. Fully consistent with a revenue outlook and phasing we shared with you earlier this year. As we've discussed on previous calls, organic growth this year is being pressured by the impact of account activity that concluded in 2024. As expected, those headwinds intensified sequentially from our first quarter. Our three largest losses in 2024 weighed on growth by approximately 5.5% in Q2, which is reflected in our results across a number of geographic regions and disciplines, with the greatest impact on media and health care. That said, our growth underlying those headwinds showed sequential improvement precisely in those historically strong areas of media and health.
Starting with Revenue in the quarter, our organic decrease was 3.5%.
Philippe: Fully consistent with a revenue Outlook in phasing we shared with you earlier this year.
Philippe: As we've discussed on previous calls, organic growth. This year is being pressured by the impact of account activity. That concluded in 2024.
Philippe: As expected, those headwinds intensified sequentially from our first quarter.
Our 3 largest losses in 2024 weighed on growth by approximately 5.5% in Q2, which is reflected in our results across a number of geographic regions and disciplines.
Philippe: For the greatest impact on media and Healthcare.
Philippe Krakowsky: New business performance in 2025 is showing marked improvement as well.
Philippe: That said our growth underlying those headwinds showed sequential Improvement precisely in those historically strong areas of media and Healthcare.
Philippe Krakowsky: And further, we believe that the significant changes we've already made in the business combined with a very strong strategic fit with the capabilities and geographies that on the come means that our resulting offerings will be significantly strengthened on the other side of the acquisition. In the quarter, client sector growth was led by strong increases in the food and beverage, financial services, and tech and telecom sectors. Headwinds due to prior period losses weighed on the retail, healthcare, and consumer goods client sector. Turning to expenses and profitability in the quarter, adjusted EBITDA was $393.7 million, with a margin of 18.1%.
Philippe: New business performance in 2025 is showing marked improvement as well.
Philippe: and further, we believe that the significant changes we've already made in the business combined, with a very strong strategic fit with the capabilities and geographies and Omnicom
Means that our resulting offerings will be significantly, strengthened on the other side of the acquisition.
In the quarter client. Sector growth was led by strong increases in the food and beverage.
Philippe: Financial services and Tech and Telecom sectors.
Headwinds due to Prior period losses, weighed on the retail.
Philippe: Healthcare and consumer, goods client sectors.
Philippe: turning to expenses and profitability in the quarter adjusted ebit a was 393.7 million with a margin of 18.1%
Philippe Krakowsky: That's a very strong result that reflects significant structural cost reduction. Due to our program of strategic transformation, as well as the strong underlying performance in media and health. During the quarter, we continued to demonstrate significant progress in greater functional centralization. Leveraging our enterprise-level focus on tech-driven platform benefits in key areas, including client-facing, Capabilities, such as production and analytics, as well as corporate functions, such as IT, finance, and HR management.
Philippe: That's a very strong result that reflects significant structural cost reduction.
Due to our program of strategic transformation as well as the strong underlying performance in media and Healthcare.
Philippe: During the quarter, we continued to demonstrate significant progress in Greater functional centralization.
Philippe: Leveraging, our Enterprise level focus on tech-driven platform benefits and key areas, including client-facing.
Philippe: Capabilities such as production and analytics as well as corporate functions such as it finance and HR management.
Philippe Krakowsky: As is clear in our report today, these initiatives have traction across the organization and we expect to exceed our initial objectives for enterprise redesign, client service delivery enhancements, and ongoing operating efficiency.
Philippe: As this clear in our report today.
Philippe: These initiatives have traction across the organization.
Philippe: And we expect to exceed our initial objectives for Enterprise redesign.
Philippe: Client Service, delivery enhancements and ongoing operating efficiencies
Philippe Krakowsky: Charges for restructuring in the quarter were $118 million. Our adjusted EBITDA excludes those charges, as well as $11 million of deal expenses related to the combination of on-the-counter... which appear in our SG&A. Our diluted EPS in the quarter was $0.44 as reported, which includes a restructuring investment, while our adjusted diluted EPS was $0.75. During the quarter, we returned $98 million to shareholders under our Share Repurchase Program, bringing total year-to-date share repurchase to $188 million. We currently expect to repurchase shares consistent with recent levels. and the $325 million annual cap in our merger agreement.
Philippe: charges for restructuring in the quarter were 1118 million.
Philippe: our adjusted ebida excludes those charges as well as 11 million of deal expenses related to the combination of Omnicom,
Which appear in our sgna expense.
Philippe: Has reported.
Philippe: Which includes the restructuring investment. While our adjusted diluted EPS was 75 cents.
during the quarter we returned 98 million to shareholders under our share repurchase program, bringing total, year-to-date share repurchase to 188 million
We currently expect to repurchase shares consistent with recent levels.
Philippe: And the 325 million annual cap, in our merger agreement.
Philippe Krakowsky: Turning to some observations on our outlook for the full year. The macro environment has been more volatile than anticipated as we entered the year. And we are, of course, staying close to client. This, in turn, allows us to report that marketers as a whole are not reacting reflexively to the changing business and geopolitical landscape. The fact Clients are assessing developments very methodically and continue to engage with us constructively. in order to evaluate their alternatives. whether that means assessing investment levels or messaging. Channel Nick or the mix of marketing disciplines required to deliver against the desired business outcome.
Turning to some observations on our outlook for the full year.
Philippe: The macro environment has been more volatile than anticipated as we entered the year.
Philippe: And we are, of course, staying close to clients.
Philippe: This in turn allows us to report that marketers as a whole are not reacting reflexively to the changing business and geopolitical Landscape.
Philippe: In fact.
Philippe: Clients are assessing developments, very methodically and continue to engage with us constructively.
Philippe: In order to evaluate their alternatives.
Philippe: Whether that means assessing investment levels or messaging.
Philippe: Channel mix.
Or the mix of marketing disciplines required to deliver against their desired business outcomes.
Philippe Krakowsky: This is specific to each of their business situations, whether due to the industry, geography, or competitive dynamic of the sector in which each of them operates. And that means that while there can be puts and takes by individual clients. our overall experience in Q2 and the first half. has netted out at levels that are consistent with what we expect. and we've not seen a marked change in net client activity. We therefore remain on track with a four-year target for organic net revenue that we shared earlier this year. which is an organic decrease of one to two percent.
Is the specific to each of their business situations whether due to the industry geography or competitive Dynamic of the sector in which each of them operates.
And that means that while there can be puts and takes by individual client.
Philippe: Our overall experience in Q2 and the first half.
Has netted out at levels that are consistent with what we expected.
Philippe: And we've not seen a marked change in net client activity.
Philippe: We therefore remain on track with a 4-year Target for organic net revenue that we shared earlier this year.
Philippe: Which is an organic decrease of 1 to 2%.
Philippe Krakowsky: on a full year 2025 adjusted EBIT OM margin.
Philippe Krakowsky: Our transformation work and evolving business mix have put us ahead of plan. and our expected level of revenue. We're confident that our actions to date, along with ongoing expense, discipline. can drive adjusted EBITDA margin for the full year that is well ahead of the 16.6% we had shared with you previously.
On a full year 2025 adjusted. Ebit a margin.
Philippe: Our transformation work and evolving business. Mix have put us ahead of plan.
At our expected level of Revenue.
We're confident that our actions to date along with ongoing expense discipline.
Philippe: Can drive adjusted, even on margin for the full year? That is well ahead of the 16.6%. We had shared with you previously.
Philippe Krakowsky: I'll come back with an update on the status of our acquisition by Omnicom. The compelling growth benefits of the new company for clients and the resulting value creation that we see in the combination.
Philippe: I'll come back with an update on the status of our acquisition by Omnicom.
Philippe Krakowsky: I'll also share some observations and examples to illustrate the growing pace at which AI is becoming core to our offerings and the opportunities that represent.
Philippe: The compelling growth benefits of the new company for clients and the resulting value creation that we see in the combination.
Ellen Johnson: But at this point, I'll turn things over to Ellen for a more in-depth view of our results in the quarter. Thank you. I hope that everyone is well. As a reminder, my remarks will track to the presentation slides that accompany our webcast. Beginning on slide 2 of the presentation, our organic decrease in net revenue for the quarter was 3.5% in line with our expected performance. Adjusted EBITDA in the quarter was $393.7 million, and margin on that revenue was 18.1%, which is a historic high for a second quarter. Adjustments exclude our charges for restructuring and deal expenses in SG&A related to our acquisition by Omnicom.
Philippe: also share some observations and examples to illustrate the growing Pace at, which AI is becoming core to our offerings and the opportunity that represents
But at this point, I'll turn things over to Alan for more in-depth view of our results in the quarter.
Thank you. I hope that everyone is well.
Speaker Change: As a reminder, my remarks will track to the presentation slides, that accompany our webcast.
Beginning on slide 2 of the presentation.
Speaker Change: Our organic decrease in net revenue for the quarter was 3.5%.
Speaker Change: In line with our extract performance.
Speaker Change: Adjusted ebit TA in the quarter with 393.7 million.
And margin on that Revenue was 18.1%.
Which is a historic high for a second quarter.
Speaker Change: Adjustments. Exclude are charges for restructuring and deal expenses and sgna related to our acquisition by Omnicom.
Ellen Johnson: Earnings per diluted share in the quarter was $0.44 as reported, while earnings were $0.75 per diluted share as adjusted. We repurchased 4 million shares, returning 98 million.
Speaker Change: Earnings per diluted share in the quarter was 44 cents as reported while earnings were 75 cents per diluted share as adjusted.
Ellen Johnson: We concluded in the quarter. in a strong financial position with $1.6 billion of cash on the balance sheet and with only 1.9 times gross financial debt to EBITDA as defined in our credit facility.
