The Interpublic Group of Companies, Inc.

Good morning and welcome to the Interpublic Group second quarter 2025 conference call. All parties 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 Leshne, 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 Ellen 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 10Q 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 for greater transparency in the review of financial and operational performance. At this point, it is my pleasure to turn things over to Philippe Krakowski.

Thanks, Jerry, and thank you all for joining us. This morning, I'll begin with a high-level view of the quarter and the strong progress we're making on our program of strategic transformation. Ellen will then add details on our performance, and I'll conclude with an update on the tone of the business and where our clients are focused as well as on the status of our acquisition by Omnicom and the significant value the combination will drive for all of our stakeholders. Starting with revenue in the quarter, our organic decrease was 3.5%, fully consistent with a revenue outlook and phasing we shared with you earlier this year. As we've discussed on previous calls, organic growth this year is being pressured by the impact of account activity that concluded in 2024. As expected, those headwinds intensified sequentially from our first quarter. Our three largest losses in 2024 weighed on growth by approximately 5.5% in Q2, which is reflected in our results across a number of geographic regions and disciplines, with the greatest impact on media and healthcare. That said, Our growth underlying those headwinds showed sequential improvement precisely in those historically strong areas of media and healthcare. New business performance in 2025 is showing marked improvement as well. And further, we believe that the significant changes we've already made in the business combined with a very strong strategic fit with the capabilities and geographies at Omnicom means that our resulting offerings will be significantly strengthened on the other side of the acquisition. In the quarter, client sector growth was led by strong increases in the food and beverage, financial services, and tech and telecom sectors. Headwinds due to prior period losses weighed on the retail, healthcare, and consumer goods client sectors. Turning to expenses and profitability in the quarter, Adjusted EBITDA was $393.7 million with a margin of 18.1%. That's a very strong result that reflects significant structural cost reduction due to our program of strategic transformation as well as the strong underlying performance in media and healthcare. During the quarter, we continued to demonstrate significant progress in greater functional centralization. leveraging our enterprise-level focus on tech-driven platform benefits in key areas, including client-facing capabilities, such as production and analytics, as well as corporate functions, such as IT, finance, and HR management. As is clear in our report today, these initiatives have traction across the organization, and we expect to exceed our initial objectives for enterprise redesign, client service delivery enhancements, and ongoing operating efficiencies. Charges for restructuring in the quarter were $118 million. Our adjusted EBITDA excludes those charges, as well as $11 million of deal expenses related to the combination of Omnicom, which appear in our SG&A expense. Our diluted EPS in the quarter was 44 cents as reported, which includes the restructuring investment while our adjusted deleted EPS was 75 cents. During the quarter, we returned $98 million to shareholders under our share repurchase program, bringing total year-to-date share repurchase to $188 million. We currently expect to repurchase shares consistent with recent levels and the $325 million annual cap in our merger agreement. Turning to some observations on our outlook for the full year, the macro environment has been more volatile than anticipated as we entered the year. And we are, of course, staying close to clients. This in turn allows us to report that marketers as a whole are not reacting reflexively to the changing business and geopolitical landscape. In fact, clients are assessing developments very methodically and continue to engage with us constructively in order to evaluate their alternatives, whether that means assessing investment levels or messaging, channel mix, or the mix of marketing disciplines required to deliver against their desired business outcomes. This is specific to each of their business situations, whether due to the industry, geography, or competitive dynamic of the sector in which each of them operates. And that means that while there can be puts and takes by individual clients, our overall experience in Q2 and the first half has netted out at levels that are consistent with what we expected, and we've not seen a marked change in net client activity. We therefore remain on track with a four-year target for organic net revenue that we shared earlier this year, which is an organic decrease of 1% to 2%. On a full-year 2025 adjusted EBITDA margin, our transformation work and evolving business mix have put us ahead of plan. At our expected level of revenue, we're confident that our actions to date, along with ongoing expense discipline, can drive adjusted EBITDA margin for the full year that is well ahead of the 16.6% we had shared with you previously. I'll come back with an update on the status of our acquisition by Omnicom, the compelling growth benefits of the new company for clients, and the resulting value creation that we see in the combination. I'll also share some observations and examples to illustrate the growing pace at which AI is becoming core to our offerings and the opportunities that represents. But at this point, I'll turn things over to Ellen for a more in-depth view of our results in the quarter.