We will now begin the question and answer session. Please limit yourself to 1 question. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by for a moment while we compile the Q&A roster. Your first call comes from the line of David Karnovsky with J.P. Morgan. Your line is open. Please go ahead.

Hi. Thanks. John, just when we look at the organic growth to date, in particular for media, it is a strong improvement from where Omnicom was operating pre-IPG. Just given the changes in the portfolio, do you see room to sustain at these levels on a go-forward basis? For Phil, your core margin to date I think is 17%. Historically, IPG would post stronger margins in Q4, and you do have the benefit of more fully realizing synergies from here. Just wanted to see if there was any view you would be willing to provide on how to think about the full-year core margin. Thank you.

Our connected capabilities, which include media, CRM, advertising, continue to be a very strong offering in the marketplace, and we fully expect that to continue into 2027 as we finish this year. What our organic revenue growth will be for next year, we are not prepared to forecast just yet, but everything has come together pretty well, and our expectations are to stay at a marketing leader position in terms of organic growth going forward.

As far as margins go, David, I think we grew our margins about 200 basis points in Q3. For the 9-month period, margins were up 210 basis points. Although we always say we are focused on growing EBITA dollars, which we are, and the margins take care of themselves, I think you should expect something similar. We will certainly going to be striving to grow margins a little bit more in Q4, but I would expect something similar in Q4 and the full year will be an add them up, which given we are at 210 basis points through 9 months, it is going to be in that zone, is what I would say our current expectation is. There is certainly the usual situation in Q4 in terms of where we sit today. We don't have a lot of visibility into project spend at this point, but that certainly we would expect is going to be helpful. We just don't have full visibility to it today.

Phil, just to that last point on visibility into project work, just how much does that kind of factor into your kind of implied organic for Q4, which is a bit of a detail, or are there kind of other factors that maybe helped in 2Q, 3Q that are a part of that as well?

We certainly think it's a conservative estimate, which is consistent with how we've always approached this process, especially for Q4. I think depending where we come out with project spend, while we're not we're certainly, the global macro seems to be fine at the moment, even though there's some headwinds, or a lot of press anyway and noise related to the Middle East. But certainly we expect it to benefit us in the fourth quarter. We just don't have enough visibility to kind of commit to by how much that benefit is going to help us.

David, you've been covering us a long time, and as long as I remember, as we come into the fourth quarter, there's always a couple of hundred million dollars worth of spend that as clients look to see what's left in their budgets, they either release it, or if they're looking to report more revenue or more net income themselves, sometimes they don't. We have confidence that we've been saying the same thing for the last 20 years, and probably of that, only 1 or 2 years that excess didn't come through. But as Phil just said, we prefer to be conservative in our estimates, because it helps keep everything else in line.

Yeah, in terms of how we manage the cost base. It isn't anything inconsistent with how we've approached it in the past.

Thank you.

Your next question comes from the line of Adam Berlin with Goldman Sachs. Your line is open. Please go ahead.

Yeah. Hi, good evening. It's Adam Berlin from Goldman Sachs. A couple of questions. The first one is just during the call, I think Ad Age have reported that you've won the Coke North America account. Congratulations on that. Just any comments, particularly given that you also work with Pepsi on creative. Can you keep both? Any conflicts around that, or should we assume that you benefit from the Coke win and also continue to work with Pepsi as you are at the moment? That's the first question. Second question is, can you just give us an update for 2026 at 9 months, how much of the $900 million of the synergies is already in the numbers up to the 9 months? That would be very helpful. Thank you.

In terms of Coke, we're deferring any comments we want to make about Coke to the client for them to handle as they come to a decision after the process. Any business we win from Coke would be incremental to our existing revenue and our existing relationship because the decision that was made earlier in this third quarter. We're very bullish about where we are and how we're winning business as it comes available, and we feel really good about the company at the moment.

As far as the second question, Adam, we continue to track where we expected to be, which is where we're on track to achieve the $900 million in cost reduction synergies. We also, as we had indicated, expect to deliver 75%-85% of that to the bottom line as we go through the year, and we're certainly on pace with where we expected to be when we started out the year. There's a lot of moving parts in the business in terms of how that's going to play through or flow through with the rest of the growth and investments we're making. But we're certainly on track through the first 9 months, and we don't have any reason to believe anything other than we will achieve the goal when we get to the end of the year, and then we'll certainly start or continue to focus on what comes next in 2027. A number of those efforts with respect to additional synergies in 2027 have been put in place and it's just a matter of timing as to when those improvements come through.

