noodls browser compatibility check

The security settings of your browser are blocking the execution of scripts.

To use noodls, javascript support must be enabled. Please change your browser's security settings to enable javascript.

If you have changed your browser's security settings, you can click here.

related announcements

Company News

Arts and Culture

Omnicom Group Inc.

07/16/2025 | Press release | Distributed by Public on 07/16/2025 04:01

Quarterly Report for Quarter Ending JUNE 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

(Dollars in tables in millions, except per share amounts.)

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements, including statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, from time to time, the Company or its representatives have made, or may make, forward-looking statements, orally or in writing. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs of the Company's management as well as assumptions made by, and information currently available to, the Company's management. Forward-looking statements may be accompanied by words such as "aim," "anticipate," "believe," "plan," "could," "should," "would," "estimate," "expect," "forecast," "future," "guidance," "intend," "may," "will," "possible," "potential," "predict," "project" or similar words, phrases or expressions. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company's control. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include:

•risks relating to the pending Merger (as defined below) with The Interpublic Group of Companies, Inc., or IPG, including: that the Merger may not be completed in a timely manner or at all; delays, unanticipated costs or restrictions resulting from regulatory review of the Merger, including the risk that Omnicom or IPG may be unable to obtain governmental and regulatory approvals required for the Merger, or that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the Merger; uncertainties associated with the Merger may cause a loss of both companies' management personnel and other key employees, and cause disruptions to both companies' business relationships; the Merger Agreement (as defined below) subjects the Company and IPG to restrictions on business activities prior to the effective time of the Merger; the Company and IPG are expected to incur significant costs in connection with the Merger and integration; litigation risks relating to the Merger; the business and operations of both companies may not be integrated successfully in the expected time frame; the Merger may result in a loss of both companies' clients, service providers, vendors, joint venture participants and other business counterparties; and the combined company may fail to realize all of the anticipated benefits of the Merger or fail to effectively manage its expanded operations;

•adverse economic conditions and disruptions, including geopolitical events, international hostilities, acts of terrorism, public health crises, inflation or stagflation, tariffs and other trade barriers, central bank interest rate policies in countries that comprise our major markets, labor and supply chain issues affecting the distribution of our clients' products, or a disruption in the credit markets;

•international, national or local economic conditions that could adversely affect the Company or its clients;

•losses on media purchases and production costs incurred on behalf of clients;

•reductions in client spending, a slowdown in client payments or a deterioration or disruption in the credit markets;

•the ability to attract new clients and retain existing clients in the manner anticipated;

•changes in client marketing and communications services requirements;

•failure to manage potential conflicts of interest between or among clients;

•unanticipated changes related to competitive factors in the marketing and communications services industries;

•unanticipated changes to, or the ability to hire and retain, key personnel;

•currency exchange rate fluctuations;

•reliance on information technology systems and risks related to cybersecurity incidents;

•effective management of the risks, challenges and efficiencies presented by utilizing Artificial Intelligence (AI) technologies and related partnerships in our business;

•changes in legislation or governmental regulations affecting the Company or its clients;

•risks associated with assumptions the Company makes in connection with its acquisitions, critical accounting estimates and legal proceedings;

•the Company's international operations, which are subject to the risks of currency repatriation restrictions, social or political conditions and an evolving regulatory environment in high-growth markets and developing countries; and

•risks related to environmental, social and governance goals and initiatives, including impacts from regulators and other stakeholders, and the impact of factors outside of our control on such goals and initiatives.

The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties that may affect the Company's business, including those described in Item 1A, "Risk Factors" and Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024, or 2024 10-K, and in Item 2, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this report and in other documents filed from time to time with the Securities and Exchange Commission. Except as required under applicable law, the Company does not assume any obligation to update these forward-looking statements.

EXECUTIVE SUMMARY

The unaudited consolidated financial statements and related notes to the unaudited consolidated financial statements, including our critical accounting estimates, and the related Management's Discussion and Analysis of Financial Condition and Results of Operations included in this report, should be read in conjunction with our 2024 Form 10-K.

Agreement to Acquire IPG

On December 8, 2024, Omnicom entered into an Agreement and Plan of Merger, or the Merger Agreement, by and among Omnicom, EXT Subsidiary Inc., a direct wholly owned subsidiary of Omnicom, or Merger Sub, and IPG, pursuant to which, subject to the terms and conditions of the Merger Agreement, Merger Sub will merge with and into IPG, or the Merger, with IPG surviving the Merger as a wholly owned subsidiary of Omnicom. On March 18, 2025, the shareholders of each of Omnicom and IPG approved the Merger. Under the terms of the Merger Agreement, IPG shareholders will receive 0.344 shares of Omnicom common stock for each share of IPG common stock they own. Following the closing of the Merger, Omnicom shareholders are expected to own approximately 60.6% of the combined company, and IPG shareholders are expected to own approximately 39.4%, on a fully diluted basis. The completion of the Merger is subject to customary closing conditions, including required regulatory approvals. If completed, the Merger is expected to have a material impact on our business, results of operations and financial condition. During the three and six months ended June 30, 2025, we recorded acquisition related costs related to the Merger of $66.0 million and $99.8 million, respectively, in selling, general and administrative expenses. The results of IPG are not included in our 2025 or 2024 results of operations or financial position.

On June 23, 2025, the U.S. Federal Trade Commission FTC concluded its antitrust review of Omnicom's pending acquisition of IPG and reached agreement with Omnicom and IPG on a mutually acceptable consent order. We continue to work to obtain other required regulatory approvals and continue to expect that the Merger will be completed in the second half of 2025.

Risks and Uncertainties

Global economic conditions and disruptions, including geopolitical events, international hostilities, acts of terrorism, public health crises, inflation or stagflation, tariffs and other trade barriers, central bank interest rate policies in countries that comprise our major markets, labor and supply chain challenges affecting the distribution of our clients' products, or a disruption in the credit markets could cause economic uncertainty and volatility. The impact of these issues on our business will vary by geographic market and discipline. We monitor economic conditions closely, as well as client revenue levels and other factors. In response to reductions in revenue, we can take actions to align our cost structure with changes in client demand and manage our working capital. However, there can be no assurance as to the effectiveness of our efforts to mitigate any impact of the current and future adverse economic conditions, reductions in client revenue, changes in client creditworthiness and other developments.

Our Business

We are a strategic holding company providing data-inspired, creative marketing and sales solutions to many of the largest global companies. Our portfolio of companies includes our global networks: Omnicom Advertising Group (OAG), Omnicom Media Group, the DAS Group of Companies, and the Communications Consultancy Network. OAG includes our creative brands BBDO, DDB, TBWA and the brands included within the Omnicom Advertising Collective. All of our global networks integrate their service offerings with the Omnicom branded practice areas, including Omnicom Health Group, Omnicom Precision Marketing Group, Omnicom Commerce Group, Omnicom Public Relations Group, Omnicom Brand Consulting Group, Flywheel Digital and Omnicom Production, as well as our Experiential businesses and Execution & Support businesses, which includes Omnicom Specialty Marketing Group.

On a global, pan-regional, and local basis, our networks, practice areas and agencies provide a comprehensive range of services in the following fundamental disciplines: Media & Advertising, Precision Marketing, Public Relations, Healthcare, Branding & Retail Commerce, Experiential, and Execution & Support. Media & Advertising includes creative services across digital and traditional media, strategic media planning and buying, performance media, data analytics services, and Omnicom Production. Precision Marketing includes digital and direct marketing, digital transformation consulting, e-commerce operations, media execution, market intelligence and data and analytics. Public Relations services include corporate communications, crisis management, public affairs and media and media relations services. Healthcare includes corporate communications and advertising and media services to global healthcare and pharmaceutical companies. Branding & Retail Commerce services include brand and product consulting, strategy and research and retail marketing. Experiential marketing services include live and digital events and experience design and execution. Execution & Support includes field marketing, sales support, digital and physical merchandising, point-of-sale and product placement, as well as other specialized marketing and custom communications services. Our geographic markets include the Americas, which includes North America and Latin America, Europe, the Middle East and Africa or EMEA, and Asia-Pacific.

Our business model was built and continues to evolve around our clients. While our networks, practice areas and agencies operate under different names and frame their ideas in different disciplines, we organize our services around our clients. Our fundamental business principle is that our clients' specific requirements are the central focus of how we structure our service offerings and allocate our resources. This client-centric business model requires that multiple agencies within Omnicom

collaborate in formal and informal virtual client networks utilizing our key client matrix organization structure. This collaboration allows us to cut across our internal organizational structures to execute our clients' marketing requirements in a consistent and comprehensive manner. We use our client-centric approach to grow our business by expanding our service offerings to existing clients, moving into new markets and obtaining new clients. In addition, we pursue selective acquisitions of complementary companies with strong entrepreneurial management teams that could fill gaps in our service delivery to our existing clients.

