Hello, welcome to the S4 Capital Q1 2020 trading update. I will shortly be handing you over to Sir Martin Sorrell, who will take you through today's presentation. There will be an opportunity for Q&A later in the call. For now, over to you, Sir Martin.
Thank you very much. Thanks for the introduction. Welcome everybody to our Q1 trading update for 2020. I'm joined by Peter Rademaker, our CFO, Scott Spirit, our Chief Growth Officer, and we thought it would be a good idea for the people that are involved in our operations, Victor Knaap , and Wesley ter Haar from MediaMonks, our content practice, and Pete Kim and Chris Martin from our programmatic and data analytics practice to join us as well to give you a full idea of what's been going on in Q1, and what we think will go on beyond Q1. I should start by saying that, most importantly, most, if not all, of our 2,500 people, a lot of whom I think are on this call this morning, have performed extremely well during this terrible crisis that we've been going through COVID-19.
I want to thank them all for their efforts. Thankfully, we have been actually only marginally affected so far by COVID in terms of COVID-19, in terms of infections, and the implications from those infections and illnesses. I want to say first that we're very thankful for that, and secondly, to call out the efforts of all the frontline workers who've made our lives much more healthy and much safer during this crisis. With that, I just want to make a few outline comments. We've had a reasonably good first quarter in obviously very challenging circumstances for our clients, and our people have responded extremely well by working from home in an extremely effective way. I have to say that that's not something new to us. It's something that we've been used to as digital natives in the industry. This is something we've been used to.
Working from home was not really a wrench or a change, but neither was 24/7 working. We've adapted very strongly to it. I will also add that we're probably a little bit more optimistic than most about the pattern of exit from these lockdowns that we've seen, mandatory lockdowns that we've seen in most jurisdictions. Obviously, Q2 is going to be an extremely difficult quarter for our clients. We expect that Q3, we will see an improvement, a relative improvement, I stress, from Q2 and in Q4. Q3 and Q4, and into 2021. We would tend to be more in the V shape school than the U shape or W or L shape, although there are going to be some sectors, as we'll go into, which will suffer more than others and will take longer to adjust.
For example, IHG and IAG reporting this morning in the travel and hotel industry are probably examples of that. With that, I'll turn over to Peter, who will be dealing with the trading update, to Scott, who will be dealing with the trends, then Victor will take us through what's been happening with our content practice at MediaMonks. Pete Kim will take us through our data and programmatic practice at MightyHive. Scott will then come back to talk about clients and our merger activity, and then I'll come back with the summary and outlook and take the people on the call through Q&A. Firstly, over to you, Peter.
Thank you, Sir Martin. Good morning, ladies and gentlemen. I'll run through the financial performance of the group over the first quarter. What we have seen in the first quarter is a continued strong growth despite the early impact of COVID-19. You may have read it in the press release, but what we've seen is growth percentages in January of 33%, February 21%, and in March of 6%. There you see also the impact of COVID-19 on our financial performance. If I look at Q1 as a whole, the reported revenue was up with 73% to GBP 71 million. Our Q1 reported gross profit was up with 85% to almost GBP 61 million. More importantly, given all the mergers we have done and finalized last year, a more relevant comparison, I would say so, is the like-for-like comparison.
Q1 2020 was up compared to like-for-like constant currency revenues with 17%. On a gross profit basis, our most important measure was up with 19%. Again, like I just said, in relation to the mergers we have done, maybe pro forma on a sort of full basis, including all the acquisitions for the full quarter of 2020, our pro forma revenue was up 19% and our gross profit 22%. All regions contributed, although we have seen impact, of course, in different stages of the quarter in China, in Europe, and in U.S., but all regions have shown strong growth.
Our cash flow, that remains very strong with net cash balances positive on most of the period, and to show you an average of the first quarter, we have operated with a GBP 16 million net cash position, consisting of basically GBP 91 million cash on our balance sheet in average of the first quarter, and approximately GBP 75 million of term debt and revolver that the company carries. Maybe most importantly, Sir Martin just mentioned it already, our 2020 full year, what we are expecting is a sector-leading double-digit growth on a like-for-like revenue and gross profit basis, with reasonably strong EBITDA margins. Flipping to the next page, you see our practices, our revenue and gross profit by practice.