Okay. Thank you.

Thank you.

Your next question comes from the line of Jason Bazinet with Citigroup. Your line is unmuting. Just a few seconds. Go ahead.

Thanks. Can I just ask 1 question about the revenues from the assets that you are holding for sale? I think on the last call, you expected about $300 million, and then in the fourth quarter, you anticipated about $225 million. If I am reading these slides right, I think it was over $400 million is still there in the third quarter. Can you just give us an updated number for the fourth quarter?

Sure. You are right, the number in Q3 coming from businesses that we had not disposed of, either as of 9/30 or we disposed of during the quarter, during the third quarter, came through at about $412 million, which is higher than our estimate. It is, as we have said before, quite difficult to estimate the timing of when these deals are going to close. We are certainly, we believe, on track for getting the vast majority, and we anticipate all of the transactions that we had anticipated disposing, the sales and dispositions done by the end of the year. It is possible, as I said in my prepared remarks, that could go into early 2027 when they actually officially close.

Sure.

We updated the estimate for the fourth quarter. At this point, we expect about $325 million of revenue from the deals that haven't been completed in Q4.

Great.

Again, it's difficult to know when to estimate when the deal's going to get signed. That is the update for Q4.

Probably the point we want to leave with you is that we submit substantially through that effort, and we're down to a handful of organizations that we're in the process of talking to potential buyers.

Yeah. We've got some bankers involved and certainly good progress at this point. But until they're done, they're not done. And we continue to push to get the deals done and we can't wait until they're completed.

Right.

We want to get back into acquisition mode. And we have been entertaining some discussions with potential targets that would help the future of the business and the future growth of the business. But the sooner we can get the dispositions behind us, the better. I think investors and analysts certainly would agree and that's what we endeavor to do.

No, that's great. Thank you.

Thank you.

Your next question comes from the line of Steven Cahall from Wells Fargo. Your line is open. Please go ahead.

Thank you. So kind of a two-parter. Was wondering if you could talk about the biggest sources of acceleration and growth. Just looking at percentage of revenue, it looks like it is probably in the integrated media division. I would love to know, is that driven by wins? Is that driven by expansion of businesses and just the complexity in the media world? Then, related, if we back some of the synergies out of the incremental EBITA you are seeing at core, it looks like the margin on revenue growth is pretty low. Is that because the media business is a little lower margin when you started off? Is that because you are reinvesting in more? Just help us kind of understand, ex synergies, what the margins are looking like on revenue growth. Thank you.

Okay. You want to take part of it?

Yeah. I will do the synergies part. I think similar to what I said previously, Steve, there is a bunch of factors that are contributing to the improvement in EBITA dollar growth and certainly, a key part of that is the revenue growth that we have achieved through the first 9 months. There is also, as I had said before, we are tracking to achieve the synergies that we expected to achieve to get the costs out of the business and we are certainly balancing the timing of when those synergies are being achieved and the timing of the investments that we are making in the underlying business, especially our technology platforms, including the Omni platform and our agentic AI capabilities that we have been investing in over the last, since the deal closed. We are very happy with all that progress. It's kind of accelerated in terms of us getting to where we need to get to sooner and quicker, and we believe we're in a much better place today than we were back in December when we closed the transaction. All that is in the impact of, or the drivers of what's impacting our increased EBITA growth, and we're certainly satisfied with 9 months of growth at 5.8% organic. EBITA dollar growth of $553 million, 210 basis points of EBIT on margin improvement, and 21% EPS growth. While I know everybody wants to do their mathematical calculations related to the $900 million, we're managing the business overall, and we're pleased with the overall results.

What I would add to that is we're very happy with the 200 basis point improvement in our EBIT, and we feel very encouraged to invest money over and above that improvement in our business and the ongoing efforts of what we're doing in platforms, and making us more attractive to potential clients. Not doing the math the same way you just might have suggested you're doing it, and I don't think that would help you get an accurate view going forward of what you can expect from us. We're going to hold those margins where they are now, or aspire to, and actually grow our business and our organic growth at the same time, while making some very significant investments, especially in our AI work and our platforms, which we think will contribute to our ongoing growth. I'm actually trying to explain what you can expect from us, which I think is all positive. It just doesn't follow that math.

