Executive Summary

Q1 2025 delivered modest top-line growth but margin compression: revenue rose 1.6% to $3.69B with 3.4% organic growth, while operating margin fell 90 bps to 12.3% due to $33.8M IPG acquisition-related costs and higher third‑party service spending .
Adjusted EPS of $1.70 increased 1.8% YoY; GAAP diluted EPS declined to $1.45 on higher tax rate (28.5%) tied to non‑deductible acquisition costs .
Versus S&P Global consensus: EPS beat (1.70 vs 1.662*), revenue slight miss ($3.690B vs $3.718B*), EBITDA slight miss ($541.4M vs $546.3M*); management widened FY25 organic growth range to 2.5%–4.5% and maintained margin guidance (+10 bps vs FY24) amid macro/tariff uncertainty . Values retrieved from S&P Global*.
Strategic catalysts: accelerated AI deployment (Omni AI), strong media momentum, and continued progress on the IPG acquisition (stockholder approvals; 5 of 18 jurisdictions approved, including China) underpin medium‑term synergy and revenue opportunities .

What Went Well and What Went Wrong

What Went Well

Strong organic growth in Media & Advertising (+7%) and Precision Marketing (+6%) drove overall 3.4% organic growth; Asia Pacific and Latin America led regional gains (+6.0% and +14.8%) .
Adjusted EPS rose to $1.70 and Adjusted EBITA margin held flat at 13.8% despite FX headwinds and acquisition costs; YoY adjusted EBITA increased to $508.2M .
Management emphasized AI adoption (Omni AI) across workflows with thousands of users and plans to deploy to all client‑facing staff by year‑end: “AI is touching every aspect of how our people work…driving transformative outcomes for our clients” — John Wren .

What Went Wrong

Public Relations (-4.5%), Healthcare (-3.2%), Branding & Retail Commerce (-10.0%) saw organic declines, reflecting government project delays, client launch timing, M&A slowdown, and macro uncertainty .
Operating income fell 5.5% YoY to $452.6M and operating margin compressed to 12.3% (−90 bps), with acquisition costs reducing margin by ~90 bps .
Effective tax rate rose to 28.5% vs 25.7% a year ago, primarily due to non‑deductible acquisition costs; GAAP diluted EPS declined to $1.45 .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Billions)	$3.883	$4.322	$3.690
Operating Income ($USD Millions)	$600.1	$685.3	$452.6
Operating Margin (%)	15.5%	15.9%	12.3%
EBITA ($USD Millions)	$622.3	$707.6	$474.4
EBITA Margin (%)	16.0%	16.4%	12.9%
Adjusted EBITA ($USD Millions)	$622.3	$722.2	$508.2
Adjusted EBITA Margin (%)	16.0%	16.7%	13.8%
EBITDA ($USD Millions)	$661.5	$745.6	$511.6
Diluted EPS (GAAP, $)	$1.95	$2.26	$1.45
Adjusted Diluted EPS ($)	$2.03	$2.41	$1.70

YoY and QoQ context (Q1 2025):

YoY: Revenue $3.690B vs $3.631B (+1.6%); GAAP EPS $1.45 vs $1.59 (−8.8%); Adjusted EPS $1.70 vs $1.67 (+1.8%) .
QoQ: Revenue down vs Q4 seasonal high; margin compression reflects acquisition costs and higher third‑party service/incidentals .

Segment organic growth (Q1 2025 vs Q1 2024):

Media & Advertising +7.2%; Precision Marketing +5.8%; Execution & Support +1.9%; Public Relations −4.5%; Healthcare −3.2%; Experiential −1.5%; Branding & Retail Commerce −10.0% .

Regional organic growth (Q1 2025 vs Q1 2024):

United States +4.6%; Euro Markets & Other Europe +1.7%; Asia Pacific +6.0%; Latin America +14.8%; Other North America −3.6%; United Kingdom −0.7%; Middle East & Africa −9.3% .

KPIs and balance sheet

KPI	Q3 2024	Q4 2024	Q1 2025
Net Interest Expense ($USD Millions)	$40.4	$38.1	$29.4
Effective Tax Rate (%)	26.8%	26.4%	28.5%
Debt (Book Value, $USD Billions)	$6.9	$6.0	$6.1
Cash & ST Investments ($USD Billions)	$4.3 (as of Sep 30)	—	$3.4
Dividend per Share ($)	$0.70	$0.70	$0.70

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Organic Revenue Growth	FY 2025	3.5%–4.5%	2.5%–4.5%	Lowered bottom end
Adjusted EBITA Margin	FY 2025	+10 bps vs FY24 15.5% (≈15.6%)	Maintained (≈15.6%)	Maintained
FX Impact to Revenue	FY 2025	~−2%	~−1% (Q2 −0.5%, Q3 −1%, Q4 flat)	Improved
Tax Rate	FY 2025	26.5%–27%	26.5%–27%	Maintained
Net Interest Expense	FY 2025	+$15–$20M vs FY24	+$15–$20M vs FY24	Maintained
Share Repurchases	FY 2025	~$600M	~$600M (resumed post Mar 18 vote)	Maintained
Dividend	Quarterly	$0.70/share	$0.70/share (declared Feb 13, 2025)	Maintained

