Omnicom Group Inc. (OMC) Earnings Call Transcript & Summary

Hello, and welcome to the Omnicom Second Quarter 2025 Earnings Call. [Operator Instructions] I would now like you to turn the conference over Greg Lundberg, Senior Vice President of Investor Relations. You may be begin.

Thank you for joining our second quarter earnings call. With me today are John Wren, Chairman and Executive Officer; Phil Angelastro, Executive Vice President and Chief Financial Officer; and Paolo Yuvienco, Chief Technology Officer. On our website omnicomgroup.com, you will find the press release and the presentation covering the information that 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 2024 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. After our prepared remarks, we will open up the line for your questions. And I'll now hand the call over to John.

Thank you, Greg. Good afternoon, everyone, and thank you for joining us today. We are pleased to share our second quarter results. Organic growth was a solid 3% for the quarter, in line with our expectations. Non-GAAP adjusted EBITDA margin was 15.3% for the quarter and flat to last year. Non-GAAP adjusted net income per share, which excludes the after-tax effect of the amortization of acquired and strategic platform intangibles, repositioning costs and acquisitions costs was $2.05, up 5.1% versus the comparable amount in 2024. Our cash flow continues to support our primary uses of cash: dividends, acquisitions and share repurchases. And our liquidity and balance sheet remain very strong. During the first half, we used $223 million in cash to repurchase shares and are on track to repurchase $600 million in shares in 2025. After a solid first half of the year, we are maintaining our guidance for the full year 2025 organic growth to be 2.5% to 4.5% and adjusted EBITDA guidance to be 10 basis points higher than the 15.5% we achieved in 2024. Turning now to our key initiatives. I'd like to begin with an update on our proposed acquisition of Interpublic. In June, we reached a major milestone when we received antitrust approval to close the transaction in the United States bringing the total number of approved jurisdictions to 13 out of the 18 required for closing. We remain fully on track to complete the transaction in the second half of this year. As we progress through the regulatory approval process, Philip and I have continued to speak with our clients and our people. The response has been overwhelmingly positive. There's a genuine sense of anticipation and excitement about the opportunities our combined company will create that has only intensified as we approach the closing. By combining our complementary strengths, the new Omnicom will be equipped with industry-leading resources to drive a bold era of growth for our people, delivering superior outcomes for our clients and generating significant long-term value for our shareholders. Omnicom and IPG have dedicated teams at both corporate levels, working closely with our merger consultants, leading the process to ensure a seamless and successful closing. Contrary to the early speculation that the transaction might distract our professional staff, our agencies remain fully focused on delivering exceptional service to our clients and securing new business. Recent wins include: Under Armour, Bimbo Global and Asda, just to name a few. We continue to refine our analysis and identification of synergies to achieve our $750 million run rate target following the closing. We are highly confident that we will achieve this level of synergies, and we continue to identify further opportunities beyond our target as we move forward with the evaluation. We've also taken steps to align our existing portfolio, ensuring that we can immediately deliver the benefits of the combined company to our clients, particularly in relation to our operating platform strategy. To that end, effective July 1, Omnicom reorganized our most advanced data and technology assets, Omni, Omni AI, ArtBot and the Flywheel Commerce Cloud into an end-to-end platform organization to drive our strategy forward. This move is designed to directly support our clients' marketing and commercial ambitions while accelerating our own growth trajectory. With the proposed acquisition of IPG, our new platform will be significantly enhanced by the addition of KINESSO and Acxiom recognized as the world's highest fidelity data platform, as well as Real ID, the most comprehensive customer identity solution available. These assets will enable us to deliver an even greater value and innovation to our clients. The new platform organization will be led by Duncan Painter, whose experience in building well-established tech platforms across Flywheel, EVS, Experian and Sky and makes him uniquely suited for this role. Our long-standing strategy has always been rooted in the belief that data and technology supercharge creativity. In today's world, especially with the rise of generative AI, breakthrough creativity is more valuable than ever. I'm proud to share that our agencies returned from this year's Cannes Lions Festival of Creativity with 2 of the industry's highest honors. OMD worldwide won Media Network of the Year and DDB Worldwide won Network of the Year. Our ability to excel in both creative and media underscores the strength of Omnicom's end-to-end capabilities and the outstanding work we deliver for our clients. The recognition also follows Omnicom being named, most effective holding company for the second consecutive year by the 2024 Effie Index demonstrating that our people and agencies continue to stay ahead of the curve, consistently delivering work that drives real business impact. Lastly, I want to highlight a key addition to our leadership team. In May, we welcome Susan Catalano, our new Chief People Officer in the United States. Susan brings a wealth of experience in organizational redesign, talent operations and management and has successfully guided global organizations through transformational changes. Susan will play a key role in bringing Omnicom and Interpublic together, creating a world-class HR organization that attracts and develops the industry's best talent. In closing, we're pleased with our first half financial results, our progress on key strategic initiatives and the integration planning underway for Interpublic. As we look to the second half of the year, we remain confident in achieving our full year organic growth and margin targets. Our focus will remain on delivering for our clients and successfully completing the Interpublic transaction. Now I want to introduce and turn the call over to Paolo Yuvienco, our Chief Technology Officer, who is joining us today to explain how we are making generative AI accessible to all our colleagues and clients across the organization. Paolo?

