Imax at Bank of America Conference: Strategic Insights and Growth Plans

On Wednesday, 03 September 2025, Imax Corporation (NYSE:IMAX) participated in the Bank of America 2025 Media, Communications & Entertainment Conference. CEO Rich Gelfond highlighted Imax’s robust performance and strategic initiatives amid industry challenges. The company is leveraging its unique position in the theatrical industry to drive growth, despite a downturn in North American exhibitors. Meanwhile, Publicis’s discussion centered on AI integration and business trends, underscoring a positive outlook.

Key Takeaways

• Imax projects $1.2 billion in box office revenue for the year.
• Significant demand for Imax screens is driving content and strategic release planning.
• Publicis is leveraging AI for business growth and margin expansion.
• Both companies are optimistic about future growth and innovation.

Financial Results

Imax is guiding towards $1.2 billion in box office revenue for the year, reflecting a strong performance despite challenges. Quarter-to-date box office revenue stands at approximately $270 million, up 40% year-over-year, although slightly below the consensus of $286 million. North American exhibitors, however, have seen a 14% decline in box office revenue quarter-to-date.

Operational Updates

Imax’s global programming strategy and premium experiences are key drivers of its success. One-third of the company’s box office revenue year-to-date comes from foreign language films, with "Demon Slayer" marking a record in Japan. The company plans to release the film in 40 other countries. Imax’s market share has increased by 40% compared to pre-pandemic levels, with recent films achieving over 20% of the box office on just 1% of screens.

Future Outlook

Looking ahead, Imax is expanding its "Film for IMAX" program with 11 films committed for 2026. Studios are now planning release schedules around Imax screen availability, with Disney heavily investing in the Imax brand. The company is also exploring hybrid theatrical and streaming releases, partnering with streamers like Netflix. AI is being utilized to enhance business systems and programming decisions, with real-time theater monitoring to optimize performance. Imax aims to penetrate 50% of its total addressable market, with a focus on local language box office growth.

Publicis Overview

Publicis CEO Arthur Sadoun expressed confidence in the company’s performance, highlighting successful new business acquisitions and client retention. AI integration is a central theme, with Publicis leveraging AI to enhance creative and connected media services. The company has invested €300 million in AI, contributing to high single-digit growth and a 300 basis point margin increase. Publicis’s M&A strategy focuses on acquiring capabilities that complement its existing business, with no interest in large-scale consolidations.

Q&A Highlights

During the Q&A session, Gelfond emphasized the competitive landscape for blockbuster slots, with streamers now vying for these prime positions alongside studios. Sadoun highlighted the importance of providing the best model to existing clients, stressing the potential for AI to create winners and losers across industries.

In conclusion, for a deeper dive into the discussions and strategic insights shared, please refer to the full transcript.

Full transcript - Bank of America 2025 Media, Communications & Entertainment Conference:

Jessica, Conference Host: Welcome to our thirty second annual media and telecom conference. We’re thrilled to start the day with Rich Gelfond, CEO of IMAX, and Rich has a lot to talk about today. So you’ve clearly managed your business extremely well in what is only can only be described as a very challenging box office environment post pandemic. What impact has your global programming strategy had on your business?

Rich Gelfond, CEO, IMAX: A really significant impact, Jessica. As a matter of fact, if you look at the theatrical industry in general, and particularly North American box office, it’s having a very challenging year. For IMAX, this will be a record year, and we’ve guided to $1,200,000,000 in box office revenue. And, you know, we’re tracking very well against that number. As a matter of fact, the only reason I’m gonna reveal this is because online at the end of every month, we post our box office.

We’re gonna post it today. So quarter to date, we’re at about $270,000,000, and consensus is $2.86, and we have a month to go. So while others in theatrical have kinda been, you know, negative and saying the box office is terrible, Not to go too overboard with it, but quarter to date, we’re up 40% from last year. And the North American exhibitors in North with their box office is down 14% quarter to date. So we’re just in a completely different business, and we’ve been saying that for years.

And this is last year, I guess, the first year investors, you know, really understood that much more, and our stock has been, you know, on a tear, and we’re close to a five year high and, you know, on a consistent basis. But, you know, who cares about that? What I care about is how the business is doing, and it reflects very much reality. So some of the key points, I’m sure we’ll get into this, is we’ve really pivoted where we do not just North American movies, but global content. So one third of our box office year to date is foreign language film.

We’re doing a film now called Demon Slayer in which is a Japanese film, and it be has already become the biggest film in Japan in the history of IMAX. I don’t remember the exactly the number offhand, but we’re releasing it in 40 other countries. And, you know, this movie will do really high numbers for us, and I bet most people here never even heard of the movie. And I think one of the bigger issues with Hollywood is that they have a mantra, which is streaming, streaming, streaming, and they’ve been just so focused on streaming. So pre pandemic, Hollywood’s market share was 80% of content.

Last year, it was 60%. So if I were running a company, you know, I think I’d have a lot to answer for losing 40% market share over that period of time, but everybody seems to be doubling down on streaming. Whereas the only ones I can think of are IMAX and Netflix that have really been looking globally for box office, and it’s been really

Jessica, Conference Host: I thought I was gonna say that you sound like the Netflix of of theatrical, you know? So you take a lot of local content, and it translates.

Rich Gelfond, CEO, IMAX: Yeah, and it’s not just in the country it plays in. Demon Slayer’s a good example, because we’re showing that in 40 other countries. And then just briefly, we also do alternative content. So in the last week or two, we’ve done a dead re release of a film, a dead live concert from Golden Gate Park. We have Prince playing right now.

You know, later in the year, we have the Stones. So we all you know, we program it like almost like someone who owned a box would program it. We did League of Legends in China, the final, and it sold out in a 160 theaters pretty quick. So we have a totally different view. We think we know we have a platform, and we’re 90 countries, and it’s just in a different business.

Jessica, Conference Host: Right. And we will get back to some of those the comments that you made. But in world where premium or demand for premium is so great, how do you think about the positioning of IMAX in the overall landscape?

Rich Gelfond, CEO, IMAX: Well, I think your point about premium applies beyond theatrical. So if you look at sporting events, things like F one or Formula one, or you look at concerts. Know, public post pandemic seems to really be seeking out premium experiences, and we have competitors. Their biggest similarity is they have an x in the name, and that, you know, that that’s how they compete with us. But the public really wants premium experiences, and they’re willing to pay extra for them.

And, you know, our market share has gone up consistently. We we have a 40% higher market share than we had pre pandemic. And one of my favorite statistics is in indexing in The United States in our fifty plus year history. Before this year, we had five films where we did over 20% of the box office on 1% of the screens. In the last three months, we’ve had three films that have done over 20% of the box office on 1% of the screens.

And when you look at the demand, because part of your question was, how do you sustain that? You know, the ecosystem really gets the numbers. So the studios are really leaning in. The directors are certainly leaning in. And what we do is we have a film for IMAX program, where we use IMAX cameras, both film and digital, to capture images.

And for 02/1926, we already have 11 films committed, which is about the number we had for all of this year, and ’27, ’28, we even have films for ’29. So I think it’s become like a virtuous cycle where I talked to one director last week who called me up to talk about the next few films he was making. And he said, well, I need dates for ’27 and ’28. And he said, we gotta talk about it now cause I’m not gonna release the film if it’s not released in IMAX.

Jessica, Conference Host: Wow. So on that that topic, films for IMAX films, I think you’ve more than doubled the number of titles this year since from in in the past year or almost doubled. Can you talk a little bit about how you’re able to drive studios and filmmakers to use the technology in production?

Rich Gelfond, CEO, IMAX: Yeah. As a matter of fact, I I like to think about how much content we put through the network, and this year we’ll have a 130 separate piece of content. So that includes Hollywood films or local language films or alternative, all that. You know, we don’t have to push it through. There’s a demand.

So this anecdote I was telling you about the filmmaker, I mean, he called me last week on vacation to make sure Right. That he gets these dates. You know, there are projects out to ’28, ’29 where the filmmakers are driving it and the studios are driving it. And, you know, one of our most difficult nuts to crack, not surprisingly, historically was the Walt Disney company because, you know, they’re so their brand is so strong and they lean into their brand. But they observed that IMAX was doing all this over indexing.

