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    OMC
    Earnings call· Jun 2026(Q2 FY26)

    OMNICOM GROUP Q2 FY26 earnings call OMC

    Jul 28, 2026 Source

    Executive summary

    Omnicom Group Inc. Q2 FY26 — Strong Organic Growth and Margin Expansion Driven by Integrated Media

    Omnicom delivered robust Q2 FY26 results, showcasing strong organic growth and significant margin expansion, primarily fueled by Integrated Media and Experiential segments. The company is actively integrating Interpublic assets, driving substantial cost synergies, and strategically divesting non-core businesses to sharpen its focus on high-growth areas. Management is confident in the new Omnicom's integrated operating model to drive sustainable growth and enhance client outcomes, leading to an upward revision of full-year organic revenue guidance.

    Highlights

    5

    • Organic growth from Core Operations of 6.1% in Q2 FY26, driven by Integrated Media and Experiential disciplines.

    • Adjusted EBITA growth from Core Operations of 20.4% in Q2 FY26, with margin increasing by almost 200 bps to 17.8%.

    • Non-GAAP adjusted EPS increased 29.3% to $2.65 per share in Q2 FY26.

    • Successfully completed $3 billion in share repurchases as part of a $5 billion authorization, with $2.5 billion from an accelerated share repurchase program.

    • Raised full-year 2026 organic revenue growth guidance from 4%-4.5% to 5%.

    Concerns

    3

    • Advertising revenue was down in the high single digits in Q2 FY26, impacted by internal reorganization and dispositions.

    • Middle East and Africa revenue declined double digits in Q2 FY26 due to ongoing conflict.

    • Net interest expense increased to $93 million in Q2 FY26 from $41 million in Q2 FY25, primarily due to Interpublic's debt assumption.

    Guidance & targets

    9
    CategoryTargetConfidence
    Full-year 2026 organic revenue growth from ongoing operations
    5%
    high materiality
    High
    Full-year 2026 adjusted EPS growth
    high teens, greater than 15%
    high materiality
    High
    Full-year 2026 annual tax rate
    26.0%
    medium materiality
    High
    Share repurchase program completion
    $5 billion
    high materiality
    High
    Remaining dispositions revenue
    $300 million
    medium materiality
    High
    Remaining dispositions revenue
    $225 million
    medium materiality
    High
    FX impact on reported revenue
    decrease by 1%
    low materiality
    Medium
    FX impact on reported revenue
    flat
    low materiality
    Medium
    FX impact on reported revenue
    approximately 1% benefit
    low materiality
    Medium

    Segment performance

    12
    SegmentRevenueYoYQoQMargin
    Integrated Media
    Led the way with very strong growth.
    		53% of revenuesover 10%——
    Advertising
    Impacted by internal reorganization and disposition of small, low-growth markets. Creative remains a core IP.
    		under 16%down in the high single digits——
    Health
    		9%flat——
    PR
    		11%mid-single digit——
    Experiential & Other
    Due largely to experiential growth related to the FIFA World Cup.
    		11%over 10%——
    U.S.
    		59% of revenuehigh single digit——
    U.K. and Europe
    		23% of revenuelow single digit——
    Asia Pacific
    		9% of revenuedecreased slightly——
    Latin America
    		4% of revenuestrong at over 10%——
    Middle East and Africa
    As a result of the ongoing conflict.
    		2% of revenuedeclined double digits——
    Pharma and Health
    Increase driven by the larger portfolio in this category at Interpublic.
    		18% of revenue———
    Auto
    Decreased due to Interpublic's smaller portfolio in this category relative to Omnicom.
    		10% of revenue———

    Operational metrics

    34
    Adjusted EBITA growth
    $181.4M20.4% YoY
    Q2 FY26

    Primarily driven by cost reduction synergies.

    Adjusted EBITA margin
    17.8%increased almost 200 bps YoY
    Q2 FY26

    Compared to combined operations in Q2 FY25.

    Adjusted EPS
    $2.6529.3% YoY
    Q2 FY26

    Excludes after-tax costs from severance and repositioning, acquisition and integration expenses, and amortization of acquired intangible assets.

    Adjusted EBITA growth
    23.5%
    YTD FY26

    Primarily driven by cost reduction synergies.

    Adjusted EBITA margin
    16.4%increased from 14.2% YoY
    YTD FY26

    Primarily driven by cost reduction synergies.

    Integration-related costs
    $40.1M
    Q2 FY26

    Recorded on the SG&A expense line.

