IPG - Earnings call transcript Q1 2024 | The Interpublic Group of Companies, Inc.

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Operator

Good morning, and welcome to the Interpublic Group First Quarter 2024 Conference Call. [Operator Instructions] This conference is being recorded.

If you have any objections, you may disconnect at this time. I would now like to introduce Mr. Jerry Leshne, Senior Vice President of Investor Relations. Sir, you may begin.

Jerome Leshne

morning. Good joining for us. you Thank morning, joined Krakowsky our Philippe are by This Ellen by and Johnson, CEO, we our CFO.

We our slide earnings release our our interpublic.com. have website, presentation posted on and

be begin followed conclude prepared market X:XX at Eastern open will We remarks before by We plan with Q&A. to time. a.m. to

These included refer the forward-looking the cautionary the uncertainties about call, further in earnings company. and our are are release our this presentation. our SEC. During other to These in we slide and with statement will filings statements XX-Q are to detailed that subject and the

We non-GAAP that, point, of and operational these while pleasure that is refer over transparency measures, will data substitute our measures financial to my Krakowsky. Philippe a greater also review GAAP for to measures. We it to the this not supplemental performance. At turn allow certain provide things useful for believe in

Philippe Krakowsky

Thank you, Jerry.

a the followed provide of I'll agencies begin Q&A. usual, view highlights at be strategic our call and then will your high-level Ellen our key in with updates performance additional with and some to As our by conclude I'll details. quarter,

continue targets morning, solid long-term our the Mediabrands we in Europe, insights of offering discipline, growth Health strong IPG quarter. From LatAm quarters food sector growth we of growth revenue increases public This of in followed the Golin, and reporting FCB's growth start creativity of as record, U.S. In X as see highlight posted our the sector solid growth by consumer was with industrials. X growth well followed goods by we XXXX, of and also which first QX were expenses again came and and growth by retail billable of as are before our Regionally, in diversified care data QX, we strong sectors double-digit paced and performance had year. growth the with consistent very margin X.X%. IPG health a and in by beverage precision keeping informed at to public with increases that strong The this client shared organic fully our earlier sectors to and organic we across worldwide, for double-digit relations standpoint clients, of clients, as at well a specifically marked among other led the our by and in

We our within telecom we've our and also tech portfolio underperformance that have agencies sector. see on specialty continue trends quarters. are a of recent client our and growth during been that digital drag Those the and to identified our

previously, of stabilized. of sector the indicated large item, we've client heading late most last to into As XXXX, the a the due largely sector the in decreases telecom be have of a with loss telco same client assignment from tech year. Outside AOR weight that will and

expenses and business. quarter focus Turning investing that high margin. keep the a to our of continue in degree of demonstrates as growth areas teams The the with to operate we

noting in expectations QX. Our for should which expense quarter. the year on our line seasonal quarter adjusted tax severance expense from base EBITDA first result payroll, XXX for basis and operating of a that That in worth the is of with our elevated balance Those the for in expenses was margin is X.X%, margin points year. It's our we benefits leverage had ago. for despite smallest actions benefit

reported acquired as net for business per was $X.XX as adjusted intangibles earnings impact $X.XX the in and amortization dispositions. of and the diluted Our share quarter

$XX returning repurchased million. During the shares, X.X quarter, million we

February, million in You'll another X%. Board and program repurchase authorized recall share share dividend by that our increased common $XXX our

more target of and year continue achieving of X% A year. XX.X% this likely full an adversely end client full organic expect range continue the deliver our important growth make expect to the recent of of decision achieve year balance impact ongoing we In terms of EBITDA top our X%. to will by to outlook, for adjusted growth, we margin challenging. Within of to that the to

look consistent areas tech-driven such expertise, data care business, media our we are marketing most over strongest specialist capabilities strong to marketing offerings, continue growth we long that positioned and our as and the of ahead, As health performance and anticipate experiential their term. PR the

for sustained higher which value these combined long-term result discipline in margin offerings, with our compensation, improvement. Additionally, opportunities will include outcome-based operational proven performance

such existing performance the of our help offering results. and on and As come we well AI media has the successfully move further offerings marketers media that with embedding as This environment. It's detail to a our we'll chance walk back as entails most solutions marketing to the continue a of our increasingly of evolution with a into marketing generative as ahead, deal capabilities. I'll more through more offerings, Ellen and at you our core technologies detailed after our holistic contemporary dynamic. precision services view enhance providing complex integrating had

