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Jun 30, 2023
Interpublic Group Q2 2023 Earnings Report
Interpublic Group's Q2 2023 earnings were discussed, revealing a decrease in organic revenue but strong adjusted EBITA margin.
Key Takeaways
Interpublic Group reported a decrease in second-quarter revenue before billable expenses by 2.0% with an organic decrease of 1.7%. Despite revenue challenges, the adjusted EBITA margin was 14.2%, and the company is revisiting its full-year organic growth expectation to 1% to 2% while affirming its commitment to a 16.7% margin target.
Organic revenue before billable expenses decreased by 1.7% in Q2 2023.
Adjusted EBITA margin was 14.2%, surpassing the pre-pandemic Q2 2019 margin.
The company is revising its full-year organic growth expectation to 1% to 2%.
Diluted earnings per share was $0.68 as reported and $0.74 as adjusted, including a $0.17 benefit from the resolution of federal income tax audits.
Forward Guidance
Interpublic Group is positioned to resume solid organic revenue growth in the range of 3.5% to 4% over the course of the year’s second half. Nonetheless, given our first six months, which in Q2 reflect what we believe is modestly heightened macro uncertainty, we are revisiting our full-year organic growth expectation to 1% to 2%.
Positive Outlook
- Benefit of net new business will be increasingly meaningful.
- Underlying growth from several of our larger businesses will also strengthen.
- Strong new business tailwinds.
- Growth in our existing client base, notably in media and healthcare.
- Longstanding Open Architecture model, based on collaboration by design and a foundational data and technology infrastructure.
Challenges Ahead
- Modestly heightened macro uncertainty.
- Pressure on tech & telco is not abating.
- The timeline on the digital specialty agencies, given this greater uncertainty, is pushed.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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