Interpublic Group’s second quarter results were received positively by the market, despite a year-on-year revenue decline. Management attributed this to ongoing pressures from major account losses in 2024—particularly in media and healthcare—which weighed on organic growth. However, CEO Philippe Krakowsky pointed to underlying improvements in these areas, alongside strong performance in food and beverage, financial services, and technology sectors. Krakowsky highlighted the company’s structural cost reductions, achieved through a broad transformation program, as key to supporting profitability. He noted, “Our transformation work and evolving business mix have put us ahead of plan,” with cost discipline and centralized functions offsetting revenue headwinds.
Is now the time to buy IPG? Find out in our full research report (it’s free).
Interpublic Group (IPG) Q2 CY2025 Highlights:
- Revenue: $2.17 billion vs analyst estimates of $2.18 billion (6.6% year-on-year decline, in line)
- Adjusted EPS: $0.75 vs analyst estimates of $0.56 (33.7% beat)
- Adjusted EBITDA: $432.3 million vs analyst estimates of $355.4 million (19.9% margin, 21.6% beat)
- Operating Margin: 11.2%, down from 13.7% in the same quarter last year
- Organic Revenue fell 3.5% year on year (1.7% in the same quarter last year)
- Market Capitalization: $9.35 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Interpublic Group’s Q2 Earnings Call
- David Karnovsky (JPMorgan) asked what enabled faster realization of margin benefits and if there was overlap with Omnicom synergies. CEO Philippe Krakowsky cited comprehensive restructuring focused on both efficiency and strengthening capabilities.
- David Karnovsky (JPMorgan) followed up on underlying organic growth improvement, seeking to segment headwinds from client losses versus business momentum. Krakowsky explained that excluding three large losses, core media and healthcare showed sequential improvement.
- Stephen Cahall (Wells Fargo) questioned the performance of creative services excluding account churn and the shift to outcome-based contracts. Krakowsky noted traditional creative agencies faced industry-wide challenges, but outcome-based work now comprises over half of media contracts, reflecting a broader industry trend.
- Adam Berlin (UBS) asked about the run-rate cost savings from restructuring and expectations for the second half’s revenue trajectory. Krakowsky estimated in-year savings around $300 million, with Q3 and Q4 revenue expected to be relatively flat but stronger than the first half.
- Bank of America (analyst not named) inquired about headcount needs as growth resumes and the impact of healthcare policy changes on client spending. Johnson said structural efficiencies should persist, with future hiring focused on new skill sets, while Krakowsky described healthcare marketing as facing localized volatility due to policy uncertainty.
Catalysts in Upcoming Quarters
Our team will closely monitor (1) the pace of regulatory approvals and progress toward completing the Omnicom merger, (2) evidence of sustained margin improvement from cost transformation initiatives, and (3) signs of organic revenue stabilization as Interpublic Group laps prior account losses and wins new business. The response of key client sectors to broader macroeconomic trends and policy changes, particularly in healthcare and retail, will also be important indicators.
Interpublic Group currently trades at $25.52, up from $24.02 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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