Omnicom Group Aktie

Good morning, everyone. I hope you're all really enjoying the conference this week. I'm really delighted to have with us Phil Angelastro, the CFO of Omnicom. Just telling me he's been at Omnicom for nearly 30 years. So I'm sure he's done this a few times before.

Maybe we can just start by reflecting on what it's been like since the deal closed with IPG. How happy are you with the progress that's been made since the acquisition? What's gone better than you thought? What's gone worse than you thought? Maybe we can start with that.

Sure. So it has been 9 months or so since we closed the deal, and we spent probably the better part of almost a year planning for the integration. And we certainly had a lot of familiarity with IPG's assets leading up to the transaction. But we're quite pleased with how the integration has gone, in particular, I would say that the integrated media business has come together quite quickly and quite well, somewhat seamlessly in bringing two very large global organizations together. And certainly, we've seen the benefits of that kind of from day 1. And the scale that we've achieved in that business, in particular, has been quite helpful for the business and our growth. So we're pleased with that.

We're also pleased with the progress we've made with Omni and the integration with IPG's platform, Interact. We've kind of taken the best of what both had to offer, integrated them together and continue to make investments to evolve the platform itself. And we've made quite a bit of progress in that area, including agentic AI, integrating Acxiom data and the Acxiom business into the Omni platform, as well as getting Acxiom and our Integrated Media business and our other businesses working together more closely. I think there's still a lot of work to be done there and progress to be made, but that was certainly one of our goals and one of the opportunities we viewed in the deal was to get Acxiom more integrated into the business to drive growth. So we're pleased with that.

We're certainly also pleased with the progress we've made in terms of achieving the cost reduction synergy targets that we set out. There's still ways to go in the second half and beyond, but we made a lot of progress there. I think the biggest challenge we faced has been in the advertising business in bringing together both IPG portfolio and the Omnicom portfolio. It was certainly not an integration challenge that we didn't anticipate, but we probably made the most changes in that business coming together on a global basis than any of our other businesses. We've gotten rid of or eliminated a number of brands. So there's been a lot of activity in that business and a lot of challenges in bringing that together. But I think we're largely through that process. There's still an evolution to come. But I think that's been our biggest challenge.

You mentioned the synergies program, which is $1.5 billion of gross cost savings over the next couple of years. I think, John, CEO has said publicly that trying to get the headcount to around 105,000 for the new organization. Can you give us an update on where we are at the moment and how long you think it will take to get to that -- steady state?

Sure. So I think that was probably a number that was referenced in the press about right around when we announced and closed the deal, so say, December of '25. Obviously, a rough estimate of where we expect it to be, but we think that's a pretty good estimate in terms of what we're going to be able to achieve by the time we get to, say, post 1 year, by the end of the year 2026. Now that number includes in addition to headcount reductions from synergies largely due to duplicative corporate costs and duplicative regional management and other areas of opportunity when it comes to outsourcing and offshoring.

There is also a component of that, that relates to the dispositions that we've been doing, not yet complete, but a lot of progress in that area, and we expect to be largely complete with that by the end of the year. So the number that we had disclosed at the end of 2025, I think, was about 120,000 in headcount. It was probably a bigger number if you combine Omnicom and IPG, if you go back to 2024, just the nature of the business changes have been happening.

Yes. But those headcount changes really have not impacted client-facing people very much at all, except for if we lose a client or win a client here and there, there might be some shifts across our agencies. But in terms of a rough estimate, I think that's certainly one we're comfortable with, but we'll see what happens over the next few months here.

But that's broadly where you'd expect to be by the end of the year once all the dispositions are completed and...

Yes, yes. It's not going to be a perfect number, but I think that's a pretty good estimate.

Okay. Maybe we can talk a little bit about growth. At Q2, you upgraded your full year guidance for organic revenue growth to 4.5% to 5%. This is a good year for agencies in the sense that we've got Olympics and World Cups and the midterm elections and you have businesses in the political area. Is that making much of a contribution? Or is that -- or do you think that 4.5% to 5% is kind of more of a steady state of what you should be expecting to achieve...

I think the 4% to 5% is what we expect right now. I think we're typically somewhat conservative. We don't want to get ahead of our skis in terms of our expectations, especially given kind of the items that we can't control, the geopolitics of the day and some of the uncertainties that are out there. But we're certainly comfortable with the 4.5% to 5% for the year. We benefited certainly from the World Cup in our experiential businesses in the second quarter. We expect there will be a little bit more benefit in the third quarter, not in the fourth.

And the U.S. national elections will help a little bit in the PR business in the second half, but not quite to the extent that a national election with the presidential election as well would benefit the business. So I'm not quite sure we have a number yet for how much of the annual estimate, the 4.5% to 5% will be coming from those businesses because there's still some time to play out here.

But I think as we look into '27, we don't see there being a dramatic downturn in terms of our growth rate and the possibilities. It's a long time between now and 2027, and we haven't done our planning process yet. But there are going to be some reductions year-on-year and some difficult headwinds in the experiential business and perhaps a little bit in PR. But there will also be some other parts of the business that we expect will improve, especially in the area of probably our health care business. They've had some challenges in '26, and we've certainly got a great franchise when you bring together Omnicom and IPG's health businesses. So we have high expectations for them going forward.

The other thing that will affect 2027, I suppose, is where we end up with net new business during this year -- and then flow into next year. Do you want to give an overview of how you think the year has gone so far in terms of new business? And maybe we could talk a little bit about what happened with Pepsi last week as well.

Sure. So new business has been quite robust, the first half of the year, especially in the Integrated Media business. We've had a lot of wins, a lot of big brands either have joined the portfolio or we've grown our business with those brands during the year. And the Pepsi situation is an unfortunate one, certainly a disappointment from our perspective. You can't sugarcoat it. We're doing a detailed kind of deconstruction of how it happened and what we should have been doing differently to prevent it from happening.

We're not completed with that process, but we're going to learn some lessons from this. And certainly, we're going to take them very seriously, not interested in excuses. But ultimately, we want to do a root cause analysis so that we can improve the business and our processes going forward. So -- I think Pepsi is certainly a long-standing client. We still have a relationship with them when it comes to PR and creative and some sports activation business. So it's a great client, not a happy process that we've been through here, but we'll rebound from that. We don't think it's going to have a significant impact on the business going forward when we get to '27 and our expectations. But there's still quite a bit of time between now and '27, and we'll be aggressively pursuing new business as we always do.

Does that open up some opportunities for you, in the accounts you maybe couldn't have gone for in the past that now you can go after?

I think it likely will. Coke and Pepsi is a unique competitive relationship. And I think we'll see what happens as this plays out. But I think we would agree, we're not likely to be as restricted as we once were.

With Coke specifically, you mean or other?

Just in the categories that Pepsi operates in, in general. But again, it's an existing client. We value the relationship. But certainly, there'll be a little bit more flexibility in terms of what we pursue in the future.

As we sit here today, based on the new business over the last 9 months, is it going to be much of a tailwind, headwind into next year, neutral based on what you've won so far?

I think net-net, it's going to be -- we expect it to be a tailwind, a positive, not a headwind, overall. But there's a lot of moving parts in what drives revenue growth. But the key to revenue growth ultimately is growing with your existing client base. And oftentimes, new projects, new wins with existing clients don't get a lot of press. So I think when you look at the overall portfolio, there's the big notable wins that show up in the press, and then there's a lot of other activity that drives revenue growth. And I think this year has been a good year and we'd expect it to continue.

Okay. It seems from outside and looking at the data that is public that Pepsi aside, you've actually been doing pretty well in media. There have been quite a few big wins in media, definitely up. But I think on the creative side, for the things, again, that have been in the press, there seems to have been quite a few losses, not that many wins on the creative side. Is that linked to these integration issues? One, as you mentioned at the beginning, that media has come together quite seamlessly and advertising hasn't. And does that create an opportunity or for an improvement next year?

Certainly. I think I would kind of reiterate the point I just made about, not every win shows up in the press or not every incremental bit of business and spend that an existing client shows up on the press necessarily, but it's incremental revenue, the same. But the business has been through a lot as far as Omnicom advertising goes on a global basis. And I think as I had said earlier, we're largely done with the changes and the repositioning, if you will, of the business. More of an evolution to come with the new management team given Troy's retirement, but we're optimistic about 2027 for that business. And I think the new CEO, recognizes -- Andrew Robertson has been at Omnicom for many years. He certainly recognizes the key to the business is driving growth, and we expect to get back into that mode for sure.

A lot of the growth in the business this year is coming from your Integrated Media business, which is just over half of the core revenues right now. And that actually accelerated from high single digit in Q1 to double-digit growth in Q2. Can you just talk a little bit about why that business is growing so quickly? What are the kind of underlying drivers? Is it clients spending more, more products, new business? Maybe you can break that down a little bit.

I think it's a little bit of all of that. But certainly, in doing the deal, the scale that we were able to obtain by combining the two businesses has been quite beneficial. Ultimately, what clients want is more for the media dollar -- every media dollar spent, and that's what we endeavor to give them. The business itself is -- it's not about media trading anymore. Ultimately, it's about delivering value to clients. It's very -- heavy data intelligence, science-driven -- data science-driven. And I think we've got, with the scale, scale improves reach, the quality of the data improves and the measurability of the outcomes improves. And when you can improve the solution for the client in all those areas, I think clients are ready to invest more. And ultimately, that drives more growth for the client, and it drives more growth for Omnicom. So I think the solution is quite different and quite compelling. And I think we've seen the results of that so far this year.

So do you report a revenue number for media in terms of -- so that's including the growth in the principal media buying that you do, which is a little different than some of the other agencies who give you kind of net number, particularly like WPP gives you a net media number. Does that make much of a difference? Like if you did report differently, would that media business still be growing that fast? Or how material is that in terms of what we're seeing?

I can't really comment on what other people report or don't report. We're the only U.S. public company in the group. But ultimately, we believe in measuring and managing all the costs in our P&L, not setting aside some of those costs and having people ignore them, if you will, and not manage them. We've always done it that way. We've been consistent in our reporting. And in fact, the revenue growth is revenue growth. I think the key from our perspective and how we manage the business is we don't overlook some very important items on the P&L that come with that revenue growth, and that's EBIT dollar growth and EPS growth and our returns, our capital returns.

So I think -- if you look at those numbers, we've had quite a good year so far, and we expect to continue to have quite a good year so far. We don't obsess about this one number. And other people report it differently, but other people can certainly report revenue growth and do. And I think if you want true comparability, you should look at the revenue growth, not a number that is somewhat ill-defined as far as the net number.

Okay. Maybe we can talk a little bit about the advertising part of the business. That was the second largest component of the new segments. That actually got worse in the second quarter than the first quarter was a bit of surprise. Is there any -- do you think there's a structural problem with creative advertising agencies? Can they still grow structurally? Or does AI make that more difficult? How do you see that playing out?

They can certainly grow. We don't see it as a structural issue. We see it more as some of the challenges we faced with the integration. And if you look through the entire portfolio, the advertising business, we've got a number of agencies, a number of regional agencies. And we operate in about 30-plus markets around the world. Quite a few of those agencies, the independent ones and the agencies in markets outside the U.S. have been growing. So the formula is there. The execution probably needs to continue to improve, and we expect it to.

So structurally, we think the business is sound. It's a key part of our DNA, creativity. It's not just the creative advertising agencies that creativity is important, it's something that's important throughout all of Omnicom, but the creative agencies certainly can grow. I think there may have been -- or there may be a little bit of a mix shift in terms of clients spending more in certain areas and us benefiting that -- from that and perhaps spending a little bit less than they traditionally had in advertising. But we definitely think the business can grow. It's certainly a smaller portion of the business now than it has been, when you brought the two companies together, given some of the disposition activity that's occurred as well. So we expect it to be about 16% or 15% to 16% of the business going forward, but we certainly think it can grow in the future, for sure.

One of the questions I get asked a lot when thinking about the agency space is that people assume that AI is going to enable some automation, which can allow you to do the same tasks with fewer people. But you charge revenues based on the number of people employed and you are reducing the number of people in the organization. So how do you grow revenues if you're not growing the number of employees when your clients pay you based on the time that's being spent?

So I think there's a couple of thoughts there. One is back to kind of the reduction in headcount that has occurred in our business. And I don't know if I said this before, but essentially, it's had very little impact on client-facing people. If there have been changes in terms of headcount with client-facing people in our business, it's because of some clients being lost and other clients being won in different agencies, the agencies are flexible cost structures. And there's some flex in that, and there might be some reductions in some agencies and increases in others. But ultimately, the client-facing people has not been the area that really has been reduced.

Over time with AI, is that going to happen? And how soon will it happen? I can't really comment on the timing. But ultimately, it's likely that there's going to be some benefits that come from AI and that drive the headcount lower. It might get replaced by headcount needed to grow with other new business. But ultimately, there's going to be other costs that come with that business and with those reductions. You're going to have to invest in AI and AI agents and the token costs, et cetera, that come with it. So ultimately, what's going to happen is the model in terms of how we get remunerated from our clients is going to transition. That transition has been happening. It's going to happen over a period of time. It's not likely to happen overnight.

But there is going to be likely more investment from clients because one of the changes or one of the meaningful changes that's been happening in the business and that will continue to happen with AI is, all of what we do and the results are going to be much more clearly and easily measured. Some of them it's going to be a challenge to measure but ultimately, measurement is going to improve. And the more measurement improves, the better it's going to be for us because we're going to be able to prove the return on investment that we deliver to clients. And when you can do that, clients are going to be more likely to invest more in what works. And that's a key part of what we're going to do and a key part of the continued technology changes that are going to impact our business. So ultimately, we see it as a positive. Might -- the headcount mix change a bit? It might. But ultimately, we think we can certainly continue to grow in that environment even if the headcount numbers might be coming down a bit.

Are you already starting to invoice clients for token costs?

I'd say it's early days there. There isn't much of that yet. There isn't actually much of a meaningful increase in token cost overall at the business. There's some. But it's something that we certainly are discussing in meetings on a regular basis to come up with a model that makes sense for us and for our clients and the process and controls that we need in place to manage those token costs and then to measure them and then to get reimbursed for the additional cost to deliver what we do. But again, there's a number of moving costs in that model. And ultimately, we're going to move towards a more output-driven model from a revenue perspective, and we think that will be a long-term positive in the end.

Can you talk a little bit about what that outcome pricing model might look like? Because I think the pushback I've heard is that sometimes CFOs like to have predictability about what they're going to pay their suppliers. And if they're uncertain what they going to have to pay because they don't know how the campaigns are going to go, it's quite challenging for them. So -- how do you get around that hurdle?

I think ultimately, it's about value. But we bought a business, Flywheel, several years ago. And probably 80% or 90% of that business is outcome-based. And the clients and the CFOs of those clients are very happy to participate in the model. It works that way because they know exactly what the return is and they know exactly what they're getting, what they paid for. So I think there might be some clients certainly in the portfolio, for sure, that have procurement organizations or are procurement-led, and they're not ready to make this transition just yet. They're happy with how the process works today. They're happy with how to evaluate what the cost is and what it's going to be, and that's fine.

That transition will take a little bit longer. But there are other clients that are more ready to try and experiment with new models. I don't think there is an answer yet in terms of this is exactly how it's going to work, and there's going to be an experimentation phase on our part and on the clients' parts. And everybody is going to find out what works and what doesn't and what certain clients are comfortable with and what other clients are not comfortable with. But our industry has been through this evolution a couple of times over a long period of time in terms of transitioning from commissions to rate per hour and fee-type arrangements, fixed fee arrangements and now more output models as the business evolves. And I think it's an evolution that we're certainly looking forward to because we think it will be a long-term positive for us.

Maybe we can talk about margins now. I mean, before the acquisition, you would tend to give annual margin guidance, but you didn't do that this year, I suppose because there's a lot of moving parts. When do you think we get back to that? Because it's quite a modeling challenge with trying to figure out what the margins are going to be for this year and next year? And maybe just talk a little bit about how investors should think about where the margins of this business are likely to get to over time, and whatever help you can give us to think about that?

So I think we've been consistent on this point for quite some time. Our focus is primarily on growing EBIT dollars and EBITDA dollars, not obsessing about a margin percentage. We think if we can deliver growth in EBITDA dollars, absolute dollars, the margins will work out because if you set a target and the target is a percentage margin, you need to be careful because people will likely hit it. And when they hit it, they can hit it in a number of ways that isn't necessarily just grow the EBIT dollars, which ultimately make it to the bottom line and EPS.

So we haven't managed the business that way. We don't manage the business that way. We're focused on growing the EBIT dollars. I think there have been -- there's been a challenge this year certainly, and we knew it was coming because you've got two very big organizations coming together. The historical data, it's certainly not on the IPG side, it was IPG data, not Omnicom data. And there have been a lot of moving parts with respect to the assets held for sale and the disposition. So it's been somewhat challenging.

If we could run the business through a model, it'd be a lot easier for us. And then we have -- it'd be easier for certainly yourself and others. But on a day-to-day basis, we got to manage the business. It's not managing the model. I think once we get through this disposition phase, which we can't get through quick enough from our perspective. We certainly want to get through it as quickly as we can and have been working to do that because we want to get back to a more clear way of reporting. And we're trying to give investors as much information as we can give them in as clear a way as we can do that but there are a lot of moving parts.

I think we also want to move beyond the disposition phase because we want to get back into acquisition mode and doing some tuck-in acquisitions that will benefit the growth platforms that we have and we're excited to do that. But the reality is whether it's a small disposition or a large disposition, it still takes quite a bit more time than we would hope to get them done, but we certainly expect to get them done by the end of the year so that we can have more clarity just in that asset held-for-sale area.

So by January 1, 2027, core revenue equals group revenue.

I think we'll see what happens between now and then, but that's certainly the goal that there will be more clarity on that, yes.

So of the $1.5 billion of gross synergies, you've talked about some reinvestment, 20%, 30% in the first year, you're not specified what that will be in the kind of next couple of years. But can you talk a little bit about what kind of investments you're making and what kind of returns you're expecting to get from that?

Sure. So some of them certainly are not -- they're not optional. The investments that we had been planning to make in the business pre-deal. Bringing the two organizations together certainly helps us get to the finish line or get to where we need to be quicker in a more scaled way. But the primary investment areas relate to the Omni platform. Agentic AI and building that out and then getting all of our people trained on using the platform and creating new beneficial use cases for clients using the platform and all the tools, et cetera. That's the primary investment area from the company's perspective. And I think if the world stood still and the marketplace and technology stop changing, it would be easier to not continue to invest in the business and need to have a stable platform, but that isn't the reality.

So investing in the business is always going to continue to be a key part of what we do because the goal is to drive sustainable growth, not just periodic spotty growth here and there. So I think that's the primary area. Certainly, we've been investing in training and growing the skills of our people, et cetera. But the platform and related technologies is the primary area of the investments that we've made.

One thing I want to ask you about is cash and use of cash because if I look at my numbers, there's a lot of cash going to come out of the business over the next 3 or 4 years. Maybe start with specifically, like you kind of had the ability to buy back $5 billion of stock once the deal closed, and you're doing about $3.5 billion this year. And I suppose what's the reason you're not doing the whole $5 billion in 2026? Do we assume that '27 is just the $1.5 billion that's left over? Or could that be higher? Just how should we think about that?

Sure. So if you go back to when we were -- we had announced the deal and we were anticipating closing we were limited to buying back a certain amount of stock and IPG was limited to buying back a certain amount of stock during that period of time. We got a lot of investor questions at the time. Why aren't you buying the stock? The stock was down, you don't think it's attractive, et cetera. So when we closed the deal, management and the Board made a decision that we were going to send a signal to the market clearly that we had conviction in the business. We had conviction in the transaction. We had conviction in success, the future success of the business.

Keeping in mind that when the two businesses came together was actually deleveraging. So IPG's relative portion of debt compared to Omnicom's was a little lower. So we delevered the business through the stock deal. And the goal ultimately and the guardrails, if there are any, is management and the Board chooses to manage the company in the context of maintaining our rating. And that's evidenced through what we view as the total debt-to-EBITDA ratio, and that ratio has been somewhat consistent with Omnicom pre-deal during '26, and we expect we'll close out the year in a very similar spot.

As you said, we expect to spend about $3.5 billion this year. We expect to complete the balance of the $5 billion by the end of April in '27. And then I think we'll reevaluate what we're going to do next with the Board. I think it doesn't mean sitting here today, $1.5 billion is the number, and that's it for 2027. I'm not sure, and we certainly haven't made any commitments that we're going to be -- we're going to spend more in '27.

But I think longer term, what should investors expect? I think they should expect a consistent approach to what we've done in the past going forward. If you look at the two businesses, we spent combined pre-deal for the last few years, pre-deal, about $1 billion in share repurchases. That's a pretty good estimate for now of what we'll do going forward. But the process will be the same and that number can vary. So we're going to continue to pay -- use our free cash flow to pay a competitive dividend.

We're going to look to do acquisitions that add to our growth profile, and we're going to use the balance of the cash to buy back shares. We don't set a target for acquisition spend at the beginning of the year and then set our M&A team off to fill that and meet that target, because then we end up doing deals that we otherwise wouldn't necessarily do if they meet our criteria. And we also don't want to be prevented from doing deals that we think make sense where we might go a little bit over that target. I think you should expect a consistent approach going forward once we get beyond the $5 billion.

Thank you very much.

Okay. Great.

Thank you all for joining us.

Ladies and gentlemen, thank you for joining us, and welcome to the Omnicom Second Quarter 2026 Earnings Conference Call. [Operator Instructions] I will now hand the conference over to Greg Lundberg, Investor Relations. Greg, please go ahead.

Thank you for joining our second quarter 2026 earnings call. With me today are John Wren, Chairman and Chief Executive Officer, and Phil Angelastro, Executive Vice President and Chief Financial Officer. On our website, omc.com, you will find a press release and a presentation covering the information we'll review today. An archived webcast will be available when today's call concludes.

Before we start, I would like to remind everyone to read the forward-looking statements and non-GAAP financial and other information that we've included at the end of our investor presentation. Certain of the statements made today may constitute forward-looking statements. These represent our present expectations, and relevant factors could cause actual results to differ materially are listed in our earnings materials and in our SEC filings, including our 2025 Form 10-K. During the course of today's call, we will also discuss certain non-GAAP measures. You can find the reconciliation of these to the nearest comparable GAAP measures in the presentation materials.

We will begin the call with an overview of our business from John then Phil will review our financial results. And after our prepared remarks, we will open the line for your questions. I'll now hand the call over to John.

Thank you, Greg. Good afternoon, everyone, and thank you for joining us today. I'm pleased to share our second quarter results. Starting with revenue from Core Operations, which comprises our ongoing operations and excludes assets held for sale and planned disposition, we achieved organic growth of 6.1% in the second quarter. These strong results were driven by our Integrated Media and Experiential disciplines. Ongoing or Core Operations adjusted EBITDA growth was 20.4% and EBITDA margin increased by almost 200 basis points to 17.8% as compared to the combined operations in the second quarter of 2025. Our non-GAAP adjusted EPS in the quarter, which excludes after-tax costs from severance and repositioning actions, acquisition and integration expenses as well as amortization of acquired intangible assets was $2.65 per share, an increase of 29.3% versus the prior year.

We also continue to be on track to successfully achieve the initiatives we communicated on our prior calls, including $900 million in 2026 cost reduction synergies and $1.5 billion by mid-2028. In compliance with our Board authorization, we're executing our plan to repurchase $5 billion in shares. To date, we have completed $3 billion in share repurchases, and we expect to complete approximately $500 million of additional repurchases during 2026, with the remainder completed by the end of the first quarter of 2027. Through July, we've completed a significant number of our planned dispositions. For the second half of the year, dispositions remaining to be completed will generate approximately $525 million in revenue.

Results from ongoing operations in the second quarter and through the first half of 2026 demonstrate the momentum the new Omnicom has quickly gained from the combination with Interpublic. Over the past 8 months, we've moved beyond combining our two companies to building the leading connected marketing and sales company for a fundamentally new era of marketing. The new Omnicom is an integrated operating company, bringing together the industry's leading talent and capabilities across creativity, media, commerce, consulting, data and technology. We will align leadership teams connected our capabilities across the enterprise and unify our data and AI assets through Omni. This gives clients easier access to the full strength of Omnicom and allows us to deliver smarter decisions, faster execution and better business outcomes. The result is a more agile and connected organization, one that is better equipped to help our clients grow, transform and compete in a rapidly changing world.

Looking ahead, our focus will be on three areas, where we see the greatest opportunities for our clients and us. First is agentic marketing transformation. We have differentiated assets that help us excel in this area. [indiscernible], we demonstrated how Omni's agentic layer can be used for our clients to enable agent creation, activation and orchestration across workflows, channels and customer experiences. This is further enhanced by Omni foundational data and identity layer powered by Acxiom. Through Omni's agentic and data capabilities we can achieve significantly better audience and activation strategies and precise cross-channel measurement.

In addition, our marketing transformation consultancy and partnerships with leading technology companies will play a significant part in modernizing our clients' enterprise infrastructure for agentic marketing and connecting it with Omni to further optimize these results. Our assets and capabilities create a unified, intelligent layer that is the foundation for true agentic marketing.

The second major opportunity is the new Consumer Engagement Model. Brands are focusing investment where they can build deeper and more direct relationships with their customers. This includes sports entertainment, social and creator, connected commerce and AI-driven discovery. The combination of Omnicom into public has enabled us to integrate solutions that operate at scale and are being deployed for our clients. Sports exemplifies this combined strength. Omnicom influences $9.9 billion in sponsorships oversees 1 in every 3 sports media dollars, maintains more than 500 league and platform partnerships and has visibility into 20,000-plus sporting events each year. Our client relationships and new business opportunities continue to grow across each of these areas.

The third area of opportunity is expanding our client partnerships and attracting new clients. Our integrated client leaders, our focus on deepening our relationships, identifying white spaces and actively expanding the services we provide by bringing more of Omnicoms' capability to each client. At the same time, our newly formed growth team is aggressively pursuing net new clients by leveraging Omnicoms' connected offerings and new consumer engagement model. These efforts have already delivered meaningful results.

Within the quarter, many of our wins came from expanding existing relationships. We added services in high demand areas such as sports, media, production, commerce, social and influencer for clients like American Express, General Mills and Uber. These extensions demonstrate the value of true connectivity. During the quarter, we also secured new Integrated Media wins with Adidas, IBM and Subway. This success clearly indicates that clients recognize the value we've created at the new Omnicom. It is reinforced by our high post-acquisition client retention rates and our recognition as the most effective company in the Global Effie Index. None of these achievements would be possible without the outstanding people across our company. We brought together exceptional talent from both Omnicom and Interpublic and created something even stronger.

I want to thank everyone for their commitment and contributions over the past several months. Overall, we're very pleased with our performance in the second quarter and the first half of the year. We remain optimistic and confident about the remainder of 2026. Given our first half performance, we're raising our full year guidance for 2026 organic revenue growth from ongoing operations from 4% to 4.5% to 5%. Phil will now provide more color on our financial performance and updated guidance. Phil?

Thanks, John. I'll start on Slide 3, which presents what we call our Core Operations, which consists of our ongoing operating business excluding dispositions that we have completed and asset sales for sale that have not yet been disposed. Our plan is to complete the disposal of the businesses included in the dispositions and held for sale category by the end of 2026. This slide also presents operating income and EBITDA on a non-GAAP adjusted basis, excluding severance and repositioning costs and acquisition integration costs. For comparison purposes on this slide, we've included 2025 prior year combined amounts prepared on a similar basis to 2026. As we previously discussed, our Core Operations are the result of our ongoing strategic repositioning of the portfolio for growth and reflect our sharpened focus on the highest growing most connected parts of our business.

This slide presents the contribution of our Core Operations through our consolidated results in the second quarter of 2026 and 2025 for revenue, adjusted operating income and adjusted EBITDA. Core Operations represented 91.4% of our revenue and 95% of our adjusted EBITDA in the second quarter of 2026. Core Operations revenue grew 7.2% in total. Adjusted EBITDA grew $181.4 million or 20.4% and the related adjusted EBITDA margin increased 17.8% or 15.9%, primarily driven by cost reduction synergies. We're pleased with the strong performance for both revenue and adjusted EBITDA, and we are on track to achieve our cost reduction synergy targets for the year.

Moving to year-to-date results on Slide 4. Core Operations revenue grew $754.1 million or 6.9% in total. Adjusted EBITDA grew 23.5% and related adjusted EBITDA margin increased to 16.4% from 14.2%, again, primarily driven by cost reduction synergies.

Turning to Slide 5, we present our second quarter consolidated reported results as well as the related non-GAAP adjusted amounts, which include all entities, Core Operations, dispositions that were completed during the quarter for the period they report of Omnicom and entities that are classified as held for sale. Also, because these are reported results, the 2025 presentation reflects the prior year results of Omnicom only and does not include Interpublic. Center columns for each period show the applicable non-GAAP adjustments.

In the second quarter of 2026, integration-related costs were $40.1 million, which were recorded on the SG&A expense line and severance and repositioning costs were $47 million. Below operating income, net interest expense increased to $93 million from $41 million in 2025 due primarily to the assumption of Interpublic debt of approximately $3 billion. Interest expense increased by $61 million, primarily due to the Interpublic acquisition, including $3 million of noncash interest, as well as interest expense resulting from refinancing activity completed during the first quarter of 2026, which resulted in approximately $1 billion of incremental long-term debt, and some incremental interest expense from CP borrowings during the quarter.