That's helpful. Is media the place that we're seeing that investment come through in growth?

Yes, I think so. The 2 areas that I point out for the quarter was the consistent growth in media, which has been true throughout the entire year, and we were benefited by the World Cup, and somewhat by the midterm elections in the third quarter, contributed to our overall reported organic growth. Next year, we won't have that, but next year, we'll be looking forward to the 2028 Olympics. It's a little hard to get too far in front of ourselves.

Thank you.

You're welcome.

Thank you.

Your next question comes from the line of Sean Diffley with Morgan Stanley. Your line is open. Please go ahead.

Great. Thanks very much, team. I was hoping you could discuss pitch activity now, how aggressive the pitches are, any concessions on pricing we should be thinking about. Obviously, this Coke news would be helpful, but you've also spoken about some disappointment on the Pepsi loss. Just what is the pitch activity like? How aggressive are your competitors? Is the first question. Then the second, maybe this AWS deal, just talk about what exactly that looks like. Can that be incremental to numbers? What are you guys bringing to the table? Obviously, Amazon, a really good partner. Thanks so much.

Great.

Forgot your first question.

Oh, pitches.

Price.

The pitch activity is about the same as it typically is, and it's pretty healthy, and we're winning more than our fair share. Not all the names are household names like Pepsi or Coke, but we're making real progress, and I think as we come to the end of the year and you see our results compared to our competitors, we're in a very positive place. I would say that there's more opportunity for business we're not defending as we look forward, where if winning it would be a net gain to our operating position. I think whatever accounts wanted to go into review, for the most part have in the first 9 months of this year. We've cleared that, and we're now looking to a brighter future in terms of pitch activity.

Certainly, the investments we spoke about earlier on the call are a big part of our actual win rate in pitches to date post this transaction, and we are quite comfortable that those are the right investments to make, that will only help us accelerate that good performance in pitches going forward.

If Paolo's with us, you might want to add to what investments we're making to the platform and what we're doing.

Sure. With respect to the AWS question, Sean, it absolutely is meant to drive joint growth for our partnership. As you know, we're a big AWS partner, and this is really leveraging our technology consulting capabilities and implementation skills to drive more cloud-based AI solutions that are AWS-centric. It is something that we've been doing already for many of our clients, but this is establishing a more dedicated unit that's going to focus on driving that growth.

Thank you.

Your next question comes from the line of Julien Roch with Barclays. Your line is open. Please go ahead.

Yes. Good evening, everybody. Thank you for taking my question, and congratulations on Coke North America. Phil, thank you very much, or Greg, for slide 33, which allows us to know core and disposition last year. On that slide, you are talking about $890 million of disposition revenue in Q4 last year, which gets you to $3.527 billion, but you just upgraded or increased the disposition to $3.6 billion. Will we get $73 million of disposition in 2027? That is my first question. The second question is, outside of the 2026 disposition running into 2027, can we expect no more disposition next year and the disappearance of core and disposition, and we get clean numbers? That is my second question. Then the third one is, using again slide 33, your core EBITA last year was $3.490 billion, so $3.5 billion. At the Barclays September Media and Telecom conference, Phil, you said that the way to think about 2026 EBITA should be 2025 plus the $75 million-$80 million of synergies, so about $4.2 billion. Is that still the right way to think about 2026 EBITA? Thank you.

All right. Stay on the line because I think I am going to need you to clarify a couple of things. There was an awful lot there, Julien.

Sure.

With respect to 2027 and 2027 in reporting when it comes to core and disposition, certainly the goal is for us not to need to continue to split the numbers in that way. We are confident we are going to get through the dispositions by the end of the year, as we said. Certainly, we are on track to do that, and we expect to do that by the end of the year or very early in January. We can put the core and dispositions and asset held for sale reporting behind us. That is certainly the goal. We will keep you updated if anything changes, but that is the expectation. As far as the reference to the $3.6 billion of annualized revenue. On the last call, the estimate we gave was 35-36, so we are at the higher end of that range. And I think if I understand you right, when you add up the dispositions and held for sale Q1 to Q4, which we now kind of laid out for 2025, that number is a little bit less than 3.6. That is just the timing of.

That is correct.

