Omnicom Group NYSE: OMC executives highlighted early integration progress following the closing of its acquisition of Interpublic just before the holidays, pointing to portfolio reshaping, expanding client relationships, and a lift in profitability in the company’s first quarter 2026 earnings call.
Chairman and CEO John Wren said the company has seen “momentum and cohesive growth across the organization” since combining the businesses, while also moving quickly to simplify its agency structure and refocus on business lines expected to drive growth.
Portfolio actions and a new “core operations” lens
A major theme of the call was Omnicom’s decision to emphasize “core operations,” defined as the company’s operating businesses excluding dispositions and assets held for sale. Wren said Omnicom identified planned asset sales and dispositions representing approximately $3.2 billion of annual revenue, with about $1 billion disposed of in the first quarter. The company expects to sell or exit the remaining assets “in the next several quarters.”
Chief Financial Officer Phil Angelastro said the dispositions and held-for-sale category represented less than 5% of adjusted operating income in the first quarter, adding that management’s priority is to complete the disposals in a timely manner. During Q&A, Wren said the initial list of assets was developed based on “poor margin performance and unreliable growth,” with a second filter focused on whether clients actually needed those capabilities.
Wren also acknowledged that margin assumptions previously discussed may prove optimistic. “Maybe we were being a little optimistic or nice at Investor Day when we said the margins for these businesses are 10%,” he said, adding the margins “are probably something less.” Angelastro noted margins could vary quarter to quarter as the company progresses through dispositions.
When asked about proceeds from planned disposals, management did not provide an estimate. Wren said the effort is aimed at generating cash and removing the assets from the P&L, while Angelastro said it is “very difficult to estimate” proceeds and that the company will provide updates as transactions close.
First-quarter performance and integration costs
On a core operations basis, the company reported first-quarter revenue of $5.6 billion, which Wren said was up $345 million compared with first-quarter 2025 revenue from core operations for the combined Omnicom and Interpublic businesses. Organic revenue growth was 3.9%, and foreign exchange contributed 2.7% to growth, Angelastro said.
Adjusted profitability rose as cost synergies began to flow through results. Wren said adjusted EBITDA margin increased 240 basis points to 14.8% versus the combined operations in the prior-year quarter. Angelastro said adjusted EBITDA rose $180 million, or more than 27%, and attributed the margin improvement primarily to cost reduction synergies from the Interpublic acquisition.
Non-GAAP adjusted diluted EPS was $1.90, up 11.8% from $1.70 in the prior-year period, with Wren noting the figure excludes after-tax costs for repositioning, dispositions, and amortization of intangibles. Angelastro said the quarter included:
- $59 million of integration-related costs recorded in SG&A
- A $34 million loss on dispositions
- $4 million of severance and repositioning costs
Angelastro also highlighted higher non-cash charges following the acquisition, including $117 million of amortization expense related to acquired intangibles, an increase of $96 million compared to 2025, and a $16 million increase in depreciation.
Net interest expense increased to $72 million from $29 million a year earlier, which Angelastro said primarily reflected the assumption of approximately $3 billion of Interpublic debt and refinancing activity in the first quarter that resulted in about $1 billion of incremental long-term debt. Interest income rose $17 million to $47 million due to higher average cash balances, including cash acquired with Interpublic.
Discipline and regional trends: integrated media leads
Omnicom updated its reporting to reflect an integrated operating model. Angelastro said integrated media—which includes media, commerce, data, CRM and consulting, and content automation—represented about 52% of first-quarter core operations revenue. Other revenue shares were advertising (17%), health (10%), PR (12%), and experiential and other (10%).
On performance by discipline, Angelastro provided directional growth commentary while noting the integration process is ongoing and the company is not yet providing detailed combined prior-year comparisons by discipline or region. He said integrated media “led the way” with high-single-digit growth, PR and experiential and other grew mid-single digits, health was up low single digits, and advertising was down.
By region, Angelastro said the U.S. represented 61% of revenue in the quarter, with the U.K. and Europe together at 21% and Asia-Pacific at 9%. U.S. revenue grew mid-single digits, while Europe, Latin America, and Asia-Pacific increased low single digits; the U.K. and Middle East and Africa declined.
