Organic growth in the combined agency group's core operations reached 7.2%, and adjusted earnings rose 22% to $2.73 a share, beating forecasts. The merger with Interpublic nears its first anniversary.
Omnicom's headline revenue figure is mostly an acquisition. Its growth figure is the more useful number.
Reported revenue was $6.42 billion in the third quarter, up about 59% from a year earlier, because the total now includes Interpublic Group, which Omnicom acquired almost a year ago. That figure also includes $412.1 million from businesses that have been sold or are held for sale.
Strip those out, and the picture is clearer. Revenue from core operations was $6.0 billion, with organic growth, which excludes acquisitions, disposals and currency, of 7.2%. Adjusted earnings before interest, taxes and amortization in the core business were $1.1 billion, a margin of 18.2%.
Adjusted earnings per share rose 22% to $2.73, above the $2.67 analysts expected, according to StockStory. On a reported basis, earnings were $2.38 a share.
Chief Executive John Wren pointed to the benefits of combining with Interpublic as the deal approaches its first anniversary.
Why the organic number matters
Advertising holding companies have faced questions about whether artificial intelligence tools will reduce demand for their creative and media-buying services. Organic growth of 7.2% is a direct answer for this quarter: clients are spending more through Omnicom, not less. For a company of its scale, that is a strong rate.
The margin figure matters for the merger. Cost savings were a central part of the case for buying Interpublic, and margin progress is the first place those savings show up.
The reaction
Omnicom shares rose 2.6% to $82.56 on Thursday, before the report, and were indicated about 2% higher early Friday in thin trading.
What to watch
Omnicom's full-year outlook and an update on merger savings, along with whether organic growth holds as the combined company laps the anniversary of the deal.