Interpublic Group, one of the world’s largest ad agency holding companies, had a strong fourth quarter in 2022 with sales of $2.99 billion.

The firm’s strong quarterly showing pushed its total 2022 revenues above the $10 billion mark for the second year in a row.

Interpublic has been a leading player in the global advertising world for the better part of a century. In the 1960s, the firm was also the first to pioneer the holding company model that is now widely used by the ad sector’s top players.

Interpublic operates as a holding company, which means that it comprises dozens of different  firms that operate under their own separate brands. The three other members of the so-called Big Four group of leading ad firms have a similar business model.

Interpublic has more than 90 agencies that have offices in over 100 countries. They provide digital advertising services, experiential marketing solutions like pop-up stores, PR and a wide variety of related consulting offerings.

The $2.99 billion in revenue that Interpublic brought home during the fourth quarter is an important metric, but not the one investors pay most attention to. Interpublic shareholders are more concerned with the firm’s net revenue, which measures its sales minus billable expenses.

Interpublic’s net revenue was $2.55 million in the fourth quarter, a 3.8% improvement over the fourth quarter of 2021 on an organic basis. Organic in this context means that certain one-time financial factors have been taken out of the  equation to provide a clearer view of business growth.

Interpublic experienced growth in all other regions where it operates. Additionally, the firm improved its adjusted EBITA margin fairly substantially, increasing it from 19.3% to 22.3% in one year.

Interpublic’s fourth quarter earnings call was also significant for another reason. Executives revealed the board of directors has decided to increase the firm’s dividend by 7% and agreed to buy back $350 million in stock, a development that will no doubt be received positively by shareholders. 

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