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    OMC
    Earnings call· Mar 2026(Q1 FY26)

    OMNICOM GROUP Q1 FY26 earnings call OMC

    Apr 28, 2026 Source

    Executive summary

    Omnicom Q1 FY26 — Strong Integration Drives Revenue Growth and Margin Expansion

    Omnicom delivered strong Q1 FY26 results, reflecting successful integration of Interpublic and strategic portfolio repositioning. The company achieved solid organic revenue growth and significant adjusted EBITDA margin expansion, driven by cost reduction synergies and the scaled deployment of its AI-enabled Omni platform. Management remains focused on completing asset dispositions and executing its substantial share repurchase program while navigating geopolitical uncertainties.

    Highlights

    5

    • Core operations revenue increased $345 million compared to Q1 2025 combined operations.

    • Organic revenue growth was 3.9% for core operations.

    • Adjusted EBITDA margin for core operations increased 240 basis points to 14.8% from 12.4%.

    • Non-GAAP adjusted diluted EPS grew 11.8% to $1.90 per share.

    • Repurchased $2.8 billion of shares in Q1, reducing shares outstanding by 28.1 million from December 31, 2025.

    Concerns

    3

    • The Middle East conflict creates uncertainty, representing less than 2.5% of total revenue.

    • The advertising discipline was down in Q1 FY26.

    • Disposed businesses revenue declined from $748 million in Q1 2025 to $627 million in Q1 2026 due to actual sales during the quarter.

    Guidance & targets

    11
    CategoryTargetConfidence
    Remaining asset dispositions
    Sell or exit remaining assets
    medium materiality
    High
    Cost reduction synergies
    $900 million
    high materiality
    High
    Cost reduction synergies
    $1.5 billion
    high materiality
    High
    Share repurchases
    $5 billion
    high materiality
    High
    Share count decline
    11% to 12%
    high materiality
    High
    Weighted average shares outstanding decline
    8% to 9%
    high materiality
    High
    Annual tax rate
    26%
    medium materiality
    High
    FX impact on reported revenue
    Approximately 1% benefit
    medium materiality
    Medium
    Net interest expense increase
    Approximately $200 million
    high materiality
    High
    Core operations constant currency organic growth
    4%
    high materiality
    High
    Adjusted EPS growth
    Higher double digits
    high materiality
    Medium

    Segment performance

    11
    SegmentRevenueYoYQoQMargin
    Integrated Media
    Led the way in growth for core operations. Includes media, commerce, data, CRM, consulting, and content automation businesses.
    		approximately 52% of our revenueshigh single digits——
    Advertising
    Declined in Q1 for core operations.
    		17%down in Q1——
    Health
    Achieved positive growth in Q1 for core operations.
    		10%low single digits——
    PR
    Grew mid-single digits in Q1 for core operations.
    		12%mid-single digits——
    Experiential & Other
    Grew mid-single digits in Q1 for core operations.
    		10%mid-single digits——
    U.S.
    Delivered strong growth in Q1 for core operations.
    		61% of revenuesmid-single-digit growth——
    U.K.
    Declined in Q1 for core operations.
    		—declined——
    Europe
    Up low single digits in Q1 for core operations.
    		21% (combined with U.K.)low single digits——
    Asia Pacific
    Up low single digits in Q1 for core operations.
    		9%low single digits——
    Latin America
    Up low single digits in Q1 for core operations.
    		—low single digits——
    Middle East & Africa
    Declined in Q1 for core operations.
    		—declined——

    Operational metrics

    37
    Core operations revenue
    $5.6 billionIncreased $345 million vs Q1 FY25 combined
    Q1 FY26

    Excludes dispositions and assets held for sale.

    Organic revenue growth
    3.9%
    Q1 FY26

    For core operations.

    Adjusted EBITDA
    $180 million increaseOver 27% growth vs Q1 FY25
    Q1 FY26

    Primarily driven by cost reduction synergies.

    Non-GAAP adjusted EPS
    $1.90Up 11.8% vs Q1 FY25 ($1.70)
    Q1 FY26

    Excludes after-tax costs for repositioning, dispositions, acquisition integration, and amortization of intangibles.

    Integration-related costs
    $59 million
    Q1 FY26

    Recorded on the SG&A expense line.

    Loss on dispositions
    $34 million
    Q1 FY26
    Severance and repositioning costs
    $4 million
    Q1 FY26
    Amortization expense
    $117 millionIncreased $96 million vs Q1 FY25
    Q1 FY26

    Related to intangible assets acquired from Interpublic.

