OMNICOM GROUP INC

Previous wording

This Quarterly Report on Form 10-Q contains forward-looking statements, including statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, from time to time, the Company or its representatives have made, or may make, forward-looking statements, orally or in writing. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial position, or otherwise, based on current beliefs of the Company’s management as well as assumptions made by, and information currently available to, the Company’s management. Forward-looking statements may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,” “should,” “would,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “possible,” “potential,” “predict,” “project” or similar words, phrases or expressions. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company’s control. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include:

Current wording

This Quarterly Report on Form 10-Q contains forward-looking statements, including statements within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, from time to time, the Company or its representatives have made, or may make, forward-looking statements, orally or in writing. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise, based on current beliefs of the Company’s management as well as assumptions made by, and information currently available to, the Company’s management. Forward-looking statements may be accompanied by words such as “aim,” “anticipate,” “believe,” “plan,” “could,” “should,” “would,” “estimate,” “expect,” “forecast,” “future,” “guidance,” “intend,” “may,” “will,” “possible,” “potential,” “predict,” “project” or similar words, phrases or expressions. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company’s control. Therefore, you should not place undue reliance on such statements. Factors that could cause actual results to differ materially from those in the forward-looking statements include:

Previous wording

•adverse economic conditions, including those caused by geopolitical events, international hostilities, acts of terrorism, public health crises, high and sustained inflation in countries that comprise our major markets, high interest rates, and labor and supply chain issues affecting the distribution of our clients’ products;

Current wording

•adverse economic conditions and disruptions, including geopolitical events, international hostilities, acts of terrorism, public health crises, inflation or stagflation, tariffs and other trade barriers, central bank interest rate policies in countries that comprise our major markets, labor and supply chain issues affecting the distribution of our clients’ products, or a disruption in the credit markets;

Previous wording

•reductions in client spending, a slowdown in client payments and a deterioration or disruption in the credit markets;

Current wording

•reductions in client spending, a slowdown in client payments or a deterioration or disruption in the credit markets;

Previous wording

•unanticipated changes related to competitive factors in the advertising, marketing and corporate communications industries;

Current wording

•unanticipated changes related to competitive factors in the marketing and communications services industries;

Previous wording

•risks related to our environmental, social and governance goals and initiatives, including impacts from regulators and other stakeholders, and the impact of factors outside of our control on such goals and initiatives.

Current wording

•risks related to environmental, social and governance goals and initiatives, including impacts from regulators and other stakeholders, and the impact of factors outside of our control on such goals and initiatives.

Previous wording

The unaudited consolidated financial statements and related notes to the unaudited consolidated financial statements, including our critical accounting estimates, and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this report, should be read in conjunction with our 2023 10-K. In the following tables, dollars are presented in millions, except share amounts.

Current wording

The unaudited consolidated financial statements and related notes to the unaudited consolidated financial statements, including our critical accounting estimates, and the related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this report, should be read in conjunction with our 2024 Form 10-K.

Previous wording

Global economic disruptions, including geopolitical events, international hostilities, acts of terrorism, public health crises, high and sustained inflation in countries that comprise our major markets, high interest rates, and labor and supply chain issues could cause economic uncertainty and volatility. The impact of these issues on our business will vary by geographic market and discipline. We monitor economic conditions closely, as well as client revenue levels and other factors. In response to reductions in revenue, we can take actions to align our cost structure with changes in client demand and manage our working capital. However, there can be no assurance as to the effectiveness of our efforts to mitigate any impact of the current and future adverse economic conditions, reductions in client revenue, changes in client creditworthiness and other developments.

Current wording

Global economic conditions and disruptions, including geopolitical events, international hostilities, acts of terrorism, public health crises, inflation or stagflation, tariffs and other trade barriers, central bank interest rate policies in countries that comprise our major markets, labor and supply chain challenges affecting the distribution of our clients' products, or a disruption in the credit markets could cause economic uncertainty and volatility. The impact of these issues on our business will vary by geographic market and discipline. We monitor economic conditions closely, as well as client revenue levels and other factors. In response to reductions in revenue, we can take actions to align our cost structure with changes in client demand and manage our working capital. However, there can be no assurance as to the effectiveness of our efforts to mitigate any impact of the current and future adverse economic conditions, reductions in client revenue, changes in client creditworthiness and other developments.

Previous wording

Omnicom is a strategic holding company providing data-inspired, creative marketing and sales solutions to many of the largest global companies. Our portfolio of companies includes our global networks, BBDO, DDB, TBWA, Omnicom Media Group, the DAS Group of Companies, and the Communications Consultancy Network. All of our global networks integrate their service offerings with the Omnicom branded practice areas, including Omnicom Health Group, Omnicom Precision Marketing Group, Omnicom Commerce Group, Omnicom Advertising Collective, Omnicom Public Relations Group, Omnicom Brand Consulting Group, Flywheel Digital and Omnicom Production, a new practice area that brings together Omnicom's global production capabilities, as well as our Experiential businesses and Execution & Support businesses, which includes Omnicom Specialty Marketing Group.

