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What changed in Omnicom Group's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Omnicom Group's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+375 added−330 removedSource: 10-K (2026-02-20) vs 10-K (2025-02-05)

Top changes in Omnicom Group's 2025 10-K

375 paragraphs added · 330 removed · 244 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeBusiness Agreement to Acquire IPG On December 8, 2024, Omnicom entered into an Agreement and Plan of Merger, or the Merger Agreement, by and among Omnicom, EXT Subsidiary Inc., a direct wholly owned subsidiary of Omnicom, or Merger Sub, and IPG, pursuant to which, subject to the terms and conditions of the Merger Agreement, Merger Sub will merge with and into IPG, or the Merger, with IPG surviving the Merger as a wholly owned subsidiary of Omnicom.
Biggest changeOn the Closing Date, pursuant to the terms and conditions of the Merger Agreement, Merger Sub merged with and into IPG, with IPG continuing as the surviving corporation and a direct wholly owned subsidiary of Omnicom.
Healthcare includes corporate communications and advertising and media services to global healthcare and pharmaceutical companies. Branding & Retail Commerce services include brand and product consulting, strategy and research and retail marketing. Experiential marketing services include live and digital events and experience design and execution.
Healthcare includes corporate communications and advertising and media services to global healthcare and pharmaceutical companies. Branding & Retail Commerce includes brand and product consulting, strategy and research, and retail marketing. Experiential marketing services include live and digital events and experience design and execution.
Available Information We file annual, quarterly and current reports and any amendments to those reports, proxy statements and other information with the SEC. Documents we file with the SEC are available free of charge on our website at http://investor.omnicomgroup.com, as soon as reasonably practicable after such material is filed with the SEC.
Available Information We file annual, quarterly and current reports and any amendments to those reports, proxy statements and other information with the SEC. Documents we file with the SEC are available free of charge on our website at http://investor.omc.com as soon as reasonably practicable after such material is filed with the SEC.
Recognizing the importance of this core competency, we support and develop our employees through training and development programs that build and strengthen employees’ leadership and professional skills. Human capital management strategies are developed collectively by senior management, including the management teams of our networks, practice areas, and agencies, and are overseen by our Board of Directors.
Recognizing the importance of this core competency, we support and develop our employees through training and development programs that build and strengthen employees’ leadership and professional skills. 3 Human capital management strategies are developed collectively by senior management, including the management teams of our networks and agencies, and are overseen by our Board of Directors.
Our geographic markets include the Americas, which includes North America and Latin America, Europe, the Middle East and Africa, or EMEA, and Asia-Pacific. Our business model was built and continues to evolve around our clients. While our networks, practice areas and agencies operate under different names and frame their ideas in different disciplines, we organize our services around our clients.
Our geographic markets include the Americas, which includes North America and Latin America, Europe, the Middle East and Africa (EMEA), and Asia-Pacific. Our business model was built and continues to evolve around our clients. While our networks, connected capabilities and agencies operate under different names and frame their ideas in different disciplines, we organize our services around our clients.
We are committed to responsible AI practices and collaboration to harness AI's potential, while evaluating related risks, such as ethical considerations, public perception and reputational concerns, intellectual property protection, regulatory compliance, privacy and data security concerns and our ability to effectively adopt this new emerging technology.
As we continue to make investments in new technologies, we remain committed to responsible AI practices and collaboration to harness AI's potential, while evaluating related risks, such as ethical considerations, public perception and reputational concerns, intellectual property protection, regulatory compliance, privacy and data security concerns and our ability to effectively adopt this new emerging technology.
In certain countries outside the United States, primarily in Europe, some employees are represented by work councils. See MD&A for the effect of salary and related costs on our results of operations. Our environmental sustainability initiatives focus on emissions reductions through efficiency of office space, energy usage, travel and vendor engagement.
In certain countries outside the United States, primarily in Europe, some employees are represented by work councils. See our MD&A for the effect of salary and related costs on our results of operations. Our environmental sustainability initiatives include efforts to reduce greenhouse gas emissions through improvements in office space efficiency, energy usage, employee travel, and engagement with vendors.
We believe that our key client matrix organization structure approach to collaboration and integration of our services and solutions have provided a competitive advantage to our business in the past and we expect this to continue over the medium and long term.
We believe that our client matrix organization structure approach to collaboration and integration of our services and solutions have provided a competitive advantage to our business in the past and we expect this to continue over the medium and long term. Our client matrix organization structure facilitates superior client management and allows for greater integration across our service platforms.
The various components of our business, including revenue by discipline and geographic area, and material factors that affected us in the three years ended December 31, 2024, are discussed in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”). 2 Our Clients Our clients operate in virtually every sector of the global economy.
The various components of our business, including revenue by discipline and geographic area, and material factors that affected us in the three years ended December 31, 2025, are discussed in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A).
At December 31, 2024, we employed approximately 74,900 people worldwide, including 31,200 people in the Americas, 26,800 people in EMEA, and 16,900 people in Asia-Pacific. The United States is our largest employee base, where we employed approximately 21,900 people. None of our regular employees in the United States are represented by a labor union.
At December 31, 2025, we employed approximately 120,000 people worldwide, including 55,300 people in the Americas, 38,000 people in EMEA, and 26,700 people in Asia-Pacific. The United States is our largest employee base, where we employed approximately 37,700 people. None of our regular employees in the United States are represented by a labor union.
Government Regulations We are subject to various federal, state and local laws and regulations in the countries in which we conduct business. Compliance with these laws and regulations in the normal course of business did not have a material effect on our business, results of operations or financial condition.
Compliance with these laws and regulations in the normal course of business did not have a material effect on our business, results of operations or financial condition.
On a global, pan-regional, and local basis, our networks, practice areas and agencies provide a comprehensive range of services in the following fundamental disciplines: Media & Advertising, Precision Marketing, Public Relations, Healthcare, Branding & Retail Commerce, Experiential, and Execution & Support.
CCN includes FleishmanHillard and Ketchum, as well as Golin and Weber Shandwick, which we acquired from IPG. 1 On a global, pan-regional, and local basis, our agencies provide a comprehensive range of services in the following fundamental disciplines: Media & Advertising, Precision Marketing, Public Relations, Healthcare, Branding & Retail Commerce, Experiential, and Execution & Support.
Our service offerings include: advertising marketing research branding media planning and buying content marketing merchandising and point of sale corporate social responsibility consulting mobile marketing crisis communications multi-cultural marketing custom publishing non-profit marketing data analytics organizational communications database management package design digital/direct marketing and post-production services product placement digital transformation consulting promotional marketing entertainment marketing public affairs experiential marketing public relations field marketing retail marketing financial/corporate business-to-business advertising retail media and e-commerce graphic arts/digital imaging search engine marketing healthcare marketing and communications shopper marketing instore design studio production interactive marketing social media marketing investor relations sports and event marketing Certain business trends have impacted our business and industry.
Our service offerings include: advertising media planning and buying branding merchandising and point of sale content marketing mobile marketing crisis communications multi-cultural marketing customer data analytics and data-driven decision making organizational communications customer relationship management package design decision sciences performance marketing digital experience design product placement digital transformation promotional marketing e-commerce optimization public affairs entertainment marketing public relations experiential marketing retail media and e-commerce field marketing shopper marketing healthcare marketing and communications structured innovation in-store design studio production investor relations social media and influencer marketing marketing research sports and event marketing Certain business trends have impacted our business and industry.
Angelastro Executive Vice President and Chief Financial Officer 60 Louis F. Januzzi Senior Vice President, General Counsel and Secretary 51 3 Mr. Simm was named President and Chief Operating Officer in November 2021 and previously served as Chief Executive Officer of Omnicom Media Group for more than 20 years. Mr.
Simm was named President and Chief Operating Officer in November 2021 and became Co-President and Co-Chief Operating Officer in November 2025 and previously served as Chief Executive Officer of Omnicom Media Group for more than 20 years. Mr.
Media & Advertising includes creative services across digital and traditional media, strategic media planning and buying, performance media, data analytics services, and Omnicom Production. Precision Marketing includes digital and direct marketing, digital transformation consulting, e-commerce operations, media execution, market intelligence and data and analytics. Public Relations services include corporate communications, crisis management, public affairs and media and media relations services.
Media & Advertising includes strategic media planning, buying and optimization, data and analytics, creative services, and content production. Precision Marketing includes technology and digital transformation consulting, decision sciences, digital experience design, customer relationship management, and e-commerce and enterprise platforms. Public Relations services include corporate communications, crisis management, public affairs and media and media relations services.
Execution & Support includes field marketing, sales support, digital and physical merchandising, point-of-sale and product placement, as well as other specialized marketing and custom communications services. We operate in all major markets and have a large client base.
Execution & Support includes field marketing, sales support, digital and physical merchandising, point-of-sale and product placement, as well as other specialized marketing and custom communications services. Our Omni platform integrates data and technology in support of the services provided by all of our disciplines .
Our fundamental business principle is that our clients’ specific requirements are the central focus of how we structure our service offerings and allocate our resources. This client-centric business model requires that multiple agencies within Omnicom collaborate in formal and informal virtual client networks utilizing our key client matrix organization structure.
Our fundamental business principle is that our clients’ specific requirements are the central focus of how we structure our service offerings and allocate our resources.
Our 100 largest clients, which represent many of the major marketers, represented approximately 54% of revenue and were each served, on average, by approximately 55 of our agencies. Although we have a large and diverse client base, we are not immune to general economic downturns.
For example, in 2025, our largest client represented 2.4% of revenue and was served by approximately 144 of our agencies. Our 100 largest clients, which represent many of the major marketers, represented approximately 54% of revenue and were each served, on average, by approximately 55 of our agencies.
All other executive officers have held their present positions for at least five years. Additional information about our directors and executive officers will appear in our definitive proxy statement, which is expected to be filed with the SEC in March 2025.
Additional information about our directors and executive officers will appear in our definitive proxy statement on Schedule 14A for our annual meeting of shareholders to be held on May 5, 2026 (the “2026 Proxy Statement”), which is expected to be filed with the SEC in March 2026.
Our key client matrix organization structure facilitates superior client management and allows for greater integration across our service platforms. Our overarching strategy is to continue to use our virtual client networks to grow our business relationships with our largest clients by serving them across our networks, disciplines and geographies.
Our overarching strategy is to continue to use our CSLs to grow our business relationships with our largest clients by serving them across our networks, agencies and geographies.
In addition, we pursue selective acquisitions of complementary companies with strong entrepreneurial management teams that fill gaps in our service delivery to our existing clients. In addition to 1 collaborating through our client service models, our agencies, practice areas and networks collaborate across internally developed technology platforms.
We use our client-centric approach to grow our business by expanding our service offerings to existing clients, moving into new markets and obtaining new clients. In addition, we pursue selective acquisitions of complementary companies with strong entrepreneurial management teams that could fill gaps in our service delivery to our existing clients.
The rapidly developing nature of AI technology makes it difficult to assess the full impact on our business at this time. Driven by our clients’ continuous demand for more effective and efficient marketing activities, we strive to provide an extensive range of marketing and communications services through various client-centric networks that are organized to meet specific client objectives.
Operating expenses primarily consist of cost of services, selling, general and administrative expenses, or SG&A, and depreciation and amortization, and are analyzed for each network by the Chief Operating Decision Maker, who allocates resources accordingly. 2 Driven by our clients’ continuous demand for more effective and efficient marketing activities, we strive to provide an extensive range of marketing and communications services through various client-centric networks that are organized to meet specific client objectives.
Under the terms of the Merger Agreement, IPG shareholders will receive 0.344 shares of Omnicom common stock for each share of IPG common stock they own. Following the close of the Merger, Omnicom shareholders are expected to own approximately 60.6% of the combined company and IPG shareholders are expected to own approximately 39.4%, on a fully diluted basis.
Following the closing of the Merger, legacy Omnicom shareholders owned approximately 60.6% of the combined company and legacy IPG shareholders owned approximately 39.4%, on a fully diluted basis (see Note 5 to the consolidated financial statements).
We are monitoring the requirements in all the jurisdictions we operate and evaluating the impacts of those requirements and related reporting timelines. Information About Our Executive Officers At January 30, 2025, our executive officers were: Name Position Age John D. Wren Chairman of the Board and Chief Executive Officer 72 Daryl Simm President and Chief Operating Officer 63 Philip J.
Sustainability reporting standards and requirements in other jurisdictions where we operate continue to evolve. We are monitoring these developments, assessing their potential impacts, and evaluating related reporting timelines to ensure we comply with applicable laws and regulations. Information About Our Executive Officers At January 30, 2026, our executive officers were: Name Position Age John D.
We believe generative AI will have a significant effect on how we provide services to our clients and how we enhance the productivity of our people. As with any new technology, we are working closely with our clients and technology partners to take advantage of the benefits of AI while being mindful of its limitations and risks, and privacy concerns.
We believe generative AI and agentic AI have, and will continue to have, a significant impact on how we provide services to our clients and how we enhance the productivity of our people. As the marketing industry adjusts to the evolving AI landscape, we seek to leverage these technologies to better serve our clients and maintain our competitive advantage.
Our Business We are a strategic holding company providing data-inspired, creative marketing and sales solutions to many of the largest global companies. Our portfolio of companies includes our global networks, BBDO, DDB and TBWA, Omnicom Media Group, the DAS Group of Companies, and the Communications Consultancy Network.
Our Business Omnicom is a strategic holding company that operates through global networks, connected capabilities and specialized agencies, which connect its comprehensive portfolio of companies to deliver marketing, sales, communications, and commerce services to many of the largest global companies.
In many cases, multiple agencies, practice areas or networks serve different brands, product groups or both within the same client. For example, in 2024, our largest client represented 2.7% of revenue and was served by approximately 155 of our agencies.
Our Clients Our clients operate in virtually every sector of the global economy, with no one industry representing more than 15% of our revenue in 2025. In many cases, multiple agencies within our networks serve different brands, product groups or both within the same client.
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The completion of the Merger is subject to customary closing conditions, including required regulatory approvals and the approval of the stockholders of both Omnicom and IPG. If completed, the Merger is expected to have a material impact on our business, results of operations and financial condition.
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Item 1. Business Merger with IPG On November 26, 2025 (the “Closing Date”), Omnicom completed its Merger with IPG (the “Merger”). As previously reported, on December 8, 2024, Omnicom entered into an Agreement and Plan of Merger (the “Merger Agreement”) with IPG and EXT Subsidiary Inc., a Delaware corporation and a direct wholly owned subsidiary of Omnicom (“Merger Sub”).
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All of our global networks integrate their service offerings with the Omnicom branded practice areas, including Omnicom Health Group, Omnicom Precision Marketing Group, Omnicom Commerce Group, Omnicom Advertising Collective, Omnicom Public Relations Group, Omnicom Brand Consulting Group, Flywheel Digital and Omnicom Production, a practice area that brings together Omnicom’s global production capabilities, as well as our Experiential businesses and Execution & Support businesses, which includes Omnicom Specialty Marketing Group.
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Upon the Merger, each outstanding share of IPG common stock (other than certain excluded shares) converted into the right to receive 0.344 shares of Omnicom common stock and cash in lieu of fractional shares.
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In August 2024, we announced the formation of Omnicom Advertising Group, or OAG, a new global organization that aligns the world-class creative networks BBDO, DDB and TBWA, as well as leading agencies within the Omnicom Advertising Collective. OAG began operations in January 2025.
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Omnicom’s common stock continues to trade on the New York Stock Exchange, or NYSE, under the symbol “OMC,” and IPG’s common stock has ceased trading. The Merger qualified as a tax-free reorganization for U.S. federal income tax purposes, and the combined company operates under the Omnicom name with headquarters in New York, New York.
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We operate in a highly competitive industry and compete against other global, national and regional advertising, marketing and communications services companies, as well as technology, social media and professional services companies. The proliferation of media channels, including the rapid development and integration of interactive technologies and media, has fragmented consumer audiences targeted by our clients.
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Omnicom is the acquirer of IPG under U.S. generally accepted accounting principles (U.S. GAAP), and as a result, the consolidated financial statements of Omnicom for periods prior to the Closing Date do not include the results of operations, financial position, or cash flows of IPG.
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These developments make it more complex for marketers to reach their target audiences in a cost-effective way, causing them to turn to Omnicom for a customized mix of marketing and communications services designed to optimize their total marketing expenditure.
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The results of operations of IPG are included in Omnicom’s consolidated financial statements only from the Closing Date forward. Accordingly, Omnicom’s results of operations, financial condition and cash flows after the Closing Date are not comparable to prior periods due to the inclusion of IPG’s results from the Closing Date (see Note 5 to the consolidated financial statements).
