INTERPUBLIC GROUP OF COMPANIES, INC. - Quarter Report: 2025 March (Form 10-Q)

) ) )) )) $ $

Common Stock

Additional
Paid-In
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Loss, Net of Tax

Treasury
Stock

Total IPG
Stockholders’
Equity

Non-controlling
Interests

Total
Stockholders’
Equity

Amount

Balance at December 31, 2023

()

Net income

Other comprehensive loss

()

Reclassifications related to redeemable non-controlling interests

Distributions to non-controlling interests

()

Change in redemption value of redeemable non-controlling interests

Repurchases of common stock

()

Common stock dividends ($0.33 per share)

()

Stock-based compensation

)

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Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 11:

to $ and is subject to finalization of terms and changes in the British Pound Sterling. $ $ $ $ $ Interest cost Expected return on plan assets()()()() Settlements Amortization of:Prior service cost Unrecognized actuarial losses Net periodic cost$ $ $ $ $ $

The components of net periodic cost other than the service cost component are included in the line item “Other expense, net” in the Consolidated Statements of Operations.

During the three months ended March 31, 2025, we contributed $ and $ of cash to our domestic and foreign pension plans, respectively. For the remainder of 2025, we expect to contribute approximately $ and $ of cash to our domestic and foreign pension plans, respectively.

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Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 12:

$ $ $ Revenue before billable expenses Base salaries, benefits and tax Incentive expense Severance expense Temporary help Office and other direct expenses

Depreciation and amortization1

Restructuring Charges2

Other segment items3

Segment EBITA$ $()$ $ Amortization of acquired intangibles Capital expenditures

1 Excludes amortization of acquired intangibles.

2 Non-cash lease impairment costs were comprised of $ at MD&E, $ at IA&C and $ at SC&E for the three months ended March 31, 2025.

3 Includes billable expenses and other salaries and related expenses.

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Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

$ $ $ Revenue before billable expenses Base salaries, benefits and tax Incentive expense Severance expense Temporary help Office and other direct expenses

Depreciation and amortization1

Restructuring Charges2

Other segment items3

Segment EBITA$ $ $ $ Amortization of acquired intangibles Capital expenditures

1 Includes restructuring charges of $ for the three months ended March 31, 2025, including non-cash lease impairment costs of $.

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Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 13:

$ $ $ Cash and cash equivalentsLiabilities

Contingent acquisition obligations 1

$ $ $ $ Accrued liabilities and Other non-current liabilities December 31, 2024Balance Sheet Classification Level 1Level 2Level 3TotalAssetsCash equivalents$ $ $ $ Cash and cash equivalentsLiabilities

Contingent acquisition obligations 1

$ $ $ $ Accrued liabilities and Other non-current liabilities

Financial Instruments that are not Measured at Fair Value on a Recurring Basis

$ $ $ $ $ $ $

Our long-term debt is comprised of senior notes and other notes payable. The fair value of our senior notes, which are traded over-the-counter, is based on quoted prices in markets that are not active. Therefore, these senior notes are classified as

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Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

% to %.

Non-financial Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis

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Notes to Consolidated Financial Statements – (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Note 14:

and $, respectively, the amount of parent company guarantees primarily relating to uncommitted lines of credit was $ and $, respectively, and the amount of parent company guarantees related to daylight overdrafts, primarily utilized to manage intra-day overdrafts due to timing of transactions under cash pooling arrangements without resulting in incremental borrowings, was $ and $, respectively. In the event of non-payment by the applicable subsidiary of the obligations covered by a guarantee, we would be obligated to pay the amounts covered by that guarantee. As of both March 31, 2025, and December 31, 2024 there were material assets pledged as security for such parent company guarantees.

Legal Matters

We are involved in various legal proceedings, and subject to investigations, inspections, audits, inquiries and similar actions by governmental authorities arising in the normal course of business. The types of allegations that arise in connection with such legal proceedings vary in nature, but can include claims related to contract, employment, tax and intellectual property matters. We evaluate all cases each reporting period and record liabilities for losses from legal proceedings when we determine that it is probable that the outcome in a legal proceeding will be unfavorable and the amount, or potential range, of loss can be reasonably estimated. In certain cases, we cannot reasonably estimate the potential loss because, for example, the litigation is in its early stages. While any outcome related to litigation or such governmental proceedings in which we are involved cannot be predicted with certainty, management believes that the outcome of these matters, individually and in the aggregate, will not have a material adverse effect on our financial condition, results of operations or cash flows.