Speaker Change: We repurchased 4 million shares returning, 98 million.
We concluded in the quarter.
In a strong financial position with 1.6 billion of cash on the balance sheet and with only 1.9 times gross financial debt to ibida as defined in our credit facility.
Ellen Johnson: Turning to slide three, you'll see our P&O for the quarter. I'll cover revenue and operating expenses in detail in the slides that follow. Turning to second quarter revenue on slide four. Our net revenue in the quarter is $2.2 billion, a decrease of 6.6% from a year ago. Compared to Q2-24, the impact of the change in exchange rates was positive 30 basis points. The impact of our net divestitures, mainly RGA and UGE, is negative 3.4%. Our organic net revenue decrease was 3.5% in the quarter, which brings us to a decrease of 3.6% in the year's first half.
Speaker Change: Turning to slide 3, you'll see our pnl for the quarter.
I'll cover revenue and operating expenses and Detail in the slides that follow up.
Speaker Change: turning to second quarter of Revenue on slide 4,
Speaker Change: our net revenue in the quarter, the
Speaker Change: 2.2 billion.
Speaker Change: It decreases 6.6% from a year ago.
Speaker Change: Compared to Q2 24, the impact of the change. In exchange rates was positive -30 basis points,
Speaker Change: Our net, debtor mainly RGA and huge was -3.4.
Speaker Change: Or organic Revenue. Decrease was 3.5% in the quarter.
Speaker Change: Which brings us to a decrease of 3.6% in the year's first half.
Ellen Johnson: Further down the slide, we break out segment net revenue performance in the quarter. Our media, data, and engagement solutions segment decreased 3.1% organically. Client activity in 2024, which we've identified previously, weighed on our ability to grow segment revenue in the quarter. MRM's decrease was diluted to the overall performance of the segment. The organic decrease in our Integrated Advertising and Creativity-Led Solutions segment was 6.3%. That performance largely reflects the decision of a single client in the healthcare sector. Apart from that loss, our healthcare specialty operations had solid growth in the quarter. However, aside from healthcare, we had generally soft performance across our more traditional consumer-facing agencies.
Speaker Change: Further down the slide, the breakout segment, net revenue performance in the quarter.
Speaker Change: Our media data and engagement solution, segment, decreased 3.1% organically.
Client activity in 2024 which we've identified previously, wait on our ability to grow segment Revenue in the quarter.
Speaker Change: Mrm's decrease was diluted to the overall performance of the segment.
The organic decrease that our integrated advertising and creativity LED solution segment with 6.3%.
Speaker Change: That performance. Largely reflects the decision of a single client in the healthcare sector.
Apart from that loss. Our our Healthcare specialty operations have solid growth in the quarter.
Speaker Change: However, aside from Healthcare, we have generally sought performance across our more traditional consumer-facing agencies.
Ellen Johnson: At our Specialized Communications and Experiential Solutions segment, our organic growth was 2.3 percent, which was led by Octagon and Momentum in our Experiential group and Golan in Public Relations.
Speaker Change: At our specialized Communications and exponential solution segment. Our organic growth was 2.3%, which was led by octagon and momentum, in our exponential group in Golan in public relations.
Ellen Johnson: Moving on to slide five, our net revenue change by region in the quarter. Most regions reflect the impact of prior account activity. The U.S., which was 66% of net revenue in the second quarter, decreased 2.6% organically. IPG Media Brands was able to post growth domestically despite the significant trailing client headwinds. our ex-friendsial group, and Golan Group as well. International markets accounted for 34% of our net revenue in the quarter and decreased 5.4% organically. Three largest account losses from last year weighed on performance in each of our regional markets.
Speaker Change: Moving on to side, 5 are Revenue change by region in the quarter.
Speaker Change: Most regions reflect the impact of Prior account activity.
Speaker Change: The US which was 66% of net revenue in the second quarter.
Decreased 2.6%, organically.
Speaker Change: Ipg media Brands was able to close growth domestically despite the significant trailing client headwinds.
Speaker Change: Our exponential growth in Golan grew as well.
Speaker Change: International markets, accounted for, 34% of our net revenue in the quarter.
Speaker Change: In decreased 5.4% organically.
Speaker Change: For 3 largest in count losses from last year, weighed on performance in each of our regional markets.
Ellen Johnson: Moving on to slide six and the operating expenses in the quarter. Our fully adjusted EVTA margin in the quarter was 18.1%, which is an increase of 350 basis points from a year ago. That strong result is ahead of plan and is consistent with our conviction that there's continued opportunity for margin and cash flow growth in our business. I want to acknowledge and thank our teams around the world for their focus, professionalism, and high level of execution on our Strategic Transformation Program, which continues. Our adjusted EBITDA margin is before restructuring expenses and omnicum deal costs in SG&A.
Moving on to slide 6, an operating expenses in the quarter.
A fully adjusted evta margin in the quarter was 18.1%.
Speaker Change: Which is an increase of 350 basis points from a year ago.
That strong result is ahead of plan and is consistent with our conviction that there's continued opportunity for margin and cash flow growth in our business.
I want to acknowledge and thank our teams around the world for their focus, professionalism and high level of execution on our strategic transformation programme, which continues
Ellen Johnson: The charge for restructuring was $118 million, of which $37 million is non-cash. Well Jill, the costs in the quarter were $11 million. We drove operating leverage from a year ago on every major expense line. A ratio of total salaries and related expenses improved 350 basis points to 63.4% of net revenue. Compared to a year ago, we have leverage on base payroll, benefits and taxes, incentives, and severance expenses. We ended the quarter with headcount of approximately 51,300, an organic decrease of 6% from a year ago. Our office and other direct expenses decreased as a percent of net revenue by 40 basis points to 15%.
Speaker Change: Our adjusted ebta margin is before restructuring expenses and Omnicom deal costs in sgna.
Speaker Change: The charge for restructuring with 118 million of which 37 million is non-cash.
While deal costs in the quarter were 11 million.
Speaker Change: We drove operating leverage from a year ago on every major expense line.
Speaker Change: a ratio of total salaries and related expenses, improved 350, basis points to 63.4% of net revenue,
Speaker Change: Compared to a year ago, we have leveraged on base, payroll benefits and taxes incentives and Severance expense.
Speaker Change: We ended the quarter with headcount of approximately 51,300.
Speaker Change: An organic decrease of 6% from a year ago.
Ellen Johnson: Occupancy expense decreased by 30 basis points as a percent of net revenue while all other office and other direct expenses decreased 10 basis points. Our SG&A expense was 2.1% of net revenue. compared with 1.2% a year ago. That comparison reflects continuing investments in centralized systems, technology, and software, and also includes Omnicom deal costs that added 50 basis points to this increase.
Our office and other direct expenses. Decreased as a percent of net revenue by 40 basis points to 15%.
Speaker Change: Occupancy expense decreased by 30 basis points as a percent of net revenue.
Speaker Change: While all other office and other direct expenses, decreased 10 basis points.
Speaker Change: Our sgna expense was 2.1% of net revenue.
Compared with 1.2% a year ago.
That comparison reflects continuing investments in centralized Systems Technology and software and also includes Omnicom deal costs that added 50 basis points to this increase.
Ellen Johnson: Turning to slide 7, we present detail and adjustments to our reported second quarter results in order to give you transparency and a picture of comparable performance. This begins on the left-hand side with our reported results and steps through to Adjusted EBTA and our Adjusted Diluted EPS. Our expense for the amortization of regards and tangibles in the second column was $21.1 million. Charges for restructuring $118 million. Deal costs pertaining to the plan of acquisition by Omnicom were $10.9 million. Below operating expenses are net gain due to sales of non-strategic businesses were $1.9 million. At the foot of the slide, you can see the after-tax impact per diluted share of each of these adjustments.
Speaker Change: Turning to slide 7, we present detail and adjustments to a reported second quarter results in order to give you transparency and a picture of comparable performance.
This begins on the left hand side with our reported results in steps through to adjusted Ava and are adjusted diluted eps.
Speaker Change: our expense for the amortization of regards intangibles in the second column width 21.1 million
charges were restructuring.
Speaker Change: 118 million.
Speaker Change: Pertaining to the plan acquisition by Omnicom where 10.9 million.
Speaker Change: Below. Operating expenses are net gain due to the sales of non-strategic, businesses or 1.9 million.
Ellen Johnson: which bridges the second quarter diluted earnings per share as reported of $0.44 to adjusted earnings of $0.75 per diluted share.
Speaker Change: At the foot of the slide, you can see, the after tax impact for diluted, share of each of these adjustments, which Bridges the second quarter diluted earnings per share. As reported of 44 cents to adjusted earnings of 75 cents per diluted share.
Ellen Johnson: On slide 8, we turn to cash flow for the quarter. Cash used in operations was $96 million and cash generated was $206.3 million before working capital changes. As a reminder, our operating cash flow is highly seasonal and can be volatile by quarter due to changes in the working capital component. In our investing activities, we used a net $21.3 million primarily for our capital expenditures. Our financing activities is $223.2 million, mainly for our regular quarterly dividend and share repurchases in the quarter. Our net decrease in cash for the quarter was $300.5 million.
Speaker Change: On slide 8, we turned to cash flow for the quarter.
Cash used in operations is 96 million and cast, generated was 206.3 Million before working capital changes?
Speaker Change: As a reminder, our operating cash flow is highly seasonal and can be volatile by quarter due to changes in the working capital, come component.
Speaker Change: In our investing activities, we use a net 21.3 million primarily for our Capital expenditures.
Speaker Change: Our financing activities. Use 223.2 million mainly for our regular quarterly dividend in Sherry purchases in the quarter.