Current wording

We are a strategic holding company providing data-inspired, creative marketing and sales solutions to many of the largest global companies. Our portfolio of companies includes our global networks: Omnicom Advertising Group (OAG), Omnicom Media Group, the DAS Group of Companies, and the Communications Consultancy Network. OAG includes our creative brands BBDO, DDB, TBWA and the brands included within the Omnicom Advertising Collective. All of our global networks integrate their service offerings with the Omnicom branded practice areas, including Omnicom Health Group, Omnicom Precision Marketing Group, Omnicom Commerce Group, Omnicom Public Relations Group, Omnicom Brand Consulting Group, Flywheel Digital and Omnicom Production, as well as our Experiential businesses and Execution & Support businesses, which includes Omnicom Specialty Marketing Group.

Previous wording

On a global, pan-regional, and local basis, our networks, practice areas, and agencies provide a comprehensive range of solutions in the following fundamental disciplines: Advertising & Media, Precision Marketing, Public Relations, Healthcare, Branding & Retail Commerce, Experiential, and Execution & Support. Advertising & Media includes creative services across digital and traditional media, strategic media planning and buying, performance media, data analytics services, and Omnicom Production. Precision Marketing includes digital and direct marketing, digital transformation consulting, e-commerce operations, media execution, market intelligence and data and analytics. Public Relations services include corporate communications, crisis management, public affairs and media and media relations services. Healthcare includes corporate communications and advertising and media services to global healthcare and pharmaceutical companies. Branding & Retail Commerce services include brand and product consulting, strategy and research and retail marketing. Experiential marketing services include live and digital events and experience design and execution. Execution & Support includes field marketing, sales support, digital and physical merchandising, as well as other specialized marketing and custom communications services. Our geographic markets include the Americas, which includes North America and Latin America, Europe, the Middle East and Africa, or EMEA, and Asia-Pacific.

Current wording

On a global, pan-regional, and local basis, our networks, practice areas and agencies provide a comprehensive range of services in the following fundamental disciplines: Media & Advertising, Precision Marketing, Public Relations, Healthcare, Branding & Retail Commerce, Experiential, and Execution & Support. Media & Advertising includes creative services across digital and traditional media, strategic media planning and buying, performance media, data analytics services, and Omnicom Production. Precision Marketing includes digital and direct marketing, digital transformation consulting, e-commerce operations, media execution, market intelligence and data and analytics. Public Relations services include corporate communications, crisis management, public affairs and media and media relations services. Healthcare includes corporate communications and advertising and media services to global healthcare and pharmaceutical companies. Branding & Retail Commerce services include brand and product consulting, strategy and research and retail marketing. Experiential marketing services include live and digital events and experience design and execution. Execution & Support includes field marketing, sales support, digital and physical merchandising, point-of-sale and product placement, as well as other specialized marketing and custom communications services. Our geographic markets include the Americas, which includes North America and Latin America, Europe, the Middle East and Africa or EMEA, and Asia-Pacific.

Previous wording

Our business model was built and continues to evolve around our clients. While our networks, practice areas and agencies operate under different names and frame their ideas in different disciplines, we organize our services around our clients. Our fundamental business principle is that our clients’ specific marketing requirements are the central focus of how we structure our service offerings and allocate our resources. This client-centric business model requires that multiple agencies within Omnicom collaborate in formal and informal virtual client networks utilizing our key client matrix organization structure. This collaboration allows us to cut across our internal organizational structures to execute our clients’ marketing requirements in a consistent and comprehensive manner. We use our client-centric approach to grow our business by expanding our service offerings to existing clients, moving into new markets and obtaining new clients. In addition, we pursue selective acquisitions of complementary companies with strong entrepreneurial management teams that currently serve or could serve our existing clients. In addition to collaborating through our client service models, our agencies, practice areas and networks collaborate across internally developed technology platforms. Annalect and Omni, our proprietary data and analytics platforms, serve as the strategic resource for all of our agencies, practice areas and networks to share when developing client service strategies across our virtual networks. These platforms provide precision marketing and insights at scale across creative, media and other disciplines.

Current wording

Our business model was built and continues to evolve around our clients. While our networks, practice areas and agencies operate under different names and frame their ideas in different disciplines, we organize our services around our clients. Our fundamental business principle is that our clients’ specific requirements are the central focus of how we structure our service offerings and allocate our resources. This client-centric business model requires that multiple agencies within Omnicom collaborate in formal and informal virtual client networks utilizing our key client matrix organization structure. This collaboration allows us to cut across our internal organizational structures to execute our clients’ marketing requirements in a consistent and comprehensive manner. We use our client-centric approach to grow our business by expanding our service offerings to existing clients, moving into new markets and obtaining new clients. In addition, we pursue selective acquisitions of complementary companies with strong entrepreneurial management teams that could fill gaps in our service delivery to our existing clients.

Previous wording

Revenue is typically lower in the first and third quarters and higher in the second and fourth quarters, reflecting client spending patterns during the year and additional project work that usually occurs in the fourth quarter. Certain global events targeted by major marketers for advertising expenditures, such as the FIFA World Cup and the Olympics, and certain national events, such as the U.S. election process, may affect our revenue period-over-period in certain businesses. Typically, these events do not have a significant impact on our revenue in any period.

Current wording

Global economic conditions and disruptions have a direct impact on our business and financial performance. Adverse global economic conditions and disruptions pose a risk that our clients may reduce, postpone or cancel spending on marketing and communications services, which would reduce the demand for our services. Revenue is typically lower in the first and third quarters and higher in the second and fourth quarters, reflecting client spending patterns during the year and additional project work that usually occurs in the fourth quarter. Certain global events targeted by major marketers for advertising expenditures, such as the FIFA World Cup and the Olympics, and certain national events, such as the U.S. election process, may affect our revenue year-over-year in certain businesses. Typically, these events do not have a significant impact on our revenue in any period.