Thanks, John. I want to now spend a few minutes on what we think is one of our most significant competitive differentiators, how we're deploying generative AI and agentic capabilities through our Omni platform and data assets to fundamentally reshape how we create value for clients. Back in 2022, we made the strategic decision to be an early adopter of generative AI recognizing the transformative potential ahead of many of our competitors and clients. Initially, our focus was on the obvious applications using generative AI for ideation in content creation and copy generation as well as distilling insights from audiences. While these delivered immediate productivity gains, they represented only the first phase of our AI strategy. What is driving the latest phase of our continuous transformation has been the development and deployment of our agentic framework. Over the last year, we have been aggressively and systematically rolling out AI agents throughout our workflows, where we can deploy multiple AI agents that collaborate seamlessly to deliver comprehensive solutions rather than isolated AI tools addressing individual tasks, we can now orchestrate intelligent agents across campaign life cycles, simultaneously analyzing data, optimizing strategies and refining creative elements. This capability is powered by a proprietary data asset and institutional knowledge, democratizing access to our industry-leading consumer intelligence, encompassing behaviors, demographics, cultural insights and transactions. Additionally, we are fine-tuning and grounding the market-leading foundational and frontier models, effectively encoding our strategic expertise into our scalable AI system. Most importantly, we are orchestrating complex multistage workflows that previously required extensive human resources. Examples of this cover the entire spectrum of our workforce. For instance, our strategy and creative teams across all our agencies are incorporating synthetic audience agents that are grounded in the omni data sets allowing teams to conduct synthetic focus groups for ideation, personalized content creation and prelaunch testing and scoring of campaigns and assets. In our Healthcare group, the teams have been able to create a multi-agent reasoning engine that helps in recalibrating campaigns and assets at significantly greater speed when the market conditions change by simulating market scenarios, model stakeholder responses and synthesize its existing signals. Within our digital commerce group, the teams have crafted numerous agents that assist in new product launches helping to optimize strategies by surfacing actionable insights from sales trends, market data and competitor analysis. This all represents far more than operational efficiency, but those benefits are significant. We are building differentiated capabilities through our data and technology stack. This positions Omnicom to capture value as the industry evolves and strengthens our long-term competitive positioning. Now I'm going to hand it back to John, but I'll be available for our Q&A session later on the call.

Thanks, Paolo. I hope that gives you a better sense of how we are embedding generative AI across the enterprise. I'll now turn the call over to Phil for a closer look at our financial results. Phil?