Interest income increased by $8 million to $30 million, primarily due to higher average cash balances. Depreciation expense in the quarter was $49 million, and amortization expense was $118 million. Both increased year-over-year primarily due to the Interpublic acquisition. For both we estimate that amounts in Q3 and Q4 of 2026 will approximate Q2 actuals. Our adjusted tax rate of 26% was down slightly from 26.5% in 2025. For 2026, we estimate our annual tax rate to also be 26.0%. Our non-GAAP adjusted net income increased $344.1 million to $745.2 million.

Finally, non-GAAP adjusted diluted EPS grew 29.3% to $2.65 from $2.05 last year, driven by an increase in related net income. Our fully diluted weighted average shares outstanding for the second quarter were 281 million, down 10% from 313.1 million shares outstanding at year-end 12/31/25. On a year-over-year basis, our share count increased from last year due to shares issued for the Interpublic acquisition, partially offset by share repurchase activity, which I will discuss in a moment.

Now let's review revenue drivers in more detail, beginning with the components of our revenue change on Slide 7. To assist in understanding the drivers of our underlying business, this analysis focuses on growth from our Core Operations, exclusive of businesses that have been disposed of or are expected to be disposed of. Organic revenue growth in the quarter was 6.1%. The impact from foreign exchange translations was positive 1.1%, along with a nominal impact from a small acquisition. Total revenue from Core Operations was $6 billion. Year-to-date, organic revenue growth as of June 30 was 5%. During the quarter and through the end of July, we've completed more than half of the planned disposals included in our dispositions and held for sale category. We expect to complete the remaining dispositions in Q3 and Q4 of 2026. And we estimate the revenue related to those businesses will approximate $300 million in Q3 and $225 million in Q4, with EBITDA margins of approximately 10%.

Through June 30, 2026. We received proceeds from assets sold of $168 million, and we expect additional proceeds from sales completed in July in excess of $200 million. Assuming recent FX rates stay the same, we estimate FX will decrease our reported revenue for Q3 by 1% and be flat for Q4, resulting in an expected benefit for the year of approximately 1%. Turning to Slide 8. You can see our Core Operations revenue by discipline for the quarter. In the second quarter of 2026, revenue for Integrated Media was approximately 53% of our revenues, which includes our media, commerce, data, CRM and consulting and our content automation business. Revenue from Advertising was under 16%; health was 9%, PR was 11% and Experiential & Other was 11%. Organic revenue growth rates for these core operations disciplines were as follows.

Integrated Media lend away with very strong growth, a little over 10%. Health was flat. PR growth was mid-single digit. Experiential & Other grew over 10% in the quarter due largely to Experiential growth related to the FIFA World Cup and Advertising was down in the high single digits. Slide 9 shows our Core Operations revenue by region for the quarter.

In terms of the top markets the U.S. represents 59% of revenue. Together, the U.K. and Europe were 23%, followed by Asia Pacific at 9%, Latin America at 4% and Middle East and Africa at 2%. During the quarter, revenue growth in the U.S. was high single digit. Europe growth was low single digit, and Latin American growth is strong at over 10%. Asia Pacific decreased slightly, and Middle East and Africa declined double digits as a result of the ongoing conflict.

Slide 10 is our revenue weighted by the industry sectors of our clients. So 2025 amounts reflect [indiscernible] only. In the second quarter, Pharma and Health was our largest category at 18% of revenue, an increase driven by the larger portfolio in this category at Interpublic. The Auto category at 10% decreased due to Interpublic smaller portfolio in this category relative to Omnicom.

Slide 11 is a view of our free cash flow for the first 6 months of the year. The increases in free cash flow and capital expenditures are primarily due to the addition of Interpublic's business. Dividends increased $481.5 million resulting from the additional shares issued for the IPG acquisition and recent increase in the quarterly dividend amount. Most notable change in this table is the change in stock repurchases which were $3 billion in the first half of 2026. This is composed of both the $2.5 billion accelerated share repurchase program and additional repurchases we made in Q1 and Q2. We plan to complete the $5 billion share repurchase program announced in February 2026 by the end of Q1 2027. Our definition of free cash flow excludes changes in operating capital. We provide those changes in the non-GAAP reconciliations in the appendix.

I want to point out that changes in operating capital in the first half were negative $2.4 billion compared to a negative $1.4 billion in the same period last year. This increase is primarily due to the addition of Interpublic's business and operations in 2026, which are not included in the prior year amounts. Note for the 6 months ended June 30 of last year, the change in Interpublic operating capital was approximately negative $445 million, as well as incremental payments of approximately $550 million related to severance, repositioning and integration costs as well as lease and contractual termination payments. All other operating capital changes were close to flat year-over-year. Excluding any similar incremental payments in the second half, we expect operating capital changes to be flat for the remainder of the year.

Slide 12 is a summary of our credit, liquidity and debt maturities. At the end of the second quarter of 2026, our gross long-term debt was $10.2 billion. Relative to 2025, changes reflect the retirement of our $1.4 billion, 3.6% senior notes due April 15, 2026, the issuance of our new senior notes totaling $2.3 billion including USD 1.7 billion denominated notes at a weighted average coupon of 4.9% and $600 million of Euro denominated notes at a 3.85% coupon. Our next maturity is not until July of 2027, and we're comfortable with our maturity schedule. Net interest expense is expected to increase by approximately $200 million in 2026, compared to $167 million in 2025. This includes $13 million of noncash interest. The estimated drivers of this are higher gross interest expense of approximately $230 million partially offset by higher gross interest income of $30 million. The majority of the increase in gross interest expense is due to long-term debt assumed from Interpublic as well as the new debt issued and debt refinancing activities in 2026.

Please note that the total and net leverage ratios on this slide, which compares the last 12 months ended June 30, 2026 in the prior year, reflect the full assumption of Interpublic's debt, but only EBITDA from Interpublic, the 7 months since the date of acquisition. However, at June 30, 2026, we were in compliance with the leverage ratio covenant in our credit facility, which makes pro forma adjustments for the impact of the acquisition. Calculation of total debt to pro forma adjusted EBITDA, done in accordance with the definition in our credit agreement results in a total leverage ratio of 2.4x, which is lower than the 2.6x at June 30, 2025. Cash equivalents and short-term investments at the end of the quarter was $3.3 billion. Our liquidity also includes an undrawn $3.5 billion revolving credit facility, backstops our $3 billion commercial payment program.

We're very encouraged by the progress we've made over the first 6-months of the year, and we look forward to continuing to build on that progress going forward. I will now ask the operator, please open the lines up for questions and answers. Thank you.

[Operator Instructions] Your first question comes from the line of David Karnovsky with JPMorgan.

John, sizable acceleration in organic in the quarter. Can you speak to some of the drivers of the better performance, including the excel in media, was this reflective of new business wins or kind of better underlying market or demand? Any color would be great.

And then for Phil, I heard you reiterate the $900 million of synergies this year, you had at one point, given an expectation of 75% to 80% of that is impacting the growth and margin. Is that still the case? And just how should we think about kind of balancing the synergy versus reinvestment in general?

Got it. And just one correction. I knew you had more than one question. Feel free to ask it.

In terms of organic growth, our organic growth is coming from -- and I tried to communicate this in my prepared remarks and I could do a better job in the next time, expansion of services to our existing client base was a big contributor to our organic growth this quarter and the new business wins we had, and so that continues. And we now have a nascent organization of very qualified people, with corporate in addition to what our units are doing that are looking for those opportunities where we have, what we believe is appropriate subsidiaries that can service those clients' needs and being proactive about going out and talking about it.

And we also have a more sophisticated, I think, corporate approach to new business in general. So I think both of the -- a combination of all those activities, which are still new, and they're dropping every single day will continue to seriously contribute to our organic growth.

On the synergy front, David, we certainly are on track, as we said in the prepared remarks, 75% to 80% of the $900 million in synergy targets is what we expect to deliver for the year. And we're definitely on track with that. That does include the fact that we're going to continue to invest in the business and invest in the Omni platform and other aspects of the business. So you see that in the delivery this quarter and in the first quarter in terms of the overall improvement in our EBITDA dollars and in the margin itself.

And just going back to the first question, it would be unfair. Since we've Florian to the call to be available to us and quite a number of the wins were Media, maybe he has something to add that I missed.

No, I don't think you missed anything. Look, I think David asked about like the client [indiscernible] sentiment, right? I mean they're looking for value from every dollar of marketing investment. Clients are looking for certainty, in what they do in their future related activities. They're looking for measurable outcomes. I think we've -- together with the new assets as we have them assembled, we've built a modern and integrated ecosystem of growth, bringing together industry-leading data identity solutions, best-in-class commerce and retail media is all unified in Omni.

So yes, we're happy. We're satisfied with the -- with some of the new business wins that we're seeing to John's point. We're seeing -- it is existing clients growing as we help them to better convert audience strategies and come up with more impactful smarter activation and also have a better closed-loop attribution and measurement. So overall, we're seeing our business growing on new, net new clients, but also existing clients at this point, and we would hope for that to continue.

Your next question comes from the line of Steven Cahall from Wells Fargo.

So John, as we think about the organic growth trend this year and the way you just talked about the contributors, I think right now, The Street is still skeptical on the sustainability of growth at the new Omnicom pre IPG pre-synergies, the growth rate was certainly lower sort of typically than what you're seeing this year. How do you just think about the ability to sort of run rate these levels of growth? I'm not asking for a medium-term guidance, but just you're divesting a lot of businesses that are [ slower growth ]. You're finding synergies in the business. So -- is there any way to sort of push back on that street skepticism that you've kind of just solved into it financially this year and how we think about the longer-term outlook for Omnicom's growth?

And then, Phil, I was wondering if I could just pin you down a little bit on expectations for EPS growth. I mean I think double digit was the guide maybe at the Investor Day. The share count alone gets you there, revenues growing faster. I don't know what the incremental margin on the revenue raise is, but you've got synergies in there, too. So how should we think about the EPS growth in 2026?

Its hard to predict the future. And if I was better at it, I probably have done something else as a career. But I'm very confident with the portfolio of assets that we have and the way that they're coming together in a way that, its different than the way Omnicom operated prior to the acquisition of Interpublic. We're now more of an operating company than a holding company. And we're selling as a team with multiple capabilities and crafts because clients are asking for that because they're asking for simplification in a complicated environment.

And so I'm very comfortable with the teams that we have and with the geographies that we've selected many of the companies that we had identified for sale, were actually bringing us down in many quarters in terms of what our organic growth was, we were never -- we're never explaining [indiscernible] our ongoing companies, we're growing at x and the slow companies that we should not have in our portfolio they were bringing that great growth down. And so I know all that inside baseball, and we've gotten -- we've gotten rid of most of the companies that were low growth or no growth. It gives me greater confidence because that top number really wasn't much different than what the top number was in the past, except for we no longer being burdened by what was dragging this down.

The other thing, which helps in certain businesses of ours, not all businesses, is scale. The combination gave us scale, gave us different assets that we could assemble in a different fashion as we approach our clients' needs. We're also able in that first month of planned dispositions, we had a lot of -- quite a number of countries in our portfolio, where they weren't bad assets, but the marketplaces that they were in, weren't growing. And so it was difficult to expect any kind of growth from them. What we decided in this approach is rather than exit those, we just simply sold down to minority. So we're getting the benefits of being able to service our clients in those markets, that are global or need of service in those markets. But we're not burdened by this group of low-growth organizations that again drag down the calculation. Does that answer your question or try it again?

That's great, John.

Sure. On the EPS front, Steve, we certainly said double digit, and I get safe to say through the first 6-months, what we expect for the full year is certainly high teens, greater than 15%. I think for sure, is where we expect to be. And we're certainly satisfied with the performance of the first 6-months, and we're on track with respect to the synergies and looking at the new business and the new portfolio, we're certainly confident in delivering very strong diluted EPS growth.

Your next question comes from the line of Jason Bazinet from Citi.

I just had one quick question on the quarter. The organic growth was really good, but it didn't seem like there is as much flow through down to EBITDA or earnings or adjusted earnings. I didn't know if there was anything that you would call out that maybe caused the drop-through from that incremental revenue to be lower than what we all might have imagined?

I mean, we actually think the flow-through is pretty good. We delivered EBITDA growth in excess of $180 million. We delivered EPS growth in excess of 20% for the quarter, well in excess of 20%. And a 200 basis point margin improvement, and we've done that for the first 6-months. So part of that comes from the flow-through of the new business and the growth in the operating companies. Part of it certainly comes from or the majority of it comes from delivering the synergies. But we are continuing to invest in the business as we go. It's a critical part of what we're doing here as we bring these two companies together.

And certainly, we're focused on sustainable growth for the future, as John had talked about earlier. And in order to do that, we know we need to continue to invest in our platforms, and the critical businesses that are going to drive that growth going forward. So that's part of the equation, no doubt. And it becomes kind of a continuous in process. We need to invest in the business to grow. We grow the business, we deliver improved operating results. and we can continue to invest in the business. So that's certainly the plan, and we're very focused on executing on it.

But not leaving it there for a second. This is a [ changing tactic ] and I've only done 120-some odd quarterly calls. What were you seeing? Does that answer your question? Or are you -- what's your concern because I'd like to make sure we address you.

Its is not really a concern. I just want to make sure that we're sort of modeling everything properly as we go through the year and into next year. And I just want to make sure that if you're reinvesting in the business, that's sufficient, we'll adjust our numbers accordingly.

Yes. Great , super. Thank you.

Your next question comes from the line of Adam Berlin with Goldman Sachs.

So at the Q4 '25 results, you talked about $3.2 billion of revenue that was being held for sale, that looks like it's going to be a much bigger number by the end of the year. Can you give us any guidance of what you think that number is now going to be given you've increased the amount of assets that are being held for sale by about $100 million in this quarter alone. So that's the first question.

And then following on from that, can you give us some idea of where that extra -- those extra revenue dollars are coming from, which disciplines are they coming from that you've added into the group of held for sale? And then can you give us an update on how much of the $900 million of synergies has been delivered at the first half, please?

Sure. So I'll take each of them and follow up as needed Adam, if you have any follow-ups. But we -- we divide it, I guess, this way. So the $3.2 billion of total annualized prior year revenue related to the dispositions, the equivalent of that number now is between $3.5 billion and $3.6 billion on an annualized basis. Much of that increase probably of it relates to businesses in the Advertising category. And when we look at what's remaining to go, yes, a significant amount of that has been completed as we discussed or mentioned in our prepared remarks. So when you look at Q3 and Q4, the estimate of what we expect to still be in our P&L in Q3 and Q4 as revenue of about $300 million and revenue of about $225 million in Q4 in the disposal held-for-sale category. And certainly, we're on track right now to complete all of those dispositions by the time we get to year-end. And we're pretty satisfied with the progress we've made in completing the dispositions so far through the end of this month. And we're going to continue to aggressively pursue the completion of the remaining transactions.

If I can add just one thing. At this point, we -- and we said this, Adam, probably every other call, if not every call,we've been on, that we're always looking at the portfolio and always making adjustments. Sometimes they're internal, and you don't see them in other times you do. There still remains two assets, which are not going to seriously affect any of the information that we've given you that -- we haven't -- we have under consideration. We haven't made a final decision 6 months into the deal as to whether we're going to keep them long term or not keep them long term. That will depend on a lot of factors. And a lot is the amount of money we're going to get for them, if we do decide to get rid of them. So I think we've done an outstanding job in getting rid of over $2 billion of these assets in the first 6 months of this year.

We're 7 months on...

7 months, it was quite a bit was completed in July. So I agree.

Just a follow up on the second part of your question because I didn't address it, Adam. In terms of synergies, we're about -- we're a little over halfway through the $900 million. And we expect a similar progression in Q3 and Q4 as we continue to pursue the plans that we had set out when we announced the transaction back in December.

Your next question comes from the line of [ Sean Diffley ] with Morgan Stanley.

John, I was hoping you could describe the macro as you see it. You're obviously growing in excess of GDP but there's a lot of cross trends there with oil and rates. So I was curious the tone of conversation with your advertisers. And Phil, I think you said advertising was down high singles. Maybe just anything you'd call out from a vertical perspective there?

I would say this is a generalization. So by definition, it's wrong. But in the clients that we speak to about the futures and about what their plans are, I would say they are cautiously optimistic. Nobody is happy about what's going on in the Middle East. We're hoping that it ends soon. There's a lot of -- what is remarkable, and I think has made clients a little bit more optimistic or cautiously optimistic is that if you go back several months, these same events were in play, and they were more frightening actually then in terms of what the impact would be on business. It was what was the impact of the tariffs going to be? What was Ukrainian war, what was going to happen in the Middle East. People would seem to have digested those or they've changed their supply outlets and have adjusted to these things, which is fairly remarkable and we are pretty pleased, and we've been working with our clients through all this, and it's taught us quite a bit, too.

So on the advertising questions, certainly, creativity is and continues to be a key part of our DNA for the advertising group as well as all of our service disciplines, -- it's certainly a core in what we deliver throughout all our businesses and to our clients. The advertising group continues to roll out our implementation of a more connected and centrally driven Omnicom advertising group, which we talked about on several calls, not just this year, but we started this a while back in '25 or maybe even late '24.

And the process in that group to bring together the new assets from IPG with the Omnicom assets resulted in a number of changes in terms of realigning brands and, in some cases, eliminating brands. So there's been a lot of activity internally within the Omnicom advertising group. And we've also disposed of several small low-growth markets as John had alluded to in different parts of the world where we didn't need to have multiple agencies servicing clients in one market. So there's been a lot of activity in bringing these businesses together. And certainly, we've made significant progress. I know IPG is going to continue to drive our strategies of innovation and integrated solutions and will be a key part of all our global integrated pitches now and going forward. But I'd say some internal reorganization has been the driver of a lot of change in that business for the first 6 months or post deal.

But let me just emphasize one thing that everything that Phil said is actually what's affecting the business. But creative is our IP, and we're completely dedicated to it even as it goes through some of these difficulties, because will work through them. So I just want to reinforce that point.

Your next question comes from the line of Julien Roch with Barclays.

Yes. Boring question for Phil. Can we get the breakdown of the $568 million in Q2 this year and the $961 million last year between what has been sold already and what is to be sold? And then same question for first half.

When you say $568 million and $961 million, Julien, that isn't ringing the bell off the top of my head.

$567.5 million and $960.5 million. Those are the disposition revenue in Q2 this year and last year. And that's a mix of what you sold already and what you are going to sell? So I was wondering whether we could get the split between what you sold already. So if you sell something in...

Yes, I'm not sure I can split those exact numbers for you, but I think I would say we've completed if you look at it as how much of what we expect to sell have we completed, it's probably about close to 60% of the businesses that we intend to sell have been sold. And for 60% of the annualized revenue which we talked about before of between $3.5 billion and $3.6 billion have been sold. And if you then consider our expectations for Q3 and Q4 of what we have left to do. The contribution of those assets that we're selling in Q3, we expect to be $300 million in revenue and around a 10% margin or so and $225 million of revenue in Q4 and around about a 10% margin or so. So we're not as focused on the deconstructing necessarily the previous numbers, but we thought there would be more clarity for the people on the call and investors if we gave you the estimate of what we expect those revenues and the EBIT to be for the businesses that we're disposing in Q3 Q4.

And the other thing I would add is our focus has been and our investments have been in what we're referring to as core operations in those financial statements. The presentation that you see is driven more by the rules here of how we have to present the financials than anything else. And next year, with any good luck, we won't be discussing this any longer.

And feel that 60%, is it today end of July or is it end of June?

60% is probably the end of July, yes. Yes, there were a few timing items that closed in July and didn't close at the end of June.

And do you know what it was end of June or not?

I don't think it's significantly different, but it's lower than 60%.

Your next question comes from the line of Michael Nathanson with MoffettNathanson.

I have a couple. John, can i ask Florian a question. Is he there?

He is here. Sure, go right ahead.

So Florian, one of the assumptions we're all making is that IPG Media brands wasn't very modern when it came to principal media buying planning. Can you talk a bit about what changes have you brought to the Media brand side of the assets you acquired and kind of have that track versus what you expected and what role principle media buying play there?

And then, Phil, for you, just on those if you look at your slides, $87.1 [ billion ] of adjustments. Are those adjustments related to the assets you're selling? Or are those related to the kind of what's made in? And then you call that also World Cup as a benefit. Any way to quantify that? Is that impacting your look for the second half? And maybe there's a little bit of World Cup benefit this quarter? So anything there would be helpful.

I'll take the Media question. And Michael, look, your question was around IPG and then you added the principal media factor to it. I think what I explained a moment ago around building an integrated platform capability, is really what we're doing. And we -- what I found is two very, very strong, very sophisticated organizations coming together that complemented each other quite well. You, as we have discussed for [indiscernible] Acxiom and its Real ID is a true best-in-class asset. And around that, i.e., an identity solution what it is that we're creating is really this flywheel that delivers value, proven outcomes and measurable returns to clients. And so I would not want to score either legacy operation that's more or less sophisticated.

I think the pieces that I was provided with and given they fit to each other quite well. And so the scale combined with the capabilities, with the commerce, the retail, the platform piece that is all now AI-driven and unified in Omni. These things are coming together nicely. -- and principal media because you addressed this part of the value equation. This is what the modern marketplace looks like. It gives clients what they need and what they want in terms of value extraction. So it becomes part of a very integrated go-to-market approach. And so that's where we are with this right now. And I will say the teams have come together brilliantly. There was an immediate cultural fit. And I think that has helped a lot as we looked at both sides and try to ascertain the assets that we had and how to combine them across both legacy side. So we really look at this as one company now, and there is no more legacy this and legacy that.

So on your other questions, Michael, the $87 million of adjustments was unrelated to dispositions. $47 million of that related to severance and repositioning costs as we continue to implement our synergy and cost reduction plans. And then $40 million that related to integration-related costs as we continue a bunch of initiatives to bring the two companies together, common systems, common platforms, et cetera. And as far as the World Cup benefit goes, I think when you look at the Experiential & Other category and the numbers that we included in the investor deck, the majority of the growth in that sector, which was about in excess of about 10% of that part of the business was principally or primarily World Cup related that drives the growth in that category.

And there will be some contribution in the third quarter. And it also caused us to relook at sports, which we mentioned earlier in the call and our impact on sports because each has their own unique relationships capabilities, which we're able to bring together to the benefit of our clients. So we'll be up against it for sure next year, but but we're working very hard because sports are key to almost every one of our clients at this point.

Your next question comes from the line of Craig Huber with Huber Research Partners.

Great. On the AI front, from a cost savings perspective, can you just give us some more ideas here about where you're seeing the most significant AI-related cost savings in the portfolio? And then the more important question is, those cost savings AI in general that you guys are getting there -- getting passed on to clients. Update us on your thoughts with clients about what the client are doing with those cost savings that you passed on to them are they reinvesting that back into market in advertising so the flywheel is benefiting you guys? Or is there much leakage what's come out of the system, they're saving money and they're pulling out of marketing advertising and spend it elsewhere, R&D, et cetera? Maybe just touch on those two points, please.

Sure. I mean we've been using AI and generative AI for a long time now. And what's made easier is as we look at the agentic environment, which is nascent, and it's going to be something that will be part of the future and we'll be rolling out. But in a large part, these tools, and ultimately, the shorts and everybody else have been out there and saying, oh, my goodness this service business is going to be replaced by AI. I don't know what they're talking about. Plus the other thing the marketplace hasn't seen is what the cost of this AI is right? And that's going to weigh into the equation as well. So it's -- it's changing every moment. We have a person responsible for it here. Paolo, I don't know if you can add something to it. But yes, so what we're doing is where there savings. We're sharing them with our clients for sure. But we're still in the early stages of this.

Yes. So Craig, so I think from an AI perspective and more specifically, how our platforms are affecting how we deliver work it's really allowing us to achieve two things from an efficiency perspective and from an effectiveness perspective. So from an efficiency deploying kind of agentic workflows is helping facilitate work in a far more efficient way, driving consistency across the decisioning that we're doing across our platforms in Omni. And then from an effectiveness perspective, because the underlying assets, the data assets and the identity assets fueling kind of those agentic workflows, it's driving to better results and better outcomes for our clients.

And I would say, in large part, any savings clients are driving -- they are, in fact, reinvesting immediately into the marketplace, because we can also, as Phil mentioned in his comments, we're also focused on measurement and constantly going back to our clients and letting them know what we achieved.

Your next question comes from the line of Adrien de Saint Hilaire from Bank of America.

I've got one for Phil, please. You talked about the EPS growth being high teens. Can I just double check on this the base that you're actually using? Is it the $870 million of non-GAAP EPS that you published last year? Or is it something else?

And then maybe for John, can you talk about the pitching environment right now? There's been some comments by one of your peers that perhaps one of your other competitors may be aggressively pricing in the minute. Just wanted to know if that's also something that you observed maybe for John or Florian.

So just quickly to get this out of the way on the EPS front, Adrien, the number is, I think, it's $865 million which is our prior year actual 2025 Omnicom only, where Omnicom with IPG for the 1 month of December.

And in terms of the new business. Any follow-up to that before I move on to your other question? The new business environment is as brutal as it's ever been. And we're winning, and we're winning our fair share. We could always win one or two more. Both of our competitors are very capable companies, and so I think the competition out there that we see makes us better, all right? And that's what I take away from not only our wins, but from the accounts that we didn't win. So complain some other people. I can't speak to anybody else's personal experiences.

There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.

All right. So I'm happy to have back at the conference this year, Omnicom. With us today, we have John Wren, Chairman and CEO; Phil Angelastro, EVP and CFO; and at the end, Paolo Yuvienco, CTO. Thanks so much for being here today, guys.

John, maybe I'll start with you. So you recently reported your first full quarter following the IPG acquisition. Maybe we could start there. Can you update us on where things stand with integration and how the merits of the deal look relative to your initial expectations?

Okay. Well, we're well on target with our synergies and what we promised. Most of the synergies we promised this year were real estate related initially and then labor. Real estate, probably $150 million. That was taken care of and immediately almost day 1. And the second part was labor. The labor started December 1 and goes through -- well, the first part of it goes through just about now. And that was duplication of management because we didn't need as much middle management as each company had, and we made a lot of changes and consolidations.

So that was positive. We sunsetted quite a number of brands to get to the final answer, probably about $150 million to $160 million of labor was done in the first quarter. You'll see a lot more of that being completed as -- when we report the next quarter. So the synergies are well on target. Later on in the year, we have plans to outsource our accounting function for the most part and certain IT functions, which we believe we can hand over to experts, get a better result in the product. But you'll see most of those benefits coming in late in the, I would say, almost the fourth quarter by the time they come through.

And into '27, yes.

Yes and certainly into '27. And so that -- in terms of hitting the targets, which it was $900 million, I think, for this year, what do we say?

$900 million and in total, $1.5 billion that comes between '27 and '28.

Yes, a lesser amount in '28. So we're well on track there. We're on track, and we've changed our approach. We centralized quite a bit, and we're doing more and more of that, including the way we actually hunt for business. If I had to categorize or classify how both companies operated prior to the merger is we essentially waited to be invited to a pitch. We're being far more aggressive now. We're identifying companies that we believe we can bring value to. And we're going out and trying to stimulate the conversation, even though the company is not stimulating it.

That is just beginning, and we have a great group of people who are working on that. And we think that will yield additional growth to us as we get further and further into the year because we've always won, we've batted above average when it comes to a pitch that somebody else calls. we're going out now and creating this environment because we think we have the tools, and we think we have Omni, which I'll let Paolo talk about later, which actually differentiates us quite a bit and can add value to clients. And there's even things that I've been discovering, which I wasn't aware of in a conversation, which I'm sure you'll get to, which will be LiveRamp. We used to be partners which they were part of Acxiom.

We had lengthy conversations with our folks yesterday, and we found out that like General Motors, where we don't do the media, we license the Omni platform to them. So we're engaging and trying to stimulate conversations with clients in far different ways than ever before. And last but not least, and we'll see how this works, we're changing the incentive programs that we have for individuals in the operating companies for '26 to be more specific about focus on growth in their individual markets. The big global pitches come up, they come up by themselves, but there's quite a bit we can do to help ourselves in some of the larger local market business that we've otherwise not really focused on in the past.

Just one clarification in terms of the synergies as far as '26 goes, we have -- we're confident that we will get the $900 million of cost reduction synergies. We expect 75% to 80% of that to flow through to EBIT for the year.

And you saw our margins in the first quarter. We'll be continuing to keep those, I think.

John, when you announced the deal in December '24, I remember there was a lot of early concern on talent or client exodus. I'm curious what's been the experience to date, especially as you've consolidated some of the offerings on the creative side?

We have very little. Nothing in terms of individuals that would noticeable that would have caused me any angst or so. There were a couple of clients that I think we lost because we deserved to lose, not coming out of Omnicom, but coming out of Interpublic because of the pricing, where we were getting paid in excess of what we would normally charge. And that became very obvious. And there's also a change in management in one case, and we got what we deserved, but we learned from it.

From a business mix standpoint, you've used this moment in time to reorient the portfolio. You've announced dispositions of agencies. I think they previously contributed over $3 billion in revenue. I guess, first, John, what's the key takeaway investors should have on the new Omnicom and where you're looking to operate? And then Phil, maybe you could just update us on the status of those dispositions.

Sure. The world has gotten even more and more complex than it was. So where we're focused on media and media-related assets, which in the first quarter were 62%, I think, of our revenue by -- excuse me, 56% (sic) [ 52% ]. We expect it to be 61% (sic) [ 56% ] by the time we get to the full year. That plus the creative assets that we have. But the creative assets are not fully reorganized just yet. That connectivity clients are increasingly looking for and open to looking at assigning us their entire portfolio.