Previous wording

As a provider of data-inspired, creative marketing and sales solutions, we operate in all major markets and have a large and diverse client base. For the twelve months ended September 30, 2024, our largest client accounted for 2.8% of our revenue, and our 100 largest clients, which represent many of the world’s major marketers, accounted for approximately 54.3% of our revenue. Our clients operate in virtually every sector of the global economy with no one industry representing more than 16% of our revenue for the nine months ended September 30, 2024. Although our revenue is generally balanced between the United States and international markets, and we have a large and diverse client base, we are not immune to general economic downturns.

Current wording

We operate in all major markets and have a large client base. For the twelve months ended March 31, 2025, our largest client accounted for 2.7% of our revenue, and our 100 largest clients, which represent many of the world’s major marketers, accounted for approximately 53.6% of our revenue. Our clients operate in virtually every sector of the global economy with no one industry representing more than 16% of our revenue for the three months ended March 31, 2025. Although our revenue is generally balanced between the United States and international markets, and we have a large and diverse client base, we are not immune to general economic downturns.

Previous wording

Given our size and breadth, we manage our business by monitoring several financial indicators. The key performance indicators we focus on are revenue growth, operating income, and EBITA (defined as earnings before interest, income taxes and amortization of acquired intangible assets and internally developed strategic platform assets) and EBITA margin (defined as EBITA divided by revenue). We analyze revenue growth by reviewing the components and mix of the growth, including growth by principal regional market, practice area and marketing discipline, the impact from foreign currency exchange rate changes, growth from acquisitions, net of dispositions, and growth from our largest clients. Variability in operating expenses is analyzed in the following categories: cost of services, selling, general and administrative expenses, or SG&A, and depreciation and amortization.

Current wording

Given our size and breadth, we manage our business by monitoring several financial indicators. The key performance indicators that we focus on are revenue growth and variability of operating expenses. We analyze revenue growth by reviewing the components and mix of the growth, including growth by principal regional market, practice area and marketing discipline, the impact from foreign currency exchange rate changes, growth from acquisitions, net of dispositions, and growth from our largest clients. Operating expenses primarily consist of cost of services, selling, general and administrative expenses, or SG&A, and depreciation and amortization, and are analyzed for each network by the Chief Operating Decision Maker, who allocates resources accordingly.

Previous wording

Worldwide revenue for the three months ended September 30, 2024 increased $304.5 million, or 8.5%, to $3,882.6 million, compared to $3,578.1 million in the prior year quarter. Worldwide organic revenue growth (defined below) increased revenue $231.3 million, or 6.5%, reflecting increased client spending across most of our disciplines, primarily driven by our Advertising & Media, Public Relations and Experiential disciplines. Our Public Relations discipline was helped by spending on the upcoming U.S. elections, and the Experiential discipline benefited from the Summer Olympics. Substantially all of our major geographic markets had positive organic growth compared to the prior year period. Changes in foreign exchange rates period-over-period reduced revenue $1.2 million, or 0.1%. Acquisition revenue, net of disposition revenue, increased revenue $74.4 million, or 2.1%, primarily related to the purchase of Flywheel Digital in January 2024 (see Note 4 to the unaudited consolidated financial statements).

Current wording

Worldwide revenue for the three months ended March 31, 2025 increased $59.9 million, or 1.6%, to $3,690.4 million, compared to $3,630.5 million in the prior year period. Worldwide organic revenue growth (defined below) increased revenue $121.9 million, or 3.4%, reflecting increased client spending across most of our disciplines, primarily driven by our Media & Advertising and Precision Marketing disciplines. In contrast, our Branding & Retail Commerce, Public Relations, and Healthcare disciplines had negative performance during the quarter, while our Experiential and Execution & Support disciplines remained relatively stable. Substantially all of our major geographic regions had positive organic growth compared to the prior year period. Organic growth in the quarter was led by our largest market, the U.S. In Europe, growth in most of our markets was offset by negative performance in the U.K. In Asia-Pacific, Australia and India had strong performances, which was partially offset by a weak performance in China, with the remaining markets flat. Changes in foreign exchange rates period-over-period reduced revenue $59.2 million, or 1.6%. Acquisition revenue, net of disposition revenue, reduced revenue $2.8 million, or 0.1%.

Previous wording

Beginning with the three months ended March 31, 2024, EBITA is defined as earnings before interest, income taxes and amortization of acquired intangible assets and internally developed strategic platform assets. As a result, we reclassified the prior year period to be consistent with the revised definition, which reduced EBITA from previously reported amounts. We believe EBITA is useful in evaluating the impact of amortization of acquired intangible assets and internally developed strategic platform assets on operating performance and allows for comparability between reporting periods, the after-tax impact of which on diluted net income per share- Omnicom Group Inc. for the three and nine months ended September 30, 2024 was $0.08 and $0.24, respectively, and for the three and nine months ended September 30, 2023 was $0.06 and $0.17, respectively.

Current wording

EBITA is defined as earnings before interest, income taxes and amortization of acquired intangible assets and internally developed strategic platform assets. We believe EBITA is useful in evaluating the impact of amortization of acquired intangible assets and internally developed strategic platform assets on operating performance and allows for comparability between reporting periods. In the three months ended March 31, 2025, the effects of after-tax amortization of acquired intangible assets and internally developed strategic platform assets decreased diluted net income per share- Omnicom Group Inc. by $0.08 for each of the three months ended March 31, 2025 and 2024.