Our net decrease in cash for the quarter was 300.5 Million.
Ellen Johnson: Slide 9 is the current portion of our balance sheet. We ended the quarter with $1.6 billion of cash in equivalent. Slide 10 depicts the maturities of our outstanding deaths and our diversified maturity schedule. Total debt at quarter end is $3 billion and our next scheduled maturity is not until 2028.
Speaker Change: Slide 9 is the current portion of our balance sheet.
Speaker Change: we ended the quarter with 1.6 billion of cash and equivalents
Speaker Change: Slide 10, depicts the maturity of our outstanding debt and our Diversified maturity schedule.
Speaker Change: Total debt at quarter end was 3 billion and our next scheduled maturity is not until 2028
Ellen Johnson: In summary, our strong financial discipline continues. And the strength of our balance sheet and liquidity mean that we remain well positioned both financially as well as operationally.
Speaker Change: In summary, our strong financial discipline continues.
Philippe Krakowsky: And with that, I'll turn it back to Philippe.
Speaker Change: And the strength of our balance sheet and liquidity mean that we remain well, positioned both financially as well as operationally.
Philippe Krakowsky: Thank you, Ellen. As mentioned earlier, our organizational structure continues to evolve as we enhance the parts of the business that are growing. address areas of the portfolio where we see opportunity to embed precision and performance more fully into those service offerings. We continue to focus on transforming our ways of working to benefit from centralization, platforming, and new technologies. Since its launch, IPG's Interact platform has been a key driver of our success. Interact delivers significant value by democratizing data and making AI accessible and scalable across our agencies, operational teams, brands, and partners. The platform is automating complex marketing workflows.
And with that, I'll turn it back to Philipe.
Philippe Koozie: Thank you, Ellen.
Philippe Koozie: As mentioned earlier, our organizational structure continues to evolve as we enhance the parts of the business that are growing.
Philippe Koozie: Address areas of the portfolio where we see opportunity to embed precision and performance more fully into those Services offerings.
And continue to focus on transforming our ways of working to benefit from centralization platforming and new technologies.
Since its launch.
Philippe Koozie: Ipg is interact platform. Has been a key driver of our success.
Philippe Koozie: Interact delivers significant value by democratizing data and making AI accessible and scalable across our agencies. Operational teams Brands and partners.
Philippe Koozie: The platform is automating complex, marketing workflows.
Philippe Krakowsky: And that empowers our agencies to deliver even greater impact for client brands to drive business. Our teams are leveraging Interact for consumer insights and market analysis, creative ideation, content creation, and message testing via synthetic audience. All of this is in support of areas of the business that were not as far along on their data and AI journeys 12 months ago as early adopters such as our media business. As we continue to upscale our employees, and using AI as a core component of their job. Interact is equipping them with the tools to enhance efficiencies, but also to deepen insights and unlock new ways to deliver more innovative and effective solutions for our clients.
Philippe Koozie: And that empowers our agencies to deliver even greater impact for client Brands to drive business results.
Philippe Koozie: Our teams are leveraging, interact, for Consumer insights and market analysis, creative, ideation, content, creation and message testing via synthetic audiences.
Philippe Koozie: all of this is in support of areas of the business that we're not as far along on their data and AI Journeys, 12 months ago, as early adopters such as our media business,
as we continue to upscale our employees in using AI as a core component of their jobs,
Philippe Koozie: Interact is equipping them with a tool to enhance efficiencies that also to deepen, insights, and unlock new ways to deliver more Innovative and effective solutions for our clients.
Philippe Krakowsky: Every component of Interact is informed and connected by a foundational layer. built on our best-in-class global Axiom data set. and our Real ID product, which is the industry's most comprehensive customer identity solution.
Every component of interact is informed and connected by a foundational layer.
Philippe Koozie: Built on our best-in-class, global acxiom data set.
And our real ID product, which is the industry's most comprehensive customer identity solution.
Philippe Krakowsky: Lately, there's been a lot of focus on the industry's pivot to an AI-informed future. So I thought I'd spend a few minutes this morning on how the integration of AI into the creative side of our business enhances value for clients. As well as creating opportunity on the revenue and profitability side for us. One is to enable direct client transparency and custom level control. Interact is SaaS enabled, which allows clients to access the platform as part of their engagement with our teams, or to perform work directly on their own. The clients who opt into this second aspect of Interact, we now have an avenue to generate technology and software fees, not only remuneration for labor.
Philippe Koozie: Lately. There's been a lot of focus on the industry's pivot to an AI informed future.
Philippe Koozie: Integration of AI into the creative side of our business. Enhances value for clients.
Philippe Koozie: As well as creating opportunity on the revenue and profitability side for us.
Philippe Koozie: 1 is to enable direct client transparency, and custom level control.
Philippe Koozie: Interactive SAS enabled, which allows clients to access the platform as part of their engagement with our teams.
Philippe Koozie: Or to perform work directly on their own.
Philippe Koozie: The clients who opted into this second aspect of interact, we now have an Avenue to generate technology and software fees, not only remuneration for labor time.
Philippe Krakowsky: The second way. that AI has facilitated the integration and automation of creative. has to do with optimizing workflows, eliminating gaps, and speeding value to our clients. We're able to bring all creative assets into the system, version at scale, and connect the outputs to custom audience segments that we might find otherwise in media or a contact plan, a consumer journey. As with media, where technology allowed us to automate activation and execution. We're now able to target and to iterate creative executions based on the data that we're getting and that we then feed back into the system.
The second way.
Philippe Koozie: That AI has facilitated the integration and automation of creative.
Philippe Koozie: Has to do with optimizing workflows eliminating gaps and speeding value to our clients.
Philippe Koozie: we're able to bring all creative assets into the system for version at scale and connect the outputs to custom audience segments that we might find otherwise in a media or a contact plan, and a consumer Journey
Philippe Koozie: As with media, where technology allowed us to automate activation and execution.
Philippe Koozie: We're now able to Target and to iterate creative executions based on the data that we're getting and that we then feed back into the system.
Philippe Krakowsky: And increasingly, we can also create and deploy teams of AI agents that learn from the functional experts across our company. Those agents work together to solve for client opportunity at scale, speed, and complexity that was not previously possible. Again, that greatly shortens time to value, raises effectiveness, and lowers the cost to serve our clients. This is all relevant as it relates to the questions that are being asked about the potential impact of AI on our industry. Perhaps being missed in much of those conversations is the unlock of new opportunities for us. Those include performance-based compensation models, as well as tech-enabled SAF-like components to our compensation models.
And increasingly, we can also create and deploy teams of AI agents that learn from the functional experts across our company.
Philippe Koozie: Those agents work together to solve for client opportunity at scale.
Philippe Koozie: Speed and complexity, that was not previously possible.
Philippe Koozie: Again at greatly, shortened time to Value raises, Effectiveness, and lowers the cost to serve our clients.
Philippe Koozie: This is all relevant as it relates to the questions that are being asked about the potential impact of AI on our industry.
Philippe Koozie: But perhaps being missed in much of those conversations is the unlock of new opportunities for us.
Those include performance-based, compensation models.
Philippe Krakowsky: And I'd remind you that the parts of the business into which we have embedded greater technological know-how. Archives, Machine Learning. and Data Decisioning Tools are precisely those that have performed best for us for some time. allowing us to become higher value partners to clients by solving business and not just marketing challenges, as well as evolving our commercial models to incorporate asset and outcome-based compensation models.
Philippe Koozie: As well as Tech enabled satellite components to our compensation.
Philippe Koozie: And I'd remind you that the parts of the business into which we have embedded greater technological know-how which is machine learning.
And data decisioning tools are precisely those that have performed best for us for some time.
Philippe Koozie: Allowing us to become higher value. Partners to clients by solving business and not just marketing challenges.
Philippe Koozie: as well as evolving, our commercial models to incorporate asset and outcome based compensation models,
Philippe Krakowsky: The adoption levels we're currently seeing for Interact across Interpublic are very encouraging. We now have more than half of our employee population using the platform and 40% of our colleagues doing so daily. So far this year, we've processed well over a million prompts resulting in the creation of 10,000 purpose-built agents and of hundreds of thousands of images, consumer journeys, media plans, and other tools that make our people's work faster, better, and more effective to the benefit of our clients.
Philippe Koozie: The adoption levels. We're currently seeing for interact across interpublic, are very encouraging.
Philippe Koozie: We now have more than half of our employee population, using the platform and 40% of our colleagues doing so daily.
Philippe Koozie: So far, they see we've processed well, over a million prompts resulting in the creation of 10,000, purpose-built agents, and of hundreds of thousands of images, consumer Journeys, media, plans and other tools that make our people's work faster, better and more effective to the benefit of our clients.
Philippe Krakowsky: Later today, we'll be announcing the launch of AFC, which stands for Agentic Systems for Commerce. This is a net new offering that helps CPG brands manage the vast and complex commerce ecosystem in ways that are not possible without automation and artificial intelligence. ASC does this by using our proprietary agentic system and the powerful data from IntelligenceNode, the company we acquired earlier this year. The ASC platform captures data signals for every product and its competitors down to the SKU and store level. ingests insights into consumer searches, digital shelf position, product page content, pricing, inventory levels, and more, all in the service of optimizing sales and margin performance.
Philippe Koozie: Later today we'll be announcing the launch of ASC which stands for agentic systems for Commerce.
Philippe Koozie: This is a net new offering that helps cpg Brands, manage the vast and complex Commerce ecosystem in ways that are not possible without Automation and artificial intelligence
ASC does this by using our proprietary agentic system?