Ellen Johnson

everyone hope Philippe. Thank that well. I is you,

As the the basis a reminder, presentation revenue with revenue of presentation, increased a an from points first that year on X accompany our webcast. Beginning increase will our before X.X%. my to slides the quarter expenses billable XX remarks of ago, Slide net track with organic highlights or

our U.S., in organic organic points. basis an X.X% offset markets was Our decrease XX increase partially which revenue the net international was of in by

was the shares the and X.X small First intangibles share the quarter impact losses and per of small amortization X.X%. $XXX.X on before $XX acquired for certain adjusted. restructuring nonoperating the million. after-tax adjustment as earnings exclude adjusted $X.XX businesses. We adjustments was margin of during quarter The Diluted as million, sales million a of repurchased $X.XX was EBITA reported nonstrategic

cover detail in and X, see I'll slides the that for the our P&L operating quarter. to follow. revenue expenses Slide you'll in Turning

more in on detail revenue X. quarter first to Turning Slide

$X.XX QX change X.X%. in impact net Our net past a the of the months was dispositions basis billion, XX exchange the positive points. revenue quarter was of in impact the rates 'XX, to XX over negative was compared The

slide, revenue. our $XX.X was revenue this net of or we out of bottom million increase X.X%. At segment the organic break Our

Solutions segment. strong XX organically, offset very decreased elsewhere Our was points basis Engagement at Media segment and media our growth in businesses by decreases Data the

results specialist overall segment digital growth challenged X.X%. has were our performance and Advertising quarter the the As previously, Integrated & in agencies organic segment, on we've the our Solutions growth. And was significantly Led Creativity noted

was Solutions while double-digit year and previously. At and and public That segment, integrated at very by We offset certain the was ago. growth had Jack was The from that loss Led sector IPG by paced Experiential growth our including X.X%. at a percentage segment Golin partially FCB Creativity specialized relations technology agencies, Health. in strong mentioned decreases growth decreased Philippe organic Morton in at the communications bar telecom

net points by were the In comprised before health was in growth billable Those reflecting FCB and health was the in which largely revenues and organically. The McCann, decreases in Golin. X, by offerings the of strong sector France Europe regions. and to XX growth X.X% significant organic the revenue saw performance organically specialty of mixed and food the the the growth beverage, growth X.X%. growth advanced of in We double-digit on basis strong expenses in XX% XX organically. and at sector. International in with Moving increased Netherlands We X% by care and telecom technology with that care region. wins. strong in space. Continental and revenue net very quarter decreased our modest the offset Germany. partially was gains in very led in include and and and Italy markets quarter by Organic in by loss revenue of net in new were digital offset business net Slide the U.K. markets basis quarter. by X% quarter grew decreases U.S., growth the revenue points and our a was We in That Spain, had performance quarter XX% growth or and

net decreased to in decreased national from X% revenue India by the Pac, Asia year by our softness due were region. the in growth organically. Most LatAm clients growth Mediabrands, quarter, in spend organic in quarter. offerings. the at IPG which which X% at the was net other X.X% was a revenue was was existing in X% reductions exception. of from offset ago Organic somewhat We and led growth of was markets

of and including before. which Revenue X% on the X% markets the decreased organically, comes increase Our the East several group is in X.X% Canada. other quarter. last year was decreased Middle a The of Canada, markets national increase group, top which East, revenue net XX% Middle year Africa in the Israel a and in and

to operating Slide on quarter. in and the Moving expenses X

the the quarter of year expenses, amortization billable and XX intangibles, only margin restructuring includes acquired from expense. Our our The X.X%. a basis net result adjustment severance small notably was higher points ago, increased expenses, which which first of operating exclude

a the as drove with XXX year points SRS that our net smallest which results, expense all benefits our ratios percentage as see base decreased related quarterly of net ratio of can of was year. Underneath our percentage you we tax, and Again, on XX.X%, As leverage a base net basis XX.X% salaries for and payroll, expense revenue. of total on revenue against slide, are revenue this a ago. these compared of