The only industry I would say that isn't, and it's very wise that they're not is some of the studios, right? Because if you have a choice, you pick the 2 biggest because that's where you get the most bang from. And -- but other than that, there's generally been selection of a single agency, answering all the complex needs of that client and also embedding Omni, which we use now as an operating system, we're increasingly training our groups into its uses and it's changing every day, which I'm sure Paolo will talk about in a few minutes.

So why don't we just follow up on that point? So in January, you launched the new Omni, layering Acxiom data, AI tools across the organization. Paolo, if you want to take it, maybe you could just speak to some of the changes, the advantage of owned data, maybe where you're seeing the early ROI on this iteration of the platform?

Sure. So I think everyone probably knows this by now that data is really the fuel to artificial intelligence and really getting the most out of artificial intelligence. So Acxiom was such a critical part -- component part of the IPG acquisition because of that. And using that to fuel our ecosystem and drive deeper level of intelligence across our clients' work is super critical. And more specifically, Acxiom's RealID which effectively connects 2.6 billion individuals across the globe, 98% of addressable adults in the U.S. I think connecting that to our commerce data, to our cultural data and all the signals that we've been collecting over the years, connecting that to the capabilities, specifically around media, commerce and CRM is delivering exceptional results even in these early days for many of our clients already.

So we've seen things like within financial services, one of the top 5 financial services companies in the world. I think we announced -- we said this and stated this on Investor Day, we were driving 25% increase in customer acquisition for certain parts of their business. Within one of our CPG clients, connecting kind of the retail transaction data with all of the wealth of behavioral data taken from Acxiom, we were driving a 15% increase across their investments. So -- their marketing investments. So data has significantly shifted kind of our ability to drive better and faster outcomes for clients. And Omni, which Omnicom has had as an operating system for several years now, really allows us to actually propagate that across the entire enterprise and organization and every facet of our disciplines to drive those customer -- those client results.

And as you know, David, we relaunched Omni at the beginning of the year and continue to improve it as we go, but we took the best parts of Omnicom's platform and the best parts of IPG's platform and essentially enhanced the platform that we use today, and there'll be more investment in the platform as we go throughout '26 and beyond. But certainly, the things that Paolo was talking about are going to only be enhanced by the new improved platform.

I don't know, Paolo, if you want to add the agentic word.

Yes, I was just about to add that.

Go ahead.

Yes. So I was going to say that the real kind of shift is this agentic framework, which Omnicom started that journey roughly 2 years ago of building an agentic framework that would effectively orchestrate our marketing workflows using AI and generative AI. Having that layered on top of the data ecosystem and the business intelligence that resides within each one of our disciplines has been a game changer for us and has allowed us effectively to lead in certain areas like agentic media buying, synthetic audience creation and deployment as well as creative execution and production.

With regards to your media practice, and you mentioned in Q1, I think it was 56% of the overall revenue. Even prior to the merger, this was a leading growth segment for you. Maybe we can just review some of the industry or Omnicom-specific factors that have been driving that performance?

I think -- well, one, at this point, we're the largest in the world. That gives us permission to sit and negotiate almost in every market, the best deals we can possibly cut for our clients, and we've been doing that. One of the interesting things that happened in the merger is there was a pretty fair balance in terms of the people that were let go between Omnicom people and Interpublic people. And one of the major changes we made, which I think is a vast improvement to our approach and what our profitability from that media growth is going to be was we took the investment approach and people that were at IPG. And we actually purged ourselves with the way we're approaching it at Omnicom prior to the deal.

And those are the people who are leading that aspect of the business today. And that's brought fresh eyes to that area and created better deals actually, I think, than we would have otherwise gotten to because prior to that, we were more bottoms up. Now we're more top down. And so those deals are available for us to show the benefit to our clients and to share it with our clients. I think that makes us more competitive in the long run. So media, our CRM assets, which are closely connected to that, were operating completely separate. They're motivated and incented now to work more closely together. And between now and [indiscernible], you'll see we're reorganizing that aspect of our business. Those announcements will come out in the next 2 or 3 weeks.

So that plus our Flywheel Commerce Cloud, one thing that we didn't talk about is we are 1 of 2 companies that I'm aware of because when we started and the engineers we started with were friends with the ones who built Amazon, we have a direct API into Amazon. So in addition to all the other data that we collect, we get that feed in real time every single day. So when you look through that and somebody -- you don't even have to be terribly technological to understand it. We know quite a bit about every human being in the room and outside the room and roaming around the world.

And it certainly has an impact on what we can do from a media perspective as far as how the data is integrated, which you might want to comment on, Paolo?

Yes. So bringing all that data together gives us, I think, the highest fidelity view of consumers around the globe. We understand not just their behaviors, we not only understand the cultural kind of significance of those behaviors given all the cultural data that we've collected, but we understand the transactions that are happening across the ecosystem of marketplaces. That, in effect, gives us probably quite a unique view that I don't think any other holding company or any other entity for that matter, can provide around what consumers are doing, what they -- and ultimately, what they want. That, again, gives us the advantage to then drive better messaging and better targeting for our clients.

Just one last clarification, David. So we -- I had said 56%. It was actually 52% in the first quarter. We expect it to be 56% for the -- by the time we get to the fourth quarter and then going forward to grow from there.

Got it. Okay. Maybe staying on media, bringing it a little topical. So yesterday, we saw the announcement of Publicis buying LiveRamp. There's a couple of different ways to unpack this. But why don't we start here? Omnicom is a customer of LiveRamp. Does this potentially create a challenge or a conflict for you given your data would presumably sit with a competitor? Is there a need for adjustment on your part?

Yes. There's a contract between LiveRamp and us, and it's mutual. It nets to 0. It's -- they pay us $50 million for data every year. We pay $50 million other services and other products that LiveRamp, we could acquire in other places, but you have to go back in time a little bit. Acxiom and LiveRamp were one until Interpublic purchased them. They separated and Paolo knows more because LiveRamp to function and to be any value to a client had to be Switzerland, couldn't be integrated into Acxiom and what we ultimately planned to do with it and did with it as opposed to what Interpublic was slow to do it, act on.

We had a plan. We -- there was a plan in place that any connection -- as a result, since they were once together and they were doing different things, there's a lot of closeness between those people. They even went to market together in addition to the contracts we had with each other. Those contracts run until the very first quarter of '28. And as a result, Acxiom had plans to completely rid itself and come up with a RealID by the beginning of '28, no longer having to depend on LiveRamp at all. That changed yesterday afternoon when I moved that drop dead date till yesterday, a year from now, where we'll be completely separated from even if we have to invest a little money to honor our contract for the balance of the year.

Why don't you comment...

Yes, I think in the near term, it doesn't change much. So if we're partnering with LiveRamp through our Acxiom relationship, that is not going to change. But as John said, over the last 5 years, Acxiom has been building out RealID effectively as an alternative and more modern version of an identity solution. That identity solution is cloud native. It is interoperable by nature, which means that it can utilize any other identity graph, including the Ramp ID from LiveRamp, UID from Trade Desk and various others to then integrate that graph on behalf of our clients.

So again, there is no change in the immediate future, but there has been plans in place over the last few years already to start migrating existing clients and customers and new customers to basically own their own identity graph through the RealID solution. And that is always kind of the take that we've pushed, the narrative that we pushed with clients is that they should own their graph, they should own their data and that privacy is the #1 thing that we think about, and there's no better company to execute on that narrative than Acxiom.

I hate talking about competitors. So as at least after 30 years should have that reputation of staying out of everybody's business, except for my own. But I don't see there's any way that you can get any value keeping LiveRamp independent of the rest of your infrastructure and owning it. So that will change over time. They still have to get clearance from the FTC to get this approved. So I don't -- it will take some time to get it done. But we've just accelerated some of the actions we were always planning to take.

I guess, John, coming off this, there'll probably be a natural question from investors about your own media offering. Does yesterday's announcement change your view on your assets and what you have entering RFPs? And then maybe for Paolo, I guess I'm interested in how you viewed some of the points in the presentation around data co-creation and its role in agentic. And maybe you can just speak a little bit to your efforts to date on agentic so far and some of your initiatives.

Sure. We have our own road map in terms of things that we're improving upon and ways that we're expanding our media offerings or capabilities through the Omni platform, including -- and Paolo can speak to this to direct-to-publisher connections as opposed to having to go through DSPs and SSPs and et cetera. So that is always on our road map. That will keep our media operation, I think, well in advance of most of our competitors and make us very attractive to clients because right now, there's a lot of MarTech companies that sit between the advertiser and the publisher. And as you have to go through those different MarTech companies, they're taking a toll. And I think technology is advancing fast enough that certainly within the next 2 years, that will be simplified quite a bit and benefiting both our clients and us. But Paolo, I don't know if you want to add.

Yes. So I think we are very early on in realizing that agents and more specifically, agents with using generative AI was going to be the future. Two years ago, we embarked on a journey on building our agentic framework on top of the Omni system, and now it is fully embedded into Omni. That agentic framework is quite mature and robust in its ability to actually drive all sorts of different automations and more importantly, to surface our proprietary intelligence and data into every facet of the marketing life cycle. As part of that journey and because we were so mature in our agentic capabilities, we started, as we've publicly stated in the past, last summer on really trying to understand some of the new protocols that were emerging around media buying and things like AdCP, AMP, looking to see how we would integrate those capabilities into our system.

At CES, we announced that we started testing those pipes with real dollars, but not for real clients, and we're successful in doing so. And what we recently announced is that we actually have now started to test those pipes with real clients and real dollars flowing through. It's still quite small and very much still in the experimental stages, hasn't scaled across media budgets. But what we're trying to do is lay the groundwork for what the future of agentic media looks like. As it relates to LiveRamp and kind of the statements around agentic capabilities, it's worth noting that we did not use LiveRamp for any of our agentic media buys. It was not necessary because our whole thesis around agentic media is around the idea of shortening the media supply chain.

That doesn't mean that we're eliminating every part of the media supply chain, but shortening that path in order to drive a greater percentage of working media dollars for our clients. So efficiency plays is a key tenet of why we're doing this. Additionally, it's about driving effectiveness of those media buys. By shortening the path -- with every hop in the media supply chain and supply path, you lose a certain level of fidelity across the ecosystem, even if you're using kind of identity solutions. What we're able to do in shortening that path is actually increase the fidelity and visibility of consumers that we're actually targeting. And coupled with our beta solution in Acxiom and our identity graph with RealID, we're actually in the tests that we've done, we've seen significant increases in effectiveness in the areas of the media buys that we've done.

Now again, it's very early days. So it's still kind of -- we're still laying the foundation for this all, but what we're ensuring is that we are laying the path so that our clients can leverage that once it becomes a scaled offering.

Maybe we'll switch gears. John, I just wanted to go back to something you talked a bit earlier about, which is integrated wins with work kind of across this creative media production. Maybe you can just discuss the model, kind of what it means in terms of the scope of work, retention with clients, the advantages to them.

Sure. Well, one of the key advantages we have is using Omni as a platform across all of our crafts, all of our various marketing services broadens the perspective of our employees. I mean suddenly, a great creative person who might have an idea isn't really -- doesn't have the time in the past to look at what data is actually out there, which Omni can bring to them very quickly and maybe stimulate different approaches than they would have otherwise started with, improving the value of that product. By having everything together, doing most of the work together, it's easy to -- it's much easier to, one, take complexity out; two, to be more focused on the clients' business problems as well as what their marketing issues are. And it takes out bureaucracy, layers of people that are representing one craft or another craft.

So I think by doing all that, the client benefits, they'll be able to see the benefits in real time. They -- some clients who are interested will be trained on how to use the Omni platform. And I would imagine, over time, because this changes quite quickly, they might decide to take certain aspects of that in-house, which is just fine. That's something we're very much used to. And we -- I think without exception, we've always collaborated with. And so this different approach is nice. It sounds great as I sit around my operating committee and talk about it and everybody smiles because I'm the one bringing it up.

But we've also changed the incentives for how people get rather significant bonuses and what we want them to accomplish. And Omnicom never really did that before. Omnicom rewarded its executives for the success that they had, but never with an intended purpose other than simply growth, all right? So -- and also when you get into a situation like this, and we found this to be true already, you wind up with multiyear contracts with the client because they know that you're going to make certain investments going into it, and it's only fair to have multiyear relationships in order to sustain those. And that's very beneficial to our business. I mean, in advertising marketing, there's typically 15% churn of people changing vendors or at least pitching business every single year. Well, as you extend your client relationship, you get to focus more on the things that you want to as opposed to things that are being put to you. So I don't know if you want to add anything, Phil or Paolo, you can...

I think the integration is something certainly that we can do and we can do it at a global scale, and it's something that clients ultimately want because it benefits the clients. They can streamline the vendor relationships that they have and they can see the value in the product that truly -- that gets delivered in a truly integrated solution because if clients didn't need it, want it and ask for it, we certainly would respond probably in a little different way. But ultimately, we're trying to meet our clients' needs and make the investments in the business accordingly.

John, before -- I was going to say before we run out of time, I have to ask you about current trends. Obviously, there's a lot to consider with the macro, but just wanted to check in on the latest you're hearing from clients in terms of how they're thinking about spending or project commitments.

Well, many of the things that we've talked about here today are topical and clients want to hear about it, they want to and it benefits us given the state of where we are because we can typically prove because we have the tools, how we're optimizing their marketing dollars. And when I can prove to you that you'll get $1.40 back for every dollar that you'll invest, you might not invest $1, you might put $0.20 in your pocket, but you'll invest some of it. Therefore, increasing the organic growth I'm getting from existing clients.

The other topics at the moment are, as you would imagine, global in nature and the impact of what's going on in the Middle East and how is it -- how quickly is it going to come to my market and affect my products. And oddly enough, nobody is happy about the situation at all. Nobody has any positive things to say other than they wish it was over and over quickly. But none of them are predicting that it's going to have an immediate impact on their business this so far in terms of what they're projecting.

Now also -- and this is probably getting a little off script, they also believe that the government will try to pull rabbits out of their hat between now and the midterm elections in order to preserve their position. So they see yet unidentified benefits that are going to come their way, which may offset some of these challenges. But most of them have gone through and cleaned up or reorganized their supply chain. And it's really the price of oil and its impact that becomes very topical today.

Phil, maybe one last one. You talked about $900 million run rate synergies. You talked about what would impact this year. There's the ultimate $1.5 billion target. It's a common question. But how do you kind of think about the out years, the flow-through and balancing kind of that versus need for reinvestment, just given all the change in the industry?

Well, I think it is a balance for sure. I think we're certainly comfortable with the estimates we put out. And we're confident we can get the cost reductions achieved as we go through 2026 and into '27 and '28. What the world is going to look like, what the technology landscape is going to look like, what the marketing ecosystem is going to look like, would certainly way off. We know technology and the way consumers buy stuff is going to continue to change quite rapidly. One thing we know is we will continue to invest in the business and invest in the platform so that we can deliver what our clients need and deliver it in an efficient and effective way. So it's hard to say how much of that's going to flow through, but certainly, our goal is to achieve the savings and to deliver as much of it as we can. But at the same time, invest in a sustainable platform, sustainable in terms of ongoing growth of the business.

With that, we're out of time. John, Phil, Paolo, thanks so much for being here.

Thanks. Thanks for having us.

Thank you.

Thank you.

Ladies and gentlemen, thank you for standing by. My name is Christa, and I will be your conference operator today. At this time, I would like to welcome you to the Omnicom's First Quarter 2026 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to Greg Lundberg, Investor Relations. Please go ahead.

Thank you for joining our first quarter 2026 earnings call. With me today are John Wren, Chairman and Chief Executive Officer; and Phil Angelastro, Executive Vice President and Chief Financial Officer. On our website, omc.com, you will find a press release and a presentation covering the information we'll review today. An archived webcast will be available on today's call concludes.

Before we start, I'd like to remind everyone to read the forward-looking statements and non-GAAP financial and other information that we've included at the end of our investor presentation. Certain of the statements made today may constitute forward-looking statements. These represent our present expectations and relevant factors that could cause actual results to differ materially are listed in our earnings materials and in our SEC filings, including our 2025 Form 10-K.

During the course of today's call, we will also discuss certain non-GAAP measures. You can find the reconciliation of these to the nearest comparable GAAP measures in the presentation materials. We will begin the call with an overview of our business from John then Phil will review our financial results. And after our prepared remarks, we will open the line for your questions.

I'll now hand the call over to John.

Thank you, Greg, and good afternoon, everyone. Thank you for joining us today. I'm pleased to share highlights from our first quarter as the new Omnicom. Since closing the Interpublic acquisition just before the holidays, we have seen momentum and cohesive growth across the organization. Our steady progress is reflected in our strong financial performance in the first quarter.

As you will recall from our fourth quarter call and Investor Day, we've strategically repositioned our portfolio for growth. As part of the portfolio realignment, we identified planned asset sales and disposition of businesses with approximately $3.2 billion of annual revenue, of which approximately $1 billion was disposed of in the first quarter. Our plan is to sell or exit the remaining assets in the next several quarters.

To clarify our focus on the operations that will drive growth, we've excluded assets held for sale and planned disposition from our core operations. Revenue from core operations was $5.6 billion in the first quarter which increased $345 million when compared to Q1 2025 revenue from core operations for the combined Omnicom and Interpublic. Organic revenue growth was 3.9%. We also updated our revenue reporting to reflect our integrated operating model, which is central to driving our growth. Phil will walk through the details of our reporting changes in his remarks.

One point I wanted to discuss was the increase in EBITDA performance. Our adjusted EBITDA margin increased 240 basis points to 14.8% as compared to the combined operations for Q1 2025. Our non-GAAP adjusted EPS in the quarter, which excludes after-tax cost for repositioning dispositions and acquisition integration expenses and amortization of intangibles was $1.90 per share, an increase of 11.8% and versus Q1 2025. Our solid performance for the quarter was the result of us realigning our portfolio for growth and moving decisively on our integration efforts.

By integrating our capabilities upon closing, we merged or sunset more than 20 major agency brands with a long tail of smaller brands. This allowed us to quickly bring together the best talent from across the new Omnicom, combined with our integrated client leaders and new strategy and growth teams, our efforts have translated into new business wins. In the first quarter, these include IBM, GSK, John Deere, Little Caesars, Acadia Pharmaceuticals and Bally's. We're not just winning new clients. We're expanding our relationships with existing ones.

Our integrated approach is making it easier for clients to access all their marketing and sales needs from a single partner. This model has gained traction across a number of our clients, including Clorox, Dyson, Delta, Exxon, Kroger, Merck and Unilever. Our growth from integrated services is helping to diversify our revenue streams and deepen our client relationships, underscoring the strength of our offerings.

As we discussed at our Investor Day last month, Omni, our AI-enabled intelligent sales and marketing platform is connecting our talent, data and services. We've scaled our next generation of Omni across the entire organization in Q1, putting the latest agentic AI tools in the hands of all of our employees. The new Omni is delivering on multiple fronts, driving stronger media performance, greater addressability and improved measurement increasing speed to activation and enhancing ROI with Acxiom's Real ID, improving performance across retail and commerce channels. and enabling more effective marketing and client outcomes through deeper integrations with partners like Adobe and Amazon.

We also made significant progress to accelerate collaboration across the group. Throughout the quarter, we continue to move into the hub building locations, deploy common HR and IT platforms and migrate teams to shared workflow systems.

As we look ahead, we will continue to work towards the initiatives we've communicated in our prior calls, including $900 million in 2026 cost reduction synergies and $1.5 billion by mid-2028. $5 billion in share repurchases over the next 12 months, including a $2.5 billion accelerated share repurchase program currently being executed. Through the ASR and open market purchases, we repurchased $2.8 billion of shares through the first quarter. Planned asset sales and dispositions of businesses with approximately $3.2 billion of annual revenue, dispositions with approximately $1 billion in annual revenue have already been completed. We will continue to evaluate our portfolio to ensure we remain positioned for growth.

Overall, I'm pleased with how we've executed in the first quarter. Our results clearly demonstrate the significant benefits of the combination for our people, clients and shareholders. While we remain bullish about the combination for the year ahead, we're also mindful of the broader geopolitical environment. The ongoing conflict in the Middle East, which represents less than 2.5% of our revenue, continues to create uncertainty in the region and across the world. As always, we are prioritizing the safety of our people in the region and monitoring developments closely so we can adapt quickly to changes that impact our business.

Before I close, I want to thank every member of the Omnicom team for their outstanding efforts. None of this progress would have been possible without the exceptional commitment and hard work of our people over these past few months.

With that, I'll turn it over to Phil to walk through our quarterly financial results.

Thanks, John. This is our first quarterly report as the new Omnicom with Interpublic's operations included for the full 90 days of the quarter. We started the year with strong performance in revenue growth and cost reduction, with a meaningful amount of synergies flowing through to EBITDA, while we continue to invest for future growth. We're making significant progress integrating into public operations and positioning our portfolio for growth.

I will start on Slide 3. We know that there are a lot of moving pieces right now and we want to make things easy for you to understand. This slide should help. It presents what we call our core operations. Our core operations are comprised of our operating businesses, excluding dispositions and assets held for sale.

To ensure it's clear, our main focus in driving the company forward is on our core operations. As we talked about at Investor Day, our core operations are the result of our ongoing strategic repositioning of the portfolio for growth and reflect our sharpened focus on the highest growing, most connected parts of our business. Business is included in the dispositions and held for sale category will be sold in 2026, and they represented less than 5% of our adjusted operating income in the first quarter. And our only priority regarding these businesses is to complete these disposals in a timely fashion.

This slide also presents operating income and EBITDA on a non-GAAP adjusted basis, excluding severance and repositioning costs, loss on dispositions and acquisition integration costs. For comparison purposes on this slide, we've included 2025 prior year combined amounts prepared on a similar basis. As you can see, revenue from core operations grew 6.7% in total. Adjusted EBITDA grew $180 million or over 27% and adjusted EBITDA margin increased to 14.8% from 12.4%, primarily driven by cost reduction synergies from the acquisition of Interpublic. We are pleased with the strong performance on both revenue and adjusted EBITDA, and we are on track to achieve our operating plans and targets for the year.

Turning to Slide 4. We present our reported results as we traditionally have as well as the related non-GAAP adjusted amounts. This slide presents our reported results, including all entities, core operations, dispositions that occurred during the quarter with a period that they were part of Omnicom and entities that are classified as held for sale. Since these are reported results, the 2025 presentation reflects the prior year results of Omnicom and does not include in public.

Center column for each period shows the applicable non-GAAP adjustments. In the first quarter of 2026, we recorded integration-related costs of $59 million, which are recorded on the SG&A expense line. We recorded a loss on dispositions of $34 million, and we recorded severance and repositioning costs of $4 million. When considering the change in operating income on both a reported and adjusted basis, note that it includes $117 million of amortization expense related to the intangible assets acquired from Interpublic, an increase of $96 million compared to 2025. Change in operating income also reflects a $16 million increase in depreciation expense.

Below operating income, net interest expense increased to $72 million from $29 million in Q1 of 2025, an increase of $43 million, primarily resulting from assuming Interpublic's debt of approximately $3 billion in Q4 2025. Interest expense in Q1 2026 increased by $60 million, primarily from interest expense from Interpublic, which added approximately $47 million, of which $3 million is noncash interest and higher interest expense resulting from refinancing activity completed during the first quarter of 2026, which resulted in approximately $1 billion of incremental long-term debt. Note, Q1 includes 1 month of the incremental interest expense from the new debt issuance.

Additionally, interest income increased this quarter by $17 million to $47 million, primarily due to interest income earned on higher average cash balances, including cash acquired with Interpublic. Our adjusted tax rate of 26% was down slightly from 26.7% in 2025. For 2026, we expect our annual tax rate to also be 26%.

Income from equity investments and noncontrolling interest declined by $4 million in total. Finally, non-GAAP adjusted diluted EPS grew 11.8% to $1.90 from $1.70 last year. Our fully diluted weighted average shares outstanding for Q1 2026 were 299.2 million. Actual shares outstanding at March 31, 2026, were 285.3 million compared to 313.4 million at year-end December 31, 2025, and compared to 196.1 million shares at March 31, 2025. On a year-over-year basis, our share count increased from last year due to shares issued for the Interpublic acquisition, but they also declined as a result of our share repurchase activity, which I will discuss later.

Now let's review our business in more detail, beginning with the components of our revenue change on Slide 5. To assist in understanding the drivers of our underlying business, we've included an analysis of our growth, beginning with core operations, which excludes businesses that have been disposed of or classified as held for sale. For the first quarter of 2025 on a combined Omnicom Interpublic basis. Revenue for Q1 2026 increased by 2.7% from positive foreign exchange rate changes and by 3.9% from organic growth.

We expect FX will continue to be positive in 2026. And assuming recent FX rates stay the same, will benefit our reported revenue for the year by approximately 1%. Relative to our traditional presentation in this table, there's no role for acquisition and disposition revenue because there were no acquisitions during the quarter and as we have noted, dispositions have been removed from the opening balance of core operations revenue.

Turning to Slide 6, you can see our core operations revenue by discipline. Presentation of our disciplines has been updated from 2025. As we discussed at Investor Day, the strategic reshaping of our portfolio with the Interpublic acquisition will result in a business with more than half of our revenue coming from the faster-growing integrated media business. Integrated Media includes our media, commerce, data, CRM and consulting and content automation businesses. Revenue from our core operations in the first quarter of 2026, for Integrated Media was approximately 52% of our revenues. And for Advertising was 17%, Health, 10%; PR 12% and experiential and other 10%.

Q1 revenue growth from core operations was as follows: Integrated Media led the way with very strong growth in the high single digits. ER and Experiential and Other grew in the quarter mid-single digits. Health had positive growth advertising was down in Q1. We're not providing detailed prior year combined revenue balances, organic growth by discipline or region because our integration process is ongoing, and we continue to evaluate the portfolio.

Slide 7 shows our core operations revenue by region. As we highlighted when we announced the Interpublic acquisition. The transaction gives us greater relative exposure in the U.S. which was 61% of revenues this quarter. Together, the U.K. and Europe were 21%, followed by Asia Pacific at 9%.

In Q1, revenue growth in the U.S. was strong and delivered mid-single-digit growth. Europe, Latin America and Asia Pacific were also up low single digits. And the U.K. and Middle East and Africa declined.

Slide 8 is our revenue weighted by the industry sectors of our clients. Because the first quarter of 2026 reflects a full quarter Interpublic, there are some changes worth noting relative to the prior year Omnicom 2025 amounts. The largest changes were the Pharma & Health and Auto categories. There were small changes to our Other categories, which moved up or down 1 or 2 points with increases in Financial Services, Retail and Services. And decreases in Food & Beverage, Travel & Entertainment and Government.

Now please turn to Slide 9 for our year-to-date free cash flow summary. 70% increase relative to our last year excuse me. The 70% increase relative to last year was driven by the addition of Interpublic and improved performance in Omnicom's business. free cash flow definition excludes changes in operating capital, which is seasonal with the first quarter generally the largest use of cash during the year. There's a reconciliation in the appendix that shows the change in operating capital for the quarter was flat compared to the change from the first quarter of last year.

For the 3 months ended March 31, 2025, our primary uses of free cash flow included $252 million of cash paid for dividends to common shareholders and another $12 million for dividends to noncontrolling interest shareholders. Dividend payments increased year-over-year as a result of the shares issued for the Interpublic acquisition and an increase in our quarterly dividend payment. Quarterly dividend payment approximates the combined dividend payments made by Omnicom and Interpublic in Q1 of 2025.

Capital expenditures were $61 million, higher than the prior year due to the Interpublic acquisition, but at the same overall level relative to the size of the business. Total contingent purchase price payments and payments for the acquisitions of noncontrolling interests, were $16 million. Finally, our share repurchase activity for the first quarter was $2.8 billion, excluding proceeds from stock plans of $16 million.

The majority of this resulted from our accelerated share repurchase program, which drove a significant reduction in shares outstanding to 285.3 million as of March 31, 2026, a reduction of 28.1 million shares from December 31, 2025. We have significant remaining capacity under our $5 billion total share repurchase plan. And our plan is to complete the $5 billion over the next 12 months or by the end of April 2027.

We estimate that relative to our shares outstanding at December 31, 2025, and of 313.4 million shares. We will see our share count decline approximately 11% to 12% by December 31, 2026, and that weighted average shares outstanding for the year will decline approximately 8% to 9%.

Slide 10 is a summary of our credit, liquidity and debt maturities. At the end of Q1 2026, our gross long-term debt was $10.2 billion. Since December 31, 2026, ( sic ) [ 2025 ] our debt is approximately $1 billion higher, reflecting the retirement of our $1.4 billion, 3.6% senior notes due April 15, 2026, and the issuance of new senior notes totaling $2.3 billion, including $1.7 billion of [ US-dollar ] denominated notes at a weighted average coupon of 4.9% and $600 million of euro-denominated notes at a 3.85% coupon. Maturities range from 3 years to 10 years, which you can see in the maturity chart on this page. Our next maturity is not until July of 2027.

Net interest expense is expected to increase by approximately $200 million in 2026 compared to 2025. Of this increase, $13 million is noncash interest. The change is primarily driven by higher interest expense from the inclusion of Interpublic's debt, the refinancing I just described as well as interest on incremental commercial paper borrowings of approximately $10 million and lower interest income on cash balances of approximately $20 million primarily due to lower forecasted short-term interest rates on invested cash.