We believe generative AI and agentic AI will have a significant effect on how we provide services to our clients and how we enhance the productivity of our people. As with any new technology, we are working closely with our clients and technology partners to take advantage of the benefits of AI while being mindful of its limitations, risks, and privacy concerns. We are committed to responsible AI practices and collaboration to harness AI's potential, while evaluating related risks, such as ethical considerations, public perception and reputational concerns, intellectual property protection, regulatory compliance, privacy and data security concerns and our ability to effectively adopt this new emerging technology. The rapidly developing nature of AI technology makes it difficult to assess the full impact on our business at this time.

Global economic conditions and disruptions have a direct impact on our business and financial performance. Adverse global economic conditions and disruptions pose a risk that our clients may reduce, postpone or cancel spending on marketing and communications services, which would reduce the demand for our services. Revenue is typically lower in the first and third quarters and higher in the second and fourth quarters, reflecting client spending patterns during the year and additional project work that usually occurs in the fourth quarter. Certain global events targeted by major marketers for advertising expenditures, such as the FIFA World Cup and the Olympics, and certain national events, such as the U.S. election process, may affect our revenue year-over-year in certain businesses. Typically, these events do not have a significant impact on our revenue in any period.

We operate in all major markets and have a large client base. For the twelve months ended June 30, 2025, our largest client accounted for 2.6% of our revenue, and our 100 largest clients, which represent many of the world's major marketers, accounted for approximately 54.1% of our revenue. Our clients operate in virtually every sector of the global economy with no one industry representing more than 15% of our revenue for the six months ended June 30, 2025. Although our revenue is generally balanced between the United States and international markets, and we have a large and diverse client base, we are not immune to general economic downturns.

Given our size and breadth, we manage our business by monitoring several financial indicators. The key performance indicators that we focus on are revenue growth and variability of operating expenses. We analyze revenue growth by reviewing the components and mix of the growth, including growth by principal regional market, practice area and marketing discipline, the impact from foreign currency exchange rate changes, growth from acquisitions, net of dispositions, and growth from our largest clients. Operating expenses primarily consist of cost of services, selling, general and administrative expenses, or SG&A, and depreciation and amortization, and are analyzed for each network by the Chief Operating Decision Maker, who allocates resources accordingly.

Financial Performance

Worldwide revenue for the three months ended June 30, 2025 increased $161.8 million, or 4.2%, to $4,015.6 million, compared to $3,853.8 million in the prior year quarter. Worldwide organic revenue growth increased revenue $116.8 million, or 3.0%, primarily driven by our Media & Advertising, Precision Marketing and Experiential disciplines. Our Public Relations, Branding & Retail Commerce and Healthcare disciplines had negative performance during the quarter. All of our major geographic regions had positive organic growth compared to the prior year period. Organic growth in the quarter was led by our largest market, the U.S. In Europe, growth was mixed by market. In Asia-Pacific, we experienced growth in substantially all of our markets. Changes in foreign exchange rates period-over-period increased revenue $42.4 million, or 1.1%. Acquisition revenue, net of disposition revenue, increased revenue $2.6 million, or 0.1%.

Worldwide revenue for the six months ended June 30, 2025 increased $221.7 million, or 3.0%, to $7,706.0 million, compared to $7,484.3 million in the prior year period. Worldwide organic revenue growth increased revenue $238.7 million, or 3.2%, primarily driven by our Media & Advertising, Precision Marketing and Execution & Support disciplines. Our Public Relations, Branding & Retail Commerce and Healthcare disciplines had negative performance during the period. All of our major geographic regions had positive organic growth compared to the prior year period. Organic growth in the six month period was led by our largest market, the U.S. In Europe, growth was mixed by market. In Asia-Pacific, we experienced growth in substantially all of our markets. Changes in foreign exchange rates period-over-period reduced revenue $16.8 million, or 0.2%. Acquisition revenue, net of disposition revenue, reduced revenue slightly by $0.2 million.

increased $54.9 million, Public Relations decreased $55.8 million, Healthcare decreased $23.8 million, Branding & Retail Commerce decreased $59.5 million, Experiential increased $12.9 million, and Execution & Support increased $8.7 million.

The period-over-period change in worldwide revenue across our geographic markets for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, was: North America increased $61.3 million, or 2.9%, Latin America increased $8.2 million, or 7.7%, Europe increased $64.5 million, or 5.9%, Middle East and Africa increased $0.5 million, or 0.8%, and Asia-Pacific increased $27.3 million, or 6.3%.

The period-over-period change in the worldwide revenue across our geographic markets for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, was: North America increased $131.9 million, or 3.1%, Latin America increased $8.1 million, or 4.0%, Europe increased $53.7 million, or 2.5%, Middle East and Africa decreased $8.3 million, or 5.7%, and Asia-Pacific increased $36.3 million, or 4.3%.

A summary of our consolidated results of operations period-over-period:


	Three Months Ended June 30,										Six Months Ended June 30,
	2025			2024			$ Change		% Change		2025			2024			$ Change		% Change
Revenue	$	4,015.6		$	3,853.8		$	161.8	4.2	%	$	7,706.0		$	7,484.3		$	221.7	3.0	%
Operating Income2	$	439.2		$	510.3		$	(71.1)	(13.9)	%	$	891.8		$	989.2		$	(97.4)	(9.8)	%
Operating Margin2	10.9		%	13.2		%			(2.3)	%	11.6		%	13.2		%			(1.6)	%
Net Income - Omnicom Group Inc.2	$	257.6		$	328.1		$	(70.5)	(21.5)	%	$	545.3		$	646.7		$	(101.4)	(15.7)	%
Net Income per Share - Omnicom Group Inc.: Diluted2,3	$	1.31		$	1.65		$	(0.34)	(20.6)	%	$	2.77		$	3.24		$	(0.47)	(14.5)	%
EBITA1,2,3	$	459.0		$	531.8		$	(72.8)	(13.7)	%	$	933.4		$	1,032.2		$	(98.8)	(9.6)	%
EBITA Margin %1,2,3	11.4		%	13.8		%			(2.4)	%	12.1		%	13.8		%			(1.7)	%

1) Reconciliation of Non-GAAP Financial Measures on page 27.

2) For the three and six months ended June 30, 2025, operating expenses included $88.8 million ($67.2 million after-tax) of repositioning costs recorded in the second quarter of 2025, primarily related to severance actions related to efficiency initiatives (see Note 9 to the unaudited consolidated financial statements). In addition, included in selling, general and administrative expenses for the three and six months ended June 30, 2025, are acquisition related costs of $66.0 million ($61.6 million after-tax) and $99.8 million ($94.3 million after-tax), respectively, related to the pending merger with IPG (see Note 1 to the unaudited consolidated financial statements). The net impact of these items reduced operating income for the three and six months ended June 30, 2025, by $154.8 million ($128.8 million after-tax) and $188.6 million ($161.5 million after-tax), respectively, which reduced diluted net income per share - Omnicom Group Inc. by $0.66 and $0.82, respectively. For the three and six months ended June 30, 2024, operating expenses included $57.8 million ($42.9 million after-tax) of repositioning costs recorded in the second quarter of 2024, primarily related to severance actions related to ongoing efficiency initiatives, including strategic agency consolidation in our smaller international markets and the launch of our centralized production strategy, which reduced diluted net income per share - Omnicom Group Inc. by $0.22. There were no acquisition related costs for the three and six months ended June 30, 2024.

3) EBITA is defined as earnings before interest, income taxes and amortization of acquired intangible assets and internally developed strategic platform assets. We believe EBITA is useful in evaluating the impact of amortization of acquired intangible assets and internally developed strategic platform assets on operating performance and allows for comparability between reporting periods. In the three and six months ended June 30, 2025, the effect of after-tax amortization of acquired intangible assets and internally developed strategic platform assets decreased diluted net income per share by $0.08 for each of the three months ended June 30, 2025 and 2024 and $0.15, and $0.16 for the six months ended June 30, 2025 and 2024, respectively.