Our decreased X.X% average last head the from year. count in the first quarter quarter of

year of Our quarter X.X% XX year expense from basis increase net revenue, first net slightly compensation from a for to points X.X% a ago. expense ago an X.X% from of increased incentive the revenue. Severance performance-based of was

year. forward margins We these expect the actions to on see the move benefits of as we through

with labor X.X% slide, Our compared was QX for in was ago. expense of quarter in the and 'XX. our XX.X% compared XX.X% Also direct a net year office this revenue other temporary expense ratio on X.X% with

against Underneath was was expense management, that, office compared continue of to which disciplined other XX.X% our occupancy flat for on year cost year X.X%. ratio a and expense net revenue ago. with at other all last direct, lever we XX.X% Through our

both the of adjusted better EPS. and change X.X% to leadership of of quarter comparable X, results revenue on provide strategic the our the SG&A through a with reported Slide our performance. Our ago. in results a we our information adjusted was reflects present of side basis compared points enterprise and net investments steps adjustments year reported senior order The expense to EBITDA This revenues begins in transparency technology. On first detail on to and with left-hand higher and net XX diluted picture level

with X, previous the amortization million. had million $X.X were loss million, in column $X.X adjustments compared Our column of adjustments, charges expenses represents of our pretax the second we cash slide, foot small our we in operating to the to these diluted year a businesses. $XXX.X The in diluted flow $X.XX per disposition of few diluted share which related we of expenses, quarter $XX.X million X, a to expense per other to bridges for used reported earnings adjusted turn each which was the in operations quarter. Cash EPS restructuring the was in in at $XXX.X a the million nonstrategic as in share. On of quarter due present ago. acquired $X.XX of intangibles At the impact the after-tax actions. Low Slide of the

highly As our cash significant working the reminder, We capital operating cash in flow quarter. the is seasonal. cash fourth first typically from a quarter use and in generate

working cash million, low first use the from noting capital million capital first was CapEx. uses the XX our the at of used this for $XX the During quarter, the a changes activities, $XXX.X before mainly that generated range, of near end period in is years. It's the over year's investing which least was past our quarter $XXX.X million quarter. working in we operations quarter In worth

share quarter activities repurchases. and primarily Our the used million, for $XXX.X in dividend common our financing stock

quarter portion outstanding the quarter maturities was Our depicts billion balance XX. the our net current debt equivalents. We cash of March of ended sheet. X and $X.XX decrease the of cash in XX our with million. Slide is as $XXX.X of Slide for the

on from that, the With first XX. at noting not can was see was debt our maturity you repaid this that total $XXX quarter $X.X million depicted It's earlier column in is summary, next schedule, As month, until billion. XXXX. In maturity the Slide worth end that on the cash.

means of with I'll that a gratitude of teams on commercially. And sheet The are that, focused positioned express balance our our and strength turn the Philippe. for at Our it we in efforts financially and and remain level. I to both to well high our people. executing pride back liquidity would like

Philippe Krakowsky

Thanks, Ellen.

results we're line are the reporting forecast mentioned, As year. with today in the into our coming

business most prestigious list new with of Fast the at of active. group. We're of than other speaking, most capabilities spine. Broadly every the of strength leading never media that geographical first that live the to we're in in holding and data those announced both Organizations more at was period strong IPG industry our through region year innovation care technological adoption year to and thrive by journeys which also of of last well environment, marketing of We've and see services were ambitious has and are many begun health partner finding the to to to more improve Interpublic the sentiment pipeline during companies, looking company every transformation a innovative to are continue agencies highly disruption, order levels We [ ] offerings of recognition industry to Company's list reinvent any relative audience-led on businesses. better competitive significant adapt world's the is across DHA quarter, at most marketer trusted as the represented has entered in in as our important. the been enabled and continuing themselves remains of a in heart this and

and technology in audience resolution, commerce foundation resources that strong and recent and course, capabilities that production. such identity meant Of a an that's data And also share. centralized developing years, strategic with as definition, has ambition we

course added the fact to we're success. led precision the at the quite has to the CRM we XXXX, performance to have IPG we to media, all a of that number these and of order a of ensure functional work leaders portfolio more machine analytics that predictive part quarter, spoke in connecting to senior years been services. Last data level of Over to the learning our make and of horizontal and corporate long-term capabilities our our modeling practices, in essential that

