Earnings call transcript: Omnicom Group’s Q1 2026 earnings surpass expectations

Omnicom Group Inc. reported its first-quarter 2026 earnings, showcasing a robust performance that exceeded market expectations. The company’s earnings per share (EPS) reached $1.90, surpassing analysts’ forecast of $1.84, marking a 3.26% surprise. Revenue also outperformed, totaling $6.24 billion against a forecast of $5.85 billion, reflecting a 6.67% surprise. Following the earnings release, Omnicom’s stock price increased by 1.14%, closing at $76.01, as investors reacted positively to the strong financial performance.

Omnicom’s Q1 2026 results indicate a strong start to the year, driven by strategic acquisitions and operational efficiencies. The integration of Interpublic has bolstered the company’s revenue and market position, with core operations revenue reaching $5.6 billion. The company’s focus on leveraging AI and innovative platforms has contributed to its competitive edge in the advertising industry.

Omnicom’s actual EPS of $1.90 exceeded the forecast of $1.84, resulting in a positive surprise of 3.26%. The revenue of $6.24 billion also surpassed the expected $5.85 billion, indicating strong operational performance and effective integration strategies following the Interpublic acquisition.

The stock price of Omnicom rose by 1.14% in after-hours trading, reflecting investor confidence in the company’s ability to exceed earnings expectations. The stock’s current price of $76.01 remains within its 52-week range of $66.33 to $87.17, showing resilience amid broader market volatility. According to InvestingPro analysis, the stock appears undervalued at current levels, suggesting potential upside for investors. The company ranks among most undervalued stocks tracked by the platform.

Omnicom maintains a positive outlook, with EPS forecasts for the coming quarters set to increase. The company projects continued growth with a focus on AI-driven innovations and strategic partnerships. Revenue guidance for the fiscal year 2026 stands at approximately $25.1 billion, with expectations for higher double-digit EPS growth in upcoming quarters.

CEO John Wren stated, "Our strong Q1 performance reflects the successful integration of Interpublic and the strategic deployment of our AI-enabled platforms. We continue to invest in innovation while delivering value to our shareholders."

During the earnings call, analysts inquired about the impact of AI integration on future growth and the potential risks associated with increased debt levels. Executives reassured stakeholders of the company’s strategic focus on innovation and effective debt management to sustain growth momentum.

Krista, Conference Operator: Ladies and gentlemen, thank you for standing by. My name is Krista and I’ll be your conference operator today. At this time, I would like to welcome you to the Omnicom’s first quarter 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question and answer session. If you would like to ask a question, simply press star, then the number 1 on your telephone keypad. If you’d like to withdraw that question, again, press star 1. Thank you. I would now like to turn the conference over to Greg Lundberg, Investor Relations. Please go ahead.

Greg Lundberg, Investor Relations, Omnicom: Thank you for joining our first quarter 2026 earnings call. With me today are John Wren, Chairman and Chief Executive Officer, and Phil Angelastro, Executive Vice President and Chief Financial Officer. On our website, omc.com, you will find a press release and a presentation covering the information we’ll review today. An archived webcast will be available when today’s call concludes. Before we start, I’d like to remind everyone to read the forward-looking statements and non-GAAP financial and other information that we’ve included at the end of our Investor Presentation. Certain of the statements made today may constitute forward-looking statements. These represent our present expectations and relevant factors that could cause actual results to differ materially are listed in our earnings materials and in our SEC filings, including our 2025 Form 10-K. During the course of today’s call, we will also discuss certain non-GAAP measures.

You can find the reconciliation of these to the nearest comparable GAAP measures in the presentation materials. We will begin the call with an overview of our business from John, then Phil will review our financial results, and after our prepared remarks, we will open the line for your questions. I’ll now hand the call over to John.