Thanks, John. In an uncertain market, our performance through the first half was solid, with organic revenue growth near the midpoint of our annual guidance, and our adjusted EBITDA margin levels flat. As we begin the second half, less uncertainty in the macro environment may allow marketers to normalize spending levels. Although it is still too early to say that the uncertainty in the macro environment has been eliminated. The larger parts of our business continue to perform very well and we continue to invest in our technology platforms and tools that differentiate us in the marketplace. And at the corporate level, as John said, we are focused on planning for the integration of IPG and so we can hit the ground running. Let's now review our results in more detail, beginning with changes in revenue on Slide 3. Organic growth in the quarter was 3%. The impact on revenue from foreign currency translation increased reported revenue by 1.1% as the U.S. dollar weakened relative to most currencies throughout the quarter. If rates stay where they are, we estimate the impact of foreign currency translation on revenue will approximate positive 1% for Q3 and positive 2% in Q4, which will result in a benefit from foreign exchange of approximately 1% for the full year 2025. The net impact of acquisitions and dispositions on reported revenue was positive 0.1%. At this time, we expect the impact of acquisitions and dispositions completed to date will be minimal for the full year 2025. Let's now turn to Slide 4 for a summary of our income statement. This table shows our reported numbers on the left and non-GAAP adjusted numbers on the right. Adjusting for acquisition-related expenses and repositioning costs, our Q2 2025 non-GAAP adjusted EBITDA grew 3.7% to $613.8 million with a margin of 15.3%. And our non-GAAP adjusted diluted EPS in grew 5.1% to $2.05. To highlight the 2 adjustments made to operating expenses. The first is an increase in Q2 of acquisition-related expenses related to both regulatory approval work and an acceleration of our integration planning work. The second relates to repositioning actions, primarily severance, we took to optimize Omnicom Advertising Group and Omnicom Production Group as well as to align our businesses and markets more broadly to recent changes in market conditions and client demand related to the challenging macro environment. Please turn to Slide 5 for a reconciliation of these items in detail. Acquisition-related costs of $66 million in Q2 2025, increased from the $34 million we incurred in Q1 of 2025 and repositioning costs were $89 million during Q2 of '25. We continue to expect our non-GAAP adjusted EBITDA margin for the year to be 10 basis points higher than our 2024 results of 15.5%. As we get closer to closing the acquisition of IPG, we'll be evaluating ways to accelerate savings opportunities prior to the closing date. We continue to expect to achieve our cost savings target of $750 million. Let's now turn to Slide 8 and review organic revenue growth in more detail, beginning with our disciplines. Media & Advertising was up 8%, with solid growth in most geographies. Overall results were driven by strong growth in our Media business and mix performance in Advertising. Precision Marketing grew 5%, including strong performance in our digital, CRM and experienced design agencies in the U.S., offset by mixed performance internationally. Public Relations declined 9%, primarily in the U.S., due largely to weaker performance in our global networks and some reduction relative to the benefit in 2024 from national election spend. We expect to see a difficult comp for the rest of 2025. Healthcare revenues were down 5%, and this includes our having now cycled through a large prior period client loss as well as work winding down on brands that are close to loss of patent protection. We continue to expect improved performance as the year progresses. Branding & Retail Commerce was down 17%. Branding experienced continued pressure from uncertain market conditions impacting both new brand launches and rebranding projects as well as continued slow M&A activity while Retail Commerce in the quarter slowed. Experiential grew 3%, driven by good performance in the U.S., offset by a challenging comparison to last year with the Olympics as well as declines in the Middle East and China. Lastly, Execution & Support increased 1%, driven by strong growth in the U.S., offset by negative performance in the U.K. and Continental Europe. Turning to organic revenue growth by geography on Slide 9. We saw growth across all of our regions with the exception of the U.K., where strength in Media & Advertising was offset by other disciplines. Our largest market, the U.S., had organic growth of 3% and Asia Pacific also posted solid growth as well as Continental Europe, although mix by market. Slide 10 is our revenue by industry sector. Year-to-date, relative to 2024, there are various small changes in the categories we track. The auto category increased year-over-year, reflecting new business wins, which were offset by some client spend reductions. Now let's move down the income statement and look at our expenses on Slide 11. In the quarter, salary-related service costs, our largest expense, were down on a reported basis and as a percentage of revenue, driven by our continued efficiency initiatives and ongoing changes in our global employee mix. Third-party service costs grew in connection with the growth in revenue, primarily in the media and advertising discipline. Third-party incidental costs which are out-of-pocket costs build back to clients at our cost also grew in connection with revenue growth. Occupancy and other costs increased just under 4%, but decreased as a percentage of revenue. These include office rent, other occupancy and general office expenses as well as technology expenses. SG&A expenses increased primarily due to the $66 million of IPG acquisition-related costs in the second quarter of 2025. Excluding these costs, reported SG&A expenses declined by 6%. Turning to Slide 12. You can see a presentation of our income statement that adjust for the items that are not part of our normal course operations. As I mentioned earlier, when excluding both the acquisition-related and repositioning costs from the second quarter of 2025. Non-GAAP adjusted EBITDA grew 4.1%, and the related margin was flat at 15.3%. Net interest expense in the second quarter of 2025 was flat, reflecting a decrease of $1 million to $40.7 million. We estimate that net interest expense will increase by approximately $4 million in Q3 and by $5 million in Q4. Our reported income tax rate was 30.2% in Q2 of 2025 compared to 26.4% in the prior year. The increased rate is primarily due to the nondeductibility of certain acquisition-related costs in 2025. On an adjusted basis, our Q2 2025 rate was 26.5%, up slightly from Q2 of '24, which was 26.3%. For full year 2025, we expect the rate on an adjusted basis to be between 26.5% and 27%. Average diluted shares outstanding were down 1% from Q2 2024 due to net repurchase activity. Reported diluted earnings per share were down 21% on an adjusted non-GAAP basis. As discussed, it increased 5% to $2.05 per share. Now please turn to Slide 12 for a look at year-to-date free cash flow. The year-over-year decline was driven primarily by the reduction in net income resulting from the impact of both the acquisition-related costs and the repositioning costs. As you know, our free cash flow definition excludes changes in operating capital. As you can see in the appendix on Slide 18, we had an improvement of approximately $250 million in the use of operating capital in the first 6 months of 2025 compared to last year. It's worth noting that on a 12-month basis, our change in operating capital is once again positive. Regarding our primary uses of free cash flow for the 6 months ended June 30, we used $277 million of cash to pay for dividends to common shareholders and another $34 million for dividends to noncontrolling interest shareholders. Our capital expenditures were $72 million. As we've discussed, they are a bit higher than our historical average due to ongoing investments in our strategic technology platform initiatives. Total acquisition payments were $48 million, including earn-out payments and the acquisition of additional noncontrolling interests. This is down significantly from last year, which included the acquisition of Flywheel, net of cash acquired. Finally, our share repurchase activity was $223 million, excluding proceeds from stock plans of $13 million. This included share repurchases of $142 million in Q2 and $81 million in Q1. We still expect repurchase activity of approximately $600 million in total for the year. Slide 13 is a summary of our credit, liquidity and debt maturities. At the end of Q2 2025, the book value of our outstanding debt was $6.3 billion, flat with the same prior year period. We have no maturities in '25. However, you will note that our $1.4 billion April 2026 maturities are now classified as current on our balance sheet. We will address these in due course. Our cash equivalents and short-term investments at the end of the quarter were $3.3 billion. We continue to maintain an undrawn $2.5 billion revolving credit facility, which backstops our $2 billion U.S. commercial paper program. Slide 14 presents our historical returns on 2 important performance metrics for the 12 months ended June 30, 2025. Omnicom's return on invested capital was 18% and our return on equity is 34%, both of which reflect our strong performance and strong balance sheet. The year-over-year change is driven by the IPG related acquisition costs and the repositioning costs incurred in the 12 months ended June 30, 2025. I will now ask the operator to please open the lines up for questions and answers. Thank you.