    Depreciation expense increase
    $16 millionIncrease vs Q1 FY25
    Q1 FY26
    Net interest expense
    $72 millionIncreased $43 million vs Q1 FY25 ($29 million)
    Q1 FY26

    Primarily from assuming Interpublic's debt.

    Interest expense from Interpublic
    $47 million
    Q1 FY26

    Included in total interest expense increase.

    Interest income
    $47 millionIncreased $17 million vs Q1 FY25
    Q1 FY26

    Primarily due to interest income earned on higher average cash balances, including cash acquired with Interpublic.

    Adjusted tax rate
    26%Down slightly from 26.7% in Q1 FY25
    Q1 FY26
    Income from equity investments and noncontrolling interest
    $4 million declineDecline vs Q1 FY25
    Q1 FY26
    Fully diluted weighted average shares outstanding
    299.2 million
    Q1 FY26
    Actual shares outstanding
    285.3 millionDown 28.1 million vs Dec 31, 2025; Up vs March 31, 2025
    March 31, 2026

    Decline due to share repurchase activity.

    FX rate changes benefit to revenue
    2.7%
    Q1 FY26

    From positive foreign exchange rate changes.

    Disposed businesses annual revenue (planned)
    $3.2 billion
    Annual

    Identified for asset sales and disposition as part of portfolio realignment.

    Disposed businesses annual revenue (completed)
    $1 billion
    Annual

    Disposed of in Q1 FY26.

    Disposed businesses adjusted operating income contribution
    Less than 5%
    Q1 FY26

    Refers to adjusted operating income.

    Cash paid for dividends to common shareholders
    $252 millionIncreased year-over-year
    Q1 FY26

    Increased due to shares issued for Interpublic acquisition and quarterly dividend payment increase.

    Cash paid for dividends to noncontrolling interest shareholders
    $12 million
    Q1 FY26
    Share repurchase activity
    $2.8 billion
    Q1 FY26

    Drove significant reduction in shares outstanding.

    Gross long-term debt
    $10.2 billionUp approximately $1 billion vs Dec 31, 2025
    March 31, 2026

    Reflects retirement of $1.4 billion notes and issuance of $2.3 billion new notes.

    Retired senior notes
    $1.4 billion
    April 15, 2026

    Due April 15, 2026.

    New senior notes issued
    $2.3 billion
    Q1 FY26

    Issued to refinance debt and for other purposes.

    Incremental long-term debt from refinancing
    $1 billion
    Q1 FY26

    Resulted from refinancing activity.

    Total interest expense increase
    $60 million
    Q1 FY26

    Primarily from Interpublic and refinancing.

    Lower interest income on cash balances
    Approximately $20 million
    FY26

    Primarily due to lower forecasted short-term interest rates on invested cash.

    Incremental commercial paper borrowings interest
    Approximately $10 million
    FY26
    Total debt to pro forma adjusted EBITDA
    2.5x
    March 31, 2026

    Calculated in accordance with credit agreement definition, making pro forma adjustments for acquisition impact.

    Cash equivalents and short-term investments
    $4.3 billion
    End of Q1 FY26
    Undrawn revolving credit facility
    $3.5 billion
    Q1 FY26

    Backstops $3 billion commercial paper program.

    Disposed businesses revenue
    $748 million
    Q1 FY25

    Prior year revenue for businesses that were disposed of or held for sale.

    Disposed businesses revenue
    $627 million
    Q1 FY26

    Current year revenue for businesses that were disposed of or held for sale, reflecting actual sales during the quarter.

    Annual base for production business
    $23 billion
    Annual

    Reference for the total annual base, with production being a non-substantial component.

    Proceeds from planned disposals
    $152 million
    Q1 FY26

    From the sale of businesses, principally Jack Morton.

    Industry KPIs

    8
    MetricValueDetails
    Total revenue$5.6 billionUSD
    Net income EPS$1.90USD per share
    Adjusted EBITDA14.8%%
    CAPEX capital program$61 millionUSD
    Cash marketable securities$4.3 billionUSD
    Ai product feature adoptionscaled
    M a integration cost synergies$900 millionUSD
    Free cash flow operating cash flow—

    Product announcements

    1
    ProductTypeDetails
    Omni (AI-enabled intelligent sales and marketing platform)expansion

    Deals & partnerships

    4
    InterpublicAcquisition of Interpublic Group, leading to the formation of the "new Omnicom".$9 billion

    Closed just before the holidays (Q4 FY25). Resulted in portfolio realignment and integration efforts.

