WPP cuts profit, revenue outlook for 2025 as client spending slows amid tougher economy

WPP, one of the world’s largest advertising groups, cut its full-year guidance on Tuesday after reporting a deterioration in trading conditions during the second quarter, citing macroeconomic pressures and weaker new business than anticipated.

The company now expects like-for-like revenue less pass-through costs to decline between 3 percent and 5 percent in 2025, down from a prior forecast range of flat to a 2 percent decline. WPP also expects headline operating profit margins to fall by 50 to 175 basis points, reflecting the impact of lower revenue and continued macro uncertainty.

“Since the start of the year, we have faced a challenging trading environment with macro pressures intensifying and lower net new business,” Mark Read, Chief Executive Officer of WPP, said. “While we expected the second quarter to be similar to the first quarter, performance in June was worse than anticipated and we expect this pattern of trading in the first half to continue into the second half.”

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The company said it now anticipates first-half like-for-like revenue less pass-through costs to decline by between 4.2 percent and 4.5 percent, with a sharper decline of 5.5 percent to 6 percent in the second quarter. The weakness in the second quarter, WPP noted, was partly driven by one-off factors but nonetheless came in below expectations.

Headline operating profit for the first half is expected to fall in the range of £400 million to £425 million, reflecting a margin decline of 280 to 330 basis points year-on-year, excluding currency effects.

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“As a result, we are updating our guidance for the full year and reducing our expectations on LFL revenue less pass-through costs growth to -3% to -5% (from flat to -2%) with a year-on-year decline in headline operating profit margin of 50 to 175 bps (vs. around flat previously),” Read said.

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He added: “Our focus remains on ensuring the right balance between investing in the business for the long-term and continuing to reduce structural costs, while taking appropriate actions to respond to the current trading environment.”

WPP’s update comes as the advertising industry navigates a period of uncertainty, with clients reining in spending amid persistent inflationary pressures and broader economic volatility. The company has also faced challenges in net new business generation, adding further strain to its revenue outlook.

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