every this all modeling targeting, what unites we're, insights way AI will call every what through way company we content These in all become by call with integrate to system, businesses the platform. This Studio then high-value and Acxiom concepts or unified and and we brand marketing on This will us ideation the our content and emerging at by generative Gen the including of which partnership quickly through creative strategies our dissemination production and the and their announced in to discipline. And AI journey. the channels. touch move use engaging through teams ideas. At use all and formats in audiences, marketing products can technology seamlessly identity that whether a of connect the us our earlier on provide activation. creative of consumers global QX, of product, engine. into first chain production and IPG of that see marketing level, During for to and enterprise we I and the facets empowering a point scale can insights through media data connect AI we platforms their creative fueled all for Adobe our called us tools marketing is messaging operating campaigns supply all technology the people therefore, accelerate with to underpinned allow investment And and and that the work to predictive builds new technologies strategists to with from activation, and of segmentation the canvases media out across adoption

campaigns. and through next help attribution, better the this our assess Our best effectiveness and the funnel. clients us customers engine of positions decisions retain solution end-to-end to And optimize then entire with, engage can convert marketing analyze

heard As in to the us ongoing and as a using efforts we're company. you the AI also across part internal past, processes transformation of improve from structure our

data a just from we few view, we've solutions, media and that in retailer and Mediabrands as and quarter. Within Now strong as marketing planning much recognition expand our aggregators. turn data strategically, continues very well the for IPG in to and media solution, engagement with I'll optimization range for and now mentioned media a partners doing specific retail high-level guess retailer with operations. is and to tactics. We're Media to integrate clients as delivering retail the portfolio industry a that this growth, of I from identification as highlights across media of saw unified spans brands cross audience which the platforms our leading conjunction networks ecosystem

news data our Amazon ads can to proprietary reach company Prime into with became integrate include our Another Amazon, Cloud an other teams for our Ads Amazon partnership developed so alongside platforms by planning partners we also digital of that and inventory. In our APIs media media suite was Canesten. to Marketing those ads out historical Prime of intelligence and analytics our and now deep QX, video maps view teams video first platform, we the solutions relating rolled updated at

for delivering mentioned, the which U.S. AI Our a and with named to important of without will media an the insights operations Acxiom Network role, the Year. In our be IPG need to honors clients engage scale receive data Mediabrands individual top-performing continue data increasingly are have play in A-List, to an as was audience continues the the access to I of success. level audience to world key at in for at Media named proprietary Ad-Age to consumers which and highest industry's one will Year performance UM essential segmentation is industry's the and on proxies. Agency

at device consumer optimized anchored Our people. and by match IDs data greater people other to them able more and significantly industry set, per data We're tech those X.X this our a any ID using attributes X/X sector. closest engine performance to of anyone to we transaction marketing data the The than of abundant connect Acxiom rates which are real and competitor. than billion available data also with those in equivalent our understanding stack deep spine, is refresh can that to to global

data third-party decades from on Acxiom second teams the adTech Our of consulting writing software data inside in work of first, use that first-party both trust since through and architects for large management and martech. enterprises, and the clients earned scaled benefit experience and

performance. on and with focused is data and segment, mentioned, Integrated our work, FCB leadership team & at Solutions FCB to Health led at Acxiom Led bringing as the clients as tools we've closer IPG to and interact media they foundations with planners FCB consumers. creative both sector ultimately using Advertising production its both planning how and The Turning traditional Creativity for

and to results in creative that creative in-market strategy segments insights are lead ideas that in and grounded This audience work drives results.

During professionals, to the won of in important targeted Health also One highly the personalized enable Global of notably, Martin our the delivery innovative which companies list. the Agency given of Global Year consecutive the FCB is the an Company American Healthcare named York contributions creative second Fast New the among marketing region we're Ad as at And data Year was And McCann Network and consistently launched LA part with agency the the FCB a partner year. and Company's first media and Fast client to companies named teams. Wenchi Network North of Agency of the strong marketing competition. and was the most the Europe Agency, Show, regulatory make and Year tools as A-List Year of a important continued that there. The in health for performance. for of ]. IPG Deutsch this particularly [ the to data-driven suite on featured also care quarter, company was part integrated And environment on cited services Age our

and wellness responsibilities content start and Weber quarter, Solutions segment, had global to During the Shandwick a work. led Within for firm's IPG solid leadership the clients and increasingly and company most that and innovative Age corporate studios Experiential affairs year, public a everything capabilities agency and agency Ad communications Benckiser was ] mental making thought DXTRA doing a like it IPG McCann's health in for to and to well IKEA. Fast includes AOR named as from driven Reckitt list, by our production won the work the Weber franchise, A-List field. Ingelheim's and Company's as bearing major [ are its your for Specialized win Health Communications and AOR its PwC regulatory leader practice. And data pan the