So really, it started on their own. They said, we wanna lean in heavily to the IMAX brand, and they do it, you know, really way in advance. So Avatar is the end of this year. We already, with them, have a great brand campaign center, obviously, around Jim Cameron and the movie, but IMAX is a really big part of it. So it’s it’s much more their ability to read the financial results, and then, you know, they’re coming to us.

Right. So what is the typical difference in how these films perform, the films in IMAX versus, call

Jessica, Conference Host: it a regular film. Don’t know.

Rich Gelfond, CEO, IMAX: Well, in IMAX, you know, we used to be about 10% of the domestic box office for kind of a blockbuster, sort of like a Marvel film or, you know, another kind of action film. But this year we’re doing 15% on those kinds of films. So if you’re dating a blockbuster film, it it kinda sounds hard for me to believe even though I’m saying it, is a lot of the studios plan their release schedule around the availability of IMAX screens. And, you know, a lot of behind the scenes trading takes place where a studio is saying, I’m gonna release a film on this date, but we’re booked with someone else, and they they move the date. There were two films dated on the same date, Predator from Disney and Running Man from Paramount, you know, this year.

And, you know, that we were gonna share screens for both of them, but they worked it out, so they moved the dates. So now we have a full week to play predator and a full week to play running man. So, you know, it it’s kind of ironic because all this is very much in the background, but where we play a strong role in curating how these films fall together. Like, it’s not an accident that a lot of blockbusters aren’t dated on the same date because the studios really want an IMAX release.

Jessica, Conference Host: And do you envision a point in time where most or all of your films across your network are filmed for IMAX?

Rich Gelfond, CEO, IMAX: I don’t think so, Jessica. And reason is we like to do special films. So obviously, coming up in ’26, one of the most special is The Odyssey that Chris Nolan is doing. And, you know, Chris approached us, I don’t know, a year and a half ago, to say, could I have 07/17/2026? And we usually don’t make this big a commitment, but we committed three weeks to him to do that.

And increasingly, that’s very much what happens. So in ’26, we’re playing the new Star Wars, the Mandalorian film. We locked that down, I don’t know, six months, eight months ago. If you think of the real avatar we locked up a long time ago, so the studios and the filmmakers recognize the incremental box office. And also, know, this kind of sounds weird, especially at a financial conference because you would think, you know, it’s all about the money, but for the filmmakers, it’s about more than the money.

It’s about painting on the biggest canvas on the planet, and it’s the way they want their movie shown and the way they wanna do it. So when they work with us and they have really good financial results, and we’ve done tests where you ask how much the audience likes a film after they’ve seen it in IMAX, and you ask how much they like the film seeing in a regular theater. And, you know, by the way, it’s we we don’t they’re separate groups, you ask, but you get a much higher like score. So it actually it makes the film better for the audience. And going back to one of your earlier points, especially at a time where people are leaning into premium, and especially coming off a time when they got a little tired of watching everything on the couch, you know, taking all kinds of breaks, and their kids coming in and out.

You know, this has become a much more popular way to watch movies, and the filmmakers really know that.

Jessica, Conference Host: Right. So there’s a lot going on. We’ve kind of alluded to streaming, going to talk about streaming a little bit already. But this this let’s so I’m gonna go back to that. There’s there’s just so much going on in theatrical production and distribution even with the streamers.

So you have Amazon, MGM with coming releases, Mercy, and also Project Hail Mary. Apple released, form f one. Netflix, k pop, Demon Hunters went from streaming to theaters. You know, so so now with the streamers coming to theaters, could you talk about the implications for this on your business and theatrical overall?

Rich Gelfond, CEO, IMAX: Well, first at a very high level, you know, what drives IMAX are these slots that we have. So even though I said there’s a 130 pieces of content, you know, the main blockbuster slots, I don’t know, there are 15 of them that drive a lot of the box office during the year, and you have the studios competing for those slots. Well, now, you have the streamers competing for those slots. So if there were five people competing for these slots, you now have eight because you have Apple, and you have Amazon, and you have Netflix. So like in any business, having a stable supply but more demand, I mean, that’s a really good thing for your business in the most simple terms.

And we made a particular push into streamers. A lot of people are have treated streaming or theatrical as like a religion. You know, I’ll never show something streamed, or I’ll never take my product and put it in the theater. But we have a much more pragmatic view, and I really think we’re gonna succeed at it, is the new model is it’s gonna be some kind of hybrid. And, you know, we figured out that we wanna be part of that hybrid.

So couple very quick examples. In in f one, which was produced by Jerry Bruckheimer and Joe Kaczynski directed it, both of whom did Top Gun, and they did Top Gun with IMAX where we were really successful. A year or two before they started the movie, they came to see us, And they said, you know, tell us what an IMAX date could be, because we haven’t succeeded theatrically, and we wanna lean into theatrical. So we were a part of it. Their distributor was Warner Brothers, but they didn’t hire their distributor until about six months after we reached a deal.

So they did an unconventional route. They didn’t go through a studio. They they went to us, and we’re close to a $100,000,000 in IMAX in f one, and the film has done about 600,000,000 worldwide. So we’re about 15% of the global box office. And, you know, and it it’s a different movie in IMAX.

So I wouldn’t say that about every movie, but if you see it, it’s just a completely different movie. And then, you know, I don’t know. I as you know, I could talk about this for a month, but Narnia is coming out the ’26, and that’s a Netflix film, and everybody knows that Netflix has had kind of a bias against theatrical, and, you know, everybody is fighting with everybody else. So Greta Gerwig is the one who really started it. She felt that she was really making an IMAX movie, and she always wanted to make an IMAX movie, and she she and we came up with a plan where we talked to Netflix.

So in in in ’26, the film is coming out in IMAX a month before it comes out on streaming, and, you know, the agreement we made, which you’ll understand, we didn’t have to do that movie, So we’re not like a theatrical North American exhibitor that needs the content. We have more demand than we have supply. So we were able to drive a deal that worked for IMAX, which is one where we said, okay, we’ll do it, But we want theatrical marketing. We want Greta to do her, you know, her her interviews, real premieres. You’ll see the marketing, which we’re already working on, much of which is gonna say, see it in IMAX and in Netflix, and it’s exclusive to the IMAX network.

So our roughly 1,800 theaters worldwide. So if you’re not in the IMAX business, you’re not showing that movie. So I think that’s a tremendous opportunity, and, you know, we saw this weekend even with the k pop movie that Netflix released that, you know, despite at a high level people fighting, the audience is really happy to see the right movie which you could stream, you know, in a theatrical way. And it’s really worked. And, you know, Netflix can speak for themselves, but at Netflix, I think there are a lot of people, including Ted to some extent, that think this is a good experiment and are looking forward to the results of it.

And I know it’s hard to believe, but we get along really well. We’re working together. And I I do think, you know, the other part of your question had to do with traditional exhibitors. I do think over time, there’s going to be a model where theatrical and streaming work together. I think this weekend was just the beginning of it.

And I do think, not only because of the slots, but because of the filmmakers will be significant beneficiaries of that.

Jessica, Conference Host: No. All things definitely seem to be poise theatrical, even with Netflix, which is a huge change. But there’s there’s also other stuff going on in the industry. It seems like, finally, after years and years of expecting this, that media consolidation is you know, it just seems inevitable. And we’re starting to see the beginning with Paramount and Skydance and, you know, this rampant speculation about Legendary and Lionsgate or Lionsgate and somebody, likely sale of Warner Brothers post the split from Warner WBD.

You know, are there any implications of all of this on your business?

Rich Gelfond, CEO, IMAX: Yes. I think they’re mostly good ones because I think what you do is you bring more capital to studios or entities that are undercapitalized. So Paramount Skydance is a really good example. So David Ellison announced at, I guess, some conference recently that he’s gonna do, I think, 20 blockbuster sorts of films rather than Paramount was doing eight a year just because of the capital constraints they were operating under. And, you know, I don’t remember the number, but we’ve done probably 15 movies or more with Skydance over the years.