Note 15:

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)


Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help you understand The Interpublic Group of Companies, Inc. and its subsidiaries (the “Company,” “IPG,” “we,” “us” or “our”). MD&A should be read in conjunction with our unaudited Consolidated Financial Statements and the accompanying notes included in this report and our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”), as well as our other reports and filings with the Securities and Exchange Commission (the “SEC”). Our 2024 Annual Report includes additional information about our significant accounting policies and practices as well as details about the most significant risks and uncertainties associated with our financial and operating results. Our MD&A includes the following sections:

EXECUTIVE SUMMARY provides a discussion about our strategic outlook, factors influencing our business and an overview of our results of operations.

RESULTS OF OPERATIONS provides an analysis of the consolidated and segment results of operations for the periods presented.

LIQUIDITY AND CAPITAL RESOURCES provides an overview of our cash flows, funding requirements, financing and sources of funds, and debt credit ratings.

CRITICAL ACCOUNTING ESTIMATES provides an update to the discussion in our 2024 Annual Report of our accounting policies that require critical judgment, assumptions and estimates.

RECENT ACCOUNTING STANDARDS, by reference to Note 15 to the unaudited Consolidated Financial Statements, provides a discussion of certain accounting standards that have been recently adopted or that have not yet been required to be implemented and may be applicable to our future operations.

NON-GAAP FINANCIAL MEASURE, provides a reconciliation of non-GAAP financial measure with the most directly comparable generally accepted accounting principles in the United States (“U.S. GAAP”) financial measures and sets forth the reasons we believe that presentation of the non-GAAP financial measure contained therein provides useful information to investors regarding our results of operations and financial condition.

EXECUTIVE SUMMARY

Our Business

We provide marketing, communications and business transformation services that measurably drive growth for businesses and brands. Combining the power of creativity and technology, our approximately 51,500 employees and operations span all major world markets. Our companies specialize in insights, data, media, creative and production, digital commerce, healthcare marketing and communications, producing marketing solutions for clients that range in scale from large global marketers to regional and local clients. Our comprehensive global services help marketers build brands, increase sales of their products and services, and gain market share.

Our capabilities span ideation to execution: growth, product and experience design; technology and experience platforms; creative, media and marketing strategy; and campaign, content and channel orchestration. The work we produce for our clients is tailored specifically to their unique needs, opportunity and outcomes. Our solutions vary from project-based activity to long-term, fully integrated campaigns. Our operations support the strategic position that marketers have access to the best and most appropriate resources within IPG to drive business success, and may access these capabilities from across the IPG network in an open model that leverages our marketing intelligence platform, Interact. With operations in over 100 countries, we can operate in a single region or deliver global integrated programs.

We operate in a media, consumer and technology ecosystem that continues to evolve at a rapid pace. To help our clients win in a data-led and digital-first world, we have made and continue to make investments in strategic areas including digital commerce, retail media, artificial intelligence, audience resolution and production across world markets. In addition, we consistently review opportunities within our Company to enhance our operations through acquisitions and strategic alliances and internal programs that encourage client-centric collaboration. As appropriate, we also develop relationships with technology and emerging media companies that are building leading-edge marketing tools that complement our agencies' skill sets and capabilities.

Home to some of the world’s best-known and most innovative communications specialists, IPG global brands include Acxiom, Craft, FCB, FutureBrand, Golin, Initiative, IPG Health, IPG Mediabrands, Jack Morton, KINESSO, MAGNA, McCann, Mediahub, Momentum, MRM, MullenLowe Global, Octagon, UM, Weber Shandwick and more.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Our financial goals include competitive organic growth of revenue before billable expenses and expansion of Adjusted EBITA margin, as defined and discussed within the Non-GAAP Financial Measure section of this MD&A, which we expect will further strengthen our balance sheet and total liquidity and increase value to our stakeholders. Accordingly, we remain focused on meeting the evolving needs of our clients while concurrently managing our cost structure. We continually seek greater efficiency in the delivery of our services, focusing on more effective resource utilization, including the productivity of our employees, real estate, information technology and shared services, such as finance, human resources and legal. The improvements we have made and continue to make in our financial reporting and business information systems in recent years allow us more timely and actionable insights from our global operations. Our disciplined approach to our balance sheet and liquidity provides us with a solid financial foundation and financial flexibility to manage and grow our business. We believe that our strategy and execution position us to meet our financial goals and to deliver long-term value to all of our stakeholders.