    IBM, GSK, John Deere, Little Caesars, Acadia Pharmaceuticals, BaileysNew business wins.

    Secured in Q1 FY26.

    Clorox, Dyson, Delta, Exxon, Kroger, Merck, UnileverExpanded relationships with existing clients.multiyear contracts

    Extended multiyear contracts with these clients.

    Adobe, AmazonDeeper integrations for Omni platform.

    Integrations enhance Omni's capabilities.

    Risks & headwinds

    2
    Geopolitical environment / Middle East conflictOngoing

    Represents less than 2.5% of revenue.

    Mitigation: Prioritizing safety of people in the region, monitoring developments closely to adapt quickly.

    Competitive pricing pressureOngoing

    Not quantified, but acknowledged as a factor in some new business losses.

    Mitigation: Winning more than fair share, conducting root-cause analysis for losses, leveraging size, influence, and state-of-the-art investments (Omni AI).

    What to watch in Q2 FY26

    5

    Remaining asset dispositions

    Next several quarters
    Current$2.2 billion of annual revenue remaining to be disposed of.
    TargetProgress on selling or exiting remaining assets.

    Why it matters

    Completing these dispositions will streamline the portfolio, improve overall margins, and remove non-core assets from financial statements.

    Our plan is to sell or exit the remaining assets in the next several quarters.

    Q&A highlights

    5

    Asked for more detail on growth rates for Integrated Media, Advertising, and Health, and an update on the 'double-digit' adjusted EPS growth guidance, noting share count alone implies 8-9%.

    Management provided high-level growth rates for disciplines (Integrated Media high-single-digits, PR/Experiential mid-single-digits, Health low-single-digits, Advertising down). For EPS, they expect 'higher double digits' for the remaining quarters of the year compared to Q1's 11.8%.

    “Integrated Media certainly led the way in terms of growing high single digits. PR and experiential and other grew mid-single digits. Health was positive for the year, low single digits and advertising was down.”

    asked by Steven Cahall · answered by Philip Angelastro

    2 min read5 chapters

    Detailed Narrative

    01

    Interpublic Integration & Portfolio Repositioning

    Omnicom successfully integrated Interpublic's operations, leading to the merger or sunsetting of over 20 major agency brands. This strategic repositioning involved identifying $3.2 billion in annual revenue from assets for sale or disposition, with $1 billion already disposed of in Q1. This allows a sharpened focus on higher-growth core operations, which saw revenue increase by $345 million compared to Q1 2025 combined operations.

    02

    Core Operations Focus

    The company has redefined its reporting to emphasize "core operations," which exclude disposed assets and those held for sale. This focus is intended to highlight the businesses driving future growth, with the disposed assets representing less than 5% of adjusted operating income in Q1 and targeted for timely divestiture. Management aims to complete these dispositions over the next several quarters to streamline the portfolio.

    03

    AI-Enabled Omni Platform

    Omnicom has scaled its next-generation AI-enabled Omni platform across the entire organization in Q1, putting the latest Agentic AI tools in the hands of all employees. This platform is leveraging Agentic AI to enhance media performance, addressability, measurement, speed to activation, and ROI, particularly through integrations with partners like Adobe and Amazon. The company is also exploring more direct relationships with publishers to shorten the media supply chain.

    04

    Client Wins & Expanded Relationships

    The integrated operating model has translated into new business wins, including IBM, GSK, John Deere, Little Caesars, Acadia Pharmaceuticals, and Baileys. The company is also expanding relationships with existing clients like Clorox, Dyson, Delta, Exxon, Kroger, Merck, and Unilever, leveraging its integrated approach to provide comprehensive marketing and sales solutions from a single partner. This strategy is helping to diversify revenue streams and deepen client relationships.

    05

    Synergies and Capital Deployment

    The integration is on track to deliver $900 million in cost reduction synergies in FY26 and $1.5 billion by mid-2028. Omnicom is also actively deploying capital for shareholders, having repurchased $2.8 billion in shares during Q1, part of a $5 billion program over the next 12 months. This activity is expected to drive an 11-12% decline in share count by year-end 2026 and higher double-digit adjusted EPS growth in subsequent quarters.

    AI-generated summary of the company’s earnings call. Not investment advice.