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This collaboration allows us to cut across our internal organizational structures to execute our clients’ marketing requirements in a consistent and comprehensive manner. We use our client-centric approach to grow our business by expanding our service offerings to existing clients, moving into new markets and obtaining new clients.
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IPG Senior Notes Exchange Offers In connection with the Merger, Omnicom commenced offers to exchange all outstanding notes of certain series issued by IPG for up to $2.95 billion in aggregate principal amount of new notes issued by Omnicom.
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Annalect and Omni, our proprietary data and analytics platforms, serve as the strategic resource for all of our agencies, practice areas and networks to share when developing client service strategies across our virtual networks. These platforms provide precision marketing and insights at scale across creative, media and other disciplines.
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As a result of these exchange offers, which were completed on December 2, 2025, approximately 94% of IPG's outstanding senior notes were exchanged for $2.76 billion in aggregate principal amount of new notes issued by Omnicom.
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We continually evaluate our portfolio of businesses to identify areas for investment and acquisition opportunities, as well as to identify non-strategic or underperforming businesses for disposition. In January 2024 , we acquired Flywheel Digital, the digital commerce business of Ascential plc, for a net cash purchase price of approximately $845 million .
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The remaining approximately 6% of IPG's senior notes that were not tendered for exchange by holders remain outstanding obligations of IPG, a wholly owned subsidiary of Omnicom (see Note 7 to the consolidated financial statements).
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For information about our acquisitions and dispositions, see Item 7, “MD&A - Acquisitions and Goodwill” and Notes 5, 14 and 15 to the consolidated financial statements. In each of the three years ended December 31, 2024, none of our acquisitions or dispositions, individually or in the aggregate, were material to our results of operations or financial condition.
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Our products and service offerings support client objectives across our primary focus areas: media, content, commerce, generative AI, and branding communications. Omnicom’s agencies integrate data, creativity, and technology to deliver coordinated marketing, communications, and commerce solutions.
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In connection with our environmental sustainability efforts, we are a signatory to the UN Global Compact, a principle-based framework to encourage businesses and firms worldwide to adopt sustainable and socially responsible policies. We support the UN Sustainable Development Goals, a collection of global goals designed to be a blueprint to achieve a better, more inclusive and sustainable future.
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All of our agencies are supported by our integrated technology platform: Omni- including Acxiom and Interact, which were acquired from IPG and Flywheel Commerce Cloud, as well as privacy-focused identity and data management capabilities. These capabilities include the integration of emerging AI-based tools, such as generative AI, into planning, creative advertising, media, and analytics workflows.
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Our emissions reductions strategy, in line with the 1.5 degree Celsius climate scenario, was submitted to and approved by the Science Based Target initiative, or SBTi, which publicly audits companies on their emissions reduction efforts. Various regulatory bodies have proposed or enacted climate-related reporting requirements and similar proposals, including the SEC’s climate-related reporting proposal and California’s climate-related disclosure laws.
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Omnicom client teams collaborate and accelerate client-service innovation through two integral enterprise-wide solutions: the Global Growth Team (GGT) and our Client Success Leaders (CSLs). GGT ensures an integrated, enterprise-level view of client needs and innovative solutions across new business development.
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The European Union’s Corporate Sustainability Reporting Directive has established disclosure requirements based on the European Sustainability Reporting Standards, or ESRS. However, reporting standards based on ESRS requirements are evolving for sustainability reporting, and regulations in other international markets are still evolving.
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CSLs manage our agency’s capabilities, providing holistic, tailored solutions across our service lines for individual client strategies and key performance indicators (KPIs) to enable client success. Our global networks include: Omnicom Advertising (OA), Omnicom Media (OM), the DAS Group of Companies (DAS), and the Communications Consultancy Network (CCN).
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OA includes our creative brands, BBDO, TBWA, and McCann, which we acquired from IPG, and the brands included within the Advertising Collective. OM includes OMD, PHD, Hearts & Sciences, as well as UM, Acxiom, Initiative and Mediahub, which we acquired from IPG.
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DAS includes Omnicom Precision Marketing and MRM, which we acquired from IPG and Omnicom Health, which includes IPG Health.
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This client-centric business model requires that multiple agencies and disciplines within Omnicom collaborate in formal client networks, such as our CSLs and GGT, as well as informal virtual client networks, resulting in a client matrix organization structure. This collaboration allows us execute our clients’ marketing requirements in a consistent and comprehensive manner.
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In January 2026, we unveiled our next generation of Omni, our proprietary marketing intelligence platform. Omni integrates our connected capabilities, high-quality and comprehensive identity and data infrastructure, and cutting-edge AI into a single operating system that we believe will give clients a unified foundation to connect strategy, execution, and performance across their entire marketing ecosystem.
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Global economic conditions and disruptions have a direct impact on our business and financial performance. Adverse global economic conditions and disruptions pose a risk that our clients may reduce, postpone or cancel spending on marketing and communications services, which would reduce the demand for our services.
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Revenue is typically lower in the first and third quarters and higher in the second and fourth quarters, reflecting client spending patterns during the year, as well as additional project work that usually occurs in the fourth quarter.
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Certain global events targeted by major marketers for advertising expenditures, such as the FIFA World Cup and the Olympics, and certain national events, such as the U.S. election process, may affect our revenue year-over-year in certain businesses. Typically, these events do not have a significant impact on our revenue in any period.
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Given our size and breadth, we monitor several financial indicators. The KPIs that we focus on are revenue growth and variability of operating expenses.
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We analyze revenue growth by reviewing the components and mix of the growth, including growth by principal regional market, connected capabilities and marketing disciplines, the impact from foreign currency exchange rate changes, and growth from our largest clients.
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Although our revenue is generally balanced between the United States and international markets and we have a large and diverse client base, we are not immune to general economic downturns. Government Regulations We are subject to various federal, state and local laws and regulations in the countries in which we conduct business.
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We are a signatory to the United Nations Global Compact and support the United Nations Sustainable Development Goals, both of which provide frameworks for advancing responsible business practices. Our emissions reduction strategy was reviewed and approved by the Science Based Targets initiative (SBTi) against a 1.5 degree Celsius scenario, and we continue to monitor developments in methodology and implementation.
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Various regulatory bodies have adopted or proposed climate-related reporting requirements. In the United States, certain states such as California have enacted climate-related reporting obligations for some companies. In the European Union, the Corporate Sustainability Reporting Directive (CSRD) establishes sustainability disclosure requirements based on the European Sustainability Reporting Standards (ESRS) for in-scope companies.
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Wren Chairman of the Board and Chief Executive Officer 73 Daryl Simm Co-President and Co-Chief Operating Officer 64 Philippe Krakowsky Co-President and Co-Chief Operating Officer 63 Philip J. Angelastro Executive Vice President and Chief Financial Officer 61 Louis F. Januzzi Senior Vice President, General Counsel and Secretary 52 Mr.
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Krakowsky became Co-President and Co-Chief Operating Officer in November 2025 after the completion of the Merger with IPG; he previously served as CEO of IPG for approximately five years. Mr.
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All other executive officers have held their present positions for at least five years.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

50 edited+25 added−30 removed48 unchanged
Biggest changeThis technology, which is a new and emerging technology in early stages of commercial use, presents a number of risks inherent in its use, including ethical considerations, public perception and reputation concerns, intellectual property protection, regulatory compliance and privacy and data security concerns, all of which could have a material adverse effect on our business, results of operations and financial condition.
Biggest changeThese technologies present a number of risks inherent to their use, including ethical considerations, public perception and reputation concerns, intellectual property protection, intellectual property infringement or misappropriation, regulatory compliance, privacy and data security concerns, and risks related to AI algorithms and training methodologies that may be flawed, datasets or outputs that may be over-broad, insufficient or contain biased, misleading or inaccurate information, harmful content, or defamation, as well as concerns about accuracy, health and safety, all of which could have a material adverse effect on our business, results of operations and financial condition.
Such countries tend to have longer billing collection cycles, currency repatriation restrictions and commercial laws that can be undeveloped, vague, inconsistently enforced, retroactively applied or frequently changed. Our operations are also subject to the United States Foreign Corrupt Practices Act and other anti-corruption and anti- 6 bribery laws and regulations.
Such countries tend to have longer billing collection cycles, currency repatriation restrictions and commercial laws that can be undeveloped, vague, inconsistently enforced, retroactively applied or frequently changed. Our operations are also subject to the United States Foreign Corrupt Practices Act and other anti-corruption and anti-bribery laws and regulations.
Any attack or incident could result in legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties, negative reputational impacts, and/or significant incident response, system restoration or remediation and future compliance costs, which could materially adversely affect our business, results of operations and financial condition.
Any attack or incident could result in legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties, negative reputational impacts, and/or significant incident response, system restoration or remediation 6 and future compliance costs, which could materially adversely affect our business, results of operations and financial condition.
Our agencies transact business in more than 50 different currencies. Substantially all of our foreign operations transact business in their local currency and, accordingly, their financial statements are translated into U.S. Dollars. As a result, both adverse and beneficial fluctuations in foreign exchange rates impact our business, results of operations and financial condition.
Our agencies 7 transact business in more than 50 different currencies. Substantially all of our foreign operations transact business in their local currency and, accordingly, their financial statements are translated into U.S. Dollars. As a result, both adverse and beneficial fluctuations in foreign exchange rates impact our business, results of operations and financial condition.
Key competitive considerations for retaining existing clients and winning new clients include our ability to develop solutions that meet client needs in a rapidly changing environment, the quality and effectiveness of our services and our ability to serve clients efficiently, particularly large multinational clients, on a broad geographic basis.
Key competitive considerations for retaining existing clients and winning new clients include our ability to develop solutions that meet client needs in a rapidly changing environment, the quality and 5 effectiveness of our services and our ability to serve clients efficiently, particularly large multinational clients, on a broad geographic basis.
If we fail to increase our capabilities in generative AI, or if we are unable to successfully adapt to new developments related to the risks and challenges associated with AI, demand for our services could be reduced, and our business, results of operations and financial condition could be negatively impacted.
If we fail to increase our capabilities in AI, or if we are unable to successfully adapt to new developments related to the risks and challenges associated with AI, demand for our services could be reduced, and our business, results of operations and financial condition could be negatively impacted.
Such actions would reduce the demand for our services and could result in a reduction in our revenue, which would adversely affect our business, results of operations and financial condition.
Such actions would reduce the 4 demand for our services and could result in a reduction of our revenue, which would adversely affect our business, results of operations and financial condition.
Any failure, or perceived failure, by us to achieve our goals, further our initiatives, adhere to our public statements, comply with federal, state or international environmental, social and governance laws and regulations, or meet evolving and varied stakeholder expectations and views could materially adversely affect our business, reputation, results of operations, financial condition and stock price. Item 1B.
Any failure, or perceived failure, by us to achieve our goals, further our initiatives, adhere to our public statements, comply with federal, state or international environmental, social and governance laws and regulations, or meet evolving and varied stakeholder expectations and views could materially adversely affect our business, reputation, results of operations, financial condition and stock price.
The anticipated cost savings, operating synergies and other benefits of the Merger may not be realized fully or at all, may take longer to realize than expected, or may result in other adverse effects that we do not currently foresee, in which case, among other things, the Merger may not be accretive to adjusted earnings per share for both us and IPG and may not generate significant cash to return to stockholders via share repurchases or other means.
The anticipated cost savings, operating synergies and other benefits of the Merger may not be realized fully or at all, may take longer to realize than expected, or may result in other adverse effects that we do not currently foresee, in which case, among other things, the Merger may not be accretive to adjusted earnings per share and may not generate significant cash to return to stockholders via share repurchases or other means.
Compliance with ever evolving federal, state, and foreign laws relating to the handling of information about individuals involves significant expenditure and resources, and any failure by us or our vendors to comply could materially adversely affect our business, results of operations and financial condition.
Compliance with ever evolving federal, state, and foreign laws, regulations and other requirements relating to the handling of information about individuals involves significant expenditure and resources, and any failure by us or our vendors to comply could materially adversely affect our business, results of operations and financial condition.
We rely extensively on information technology systems, and cybersecurity incidents could adversely affect us. We rely on our own and third-party service providers’ information technology systems and infrastructure to connect with our clients, people and others, and to collect, store, transfer, process and use business, personal and financial data.
We rely extensively on information technology systems and data, and cybersecurity incidents could adversely affect us. We rely on our own and third-party service providers’ information technology systems and infrastructure that are critical to our business, to connect with our clients, people and others, and to collect, store, transfer, process and use business, personal and financial data.
These third-party service providers are also subject to malicious attacks and cybersecurity threats that could adversely affect our business, results of operations, financial condition and reputation and could result in litigation or regulatory action, as discussed below. Currently, many of our agencies operate in a flexible working environment that allows for partial remote work.
These third-party service providers are also subject to cybersecurity risks that could adversely affect our business, results of operations, financial condition and reputation and could result in litigation or regulatory action, as discussed below. Currently, many of our agencies operate in a flexible working environment that allows for partial remote work.
Risks Related to International Operations Currency exchange rate fluctuations have impacted, and in the future could impact, our business, results of operations and financial condition. In 2024, our international operations represented approximately 48% of our revenue. We operate in all major international markets including the Euro Zone, the United Kingdom, or the U.K., Australia, Brazil, Canada, China and Japan.
Risks Related to International Operations Currency exchange rate fluctuations have impacted, and in the future could impact, our business, results of operations and financial condition. In 2025, our international operations represented approximately 47% of our revenue. We operate in all major international markets including the Euro Zone, the United Kingdom, or the U.K., Australia, Brazil, Canada, China and Japan.
The combined company may fail to realize all of the anticipated benefits of the Merger. The success of the Merger will depend, in part, on our ability to realize the cost savings, operating synergies and other benefits from combining our and IPG’s businesses.
We may fail to realize all of the anticipated benefits of the Merger. The success of the Merger will depend, in part, on our ability to realize the cost savings, operating synergies and other benefits from combining our and IPG’s businesses.
If we or IPG are unable to retain personnel, including our or IPG’s key management, who are critical to the future operations of the companies, we and IPG could face disruptions in our respective operations, loss of existing clients, loss of key information, expertise or know‑how and unanticipated additional recruitment and training costs.
If we are unable to retain personnel who are critical to the future operations of the company, including our key management, we could face disruptions in our respective operations, loss of existing clients, loss of key information, expertise or know‑how and unanticipated additional recruitment and training costs.
If we fail to identify certain material risks from one or more acquisitions, our business, results of operations and financial condition could be adversely affected. Our goodwill is an intangible asset that may become impaired, which could have a material adverse effect on our business, results of operations and financial condition.
If we fail to identify certain material risks from one or more acquisitions, our business, results of operations and financial condition could be adversely affected. Our goodwill is an intangible asset that may become impaired, which could have a material adverse effect on our business, results of operations and financial condition. In accordance with U.S.
Some of the assumptions that we and IPG have made, such as the achievement of the anticipated benefits related to combining complementary assets to create a portfolio of services and produces that expand client opportunities, and advances in both companies’ ability to innovate and develop new products and services, may not be realized.
Some of the assumptions that we have made, such as the achievement of the anticipated benefits related to combining complementary assets to create a portfolio of services and products that expand client opportunities, and advances in our ability to innovate and develop new products and services, may not be realized.
Specifically, the following challenges, among others, must be addressed in integrating our and IPG’s operations in order to realize the anticipated benefits of the Merger: • combining the companies’ operations and corporate functions and the resulting difficulties associated with managing a larger, more complex, diversified business; • combining our and IPG’s businesses in a manner that permits the combined company to achieve the cost savings and operating synergies anticipated to result from the Merger; • avoiding delays in connection with the completion of the Merger or the integration process; • integrating personnel from the two companies and minimizing the loss of key employees; • identifying and eliminating redundant functions and assets; • harmonizing the companies’ operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes; • maintaining existing agreements with clients, service providers, vendors and other business counterparties and avoiding delays in entering into new agreements with prospective clients, service providers, vendors and other business counterparties; • addressing possible differences in business backgrounds, corporate cultures and management philosophies; and • consolidating the companies’ operating, administrative and information technology infrastructure and financial systems.
Specifically, the following challenges, among others, must be addressed in integrating our and IPG’s operations in order to realize the anticipated benefits of the Merger: • combining operations and corporate functions and the resulting difficulties associated with managing a larger, more complex, diversified business; • combining our businesses in a manner that permits us to achieve the cost savings and operating synergies anticipated from the Merger; • integrating personnel and minimizing the loss of key employees; • identifying and eliminating redundant functions and assets; • harmonizing operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes; 8 • maintaining existing agreements with clients, service providers, vendors and other business counterparties and avoiding delays in entering into new agreements with prospective clients, service providers, vendors and other business counterparties; • addressing possible differences in business backgrounds, corporate cultures and management philosophies; and • consolidating our operating, administrative and information technology infrastructure and financial systems.