We have a great relationship with David and with Jeff, and we’re already discussing, you know, more movies that they could do in IMAX. So that that’s kind of one example. And then your other part about consolidation, another place I would go is like Amazon MGM. So Amazon was very kind of leaning away from theatrical, and then they bought MGM. And, you know, on the list you mentioned Hail Mary and Mercy and a number of other movies, they’re very interested in IMAX release.

And then there’s the numbers. I mean, despite what some people say, you can’t deny the fact that a theatrical release enhances the value of streaming. And in fact, we did a study. I don’t talk that much about it because it’s not the most scientific thing, but I think it directionally is important, where we showed consumers movie posters, and some of them said, see it in IMAX, and some didn’t. And we said, how likely would you be to wanna see this movie in streaming?

And, again, one reason I don’t wanna push it too hard, because it was almost too good to be true, but when you put the IMAX name on the poster, so many more people said they wanna see the streaming version. I think f one is gonna be a great test right now, because Apple really held a fairly long window originally. They made it for streaming. But I think we’re gonna see, you know, great streaming numbers, and I think it’s gonna work for them. And then I think the exhibitors, like we just saw this weekend, are just gonna decide, you know, how is it better for me not to play that content?

I mean, I just think it’s like, you know, kids in a sandbox, but when people kind of get real about what’s best for their business, they’re gonna converge in a way that’s gonna be good for everyone.

Jessica, Conference Host: So maybe moving on to markets outside of The US. I mean, you you generate the majority of your revenue outside of North America. How much more runway is left for growth in in these markets where you still seem somewhat underpenetrated?

Rich Gelfond, CEO, IMAX: So we give out kind of guidance about what the addressable market is. And the last time we did that was three years ago, where we’re gonna have an Investor Day later this year. We’re gonna give out a new a revised version. But we’re about 50% penetrated now of our total addressable market. Even The US, which is one of the most penetrated, we made deals with eight new different chains last year.

In Australia, last year, we had four screens, and the year before, we had two. By the time Avatar opens this year, I think there’ll be 10. So it’s it’s the kind of thing it’s a it’s a very weird dynamic because people say, well, you know, it works in Malaysia and Korea and Japan, but it’s never gonna work in Australia. And then surprise, it works in Australia, and then you have the theater chains compete with each other, and that’s what’s going on now in Australia. So that’s why it’s grown so rapidly.

Another really rapid growth market is Japan, where we’ve had 11 signings so far this year for new theaters, and the most we’ve ever had, I think, is 12. Western Europe is still very under penetrated. Obviously, Middle East is really good growth area for entertainment in general, and for IMAX the disposable income is high, the IMAX ticket premium they could afford it. So that’s a very good market for us. A little ways probably a little farther back is South America.

There are a lot of I hate to use the word at a conference like this, but there are a lot of tariffs coming from South America, and it’s really, you know, hurt our growth in the region because they’re so high, and obviously that world is changing fairly rapidly, so we’ll see what happens there. You know, most of our growth will come outside of North America, by the way, two thirds of our revenues are outside North America now, and before anyone asked the question, the economics are virtually the same, you know, anywhere in the world. So it’s not, you know, it’s not like a subsidized thing. And Formula One, I think, did two thirds of its business outside of North America. So I think, you know, again, for a relatively small company, we’re really global, and I think, you know, that will really sustain our addressable market over the next number of years.

Jessica, Conference Host: I don’t wanna front run your investors, have you said what your network potential is?

Rich Gelfond, CEO, IMAX: We haven’t, and we probably will do that at our Investor Day.

Jessica, Conference Host: Okay. And then Other

Rich Gelfond, CEO, IMAX: than to say it’s about double where it is now, we have So to

Jessica, Conference Host: in the first half of this year, your local language box office is already over 50% higher than in ’24. How do you view local language content evolving as a percentage of your mix?

Rich Gelfond, CEO, IMAX: So if you go back to pre pandemic around ’19, in China, local language did pretty well for us, but that was about it. And I don’t remember the number. I think it was probably 10% of our box office local language. In ’23 and ’24, it was around 20% of our box office. And as I said, this year, we’re about a third right now.

But earlier in the year, as you know, there was a Chinese film called Nezha two, which did over 2,000,000,000 US dollars, mostly in China, but globally. So we were it was 40% of our box office. And so now it’s settled down to around 33, but as I said, Demon Slayer is gonna be a a pretty big movie. You know, I think 40% is a reasonable goal over the next couple years, but it could be a lot more than that. So, you know, a little anecdote that’s right up to date is we had a very good second quarter.

We beat on almost every line, and our stock went down 15%. And the reason was everybody said, oh, August is gonna be a terrible month. Fantastic Four is the last of the blockbuster movies coming out of Hollywood. And, you know, we tried to say, have, you know, Demon Slayer, we have, alternative content, this, that, but investors are very much in this North American mindset, and had they sold off the North American exhibitors, they would have been right, because as I said, they were down 14%. Well, we’re back higher than we were then, because we’re quarter to date up 40.

And I think that’s one of the biggest disconnects is people think of, you know, our business like they think about North American exhibitors, but the local language business is huge. And there’s been a huge change in the local language business in the last couple years, which is that we did very well in the country where the film was from. So if we did a Japanese movie, it did very well in Japan or a Chinese movie in China. But they’ve started to migrate. So a lot of the box office so I don’t remember the name of the movie, but anime is very successful globally.

So some of the anime movies we’ve done give us more box office in China than they give us in Japan, and that’s a trend I definitely see happening. And again, you know, I think eventually it’s an opportunity for Hollywood, but they’re still so obsessed with this streaming narrative, you know, and again, nobody asked my opinion, so they can run their businesses the way they want, but I think that’s an obvious way to go, and I think you’ll see more of that.

Jessica, Conference Host: Right. How do you think about allocating capital across regions? Do you see opportunity here in The US, China, or, you know, is the rest

Rich Gelfond, CEO, IMAX: of the world more interesting? Well, we have two models for our theaters. One is where we sell our equipment, and one is where we do joint ventures. And just a high level version of our model, when you blend it all, in addition to upfront payments for our systems, we get around 18% of the box office. So if somebody buys a ticket, we get paid by the studio, and we get paid by the exhibitor.

We get paid more if it’s a joint venture, because obviously we’ve gotten less money up front, whereas if it that’s called a sales type lease. So we’ve been a little bit cautious about our capital, so a bad story probably, but one not so bad for us, is we had 60 theaters in Russia, which are all closed now, but we didn’t joint venture any of them. We sold them, so we got cash up front. So when that happened, it didn’t really have a dramatic effect on us. So Jess, it really depends, you know, very much on the territory.

So in China, we used to do more joint ventures, but we’ve cut it back as the global situation has changed a little bit. So I think, you know, since we’re generating more cash, I think you’ll see us allocating more to JVs in the right territories. We did a pretty big deal with AMC this year, and a pretty big deal with Regal, where we did a number of theaters in The US and some foreign markets. So I it it I’d we think about it less by region and more by country. And again, Japan is one we love doing JVs with because their per screen averages are so high.

Again, we get a percentage of the box office, so you’d rather do a joint venture in Japan than you would in India because the box office is so much higher. So I think that’s maybe a better way to think about capital allocation.

Jessica, Conference Host: Okay. And then maybe moving on to to some of the things about content. For years, franchises and superhero films dominated the box office, but more recently they’ve had mixed success best. And we’ve seen some of the original IP do really well. How do you view these dynamics?

Rich Gelfond, CEO, IMAX: So I think it’s good for IMAX because of Warner’s seven movies in a row that, you know, have been number one, every one of them was an IMAX film. So Sinners is a pretty good example. You know, was it it those of you who haven’t seen it, I’m sure you know, it’s basically a vampire story about the Jim Crow South. And, you know, you wouldn’t that doesn’t scream IMAX to you, but Warner Brothers and we both really leaned in to the fact that it was filmed with IMAX film, and it was the first movie after Oppenheimer, which won the Academy Award and did a billion close to a billion dollars, and Odyssey, which is the next one being filmed with IMAX film cameras. And the narrative was auteur filmmaker, filmed with IMAX film, and Ryan Coogler really leaned into that narrative.