CONSOLIDATED RESULTS OF OPERATIONS

The period-over-period change in results of operations:


	Three Months Ended June 30,									Six Months Ended June 30,
	2025			2024			$ Change			2025			2024			$ Change
Revenue	$	4,015.6		$	3,853.8		$	161.8		$	7,706.0		$	7,484.3		$	221.7
Operating Expenses:
Salary and service costs	2,932.6			2,800.1			132.5			5,678.9			5,492.7			186.2
Occupancy and other costs	325.9			314.2			11.7			640.5			628.3			12.2
Repositioning costs2	88.8			57.8			31.0			88.8			57.8			31.0
Cost of services	3,347.3			3,172.1			175.2			6,408.2			6,178.8			229.4
Selling, general and administrative expenses2	170.4			111.0			59.4			288.3			196.3			92.0
Depreciation and amortization	58.7			60.4			(1.7)			117.7			120.0			(2.3)
Total Operating Expenses2	3,576.4			3,343.5			232.9			6,814.2			6,495.1			319.1
Operating Income2	439.2			510.3			(71.1)			891.8			989.2			(97.4)
Interest Expense	62.6			62.7			(0.1)			121.7			116.5			5.2
Interest Income	21.9			21.0			0.9			51.6			48.0			3.6
Income Before Income Taxes and Income From Equity Method Investments	398.5			468.6			(70.1)			821.7			920.7			(99.0)
Income Tax Expense	120.5			123.7			(3.2)			241.2			239.7			1.5
Income From Equity Method Investments	(0.2)			3.3			(3.5)			0.7			4.2			(3.5)
Net Income2	277.8			348.2			(70.4)			581.2			685.2			(104.0)
Net Income Attributed To Noncontrolling Interests	20.2			20.1			0.1			35.9			38.5			(2.6)
Net Income - Omnicom Group Inc.2	$	257.6		$	328.1		$	(70.5)		$	545.3		$	646.7		$	(101.4)
Net Income Per Share - Omnicom Group Inc.:2,3
Basic	$	1.32		$	1.67		$	(0.35)		$	2.78		$	3.28		$	(0.50)
Diluted	$	1.31		$	1.65		$	(0.34)		$	2.77		$	3.24		$	(0.47)

Revenue	$	4,015.6		$	3,853.8		$	161.8		$	7,706.0		$	7,484.3		$	221.7
Operating Margin %2	10.9		%	13.2		%				11.6		%	13.2		%
EBITA1,2,3	$	459.0		$	531.8		$	(72.8)		$	933.4		$	1,032.2		$	(98.8)
EBITA Margin %1,2,3	11.4		%	13.8		%	(2.4)		%	12.1		%	13.8		%	(1.7)		%

1) Reconciliation of Non-GAAP Financial Measures on page 27.

Revenue

The components of period-over-period revenue change in the United States ("Domestic") and the remainder of the world ("International"):


	Total				Domestic				International
	$		%		$		%		$		%
Three months ended June 30, 2024	$	3,853.8			$	2,033.4			$	1,820.4
Components of revenue change:
Foreign exchange rate impact	42.4		1.1	%	-		-	%	42.4		2.3	%
Acquisition revenue, net of disposition revenue	2.6		0.1	%	(0.3)		-	%	2.9		0.2	%
Organic growth	116.8		3.0	%	60.4		3.0	%	56.4		3.1	%
Three months ended June 30, 2025	$	4,015.6	4.2	%	$	2,093.5	3.0	%	$	1,922.1	5.6	%


	Total				Domestic				International
	$		%		$		%		$		%
Six months ended June 30, 2024	$	7,484.3			$	3,959.3			$	3,525.0
Components of revenue change:
Foreign exchange rate impact	(16.8)		(0.2)	%	-		-	%	(16.8)		(0.5)	%
Acquisition revenue, net of disposition revenue	(0.2)		-	%	(7.0)		(0.2)	%	6.8		0.2	%
Organic growth	238.7		3.2	%	148.2		3.7	%	90.5		2.6	%
Six months ended June 30, 2025	$	7,706.0	3.0	%	$	4,100.5	3.6	%	$	3,605.5	2.3	%

The components and percentages are calculated as follows:

•Foreign exchange rate impact is calculated by translating the current period's local currency revenue using the prior period average exchange rates to derive current period constant currency revenue (in this case $3,973.2 million and $7,722.8 million for the Total column for the three and six months ended June 30, 2025, respectively). The foreign exchange impact is the difference between the current period revenue in U.S. Dollars and the current period constant currency revenue ($4,015.6 million less $3,973.2 million and $7,706.0 million less $7,722.8 million for the Total column for the three and six months ended June 30, 2025, respectively).

•Acquisition revenue is calculated as if the acquisition occurred twelve months prior to the acquisition date by aggregating the comparable prior period revenue of acquisitions through the acquisition date. As a result, acquisition revenue excludes the positive or negative difference between our current period revenue subsequent to the acquisition date and the comparable prior period revenue and the positive or negative growth after the acquisition is attributed to organic growth. Disposition revenue is calculated as if the disposition occurred twelve months prior to the disposition date by aggregating the comparable prior period revenue of dispositions through the disposition date. The acquisition revenue and disposition revenue amounts are netted in the table.

•Organic growth is calculated by subtracting the foreign exchange rate impact, and the acquisition revenue, net of disposition revenue components from total revenue growth.

•The percentage change is calculated by dividing the individual component amount by the prior period revenue base of that component ($3,853.8 million and $7,484.3 million for the Total column for the three and six months ended June 30, 2025, respectively).

Changes in the value of foreign currencies against the U.S. Dollar affect our results of operations and financial position. For the most part, because the revenue and expense of our foreign operations are both denominated in the same local currency, the economic impact on operating margin is minimized. Assuming exchange rates at July 14, 2025 remain unchanged, we expect the impact of changes in foreign exchange rates will be a positive 1.0% for the third quarter and positive 1.0% for the full year. Based on our acquisition and disposition activity completed to date, we expect the net impact on revenue to remain flat for both the third quarter and the full year.

Revenue by Discipline

To monitor the changing needs of our clients and to further expand the scope of our services to key clients, we monitor revenue across a broad range of disciplines and group them into the following categories: Media & Advertising, Precision Marketing, Public Relations, Healthcare, Branding & Retail Commerce, Experiential and Execution & Support.

The period-over-period change in revenue and organic growth by discipline:


	Three Months Ended June 30,
	2025				2024				2025 vs. 2024
	$		% of Revenue		$		% of Revenue		$ Change		% Organic Growth
Media & Advertising	$	2,291.3	57.1	%	$	2,101.0	54.5	%	$	190.3	8.2	%
Precision Marketing	457.1		11.4	%	427.1		11.1	%	30.0		5.0	%
Public Relations	372.9		9.3	%	407.9		10.6	%	(35.0)		(9.3)	%
Healthcare	332.6		8.2	%	345.1		9.0	%	(12.5)		(4.9)	%
Branding & Retail Commerce	148.6		3.7	%	182.1		4.7	%	(33.5)		(16.9)	%
Experiential	196.8		4.9	%	182.4		4.7	%	14.4		2.9	%
Execution & Support	216.3		5.4	%	208.2		5.4	%	8.1		1.5	%
Revenue	$	4,015.6			$	3,853.8			$	161.8	3.0	%


	Six Months Ended June 30,
	2025				2024				2025 vs. 2024
	$		% of Revenue		$		% of Revenue		$ Change		% Organic Growth
Media & Advertising	$	4,339.5	56.3	%	$	4,055.2	54.2	%	$	284.3	7.7	%
Precision Marketing	907.4		11.8	%	852.5		11.4	%	54.9		5.4	%
Public Relations	735.6		9.5	%	791.4		10.6	%	(55.8)		(7.0)	%
Healthcare	638.3		8.3	%	662.1		8.8	%	(23.8)		(4.0)	%
Branding & Retail Commerce	308.1		4.0	%	367.6		4.9	%	(59.5)		(13.4)	%
Experiential	351.0		4.6	%	338.1		4.5	%	12.9		0.9	%
Execution & Support	426.1		5.5	%	417.4		5.6	%	8.7		1.7	%
Revenue	$	7,706.0			$	7,484.3			$	221.7	3.2	%

Beginning in the first quarter of 2025, we realigned the classification of certain services, primarily within our Media & Advertising, Branding & Retail Commerce, Precision Marketing and Public Relations disciplines. As a result, we reclassified the prior year periods to be consistent with the revised classifications.