Previous wording

Beginning with the three months ended March 31, 2024, EBITA is defined as earnings before interest, income taxes and amortization of acquired intangible assets and internally developed strategic platform assets. As a result, we reclassified the prior year period to be consistent with the revised definition, which reduced EBITA from previously reported amounts. We believe EBITA is useful in evaluating the impact of amortization of acquired intangible assets and internally developed strategic platform assets on operating performance and allows for comparability between reporting periods, the after-tax impact of which on diluted net income per share- Omnicom Group Inc. for the three and nine months ended September 30, 2024 was $0.08 and $0.24, respectively, and for the three and nine months ended September 30, 2023 was $0.06 and $0.17, respectively.

Current wording

EBITA is defined as earnings before interest, income taxes and amortization of acquired intangible assets and internally developed strategic platform assets. We believe EBITA is useful in evaluating the impact of amortization of acquired intangible assets and internally developed strategic platform assets on operating performance and allows for comparability between reporting periods. In the three months ended March 31, 2025, the effects of after-tax amortization of acquired intangible assets and internally developed strategic platform assets decreased diluted net income per share- Omnicom Group Inc. by $0.08 for each of the three months ended March 31, 2025 and 2024.

Previous wording

•Foreign exchange rate impact is calculated by translating the current period’s local currency revenue using the prior period average exchange rates to derive current period constant currency revenue (in this case $3,883.8 million and $11,408.2 million for the Total column for the three and nine months ended September 30, 2024, respectively). The foreign exchange impact is the difference between the current period revenue in U.S. Dollars and the current period constant currency revenue ($3,882.6 million less $3,883.8 million and $11,366.9 million less $11,408.2 million for the Total column for the three and nine months ended September 30, 2024, respectively).

Current wording

•Foreign exchange rate impact is calculated by translating the current period’s local currency revenue using the prior period average exchange rates to derive current period constant currency revenue (in this case $3,749.6 million for the Total column). The foreign exchange impact is the difference between the current period revenue in U.S. Dollars and the current period constant currency revenue ($3,690.4 million less $3,749.6 million for the Total column).

Previous wording

•The percentage change is calculated by dividing the individual component amount by the prior period revenue base of that component ($3,578.1 million and $10,631.3 million for the Total column for the three and nine months ended September 30, 2024, respectively).

Current wording

•The percentage change is calculated by dividing the individual component amount by the prior period revenue base of that component ($3,630.5 million for the Total column).

Previous wording

Changes in the value of foreign currencies against the U.S. Dollar affect our results of operations and financial position. For the most part, because the revenue and expense of our foreign operations are both denominated in the same local currency, the economic impact on operating margin is minimized. Assuming exchange rates at October 11, 2024 remain unchanged, we expect the impact of changes in foreign exchange rates will increase revenue by 1.0% for the fourth quarter and be flat for the full year. Based on our acquisition and disposition activity to date, we expect that the net impact will increase revenue by 1.8% for the fourth quarter and 2.0% for the full year.

Current wording

Changes in the value of foreign currencies against the U.S. Dollar affect our results of operations and financial position. For the most part, because the revenue and expense of our foreign operations are both denominated in the same local currency, the economic impact on operating margin is minimized. Assuming exchange rates at March 31, 2025 remain unchanged, we expect the impact of changes in foreign exchange rates will be a negative 0.5% for the second quarter and a negative 1.0% for the full year. Based on our acquisition and disposition activity completed to date, we expect the net impact on revenue to remain flat for both the second quarter and the full year.

Previous wording

To monitor the changing needs of our clients and to further expand the scope of our services to key clients, we monitor revenue across a broad range of disciplines and group them into the following categories: Advertising & Media, Precision Marketing, Branding & Retail Commerce, Experiential, Execution & Support, Public Relations, and Healthcare.

Current wording

To monitor the changing needs of our clients and to further expand the scope of our services to key clients, we monitor revenue across a broad range of disciplines and group them into the following categories: Media & Advertising, Precision Marketing, Public Relations, Healthcare, Branding & Retail Commerce, Experiential and Execution & Support.

Previous wording

The period-over-period change in worldwide revenue for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, in our fundamental disciplines was: Advertising & Media increased $174.5 million, Precision Marketing increased $77.3 million, Public Relations increased $22.0 million, Healthcare decreased $3.1 million, Branding & Retail Commerce decreased $12.6 million, Experiential increased $43.7 million, and Execution & Support increased $2.7 million. Worldwide organic revenue growth increased revenue $231.3 million, or 6.5%, primarily reflecting increased client spending across most of our disciplines, primarily driven by Advertising & Media, led by Media, as well as Public Relations and Experiential disciplines compared to the prior year period. Our Public Relations discipline was helped by spending on the upcoming U.S. election cycle, and the Experiential discipline benefited from the Summer Olympics. The organic growth was partially offset by underperformance in our Branding & Retail Commerce discipline. Changes in foreign exchange rates period-over-period reduced revenue $1.2 million, or 0.1%. The decrease in revenue from foreign exchange translation was primarily related to the weakening of some currencies, including the Brazilian Real, against the U.S. Dollar, partially offset by the strengthening of the British Pound, Euro and Australian Dollar against the U.S. Dollar. Acquisition revenue, net of disposition revenue, increased revenue $74.4 million, or 2.1%, primarily related to the purchase of Flywheel Digital in January 2024, which is included in our Precision Marketing discipline.

