Martin Sorrell’s S4 Capital is heading for a full year revenue slide in the high “single digits” as clients remain “cautious”.
Tech platforms continued to cut sales and marketing spend but this is stabilising, particularly at Google, S4’s largest client.
And the pure play digital advertising group is seeing “significant opportunities” for new business, particularly driven by the company’s AI tools and capability.
S4 reported September quarter billings up 1.9% but revenue still down 1% on a like-for-like basis.
"Market conditions in the third quarter reflect the continuing impact of volatile global macroeconomic conditions,” Sir Martin said.
“As a result, clients remain generally cautious given the uncertainty, with technology clients, which account for almost half our revenue, in particular, continuing to prioritise capital expenditure on expanding AI capacity.”
However, he said this may be the time when AI adoption accelerates at scale.
“We are seeing significant opportunities for new business, particularly driven by our AI tools and capability,” he said.
“New business wins so far this year include new or broadened relationships with Asana, Amplifon, Samsung, Square, NCS, Opella, Visa, Cinemark and HelloFresh.
“We also continue to expand many of our existing relationships, in particular General Motors, Amazon, T-Mobile, PIF, and now two unannounced leading US-based Global FMCG companies, which are ramping up significantly in the second half of the year.”
The company is continuing cost cutting with headcount reduced by about 5% to 6,500.
Sir Martin said the company would take a cautious approach forecasting for next year.
“When we look at next year, given our record on forecasting, particularly the top line, the bottom line is a little bit stronger, liquidity is a bit stronger,” he said.
“We’re going to take a cautious view to 2026, whatever that number is. “On the general economic environment next year, I don’t expect it to change very much. It will continue to be volatile.
“The interesting thing about the tariffs is that so far, we have not seen any margin compression, despite the fact it seems to be the case.
“Companies are not necessarily passing on the cost of tariffs to the consumer.”
September quarter 2025 numbers:
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