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The call showed strong early execution of the Omnicom–Interpublic integration: solid top-line growth from core operations, meaningful margin expansion (adjusted EBITDA +240 bps), double-digit adjusted EPS growth, robust free cash flow improvement, and rapid deployment of the Omni AI platform and integrated media capabilities. Management is realizing cost synergies and returning capital via a large buyback program. Offsetting these positives are acquisition-related charges, substantially higher debt and interest expense, underperforming disposed businesses (margins lower than originally expected), weakness in the advertising discipline, and uncertainty around disposal proceeds and some regional softness. Overall, the positives from revenue, margins, cash flow and integration momentum substantially outweigh the near-term financial and disposal-related headwinds.
Guidance and forward-looking targets from the call emphasized aggressive cost and capital deployment plans and specified financial assumptions: management reiterated $900 million of cost‑reduction synergies in 2026 and $1.5 billion by mid‑2028; a $5 billion share‑repurchase program to be completed over the next 12 months (including a $2.5 billion ASR), with $2.8 billion repurchased through Q1 and an expected shares‑out decline of roughly 11–12% by year‑end 2026 (weighted‑average shares for the year down ~8–9%); an adjusted tax rate of ~26% for 2026; net interest expense expected to rise by about $200 million in 2026 versus 2025; FX is expected to benefit reported revenue by ~1% assuming current rates; planned asset dispositions total about $3.2 billion of annual revenue (≈$1 billion already disposed in Q1); and operationally they remain on track for prior organic growth and margin targets after reporting Q1 core revenue of $5.6 billion (organic growth 3.9%), adjusted EBITDA up ~$180 million (>27%) with a 240‑bp margin expansion to 14.8%, while Q1 recorded $59 million of integration costs, $34 million loss on dispositions, $4 million of severance/repositioning, $117 million of acquisition‑related amortization, gross long‑term debt of $10.2 billion, cash/short‑term investments of $4.3 billion, an undrawn $3.5 billion revolver, and a pro‑forma total leverage ratio of ~2.5x.
Core operations revenue of $5.6 billion in Q1 2026, increase of $345 million versus Q1 2025 (combined Omnicom + Interpublic). Organic revenue growth was 3.9%, and Phil reported total core revenue growth of 6.7% year-over-year.
Adjusted EBITDA grew by $180 million (over 27% increase) and adjusted EBITDA margin expanded by 240 basis points to 14.8% from 12.4%, driven primarily by cost-reduction synergies from the Interpublic acquisition.
Non-GAAP adjusted diluted EPS of $1.90 in Q1 2026, up 11.8% from $1.70 in Q1 2025 (excludes after-tax repositioning, disposition, integration and amortization costs).
Integrated Media represents ~52% of core revenue and led growth, expanding in the high single digits. PR and Experiential grew mid-single digits; Health grew low single digits, reflecting the strategic shift toward faster-growing integrated services.
Notable new business wins in Q1 include IBM, GSK, John Deere, Little Caesars, Acadia Pharmaceuticals and Baileys. Multi-year expansions with existing clients include Clorox, Dyson, Delta, Exxon, Kroger, Merck and Unilever, indicating traction for the integrated operating model.
Scaled the Omni AI-enabled intelligent sales and marketing platform across the organization in Q1; reported benefits include improved media performance, increased addressability and measurement, faster activation, and stronger retail/commerce performance through Acxiom Real ID and partner integrations.
Reported a ~70% increase in year-to-date free cash flow (driven by Interpublic inclusion and improved performance). Executed $2.8 billion of share repurchases in Q1 (ASR + open market) and maintaining a $5 billion repurchase program to be completed over the next 12 months.
Integrated operations rapidly: merged/sunset >20 major agency brands, deployed common HR/IT platforms and shared workflows, and moved into hub locations. On-track synergy targets: $900 million cost reductions in 2026 and $1.5 billion by mid-2028.
Cash equivalents and short-term investments of $4.3 billion, an undrawn $3.5 billion revolver and $3 billion commercial paper program. Pro forma total leverage ratio per credit agreement of 2.5x and in compliance with covenant at March 31, 2026.
Ladies and gentlemen, thank you for standing by. My name is [ Krista ], and I will be your conference operator today. At this time, I would like to welcome you to the Omnicom's First Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Greg Lundberg, Investor Relations. Please go ahead.
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 ...