Current wording

The period-over-period change in worldwide revenue for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, in our fundamental disciplines was: Media & Advertising increased $94.0 million, Precision Marketing increased $24.9 million, Public Relations decreased $20.8 million, Healthcare decreased $11.3 million, Branding & Retail Commerce decreased $26.0 million, Experiential decreased $1.5 million, and Execution & Support increased $0.6 million. Worldwide organic revenue growth increased revenue $121.9 million, or 3.4%, primarily reflecting increased client spending across most of our disciplines, primarily driven by Media & Advertising, led by our media business, and Precision Marketing disciplines compared to the prior year period. The organic growth was partially offset by underperformance in our Branding & Retail Commerce, Public Relations and Healthcare disciplines. Changes in foreign exchange rates period-over-period reduced revenue $59.2 million, or 1.6%. The decrease in revenue from foreign exchange translation was primarily related to the weakening of most currencies, including the Euro, Brazilian Real, Canadian Dollar, Australian Dollar, Mexican Peso and British Pound, against the U.S. Dollar. Acquisition revenue, net of disposition revenue, reduced revenue $2.8 million, or 0.1%.

Previous wording

In the normal course of business, our agencies both gain and lose business from clients each year due to a variety of factors. Under our client-centric approach, we seek to broaden our relationships with all of our clients. Our largest client represented 2.8% and 3.0% of revenue for the twelve months ended September 30, 2024 and 2023, respectively. Our ten largest and 100 largest clients represented 19.4% and 54.3% of revenue for the twelve months ended September 30, 2024, respectively, and 20.4% and 54.4% of revenue for the twelve months ended September 30, 2023, respectively.

Current wording

In the normal course of business, our agencies both gain and lose business from clients each year due to a variety of factors. Under our client-centric approach, we seek to broaden our relationships with all of our clients. Our largest client represented 2.7% and 3.0% of revenue for the twelve months ended March 31, 2025 and 2024, respectively. Our ten largest and 100 largest clients represented 19.1% and 53.6% of revenue for the twelve months ended March 31, 2025, respectively, and 20.0% and 53.8% of revenue for the twelve months ended March 31, 2024, respectively.

Previous wording

In North America, organic revenue growth period-over-period for the three and nine months ended September 30, 2024 was primarily driven by strong performance in the United States, especially in the Advertising & Media discipline, led by our media business, and our Precision Marketing, Experiential, and Public Relations disciplines. Our Public Relations discipline was helped by spending on the upcoming U.S. election cycle, and the Experiential discipline benefited from the Summer Olympics. The organic growth was partially offset by underperformance in our Branding & Retail Commerce discipline. Acquisitions net of dispositions positively impacted revenue and were primarily related to the purchase of Flywheel Digital in January 2024 and acquisitions in the prior year in our Public Relations discipline. In the nine months ended September 30, 2024, the acquisition growth was partially offset by dispositions in the Execution & Support discipline in the first half of 2023.

Current wording

In North America, organic revenue growth period-over-period for the three months ended March 31, 2025 was primarily driven by strong performance in the United States, especially in the Media & Advertising discipline, led by our media business, and our Precision Marketing, Experiential and Execution & Support disciplines. The organic growth was partially offset by underperformance in our Branding & Retail Commerce, Public Relations and Healthcare disciplines.

Previous wording

In Latin America, organic revenue growth for the three and nine months ended September 30, 2024 increased in substantially all our disciplines, led by Advertising & Media, and in substantially all countries in the region, compared to the prior year period. The weakening of several currencies, including the Brazilian Real, against the U.S. Dollar decreased revenue in the three and nine months ended September 30, 2024 compared to the same periods in 2023, partially offset by the strengthening of the Colombian Peso against the U.S. Dollar in the nine months ended September 30, 2024. Acquisitions positively impacted revenue and were primarily related to acquisition activity in our Advertising & Media discipline in the prior year and the purchase of Flywheel Digital in January 2024.

Current wording

In Latin America, organic revenue growth for the three months ended March 31, 2025 was led by our Media & Advertising discipline, and in substantially all countries in the region, compared to the prior year period. The weakening of all currencies, especially the Brazilian Real and Mexican Peso, against the U.S. Dollar decreased revenue in the three months ended March 31, 2025 compared to the prior year period.

Previous wording

In Europe, compared to the prior year period, organic revenue growth for the three months ended September 30, 2024 was driven by strong performance in our Advertising & Media discipline, led by our media business, and in our Experiential and Execution & Support disciplines, partially offset by under performance in our Precision Marketing, Branding & Retail Commerce and Public Relations disciplines. Foreign currency changes increased revenue for the three months ended September 30, 2024, primarily as a result of the strengthening of the British Pound and the Euro against the U.S. Dollar period-over-period. Acquisitions, net of dispositions for the three months ended September 30, 2024 positively impacted revenue and were primarily related to the purchase of Flywheel Digital in January 2024 and acquisition activity in our Advertising & Media discipline in the current and prior year.

Current wording

In Europe, compared to the prior year period, organic revenue growth for the three months ended March 31, 2025 was driven by strong performance in our Media & Advertising discipline, led by our media business, and in our Experiential discipline, partially offset by underperformance in our Precision Marketing, Healthcare, Branding & Retail Commerce and Public Relations disciplines. Foreign currency changes decreased revenue for the three months ended March 31, 2025, primarily as a result of the weakening of the Euro and British Pound against the U.S. Dollar period-over-period.

