Interpublic Group (IPG) has reported its Q3 2024 results, with total revenue, including billable expenses, of US$2.63 billion and net revenue remaining organically unchanged year-on-year.

According to the holdco’s quarterly results, adjusted EBITDA was $385.8 million, a figure impacted by a no-cash goodwill impairment expense of $232.1m related to digital specialist agencies and the sale process for R/GA and Huge.

Net revenue in the third quarter was unchanged organically from the same period a year ago ($2.24bn), which brings organic growth over the first nine months of this year to 1.0%. Operating revenue over Q3 was $132.9m.

Over the nine months so far, Interpublic said revenue before billable expenses was sitting at $6.75 billion, a decrease of 0.9% compared with the same period in 2023. Compared to the first nine months of 2023, the effect of foreign currency translation was negative 0.3%, the impact of net dispositions was negative 1.6%, and the resulting organic increase of net revenue was 1%.

“During the quarter, we saw solid contributions to growth from media services, sports marketing, data management and public relations,” CEO of Interpublic Philippe Krakowsky said. “Our adjusted EBITA margin was 17.2%, underscoring continued operating discipline as we continue our enterprise-wide investments in growth and business transformation.

“The quarter also continued to see progress in the evolution of our offerings and organisational structure, as we invest in the stronger, growing areas within the portfolio.”

Other highlights from Krakowsky included the launch of Interact, which he said marked an evolution in its marketing intelligence engine, integrating data flows across the campaign lifecycle and consumer journey.

“This core technology connects our entire portfolio, from brand research as well as audience insights and audience creation, all the way through to creative ideation, production, commerce, and personalised CRM programs through the use of generative AI. It also powers media activation and optimisation, including earned and owned channels, delivering better marketing results across media channels and touchpoints for our clients, in real time,” Krakowsky continued.

“Looking forward, we are seeing a strong new business pipeline, for both Q4 activity and longer-term AOR opportunities, and we remain focused on achieving organic growth of approximately 1% this year. At that level, we continue to target adjusted EBITA margin of 16.6%. Our long-standing commitment to capital returns remains an important priority and our strong balance sheet provides a solid foundation from which to continue to evolve our offerings and the solutions we provide for marketers.”

In a Madison and Wall observations posting on the results, the firm noted Interpublic’s results were in line with prior guidance, including flat organic revenue trends globally and in the US, with similar results (+/- 1%) in the UK and continental Europe. Adjusted EBITA margins was stable year over year for the quarter while company remains on track towards previously established guidance of 1% organic revenue growth and 16.6% EBITA margins.

The firm said if there was a tone regarding the fourth quarter and 2025, it was arguably incrementally positive given comments about the pipeline for project work in the near-term.

“On the topic of account losses, company management was reluctant to provide much colour around the scale of the new business headwinds it faces, although we note that if Amazon-related billings were US$5 billion (according to Comvergence) and revenues equated to 5% of billings, we could calculate $250 million in lost revenue,” Madison and Wall stated.

“Similarly, press we have seen from 2021 indicating that the bespoke unit had approximately 1000 staff, using a multiplier of $200k/person we would calculate $200 million in revenue at that point in time. Either way it’s likely that the account represents around 3% of the company-wide revenue, but a harder-to-know percentage of profitability.”

While current period stability was evident in terms of the financial results, Madison and Wall saw a number of comments made that reflected the future direction of IPG and the broader industry. Among them were an emphasis on tactics that will lead towards the necessary centralisation all agencies need to pursue.

“For example, management stated there will be a centralised head of global content production strategy. Notwithstanding that it’s always possible to add value to clients with non-centralised production, a centralised focus is significant to the extent it reflects an improved capacity to invest in new production technologies,” the firm stated.

There were additional comments around further portfolio-pruning efforts, “more to be done” with the company’s operational structure and offshoring, too. Management also made note of the potential for inorganic expansion – i.e. acquisitions – such as with retail media technology platform or related data assets.

“As a final point of interest, significant airtime was taken on the earnings call to provide colour around the adoption of principal-based trading within Mediabrands As this is an under-developed capability for Mediabrands vs. Omnicom and Publicis, and because essentially all large clients by now accept that their agencies participate in these activities, additional growth opportunities will surely follow,” Madison and Wall added.