Please note that the total and net leverage ratios on this slide, which compares the last 12 months ended March 31, 2026 and 2025, reflect the full assumption of Interpublic's debt, but only 4 months of Omnicom's EBITDA results, including Interpublic. However, at March 31, 2026, we're in compliance with the leverage ratio covenant in our credit facility, which makes pro forma adjustments to the impact of the acquisition. Calculation of total debt to pro forma adjusted EBITDA, done in accordance with the definition in our credit agreement results in a total leverage ratio of 2.5x. Cash equivalents and short-term investments at the end of the quarter of $4.3 billion. While liquidity also includes an undrawn $3.5 billion revolving credit facility, which backstops our $3 billion commercial paper program.

In closing, we completed our first full quarter as the new Omnicom. Our operations delivered solid top and bottom line growth. We are realizing significant cost reduction synergies and while investing for future growth. Our balance sheet is strong, and we are deploying capital for the benefit of shareholders in the long run.

I will now ask the operator to please open the lines up for questions and answers. Thank you.

[Operator Instructions] Your first question comes from Steven Cahall with Wells Fargo.

First, I was wondering if you could talk a little more about some of the revenue by discipline. So I was just wondering if we could get some underlying trends or even growth rates, especially of what you're seeing in integrated media versus advertising versus health. To kind of understand the trajectories, you talked a lot about those disciplines at the Investor Day would love to understand how they're trending.

And then Phil, I was just wondering if you care to provide any additional update to the adjusted EPS growth guidance. I think the prior guidance is double digit. I mean, you said that the share count alone gets you to 8% to 9% this year. So it seems like it's going to be a very, very healthy interpretation of double-digit -- and we saw some of that in the first quarter results. So I was wondering how we can think about maybe some guardrails around where EPS growth can come in for the year.

I'll give some detail and then John can add some color. But as far as disciplines go, as I said in my prepared remarks, Integrated Media certainly led the way in terms of growing high single digits an experiential and other grew mid-single digits health was positive for the year, low single digits and advertising was down. I think there's an awful lot going on as we integrate all these businesses, and we're certainly pleased with our progress to date and the growth to date. But in terms of additional details with specifics -- that's about as specific as we're going to get this early in the year in our first full 90-day quarter.

In terms of trends, you want to give some comments, John there?

Yes. Steven, the only thing I would add to what Phil said was -- and I mentioned this in my comments, we remain very healthy in terms of competition in terms of winning our fair share of new business, and that's great, considering bringing 2 big organizations together in such a very short period of time we're functioning very well. But if there's an underlying trend that's out there, it's really clients, especially with the change in the landscape of the industry, clients are becoming more focused on selecting a single provider to take care of most of their needs.

And we saw during the quarter that we were able to extend the multiyear contracts, quite a number of clients, and that's a focus that we're going to continue to work on as we get further and further into the year. That gives us security and that gives us a better ability to plan as we move forward. And it's our size, it's our influence that is contributing to all this, not to mention -- the state-of-the-art investments we've made in terms of omni and on the AI and the breakthroughs and the contributions we're making there. So that's all I would add to the color that Phil mentioned.

Yes, I'll answer the EPS question. So certainly, we're pleased in the first quarter. Diluted EPS grew almost 12%. I think as we go through the rest of the quarters for the year, when we talk about double digit, I think at this point, we'd certainly say we expect probably the quarters as they roll out are going to be higher double digits than the first quarter performance. I think at this point, we're going to leave it at that. But we're certainly pleased with the quarter, and we expect good performance to continue on that front. .

Your next question comes from the line of David Karnovsky with JPMorgan.

John, just with the integration, I wanted to see if you could comment a bit more on Healthcare and PR. I think these were 2 areas you talked in the past about the scale combining with IPG and the opportunity going forward. So kind of what's been the experience to date? And what are you seeing generally across these disciplines?

And then, Phil, I'll revisit the Investor Day. Also, you guys had provided an expectation of 4% constant currency growth for the core businesses. That was well within to the kind of macro volatility we've seen, but just was curious if there was any update there to give?

Sure. The health care business, the combination of both the size that IPG had as a business, and we added a business is extraordinary. We clearly have an incredible amount of talent and representation across the whole pharma business. And what leads that lets us attract the best and smartest people and makes us -- every single pharma company has to come and speak to us if they want to do some in terms of their marketing.

In terms of PR, PR is now -- PR is a different type of business. We've been able to continue to grow it. In the past, we've been affected by elections, but any negative news is behind us from '25. And so we have good comps coming forward. And I think the only real comment I made is that I'm happy with the performance of those units as we go forward. There's a lot of combination there, too. And there's synergies that are going to come out of probably the PR business more than the health care business. But -- so it's all quite positive. It's is a very solid contributor to our overall growth, and we expect it to continue that way.

Regarding the question on organic growth at Investor Day and the 4% reference. Certainly, as I said in my prepared remarks, we're on track to achieve our operating plans and targets, and that would include the organic growth reference as well. So we're not changing that expectation at this point in time. But we're certainly comfortable with what we said at Investor Day.

Your next question comes from the line of Jason Bazinet with Citigroup.

I just had a handful of questions around the disposed business and core operations. I guess the first one is why did you decide to sort of focus the Street on core operations. Why do you think that's the right way to look at the business?

I'm sorry -- okay -- no, no, you go right ask you questions, I'll write them down, and then I'll try to answer them.

Right? I think and maybe I'm misremembering, you guys gave a rough benchmark of about 10% EBITDA margins for the disposed businesses. And if I'm looking at the Slide 3, which is quite helpful, it looks a bit lower than that. .

And then third, I was just struck by the disposed businesses, if I'm doing the math right, it looks like they shrank, I don't know, 16% or something like that year-over-year, which is far worse than I would have thought any business would be performing even in that business to put it that way that you might be disposing? So those are my 3.

I mean you could repeat that on the last question. You're talking about the performance of the disposed businesses.

Yes, it's just shrinking much more than I would have thought.

Well, which numbers are you looking at, Jason, because I think -- when you look at the year-over-year -- got it. sorry .

748 versus 627.

Yes. So some of those businesses that we're disposing of, we're actually disposed of -- so -- there was a meaningful -- as we said on the year-end call in February, we closed on the sale of an experiential business, Jack Morton kind of the day before February 15. So the first quarter in that example has 1.5 months of their revenue, but it doesn't have the second 1.5 months in the quarter. So the revenues are down because the business was sold. So it isn't a performance, I think it's just a timing of when the dispositions occur.

And Jason, I'm please to ask the question I really am. What we decided when we closed the transaction and looking at and our businesses is which set of businesses that are going to grow -- continue to grow and which are contributing a fair margin for the efforts that we're putting in. And the way we developed the initial list of $3.2 billion of companies that we were going to hold to resell is based upon poor margin performance and maybe unreliable growth.

And then after we went through that filter, the second filter, which was the governing filter was is this necessary for our clients? Is this what our clients are asking for. And we reached the conclusion that no, they weren't. Now there's a number of businesses in there, some of them terribly large, but there's a lot of units because we're spread out throughout the entire world. And what we're doing is we're working to dispose of them. And if there was another way to get them out of our financial statements we would, but there isn't. We have to -- until we get rid of them, we have to account for them and that's why we decided to put them in the columns that are reflected on Slide 3.

And we -- maybe we're being a little optimistic or a nice Investor Day when we said the margins for these businesses are 10%. It turns out that the margins of these businesses are probably not 10% or probably something less -- so the sooner and because -- and what was interesting is coming out of Investor Day, you can see that we had not clearly communicated that this distinction that what we're calling core now are the operations that we're planning to focus on and will contribute to the ongoing growth of Omnicom. And the noncore assets that you see will hopefully disappear as we dispose of them throughout the rest of the year.

Yes. Which is one other piece of input in terms of the margin. Certainly, the margins will likely vary by quarter. So as we get through the year and we get through this process, the historical reference is what we made. The historical reference was about 10% for that group. We'll see how each of the quarters play out. But certainly, it's a focus of ours to move expeditiously to complete those dispositions.

I can't wait for the day that you never have to ask me that question, but I do appreciate you asking it.

Your next question comes from the line of Tim Nollen with SSR.

I've got a couple actually related to really what a lot of people would think of as your core businesses, which are the media planning and buying businesses and then the creative business. On the media planning, John, you made a brief reference to agentic AI. And I wonder if you could talk a little bit more about as these LLM come more and more to market and enable direct communication amongst the various parties in the value chain, and as Omnicom is doing a lot of principal media buying itself, can you more directly go to publishers yourselves in ways that you have not before?

And then on the creative side, I just want to push again why the advertising business was down, and I'm wondering if there might be something of a trade-off with production which I think you hold in your integrated media business, which you said was growing high single digits. Is there maybe a little bit of a trade-off between creative advertising and production?

There's a couple of very interesting questions. I'm going to answer some of them, and then I'm going to refer to Paolo, who leads our AI work to answer some of it too, Tim.

Yes, it's interesting that the Quest right now, and I think every major -- there aren't too many major groups that's the major groups that are working on it is looking to have direct -- more direct relationships with the publishers. That is an aim and it's an objective, and it's something actually that we're investing in as we sit here today.

When you look at -- I'd be dating myself if I went back to the internet days of the '90s, but there's always a messy middle between the client, the advertiser and what they pay for the media and reaching the consumer and a lot of martech and stuff, which becomes exciting for a moment or 2 and then fades away. Most of those businesses don't last very long. And there are intermediaries today, the stand between us and the publishers and they take a toll. -- and the toll is paid for by the clients and by the industry itself. So that is something you can continue to ask me about in the future because that is something we're clearly working on.

The second part of your question, as -- what happens with the quality and now I'll turn to Paolo of our platform in addition to being a common way for our people to communicate to both the clients and to work in problems and the quality of our data gives us more information data itself doesn't mean too much unless you use it properly. And we have the -- we think the best data at the moment in the industry, and it allows our creative and newly smart thinkers. -- to come up with some really different ideas and explore different opportunities.

Part of the agentic revolution and what's going on, is it reduces the need for what was previously manual work that was -- or semi-manual work that was required to put together Excel spreadsheets and to do a lot of other things. in the simplest terms, and it makes us more productive. And we believe that the contribution that our creative people can make and the contribution that our media cloud size and influence could make will maintain and help grow our profits in certain parts of the business, exceeding any declines that come in because of the automation or efficiencies that we go through. And the quarter proves it. We grew 4%. -- in a complicated world with a company that we've just been together for 90 days.

I don't know, Paolo, if you want to add anything to...

Sure. Tim, I can address the agentic media buying. So as we mentioned in Investor Day, Omnicom is really leading the charge from our perspective on agentic media and the agentic media ecosystem. We're first to market with things like which is a protocol that's being defined and being evolved around agentic media buying. What I also mentioned in Investor Day that we had already tested the pipes and being able to have money flow through to actually buy inventory available on certain publishers.

Since then, we've actually executed real media buys for several clients using our agent framework doing agent to agent buying, which is all in service to shortening the media supply chain, as John articulated. How do we get -- drive higher value for our clients deliver a greater amount of working media dollars for our clients and ultimately making the entire process more efficient and effective.

That's really helpful. .

Got a go ahead, Yes.

And if you have a follow-up for Paolo or...

Yes. Can I just ask a follow-up in, which is I wonder everything you're saying makes sense. I wonder what happens to your pricing models and your ability to price for your services in a world where, as you said, probably the media supply chain is shortening. I mean are you in a position of strength to leverage to gain better pricing terms for your clients and to -- I mean, so far, we seem to be doing well for yourselves as well.

The whole environment expands, Tim -- and we will be rewarded as a result of that. And when we're talking about taking out in effect is the lower cost type of efforts, which contributes to our revenue. And increasingly, we're moving towards performance. That's a change -- it's ongoing, nothing is overnight, even I don't know everybody likes everything to be overnight, and it's not overnight. And the higher quality people with a higher-quality approaches and reaching more customers and selling more product and building better brands. That's where we sit. That's where our clients trust us. That's why they buy our products. And as a result, we will get paid a very fair price the efforts that we put in because we've made these investments. I don't know if...

Yes. In terms -- just to close out on the production question. Relative to our $23 billion annual base, -- it's not -- it's just not a substantial component in terms of dollar value. The key to the portion of the business that's in integrated media is the intelligent content automation business, which is closely integrated with media and our platform. So that's what we were distinguishing at Investor Day.

Your next question comes from the line of Michael Nathanson with MoffettNathanson.

I have one for John and Paolo and one for Phil. John, I've got date myself, I am on into public bought Acxiom. I asked you about that strategy by Acxiom, and it wasn't the right time for you to buy it. Now it's the second bullet point on the momentum of your company. So what have you found 4 months into 1 Acxiom? How has the integration help you? And how does that give you an edge for maybe where the asset was used previously at IPG. And then Phil, on Page 14, thanks for all the color. But would you ever put out or pro forma operating expense detail, so we actually build models that work on a pro forma basis on a core basis, too, on the cost side?

I can't go back completely to 2018. And remember everything I was thinking, although I'm accused of remembering every number that I see. At Acxiom, I think Interpublic at the time paid $2 million -- $2 billion for the company. 5 years later, I paid $9 billion for all of Interpublic. So I think my waiting paid off from an economic point of view.

And -- but most importantly is that -- and this was true then, and it's certainly true now is the quality and the fidelity of the data that Acxiom gathers has not changed in that 5-, 7-year period. they because they work principally for regulated industries in the finance sector in the pharma sector, their data is not as [indiscernible] consumer data can be. And it has to have fidelity because there's a lot of laws and regulations that go around it. And so we're able to ingest and use this to develop our Acxiom customer ID methodology.

And I'll let Paolo even comment a little bit on that. And it's been a real contributor to our overall efforts. Now if I want to be really fair, we probably weren't ready for it in 2018, but we're certainly ready for it when we bought it now.

Yes. I would add to that, Michael, that especially now with kind of the proliferation of artificial intelligence and more specifically, generative AI and how we've incorporated it into almost every facet of the marketing life cycle -- the ability for us to actually drive value from that data is greater now than it's ever been. And it is exponentially more powerful for our clients.

So just on the specific question that you asked, Michael, given the size of the acquisition not every number of schedule related to the prior year data is perfectly comparable. -- certainly, we understand and we're working towards that. We're happy to take any follow-up questions that you have on the detail, certainly offline, no problem.

Your next question comes from the line of Adrien de Saint Hilaire with Bank of America.

Two of them. Do you have any better visibility on how much proceeds you think you're going to get from the planned disposals? I can see you've fetched $152 million in Q1, but interested in your views for the year?

And then maybe for John, in terms of new business, one of your peers seems to have a bit of a revival of late. I'm just wondering if you're seeing a bit of a change in the pricing dynamics? Are you seeing potentially any pricing pressure around those pitches, more so than usual? I understand there's always a bit of price pressure around those.

Sure. With respect to -- your first question we -- restate it for me, please, Adrien just so I answer it properly.

I think it's visibility on the product.

Yes. On the proceeds yes...

Yes. On the proceeds, yes, yes. No. As you saw, if you look at our cash flow, even money made on the sale of...

Principally, Jack Morton.

Principally, Jack Morton. And there's a number of companies that we expect to receive proceeds from the sale of a significant number of those units that were holding in that bucket -- there's some that are just disposables that does things that we have to go through the process because -- they are really low growth. They've been around for a long time, but they happen to be in some instances in countries where the exercise of going through and shutting them down or paying out proper severance and things to people cost us money. We've accrued for the downside as best we could. And so we're looking to sell and generate positive cash flow. But I don't think it's going to add to net income for the year so much as it is it will generate additional cash .

Certainly, we have an expectation, but it's really very difficult to estimate what those proceeds are going to be. And we certainly don't want to give you any inaccurate expectations regarding what they're going to be when those deals happen and the proceeds come in, we're certainly going to keep you updated and let me know.

Yes. Adrien, after listening to me for years, as I said earlier to our question, I'd love to see these things off of my P&L and not talk about it anymore. But that's not going to make me give them away either. So we're pretty confident that over the next several quarters, we can get through most of them. And we have teams doing this and outsiders. We are focused on new business and growing our business and getting the teams that we brought together functioning in a proper way. So that's why we even call them core assets. That's where most of our focus is. There's a bunch of accountants running around trying to sell these things.

And what was the second question?

Yes, it's on the new business and competitive...

Competitive pricing. And I certainly know the ones you're talking about, there's been 2 or 3. Everyone strikes me as if I've just been defeated because I hate losing. And some of it has to do with competitive pricing, but we win more than our fair share. and we'll continue to win more than our fair share. And every loss, there's no such things coming in a second. Believe me, I do a root cause analysis, why we lost it to try to cure for the next opportunity that we have. So yes, we lost but not much, and I'm not happy about it.

And that concludes our question-and-answer session. And that does conclude today's call. Thank you all for your participation, and you may now disconnect.

Good morning. I'm Greg Lundberg, Head of Investor Relations for Omnicom. Welcome to our Investor Day. You get every year one of these. Thank you for taking the time to be here. A little housekeeping before we get started. Please silence your phone and if you do have to make a call, feel free to step out to the reception area. In the event of an emergency, the venues personnel will be directing us in the closest exits through the doors that you came into today.

A lot of great content today, and we're going to punctuate it with a couple of short breaks. And after all the presentations, we're going to have a Q&A session, and we request that you please hold your questions until then. And now for our disclaimer. Certain of the statements made today may constitute forward-looking statements. These represent our present expectations and relevant factors that could cause actual results to differ materially from those are listed in our SEC filings, including our 2025 Form 10-K. After today's event concludes, an archived webcast of this will be available on our website, omc.com.

And with that, please welcome Omnicom's Chairman and CEO, John Wren.

Welcome. We're really happy that you guys have all made the time to come and to listen to us today. We're really excited to share with you the new Omnicom. Now in terms of the merger to all the regulatory people that we had to go through and make sure that they were happy, we probably had 9 months where we were doing pretty serious planning. And the extraordinary thing that emerged from that was how well both sides got together and determined basically what the instructions were, that if there was 2 candidates and 1 job, let's pick the very best candidate, not the one coming from the acquiring company.

People faithfully follow that. And as a result, we have a tremendous amount of talent. All of the naysayers out there, everybody who's looking for something negative suggesting we were going to lose talent, quite the opposite happened. We've come together and come together well and quite unexpectedly in a very rapid way where these teams are out there 90 days later, functioning very well together, and it's only going to get better with some time. I just want to cover 1 or 2 other points here, and then I'm going to turn the program over to my folks.

We decided as we were fairness that many of you gets to see the top management from time to time. Very rarely do we let you see the practitioners, the people our clients see, the people listening and speaking to our clients every single day. So those are the folks you're going to hear from today. And they're going to be covering the new Omnicom basically.

One is our industry-leading capabilities. The second is how we've decided to come together and to -- in a very complicated world, make this as simple as possible for clients, and you'll hear more about that later on in the speech. And to expose you to something that's been developing for a long time, but is really on speed at this point, which is our Omni platform and our AI investments and how we're integrating into the tools that people who are working for use on behalf of our clients.

Other things that the merger allowed me to do that is very key and will be very key to our growth in the future, and that is to reshape the portfolio. And what I mean by that is where -- what percentage of the assets that we're going to be and the folks and the resources are going to be dedicated to. And is that -- not is that an important area, but is it a fast-growing area. In [indiscernible], what you'll see and probably Phil will cover this a little bit more in his presentation, what we're starting out with is 58% of our revenue is going to be from media and media-related activities. About 18% is going to come from advertising, as you know it, and the balance, which is our PR operations, experimental, and health care operations make up the balance.

We expect as we go forward, as you've seen from just reading reports on the industry, media is the closest, easiest thing to understand because large part, it's a financial transaction. Creativity is perishable in the environment we operate in. So it's very important to have the best and the brightest, but it's a lot harder for them to come up with the ideas that resonate with consumers. And again, you'll see a lot of it today.

So the last thing I want to stress, and I probably shouldn't go too far into this, is the combined cash flow of the companies has allowed us to make some interesting decisions with our Board with respect to our share repurchase program and still leave us in a very comfortable position that we are dedicated to living and we just have an investment-grade rated for our debt and our cash flow and for our needs.

And we're going to continue as you go into the future, seeing us paying healthy dividend, seeing us do more share buybacks over time. And now that things are settling down, there's a number of tuck-in acquisitions that we're going to want to continue to do. And after people get a little bit of rest, we'll get on the bicycle again and start up, but hopefully, nothing to the size of Interpublic.

So with that, I just really want to turn the program over to Daryl, who is the President of the company, and he's going to take you through what we do. Thank you.

Great. Thank you, John, and good morning to all of you. Thank you for joining us. I'm pleased to be speaking about how the new Omnicom is integrating stronger capabilities and how we've reshaped our business in response to structural shifts in marketing. And those shifts are changing the kind of solutions that clients expect of us. And they're transforming how brands grow, how marketing dollars are invested and how business value is created.

And importantly, they're expanding the role that we as Omnicom play in our clients' businesses, providing new opportunities for more strategic solutions to deliver value to clients while improving the quality and the durability of our revenue model. So over the course of this morning, you're going to hear a very consistent message. Complexity is rising, fragmentation is accelerating, and the winners will be the partners, those 1partners who effectively navigate the complexity by uniting superior capabilities together at scale to deliver business growth for clients. And Omnicom is uniquely positioned for clients navigating these structural shifts.

Let's take a moment and look at the changes in today's marketing environment. In a word, it's fragmentation, and it's accelerating and consumer attention is more dispersed than ever before. The number of platforms that marketers engage consumers is growing and each has its own data and its own measurement. Media and commerce systems are disconnected from one another. And this is most prevalent in some of the fastest-growing parts of the ecosystem.

Retail media is a clear example of this. Spending from an industry standpoint is on track to reach $69 billion in the United States alone. Globally, spending is distributed across more than 500 retail networks, each with its own closed data systems, its own buying tools and its own measurement framework. Connected TV is another. It's more intuitive to all of us, I think. Streaming now approaches half of total U.S. TV viewing. And that consumption is across dozens of ad-supported platforms, including Disney+, Prime, Paramount, Netflix, the list goes on and with many, many others. Each with different formats, different data signals and reporting standards. Even Prime Sports or even Prime -- premium live sports, I should say, which not so long ago was concentrated amongst a small group of broadcasters. It seems like yesterday that it was are now distributed across multiple rights holders and streaming services. And then...

So the first step is applying the Prime, as you can see here.

Then there's the creator economy. Brands are no longer planning across individual publishers. They're navigating countless individual channels, each with its own engagement model and with its own performance signals. And at the same time, the consumer journey from product discovery to purchase is changing, accelerated by generative AI as consumers use ChatGPT, Claude and Gemini, which introduce even more new marketing formats.

So the bottom line is reaching target consumer audiences across platforms has become increasingly complex and costly. The challenges are greater than ever and the need for a solutions-driven partner with scale, with integrated capabilities and with the talent to deliver top line growth is why we're here today. If you're a brand leader, your marketing budgets continue to grow, but your investments in marketing are more disconnected than ever before.

You're under pressure to deliver business outcomes in an environment where commerce, data, tech are deeply interconnected, but platforms and closed systems are not. And this changes the value equation because your brands need performance across all platforms optimize together. And delivering this in today's environment is no small task. It requires an elevated view of identity across the consumer journey. It requires scale and global reach to drive maximum ROI across the whole ecosystem. It requires systems interoperability and the talent and techniques to engage consumers at every touch point with the highest level of effectiveness.

As John mentioned, we have fundamentally strengthened Omnicom from an already-strong position by combining with Interpublic. We brought together 2 businesses that are working with the most iconic brands in the world. We now offer this portfolio of clients that you see behind me as well as new prospects, a broader set of integrated services with greater scale and a deeper bench of talent. We significantly reshaped our portfolio of assets. As John emphasized, approximately 55% of our revenue is now driven by higher-growth media, CRM, consulting and other related media services, which are differentiated by -- further by our world-class capabilities across advertising, health, PR and experiential.

We've gained enhanced capacity and capabilities in every region of the world, from Lat Am to Europe, the Middle East, Asia and, of course, in the U.S. Our combined portfolio now unlocks greater flexibility and financial wherewithal to make investments in areas that will generate the most growth for Omnicom and for our clients. And this includes investing in new products and services, in our next-generation omni platform, and AI capabilities, all of which expand our market-leading position. All right.

So now that I've talked about who our clients are, let's talk about what those clients want. And increasingly, they are looking for a strategic partner, one that can navigate a complex environment where individual marketing functions overlap. And in fact, in many organizations, they even compete. Those clients seek a comprehensive solution connecting either all or several of their capabilities, but their objectives remain the same.

They want a single-minded focus on growth and on improved marketing ROI. And they want to unite and optimize their communications across capabilities as opposed to having a plethora of individual point solutions with their own siloed KPIs and measures. In short, they're looking for an agile partner connect to connect and orchestrate capabilities and drive better business performance. In a recent industry report that actually was issued a couple of weeks ago by an analyst, it was reported, "CMOs are now looking to partner for one-stop shops to work with fewer agencies."

The driver for this, it went on to say, is that the increasing number of touch points for each consumer is leading to a need for seamless integration of services, making it less efficient to work with more than one agency. Omnicom is exceptionally well positioned to provide that one-stop solution with the superior strength of our capabilities and our unmatched talent underpinned by the data through line that unites them and the foundation of our next-gen Omni platform, which you'll be hearing more about.

We've shared how our portfolio is weighted to higher-growth media. With the acquisition, we've now added more muscle and reach to become the largest buyer of media, representing over $70 billion in billing according to COMvergence. This provides unmatched access to content, access to data on platforms and to inventory. And since closing the acquisition, we have already won, retained and expanded substantial scopes of business. Some of them you will have read about in the last 2 or 3 days.

But importantly, we've also added Acxiom, an invaluable strategic asset that provides outstanding identity solutions across every capability and every touch point. And this combination of media and data assets gets the attention of clients and publishers alike, furthering what was already a strong competitive position for Omnicom. All right. Enough for me. You don't need to hear this without me introducing some of the great leaders and practitioners that we have in our organization who are engaging with clients every day, and they will explain the unique advantages that our new organization brings in more detail.

First, you're going to hear from George Manas about our unmatched position in data and identity. Then Ellen Griffin will review our leadership in media, discussing how we leverage our data and identity solutions to drive advanced media outcomes. And Deepthi Prakash will talk about how we organize the world's most awarded creative teams, undisputed leadership in that area to deliver personalized content at scale. You'll hear from Jantzen Bridges on how we're helping clients modernize their organizations through our enterprise transformation consultancy.

And bringing all this together, building and operating integrated client solutions requires more than just some of the united capabilities I've talked about. It requires the leadership and culture to make it happen. Jacki Kelley will discuss our integrated client leadership group, which has direct line responsibility for our largest client engagements. And George will be back to speak to our new enterprise-level growth and solutions team.

And finally, enabling all of these capabilities is our adoption of generative AI. You'll hear from Paolo Yuvienco on how -- our Chief Technology Officer on how AI is enabling our business and our work for clients. And then Christine Gambino, COO of Omni, will walk through how we're operationalizing this in our next gen of the platform.

So with that, George, I'll invite you up to get started on our data and identity capabilities.

Thank you, Daryl. My name is George Manas. I lead Growth and Integrated Solutions for Omnicom. I'll explain to you how the integration of Acxiom has strengthened our data and identity foundation and how that capability allows us to connect media, commerce, culture and customer data to drive growth for our clients and for Omnicom. In today's marketing ecosystem, the most valuable capability is the ability to connect marketing investment directly to real consumer behavior. Identity is what makes that possible.

With the integration of Interpublic and Acxiom's Real ID, Omnicom now operates one of the most scaled and trusted identity frameworks in the world, allowing us to connect media exposure, commerce transactions and customer data across platforms and channels. Now Omnicom has been investing in data capabilities for decades. We operationalized that strategy with the launch of the original Omni platform in 2018. Through our 2024 acquisition of Flywheel, we gained access to a global database of digital commerce transactions, providing visibility into what consumers purchase, where they purchase and how pricing and promotion influence demand. And now with Acxiom Real ID, we anchor those signals to a verified unified view of the consumer at the individual level and at scale. We're talking real people, not proxies.

Acxiom Real ID is a cloud-native identity resolution solution. It provides persistent identifier for individuals, for households and for addresses. This enables accurate consumer recognition and data-driven marketing at scale. It's built from the most comprehensive consumer data assets in the industry, and it is among the most widely used identity frameworks globally. Real ID recognizes approximately 2.6 billion individuals across 36 markets. Now this includes 98% of the U.S. adult population. Wow.

But scale alone is not the differentiator. Trust is. Real ID is used by leading companies across industries. You can see them here. Notably, it is relied upon by many of the most highly regulated organizations. Now this includes 7 of the 10 largest retail banks, 3 of the 5 top pharma companies, 9 of the 10 leading credit card issuers. This trust reflects decades of operating with the most rigorous privacy, security and compliance standards. It also creates meaningful barriers to entry. Identity systems become embedded in how organizations manage customer data, how they activate their marketing programs, how they measure performance.

Once those systems are integrated across media, CRM, analytics workflows, they become part of clients' operating infrastructure. That creates switching costs, and it strengthens the durability of these relationships over time. With this highly trusted and scaled identity solution integrated with media, with commerce and with CRM, Omnicom provides a connected view of the consumer that individual platforms alone cannot replicate. Platforms measure behavior inside their own ecosystems. What they cannot see is how the consumer moves across the broader marketplace, including competing platforms.

We help clients understand the full journey. And because identity and measurement become embedded in how marketing decisions are made, these relationships tend to expand over time as clients adopt additional capabilities across media, across commerce, customer engagement and beyond. And when identity is unified, 3 things change. First, precision improves. Instead of guessing who's behind a device or a cookie, we recognize consumers accurately across environments and channels. That allows brands to reach the right audiences across paid, owned and earned media, reducing waste and improving marketing ROI.

