Dentsu posts operating losses of $424 million in Q1, targets 2027 margin recovery

Japanese advertising company Dentsu Group Inc operating loss stood at 62 billion yen ($424 million) during the first quarter ended in June this year after booking an impairment loss of 86 billion yen due to sluggish performance in the US and Europe, Bloomberg reported.

However, the ad agency has cut its target of operating loss to 3.5 billion yen this year, compared to 66 billion yen in operating profit.

Layoffs: Japan’s Dentsu to cut 3,400 jobs abroad as part of restructuring effort

Dentsu said it is making progress to achieve an operating margin of 16-17% in FY 2027 and is projected to deliver 52 billion yen in annual operating cost cuts.

Dentsu CEO pledges overhaul of struggling overseas business; reports 3,400 job cuts

In Japan, Dentsu saw a net revenue organic growth rate of 5.3% and net revenue of 236,708 million yen--5.3% rise year-on-year in the first six months of 2025, with the growth in Marketing business led by internet advertising, Business Transformation (BX), Digital Transformation (DX), and Sports & Entertainment (SP&E).

The net revenue organic growth rate stood at 3.4% in America between January and June 2025. Due to a shift in the exchange rate toward a stronger yen and disposals of some subsidiaries, net revenue in the Americas was 153,847 million yen, nearly 8% drop YoY.

Dentu's net revenue in the Asia Pacific region dropped 11.9% YoY to 47,171 million yen while underlying operating loss stood at 4,191 million yen, and the operating margin was negative at 8.9% in the fist six months.

Meanwhile, the company said it will cut about 3,400 jobs in markets outside of Japan, equivalent of 8% of headcount. It is also mulling options of a partnership for overseas operations.

(This is a developing story. More details awaited)