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Mint
13 hours ago
- Business
- Mint
The advertising industry parties in Cannes, with AI as its new plus-one
Tech companies like Spotify annually host parties for clients and business partners at the Cannes Lions advertising festival, where attendees are known for letting loose after dark. After several years of small experiments with AI and big anxieties over its impact, advertising executives got with the program at this week's Cannes Lions International Festival of Creativity, the ad industry's annual five-day gathering on the French Riviera. Almost every company that took over a swanky beach club, hosted guests in a villa or bought its staff $5,000 festival passes told an enthusiastic story about artificial intelligence. Raging against the machine was firmly out. Any remaining rank-and-file worries about job losses were mostly voiced far from official events. 'We've moved beyond the promise and the fear to the practical application," said Don McGuire, chief marketing officer at chip maker Qualcomm, adding that the company is saving 2,400 hours a month by using an AI agent-building tool called Writer. 'People are talking about using it in different contexts. It's no longer, 'Well, it could do this, or could do that.' " Two years ago, at the first Cannes Lions since the debut of ChatGPT announced AI's new potential, ad agency Monks co-founder Wesley ter Haar set up in a small apartment. Cassandra-like, he told visitors that AI was about to upend ad creation and employment. Executives at other companies in Cannes that year described their trials with the technology but emphasized that only humans can develop the emotional insights that steer ad campaigns. This time the idea of AI-driven industry transformation was mainstream, even if leaders still expressed confidence about humans' continued role. 'Obviously the world of business, and the world at large, is being profoundly disrupted as we speak, and the impact on jobs is already being felt," said Marisa Thalberg, the chief customer and marketing officer at Catalyst Brands, the company formed by the merger of Brooks Brothers-owner SPARC Group and JCPenney. 'My optimism comes from knowing how much creativity is—and will remain—so fundamentally and uniquely human, even if the ways we harness and express it continue to change." Instagram and Facebook owner Meta Platforms used the festival to unveil a host of new AI-based products designed to help advertisers make ads as quickly and simply as possible, feasibly without the need for an agency. Executives at the company repeatedly said the tools weren't designed to replace agencies, however—just to speed up their work and help smaller businesses that can't afford agencies. Marketers in Cannes even put concerns such as President Trump's trade war and tightening consumer budgets on the back burner in favor of talking about AI. 'I didn't have one single conversation about tariffs," said Yannick Bolloré, the chairman and chief executive officer of French advertising holding company Havas. The guest list-only 'cafe" run by Havas on the grounds of the Mondrian Hotel used AI to turn guests into 3-D characters in a movie using only a photo. The company last year said it would invest 400 million euros, or more than $429 million at the time, in AI development over the course of four years, a commitment similar to those made by rival holding companies. Now Bolloré is asking that his staff refer to AI agents as 'teammates." 'Those agents will be fully part of the Havas family," Bolloré said. 'In terms of employees we will find a lot of efficiencies, but our bet is that we will manage more revenue with the same amount of people." But reality isn't always close at hand during Cannes, a 13,000-person conference where $1,355 magnums of Dom Pérignon are regularly ordered to business tables at lunch, and executives' public displays of affection for AI began to wear thin with some. Lower-ranking attendees darkly joked at post-programming parties that they'd be replaced by their artificial counterparts before the next festival. And research published Monday raised some red flags for agencies, most of which have been racing to build up their AI arsenal. Agency trade association the 4As and consulting firm Forrester found that although 75% of agencies are using the technology—up from 61% last year—75% of those using it are also funding it directly without passing on the costs to clients, up from 41% in 2024. 'That is deeply concerning," said Jay Pattisall, principal analyst at Forrester, who wrote in the report that 'agencies are backsliding into antiquated commercial models that led to the commoditization and lack of transparency associated with marketing services." The strongest pushback to the AI overload at Cannes came from the celebrities and social-media content creators who now flood Cannes along with traditional ad players and tech companies. Actors Josh Duhamel, Reese Witherspoon, JB Smoove and others touted their own creative companies but also made a case for the employment of Hollywood talent in the ad industry. Advertising benefits from emotional connections that actors, directors and scriptwriters know how to provide, Smoove said. 'We're talking about mastering the moment," Smoove said. 'You meet somebody that you haven't seen in years and they tell you a funny joke? AI can't do that."
