Big Four ad agency WPP managed to significantly increase its earnings per share last year while simultaneously growing revenue.

That’s according to the firm’s recently published preliminary financial report for fiscal 2022. The report also shows that GroupM, one of WPP’s flagship business units, did particularly well last year.

WPP and the other top-earning ad agencies that form the marketing industry’s Big Four group are holding companies. They each own dozens and, in some cases, hundreds of ad agencies that operate under their own brands but share certain backoffice resources.

WPP’s revenue climbed 12.7%, to £14.429 billion, in 2022. The fastest growing of its major business units was GroupM, a New York-based company that manages big brands’ ad spend and grew its sales by 9.1% year-over-year.

“WPP delivered strong growth in 2022, despite the macro challenges, reflecting the priority placed by our clients on investing in communications, customer experience, commerce, data and technology,” commented WPP chief exec Mark Read.

WPP’s earnings per share, a measure of probability, grew at a significantly faster clip than its top line during fiscal 2022.

WPP closed the books on 2022 with headline diluted earnings per share of 98.5 pence, which is 25.5% better than the same time a year ago.

One reason for the profitability jump is a cost-cutting push that WPP’s management team launched a few quarters ago. The company trimmed £375 million off its operating expenses in 2022, more than the  £300 million it had originally planned to save as part of the cost-cutting measure.

WPP has realized savings by consolidating offices, finding creative ways to streamline its procurement processes and rejigging inefficient employee workflows. If everything goes according to WPP’s plan, the firm will have cut £600 billion in annual expenses by 2025.

WPP’s preliminary 2022 earnings report also offers a glimpse at its expected 2023 financial performance. The firm disclosed that it has won net new contracts worth $5.9 billion from brands such as Audible and Verizon.

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