Ipsos (IPS) Q3 2024 earnings summary

Executive summary

• Revenue for the first nine months reached €1,730M, with total growth of 3.3% and organic growth of 2.4%, but Q3 saw a slowdown with revenue at €591M and organic growth nearly flat at -0.1%.

• Growth outside the U.S. was 5.6% for the nine months, with strong performance in EMEA, Latin America, and Ipsos Digital, while the U.S. and parts of Asia underperformed.

• Macroeconomic and political uncertainties, especially in France, the U.K., and Asia, weighed on results.

• New management appointed in the U.S. to address underperformance, with improvements expected in 2025.

• Strong growth observed in advertising, innovation, and Ipsos Digital, with double-digit growth in the Middle East and Latin America.

Financial highlights

• Q3 organic growth was -0.1%, with a positive scope effect (+2.8%) and negative FX effect (-2.2%).

• EMEA contributed 46% of revenue with 4.9% organic growth in Q3 and 6.7% over nine months; Americas declined by -5.9% in Q3 and -2.5% over nine months.

• Ipsos Digital platform grew 32% organically and is twice as profitable as the group average.

• Operating margin for 2024 is expected to be around 13%, supported by improved gross margins.

• Gross margin improved year-over-year, supported by effective cost management.

Outlook and guidance

• Organic growth for the full year is expected to be around 1% due to Q4 slowdown.

• Operating margin guidance confirmed at approximately 13%.

• Management expects recovery in the U.S. and citizen segment later in 2025, post-election cycles.

• Strategic review "Horizons 2030" underway, with new plans to be announced before summer 2025.

• Continued investment in generative AI, digital data collection, and new platforms.