There were a couple of added dispositions in terms of the annual revenue so that people could get an idea of what the annual revenue was. The 36 and the 35 something does not mean there is going to be additional disposition revenue in 2027. It is just a timing issue. There were a couple businesses that we added in Q2 to the disposition list, which led to a difference in the annualized revenue from our first estimate. That really is not an important point. It is roughly a similar number and similar to the estimate we gave last time. We do not think anything changed in any material way. Then the third part of your question, I think you just need to walk me through again, so that I can respond to it.

Using page 33 again, the slide, we now calculate that core EBITA last year was $3,490. So let us call that $3.5 billion, right? So that is 2025 core EBITA of $3.5 billion. And at our September conference, you said that the way to think about 2026 EBITA would be to take 2025 EBITA plus 75%-80% of the synergies. So if I take 75% or 80% of the synergies added to that $3.5 billion, then you get about $4.2 billion of core EBITA for 2026. I wanted to know whether that was the right way to think about it still.

I think the answer is yes, but I will just add to that. When we look at the overall expectations for 2026 for the year, as we said earlier on the call, and as we have said previous to this, we have achieved about 200-210 basis points improvement over the prior year through 9 months. Pretty consistent through the quarters. And that is our expectation for the year, including the math on the synergies, including incremental contributions from the business itself and the growth, and including the investments we are making in our platforms and in our people and talent and everything else that is going on so that we can better prepare the company for sustained long-term growth. We are certainly satisfied with the progress to date. That is what we expect. I think if you just isolate the synergies in and of themselves, you get close to the number you just described. But the 210 basis points or so of margin improvement and EBITA growth in total is ultimately what we are focused on. That is going to be a number with a lot of different things in it. Timing impacts that. Investments impact that. Ultimately, I think the answer is yes to your question, but it is all in there. It is not just a simple static planning spreadsheet that we use. The operations have a lot of different moving parts, and that is what we ultimately expect the result to be.

That is very clear. 200-210 basis point of margin improvement. Thank you very much, Phil.

Thank you.

Thank you.

Your next question comes from the line of Michael Nathanson with MoffettNathanson. Your line is open. Please go ahead.

Thanks. I just have a quick one for Phil Angelastro. Trying to understand the acquisition strategy year to date. Looks like you spent $303 million on page 20 on acquisitions. What type of acquisitions were those? In the revenue contribution line, you are showing a very small contribution from M&A. Help me understand, what are you buying and what is being reflected in the revenue contribution line, if that is possible?

Sure. I think I touched on this in the prepared remarks, but to expand on it a little bit. In the cash flow that is in the investor presentation, on that line, there are basically 3 things. One of them is traditional acquisitions. That number is very small, as I have said. It is just a small acquisition. Nothing really to speak of in terms of cash or even revenue and EBITA contribution. We do expect and have started to get back into acquisition mode, and we will get back into acquisition mode. The primary focus to date has been completing the dispositions. A very small traditional acquisition number. We have also got some earn-out payments that are in that number, as we always historically do. There are still a few outstanding earn-outs. Some of those payments that are on the acquisition line relate to earn-outs. In addition to that, probably the biggest component of the spend has been an increase in spend on acquiring minority interests, which is part of our integration plan from the beginning, because as we make some of the changes we have made globally, outside the U.S. especially, we have integrated operations. As part of that we bought out some minority interests so that we could merge and integrate the businesses and operate more efficiently market by market. Most of the spend in the acquisition category through 9 months relates to acquisitions of additional minority interests. That is certainly where the numbers are coming from. There really is not a lot of activity in terms of traditional M&A that is contributing to revenue and EBITA growth so far through the first 9 months.

Right. Probably the biggest number in there is we topped up our ownership of what was Interpublic's Middle East operations, where they owned 51%, we repurchased the other 49%.

Yeah. That was the single biggest spend number.

That's why the revenues don't change because you were consolidating it anyway, so it's just owning 100%.

Correct.

That's correct.

That's correct. Yeah.

Yeah. We would expect minority interest contribution to be reduced going forward, except to the extent that there are a few businesses that still have some minority ownership in them. If they grow, the minority interest expense will grow accordingly.

Okay. Thanks, guys.

Thank you.

You are welcome.

Your next question comes from the line of Tim Nollen with SSR. Your line is open. Please go ahead.

