Omnicom's acquisition of IPG expected to close in November

Omnicom Group reported third-quarter revenue of $4.04 billion, a 4 percent increase from a year earlier, driven by modest organic growth and favorable currency movements, as the advertising giant prepares to complete its acquisition of Interpublic Group next month.

Net income for the quarter was $341.3 million, down 11.6 percent from the same period in 2024. On an adjusted basis, non-GAAP net income was $436.4 million. Diluted earnings per share fell to $1.75 from $1.95 a year earlier, while adjusted earnings rose to $2.24 per share.

“We expect to close the Interpublic acquisition next month, creating the world’s leading marketing and sales company,” said John Wren, Omnicom’s chairman and chief executive. “Together, we will emerge with the industry’s most talented team and a powerful platform designed to accelerate growth through strategic advantages in data, media, creativity, production, and technology.”

Wren added that both companies were seeing “strong momentum with significant new business wins,” and that the deal would position Omnicom for stronger revenue growth, greater efficiency, and long-term shareholder value.

Mixed Growth Across Business Lines

Organic revenue grew 2.6 percent from a year earlier, with performance varying sharply across Omnicom’s business segments. Media and advertising posted a 9.1 percent increase, followed by a 2 percent rise in execution and support services and a 0.8 percent uptick in precision marketing. Other areas lagged: healthcare fell 1.9 percent, public relations declined 7.5 percent, experiential marketing dropped 17.7 percent, and branding and retail commerce slipped 16.9 percent.

By region, organic growth was strongest in Latin America (27.3 percent) and the Middle East and Africa (5.9 percent), while the United States rose 4.6 percent and the United Kingdom 3.7 percent. Revenue declined slightly in Asia Pacific, other parts of North America, and Europe.

Rising Costs and Integration Expenses

Operating expenses climbed 6.8 percent to $3.51 billion, including $60.8 million in acquisition-related costs tied to the pending Interpublic deal and $38.6 million in repositioning charges, largely severance costs linked to integration efforts.

Salary and service costs rose 4.5 percent to $2.92 billion, reflecting higher third-party service and incidental costs offset by lower direct compensation expenses. Occupancy and other costs fell slightly to $322.7 million, while selling, general and administrative expenses jumped 64.3 percent to $163.5 million, largely due to acquisition costs.

Operating income dropped 11.7 percent to $530.1 million, with operating margins narrowing to 13.1 percent from 15.5 percent a year ago. The company said that the Interpublic-related costs and repositioning reduced margins by 2.4 percentage points.

Earnings and Margins

Adjusted EBITA—a key measure of operating performance—rose 4.6 percent to $651 million, representing a margin of 16.1 percent. On a GAAP basis, EBITA declined 11.4 percent to $551.6 million.

Net interest expense increased modestly to $43.2 million as lower interest rates and reduced cash balances dampened income. Omnicom’s effective tax rate rose slightly to 27.2 percent from 26.8 percent due to the non-deductibility of some acquisition-related costs.

Economic Outlook

The company cautioned that global macroeconomic risks — including inflation, geopolitical instability, and potential disruptions to supply chains and credit markets — could create volatility in the quarters ahead. Omnicom said it continues to monitor client spending closely and will adjust its cost structure as needed to align with demand.

Despite the near-term pressures, the company expressed confidence in its growth trajectory, bolstered by its upcoming merger. As Wren put it, the Interpublic deal is expected to strengthen “our confidence in the future — for our clients, our people and for long-term shareholder value.”

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