Philippe Koozie: And the powerful data from intelligence node. The company we acquired earlier this year,
Philippe Koozie: the ASC platform captures data signals for every product and its competitors down to the SKU and store level.
Philippe Koozie: ingests insights into consumer searches digital shelf position product page content, pricing inventory levels and more
Philippe Krakowsky: Across the Digital Commerce Ecosystem on behalf of a brand.
Philippe Krakowsky: That problem presents too big a set of variables and communications outputs to be solved without an AI toolkit. And ASC is already being piloted by almost two dozen of our global clients, with results to date that have shown double-digit improvements in impressions. We believe products like ASC can become a new revenue stream. And it's another way in which we can use AI to scale our expertise and expand our business beyond our core capability set of marketing communications and media into solutions that sets that deliver quantifiable results.
All in the service of optimizing sales and margin performance across the digital Commerce ecosystem on behalf of a brand.
Philippe Koozie: That problem presents too big, a set of variables and Communications outputs to be solved without an AI toolkit.
At ASC has already been piloted by almost 2 dozen of our Global clients with results to date that have shown double-digit improvements in Impressions and sales.
We Believe products, like ASC can become a new Revenue stream for us.
Philippe Koozie: The solutions that sets that deliver quantifiable results.
Philippe Krakowsky: On his call last week, John mentioned that our integration planning process with Omnicom has been progressing. As we expected, we're finding that our respective capabilities in areas such as platforms, data, commerce, and AI development are highly complementary. And this gives us a high degree of confidence that the combined assets will be extremely powerful and differentiated in the market. As John and I have also noted previously, the capacity that the new Omnicom will have to continue to invest and build out on its leadership position in the tech and AI space will be considerable and will further differentiate these offerings over time.
Philippe Koozie: On his call last week. John mentioned that our integration planning with process with Omnicom has been progressing.
Philippe Koozie: As we expected, we're finding that our respective capabilities in areas such as platforms data, Commerce and AI development are highly complimentary.
Philippe Koozie: And this gives us a high degree of confidence that the combined assets will be extremely powerful and differentiated in the marketplace.
Philippe Koozie: John and I have also noted previously, the capacity that the new Omnicom will have to continue to invest and build out on its leadership position in the tech and AI space will be considerable. And will further differentiate these offerings over time?
Philippe Krakowsky: as we talk about our platform capabilities. It's also essential to note that we continue to put ideas and craft at the heart of how we build brands and businesses on behalf of clients. when they're integral parts of audience-led and accountable marketing solutions and sales programs. World-class creativity has a multiplier effect in driving business out.
Philippe Koozie: As we talk about our platform capabilities,
Philippe Koozie: it's also essential to note that we continue to put ideas and crafts at the heart of how we build Brands and businesses on behalf of clients,
Philippe Koozie: When their integral parts of audience, LED and accountable Marketing Solutions and sales programs.
Philippe Koozie: World-class creativity has a multiplier effect in driving business outcomes.
Philippe Krakowsky: Last month, we saw the creative firepower of Interpublic recognized at the Cannes Film Festival of Creativity. where we won 107 lines. including one titanium and five Grand Prix. Among those celebrated work was Caption with Intention by FCB Chicago. for the Academy of Motion Picture Arts and Science. which leverages AI to reimagine closed captions through color, motion, and dynamic typography. Other Grand Prix winners include a campaign by FCB India. for the Indian Railway System, which transforms train tickets into daily lottery entries. Combat Stare Evasion. that are multiple Gold Lions, as well as the Grand Prix and PR, as well as McCann Paris's documentary which honored the copywriter behind L'Oreal's iconic Because I'm Worth It positioning and tagline, and that won the film Grand Prix and the Gold Lion in entertainment.
Philippe Koozie: Last month we saw the creative Firepower of inner public recognized at the con Film Festival of creativity.
Philippe Koozie: Where we won, 107 Lyons including 1, titanium and 5 Grand Prix.
Philippe Koozie: Among the most celebrated work was captioned with intention by FCB Chicago for the Academy of Motion Picture Arts and Sciences which leverages AI to reimagine closed captions through color motion and dynamic typography.
Philippe Koozie: Other Grand, Prix. Winners include a campaign by FCB India.
Philippe Koozie: For the Indian Railway system, which transforms train tickets into daily lottery entries.
Philippe Koozie: To combat fare evasion.
And that are multiple gold lines as well as the Grand Prix in PR.
As well as the McCann paris's documentary which honored the copywriter behind L'Oreal's iconic because I'm worth it positioning and tagline.
Philippe Krakowsky: Additionally… IPG Health was named Healthcare Network of the Year, and Area 23 earned Healthcare Agency of the Year, both for the fifth consecutive year. FCB was also recognized as the Conn-Lion Regional Network of the Year for North America for the seventh consecutive year, and these accomplishments underscore the sustained excellence of these two organizations.
Philippe Koozie: And that won the film Grand Prix and the Gold Lion in entertainment.
Philippe Koozie: Additionally.
Ipg Health was named Healthcare network of the Year, an area, 23 earned Healthcare agency of the Year both for the fifth consecutive year.
Philippe Koozie: FCB was also recognized as a con line Regional network of the year for North America for the seventh consecutive year. And these accomplishments underscore, the sustained Excellence of these 2 organizations
Philippe Krakowsky: Outside of Cannes, Interpublic was named the most effective holding company at the U.S. Effie Awards, and we were honored for the second consecutive year as the Creative Holding Company of the Year at the one show.
Philippe Koozie: Outside of Khan.
Philippe Koozie: In Republic was named the most effective holding company at the US sea Awards.
Philippe Koozie: And we were honored for the second consecutive year as the creator of holding company of the year at the 1 show.
Philippe Krakowsky: Turning now to highlights in the quarter, IPG Media Brands continue to demonstrate Significant Industry Leadership earning recognition as a Global Network of the Year by campaign and being ranked by RECMA as the number one media network in Latin America and Canada. The network deepened its retail media capabilities through a new partnership with T-Mobile Advertising Solutions. provides enhanced access to first-party data for our clients. And IPG Media Brands also won significant new accounts during the quarter, being named Media AOR for the U.S. by Paramount-CBS.
Philippe Koozie: turning now to highlights in the quarter, ipg media Brands, continue to demonstrate
significant industry leadership earning recognition as a Global Network of the Year by campaign and being ranked by remma as the number 1, media Network in Latin America and Canada,
Philippe Koozie: The network deepened, its retail media capabilities through a new partnership with T-Mobile Advertising Solutions.
Which provides enhanced access to first-party data.
Philippe Koozie: For our clients.
Philippe Koozie: And ipg media brands. Also, 1 significant new accounts during the quarter
Philippe Krakowsky: A.I. leader Amtrop. and 7-Eleven. The network also secured an important three-year renewal with its client Merck and Company Incorporated.
being a media aor for the US by Paramount. CBS
Andy leider: Andy leider anthropic.
Philippe Koozie: And 711.
Philippe Koozie: The network also secured an important 3 year, renewal with its client MK, and Company Incorporated.
Philippe Krakowsky: Axiom saw significant partner activity, including launching a new Salesforce practice with Rafter1. provide a connected Salesforce ecosystem for great data-driven AI insights, and at Kahn, we announced the collaboration with Snowflake. that brings Axiom's comprehensive suite of data and identity solutions, as well as an Interact platform, directly into any company's Snowflake environment. As I mentioned, IPG Health continued to lead the industry, and it also added of Client Relationships such as Acadia, B1, and Ionis during the quarter, as well as expanding its relationship with Novartis.
Philippe Koozie: Axim saw significant partner activity, including launching a new sales force, practice with rafter 1.
Philippe Koozie: To provide a connected sales, force ecosystem for data, driven AI insights. And at Khan we announced the collaboration with snowflake
Philippe Koozie: That brings aims comprehensive Suite of data, and identity Solutions, as well as interact platform directly into any companies snowflake environment.
Philippe Koozie: as I mentioned, ipg Health continued to lead the industry and it also added
Philippe Krakowsky: During the quarter, the network introduced an industry-first AI focus group called Living Mirror. Full-Service MedComs Agency called VYO. and it also further strengthened the sector-leading influencer ID office. and that influences, that, excuse me, leverages genuine voices in social media and among health industry. of Massachusetts.
um, client relationships such as aadia B1 and ionis during the quarter, as well as expanding its relationship with nardis.
During the quarter, the network introduced an industry first AI focus group called living mirror.
Philippe Koozie: Full Service medcomms Agency, called Vio.
Philippe Koozie: Strengthened its sector leading, influencer ID, offering. And that influences. That excuse me, leverages genuine voices in social media and among Health in
Philippe Koozie: Relevance and impact.
Philippe Krakowsky: among our creative agencies, FCP, not only when the con. Recognition that I mentioned, but was also named Network of the Year at the prestigious One Show, the Art Directors Club, and the D&AD Awards, which is a very rare sweep in our industry. Golan.
Philippe Koozie: Among our creative agencies. FCB, not only when the con um,
Philippe Koozie: recognition that I mentioned, but was also named network of the year at the prestigious 1 show, the art, directors club and the DNA D Awards, which is a very rare sweep in our industry.
Philippe Krakowsky: Ellen talked about their performance. Golan was named PR Week's 2025 Global Agency of the Year. During the quarter, PepsiCo chose the agency as its global data and analytics partner for communications. And the agency also introduced a new offering called FirstAnswer, which leverages the critical role of earned media in AI search.
Jen, Ellen talked about their performance going with named PR weeks, 2025 Global agency of the year.
Philippe Koozie: During the quarter of PepsiCo chose the agency as its global data and analytics partner for communications
And the agency also introduced a new offering called first answer, which leverages the critical role of earned media in AI search results.