The loss of several of our largest clients could have a material adverse effect on our business, results of operations and financial condition. In 2024, our largest client represented approximately 2.7% and our 100 largest clients represented approximately 54% of our revenue.
The loss of several of our largest clients could have a material adverse effect on our business, results of operations and financial condition. In 2025, our largest client represented approximately 2.4% and our 100 largest clients represented approximately 54% of our revenue.
Legal and Regulatory Risks Laws and regulations and actions of consumer advocates may limit the scope and content of our services, affect our ability to meet our clients’ needs, result in third-party claims, litigation, regulatory proceedings or government investigations, or otherwise have a material adverse effect on our business, results of operations and financial condition.
Any resulting non-cash impairment charge could have a material adverse effect on our business, results of operations and financial condition. 9 Legal and Regulatory Risks Laws and regulations and actions of consumer advocates may limit the scope and content of our services, affect our ability to meet our clients’ needs, result in third-party claims, litigation, regulatory proceedings or government investigations, or otherwise have a material adverse effect on our business, results of operations and financial condition.
We will continue to assess the magnitude of these costs, and additional unanticipated costs may be incurred in connection with the Merger and the integration of the two companies’ businesses.
We will continue to assess the magnitude of these costs, and additional unanticipated costs may be incurred in connection with the Merger and the integration of IPG.
If we are unable to attract and retain key personnel, our ability to provide our services in the manner clients have come to expect may be adversely affected, which could harm our reputation and result in a loss of clients, which could have a material adverse effect on our business, results of operations and financial condition.
If we are unable to attract and retain key personnel, our ability to provide our services in the manner clients have come to expect may be adversely affected, which could harm our reputation and result in a loss of clients.
The combined company’s future success will depend, in part, upon its ability to manage this expanded business, which will pose substantial challenges for management, including challenges related to the management of a larger number of operations and geographies and associated increased costs and complexity.
Following the Merger, the size and complexity of our Company has increased significantly. Our future success will depend, in part, upon our ability to manage this expanded business, which will pose substantial challenges for management, including challenges related to the management of a larger number of operations and geographies and associated increased costs and complexity.
No assurance can be given that the combined company, following the Merger, will be able to retain or attract our and IPG’s key management personnel and other key employees to the same extent that we and IPG have previously been able to retain or attract personnel.
In addition, the loss of our key personnel could diminish the anticipated benefits of the Merger. No assurance can be given that the combined company, following the Merger, will be able to retain or attract our key management personnel and other key employees to the same extent that we have previously been able to retain or attract personnel.
Our and IPG’s current and prospective employees may experience uncertainty about their roles within the combined company following the Merger or other concerns regarding the timing and completion of the Merger or the operations of the combined company following the Merger, any of which may have an adverse effect on our and IPG’s ability to retain or attract key management and other key personnel.
Our current and prospective employees may experience uncertainty about their roles following the Merger, which may have an adverse effect on our ability to retain or attract key management and other key personnel.
Many governments, regulators, investors, employees, customers and other stakeholders are focused on environmental, social and governance considerations relating to businesses, including climate change and greenhouse gas emissions, human capital and diversity, equity and inclusion.
Expectations relating to environmental, social and governance considerations expose us to potential liabilities, reputational harm and other unforeseen adverse effects on our business. Many governments, regulators, investors, employees, customers and other stakeholders are focused on environmental, social and governance considerations relating to businesses, including climate change and greenhouse gas emissions, human capital and diversity, equity and inclusion.
For financial information by geographic region, see Notes 3 and 8 to the consolidated financial statements. Risks Related to Acquisitions We may be unsuccessful in evaluating material risks involved in completed and future acquisitions. We regularly evaluate potential acquisitions of businesses that are complementary to our businesses and service offerings, and in some cases, associated technological capabilities and assets.
Risks Related to Acquisitions We may be unsuccessful in evaluating material risks involved in completed and future acquisitions. We regularly evaluate potential acquisitions of businesses that are complementary to our businesses and service offerings, and in some cases, associated technological capabilities and assets.
For additional information, see “Risk Factors - The failure to integrate our and IPG’s businesses and operations successfully in the expected time frame may adversely affect the combined company’s business and results of operations .” The costs described above, as well as other unanticipated costs and expenses, could adversely affect the results of operations, financial condition and cash flows of the combined company following the completion of the Merger. 8 Litigation relating to the Merger, if any, could result in an injunction preventing the completion of the Merger and/or substantial costs to us.
For additional information, see “Risk Factors - The failure to integrate our and IPG’s businesses and operations successfully in the expected time frame may adversely affect our business, results of operations and financial condition .” The costs described above, as well as other unanticipated costs and expenses, could adversely affect our results of operations, financial condition and cash flows.
While we have concluded, for each year presented in the financial statements included in this report, that our goodwill is not impaired, future events could cause us to conclude that the goodwill associated with a given operation may become impaired. Any resulting non-cash impairment charge could have a material adverse effect on our business, results of operations and financial condition.
While we have concluded, for each year presented in the financial statements included in this report, that our goodwill is not impaired, future events could cause us to conclude that the goodwill associated with a given operation may become impaired.
While we use various methods to manage the risk of payment default, including obtaining credit insurance, requiring payment in advance, mitigating the potential loss in the marketplace or negotiating with media providers, these may be insufficient, less available, or unavailable during a severe economic downturn. 4 Geopolitical events, international hostilities or acts of terrorism could have a material adverse effect on our business, results of operations and financial condition.
While we use various methods to manage the risk of payment default, including obtaining credit insurance, requiring payment in advance, mitigating the potential loss in the marketplace or negotiating with media providers, these may be insufficient, less available, or unavailable during a severe economic downturn.
The failure to integrate our and IPG’s businesses and operations successfully in the expected time frame may adversely affect the combined company’s business and results of operations. We and IPG have operated and, until the completion of the Merger, will continue to operate independently. Following the completion of the Merger, our and IPG’s businesses may not be integrated successfully.
The failure to integrate our and IPG’s businesses and operations successfully in the expected time frame may adversely affect our business, results of operations and financial condition. Following the completion of the Merger, our and IPG’s businesses may not be integrated successfully.
Following the Merger, some of our and IPG’s clients, service providers, vendors, joint venture participants and other business counterparties may terminate or scale back their current or prospective business relationships with the combined company.
The Merger may result in a loss of our clients, service providers, vendors, joint venture participants and other business counterparties and may result in the termination of existing contracts. Some of our clients, service providers, vendors, joint venture participants and other business counterparties may terminate or scale back their current or prospective business relationships with us after the Merger.
The integration process may, for each of us and IPG, result in the loss of key employees, the disruption of ongoing businesses or inconsistencies in standards, controls, procedures and policies. In addition, there could be potential unknown liabilities and unforeseen expenses associated with the Merger that could adversely impact the combined company.
The integration process may result in the loss of key employees, the disruption of ongoing businesses or inconsistencies in standards, controls, procedures and policies. In addition, there could be potential unknown liabilities and unforeseen expenses associated with the Merger that could adversely impact us. Our future results following the Merger will suffer if we do not effectively manage expanded operations.
It is possible that the integration process could result in the loss of our or IPG’s key employees, the loss of clients, service providers, vendors or other business counterparties, the disruption of either company’s or both companies’ ongoing businesses, inconsistencies in standards, controls, procedures and policies, potential unknown liabilities and unforeseen expenses, delays, or regulatory conditions associated with and following completion of the Merger; or higher‑than‑expected integration costs and an overall post‑completion integration process that takes longer than originally anticipated.
It is possible that the continued integration process could result in the loss of our key employees, the loss of clients, service providers, vendors or other business counterparties, the disruption of our businesses, inconsistencies in standards, controls, procedures and policies, potential unknown liabilities and unforeseen expenses, or delays associated with the Merger.
In recent years, the use of AI has come under increased scrutiny.
With the emergence of AI, the use of AI has come under increased scrutiny.
Additionally, hardware, software applications or services that we develop or procure from third parties may contain defects in design or manufacture or other problems that could compromise the confidentiality, integrity or availability of our information technology systems or data stored on such systems. 5 Cybersecurity threats and attacks, including computer viruses, advanced persistent threats, malware, hacking, ransomware or other destructive or disruptive activities or software, are constantly evolving and pose a risk to our information technology systems and data.
Additionally, hardware, software applications or services that we develop or procure from third parties may contain defects in design or manufacture or other problems that could compromise the confidentiality, integrity or availability of our information technology systems or data stored on such systems.
If relationships with clients, service providers, vendors, joint venture participants and other business counterparties are adversely affected by the Merger, or if the combined company, following the Merger, loses the benefits of the contracts of Omnicom or IPG, the business, results of operations, financial condition and cash flows of the combined company could be adversely affected.
If relationships with clients, service providers, vendors, joint venture participants and other business counterparties are adversely affected by the Merger, or we lose the benefits of existing contracts due to conflicts that may arise in connection with the Merger or other factors discussed above, our business, results of operations, financial condition and cash flows could be adversely affected.
The combined company may also face increased scrutiny from, and/or additional regulatory requirements of, governmental authorities as a result of the significant increase in the size and complexity of the business.
We may also face increased scrutiny from, and/or additional regulatory requirements of, governmental authorities as a result of the significant increase in the size and complexity of the business. There can be no assurances that the combined company will be successful or that we will realize the expected operating synergies, cost savings or other benefits currently anticipated from the Merger.
The success of the combined company after the Merger will depend, in part, on its ability to retain key management personnel and other key employees.
We depend on the experience and industry knowledge of our officers and other key employees to execute our business plans. The success of the combined company depends, in part, on our ability to retain key management personnel and other key employees.
In addition, at times the attention of certain members of either company’s or both companies’ management and resources may be focused on completion of the Merger and the integration of the businesses of the two companies and may reduce their availability for day‑to‑day business operations or other opportunities that may be beneficial, which may disrupt each company’s ongoing operations and the operations of the combined company. 9 The Merger may result in a loss of our and IPG’s clients, service providers, vendors, joint venture participants and other business counterparties, and may result in the termination of existing contracts.
In addition, at times, the attention of certain members of our management and our resources may be focused on integration of the businesses of the two companies, reducing availability for day‑to‑day business operations or other opportunities that may be beneficial, which may disrupt our ongoing operations.
In accordance with generally accepted accounting principles in the United States, or U.S. GAAP or GAAP, we have recorded a significant amount of goodwill related to our acquisitions; a substantial portion of which represents the intangible specialized know-how of the acquired workforce.
GAAP, we have recorded a significant amount of goodwill related to our acquisitions including goodwill recorded in connection with the Merger, see Notes 5 and 6 to the consolidated financial statements; a substantial portion of which represents the intangible specialized know-how of the acquired workforce.
We are expected to incur significant costs in connection with the Merger and integration of the two companies, which may be in excess of those anticipated by us. We have incurred and expect to continue to incur costs associated with negotiating and completing the Merger and combining the operations of the two companies.
We have incurred and are expected to continue to incur significant costs in connection with the Merger and integration of IPG, which may be in excess of those anticipated by us. We have incurred and will continue to incur transaction costs related to formulating and implementing integration plans, including facilities, systems and service contract consolidation costs and employment‑related costs.
Further, new laws, guidance and decisions in this area may limit our ability to use AI or decrease its usefulness. As a result, we cannot predict future developments in AI and related impacts to our business and our industry.
As a result, we cannot predict future developments in AI and related impacts to our business and our industry.
We are subject to risks related to our use of generative AI, a new and emerging technology, which is in the early stages of commercial use. We continually evaluate the use of AI in our business processes, and in 2023, we entered into strategic partnerships with leading AI technology companies, enabling enhanced product and service capabilities in generative AI.
We continually evaluate the use of AI in our business processes, and in 2023, we entered into strategic partnerships with leading AI technology companies, enabling enhanced product and service capabilities using AI. We recently announced the new Omni platform that further enhances our product offerings using innovative AI tools and data analytic technologies.
We and our vendors are subject to a variety of federal, state, and foreign laws, rules, regulations, industry standards, and other requirements related to privacy, use of personal information, marketing and advertising, and internet tracking technologies.
As a result, we are subject to a complex and evolving framework of federal, state, and foreign privacy, data protection, marketing, advertising, and internet tracking laws, regulations, industry standards, and contractual obligations.
Any failure or perceived failure by us, or third parties on which we depend, to comply with data privacy laws, rules, regulations, industry standards and other requirements could result in legal claims or proceedings (such as class actions), regulatory investigations and enforcement actions, fines and penalties, negative reputational impacts and future compliance costs, which could materially and adversely affect our business, results of operations and financial condition.
Any actual or perceived failure by us or the third parties on which we rely to comply with applicable privacy and data protection requirements could result in regulatory investigations or enforcement actions, litigation (including class actions), fines and penalties, reputational harm, and increased compliance costs.
We, and third-party vendors on our behalf, process information related to individuals, including from and about individuals we may advertise to, actual and prospective clients, employees, and service providers.
The use of personal information is critical to our advertising and marketing services. We, and third-party vendors acting on our behalf, process personal information relating to individuals, including consumers, clients, employees, and service providers.
Uncertainties associated with the Merger may cause a loss of our and IPG’s management personnel and other key employees, which could adversely affect the business and operations of the combined company following the Merger. Each of Omnicom and IPG depends on the experience and industry knowledge of its officers and other key employees to execute its business plans.
For financial information by geographic region, see Notes 3 and 8 to the consolidated financial statements. Risks Related to the Merger with IPG Uncertainties associated with the Merger may cause a loss of our management personnel and other key employees, which could adversely affect our business, results of operations and financial condition.
These requirements, and their application, interpretation, and amendments are constantly evolving and developing. 10 Among other things, such laws generally: require disclosures about the data collection, use, and disclosure practices of covered businesses, and provide individuals expanded rights to access, delete, and correct their personal information, and opt out of certain sales or transfers of personal information.
These requirements generally mandate disclosures regarding data practices and provide individuals with expanded rights to access, delete, correct, or restrict the use of their personal information, including for targeted advertising.
Our and IPG’s business relationships may be subject to disruption due to uncertainty associated with the Merger, which could have a material effect on our business, results of operations, financial condition and cash flows or those of the combined company following the Merger.
Geopolitical events, international hostilities or acts of terrorism could have a material adverse effect on our business, results of operations and financial condition.
Removed
Risks Related to the Proposed Merger with IPG The Merger may not be completed, and the Merger Agreement may be terminated in accordance with its terms.
Added
Additionally, we may be unable to hire or retain talent who are trained in artificial intelligence, machine learning and advanced algorithms, to keep up with the rapid and ongoing technological advancements in our industry. Any of the foregoing could have a material adverse effect on our business, results of operations, and financial condition.
Removed
The Merger is subject to a number of conditions that must be satisfied or waived prior to the completion of the Merger, including, among others, the approval by our stockholders of our share issuance proposal, the approval by IPG stockholders of the proposal to adopt the Merger Agreement, the receipt of requisite regulatory approvals and the approval for listing on the New York Stock Exchange, or NYSE, of the shares of our common stock issuable to IPG stockholders pursuant to the Merger Agreement.
Added
Cybersecurity threats and attacks, including computer viruses, social engineering/phishing, malfeasance by insiders, human or technological error, advanced persistent threats, malware, hacking, ransomware or other destructive or disruptive activities or software, are constantly evolving and pose a risk to our information technology systems and data.
Removed
These conditions to the completion of the Merger may not be satisfied or waived in a timely manner or at all, and, accordingly, the Merger may be delayed or may not be completed.
Added
Cyberattacks are expected to accelerate on a global basis in frequency and magnitude as threat actors are becoming increasingly sophisticated using techniques and tools, including AI, that circumvent security controls, evade detection and remove forensic evidence.
Removed
In addition, if the Merger is not completed by December 8, 2025, which date may be extended to June 8, 2026 in certain circumstances, either we or IPG may choose not to proceed with the Merger by terminating the Merger Agreement, and the parties can mutually decide to terminate the Merger Agreement at any time, before or after stockholder approval.
Added
As a result, we may be unable to detect, investigate, remediate or recover from future attacks or incidents, or to avoid a material adverse impact to our information technology systems and data.
Removed
In addition, we and IPG may elect to terminate the Merger in certain other circumstances as set forth in the Merger Agreement. If the Merger Agreement is terminated under specified circumstances, Omnicom would be required to pay IPG a termination fee of $676 million.