Some of the numbers I just addressed in the previous slide. Here you see it also on the practices split out, meaning that content, on a reported basis, grew with 89% in the first quarter, and programmatic with 32%. That means that also content is even relatively stronger than last year in the performance because it consists of 80% of our total revenue, where programmatic contributed 20%. On a like-for-like basis, like I just mentioned, the 17%, if you split it out, that's content grew with 17% and programmatic with 18%. On a pro forma basis, again, for the full quarter, including all the mergers for the full three months, content grew with 20% and programmatic with 18%, and total revenue as a result with 19%.
On a gross profit basis, content grew with 112% on a reported comparison, especially as a result of five of the acquisitions or mergers were done in the content practice, grew with 112%, where programmatic grew with 32%. On a like-for-like basis, content with 19% and programmatic with 17%. On a pro forma basis, content grew with 23%, where programmatic grew with 17%. Flipping to the next page, you will see our gross profit by geography. As we've seen also in last year and also in the preliminary results of 2019 presentation, Americas, that's North and South America, are our biggest regions, contributing 73% of the total gross profit, where EMEA contributed 18% and Asia Pacific 9%.
The growth, what I referred to on the first slide, Americas, on a reported basis, grew with 96%, where EMEA grew with 45% and Asia Pacific with 118%. Again, more relevant with all the mergers executed. On a like-for-like basis, Americas grew with 21%, EMEA with 11%, and Asia Pacific with 21%. Finally, on the pro forma basis, Americas grew with 24%, where EMEA grew with 11% and Asia Pacific with 23%. Going to the next page, a short summary of our precautionary actions taken to mitigate COVID-19. What we've done is, although our growth is still very strong, with approximately 20% growth compared to last year on a like-for-like basis. We took these precautionary measures because, as you know from last year, our top line and gross profit lines were up over above 40% and now at the 20% level.
As a result, we immediately took our precautionary measures on cost and on liquidity. On cost side, basically as a sort of waterfall from the top to the bottom, we took a 50% reduction in the compensations for the executives and the board as of April 1st of this year. We have been reducing and terminating office leases in a number of cities, which is also accelerating the integration. What we have seen also from our people, and Sir Martin referred to it was, I would say, almost flawless working through working from home methodology in the past quarter. That we have also seen that also going forward, that we expect that working from home in the various territories will remain for at least a couple of months.
We have also seen that a lot of our employees already indicate that going forward, the mix of working from home and in the office will be different going forward. As a result, where possible, we immediately took the measures to reduce office leases because of working from home or using the other offices of the practices or the companies in the various cities to further integrate the company. On other OpEx reductions, we did, of course, travel, which came sort of naturally, but also on entertainment, marketing, promotions, bonuses. All these measures were taken by drilling down in these costs and basically setting certain targets and agreeing on cutbacks in costs. Again, precautionary, because we were still in a good growth position. Basically, gearing up or buckling up, as I would say, maybe for Q2 and Q3.
Hiring reduction and scaling down on the numbers of freelancers was one of the measures we took. Adjusting people to client demand where necessary. It was very limited, but where we could or needed to, we took these measures. With the current measures on the above, the impact from 2020 will be around GBP 18 million relative to the budget that we have now prepared for 2020. Going to the next slide. On the precautionary actions, again, precautionary actions to mitigate COVID-19 impact on liquidity. We've drawn down our revolver early March in order to, not from necessity that we needed the liquidity, but basically to be on the safe side. Because as I mentioned in the first slide, in average, we've been operating with GBP 91 million cash on our balance sheet and in total, GBP 75 million debt in term loans and revolvers.
We're monitoring cash of all entities on a daily basis. We have, of course, intensified everything in relation to cash balances and receivable collections, in order to get in as much as possible of our cash flow. The good thing is, Scott will touch upon that also later in our client split or per sector, that in the first quarter, approximately 53% of our revenues came with the big tech companies and tech platforms. They maintain, at least also do the others, but especially you can see it from a tech platform, they maintain their payment terms quite strict. Our cash inflow is still very strong. Although we applied for it, no government loans so far. Basically, what we made use of in the various territories, because every territory has different rules and regulations.