Previous wording

In the U.K., organic revenue decreased by 0.2% period-over-period for the three months ended September 30, 2024. In Continental Europe, which includes the Euro Zone and the other European countries, organic growth for the three months ended September 30, 2024 of 6.8% was led by Italy, France, Spain and Germany and in most disciplines, partially offset by underperformance in our Branding & Retail Commerce and Precision Marketing disciplines.

Current wording

In the U.K., for the three months ended March 31, 2025, organic revenue decreased period-over-period by 0.7%. In Continental Europe, which includes the Euro Zone and the other European countries, organic revenue growth of 1.7% for the three months ended March 31, 2025 was led by Czech Republic, Italy and Poland, primarily driven by our Media & Advertising and Experiential disciplines.

Previous wording

In the Middle East and Africa, for the three and nine months ended September 30, 2024, organic revenue increased period-over-period, driven by our Experiential and our Advertising & Media disciplines.

Current wording

In the Middle East and Africa, for the three months ended March 31, 2025, organic revenue decreased period-over-period by 9.3%, primarily due to underperformance in our Experiential discipline.

Previous wording

In Asia-Pacific, organic revenue increased period-over-period for the three months ended September 30, 2024. Organic growth led by our Advertising & Media discipline was partially offset by underperformance in our Precision Marketing and Public Relations disciplines. Most markets in the region, especially Australia, India and China, had positive organic growth as compared to the prior year period. Foreign currency changes increased revenue for the three months ended September 30, 2024, primarily as a result of the strengthening of the Australian Dollar against the U.S. Dollar, partially offset by the weakening of the Japanese Yen against the U.S. Dollar period-over-period. Acquisition activity, including the purchase of Flywheel Digital in January 2024, increased revenue compared to the prior year periods.

Current wording

In Asia-Pacific, organic revenue increased period-over-period for the three months ended March 31, 2025 by 6.0%. Organic growth, led by our Media & Advertising discipline, was partially offset by underperformance in our Experiential and Public Relations disciplines. Several markets in the region, especially India and Australia, had positive organic growth, partially offset by weakening in China, as compared to the prior year period. Foreign currency changes decreased revenue for the three months ended March 31, 2025, primarily as a result of the weakening of several currencies, including the Australian Dollar, New Zealand Dollar and Japanese Yen, against the U.S. Dollar.

Previous wording

We measure cost of services in two distinct categories: salary and service costs and occupancy and other costs. As a service business, salary and service costs make up the significant portion of our operating expenses and substantially all these costs comprise the essential components directly linked to the delivery of our services. Salary and service costs include employee compensation and benefits, freelance labor, third-party service costs, and third-party incidental costs. Third-party service costs include vendor costs when we act as principal in providing services to our clients. Third-party incidental costs that are required to be included in revenue primarily consist of client-related travel and incidental out-of-pocket costs that are billed back to the client directly at our cost. Occupancy and other costs consist of the indirect costs related to the delivery of our services, including office rent and other occupancy costs, equipment rent, technology costs, general office expenses and other expenses. Adverse and beneficial fluctuations in foreign currencies from period to period impact our results of operations and financial position when we translate our financial statements from local foreign currencies to the U.S. Dollar. However, substantially all of our foreign operations transact business in their local currency, mitigating the impact of changes in foreign currency exchange rates on our operating margin percentage. As a result, the changes in our operating expenses period-over-period from foreign currency translation were in line with the percentage impact from changes in foreign currencies on revenue for the three- and nine-month periods ended September 30, 2024.

Current wording

We measure cost of services in two distinct categories: salary and service costs and occupancy and other costs. As a service business, salary and service costs make up a significant portion of our operating expenses and substantially all these costs comprise the essential components directly linked to the delivery of our services. Salary and service costs include employee compensation and benefits, freelance labor, third-party service costs, and third-party incidental costs. Third-party service costs include vendor costs when we act as principal in providing services to our clients. Third-party incidental costs that are required to be included in revenue primarily consist of client-related travel and incidental out-of-pocket costs that are billed back to the client directly at our cost. Occupancy and other costs consist of the indirect costs related to the delivery of our services, including office rent and other occupancy costs, equipment rent, technology costs, general office expenses and other expenses. Adverse and beneficial fluctuations in foreign currencies from period to period impact our results of operations and financial position when we translate our financial statements from local foreign currencies to the U.S. Dollar. However, substantially all of our foreign operations transact business in their local currency, mitigating the impact of changes in foreign currency exchange rates on our operating margin percentage. As a result, the changes in our operating expenses period-over-period from foreign currency translation were in line with the percentage impact from changes in foreign currencies on revenue for the three months ended March 31, 2025.

Previous wording

Salary and service costs for the three months ended September 30, 2024 increased $209.5 million, or 8.1%, to $2,796.0 million, compared to the prior year period. Salary and related costs for the three months ended September 30, 2024 increased $90.2 million, or 5.1%, to $1,846.9 million, primarily as a result of our acquisition of Flywheel Digital. These costs decreased as a percentage of revenue, primarily due to the reduction arising from our ongoing repositioning actions and global employee mix. Third-party service costs for the three months ended September 30, 2024 increased $105.7 million, or 15.6%, to $784.5 million, primarily as a result of organic growth in our Advertising & Media and Experiential disciplines. Third-party incidental costs for the three months ended September 30, 2024 increased $13.6 million, or 9.0%, to $164.6 million.