John Wren, Chairman and Chief Executive Officer, Omnicom: Thank you, Greg. Good afternoon, everyone. Thank you for joining us today. I’m pleased to share highlights from our first quarter as the new Omnicom. Since closing the Interpublic acquisition just before the holidays, we’ve seen momentum and cohesive growth across the organization. Our steady progress is reflected in our strong financial performance in the first quarter. As you’ll recall from our fourth quarter call and Investor Day, we’ve strategically repositioned our portfolio for growth. As part of the portfolio realignment, we identified planned asset sales and disposition of businesses with approximately $3.2 billion of annual revenue, of which approximately $1 billion was disposed of in the first quarter. Our plan is to sell or exit the remaining assets in the next several quarters.

To clarify our focus on the operations that will drive growth, we’ve excluded assets held for sale and planned disposition from our core operations. Revenue from core operations was $5.6 billion in the first quarter, which increased $345 million when compared to Q1 2025 revenue from core operations for the combined Omnicom and Interpublic. Organic revenue growth was 3.9%. We also updated our revenue reporting to reflect our integrated operating model, which is central to driving our growth. Phil will walk through the details of our reporting changes in his remarks. One point I wanted to discuss was the increase in EBITDA performance. Our adjusted EBITDA margin increased 240 basis points to 14.8% as compared to the combined operations for Q1 2025.

Our non-GAAP adjusted EPS in the quarter, which excludes after-tax costs for repositioning, dispositions and amortizations of intangibles, was $1.90 per share, an increase of 11.8% versus Q1 2025. Our solid performance for the quarter was the result of us realigning our portfolio for growth and moving decisively on our integration efforts. By integrating our capabilities upon closing, we merged or sunset more than 20 major agency brands with a long tail of smaller brands. This allowed us to quickly bring together the best talent from across the new Omnicom. Combined with our integrated client leaders and new strategy and growth teams, our efforts have translated into new business wins. In the first quarter, these include IBM, GSK, John Deere, Little Caesars, Acadia Pharmaceuticals, and Baileys.

We’re not just winning new clients, we’re expanding our relationships with existing ones. Our integrated approach is making it easier for clients to access all their marketing and sales needs from a single partner. This model has gained traction across a number of our clients, including Clorox, Dyson, Delta, Exxon, Kroger, Merck, and Unilever. Our growth from integrated services is helping to diversify our revenue streams and deepen our client relationships, underscoring the strength of our offerings. As we discussed at our Investor Day last month, Omni, our AI-enabled intelligent sales and marketing platform, is connecting our talent, data, and services.

We’ve scaled our next generation of Omni across the entire organization in Q1, putting the latest agentic AI tools in the hands of all of our employees. The new Omni is delivering on multiple fronts, driving stronger media performance, greater addressability and improved measurement, increasing speed to activation and enhancing ROI with Acxiom’s Real ID, improving performance across retail and commerce channels, and enabling more effective marketing and client outcomes through deeper integrations with partners like Adobe and Amazon. We also made significant progress to accelerate collaboration across the group. Throughout the quarter, we continued to move into the hub building locations, deploy common HR and IT platforms, and migrate teams to shared workflow systems.

As we look ahead, we will continue to work towards the initiatives we’ve communicated in our prior calls, including $900 million in 2026 cost reduction synergies and $1.5 billion by mid-2028. $5 billion in share repurchases over the next 12 months, including a $2.5 billion accelerated share repurchase program currently being executed. Through the ASR and open market purchases, we repurchased $2.8 billion of shares through the first quarter. Planned asset sales and dispositions of businesses with approximately $3.2 billion of annual revenue. Dispositions with approximately $1 billion in annual revenue have already been completed. We will continue to evaluate our portfolio to ensure we remain positioned for growth. Overall, I’m pleased with how we’ve executed in the first quarter.

Our results clearly demonstrate the significant benefits of the combination for our people, clients, and shareholders. While we remain bullish about the combination for the year ahead, we’re also mindful of the broader geopolitical environment. The ongoing conflict in the Middle East, which represents less than 2.5% of our revenue, continues to create uncertainty in the region and across the world. As always, we are prioritizing the safety of our people in the region and monitoring developments closely so we can adapt quickly to changes that impact our business. Before I close, I want to thank every member of the Omnicom team for their outstanding efforts. None of this progress would have been possible without the exceptional