Proposed Omnicom Transaction

On December 8, 2024, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Omnicom Group Inc. (“Omnicom”), pursuant to which an Omnicom merger subsidiary will merge with and into IPG, with IPG surviving the merger as a direct wholly owned subsidiary of Omnicom.

As a result of the merger, each share of IPG common stock issued and outstanding immediately prior to the effective time of the merger will be converted into the right to receive 0.344 shares of Omnicom common stock. The exchange ratio is fixed and will not be adjusted to reflect stock price changes prior to closing the merger.

If the transaction is completed, following the closing Omnicom shareholders will own 60.6% of the combined company and IPG shareholders will own 39.4%, on a fully diluted basis. As a result of the merger, we will cease to be a publicly traded company.

We believe the combined company will bring together the industry’s deepest bench of marketing talent, and the broadest and most innovative services and products, driven by the most advanced sales and marketing platform. Together, the companies will expand their capacity to create comprehensive full-funnel solutions that deliver better outcomes for the world’s most sophisticated clients. We anticipate the combined company will have over 100,000 expert practitioners, delivering end-to-end services across media, precision marketing, CRM, data, digital commerce, advertising, healthcare, public relations and branding.

On March 12, 2025, each of Omnicom and Interpublic received a Request for Additional Information and Documentary Material (the “Second Request”) from the U.S. Federal Trade Commission (FTC) in connection with Omnicom's proposed acquisition of Interpublic. The Second Request was issued under notification requirements of the Hart-Scott-Rodino (HSR) Antitrust Improvements Act of 1976, as amended.

On March 18, 2025, the shareholders of Omnicom and Interpublic each approved the acquisition of Interpublic at each company's special meeting of stockholders held that day.

We also face risks related to our proposed transaction with Omnicom, including as a result of any failure to complete, or delays in completing, the proposed transaction. The closing of the merger is subject to the satisfaction of customary closing conditions, including receipt of required regulatory approvals. Furthermore, uncertainty about the mergers may adversely affect relationships with our clients, partners, suppliers, and employees, whether or not the merger transactions are completed, and if the transaction is completed, the combined company may not perform as we currently expect. See Item 1A, Risk Factors, in our most recent Annual Report on Form 10-K.

Current Market Conditions

The global macroeconomic backdrop continues to be characterized by complex and dynamic developments, due to active business, economic and geopolitical crosscurrents. Shifting economic developments in the first part of the year, both domestically and among the largest global economic actors, have introduced a greater measure of caution to the global economy, though with impacts that may vary widely by sector and individual client. Several trends continue to support the demand for our services, notably proliferating media complexity and the ongoing evolution, at pace, of consumer interaction with brands and commerce. These trends offer significant long-term support to our growth opportunities, while our ability to leverage our agile and flexible operating model enables us to adapt to changing macro circumstances.

The principal macroeconomic risks to our performance include the impact of any general or regional economic slowdown or contraction, the extent of inflation of labor costs and potential for labor shortages, continuing inflationary pressures on our clients and their customers, and the economic impacts of geopolitical conflict and resulting potential for uncertainty and restrictions on spending on the part of some clients and consumers. See Item 1A, Risk Factors, in our most recent Annual Report on Form 10-K.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Our Financial Information

When we analyze period-to-period changes in our operating performance, we determine the portion of the change that is attributable to changes in foreign currency rates and the net effect of acquisitions and divestitures, and the remainder we call organic change, which indicates how our underlying business performed. We exclude the impact of billable expenses in analyzing our operating performance as the fluctuations from period to period are not indicative of the performance of our underlying businesses and have no impact on our operating income or net income.

The change in our operating performance attributable to changes in foreign currency rates is determined by converting the prior-period reported results using the current-period exchange rates and comparing these prior-period adjusted amounts to the prior-period reported results. Although the U.S. Dollar is our reporting currency, a substantial portion of our revenues and expenses are generated in foreign currencies. Therefore, our reported results are affected by fluctuations in the currencies in which we conduct our international businesses. Our exposure is mitigated as the majority of our revenues and expenses in any given market are generally denominated in the same currency. Both positive and negative currency fluctuations against the U.S. Dollar affect our consolidated results of operations, and the magnitude of the foreign currency impact to our operations related to each geographic region depends on the significance and operating performance of the region. The foreign currencies that most adversely impacted our results during the first quarter of 2025 were the Euro, the Brazilian Real, the Canadian Dollar, the Mexican Peso and the British Pound Sterling.