event by actors quarter very space, platform that AI-powered threats Year the and disinformation, bots, was clear Agency core AI. In on New mentioned of mentioned, priority Across enabled clients named launch our malicious in detect Week's that AI and PR for information patents beverage generated efficiency to and As experience an U.S. ESG deliver I interesting from the IPG, we've continue of the new and this is experiential to including York in the long key spiced helps commitment momentum marketing growth saw the and Golin and improved an you clients. logistics our for to we've to introduced to recently its created culture. it's previously part a the strong its combat build been Coca-Cola

combines metrics. to engaged first reporting disclosure ninth leaderboard and in report, engagement frameworks work listed on into represents supplier to ESG do quarter, provide engage external of annual suppliers the published the our CDP we've were During ESG we third also on climate various change. one year which assurances experts comprehensive and the recognition which our we recently on We

it year noting of of Looking X the forward, the the the tenor bears that as quarters since has been earlier, last start of mentioned clients our XXXX. positive compared more with conversations to

we'll achieve margin to growth, X% decision significant year. a end to that within expect of as full deliver target full range client earlier, make expect of top mentioned And year continue to ongoing X%. But organic we the the achieving EBITDA that adjusted more that likely a to of XX.X% will continue challenging. recent of growth by We for

we today As margins our overall growth. media, out demonstrated you We as health And PR time, of call with very experiential are can that consistently of accretive the which over well. well. consistently strength, to number areas expand know, them and care, a we've profitability performed

that enhance Our as is models. or compensation and new more that lever model performance-driven accountable lead offerings margins opportunity precise for have and more that to the of will cost some an are flexible that we they improving important further

to remain continued mix to evident and for returns, increase is balance sheet stay in our our broadening was capital asset transformation higher will recent as further area committed positioning digital our our them our turn particular us these commerce to continuing our us delivering strong on augment with to teams our in provide also on creation capabilities. Across value to and digital important focus Another in allow focused highly order repurchases share the solutions this offerings economy. dividend and which M&A while by succeed clients, business company, with help scaled a to

to you call as people those for So partners, for this that, of to time. and thanks the our on again questions. your And their well continued our to as commitment let's open floor support with

Operator

[Operator comes Instructions] Adrien Saint of with Our America. question de Hilaire first from Bank

Adrien de Saint Hilaire

defending? but to accounts growing of Philippe, we Ellen said Or new is year? couple defend like too you drag Philippe, Could are you has about you this of and Amazon, do you what forward? I've revenue on organic should in QX got comprehensive at you a a Jerry actually then see this think like more that the Philippe, tech questions, pipeline, this which talked your I for mind. early And that right if much the you expect don't the and active few us growth quarter? was just stabilized. big to space? Secondly, And later Or presentation. are under from you about it how year? your housekeeping, in your much now moment for for that are there how expect going segment third this intro, review business largely growth one, more talk for on Huge a Can tell example. audience

Philippe Krakowsky

particulars where not you to that. proprietary things but us, clients. is because, just I our very which are don't really you called review a are one others we can to middle can't as please. that large know defending. But is I relative to speak important ongoing we the beneficiary clearly there speak are out, that to there you where really we're No, theoretically And don't that know, the or help question with I

On and the do unpack it other one to all that go. for you, one, I'm at happy I'll probably

the overall specialist So drag at basis IPG time. quarter-to-quarter say, you be the 'XX, if digital the was about given would continues to that agencies, And a through point at on X.X points look to any case. in I

in significant, drag to telco from about And sector was seeing X.X% course and QX. Tech that them X.X% client over has a varied somewhere called X in AOR about it a out. and the of due range. come X% between probably to So X.X% we're in XX% again, we quarter-to-quarter. 'XX the down XX% of X.X% that as And say, this to year the that is loss of QX and

were damaging crypto, to we're a kind said leading least et not that seeing small, So been and space large edge progress less cross-section. of not as of if our sort the a digital not clients, you of was take We've of clearly the names, it results. And at function or always tech medium-sized cetera. telco has

look bellwether, you QX, flat. big if those hair a were the So telco below at and tech clients, the names, just in

So that's why we say stabilization.