So it broke out in the first week. And, obviously, it was a great movie by a great filmmaker. That’s not a formula that works if it’s not a really good filmmaker. But I but I think it kinda says to the public that this is a special movie. It was shot with IMAX film cameras, and I’m sure most people here heard the the anecdote that we we and Universal put tickets on sale for Odyssey a year in advance, and we only put some on for the film ones, and it completely sold out a year in advance.

So that’s kind of the power of the IMAX brand, to have something I mean, no one had seen a trailer. No one you know, Chris Nolan is notoriously secretive about his product, but it’s sold out. And like in New York, I think it’s sold out in one minute. So I think for original IP, it helps us because we can really help distinguish it from other IP. I also think, you know, the the media is way too quick to generalize.

So, yes, superhero movies, you haven’t done quite as well. But if you look like one example, Fantastic Four, this was the best Fantastic Four in the franchise ever. So I think you have to scratch a little below the numbers to see what’s really going on, and you know, who would have thought, you know, that this year you know, horror, I guess that’s another example, like Conjuring opens next week, and it’s tracking extremely well, and Final Destination, which Warner did, you know, did really well, and Sinners did really well. So I think people’s tastes change. Obviously, Westerns used to be a big deal, and they’re not anymore.

So I think the studios are just going to be flexible and understand that they need to go in different directions.

Jessica, Conference Host: Right. And you’ve over the years, you’ve experimented with a lot of different kinds of content. I mean, you mentioned before earlier, the con some of the concerts, Prince and the Rolling Stones, etcetera. You’ve done live events. You’ve done some sporting stuff.

You’ve you’ve just you’ve you have experimented. Could you what’s been successful, how big of an opportunity is this for IMAX?

Rich Gelfond, CEO, IMAX: So as I said, was really surprised by League of Legends. You know, so by the way, we we not only sold out, but at a higher ticket price than the regular IMAX ticket price. But the other thing that was good about it was it brought a completely different audience in, who learned what IMAX was. So they came back presumably to do other things. This recent run of films we just did so we did prints over a couple up a couple of days, a re release, and we did $2,000,000 this weekend on it.

This week prior weekend is a really interesting example. We did about close to $15,000,000 over the weekend, and we did $3,000,000 on a fifty year old movie, Steven Spielberg’s Jaws. I was worried about it because I thought the shark might not look so good six stories high, but apparently it looked okay. And then we did the Prince movie. We we brought back Formula one, which still has playtime in it and did well.

There were three or four local language movies together. By the way, as a way to give you context, this year was really a rapid change. We’ve been building to this year, and IMAX was on a great trajectory until the pandemic came, and then obviously the pandemic affected us. And last year was ’24 was our best domestic box office ever, so it’s not like this is overnight, but it but it’s been happening, you know, over time in this way. And we shifted our focus a little bit to how to program these theaters a little bit better than just, you know, blockbuster films coming out that weekend.

We have a different philosophy about doing it. So our original budget for this weekend was $4,400,000, our internal budget, and we did 15. So I’m using that as an example of just how much our business has changed, and the way we’re managing it has changed.

Jessica, Conference Host: My diversified portfolio. So given the strength I have to ask this question because everyone has to ask an AI question. But, I mean, given the strength of your brand, the reputation as the most premium offering with leading technology, what are the opportunities and the challenges of AI for IMAX? Dan, just maybe talk a little

Rich Gelfond, CEO, IMAX: bit about how you’re currently integrating AI in the business, and how you think that might even change over time. So the, you know, the most obvious example, which we’re doing, is just how to make our business systems better. So whether it’s how to make programming decisions by getting more data and analyzing more deeply how things play, you’d kind of be surprised, or maybe you wouldn’t be, by how dated a lot of the analytics are. You know, well, we’re playing a film that’s kind of similar to Mission Impossible two, so it’ll do the same as Mission Impossible two. But you could use AI tools to be a lot more sophisticated than that, you know, and we’re doing that.

We monitor every IMAX theater in the world in real time. So whether you’re in Shanghai or you’re in Saint Louis, when you go to an IMAX theater, we know how whether the bulb is getting old. We know whether the sound is loud enough. I know a lot of people think, I’m a wow. It’s a brand.

How exciting. Use your brand. But but it it it’s the brand is the sum of the parts. The brand isn’t something that exists outside. But we get tons of real time data, and we’re trying to figure out ways to better capture that data, and could we control our inventory better by understanding something’s going to break two months from now, so, you know, save costs.

We’re obviously using it the way a lot of other companies are in the finance area, finance marketing, and then we’re using it in the image enhancement area to some extent. But remember, we don’t only film with our cameras, but we take other content and we blow it up, and obviously Jaws would be one example. It wasn’t filmed last week. And there are a lot of tools out there that help you, you know, clean it up. Again, as I said, I was really personally afraid of what that shark would look like, but there are a lot of tools available that can make it better.

And then, of course, there’s a whole question of the software aspect, and what it does to filmmaking. And, you know, I know there’s a lot of controversy over what role it’s going to play, and I would say, you know, we’re trying to invent new applications, but we’re we’re we pay close attention to it, and where it’s going, and how it’s going to change filmmaking. And, actually, was on the set of The Mandalorian, the new Star Wars movie that Jon Favreau is using, and by the way, it’s not AI. But the way they have new tools that can help film an IMAX version at the same time you can film a regular theatrical version is completely different than you could have done years ago. For those of you who don’t know, we have a different aspect ratio, So IMAX is much more vertical than the letterbox and horizontal.

So you would take one version and you would blow it up, or you wouldn’t. And Favreau and the Disney team invented a tool, ironically, they’ll talk more about this, using the Vision Pro, where at the same time, he could shoot an IMAX version to a different aspect ratio, and shoot a regular version. So these kinds of tools for filmmakers, whether they’re strictly AI or they’re more coming out of the innovation that’s coming out, I think will help us further differentiate our content.

Jessica, Conference Host: Okay. So in the less than a minute we have left, I just wanted I have to ask the question. But as you look out over the next twelve months, or, you know, through the twenty sixth, what are you most excited about? You know, what do you think the surprise will be?

Rich Gelfond, CEO, IMAX: So those are two different questions. Are we excited about, what what could the surprise be? So you can’t not be excited about Odyssey. It’s the first film ever shot completely with IMAX cameras, and we, you know, we spent a fair amount of money, and we developed a new generation of cameras, which has a lot more features, and is much more flexible, and, you know, the principal photography is is pretty much done, and as you know, the cast is like a red carpet in itself, and, you know, Chris’ track record in Emma is obviously quite enviable. So, you know, very excited about that.

For this year, excited about Avatar. I’ve seen, I don’t know, twenty minutes of the footage, and, you know, I think it’s dumb to bet against Jim Cameron. I think he guy knows what he’s doing, and extremely excited about that. And then, again, next year, the new Star Wars movie coming out, really excited about. And then surprise ones, I’m trying to think about that.

This year my pick was Formula One, and I think it was the surprise of this year. Know, I’m just not going to go out there, Jess, because I hate to as you know, I like saying whatever I think, whatever the consequences, but I just think it’s a little too early to say what it’s going to be, but there are a lot of kind of original content, and again, I’m not naming these, but one of them, like Amazon MGM is doing Hail Mary, which has gotten a lot of positive views around it. And I think, you know, Disney always comes up. Like, this year was Lilo and Stitch. They always have things that you haven’t thought about it before, and how could you bet against Warner with the winning streak they’re on right now?

And I’ve looked at some of the Paramount stuff coming. So I’m quite sure there will be, but it’s too early to identify them.

Jessica, Conference Host: Right. With that, we’re like totally out of time, but thank you so much.

Rich Gelfond, CEO, IMAX: Okay. Thank you.

Arthur Sadoun, Publicis: Okay. Good.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Right. Okay. Well, good morning, everyone. My name is Adrian de Saint Hilaire. I work at Bank of America.