Second, personalization becomes scalable. When identity is connected to commerce behavior and media exposure, messaging and offers are aligned with real purchase patterns and engagement signals. This improves conversion. It improves customer loyalty while helping clients allocate their marketing budgets towards the audiences and the channels that are generating the greatest business impact. And third, and this is really important, measurement improves.

With our unified identity layer, we are connecting marketing exposure directly to real-world outcomes, such as purchases, subscriptions, revenue. So instead of asking how did this campaign perform, our clients ask a much more valuable question, where should I invest my next dollar to drive incremental growth? When we connect marketing investment directly to business outcomes, our role expands from executing campaigns to helping clients guide enterprise investment decisions. And when identity and measurement become embedded in those decisions, Omnicom becomes part of the infrastructure clients rely on to allocate marketing capital across their business.

The bottom line, by combining a trusted identity framework with our broad set of marketing signals, Omnicom provides a more connected view of the consumer journey across platforms and channels. This proprietary asset allows us to help clients deploy marketing capital more effectively while building deeper, longer-term relationships.

Now in the 3 months since the acquisition closed, identity-enabled solutions are already supporting a growing share of our largest integrated client engagements and contributing to client retention, scope expansion and those new business wins that Daryl referenced earlier. And with that foundation in place, Ellen is going to now explain how data and identity further strengthen our media offer and turn our scale into influence.

Thanks, George. My name is Ellen Griffin, and I help many of our largest clients navigate today's rapidly evolving media landscape by bringing together Omnicom's integrated media capabilities. Today, I want to focus on how Omnicom Media scale, combined with our data and identity capabilities, creates a meaningful advantage for our clients. It improves how marketing capital is deployed, strengthens our influence with media platforms and ultimately drives stronger business outcomes. Omnicom now manages more than $70 billion in annual media investment, giving us unmatched scale in the market. But scale alone isn't the advantage.

Scale connected through identity is the advantage. When identity links media exposure directly to real consumer outcomes, media stops being just a distribution channel. It becomes an outcomes engine. This allows us to understand what is truly driving growth and continuously optimize client investment. The first place this shows up is how capital is deployed. When identity connects media, commerce and CRM signals across platforms, we forecast demand more accurately, allocate budgets more effectively and efficiently and shift investment quickly as performance signals emerge. The result is stronger marketing ROI and better business outcomes. Let me share a couple of examples.

For a top 5 U.S. financial services company, we built a connected identity foundation, powering more than 400 cross-channel campaigns every month. By linking media exposure directly to customer acquisition, the system enables continuous optimization of investments across channels. The result was a 25% increase in new customer acquisition and a 12% increase in revenue growth. For a global CPG client, we integrated retail transaction data with cross-channel media signals to understand which products and promotions were driving incremental sales. That visibility allowed the team to dynamically shift investment towards the strongest performing categories, delivering a 15% improvement in marketing ROI and expanding our work into additional markets.

When you operate at this scale, another advantage emerges, our influence with media platforms. We have a deep co-development partnership with Amazon, Google, Meta, TikTok, Roku, Walmart, Instacart, X and many more. These partnerships allow us to shape how the fastest-growing parts of the media ecosystem evolve. In Connected TV, we launched early collaborations with Amazon and Roku that connect identity across streaming platforms, giving clients near real-time visibility into reach, frequency and outcomes.

With Disney, we introduced a new capability that allows advertisers to target high attention moments within live sports programming, bringing real-time addressability to live events. In the creator economy, we are connecting Omnicom's identity-based audiences to improve creator selection, activation and measurement, increasing accountability across this fast-growing segment. And in sports, where rights are increasingly fragmented across broadcasters and streaming platforms, our scale allows us to secure premium inventory across tentpole moments that unlock new forms of brand participation.

And even at this year's Super Bowl, Omnicom clients accounted for more than 30% of NBCUniversal's advertising inventory. Identity and scale also allow us to simplify the media supply chain. As the programmatic ecosystem has grown more complex, many transactions now involve multiple intermediaries that add cost without improving performance. But by combining our scale with identity-based supply path optimization, we create a more direct path to high-quality inventory. That increases the percentage of working media while improving signal quality and campaign performance.

Another area where scale, data and identity create a significant advantage is in commerce. Retail Media is one of the fastest-growing segments of the market where advertising and transactions increasingly happen inside retailer platforms and marketplaces. With Flywheel, Omnicom operates the largest retail media practice globally, managing more than $10 billion in retail media investment. We combine that scale with deep retailer integrations and verified commerce transaction data. This allows us to operate effectively across fragmented retail ecosystems while maintaining closed-loop measurement from impression to purchase.

Instead of optimizing campaigns for engagement metrics, we optimize directly for business outcomes. For a multinational CPG company, combining identity data with Amazon retail and media signals, we were able to increase the return on ad spend by 8.4%. For a fast-growing technology company, our unified measurement framework connecting awareness, creator engagement and commerce outcomes has contributed to 440% revenue growth. This capability has also been independently recognized. In Forrester's most recent assessment of the category, they ranked Omnicom as the strongest commerce offering among major providers, highlighting our vision and execution across stores, marketplaces and direct-to-consumer environments.

Looking ahead, a significant shift in the media ecosystem is the transformation of search and discovery through generative AI. Search has historically been one of the largest drivers of commercial intent online. As discovery becomes conversational and AI-driven, the way brands capture demand is fundamentally changing. Instead of navigating lists of links, consumers increasingly receive a small set of AI-generated recommendations. That dramatically raises the importance of visibility within these systems.

Because our system connects identity, media exposure and commerce outcomes, we help brands understand how AI systems shape discovery, and we optimize brand visibility within these environments. We're already collaborating with partners like Google and OpenAI to develop new ways to measure and optimize marketing performance in AI-driven environments. At CES, we introduced a consumer prompt insights agent with Google that helps brands understand how consumers interact with AI assistant and how those prompts shape discovery. We are also developing new measurement approaches within platforms like ChatGPT to better understand the incremental business impact of advertising in conversational environments.

These capabilities are generating new opportunity through generative engine optimization, helping brands remain visible as discovery increasingly happens through AI. And nearly all of our top clients are seeking our support in this space. For example, a leading global technology company turned to Omnicom to strengthen its visibility in AI-driven discovery. We delivered a comprehensive solution, combining technical audits, content optimization and LLM response, leading to a 10-point increase in visibility during their peak sales event.

Solutions like this are only possible because of the integration across our system. Our media model combines unmatched market leverage with proprietary data and identity to create a powerful platform for growth. But succeeding in this environment requires creative ideas and content that breaks through the clutter and that can travel across an increasingly complex media ecosystem. And that's where Deepthi comes in.

Hello, everyone. I'm Deepthi Prakash. My focus is on ensuring that we create distinctive content and experiences for clients by integrating our data, identity and omni platform with our creative and content production capabilities. And Ellen is right, to win in today's media environment, brands not only need more content than ever, they also need creativity that cuts through the noise. Essentially, the system is only as good as the creative that fuels it and the new Omnicom has deep capabilities to create distinctive content and optimize it for clients across every channel and market.

It starts with creating more of the right content across an expanding media landscape. Now reach and tailored content at scale are not enough because there is more content than ever before. And AI is only accelerating that trend by lowering the barriers to creation and distribution, which makes it harder than ever for brands to stand out. This is where creativity comes in. Great creative ideas help brands break through the AI slop. They create and capture new demand. They open new ways to go to market. And great creative build stronger brands and stronger brands drive disproportionate growth.

We know this because we've been studying it for decades. Interbrands research validated by NASDAQ shows that brand strength remains a major driver of business value with the world's strongest brands historically outperforming the broader market over long periods. Omnicom has helped build some of the world's strongest brands. And the new Omnicom strengthens that foundation even further with an unrivaled agency portfolio spanning distinctive global creative powerhouses as well as creative boutiques.

Today, we offer clients the deepest bench of creative talent in the industry and are the most awarded creative network of the past decade across major creative shows. Our accolades include being named Fast Company's Most Innovative Company every single year since 2019. And in 2025 alone, we won over 175 Cannes Lions, the Cannes Lion Grand Prix for effectiveness, and we were named the Most Effective Network by the Effie Index. The work we make is both creative and effective. Let's take a look at some of it.

[Presentation]

That's pretty good, right? Our creativity and effectiveness is why clients turn to and stay with us. Look, everyday matters in marketing, but there are moments where it is more scrutinized, moments where the risk is high, the investment is significant and the work has got to land. In these moments, our clients back Omnicom to deliver. Take the Super Bowl, for instance. It remains one of the most demanding stages in our industry, culturally, creatively, commercially.

And Omnicom had more clients featured in the Super Bowl than any other company, and our work dominated the best ad list across publications from ad age to billboard to Vogue. Achieving this level of creative excellence is only possible through constant evolution and deep integration. Our creative talent now work with intelligence, tools and AI that also underpin our media strategies and our content production workflows. So the same intelligence guides media investment, creative ideation and content production to create more connected and effective work for clients.

And speaking of production, with each media channel having its own format, its own specifications and audience behaviors, a single campaign now requires thousands of individual assets, and that number will only continue to grow. The new Omnicom is positioned better than ever to scale content globally with our extended production assets. We now have one of the industry's most comprehensive production capabilities and content studios across every major region of the world using intelligent automation to deliver the full spectrum of modern content needs at speed and scale.

From big tentpole films and fast-moving social influencer and commerce content to personalized, localized and in-language versioning, we do it all. We deliver at high quality, and we do it at speed. And what once used to take months now happens in days and what once took days now happens in hours. But this infrastructure does more than improve efficiency. It expands our role with clients. When we scale with their needs across more brands, markets and channels, the economics of our relationship change. And when AI-enabled production is paired with continuous media optimization, the conversation shifts from the cost of assets to the value of outcomes.

Let me illustrate how this comes to life. For a global automotive client, we begin with one distinctive creative concept built on strategy that's informed by identity, culture, behavior and performance data. A connections plan that's developed collaboratively by media and creative teams defines the full set of required assets. Our data-driven demand index validates the media investment and targeting strategy.

As our teams develop ideas, AI creative agents help evaluate and refine the messaging and the creative idea. Our production teams then bring these ideas to life through original craft and scale with AI. Once the work is produced, AI governance agents overseen by our talent ensure that every variation stays true to the brand. And after the work is deployed, our systems analyze creative performance, identifying patterns and what resonates and what drives action and evolve creative continuously based on performance, always with oversight from our expert talent. And the impacts are tangible.

In the last year alone, we've been able to increase full funnel impressions by over 30% in most markets globally on a dollar-for-dollar basis. We've also had double-digit increases of key buying actions through our right target, right time, right message marketing. And now we have plans in place to drive sales conversion metrics by an additional 10% through media and messaging even more precisely targeted to in-market shoppers. We drive stronger performance because every asset is informed by real data connected to media, fueled by great ideas, governed for brand consistency and optimized for impact.

For our clients and for us, this translates to increased revenue growth. This is how Omnicom helps clients win by building stronger, more distinct brands that deliver superior business outcomes through media, creative and production working hand-in-hand in one integrated system that's powered by proprietary data and identity and a shared platform. Now to fully unlock this opportunity, clients need the right technology and operating infrastructure in place. Jantzen will explain how we help them build exactly that.

Thank you, Deepthi. I'm Jantzen Bridges, and I joined Omnicom in December to accelerate the growth of our enterprise transformation consultancy. George, Ellen and Deepthi have described how we connect data and identity, media, creative and content to deliver superior experiences and outcomes for clients. I'm here to explain how Omnicom's integrated approach to driving growth is actually implemented inside our clients' businesses, how strategy becomes operating reality.

Built on the foundation of Credera, which Omnicom acquired in 2018, our enterprise transformation consultancy is comprised of more than 3,000 management and technology consultants globally. Today, we are recognized for our high quality of talent and scale and future-facing capabilities while also embracing a modern AI-first value-based delivery model for our clients, skilled, scaled and optimized to stay responsive to technology and trends that can help our clients transform better, faster and sustainably. And while our consultants and our client-centric delivery model are core to powering our growth, so our alliance partnerships.

We are doubling down this year and going forward on our partnership with Adobe and AWS as well as continuing to invest in emerging partnerships that will help our clients thrive in the market. And in the current market, as we all know and as you've heard many times today, enterprise executives are being challenged to drive more revenue growth more efficiently than ever. While consumers are demanding greater privacy, more personalization, greater ease of transacting and purchasing.

These are delicate, complex and necessary tensions to balance. Our clients come to us when their traditional ways of working aren't striking that balance to deliver growth. They come to us when they realize the hundreds of marketing tools and applications they have at their disposal aren't actually driving creativity and productivity. They come to us wanting to understand marketing agents, where should they have them? How do they work? What should the operating model do to change to accommodate them. They come to us recognizing that they don't have the data foundation in place to even start the AI journey. Simply, they come to us to help them bridge the gap between transformation ambition and execution.

And given how foundational bridging this gap is now and will continue to be to our clients and our business, I want to share a client story that brings it to life. A global pharmaceutical company and a long-time Omnicom creative client was struggling with fragmented marketing processes and data across its patient, health care provider and commercial segments, unable to deliver unified and contextual experiences. It's a common challenge. And these challenges were reflected in declining market share. We were engaged to help them develop a strategy and a multiyear transformation road map. From there, we worked with them to systematically unify marketing operations across more than 60 brands in more than 120 markets.

To do that, we built a cross-brand consumer data hub to consolidate data and power multichannel personalization at scale. We then help them redesign and implement a modern refreshed operating model and agentic workflow to break down silos, leverage the new enabling data and technology and improve ways of working. And the results within the first 6 months, the client reported a 46% reduction in campaign time to market and a 30% improvement in marketing ROI and again, in just the first 6 months, representing millions in recurring quarterly savings while also driving growth in prioritized product segments.

As that example demonstrates, these engagements reflect a broader shift in how transformation work is being bought, delivered and measured. Clients are moving toward value-based transformation programs tied to measurable performance improvement and true value realization. These programs tend to be longer in duration, more deeply integrated into our clients' operations, and they carry strategically higher value when delivered with our high caliber of talent. And the good news, we're already working this way with the majority of our enterprise transformation clients.

So in summary and in closing, you should take away from here, we have a thriving enterprise transformation consultancy. And with our Omnicom integrated client delivery model, we are poised for continued growth.

And with that, I'll hand over to Jacki and George to talk us through our integrated client delivery model.

Thank you, Jantzen. I am Jacki Kelley, and I have the privilege to work across our entire customer base and client base as well as to work with our integrated client leaders. I help to ensure seamless integration across all capabilities, delivering united solutions for these clients. As you've heard this morning, we have significantly strengthened our offering in the areas that matter most to these clients. Individually, these capabilities are powerful. Together, they are the engine that drives compounding growth.

With our proprietary data and identity, we know consumers better than anyone. This is at the heart of how we deliver insights and connectivity that drives growth for our clients. It's the through line that connects media to content and creation, transforming reach into relevance. A critical part of that opportunity lies in how we operationalize this integrated model.

Let's take a look at how this came to life for BMW, where we built a solution across creative, media, CRM performance, digital and social. Our starting point is a brilliant brand platform through our integrated model, uniting creative, media, CRM and content with connected workflow powered by shared data and identity and AI. We unleash across this platform all throughout the customer journey, driving both awareness and sales for the BMW 5 Series. BMW's target audience knows what they like, and so do we.

For BMW, we can deliver exactly what each unique customer needs. It starts with connecting BMW's first-party data across this high-fidelity identity spine to reach the valued audience and enrich the understanding with this extensive data. From there, we build detailed audience segments and subgroups based on demographics, behaviors, interest, values and purchase propensity. We then validate these audience [indiscernible] with real survey data, achieving up to 90% accuracy compared to actual BMW buyers. This gives us deeper insight into individualized end-to-end consumer journeys and optimal media plan allocations that reveal the most high-impact touch points along the way.

The shared intelligence connects media, content production, personalization, ensuring we are delivering relevance and impact across the entire customer journey from paid media to CRM, website development and well beyond. At every step, performance and data provides right back into the continuous feedback loop to make sure we're optimizing across all of these touch points. And personalization goes far beyond advertising. Using advanced 3D production capabilities, we create more relevant vehicle experiences at an individual level, enhancing and helping move customers through this purchase journey.

With connected capabilities leading data and identity solutions and AI-powered workflows, our teams are moving faster, more efficiently and with greater precision. When we do this well, the benefits are mutual, better results for our clients, greater share of wallet for Omnicom and more durable growth for both. We know this model works. We've been operating integrated approaches across many of our clients for years, in some cases, decades. What's different now is an enterprise-level focus that is made stronger by truly connected capabilities, which you've heard about this morning, and a client list that brings in many ways, demands the need for this greater integration of services.

We have fundamentally changed the client leadership group for service from a service and delivery organization to a strategic growth partner to our clients. Our integrated client leads are accountable for client growth. They're experts in their clients' businesses, serving as a strategic adviser, a collaborator and responsible for the orchestration across the full breadth of our capabilities. These leaders oversee unified teams operating with connected workflows and shared data identity and AI, the foundation that truly enables these integrated solutions.

We are investing in our client leadership to provide this level of orchestration. This supports the client expectation that Daryl started with this morning. Our clients want fewer partners solving much bigger problems. We have all the expertise across the areas that matter most to our clients and our ambidextrous client leaders will help harness this with the agility and ease that maximizes value.

George will now talk about how we bring the same integrated approach to market.

Thank you, Jacki. What a great example that is. So to fully harness the power of our connected capabilities for growth, we've established the enterprise growth and solutions team, which I lead. We partner closely with our client leaders and business development team to design integrated solutions that address our clients' most critical growth challenges. Our focus is on Omnicom's most complex opportunities. This is where integrating media, data, technology, creative and other services delivers value at enterprise scale.

In many ways, we serve as Omnicom's connected layer, bringing together the right teams, expertise and capabilities to pursue larger opportunities and deliver more integrated outcomes for our clients. We also lead the strategy and development of new enterprise solutions, creating differentiated offerings that drive new growth and keep us ahead of a rapidly evolving marketplace and those evolving client needs. Our AI capabilities and our next-generation Omni platform are fundamental to this model, enabling us to move faster, to operate with more scale and to connect teams through shared data and identity.

We're going to take a 10-minute break, only 10 minutes. And when we return, you're going to hear a lot more about our AI strategy and our next-gen Omni platform from Paolo and Christine. Thank you.

[Break]

Everybody welcome back. Take your seats. That's you, Paolo because you're next. All right. So far this morning, you've heard a bit about our strategy, how it's built around connected capabilities, which bring together data, identity, media, creative, commerce, consulting and technology to help our clients grow in a marketplace that's increasingly fragmented and very complicated. What we're going to show you now is how artificial intelligence strengthens that model.

For us, AI is not a stand-alone story. It's an enterprise capability that improves how our people work. It enhances the solutions we deliver to clients and increases the value of our data, identity and platform assets that you've heard about this morning. So to begin this discussion, please welcome our Chief Technology Officer, Paolo Yuvienco.

Hello. I'm Paolo Yuvienco. I drive how we build and scale technology across our business. So part of my role is focused on strategically accelerating our use of AI from developing our strategy and frameworks to building community for adoption and knowledge sharing and from establishing relationships with the frontier and foundational model providers to building solutions for clients in partnership with our expert practitioners.

So before the break, you heard our leaders talk about AI across every facet of our capabilities. What I'm going to share with you is Omnicom's overall AI vision and strategy and how we're using artificial intelligence to accelerate our business and ultimately drive growth for our clients and Omnicom. -- how we're moving from tools to agents from generation to orchestration. So let me set the context. We've spent the last 3 years or so exploring how generative AI can empower our people, deliver our connected services, increase productivity and enhance our client outputs.

Across Omnicom, we've now mobilized over 70,000 users who collectively produce millions of generations every single month. As we've explored these tools and scale, we realized that simply using the large language models that everyone can deploy, OpenAI, Claude, Gemini, it's just not enough. What differentiates us isn't just our ability to use these models. It's how we ground these models, connect them to our proprietary data and teach our people to use them to meet the specific requirements of our clients and our organization. That's why I'm excited to share what comes next.

If we walk through how AI has evolved in our company and frankly, how it should really evolve in any organization, we think of it in phases. The first phase was AI as a tool, such as using an LLM, asking it to generate some potential taglines, that person waits, reviews the output, decides what to do with it. There's value there, absolutely, but it was only a starting point. Where we are now is moving towards true orchestrated intelligence. This is where AI agents don't work in isolation. They work in concert with our teams and handoff work to one another based on context and goals. Through this evolution, we've declared the end of the tool era and the beginning of the era of agents.

At CES, we announced the new Omni and with it, a new generation of semi-autonomous multi-agent reasoning workflows. These agents have been developed to perform sophisticated functions. At the direction of our agency experts, they can operate continuously, reasoning through problems, understanding context, making decisions and once activated, drive actual business outcomes. In essence, our people set strategy, objectives and values and evaluate the results, determining what will resonate with consumers in a world where human connection is more important than ever. An agent allows them to execute functions at speed and scale.

So I'm sure everyone in this room has probably used some form of AI, generative AI. There are times where you put in a prompt and get an answer that was not really what you were looking for. This is the reality. If you put AI and agents in the hands of someone who does a mediocre job, the result will still be mediocre, just faster. But if you put AI and agents in the hands of an expert, now all of a sudden, we get expert results exponentially faster.

An example of this is how we perform research. Rather than independently accessing various sources to compile and collate data, we set off a deep agent that utilizes a multitude of other research agents, each one tied to specific data sources and services. This deep agent then distills all the information into a comprehensive report utilized by our strategy and planning teams to feed into their briefs. You'll see more of this actually in action during the demonstration a little later.

So these agents are not just changing the way we deliver work for clients. They have started to deliver internal efficiencies for our back-office functions, including finance, HR and more. For example, our finance team has implemented an agent that handles high-volume administrative requests involving establishing and maintaining client relationships. paperwork like W-9s, vendor setup forms, tax forms, CODs, the list goes on. previously handled by e-mail, the agent has not only saved time for our finance functions, but also improved the workflows of our sales and customer service teams.

Now here's the hard truth. Generative AI without accurate data results in unreliable outcomes. At Omnicom, we're ensuring that what goes into our AI is the world's most elite data set. This is why the Interpublic acquisition was so strategically attractive. As George mentioned earlier, with Acxiom, one of the world's most sophisticated data companies, we're integrating that data infrastructure directly into our ecosystem.

Specifically, we have integrated Acxiom's Real ID, the world's most comprehensive consumer identity graph into Omni, marrying it with flywheel's purchase data and Omni's existing data sets, including our proprietary cultural and behavioral intelligence. So let me give you a specific example of why this data advantage matters so profoundly. Traditionally, generative AI is trained on, for the most part, Internet data, which means it's trained on what people have written about on the Internet. It's reflective, it's biased. It's biased towards loudest voices, towards English speakers, towards certain demographics.

Our AI is grounded differently. It's grounded in actual consumer behaviors. When our AI agents propose a campaign strategy, that strategy is informed by 5-plus years of real purchase history. It's informed by actual behaviors, not Internet commentary. But here's where it gets really powerful, mass personalization that actually feels personal. Think about traditional personalization. You need to send, I don't know, 100,000 e-mails. The subject lines might say, hi, so and so, maybe you segment by demographic. But fundamentally, you're still sending thousands of variations of the same message.

With our agentic framework, grounded in our identity graph, we generate thousands of genuinely unique creative variations. We're not just swapping names. We're tailoring cultural references, behavioral triggers, imagery, tone, everything to the specific signals of individual consumers. This is mass personalization that actually achieves what mass personalization always promised but could never deliver before. We'll show you an example of this also in our demo later.

So another powerful and underrated application of Omni's agentic framework is not about creating content or running campaigns, although those are very important. It's about simulation. It's about testing reality before you live it. We are pioneering the use of synthetic audiences and synthetic focus groups. Let me explain what this means. Before we create a single frame, -- before we book a single media placement, before we spend a single dollar, our AI agents are simulating how a campaign will perform. We do this by modeling thousands of simulated consumers, each one based on real consumer attributes and behaviors from our identity graph against our vast and proprietary media activation data.

Then we run the campaign against those simulated consumers. We see what works. We see what doesn't. We iterate, we refine. The advantages are profound. First, prediction before production. We reduce financial risk. We're not estimating how something will perform. We're predicting it based on simulated reality. Second, risk-free experimentation. Great creativity requires testing ideas without limits. Creators need permission to explore territories that hasn't been chartered before. Many of our creators have ideas that go far beyond content. Synthetic audiences gives us that permission while keeping our strategic creative leadership at the helm to drive the creative direction that allows for meaningful execution, which remains irreplaceable. We test radical unchartered experiences in a risk-free environment. We then take bigger, more creative ideas to market with higher confidence that the business outcomes will be positive.

This is prediction and experimentation that wasn't possible before. Because our synthetic audiences are based on actual consumer identities and attributes, we have a higher confidence levels around its performance, leading to a clear and differentiated advantage for our clients. This is the new Omnicom, powered by data, enabled by agents, led by expert talent. Now you're going to see how we put this strategy into action.

Hello. I'm Christine Gambino, and I oversee the product strategy for Omni, our next-generation marketing and sales intelligence platform. This is truly an exciting time. We have the ability in this evolving space of AI that Paolo just discussed, combined with the power of the Interpublic acquisition to create real change. This will provide new opportunities, insights and speed to market like we've never seen before. So let me show you what Omni is all about.

[Presentation]

So what you just saw was a platform that scales. It's driven by an advanced agent ecosystem built on our leading data and identity foundation that George described earlier. Now let me give you an inside look at the capabilities that make this all possible. So first, we have a comprehensive integrated data ecosystem that converges consumer insights cultural trends, media dynamics and behavioral intelligence into a unified intelligence layer. This foundational research capability isn't siloed. It's woven throughout our organization, informing strategy, creative development and media planning at every stage.

Whether strategists are identifying market opportunities, creatives are developing compelling narratives or media teams are optimizing channel performance. They have immediate access to rich insights. Omni ensures that every decision from concept to execution is informed by a complete understanding of consumer intent, cultural relevance and media opportunity, creating consistency and precision across all marketing initiatives.

So second, synthetic audiences, which you heard Paolo describe a minute ago, unlocks testing capabilities by leveraging actual audience data, enabling brands to validate campaign strategies, creative approaches and targeting hypotheses with confidence rather than relying on theoretical models or speculative assumptions, synthetic audience tests are grounded in real behavior patterns and demographic insights, eliminating guesswork and ensuring that strategic decisions are informed by authentic data-backed evidence.

So third, we have our generative AI that amplifies expert creativity by transforming our data and intelligence into actionable insights. Our expert teams develop concepts, test ideas and scales campaigns with AI-powered precision. We directly connect concepts to audience definitions and channel requirements, ensuring production is never theoretical. Instead, every asset is engineered for specific outcomes and channels.

So fourth, our advanced bidding transforms years of marketing intelligence and proprietary machine learning models into performance optimization. We're operationalizing years of insights and predictive models that reflect how Omnicom uniquely approaches marketing, competitive advantages built through continuous learning and partnerships. This proprietary intelligence layer is activated through Omni enabling bidding systems to dynamically balance reach, frequency and outcome-driven performance goals.

Rather than relying on generic algorithms, our automation harnesses Omnicom's institutional knowledge and proven methodologies, ensuring that every media dollar deployed reflects the collective intelligence of our organization. So as you can see, Omni is the AI-enabled platform built on a strong foundational layer that underpins everything we do, from strategy to sale across the marketing life cycle and through all of our brands and agencies. It unites our people and services by standardizing the intelligence, data sets and processes by which we work.

In practice, it enables our teams to execute complex multifunction operations instructed in a natural language. That's the true Omnicom difference, an expert team that brings more precise, more distinct and more impactful work to market, all while laser focused on the most important prize for all of our clients, sales growth and share ahead of the market and their competition.

Good morning. And thank you. We really appreciate you creating time in your busy schedule to be with us here today. You just heard a lot about Omnicom's strategy, what we do for our clients and what drives our business now. We'll also focus on what will drive our business and our growth into the future. And I'm going to talk about how this translates to our future financial performance. The acquisition of Interpublic was truly transformative, enhancing the combined business and allowing us to optimize the new Omnicom for future growth.

Our portfolio realignment was a significant first step. and will result in 55% of our revenue coming from our faster-growing interconnected businesses, including media, data, CRM, consulting and commerce. These should represent an even larger percentage of our revenue over time. The balance of our revenue comes from our industry-leading businesses in creative, health, PR and experiential. Our U.S. business now represents a larger portion of our revenue and Interpublic also complemented our position in every other region globally.

Interpublic not only complements our overall client portfolio, consisting of some of the world's most successful companies, it improved the integrated services we bring to these companies. And our new connected capabilities organization and the enhancement of our omni platform is designed to focus on the delivery of integrated services, connecting media, data, creative content, commerce, consulting and technology. These high-growth strategic services will drive business outcomes for our clients.

As our leaders have shared throughout the morning, our businesses are ever connected more than ever, they're interconnected more than ever before. And our efforts across these areas are enabling us to move forward as a company with a clear mission to help our clients drive enterprise growth in this new era of marketing. And by helping our clients grow, we will grow. More specifically, regarding the full year 2026, included in our investor presentation in February, the combined Omnicom and Interpublic revenue was $26.3 billion for the 12 months ended September 30, 2025.

These were -- this was the last 12-month period that each company reported stand-alone results. As we've said before, this includes $3.2 billion of revenue from the same period that represents planned dispositions that we expect to complete in 2026. We continue to move forward with our strategy to complete these transactions as early as possible in 2026, but we cannot accurately estimate when they will be finished. Therefore, we plan to provide the revenue and EBITDA of these businesses for 2026 separately from our core operations until these dispositions are complete.