For purposes of analyzing changes in our operating performance attributable to the net effect of acquisitions and divestitures, transactions are treated as if they occurred on the first day of the quarter during which the transaction occurred. We continually evaluate our portfolio of businesses, and over the past several years, we have acquired companies that we believe will enhance our offerings and disposed of businesses that are not consistent with our strategic plan.

The metrics that we use to evaluate our financial performance include organic change in revenue before billable expenses as well as the change in certain operating expenses, and the components thereof, expressed as a percentage of consolidated revenue before billable expenses, as well as Adjusted EBITA. These metrics are also used by management to assess the financial performance of our reportable segments, MD&E, IA&C, and SC&E. In certain of our discussions, we analyze revenue before billable expenses by geographic region and by business sector, in which we focus on our top 500 clients, which typically constitute approximately 85% of our annual consolidated revenue before billable expenses.

Results for the three months ended March 31, 2025, may not be indicative of the results that may be expected for the fiscal year ending December 31, 2025. The Consolidated Financial Statements and MD&A presented herein reflect the latest estimates and assumptions made by us that affect the reported amounts of assets and liabilities and related disclosures as of the date of the consolidated financial statements and reported amounts of revenue and expenses during the reporting periods presented. We believe we have used reasonable estimates and assumptions to assess the fair values of the Company’s goodwill, long-lived assets and indefinite-lived intangible assets; assessment of the annual effective tax rate; valuation of deferred income taxes and the allowance for expected credit losses on future uncollectible accounts receivable. If actual market conditions vary significantly from those currently projected, these estimates and assumptions could materially change resulting in adjustments to the carrying values of our assets and liabilities.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

The following table presents a summary of our financial performance for the three months ended March 31, 2025 and 2024.


Statement of Operations Data	2025			2024			% Increase/ (Decrease)
REVENUE:
Revenue before billable expenses	$	1,996.3		$	2,182.9		(8.5)	%
Billable expenses	326.3			313.0			4.2	%
Total revenue	$	2,322.6		$	2,495.9		(6.9)	%

OPERATING INCOME (LOSS)1	$	(42.0)		$	184.2		(122.8)	%

Adjusted EBITA 1,2	$	(21.6)		$	204.9		(110.5)	%

NET INCOME (LOSS) AVAILABLE TO IPG COMMON STOCKHOLDERS	$	(85.4)		$	110.4

Earnings per share available to IPG common stockholders:
Basic	$	(0.23)		$	0.29
Diluted	$	(0.23)		$	0.29

Operating Ratios
Organic change in revenue before billable expenses	(3.6)		%	1.3		%

Operating margin on revenue before billable expenses	(2.1)		%	8.4		%
Operating margin on total revenue	(1.8)		%	7.4		%

Adjusted EBITA margin on revenue before billable expenses 1,2	(1.1)		%	9.4		%

Expenses as a % of revenue before billable expenses:
Salaries and related expenses	70.9		%	72.1		%
Office and other direct expenses	16.0		%	14.8		%
Selling, general and administrative expenses	2.0		%	1.7		%
Depreciation and amortization	3.1		%	3.0		%
Restructuring charges	10.2		%	0.0		%

1 For the three months ended March 31, 2025 and 2024, results include restructuring charges of $203.3 and $0.6, respectively. See "Restructuring Charges" section of this MD&A and Note 8 of Item 1, Financial Statements and Supplementary Data for further information. For the three months ended March 31, 2025, results include deal costs of $4.8 related to the planned acquisition of IPG by Omnicom. See Note 2 of Item 1, Financial Statements and Supplementary Data for further information.

2 Adjusted EBITA is a financial measure that is not defined by U.S. GAAP. Adjusted EBITA is calculated as net income available to IPG common stockholders before provision for income taxes, total (expenses) and other income, equity in net loss of unconsolidated affiliates, net income attributable to non-controlling interests, and amortization of acquired intangibles. Refer to the “Non-GAAP Financial Measure” section of this MD&A for additional information and for a reconciliation to U.S. GAAP measures.

