IPG posted a 3.5% fall in organic net revenue for the June quarter “due to prior-year client account activity” and as restructuring costs rose in preparation for being swallowed by rival Omnicom.
The company’s three largest losses in 2024 weighed on growth by about 5.5% over the three months.
However, new business performance this year is showing “marked” improvement.
CEO Philippe Krakowsky said organic revenue was in line with expectations and that "underlying growth" improved with strong performances by media and healthcare practice areas. Sports marketing and public relations also grew.
Client activity was largely resilient in the face of macro uncertainty, he said.
At Omnicom, which is on track to formally take IPG into its business, earlier this month reported a 21.5% fall to $US257.6 million in net income for the June quarter as costs increased from the the takeover and from cutting staff.
At IPG, June quarter net revenue was $US2.2 billion. After-tax expenses for restructuring totalled $88.4 million. Full year restructuring costs were expected to be $375 million to $400 million.
Salaries and related expenses fell 11.5% to $1.38 billion, mainly driven by lower base salaries, benefits and tax, as well as lower bonuses and severance costs.
The global advertising group maintained its guidance for a fall in full year organic net revenue of 1% to 2%.
And IPG expects to drive its EBITA (earnings before interest, taxes, depreciation and amortisation) margin significantly ahead of the 16.6% target, “reflecting both structural and operating improvement”.
“Our organisation continues to evolve as we connect more of our capabilities to the strong foundational elements of data and technology,” Krakowsky said.
“This includes continued progress in embedding artificial intelligence in our workflows and products, allowing us to deliver the benefits of our centres of excellence and platforms to clients through solutions that drive marketing and sales outcomes for their businesses.
“With these investments in our people and our capabilities, we are seeing positive new business performance.
“Looking ahead to our combination with Omnicom, we remain on track to see the transaction completed in the second half of this year.
“The level of interest and support from clients continues to be strong, and there is enthusiasm on the part of practitioners across both organisations to unlock the value that the combination will create.
“By bringing together our deep pools of talent, complementary capabilities, and geographic strengths, we can create an organisation with unmatched ability to deliver business outcomes for marketers in every industry sector, around the world."
US organic revenue was -2.6% and international -5.4%. Asia-Pacific was -13.6.
June quarter 2025 numbers:
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