Current wording

Salary and service costs for the three months ended March 31, 2025 increased $53.7 million, or 2.0%, to $2,746.3 million, compared to the prior year period. Salary and related costs for the three months ended March 31, 2025 decreased $66.8 million, or 3.6%, to $1,780.5 million. These costs decreased primarily due to the reduction arising from our repositioning actions in 2024 and global employee mix. Third-party service costs for the three months ended March 31, 2025 increased $98.6 million, or 14.1%, to $796.8 million, primarily as a result of organic growth in our Media & Advertising discipline. Third-party incidental costs for the three months ended March 31, 2025 increased $21.9 million, or 14.9%, to $169.0 million, primarily as a result of organic growth.

Previous wording

Occupancy and other costs for the three and nine months ended September 30, 2024, which are less directly linked to changes in revenue than salary and service costs, increased by $37.0 million, or 12.8%, to $325.6 million and increased by $76.0 million, or 8.7%, to $953.9 million, respectively, primarily resulting from our acquisition activity. Increased office and other related costs were partially offset by lower rent expense in the periods.

Current wording

Occupancy and other costs are less directly linked to changes in revenue than salary and service costs. For the three months ended March 31, 2025, occupancy and other costs increased by $0.5 million to $314.6 million.

Previous wording

SG&A expenses primarily consist of third-party marketing costs, professional fees, compensation and benefits and occupancy and other costs of our corporate and executive offices, including group-wide finance and accounting, treasury, legal and governance, human resource oversight and similar costs. SG&A expenses increased for the three and nine months ended September 30, 2024 by $9.7 million and $17.7 million, respectively, compared to the same period in 2023, primarily due to professional fees related to strategic initiatives.

Current wording

SG&A expenses primarily consist of third-party marketing costs, professional fees, compensation and benefits and occupancy and other costs of our corporate and executive offices, including group-wide finance and accounting, treasury, legal and governance, human resource oversight and similar costs. SG&A expenses increased for the three months ended March 31, 2025 by $32.6 million, compared to the same period in 2024, primarily due to acquisition related costs of $33.8 million ($32.7 million after-tax), in connection with the pending merger with IPG (see Note 1 to the unaudited consolidated financial statements).

Previous wording

Interest income in the three months ended September 30, 2024 increased $10.8 million period-over-period to $26.0 million, principally due to higher cash balances from the issuance of the $600 million 2034 notes. Interest income in the nine months ended September 30, 2024 decreased $6.9 million period-over-period to $74.0 million.

Current wording

Net interest expense for the three months ended March 31, 2025 increased $2.6 million period-over-period to $29.4 million. Interest expense for the three months ended March 31, 2025 increased $5.3 million period-over-period to $59.1 million, primarily related to the higher weighted average cost of debt in connection with our financing activities in 2024. Interest income in the three months ended March 31, 2025 increased $2.7 million period-over-period to $29.7 million, principally due to higher cash balances.

Previous wording

Our effective tax rate for the nine months ended September 30, 2024 was flat period-over-period at 26.3%. The effective tax rate for the nine months ended September 30, 2024 includes the favorable impact from the resolution of certain non-U.S. tax positions of $7.5 million. The effective tax rate for the nine months ended September 30, 2023 includes an increase of approximately $10.7 million in income tax expense related to a lower tax benefit in certain jurisdictions for the real estate and other repositioning costs in the period and an increase in the U.K. statutory tax rate, partially offset by approximately $10.0 million of favorable impacts from the resolution of certain non-U.S. tax positions.

Current wording

Our effective tax rate for the three months ended March 31, 2025 increased period-over-period to 28.5% from 25.7%, due primarily to the non-deductibility of acquisition related costs related to the pending merger with IPG. The effective tax rate for the three months ended March 31, 2024, includes the favorable impact from the resolution of certain non-U.S. tax positions of $7.5 million.

Previous wording

Net income - Omnicom Group Inc. in the three months ended September 30, 2024 increased $14.0 million to $385.9 million from $371.9 million. The period-over-period increase is due to the factors described above. Diluted net income per share - Omnicom Group Inc. increased to $1.95 in the three months ended September 30, 2024, from $1.86 in the three months ended September 30, 2023, due to the factors described above and the impact of the reduction in our weighted average common shares outstanding resulting from the repurchases of our common stock. For the three months ended September 30, 2024 and 2023, there were no repositioning costs.

Current wording

Net income - Omnicom Group Inc. in the three months ended March 31, 2025 decreased $30.9 million to $287.7 million from $318.6 million. The period-over-period decrease is due to the factors described above. Diluted net income per share - Omnicom Group Inc. decreased to $1.45 in the three months ended March 31, 2025, from $1.59 in the three months ended March 31, 2024, due to the factors described above and the impact of the reduction in our weighted average common shares outstanding resulting from repurchases of our common stock. After-tax, the acquisition related costs recorded in the first quarter of 2025 (see Note 1 to the unaudited consolidated financial statements) reduced net income - Omnicom Group Inc. by $32.7 million and diluted net income per share - Omnicom Group Inc. by $0.17.