Added
We are subject to risks related to our use of generative AI and agentic AI, new and emerging technologies, which are in the early stages of commercial use and subject to evolving legislative and regulatory requirements.
Removed
Additionally, if the Merger Agreement is terminated in circumstances where the Omnicom shareholders have not approved our share issuance proposal, then Omnicom has agreed to reimburse IPG’s expenses up to $25 million. Failure to complete the Merger could negatively impact the price of shares of our common stock, as well as our business and results of operations.
Added
Evolving rules, regulations and industry standards governing AI may require us to spend significantly to modify, maintain, or align our business practices, solutions and services, the nature of which cannot be determined at this time and may be inconsistent from region to region.
Removed
If the Merger is not completed for any reason, our business and results of operations may be adversely affected and, without realizing any of the benefits of having completed the Merger, we would be subject to a number of risks, including: • we may experience negative reactions from the financial markets, including negative impacts on the market price of our common stock; • we may experience negative reactions from clients, vendors, joint venture participants and other third parties with whom we do business, which in turn could affect our business operations or our ability to compete for new business or obtain renewals in the marketplace more broadly; • we may experience negative reactions from employees; • we will still be required to pay certain significant costs relating to the Merger, such as legal, accounting, financial advisor and printing fees; and • we will have expended time and resources that could otherwise have been spent on our existing business and the pursuit of other opportunities that could have been beneficial to us, and our ongoing business and results of operations may be adversely affected. 7 If the Merger Agreement is terminated under specified circumstances, we may be required to pay IPG a termination fee or other termination‑related payment as discussed above.
Added
There is increasing divergence globally among AI regulations, which will require us to navigate different obligations in different geographies. Further, new laws, guidance and decisions in this area may limit our ability to use AI and related technologies or decrease their usefulness to our businesses.
Removed
In addition, the loss of our and IPG’s key personnel could diminish the anticipated benefits of the Merger.
Added
Failure to adapt to technological developments, including emerging technologies such as generative AI and agentic AI, could adversely affect our competitive position, reputation, client relationships, results of operations and financial condition. Our industry is highly competitive and subject to rapid technological change.
Removed
Parties with whom we or IPG do business may experience uncertainty associated with the Merger, including with respect to current or future business relationships with us or IPG following the Merger.
Added
Our ability to remain competitive depends in part on our ability to anticipate, develop, acquire and integrate new technologies, platforms and capabilities, including data-driven solutions, automation, generative AI and agentic AI. These technologies may require significant and ongoing investment, involve long development cycles and uncertain returns, and may not be accepted by clients or generate expected benefits.
Removed
Our and IPG’s business relationships may be subject to disruption as clients, vendors, landlords, joint venture participants and other third parties with whom we or IPG do business may attempt to delay or defer entering into new business relationships, negotiate changes in existing business relationships or consider entering into business relationships with parties other than us or IPG.
Added
If we fail to keep pace with technological developments, or if competitors or new market entrants adopt new technologies more quickly or effectively, or if our clients develop their own AI-related capabilities, our services could become less attractive to clients, our competitive position could be harmed, and our revenues and profitability could decline.
Removed
These disruptions could have a material and adverse effect on our and IPG’s business, results of operations, financial condition and cash flows, regardless of whether the Merger is completed, as well as a material and adverse effect on the combined company’s ability to realize the expected cost savings, operating synergies and other benefits of the Merger.
Added
In addition, the use of emerging technologies presents risks related to intellectual property, ethics, data privacy, cybersecurity and regulatory compliance. Any failure to address these risks effectively could adversely affect our reputation, client relationships, business results of operations and financial condition.
Removed
The risk, and adverse effects, of any disruption could be exacerbated by a delay in completion of the Merger or termination of the Merger Agreement. The Merger Agreement subjects us to restrictions on business activities prior to the effective time of the Merger.
Added
Our liquidity, long-term financing needs, credit rating and access to capital markets is dependent on our agencies, operating cash flow. Our agencies’ operating cash flows have a significant impact on our liquidity and access to short-term and long-term financing in the capital markets.
Removed
The Merger Agreement restricts us from entering into certain corporate transactions and taking other specified actions without the consent of IPG and generally requires us to continue our operations in the ordinary course through the completion of the Merger.
Added
We maintain a committed, unsecured multi-currency revolving credit facility, which also provides us with the ability to issue commercial paper, and to manage and support our operating liquidity in the short term. In addition, we issue senior long-term notes in the capital markets.
Removed
These restrictions could be in place for an extended period of time if completion of the Merger is delayed and could prevent us from pursuing attractive business opportunities that may arise prior to the completion of the Merger.
Added
If our agencies’ operating cash flow significantly declines or any of these sources were unavailable to us or insufficient, our liquidity and ability to refinance our long-term debt could be impeded. We could be required to restructure our debt, sell assets or take other actions, and our business, results of operations and financial condition would be adversely affected.
Removed
These costs have been, and will continue to be, substantial. The substantial majority of costs will consist of transaction costs related to the Merger and include, among others, fees paid to financial, legal and accounting advisors, filing fees, employee retention and other employment-related costs, and debt restructuring costs.
Added
In addition, our credit rating, which is also dependent on our agencies operating cash flows among other factors, has a direct effect on our ability to obtain bank financing and access the capital markets.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

10 edited+5 added−0 removed2 unchanged
Biggest changeKey aspects of our cybersecurity risk management program include: • risk assessments designed to help identify material cybersecurity risks to our critical systems, and information; • an internal security staff principally responsible for managing our cybersecurity risk assessment processes, our security controls, and our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test, or otherwise assist with aspects of our security controls; • cybersecurity awareness training of our employees, incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for key service providers, suppliers, and vendors, including cloud-related service providers. 11 While we have experienced cybersecurity incidents that resulted in the disruption of our information technology systems and required us to engage third parties to remediate the issues, we have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, results of operations, or financial condition.
Biggest changeKey aspects of our cybersecurity risk management program include, but are not limited to, the following: • risk assessments designed to help identify risks from cybersecurity threats to our critical systems, and information; • an internal security staff principally responsible for managing our cybersecurity risk assessment processes, our security controls, and our response to cybersecurity incidents; • the use of external service providers, where appropriate, to assess, test, or otherwise assist with aspects of our security processes; • cybersecurity awareness training of our employees, incident response personnel, and senior management; • a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents; and • a third-party risk management process for key service providers and suppliers based on our assessment of their criticality to our operations and respective risk profile.
See Item 1A, “Risk Factors - We rely extensively on information technology systems, and cybersecurity incidents could adversely affect us .” Cybersecurity Governance Our Board of Directors, or Board, considers cybersecurity risk as part of its risk oversight function and has delegated to its Audit Committee oversight of cybersecurity and other information technology risks.
See Item 1A, “Risk Factors - We rely extensively on information technology systems and data, and cybersecurity incidents could adversely affect us .” Cybersecurity Governance Our Board of Directors, or Board, considers cybersecurity risk as part of its risk oversight function and has delegated to its Audit Committee oversight of cybersecurity and other information technology risks.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. Our cybersecurity risk management program includes a cybersecurity incident response plan.
Item 1C. Cybersecurity Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information.
We use the National Institute of Standards and Technology Cybersecurity Framework, or NIST CSF, and the ISO 27001 framework as published by the International Organization for Standardization as guides to help us identify, assess, and manage cybersecurity risks relevant to our business. We have designed and assessed our program based on the NIST CSF and ISO 27001.
We use the National Institute of Standards and Technology Cybersecurity Framework, or NIST CSF, and the ISO 27001 framework as published by the International Organization for Standardization as guides to help us identify, assess, and manage cybersecurity risks relevant to our business.
The full Board also receives briefings from management on our cybersecurity risk management program. Board members receive presentations on cybersecurity topics from our Chief Information Officer, or CIO, Chief Information Security Officer, or CISO, and Chief Information Risk Officer, or CIRO, and other security staff as part of the Board’s continuing education on topics that impact the Company.
Board members receive presentations on cybersecurity topics from our Chief Information Officer, or CIO, Chief Information Security Officer, or CISO, and Chief Information Risk Officer, or CIRO, and other security staff as part of the Board’s continuing education on topics that impact the Company.
The IT management team has demonstrated achievement in Information Security strategy development, risk management and implementation of security and risk management programs that drive awareness, decrease exposure and strengthen organizational IT controls.
Each member of the team has experience operating in complex, international business environments. The IT management team has demonstrated achievement in Information Security strategy development, risk management and implementation of security and risk management programs that drive awareness, decrease exposure and strengthen organizational IT controls.
This does not imply that we meet any particular technical standards, specifications, or requirements. Our cybersecurity risk management program is integrated into our overall enterprise risk management program; and shares common methodologies, reporting channels, and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Our cybersecurity risk management program is integrated into our overall enterprise risk management program; and shares common methodologies, reporting channels, and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas.
Our Audit Committee oversees management’s ongoing activities related to our cybersecurity risk management program. Our Audit Committee receives periodic reports from management on our cybersecurity risks. In addition, management updates the Audit Committee, as necessary, regarding cybersecurity incidents. Our Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity.
Our Audit Committee oversees management’s ongoing activities related to our cybersecurity risk management program. Our Audit Committee receives periodic reports from management on our cybersecurity risks. In addition, management updates the Audit Committee, where it deems appropriate, regarding cybersecurity incidents it considers to be significant.
Our Information Technology (IT) management team collectively holds over 50 years of strategic IT and global transformational experience, including having held IT advisory roles with top-tier organizations. Each member of the team has experience operating in complex, international business environments.
The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity advisors. Our Information Technology management team collectively holds over 50 years of strategic IT and global transformational experience, including having held IT advisory roles with top-tier organizations.
Our management team, including our CIO, CISO and CIRO, is responsible for assessing and managing our material risks from cybersecurity threats. The team has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity advisors.
Our management team, including our CIO, CISO and CIRO, is responsible for assessing and managing our material risks from cybersecurity threats. Our CIO has over 25 years of experience in global IT operations, including developing information security strategy, managing enterprise risk and overseeing digital transformation initiatives.
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This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use such standards as a guide.
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While we have experienced cybersecurity incidents that resulted in the disruption of our information technology systems and required us to engage third parties to remediate the issues, we have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, results of operations, or financial condition.
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Our Audit Committee reports to the full Board regarding its activities, including those related to cybersecurity. The full Board also receives briefings from management on our cybersecurity risk management program.
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Our CISO has over 20 years of experience leading global information security, cyber risk, and compliance programs. His expertise spans Security Operations Center (SOC) 11 leadership, security architecture, incident response, information and third‑party risk, compliance management, and data protection, supported by leading certifications including CISSP, CISM, CISA, and CRISC.
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Our CIRO has extensive experience in enterprise risk management, governance, and compliance. He has over 30 years of experience leading the development of risk management frameworks, management of cyber security and cyber regulatory compliance. He holds the following professional certifications: CISA, CISM, CPA and Chartered Accountant (SA).

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe do not expect that such proceedings will have a material adverse effect on our results of operations or financial condition. Item 4. Mine Safety Disclosures Not Applicable. 12 PART II
Biggest changeWe do not expect that such proceedings will have a material adverse effect on our results of operations or financial condition. Item 4. Mine Safety Disclosures Not applicable. PART II
Notes 2 and 18 to the consolidated financial statements provide a description of our lease expense, which comprises a significant component of our occupancy and other costs, and our lease commitments. Item 3. Legal Proceedings In the ordinary course of business, we are involved in various legal proceedings.
Notes 2 and 17 to the consolidated financial statements provide a description of our lease expense, which comprises a significant component of our occupancy and other costs, and our lease commitments. Item 3. Legal Proceedings In the ordinary course of business, we are involved in various legal proceedings.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 12 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 13 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 13 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 34
Biggest changeItem 4. Mine Safety Disclosures 12 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 12 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 13 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 33

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeCommon stock repurchase activity during the three months ended December 31, 2024 was: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs October 1 - October 31, 2024 80,022 $103.46 — — November 1 - November 30, 2024 4,983 103.07 — — December 1 - December 31, 2024 — — — 85,005 $103.44 — — During the three months ended December 31, 2024, we withheld 85,005 shares of common stock from employees to satisfy estimated statutory income tax obligations related to the vesting of restricted stock awards and exercises of stock options.
Biggest changePurchases of Equity Securities by the Issuer Common stock repurchase activity during the three months ended December 31, 2025 was: Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs October 1 - October 31, 2025 1,217,401 $78.03 — — November 1 - November 30, 2025 162,315 73.97 — — December 1 - December 31, 2025 3,717,888 77.61 — — 5,097,604 $77.59 — — During the three months ended December 31, 2025, we withheld 5,034,453 shares of common stock for general corporate purposes in the open market, including under a plan meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we withheld 63,151 shares from employees to satisfy estimated statutory income tax 12 obligations related to vesting of restricted stock awards and stock option exercises.
The value of the stock withheld was based on the closing price of our common stock on the applicable vesting date. There were no unregistered sales of equity securities during the three months ended December 31, 2024.
The value of the common stock withheld was based on the closing price of our common stock on the applicable vesting or exercise date. Recent Sales of Unregistered Securities There were no unregistered sales of equity securities during the three months ended December 31, 2025.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed and trades on the NYSE under the symbol OMC. As of January 30, 2025, there were 1,717 shareholders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed and trades on the New York Stock Exchange (NYSE) under the symbol “OMC”. As of January 30, 2026, there were 5,302 shareholders of record.
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Cash Dividends During 2025, we paid quarterly cash dividends of $0.70 per share to shareholders of record in the first three quarters of the year.
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During the fourth quarter of 2025, the Board of Directors (the “Board”) approved a quarterly cash dividend of $0.80 per share to shareholders of record, reflecting a $0.10 per share increase, for a total of $2.90 per share for the year.
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Although we intend to continue to pay quarterly cash dividends, the declaration and payment of future dividends is subject to the discretion of the Board and will depend on financial and legal requirements and capital allocation considerations.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeRevenue by Industry Revenue by industry sector: Year Ended December 31, 2024 2023 2022 Pharmaceuticals and Healthcare 16 % 16 % 16 % Food and Beverage 15 % 15 % 15 % Auto 12 % 12 % 12 % Consumer Products 10 % 8 % 8 % Technology 8 % 8 % 8 % Financial Services 7 % 8 % 8 % Travel and Entertainment 7 % 7 % 6 % Retail 6 % 6 % 6 % Telecommunications 3 % 4 % 4 % Government 4 % 4 % 4 % Services 3 % 2 % 3 % Oil, Gas and Utilities 2 % 2 % 2 % Not-for-Profit 1 % 1 % 1 % Education 1 % 1 % 1 % Other 5 % 6 % 6 % Total 100 % 100 % 100 % 25 Operating Expenses The year-over-year change in operating expenses: Year Ended December 31, 2024 2023 2024 vs. 2023 $ % of Revenue $ % of Revenue $ Change % Change Revenue $ 15,689.1 $ 14,692.2 $ 996.9 6.8 % Operating Expenses: Salary and service costs: Salary and related costs 7,441.4 47.4 % 7,212.8 49.1 % 228.6 3.2 % Third-party service costs 3,348.6 21.3 % 2,917.9 19.9 % 430.7 14.8 % Third-party incidental costs 642.5 4.1 % 570.5 3.9 % 72.0 12.6 % Total salary and service costs 11,432.5 72.9 % 10,701.2 72.8 % 731.3 6.8 % Occupancy and other costs 1,274.4 8.1 % 1,168.8 8.0 % 105.6 9.0 % Real estate and other repositioning costs 57.8 0.4 % 191.5 1.3 % (133.7) Gain on disposition of subsidiary — — % (78.8) (0.5) % 78.8 Cost of services 12,764.7 11,982.7 782.0 6.5 % Selling, general and administrative expenses 408.1 2.6 % 393.7 2.7 % 14.4 3.7 % Depreciation and amortization 241.7 1.5 % 211.1 1.4 % 30.6 14.5 % Total operating expenses 13,414.5 85.5 % 12,587.5 85.7 % 827.0 6.6 % Operating Income $ 2,274.6 14.5 % $ 2,104.7 14.3 % $ 169.9 8.1 % Year Ended December 31, 2023 2022 2023 vs. 2022 $ % of Revenue $ % of Revenue $ Change % Change Revenue $ 14,692.2 $ 14,289.1 $ 403.1 2.8 % Operating Expenses: Salary and service costs: Salary and related costs 7,212.8 49.1 % 7,197.9 50.4 % 14.9 0.2 % Third-party service costs 2,917.9 19.9 % 2,585.5 18.1 % 332.4 12.9 % Third-party incidental costs 570.5 3.9 % 542.5 3.8 % 28.0 5.2 % Total salary and service costs 10,701.2 72.8 % 10,325.9 72.3 % 375.3 3.6 % Occupancy and other costs 1,168.8 8.0 % 1,168.6 8.2 % 0.2 — % Real estate and other repositioning costs 191.5 1.3 % — — % 191.5 — % Charges arising from the effects of the war in Ukraine — — % 113.4 0.8 % (113.4) Gain on disposition of subsidiary (78.8) (0.5) % — — % (78.8) Cost of services 11,982.7 11,607.9 374.8 3.2 % Selling, general and administrative expenses 393.7 2.7 % 378.5 2.6 % 15.2 4.0 % Depreciation and amortization 211.1 1.4 % 219.4 1.5 % (8.3) (3.8) % Total operating expenses 12,587.5 85.7 % 12,205.8 85.4 % 381.7 3.1 % Operating Income $ 2,104.7 14.3 % $ 2,083.3 14.6 % $ 21.4 1.0 % We measure cost of services in two distinct categories: salary and service costs and occupancy and other costs.