The period-over-period change in worldwide revenue for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, in our fundamental disciplines was: Media & Advertising increased $190.3 million, Precision Marketing increased $30.0 million, Public Relations decreased $35.0 million, Healthcare decreased $12.5 million, Branding & Retail Commerce decreased $33.5 million, Experiential increased $14.4 million, and Execution & Support increased $8.1 million. Worldwide organic revenue growth increased revenue $116.8 million, or 3.0%, compared to the prior year period, primarily driven by Media & Advertising, led by our media business, Precision Marketing and Experiential disciplines. The organic growth was partially offset by underperformance in our Public Relations, Branding & Retail Commerce and Healthcare disciplines. Changes in foreign exchange rates period-over-period increased revenue $42.4 million, or 1.1%. The increase in revenue from foreign exchange translation was primarily related to the strengthening of some currencies, including the British Pound and the Euro, against the U.S. Dollar, partially offset by the weakening of the Brazilian Real, Mexican Peso, and Australian Dollar against the U.S. Dollar. Acquisition revenue, net of disposition revenue, increased revenue $2.6 million, or 0.1%.

The period-over-period change in worldwide revenue for the six months ended June 30, 2025, compared to the six months ended June 30, 2024, in our fundamental disciplines was: Media & Advertising increased $284.3 million, Precision Marketing increased $54.9 million, Public Relations decreased $55.8 million, Healthcare decreased $23.8 million, Branding & Retail Commerce decreased $59.5 million, Experiential increased $12.9 million, and Execution & Support increased $8.7 million. Worldwide organic revenue growth increased revenue $238.7 million, or 3.2%, compared to the prior year period, primarily driven by Media & Advertising, led by our media business, Precision Marketing, Experiential and Execution & Support disciplines. The organic growth was partially offset by underperformance in our Public Relations, Branding & Retail Commerce and Healthcare disciplines. Changes in foreign exchange rates period-over-period reduced revenue $16.8 million, or 0.2%. The decrease in revenue from foreign exchange translation was primarily related to the weakening of several currencies, including the Brazilian Real, Australian Dollar, Mexican Peso, and the Canadian Dollar, against the U.S. Dollar, partially offset by the strengthening of the

British Pound and the Euro against the U.S. Dollar. Acquisition revenue, net of disposition revenue, reduced revenue slightly by $0.2 million.

In the normal course of business, our agencies both gain and lose business from clients each year due to a variety of factors. Under our client-centric approach, we seek to broaden our relationships with all of our clients. Our largest client represented 2.6% and 2.9% of revenue for the twelve months ended June 30, 2025 and 2024, respectively. Our ten largest and 100 largest clients represented 19.0% and 54.1% of revenue for the twelve months ended June 30, 2025, respectively, and 19.7% and 53.6% of revenue for the twelve months ended June 30, 2024, respectively.

Revenue by Geography

The period-over-period change in revenue and organic growth in our geographic markets:


	Three Months Ended June 30,
	2025				2024				2025 vs. 2024
	$		% of Revenue		$		% of Revenue		$ Change		% Organic Growth
Americas:
North America	$	2,209.7	55.0	%	$	2,148.4	55.8	%	$	61.3	2.9	%
Latin America	114.6		2.9	%	106.4		2.7	%	8.2		18.0	%
EMEA:
Europe	1,166.4		29.0	%	1,101.9		28.6	%	64.5		0.5	%
Middle East and Africa	66.1		1.6	%	65.6		1.7	%	0.5		0.9	%
Asia-Pacific	458.8		11.5	%	431.5		11.2	%	27.3		6.5	%
Revenue	$	4,015.6			$	3,853.8			$	161.8	3.0	%


	Six Months Ended June 30,
	2025				2024				2025 vs. 2024
	$		% of Revenue		$		% of Revenue		$ Change		% Organic Growth
Americas:
North America	$	4,321.2	56.1	%	$	4,189.3	56.0	%	$	131.9	3.5	%
Latin America	211.0		2.7	%	202.9		2.7	%	8.1		16.5	%
EMEA:
Europe	2,161.4		28.0	%	2,107.7		28.2	%	53.7		0.6	%
Middle East and Africa	136.9		1.8	%	145.2		1.9	%	(8.3)		(4.7)	%
Asia-Pacific	875.5		11.4	%	839.2		11.2	%	36.3		6.2	%
Revenue	$	7,706.0			$	7,484.3			$	221.7	3.2	%

North America

In North America, organic revenue growth period-over-period for the three and six months ended June 30, 2025 was primarily driven by strong performance in the United States, especially in the Media & Advertising discipline, led by our media business, and our Precision Marketing, Experiential and Execution & Support disciplines. The organic growth was partially offset by underperformance in our Public Relations, Branding & Retail Commerce and Healthcare disciplines.

Latin America

In Latin America, organic revenue growth for the three and six months ended June 30, 2025, compared to the prior year periods, was led by our Media & Advertising discipline, and in all countries in the region. The weakening of all currencies, especially the Brazilian Real and Mexican Peso, against the U.S. Dollar decreased revenue in the three and six months ended June 30, 2025 compared to the same periods in 2024.

EMEA

In Europe, compared to the prior year periods, organic revenue growth for the three and six months ended June 30, 2025 was driven by strong performance in our Media & Advertising discipline, led by our media business, and our Experiential discipline, substantially offset by underperformance in all other disciplines. Foreign currency exchange rate changes increased revenue for the three and six months ended June 30, 2025, primarily as a result of the strengthening of the Euro and the British Pound against the U.S. Dollar period-over-period.

In the U.K., for the three and six months ended June 30, 2025, organic revenue decreased period-over-period by 2.5% and 1.6%, respectively. A strong performance in our Media & Advertising discipline, led by our media business, was substantially offset by underperformance in all other disciplines. In Continental Europe, which includes the Euro Zone and the other European countries, organic revenue growth of 2.5% and 2.1% for the three and six months ended June 30, 2025, respectively, was mixed by country and driven primarily by our Media & Advertising, led by our media business, and Experiential disciplines.

The Middle East and Africa, for the three and six months ended June 30, 2025, experienced weak organic growth with a strong performance in our Media & Advertising discipline, led by our media business, offset by negative performance in our Experiential discipline.

Asia-Pacific

In Asia-Pacific, organic growth for the three and six months ended June 30, 2025 was 6.5% and 6.2%, respectively. Organic growth, led by our Media & Advertising discipline, was partially offset by underperformance in our Experiential and Public Relations disciplines. Substantially all markets in the region, led by Australia, India and New Zealand, had positive organic growth, partially offset by slight weakening in China, as compared to the prior year periods. Foreign currency exchange rate changes increased revenue for the three months ended June 30, 2025, primarily as a result of the strengthening of several currencies against the U.S. Dollar, including the Japanese Yen. Foreign currency exchange rate changes decreased revenue for the six months ended June 30, 2025, primarily as a result of the weakening of several currencies against the U.S. Dollar, including the Australian Dollar and New Zealand Dollar.

Revenue by Industry

Revenue by type of client industry sector:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Pharmaceuticals and Healthcare	15	%	17	%	15	%	16	%
Food and Beverage	15	%	15	%	15	%	16	%
Auto	13	%	11	%	13	%	11	%
Consumer Products	9	%	11	%	9	%	10	%
Financial Services	8	%	7	%	8	%	7	%
Travel and Entertainment	8	%	7	%	8	%	7	%
Technology	8	%	7	%	8	%	7	%
Retail	7	%	7	%	7	%	6	%
Government	4	%	4	%	3	%	4	%
Telecommunications	3	%	3	%	3	%	3	%
Services	3	%	3	%	3	%	3	%
Oil, Gas and Utilities	2	%	2	%	2	%	2	%
Not-for-Profit	2	%	1	%	1	%	1	%
Education	1	%	1	%	1	%	1	%
Other	2	%	4	%	4	%	6	%
Total	100	%	100	%	100	%	100	%

Operating Expenses

The period-over-period change in operating expenses:


	Three Months Ended June 30,
	2025				2024				2025 vs. 2024
	$		% of Revenue		$		% of Revenue		$ Change		% Change
Revenue	$	4,015.6			$	3,853.8			$	161.8	4.2	%
Operating Expenses:
Salary and service costs:
Salary and related costs	1,827.8		45.5	%	1,836.9		47.7	%	(9.1)		(0.5)	%
Third-party service costs	918.4		22.9	%	811.1		21.0	%	107.3		13.2	%
Third-party incidental costs	186.4		4.6	%	152.1		3.9	%	34.3		22.6	%
Total salary and service costs	2,932.6		73.0	%	2,800.1		72.7	%	132.5		4.7	%
Occupancy and other costs	325.9		8.1	%	314.2		8.2	%	11.7		3.7	%
Repositioning costs	88.8		2.2	%	57.8		1.5	%	31.0		53.6	%
Cost of services	3,347.3				3,172.1				175.2		5.5	%
Selling, general and administrative expenses	170.4		4.2	%	111.0		2.9	%	59.4		53.5	%
Depreciation and amortization	58.7		1.5	%	60.4		1.6	%	(1.7)		(2.8)	%
Total Operating Expenses	3,576.4		89.1	%	3,343.5		86.8	%	232.9		7.0	%
Operating Income	$	439.2	10.9	%	$	510.3	13.2	%	$	(71.1)	(13.9)	%


