Dive Brief:
- Omnicom posted first quarter revenue growth of 6.7% year over year for its core operations — which excludes the businesses the company plans to sell or release through dispositions following its acquisition of Interpublic Group — for a total of $5.6 billion, per an earnings release.
- Integrated media made up 51.5% of revenue for the period ended March 31, while advertising made up 16.8%. The health, public relations and experiential and other sectors made up 9.5%, 11.7% and 10.4%, respectively.
- Operating expenses increased $2.4 billion to $5.6 billion in Q1, mostly due to the IPG acquisition. On an earnings call, CEO John Wren maintained the company’s plan to reach $900 million in cost-reduction efforts in 2026 and $1.5 billion by mid-2028.
Dive Insight:
Omnicom painted a picture of how its repositioned portfolio is driving growth, including new business wins, in its second earnings report following its $13 billion-plus acquisition of IPG, focusing on core operations, or its current business minus assets held for sale and planned disposition, the companies it plans to dispose of.
“By integrating our capabilities upon closing, we merged or sunset more than 20 major agency brands with a long tail of smaller brands,” Wren said on an earnings call. “Combined with our integrated client leaders and new strategy and growth teams, our efforts have translated into new business wins. In the first quarter, these include IBM, GSK, John Deere, Little Caesars, Acadia Pharmaceuticals and Baileys.”
The company’s revenue for its core operations totaled $5.6 billion in Q1, representing a $345 million increase compared to the same period a year prior. Organic revenue growth for its core operations was 3.9% YoY.
Revenue from dispositions and assets held for sale totaled $627.2 million, while operating expenses totaling $5.6 billion included $59.4 million of integration and transaction costs tied to the IPG acquisition, $4.1 million in repositioning costs and $34.3 million in losses on planned dispositions. Total company revenue totaled $6.2 billion.
Wren also detailed efforts in Q1 to fully scale the company’s AI-powered Omni operating system across the entire organization. The platform is driving stronger media performance, greater addressability, improved measurement and enhanced return-on-investment with IPG’s Acxiom Real ID solution, per the executive.
Looking ahead, Omnicom will continue to focus on reducing costs by $900 million in 2026 and $1.5 billion by mid-2028. Omnicom originally said it would reduce costs by $750 million total, but announced earlier this year that it would be doubling that total to $1.5 billion. The company plans to generate savings through three core initiatives, including reductions in labor costs, real estate consolidation and synergies stemming from general and administrative expenses, IT, procurement and other operational areas.
Omnicom completed its acquisition of IPG in November 2025, leading to what is now considered the world’s largest ad-holding group. The following month, the company detailed its new agency structure, changes that are meant to support a roster of core directives that include a sharper focus on AI.