Biggest changeRevenue by Industry Revenue by industry sector: Year Ended December 31, 2025 2024 2023 Pharmaceuticals and Healthcare 15 % 16 % 16 % Food and Beverage 15 % 15 % 15 % Auto 12 % 12 % 12 % Consumer Products 9 % 10 % 8 % Financial Services 8 % 7 % 8 % Retail 8 % 6 % 6 % Technology 8 % 8 % 8 % Travel and Entertainment 7 % 7 % 7 % Government 3 % 4 % 4 % Telecommunications 3 % 3 % 4 % Services 3 % 3 % 2 % Oil, Gas and Utilities 2 % 2 % 2 % Not-for-Profit 1 % 1 % 1 % Education 1 % 1 % 1 % Other 5 % 5 % 6 % Total 100 % 100 % 100 % 25 Operating Expenses The year-over-year change in operating expenses: Year Ended December 31, 2025 2024 2025 vs. 2024 $ % of Revenue $ % of Revenue $ Change % Change Revenue $ 17,271.9 $ 15,689.1 $ 1,582.8 10.1 % Operating Expenses: Salary and service costs: Salary and related costs 7,777.9 45.0 % 7,441.4 47.4 % 336.5 4.5 % Third-party service costs 4,113.7 23.8 % 3,348.6 21.3 % 765.1 22.8 % Third-party incidental costs 752.4 4.4 % 642.5 4.1 % 109.9 17.1 % Total salary and service costs 12,644.0 73.2 % 11,432.5 72.9 % 1,211.5 10.6 % Occupancy and other costs 1,366.7 7.9 % 1,274.4 8.1 % 92.3 7.2 % Severance and repositioning costs 1,247.0 7.2 % 57.8 0.4 % 1,189.2 Loss on assets held for sale and dispositions 547.1 3.2 % — — % 547.1 Cost of services 15,804.8 12,764.7 3,040.1 23.8 % Selling, general and administrative expenses 745.7 4.3 % 408.1 2.6 % 337.6 82.7 % Depreciation and amortization 276.7 1.6 % 241.7 1.5 % 35.0 14.5 % Total operating expenses 16,827.2 97.4 % 13,414.5 85.5 % 3,412.7 25.4 % Operating Income $ 444.7 2.6 % $ 2,274.6 14.5 % $ (1,829.9) (80.4) % Year Ended December 31, 2024 2023 2024 vs. 2023 $ % of Revenue $ % of Revenue $ Change % Change Revenue $ 15,689.1 $ 14,692.2 $ 996.9 6.8 % Operating Expenses: Salary and service costs: Salary and related costs 7,441.4 47.4 % 7,212.8 49.1 % 228.6 3.2 % Third-party service costs 3,348.6 21.3 % 2,917.9 19.9 % 430.7 14.8 % Third-party incidental costs 642.5 4.1 % 570.5 3.9 % 72.0 12.6 % Total salary and service costs 11,432.5 72.9 % 10,701.2 72.8 % 731.3 6.8 % Occupancy and other costs 1,274.4 8.1 % 1,168.8 8.0 % 105.6 9.0 % Severance and repositioning costs 57.8 0.4 % 191.5 1.3 % (133.7) (69.8) % Gain on assets held for sale and dispositions — — % (78.8) (0.5) % 78.8 Cost of services 12,764.7 11,982.7 782.0 6.5 % Selling, general and administrative expenses 408.1 2.6 % 393.7 2.7 % 14.4 3.7 % Depreciation and amortization 241.7 1.5 % 211.1 1.4 % 30.6 14.5 % Total operating expenses 13,414.5 85.5 % 12,587.5 85.7 % 827.0 6.6 % Operating Income $ 2,274.6 14.5 % $ 2,104.7 14.3 % $ 169.9 8.1 % We measure cost of services in two distinct categories: salary and service costs and occupancy and other costs.
Omnicom and OCI have, jointly and severally, fully and unconditionally guaranteed the obligations of OFH with respect to the €500 million 0.80% Senior Notes due 2027 and the €500 million 1.40% Senior Notes due 2031, and Omnicom has fully and unconditionally guaranteed the obligations of OFH with respect the €600 million 3.70% Senior Notes due 2032, collectively the Euro Notes.
Omnicom and OCI have, jointly and severally, fully and unconditionally guaranteed the obligations of OFH with respect to the €500 million 0.80% Senior Notes due 2027 and the €500 million 1.40% Senior Notes due 2031, and Omnicom has fully and unconditionally guaranteed the obligations of OFH with respect to the €600 million 3.70% Senior Notes due 2032, collectively the Euro Notes.
The net impact of these items reduced operating income for 2023 by $127.2 million ($102.6 million after-tax) and reduced diluted net income per share - Omnicom Group Inc. by $0.50 (see Notes 13 and 14 to the consolidated financial statements). 3) Beginning in 2024, EBITA is defined as earnings before interest, income taxes and amortization of acquired intangible assets and internally developed strategic platform assets.
The net impact of these items reduced operating income for 2023 by $127.2 million ($102.6 million after-tax) and reduced diluted net income per share - Omnicom Group Inc. by $0.50 (see Notes 13 and 14 to the consolidated financial statements). 20 3) Beginning in 2024, EBITA is defined as earnings before interest, income taxes and amortization of acquired intangible assets and internally developed strategic platform assets.
As a result, we reclassified the prior year to be consistent with the revised definition, which reduced EBITA from previously reported amounts. We believe EBITA is useful in evaluating the impact of amortization of acquired intangible assets 20 and internally developed strategic platform assets on operating performance and allows for comparability between reporting periods.
As a result, we reclassified the prior year to be consistent with the revised definition, which reduced EBITA from previously reported amounts. We believe EBITA is useful in evaluating the impact of amortization of acquired intangible assets and internally developed strategic platform assets on operating performance and allows for comparability between reporting periods.
The net effect of repositioning actions, primarily related to severance, recorded in the second quarter of 2024 and acquisition transaction costs recorded in the fourth quarter of 2024 (see Note 13 to the consolidated financial statements) reduced both operating income and EBITA by $72.4 million, and reduced both operating margin by 0.5% and EBITA margin by 0.4%.
The net effect of repositioning actions, primarily related to severance, recorded in the second quarter of 2024 and acquisition related costs recorded in the fourth quarter of 2024 (see Note 13 to the consolidated financial statements) reduced both operating income and EBITA by $72.4 million, and reduced both operating margin by 0.5% and EBITA margin by 0.4%.
We cannot predict with any certainty the impact on us of any disruptions in the credit markets. In such circumstances, we may need to obtain additional financing to fund our day-to-day working capital requirements. Such additional financing may not be available on favorable terms, or at all. 33
We cannot predict with any certainty the impact on us of any disruptions in the credit markets. In such circumstances, we may need to obtain additional financing to fund our day-to-day working capital requirements. Such additional financing may not be available on favorable terms, or at all.
Included in the fourth quarter of 2023 within selling, general and administrative expenses are acquisition transaction costs of $14.5 million ($13.0 million after-tax), primarily related to the purchase of Flywheel Digital in January 2024 (see Note 5 to the consolidated financial statements).
Included in the fourth quarter of 2023 within selling, general and administrative expenses are acquisition related costs of $14.5 million ($13.0 million after-tax), primarily related to the purchase of Flywheel Digital in January 2024 (see Note 5 to the consolidated financial statements).
Although our revenue is generally balanced between the United States and international markets and we have a large and diverse client base, we are not immune to general economic downturns. Global economic conditions have a direct impact on our business and financial performance.
Although our revenue is generally balanced between the United States and international markets and we have a large and diverse client base, we are not immune to general economic downturns. Global economic conditions and disruptions have a direct impact on our business and financial performance.
Where the transaction price or a portion of the transaction price is derived from commissions based on a percentage of purchased media from third parties, the performance obligation is not satisfied until the media is run and we have an enforceable contract providing a right to payment.
Where the transaction price or a portion of the transaction price is derived from commissions based on a percentage of 18 purchased media from third parties, the performance obligation is not satisfied until the media is run and we have an enforceable contract providing a right to payment.
Interest expense on debt increased by $31.2 million year-over-year, primarily related to the issuance in the first quarter of 2024 of €600 million 3.70% Senior Notes due 2032, or 2032 Notes, and the issuance in the third quarter of 2024 of $600 million 5.30% Senior Notes due 2034, or 2034 Notes.
Interest expense on debt increased by $31.2 million year-over-year, primarily related to the issuance in the first quarter of 2024 of €600.0 million 3.70% Senior Notes due 2032, or 2032 Notes, and the issuance in the third quarter of 2024 of $600.0 million 5.30% Senior Notes due 2034, or 2034 Notes.
The arrangements require each treasury center to have its own notional pool account and to maintain a notional positive account balance. Additionally, under the terms of the arrangement, set-off of foreign exchange positions are limited to the long and short positions within their own account.
These arrangements require each treasury center to have its own notional pool account and to maintain a positive notional balance. Additionally, under the terms of the arrangement, set-off of foreign exchange positions are limited to the long and short positions within their own account.
The main economic components of each agency are employee compensation and related costs, and direct service costs and occupancy and other costs, which include rent and occupancy costs, technology costs that are generally limited to personal computers, servers and off-the-shelf software and other overhead expenses.
The main economic components of each agency are employee compensation and related costs, and direct service costs and occupancy and other costs, which include rent and occupancy costs, technology costs that are generally limited to personal 16 computers, servers and off-the-shelf software and other overhead expenses.
Adverse global economic conditions pose a risk that our clients may reduce, postpone or cancel spending on marketing and communications services, which would reduce the demand for our services.
Adverse global economic conditions and disruptions pose a risk that our clients may reduce, postpone or cancel spending on marketing and communications services, which would reduce the demand for our services.
Accordingly, for our annual test as of May 1, 2024, we used an estimated long-term growth rate of 3.5%. When performing the annual impairment test as of May 1, 2024 and estimating the future cash flows of our reporting units, we considered the current macroeconomic environment, as well as industry and market specific conditions in 2024.
Accordingly, for our annual test as of May 1, 2025, we used an estimated long-term growth rate of 3.5%. When performing the annual impairment test as of May 1, 2025 and estimating the future cash flows of our reporting units, we considered the current macroeconomic environment, as well as industry and market specific conditions in 2025.
We considered this history when determining the long-term growth rates used in our annual impairment test at May 1, 2024. Included in the 10-year history is the full year 2020, which included the negative impact of the COVID-19 pandemic on the global economy and our revenue.
We considered this history when determining the long-term growth rates used in our annual impairment test at May 1, 2025. Included in the 10-year history is the full year 2020, which included the negative impact of the COVID-19 pandemic on the global economy and our revenue.
The net effect of the real estate and other repositioning costs, the gain on disposition of subsidiaries (see Notes 13 and 14 to the consolidated financial statements) and acquisition costs, reduced both operating income and EBITA by $127.2 million, and reduced both operating margin and EBITA margin by 0.9%.
In 2023, the net effect of the real estate and other repositioning costs, the gain on disposition of subsidiaries (see Notes 13 and 14 to the consolidated financial statements) and acquisition costs, reduced both operating income and EBITA by $127.2 million, and reduced both operating margin and EBITA margin by 0.9% in 2023.
Non-GAAP liquidity measures as reported by us may not be comparable to similarly titled amounts reported by other companies. Additional information regarding our cash flows can be found in our consolidated statement of cash flows and Note 16 to the consolidated financial statements.
Non-GAAP liquidity measures as reported by us may not be comparable to similarly titled amounts reported by other companies. Additional information regarding our cash flows can be found in our consolidated statement of cash flows and Note 15 to the consolidated financial statements.
Our six reporting units vary in size with respect to revenue and the amount of debt allocated to them. These differences drive variations in fair value among our reporting units. In addition, these differences as well as differences in book value, including goodwill, cause variations in the amount by which fair value exceeds book value among the reporting units.
Our four reporting units vary in size with respect to revenue and the amount of debt allocated to them. These differences drive variations in fair value among our reporting units. In addition, these differences as well as differences in book value, including goodwill, cause variations in the amount by which fair value exceeds book value among the reporting units.
For our reporting units with negative book value, we concluded that the fair value of their total assets was in excess of book value. The minimum decline in fair value that one of our reporting units would need to experience in order to fail the goodwill impairment test was approximately 48%.
For our reporting units with negative book value, we concluded that the fair value of their total assets was in excess of book value of total assets. The minimum decline in fair value that one of our reporting units would need to experience in order to fail the goodwill impairment test was approximately 46%.
Included in selling, general and administrative expenses in the fourth quarter of 2024 are acquisition transaction costs of $14.6 million ($13.1 million after-tax), related to the proposed merger with IPG (see Note 1 to the consolidated financial statements).
Included in selling, general and administrative expenses in the fourth quarter of 2024 are acquisition-related costs of $14.6 million ($13.1 million after-tax) related to the Merger with IPG (see Note 1 to the consolidated financial statements).
Goodwill Impairment Review - Conclusion Based on the results of our impairment test, we concluded that our goodwill as of May 1, 2024 was not impaired, because the fair value of each of our reporting units was in excess of its respective net book value.
Goodwill Impairment Review - Conclusion Based on the results of our impairment test, we concluded that our goodwill as of May 1, 2025 was not impaired, because the fair value of each of our reporting units was in excess of its respective net book value.
In applying the income approach, we use estimates to derive the discounted expected cash flows (“DCF”) for each reporting unit that serves as the basis of our valuation. These estimates and assumptions include revenue growth and operating margin, EBITDA, tax rates, capital expenditures, weighted average cost of capital and related discount rates and expected long-term cash flow growth rates.
In applying the income approach, we use estimates to derive the discounted expected cash flows, or DCF, for each reporting unit that serves as the basis of our valuation. These estimates and assumptions include revenue growth and operating margin, EBITDA, tax rates, capital expenditures, weighted average cost of capital and related discount rates and expected long-term cash flow growth rates.
Finally, the expected benefits of our acquisitions are typically shared by multiple agencies in various regions as they work together to integrate the acquired business into our virtual client network strategy.
Finally, the expected benefits of our acquisitions are typically shared by multiple agencies in various regions as they work together to integrate the acquired agency into our virtual client network strategy.
Revenue is typically lower in the first and third quarters and higher in the second and fourth quarters, reflecting client spending patterns during the year and additional project work that usually occurs in the fourth quarter.
Revenue is typically lower in the first and third quarters and higher in the second and fourth quarters, reflecting client spending patterns during the year, as well as additional project work that usually occurs in the fourth quarter.
Our Public Relations discipline was helped by spending on the U.S. elections, and the Experiential discipline benefited from spending on the Summer Olympics. The organic growth was partially offset by underperformance in our Branding & Retail Commerce, Execution & Support and Healthcare disciplines.
Our Public Relations discipline was helped by spending on the U.S. elections, and the Experiential discipline benefited from spending on the Summer Olympics. Constant currency growth was partially offset by underperformance in our Branding & Retail Commerce, Execution & Support, and Healthcare disciplines.
In addition, certain of our international subsidiaries have uncommitted credit lines that are guaranteed by Omnicom aggregating $517.4 million. Our liquidity sources fund our non-discretionary cash requirements and our discretionary spending. Our $600 million Delayed Draw Term Loan Agreement automatically terminated on July 15, 2024.
In addition, certain of our international subsidiaries have uncommitted credit lines that are guaranteed by Omnicom aggregating $1.1 billion. Our liquidity sources fund our non-discretionary cash requirements and our discretionary spending. Our $600 million Delayed Draw Term Loan Agreement automatically terminated on July 15, 2024.