    Severance and repositioning costs
    $47M
    Q2 FY26
    Net interest expense
    $93Mincreased from $41M in Q2 FY25
    Q2 FY26

    Due primarily to the assumption of Interpublic's debt of approximately $3 billion.

    Interest expense increase
    $61M
    Q2 FY26

    Primarily due to the Interpublic acquisition, including $3 million of noncash interest, and refinancing activity in Q1 FY26.

    Interest income
    $30Mincreased $8M
    Q2 FY26

    Primarily due to higher average cash balances.

    Depreciation expense
    $49Mincreased YoY
    Q2 FY26

    Increased YoY primarily due to Interpublic acquisition. Estimated to approximate Q2 actuals in Q3 and Q4 FY26.

    Amortization expense
    $118Mincreased YoY
    Q2 FY26

    Increased YoY primarily due to Interpublic acquisition. Estimated to approximate Q2 actuals in Q3 and Q4 FY26.

    Adjusted tax rate
    26%down slightly from 26.5% in Q2 FY25
    Q2 FY26

    Annual tax rate for 2026 estimated to be 26.0%.

    Non-GAAP adjusted net income
    $745.2Mincreased $344.1M
    Q2 FY26
    Fully diluted weighted average shares outstanding
    281Mdown 10% from 313.1M at 12/31/25
    Q2 FY26

    Increased YoY due to shares issued for Interpublic acquisition, partially offset by share repurchases.

    Proceeds from assets sold
    $168M
    YTD Q2 FY26

    Additional proceeds in excess of $200M expected from July sales.

    Change in operating capital
    negative $2.4Bcompared to negative $1.4B in H1 FY25
    H1 FY26

    Increase primarily due to Interpublic's business and operations in 2026. Interpublic's H1 FY25 change was negative $445M, plus $550M incremental payments for severance, repositioning, integration, lease/contractual terminations. Expected to be flat for remainder of year, excluding similar incremental payments.

    Gross long-term debt
    $10.2B
    Q2 FY26

    Reflects retirement of $1.4B senior notes, issuance of $2.3B new senior notes.

    New senior notes issued
    $2.3B
    Q1 FY26
    Next debt maturity
    July 2027
    future

    Comfortable with maturity schedule.

    Net interest expense increase
    $200Mcompared to $167M in FY25
    FY26

    Includes $13M of noncash interest. Drivers: $230M higher gross interest expense, offset by $30M higher gross interest income. Majority due to Interpublic debt assumption and new debt issuance.

    Total debt to pro forma adjusted EBITDA
    2.4xlower than 2.6x at Q2 FY25
    Q2 FY26

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

    Cash equivalents and short-term investments
    $3.3B
    Q2 FY26
    Undrawn revolving credit facility
    $3.5B
    Q2 FY26

    Backstops $3B commercial paper program.

    Cost reduction synergies
    $900M
    FY26

    75-80% expected to impact EBITDA growth and margin.

    Cost reduction synergies
    $1.5B
    by mid-2028
    Total annualized revenue from dispositions
    $3.5B-$3.6Bincreased from $3.2B
    annualized

    Approximately 60% of businesses intended for sale have been sold by end of July.

    Disposition revenue remaining
    $525M
    H2 FY26

    Expected to be completed by year-end 2026.

    Total capital returned to shareholders
    $3B
    H1 FY26

    Part of a $5B share repurchase program to be completed by end of Q1 2027.

    Dividends increase
    $481.5M
    H1 FY26

    Resulting from additional shares issued for IPG acquisition and recent quarterly dividend increase.

    Sports sponsorships influenced
    $9.9B
    current

    Omnicom influences $9.9 billion in sponsorships.

    Sports media dollars overseen
    1 in 3
    current

    Omnicom oversees 1 in every 3 sports media dollars.

    League and platform partnerships
    over 500
    current
    Sporting events visibility
    20,000+
    annual

    Industry KPIs

    9
    MetricValueDetails
    Total revenue$6BUSD
    Net income EPS$2.65USD
    Adjusted EBITDA—
    CAPEX capital program—
    Content title performanceFIFA World Cupevent
    Cash marketable securities$3.3BUSD
    Ai product feature adoption—
    M a integration cost synergies$900MUSD
    Free cash flow operating cash flow—

    Deals & partnerships

    1
    InterpublicCombination of Omnicom and Interpublic to form a leading connected marketing and sales company.

    Over the past 8 months, moved beyond combining to building an integrated operating company. Led to $900M in 2026 cost reduction synergies and $1.5B by mid-2028. Assumed approximately $3B of Interpublic's debt.