Previous wording

The following table reconciles the U.S. GAAP financial measure of Net Income- Omnicom Group Inc. to EBITDA, EBITA and EBITA Margin:

Current wording

The following table reconciles the U.S. GAAP financial measure of Net Income - Omnicom Group Inc. to EBITA and EBITA Margin:

Previous wording

The primary sources of our short-term liquidity are net cash provided by operating activities and cash and cash equivalents. Additional liquidity sources include our $2.5 billion unsecured multi-currency revolving credit facility, or Credit Facility, terminating on June 2, 2028, and the ability to issue up to $2 billion of U.S. Dollar denominated commercial paper and issue up to the equivalent of $500 million in British Pounds or Euro under a Euro commercial paper program. In addition, certain of our international subsidiaries have uncommitted credit lines that are guaranteed by Omnicom, aggregating $510.3 million. Our liquidity sources fund our non-discretionary cash requirements and our discretionary spending. The $600 million Delayed Draw Term Loan Agreement automatically terminated on July 15, 2024.

Current wording

The primary sources of our short-term liquidity are net cash provided by operating activities and cash and cash equivalents. Additional liquidity sources include our $2.5 billion unsecured multi-currency revolving credit facility, or Credit Facility, terminating on June 2, 2028, and the ability to issue up to $2 billion of U.S. Dollar denominated commercial paper and issue up to the equivalent of $500 million in British Pounds or Euro under a Euro commercial paper program, and access to the capital markets. In addition, certain of our international subsidiaries have uncommitted credit lines that are guaranteed by Omnicom, aggregating $520.6 million. Our liquidity sources fund our non-discretionary cash requirements and our discretionary spending.

Previous wording

Working capital, which we define as current assets minus current liabilities, is our principal non-discretionary funding requirement. Our working capital requirement typically peaks during the second quarter of the year due to the timing of payments for incentive compensation, income taxes and contingent purchase price obligations. In addition, we have contractual obligations related to our long-term debt (principal and interest payments), recurring business operations, primarily related to lease obligations, and acquisition related obligations. Our principal discretionary cash spending includes dividend payments to common shareholders, capital expenditures, strategic acquisitions and repurchases of our common stock.

Current wording

Working capital, which we define as current assets minus current liabilities, is our principal non-discretionary funding requirement. Our working capital cycle typically peaks during the second quarter of the year due to the timing of payments for incentive compensation, income taxes and contingent purchase price obligations. In addition, we have contractual obligations related to our long-term debt (principal and interest payments), recurring business operations, primarily related to lease obligations, and acquisition related obligations. Our principal discretionary cash spending includes dividend payments to common shareholders, capital expenditures, strategic acquisitions and repurchases of our common stock.

Previous wording

Cash and cash equivalents decreased $898.1 million from December 31, 2023. During the first nine months of 2024, we used $191.5 million of cash in operating activities, which included the use for operating capital of $1.6 billion, primarily related to our typical working capital cycle. Discretionary spending for the first nine months of 2024 was $1.9 billion, compared to $1.3 billion for the first nine months of 2023. Discretionary spending for the first nine months of 2024 was comprised of capital expenditures of $93.6 million, dividends paid to common shareholders of $416.0 million, dividends paid to shareholders of noncontrolling interests of $64.0 million, repurchases of our common stock, net of proceeds from vesting of restricted stock awards and related tax benefits and common stock sold to our employee stock purchase plan of $358.5 million, and the acquisition of businesses, net of cash acquired, primarily attributable to the acquisition of Flywheel Digital and acquisition of additional shares of noncontrolling interests, and payment of contingent purchase price obligations of $953.4 million. Discretionary spending was partially offset by the proceeds from financing activities of approximately $1.2 billion, which includes the issuance in the third quarter of 2024 of $600 million 5.30% Senior Notes due 2034, or 2034 Notes. The net proceeds from the issuance of the 2034 Notes, along with available cash, will be used to fund the repayment of our $750 million 3.65% Senior Notes due November 1, 2024 (see Note 6 to the unaudited financial statements).

Current wording

Cash and cash equivalents decreased $961.1 million from December 31, 2024. During the first three months of 2025, we used $786.8 million of cash in operating activities, which included the use for operating capital of $1.2 billion, primarily related to our typical working capital cycle. Discretionary spending for the first three months of 2025 was $253.7 million, compared to $1.2 billion for the first three months of 2024, which included $801.5 million for acquisition of businesses and interests in affiliates, net of cash acquired. Discretionary spending for the first three months of 2025 was comprised of capital expenditures of $29.5 million, dividends paid to common shareholders of $137.7 million, dividends paid to shareholders of noncontrolling interests of $13.0 million, repurchases of our common stock, net of proceeds from vesting of restricted stock awards and related tax benefits and common stock sold under our employee stock purchase plan of $69.5 million, the acquisition of additional shares of noncontrolling interests, and payment of contingent purchase price obligations of $4.0 million. Based on past performance and current expectations, we believe that net cash provided by operating activities and cash and cash equivalents will be sufficient to meet our non-discretionary cash requirements for the next twelve months. In addition, and over the longer term, our Credit Facility is available to fund our working capital and contractual obligations.

Previous wording

At September 30, 2024, our foreign subsidiaries held approximately $1.9 billion of our total cash and cash equivalents of $3.5 billion. Substantially all of the cash is available to us, net of any foreign withholding taxes payable upon repatriation to the United States.

Current wording

At March 31, 2025, our foreign subsidiaries held approximately $1.8 billion of our total cash and cash equivalents of $3.4 billion. Substantially all of the cash is available to us, net of any foreign withholding taxes payable upon repatriation to the United States.