To the extent that our treasury centers require liquidity, they can issue up to a total of $2 billion of U.S. Dollar-denominated commercial paper, issue up to the equivalent of $500 million in British Pounds or Euro under a Euro commercial paper program, or borrow under the Credit Facility or the uncommitted credit lines.
To the extent that our treasury centers require liquidity, they can issue up to a total of $3.0 billion 31 of U.S. Dollar-denominated commercial paper, issue up to the equivalent of $500 million in British Pounds or Euro under a Euro commercial paper program, or borrow under the Credit Facility or the uncommitted credit lines.
Included in selling, general and administrative expenses in the fourth quarter of 2024 are acquisition transaction costs of $14.6 million ($13.1 million after-tax), related to the proposed merger with IPG (see Note 1 to the consolidated financial statements).
Included in selling, general and administrative expenses in the fourth quarter of 2024 are acquisition-related costs of $14.6 million ($13.1 million after-tax), related to the Merger (see Note 1 to the consolidated financial statements).
For the past ten years, the average historical revenue growth rate of our reporting units and the Average Nominal GDP, or NGDP, growth of the countries comprising the major markets that account for substantially all of our revenue, was approximately 3.6% and 4.7% , respectively.
For the past ten years, the average historical revenue growth rate of our reporting units and the Average Nominal GDP, or NGDP, growth of the countries comprising the major markets that account for substantially all of our revenue, was approximately 3.5% and 5.0% , respectively.
Additional liquidity sources include our $2.5 billion unsecured multi-currency revolving credit facility, or Credit Facility, terminating on June 2, 2028, the ability to issue up to $2 billion of U.S. Dollar denominated commercial paper and issue up to the equivalent of $500 million in British Pounds or Euro under a Euro commercial paper program, and access to the capital markets.
Additional liquidity sources include our $3.5 billion unsecured multi-currency revolving credit facility, or Credit Facility, terminating on November 26, 2030, the ability to issue up to $3 billion of U.S. Dollar denominated commercial paper and issue up to the equivalent of $500 million in British Pounds or Euro under a Euro commercial paper program, and access to the capital markets.
We are committed to responsible AI practices and collaboration to harness AI's potential, while evaluating related risks, such as ethical considerations, public perception and reputational concerns, intellectual property protection, regulatory compliance, privacy and data security concerns and our ability to effectively adopt this new emerging technology.
As we continue to make investments in new technologies, we remain committed to responsible AI practices and collaboration to harness AI's potential, while evaluating related risks, such as ethical considerations, public perception and reputational concerns, intellectual property protection, regulatory compliance, privacy and data security concerns and our ability to effectively adopt this new emerging technology.
The after-tax impact on diluted net income per share- Omnicom Group Inc. for 2024, 2023 and 2022 was $0.32, $0.23 and $0.21, respectively.
The after-tax impact on diluted net income per share- Omnicom Group Inc. for 2025, 2024 and 2023 was $0.42, $0.32 and $0.23, respectively.
In addition, and over the longer term, our Credit Facility is available to fund our working capital and contractual obligations. 31 Cash Management Our regional treasury centers in North America, Europe and Asia manage our cash and liquidity. Each day, operations with excess funds invest those funds with their regional treasury center.
In addition, and over the longer term, our Credit Facility and access to capital markets are available to fund our working capital, contractual obligations and discretionary spending. Cash Management Our regional treasury centers in North America, Europe and Asia manage our cash and liquidity. Each day, operations with excess funds invest those funds with their regional treasury center.
Organic growth was partially offset by underperformance in our Branding & Retail Commerce discipline. Changes in foreign exchange rates reduced revenue slightly. The decrease in revenue from foreign exchange translation was primarily related to the weakening of some currencies, including the Japanese Yen and Brazilian Real against the U.S.
Constant currency growth was partially offset by underperformance in our Branding & Retail Commerce discipline. Changes in foreign exchange rates reduced revenue slightly. The decrease in revenue from foreign exchange translation was primarily related to the weakening of the Japanese Yen and 22 Brazilian Real against the U.S.
Foreign currency exchange rate changes increased revenue year-over-year, primarily as a result of the strengthening of the British Pound, partially offset by the weakening of several currencies against the U.S. Dollar year-over-year.
Foreign currency exchange rate changes increased revenue year-over-year by $20.8 million, or 0.5%, primarily as a result of the strengthening of the British Pound, partially offset by the weakening of several currencies against the U.S. Dollar.
The effective tax rate for 2023 includes an increase of approximately $10.7 million in income tax expense related to a lower tax benefit in certain jurisdictions for the real estate and other repositioning costs in the period and an increase in the U.K. statutory tax rate, partially offset by approximately $10.0 million of favorable impacts from the resolution of certain non-U.S. tax positions. 28 2023 vs. 2022 Our effective tax rate for 2023 decreased year-over-year to 26.3% from 28.1%.
The effective tax rate for 2023 includes an increase of approximately $10.7 million in income tax expense related to a lower tax benefit in certain jurisdictions for the real estate and other repositioning costs in the period and an increase in the U.K. statutory tax rate, partially offset by approximately $10.0 million of favorable impacts from the resolution of certain non-U.S. tax positions.
Substantially all markets in the region, especially China, India, Australia, the Philippines and Thailand, had positive organic revenue growth as compared to the prior year. Foreign currency changes decreased revenue for the year, primarily as a result of the weakening of the Japanese Yen and Chinese Reminbi against the U.S. Dollar.
Substantially all markets in the region, especially China, India, Australia, the Philippines and Thailand, had positive constant currency growth as compared to the prior year. Foreign currency changes decreased revenue for the year by $35.1 million, or 2.0%, primarily as a result of the weakening of the Japanese Yen and Chinese Reminbi against the U.S. Dollar.
In addition, we have contractual obligations related to our long-term debt (principal and interest payments), recurring business operations, primarily related to lease obligations, and acquisition related obligations. Our principal discretionary cash spending includes dividend payments to common shareholders, capital expenditures, strategic acquisitions and repurchases of our common stock. Cash and cash equivalents decreased $92.6 million from December 31, 2023.
In addition, we have contractual obligations related to our long-term debt (principal and interest payments), recurring business operations, primarily related to lease obligations, and acquisition-related obligations. Our principal discretionary cash spending includes dividend payments to common shareholders, capital expenditures, strategic acquisitions and repurchases of our common stock. 30 Cash and cash equivalents increased $2,541.7 million from December 31, 2024.
Operating expenses primarily consist of cost of services, selling, general and administrative expenses, or SG&A, and depreciation and amortization, and are analyzed for each network by the chief operating decision maker, who allocates resources accordingly. Financial Performance Worldwide revenue in 2024 increased $996.9 million, or 6.8%, to $15.7 billion compared to $14.7 billion in 2023.
Operating expenses primarily consist of cost of services, selling, general and administrative expenses, or SG&A, and depreciation and amortization, and are analyzed for each network by the Chief Operating Decision Maker, who allocates resources accordingly. Financial Performance Worldwide revenue in 2025 increased by $1.6 billion, or 10.1%, to $17.3 billion compared to $15.7 billion in 2024.
Third-party service costs for 2024 increased $430.7 million, or 14.8%, to $3,348.6 million, primarily as a result of organic growth in our Media & Advertising and Experiential disciplines.
Third-party service costs for 2024 increased $430.7 million, or 14.8%, to $3,348.6 million, primarily as a result of revenue growth in our Media & Advertising and Experiential disciplines. Third-party incidental costs for 2024 increased $72.0 million, or 12.6%, to $642.5 million.
GAAP financial measure of Net Income - Omnicom Group Inc. to EBITA and EBITA Margin: Year Ended December 31, 2024 2023 2022 Net Income - Omnicom Group Inc. $ 1,480.6 $ 1,391.4 $ 1,316.5 Net Income Attributed To Noncontrolling Interests 93.4 81.8 87.3 Net Income 1,574.0 1,473.2 1,403.8 Income From Equity Method Investments 6.9 5.2 5.2 Income Tax Expense 560.5 524.9 546.8 Income Before Income Taxes and Income From Equity Method Investments 2,127.6 1,992.9 1,945.4 Interest Expense 247.9 218.5 208.6 Interest Income 100.9 106.7 70.7 Operating Income 2,274.6 2,104.7 2,083.3 Add back: Amortization of acquired intangible assets and internally developed strategic platform assets 87.5 61.8 58.8 Earnings before interest, taxes, and amortization of intangible assets (“EBITA”) $ 2,362.1 $ 2,166.5 $ 2,142.1 Revenue $ 15,689.1 $ 14,692.2 $ 14,289.1 EBITA $ 2,362.1 $ 2,166.5 $ 2,142.1 EBITA Margin % 15.1 % 14.7 % 15.0 % 30 LIQUIDITY AND CAPITAL RESOURCES Cash Sources and Requirements The primary sources of our short-term liquidity are net cash provided by operating activities and cash and cash equivalents.
GAAP financial measure of Net Income - Omnicom Group Inc. to EBITA and EBITA Margin: Year Ended December 31, 2025 2024 2023 Net Income (Loss) - Omnicom Group Inc. $ (54.5) $ 1,480.6 $ 1,391.4 Net Income Attributed To Noncontrolling Interests 98.2 93.4 81.8 Net Income 43.7 1,574.0 1,473.2 Income From Equity Method Investments 7.7 6.9 5.2 Income Tax Expense 242.2 560.5 524.9 Income Before Income Taxes and Income From Equity Method Investments 278.2 2,127.6 1,992.9 Interest Expense 263.4 247.9 218.5 Interest Income 96.9 100.9 106.7 Operating Income 444.7 2,274.6 2,104.7 Add back: Amortization of acquired intangible assets and internally developed strategic platform assets 115.8 87.5 61.8 Earnings before interest, taxes, and amortization of intangible assets (EBITA) $ 560.5 $ 2,362.1 $ 2,166.5 Revenue $ 17,271.9 $ 15,689.1 $ 14,692.2 EBITA $ 560.5 $ 2,362.1 $ 2,166.5 EBITA Margin % 3.2 % 15.1 % 14.7 % LIQUIDITY AND CAPITAL RESOURCES Cash Sources and Requirements The primary sources of our short-term liquidity are net cash provided by operating activities and cash and cash equivalents.
Net debt: December 31, 2024 2023 Short-term debt $ 21.3 $ 10.9 Long-term debt, including current portion 6,035.3 5,639.6 Total debt 6,056.6 5,650.5 Less: Cash and cash equivalents 4,339.4 4,432.0 Net debt $ 1,717.2 $ 1,218.5 Net debt is a Non-GAAP liquidity measure. This presentation, together with the comparable U.S.
Net debt: December 31, 2025 2024 Short-term debt $ 62.0 $ 21.3 Long-term debt, including current portion 9,054.5 6,035.3 Total debt 9,116.5 6,056.6 Less: Cash and cash equivalents 6,881.1 4,339.4 Net debt $ 2,235.4 $ 1,717.2 Net debt is a Non-GAAP liquidity measure. This presentation, together with the comparable U.S.
North America 2024 vs. 2023 In North America, organic revenue growth in 2024 compared to the prior year was primarily driven by strong performance in the United States, especially in the Media & Advertising discipline, led by our media business, and our Precision Marketing, Experiential, and Public Relations disciplines.
The impact of foreign currency exchange rates on revenue was nominal. 23 2024 vs. 2023 In North America, constant currency growth in 2024 compared to the prior year was primarily driven by strong performance in the United States, especially in the Media & Advertising discipline, led by our media business, and our Precision Marketing, Experiential, and Public Relations disciplines.
For 2024, the net impact of the real estate and other repositioning costs, primarily related to severance, recorded in the second quarter of 2024 (see Note 13 to the consolidated financial statements) and acquisition transaction costs, recorded in the fourth quarter of 2024 reduced net income - Omnicom Group Inc. by $56.0 million and diluted net income per share - Omnicom Group Inc. by $0.28. 2023 vs. 2022 Net income - Omnicom Group Inc. in 2023 increased $74.9 million to $1,391.4 million from $1,316.5 million.
For 2024, the net impact of the real estate and other repositioning costs, primarily related to severance, recorded in the second quarter of 2024 (see Note 13 to the consolidated financial statements) and acquisition-related costs, recorded in the fourth quarter of 2024 reduced net income - Omnicom Group Inc. by $56.0 million and diluted net income per share - Omnicom Group Inc. by $0.28.
At December 31, 2024, we have the following contractual obligations: • The aggregate principal amount of long-term debt is $6.1 billion and matures at various dates from 2026 through 2034.
At December 31, 2025, we have the following contractual obligations: • The aggregate principal amount of long-term debt is $9.3 billion and matures at various dates from 2026 through 2048.
EMEA Europe 2024 vs. 2023 In Europe, organic revenue growth in 2024 compared to the prior year was driven by strong performance in our Media & Advertising discipline, led by our media business, and in our Experiential and Execution & Support disciplines, partially offset by underperformance in our Precision Marketing, Branding & Retail Commerce and Public Relations disciplines.
Constant currency growth by country was led by Turkey, Poland, Germany and Italy, partially offset by underperformance in the Netherlands and France. 2024 vs. 2023 In Europe, constant currency growth in 2024 compared to the prior year was driven by strong performance in our Media & Advertising discipline, led by our media business, and in our Experiential and Execution & Support disciplines, partially offset by underperformance in our Precision Marketing, Branding & Retail Commerce and Public Relations disciplines.
Worldwide organic revenue growth increased revenue $768.7 million, or 5.2%, primarily reflecting increased client spending in Media & Advertising, led by Media, as well as Precision Marketing, Public Relations and Experiential disciplines compared to the prior year. Our Public Relations discipline was helped by spending on the U.S. elections, and the Experiential discipline benefited from spending on the Summer Olympics.
Constant currency growth of $1,062.4 million, or 7.2%, primarily reflected increased client spending in Media & Advertising, led by our media business, as well as Precision Marketing, Public Relations and Experiential disciplines compared to the prior year. Our Public Relations discipline was helped by spending on the U.S. elections, and the Experiential discipline benefited from spending on the Summer Olympics.
While there were no trigger events that required us to perform a quantitative test, we performed the annual quantitative impairment test and compared the fair value of each of our reporting units to its respective carrying value, including goodwill. We identified our regional reporting units as components of our operating segments, which are our six global agency networks.
While there were no trigger events that required us to perform a quantitative test, we performed the annual quantitative impairment test and compared the fair value of each of our reporting units to its respective carrying value, including goodwill.
In 2024, we contributed $10.6 million to the defined benefit plans and paid $11.4 million for the postemployment arrangements.
In 2025, we contributed $11.6 million to the defined benefit plans and paid $14.0 million for the postemployment arrangements.
The results of this sensitivity analysis on our impairment test as of May 1, 2024 revealed that if the WACC increased by 1% and/or the long-term growth rate decreased by 1%, the fair value of each of our reporting units would continue to be in excess of its respective net book value and would pass the impairment test.
The results of this sensitivity analysis on our impairment test as of May 1, 2025 revealed that if the WACC increased by 1% and/or the long-term growth rate decreased by 1%, the fair value of each of our reporting units would continue to be in excess of its respective net book value and would pass the impairment test. 17 We will continue to perform our impairment test each year at May 1, unless events or circumstances trigger the need for an interim impairment test.
The impact of these issues on our business will vary by geographic market and discipline. We monitor economic conditions closely, as well as client revenue levels and other factors. In response to reductions in revenue, we can take actions to align our cost structure with changes in client demand and manage our working capital.
The impact of these conditions on our business may vary by geographic market and service discipline. We monitor macroeconomic conditions, client revenue levels, and other relevant factors and may take actions to align our cost structure with changes in client demand and to manage working capital.
Actual results of operations and other factors will likely differ from the estimates used in our discounted cash flow valuation, and it is possible that differences could be significant.
We believe that our estimates and assumptions are reasonable, but they are subject to change from period to period. Actual results of operations and other factors will likely differ from the estimates used in our discounted cash flow valuation, and it is possible that differences could be significant.
On a global, pan-regional, and local basis, our networks, practice areas and agencies provide a comprehensive range of services in the following fundamental disciplines: Media & Advertising, Precision Marketing, Public Relations, Healthcare, Branding & Retail Commerce, Experiential, and Execution & Support.
On a global, pan-regional, and local basis, our agencies provide a comprehensive range of services in the following fundamental disciplines: Media & Advertising, Precision Marketing, Public Relations, Healthcare, Branding & Retail Commerce, Experiential, and Execution & Support. Media & Advertising includes strategic media planning, buying and optimization, data and analytics, creative services, and content production.
Additional information about acquisitions and goodwill appears in Notes 2, 5 and 6 to the consolidated financial statements. 17 Revenue Recognition Revenue is recognized when a customer obtains control and receives the benefit of the promised goods or services (the performance obligation) in an amount that reflects the consideration we expect to receive in exchange for those goods or services (the transaction price).