[Operator Instructions] Your first question comes from David Karnovsky with JPMorgan.

John, you noted the ongoing macro uncertainty in your remarks. Can you speak to the progression of things since you last updated in April, just given 1 of your competitors have noted a worsening trend in June. And then how should we view the low end of the guide? And what's your thinking to maintain that in the context of the over 3% growth in the first half?

Sure. Other than some specific clients have issues with them being more impacted by proposed tariffs than not. In general, I don't think the environment has changed all that much since the last time we spoke. I think the Trump administration hasn't issued final guidelines nor conclusions about some key markets that our clients operate in. And so I think it's business as usual for the most part. I think on all of our major clients, and they'll be even more significant to us after this transaction closes, they are long-term partners of ours. And so to the extent that there's a little bump in the road someplace. It's nothing more than just that, and we will collectively get through it together in a very constructive way. So yes, there are macro concerns. I would imagine, there are macro concerns of different sorts almost every year. But these seem to be controlled by decisions coming out of Washington for the most part. And I think they're going to settle down as we get through the balance of the year. You have more some specific I'd be happy to answer you, David.

No. Just any more thinking, John, on the low end of the range, maintaining in the context.

No, no, no. What we did is, with the uncertainty, we made our comments earlier in the year. We're still operating well within that range, and we have no reason at this point to think it's going to be any lower for any circumstance, and so everything should be upside from the bottom. But until we get further and further into these decisions that are being made by third parties, we really can't measure that impact.