I’ve got the great pleasure of leading our European Media Research department, and it is my great pleasure to be welcoming Arthur Sadoun.

Arthur Sadoun, Publicis: The pleasure is mine.

Rich Gelfond, CEO, IMAX: You, Arthur.

Arthur Sadoun, Publicis: Great to see you guys.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: I think it’s the first time you come to this event, we’re very, very pleased to We’ve have you got Arthur for about forty minutes, And if you don’t mind, maybe, Arthur, we can kick off with some questions of mine. Maybe what I suggest As

Arthur Sadoun, Publicis: long as we don’t talk about current trading I’m kidding. I’m kidding. I’m kidding. I’m kidding. Let’s keep

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: the current trading questions just start off with, and then we can broaden out maybe to the to the term longer term discussion if that’s that’s okay with you.

Arthur Sadoun, Publicis: To whatever he wants.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Fantastic. So talking about trading and and current business trends. So at your last results, you’ve slightly raised your full year guidance. It still implied that H2 would be a bit slower than H1. I think you said that your guidance would assume that there would be some outcuts maybe sometimes later in the year.

So where do we stand on that?

Arthur Sadoun, Publicis: I think we can fairly say that we had a good summer. Summer has been good. What we have experienced is first, the the marketing cuts that we have discussed in q two did not happen, did not matter so far, which is a good sign. Second, it’s very interesting to see that we have more AI project at Sapiens every day. So don’t get me wrong.

It’s still the strategic phase, which is not where there is material impact on the revenue, but we can see a cadence. And by the way, although it’s it has been a very busy first part of the year in new business, we have continued to win over the summer. So when when you add all of these, actually you look at the underlying business between h one and h two, there is no deceleration. There is a comparable that is tougher, that you need to take into consideration, but the business still on the same pace, and we have to be a bit cautious because we just have the first month of the second half. But we feel very confident that the five now is very solid, to make a long story short.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Yep. That’s that’s very clear.

Arthur Sadoun, Publicis: It’s good. No?

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: That’s I think that’s a great information. Can you perhaps talk about the the pitching activity of lates? Because you’ve been very, very successful into the the first part of the year. I I think you also touched on the fact that maybe pitches could be a bit a bit lower in terms of intensity in the second half.

Arthur Sadoun, Publicis: We we think I mean, again, h one has been historically high for us. We won, I guess, 70% of the pitches and 100% of the big one. By the way, I just have to say that Once for All, which is the big one we won in h one, won’t have impact before next year. So we won’t see any impact for the moment, but it has been an amazing time. And I think it has been at the crossroad of two things, which is best model, best people, best tech, basically, on one side.

And second, a single focus on our client while some of our competitors are pretty busy doing other things at the moment, so that was awesome. But this historically high track record, I don’t know if it’s going to replicate in h two. What I do know is that we have a good momentum at the moment, but it’s I would say the the pitch rate is closer from what we have experienced in last year than what we have experienced in h one this year, which was again a very particular situation. So no real slowdown on new business, and again, some wins, some that are public, some that are not, but feeling good about that.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: And just so that we tackle any potential downside risk, is there any major account that you’re currently defending and that, you know, there could be a risk of of maybe a loss at some point?

Arthur Sadoun, Publicis: At the moment, we are talking. No. But we are in a business where I could have a call in my phone that has been charging at the moment that will change what I’m telling you. What is sure is that if you look at twelve months, there is there there could not be any impact of big losses that will come onto our numbers because I would have to receive a call when I leave that would tell me that maybe there will be a pitch, then I will have to pitch, then I will have to lose, then I will have to transition. So this would take twelve months before we see that.

But I thank you for asking the question because I think that that what the market is not understanding enough, at least, is that where I think we are doing a great job is not in new business, and we are number one by far as you know. It’s in client retention. Mhmm. It’s funny because if you look at h two last year, some of our competitors have major wins. Okay?

And some of you, by the way, started to think there is a revival here. And then you look at the number this year, and you don’t see you don’t see the number, the the the wins. Basically for two reasons, maybe they have given away too much, which we don’t do. We don’t buy market share. And this is why, by the way, there are some pitches and talking about big pitches, there are some pitches last year that we didn’t take for this reason.

So that’s the one. And second, because they are losing. And and if you ask me, what keeps me awake at night is not to win a new client, even though we are winning more than anyone else, is to make sure that we bring to our existing client the best model. And I guess if I was an investor, this is what I would look first, which is are we doing what is right for our current clients so much so that they don’t even want to go and see outside if it means something for them.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Yeah. Understood.

Arthur Sadoun, Publicis: But I think we build on that data.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: No doubt. Maybe if I can touch on one part of the business which hasn’t exactly perhaps lived up to to expectations or maybe that’s been a little disappointing, let’s say, it’s it’s Sapiens. Q two was actually better from your perspective. Is that the start of a proper recovery? Or are you seeing still seeing things touch and go here?

Arthur Sadoun, Publicis: I mean, first of all, this kind of wait and see attitude that has been described by all of our competitors on Sapient, which are basically the Accenture and Capgemini of the world, is still here. I mean, clients, and I guess you see that over everywhere, are kind of reluctant to spend a big CapEx. Everyone is excited about the promise of AI, but before you move again from the strategic phase to the implementation phase, there is a lot of money that needs to be spent and we still see that. Now, I mean, I wanna be again careful, but what we are seeing at the moment is pretty encouraging. We are seeing, as I said, more AI project going through.

Mhmm. We believe that q one was definitely the bottom of the swimming pool, which is a good thing. Sorry, that’s a French expression. I don’t know if you say that in English, but he understands. So that’s the lowest we could go for sure.

And if you ask me, what we see at the moment because of the reason of the momentum coming back slowly, we see a q three that will improve versus h one. Mhmm. So it gives you an indication. Again, we are one month into the quarter. It’s project based.

I mean, need to remember that Sapient is roughly 15% of our revenue. So whether you have a new project that starts earlier, it has an impact. But I won’t tell you that I’m ecstatic about what I see. I think that with the capabilities we have, it should already been growing double digit as it did in the past. But we are seeing slowly, and hopefully my competitors will see the same and stay the same, we are seeing that project.

Now, I was telling you, you know, we’re we’re having our comics at the moment in New York, so I left it to come with you, is, I mean, I should thank Maurice Levy every day for having both twelve years ago and a tech consulting that is gonna be able to do true AI integration for all of our clients. Because what Singh is absolutely certain is that we can talk hours about the potential of AI, and I can show you a super UX of what we can do with production, blah blah blah blah blah blah blah. If our clients do not build all of this AI machine on the right tech foundation, it will never work. It will be built on sand, and we are in a unique position with Sapient to help every of our client truly transform their marketing. And if you add to that the fact that Sapient is a business that doesn’t do outsourcing.

So what is going to be disrupted is, of course, this kind of heavy headcount business in transformation. We don’t have this part. We just have AI engineer that can bring our clients through new products into the AI transformation. We are fit in terms of structure for what AI can do for our clients, and we are at the heart of all of our clients speaking about transformation with our Sapient people. So I have never felt so confident about the power of of Sapient Mhmm.

As long as clients realize that they now have to move from architecting what they need to do to putting the money and doing it, which, again, I don’t want to be too optimistic and things have changed again during the last days, I think clients start to stabilize. Because if you look at where they are today, they they just have two main concern. Concern number one is how I’m gonna deal with the tariff, how I’m gonna deal with the macro situation in the and and how I’m gonna deal with my own industry that is being disturbed. So that’s one thing. And on the other side, we have is AI an empowerment or a challenge for me?

And we are in a unique place because of the trust, because of our capabilities, because of our model, because of our people to actually help them with that. So I want to stay very cautious on how fast Sapiens can take over. Not take over, take take off. But what is certain is we will see an improvement in q three versus h one, for sure. We feel better about the number of projects.

We feel super confident when we look at what we can bring and the structure we’ve got, and then we have to work.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Interesting. And and actually, very often times, I think people refer to Epsilon as being a key success factor in pitchers, but maybe not so sapient. Is sapient something that is being used in in day to day pitching?

