The Interpublic Group of Companies, Inc.

Good morning and welcome to the Interpublic Group second quarter 2024 conference call. All participants are in a listen-only mode until the question and answer portion. At that time, if you would like to ask a question, you may press star 1. This conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to introduce Mr. Jerry Lushney, Senior Vice President of Investor Relations. Sir, you may begin.

Good morning. Thank you for joining us. This morning we are joined by our CEO, Philippe Krakowski, and by Alan Johnson, our CFO. We have posted our earnings release and our slide presentation on our website, interpublic.com. We will begin with prepared remarks to be followed by Q&A. We plan to conclude before market open at 9.30 Eastern Time. During this call, we will refer to forward-looking statements about our company. These are subject to the uncertainties and the cautionary statement that are included in our earnings release and the slide presentation. These are further detailed in our 10-Q and other filings with the SEC. We will also refer to certain non-GAAP measures. We believe that these measures provide useful supplemental data that, while not a substitute for GAAP measures, allow greater transparency in the review of our financial and operational performance. At this point, it is my pleasure to turn things over to Philippe Krakowski.

Thank you, Jerry. As usual, I'll begin our call with a high-level view of our results and the business overall. Ellen will then provide additional insights on the quarter, and I'll conclude with highlights at our agencies to be followed by your Q&A. This morning, We are reporting a solid second quarter, highlighted by moderate acceleration of our growth, as well as margin expansion from the same period a year ago. To begin with revenue, second quarter organic growth before billable expenses came in at 1.7%, bringing organic growth in the first half to 1.5%. In the quarter, we were paced by growth in continental Europe, LATAM, and the U.K., followed by increases in our other markets group and the U.S. Each of our three operating segments grew organically from a year ago. And underneath that, consistent with our performance over some time, we were again led by IPG Health and IPG Media Brands. We saw strong performance as well at Deutsche LA, Golan, and at Axiom. We saw solid growth in the quarters. Also in keeping with recent quarters, underperformance at our digital specialty agencies weighed on our consolidated growth. That drag was about 1% of organic growth in the second quarter. From the standpoint of client sector performance, growth was driven by healthcare, food and beverage, and consumer goods. Retail was approximately flat, and we saw decreases in financial services, tech and telecom, and auto and transportation. As we've called out previously, the tech and telecom sector continued to weigh on growth by approximately 1% organically in the quarter. Most of that decrease was due to the loss of a large AOR assignment with a telco client late last year. For the sake of clarity, I would note that excluding double counting, the tech and telco sector and our digital specialists combined weighed on Q2 organic revenue growth by negative 1.7 percent. Turning to expenses and margin, our teams continue to effectively balance cost discipline with ongoing investment in the evolution of our business. Second quarter adjusted EBITDA margin was 14.6 percent, an improvement of 40 basis points from a year ago. We had strong leverage on base payroll which helped drive 180 basis points of operating leverage on salaries and related expenses compared to a year ago. That was partially offset by planned investments in technology, business transformation, and senior talent, particularly for centralized platform resources, which resulted in increased office and other and SG&A expenses. Diluted earnings per share in the quarter was 57 cents as reported and 61 cents as adjusted for acquired intangibles amortization and a small impact from net business dispositions. During the quarter, we repurchased 2.2 million shares, returning $68 million to shareholders. On our last call with you, we noted that due to a decision by a major and ongoing health care client, in late March related to their global consumer advertising work. The high end of the 1 to 2 percent growth range that we had targeted as we entered the year would not be achievable. As the year has progressed, we are seeing modest incremental uncertainty in the macro environment and in domestic consumer sentiment. Our view is therefore that we expect to achieve approximately 1 percent organic growth for the full year And with that level of growth, we continue to target adjusted 2024 EBITDA margin of 16.6%. Looking ahead, we anticipate that the strongest and most consistent growth areas of our business, such as our data and tech-driven media offerings, specialist healthcare marketing expertise, PR and experiential marketing capabilities, are positioned to continue their strong performance. The common thread in the growth of our two largest businesses, IPG Media Brands and IPG Health, which are also our most successful businesses, has to do with the specialized, high-value services that they provide to marketers. These rely on skill sets that are more technical, reach audiences with greater precision, and lead directly to outcomes that we can assess and optimize. As you heard from us in the past, these include audience segmentation work, predictive analytics, and data-driven decisioning, much of it powered by Axiom, and all of which has been built by in-house engineering talent creating technology solutions that rely on machine learning algorithms and, more recently, newer AI capabilities. The developments we're seeing in generative AI will be equally fundamental to the transformation of a broader set of our offerings. Collaborations with Adobe, Amazon, Blackbird AI, Getty Images, Google, Microsoft, and others have given us secure enterprise access to advanced AI tools and large language models, which are increasingly informing every area of our business. including insight generation, creative ideation and production, and work in our earned and experiential communications practices, as well as further enhancing our media and precision marketing capabilities. Over the past 12 months, our progress with these emerging technologies has been significant. The ongoing upskilling of our people has been central to this process. We see this as a strategic imperative and have made it the responsibility of every operating leadership team across the company. Generative AI produces foundational capabilities and new canvases for us to work more expansively with our clients. Over time, this offers the promise of reigniting many of our creative offerings as engines of value creation. As you heard last quarter, we recently became the first company to unite all facets of the content supply chain by integrating Adobe's Gen Studio AI product into our marketing technology platform, the IPG engine. That engine sits at the enterprise level and is a unified set of standards, practices, and a technology layer, which in turn is built on consumer insights at scale, fueled by our Axiom data and identity products. It seamlessly connects media strategies and targeting including predictive modeling of what we call high value audiences to creative concepts and messaging across all marketing disciplines. We then move from data all the way through activation by which we mean the production and dissemination of campaigns whether on marketing technology platforms, in earned media, or in paid media investments across all formats and channels. Our engine then analyzes the impact of this activity for purposes of attribution and optimization. This allows us to do with our communication strategies, creative assets, and all forms of marketing activity what we've been doing in media, which is true personalization at scale. This is an end-to-end solution. which helps our clients better engage, convert, and retain customers through the entire funnel, assessing and understanding the value of their investments across media, marketing, and sales channels. In a world in which data-driven audience insights are key to delivering performance for our clients, and one which AI will play an increasingly important role, access to high-quality, proprietary data at scale will be essential to success. Axiom continues to have industry's top performing audience data to engage with customers at an individual level without the need for cookies or other proxies. Our tech stack and marketing engine optimize performance using this global data spine of two and a half billion real people with Axiom ID attributes that are meaningfully greater than those available from any other industry data set and which we can match to significantly more global device IDs than our closest competitors. The engine and Axiom are now core to every significant engagement across the company and help power many of the new business wins I'll cover later in my remarks. Now, though, let's turn things over to Ellen for a more detailed view of our quarterly results.