Philippe Krakowsky: During the quarter, Weber Shanwick won the biggest industry pitch of the year in the social and influencer space when it was named Global Earned Media Agency of Record for Mars. The major driver of that result was Weber's proprietary, data-driven approach to winning in culture called cultural choreography. which leverages Axiom data and Interact for this earn-first solution. The company also launched an AI workspace called Halo, and it's purpose-built to help communicators jumpstart learning, strengthen and accelerate the work, which upskills all of Weber's employees globally.
Philippe Koozie: During the quarter Weber, shanwick won, the biggest industry pitch of the year in the social and influencer space, when it was named Global earned media, agency of record for Mars.
Philippe Koozie: The major driver of that result was Weber's. Proprietary data-driven approach to winning it in culture called cultural choreography.
Philippe Koozie: Which leverages axim data and interact for this earned first solution.
The company also launched an AI workspace called Halo and its purpose-built to help communicators jumpstart learning strengthen and accelerate, the work, which upskills all of weather's employees globally.
Philippe Krakowsky: Now, as we look at the remainder of the year, among our more advanced off... We continue to see a solid pipeline, new business opportunities, and are a finalist in several large ongoing reviews. These opportunities, along with organic growth from our existing client base and accelerating the development of new capabilities in areas such as Proprietary Media Trading, Agentic Commerce, and Data-Led Influencer Work. will continue to have our full focus as we look to deliver the best top line outcome for the year.
Philippe Koozie: Now, as we look at the remainder of the Year among our more advanced offerings, we continue to see a solid pipeline.
New business opportunities and our finalists in several large ongoing reviews.
Philippe Koozie: These opportunities.
Philippe Koozie: Along with Organic growth from our existing client base and accelerating the development of new capabilities in areas such as.
Proprietary media trading, agentic Commerce and data-led influencer work.
Philippe Koozie: Will continue to have our full Focus as we look to deliver the best Topline outcome for the year.
Philippe Krakowsky: Based on our track record to date, we would also expect to enter 2026 with tailwinds, thanks to our new business provider. As mentioned earlier, we continue to be on track to deliver the target for organic net revenue that we had shared with you previously. which is an organic decrease of 1% to 2% in net revenue. And at this level, we expect to drive significantly enhanced adjusted EBITDA margin well ahead of the 16.6%. we had previously shared. This increase reflects the significant progress to date on our strategic transformation efforts. as well as improving underlying performance. and some of our stronger offerings.
Philippe Koozie: Based on our track record today, we would also expect to enter 2026 with Tailwind. Thanks to our new business performance.
Philippe Koozie: Mentioned earlier, we continue to be on track to deliver the target for organic net revenue that we had shared with you previously.
Philippe Koozie: Which is an organic decrease of 1 to 2% in net revenue.
Philippe Koozie: And at this level, we expect to drive significantly. Enhanced adjusted. Ebit on margin. Well, ahead of the 16.6%. We had previously shared
Philippe Koozie: This increase reflects the significant progress to date on our strategic transformation efforts.
Philippe Koozie: As well as improving underlying performance.
Philippe Krakowsky: The charge associated with our transformation program, which we'd previously estimated at $350 million will likely increase to $375 to $400 million. which as you know has a substantial non-cash portion. It's encouraging to see this work trending so positively. And over the long term, the additional benefits will accrue to the new Omni-Credit.
Philippe Koozie: Some of our stronger offerings.
Philippe Koozie: The charge associated with our transformation program, which we had previously estimated at 350 million will likely increase to 375 to 400 million.
Philippe Koozie: which as you know, has a sustained substantial non-cash portion
Philippe Koozie: it's encouraging to see this work trending, so positively
Philippe Koozie: And over the long term, the additional benefits will accrue to the new Omnicom.
Philippe Krakowsky: In moving through this transformation process, it was always our ambition to make Interpublic the strongest possible company as it came into the merged organization. And we're clearly making good on that goal.
Philippe Koozie: And moving through this transformation process, it was always our ambition to make interpublic the strongest possible company as
Philippe Koozie: Came into the merged organization, and we're clearly making good on that goal.
Philippe Krakowsky: Finally, I'd like to close with a few words about our proposed acquisition by OmniGate. We've now secured antitrust clearance in all but four of the jurisdictions required, having been cleared in Australia last week. Importantly, this includes FTC clearance in the U.S. which took place in late June. We therefore remain solidly on track to see the transaction completed in the second half of the year. Notwithstanding noise from certain competitors about distractions or inward focus. since the acquisition was announced. We've never lost sight of the needs of our clients. and the teams that deliver value to marketers around the world.
Philippe Koozie: Finally, I'd like to close with a few words about our proposed, acquisition by Omnicom.
Philippe Koozie: We've now secured antitrust clearance in all but 4 of the jurisdictions required.
Philippe Koozie: Having been cleared in Australia last week.
Philippe Koozie: Importantly, this includes FTC clearance in the US, which took place in late June.
Philippe Koozie: We therefore remain solely on track to see the transaction completed in the second half of the year.
Philippe Koozie: Notwithstanding noise from certain competitors about distractions or inward Focus.
since the acquisition was announced,
we've never lost sight of the needs of our clients.
And the teams that deliver value to marketers around the world.
Philippe Krakowsky: The level of interest and support from clients continues to be extremely strong and there's eagerness on the part of practitioners across both organizations to unlock the value that the combination will create. by bringing together our deep pools of talent and our complementary capabilities, geographic strengths, and platform assets. What we know will result is an organization with unmatched ability to deliver business outcomes for marketers in every industry sector around the world. Together, we'll be creating a company that can drive growth for clients with the most comprehensive and powerful range of marketing and sales solutions that incorporate creativity, data and technology.
Philippe Koozie: The level of interest and support from clients continues to be extremely strong. And there's eagerness on the part of practitioners across both organizations to unlock the value. That the combination will create
Philippe Koozie: Geographic, strengths and platform assets.
Philippe Koozie: What we know will result is an organization with unmatched, ability to deliver business outcomes from marketers in every industry sector around the world.
Philippe Koozie: Together will be creating a company that can drive growth for clients with the most comprehensive and Powerful range of marketing and sales Solutions.
Philippe Krakowsky: It's an exciting vision, and as you heard from John, one that will become a reality in the near future. As always, We thank our people and our partners. as well as those of you on this call.
Philippe Koozie: That incorporate creativity, data and Technology.
Philippe Koozie: An exciting vision.
Philippe Koozie: And as you heard from John 1, that will become a reality in the near future.
Philippe Koozie: As always.
Philippe Koozie: We thank our people and our partners.
Philippe Krakowsky: for your support.
Philippe Koozie: As well as those of you on this call.
Operator: And with that, let's open the floor to your questions. Thank you. At this time, if you would like to ask a question, please press star 1 on your phone. Please ensure that your mute is off and state your name clearly when prompted.
Philippe Koozie: For your support and with that, well, let's open the floor to your questions.
Philippe Koozie: Thank you at this time. If you would like to ask a question, please press star 1 on your phone.
Philippe Koozie: Please ensure that your mute is off and state your name clearly. When prompted
David Karnovsky: Our first question comes from David Karnovsky of J.P.
David Karnovsky: Morgan. Sir, your line is open. Hi, thank you. For me, for Ellen, last quarter, you had identified, I think, annualized savings over $300 million, but you chose to maintain the margin outlook. Just can you speak to what allowed you to realize maybe some of those benefits faster? Is there any overlap with the Omnicom deal synergies? And then I know you spoke to the full-year margin now, significantly ahead of that 16.6, but I wanted to see if you could put any guardrails around that, because if we look to your kind of typical seasonality for margin, it would imply a fairly large lift for all of 25.
David Karnowski: Our first question comes from David karnowski as JP Morgan, sir, your line is open.
Hi. Thank you. Um, for fully for Allen just, uh, last quarter you had identified. I think annualized savings over 300 million but you chose to, uh, maintain the margin Outlook, just, can you speak to what allowed you to realize maybe some of those benefits.
David Karnowski: Faster. If there any overlap um with the Omnicom deal synergies and then I know you spoke to the full year March and now significantly had of that 16.6, but I wanted to see if you could put any guard rails around that because if we look to your kind of typical seasonality for margin, it would imply uh a fairly large lift for all of 25. Thanks.
Ellen Johnson: That's a lot at one go, so I guess maybe in reverse order. I realize you're building a model, so I'd say north of 100 basis points on your last question. And then on your two prior questions. Look, we said when we started this process that it was going to be a strategic process and a comprehensive process. So what we were looking for is not a restructuring. that focused on, you know, cost. without an understanding of where we're trying to take the business and how we're trying to make the business stronger. And as I said, obviously, make it as strong as possible.
David Karnowski: Um, that's a lot at 1 go, so I guess um maybe in reverse order.
David Karnowski: I realize you, you know you're building a model. So I'd say, you know, north of a 100 basis points on your last question.
and then on, on your 2 prior questions, um,
David Karnowski: Look we said when we started this process that it was going to be a strategic process and a comprehensive process. So what we were looking for is not a restructuring.
David Karnowski: that focused on, you know, costs
Philippe Krakowsky: from a capabilities set as we come into this new organization. So the restructuring has been focused on kind of improving service delivery as well as delivering structural efficiencies.
David Karnowski: Um, without an understanding of where we're trying to take the business and how we're trying to make the business stronger. And as I said, obviously, um, make it the strongest possible. Um,
Philippe Krakowsky: And I think transformation is organizational change, which is hard for people. There's probably three things that have... helped us move it along at the rate that we have. I mean, we obviously prepared for it. We sort of let you know that we were doing this and that we'd been looking at it towards the back half or more or less the back half of last year. But I think that industry pace of change, so there's clearly a lean in and an understanding on the part of folks across our organization for the need to do this. Then obviously there's some IPG-specific issues, given the top line challenge.