On a combined basis, net of planned dispositions, our adjusted 2025 revenue base is $23.1 billion. In 2026, we expect this revenue base to grow approximately 4% on a constant currency basis. As we look beyond 2026, we believe our growth will further benefit from our new positioning. And now I'm going to add some comments regarding some key financial items. As it has over time through many economic cycles and technological disruptions, Omnicom has delivered low to mid-single-digit revenue growth. After completing the integration in 2026 and with the strength of the new Omnicom, we're well positioned for strong growth in the future.

As you know, Omnicom has steadily increased its adjusted EBITDA margins over time through a focus on cost control, including offshoring, nearshoring, automation, real estate optimization and other measures, all of which we expect to continue. Our synergy expectation is to achieve $1.5 billion in cost reductions by mid-2028, including $900 million in 2026 and $1.3 billion in 2027. We're making solid progress in reducing these costs, and we'll continue to update you on our progress throughout our 2026 quarterly reporting cycle. And while we expect the synergies to result in incremental EBIT dollar growth and margin expansion, we're committed to continuing to invest in the business as we always have, to drive sustainable long-term growth.

This includes investing in new products and services, our Omni platform, generative AI and acquisitions in the fastest-growing parts of our business that will drive greater growth in the future. We're confident we'll achieve the expected cost reductions in 2026. And although it's early in the process of our newly combined company, we currently estimate a significant amount, approximately 75% to 80% of the $900 million of savings will flow through to increased EBITDA and net income.

While we're confident in our ability to achieve the $1.5 billion in cost reduction synergies, as we discussed on our earnings call, it's too early to estimate how much of the 2027 and 2028 synergies will flow through to the bottom line. Earnings per share growth resulting from our revenue growth and our synergy realization will primarily be driven by growth in non-GAAP adjusted EBITDA. Below the line, net interest expense in 2026 is expected to increase by approximately $210 million in '26 compared to '25, driven by higher interest expense and lower interest income.

For planning purposes, we expect a tax rate of 26% for 2026 and net income attributed to noncontrolling interests and income from equity method investments are each expected to increase slightly. Together with the expected reduction in diluted shares outstanding from our share repurchases, we expect double-digit growth in fully diluted non-GAAP adjusted EPS for full year 2026. As we discussed on our February 18 earnings call, our Board of Directors approved a $5 billion share repurchase program.

We plan to repurchase $3 billion to $3.5 billion of shares during 2026. And we'll address our plans regarding the balance of the program in early 2027. Upon completion of the $5 billion share buyback authorization, we expect to maintain our consistent historical approach to capital allocation across dividends, acquisitions and share repurchases. We'll continue to use our free cash flow to pay a competitive dividend, which our Board recently increased by 15%, and we'll pursue tuck-in acquisitions focused on the fastest-growing parts of our business. And we'll return the balance of our free cash flow to shareholders through share repurchases.

Before I conclude my remarks, I have one housekeeping item to update you on. We recently raised $2.4 billion in new bonds at an average coupon of 4.6% and an all-in yield of 4.7%. $700 million of this was an 8-year eurobond and the balance was a mix of 3-, 7- and 10-year U.S. dollar bonds. We'll use the proceeds to retire the $1.4 billion of notes that was due or that come due next month as well as for general corporate purposes. Moody's and S&P have reconfirmed our ratings, and we remain committed to maintaining our current investment-grade rating.

We estimate our total debt-to-EBITDA leverage ratio will be approximately 2.4x by year-end 2026. In closing, we look forward to providing you updates and further insights as we move through the next few quarters and as we execute against our synergy targets, asset dispositions and share repurchases. And as the team has shared throughout the morning, our growth platform has been enhanced. Our balance sheet position is strong and our future growth potential at Omnicom is brighter than ever. We're now going to take a short break, no more than 10 minutes like the first break, while we set the stage up for Q&A, and we'll be happy to take your questions at that point in time. Thank you.

[Break]

We're back. For the Q&A session with us here on stage are -- we have in order here, Daryl, John, Phil, Philippe and Paolo. If you have questions, raise your hand, and I'll direct the mic your way. And we ask for the sake of the transcript to please state your name and your firm before you ask your question.

And with that, let's begin. Steven, saw it first.

So I just wanted to...

Your name and your firm.

Steven Cahall, Wells Fargo Securities. I wanted to talk more about the way you've shown the growth outlook today with media being a much bigger part of the business than it used to be, creative going through some change, but smaller than it used to be. And Phil, I think you said Omnicom typically was kind of low to mid-single-digit growth, but you think growth is going to be stronger in the future. So I was wondering if you could help us think about, number one, what does the media business grow in the current market? And what does Omnicom grow on a multiyear basis that we can think about?

And then just a housekeeping one, Phil, for the double-digit EPS growth expected in 2026. Since there was a lot of noise in last year, what's the base that we can think that, that grows at for 2025 pro forma adjusted earnings per share?

Do you want to start?

No, I don't. Why don't you.

Okay. So there was a lot there, Steve, but we haven't in the past, and we're not going to today predict what future growth is going to be. And we don't do a 5-year plan, never have. And given the pace of change in the marketplace, especially in the last few years, we don't think we can predict with confidence what that growth rate ultimately is going to be, especially since there's an awful lot of it that's out of our hands. So that's why we didn't give you a long-term growth rate per se.

Certainly, we do expect the media business and the broader media business, the one we discussed today, that includes data and CRM and commerce are going to grow faster than the Omnicom average rate. Our average rate for the last 3 years was probably a 4% growth rate. And if you look at those businesses overall, we expect them to grow at a rate higher than that into the future. So I think that gives you a sense for what our expectations are. The rest of the business is going to grow as well when you look at the assets that are represented by Healthcare, NPR and creative and experiential.

But I think we're comfortable with the guidance we gave for 2026. We're using a base from what we presented in our investor deck at the end of 2025, which takes the last 12 months of Omnicom and IPG when we reported independently through September 30 of '25 as the base for which both the revenue growth and the fully diluted EPS growth is coming from or what we're comparing it to. So I think that base itself is probably pretty close to what analyst estimates were for 2026, if you took Omnicom and IPG and added them together from everybody's models. So we think it's fairly representative of the new company once you take out the dispositions that we talked about.

So those numbers are in the back of the first quarter of the year-end investor presentation. And that's what our internal forecasts are comparing to at this point. So I'm not sure if I missed anything or a couple of things in the overall set of questions you had, but feel free to follow up.

Over here with Thomas.

Thomas Yeh at Morgan Stanley. You gave us some color, I think, on just the incremental desire to reinvest some of the cost synergies that you're extracting this year. Can you maybe just expand a little bit on that in terms of what you're looking into and what avenues you're really focused on in the near term to put money back into the business for?

And then, John, you talked at the outset about retaining the best people in both organizations. Are you confident that just in terms of any of the disruption from the restructuring that were passed that in terms of any concerns that clients might have regarding just, I think, a lot of the change that's happening at the organization?

Sure. Well, I'm comfortable that we're able to deal with any disruptions, which might come up as a result of the deal going through. We've been together for 90 days. And in fact, we will go through for our first quarter formal closing at the end of this month. In the middle, there's something like a little war that's been declared. So like every other year in my past 30 years, there will be disruptions and changes that pop up from time to time, and we've always confidently been able to work our way through it. I think the further you get away from the closing, which was right before Thanksgiving, people now own their businesses, the leaders to run those businesses have been selected.

They haven't all had the opportunity to work together yet, but we've got Jacki and George in key positions to grow our existing accounts and businesses and to aggressively go out and create new opportunities with the team and with the platform and all the investments we made. So, yes, different things will come up, but I think all the original speculation that -- because of the regulatory period being the length it was, that we were going to lose significant talent and as a result, lose business. Neither of those 2 things happened. Nothing out of the ordinary really happened during the 9 months that it took us to get the final approval.

With respect to the investments, I think to the first part of the question, certainly, it's no different than what Omnicom has dealt with and how we've approached it over the years. We're always focused on making sure we continue to invest in the future growth of the business. I think a lot of what we're investing in is exactly what you saw today, the businesses, the people and everything that goes with that. So the Omni platform, generative AI and how it fits in and around the Omni platform and beyond, certainly, the data component of the business and how we integrate that further into what you saw today, both the platform itself and all the rest of the connected capabilities accessing that data and the platform.

The faster growth areas of the business are going to get the most attention and the most investment, but we're not going to overlook the rest of the portfolio, which has operated quite well over the years, and we expect good things from it into the future. So I think that feeds into the people equation as well, because we've got some great talent that, I think the purpose of this meeting, one of the purposes was to give you access to the people who are really driving the business and behind the scenes. We couldn't bring everybody with us today. But certainly, we're confident in the talent that we have, and we expect great things in the future.

But as far as investments go, the primary focus areas are going to be the ones you saw today. And as John had mentioned in his opening remarks, we're certainly going to be looking for some tuck-in acquisitions, et cetera, as we always have. But we certainly have had plenty to do and we'll still have plenty to do in the coming months before we fully get back into acquisition mode.

The front -- sorry, I saw Jason first.

Jason Bazinet at Citi. So for better or worse, organic growth is a key street metric that people use. And I think it's not just your company, not even your sector, broad brush stroke, the Street has just decided to shoot first and assume that AI is this big negative and compress multiples across a number of companies. My question is very simple. Of all the clients that you speak with, how many have come to you and said, I spent $1 with Omnicom last year and got so much value. I want to spend $1 this year or more, but I really want a better outcome. And how many clients have come to you and said, I spent $1 with Omnicom last year, use all these AI tools, and I want it to be $0.85 this year or some hypothetical number.

The reality of what you've just asked is AI is not at the moment, creating the kind of environment that you would -- that you could say, gee, buy these 4 tools that these other people are selling them and as a result, you can cut your marketing budget by x. Having said that, we're always in constant conversations. In most instances, it's very productive in terms of how do we improve the yield that we get for the marketing dollars that we're spending. And we go through that process, looking inside our own house to find out where there are efficiencies. And most clients, not all clients, it depends on their business at the moment.

If we can save and prove to them that we can save money by investing dollars, we'll be doing just that. They'll be taking those savings and putting them back into what is increasingly every day, a complex environment. They're advertisers are in and then there are advertisers, too. You can take a local small let's say, pizza chain of 3 companies. That's not our client. We'd never be interested in going after that client, but Facebook would or Meta would or whatever. So some of the tools that are available, if you're one of those type of -- your advertising in that environment might be just easier to give you a credit card to Facebook and see what result you get back.

But that's not ever been our issue because that has never been our client. And there's still plenty of market share out there for us to win. So now as the marketplace improves, and it's going to improve at a pace, I think, faster than we've ever seen historically looking at things. I think the capabilities, especially in an agentic world are going to offer plenty of opportunities to be creative and to take cost out of a budget, but most clients are going to reinvest whatever those savings are.

Given the changes in technology and a lot of what you saw today, Daryl talked about complexity. The reality is the marketing investment that our clients are making using these tools and using all these things that are available today, and that our agencies can deliver, the more measurable the results that we can deliver, the more measurable the results of our services and our products, the more confident clients are going to be reinvesting those dollars and investing more in some cases, every client is different. But the more measurable investment in their spend with us, the more comfortable they're going to be investing more and more with us. Some of that may change in terms of the types of things they dial up and the types of things they dial back. But broadly speaking, the more measurable investment, the more tangible return, the more they're going to invest and they're going to invest with Omnicom.

Okay. Mic back up in front.

Is there any way to kill half of these lights.

The klieg lights.

I mean, great, if I could see your face but -- I don't know.

Julien there in the front.

See it's not Julien.

It's the lights.

It's actually Adrien, Bank of America. Adrien de Saint Hilaire. You talked a lot about integration today. What are the incentives you're putting in place to foster greater collaboration between the various capabilities? Like how are the P&Ls structured within Omnicom? Is it country P&Ls, client P&Ls or still agency P&Ls? And then since media is going to be an even bigger part of your business, I imagine principal buying will be also a bigger part of the business. So Phil, can you help us think about the growth of the media pass-through cost for '26 or going forward, 15%, 20%? I don't know if you have any numbers in mind?

I'll start with both, but -- and anybody can chime in. But certainly, in terms of incentives, it's something that we're currently considering. It's an important part of bringing the 2 companies together. The reality is it's been 90 days or so since we've been together. And the detailed program of how incentives are going to work is not finalized. But it's certainly at the top of our agenda at this point as we've gotten through the integration, the year-end close and now we start planning for 2026. So I don't have any specifics for you, but there'll be more, I think, on that in terms of how we're organized and how we're going to drive that as we go throughout the early part of the year here and as we speak to you in a month or 1.5 months when we release earnings coming up.

As far as principal media, I think it's part -- is one part of what our clients spend when they're looking at what they're looking for from our media portfolio and the rest of the services that they buy from us. I think somebody else can give you more details on how that really works. But it's a part of the business that it's table stakes. All of our competitors have a principal solution. It's a key part of the solution because it drives value for our clients. It's value our clients want, and it's value our clients have been asking for. And frankly, it's not new. It's been around for 10-plus years, and it's just a part of the mix. I think sometimes it gets a little bit oversized attention in the press. for whatever reason. But it's just a key part of the solution that we deliver to our clients, but it's only part of the solution. It's part of the media mix.

Yes, I don't have numbers for you, but I think it will continue to be a key part of the business going forward because that's what clients ultimately want as part of the solution.

I think the only thing I would add to that is it is an approach, a product. It's part of the services that we deliver to the client. And each and every client that avails itself for this has signed a document that clearly explains that your reminds the CMO or whoever the Head of Media is that they've elected to invest 5% of their budget through a principal product or not, and that might change from year-to-year. And we've been doing that. Daryl had led media from '98 to a few years back. And we've always very, very faithfully made sure that the client is triply aware of the fact that they've elected to use some of this product.

Yes. Just a few other comments on that. It is, as Phil said, a very important part of the value equation for clients when they come in as a media client. And certainly, as we talk today about integration and client focus on marketing ROI and more on outputs and outcomes than perhaps in the past, it becomes an important part of the portfolio of services and offerings we provide to deliver on that end goal that they have for us when we build those kinds of contracts with them.

Now it will be Julien's turn.

Another [ Frenglish ]. it's Julien Roch with Barclays. On the new breakdown of revenue, 55% media, 18% advertising and 27% the rest. Could you tell us what you put in the 55% of media on a qualitative basis? So there's obviously pure media, but I think you probably put Commerce and Flywheel, is production in there? So could you give us the building block to get to that 55%? And then if you want to give us the percentage even better?

And then on the '27, as you are quite likely to actually report them separately, if we could get the breakdown between CRM, PR and Healthcare. That's the second question. And then the last one, 75% to 80% of synergies dropping to the bottom line in 2026. Phil, you said it was too early to tell us about '27 and '28 because the world is changing at a rapid pace. But as you will want to reinvest, does it make sense that it will be lower than the 75% to 80%?

So there's a lot there, and you didn't disappoint in terms of a lot of the details for sure. So thank you for that. So with respect to the 55%, the parts of the business that are in there were the ones on the slide, probably wasn't up there for too long, but there'll be more on that certainly in the first quarter. But it's essentially the media business and what we call OMG predominantly, Omnicom Media. In addition to that, it has the data business, the commerce business, our transformation consulting business, and there is a -- I'd say, a relatively small portion of our production business, Omnicom Production is in that component of the business as well because it's integrated in the platform.

So all of the things that you heard about today certainly were a focus item. Many of those are included in that media plus category, if you will. We haven't given it a new name, but maybe we will by the time we get to the end of the first quarter, and we'll get back to you on that. With respect to '27 and '28, and then you can remind me about the question you had in the middle. With respect to '27 and '28, I think it really is too early to tell. There's a long way between now and 2027. Certainly, we've got details and detailed plans of what represents our 2026 expected synergies. We also have details that relate to '27 and '28, not as much detail on '27 and '28 because it is quite a ways away.

But there's just too many other things that could impact those numbers. We are confident that when we get to '27 and we get to '28, we will get the additional costs out because there are detailed plans. Some of those, for example, relate to real estate benefits continuing to accrue in the out years, et cetera. Those are more known, but there's an awful lot of other things that we are going to have to see what comes when we get to '27. And at the appropriate time, we'll give you more detail as it relates to the out years.

And the missing question was the breakdown of the 27% between CRM, PR and Healthcare.

Yes. So I think the difference between us and some others is we have provided that information in the past. And I think you'd expect the numbers that you're going to see or that you would estimate when it comes to PR and Healthcare and Experiential, et cetera, the percentage of the business hasn't changed dramatically when you combine Omnicom and IPG. Our percentage of revenue that's health care business or what we refer to as Omnicom Health now probably came up about 1% or so, maybe 1.5% in terms of the overall Omnicom mix because IPG's percentage was probably a little more weighted than ours in health care.

PR is pretty consistent. We both had significant PR franchises. We're very happy about how they've come together. There's still a lot of work to be done in that area and a lot of growth opportunity in the future in that area. But the percentage of revenue is probably very similar. And even with the disposition of Jack Morton, which was in the experiential numbers from IPG, our experiential percentage of the total Omnicom is probably in and around a similar percentage as we've reported in the past. So I think Health and PR are probably in the neighborhood of 9% to 11% I don't recall the exact percentages, but...

I think it was 10.2%.

There you go.

I'm an idiot when it comes to numbers. But Phil is right. If you just -- I think one is 10.2% and the other is probably 10.6% and [ 10.7% ] and the balance is Experiential and probably Branding. So to Phil's point, historically, Omnicom standing by itself, those 2 businesses would have been a bit approximately the same percentage as they are for the new combined company.

We appreciate you didn't ask about the quarters and the percentages by quarter but...

But I can let you know.

Tim, over here. See the trick is to raise your hand right when you're finishing speaking, and I'll see you right away.

You're calling whoever raised their hand first, so I got my hand up first at that time. It's Tim Nollen from SSR. I've got a couple of bigger picture questions, if I could. One of your presentations, you mentioned supply path optimization. And so my question is, how do you see now that you have Acxiom and Flywheel data and the whole Omni platform, you're doing principal buying, which you have for some time. My question, I guess, is how do you see the ad transaction, the media supply path evolving over time now that you've got much more ability to handle a lot of these processes yourself? That's the first question. Maybe I'll ask the second question after that.

I bet you want to take a shot at that, Daryl?

Yes, sure. I think that when we talk about the connectivity of the data from flywheel and for Acxiom, particularly connected into media, but beyond media into advertising as well. What we're talking about is indeed a full view, a better full view of the supply system that connects directly with individual client needs. And that gives us a much stronger view of what we need to go to market with in terms of both extracting data from platforms, accessing inventory pools from platforms and getting specific content. So clearly, we're going to have a better -- clearer inventory graph with that kind of data built into our overall investment and commercial strategy from a media standpoint. I think I would leave my comments at that in terms of...

I can add something maybe. So as we look at our data and identity allowing us to get that kind of reach and understanding of the ecosystem and getting -- shortening that supply chain path. The other thing that we're doing is actually exploring more agentic media buying. So we're spearheading things like AdCP, which is the protocol around agentic media buying. We're also looking at things like AdCom as another protocol. The ecosystem is obviously evolving quite significantly as -- in regards to agentic media ecosystems, shortening that supply path even further. So we look to get ahead of that curve right now, and we've done some experimentation already with actual media buys across some of those publishers with direct connections via agents. So that's another way we're doing.

So can you go more directly to the publishers now more so than over the last 10, 15 years, whatever, in the way that you used to just your media buyers in the pre-digital age will go straight to the newspapers and straight to the TV networks?

I think in the more traditional sense, yes, we can, given certainly the scale and the data that we have to underpin our media activations. But with the future of media buying and moving more towards agentic, it's actually going to be a mixed ecosystem from my perspective, where we're going sometimes direct to the media suppliers, sometimes we're going through other providers that are aggregating media inventory. So it will depend and it will -- we will take the shortest path for our clients to optimize their working media dollars.

During the media presentation, I think what you heard, which is key to your question, Tim, is given the line of sight we now have and the place we play in the ecosystem, what that allows us to do is whether it's from an influence point of view or as Daryl was saying, it's all in the service of outcomes and value for clients. So as a partner, we're now much more front foot in terms of allowing them to unlock all of the value regardless of where those flows are, whether you're buying it agentically, whether you're coming at it with, as John was saying, a principal solution. I just think that it was one of the -- if you think about all of the data sets that are coming together and then the market presence that we have and how that allows us to shape the landscape, that's one of the real powerful positions to be sitting in.

My second question is in another one of your presentations, you were talking about kind of a shift in pricing models toward more output-based pricing. And given how much the industry has been changing and how much AI brings more change to the business, I just wonder what output-based pricing might look like for Omnicom?

I think it's still early days. And at the moment, it depends on the client as well. There are certain clients that are interested in and are experimenting and/or pushing real change in those areas, and we're working with them. And that's happening more and more every day. And frankly, when you go back to the measurability point from earlier, the more measurable the spend is, the results of the spend, the more comfortable clients are going to be investing and investing more. But there are still clients certainly that are focused on -- they've got big procurement organizations. They're not ready to leave the current model and move on to a totally different model. They're going to experiment more before they're willing to go that extra yard and change the compensation model.

And you need to be flexible enough to do both. And this transition is going to happen over some time. And certainly, many of us on the stage have been through this while we've been here at Omnicom or IPG in Philippe's case, and we've seen these changes happen in the past. And we're going to change dynamically with it. I think there isn't going to be a start date and a stop date and client contracts are going to change all at once. I think it's going to change over time, and we're happy to work in the new model. And for the clients that don't want to transition yet, we're happy to continue with things the way they are.

If I could just add to that, I totally agree with Phil. I mean during my career, I've seen it going from commissions, which we love. So you'd rather spend money for us than make money, then it went to fee-for-service. We still have a few commission clients, believe it or not. But we are -- it is very early days. We'd be very comfortable if we can come to an agreed target for some kind of a deliverable, however you want to define success. And that requires some thought, some knowledge, both on the client side and on our side as to what are the goals and objectives we're trying to solve for. And then we're certainly prepared to put skin in the game. And there's always a state of the environment where there's some kind of small test going on in one place or another. So I think it is going to take.

I would just add, I think there's intermediate output measures that in areas, as Phil was saying, are more measurable and trackable have been developing for some time in certain parts of the business. And in those areas, those businesses have actually performed very well with those kinds of arrangements with clients, again, in the more measurable parts of the business like media.

David, over here.

David Karnovsky, JPMorgan. So you've been out in the market with the combined and new offering for a few months. It would just be great to kind of hear what the reaction and RFPs have been read through to new business. And then you highlighted an integrated model. I'm kind of curious what the buy-in from clients has been on that. Do you expect this to become more the norm and a shift away from what maybe you saw in the past where clients would separate media, creative, even within creative, separate that amongst brands?

Jacki, do you want to get that? Please give her.

Bring the mic over.

The way I would think about that is I think that clients want the best solution no matter where that exists. And we're fortunate in the quality of our capability across all the service lines that we've talked about. So I think our job is now knitting that together, so there's no value lost as we begin to integrate that capability. But most clients want the best capability, and we're fortunate because of the coming together of our companies allows us to have that. Does that answer your question?

If I can add to that, having spent time with a number of clients, I can say that in these early weeks and months, there's a high level of interest in engaging in a conversation of connectivity. And further consolidation of services. They're exploratory on many clients at this point that there's high interest, frankly, as a result of the actions that we've taken in the business. And in terms of how clients are responding, as I said in my remarks earlier, we have seen tremendous progress in terms of extensions and more recently, new business wins. Some of those were publicized over the past few days. You will have seen them. So the story, the level of interest in the integrated capabilities that we talked about, particularly in data and identity, media and into content, high level of interest and engagement.

Given the complexity of what clients are dealing with and how fast the market is moving, you heard from any number of people who are up here and Daryl at the outset, helping them to simplify that is very valuable. To Jacki's point, if you don't have it altogether, there's clearly the risk that what you have is you leak opportunity or you leak value. And then the fact that all of it is connected back to this extremely powerful and I would say, unique data capability and spine that allows you to get addressable and to get, to John's point, accountable, there's a high degree of interest.

Do you have a follow-up, David?

There is one other aspect to it, which you have to have the quality service in order to play any part of this. And we're making very sure that each one of the parts of this offering that wind up being a connected response are handled by our very best people from our very best corners of the earth. The other situation that's developing is the supply of competitors that we have that could have from a quality point of view, play in that corner of the field on a sustained basis is shrunk quite a bit by the combination of both Interpublic and Omnicom. And that will start to demonstrate itself further, I think, as we get further along.

Back in the corner.

Jason Samwick from Woodline Partners. In your presentation, you talked about Omnicom's historic ability to expand margins. Obviously, now you're going to get the benefit of synergies as you combine these 2 businesses. But over time, how should we think about the continued margin opportunity as more revenue shifts into these high-growth businesses you talked about today?

I think you're not going to see anything different than we're always trying to find, and we've said this for years. We're always trying to find the right balance between investing in the business and for future growth and sustainable growth and delivering more shareholder value. We don't focus. We've also said this for many years. We focus on growing EBIT dollars, not on a percentage. You can't see touch feel a percentage. We're not obsessed with the percentage. We're more focused on growing the EBIT dollars and the EBITDA dollars. And we're going to continue to focus on that.

We're going to continue to invest in the business and the platform and everything else, things that you heard today. And in the future, there'll be new and different things. Certainly, clients' needs will change, the marketplace will change, and we're going to change with it. So I don't think we can predict on into the future that there's a never-ending growth in an EBITDA margin percentage per se. But certainly, we're going to reinvest in the business, and we're going to continue to grow EBITDA dollars. I think that's what you should expect, and that's what we'll be striving to do.

Okay. Any other questions?

Anything else?

All right.

All right. Well, thank you for joining us. I hope you found it useful. You can certainly...

Yes, plenty of follow-up from everybody, I'm sure, but we really appreciate you taking the time. And hopefully, we didn't take too much of your day away. But thanks again for coming, and I look forward to talking to you more in the future.

Yes. So that's going to conclude the formal part of today's event. And if you've joined us on the webcast, you may now disconnect. Thank you.

Good afternoon, and welcome, everyone, to the Omnicom Fourth Quarter and Full Year 2025 Earnings Call. Today's conference is being recorded. [Operator Instructions]

At this time, I would like to turn the conference over to Greg Lundberg, Senior Vice President, Investor Relations. Please go ahead.

Thank you for joining our fourth quarter and full year 2025 earnings call. With me today are John Wren, Chairman and Chief Executive Officer; and Phil Angelastro, Executive Vice President and Chief Financial Officer. On our website, omc.com. You will find a press release and a presentation covering the information that we'll be reviewing today. An archived webcast will be available on today's call concludes.

Before we start, I would like to remind everyone to read the forward-looking statements and non-GAAP financial and other information that we have included at the end of our investor presentation. Certain of the statements made today may constitute forward-looking statements. These represent our present expectations and relevant factors that could cause actual results to differ materially are listed in our earnings materials and in our SEC filings, including our 2025 Form 10-K, which will be filed shortly.

During the course of today's call, we will also discuss certain non-GAAP measures. You can find a reconciliation of these to the nearest comparable GAAP measures in the presentation materials. We will begin the call with an overview of our business from John, then Phil will review our financial results. And after our prepared remarks, we will open the line for your questions.

I will now hand the call over to John.

Thank you, Greg, and good afternoon, everyone. Thank you for joining us today. It's been 11 weeks since we closed the acquisition of Interpublic, creating the world's leading marketing and sales company, and I'm extremely encouraged by the momentum we've seen in such a short period of time. Today, I'll start with the progress we have made to position the new Omnicom for sustained growth, and Phil will then cover our fourth quarter and full year 2025 results.

Throughout our year-long approval process, our integration teams created detailed road maps for how we would come together. That preparation allowed us to move more decisively and with strategic clarity on day 1. We announced our new Connected Capabilities organization and leadership team, bringing together the exceptional capabilities and talent to address our clients' growth priorities. We reinforced our enterprise-level client strategy through a newly formed Growth & Solutions team to drive new business and expanded our client success leaders group to grow our services to existing clients.

We formed a combined platform organization and launched the next generation of Omni integrating Acxiom's Real ID, Flywheels Commerce Cloud and Omni's proprietary data as well as strengthening our talent and industry leadership in data, identity and AI. And we began integrating our operations across real estate, IT, shared services and procurement, among others, which will result in significant operational improvements and cost efficiencies.

Following the acquisitions closed, we began simplifying and realigning our portfolio to position Omnicom for stronger sustainable growth and profitability. Our core focus is to deliver integrated services, connecting media creative content, commerce, consulting, data and technology. These connected capabilities underpinned by Omni bring together high-growth strategic services that drive business outcomes for our clients. As part of our portfolio realignment, we've identified certain smaller markets as well as operations that are not strategic to our business that we plan to sell or exit.

We will move from a majority to a minority-owned position in these smaller markets, which represent approximately $700 million in annual revenue. These markets remain important to many of our clients and through continuous ownership in these agencies, we will provide the same level of service we have in the past. We identified nonstrategic or underperforming operations with approximately $2.5 billion in annual revenue that we plan to sell or exit. We've already sold or exited some of these businesses, representing annual revenue exceeding $800 million. We expect to execute the remaining sales and exits over the next 12 months.