Wren said an underlying trend he is seeing is that clients are increasingly focused on selecting “a single provider to take care of most of their needs,” and he said the company extended multi-year contracts with “quite a number of clients” during the quarter.
Client wins, relationship expansion, and AI-driven platform efforts
Wren said integration actions included merging or sunsetting more than 20 major agency brands, along with “a long tail of smaller brands,” which he said helped bring together talent and support new business momentum. He cited first-quarter new business wins including IBM, GSK, John Deere, Little Caesars, Acadia Pharmaceuticals, and Baileys. He also pointed to expanded relationships with existing clients including Clorox, Dyson, Delta, Exxon, Kroger, Merck, and Unilever.
Executives also emphasized Omni, the company’s AI-enabled sales and marketing platform. Wren said Omnicom scaled its “next generation of Omni across the entire organization” in the first quarter, putting “the latest agentic AI tools” in employees’ hands. He said the platform is contributing to media performance and measurement improvements, faster activation, and enhanced ROI using Acxiom’s Real Identity, along with deeper integrations with partners such as Adobe and Amazon.
In response to questions about agentic AI and the media supply chain, Chief Technology Officer Paolo Yuvienco said Omnicom has tested “agent-to-agent buying” and has since executed “real media buys for several clients using our agent framework,” describing the effort as designed to shorten the media supply chain and increase working media dollars for clients. Wren said Omnicom is investing in more direct relationships with publishers, arguing intermediaries can add cost to clients and the industry.
On Acxiom, Wren said the “quality and the fidelity of the data” has been a meaningful contributor, particularly because the data is built around regulated industries such as finance and pharma. Yuvienco said the value Omnicom can derive from the data has increased with the proliferation of AI, calling it “exponentially more powerful for our clients.”
Capital allocation, leverage, and outlook commentary
Management reiterated previously communicated targets and capital plans. Wren cited cost reduction synergy goals of $900 million in 2026 and $1.5 billion by mid-2028, as well as a $5 billion share repurchase plan over the next 12 months, including a $2.5 billion accelerated share repurchase program.
Angelastro said Omnicom repurchased $2.8 billion of shares in the first quarter (excluding $16 million of proceeds from stock plans), primarily driven by the ASR. Actual shares outstanding were 285.3 million as of March 31, 2026, down from 313.4 million at year-end 2025. He said the company plans to complete the $5 billion repurchase plan by the end of April 2027 and estimated the share count could decline about 11% to 12% by December 31, 2026 versus the December 31, 2025 level.
On the balance sheet, Angelastro said gross long-term debt was $10.2 billion at the end of the first quarter. The company retired $1.4 billion of senior notes due April 2026 and issued $2.3 billion of new senior notes, including $1.7 billion of U.S. dollar notes at a weighted average coupon of 4.9% and €600 million of euro notes at a 3.85% coupon, with maturities ranging from three to 10 years. He said the next maturity is in July 2027 and projected net interest expense would rise by about $200 million in 2026 compared with 2025.
Angelastro said the leverage ratio under the company’s credit agreement, calculated as total debt to pro forma adjusted EBITDA, was 2.5 times, and the company was in compliance with its covenant. Cash equivalents and short-term investments totaled $4.3 billion, and Omnicom also has a $3.5 billion undrawn revolving credit facility backing a $3 billion commercial paper program.
On outlook-related questions, Angelastro said the company is “on track” to achieve operating plans and targets, including the organic growth expectation discussed at Investor Day. On adjusted EPS growth, he said the company was pleased with first-quarter performance and that subsequent quarters are expected to be “higher double digits than the first quarter performance,” while stopping short of giving a more specific range.
Wren also noted external uncertainty, citing the ongoing conflict in the Middle East, which he said represents less than 2.5% of Omnicom’s revenue, and said the company is prioritizing employee safety and monitoring developments.
About Omnicom Group NYSE: OMC
Omnicom Group Inc NYSE: OMC is a global marketing and corporate communications holding company headquartered in New York City. Founded in 1986 through the merger of the BBDO, DDB and Needham Harper agencies, Omnicom has built a portfolio of leading brands and networks serving clients across diverse industries.
The company's primary business activities encompass advertising, strategic media planning and buying, digital and interactive marketing, direct and promotional marketing, public relations, and customer relationship management.
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