Total revenue, which includes billable expenses, decreased (6.9)% during the first quarter of 2025. Our organic decrease of revenue before billable expenses was (3.6)% during the first quarter of 2025, compared to an organic increase of 1.3% during the first quarter of 2024. This was a result of net client losses in our auto and transportation, retail and health care sectors, partially offset by increased spending from existing clients in our technology & telecom and financial services sectors and net client wins in our food and beverage sector. During the first quarter of 2025, our Adjusted EBITA margin on revenue before billable expenses decreased to (1.1)% from 9.4% in the prior-year period as revenue before billable expenses decreased and operating expenses, excluding billable expenses and amortization of acquired intangibles increased. Adjusted EBITA includes

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Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

$203.3 of restructuring charges related to our 2025 restructuring actions and $4.8 of deal costs related to the planned acquisition of IPG by Omnicom, which had a (10.2)% and (0.2)% impact, respectively, on Adjusted EBITA margin on revenue before billable expenses. See further discussion below in the “Results of Operations” section.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

RESULTS OF OPERATIONS

Consolidated Results of Operations – Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Revenue before billable expenses

Our revenue before billable expenses is directly impacted by the retention and spending levels of existing clients and by our ability to win new clients. Most of our expenses are recognized ratably throughout the year and are therefore less seasonal than revenue. Our revenue before billable expenses is typically lowest in the first quarter and highest in the fourth quarter, reflecting the seasonal spending of our clients.


			Components of Change								Change
	Three months ended March 31, 2024		Foreign Currency		Net Acquisitions/ (Divestitures)		Organic		Three months ended March 31, 2025		Organic		Total
Consolidated	$	2,182.9	$	(27.1)	$	(81.6)	$	(77.9)	$	1,996.3	(3.6)	%	(8.5)	%
Domestic	1,476.3		—		(58.6)		(59.5)		1,358.2		(4.0)	%	(8.0)	%
International	706.6		(27.1)		(23.0)		(18.4)		638.1		(2.6)	%	(9.7)	%
United Kingdom	178.0		(1.8)		(5.9)		(10.9)		159.4		(6.1)	%	(10.4)	%
Continental Europe	179.5		(6.7)		(2.8)		(0.7)		169.3		(0.4)	%	(5.7)	%
Asia Pacific	142.8		(4.1)		(6.5)		(12.9)		119.3		(9.0)	%	(16.5)	%
Latin America	87.1		(10.3)		(7.0)		2.7		72.5		3.1	%	(16.8)	%
Other	119.2		(4.2)		(0.8)		3.4		117.6		2.9	%	(1.3)	%

The organic decrease of revenue before billable expenses was (3.6)% during the first quarter of 2025. The organic decrease in our domestic market was primarily due to revenue decreases at our advertising businesses, digital project-based offerings and experiential businesses, partially offset by revenue increases at our media businesses, public relations agencies and data management and analytics. In our international markets, the organic decrease was driven by revenue decreases across all disciplines, primarily in our Asia Pacific and United Kingdom regions.

Refer to the segment discussion later in this MD&A for information on changes in revenue before billable expenses by segment.

Salaries and Related Expenses


	2025			2024			% Increase/ (Decrease)
Salaries and related expenses	$	1,414.4		$	1,572.8		(10.1)	%









As a % of revenue before billable expenses:
Salaries and related expenses	70.9		%	72.1		%
Base salaries, benefits and tax	62.6		%	62.9		%
Incentive expense	4.2		%	2.6		%
Severance expense	0.2		%	2.2		%
Temporary help	3.1		%	3.3		%
All other salaries and related expenses	0.8		%	1.1		%

Total salaries and related expenses decreased (10.1)% during the first quarter of 2025 as compared to the prior-year period, primarily driven by decreased base salaries, benefits and tax, as well as decreases in severance and temporary help expenses, partially offset by an increase in performance-based employee compensation expense.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Office and Other Direct Expenses


	2025			2024			% Increase/ (Decrease)
Office and other direct expenses	$	319.2		$	322.1		(0.9)	%






As a % of revenue before billable expenses:
Office and other direct expenses	16.0		%	14.8		%
Occupancy expense	4.3		%	4.4		%
All other office and other direct expenses 1	11.7		%	10.4		%

Our tax rates are affected by many factors, including our worldwide earnings from various countries, changes in legislation and tax characteristics of our income. For the three months ended March 31, 2025, our income tax benefit was attributable to our loss on income before income taxes, which reflects restructuring charges of $203.3. The income tax benefit was negatively impacted by losses related to the disposition of previously held for sale entities for which we recorded a nominal tax benefit and by losses in certain foreign jurisdictions where we receive no tax benefit due to 100% valuation allowances.