	Six Months Ended June 30,
	2025				2024				2025 vs. 2024
	$		% of Revenue		$		% of Revenue		$ Change		% Change
Revenue	$	7,706.0			$	7,484.3			$	221.7	3.0	%
Operating Expenses:
Salary and service costs:
Salary and related costs	3,608.3		46.8	%	3,684.2		49.2	%	(75.9)		(2.1)	%
Third-party service costs	1,715.2		22.3	%	1,509.3		20.2	%	205.9		13.6	%
Third-party incidental costs	355.4		4.6	%	299.2		4.0	%	56.2		18.8	%
Total salary and service costs	5,678.9		73.7	%	5,492.7		73.4	%	186.2		3.4	%
Occupancy and other costs	640.5		8.3	%	628.3		8.4	%	12.2		1.9	%
Repositioning costs	88.8		1.2	%	57.8		0.8	%	31.0		53.6	%
Cost of services	6,408.2				6,178.8				229.4		3.7	%
Selling, general and administrative expenses	288.3		3.7	%	196.3		2.6	%	92.0		46.9	%
Depreciation and amortization	117.7		1.5	%	120.0		1.6	%	(2.3)		(1.9)	%
Total Operating Expenses	6,814.2		88.4	%	6,495.1		86.8	%	319.1		4.9	%
Operating Income	$	891.8	11.6	%	$	989.2	13.2	%	$	(97.4)	(9.8)	%

We measure cost of services in two distinct categories: salary and service costs and occupancy and other costs. As a service business, salary and service costs make up a significant portion of our operating expenses and substantially all these costs comprise the essential components directly linked to the delivery of our services. Salary and service costs include employee compensation and benefits, freelance labor, third-party service costs, and third-party incidental costs. Third-party service costs include vendor costs when we act as principal in providing services to our clients. Third-party incidental costs that are required to be included in revenue primarily consist of client-related travel and incidental out-of-pocket costs that are billed back to the client directly at our cost. Occupancy and other costs consist of the indirect costs related to the delivery of our services, including office rent and other occupancy costs, equipment rent, technology costs, general office expenses and other expenses. Adverse and beneficial fluctuations in foreign currency exchange rates from period to period impact our results of operations and financial position when we translate our financial statements from local foreign currency exchange rates to the U.S. Dollar. However, substantially all of our foreign operations transact business in their local currency, mitigating the impact of changes in foreign currency exchange rates on our operating margin percentage. As a result, the changes in our operating expenses period-over-period from foreign currency translation were in line with the percentage impact from changes in foreign currencies on revenue for the three and six months ended June 30, 2025.

Operating expenses for the three months ended June 30, 2025 increased $232.9 million, or 7.0%, to $3,576.4 million from $3,343.5 million, in the prior year period. Included in selling, general and administrative expenses for the three months ended June 30, 2025 are acquisition related costs of $66.0 million ($61.6 million after-tax) related to the pending merger with IPG (see Note 1 to the unaudited consolidated financial statements). Included in operating expenses for the three months ended June 30, 2025 are $88.8 million ($67.2 million after-tax) of repositioning costs recorded in the second quarter of 2025, primarily related to severance actions related to efficiency initiatives, primarily within the Omnicom Advertising Group and the Omnicom Production Group (see Note 9 to the unaudited financial statements).

Operating expenses for the six months ended June 30, 2025 increased $319.1 million, or 4.9%, to $6,814.2 million from $6,495.1 million, in the prior year period. Included in selling, general and administrative expenses for the six months ended June 30, 2025 are acquisition related costs of $99.8 million ($94.3 million after-tax) related to the pending merger with IPG (see Note 1 to the unaudited consolidated financial statements). Included in operating expenses are $88.8 million ($67.2 million after-tax) of repositioning costs recorded in the second quarter of 2025, primarily related to severance actions related to efficiency initiatives, primarily within the Omnicom Advertising Group and the Omnicom Production Group (see Note 9 to the unaudited financial statements).

Operating Expenses - Salary and Service Costs

Salary and service costs, which tend to fluctuate with changes in revenue, are comprised of salary and related costs, third-party service costs, and third-party incidental costs.

Salary and service costs for the three months ended June 30, 2025 increased $132.5 million, or 4.7%, to $2,932.6 million, compared to the prior year period. Salary and related costs for the three months ended June 30, 2025 decreased $9.1 million, or 0.5%, to $1,827.8 million, primarily due to reductions arising from our ongoing repositioning actions and changes in our global employee mix, substantially offset by an increase related to changes in foreign currency exchange rates. Third-party service costs for the three months ended June 30, 2025 increased $107.3 million, or 13.2%, to $918.4 million, primarily as a result of organic growth in our Media & Advertising discipline. Third-party incidental costs for the three months ended June 30, 2025 increased $34.3 million, or 22.6%, to $186.4 million.

Salary and service costs for the six months ended June 30, 2025 increased $186.2 million, or 3.4%, to $5,678.9 million, compared to the prior year period. Salary and related costs for the six months ended June 30, 2025 decreased $75.9 million, or 2.1%, to $3,608.3 million, primarily due to reductions arising from our repositioning actions and changes in our global employee mix. Third-party service costs for the six months ended June 30, 2025 increased $205.9 million, or 13.6%, to $1,715.2 million, primarily as a result of organic growth in our Media & Advertising discipline. Third-party incidental costs for the six months ended June 30, 2025 increased $56.2 million, or 18.8%, to $355.4 million.

Operating Expenses - Occupancy and Other Costs

Occupancy and other costs for the three and six months ended June 30, 2025, which are less directly linked to changes in revenue than salary and service costs, increased by $11.7 million, or 3.7%, to $325.9 million and increased by $12.2 million, or 1.9%, to $640.5 million, respectively. Increased other occupancy costs were driven in part by negative effects from foreign currency exchange rates, partially offset by lower rent expense in the periods. As a percentage of revenue, occupancy and other costs decreased for the three and six month periods ended June 30, 2025.

Operating Expenses - Selling, General & Administrative Expenses

SG&A expenses primarily consist of third-party marketing costs, professional fees, compensation and benefits and occupancy and other costs of our corporate and executive offices, including group-wide finance and accounting, treasury, legal and governance, human resource oversight and similar costs. SG&A expenses increased for the three and six months ended June 30, 2025 by $59.4 million and $92.0 million, respectively, compared to the same periods in 2024, primarily due to acquisition related costs in connection with the pending merger with IPG (see Note 1 to the unaudited consolidated financial statements).

Operating Income

Operating income for the three months ended June 30, 2025 decreased $71.1 million to $439.2 million, and operating margin decreased to 10.9% from 13.2% compared to the same period in 2024. EBITA for the three months ended June 30, 2025 decreased $72.8 million to $459.0 million, and EBITA Margin decreased to 11.4% from 13.8%. Acquisition related costs and repositioning costs recorded in the second quarter of 2025 (see Notes 1 and 9 to the unaudited financial statements) reduced both operating income and EBITA by $154.8 million, and reduced both operating margin and EBITA margin by 3.9%. The effect of the repositioning actions in the second quarter of 2024 reduced operating income and EBITA by $57.8 million and decreased both operating margin and EBITA margin by 1.5%.

Operating income for the six months ended June 30, 2025 decreased $97.4 million to $891.8 million, and operating margin decreased to 11.6% from 13.2% compared to the same period in 2024. EBITA for the six months ended June 30, 2025 decreased $98.8 million to $933.4 million, and EBITA Margin decreased to 12.1% from 13.8%. Acquisition related costs in the first half of 2025 and repositioning costs recorded in the second quarter of 2025 (see Notes 1 and 9 to the unaudited financial statements)

reduced both operating income and EBITA by $188.6 million, and reduced operating margin by 2.4% and EBITA margin by 2.5% for the six month period. The effect of the repositioning actions in the second quarter of 2024 reduced both operating income and EBITA by $57.8 million and decreased both operating margin and EBITA margin by 0.8%.