Our retained portfolio of businesses generated revenue of $23.1 billion for the 12 months ended September 30, 2025. This portfolio positions Omnicom to drive stronger growth and deliver measurable business outcomes for our clients. Our integration planning enabled us to identify significantly greater synergies than we had initially communicated at the announcement of the IPG acquisition. We now expect our annual run rate synergies to double from our initial estimate of $750 million to $1.5 billion over the next 30 months. We expect to achieve $900 million of these savings in 2026.

The key areas for these synergies are as follows: $1 billion from reductions in labor costs through the elimination of duplicative corporate network and operational functions, streamlining our regional country and brand structure, and optimizing utilization by shifting to more unified resourcing model, including accelerating outsourcing and offshoring. Additionally, across every area of our business, we are evaluating and deploying automation and AI to improve how we service our clients and run our operations.

$240 million of synergies related to real estate consolidation and $260 million of synergies from G&A, IT, procurement and other operational savings. Finally, as part of our capital allocation strategy, our Board of Directors authorized a $5 billion share repurchase program. And today, we are launching $2.5 billion accelerated share repurchase program. Phil will provide more color on this ASR program during his remarks.

We will also continue our historical use of cash for dividends and acquisitions. In December, we announced an increase to our quarterly dividend to $0.80 per share. Our investments will focus on strategic tuck-in acquisitions and organic growth initiatives to maintain our leading positions in media, content, commerce, consulting, data and AI. As we do this, our capital structure is strong and our liquidity and balance sheet positions us to maintain our investment-grade credit rating.

Our efforts across these areas are enabling us to move forward, as a company with a clear mission to help our clients drive enterprise growth in this new era of marketing defined by data-led AI transformation. More than ever, we're seeing brands ask for an enterprise-level partner that can orchestrate their marketing investments across platforms and optimize performance across the entire consumer journey from engagement to sales.

The new Omnicom delivers 5 competitive advantage directly aligned to what our clients are asking for. We have the world's largest media ecosystem with unparalleled market leverage and intelligence. The deepest bench of award-winning creative talent that fuses human imagination with machine computing to deliver a superior personalized content at scale. Connected commerce that transforms every consumer touch point into a driver of measurable sales growth for our clients. An enterprise transformation consultancy that can reengineer clients' marketing operations for speed, intelligence and growth. And a gold standard data and identity solution that gives brands an unparalleled privacy-first understanding of their consumers.

Together, these advantages provide a competitive edge across every dimension of modern marketing and sales and will deliver strategic solutions that address our clients' most important growth priorities. As a nod to our strategic advantages just yesterday, Forrester named Omnicom, a leader in their Commerce Services Wave Evaluation. Omnicom showed a significant lead versus the competition proving that our advantage in connected commerce is differentiated by spanning demand and loyalty across physical stores, online marketplaces and direct-to-consumer experiences. The evaluation noted that clients praised Omnicom's ability to operate as a single agency, providing them with access to a large pool of highly qualified talent.

Our strategic advantages are translating into client wins, which is the ultimate validation of what we're building. We've secured new business and extended contracts with leading brands such as American Express, [ Bear ], BBVA, BNY, [ Clarence ], Mercedes and [ NatWest ]. These client wins as well as the significant progress we've made as a new organization in a few short weeks are a direct result of our people's unwavering focus, commitment and exceptional work during this pivotal period. I'm extremely grateful to them for their efforts.

Overall, I'm very pleased with how we've executed as the new Omnicom. This momentum positions us for strong growth in the years ahead. I look forward to sharing more about our organization, strategy and financial performance at our Investor Day on Thursday, March 12.

With that, I will turn it over to Phil to walk through our quarterly and year-end financial results. Phil?

Thanks, John. Before reviewing our financial results, please note that our fourth quarter and full year 2025 amounts include Interpublic results for only the month of December 2025. Since John already covered the first few slides, let's now look at an overview of our fourth quarter income statement on Slide 7.

The IPG acquisition closed just before Thanksgiving on November 26, 2025. Upon closing, and as John referred to, we immediately began the implementation of our strategic plan. We have separated the impact of several parts of the plan on this slide. We recorded severance and repositioning costs of $1.1 billion, related to severance, real estate impairment charges and contract exits. We recorded a loss on planned dispositions of $543 million related to businesses that we are in the process of disposing that were recorded at their net realizable value. And we recorded acquisition-related costs of $187 million related to transaction and integration costs.

Note that this does not include any potential gains on the sale of certain businesses in this group because we are not permitted to record gains on Omnicom assets until the transactions are completed. Additionally, any expected gains on the sale of IPG assets were included in the fair value adjustment recorded on the balance sheet at the closing date.

Excluding these amounts, adjusted operating income or EBIT in Q4 was $876 million, and adjusted EBITA was $929 million and a 16.8% margin, an increase of 10 basis points compared to last year. Net interest expense in the fourth quarter of 2025 increased primarily due to the IPG acquisition and the related exchange of IPG debt into Omnicom debt. Interest income increased slightly in the quarter.

The tax rate on our non-GAAP adjusted Q4 pretax income was 25.8%, flat with the prior year non-GAAP adjusted tax rate of 26%. Our effective income tax rate on the reported operating loss was 12.7% compared to a more typical reported tax rate of 26.4% in the prior year. The lower tax rate this quarter reflects the impacts of the lower tax benefit associated with the charges I just discussed relating to severance, repositioning, the planned dispositions and the IPG acquisition-related costs some of which are not deductible in certain jurisdictions. For planning purposes, we expect a similar tax rate of 26% for 2026.

Non-GAAP adjusted net income per diluted share of $2.59 was based on weighted average shares outstanding of $233.8 million, which were up from last year due to shares issued for the IPG acquisition. Note, the additional shares issued for the acquisition were outstanding for 1 month. We closed out the year with 313.1 million shares outstanding as of December 31, 2025.

Let's now move to revenue. Given the size of the acquisition of IPG and the scale of the implementation of our integration strategy across service lines, geographies and our operating platforms as well as our plans to reposition the business through disposing of certain parts of our portfolio. We have not included our usual organic revenue growth metrics in our slide deck. Had we calculated organic growth consistent with our prior practice. Excluding planned dispositions and assets held for sale, organic growth in Q4 2025 would have been approximately 4%.

Slides 8 and 9 show the breakdown of our revenue by discipline and by major markets. The primary driver of year-on-year growth resulted from the addition of IPG effective December 1. The foreign exchange changes increased our revenue in the quarter by approximately 2% and a little less than 1% for the year. We expect FX will continue to be positive in 2026, and assuming recent FX rates stay the same, will benefit our reported revenue for the year in excess of 2%.

Regarding revenue by discipline, the Media business performed very well in Q4 as did the Experiential business. On the negative side, during the year, our PR business, excluding the acquisition, experienced negative growth due to the challenging prior year comps from national elections in the U.S. Additionally, although small, our Branding & Execution and Support disciplines continue to be challenged in the current environment.

As John mentioned, we moved quickly to integrate the IPG businesses into our Connected Capability organization through geographic and brand alignments. Given the scale of these integrations as well as our strategy to reposition the portfolio, we do not plan to include our historical organic growth metric slide in our 2026 quarterly presentations.

With regards to the planned dispositions, approximately 40% of revenue to be disposed of relates to the Execution & Support and Experiential disciplines, and 25% relates to the Advertising group, which is included in the Media & Advertising discipline. The balance of plan is positioned is spread across the rest of our disciplines.

Regarding revenue by region, our businesses in the U.S. had strong growth, led by Media, as did our European markets and our businesses in the Middle East. Our businesses in France, the Netherlands and China struggled in Q4, and the Latin America market was strong.

Slide 10 is our revenue weighted by industry sector. Given these numbers only include 1 month of IPG and our portfolios are very similar. The comparisons to prior periods only show differences of a point or so in a few categories.

Now please turn to Slide 11 for our year-to-date free cash flow summary. The increase relative to last year was driven by the improvement in Omnicom's business over the course of the year, and the addition of IPG in December 2025. Our free cash flow definition excludes changes in operating capital. However, our use of operating capital improved throughout the year, and we were positive for the full year.

You'll note in the reconciliation on Slide 18, the change in operating capital was a positive of approximately $700 million, a significant improvement in the change in operating capital of over $900 million from 2024. Approximately $170 million of that improvement resulted from Omnicom's businesses, excluding IPG. The balance reflected the timing of the IPG closing and positive working capital growth from IPG's businesses in the month of December 2025.

For the year-ended 2025, our primary uses of free cash flow included $550 million of cash paid for dividends to common shareholders and another $83 million for dividends to noncontrolling interest shareholders. Dividend payments decreased due to an increase in share repurchases during the quarter. This excludes our recent 15% increase in the quarterly dividend to $0.80 per share, which was declared prior to the closing of the acquisition.

Capital expenditures were $150 million, roughly in line with last year. Total net acquisition and disposition payments were actually a source of cash of $914 million. This included $1.1 billion of net cash received from the IPG acquisition, which was partially offset by acquisition-related payments of approximately $186 million, including $117 million of payments for acquisitions of additional noncontrolling interests and payments of contingent purchase price obligations on acquisitions completed in prior periods.

Finally, our share repurchase activity for the year was $708 million, excluding proceeds from stock plans of $27 million. As of Q3 2025, we had repurchased 312 million shares. And during Q4, we repurchased 396 million. Slide 12 is a summary of our credit, liquidity and debt maturities. At the end of Q4 2025, the book value of our outstanding debt was $9.1 billion. Legacy Omnicom debt was flat with last year, but we assumed approximately $3 billion of IPG debt.

As you are aware, our $1.4 billion April 2026 notes are now classified as current on our balance sheet. And we will be addressing that maturity in the near term. As John mentioned, our Board approved a $5 billion share repurchase program, including a $2.5 billion accelerated share repurchase plan, which we initiated earlier today. We also plan to repurchase an additional 500 million to 1 billion of shares during the balance of 2026 as part of the share authorization program. As a result, we estimate the reduction to our shares outstanding compared to the balance of shares outstanding at December 31, 2025, of 313.1 million shares will decline by approximately 9% to 11% by the end of 2026, with weighted average shares outstanding for the year estimated to be reduced by approximately 7% to 8%.

Net interest expense is expected to increase by approximately $210 million in 2026 compared to 2025. The change is primarily driven by higher interest expense including approximately $125 million from the addition of IPG's long-term debt, including $14 million of noncash interest expense, resulting from the fair value adjustment to IPG's debt recorded as a result of the acquisition. We are also estimating an increase of approximately $50 million to $55 million, resulting from the refinancing of our $1.4 billion bond, which has a book effective interest rate of 4.07%, and which is due in mid-April. And incremental commercial paper borrowings related to our share buyback program, including the ASR.

Together, these items are estimated to increase interest expense by approximately $175 million to $180 million. In addition, interest income on net cash balances is expected to decrease by approximately $30 million, primarily due to lower forecasted short-term interest rates on invested cash. In total, these factors result in a projected increase in net interest expense of approximately $210 million in 2026, compared to Omnicom's prior year 2025 actual amount of $167 million. Please note that the total and net leverage ratios for 2025 reflect the full assumption of IPG's debt but only 1 month of IPG's EBITA. This results in distorted leverage ratios for the period when calculated directly from our reported financials.

However, at December 31, 2025, we were in compliance with the leverage ratio covenant in our credit facility, which makes pro forma adjustments for the acquisition. Comparable calculation of our total debt to pro forma adjusted EBITA and would result in a total leverage ratio of 2.4x for the full year ended December 31, 2025.

Lastly, our cash equivalents and short-term investments at the end of the year were $6.9 billion, up $2.5 billion from last year, largely due to the IPG acquisition and the strong performance managing working capital and cash we just discussed. While liquidity also includes an undrawn $3.5 billion revolving credit facility, which backstops our $3 billion U.S. commercial paper program.

Before I hand this call over to Q&A, I would like to take a moment to address the framework for how we plan to forecast for 2026. In the appendix on Slides 22 to 24, we present combined Omnicom and Interpublic income statement data. Based on each company's reported results for the last 12-month period ended September 30, 2025. These are the last 4 quarters in which both of us operated independently. We also use this combined methodology when we announced the transaction in December 2024.

For the LTM September 30, 2025 period, combined revenue was $26.3 billion and combined adjusted EBITA was $4.1 billion. These 2 numbers are very close to published analyst consensus estimates prior to the IPG closing for fiscal year 2025 on a combined basis, because a combined presentation doesn't reflect our planned dispositions, we've used the estimated disposition revenue amounts on Slide 3 to adjust the combined base, which we plan to use for forecasting 2026. The adjusted total EBITA margin for the businesses we plan to dispose of was approximately 10%.

Given the IPG acquisition recently closed, we have not yet completed our 2026 planning process. As a result, we will provide additional details on our expectations regarding revenue growth and EBITA growth for 2026 at our Investor Day on March 12.

In closing, we've accomplished a lot in the past year to position Omnicom for sustained future growth. As John said, we have great momentum across the company, including revenue initiatives and cost efficiency initiatives. And we are deploying these benefits to the share buyback program announced today. We understand that there is a lot of material to digest. We look forward to updating you on these topics and some new ones at our Investor Day on March 12.

I will now ask the operator to please open the lines up for questions and answers. Thank you.

[Operator Instructions] We'll take our first question from Steven Cahall at Wells Fargo.

So it sounds like you're going to talk more about organic growth at the Investor Day in a few weeks. But John, you just -- you've done a ton of work around the operations and bringing the Connected Capability together. I think a much bigger percentage of the business is now Media, and it sounds like it's performing well. So I was wondering if you could give us any sense of what your expectations are in organic growth for the retained business this year? Or if that's a little too specific, maybe you could at least give us a sense of how you would expect the media business to perform this year? And how big within the overall business, that one is.

And then, Phil, thanks for the color on the margins of the businesses that you are divesting. Is the right way to think about margins for this year that we back out those 10% margins that are being disposed of, and then we kind of layer on the synergy targets net of cost to achieve that you've given, and that's kind of the math that we need to do to think about margins for the next few years?

Thanks to your question, Steve. We will certainly give you more color on March 12 to the extent that we've done completing our review of the combined companies in the detailed plans. If I was guessing, which I probably shouldn't do, I would think Media going forward, we, I would say, in mid 50% of our revenue, which is a change, it increases that segment of our organization. But that needs to be finalized, which we were doing in the coming weeks.

Advertising will be, again, same type of caution, but less than -- slightly less than 20% of our total revenue. But as I said, we're working through those areas as we speak. We did get some very early profit plans, but we haven't had the time to go through and interrogate them the way we generally can before we have this call. So that's what we'll be doing in the coming weeks as we prepare for that.

Just to clarify, Steve, that the Media reference, I think, includes what we would consider media-related or connected to media. So that percentage probably includes precision as well as commerce, which is in our Precision Marketing category. So it's the connected media component of the business.

With respect to the second question on margins were '26. Certainly, as I said in my prepared remarks, we'll have some more detail and color on our expectations for '26 at the Investor Day, but I think your assumption is certainly a good one to start with, and then we'll give an update at the meeting in March.

We'll go next to David Karnovsky at JPMorgan.

John, I know it's early in the integration, but can you speak a bit more to what the reception has been so far to the combined company offering both from existing clients and recent RFPs. And then for Phil, you mentioned a 4% organic figure for the fourth quarter. Can you just clarify what this specifically refers to? And for the assets, identify for sale exit or moving to minority. Is this all going to assets held for sale immediately? Or does it get spaced out? And then can you say anything about what the kind of organic growth for some of these agents or what these agencies were in aggregate for what's moving?

I'd say in all the major markets that we operate in, there's been a lot of enthusiasm on the part of the groups that we've combined. And we -- just the attitude and the optimism that is shared all the way down through to our employee base about what position Omnicom now is in what capabilities we have when we join these 2 groups together and the resources that we'll have to pivot and change where necessary and making the correct investments to keep us in a leadership position. So across the board, it's far better than I fully expected because always anticipate that there'll be some negativity, but we haven't seen any of that, any particular place in the group.

I'll leave the second question to Phil.

Sure. So I'll start with the businesses that we've identified as disposals and assets held for sale. So as you referred to a portion of that, and as was referred to in the slide and then John's prepared remarks, a portion that relates to us intending to move from a majority position to a minority position in certain smaller markets around the world. Those businesses are solid businesses. They service some of our important clients in certain of those markets. But we're really taking that action more for simplicity of the organization and managing the organization than underperformance or the businesses are not strategic to where we're headed in the future.

We just don't need to be in all markets with subsidiaries that come with a lot of compliance requirements and other things. So the organization as a result, will become much more efficient, and we'll still be able to provide the quality service that we need to for our important global clients that might have operations in those markets where we go from a majority to minority.

The rest of the businesses that we've targeted for disposals and/or sales essentially are made up of either nonstrategic businesses or underperforming businesses. And as John had referred to, we've completed about -- we've completed dispositions with about $800 million of revenue to date. And certainly, we're committed to completing those transactions during the next 12 months. And we've made some good headway recently an experiential business within the IPG portfolio, Jack Morton, that sale closed this week. So we've got a good head start on moving forward with the plans as far as assets held for sale go. And we'll give a little more color and a little more update at the Investor Day.

As far as organic goes, what we did and what I referred to in my prepared remarks was we did the calculation consistent with how we've always done it with one exception, we excluded the organic growth related to those companies that we intend to dispose of and sell. And as a result of doing that, the calculation yielded a growth rate in the quarter of 4%. I'd say, certainly because those businesses are either a bulk of the businesses are either nonstrategic or underperforming, the organic growth rate related to those businesses is likely lower than what we achieved on the businesses that we intend to invest in going forward for the quarter. But the businesses that are -- where we see the most opportunity, the growth opportunity and the investment opportunity that's what yielded the 4%.

We'll move next to Thomas Yeh at Morgan Stanley.

Just that was very helpful on the 4% organic growth explanation. Just to put a finer point on that. That also excludes the incoming assets in terms of IPG or is it pro forma for both of them. And if you could just add some color on where you're seeing the areas contributing to that acceleration in growth beyond the upward bias that is being seen from the dispositions, that would be very helpful.

If you could just repeat the second part of that, Thomas, that would be helpful.

Yes. Just in terms of the sequential acceleration beyond what you mentioned as the benefit associated with stripping out the planned dispositions, maybe talking about just particularly areas of strength in terms of media and advertising, like maybe talking about specific segments contribution.

Do you want to take that one?

Well, 1 month that we owned IPG was included in the calculation. We weren't committed as we didn't know in September and October. Otherwise, we'd have 12 months of IPG numbers. So it was 12 months of Omnicom and 1 month of IPG. So that's in what became the calculation. The $2.5 billion in companies that we had that have annual revenue we're a combination of both Omnicom companies. Well, they were primarily, believe it or not, in terms of the revenue side, Omnicom companies. And so the calculation basically excluded the pros and the cons, the pluses and the minuses from that group of companies. And there it turned out there are many things which would have contributed to a higher organic growth calculation and a few that would have taken in the other direction. But it was nothing material in the aggregate. I don't know if you want to add anything, Phil.

Yes. No, I think that's accurate. In terms of the other areas where we're focused and where we see the business headed certainly, it's -- yes, in the more strategic areas of media, precision marketing, commerce data and the holistic platform organization. We think there's an awful lot of opportunities for growth in those areas and certainly incorporating our content solution and creative solution into that is a critical part of that solution. So those are the areas that we're certainly most interested in investing and in addition to that, certainly bringing together the Healthcare businesses of both portfolios, we think is going to be a very powerful selling opportunity for us going forward and a growth opportunity for us going forward.

You shouldn't lose sight of the fact that we didn't do this merger. It was an acquisition that we treated as a merger looking at the short term. We were not looking to show them at all. We're looking at strengthening in those areas we think are going to be important to clients well into the future and going to contribute to our income and revenue growth. And so it's all full steam ahead, but nothing was done because we were worried about the calculation of this month or that month in any manner makes shape or form.

Jason, please go ahead.

Okay. Just had 1 quick -- can you hear me?

Yes, we can hear you.

Yes, we can hear you Jason.

Okay. Great. I just had 1 clarifying question on the margins on the disposed businesses. Is that on the $2.5 billion? Or is that on the $3.2 billion?

It's more or less on the $2.5 billion, I think...

Yes.

And the remaining assets going who are planning to go to a minority on we're still going to collect a very healthy dividend of being a minority owner of those companies.

I think, Jason, that the margin is the weighted margin from the entire group. So the [ 3.2 ]. I think in terms of the pieces, the larger group is probably a little lower than that average margin of 10% and the majority of minority group is probably higher than the average of 10%.

We'll go next to Nicolas Langlet at BNP Paribas.

Two questions for me, please. First on the Omni platform. So you invent the next generation of Omni platform earlier this year. Could you share first the key feedback you have received from clients far? Second, how the platform distinguish itself compared to peers and [indiscernible] solutions; and three, whatever the platform is not considered complete or if additional building blocks are still required?

And secondly, on the margin trajectory. So regarding the cost synergies benefits you expect? Do you plan to redeploy a portion of the $1.5 billion cost synergies into growth initiatives we should assume the majority will flow directly for the year.

I'll ask Paolo to answer the first question. And then we'll tell you how we're going to reinvest.

Sure, Nicolas. So with respect to the platform, so far, all of our clients are very excited about the capabilities that is currently available and the new capabilities that we'll be launching, which will incorporate the capabilities across various platforms, including our legacy Omni platform, the legacy IPG [ Interact ] platform; Flywheel Commerce Cloud, which has already been part of the legacy Omnicom ecosystem. And then, of course, the really exciting part, which is all of this being underpinned by Acxiom and the Axiom ID.

So the response from existing clients and potential new clients has been overwhelming, to be honest, and everyone is very excited to get their hands on the platform when we formally launch it at the end of Q1. But all of the existing capabilities that the combination of those platforms have today, have been driving outcomes for our clients on both sides of the IPG and Omnicom organizations.

So the second question regarding margin trajectory. I think certainly, there's going to -- we expect a substantial portion of the '26 benefit to flow through during the calendar year '26, and we'll provide some additional detail at the Investor Day. And when we look out to the total for the 3 years, the expectation of the $1.5 billion of synergies, we're confident that we'll achieve those synergies in terms of achieving the cost reductions associated with them over that period of time. But 3 years is a long time. I think that there's certainly a number of initiatives that we're going to continue to pursue both on the cost front and on the revenue synergy and revenue growth front, and we've been pursuing those and planning for those pre-deal and have accelerated that now that the deal is closed.

So it's hard to say exactly how much of that will be reinvested in the business, but certainly, a lot may change over that 3-year period in terms of what's happening in the market, what's happening with technology, what's happening in the industry what's happening with our clients, and what are they most focused on in the future. But certainly, we're going to continue to invest in our platforms and our businesses. And we do expect a substantial portion of the '26 benefit to flow through. And we do also expect to take the cost out in those out years of '27 and '28. And we'll talk a little bit more about it at the March 12 meeting.

We'll go next to Michael Nathanson at MoffettNathanson.

I guess I have two quick ones for you, Phil. What is the $3.3 billion of disposals? Did I get that right that half of the revenues are, I guess, honestly, half is legacy IPG. Is that the right way to think about it? To share that?

I think there's certainly a mix. It's both businesses in our portfolio and in IPG's portfolio. In terms of the size of the revenue, as I indicated, there's about 40% of the businesses relate to the execution and support category. That includes the 1 experiential business that was in IPG's portfolio that we've sold. The rest of that component is Omnicom businesses. And then I mentioned the advertising businesses that are in that group as well, about 25% of the number that's probably distributed across both Omnicom and IPG.

And the rest of the businesses, I think when you look at them, there's probably maybe it's an equal amount, IPG and an equal amount Omnicom. I think we weren't necessarily focused on whether they were Omnicom business or IPG businesses, we are focused on the strategy ultimately where we wanted to invest and what businesses were underperforming and needed to -- we needed to exit from the portfolio longer term. So I think that gives you a little bit of perspective in terms of the numbers and the split, but it certainly wasn't a focus of ours to determine we're going to exit businesses in the IPG portfolio that we inherited or we're going to focus on reshaping the Omnicom portfolio. It's a combined business.

And certainly, we were focused more on the businesses that we're keeping and the investments we were going to make and how we're going to provide for strategic growth going forward, that was first and foremost.

Okay. And my second one, just a housekeeping one. I appreciate Chart #4 in the deck, you gave us all the revenue and disposals. Could you try and help us just to give us a range of what the last 12 months would be if it ended 12/31/25. So $3.1 billion is where you ended September. But if you knowing what you know if you as a sense of what the range would and what the base would look like exiting '25, so we could help model '26?

Yes. That approximates what the base would be if we had full year numbers for both IPG and Omnicom. And as I indicated in my prepared remarks, that actually -- it's actually pretty close both in terms of revenue and EBITA when you look at the consensus analyst estimates for calendar year 2025. So even though there is no published set of numbers for Omnicom only for 2025 and IPG for only 2025. Those LTM numbers are very close to what analyst assets were and to what the numbers we believe would have been, except they just haven't been published that way. I think there'll be a pro forma done in accordance with the pro forma rules in the 10-K, but the pro forma rules are pretty specific in particular. And you need to show the -- or make an estimate of what the acquisition would have been or what the impact would have been on our numbers had the acquisition been completed as of January 1, '24.

But any and all of those ways, the numbers aren't very different than the combined numbers we've included in the back of this deck. And for our own internal planning purposes and forecasting purposes, that's the baseline that we believe is the most appropriate to use. And that's ultimately how we're going to be looking at the business.

And we'll take our next question from Tom Nolan at SSR.

I'm interested in the new corporate operating structure. If you could give a bit more color, please, around the decision to create the new divisions that you announced back at the close of the deal. So consolidating some of the creative agencies, keeping, I think, all the Media agencies separate production unit PR unit, et cetera. Just maybe a little discussion around why you organize things that way. And then the Connected Capability that you're talking about, maybe talk a bit please about what that encompasses. I get that it takes the Omni capabilities set to the Media plan and buying operations, but does that also go into all the other Omnicom divisions that you've now laid out?

Sure. The structure that we concluded on largely was reflective of Omnicom structure prior to the transaction. the media companies, and I don't -- maybe you need to clarify for me whether you're talking about the crafts? Or are you talking about the number of brands that we wound up with?

Yes. Let me just try and clarify one thing for you, Steve (sic) [ Tom ] based on the terminology. So the connected capability reference is essentially in the -- by the way, I know they called you, Tom, but sorry about that. I just didn't want to -- want to forget. But anyway, the Connected Capability reference is really what we used to refer to as our practice areas and networks. So the IPG businesses were brought in and integrated into our Omnicom existing structure, as John had said, the connected capability terminology is what was new. We introduced that in the press release upon the closing of the deal.

So certainly, the media business and businesses were integrated into Omnicom Media Group and Omnicom Media Group runs their operation as 1 global group with multiple brands. The brand still exists, but they run the operations as 1 combined coordinated integrated operations. And we brought the IPG businesses into those Connected Capabilities across each of our major disciplines. So Media Omnicom Advertising, Precision Marketing, PR, Healthcare, et cetera. I'm not sure if that clarifies the structure for you, but that is how we kind of look at it.

I don't know what we want to add to that, John.

That's largely correct. I mean just using Media as an example, where there were 6 brands before the deal, there remains 6 brands. The operations and investments that we make and the type of deals we can accomplish on behalf of our clients. Those have done as 1 group. And then culturally, as you go across the different groups or 6 brands, you'll find differences, which allow us to attract the best and brightest talent into the groups where they're best fit and be in the best position to service our clients.

So the other area where there's probably the largest amount of change was in the Media -- excuse me, in the Advertising business, where we went in with global network brands, and we decided that we would be best served by going forward with 30 brands. And those name changes and some other changes in terms of management, but anyone that was contributing rate prior to the deal and still contributing revenue is still working for us. They just met their business card say something different. I don't know if that helps clarify it or not.

That helps both the explanations you gave, both you gave is great.

And we'll move next to Craig Huber at Huber Research Partners.

I've got a few questions. I'll just do 1 at a time and make it easier I'm looking at your Slide 5 here, where you've talked about you going from $750 million to $1.5 billion of synergies over 30 months or so. The $1 billion number that are labor-related, can you touch on with AI out there, is that capability partly allowing you to take out more heads than you originally were planning? Maybe you can also touch on -- is any of this labor-related sub-billion that you're taking out? Is it people that are -- have any significance people are directly related to the revenues of your company? Or are they all back office stuff? Because in the past, you've said it wasn't going to be related to revenue-generating folks. That's my first question.

Yes. Go ahead.

So I think the bulk of the labor-related synergies really relates to a number of things. AI is not necessarily the primary driver of how we looked at this. There were certainly some duplication of roles when you bring together 2 public companies, first off, a number of corporate roles both at Omnicom and IPG. Unfortunately, we had to make some difficult decisions because you couldn't keep 2 of everything.

So there were certainly some head count reductions related to that. There's also some regional organizations and corporate organizations within the practice areas of Connected Capabilities that were also duplicate roles, which were certainly part of it going into the deal, we expected there would be those areas to focus on. But really, we didn't have a lot of data to do the due diligence on.

And as we plan for the transaction and then executed post close, senior management of both IPG and Omnicom, were involved in making the decision, as John has referred to several times, the goal was to select the best player for the role, not necessarily to have a bias towards only selecting Omnicom folks, and we think we've been successful in achieving that.

But there are a number of other areas where we expect the labor synergies come from, which are areas around nearshoring, offshoring, outsourcing the areas of facility management, shared services, technology, et cetera. There are a lot of opportunities certainly for efficiencies that we expect to achieve. We started on a number of these paths prior to the deal, but certainly, coming together with IPG, we're accelerating those efforts in all those areas. And yes, we've accomplished quite a bit to date, and we expect to continue to make progress in those areas over '26 and beyond.