Mainly, we took advantage in a way or took the possibility of the delays in tax payments where we could. Finally, one of the things, these are the main things, main measures we took. We've been waiving our bonuses for the execs, and exchanged that in shares with a lockup for two years in order to improve or maintain our liquidity position in the company. Scott, I think that was my part. I would say over to you.
Great. Thank you, Peter. Thank you everyone for joining. Whilst the impact of COVID-19 has obviously been profoundly negative on our health and the economy and employment, as countries start to follow China's lead and emerge from the lockdowns, I think it's important for us to consider what that new normal looks like for our consumers and for our business and for that of our clients. If we could go to the next slide. One of our clients, Satya Nadella of Microsoft, said on their earnings call, "We've seen two years' worth of digital transformation in two months." I think many others have concurred or even gone further, because we see consumers and brands rapidly changing their behavior and their consumption patterns.
I know in my own family, my mom's now raving about the benefits of Tesco delivery, my dad's worked out how to FaceTime my sister and me at the same time. It's not just our parents. I'm sure all of us on this call can look at our behaviors over the past month or so, and see the same accelerated digital trends. Even those of us with kids who already spent most of their waking hours looking at screens are doing even more online. I'm gonna run through a few examples, where we're seeing growth opportunities, for our clients and for ourselves, both now and I think in the future. The first one, if we can go to slide 11, is streaming services. Obviously with all of us stuck at home, this has been a real boom for the streaming entertainment industry.
One of our large clients, Netflix, added 15.8 million subscribers, which was more than double the expectation and represented growth of more than 22% year-on-year in the first quarter. Another one of our clients, Spotify, gained six million paid subscribers, as they said listening habits were changing due to coronavirus. We move to the next slide. Live events have all been canceled, so whether that's sport, music, or B2B trade events, they're no longer happening given social distancing. That hasn't stopped the industry. This is an example of Travis Scott, the hip hop star, who performed live in Fortnite, which is a game, mobile online game. Over 27.7 million unique players in-game participated in that event. Far more than his entire world tour that happened last year. Consumer and trade events alike are starting to go virtual, at least for the foreseeable future.
We are helping a number of clients work through the implications of this. Next slide is gaming. Gaming and e-sports were already on the rise. This was underlined when during the middle of this pandemic, BMW announced that they'd sponsored five of the world's leading e-sports teams. Another client of ours, a new client, the Twitch division of Amazon, has seen activity explode during Q1. Next slide is e-commerce. Our client and partner, Adobe, released a study recently that showed e-grocery sales have doubled between March 13th and 15th compared to the previous 11 days, which is when the lockdowns really started to kick in. We've also seen from our client, Amazon, they've hired an amazing 175,000 additional employees in Q1 to handle the surge in orders that they're experiencing. Next slide is learning.
Any of those on the call with kids will be familiar with this, but UNICEF has estimated 1.6 billion young people are learning from home while schools, universities are shut down. Google announced on their results that 100 million students and educators are now using Google Classroom, which is double the number from the beginning of March. Next slide, social networking. Our client and partner, Facebook, saw messaging volumes increase more than 50% and voice and video calling more than double across Messenger and WhatsApp. Another client of ours, TikTok, is celebrating being Q1's most downloaded app globally with over 2 billion installs now. The final slide in this section is around work. Obviously, we're not having a live quarterly event in London. We're all joining this by call, and that's probably become very usual for all of us now.
Our work's been transformed in the last month. Our largest client and partner, Google, said that Meet, their online comms product, is now adding roughly three million users each day, and has seen a 30-fold increase in usage since January. We're all obviously now familiar with Zoom, who've increased their users from 10 million in January to 200 million in March. These are just some of the trends that we've seen, in consumer behavior and enterprise behavior, in the past month or two that have really been a giant leap forward for digital transformation. There are clear winners emerging in these categories, and many of them are the disruptive tech firms, the Googles, Facebooks, Amazons, Netflix, Spotify, et cetera of the world. It's also obvious that many of the more so-called traditional brands can and need to adapt and take advantage of this switch in digital behavior.
Certainly many of these lockdown inspired peaks in behavior and consumption will probably recede a little as we're allowed to go outside and reengage with the physical world. These leaps forward will remain with us, and the conversations we're having with brands and clients are all around how they can accelerate their own digital transformation plans, how they can reach more consumers through digital marketing. They're looking for partners like us to help them get there faster, better and cheaper. That makes us feel confident that we're very well placed for a recovery. The next slide, 18. That said, S4's performance is clearly not immune to the effects of COVID-19, and we've seen significant volatility in the past month or so.
