IPG: IPG Q1 revenue declines amid restructuring and Omnicom merger preparations

New Delhi: Interpublic Group (IPG) reported an 8.5% year-over-year decline in net revenue to $2 billion, down from $2.18 billion in Q1 2024. The company cited significant client losses from 2024 and ongoing restructuring efforts ahead of its anticipated merger with Omnicom Group as key factors impacting performance. Total revenue, including billable expenses, reached $2.32 billion, a 6.9% decrease from the prior year.IPG reported a net loss of $85.4 million, or $0.23 per diluted share, compared to net income of $110.4 million, or $0.29 per diluted share, in Q1 2024. The loss was driven by $203.3 million in pre-tax restructuring charges tied to a strategic overhaul aimed at streamlining operations and cutting costs by approximately $250 million in 2025. Adjusted earnings, excluding restructuring and merger-related costs, were $0.33 per diluted share, slightly below the $0.36 reported a year ago and analysts' expectations of $0.26 per share.Organic net revenue fell 3.6%, aligning with IPG's guidance but reflecting headwinds from three major client losses in 2024, which CEO Philippe Krakowsky noted impacted 2025 organic growth by 4.5% to 5%. Despite the downturn, IPG highlighted pockets of strength, with IPG Mediabrands, Deutsch, Golin, and Acxiom delivering notable growth. "The underlying business is sound, with net growth of 1% to 1.5%," Krakowsky said during the earnings call, emphasising resilience in data-driven media, healthcare marketing, and public relations.The company's adjusted EBITA before restructuring and deal costs was $186.5 million, yielding a 9.3% margin on net revenue, a testament to IPG's financial discipline in a seasonally weak quarter. IPG's restructuring, expected to conclude by year-end, focuses on centralising functions, enhancing offshoring, and improving operational efficiencies. Krakowsky projected savings will exceed initial forecasts and benefit the merged entity post-Omnicom acquisition, which shareholders approved in March and is slated to close in the second half of 2025. Despite the revenue decline, IPG reaffirmed its full-year 2025 guidance, projecting a 1% to 2% organic revenue decrease and an adjusted EBITA margin of 16.6%. The company returned $727 million to shareholders in 2024 through dividends and share repurchases.