David Karnowski: From a from a capabilities set, um, as we come into this new organization. So the restructuring has been focused on kind of improving Service delivery, as well as delivering structural efficiencies.
David Karnowski: And, you know, I I think transformation is organizational change, which is hard for people. There's probably 3 things that have, um,
David Karnowski: Helped us move it along at the rate that we have. I mean, we we obviously prepared for it. We we, you know, sort of let you know that we were doing this and that we've been looking at it towards the back half or, you know, more or less the back half of last year, but I think that, um, industry pace of change.
Philippe Krakowsky: And we've adjusted to that on a sort of capabilities and offerings point of view. But I think that driving to a moment in time, knowing that the acquisition is there has also helped us move at the rate that we've done. And so I think it's a streamlining and modernizing of the business model. And it's trending very positively. And so, you know, kind of the read across would be that a thing that we've talked about for a long time, which is that we think that there's earnings power in our model. And then I think there's, you know, clearly going to be, you know, more if you think about the longer term, kind of the business model can continue to progress both top and bottom.
David Karnowski: So there's clearly a lean in and an understanding on the part of folks across our Organization for the need to do this. And obviously there are some ipg specific issues, you know, given the Topline Challenge and you know we've adjusted to that on a sort of capabilities and and offerings point of view but I think that driving to a moment in time knowing that the acquisition is there has also helped us move you know at the rate that we've done and so I think it's a streamlining and modernizing it.
The business model.
David Karnowski: And it's trending very positively and so, you know, kind of the read across would be that.
A thing that we've talked about, for a long time, which is that we think that there's, um, earnings power in our model and then I think there's, you know, clearly going to be, um, you know more if you think about the longer term kind of the the the business model um, can continue to to progress both topics.
Philippe Krakowsky: And there's just one more if I can, Philippe, your guide from here does imply an inflection in organic. I just don't know if you can segment that out between kind of lapping that or at least lapping part of that account loss headwind versus underlying improvement. Look, I mean, we don't excuse ourselves for the losses, right? But I mean, I think that if you, I mean, you know, we said impact Q1 was four and a half, impact in Q2 was five and a half. That's kind of consistent with what we'd seen and what we'd modeled. I think, you know, we're pleased to see that underneath that, you're seeing that there's real growth and that there are parts of the business that are performing well.
David Karnowski: And then just, uh, 1 more. If I can flip your, uh, your guide, uh, from here it doesn't apply, uh, an inflection and organic. Uh, just don't know if you can segment that out between kind of lapping that, um, or at least lapping part of that, uh, account loss headwind versus the underlying Improvement.
We we don't, we don't excuse ourselves for the losses, right? But I mean, I think that if you I mean, you know, we said impact q1 was 4 1/2, impacting Q2 was 5 1/2 that's kind of consistent with what we'd seen and what we'd modeled, I think, you know, we're pleased to see that underneath that you're seeing that there's um,
David Karnowski: Real.
Philippe Krakowsky: If you basically take away those three sizable, you know, two in media, one in pharma, you then have our two largest and historically strongest performing units, both, you know, sort of showing up in a way that if you think about kind of broader industry. Context is pretty solid, so we knew that that would be how the year phased out. And then, you know, you saw sequential improvement in the U.S., quarter to quarter, which is obviously important given the... The scale that has in our business and the fact that it is a leading indicator for sort of broader macroeconomics.
David Karnowski: Growth and that there are parts of the business that are performing well if if you basically take away those 3 sizes, you know, 2 and media 1 in in Pharma, you then have our 2 largest and and historically strongest performing units both up, you know.
David Karnowski: Sort of showing up in a way that if you think about kind of broader industry. Um,
David Karnowski: Context is is pretty solid. So we knew that that would um
David Karnowski: be how the year phased out. And then you know you saw sequential Improvement in the US Quarter to quarter which is obviously important. Given the the
David Karnowski: scale that has in our business and the fact that it is a leading indicator for sort of broader macroeconomics.
Philippe Krakowsky: And then, you know, we're liking what, you know, we're able to show up with the integration through Interact. Obviously, having moved fast to build a very modern kind of approach to buying is resonating in market and all of that probably really has modest impact in the back half for us. But you know, hopefully that helps also give you some context on that, David.
Um,
and then, you know, we're we're liking what um, you know we're able to show up with the integration through interact, obviously having having moved fast to build a very modern um, kind of approach to um buying is is resonating in market and and all of the
David Karnowski: Probably really has modest impact in the back half for us, but, you know, hopefully that helps also give you some context on that David.
Thank you.
David Karnovsky: Thank you.
Steven Cahall: Our next question comes from Steven Cahall of Wells Fargo. Your line is open. Thank you. So, Philippe, I think Omnicom said that their creative was slightly down through the first half of the year. And I know your integrated advertising and creativity faced some idiosyncratic losses that you've just been cycling through. But I was wondering if you could just give us an update on the context of how creative is performing overall, maybe excluding some of that account churn that you're seeing. It just seems like we've had a long-term industry tailwind from media, probably due to consumer fragmentation.
Speaker Change: Thank you. Our next question comes from Stephen cahal of Wells, Fargo. Your line is open
Steven Cahall: And I don't know if that has an equally negative impact on creative as attention spans on things like TikTok and YouTube maybe devalue creative a little bit. So, I'd love to just get your check-in on creative. And then on the outcome-based work that you're doing, I think you said that that's a growing trend. Could you help us maybe think about what percentage of the business is outcome-based today and where you think that can go over time? And is that a better financial business to be outcome-based versus sort of time-billings-based than I think the preponderance is today?
Stephen Cahal: Thank you. So, um, please I think Omnicom said that they're creative was uh slightly down through the first half of the year and I know your integrated advertising and creativity. Um, based some idiosyncratic losses that you've just been cycling through, but I was wondering if you could, just give us an update on the context of how creative is performing. Overall, maybe excluding some of that account churn that that you're seeing. Um, it just seems like we've had a long-term industry Tailwind, uh, from from media, probably due to Consumer fragmentation, and I don't know if that has an equally negative, um, impact on on Creative as attention spans on things like Tik Tok and YouTube. Maybe devalue creative a little bit. So we'd love to just get your check in on, on Creative. Um, and then on the outcome based work that you're doing, uh, you know, I think you said that. That's a, that's a growing Trend. Could you help us maybe think about what percentage of the business is outcome based today. Um, and and where you think that can
Steven Cahall: Thanks.
Stephen Cahal: Go over time and is that a better Financial business to be outcome based versus sort of time Billings based then I think the preponderance is today. Thanks.
Philippe Krakowsky: All right, that's a lot in one go. So I guess I'd point out to you that, you know, IAC for us is, as you put it, idiosyncratic, because it has our, quote, traditional, creative assets in it. And it also has our our healthcare specialty business in there. And I think one of the very sizable losses from last year impacted them. So there's probably the largest. Single impact on a year-to-year basis from the three losses is in IAC, and it's probably not where you would expect it to be, because it's not in the, quote, traditional advertising parts of the business, as we called out, respectively, Ellen and I in our script.
Stephen Cahal: All right. That's a lot in 1 go. So, um, I guess I'd point out to you that, you know, I see for us is, um, as you put in ads and credit because it has our quote traditional, um, creative Assets in it and it also has our
Stephen Cahal: Um our Healthcare specialty business in there um and I think the 1 of the very sizable losses from last year impacted impacted them. So there's there's probably the the largest
Stephen Cahal: Single impact on a year-to-year basis. From the 3, losses is in IAC and it's probably not where you would expect it to be because it's not in the quote, traditional advertising parts of the business, as we called out, um, respectively Allen and I, and our Scripts
Philippe Krakowsky: The healthcare specialty business is performing well, and so if you essentially just sort of I think that the challenge on traditional creative, which is industry wide, broadly speaking, is something that we will kind of address through, and maybe it's the sort of segue into your second question. It's something that we'll address because, as I said, and I think you've all heard me say this before, if you take the value and the impact, I mean, we were just in a pitch-dark world, and we're not going to be able to do that. Not long ago, we were talking to the client about all the uplifts that we can deliver.
Stephen Cahal: the healthcare specialty business is performing well um, and so if you essentially just sort of
Stephen Cahal: Strip out. Or at least look through that 1 Time Event.
um, I think that
Stephen Cahal: The Challenge on traditional creative which is industrywide. Broadly speaking is something that we will.
Stephen Cahal: Kind of address through and maybe it's the sort of segue into your second question. It's something that we'll address because
Philippe Krakowsky: We were essentially doing a lot of a kind of metric modeling for them and showing them where and how we can help them achieve a growth target for their business overall. And pieces of it had to do with what we can drive through data, and pieces of it had to do with how we can kind of optimize on the media and the precision side of the business. But a piece of it also does have to do with the fact that the creative work, when it's connected to all of this, so it's informed by those audience insights, it's tailored and targeted to those growth audiences.
Philippe Krakowsky: And then you connect it back through. through your production spine to the taxonomies and the KPIs and so on and so forth, you begin to be able to do You know, something that we've done in those precision and the media businesses, which is that we're much, much more kind of focused on and connected to outcomes. And so to answer the last part of your question, you know, outcomes based components on the media side, you know, are baked into more than 50% of the of the contract. And so I think it's a journey. And I think that that part of the business across the industry is is still.
Stephen Cahal: Side of the business, but a piece of it also does have to do with the fact that the, the creative work when it's connected to all of this. So it's informed by those audience insights. It's it's tailored and targeted to those growth audiences and then you connect it back through.