Earnings Call Themes & Trends

Topic	Q3 2024 (Prior)	Q4 2024 (Prior)	Q1 2025 (Current)	Trend
AI/Technology	OAG/Production launched; investments in Omni, Flywheel; AI tools in development	Continued investment; margin balance with AI/tech	Omni AI scaling to thousands, targeting all client-facing staff; efficiency expectations growing	Strengthening
Macro/Tariffs	Election/Olympics drivers; cautious outlook	Caution for 2025; FX −2% FY guide	Bottom-end growth lowered amid tariff/macro uncertainty; FX impact refined	More cautious
Media & Advertising	Strong wins (Amazon, Michelin); 9% discipline growth	Media strength; creative low single-digit	Media remains very strong; creative flat to slightly down in Q1; production growing	Mixed but resilient
Precision Marketing	0.8% in Q3; expected to accelerate	+9% in Q4; strong in U.S.	+6% Q1; Flywheel smaller in Q1 seasonally; ex-Flywheel CRM strong	Improving
Public Relations	+4% Q3; election benefit	+10% Q4; election spend ~$25M Q4	−4.5% Q1; govt delays; tough election comps ahead	Moderating
Healthcare	−1% Q3; cycling client loss	−4% Q4; improvement expected 2H25	−3.2% Q1; strength in high‑science focus; improvement expected 2H	Stabilizing
Branding & Retail Commerce	−5.4% Q3	−12% Q4	−10% Q1; tied to M&A slowdown and fewer rebrand projects	Weak

Management Commentary

“Organic revenue growth in the first quarter was in line with our expectations of 3.4%… Non‑GAAP adjusted earnings per share…was $1.70, up 1.8%” — John Wren .
“Given the uncertainty of the current environment, we're expanding the range of full year 2025 organic growth to between 2.5% and 4.5% and maintaining our adjusted EBITA margin guidance” — John Wren .
“Excluding the acquisition‑related costs… non‑GAAP adjusted EBITA…margin was flat at 13.8%… FX reduced EBITA by ~1.5%” — Phil Angelastro .
“We remain on track to close in the second half of 2025… targeted $750 million in run rate cost synergies” — John Wren .
“Third‑party service costs increased…primarily as a result of organic growth in our Media & Advertising and Precision Marketing disciplines” .

Q&A Highlights

Guidance conservatism: Lowered bottom end due to macro/tariff uncertainty; no specific client cutbacks observed; stronger segments remain advertising, media, CRM; events more vulnerable .
Cost discipline and margins: Flexible cost base; proactive actions to align costs with revenue; confidence in margin targets despite uncertainty .
IPG acquisition: No significant client loss fears; jurisdictions approved include China, Colombia, Brazil, Saudi Arabia, Egypt; synergy planning underway toward $750M run‑rate savings .
Segment color: Healthcare decline tied to cycling Pfizer and launch timing; media very strong; creative slightly down in Q1 with production expanding; branding remains challenged and small mix (<2%) .
FX/interest: Q2 net interest expense guided +$2–$5M YoY; FY +$15–$20M; FX impact: Q2 −0.5%, Q3 −1%, Q4 flat .

Estimates Context

Metric (Q1 2025)	S&P Global Consensus*	Reported/Actual*	Surprise*
Primary EPS (US$)	1.662*	1.70*	+0.038 (+2.3%)*
Revenue (US$)	$3,717.2M*	$3,690.4M*	−$26.8M (−0.7%)*
EBITDA (US$)	$546.3M*	$541.4M*	−$4.9M (−0.9%)*

Values retrieved from S&P Global*.
Note: Company‑reported EBITDA was $511.6M (press release) reflecting Omnicom’s defined adjustments; S&P Global “EBITDA” methodology may differ .

Key Takeaways for Investors

Mix quality intact: Media & Advertising and Precision Marketing are driving growth; PR/branding/healthcare weigh on mix but are manageable given low exposure and expected 2H improvement .
Margin path: Adjusted EBITA margin held at 13.8% despite FX and one‑time acquisition costs; disciplined cost actions and production/automation support margin resiliency .
AI as a differentiator: Omni AI deployment is broadening, aimed at measurable efficiencies and outcome‑based client ROI—an important narrative for multiple expansion .
IPG deal progress: Regulatory approvals advancing (including China); $750M cost synergies plus data/commerce platform revenue synergies (Acxiom + Omni + Flywheel) are the medium‑term upside catalyst .
FX and macro watch‑items: FY FX impact now ~−1% (improved vs prior view); tariff clarity and client spending patterns over next 90 days are key for achieving top‑end growth .
Capital returns steady: Dividend maintained at $0.70/share; buybacks targeted at ~$600M in 2025 post vote blackout period .
Trade setup: Near‑term volatility risk from macro/tariffs and weak segments; medium‑term positive skew from IPG integration, AI/productivity gains, and strong media execution—monitor segment trends and regulatory milestones .

Sources: Q1 2025 press release and tables ; Q1 2025 earnings call prepared remarks and Q&A ; Dividend release ; Q4 2024 press release and call ; Q3 2024 press release/call ; IPG transaction updates .

OMNICOM GROUP INC. (OMC)·Q1 2025 Earnings Summary