Hi. Thanks for taking the question. It's a question probably for you, John. Maybe Paolo could weigh in as well. It's a bigger picture question. Thinking of how clients have always leaned on the ad agency groups like Omnicom to manage complexity in the marketplace, and it's probably a more complex world than ever now. In this agentic AI era as the walled gardens and even some independent ad tech companies are building out end-to-end platforms, I'm just wondering how does a scaled hold co like Omnicom fit in? How is its role changing in this environment? You've referenced AI several times on this call. I'm just curious how you view your role in this much broader, more complex ad market is evolving.

Sure. I think we're central to it in terms of the platform that we're building out, in terms of the ease with both Omnicom employees and employees of the client can come together on a platform and execute certain statements of work and achievements. I will defer actually to Paolo, who is living those improvements every day. He's with us, so.

Yeah, so I think ultimately what we do is we orchestrate that complexity on behalf of our clients. What Omni are. Our platform, our marketing intelligence platform does, is perform that orchestration and helps facilitate the work that our people are actually delivering for our clients every day. When you think about agentic and why it becomes so important, because implementing these tasks through AI, through the lens of AI, and making sure that we're doing it in the most efficient and effective way, that is ultimately what we're doing to simplify the entire marketing life cycle.

I guess it's fair to say, looking at your growth rates, you're seeing a lot of opportunity here. You're even seeing opportunities to gain share versus the opportunities that you used to have. Things are even changing to your benefit in the market. Is that fair?

That is fair. Our client base allows us to do that, and our resources and cash flow allow us to make those investments.

Okay. Thank you.

Your next question comes from the line of Craig Huber with Huber Research Partners. Your line is open. Please go ahead. Craig, your line is open. Please go ahead. Your next question.

Maybe we'll go to the next question operator.

Yep. Your next question comes from the line of Adrien de Saint Hilaire from Bank of America. Your line is open. Please go ahead.

Hello. Good evening, John, Phil, Greg. I've got a couple of questions, if you don't mind. First of all, John, can you perhaps talk about the recent changes that have taken place at some of your creative agencies? I think there were some changes at the Omnicom advertising group level, maybe also at the individual agency level. Would you expect that comes with any disruption perhaps? Then maybe secondly, just, sorry, Phil, to come back on that Q4 base that you gave us. I'm just a little confused because if we look at Q4 2024, it would seem like the base for the combined business was about $1.3 billion. I'm not quite sure how you get to 1161 as you indicate in that slide 33. Thank you.

Sure. In terms of the advertising agency changes in personnel, there has been some during the quarter for sure. One is Troy Ruhanen, who was running it, has elected for personal reasons to retire. We had in place Andrew Robertson, who had previously run BBDO and was currently the Chairman of BBDO, to take his place. It was a very well-executed handover, for an unexpected job opening. Yes, there was a little bit of change below that level in terms of people electing to leave. All of it's behind us. We digested it very easily. We're just moving forward at a very rapid pace with not losing a step of anything we had planned to do from the time we finished the planning for the combination of the companies. I say this everywhere, so I believe it to be true. There's no one key individual in this company that the company revolves solely around. Everybody is replaceable, and we anticipate and have succession plans for all of our key positions throughout the company. When something like that happens, we're able to react to it very smoothly, and that's what's occurred in the advertising group.

When we put together the I'll jump to the next, the second question. When we put together the combined numbers, at the time we didn't have combined numbers for Q4 to provide because the IPG transaction only closed on December 1, 2025. We didn't have a fourth quarter to present at that time. The next best thing was the fourth quarter of 2024, which at this point is kind of dated. It's 2 years ago. An awful lot has changed and did change, between Q4 of 2024 and now in Q4 of 2024 and Q4 of 2025. The numbers that are included in the back of the deck were to provide analysts and investors with some more appropriate set of numbers related to 2025. The 2025 numbers that are in there reflect the full year of Omnicom, which includes one month of IPG post closing date, so the month of December. It also includes the month of October and November from IPG's books and records, which at the time, they had closed the third quarter, and shortly thereafter we got approval to close the deal. That took us through the end of November, and it was kind of an an uncertain time. Those are IPG's results. There was a lot of uncertainty and preparation for the transaction and the integration to begin on December 1. Year-on-year, they were a little bit different than the Q4 numbers. We think those Q4 2025 numbers that we included in the back of the deck, are more representative of the business performance for Q4. We wanted to get them out so that everybody had them in advance, rather than using them and providing them when we close the year in February of 2027. That is why we included them in the back.

Yep. That is much appreciated, Phil. Thank you.

Sure. Thank you.

This concludes today's call. Thank you for attending. You may now disconnect.