Net Interest Expense

Net interest expense for the three and six months ended June 30, 2025 decreased $1.0 million and $1.6 million period-over-period to $40.7 million and $70.1 million, respectively. Interest expense on debt for the three and six months ended June 30, 2025 increased $2.0 million and $7.5 million period-over-period to $58.8 million and $114.9 million, respectively, primarily related to the higher weighted average cost of debt in connection with our financing activities in 2024. Interest income in the three and six months ended June 30, 2025 increased $0.9 million to $21.9 million and $3.6 million to $51.6 million, respectively, principally due to higher cash balances.

Income Taxes

Our effective tax rate for the six months ended June 30, 2025 increased period-over-period to 29.4% from 26.0%, primarily due to the non-deductibility of certain acquisition related costs in connection with the pending merger with IPG (see Note 1 to the unaudited consolidated financial statements). The effective tax rate for the six months ended June 30, 2024, includes the favorable impact from the resolution of certain non-U.S. tax positions of $7.5 million.

On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the U.S. which contains a broad range of tax reform provisions affecting businesses. We are evaluating the full effects of the legislation on our estimated annual effective tax rate and cash tax position, but we expect that the legislation will likely not have a material impact on our financial statements. As the legislation was signed into law after the close of our second quarter, the impacts are not included in our operating results for the six months ended June 30, 2025.

Net Income and Net Income Per Share - Omnicom Group Inc.

Net income - Omnicom Group Inc. in the three months ended June 30, 2025 decreased $70.5 million to $257.6 million from $328.1 million. The period-over-period decrease is due to the factors described above. Diluted net income per share - Omnicom Group Inc. decreased to $1.31 in the three months ended June 30, 2025, from $1.65 in the three months ended June 30, 2024, due to the factors described above, partially offset by the impact of the reduction in our weighted average common shares outstanding resulting from repurchases of our common stock. For the three months ended June 30, 2025, the impact of the acquisition related costs and repositioning costs (see Notes 1 and 9 to the unaudited consolidated financial statements) reduced net income - Omnicom Group Inc. by $128.8 million and diluted net income per share - Omnicom Group Inc. by $0.66. For the three months ended June 30, 2024, the impact of repositioning costs reduced net income - Omnicom Group Inc. by $42.9 million and diluted net income per share - Omnicom Group Inc. by $0.22.

Net income - Omnicom Group Inc. in the six months ended June 30, 2025 decreased $101.4 million to $545.3 million from $646.7 million. The period-over-period decrease is due to the factors described above. Diluted net income per share - Omnicom Group Inc. decreased to $2.77 in the six months ended June 30, 2025 from $3.24 in the six months ended June 30, 2024, due to the factors described above, partially offset by the impact of the reduction in our weighted average common shares outstanding resulting from the repurchases of our common stock. For the six months ended June 30, 2025, the impact of the acquisition related costs and repositioning costs (see Notes 1 and 9 to the unaudited consolidated financial statements) reduced net income - Omnicom Group Inc. by $161.5 million and diluted net income per share - Omnicom Group Inc. by $0.82. For the six months ended June 30, 2024, the impact of repositioning costs reduced net income - Omnicom Group Inc. by $42.9 million and diluted net income per share - Omnicom Group Inc. by $0.22.

The effect of after-tax amortization of acquired intangible assets and internally developed strategic platform assets decreased diluted net income per share by $0.08 for each of the three months ended June 30, 2025 and 2024 and $0.15 and $0.16 for the six months ended June 30, 2025 and 2024, respectively.

NON-GAAP FINANCIAL MEASURES

We use certain non-GAAP financial measures in describing our performance. We use EBITA and EBITA Margin as additional operating performance measures, which excludes from operating income the non-cash amortization expense of acquired intangible assets and internally developed strategic platform assets. We believe EBITA and EBITA Margin are useful measures for investors to evaluate the performance of our business and allows for comparability between the periods presented. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP. Non-GAAP financial measures reported by us may not be comparable to similarly titled amounts reported by other companies.

Reconciliation of Non-GAAP Financial Measures

The following table reconciles the U.S. GAAP financial measure of Net Income - Omnicom Group Inc. to EBITA and EBITA Margin:


	Three Months Ended June 30,						Six Months Ended June 30,
	2025			2024			2025			2024
Net Income - Omnicom Group Inc.	$	257.6		$	328.1		$	545.3		$	646.7
Net Income Attributed To Noncontrolling Interests	20.2			20.1			35.9			38.5
Net Income	277.8			348.2			581.2			685.2
Income From Equity Method Investments	(0.2)			3.3			0.7			4.2
Income Tax Expense	120.5			123.7			241.2			239.7
Income Before Income Taxes and Income From Equity Method Investments	398.5			468.6			821.7			920.7
Interest Expense	62.6			62.7			121.7			116.5
Interest Income	21.9			21.0			51.6			48.0
Operating Income	439.2			510.3			891.8			989.2
Add back: Amortization of acquired intangible assets and internally developed strategic platform assets	19.8			21.5			41.6			43.0
Earnings before interest, taxes and amortization of intangible assets ("EBITA")	$	459.0		$	531.8		$	933.4		$	1,032.2

Revenue	$	4,015.6		$	3,853.8		$	7,706.0		$	7,484.3
EBITA	$	459.0		$	531.8		$	933.4		$	1,032.2
EBITA Margin	11.4		%	13.8		%	12.1		%	13.8		%

LIQUIDITY AND CAPITAL RESOURCES

Cash Sources and Requirements

The primary sources of our short-term liquidity are net cash provided by operating activities and cash and cash equivalents. Additional liquidity sources include our $2.5 billion unsecured multi-currency revolving credit facility, or Credit Facility, terminating on June 2, 2028, and the ability to issue up to $2 billion of U.S. Dollar denominated commercial paper and issue up to the equivalent of $500 million in British Pounds or Euro under a Euro commercial paper program, and access to the capital markets. In addition, certain of our international subsidiaries have uncommitted credit lines that are guaranteed by Omnicom, aggregating $539.7 million. Our liquidity sources fund our non-discretionary cash requirements and our discretionary spending.

Working capital, which we define as current assets minus current liabilities, is our principal non-discretionary funding requirement. Our working capital cycle typically peaks during the second quarter of the year due to the timing of payments for incentive compensation, income taxes and contingent purchase price obligations. In addition, we have contractual obligations related to our long-term debt (principal and interest payments), recurring business operations, primarily related to lease obligations, and acquisition related obligations. Our principal discretionary cash spending includes dividend payments to common shareholders, capital expenditures, strategic acquisitions and repurchases of our common stock.

Cash and cash equivalents decreased $1,039.0 million from December 31, 2024. During the first six months of 2025, we used $576.7 million of cash in operating activities, which included the use for operating capital of $1.4 billion, primarily related to our typical working capital cycle. Discretionary spending for the first six months of 2025 was $641.6 million, compared to $1.5 billion for the first six months of 2024, which included $790.3 million for acquisition of businesses and interests in affiliates, net of cash acquired. Discretionary spending for the first six months of 2025 was comprised of capital expenditures of $71.6 million, dividends paid to common shareholders of $277.4 million, dividends paid to shareholders of noncontrolling interests of $34.3 million, repurchases of our common stock, net of proceeds from vesting of restricted stock awards and related tax benefits and common

stock sold under our employee stock purchase plan of $210.1 million, the acquisition of additional shares of noncontrolling interests, and payment of contingent purchase price obligations of $48.2 million. Based on past performance and current expectations, we believe that net cash provided by operating activities and cash and cash equivalents will be sufficient to meet our non-discretionary cash requirements for the next twelve months. In addition, and over the longer term, our Credit Facility is available to fund our working capital and contractual obligations.