    Risks & headwinds

    4
    Ongoing conflict in Middle East and AfricaQ2 FY26

    Middle East and Africa revenue declined double digits in Q2 FY26.

    Mitigation: Clients have digested these events or changed supply outlets and adjusted.

    Advertising segment declineQ2 FY26

    Advertising revenue was down in the high single digits in Q2 FY26.

    Mitigation: Internal reorganization to bring together new assets from IPG with Omnicom assets, realigning brands, and eliminating some. Disposed of several small, low-growth markets.

    Increased net interest expenseQ2 FY26

    Net interest expense increased to $93 million in Q2 FY26 from $41 million in Q2 FY25.

    Mitigation: Managed through debt refinancing activities and comfortable with maturity schedule (next maturity July 2027).

    Competitive environment in new businessCurrent

    The new business environment is as brutal as it's ever been.

    Mitigation: Focus on integrated offerings, leveraging combined capabilities, and proactive approach to client needs. Competition makes them better.

    What to watch in Q3 FY26

    5

    Organic revenue growth from Core Operations

    Next quarter (Q3 FY26)
    Current6.1% in Q2 FY26
    TargetSustain strong growth, especially in Integrated Media and Experiential.

    Why it matters

    Sustained organic growth is key to validating the success of the Interpublic integration and strategic repositioning.

    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%.

    Q&A highlights

    6

    Inquired about the drivers of the Q2 organic growth acceleration, especially in media, and whether it's due to new business or marketer demand. Also asked Phil about the 75-80% synergy impact on EBITDA and balancing synergies with reinvestment.

    John attributed growth to expanding services for existing clients and new business wins, emphasizing the new operating model and proactive approach. Phil confirmed 75-80% of $900 million synergies impacting EBITDA, noting continued investment in the business and Omni platform for sustainable growth.

    “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.”

    asked by David Karnovsky · answered by Philip Angelastro

    2 min read6 chapters

    Detailed Narrative

    01

    Strategic Repositioning and Integration

    Omnicom is transitioning from a holding company to an integrated operating company, combining talent and capabilities across creativity, media, commerce, consulting, data, and technology. This involves aligning leadership, unifying data and AI assets through Omni, and focusing on agentic marketing transformation, new consumer engagement models, and expanding client partnerships. The integration of Interpublic assets has enabled scale and new capabilities, with a focus on high-growth areas.

    02

    Agentic Marketing Transformation

    The company is leveraging Omni's agentic layer for agent creation, activation, and orchestration across workflows and channels. This is enhanced by Omni's foundational data and identity layer powered by Acxiom, aiming for better audience and activation strategies and precise cross-channel measurement. Partnerships with technology companies are modernizing client infrastructure for agentic marketing.

    03

    New Consumer Engagement Model

    Omnicom is focusing on areas where brands build direct customer relationships, including sports and entertainment, social and creator, connected commerce, and AI-driven discovery. The combined Omnicom and Interpublic strengths are evident in sports, where Omnicom influences $9.9 billion in sponsorships and oversees 1 in 3 sports media dollars.

    04

    Client Growth and Retention

    Efforts to deepen existing client relationships and attract new clients through integrated offerings have delivered meaningful results. The company secured new integrated media wins with Adidas, IBM, and Subway, and expanded services for American Express, General Mills, and Uber in high-demand areas like sports, media, production, commerce, social, and influencer. High post-acquisition client retention rates and recognition as the most effective company in the Global Effie Index reinforce this success.

    05

    Dispositions and Portfolio Optimization

    Omnicom is actively divesting non-core businesses to sharpen its focus on high-growth segments. Over half of the planned disposals have been completed through July, generating $168 million in proceeds through June 30, with an additional $200 million expected from July sales. The total annualized revenue from dispositions is now estimated between $3.5 billion and $3.6 billion, with a significant portion coming from the advertising category. This strategic move aims to improve overall organic growth by removing low-growth assets.

    06

    AI and Efficiency

    Omnicom has been using AI and generative AI for a long time, viewing it as a tool to drive efficiency and effectiveness. Agentic workflows facilitate work more efficiently and consistently, while underlying data and identity assets fuel these workflows for better client outcomes. Any cost savings derived from AI are shared with clients, who are largely reinvesting them into marketing and advertising, creating a positive feedback loop.

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