Stephen Cahal: To, you know, through your, your production, spine to the the taxonomies and, and the kpis and so on and so forth. You begin to, um, be able to do, um,
Philippe Krakowsky: You know, in the early innings, but you can do, you know, you can clearly do asset based work, because now you're doing much, much more work that still comes out of that content engine. And then you're able to understand the impact it's having in market. And then you can tie that, you know, in the way that, you know, you've heard us say for a long time that media for us is consistently, you know, margin accretive and growth accretive. So our, our traditional consumer ad agencies inside of IAC, definitely dragged. And I think it's about this broader sort of industry issue, but we're leaning into how we connect them through into the data stack.
Stephen Cahal: You know something that we've done in those precision and the media businesses which is that, we're much much more kind of focused on and connected to outcomes. And so to answer the last part of your question, you know, outcomes based components on the media side, you know, are baked into more than 50% of the, of the contracts. And so, I think it's a journey and I think that that part of the business across the industry is, is still um,
Stephen Cahal: You know, in the early Innings, but you can do, you know, you can clearly do asset based work, because now, you're doing much, much more work that still comes out of that content engine, and then you're able to understand the impact it's having in Market. Um, and then you can tie that um, you know, in in the way that, um,
Stephen Cahal: You know, you've heard us say for a long time that that media for us is consistently um you know margin accretive and and growth of creative.
so um, our our
Philippe Krakowsky: And as I said, the usage on interact with the kind of the advertising, talked a bit about obviously kind of what we're doing at some of the PR agencies to create models that allow us to connect that craft to the stack all the way from data for understanding the business opportunity, data for understanding the audiences, and then moving it all the way through.
Stephen Cahal: Traditional consumer ad agencies inside of IC. Um, definitely dragged and I think it's about this broader sort of Industry issue, but we're leaning into how we connect them through into the into the data stack. And as I said, um, the the usage on interact with the
Stephen Cahal: um, kind of the advertising talked a bit about obviously, kind of what we're doing at some of the pr agencies to to, uh, create
Stephen Cahal: Models that allow us to connect that craft to um the the stack all the way from.
Philippe Krakowsky: So, work in progress. Thank you.
Stephen Cahal: Um, you know, data for understanding the business opportunity data, for understanding the audiences, and then moving it all the way through. So, you know, work in progress.
Stephen Cahal: Thank you.
Stephen Cahal: Thank you.
Adam Berlin: Our next question comes from Adam Berlin of UBS.
Adam Berlin: Sir, your line is open. Yes, hi, good morning there. Three quick questions if I can. Following up on the earlier question, it looks like H2 is going to be broadly flat. Can you give us, just to get to the bottom end of the guidance range, can you give us some indications of how that's different between Q3 and Q4? I'm assuming that you get a sequential improvement, but is that right or are they going to be kind of similar, Q3 and Q4, in terms of organic sales growth? Second question is, can you just clarify where we are today in terms of run rate cost savings versus the original $250 million target, and where you think you'll be at the end of the year?
Speaker Change: Thank you. Our next question comes from Adam Berlin of UBS sir. Your line is open.
Speaker Change: Yes, hi. Uh, good morning there. Um, 3 3, quick questions if I can. Um,
Philippe Krakowsky: And then thirdly, Philippe, you made a comment that you expect 2026,000 tailwinds from the net winds you've had this year. Can you give us any sense of the size of that?
Following up on the earlier question. So looks like H2 is going to be broadly, flat. Um, can you give us just to get to the guy, the bottom end of the guidance range? Can you give us some, um, indications of how that's different between Q3 and Q4? Like, does I, I, I'm assuming that you get sequential Improvement. But is that right? Or is there anything, um, are they going to be kind of similar Q3 and Q4 in terms of organic, net sales growth. Uh, second question is, can you just clarify where we are today in terms of run rate cost savings versus the original 250 million? Target and where you think you'll be at the end of the year?
Speaker Change: And then, thirdly Philip, you, you made a comment that you expect, uh, 2026 to have some Tailwinds from the net wins. You've had this year, can you give us a sense of the size of that?
Philippe Krakowsky: On the third one, it's too early in the year. I mean, I think we obviously have six months to go, give or take, and that. requires that we be super focused on clients. You know, and as I pointed out, we've got, you know, some of our competitors happily talking about how we're distracted, which apparently we're not. And so there's too much that needs to happen, whether it's continue to focus on clients. And there's still a solid amount of new business activity going on out there. I mean, I think that the pipeline is middle of the road, but it's inconsistent.
Speaker Change: Uh, on the third 1 is too early in the year. I mean I I I think we obviously have 6 months to go give or take and that
Speaker Change: Requires that we be super focused on clients. Um,
Speaker Change: you know, and as I pointed out, we've got, you know, some of our competitors happily
Philippe Krakowsky: Media is very active. Healthcare. you know, despite maybe some specific policy challenges in certain parts of the world is also active and then integrated pitches that call upon the holding company and, you know, ask us to bring all of these things together and tie them together with the tech and the data are definitely taking place. But in other areas, you know, activities may be trending a bit light. So I think there's just too many variables for us to give you specificity. It was just a, you know, a broader point. As we think about, you know, there's a lot of uncertainty in the world and we obviously have some competitors kind of reading the.
Speaker Change: Talking about, you know, how we're distracted which apparently we're not. Um, and so there's there's too much that needs to happen whether it's continued, focus on clients and you know, there's still there's still a solid amount of of new business activity. Going on out there, I mean, I think that the pipeline is middle of the road but it's inconsistent media is very active Healthcare.
Ellen Johnson: macro and the client situation differently than we are, so we want to put that in there. And then in terms of The other two points, I think. Ellen will correct me, you know, but I think in-year. Savings about $300 and run rate north of $300 from the restructuring activity. And then on Q3, Q4 revenue, I think it's actually kind of fairly, I mean, I think it's definitely a stronger back half. But I think Q3 and Q4 are kind of more or less at the same level. And you had a flat, I think, that's about right.
Speaker Change: certainty in the world, and we obviously have some competitors, um, kind of reading the
Macro and the client situation differently than we are. So we want to put that in there. And then um, in terms of
Speaker Change: The other 2 points I think. Um,
Speaker Change: Ellen, will correct me, you know, but I think in your
Savings about 300 and run rate north of 300 from the restructuring activity.
Speaker Change: And then on Q3 Q4 Revenue.
Speaker Change: I I think it's actually kind of Fairly. I mean I think it's definitely a stronger back half, but I think Q3 and Q4 are are kind of more or less at the same level and you had a a flat I think uh that's about right.
Ellen Johnson: And sorry, just one more, Philippe, which was the run rate of savings at the end of Q2. I mean I don't I think like I said we think about it it's a long-term thing so it'll be 300 in year this year and more than 300 in the as ongoing structural savings beyond that point. Thank you.
Speaker Change: And so, just 1 more thing it was which was um, The Run rate of savings at the end of Q2.
Speaker Change: Like I I mean, I don't, I think, like I said, we think about it. It's it's a long-term thing, so it's, it'll be 300 in year this year and more than 300 in the as as ongoing structural savings beyond that point.
Speaker Change: Thank you.
Speaker Change: Please.
Adrien D. St. Tiller: Our next question comes from Adrien D. St. Tiller. Your line is open and he is from Bank of America. Yep, hello. Thank you. Good morning Ellen. Adrien, we're not hearing you. I don't know if you've got a mic nearby, but we're just not going to be able to pick you up. Is that working now? Much better. Thank you. Okay. Sorry about this, Philippe. So thank you for squeezing me in.
Speaker Change: Thank you. Our next question comes from Adrienne daint. Tailor your line is open and he is from Bank of America.
Speaker Change: Yep.
Speaker Change: Thank you.
Speaker Change: We don't we're not we're not hearing you, I don't know if you've got a if you've got a mic nearer by but we're just not going to be able to pick you up.
Is that working now?
Philippe Krakowsky: So a couple of questions, please, on the margin points. As the business returns back to growth, hopefully next year, do you think you will need to stuff up again? Or do you think you can basically hold the business where it is today, 51,000 people? And maybe related to that, I mean, did I hear you correctly, Philippe, that you think your model can basically deliver better operational leverage than it historically has?
Philippe Krakowsky: And if I can squeeze in one last question, you touched on that on healthcare. So, you know, lots of talks on policy reforms, as you said, in some parts of the world. I'm just wondering how that's impacting like marketing spending for those clients. And if you think that there's going to be a pullback in healthcare marketing spending as a result of those policy reforms? All right, apparently every question this morning gets answered, you know, kind of backwards. So on the health care side of things, I'd say that it is... There's a lot of sort of volatility and lack of clarity, and I think that some of those policy...
Speaker Change: Much better. Thank you. Okay, okay. Sorry about this Philip so so thank you for squeezing me in. So uh a couple of questions please on the on the margin points. Um, as you as the business returns back to growth. Hopefully next year, do you think you will need to stuff up again or do you think you can basically hold the business where it is today, 51, 51,000 people and maybe related to that? I mean, did I hear you correctly Philip that you think your model can basically deliver better operational? Leverage than it? It historically has. And if I can squeeze in 1 last question, you touched on that on Healthcare. So, you know, lots of talks on policy reforms, as you said in some parts of the world, I'm just wondering how that's impacting like marketing spending for those clients. And if you think that there's going to be a pullback in, in healthcare marketing spending as a result of those policy reforms.
Speaker Change: All right, apparently every question this morning gets answered. You know what kind of backwards. So on the healthcare side of things I'd say that. Um,
It is.