Cash Management

Our regional treasury centers in North America, Europe and Asia manage our cash and liquidity. Each day, operations with excess funds invest those funds with their regional treasury center. Likewise, operations that require funds borrow from their regional treasury center. Treasury centers with excess cash invest on a short-term basis with third parties, with maturities generally ranging from overnight to 90 days. Certain treasury centers have notional pooling arrangements that are used to manage their cash and set-off foreign exchange imbalances. The arrangements require each treasury center to have its own notional pool account and to maintain a notional positive account balance. Additionally, under the terms of the arrangement, set-off of foreign exchange positions are limited to the long and short positions within their own account. To the extent that our treasury centers require liquidity, they can issue up to a total of $2 billion of U.S. Dollar-denominated commercial paper and issue up to the equivalent of $500 million in British Pounds or Euro under a Euro commercial paper program, or borrow under the Credit Facility, or the uncommitted credit lines. This process enables us to manage our debt more efficiently and utilize our cash more effectively, as well as manage our risk to foreign exchange rate imbalances. In countries where we either do not conduct treasury operations or it is not feasible for one of our treasury centers to fund net borrowing requirements on an intercompany basis, we arrange for local currency uncommitted credit lines. We have a policy governing counterparty credit risk with financial institutions that hold our cash and cash equivalents, and we have deposit limits for each institution. In countries where we conduct treasury operations, generally the counterparties are either branches or subsidiaries of institutions that are party to the Credit Facility. These institutions generally have credit ratings equal to or better than our credit ratings. In countries where we do not conduct treasury operations, all cash and cash equivalents are held by counterparties that meet specific minimum credit standards.

At June 30, 2025, our foreign subsidiaries held approximately $1.7 billion of our total cash and cash equivalents of $3.3 billion. Substantially all of the cash is available to us, net of any foreign withholding taxes payable upon repatriation to the United States.

At June 30, 2025, our net debt position, which we define as total debt, including short-term debt, less cash and cash equivalents, increased $1.3 billion to $3.0 billion from December 31, 2024. The increase in net debt primarily resulted from the use of cash of $576.7 million for operating activities, which included the use for operating capital of $1.4 billion, primarily related to our typical working capital requirement during the period and discretionary spending of $641.6 million, as discussed above.

Components of net debt:


	June 30, 2025		December 31, 2024		June 30, 2024
Short-term debt	$	22.3	$	21.3	$	15.1
Long-term debt, including current portion	6,282.7		6,035.3		6,239.6
Total debt	6,305.0		6,056.6		6,254.7
Less: Cash and cash equivalents	3,300.4		4,339.4		2,711.7
Net debt	$	3,004.6	$	1,717.2	$	3,543.0

Net debt is a Non-GAAP liquidity measure. This presentation, together with the comparable U.S. GAAP liquidity measures, reflects one of the key metrics used by us to assess our cash management. Non-GAAP liquidity measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP. Non-GAAP liquidity measures as reported by us may not be comparable to similarly titled amounts reported by other companies.

Debt Instruments and Related Covenants

Our 2.45% Senior Notes due 2030, 4.20% Senior Notes due 2030, 2.60% Senior Notes due 2031 and 5.30% Senior Notes due 2034 are senior unsecured obligations of Omnicom that rank equal in right of payment with all existing and future unsecured senior indebtedness.

Omnicom and its wholly owned finance subsidiary, Omnicom Capital Inc., or OCI, are co-obligors under the 3.60% Senior Notes due April 2026, accordingly it has been reclassified to current liabilities on the balance sheet. These notes are a joint and several liability of Omnicom and OCI, and Omnicom unconditionally guarantees OCI's obligations with respect to the notes. OCI provides funding for our operations by incurring debt and lending the proceeds to our operating subsidiaries. OCI's assets primarily consist of cash and cash equivalents and intercompany loans made to our operating subsidiaries, and the related interest receivable. There are no restrictions on the ability of OCI or Omnicom to obtain funds from our subsidiaries through dividends, loans, or advances. Such notes are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness.

Omnicom and OCI have, jointly and severally, fully, and unconditionally guaranteed the obligations of Omnicom Finance Holdings plc, or OFH, a U.K.-based wholly owned subsidiary of Omnicom, with respect to the €500 million 0.80% Senior Notes due 2027 and the €500 million 1.40% Senior Notes due 2031, and Omnicom has fully and unconditionally guaranteed the obligations of OFH with respect to the €600 million 3.70% Senior Notes due 2032, collectively the Euro Notes. OFH's assets consist of its investments in several wholly owned finance companies that function as treasury centers, providing funding for various operating companies in Europe, Australia, and other countries in the Asia-Pacific region. The finance companies' assets consist of cash and cash equivalents and intercompany loans that they make or have made to the operating companies in their respective regions and the related interest receivable. There are no restrictions on the ability of Omnicom, OCI or OFH to obtain funds from their subsidiaries through dividends, loans, or advances. The Euro Notes and the related guarantees are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness of OFH and each of Omnicom and OCI, as applicable.

Omnicom has fully and unconditionally guaranteed the obligations of Omnicom Capital Holdings plc, or OCH, a U.K.-based wholly owned subsidiary of Omnicom, with respect to the £325 million 2.25% Senior Notes due 2033, or the Sterling Notes. OCH's assets consist of its investments in several wholly owned finance companies that function as treasury centers, providing funding for various operating companies in EMEA, Australia, and other countries in the Asia-Pacific region. The finance companies' assets consist of cash and cash equivalents and intercompany loans that they make or have made to the operating companies in their respective regions and the related interest receivable. There are no restrictions on the ability of Omnicom or OCH to obtain funds from their subsidiaries through dividends, loans, or advances. The Sterling Notes and the related guarantee are senior unsecured obligations that rank equal in right of payment with all existing and future unsecured senior indebtedness of OCH and Omnicom, respectively.

The Credit Facility has a financial covenant that requires us to maintain a Leverage Ratio of consolidated indebtedness to consolidated EBITDA (earnings before interest, taxes, depreciation, amortization and non-cash charges) of no more than 3.5 times for the most recently ended 12-month period. At June 30, 2025, we were in compliance with this covenant as our Leverage Ratio was 2.6 times. The Credit Facility does not limit our ability to declare or pay dividends or repurchase our common stock.

At June 30, 2025, our long-term and short-term debt was rated BBB+ and A2 by S&P and Baa1 and P2 by Moody's. Our access to the commercial paper market and the cost of these borrowings are affected by market conditions and our credit ratings. The long-term debt indentures and Credit Facility do not contain provisions that require acceleration of cash payments in the event of a downgrade in our credit ratings.

Credit Markets and Availability of Credit

In light of the uncertainty of future economic conditions, we will continue to take actions available to us to respond to changing economic conditions, and we will manage our discretionary expenditures. We will also continue to monitor and manage the level of credit made available to our clients. We believe that these actions, in addition to the availability of our Credit Facility, are sufficient to fund our near-term working capital needs and our discretionary spending. Information regarding our Credit Facility is provided in Note 5 to the unaudited consolidated financial statements.

We have the ability to fund our day-to-day liquidity, including working capital, by issuing commercial paper or borrowing under the Credit Facility. During the three and six months ended June 30, 2025, there were no drawings under the Credit Facility and no commercial paper issuances.

We may issue commercial paper to fund our day-to-day liquidity when needed. However, disruptions in the credit markets may lead to periods of illiquidity in the commercial paper market and higher credit spreads. To mitigate any disruption in the credit markets and to fund our liquidity, we may borrow under the Credit Facility, or the uncommitted credit lines or access the capital markets if favorable conditions exist. We will continue to monitor closely our liquidity and conditions in the credit markets. We cannot predict with any certainty the impact on us of any disruptions in the credit markets. In such circumstances, we may need to obtain additional financing to fund our day-to-day working capital requirements. Such additional financing may not be available on favorable terms, or at all.

Credit Risk

We provide marketing and communications services to several thousand clients that operate in nearly every sector of the global economy, and we grant credit to qualified clients in the normal course of business. Due to the diversified nature of our client base, we do not believe that we are exposed to a concentration of credit risk, as our largest client represented 2.6% of revenue for the twelve months ended June 30, 2025. However, during periods of economic downturn, the credit profiles of our clients could change.

In the normal course of business, our agencies enter into contractual commitments with media providers and production companies on behalf of our clients at levels that can substantially exceed the revenue from our services. These commitments are included in accounts payable when the services are delivered by the media providers or production companies. If permitted by local law and the client agreement, many of our agencies purchase media and production services for our clients as an agent for a disclosed principal. In addition, while operating practices vary by country, media type and media vendor, in the United States and

certain foreign markets, many of our agencies' contracts with media and production providers specify that our agencies are not liable to the media and production providers under the theory of sequential liability until and to the extent we have been paid by our client for the media or production services.

Where purchases of media and production services are made by our agencies as a principal or are not subject to the theory of sequential liability, the risk of a material loss as a result of payment default by our clients could increase significantly, and such a loss could have a material adverse effect on our business, results of operations and financial position.

While we use various methods to manage the risk of payment default, including obtaining credit insurance, requiring payment in advance, mitigating the potential loss in the marketplace or negotiating with media providers, these may be insufficient, less available, or unavailable during a severe economic downturn.