This makes any attempts at guidance very difficult, as Peter and Martin have said, but we did want to be as transparent as we possibly could with you and give you some impression of what we're seeing and consequently how we feel about the next quarter. This slide illustrates an internal Salesforce report, which is a comparison between 2020 at the top and 2019 at the bottom, for the global media volumes flowing through MightyHive's systems on behalf of its clients. Given the scope and shape of their business, it is skewed to the North American market. As you can see, and it's really about the shape of these graphs that we need to look at, until mid-March, the shapes are almost identical, albeit with higher volumes in 2020 given MightyHive's strong year-on-year growth.
In mid-March, the spend drops off suddenly, there's a peak, and in 2019, you can see the typical end of quarter budget flush, which is the circle. This simply didn't happen in March this year as that coincided with lockdowns and the peak panic around the COVID-19 pandemic. On a more positive note, we have seen stabilization in spend since early April, and this is very much in line with the commentary we heard from Facebook and some of the other digital media platforms in their earnings reports last week. We're seeing spend levels and patterns hold steady at similar levels to the same period in 2019. If we go to the next slide, 19. If we look at it from an S4 perspective, as Peter already said, we saw a strong start to the year in January with 33% like-to-like gross profit growth.
This began to slow in February as China instigated a strict lockdown, sending out ripples of concern across Asia and the world. The virus started to spread around the world in late February, we moved to work from home in early March. In mid-March, many markets instigated lockdowns of their own, causing what we describe as a shock to the system for our business, and I think the wider industry. Many clients simply stopped spending altogether as they instigated their own business continuity plans. From mid-March, we moved quickly to help our clients adapt and adjust to what was going on, Vic and Pete will share more detail in a second on how we modified our own service offering, creating new products and services to help clients with this transition.
In March, we had 6% like-to-like gross profit growth and continued to generate free cash flow with, as Peter said, 19% like-to-like gross profit growth for the quarter. Given our stated strategy to be the service partner of choice for all the leading platform, commerce, and marketing technology companies, it's not surprising that the shape and scale of our growth was similar to the likes of Google, Facebook, Amazon, and Adobe. We don't have access to our financials for Q4 yet, but anecdotally, just as we see stability in the programmatic media spend at MightyHive, we see stability and green shoots of recovery from the March troughs in the content, the data, and the consulting practices. Assuming the lockdowns continue to ease, as we're seeing across Asia and Europe, and to a certain degree in the U.S., this gives us much more confidence going forward.
I'm sure we'll discuss this further in the Q&A, but with that, I'll hand over to Vic, and he will cover how the content practice has been developing.
Hello, everyone. Thanks for your time. Thanks, Scott. It has been an interesting few weeks. Like Microsoft and Google and many other digitally focused companies explained already, these are the weeks that digital transformation accelerates. We see marketing and IT working together more closely, sales and brands, online and offline coming together. We could definitely say that COVID-19 speeded up digital transformation at many of the businesses and brands that we work with. Next sheet, please. We've seen a couple of things happening on the content side. First of all, our offices in APAC, predominantly China and Singapore, had a pretty soft Q1 because of the Chinese New Year, followed by the lockdown.
From the second week of March onwards, same as the trend that Scott just explained, we experienced a bit of a shock to our system by cancellations of work, especially in the work that's tied to production that involved a lot of people. In film, in experiential, we saw some influencer projects being canceled. We had some consultants in-house at clients, but because of the lockdown, they couldn't enter the buildings. We had some travel and retail brands that obviously spent less on advertising. That was the Q1 and the last two weeks of March. On the mean side, we have 2,000 people working globally that we moved to working from home. As Scott mentioned already, that went rather smooth. Obviously, we have the tooling, the digital mindset, and a way of working already, to work from home pretty efficiently.
This resulted in a low number of confirmed cases, and we're now fully focused on mental health and productivities across the teams, across the globe. Most importantly, we needed to do things differently on the commercial side. We're now six weeks in. We have a strong pipeline of COVID commercial opportunities. There's a lot of new work for brands coming in, or work that was supposed to go to another partner. We see a shift from live action shoots to more animation, from physical to live streaming events, and especially a lot of movement from trade show to other solutions. Next sheet, please. The commercial side has been extremely important and we've established three major things in order to keep our business healthy.