Arthur Sadoun, Publicis: Funny It’s you said that because it’s exactly I I shouldn’t share that. I hope there is no competition on the line, but I think that one of the big reason why we’ve been winning in media for so many years is we’ve been saying, look, it’s great to have scale in media. We have it as competitors. It’s great to have access to a wealth of data through the platform. We have it as competitors.

But what we have on the top of that is Epsilon with identity that allow you to anchor all the source of data you have into a single persona and connect this persona not only with the media, with the content, and measure it, if you wanna make a long story short. That was the pitch. That was prior to AI. Yep. Because now that you have AI, you can do two things.

First, you can superpower what we do with Epsilon. A good example of that is what we do with Influencer. But second, and that’s your point, it’s not enough to have the data, and we are leading on that. It’s not enough to have the capabilities, and we are leading on that. You need the tech expert that will build the tech foundation.

And that’s another area where the we are the only one to have it end to end, I would say with Accenture. Mhmm. But Accenture doesn’t do the lead. That’s it. But for the moment, maybe it’s a change.

I was

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: gonna say maybe that’s a question that I will be asking potentially a bit

Arthur Sadoun, Publicis: That will be fun.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: A bit later. Okay. Can we can we maybe switch gears bit and and move to another activity of Publicis, which is doing actually very well, but generally speaking, has been perceived as at risk from AI disruption, which is the creative part of your business. I think you mentioned that it grew high single digit organic in the second quarter. What’s the driver behind this?

Because the common view in general is that AI is leading to price deflation, fee pressure, etcetera, etcetera. So how are you able to drive that high single digit?

Arthur Sadoun, Publicis: If you don’t mind, I’m going to take a step back Because the the the question that is behind your question, if again I read what I’ve read in terms of reports, and by the way, how I’ve seen the stock reacted in the in the last quarters, is there is a common thought that there will be industry that will be AI winner and other that will be AI loser. Mhmm. I think this is completely wrong. Yep. I think you will be AI winner and AI loser in every industry.

Mhmm. And it’s not that I think. You just have to look around. I mean, services, you already start to see who’s going to be the AI winner. Tech start to I mean, tech companies that you sold would be thriving forever are starting to have problems, and other that were maybe more in the midst are doing well.

So the the question is, are we winning or are we losing with AI? That’s the big question.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Yep.

Arthur Sadoun, Publicis: And it’s going to be true for every industry. And I think that when you look at the marketing services, what you need to take out, and I’m going to come back to your point, what you need to take out of our result in H1 is that we are clearly winning with AI. I’m not saying we want to be an AI winner, it’s too early to say. But today, we are winning with AI. How do you think we get 500 basis points of gap with our competition on growth and 300 basis points on margin if it’s not by our ability to take what we were doing well and beating competition and accelerate it through AI.

Why do you think we are winning all of our media pitches? Maybe you remember two years ago we launched Core Okay? That was based on the 12,000,000,000 we invested in data and technology. 100% of our win, and 100% of why the we win is because we put CoreAI at the center of our media platform. Why are we growing almost double digits on creative when the rest of the industry is down?

AI production platform, growing double digit, representing a third of our of our creative. I mean, what is very interesting for people to know here is that creative for us is only 25%. Yep. And out of this 25%, 8% is production, which means that we are exposed to storytelling, which is definitely the place where there will be the most disruption, only by 17%. Yep.

It’s a third of our competition. Yep. Yep. Which means that and so to come back to your question, the reason why we are winning is twofold, I I production platform and our ability to win market share. And to be clear, no one so far has seen the impact of AI on their storytelling business.

If there is decline somewhere else, it’s because they are losing market share. It doesn’t mean that it’s not coming. Yep. And this is why we feel good about the 18, that we will have to reboot like everyone else. But that’s and so I can go on and on on the reason why we are winning with AI.

Another one, for example, is when you look at M and A. Yep. I mean, spent 2,000,000,000, they are growing 20% on average at the moment. Why are they growing way more than they were growing before acquisition? Simply because thanks to AI, we’ve been able to connect them to our data.

So it’s particularly true for creative because this is where you see the biggest gap, but AI is helping us to win, and it is what is in our number, and it’s particularly true for our creative business.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Great. And maybe a bit of a, if I may say, sensitive question, which is

Arthur Sadoun, Publicis: I love sensitive questions. Tough questions and sensitive questions, very nice.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Since Publicis and all the agencies are people based business, that’s why it’s maybe a bit sensitive. But do you see that there is an opportunity around further margin expansion, thanks to AI implementation in the

Arthur Sadoun, Publicis: fourth quarter? Course. Of course. The question is how much are we going to have to invest before it delivers the savings? And that’s true for everyone, by It’s a if you ask me, and we have I mean, there is a reason why we have actually increased our margin despite all the investment we have made this year, because we are basically the only one who still need to pay bonuses

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Yep.

Arthur Sadoun, Publicis: And raise our people Yep. Which is why we’re winning also. We have spent 300,000,000 of OpEx into our AI. I’m not even talking about what we spend in terms of m and a. We have a huge cost of onboarding and winning new business because this is a cost.

And despite all of that, we’re growing 18% plus, a bit more than 18%, which is again 300% more. Because we have already automated many things in the last two years since we launched Core I, and we’re going to continue to do that. But what we experience is for $1 of saving, there is in year one basically 80¢ of investment. Yep. On year one.

But that’s come back to the point I was making before about our clients. We have too many clients at the moment, they’re not not ready to spend this €0.8 on year one, although they can amortize it to get the $1 of savings a year after. That’s what we are expecting now to move forward.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Interesting. Again, switching gears to the last part of the business, the biggest in fact, the Connected Media part, which is growing high single digit. Loads of questions that I can ask on that. Oftentimes, hear from investors that they don’t know or they’re unsure about the sustainability of the model. Yeah.

The fact that you integrate scale and data, for example. So what would you say on that?

Arthur Sadoun, Publicis: I mean, we have been outperforming for six years, the market, pretty significantly. I’ve got a news for you, which is in 2026, we’re going to still outperform. That’s done already. So I don’t know what I should do or say to convene. And by the way, we are winning all the pitches and we are we have a retention rate of 100%.

I don’t know what I should do or say to convince them. Now, if I want to give you a bit of granularity on that, I actually think that the connecting media we have created is going to even accelerate it with the rise of AI. And I’m going tell you why. It’s a very simple model. It’s to say, which is a big difference with WPP, but we’re I guess we are aligned now with Omnicom.

Omnicom for a while, I mean John was saying we don’t need the data.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Yep.

Arthur Sadoun, Publicis: You may remember that time. Everyone changes mind one day, which is great. And so I think both of us are aligned now, and by the way there might be a reason why we’re winning, both of us, is that at the end of the day, the future of marketing lies into identity. And I’m sorry to be here, is that and I guess you asked a very good question the other day on the call it’s the only way for our client to be successful is to make sure that they can engage directly with their customer at an individual level. It was true four years ago for a car, and all car manufacturers realized that, that it was a big money item.

It is true also for pet care today. If you have a cat, you want to be able to talk to the cat owner not only to make sure that you know what kind of product, but also to make sure that you can go to the vet. This is how it works. Or it’s true if you eat chocolate. I know everyone has a mouse, but now you need to go directly to a customer.

Why do you need that? Because this comes back to your point, which is you need identity to basically do three things. First, to be able to recognize not only your customer but your prospect. And for many of our clients, they don’t have direct access to prospects. So they need to start building their audience on those two.

The second thing is to make sure, to come back to your point, that you can connect the full media ecosystem. And the reason why there is still growth for the year to come is that we have actually increased considerably our addressable market. Yesterday we were media buyers, today we help our clients connect their full media ecosystem from publishers to CRM, to commerce, to again influencers, which again increase our base of what we can do for our clients and increase what we do for our clients. This is why we’re growing so fast. And where AI makes a big difference is that as AI is only data connecting to data, three years ago I was not able to connect 5,000,000 influencers into a single platform and truly understand what are the followers of those 5,000,000 influencers that could be useful for my pet food company.