or seeing that growth Now clearly, tell to we're back we in mind, come progress. that my a QX, but that can doesn't QX you that's them in say to definitively at moment time in

some seeing are full I those then agencies QX, targets. tenor the last that of growth our digital you either for points overlap in that get a sector granularity to But because -- the movement. And client do I definitely those the of would to add reminder sort XX both guidance over-index of x take in you're was to it that, just into return just number. when is factor doesn't growth achieve agencies in the I basis if order for client sector the guess so us or the client that that of of to our And shy of the year

in clearly net would it hadn't would faster, baked a we So be something be that that improves if positive. and tech

Operator

Our from next JPMorgan. David is with question Karnovsky

David Karnovsky

growth. out you impact these know I client you're organic did any call Philippe, on decision to generally XX the calls, of hesitant to talk a but about clients significant

and extended the offboarding impact you what a large periods? this very So know period particular might I instance out to think there's don't year. would the versus over wanted common to Ellen about more up can then what see it if see frame how seem if in shift you accounts it's to an I show in unpack bit here. happened given could organic not in And short XXXX

had areas the transformation? and you the direct fairly that for commerce bit separately, portfolio? fit Why you are speak just Can broader then M&A. are attractive? does to release these in acquisitions with both a how on And And digital the potentially commentary potential where

Philippe Krakowsky

the On And disclose large should that's proprietary We we clients. don't as speak client, there's for be. don't -- our it obviously information.

can not already. I'm add much news we to that's there there's sure the out So

I a think to point out important would it's and relationship with I is what ongoing us. you significant

is creative And very sizable communications what's understand the continue They're public globally. said, us domain. talent to to within whom of And in a work client looking the win change assignment. that medical the model. proud as consolidation I do rapidly marketing relations a They've public this we as was client, So with it. last their to were organization. It obviously their We we evolve were chosen helped the it's drive year.

in So shared for understand. And magnitude I terms you remarks or of that in estimate say a the to it's think the fair of terms of organic. you decision that's baked for that that mean full into expectations our shift, we the to I we've trying dimensionalize with best that year is

will now the to still we're of the transitional going So in news be be a our supporting we'd X% think thoughtful I upper band. And And barring we this but to range. very target we're very period. you X% through telling at think the we're that end growth comfortable about be client challenging,

our us or of part and can't I you it then media M&A, the data say CRM in year some I strength empowering the but got Acxiom seeing unified more some we're where solution. then for well. in early guess using back the -- strength I grow got that. And for impact half retail we've media commerce, some that of on in We've think of that So at really unpack that 'XX, that we're We're of than commerce in brands I'd you'll the deceleration see agencies.

called area. across I As commerce a digital in we're But seeing out, scale number the in of incremental adoption clients. transformation

I growing areas. and digital are that guess, I in an importance think, would in be deep services, scale those engineering capabilities in observation,

about whole. I benefited very where And that forward are so our group as meaningfully a assets when seen talk you've asset future mix, the strong have our

get both to side. we see place So where bigger, opportunity on client and the be where that's it's there's bigger, a the demand

Operator

from next Cahall Steven Wells comes with Fargo. Our question

Steven Cahall

data about expectations strong talked experiential. and you long-term health tech and care and performance Philippe, at

is of could and experiential I you So comment? think year-to-date, both first if in I flat care performing with how just organically the was were about health in first, quarter. line kind that data talk wondering,

will working of should you confidence through we also you that move capital of been despite just then, off? year? And some gives a moving years? last talk XXXX, your for that's probably Ellen, working those couple work that pretty think guide creative organic So drag. in capital you to big part Net that has accelerate in expectations the And what could as the the of

So I'm in flow free or for any start wondering improve if to cash to and guidance expectations you that for have XXXX.

Philippe Krakowsky

Sure.

the in company opportunity much closely space, leader So have largest in likelihood, accretive There's layers of those analytics, therapeutic there group. And Healthcare, for all continued been every there. in and time sort And are broad We any To capability their also of in to data the in IPG of a some horizontal pretty world. embedded without that we've on and servicing to area or we obviously pharmaceutical as that connect you a I'd which drug client putting work the then we're very, opportunity enterprise-wide direct media space. competition recognized in overall agencies major with inside there's Health, range competence results looking place. we've as level, say long as point, because at more a the your to got the penetration. our very

So represents that opportunity.