We've connected 100-plus people sales team within S4 that get daily briefings and materials to support, and they are supported by four pitch teams that can turn around quick solution creatives. We sent you the deck with seven different solutions that we provided from how do you do production during COVID, how do you do virtual events, how you should film during COVID, how do I make my brand in a commerce environment in two weeks, and so on. That got a lot of traction, and we're proud to say that, and we will show that in the next couple of sheets, that already resulted in new work for HP, Nike, Toyota, Facebook, ABI, to name a few. Lastly, super important that those brands say something different. It's a different time.
A lot of people are spending their time at home, brands need to change their tone of voice accordingly. Lastly, we're helping our clients with the strategic next steps. We're moving into a new reality, one and a half meter distance society, with no big events possible and every single country dealing with that in a different way. What we're trying to do is connect with our partners like Adobe, Snap, Unreal, Google, YouTube, Forrester, at the best possible way, to create thought leadership on how that new reality is going to look like and how digital plays a role in that. Next sheet, please. If we are looking at to solve the now, we already done so briefed, pitched, and produced multiple solutions for our clients.
One of the great things that we produced is a Nike Athlete Program. I want to show you two videos of that. One is the Nike Athlete Program, where Nike Master Trainer, Kirsty Godso streams workouts every Saturday for an hour. I urge you all to have a look at that coming Saturday. Now you can see a 48-second version of it. Can we please play the video?
[Presentation]
Many thanks for watching. Let me move on. This is a great example on how normally Nike obviously is very active in gyms and works out and how we moved it into the new reality by training from the trainer from their own apartment to your own apartment. Secondly, what I would like to show you is the MediaMonks owned safe studios. In around a week's time, we managed to change the way how we work in all our studios worldwide. We have studios, equipment, directors, DoPs, everybody on set from a safe distance. We created a video that got a lot of traction, like how can we help brands shoot content during a time of COVID? I would like to show you the video. It only takes a minute to show you how we organize that. Okay. Good. Thank you for your attention.
What you just see is one of the first in the world's safe, hygienic, fully equipped studios where the client can call in remotely, so they can just look at their work from their home. Moving on to the next slide. How do we say things differently? We were involved in Toyota's Olympic campaign. Obviously, the Olympics are shifted to next year and even maybe further out. What we've done, and we've seen that a big trend, instead of making a new campaign, how can we repurpose materials that we already made and make them into a new context? In this case, it is all about the athletes that overcome obstacles in order to keep themselves fit and ready when the society opens up.
On the other side, I would like to tell you a little bit about our Facebook work, where we help train small and medium-sized businesses how to boost their business by using Facebook in the best possible way. It's all produced in Spanish and Portuguese for the coming two months, where small and medium businesses obviously suffer a lot from COVID. Solve the now, say things differently. Lastly, my last sheet is how to move into the new reality. We receive a lot of questions on what next.
We do a few things to help brands dealing with the upcoming months or maybe even a year to come, with social listening, expert sessions, and we do a lot of virtual workshops with tangible outcomes in tone of voice, in digital platform choices, and how to deal with the upcoming time and how to adjust your content and brands in order to keep in touch with your customers even when we live in a one and a half meter society. That's it from the content side. Please, Pete, go ahead.
Thank you very much, Victor. On slide 26, we begin our discussion of the data and programmatic practice. Broadly speaking, I'm pleased to report that from an employee health and wellness perspective, MightyHive, and indeed all of S4, has responded extremely well, taking early action to move to work from home working situations. That early action has paid off, and as of this recording, we are tracking exactly zero confirmed cases for our employees worldwide, which is a relief indeed. From a business perspective, we have seen on the media front, mixed impacts across the various verticals and industries that we serve, along the lines that you may expect with certain industries that have been more impacted, reducing media budgets, while others that have been less impacted, degrading less or even increasing in some cases.
