NYSE$IPG

Interpublic Group of Companies Inc · Q3 2023 earnings

Q3 2023 earnings · · Investor relations

Briefing

Interpublic Group's Q3 results were impacted by a decrease in client activity in the tech & telecom sector, under-performance of digital specialist agencies, and a cautious tone in the business due to macroeconomic conditions.

Interpublic Group's Q3 revenue results did not meet expectations, with an organic revenue decrease of 0.4% before billable expenses. The company's adjusted EBITA margin was 17.2%, and diluted earnings per share was $0.70 as adjusted. Despite the challenges, the company saw growth in media offerings, healthcare sector, sports & entertainment marketing, and public relations.

  • Organic revenue decreased by 0.4% before billable expenses, impacted by the tech & telecom sector and digital specialist agencies underperformance.
  • Adjusted EBITA margin increased to 17.2%, up from 15.5% a year ago, reflecting effective operating discipline.
  • Diluted earnings per share was $0.70 as adjusted for intangibles amortization and other items.
  • The company anticipates approximately 1% organic revenue growth for the fourth quarter and remains committed to a 16.7% margin for the year.

Headline financials

Total Revenue

$2.68B

Previous: $2.64B+1.5%
EPS (adj)

$0.70

Previous: $0.63+11.1%
Adjusted EBITA Margin

17.2%

Previous: 15.5%+11.0%
Capital Expenditures

-$47.8M

Previous: -$46.2M-3.5%
Free Cash Flow

-$388M

Previous: -$705M+45.0%
Net Income

$244M

Previous: $252M-3.2%
Operating Income

$377M

Previous: $342M+10.2%
Gross Profit

$459M

Previous: $422M+8.9%
Cash & Equivalents

$1.57B

Previous: $1.77B-10.9%
Total Assets

$17B

Previous: $16.9B+0.9%
Stock-Based Comp

$12.1M

Previous: $12.7M-4.7%

Revenue & EPS history

Interpublic Group · Revenue · Quarterly

$2.68B

Q3 2023+1.5%vs Q3 2022
Beat estimate in 15 of 16 quarters(94%)
ActualEstimate

Forward guidance

The company expects organic revenue growth of approximately 1% for the fourth quarter and remains committed to achieving a margin of 16.7% for the year.

Tailwinds

  • New business wins are expected to contribute more significantly in Q4.
  • Healthcare sector is expected to return to its typical rate of revenue growth.
  • Company remains focused on closing the year strongly.
  • Continued commitment to capital returns through share repurchases and consistent dividend growth.
  • Strong financial discipline and a solid balance sheet.

Headwinds

  • Geopolitical situation in the Middle East adds uncertainty to the business.
  • Economic activity in Israel is at a standstill, impacting revenue.
  • Slower conversion of new business than anticipated.
  • Underperformance in identified areas requiring structural solutions.
  • Macro conditions have become more challenging.

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 Q3 2023

Historical avgQ3 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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