Okay? Now I can. And I can do it at an individual level. And so to come back to your question, and I’ll finish with my last point, what I guess the market is not understanding is the reason why we are still growing at that pace and we will continue to grow, is that every day with connected media we are increasing our addressable market, and every day we are making it more efficient thanks to AI. You know, it’s very interesting.

The last point that you do with identity is measurement mixing. But I think the thing that we are not doing a very good job at at the moment where we really need to progress is that the 12,000,000,000 of investments we have made are actually over leveraged now, thanks to how we can connect it, thanks to AI. And this allows us to empower our clients with what they really need to be AI ready, and more importantly to think in terms of business outcome. Because you will have a lot of tech companies that will come and explain to you that they have the best product, but they can’t talk to their client about the end benefit which is what is this going to bring to my business in terms of saving and in terms of growth? And I’m sorry I’m talking around about that, but I can go on and on on this question.

This is at the end of the day ultimately what clients are expecting from what we bring. And by connecting the entire media ecosystem, we’re able to deliver the business outcome. Sorry. It was a long answer. No.

No.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Sure. Super interesting. And I and I wanna stick to that topic for a minute because in June, there were some announcements just before the CanLiance from Meta that they would launch during 2026 some tools that would allow advertisers to create their own ads, even buy their own ads and do the things that people perceive to be done by agencies. I know that Meta clarified later on that this was more aimed at SMEs than large corporations. But what would be take on that, and do you see that as a threat to your business?

Arthur Sadoun, Publicis: I’m going to make a short answer and a long answer. The short answer is Meta is a bit less than 5% of our client spend.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: So

Arthur Sadoun, Publicis: thinking that our clients I’m not talking about SMO and SMEs. Thinking that our client can go end to end with one platform Yep. Makes no sense. Okay? But I think there is something that is bigger beyond that, and maybe I’ll spend a minute on that.

Maybe it’s interesting for the audience. If it’s not, you say like this, and I will stop immediately. You know, it’s how can I say that? Because I’m being careful with the words now because I like to be provocative. I’m a mad guy, but sometimes my provocation doesn’t help my stock price, so I’m being careful.

I think we should never forget that at the core of who we are, we are a service business. And we are today a service business that is by far the most advanced when it comes to AI. But we are still a service business. And the reason why we’ve been successful in the last eight years is because we always say to our clients, don’t choose us if you’re looking for a media agency or a creative partner or go where you get a better price going somewhere else. By the way, they will increase their margin for you, so just do it.

But if you are looking for true transformation, we are the right partner for you. And this is the reason why we’ve been winning, is because we’ve been telling our clients the world is changing. If you want a transformation partner, we’re here for you. If you want a media agency, go to competition. Okay?

And this has been increasing through time. Why? Because again, clients want more transformation and AI is helping and this is why we’re winning. Where we feel very confident, and I will say incredibly excited actually, is that the world is getting more complex every day. The number of LLM, agentic network, system I mean, the the palette of possibility you have to be AI empowered as a client is just massive.

And our role here, which I think is a fantastic white space, is to be the one that truly connects all of this great technology. We will never compete with Meta or Google or Nootropic on spending hundreds of billions to get the best product. We’re going to let them race, but we’re going to make sure that whatever they create, thanks to our tech infrastructure that we can create for our clients, thanks to our data and our identity, thanks to agentic AI that we can put on the top of that, and by the way, thanks to our people and expertise, we can actually connect our data, connect our technology, connect their agents to deliver on business outcome. And the reason why we’re winning today is this: it’s because we are the only one who’s having the tech experts, the data, the expert in media and technology, and the AI, through CoreAI, to bring everything together. And so to come back to your question, this was the long answer, Meta is a very important partner for us, and everything they are creating at the moment in time of AI is very useful for us.

But it’s only a tiny bit of the ecosystem our client needs to build. And by the way, and I’ll finish with this, is people are starting to get fired because they come to their board or their comics with a single interpretation of what AI can do in silo. That’s over. Everyone understands now that it’s about connecting end to end all of your AI strategy in order to truly deliver business outcome and not just the nice things that you can show on the webcast. And this is exactly what we do.

We connect all of that.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Okay.

Arthur Sadoun, Publicis: That was long, I know.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Yeah. No. As always, I think very, very interesting and detailed. Sometimes the perception that investors have about agencies that they’re chiefly, I would say, cost plus businesses, maybe one other way to split your revenue would be to look at, like, what is actually driven by business outcomes, as you said. Yeah.

And and what is still driven by, I would say, the traditional legacy part of of agencies. Is that a split that you you ever look at?

Arthur Sadoun, Publicis: Well, there is two questions in your question. First of all, we have a revenue mix that is very different from competition. Again, we have invested $12,000,000,000 in data and technology on one side, we created the Power of One to make sure that they are truly implicated, and so today 60% of our revenue is in connecting media, growing high single digits, 15% is in Sapient, not growing as it should, but coming soon, And only 25% is in creative, with again 8%. And if you look at Sapient, it’s 100% AI, 100%. Media is 80% AI already.

Creative is 30%, which is again the production. So we still have work to do there. But to come back to your question, when it comes to Publicis, when you look at our revenue mix, the legacy business I mean, if I wanna be if I wanna be negative, I will tell you, yes, we still have 18% of legacy business. But that’s it. That’s a reality.

And again, this revenue mix, we are the only one who have it. Now there was another question in your question, which is remuneration. Today, we have two legs. We are paid for our people and we are paid for our technology. And technology is taking over people, we don’t want this to be too much the case because the reason why we are profitable again is because we are a service business.

Because people, clients value what we bring. People understand that it’s not only about giving you a product and do whatever you want with it, it’s about telling to the client, for this you should take this product, for this you should take our product, And we need to put that all together in a safe place, infused by data, delivered by great people, focused on business outcome. That, we don’t want to lose it. And by the way, this is far from disappearing. No.

Yep. I have if you want if you ask me, I get big question about the SaaS business. Yep. Which is, is SaaS going to be disrupted by AI so much that it will disappear? Maybe.

But what we do, at least I would be retired for a long time. Alright.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Maybe another theme in the industry which is resurfacing is M and A and large scale M

Arthur Sadoun, Publicis: and A, obviously. Yes, I’ve seen that already.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: So obviously, we’ve seen the deal between IPG and Omnicom. There’s been some press articles recently about Dansu putting their international business for sale, some speculation about what may happen at WPP or S4 Capital. So what sort of role do you want to play in there? Do you want to participate into that sort of large scale consolidation between agency holdcos or

Arthur Sadoun, Publicis: First of all, the Omnicom IPG merger, acquisition, whatever you want call it, is gonna happen. I know you’re seeing Philippe tonight. This is one of the best things that could happen to our market. Because the problem we’re having at the moment is a perception from our investor that we are in a declining market, which by the way is not the case. It shows that there is first of all way more player than those four Holco, and they are, most of them, growing.

And second, it’s true that at the moment we have two wooden player. Yep. We have WPG on one side that’s I’m confident that now Cindy is gonna come with a plan and make something good. And you have IPG that is moving to Omnicom, and we know that Johnny is doing a great job. So we’re going find ourselves in a position where hopefully, touching wood, we’re to have three strong players taking basically 100% of the big pitches.

So we’re going to reduce drastically the competitive landscape by 25% with players that know that we are here for the long run and we should not do anything stupid. So I feel very good about that. Coming back to your question, think I’ve been very clear so far, but if I need to be again, I will, and by the way, look, reading at the press this morning, maybe I should. We are not interested in consolidating more of the same. And if it was true a year ago, it is even truer today.

I mean, it’s it’s actually not even truer. It’s the gap I mean, I I saw myself saying that exactly a year ago for for good reason because we are not we are not interested in the more of the same for the sake of efficiencies. But one year later, with the speed of what AI is bringing us and the question we should ask ourselves and how we can automate many many things, is definitely not what we are interested in. We are interested, and I know you’re going to come with your share buyback question soon, we are interested in buying capabilities that will continue to make us outperform the market and deliver what we believe is the best shareholder value of this industry by far.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Okay. I’ll reserve the share buyback.