Revenue Recognition Revenue is recognized when a customer obtains control and receives the benefit of the promised goods or services (the performance obligation) in an amount that reflects the consideration we expect to receive in exchange for those goods or services (the transaction price).
Interest income in 2024 decreased $5.8 million year-over-year to $100.9 million, primarily as a result of lower cash balances in the first half of the year due to the timing of our financing and acquisition activity, including the purchase of Flywheel in the first quarter of 2024. 2023 vs. 2022 Net interest expense in 2023 decreased $26.1 million year-over-year to $111.8 million.
Interest income in 2024 decreased $5.8 million year-over-year to $100.9 million, primarily as a result of lower cash balances in the first half of the year due to the timing of our financing and acquisition activity, including the purchase of Flywheel in the first quarter of 2024. 28 Income Taxes 2025 vs. 2024 Our effective tax rate for 2025 increased year-over-year to 87.1%.
Middle East and Africa 2024 vs. 2023 vs. 2022 In the Middle East and Africa for 2024, organic revenue increased compared to 2023, primarily as a result of our Media & Advertising and Experiential disciplines. For 2024, the strengthening of certain currencies in the region against the U.S. Dollar decreased revenue year-over-year.
For 2025, the strengthening of certain currencies in the region against the U.S. Dollar increased revenue year-over-year. In the Middle East and Africa for 2024, constant currency growth compared to 2023, was primarily a result of a strong performance in our Media & Advertising and Experiential disciplines. For 2024, the weakening of certain currencies in the region against the U.S.
We do not expect these payments to increase significantly in 2025. • The liability for contingent purchase price payments (earn-outs) is $220.1 million, of which $56.0 million is payable in 2025. • The remaining balance for the transition tax on accumulated foreign earnings imposed by the Tax Cut and Jobs Act of 2017 is $41.3 million, of which $34.9 million is payable in 2025.
We do not expect these payments to increase significantly in 2026. • The liability for contingent purchase price payments (earn-outs) is $214.9 million, of which $95.8 million is payable in 2026. • The remaining balance for the transition tax on accumulated foreign earnings imposed by the Tax Cuts and Jobs Act of 2017 is $6.4 million, which is payable in 2026.
Billings related to out-of-pocket costs are included in revenue since we control the goods or services prior to delivery to the client. 18 However, the inclusion of billings related to third-party direct costs in revenue depends on whether we act as a principal or as an agent in the client arrangement.
However, the inclusion of billings related to third-party direct costs in revenue depends on whether we act as a principal or as an agent in the client arrangement.
Latin America 2024 vs. 2023 In Latin America, organic revenue growth in 2024 compared to the prior year, increased in all disciplines, led by Media & Advertising, and in all countries in the region. The weakening of most currencies against the U.S. Dollar decreased revenue in 2024, compared to 2023.
Dollar negatively impacted revenue in 2025, compared to 2024 by $20.6 million, or 4.8%. 2024 vs. 2023 In Latin America, constant currency growth in 2024 compared to the prior year increased in substantially all disciplines, led by Media & Advertising, and in all countries in the region. The weakening of most currencies against the U.S.
Included in the fourth quarter of 2023 within selling, general and administrative expenses are acquisition transaction costs of $14.5 million ($13.0 million after-tax), primarily related to the purchase of Flywheel Digital in January 2024 (see Note 5 to the consolidated financial statements).
Included in selling, general and administrative expenses in the fourth quarter of 2024 are acquisition related costs of $14.6 million ($13.1 million after-tax), related to the Merger (see Note 1 to the consolidated financial statements).
Revenue The components of year-over-year revenue change in the United States (“Domestic”) and the remainder of the world (“International”): Total Domestic International $ % $ % $ % Year Ended December 31, 2023 $ 14,692.2 $ 7,471.6 $ 7,220.6 Components of revenue change: Foreign exchange rate impact (65.5) (0.4) % — — % (65.5) (0.9) % Acquisition revenue, net of disposition revenue 293.7 2.0 % 205.3 2.7 % 88.4 1.2 % Organic growth 768.7 5.2 % 509.6 6.8 % 259.1 3.6 % Year Ended December 31, 2024 $ 15,689.1 6.8 % $ 8,186.5 9.6 % $ 7,502.6 3.9 % Total Domestic International $ % $ % $ % Year Ended December 31, 2022 $ 14,289.1 $ 7,367.3 $ 6,921.8 Components of revenue change: Foreign exchange rate impact (28.3) (0.2) % — — % (28.3) (0.4) % Acquisition revenue, net of disposition revenue (153.1) (1.1) % (87.2) (1.2) % (65.9) (1.0) % Organic growth 584.5 4.1 % 191.5 2.6 % 393.0 5.7 % Year Ended December 31, 2023 $ 14,692.2 2.8 % $ 7,471.6 1.4 % $ 7,220.6 4.3 % The components and percentages are calculated as follows: • Foreign exchange rate impact is calculated by translating the current period’s local currency revenue using the prior period average exchange rates to derive current period constant currency revenue (in this case $15,754.6 million and $14,720.5 million for the Total column for December 31, 2024 and December 31, 2023, respectively).
Revenue The components of year-over-year revenue change in the United States (“Domestic”) and the remainder of the world (“International”): Total Domestic International $ % $ % $ % Year Ended December 31, 2024 $ 15,689.1 $ 8,186.5 $ 7,502.6 Components of revenue change: Foreign exchange rate impact 124.6 0.8 % — — % 124.6 1.7 % Constant currency growth 1,458.2 9.3 % 916.0 11.2 % 542.2 7.2 % Year Ended December 31, 2025 $ 17,271.9 10.1 % $ 9,102.5 11.2 % $ 8,169.4 8.9 % Total Domestic International $ % $ % $ % Year Ended December 31, 2023 $ 14,692.2 $ 7,471.6 $ 7,220.6 Components of revenue change: Foreign exchange rate impact (65.5) (0.4) % — — % (65.5) (0.9) % Constant currency growth 1,062.4 7.2 % 714.9 9.6 % 347.5 4.8 % Year Ended December 31, 2024 $ 15,689.1 6.8 % $ 8,186.5 9.6 % $ 7,502.6 3.9 % The components and percentages are calculated as follows: • Foreign exchange rate impact is calculated by translating the current period’s local currency revenue using the prior period average exchange rates to derive current period constant currency revenue (in this case $17,147.3 million and $15,754.6 million for the Total column for December 31, 2025 and December 31, 2024, respectively).
The regional reporting units and practice areas monitor performance and are responsible for the agencies in their region. The regional reporting units report to the segment managers and facilitate the administrative and logistical requirements of our key client matrix organization structure for delivering services to clients in their regions.
They report to the segment managers and facilitate the administrative and logistical requirements of our key client matrix organization structure for delivering services to clients in their regions.
Our access to the commercial paper market and the cost of any issuances is affected by market conditions and our credit ratings. The long-term debt indentures and the Credit Facility do not contain provisions that require acceleration of cash payments in the event of a downgrade in our credit ratings.
The long-term debt indentures and the Credit Facility do not contain provisions that require acceleration of cash payments in the event of a downgrade in our credit ratings.
The estimates used in our goodwill impairment test do not constitute forecasts or projections of future results of operations, but rather are estimates and assumptions based on historical results and assessments of macroeconomic factors affecting our reporting units as of the valuation date. We believe that our estimates and assumptions are reasonable, but they are subject to change from year-over-year.
There were no events through December 31, 2025 that would change our impairment assessment. The estimates used in our goodwill impairment test do not constitute forecasts or projections of future results of operations, but rather are estimates and assumptions based on historical results and assessments of macroeconomic factors affecting our reporting units as of the valuation date.
The year-over-year changes in worldwide revenue in 2024, compared to 2023, in our fundamental disciplines were: Media & Advertising increased $575.0 million, Precision Marketing increased $347.4 million, Public Relations increased $100.3 million, Healthcare decreased $8.0 million, Branding & Retail Commerce decreased $60.8 million, Experiential increased $80.1 million and Execution & Support decreased $37.1 million.
Dollar. 2024 v. 2023 The year-over-year changes in worldwide revenue in 2024, compared to 2023, in our fundamental disciplines were: Media & Advertising increased $554.3 million, Precision Marketing increased $361.6 million, Public Relations increased $100.5 million, Healthcare decreased $5.3 million, Branding & Retail Commerce decreased $61.6 million, Experiential increased $84.2 million, and Execution & Support decreased $36.8 million.
In 2024, total revenue in the U.K. increased 7.1% to $1,700.5 million. Organic revenue growth year-over-year in the U.K. was 2.7%, with growth led by our media business in our Media & Advertising discipline and our Experiential and Execution & Support disciples, partially offset by negative performance in our Precision Marketing, Branding & Retail Commerce, and Public Relations disciplines.
In 2024, constant currency growth year-over-year in the U.K. of 4.3% was led by our media business, in our Media & Advertising discipline, and our Experiential and Execution & Support disciples, partially offset by negative performance in our Precision Marketing, Branding & Retail Commerce, and Public Relations disciplines.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP. Non-GAAP financial measures reported by us may not be comparable to similarly titled amounts reported by other companies. Reconciliation of Non-GAAP Financial Measures The following table reconciles the U.S.
We also use constant currency growth as an additional operating performance measure. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with U.S. GAAP. Non-GAAP financial measures reported by us may not be comparable to similarly titled amounts reported by other companies.
In Continental Europe, which includes the Euro Zone and the other European countries, organic growth year-over-year of 7.2% was led by Italy, France, and Germany across substantially all disciplines.
In Continental Europe, which includes the Euro Zone and the other European countries, constant currency growth year-over-year of 3.1% was across substantially all disciplines. Constant currency growth by country was led by Turkey, Spain, Germany and Netherlands, partially offset by underperformance in France and Italy.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Dollars in tables in millions, except per share amounts.) EXECUTIVE SUMMARY Risks and Uncertainties Global economic disruptions, including geopolitical events, international hostilities, acts of terrorism, public health crises, inflation or stagflation, tariffs and other trade barriers, central bank interest rate policies in countries that comprise our major markets and labor and supply chain challenges could cause economic uncertainty and volatility.
Risks and Uncertainties Global economic disruptions, including geopolitical events, international hostilities, acts of terrorism, public health crises, inflation or stagflation, tariffs and other trade barriers, central bank interest rate policies in our major markets, and labor or supply chain challenges, could contribute to economic uncertainty and volatility.
Revenue by Geography The year-over-year change in revenue and organic growth in our geographic markets: Year Ended December 31, 2024 2023 2024 vs. 2023 $ % of Revenue $ % of Revenue $ Change % Organic Growth Americas: North America $ 8,650.2 55.2 % $ 7,951.0 54.2 % $ 699.2 6.3 % Latin America 433.7 2.8 % 386.8 2.6 % 46.9 17.2 % EMEA: Europe 4,439.0 28.2 % 4,266.9 29.0 % 172.1 2.7 % Middle East and Africa 319.2 2.0 % 309.6 2.1 % 9.6 5.2 % Asia-Pacific 1,847.0 11.8 % 1,777.9 12.1 % 69.1 3.8 % Revenue $ 15,689.1 $ 14,692.2 $ 996.9 5.2 % Year Ended December 31, 2023 2022 2023 vs. 2022 $ % of Revenue $ % of Revenue $ Change % Organic Growth Americas: North America $ 7,951.0 54.2 % $ 7,856.0 55.0 % $ 95.0 2.6 % Latin America 386.8 2.6 % 329.0 2.3 % 57.8 13.0 % EMEA: Europe 4,266.9 29.0 % 4,010.5 28.1 % 256.4 6.2 % Middle East and Africa 309.6 2.1 % 346.7 2.4 % (37.1) (5.8) % Asia-Pacific 1,777.9 12.1 % 1,746.9 12.2 % 31.0 6.0 % Revenue $ 14,692.2 $ 14,289.1 $ 403.1 4.1 % The year-over-year increase in worldwide revenue across our geographic markets for 2024 were: North America $699.2 million, or 8.8%, Latin America $46.9 million, or 12.1%, Europe $172.1 million, or 4.0%, the Middle East and Africa $9.6 million, or 3.1%, and Asia-Pacific $69.1 million, or 3.9%.
Revenue by Geography The year-over-year change in revenue and constant currency growth in our geographic markets: Year Ended December 31, 2025 2024 2025 vs. 2024 $ % of Revenue $ % of Revenue $ Change % Constant Currency Growth Americas: North America $ 9,592.2 55.5 % $ 8,650.2 55.1 % $ 942.0 11.0 % Latin America 540.2 3.1 % 433.7 2.8 % 106.5 29.3 % EMEA: Europe 4,804.9 27.9 % 4,439.0 28.4 % 365.9 4.4 % Middle East and Africa 409.2 2.4 % 319.2 2.0 % 90.0 27.8 % Asia-Pacific 1,925.4 11.1 % 1,847.0 11.8 % 78.4 5.1 % Revenue $ 17,271.9 $ 15,689.1 $ 1,582.8 9.3 % Year Ended December 31, 2024 2023 2024 vs. 2023 $ % of Revenue $ % of Revenue $ Change % Constant Currency Growth Americas: North America $ 8,650.2 55.1 % $ 7,951.0 54.2 % $ 699.2 8.9 % Latin America 433.7 2.8 % 386.8 2.6 % 46.9 22.2 % EMEA: Europe 4,439.0 28.4 % 4,266.9 29.0 % 172.1 3.5 % Middle East and Africa 319.2 2.0 % 309.6 2.1 % 9.6 4.9 % Asia-Pacific 1,847.0 11.8 % 1,777.9 12.1 % 69.1 5.9 % Revenue $ 15,689.1 $ 14,692.2 $ 996.9 7.2 % In 2025, worldwide revenue increased by $1,582.8 million, or 10.1%, to $17,271.9 million, compared to $15,689.1 million in 2024.
We have the ability to fund our day-to-day liquidity, including working capital, by issuing commercial paper or borrowing under the Credit Facility. We did not issue commercial paper in 2024.
We have the ability to fund our day-to-day liquidity, including working capital, by issuing commercial paper or borrowing under the Credit Facility. During both 2025 and 2024, we did not issue commercial paper. At both December 31, 2025 and 2024, there were no outstanding borrowings under the Credit Facility and no outstanding commercial paper issuances.
NEW ACCOUNTING STANDARDS See Notes 1 and 24 to the consolidated financial statements for information on the adoption of new accounting standards and accounting standards not yet adopted. 19 CONSOLIDATED RESULTS OF OPERATIONS The year-over-year change in results of operations: Year Ended December 31, 2024 vs. 2023 2023 vs. 2022 2024 2023 2022 $ Change $ Change Revenue $ 15,689.1 $ 14,692.2 $ 14,289.1 $ 996.9 $ 403.1 Operating Expenses: Salary and service costs 11,432.5 10,701.2 10,325.9 731.3 375.3 Occupancy and other costs 1,274.4 1,168.8 1,168.6 105.6 0.2 Real estate and other repositioning costs 2 57.8 191.5 — (133.7) 191.5 Charges arising from the effects of the war in Ukraine 3 — — 113.4 — (113.4) Gain on disposition of subsidiary 2 — (78.8) — 78.8 (78.8) Cost of services 12,764.7 11,982.7 11,607.9 782.0 374.8 Selling, general and administrative expenses 2 408.1 393.7 378.5 14.4 15.2 Depreciation and amortization 241.7 211.1 219.4 30.6 (8.3) Total operating expenses 13,414.5 12,587.5 12,205.8 827.0 381.7 Operating Income 2,274.6 2,104.7 2,083.3 169.9 21.4 Interest Expense 247.9 218.5 208.6 29.4 9.9 Interest Income 100.9 106.7 70.7 (5.8) 36.0 Income Before Income Taxes and Income From Equity Method Investments 2,127.6 1,992.9 1,945.4 134.7 47.5 Income Tax Expense 560.5 524.9 546.8 35.6 (21.9) Income From Equity Method Investments 6.9 5.2 5.2 1.7 — Net Income 1,574.0 1,473.2 1,403.8 100.8 69.4 Net Income Attributed To Noncontrolling Interests 93.4 81.8 87.3 11.6 (5.5) Net Income - Omnicom Group Inc. 2,3 $ 1,480.6 $ 1,391.4 $ 1,316.5 $ 89.2 $ 74.9 Net Income Per Share - Omnicom Group Inc.: Basic $ 7.54 $ 6.98 $ 6.40 $ 0.56 $ 0.58 Diluted 2,3 $ 7.46 $ 6.91 $ 6.36 $ 0.55 $ 0.55 Revenue $ 15,689.1 $ 14,692.2 $ 14,289.1 $ 996.9 $ 403.1 Operating Margin % 14.5 % 14.3 % 14.6 % 0.2 % (0.3) % EBITA 1,4 $ 2,362.1 $ 2,166.5 $ 2,142.1 $ 195.6 $ 24.4 EBITA Margin % 15.1 % 14.7 % 15.0 % 0.4 % (0.3) % 1) Reconciliation of Non-GAAP Financial Measures on page 30 . 2) In 2024, operating expenses included $57.8 million ($42.9 million after-tax) of repositioning costs, primarily related to severance, recorded in the second quarter of 2024 (see Note 13 to the consolidated financial statements).