For the three months ended March 31, 2024, our income tax expense was negatively impacted by net losses on sales of businesses and the classification of certain assets as held for sale for which we received minimal tax benefit.

EARNINGS (LOSS) PER SHARE

Basic loss per share available to IPG common stockholders for the three months ended March 31, 2025 was $0.23 compared to basic earnings per share of $0.29 for the three months ended March 31, 2024. Diluted loss per share available to IPG common stockholders for the three months ended March 31, 2025 was $0.23 compared to diluted earnings per share of $0.29 for the three months ended March 31, 2024.

Basic and diluted loss per share for the three months ended March 31, 2025 included negative impacts of $0.04 from the amortization of acquired intangibles, $0.41 from restructuring charges, $0.01 related to deal costs related to the planned acquisition of IPG by Omnicom, and $0.09 from net losses on sales of businesses.

Basic and diluted earnings per share for the three months ended March 31, 2024 included negative impacts of $0.04 from the amortization of acquired intangibles and $0.02 from net losses on sales of businesses and the classification of certain assets as held for sale.

Segment Results of Operations – Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

As discussed in Note 12 to the unaudited Consolidated Financial Statements, we have three reportable segments as of March 31, 2025: MD&E, IA&C and SC&E. We also report results for the “Corporate and Other” group.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

Media, Data & Engagement Solutions

Revenue before billable expenses


			Components of Change								Change
	Three months ended March 31, 2024		Foreign Currency		Net Acquisitions/ (Divestitures)		Organic		Three months ended March 31, 2025		Organic		Total
Consolidated	$	961.3	$	(14.2)	$	(79.5)	$	21.2	$	888.8	2.2	%	(7.5)	%
Domestic	633.5		—		(58.6)		26.8		601.7		4.2	%	(5.0)	%
International	327.8		(14.2)		(20.9)		(5.6)		287.1		(1.7)	%	(12.4)	%

The organic increase during the first quarter of 2025 was mainly attributable to higher spending from existing clients and net client wins in our healthcare and food & beverage sectors as well as higher spending from existing clients in our technology & telecom sector, partially offset by net client losses in our retail, auto & transportation and consumer goods sectors. The organic increase in our domestic market during the first quarter of 2025 was primarily driven by revenue increases at our media businesses and data management and analytics, partially offset by revenue decreases at our digital project-based offerings. In our international markets, the organic decrease was due to revenue decreases at our digital project-based offerings primarily in our United Kingdom and Continental Europe regions and at our media businesses primarily in our Asia Pacific region, partially offset by revenue increases at our media businesses primarily in our Other region led by Canada and Latin America region.

Segment EBITA


	2025			2024			Change
Segment EBITA	$	75.6		$	93.2		(18.9)	%
Segment EBITA margin on revenue before billable expenses	8.5		%	9.7		%

Segment EBITA margin decreased during the first quarter of 2025 compared to the prior-year period, as the decrease in our revenue before billable expenses, inclusive of the organic increase as discussed above, outpaced the decrease in our operating expenses, excluding billable expenses and amortization of acquired intangibles. Segment EBITA reflects the inclusion of $53.3 and $0.0 of restructuring charges for the three months ended March 31, 2025 and 2024, respectively. Salaries and related expenses decreased as compared to the prior-year period, primarily due to decreases in base salaries, benefits and tax, severance expense and temporary help expense, partially offset by increases in performance-based employee compensation expense. Office and other direct expense decreased mainly due to decreases in occupancy expense, professional consulting fees, new business development, and travel and entertainment expenses, partially offset by an increase in technology & software expenses.

Depreciation and amortization, excluding amortization of acquired intangibles, as a percentage of revenue before billable expenses was 2.7% during the first quarter of 2025, respectively, which decreased slightly as compared to the prior-year period.