Arthur Sadoun, Publicis: You can.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: But if you’re buying your own capabilities

Arthur Sadoun, Publicis: And by the way, we’re already paying cash. We don’t buy without shares, ever.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Yeah. So so okay. So I think your message on, large cap M and A was Yeah. Yeah. Maybe if we can discuss a bit about the acquisitions that you have completed in the last two years.

So you’ve acquired more data assets, you’ve acquired more assets into Influential Marketing. You touched on the growth that these new, I’d say, units deliver. But what’s been the rationale for spending, I’d say, that much money on those deals? Because from the outside, it seems like the initial multiples seem a bit elevated maybe.

Arthur Sadoun, Publicis: Are you seeing so?

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: No, sir. They seem so, yes. Maybe for the faster It’s

Arthur Sadoun, Publicis: funny you said that because ’23 was a year where multiple were very high, so we didn’t buy anything. We buy like 200,000,000. But I believe that every acquisition we have made in ’24 and and ’25, multiple were pretty reasonable. And but apart from the multiple, our strategy here is very simple. We have made a very painful transformation, and you have seen it on the other side.

Sorry to say it, but we spent 10,000,000,000 in data and technology when you guys were putting me a gun in the head and say you need to do share buyback. My competitor did that and look where they are. K? But it has been extremely painful. So that’s the second thing is we said no silos, no solos, no bozos.

We fired all the bozos and we break down the b and l barrier and truly integrated this data and technology into our media and creative, which means that they are AI proof today. This has been incredibly difficult. And third, and I don’t know if you were in Canada at that time, but we said AI will matter. It was in 2017 and we started playing with AI almost ten years ago now. Thanks to that, we have built a unique model.

And now our obsession is to make sure that we keep growing and keep innovating, to keep leading, thanks to smaller acquisitions that come and complement what we do. And what we are looking at is acquisitions that bring us IPs, technology, people, and that can accelerate our existing business. If they don’t feel and by the way, the right price. If they don’t fit with that, we are not interested. So if you take the last big thing we did, which is all around influencer, I don’t even know where to start there.

It’s it’s it’s the the the excitement and the interest we got from our clients when we told them, if I want to cut a long story short, thanks to the AI platform we have bought and the 15,000,000 influencers we’ve got that we can connect to our identities, we’re able basically to get you the reach of the Superbowler for a tenth of the price, and by the way know exactly to who you talk and can measure that, this is invaluable. And by the way, I’m not even that interested about the fact that we are going to double our acquisition in terms of revenue this year. The impact it’s having on the rest of the business is way more important. We will not win on the pitch we’re winning if we didn’t have that. No.

And I’m obsessed by that. And so to come back to your question, if it’s to add more people that are doing media, more people that are doing creative at a time when, by the way, it’s going to be disruptive, I’m I’m not interested. I’m interested in buying those capabilities in identity resolution, in in intelligent content, in this new kind of media, that by the way can include very traditional things. We have made some acquisitions in sports, where we’re able to take those sports events and link it to influencers and then to commerce. This is amazing.

And that’s the only thing we’re interested in, because again it delivers the growth. And yes, we have been spending money for sure, roughly 2,000,000,000 in two year and a half, I would say. But it’s growing 25% and it makes the rest grow 5%. Because again, you’re going to ask me, are we going to do 4.8 or 5.2? By the end of the day, it’s the same number, it’s 500 basis points more than competition, which is a demonstration that thanks to AI, we actually extract ourselves from the pack.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Understood. I don’t want to end the conversation on share buybacks, so let me ask if you are. So you sound incredibly confident. You’ve shown the numbers.

Arthur Sadoun, Publicis: No. I’m not even no. The the I’m sorry, but I’m cutting you. The good news is we have a track record. Yeah.

Was confident seven years ago, and I didn’t have a track record. Okay? I I mean, I’m very serious. People are like moving away from our results. Now that you have a view of the industry and I’m not only talking about those guys.

I’m talking about the tech industry overall. I’m talking about AI winner and AI loser. If you take thirty minutes to look at the result in the different industry that broadly do marketing services, you will see that we are winning thanks to AI in an incredible way. So it’s not that I’m confident. We have a track record now.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Yes. So I’ll say both. You sound even very confident about the future and you have a strong However, track the share price performance this year has been a bit mixed, let’s say, and the multiple of Publicis has de rated. You generate a lot of cash, you have a very, very strong balance sheet. Would you be open to the idea of actually buying into your own capabilities by doing a share repurchase program?

Arthur Sadoun, Publicis: You know, I think that the reason why the stock went down is because we did a poor job in communicating what we do. I really do. And I’m going to spend more time on that now in the coming weeks because I think there are three reasons. Reason number one, because we wanted to demonstrate to the market that our guidance was bulletproof despite all the difficulties of this world, and by the way, the difficulties of our peers. I think we spent too much time showing all the risk that was baked into what can happen.

I think I would have said H1 is going to be like H2 despite the comparable. This is something that we need to reassure on, and the summer helped a lot because again we feel more confident. I’m coming to your question. The second thing is this marketing. We came just after the WPP warning.

By the way, as you remember, the Omnicom in Q1 also did the same. And and and I think John and I, and Cindy tomorrow, but let’s give her a bit of time, needs to better needs to do a better job to explain that we are in an industry that is growing and creating value. I think as an industry we have a better job to do. Okay? Even though I think we’re extracting ourselves a bit, but I I could put also the CEO of Accenteur or the CEO of I think we have a better job to do.

And the last thing is we definitely did a poor job explaining how much we were winning thanks to AI because we didn’t talk about it basically. Because for me it was assumed where people and so I think people put us in their own bucket. Yep. And but but to come back to your question, the reason why are winning thanks to AI and delivering what is again the best TSR of the industry for the last six years is because we invest. We invest in capabilities.

And when we have the opportunity to invest, do at a reasonable amount of time because we have a cash allocation strategy that I think is very shareholder friendly. 50% of our dividend goes in cash, but of our profit goes in cash and dividends, so that’s not a small thing. We buy back shares to make sure that the share count doesn’t move. As you’ve been following us for a while, these are two massive progress. And I’m not saying that if we don’t find what we are looking for and what stays for Armagh, we won’t do some share buyback, but I don’t want to tell you that this is our priority.

It is not. Our priority is to continue to maximize shareholder value, and we have made a clear demonstration in the last year that we had the right strategy to do that. And believe me, we’re going to continue to do so. And when I look at the perspective of this year and next year, at least for the next twelve months, let’s say, I feel very confident that the kind of bumps we’re having at the moment because of this uncertainty on the macro, because of our industry, and because of this AI win or lose our thing will actually go away and make us come back where we deserve to be.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: So since we have about ninety seconds left, I think I want to finish off on talking about maybe 2026. So you’ve already won a lot of business. Indeed, you mentioned the biggest one, Mars, isn’t impacting 2025, so it will impact 2026. So how much visibility do you have now on 2026?

Arthur Sadoun, Publicis: Visibility is increasing, which is a good news. And it’s increasing for two reasons. First, again, because new business start to materialize. Well, we see how this is going to trend. Second, and again this works for the first h one, is that we don’t have anything very dangerous coming, at least today, maybe tomorrow, but that gives us a bit of time.

And third, we are seeing more AI projects and AI opportunity coming every day. So for all of these reasons, we are very confident, we know that for this seventh consecutive year, we’re going to outperform GDP and RPS. For the rest, we’ll to wait a bit, I guess. But you know, again, and maybe I’ll close with that, it has been extremely painful to be where we are and I think we have been working very hard so we deserve a bit of it, But also we’ve been very lucky because we made some investments particularly in data which again you don’t have AI if you don’t have the data, and in technology that put us today in a position where we can feel very confident about what is coming in terms of technology transformation, raise of AI, and this needs for every of our clients to be AI empowered. We are a solution that can connect all the solution around to truly deliver business outcome.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: I think that’s a great way to conclude.

Arthur Sadoun, Publicis: Merci. Merci.

Adrian de Saint Hilaire, European Media Research department lead, Bank of America: Merci. See you again. Merci.

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