We have also seen in our two other lines of business, digital transformations and data, upticks in business as many companies and advertisers around the world are looking to use the respite in media and in recognition of the ongoing acceleration of digital change to accelerate their own efforts in these critical areas. Moving on to the next slide 27. We see the top cover sheet from some recent client materials that we've sent out responding to COVID-19 and encouraging our clients and potential clients to take action and build resilience during these challenging times. Next slide. Specifically, this is an executive summary from that same presentation. From a client perspective, you can see that MightyHive has focused our efforts in assisting clients to navigate these challenges, which remain over the next few months and quarters. Broadly speaking, our short-term recommendations are divided into two parts.
Immediate actions, which are divided into three different categories: essentials like food and healthcare; treats and postponables like in-home entertainment and similar services; and heavily impacted verticals, including luxury goods and restricted items like travel. For the essentials group, we are encouraging them to maintain the course and continue to advertise. Treats and postponables, adjust and monitor accordingly with luxury and restricted pausing and assessing their spends in order to really deal with the ongoing challenges well. Across all of these, we once again note that these are accelerations of trends that were already happening.
Longer term, the fork that you see in our diagram represents the unknown shape of the economic recovery, which could be either, we've here positioned it as the extremes between a rapid recovery and a longer downturn. We're working hard every day to make detailed plans with our clients based upon the themes that are listed here. Moving on to the next slide. On this slide, you'll see a sample of projects and services that we have already created to assist our clients. For example, the COVID-19 command center, which we'll go into a little bit more in detail in the next slide. This answers just a simple question: How can I gain an actionable view into media spend and allocation during these challenging times? A media platform overlap review, which is to gain additional transparency into technology cost cutting and into working media spend.
Media quality reviews, which are geared towards really making sure that the advertisements are appearing next to content that's most suited for brand objectives. Cost waterfall analyses, which once again take a look at the ongoing issues that continue even during COVID-19 around transparency of the supply chain to understand exactly where spend is going and to understand where the often confusing ad tech landscape can be improved. Brand sentiment analysis and churn risk analysis I think are self-explanatory and really just help our clients to respond quickly. The ongoing sort of projects that you see listed at the bottom include first-party data collection review.
Even as COVID-19 has impacted, we've also been dealing with other challenges inside of the advanced advertising and media world with the ongoing, quote, "death of the cookie," really making third-party data less important and first-party data, which is the biggest chunk remaining, even more important than ever before. Assisting folks with those types of things and then moving into analytics and IT and media platforms training. On the next slide, we talk about the COVID-19 command center. It's just a deeper dive into one of these things that's been very popular amongst our clients.
It demonstrates not only the specifics of one method that we're using in order to really help our clients during these challenging times, but also, I'm really proud of the fact that it shows the speed and agility which MightyHive and all of our compatriots at S4 can bring in terms of creating innovative solutions during even the most challenging times. For this COVID-19 command center, you can see that we're generating a holistic view of ad spend and performance of joining various different data sources together, building multi-touch attribution models that account for interaction between channels, and creating dashboards that accurately quantify this value so that it's usable in a timely fashion.
All of this can be done in four-six weeks at a very modest cost, not only is it valuable during the COVID-19 crisis, but also lays the groundwork for additional transformation and data work as you move forward. Inside of the next slide, we talk about one of the case studies around one of our clients who's been using MightyHive services, not for media, but for data, and how that has already proven to be very powerful. You see a quote here from Jonathan Halvorson, who is the Vice President of Global Media at Mondelēz International, saying that in order to do advanced machine learning that the fastest growth companies in the world are using, you need to have a common architecture and a common location for your data. This is precisely the types of work that Mondelēz and MightyHive have proudly achieved together.
Rather we helped and assisted Mondelez in gaining new insights by really taking a look and inventorying the different media and sales data that were trapped in silos and often needed a little bit of massaging in order to be uniform. We created a plan to really clean up that data and figure out how to put out new global advertising taxonomies to make sure that the data that was coming in was clean and accurate. From there, moved into a world in which we could combine these data sources, and ultimately creating a automated cloud-based approach that allowed Mondelez to monitor its own performance faster and in more flexible ways than legacy methods had previously been able to do. I think the results really speak for themselves.
It's often said that you cannot improve what you cannot measure, and by improving the measurement of these results, Mondelēz was really able to increase their ROI by 20% double-digit gains, even during challenging times. We're very proud of these results indeed. The final slide that we'll talk about on the next page really is something that we're announcing today, which is that in trying to support our clients during these challenging times of COVID-19, MightyHive is going to be making one of our own internal tools, the MightyDesk, available free of charge to our clients. The specific things that we're doing in it's not sexy, but it's incredibly important. Ad tech and online advertising veterans know that ad trafficking into ad servers is one of the most critical, yet time consuming and labor-intensive aspects of digital marketing.
