Net income drops to $162.5 million amid restructuring and merger-related costs
IPG
The Interpublic Group (IPG) reported a 6.4% year-on-year revenue decline for Q2 FY2025, bringing in $2.54 billion compared to $2.71 billion in the same period last year. The dip was driven by a 3.5% fall in organic revenue and significant restructuring expenses that impacted profitability.
Net income fell to $162.5 million from $214.5 million, impacted by $118 million in restructuring charges and $10.9 million in expenses linked to its pending merger with Omnicom. Diluted earnings per share (EPS) dropped to $0.44 from $0.57, while adjusted EPS-excluding non-recurring items-stood at $0.75.
Segment Performance and Market Trends
IPG’s Media, Data & Engagement Solutions segment, which includes Mediabrands, UM, Initiative and KINESSO, recorded a 3.1% drop in organic revenue. The Integrated Advertising & Creativity Led Solutions group-home to McCann, FCB, and MullenLowe-saw a steeper 6.3% decline. On a positive note, Specialized Communications & Experiential Solutions posted a 2.3% organic revenue increase.
From a regional perspective, Asia Pacific faced the most pressure with a 13.6% organic revenue decline, attributed to economic headwinds and reduced client spending. Latin America showed resilience with a 1.4% organic gain.
Selling, general, and administrative (SG&A) expenses rose to 2.1% of revenue before billable expenses, up from 1.2% a year ago. The increase was driven by merger-related costs and greater investment in new business efforts and client retention.
IPG said it is making “continued progress” on its proposed merger with Omnicom and remains optimistic about completing the transaction in the second half of 2025. CEO Philippe Krakowsky stated that “IPG agencies remain competitive in new business activity,” despite industry-wide challenges.
Adjusted EBITA before restructuring and merger costs came in at $393.7 million, with margins improving to 18.1%, up from 14.6% in the previous year.
