Interpublic Group reports Q1 revenue decline amid restructuring
Interpublic Group (IPG) reported a drop in revenue and earnings for the first quarter of 2025, in line with company expectations, as it moves forward with a major restructuring and prepares for its planned merger with Omnicom.
Financial highlights
Revenue before billable expenses, or net revenue, came in at $2.00 billion, down 8.5% from the same period last year. The decline reflects a 3.6% organic drop, a 3.7% impact from divestitures, and a 1.2% negative effect from foreign exchange. Total revenue, including billable expenses, was $2.32 billion, compared to $2.50 billion in Q1 2024.
The company posted an operating loss of $42 million for the quarter, driven by $203.3 million in restructuring charges. This compares to $184.2 million in operating income a year ago. Adjusted EBITA before restructuring and deal-related costs was $186.5 million, down from $205.5 million in Q1 2024, representing a 9.3% margin.
Interpublic reported a net loss of $85.4 million, or $0.23 per share, compared to net income of $0.29 per share a year earlier. On an adjusted basis, earnings per diluted share were $0.33, slightly down from $0.36 in Q1 2024.
CEO Philippe Krakowsky said the results were “consistent with expectations,” and highlighted strong performance from IPG Mediabrands, Deutsch, Golin, and Acxiom, despite broader revenue pressures.
He noted that the company made “significant progress” on a transformational restructuring aimed at consolidating services and increasing efficiency through centers of excellence, particularly in production and analytics. Krakowsky emphasized that these changes, combined with the upcoming Omnicom merger, will deliver “financial benefits beyond original estimates.”
Philippe Krakowsky, CEO, InterPublic: “Since our previous quarterly call, macro developments have moved front-and-center for all businesses. The implications of potential policy changes vary widely for companies across industries and geographies, and we are working closely with our clients in considering the decisions they may need to make when it comes to channel choices, investment levels, and the best mix of marketing disciplines required to deliver business outcomes in more uncertain economic circumstances,” he said.
Outlook and merger progress
The company reaffirmed its full-year forecast of an organic revenue decline between 1% and 2%, and an adjusted EBITA margin of 16.6%. It also confirmed the merger with Omnicom remains on track to close in the second half of 2025.
Restructuring and expenses
The Q1 restructuring charges are part of a broader effort to streamline operations and are expected to be completed by the end of 2025. Staff costs declined 10.1% year-over-year, while office expenses were nearly flat. Deal-related costs totaled $4.8 million during the quarter.
Balance sheet and shareholder returns
IPG ended the quarter with $1.87 billion in cash and $2.96 billion in total debt. The company returned $215.3 million to shareholders in Q1 through $90 million in share repurchases and $125.3 million in dividends.
Despite macroeconomic uncertainty and integration costs related to the Omnicom deal, Krakowsky said IPG remains focused on helping clients navigate shifting market conditions and investing in data-driven, AI-enhanced services.
Philippe: “Looking ahead, for the full year we continue to forecast an organic decrease in revenue of 1% to 2% and adjusted EBITA margin of 16.6%. The strength of our balance sheet positions us well to deliver on our long-standing commitment to capital returns, while continuing to augment our offerings and asset mix. We also remain on track to close the acquisition by Omnicom in the back-half of this year. The resulting combination will be uniquely positioned to grow our clients' businesses in a rapidly changing environment, empower our people, and drive significant value for all of our stakeholders."
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