Philippe Krakowsky: Challenges have really hit in very specific ways. So, you know, we've got some in some of our marketing services businesses. We've got. Parts of a federal or national government that are charged with communicating about broader public health, for example, and that's clearly got a big question mark around it. if you kind of kind of compare and contrast where things would have been a few years ago, say around vaccines. So I think right now, it's we're seeing it, but it's showing up in pockets. But there's the bigger kind of question about is there going to be some, some meaningful, you know, kind of policy change.
Speaker Change: there's there's a lot of sort of volatility and lack of clarity, and I think that some of those policy, um,
Speaker Change: challenges have really hit in, very
Speaker Change: Specific ways. So, um, you know, we've got some
In in some of our marketing Services. Businesses we've got um
Speaker Change: Parts of a, a federal or, you know, national government that are charged with, um, communicating about broader public health, for example. And that's clearly got a big question mark around it. Or, um,
Philippe Krakowsky: And when we think about that, it's harder to mitigate for what might be happening to a specific client at a moment in time. We feel much more comfortable with a bigger question because You know, our position in the market is very significant. The expertise that sits inside of that organization is very powerful, and the need for those clients to reach consumers at a time when they're clearly empowered and when there's a great deal of fragmentation, if you think about what's gone on over time, we've been able to flex and evolve and advise clients on how to make that happen.
Speaker Change: You know, if you kind of kind of compare and contrast, where things would have been a few years ago, say around vaccines. So I think, right now it's we're seeing it but it's showing up in Pockets but there's the bigger kind of question about, is there going to be some some meaningful, um, you know, kind of policy change? And when we think about that um it's harder to mitigate for what might be happening to a specific client at a moment in time. Um we feel much more comfortable with a bigger question because
Philippe Krakowsky: So if there are ultimately changes in terms of how you reach all of the stakeholders in the healthcare ecosystem, we feel like we'll be able to navigate that and help our clients navigate that successfully. The one-offs around something that, you know, maybe really kind of turned on or off due to some of these, you know, kind of more kind of policy or political things, that's a little bit kind of beyond our control.
You know, our position in the market is is is very significant, our the expertise that sits inside of that organization is very powerful and the need, for those clients to reach consumers at a time when they're clearly empowered. And when there's a great deal of fragmentation, if you think about what's gone on over time, we've been able to flex and evolve and advise clients on how to make that happen. So if they're ultimately changes in terms of how you reach,
Philippe Krakowsky: And then your other questions. were around. I mean, long term, I think we have always, as Interpublic, shared with you that we saw the opportunity to continue to improve margins. And so against a bigger platform, the joint company, not for me to speak on behalf of what's going to be possible there, but as I said, I think if you see the fact that we've done well with our program, my read across would be that there's a lot of earnings power in this larger entity. And obviously, that's sort of TBD and will be fleshed out for you all, you know, kind of in due course.
Speaker Change: Kind of policy or political things. That's a little bit kind of beyond our control. And then your other questions. Um,
Were around.
Ellen Johnson: And then the last question, I guess, you know, I'll let Ellen sort of speak to your kind of headcount question. I mean, I think the industry overall has clearly seen some contraction. And you've seen that we are definitely adopting technology in ways that is definitely making us more efficient. A lot of what we're doing is around, you know, centralization and platforming. Sure. I mean, what we've done is very structural, you know, as Philippe said, implementing common systems, reengineering processes, automation, right-shoring. So those things, you know, are structural and should be enduring. At some point, you know, with growth, you will need to add heads, but different heads.
I mean, long-term I think we have always as in our public shared with you. That um, we saw the, you know, the the opportunity to continue to improve margins. Um, and so against a bigger platform, um, you know, the joined company not not for me to speak on, you know, behalf of um, what that's going to what's going to be possible there. But, but as I said, I think, I think if you see the benefit the, the the fact that we've done well with our program, my read across would be that there's a lot of earnings power in this, in this larger entity and not, obviously, that's sort of TBD and will be, will be flushed out for you all, you know, kind of in due course. And then the last question I guess,
Speaker Change: you know, I'll let Ellen, um, sort of speak to your kind of
Speaker Change: headcount question, I mean, I think the industry overall is clearly seen some contraction um and and you've seen that we are definitely adopting um
Ellen: Technology in ways that is definitely making us more efficient. A lot of what we're doing is around, you know, centralization and platforming.
Ellen Johnson: And we think that we're really seeing the benefits from the extensive transformation efforts that will be done faster. The other thing which we've seen and experienced is because of the reengineering of our processes, we've been able to close previously budgeted open positions. And we haven't needed to backfill attrition. So again, we think all of those things are structural and permanent and will accrue to the benefit of margin going forward. Very clear. Thanks, both. Thank you.
Philippe Koozie: Structural, you know, as Philip said implementing common systems, re-engineering processes automation right Shoring. So those things you know, are structural and should be enduring, um, at some point, you know, with growth you will need to add heads but different heads. And we think that, um, we're really seeing the benefits, um, from the extensive transformation efforts that we've done, um, faster. Um, the other thing which we've seen and experienced is because of the re-engineering of our processes, we've been able to close, uh, previously budgeted open positions and we haven't needed to fill, um, backfill attrition. So again, we think all of those things are structural and permanent and will um, acrew to the benefit of margin going forward.
Philippe Koozie: Very clear. Thanks both.
Philippe Koozie: Thank you.
Jason Bazinet: Our last question comes from Jason Bazinet of Citi. Your line is open. I just had a quick question on the proforma entity.
Speaker Change: Thank you. Our last question comes from Jason Besse of City. Your line is open.
Philippe Krakowsky: Can you just spend a second and talk about maybe the two or three areas you're most excited about as a proforma organization? These would be the capabilities that standalone IPG has today. And then and then are there any gaps that you see, or even if you put these two companies together, you know, you still feel like some of your rivals might have a better solution in the marketplace? Thanks. I mean, look, I think it's something that you will have heard, I think, John and I talk about together. I mean, strategically, we really believe and we see immense power here.
Speaker Change: I just had a quick question on the pro-forma entity. Um,
Speaker Change: can you just spend a second and talk about maybe the
Speaker Change: 2 or 3 areas, you're most excited about.
Speaker Change: As a proforma organization. These are the capabilities that stand alone, ipg has today.
Speaker Change: and then and then are there any gaps that you see or even if you put
Speaker Change: These 2 companies together, you know, you still feel like some of your Rivals might have a better solution in the marketplace. Thanks.
Philippe Krakowsky: And so I would say to you, the... You know, I was talking a bit about it, so... The data assets that we bring, combined with the commerce capability that, um, that resides inside of Omnicom at this point. I think that if you listen to one of our competitors whose English is French inflected, he talks a lot about the scale that he has on the media side and so obviously those things combined in our case will be we think really, really powerful and will do a lot to help our clients win in the marketplace. I think.
Speaker Change: I mean, look. I think it's, it's something that you will have heard. I think John and I talked about together. I mean, strategically, we really believe and we see immense power here and so um I would say to you the
Speaker Change: you know, I was talking a bit about it, so
Speaker Change: the data assets that we bring,
Speaker Change: um, combined with a Commerce capability that, um,
Speaker Change: that, um,
It resides inside of Omnicom at this point. I think that, uh, if you listen to, you know, 1 of our competitors, who you know whose French use English is French inflected, he talks a lot about the scale that he has on the media side. And so obviously, you know, those things combined in, in our case will be, um, you know, we think really, really powerful. And we'll, we'll do a lot to help our clients win in the marketplace, I think. Um,
Philippe Krakowsky: There's a lot geographically where, you know, when you deal with clients on a very regular basis and you think about kind of where you wish that you had more resource or deeper resource, there's a really, really strong fit in that regard. I think I talked a bit about the fact that this industry is moving really fast, so the capacity to invest on the side of, you know, the platforms and in AI will be meaningful and really powerful. So, to my mind, it's not that, I mean, sitting here in this moment, the portfolio is very complete.
Speaker Change: there's a lot geographically, where, you know, when you deal with clients, um, on a very regular basis and you think about
Speaker Change: kind of where you wish that you had more resource or deeper resource. There's a really, really strong fit. Um, in, in that regard, I think I talked a bit about the fact that this industry is moving really fast. So the capacity to um, invest on the, on the side of, you know, the platforms and in AI will be meaningful and and really powerful um,
Philippe Krakowsky: And as I think I said in my remarks, you know, I don't think anybody will have anything that compares to it in terms of the kinds of problems we can solve and the talent that we can bring to bear and the tools and, you know, the data and tech. And then it does move fast, but I think it'll be, you know, the new entity, as it were, will be very, very well-positioned to, you know, move fast. to ensure that it can continue to invest both organically and then, if and as required, in things that fill in any opportunities.
Speaker Change: and then it does move fast but I think it'll be, you know, the new entity as it were will be very, very well positioned to um,
Philippe Krakowsky: And I think there'll be opportunities. There won't be gaps per se. There'll be areas where you see something and you want to move to kind of build that into your stack. So hopefully that helps you. That's great. Thank you.
Speaker Change: To ensure that it can continue to invest um both organically and then if and as required in in things that fill in, you know, any opportunities and I think there'll be opportunities and we'll be gaps per se. They'll be areas where you see something and you want to and you want to move to kind of build that into your stack.
So hopefully that helps you listen.
Speaker Change: That's great. Thank you.
Philippe Krakowsky: Please, you know, as I mentioned, we appreciate the support and the interest and and we look forward to keeping you up to date. Thank you.
Speaker Change: Please.
Speaker Change: um, you know, as I mentioned, we appreciate the support and the interest and um,
Speaker Change: And uh, we look forward to keeping you up to date.
Operator: This concludes today's conference. You may disconnect at this time. Thank you and have a good day.
Thank you. This concludes today's conference. You may disconnect at this time. Thank you and have a good day.