IPG announces Q2 2022 results, with notably slower growth but strong revenues

Interpublic Group Mediabrands (IPG) has today released their Q2 and H1 2022 results, seeing increased revenues but sluggish growth globally.

IPG, which owns Australian agencies UM, Initiative and Magna, posted net revenue of $2.38 billion for Q2 2022, an increase of 4.7% compared to $2.27 billion revenue in Q2 2021. During the quarter, organic net revenue increase was 7.9%, which was comprised of an organic net revenue increase of 8.3% in the U.S. and an increase of 7.1% internationally. Q2 2022 total revenue (including billable expenses of $2.74 billion) increased by 9.0% compared to $2.51 billion in 2021.

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In Q1 2022 however, Interpublic Group (IPG) posted revenue growth of 9.8% year on year, to US$2.23 billion (A$3.14 billion) – meaning revenue growth has still been seen in the second quarter.

Krakowsky’s reluctance to cite global macroeconomic troubles as hindrances to future performance and growth was noted in IPG’s raising of its 2022 growth forecast from 6% to 6.5%.

“Like all companies, as we look ahead we are facing a period of macroeconomic and geopolitical uncertainty, and the limited visibility that comes with such an environment. In April, we upgraded our 2022 organic growth expectation to 6% and given our growth through the first half of the year, we see upside and believe we will exceed 6.5% organic growth for the full year. We continue to expect that we will deliver adjusted EBITA margin of 16.6%,” said IPG CEO Philippe Krakowsky.

In the U.S., which comprises 66% of IPG’s business, organic net revenue increased by 8.3%. International markets grew net revenues 7.1% organically, with the UK up 4.4% and Asia-Pacific increasing 4.8%. China was the only market in Asia to decrease from a year ago, due to the country’s persistent COVID-19 lockdowns.

In an earnings call on Thursday morning, Krakowsky mentioned that IPG’s headcount grew 9% in the second quarter as the holding company has “largely caught up on hiring relative to what 2021 represented,”. He added there is a “modicum of wage inflation inside of our four walls,” but “we see that as manageable.”

“Pressure on labor markets…hasn’t fully abated, but it’s definitely slowing,” he said.

In March this year, Reddit signed a first-of-its-kind partnership with IPG Mediabrands which was set to benefit Mediabrands’ clients and strengthen Reddit’s global advertising business.

IPG shares currently trade at 29.15 USD, with a market capitalisation of 11.48 billion USD.


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