NYSE$IPG

Interpublic Group of Companies Inc · Q2 2023 earnings

Q2 2023 earnings · · Investor relations

Briefing

Interpublic Group's Q2 2023 earnings were discussed, revealing a decrease in organic revenue but strong adjusted EBITA margin.

Interpublic Group reported a decrease in second-quarter revenue before billable expenses by 2.0% with an organic decrease of 1.7%. Despite revenue challenges, the adjusted EBITA margin was 14.2%, and the company is revisiting its full-year organic growth expectation to 1% to 2% while affirming its commitment to a 16.7% margin target.

  • Organic revenue before billable expenses decreased by 1.7% in Q2 2023.
  • Adjusted EBITA margin was 14.2%, surpassing the pre-pandemic Q2 2019 margin.
  • The company is revising its full-year organic growth expectation to 1% to 2%.
  • Diluted earnings per share was $0.68 as reported and $0.74 as adjusted, including a $0.17 benefit from the resolution of federal income tax audits.

Headline financials

Total Revenue

$2.67B

Previous: $2.74B-2.5%
EPS (adj)

$0.74

Previous: $0.63+17.5%
Adjusted EBITA Margin

14.2%

Previous: 15.6%-9.0%
Capital Expenditures

-$46.4M

Previous: -$41.6M-11.5%
Free Cash Flow

-$629M

Previous: -$766M+17.9%
Net Income

$266M

Previous: $230M+15.6%
Operating Income

$311M

Previous: $349M-11.0%
Gross Profit

$389M

Previous: $436M-10.6%
Cash & Equivalents

$1.63B

Previous: $1.98B-17.9%
Total Assets

$17.1B

Previous: $17.2B-0.8%
Stock-Based Comp

$12.8M

Previous: $12.8M+0.0%

Revenue & EPS history

Interpublic Group · Revenue · Quarterly

$2.67B

Q2 2023-2.5%vs Q2 2022
Beat estimate in 15 of 16 quarters(94%)
ActualEstimate

Forward guidance

Interpublic Group is positioned to resume solid organic revenue growth in the range of 3.5% to 4% over the course of the year’s second half. Nonetheless, given our first six months, which in Q2 reflect what we believe is modestly heightened macro uncertainty, we are revisiting our full-year organic growth expectation to 1% to 2%.

Tailwinds

  • Benefit of net new business will be increasingly meaningful.
  • Underlying growth from several of our larger businesses will also strengthen.
  • Strong new business tailwinds.
  • Growth in our existing client base, notably in media and healthcare.
  • Longstanding Open Architecture model, based on collaboration by design and a foundational data and technology infrastructure.

Headwinds

  • Modestly heightened macro uncertainty.
  • Pressure on tech & telco is not abating.
  • The timeline on the digital specialty agencies, given this greater uncertainty, is pushed.
  • Drag from tech, telco and digital.
  • Full run rate for all of those new business wins is not in effect until close to the end of the year

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 15 quarterly earnings reports · overlaid with Q2 2023

Historical avgQ2 2023

+1.0%

Avg return

Earnings day

-1.2%

Avg return

5 days after

-0.8%

Avg return

30 days after

55%

37 / 67 earnings

Positive

+13.6%

Q4 2010

Best reaction

-18.9%

Q2 2011

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q3 2025-2.0%-2.7%
Q2 2025+6.9%+8.5%+10.4%
Q1 2025+4.5%+4.3%+0.2%
Q4 2024-1.4%-0.4%-2.7%
Q3 2024-5.0%-5.4%-7.7%
Q2 2024+1.1%+5.0%+8.3%
Q1 2024+0.5%+1.4%+1.3%
Q4 2023-4.5%-1.6%+0.0%
Q3 2023-1.2%-2.9%+6.3%
Q2 2023-14.0%-13.5%-14.8%
Q1 2023-2.2%-2.5%+3.2%
Q4 2022-2.7%-1.5%-11.5%
Q3 2022+3.6%+7.2%+17.6%
Q2 2022-1.5%-4.1%+0.8%
Q1 2022-4.1%-2.3%-7.0%
Q4 2021-11.4%-8.0%-16.4%
Q3 2021-2.8%
Q2 2021+9.1%
Q1 2021+7.4%
Q4 2020-6.9%
Q3 2020+6.4%
Q2 2020+0.0%
Q1 2020+4.8%
Q4 2019+7.8%
Q3 2019+2.9%
Q2 2019-0.0%
Q1 2019+5.5%
Q4 2018+6.3%
Q3 2018+8.7%
Q2 2018+1.9%
Q1 2018-3.7%
Q4 2017+12.8%
Q3 2017-5.5%
Q2 2017-16.2%
Q1 2017-2.1%
Q4 2016+6.3%
Q3 2016+1.6%
Q2 2016-4.5%
Q1 2016+0.0%
Q4 2015+1.7%
Q3 2015+3.7%
Q2 2015+4.9%
Q1 2015-1.7%
Q4 2014+5.6%
Q3 2014+4.0%
Q2 2014+3.8%
Q1 2014+3.3%
Q4 2013-4.1%
Q3 2013-6.3%
Q2 2013-0.9%
Q1 2013+5.0%
Q4 2012+0.7%
Q3 2012-4.3%
Q2 2012-7.9%
Q1 2012+5.6%
Q4 2011+8.2%
Q3 2011+6.3%
Q2 2011-18.9%
Q1 2010-5.4%
Q1 2011+1.9%
Q4 2010+13.6%
Q4 2008+13.6%
Q3 2009-2.1%
Q3 2010-2.1%
Q2 2010+10.8%
Q4 2009+10.8%
Q2 2009+10.8%

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