So something have -- health we Health as care PR. we performed I to and of also inside see that well, continue that think

well, We tracking clients. sure have because not flat around I'm question sit to health experiential as segments. it data and care we in I'm our operations different your -- media large of of inside sort they

sort data of embedded of As and strong And experiential the sort we've very side, always are we space. it smallest closely because and the that and capabilities that which media in segment our informs then the the product of to in way said, on strong is talk the very the about to you I to Acxiom going performance got we've I'm where inform not the have not fact a a that which of see of and brands is can performing that did specialized, couple that get how flat them, that view. sure quarter, our one we did but as well or deliver those

that it and accretive all to those still I be growth. stronger secularly as are as to think areas should we see were, continue our

Steven Cahall

do those decelerate bit. a was kind to expect year, assuming Yes. the bit The you of question this to accelerate a is little going creative probably

Philippe Krakowsky

well. to. them been. they continuing performing look, have we And see We mean, well as we as PR said, see I

Steven Cahall

And working capital? .

Ellen Johnson

Yes.

an working clients from our take us. payables. as on we to far how manage focus capital, of disciplined new consistent is. very It We're to we very approach, area when for always As it's starting

], but our as my it's very on volatile. impact get XX said, paid about it first the the mentioned quarter, talk doesn't creates Whether you the I lowest in get the the first if you volatility, years. about use on I As really probably result. That at paid underlying frequently, [ XX in you first, remarks, look for it's

do much normalized this expect I a So year result. more to be

Operator

comes with question Huber next Craig Huber Partners. Our Research from

Craig Huber

Can space a bit more added I might token, could. on also on enhance I you thoughts out for for be opportunity and if That's competitive do there. updated third AI questions, you there Two entering question. put out the the my same guys you efficiencies, and that talk it And hurting this feel threat little but parties services guess side your first products perhaps an you? on of

just more more quarter there. a a happened a it's on going what's little bones is what obviously give Asia bit the second here. bit question us my then for X quarters, tough in It's meat And on last about the little as been

Philippe Krakowsky

latter we'll relatively do I the maybe because first guess straightforward. it's

represents size the see our You to overall. it relative

significant dollar small about with agency Ellen, a that you're if mean, small in clients and event quarter, capabilities. range I no brands India, region terms, scale absolute being lot broad And we I'm -- that... not not of in one was exception a sure, cuts a lot the Asia amount. of have and strong smaller very It a talking So on and just a there's where it the huge took . was of across there's place. else anything

Ellen Johnson

you've No, it revenue. X% covered I think with

Philippe Krakowsky

is been the a doing the some not one. we business of places only and part broad time identify the data, precision, prepared where ability for more even obviously opportunity. in in our bit a but the AI you more modeling work, to done business last a being a remarks, have to audiences, And very lot talked do addressable And of extent call then about on question has which it our the to

what solutions we some for it's larger the what Acxiom in media So integrated IPG our obviously, we've been of doing, And time. baked business, we into use do that our engine. really of a do for our long at where breadth and then clients

that you thing important. want the the -- clients' it's so creative brings party because kind in to we how what that to is are the benefit of and business leverage you of to which and little clearly maybe opportunity the the way a parts Adobe an and of ideation so they and is the bit brands think IP valuable just is I about talk what extent announced what do evolving, with

not it's And it's risks we over being increasingly yet, to quantifiable, time. any part valuable of a larger do, home, not and if less connected if what

sort us that for talking that of And Gen was gives I Studio supply technology. us, about connectivity so the chain -- content

Gen it AI how use back AI. of integrates we it's we and and where in where iterated for created, teams a way a store any the forth approved, share it, literally of piece it how content often produce passed gets So with client

of what happens we've into we with doing with Acxiom connect one place. And in Kinesso we're doing and been then All and data. that that what

How segments can ability link that interact when kind How often understand of you haven't these So for with a effectiveness all right? it? So react in it asset it to creative was that information identified, then clearly, out when this that that we AI to to solutions used? clients. give the up we really you've have build going target consumers us in push way is the before, or do you layer the to and then we incremental we

more are in. so and the creative of PR agencies leaning for our agencies And for experiential

and through demonstrate to then you're And content. can content iterate and to so And to it connect event way connect trying layer data the what that that is to do commerce. an optimize you then the all

think on there focus. I bringing point it. We're of actually of have pretty along we're any how as that we're across that broadly beyond about the yet platforms. it up lots disruptive. going pretty with how lots as at we're We've clients used. gets years But and the industry, XX with implementing the board speed experimenting where an talked with them is also to ago tech, been And past well advent there come disruptive the looking it back technologies we've when of in have be fared clearly to things could the

Operator

Jason Bazinet Citi. question next Our from comes with

Jason Bazinet

it that accretive you had margins you Other the on growth helpful important to out there just if question prepared do guidelines financial like to adjusted organic or than to strategic additive since M&A, quick I a called are are any in to M&A or sort you of remarks. your fit, earnings?