Internally at MightyHive, we've created software that cuts huge amounts of time out of this sort of necessary, but again, labor-intensive task. In many cases, this has saved hundreds of hours per month trafficking campaigns within Google Campaign Manager and other ad servers. We're very proud to announce that we'll be making these internal tools available free of charge to our clients, and we encourage any client that might be listening to visit the webpage listed here for additional information. With that, I'll turn it back over to Scott to take it from here. Scott?
Thanks, Pete. Next slide, please. I think despite the challenges of COVID-19, and you've seen our responses to that from Pete and Vic, we've continued to see significant new business wins during this period, both from existing clients via our land and expand strategy, which we've talked about previously. The likes of Google, Netflix, HP, Facebook, P&G, Amazon, et cetera, as well as new clients. We continue to see strong demand for our services, as Pete said, around first-party data on data strategy, data engineering, cloud services, analytics. In Q1 in this area, we won significant assignments from the likes of FWD Insurance, TV Globo, Fuji TV, and other European luxury brands, and an Asia-based global automotive brand.
Several of these assignments also include media. We also won major programmatic in-house projects for a global CPG, a global e-commerce software company, a global automotive company, and a major U.S. hospital group. In-house and continue the pace. On the content side of our business, we expanded many of our existing relationships and gained particular traction around our embedded and hybrid model with our larger tech clients. We won new assignments from a global pharma company, from Quibi, from PayPal, Twitch, LA28 , AkzoNobel, and CEMEX. When it comes to major pitches, we're pretty selective about participating, given that they're often long, drawn-out processes driven by procurement. We've been fortunate enough to have a supply constraint, not a demand constraint on our resources. That said, we do continue to have a robust new business pipeline.
Whilst we know comments elsewhere in the industry that overall pitch activity has declined, we're involved in several potentially game-changing pitches for us, for a European automotive company, two global pharma companies, a global FMCG, a global electronics company. I'm sure Pete and Vic can confirm that they've never been busier on the new business front. On the next slide, please. This is a slide which illustrates the balance of our client portfolio. Just to be clear, it's based on 100% of our Q1 2020 like-for-like revenue base. We discussed this a little at preliminaries, we feel with such strong exposure to the tech sector and many of the clients we've mentioned today, this gives us an excellent base for growth and resilience. We have minimal exposure to the worst-hit sectors such as auto or retail, fashion, or travel.
Even there, we've seen some strong work from the likes of Nike and Toyota, as Victor showed. The next slide, moving on to M&A. On the merger front, we were delighted to welcome Bruno and his colleagues, around 300 of his colleagues, at Circus to the S4 family in January. Circus is a leading digital creative agency with offices across Latin America, L.A., and Madrid. They're highly awarded. They have fantastic client lists, including Google, Netflix, Spotify, Twitter, and Uber. We've already partnered with them across parts of S4 to great success. Our priority, as Peter and Martin have already alluded to is to protect our balance sheet and our liquidity. However, we do have a modest pipeline of mergers in highly strategic areas.
There's a couple of small data analytics specialists, an area we see continued strong client demand in, and a creative agency in Germany, which is one of the last remaining geographic gaps in our portfolio. These are all at various stages. We continue to talk to agencies in areas like data analytics, e-commerce, which we're seeing increased demand as a result of the current crisis. With that, I'll hand you over to Martin, who's going to sum up.
Thank you. Thank you, Peter. Thank you, Scott. Thanks, Victor, and thanks, Pete. I just want to go to the summary slide, the last slide before we get a Q&A. Our people, I'm glad to say, are safe, and most of them, if not all of them. A couple of our offices are already up and running in Asia Pacific. They are basically, most of them are well and safe. We have had one or two infections, and one or two members of families have been affected seriously, and our hearts go out to those families, and we wish them long life. Having said that, S4 continues to lead the industry, as you've seen, in double-digit top-line growth and in margin. We have a strong balance sheet, as Peter has emphasized, and liquidity.
