Omnicom Group Inc. reported a modest revenue increase in the first quarter of 2025, fueled by organic growth, even as net income fell and operating margins narrowed. The group posted revenue of $3.69 billion, a 1.6% year-on-year increase from $3.63 billion in Q1 2024. This growth was largely driven by a 3.4% rise in organic revenue, equivalent to $121.9 million, despite headwinds from foreign currency translation and minimal impact from acquisitions and divestitures.
However, net income declined 9.7% to $287.7 million, down from $318.6 million in the same period last year. Diluted earnings per share also fell to $1.45, compared to $1.59 in Q1 2024. On an adjusted basis (non-GAAP), diluted EPS rose slightly to $1.70, up from $1.67.
Omnicom’s operating margin contracted to 12.3%, down from 13.2% a year earlier, impacted by $33.8 million in acquisition-related expenses tied to its pending purchase of The Interpublic Group of Companies (IPG). Operating income fell to $452.6 million, while reported EBITA declined to $474.4 million. Adjusted EBITA showed a marginal improvement at $508.2 million, maintaining a 13.8% margin.
CEO Commentary and Strategic Outlook
John Wren, Chairman and CEO of Omnicom, acknowledged the mixed quarter but remained optimistic.
“Organic revenue growth for the first quarter was 3.4%. While global economic uncertainty persists, Omnicom remains a trusted strategic partner for our clients—delivering flexibility, value, and measurable performance,” Wren said.
“We are confident that our diversified portfolio, strong balance sheet, and seasoned leadership team will allow us to navigate a challenging environment. We also look forward to the anticipated closing of the IPG acquisition later this year, which offers substantial revenue opportunities and cost synergies that will boost profitability, EPS, and free cash flow.”
Regional Performance
Growth across regions was uneven.
- Latin America led with 14.8% organic growth.
- Asia Pacific followed at 6.0%, and the United States posted 4.6%.
- Europe saw modest growth at 1.7%, while other markets contracted:
- Middle East & Africa: -9.3%
- Other North America: -3.6%
- United Kingdom: -0.7%
Discipline Breakdown
Performance by discipline revealed areas of both strength and weakness:
- Growth sectors:
- Media & Advertising: +7.2%
- Precision Marketing: +5.8%
- Execution & Support: +1.9%
- Declining sectors:
- Public Relations: -4.5%
- Healthcare: -3.2%
- Experiential: -1.5%
- Branding & Retail Commerce: -10.0%
These figures reflect a new service classification implemented in Q1 2025.
Expense Overview
Operating expenses increased 2.7% to $3.24 billion.
- Salary and related costs fell 3.6% due to restructuring and workforce alignment.
- Third-party service costs rose 14.1% to $796.8 million, driven by growth in Media & Advertising and Precision Marketing.
- Third-party incidental costs also increased 14.9% to $169.0 million.
Despite rising costs and declining profitability, Omnicom’s solid organic growth and strategic plans, including the anticipated IPG acquisition, underscore its focus on long-term positioning and resilience in a volatile market.