Integrated Advertising & Creativity Led Solutions

Revenue before billable expenses


			Components of Change								Change
	Three months ended March 31, 2024		Foreign Currency		Net Acquisitions/ (Divestitures)		Organic		Three months ended March 31, 2025		Organic		Total
Consolidated	$	881.4	$	(10.0)	$	—	$	(90.8)	$	780.6	(10.3)	%	(11.4)	%
Domestic	600.7		—		—		(84.3)		516.4		(14.0)	%	(14.0)	%
International	280.7		(10.0)		—		(6.5)		264.2		(2.3)	%	(5.9)	%

The organic decrease during the first quarter of 2025 was due to net client losses in our healthcare sector and lower spending from existing clients and net client losses in our retail and auto & transportation sectors, partially offset by higher spending from existing clients in our technology & telecom and financial services sectors. The (14.0)% organic decrease during

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Management’s Discussion and Analysis of Financial Condition and Results of Operations - (continued)

(Amounts in Millions, Except Per Share Amounts)

(Unaudited)

the first quarter of 2025 in our domestic market was due to revenue decreases in our advertising businesses. In our international markets, the (2.3)% organic decrease was due to revenue decreases in our advertising businesses primarily in the United Kingdom and Asia Pacific regions, partially offset by revenue increases in the Continental Europe region.

Segment EBITA


	2025			2024			Change
Segment EBITA	$	(1.5)		$	107.9		(101.4)	%
Segment EBITA margin on revenue before billable expenses	(0.2)		%	12.2		%

Segment EBITA margin decreased during the first quarter of 2025 compared to the prior-year period, as revenue before billable expenses, as discussed above, decreased and our operating expenses, excluding billable expenses and amortization of acquired intangibles, increased. Segment EBITA reflects the inclusion of $55.9 and $0.3 of restructuring charges for the three months ended March 31, 2025 and 2024. Salaries and related expenses decreased as compared to the prior-year period, primarily due to decreases in base salaries, benefits and tax, severance expense and temporary help expense, partially offset by increases in performance-based employee compensation expense. Office and other direct expense increased mainly due to increases in technology & software expense and foreign currency losses, partially offset by a decrease in occupancy expense.

Depreciation and amortization, excluding amortization of acquired intangibles, as a percentage of revenue before billable expenses was 1.6% during the first quarter of 2025, which increased compared to the prior-year period.

Specialized Communications & Experiential Solutions

Revenue before billable expenses


			Components of Change								Change
	Three months ended March 31, 2024		Foreign Currency		Net Acquisitions/ (Divestitures)		Organic		Three months ended March 31, 2025		Organic		Total
Consolidated	$	340.2	$	(2.9)	$	(2.1)	$	(8.3)	$	326.9	(2.4)	%	(3.9)	%
Domestic	242.1		—		—		(2.0)		240.1		(0.8)	%	(0.8)	%
International	98.1		(2.9)		(2.1)		(6.3)		86.8		(6.4)	%	(11.5)	%

The organic decrease during the first quarter of 2025 was mainly attributable to decreased spend from existing clients in our food & beverage, other and technology & telecom sectors, partially offset by increased spending from existing clients and net client wins in our health care, retail and financial services sectors. The organic decrease of (0.8)% during the first quarter of 2025 in our domestic market was due to revenue decreases at our experiential businesses, partially offset by revenue increases at our public relations agencies. In our international markets, the (6.4)% organic decrease was due to revenue decreases at our experiential businesses across nearly all regions and at our public relations agencies, primarily in our United Kingdom region, slightly offset by revenue increases at our public relations agencies in our Other region led by Canada.

Segment EBITA


	2025			2024			Change
Segment EBITA	$	18.5		$	43.9		(57.9)	%
Segment EBITA margin on revenue before billable expenses	5.7		%	12.9		%

1 Calculations include restructuring charges of $203.3 for the three months ended March 31, 2025 and $0.6 for the three months ended March 31, 2024. See "Restructuring Charges" section of this MD&A and Note 8 of Item 1, Financial Statements and Supplementary Data for further information.

2 Calculations include $4.8 of deal costs incurred during the three months ended March 31, 2025 related to the planned acquisition of IPG by Omnicom. See Note 2 of Item 1, Financial Statements and Supplementary Data, for further information.

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Item 3.			Quantitative and Qualitative Disclosures about Market Risk

In the normal course of business, we are exposed to market risks related to interest rates, foreign currency rates and certain balance sheet items. From time to time, we use derivative instruments, pursuant to established guidelines and policies, to manage some portion of these risks. Derivative instruments utilized in our hedging activities are viewed as risk management tools and are not used for trading or speculative purposes. There has been no significant change in our exposure to market risk during the first quarter of 2025. Our exposure to market risk for changes in interest rates primarily relates to the fair market value and cash flows of our debt obligations. As of both March 31, 2025 and December 31, 2024, approximately 99% of our debt obligations bore interest rates at fixed rates. For further discussion of our exposure to market risk, refer to Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in our 2024 Annual Report.