CRITICAL ACCOUNTING ESTIMATES

For a more complete understanding of our accounting estimates and policies, the unaudited consolidated financial statements and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, readers are encouraged to consider this information together with our discussion of our critical accounting policies under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2024 10-K.

Acquisitions and Goodwill

We have made and expect to continue to make selective acquisitions. The evaluation of potential acquisitions is based on various factors, including specialized know-how, reputation, geographic coverage, competitive position and service offerings of the target businesses, as well as our experience and judgment.

Our acquisition strategy is focused on acquiring the expertise of an assembled workforce in order to continue to build upon the core capabilities of our various strategic business platforms and agency brands through the expansion of their geographic reach or their service capabilities to better serve our clients. Additional key factors we consider include the competitive position and specialized know-how of the acquisition targets. Accordingly, as is typical in most service businesses, a substantial portion of the assets we acquire are intangible assets, primarily consisting of the know-how of the personnel, which is treated as part of goodwill and is not required to be valued separately under U.S. GAAP. For each acquisition, we undertake a detailed review to identify other intangible assets that are required to be valued separately. A significant portion of the identifiable intangible assets acquired is derived from customer relationships, including the related customer contracts, as well as trade names. In valuing these identified intangible assets, we typically use an income approach and consider comparable market participant measurements.

We evaluate goodwill for impairment annually at May 1 each year and whenever events or circumstances indicate the carrying value may not be recoverable. Under FASB ASC Topic 350, Intangibles - Goodwill and Other, we have the option of either assessing qualitative factors to determine whether it is more-likely-than-not that the carrying value of our reporting units exceeds their respective fair value (Step 0) or proceeding directly to the quantitative goodwill impairment test. While there were no trigger events that required us to perform a quantitative test, we performed the annual quantitative impairment test and compared the fair value of each of our reporting units to its respective carrying value, including goodwill. Effective January 1, 2025, we formed Omnicom Advertising Group (OAG), which aligned all of our creative advertising networks under one segment manager. We identified our regional reporting units as components of our operating segments, which are our four global agency networks. The regional reporting units and practice areas monitor performance and are responsible for the agencies in their region. They report to the segment managers and facilitate the administrative and logistical requirements of our key client matrix organization structure for delivering services to clients in their regions. We have concluded that for each of our operating segments, their regional reporting units have similar economic characteristics and should be aggregated for purposes of testing goodwill for impairment at the operating segment level. Our conclusion was based on a detailed analysis of the aggregation criteria set forth in FASB ASC Topic 280, Segment Reporting, and in FASB ASC Topic 350. Consistent with our fundamental business strategy, the agencies within our regional reporting units serve similar clients in similar industries, and in many cases the same clients. In addition, the agencies within our regional reporting units have similar economic characteristics, and the employees share similar skill sets. The main economic components of each agency are employee compensation and related costs, and direct service costs and occupancy and other costs, which include rent and occupancy costs, technology costs that are generally limited to personal computers, servers and off-the-shelf software and other overhead expenses. Finally, the expected benefits of our acquisitions are typically shared by multiple agencies in various regions as they work together to integrate the acquired agency into our virtual client network strategy.

Goodwill Impairment Review - Estimates and Assumptions

We use the following valuation methodologies to determine the fair value of our reporting units: (1) the income approach, which utilizes discounted expected future cash flows, (2) comparative market participant multiples for EBITDA (earnings before interest, taxes, depreciation and amortization) and (3) when available, consideration of recent and similar acquisition transactions.

In applying the income approach, we use estimates to derive the discounted expected cash flows, or DCF, for each reporting unit that serves as the basis of our valuation. These estimates and assumptions include revenue growth and operating margin, EBITDA, tax rates, capital expenditures, weighted average cost of capital and related discount rates and expected long-term cash

flow growth rates. All of these estimates and assumptions are affected by conditions specific to our businesses, economic conditions related to the industry we operate in, as well as conditions in the global economy. The assumptions that have the most significant effect on our valuations derived using a DCF methodology are: (1) the expected long-term growth rate of our reporting units' cash flows and (2) the weighted average cost of capital, or WACC, for each reporting unit.

The long-term growth rate and WACC assumptions used in our evaluations:


	May 1, 2025	May 1, 2024
Long-Term Growth Rate	3.5%	3.5%
WACC	12.5% - 12.8%	10.8% - 11.8%

Long-term growth rate represents our estimate of the long-term growth rate for our industry and the geographic markets we operate in. For the past ten years, the average historical revenue growth rate of our reporting units and the Average Nominal GDP, or NGDP, growth of the countries comprising the major markets that account for substantially all of our revenue was approximately 3.5%and 5.0%, respectively. We considered this history when determining the long-term growth rates used in our annual impairment test at May 1, 2025. Included in the 10-year history is the full year 2020 that reflected the negative impact of the COVID-19 pandemic on the global economy and our revenue. We believe marketing expenditures over the long term have a high correlation to NGDP, notwithstanding the volatility of inflationary environments. Based on our past performance, we also believe that our growth rate can exceed NGDP growth in the short-term in the markets we operate in, which are similar across our reporting units. Accordingly, for our annual test as of May 1, 2025, we used an estimated long-term growth rate of 3.5%.

When performing the annual impairment test as of May 1, 2025 and estimating the future cash flows of our reporting units, we considered the current macroeconomic environment, as well as industry and market specific conditions in 2025. In the first half of 2025, our organic revenue increase was 3.2%, which excluded our net disposition activity and the impact from changes in foreign exchange rates.

The WACC is comprised of: (1) a risk-free rate of return, (2) a business risk index ascribed to us and to companies in our industry comparable to our reporting units based on a market derived variable that measures the volatility of the share price of equity securities relative to the volatility of the overall equity market, (3) an equity risk premium that is based on the rate of return on equity of publicly traded companies with business characteristics comparable to our reporting units, and (4) a current after-tax market rate of return on debt of companies with business characteristics similar to our reporting units, each weighted by the relative market value percentages of our equity and debt.

Our four reporting units vary in size with respect to revenue and the amount of debt allocated to them. These differences drive variations in fair value among our reporting units. In addition, these differences as well as differences in book value, including goodwill, cause variations in the amount by which fair value exceeds book value among the reporting units. The goodwill balances and debt vary by reporting unit primarily because some legacy agency networks were acquired at the formation of Omnicom and were accounted for as a pooling of interests that did not result in any additional debt or goodwill being recorded. The remaining agency networks were built through a combination of internal growth and acquisitions that were accounted for using the acquisition method and as a result, they have a relatively higher amount of goodwill and debt. Finally, the allocation of goodwill when components are transferred between reporting units is based on relative fair value at the time of transfer.

Goodwill Impairment Review - Conclusion

Based on the results of our impairment test, we concluded that our goodwill as of May 1, 2025 was not impaired, because the fair value of each of our reporting units was in excess of its respective net book value. For our reporting units with negative book value, we concluded that the fair value of their total assets was in excess of book value of total assets. The minimum decline in fair value that one of our reporting units would need to experience in order to fail the goodwill impairment test was approximately 46%. Notwithstanding our belief that the assumptions we used for WACC and long-term growth rate in our impairment testing were reasonable, we performed a sensitivity analysis for each reporting unit. The results of this sensitivity analysis on our impairment test as of May 1, 2025 revealed that if the WACC increased by 1% and/or the long-term growth rate decreased by 1%, the fair value of each of our reporting units would continue to be in excess of its respective net book value and would pass the impairment test.

We will continue to perform our impairment test at May 1 each year, unless events or circumstances trigger the need for an interim impairment test. The estimates used in our goodwill impairment test do not constitute forecasts or projections of future results of operations, but rather are estimates and assumptions based on historical results and assessments of macroeconomic factors affecting our reporting units as of the valuation date. We believe that our estimates and assumptions are reasonable, but they are subject to change from period to period. Actual results of operations and other factors will likely differ from the estimates used in our discounted cash flow valuation, and it is possible that differences could be significant. A change in the estimates we use could result in a decline in the estimated fair value of one or more of our reporting units from the amounts derived as of our latest valuation and could cause us to fail our goodwill impairment test if the estimated fair value for the reporting unit is less than the carrying value of the net assets of the reporting unit, including its goodwill. A large decline in estimated fair value of a reporting

unit could result in a non-cash impairment charge and may have an adverse effect on our results of operations and financial condition.

Omnicom Group Inc. published this content on July 16, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on July 16, 2025 at 10:01 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]

Back

View original format