And my second question on AI, John, in the past, you've talked about if your clients end up able to get services from you guys, but less time involved because you're using AI out there to save time and money. In the past, you thought that clients most likely take those savings and plow it back into marketing through your company. So the net-net, you would not be a loser at your company with AI out there? Is that still your position?

Yes. My position evolves every day as generative AI is evolving constantly. The initial -- and I'll ask Paolo to comment on this as well. What we're seeing today are efforts that we're testing with our clients, we're starting to utilize with certain other clients, that are creating tools for our people, which enhances their ability to do their job. That's one category of people.

There are other categories where we believe there are technologies or we're investing in them, which will allow us to eliminate certain positions that are done kind of manually today, but can be done in an automated fashion with generative AI. And as we build out agentic capabilities and are able to connect the processes with how we interface with clients agentic databases and everything, that will result in further savings. And those are all things we're exploring at the moment.

Paolo's living this day-to-day, so I'll ask him to add to my comments and what he's saying.

Sure. Craig. So look, I know the narrative is always about how do we do the same with less. But the reality is, is that what AI and generative is allowing us to do is to do more than we've ever been able to do. And more importantly, it's allowing us to do things that we haven't been able to do in the past. So just to give you some specifics around this, historically, creative teams would typically put 2 to 3 different concepts in front of our clients for a specific campaign. The reason is because it takes time, and it takes a lot of effort to actually bring those concepts to life.

Today, with the use of the tools that John is talking about with the agentic capabilities that we put in place, our teams can now test concepts can test 50 concepts. More importantly is that they can test them synthetically, so that we can understand what the impact and value of that work could be. We can predict that before we even spend a single dollar on Media. So we have a good sense and confidence level of what the outcome will be with the things that we're putting in front of consumers.

So I think the ability to do more and the ability to do more with a higher degree of confidence is really what's driving kind of the whole generative AI institution around us. It's not necessarily about how do we reduce the number of people around this. It's really about increasing the impact and output that we're driving for our clients.

The other thing there is that we're embracing this. Every employee, every group within the companies. We're not looking it as a threat to our jobs, but embracing it as how we're going to be able to create a better product.

But John, is it too early to know if you do things more efficiently on the benefit of the client here, those dollars savings here. Is your position still you think your clients will plow that money back into Marketing, et cetera, services through your companies, so you won't be a net loser that's what I'm trying to get to here.

Yes. No, I can understand that is a conclusion where you can see that is happening. There'll be other clients that we're able to negotiate with as to performance goals and the methodology in which our work as judge are being rewarded will change. And if our ideas generated lots of money, we'll be expecting to get paid for that as well. With all the hype and everything that's out there, and it will continue for a good long time. But you gave everybody in the world, the same tools, what differentiates 1 group from another group. It's that intellectual creative capability and the ability to source on a global basis, those most likely to be influenced to buy your product. Right? And what is going to be needed what's going to motivate them to buy.

We have all those tools and we have them at such a scale that it's going to be very difficult for many competitors to catch up at this point for a good long while. So just think about it. You gave everybody doing your job and everybody you listened to on the song -- call today, and what's going to differentiate one of you from the next one of you. And that's why we're embracing it is we know how good we are and we know how deep our capabilities and skills go. And that's why I think we'll be a winner in all of this.

And that concludes today's question-and-answer session and today's conference call. Thank you for your participation. You may now disconnect.

Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Omnicom Third Quarter 2025 Earnings Conference Call. [Operator Instructions]

It is now my pleasure to turn today's call over to Greg Lundberg, Investor Relations. Please go ahead.

Thank you for joining our third quarter earnings call. With me today are John Wren, Chairman and Chief Executive Officer; and Phil Angelastro, Executive Vice President and Chief Financial Officer. On our website, omc.com, you will find a press release and a presentation covering the information we'll review today. An archived webcast will be available on today's call concludes.

Before we start, I would like to remind everyone to read the forward-looking statements and non-GAAP financial and other information that we've included at the end of our investor presentation. Certain of the statements made today may constitute forward-looking statements. These represent our present expectations and relevant factors that could cause actual results to differ materially are listed in our earnings materials and in our SEC filings, including our 2024 Form 10-K.

During the course of today's call, we will also discuss certain non-GAAP measures. You can find a reconciliation of these to the nearest comparable GAAP measures in the presentation materials.

We will begin the call with an overview of our business from John then Phil will review our financial results, and after our prepared remarks, we'll open the line for your questions. I'll now hand the call over to John.

Thank you, Greg. Good afternoon, everyone, and thank you for joining us today. We're very pleased to share our third quarter results. Organic growth was 2.6% for the quarter. For the first 9 months, organic growth is 3%, which is in line with our annual guidance. Non-GAAP adjusted EBITDA was $551.6 million with an adjusted EBITDA margin of 16.1% for the quarter, up 10 basis points from last year.

Non-GAAP adjusted net income per share was $2.24, up 10.3% versus the comparable amount in 2024. Our cash flow continues to support our primary uses of cash, dividends, acquisitions and share repurchases, and our liquidity and balance sheet remain very strong.

I'd like to provide you an update on our proposed acquisition of Interpublic. During the quarter, we secured antitrust clearance from all outstanding jurisdictions except the European Union. We submitted our filing yesterday, October 20, and expect this to be the final step in securing EU approval. As a result, we currently expect to close on the acquisition in late November. Our dedicated integration teams at both Omnicom and IPG have been working tirelessly to ensure we're ready to hit the ground running on day 1. We've made significant progress developing detailed plans to deliver a seamless transition for our teams and clients.

Our integration team has also made progress as we prepare to launch OmniPlus our next-generation marketing operating system. This operating system unifies unparalleled data assets spanning campaign performance, consumer behaviors, demographic insights transaction intelligence and cultural and social indicators. These integrated data sources will be unified through Acxiom's real ID, the industry's most robust identity graph. The collective intelligence of OmniPlus will provide a unified intuitive experience for both clients and our internal teams. Our objective is clear: Empower our clients to accelerate brand growth, expand customer reach and deliver measurable business outcomes.

A key part of our operating system is our generative AI layer, which is an genic entry point to OmniPlus. In the last earnings call, we talked about our agentic framework and how we have been rolling it out across our entire organization. It is now the fastest-growing platform in our company's history, and our teams continue to create intelligent agents and orchestrate them to deliver faster and better outcomes for our clients. We look forward to sharing more details at its official launch at CES 2026.

The result of our integration planning is we remain highly confident in exceeding the synergies we expected when we first announced the acquisition. We maintain an extremely disciplined approach to minimizing disruption to our day-to-day operations, ensuring our client teams remain focused and continue to deliver outstanding results. The commitment is reflected in the new business we won, including American Express, Porsche, Inter snack, White Castle, OpenAI, just to name a few. Similarly, Interpublic saw significant wins with Amgen, Bayer Entropic and Paramount. The level of support we're seeing from both new and existing clients reflects the tremendous value they expect to gain from the proposed combination.

We are building strong momentum as we approach the closing of the acquisition of Interpublic. I remain extremely excited about the prospects for our growth, for our people and our clients. As we approach and close the transaction, we'll keep you informed of our plans, including our leadership team, and organization structure, the combined company's strategic priorities, including its expanded capabilities, services and products, our progress on achieving the targeted synergies and our updated financial plans and capital allocation strategy.

I will now turn the call over to Phil for a closer look at the financial results. Phil?

Thanks, John. Let's begin with our revenue growth on Slide 3. Organic revenue growth in the quarter was 2.6%. Additionally, the impact on revenue from foreign currency translation increased reported revenue by 1.4% as the U.S. dollar weakened relative to most currencies throughout the quarter. If rates stay where they are, we estimate the impact of foreign currency translation on revenue in Q4 to be similar to Q3.

The net impact of acquisitions and dispositions on reported revenue was not significant, which is also our expectation for Q4 and for the full year 2025, excluding the IPG transaction.

Let's now review our results in more detail, beginning with a summary of our income statement on Slide 4. We present our reported results on the left and we present non-GAAP adjusted numbers on the right. Adjusting for acquisition-related expenses and repositioning costs, our Q3 2025 non-GAAP adjusted EBITDA grew 4.6% to $651 million, with a margin of 16.1%, up 10 basis points from Q3 of 2024.

Our non-GAAP adjusted diluted EPS grew 10.3% to $2.24 per share. Regarding the 2 adjustments made to operating expenses, the first reflects acquisition-related expenses related to both regulatory approval work and an acceleration in our integration planning work. The second reflects repositioning costs primarily related to severance as we prepare to integrate the pending acquisition of IPG. There were no adjustments to operating expenses in Q3 of 2024. Slide 5 shows a reconciliation of these items in detail.

Operating expenses in the third quarter of 2025 include $38.6 million of repositioning costs and $60.8 million of acquisition-related costs. We continue to expect that our non-GAAP adjusted EBITDA margin for the full year 2025 will be 10 basis points higher than our full year 2024 results of 15.5%. Net interest expense in the third quarter of 2025 increased due to a decline in interest income, primarily from lower interest rates on our cash investment balances, partially offset by a year-over-year decline in gross interest expense due to the issuance of $600 million of our 5.3% notes to replace the $750 million of our 3.65% notes, which were retired in Q4 of 2024. We estimate that net interest expense will increase by approximately $7 million in Q4 compared to the same quarter last year, primarily due to lower interest income expected on cash investments.

Our reported income tax rate was 27.2% in Q3 2025 compared to 26.8% in the prior year. The increased rate is primarily due to the nondeductibility of certain acquisition-related costs in 2025. On an adjusted basis, our Q3 '25 rate was 26%. For full year 2025, we expect the rate on an adjusted basis to be between 26.5% and 27%. Average diluted shares outstanding were down 2% from Q3 2024 due to net repurchase activity.

Let's now turn to some key drivers of our performance, beginning on Slide 6 with organic revenue growth by discipline. Median advertising led our growth in the quarter with revenues up 9%. While creative continued to be impacted by lower levels of project work due to macroeconomic uncertainty, BD growth was strong across virtually all geographies. Precision Marketing growth was just under 1%. Solid growth in the U.S. was offset by declines in other markets, primarily in Europe.

Public relations declined 8%. Approximately $25 million or 80% of the decline results from no U.S. national election-related revenue in 2025 versus 2024, with the majority of the remaining reduction occurring in the U.K. We do expect similar declines in Q4 resulting from the difficult prior year comp to Q4 of '24, which included spend related to the U.S. national elections.

Health care was down $6.4 million or 2% organically. Both our U.S. and European agencies were down 2% organically as recent new business wins did not fully replace some spending declines in the quarter, on client products that are in the process of coming off patent protection. We continue to believe that our agencies in this discipline are well positioned to return to growth in the near future.

Branding and retail commerce was again down 17% as market conditions continued to impact new rebranding projects, new brand launches and in-store retail commerce. Experience declined 18% on a difficult comp against the Summer Olympics in 2024 as we expected. And lastly, execution on support grew 2%, driven by growth in our merchandising business, which was partially offset by a reduction in spend in fuel marketing.

Turning to organic revenue growth by geography on Slide 7. We saw mixed growth across our regions. Over half of our revenue is generated in the United States, which saw a 4.6% growth. U.K. growth was also solid at 3.7%, while Continental Europe, our second largest market, saw a decline of 3.1%. Although our non-euro markets delivered organic growth, it was offset by a decline in our events business related to the challenging comparison in Q3 of 2024, which, as we have said, included spend related to the Paris Olympics.

Slide 8 is our revenue weighted by industry sector. Relative to 2024, year-to-date, 2025 was fairly stable. The only meaningful change was an increase in the relative percentage of total revenue driven by the auto category, reflecting year-on-year new business wins. Other categories were relatively stable.

Moving on to expense detail on Slide 9. During the quarter, salary and related service costs, our largest expense, declined on a reported basis by 3.7% due to our continued efficiency initiatives, including automation initiatives and changes in our global employee mix. Third-party service costs grew in connection with growth in revenue, primarily in the media and advertising and execution and support disciplines. Third-party incidental costs, which are out-of-pocket costs build back to clients at our cost grew in connection with the growth in revenue. Occupancy and other costs decreased 1%, led by a decrease in general office and technology expenses. SG&A expenses increased primarily due to the $61 million of IPG acquisition-related costs in the quarter. Excluding these costs, reported SG&A expenses decreased to 2.5% of revenue.

Now please turn to Slide 10 for our year-to-date free cash flow summary. The decline relative to last year was driven primarily by the reduction in net income resulting from the impact of both the acquisition-related costs and the repositioning costs. Our free cash flow definition excludes changes in operating capital. For the 9 months ended September 30, 2025, our change in operating capital improved $171 million or 11% compared to the same prior year period. On a last 12-month basis, it improved by $267 million. For the 9 months ended September 30, our primary uses of free cash flow included $414 million of cash to pay for dividends to common shareholders and another $57 million for dividends to noncontrolling interest shareholders. Our capital expenditures were $111 million and remained higher than last year due to ongoing investments in our strategic technology platform initiatives. Total acquisition payments were $88 million, all of which represented earnout payments and the acquisition of additional noncontrolling interests.

Finally, our share repurchase activity was $312 million, excluding proceeds from stock plans of $18 million. This included share repurchases of $89 million in Q3. We currently continue to expect to spend close to $600 million on share repurchases for the full year.

Slide 11 is a summary of our credit, liquidity and debt maturities. At the end of Q3 2025, the book value of our outstanding debt was $6.3 billion, down from the same prior year period due primarily to the refinancing of our $750 million of 3.65% notes in Q4 of 2024, with the new issuance in Q3 of 2024 of $600 million, 5.3% notes due in 2034. Our $1.4 billion April 2026 notes are now classified as current on our balance sheet. We will address refinancing these notes in due course after the closing of IPG and the completion of the debt exchange.

Cash equivalents and short-term investments at the end of the quarter were $3.4 billion. We continue to maintain an undrawn $2.5 billion revolving credit facility, which backstops our $2 billion U.S. commercial paper program. Slide 14 presents our historical returns on 2 important performance metrics for the 12 months ended September 30, 2025.

Omnicom's return on invested capital was 17%, and return on equity was 31%, both of which reflect our strong performance and our strong balance sheet. These year-over-year calculations were done on a reported basis and the reduction is driven by the impact of the IPG acquisition-related costs and the repositioning costs incurred in the 12 months ended September 30, 2025.

It is approaching 1 year since our public announcement of the IPG acquisition. But as you know, we've been working on planning for the integration for some time. With closing expected by the end of next month, -- our teams have been accelerating the final planning for the integration so that we're prepared to move forward as one on day 1. We're excited to be nearing this important milestone, so we can emerge as the most powerful team platform and portfolio in the industry.

I'll now ask the operator to please open the lines up for questions and answers. Thank you.

Also joining the call today is Paolo Yuvienco with Omnicom's Chief Technology Officer. [Operator Instructions] Our first question comes from the line of Adam Berlin with UBS.

Two questions, please. The first question is if you do manage to complete the acquisition by the end of November, as you said, when do you think you'll be able to update us in the market on some of the things you talked about at the beginning of the call, so specifically when do you think we'll be able to see pro forma financials and get some guidance for how the pro forma business is going to perform? Do we have later full year results? Or will we have an opportunity to hear from you before then? That's the first question.

The second question is, I mean, I think most of the numbers were as expected, but there was a big deceleration in precision marketing. And you mentioned there were some problems in Europe. Can you just give us a bit more detail about what happened in precision marketing in the quarter and why it was so slow? And is that going to continue into Q4? What's required for that business to get back to growth again?

Sure. Thanks for the questions. On the first one, we're going to be able to articulate what our plans are shortly after we're together. But at the moment, our plans in the preliminary is -- will looking to disclose the future operations and what's in the portfolio, probably the week of CES, which is in the beginning of January. And in terms of the financial modeling and things that you'll do where we're confirming the amount of synergies that we expect to see as the P&L benefit in 2026 and then synergies thereafter. That will be sometime between then and at the worst shortly after we announced the year in earnings. We haven't come to a firm date as of yet. So I can follow up on that.

And your second question on precision marketing. There's a lot of puts and takes, as you said, most of them outside the United States. The one unit that we had particular decline year-over-year is in our Cordera business, which is our consulting business, and it was really mostly related to government work in some of the major city countries in Europe that we saw -- We're addressing ourselves to that. The rest of the business is very strong and continues to have a very good pipeline of new business coming through.

Your next question comes from the line of David Karnovsky with JPMorgan.

John, maybe just to start, I wanted to confirm the organic for the year. I think in your prepared remarks, you said 3% year-to-date growth in line with the outlook. So does that mean you're expecting around 3% for the year? Or should we consider the prior 2.5 to 4.5 is still the outlook?

I think we're only prepared this afternoon to talk about what our original guidance was and coming in within it. As you might imagine, there's a lot of given activity going on in the background as we get ready for the closing of the Interpublic transaction. So we're probably 1 week or 2 off in terms of being analytical and surgical with our operations as we would be if this was a normal calendar. But we're comfortable with our guidance. And both EBITDA, EBIT and revenue.

The other thing to keep in mind, David, we're in a position we always are in October as we look out into the fourth quarter, knowing that there's a meaningful amount of project work available in a typical year. And where we finished Q4 certainly is going to have a lot to do with how much of that our agencies are able to capture as we go through the next 2.5, 3 months of activity, trying to capture any every project our agencies can execute on. So not that much visibility on that project work, which tends to potentially get in the range of $200 million to $250 million of potential availability if we got it all. But how we close out the year is always -- that always plays a big part in it.

Yes. The other point, please, I didn't bring it up in my prepared remarks because I don't want to seem like I'm making reasons. If I compare our portfolio as it exists until we close the deal and looked to last year, which was an Olympic in the presidential election. And if I took out and compare like-for-like, without the impact of the presidential election or the Olympics, Organic growth in the quarter would be 4% or approximately 4%. So the fundamentals of the business are still very strong. That's the only reason. Even articulating is not -- is a reason for why it was 2.6%. But just to show you underlying growth of the company. And amazingly, despite all the predictions, which started after we announced this proposed transaction, we haven't really lost any significant people and we certainly haven't lost mine business, and we continue to win business. We'll be able to be even stronger when we're able to function together. So far, we've had to pitch everything kind of independently as if we're still tubed independent companies. But hopefully, that will change on the completion of the deal.

Maybe just to that Bulent, I mean I know you can't pitch together, but I have to assume the combination as a consideration in kind of the recent RFPs. So is there interest in clients? What's been sort of the kind of response to what is obviously the combined offering company?

Sure. I mean is that -- excuse me. Clients are very positive, the ones that we're engaged with, not just the ones that we're involved with a potential pitch for business, probably the only time we got to indicate was that the direction of a client who -- which is bare, which you want to see us pitch separately. And then at the very end, asked us a few questions or demanded. We answer a few questions, what will look like post the deal. So it's all been encouraging and very positive. And just from spending 8 months now getting to know the talent and the tools and everything is there, and now it complements what we have. I'm very excited about the possibility of growth.

Our next question comes from the line of Steven Cahall with Wells Fargo.

So media and advertising continued pretty strong growth in the quarter, I think up over 9% organic. So could you maybe talk about, first, how creative is performing within that? I think earlier it had been a bit of a drag and so just curious if it started to improve in the third quarter. And then as we get into a world where it feels like everything is going to be more enabled with AI or generative AI. Can you talk a little bit about what that means for the media and the creative side of the businesses? And then just on synergies, IPG has done a nice job of bringing down costs. I think you've also hinted it upside to synergies. So how are you thinking about the incremental synergies from here versus what you've talked about previously as we get so close to the merger?

At least 3 questions in there. I'll start to answer two and throw the other one to Paolo. In terms of the Creative business versus the media business, the core business I categorize as being stable and the growth is really coming out of the media side of the business without getting more take more analytics than that.

In terms of AI and Generative AI, more importantly, I'll throw it over to Paolo, which is quite a bit of real stuff is happening. Go ahead.

Sure. Steven, So with respect to Generative AI, it's really affected every facet of our business and because we've integrated it into every part of our workflow. So just to give you some specific examples in one of our most recent wins for a large automotive company, our teams used integrated agents, the agent framework that we talked about in not only this call but in the previous earnings call, throughout the entire pitch process, which includes consumer research, creative concepting, production and customer journey planning, ultimately enabling our teams to move not just with speed but to develop really a differentiated creative solution. And we have many examples like this within our sports marketing units. We're using agents that are grounded on proprietary data around experiential brand impacts of sporting events concerts and festivals, which is allowing them to really contextualize every concept that they explore for the work they do for clients.

We -- our commerce group is using it very effectively the agents and Generative AI really to these days to review historical price impact on key conversion metrics to anticipate future pricing elasticity. So there are many different ways that we're incorporating AI and Generative AI across the process. Another good one is actually around our health group, where they continue to kind of rewrite the way drug launches are being done and the processes within that using an AI-first lens using that generate in agents really at the start of the product development process.

So the entire ecosystem, frankly, is changing around the use of AI and Generative AI. We're seeing a lot of third parties starting to adopt a more agent-based approach to ad tech and Martech. And we've been working very closely with a lot of those vendors, the likes of Adobe, the DCT protocol that is being spearheaded by several media organizations. We are set up effectively to adopt those frameworks and to really drive the future of what advertising and marketing looks like.

-- Synergies?

Synergies, I'm not prepared to disclose them, but I will tell you that we have clearly identified synergies in excess of what I promised at the time we announced the deal. More to come. I'm sorry.

And your next question comes from the line of Cameron McVeigh with Morgan Stanley.

I actually just wanted to ask about the Walmart OpenAI partnership. Your view on it, the potential implications, especially in relation to Flywheels business around sponsored listings on Amazon then maybe implications on the retail media advertising industry more broadly.

Yes, sure. I'm happy to take that. Yes, I can certainly give you -- from a technical lens, I think it helps us Obviously, our role is to help our clients drive sales. And many of those -- the consumers are sitting on other platforms like OpenAI, we're helping to facilitate that. and working very closely with the likes of open AI and Walmart to understand how do we actually drive the connected tissue in order to get to the ultimate outcome that they're looking for. So ultimately, we see it as a good thing.

And your next question comes from Adrien de Saint Hilaire with Bank of America.

Can you provide a bit more color on the rise of the increase, I should say, of third-party costs in Q3, which was faster than in Q2? Is that due to a faster growth in media or maybe within media faster growth in intimal trading? And then John, I'm just curious at the last -- in the last call, you talked about the fact that there could be some relief on marketing budgets whenever the situation on tariffs becomes clearer. So 3 months on, I'm just wondering like what's the dates there?

Sure. I'll do the last one first, and then I'll refer to Phil on your formal question. In terms of marketing budgets, have certainly been part of the conversation throughout most of the year. I would say it's more to do with supply chain and tariffs in terms of how companies are approaching what they have to sell in the marketplace. And most of been rather ingenious in terms of working through and with the tariffs that are in place. Phil mentioned the stress, I guess, that various automotive companies are facing. That seems to be improving as we get through the balance of the year, but there was a huge pivot on the part of most of them where they were dependent upon getting to electric by 2030. Many of them have changed some of those plans. So they're still somewhat in flux. But that's about it. Other than that, it's been pretty much business as usual. The conversations are slightly different, but the outcomes are roughly the same types of budgets and spending. And I'm hopeful that we're going to see, as Phil mentioned, the project or the spending that gets done in the fourth quarter, expecting to -- I see some green shoots in things that we would yet to confirm but clients are talking positively. So -- that's it. And I'll throw the first question back to Phil.

Sure. So median execution and support certainly are the primary drivers of the increase in third-party service costs. Overall, as revenue grows, these types of variable costs typically grow with it. And we're happy to have them as long as it results in revenue growth and profit growth as well as you could see, while organic revenue growth was 2.6% overall, EBITDA grew 4.6% and adjusted EPS grew 10%. The media business continues to perform quite well, meeting the needs of our clients across all of our media service offerings. That certainly they are interested in proprietary media is one, but keep in mind, it's a relatively small proportion of our clients, media plan or our clients' media spend, and there's quite a bit of other media service offerings that drive media growth or our media business as well.

And your next question comes from the line of Michael Nathanson with MoffettNathanson.

John, one for you. I wonder when you take a look at the combined revenue growth into Public and Omnicom versus Publicis in aggregate, where do you think you can close the gap from that combination of -- to where they are today? So what business lines and what place do you see the most opportunity in combination to close that gap in revenues versus where you guys are today?

Sure. I mean, I think you'd have to know just from looking from the outside in, the 2 companies that are growing are both policies and us, and I expect that to continue as we go forward. I'm not really ready to disclose what I believe the combined company is going to look like. But if you sit back and with all the effort and things that we've been doing in planning this acquisition and the integration of the 2 companies, we're able to really focus in on those areas that have -- that are showing the most growth and lead us to a place where we're able to further differentiate ourselves. So that's a battle that I expect to continue kind of every working day from now on with each of us doing whatever we do, and there's certainly enough business for both of us to continue to grow in a very healthy way. And so I'm not concerned about closing the gap. I mean, as I alluded to earlier, trying to answer another question, if you looked at our portfolio, look at our base and their base from the third quarter of last year, if that's what you're focusing on, that is 90 days. Our third quarter last year was improves because of the Olympics and the elections, but they are -- they have been every 2 years in the case of the Olympics and every 4 years in the case of the presidential election. We go through do the analysis simply to make sure that the rest of our business is growing at a pace similar to what you would say is Publicis, right? We're in that range. we would have been 4% versus what they claim to be 5%. So in any 90-day period, you can't really call that a difference. But I think you can point to both of us for the last several years have been healthy performance. And I expect us to be able to even accelerate over what we've been able to do in the past because of the improvement and just the composition of the portfolio.

And our final question comes from the line of Craig Huber with Huber Research.

I have a similar question, John, if you could maybe just touch on as you look at the combination of IPG coming up here. Where do you think the 3 biggest opportunities are for revenue synergies? I mean, in the past, we've talked about media buying, for example, Flywheel Acxiom, but just walk me through with the 3 biggest opportunities for running things better here on a combined basis?

Certainly, well, our media business probably gets to be 50% to 60% bigger than what it is currently. And within that range of activity, there's a great deal of opportunity and we have some really very talented people when you put the talent from both groups together who are developing offerings and products which, on behalf of clients do it better, cheaper and faster. We're also using technology to aid in that effort. That's number one.

Our health care portfolio, even though it's had a little bit of a bumpy road, in the less months between, first of all, a lot of prize, which impacted us, which was on us. And then some of the confusion that came out of the change in the administration here in terms of its slight impact or its impact on aspects of PR. But going forward, we see unbelievably strong assets, which -- when you look at the industry, we are -- we punch way above our weight in terms of the people and the offerings and the areas in which we are going to be the leaders in the area of health care. And then I'm very encouraged about precision marketing, too. We hit a bump in the road with our consulting aspect of it, which we think we see daylight on, and we have action plans to act on -- so those 3 areas would be -- I see the most growth coming initially as well as the depth of the portfolio and other areas as well and the agility that will bring us in order to respond and change with client needs in general advertising and some other areas. But -- the 3 I'd focus on would be media, health and precision.

And my second question, if I could, can you just talk a little bit further about the tone of business from your various clients in the U.S. and Europe? Has those conversations changed much that versus, say, 3 months ago or generally, our clients feeling better about the environment out there or worse or about the same?

The conversation touches a lot of new topics, Generative AI, and it's how we're going to use it. And as I mentioned, the automotive industry is -- isn't declining, but they've reached some difficulties on the course of this year. But fundamentally, the proof is in the putting and the budgets haven't really been slashed or cut. And we're hoping to see that continue because of the -- as Phil mentioned, the fourth quarter level of projects, which clients have to actually release their funding. They have it. It's been approved for most of them in their plans. We're just waiting for confirmation of it in terms of how we bring it over the finish line between now and December 31.

So it's not -- I wouldn't say everybody is in a boric mood, but everybody has dealt with most of the challenges that have been thrown at them this year and people are seeing the sell through to the other side. And we work hand-in-hand with our clients. And when they're prospering, we prefer when they suffer, we suffer a little bit. But our product is the best, I think, that's out there and wanting to stand by that. I don't know if I fully answered your question, but...

No, that's helpful, John. My last question, different areas I want to ask you. Phil, you know this in particular, I mean, President Trump about 4 or 5 weeks ago was out there saying that he wants to give public companies the option to only report earnings twice a year as opposed to 4 times a year quarterly as it's been for decades here and stuff and give companies the option to only report twice here. What is your thought on that? If the SEC does make that change underneath his directive, would you guys look to change that or not?

Phil will answer that. But for me, personally, I'd love to be under the same pressure as by foreign competitors are in terms of what the reporting economies would be.

I think, yes, I think time will tell. We'll see what does it doesn't happen. We typically don't like speculating. But as John referenced, the thing that's a little bit unique about our industry, 2 of what will soon be the 3 largest players on a global basis are European. And if you take the 1 or 2 largest beyond that, there are also international companies that don't report quarterly. So we'd certainly evaluate it if the rules change and may make things more comparable, if we follow the regime that's currently followed by our largest competitors. But it is speculation. I think the current quarterly reporting has been in place for a long time. People used to it. We're certainly used to it. It helps our internal processes and controls, not just on the actual reporting process, but also on our forecasting and budgeting process. It's a good discipline to have. But it'd be a nice option to evaluate if it came to that.

I mean certainly still, I think the sell side and the buy side as well, like the disclosure every quarter and stuff. I'm sure you guys are obviously consider that heavily in your decision, right, if it comes down to it?

Yes, absolutely. Thank you all.

With no further questions. This does conclude today's conference call. You may now disconnect.