Omnicom reported organic revenue growth of 3.4% in the second quarter, down from the 5.2% it reported for the first quarter.  

Organic growth (which excludes M&A activity and currency fluctuations) for the first half was 4.3%. The company issued Q2 results after the close of trading this afternoon.  

Company shares slid 5% in after-hours trading as it missed consensus revenue forecasts by analysts.  

Still, the company slightly upgraded its minimum organic growth guidance for the year to 3.5% from the previous 3%. CEO John Wren told analysts on a Tuesday afternoon earnings call that the firm “remains optimistic about the second half of the year,” while keeping in mind concerns about the macroeconomic picture.  

Organic growth in the U.S. slipped to 2.4% in Q2, versus 5.1% in the first quarter, due in part to cutbacks among technology and telecom clients that struggled during the period. In other regions growth was: 7.5% for Asia Pacific, 2.6% for Europe, 8.4% for North America (outside the U.S.), 2.5% for the UK, 6.9% for Latin America, and 4.0% for the Middle East & Africa. 

Wren said Q2 results were “in line with expectations” internally, and that he was generally pleased with the firm’s performance for the first half of the year. 

Total revenue in Q2 was up 1.2% to $3.6 billion and revenue for the first six months was up about 1% to $7 billion.  

Wren reviewed some of the generative AI investments the company announced at Cannes last month, saying they will sharply boost productivity and help its teams generate insights far more quickly for clients. Those insights will translate to quicker campaign work and increased growth. He stressed that the firm sees generative AI as a tool that is only as good as the talent that is utilizing it. “It’s not a replacement for people or creativity,” he insisted.  

Organic growth by discipline in the second quarter was: 5.1% for Advertising & Media, 9.2% for Experiential, 3.0% for Healthcare, 2.3% for Precision Marketing, 2.4% for Commerce & Brand Consulting, and 0.1% for Public Relations.  

The company noted that in the first quarter it realigned the classification of certain services primarily within its Commerce & Brand Consulting, Execution & Support, and Experiential disciplines, and revenue by discipline amounts for prior periods were revised to reflect the current alignment. 

Asked about the tone of business, Wren replied that throughout the year clients have sought “flexibility” in the event that the economy takes a turn for the worse. Many clients held back dollars in the upfront, Wren noted, adding that they feel comfortable that inventory will be available when they need it in a non-election year.  

As to the Hollywood strikes that could impact TV, Wren said the company “is able to create audiences in other ways,” and that Omnicom remains media “agnostic.”