Okay. Just 1 more, if I can. Your third-party principal cost increases in the quarter would indicate continued strong contribution from principal trading just for this offering, how do we think about the sustainability and growth here and kind of maintaining that strong performance overall for Media & Advertising.

Sure. I mean, Media is probably the strongest area within the industry. And our third party, what you referred to is third-party cost, you see from our disclosures that you can't see from any of our competitors, it's a product we have. It's a product we've had for a long time. It's a product that continues to grow. And I can see very clearly that it's going to continue to grow into the future. So it isn't as unicorn by any standard other than the fact that everybody else that you speak to in the industry doesn't tell you the truth. So it is what it is. It continues to grow. It is a product. The reason it's revenue is for all sorts of accounting reasons that Phil can probably better explain. But it's a product that our clients opt into, we plan with them and then we execute against it. And the client gets a better deal, and we get incremental revenue with an incremental margin.

The next question comes from Steven Cahall with Wells Fargo.

I want to follow up on David's question, but focusing on the creative side within Media & Advertising. And Phil, I think last quarter, you said creative was flattish in Q1 and might pick up during the year. So I'm just curious if you any pickup on the creative side of things? And then relatedly, as David pointed out, it does look like the Media business is growing strong. John, you said that you think that will continue into the future. Is there any margin mix benefit or shift that we should think about as Media becomes kind of this longer-term tailwind and becomes a bigger and bigger piece of revenue ahead?

Well, let me go to the second part, and then Phil can talk to the first part. Yes, Media is a very, very strong area, which continues to grow. I think our increased size will benefit us as we move forward and complete the transaction. Also, the unique attributes of what's in our platform that we gather information, which allows us to gain insights to help target how clients spend their money and how to optimize that spend improves every single day. Paolo spoke to generative AI and the benefits it has to the tools that we're providing both our creative people and our media people, that continues to happen at breakneck pace. And he's available, by the way, to answer more specific questions because I'm a generalist. And yes, there are increasing opportunities that are being developed in terms of different products, different opportunities to increase margin different ways to process Media transaction. So to me, that is very -- I'm very optimistic about that and its continued growth. I know some I think if you objectively look at the industry, at least for the last 2 years out of the people who we consider competitive in the set, 2 of us continue to win and the others continue to suffer at 1 pace or another. By the way, those are the same 2 that I tried to merge with a decade ago. So I wasn't wrong then and probably won't be wrong this time. Do you want to take here?

Yes. On your first question, Steve. The creative business was basically flat to slightly down in the quarter, performance was stronger outside the U.S. in many international markets, not every international market, but many relative to the U.S. So performance was okay. It's been better in the past, but not that difficult. I think some of the some of the macro probably had a little more of an impact on the creative business this quarter.

It's certainly easier to move from quarter-to-quarter or from month to month than some of the media commitments as you have to make if you're standing at 20,000 feet and dissecting our business.

The next question comes from Cameron McVeigh with Morgan Stanley.

I wanted to ask about the AI agents and where you expect to see the biggest immediate value add? And then long term, how you may expect that to evolve. And then secondly, on that point, how do you expect that to impact your financials? Do you see this more enabling share gains and cross-selling some more of a top line growth driver? Or is this more for an operational efficiency standpoint and to help with margins or maybe both?

I'm going to let Paolo take a lead on the question, and then I have some opinions. I don't think they're more than that on what the impacts of it are going to be financially. But Paolo?

Sure. So as John articulated earlier, we believe that we sit on effectively the most elite data set in the industry and our generative AI strategy is grounded in this notion of an agentic framework. And what those agents are allowing us to do is to effectively infuse the intelligence of our elite data set into every facet of the marketing workflow. So every discipline, all the teams across Omnicom now have the capability to drive deeper intelligence and a deeper understanding into every part of the work that they're doing for clients. This not only connects our capabilities but also drives a better understanding of consumers at every touch point.