Item 4.			Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2025, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

Changes in Internal Control Over Financial Reporting

There has been no change in internal control over financial reporting in the quarter ended March 31, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION


Item 1.			Legal Proceedings

Information about our legal proceedings is set forth in Note 14 to the unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.


Item 1A.			Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Item 1A, Risk Factors, in our 2024 Annual Report on Form 10-K (the “2024 Annual Report”), which could materially affect our business, financial condition or future results. In the first quarter of 2025, there have been no material changes in the risk factors we have previously disclosed in Item 1A, Risk Factors, in our 2024 Annual Report. The risks described in our 2024 Annual Report are not the only risks we face, and additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect the Company’s business, financial condition or operating results.


Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds

(c)The following table provides information regarding our purchases of our equity securities during the period from January 1, 2025, to March 31, 2025:


	Total Number of Shares (or Units) Purchased 1	Average Price Paid per Share (or Unit) 2		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs 3	Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs 3
January 1 - 31	956	$	28.80	—	$	170,066,503
February 1 - 28	568,363	$	27.20	—	$	325,066,503
March 1 - 31	3,427,470	$	26.39	3,411,002	$	235,066,518
Total	3,996,789	$	26.50	3,411,002

1The total number of shares of our common stock purchased includes shares withheld under the terms of grants under employee stock-based compensation plans to offset tax withholding obligations that arose upon vesting and release of restricted shares (the “Withheld Shares”). We repurchased 956 Withheld Shares in January 2025; 568,363 Withheld Shares in February 2025; and 16,468 Withheld Shares in March 2025, for a total of 585,787 Withheld Shares during the three-month period.

2The average price per share for each of the months in the fiscal quarter and for the three-month period was calculated by dividing (a) the sum for the applicable period of the aggregate value of the tax withholding obligations and the aggregate amount we paid for shares acquired under our share repurchase program, described in Note 6 to the unaudited Consolidated Financial Statements, by (b) the sum of the number of Withheld Shares and the number of shares acquired in our share repurchase program.

3On February 7, 2024, the Company's Board of Directors authorized a share repurchase program to repurchase from time to time up to $ million, excluding fees, of our common stock. On February 11, 2025, the Board authorized a share repurchase program to repurchase from time to time up to $ million, excluding fees, of our common stock, which was in addition to any amounts remaining under the 2024 share repurchase program.

On December 8, 2024, we entered into an Agreement and Plan of Merger (the "Merger Agreement") with Omnicom Group Inc. ("Omnicom"), pursuant to which a merger subsidiary of Omnicom will merge with and into IPG, with IPG surviving the merger as a direct wholly owned subsidiary of Omnicom. Under the terms of the Merger Agreement, IPG may continue to purchase its common stock in the open market or pursuant to Rule 10b5-1 trading plans, up to $325.0 million in the aggregate per calendar year, and we expect to continue to repurchase our common stock in future periods. The timing and amount of the repurchases will depend on market conditions and other funding requirements. There are no expiration dates associated with the share repurchase programs.


Item 3.			Defaults Upon Senior Securities

None.


Item 4.			Mine Safety Disclosures

Not applicable.


Item 5.			Other Information

None.


Item 6.			Exhibits

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All exhibits required pursuant to Item 601 of Regulation S-K to be filed as part of this report or incorporated herein by reference to other documents are listed in the Index to Exhibits below.

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INDEX TO EXHIBITS


Exhibit No.						Description

31.1						Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.

31.2						Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended.

32						Certification of the Chief Executive Officer and the Chief Financial Officer furnished pursuant to 18 U.S.C. Section 1350 and Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended.

101						Interactive Data File for the period ended March 31, 2025. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

104						Cover Page Interactive Data File. The cover page XBRL tags are embedded within the inline XBRL document and are included in Exhibit 101.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



			THE INTERPUBLIC GROUP OF COMPANIES, INC.

			By			/s/ Philippe Krakowsky
						Philippe Krakowsky Chief Executive Officer

Date: April 24, 2025




			By			/s/ Christopher F. Carroll
						Christopher F. Carroll Executive Vice President, Controller and Chief Accounting and Business Transformation Officer (Principal Accounting Officer)

Date: April 24, 2025

INTERPUBLIC GROUP OF COMPANIES, INC. - Quarter Report: 2025 March (Form 10-Q)

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