Dentsu makes 14% profit, despite ¥61.5 billion loss; new strategy targets global growth

As per its earnings call, despite a tough quarter that saw the Japanese advertising and PR firm Dentsu Inc.'s stock drop and a hefty statutory net loss of ¥61.5 billion, the advertising giant delivered a strong operational performance in Q3 2025. This resilience was powered by a significant 14.1% increase in underlying operating profit, which soared to ¥111 billion, a clear sign that its cost-cutting and business initiatives are paying off.

The Japanese market proved to be the bedrock of this success, reporting robust 6.8% organic growth. In stark contrast, international markets across the Americas, EMEA, and APAC experienced declines, highlighting the key challenge for the group moving forward. Overall, the company's nine-month organic growth rate landed at a modest 0.3%.

To turn the tide globally, CEO Hiroshi Igarashi is championing the new Media++ strategy. This plan aims to integrate media services with customer experience management (CXM), creative, and data technology, creating a more comprehensive offering for clients. CFO Shigeki Endo emphasised ongoing restructuring and cost reduction efforts, underpinning the company's ambitious target to reach an operating margin of 16-17% by 2027.

While Dentsu's total revenue was slightly down at ¥851.3 billion, its operating margin improved by 170 basis points to 13.0%. The company remains optimistic, upgrading its full-year underlying operating profit guidance to ¥161.2 billion. However, it acknowledges the major risks of international market struggles and the execution required for its new strategy to succeed.