In terms of the financial impacts, there's a book yet to be written. The immediate benefit that we get is we're putting tools in the hands of our employees and colleagues all over the world and just about every practice area that we function in. What hasn't adoption of that is going to be dependent upon widespread use of many of these tools by large enterprise clients, which happen to be the clients that we serve, will happen at a slightly different pace than, say, the smaller self-service clients that somebody like Facebook looks to. . Now what hasn't been factored into this future state, as you get more productive and possibly need fewer people, there's going to be a cost which hasn't been fully loaded in by these people developing all these breakthrough wonderful technologies, the cost of compute, the cost of store all those things haven't hit the headlines yet. So they haven't been factored into the decision-making process at a client level as to -- it's better to use the fanciest product that's on the market or to do it in a more traditional fashion. That's all -- that's going to play out over the course, I think, in the next 24 to 36 months. What's key to us is to make sure that we have all the tools. We make all those tools available to the incredible group of over 100,000 professionals that we have around the world, we're still going to help us invent new things and to do things in ways that sitting here at our corporate headquarters, we can't yet imagine, which I think is going to be a great benefit. And we'll figure out ways to efficiently deliver these services to a client in a way that they're going to get a return on investment, and they're going to optimize the dollars that they spend in media, earned and unearned. Did that quite do it for you or I can expand?

That's helpful.

You're living in an interesting time as we all are. So it's wonderful. I'm very optimistic about it. .

The next question comes from Adam Berlin with UBS.

I've got 3 questions. The first question is, if macro conditions remain the same for the rest of the year as we've seen in H1. Is it reasonable to assume growth improves in H2 because of the ramp-up of the Amazon revenues from the win last year? That's the first question.

Do you want to ask all 3 them or you want me to answer one at a time?

Yes, I can -- whatever is easier. I'll ask the others then. The second question is the repositioning costs that you talked about in Q2, $8 million to $9 million, when do we see the benefit of those? Is that in H2? Or is that more 2026? And is that already in the 10 bps of guidance that you've given for margin improvement this year? And the third question is, can you tell us how Flywheel performed in Q2?

Well, I'll take a shot at it and Phil will back me up with facts. Hypothetical macro conditions. It's tough for me to project. What I do know is I do know that I have a very long history within Omnicom that we're quite flexible and agile in adjusting to whatever the conditions are, and never lose sight that we're not doing things simply transactionally, we're entering into longer-term relationships, trying to grow clients' brands. So a blip of small numbers in a particular quarter or a particular moment in time, are really irrelevant to the long-term health and continued growth of our business. So I'm not -- we're very -- as we said earlier, we're very comfortable with the guidance that we previously have given you, and we're sticking with it. We don't see -- we don't plan based upon wonderful macro conditions suddenly changing overnight. We think there's still going to be some challenges as we go forward. I think Washington will bring a lot of clarity to this over the rest of this quarter and then we'll be able to plan better as we move into the fourth quarter and into the future. So that's how I respond to the first one. Phil can talk a little bit more about [ repositioning ], but I just have 1 comment before he does. Many of the changes that we've made or we've insisted on making almost since July of last year, starting with production, then OAG, then and a few -- and then now the delivery platform that Duncan is going to go into, continue to build out for us, required some anticipated reorganization. So the host being Omnicom is ready when this closes in just a few months to absorb those activities in a very productive way, which allows us to achieve and possibly exceed the $750 million we discussed at the time we announced the merger. So we're not standing still during this period of time. We're planning the integration and where we have to reorganize ourselves to make it easier to ingest our new colleagues, that's what we're doing. Now Phil could have more specific answers on the repositioning cost. But that's the reason behind why we're incurring.

Sure. As far as the actions we took in the quarter, Adam, a couple of clarifications. They weren't -- they certainly weren't part of the actions we expect to take to meet our $750 million synergy target that we talked about post close. We continue to expect to achieve the $750 million synergy target, and we're certainly working on plans to exceed it as well, as John had mentioned in his prepared remarks. We took the actions in the second quarter, as we said, to optimize the OAG and Omnicom production units, which will help us certainly in the IPG integration process. And as I said in my prepared remarks, all of this has been considered in our 10 basis point improvement for the year as we reiterate our guidance. As far as Flywheel goes, we haven't and aren't going to provide individual numbers -- or specific numbers for individual businesses. But the Flywheel business continues to perform well, especially in the U.S. and it certainly continues to enhance our broader portfolio, including the Omni platform and our AI and data strategies and Duncan has been invaluable both in integrating Flywheel into our business as well as the additional role that he's going to take on that John referred to in his prepared remarks. So I think that addresses it, but happy to clarify any follow-up items.

And one of the positive things about Flywheel, if you look historically at the portfolios of Omnicom and Interpublic. Interpublic had a deeper relationships with many CPG companies that haven't been traditionally part of our growth in portfolio that's going to introduce Flywheel to even more opportunities to provide service.