Yahoo
14-05-2025
- Business
- Yahoo
ADP Q1 Earnings Call: Management Discusses International Bookings, New Products, and CFO Transition
Payroll and HR services provider Automatic Data Processing (NASDAQ:ADP) reported Q1 CY2025 results beating Wall Street's revenue expectations , with sales up 5.7% year on year to $5.55 billion. Its non-GAAP profit of $3.06 per share was 2.9% above analysts' consensus estimates. Is now the time to buy ADP? Find out in our full research report (it's free). Revenue: $5.55 billion vs analyst estimates of $5.51 billion (5.7% year-on-year growth, 0.8% beat) Adjusted EPS: $3.06 vs analyst estimates of $2.97 (2.9% beat) Adjusted EBITDA: $1.76 billion vs analyst estimates of $1.73 billion (31.6% margin, 1.2% beat) Operating Margin: 29.4%, in line with the same quarter last year Free Cash Flow Margin: 25%, similar to the same quarter last year Worksite Employees: 751,000, up 25,000 year on year Market Capitalization: $125.1 billion Automatic Data Processing's first quarter results reflected contributions from new business bookings in its core U.S. payroll and HR offerings, ongoing demand for compliance solutions, and continued growth in its Professional Employer Organization (PEO) segment. CEO Maria Black highlighted that U.S. client retention remained strong and enterprise clients showed increased interest in the Lyric HCM platform, while international bookings softened due to macroeconomic uncertainty, particularly with larger, multi-country deals. Looking ahead, management emphasized the resilience of ADP's business model in uncertain economic environments, citing pipelines that support continued growth across segments. Outgoing CFO Don McGuire noted, "Our business is well insulated," and pointed to the company's ability to adapt hiring and investment plans if macro conditions deteriorate. Management also previewed upcoming Investor Day disclosures on product innovation and reaffirmed a focus on integrating recent acquisitions and scaling embedded payroll partnerships. Management attributed the quarter's operating performance to new business momentum in the U.S., strong client retention, and targeted product investments, while also acknowledging international sales headwinds. Forward-looking commentary focused on continued product integration and new market initiatives. CFO Transition Announced: Don McGuire is retiring as CFO, with Peter Hadley, the current Treasurer, set to assume the CFO role. Management described this as an orderly succession with no change to strategic direction expected. U.S. New Business Bookings: Solid growth in new bookings for small business, mid-market, and enterprise offerings, especially compliance solutions, contributed to revenue expansion. Management highlighted positive feedback from clients and stable pays per control (PPC) growth. International Softness: Bookings in international markets were softer, which management attributed to macroeconomic uncertainty and the lumpy nature of large multi-country deals. However, pipelines remain strong and are expected to support future growth. PEO and Retention Strength: PEO segment revenue benefited from higher average wages and strong client retention. Management emphasized the value of ADP's fully insured PEO model, noting it offered stability in volatile benefits markets. Product and Partner Integration: The integration of Workforce Software with ADP's HCM platforms is progressing, with early wins in enterprise clients. The embedded payroll partnership with Fiserv is on track, with full integration expected to expand addressable markets and drive incremental growth. Management expects near-term performance to be shaped by resilient demand in core U.S. segments and product innovation, while monitoring macroeconomic conditions, particularly in international markets. Margin trends will reflect ongoing investments in integration and technology. Pipeline and Product Innovation: Active pipelines in enterprise and mid-market, along with the rollout of Lyric HCM and generative AI features, are expected to drive bookings and support future revenue growth. Embedded Payroll Initiatives: Expansion of embedded payroll solutions, especially through Fiserv and potential new partners, is positioned to increase distribution and addressable market size, although full revenue impact will depend on the pace of integration. Macroeconomic and Retention Risks: Management cited global macro uncertainty as a risk to international bookings and large enterprise deal closures. However, strong client satisfaction and retention in core segments are expected to partially mitigate these risks. Ramsey El-Assal (Barclays): Asked for more detail on international bookings softness; management attributed it to macro uncertainty and the lumpy nature of large deals but reaffirmed confidence in pipeline strength. Dan Dolev (Mizuho): Questioned whether client concerns were resulting in reduced hiring or simply caution; CFO Don McGuire responded that the client base remained stable, with no major pullback in hiring observed. Mark Marcon (Baird): Inquired about PEO demand and integration of Workforce Software; management reported solid PEO bookings and emphasized early success in integrating Workforce Software with positive client response. Tien-tsin Huang (JPMorgan): Sought clarity on Employer Services revenue trends and PEI Mexico acquisition; management explained Q3's revenue dynamics and noted the PEI deal's local focus with potential for broader Latin American expansion. Ashish Sabadra (RBC): Asked about progress in generative AI deployment; CEO Maria Black highlighted ongoing rollout of ADP Assist and other generative AI tools, describing it as early stage but central to future product strategy. In the coming quarters, StockStory analysts will closely track (1) the pace of international bookings recovery, especially for large, multi-country deals, (2) the rollout and client adoption of the Lyric HCM platform and generative AI features, and (3) the integration and market impact of embedded payroll partnerships like Fiserv. Progress in these areas will be key to evaluating whether ADP can maintain its growth trajectory amid external uncertainties. ADP currently trades at a forward P/E ratio of 29.1×. In the wake of earnings, is it a buy or sell? See for yourself in our free research report. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today. Sign in to access your portfolio