Philippe Krakowsky

disciplined think what we where some did something scale that's we talking what very deals said, be I is think we're -- going out as something parameters very or enhanced fact you we the for market to, always I obviously which onetime And the in in kind to or of had that that here. significant look, us, to you at the way areas notwithstanding approach been we're more complementary and the going I even in don't the that disciplined be capabilities from clients. much in seeing laid and mean, who think more I this. about we've need the in that I do demand But strategically that for we've consistently always keeping very, competitors we're mind. And of when

into terms You and sort of saw in us group. of that terms be the of delevering in thoughtful and very disciplined we incorporated how about

know commitment I as impact, you return. So going not a It's can I also to said, give to that I our capital don't guideline. specific

Operator

Nollen next question Tim Macquarie. from with Our comes

Tim Nollen

of cookie, questions, X and night. sleep. it ties I'm to curious I last delay how have work about Chrome decision wondering into the which actually announced they specifically the Google's your deprecation

your with doing advertiser are for And to work cookie? general, what the business? in at deprecation wondering, all, this you delay kind clients brand does if prepare of how, of affect like Just

Philippe Krakowsky

look, a delayed this now of and in I news it's number that that not was announced your something Well, times. to point, been think that has is

own marketers been to there that to that have we're I kind much of data also are over limitations going of thinking identity more much on focused of their more leveraging autonomy where more how disparate I'd it continue it were certain understanding and you've think say, that to having, data. And yesterday. clients when the kinds data have first-party asking operating changes and in again, proxy their graph more own benefits sophisticated advice many or world been obviously, for time to all a comes data get or think over have people announced about and this got sorts own and destiny become their control creating and sources the is on I of

leverage opportunity. And time. some data it find, really marketers do sharing, it data strength data it I of that we've We your So it our for this through been we've changed second-party given thinking, think you represents capabilities, of first-party or for of any cohorts, as ways create ready pool conversations hasn't the been with how and how own sort number said, data incremental because create you with that probably partners. to then is use is

think see don't particularly our people I do. it dramatic as don't development. I a So

Operator

comes Our Cameron Stanley. Morgan McVeigh with from next question

Cameron McVeigh

strong of And should if senior that if any enterprise you investment in secondly, the some year. maybe due a IT, and you very then couple quantify quick Curious we the saw leadership SG&A quarter? over color the could increased increase just that ones. in on Just expect more to growth in investment media this

Philippe Krakowsky

know, help unpack it's in you I because can detail. the a you latter first for as Ellen on as you -- the not one See, can really

Ellen Johnson

remarks in technology, that going will his strategic we talent growth as be forward are lead increased to Sure. enterprise efficiency forward. to and discrete higher considered, Philippe given. ratio this . slightly in that general, senior should all going higher due higher These and making QX and as investments, mentioned But should be were mentioned the was year. guidance in as items. you that we've both

Philippe Krakowsky

now increased and of centralize the And of some architecture. given that talked layer. do, these a there's layer, need an A capabilities to you're the about data and nature scale. production integration we services definitely Gen of content we've as of about the we're open at for always talking need sort But saying, work driven horizontal

does ecosystem. us Clearly, activating terms media data for what of Kinesso in that into the

the the agencies where that the need does And things that plugged can you so the and scale just focus is get at fact it at and shift operate center who into folks that.

point, So our a thinking. model. it's just shift factored going be Ellen's To to it's into our of inside

Operator

was last back to thoughts. final that any for And Philippe our I'll question. now turn it

Philippe Krakowsky

all for you Thank Sue. in you, the time. progress work Thank but some progress. Obviously,

again So back we look reporting forward next to quarter.

Operator

Thank you. today's And that concludes conference.

You may disconnect at this time.

The Interpublic Group of Companies, Inc. (IPG) 24 Apr 242024 Q1 Earnings call transcript