Martin Sorrell’s S4 Capital posted reported revenue £164.8 million, down 7.5% and 3.7% like-for-like, as the Middle East conflict and cautious technology clients held back growth.
The pure-play digital advertising group expects full year like-for-like net revenue to be slightly below 2025, in line with current analyst consensus.
“The performance reflected heightened macroeconomic uncertainty caused by the conflict in the Middle East and indeed continued client caution, especially amongst the technology clients as they allocate even more spend building AI infrastructure,” executive chair Sir Martin told analysts in a briefing.
“Overall, we remain confident in our talent, in our business model, in our strategy, and in our scaled client relationships, which we think position us very well to deliver sustainable long-term growth.”
The company is seeing stabilisation and a little improvement among technology clients, which have been throwing cash at building AI capabilities.
“We’re budgeting sort of flat revenues for tech services,” he said.
“Obviously, it’s been a rough time for the practice over the last two years.”
Scott Spirit, chief growth officer, said he sees significant opportunities for new business, particularly driven by S4’s AI tools and capacity.
“This is particularly so in the automotive sector, where we’ve recently won assignments from major manufacturers in Japan, South Korea, China, and India, and as the category establishes itself as an early adopter of AI at scale in reaction to the existential pressure from Chinese EVs and AVs,” he said.
“We see similar opportunities in financial services, where we’ve seen an uptick in pipeline and wins as financial institutions move beyond pilots and concerns around AI governance to full-scale adoption … reflecting an existential threat, this time from new fintech platforms.
“In FMCG, we continue to build on the traction of winning real-time brand and orchestration partner engagements with 2 leading US-based global clients at the end of 2025.
“One of these client relationships has since expanded internationally, and we’re engaged in several scaled pitches in this category at the moment.
“These are strong relationships that help us attract and retain talent to work on them.
“Declining spends overall have had a negative effect on the average revenue size of our top 10, 20, and 50 clients. This is primarily driven by reductions in spend and scope rather than lost business, and again, it is starting to stabilise.”
March quarter 2026:
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