NEW ACCOUNTING STANDARDS See Notes 1 and 23 to the consolidated financial statements for information on the adoption of new accounting standards and accounting standards not yet adopted. 19 CONSOLIDATED RESULTS OF OPERATIONS The year-over-year change in results of operations: Year Ended December 31, 2025 vs. 2024 2024 vs. 2023 2025 2024 2023 $ Change $ Change Revenue $ 17,271.9 $ 15,689.1 $ 14,692.2 $ 1,582.8 $ 996.9 Operating Expenses: Salary and service costs 12,644.0 11,432.5 10,701.2 1,211.5 731.3 Occupancy and other costs 1,366.7 1,274.4 1,168.8 92.3 105.6 Severance and repositioning costs 2 1,247.0 57.8 191.5 1,189.2 (133.7) Loss (gain) on assets held for sale and dispositions 2 547.1 — (78.8) 547.1 78.8 Cost of services 15,804.8 12,764.7 11,982.7 3,040.1 782.0 Selling, general and administrative expenses 2 745.7 408.1 393.7 337.6 14.4 Depreciation and amortization 276.7 241.7 211.1 35.0 30.6 Total operating expenses 16,827.2 13,414.5 12,587.5 3,412.7 827.0 Operating Income 444.7 2,274.6 2,104.7 (1,829.9) 169.9 Interest Expense 263.4 247.9 218.5 15.5 29.4 Interest Income 96.9 100.9 106.7 (4.0) (5.8) Income Before Income Taxes and Income From Equity Method Investments 278.2 2,127.6 1,992.9 (1,849.4) 134.7 Income Tax Expense 242.2 560.5 524.9 (318.3) 35.6 Income From Equity Method Investments 7.7 6.9 5.2 0.8 1.7 Net Income 43.7 1,574.0 1,473.2 (1,530.3) 100.8 Net Income Attributed To Noncontrolling Interests 98.2 93.4 81.8 4.8 11.6 Net Income (Loss) - Omnicom Group Inc. 2 $ (54.5) $ 1,480.6 $ 1,391.4 $ (1,535.1) $ 89.2 Net Income (Loss) Per Share - Omnicom Group Inc.: Basic $ (0.27) $ 7.54 $ 6.98 $ (7.81) $ 0.56 Diluted 2 $ (0.27) $ 7.46 $ 6.91 $ (7.73) $ 0.55 Revenue $ 17,271.9 $ 15,689.1 $ 14,692.2 $ 1,582.8 $ 996.9 Operating Margin % 2.6 % 14.5 % 14.3 % (11.9) % 0.2 % EBITA 1,3 $ 560.5 $ 2,362.1 $ 2,166.5 $ (1,801.6) $ 195.6 EBITA Margin % 3.2 % 15.1 % 14.7 % (11.9) % 0.4 % 1) Reconciliation of Non-GAAP Financial Measures on page 30 . 2) In 2025, operating expenses included $1,247.0 million ( $984.5 million after-tax) related to severance, real estate repositioning, contract cancellations and other costs, as well as efficiency initiatives taken in the second quarter of 2025, primarily within Omnicom Advertising and Omnicom Production, and $547.1 million ($447.5 million after-tax) of losses on dispositions of certain businesses in connection with the Merger, (see Notes 13 and 14 to the consolidated financial statements).
The decrease was composed of: Sources Net cash provided by operating activities - as reported $ 1,733.5 Add back: Decrease in operating capital 231.2 Principal cash sources $ 1,964.7 Uses Capital expenditures $ (140.6) Dividends paid to common shareholders (552.7) Dividends paid to noncontrolling interest shareholders (85.4) Acquisition payments, including payment of contingent purchase price obligations and acquisition of additional noncontrolling interests (998.1) Repurchases of common stock, net of proceeds from stock plans (268.6) Principal cash uses $ (2,045.4) Principal cash uses in excess of principal cash sources $ (80.7) Effect of foreign exchange rate changes on cash and cash equivalents (185.4) Other net financing and investing activities 404.7 Decrease in operating capital (231.2) Decrease in cash and cash equivalents - as reported $ (92.6) Principal cash sources and principal cash uses are Non-GAAP liquidity measures.
The increase was composed of: Sources Net cash provided by operating activities - as reported $ 2,938.2 Less: Increase in operating capital (712.1) Principal cash sources $ 2,226.1 Uses Capital expenditures $ (149.8) Dividends paid to common shareholders (549.6) Dividends paid to noncontrolling interest shareholders (82.9) Cash acquired from merger with IPG, net of acquisition payments, including payment of contingent purchase price obligations and acquisition of additional noncontrolling interests 914.4 Repurchases of common stock, net of proceeds from stock plans (680.7) Principal cash uses $ (548.6) Principal cash sources in excess of principal cash uses $ 1,677.5 Effect of foreign exchange rate changes on cash and cash equivalents 213.9 Other net financing and investing activities (61.8) Increase in operating capital 712.1 Increase in cash and cash equivalents - as reported $ 2,541.7 Principal cash sources and principal cash uses are Non-GAAP liquidity measures.
The net impact of these items reduced operating income for 2024 by $72.4 million ($56.0 million after-tax) and reduced diluted net income per share - Omnicom Group Inc. by $0.28.
The net impact of these items reduced operating income for 2025 by $2,141.4 million ($1,750.5 million after-tax) and reduced diluted net income per share - Omnicom Group Inc. by $8.50.
A large decline in estimated fair value of a reporting unit could result in a non-cash impairment charge and may have an adverse effect on our results of operations and financial position.
A large decline in estimated fair value of a reporting unit could result in a non-cash impairment charge and may have an adverse effect on our results of operations and financial condition. Additional information about acquisitions and goodwill appears in Notes 2, 5 and 6 to the consolidated financial statements.
Diluted net income per share - Omnicom Group Inc. decreased to $6.91 in 2023, compared to $6.36 in 2022, due to the factors described above and the impact of the reduction in our weighted average common shares outstanding resulting from repurchases of our common stock, net of shares issued for restricted stock awards, stock option exercises and the employee stock purchase plan during the year.
Diluted net income (loss) per share - Omnicom Group Inc. decreased to a $0.27 net loss per share in 2025, from net income of $7.46 in 2024, due to the factors described above and the impact of the increase in our weighted average common shares outstanding resulting from the equity consideration in connection with the Merger, partially offset by repurchases of our common stock, net of shares issued for restricted stock awards, stock option exercises and the employee stock purchase plan during the year.
Out-of-pocket costs include, among others: transportation, hotel, meals, shipping and telecommunication charges incurred by us in the course of providing our services.
Out-of-pocket costs include, among others: transportation, hotel, meals, shipping and telecommunication charges incurred by us in the course of providing our services. Billings related to out-of-pocket costs are included in revenue since we control the goods or services prior to delivery to the client.
The assumptions that have the most significant effect on our valuations derived using a DCF methodology are: (1) the expected long-term growth rate of our reporting units' cash flows and (2) the weighted average cost of capital (“WACC”) for each reporting unit. 16 The long-term growth rate and WACC assumptions used in our evaluations: May 1, 2024 May 1, 2023 Long-Term Growth Rate 3.5% 3.5% WACC 10.8% - 11.8% 11.0% - 11.4% Long -term growth rate represents our estimate of the long-term growth rate for our industry and the geographic markets we operate in.
The assumptions that have the most significant effect on our valuations derived using a DCF methodology are: (1) the expected long-term growth rate of our reporting units' cash flows and (2) the weighted average cost of capital, or WACC, for each reporting unit.
Future interest payments on the debt total $1.0 billion, of which $186.6 million is payable in 2025. • The liability for operating and finance lease payments is $1,414.9 million, of which $294.2 million is due in 2025. • The obligation for the defined benefit pension plans is $216.0 million, and the liability for the postemployment arrangements is $126.6 million.
Future interest payments on the debt total $2.1 billion, of which $282.3 million is payable in 2026. • The liability for operating and finance lease payments is $2,566.5 million, of which $574.8 million is due in 2026. • The obligation for the defined benefit pension plans is $655.4 million, and the liability for the postemployment arrangements is $143.5 million.
For 2023, the net impact of the real estate and other repositioning costs (see Note 13 to the consolidated financial statements), gain on disposition of subsidiaries (see Note 14 to the consolidated financial statements) and acquisition transaction costs reduced net income - Omnicom Group Inc. by $102.6 million and diluted net income per share - Omnicom Group Inc. by $0.50. 29 NON-GAAP FINANCIAL MEASURES We use certain non-GAAP financial measures in describing our performance.
In 2023, the net effect of the gain on disposition of subsidiary increased net income - Omnicom Group Inc. by $102.6 million and diluted income per share - Omnicom Group Inc. by $0.50. 29 NON-GAAP FINANCIAL MEASURES We use certain non-GAAP financial measures in describing our performance.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

13 edited+1 added−4 removed9 unchanged
Biggest changeIn addition, while operating practices vary by country, media type and media vendor, in the United States and certain foreign markets, many of our agencies’ contracts with media and production providers specify that our agencies are not liable to the media and production providers under the theory of sequential liability until and to the extent we have been paid by our client for the media or production services.
Biggest changeIn addition, while operating practices vary by country, media type and media vendor, in the United States and certain foreign markets, many of our agencies’ contracts with media and production providers specify that our agencies are not liable to the media and production providers under the theory of sequential liability until and to the extent we have been paid by our client for the media or production services. 34 Where purchases of media and production services are made by our agencies as a principal or are not subject to the theory of sequential liability, the risk of a material loss as a result of payment default by our clients could increase significantly and such a loss could have a material adverse effect on our business, results of operations and financial condition.
We use net investment hedges to manage the volatility of foreign exchange rates on the investment in our foreign subsidiaries. We do not use derivatives for trading or speculative purposes. Using derivatives exposes us to the credit risk that counterparties to the derivative contracts will fail to meet their contractual obligations.
We use net investment hedges to manage the volatility of foreign exchange rates 33 on the investment in our foreign subsidiaries. We do not use derivatives for trading or speculative purposes. Using derivatives exposes us to the credit risk that counterparties to the derivative contracts will fail to meet their contractual obligations.
If permitted by 34 local law and the client agreement, many of our agencies purchase media and production services for our clients as an agent for a disclosed principal.
If permitted by local law and the client agreement, many of our agencies purchase media and production services for our clients as an agent for a disclosed principal.
The VaR model is not intended to represent actual losses but is used as a risk estimation and management tool. Based on the results of the model, we estimate with 95% confidence a maximum one-day change in the net fair value of our derivative financial instruments at December 31, 2024 was not material.
The VaR model is not intended to represent actual losses but is used as a risk estimation and management tool. Based on the results of the model, we estimate with 95% confidence a maximum one-day change in the net fair value of our derivative financial instruments at December 31, 2025 was not material.
Interest Rate Risk We may use interest rate swaps to manage our interest cost and structure our long-term debt portfolio to achieve a mix of fixed rate and floating rate debt. There were no interest rate swaps in 2024 and 2023. Long-term debt at December 31, 2024 and 2023 consisted entirely of fixed-rate debt.
Interest Rate Risk We may use interest rate swaps to manage our interest cost and structure our long-term debt portfolio to achieve a mix of fixed rate and floating rate debt. There were no interest rate swaps in 2025 and 2024. Long-term debt at December 31, 2025 and 2024 consisted entirely of fixed-rate debt.
Due to the diversified nature of our client base, we do not believe that we are exposed to a concentration of credit risk as our largest client represented 2.7% of revenue in 2024. However, during periods of economic downturn, the credit profiles of our clients could change.
Due to the diversified nature of our client base, we do not believe that we are exposed to a concentration of credit risk as our largest client represented 2.4% of revenue in 2025. However, during periods of economic downturn, the credit profiles of our clients could change.
In these instances, amounts are either promptly settled or hedged with forward foreign exchange contracts. To manage this risk, at December 31, 2024, we had outstanding forward foreign exchange contracts with an aggregate notional amount of $4.7 million.
In these instances, amounts are either promptly settled or hedged with forward foreign exchange contracts. To manage this risk, at December 31, 2025 and December 31, 2024, we had outstanding forward foreign exchange contracts with an aggregate notional amount of $27.4 million and $4.7 million, respectively.
Foreign Currency Exchange Risk In 2024, our international operations represented approximately 48% of our revenue. Changes in the value of foreign currencies against the U.S. Dollar affect our results of operations and financial condition.
Foreign Currency Exchange Risk In 2025, our international operations represented approximately 47% of our revenue. Changes in the value of foreign currencies against the U.S. Dollar affect our results of operations and financial condition.
Foreign currency derivatives are designated as economic hedges; therefore, any gain or loss in fair value incurred on those instruments is generally offset by decreases or increases in the fair value of the underlying exposure.
Foreign currency derivatives are designated as fair value hedges; therefore, any gain or loss in fair value incurred on those instruments is recorded in results of operations and is generally offset by decreases or increases in the fair value of the underlying exposure.
By using these financial instruments, we reduce financial risk of adverse foreign exchange changes by foregoing any gain which might occur if the markets move favorably. The terms of our forward foreign exchange contracts are generally less than 90 days.
By using these financial instruments, we reduce financial risk of adverse foreign exchange changes by foregoing any gain which might occur if the markets move favorably. The terms of our forward foreign exchange contracts are generally less than 90 days. We have fixed-to-fixed Yen/U.S.
At December 31, 2024, an asset of $9.3 million is recorded in other assets, and at December 31, 2023, a liability of $6.6 million is recorded in long-term liabilities, for the swap fair value.
We recorded a reduction of interest expense of $10.3 million in 2025 and $6.6 million in 2024. At December 31, 2025, an asset of $7.1 million is recorded in other assets, and at December 31, 2024, an asset of $9.3 million is recorded in other assets, for the swap fair value.
Changes in the fair value of the swaps are recognized in foreign currency translation and are reported in accumulated other comprehensive income (loss), or AOCI. Any gain or loss will remain in AOCI until the complete or substantially complete liquidation of our investment in the underlying operations.
Changes in the fair value of the swaps are recognized in foreign currency translation and are reported in AOCI. Any gain or loss will remain in AOCI until the complete or substantially complete liquidation of our investment in the underlying operations. We have elected to assess the effectiveness of our net investment hedges based on changes in spot exchange rates.
We have fixed-to-fixed cross currency swaps with a notional value of $150 million that hedge a portion of the net investment in our Japanese subsidiaries against volatility in the Yen/U.S. Dollar exchange rate. The swaps are designated and qualify as a hedge of a net investment in a foreign subsidiary and are scheduled to mature in 2025 and 2029.
Dollar exchange rate and Sterling/Euro exchange rate cross currency swaps with a notional value of $181 million and £325.0 million, respectively. The Yen/U.S. Dollar swaps hedge a portion of the net investment in our Japanese subsidiaries against volatility in the Yen/U.S. Dollar exchange rate.
Removed
We operate in all major international markets including the U.K., Euro Zone, Australia, Brazil, Canada, China and Japan. Our agencies transact business in more than 50 different currencies.
Added
The Sterling/Euro swaps hedge the exchange rate volatility on a portion of the Sterling Entity's net investment in Euro Functional currency subsidiaries. The swaps are designated and qualify as a hedge of a net investment in a foreign subsidiary and are scheduled to mature in 2028, 2029, 2032 and 2033.
Removed
The net fair value of the forward foreign contracts at December 31, 2024 was not material (see Note 22 to the consolidated financial statements). At December 31, 2023, there were no forward foreign exchange contracts outstanding.
Removed
We have elected to assess the effectiveness of our net investment hedges based on changes in spot exchange rates. We receive net fixed U.S. Dollar interest payments. We recorded a reduction of interest expense of $6.6 million in each of 2024 and 2023.
Removed
Where purchases of media and production services are made by our agencies as a principal or are not subject to the theory of sequential liability, the risk of a material loss as a result of payment default by our clients could increase significantly and such a loss could have a material adverse effect on our business, results of operations and financial condition.

Other OMC 10-K year-over-year comparisons