We've stress-tested it, not only in the current quarter but beyond that in Q3 and Q4 and in fact into 2021. Our annual report, our digital annual report and our physical annual report, has been issued today, and you can see that on our website. We've taken early cost action, as Peter said, and we retain significant flexibility in relation to what may or may not happen. We have a very favorable client portfolio, as Scott has emphasized, with 50%-plus of our portfolio in the tech sector, and we have a very healthy new business record and pipeline, and we're involved in a number of very significant pitches. What we see the impact of COVID-19 as being, and this is not new to you in terms of view, is that all the trends are pointing towards increased digital transformation.
There is a controversy between those who think that the world will be in recession and those who think that the fiscal action taken by central banks and by governments is sufficient, at least in the short to medium term, to buffer what's happened and provide growth and continuity. Whatever happens, we see digital transformation accelerating at the consumer level, at the level of media, and last but not least, the enterprise level. COVID-19 really accelerates the adoption of our holy trinity model and integration. Last but not least, we are ready from now because we're seeing lockdowns eased in various jurisdictions. We're ready for recovery, whatever it shapes. With that, can we turn over to Q&A, please, operator? Thank you.
Thank you. If you wish to ask a question, please press star two on your telephone keypad. That is star two on your telephone keypad now, and there will be a brief pause while the questions are registered. The first question is from Johnathan Barrett from Panmure Gordon. Your line is now open.
Good morning.
Good morning.
Thanks very much. Those are my questions. I really just want to focus on the more difficult segments of clients. The travel, bars, restaurants, live events segments. Just the nature of the conversations that you're having with clients about how they're starting to try and work out how to come out of this. Are they giving you any hints yet as to how they're going to manage that? Are you in quite advanced dialogue or are you just simply having to be patient for the moment and wait?
Thanks, Johnathan. I think basically they're all wrestling with the problems. We had a call last night, Wesley, Pete, and I, with a mixture of CMOs, data officers, about 12 of them for about an hour and a half last night. I think it was quite interesting to see how they were wrestling with the issues. They came from various sectors. There were one or two, I think, related to travel and hospitality, but nobody, I think, front and center in that. I've listened to Airbnb and what they're doing. Obviously, they've been heavily affected, and you saw the layoffs they made yesterday, which were very significant. Brian Chesky talks about adaptations in travel patterns. For example, on leisure, less international, more domestic. On business, the nature of business travel will change.
It will get less, probably be more domestic than international, at least in the beginning, and use of technology. I think people are wrestling. Maybe Victor, you could say a little bit. You're close to travel clients, where we've seen cutbacks in spending, as you mentioned. Pete, maybe you can add a little bit from your point of view. Victor, any thoughts on the travel and hospitality area and what we're seeing? We do have clients in that area, although they're a small proportion of our revenues.
Yeah. Thank you for that. When we look at our client base, we look more like three kinds of clients, like V-shaped, like coming up, returning to the market very quickly, U-shaped, and L-shaped. We try to map the different kinds of clients based on those patterns, instead of looking just as a general audit. I feel like for the travel industry in particular, it's a little bit too soon to really look at that. On automotive, for example, we have great dialogues already how to get back to it. We see trends into, for example, smaller electric cars that are popular. That will recover way faster. We're already thinking about creative concepting, how to reach the new target audience, what kind of tone of voice.
I feel from a content perspective, the travel industry is a little bit too early to really change the tone of voice in advertising already. Pete, anything to add?
Yeah. From our perspective at MightyHive, as we talk to clients inside of the heavily impacted sectors, we see a study in contrast. The contrasts really are between sort of the desire for digital transformation and the ability with which their organizations are able to be agile and to actually have them occur. I'd say that I've never before seen more desire from really all industries, the mentioned industries notwithstanding. Everybody really recognizes the opportunity to do these things. Unfortunately for some of the more heavily impacted industries, that's offset by just some financial realities, in particular, those that have heavy capital expenditures that they need to take into account in order to see if they can afford such changes right now.
Broadly speaking, I would agree with Victor's comments that it's a little bit too early to see it, and I would just add those nuances. That the desire is high, but at the moment, the ability may be impacted by financial realities.
Just to add one thing to what Victor and Pete said. We heard last night, agility is often talked about as being the key characteristic that companies need, even pre-COVID, but post-COVID or during it, even more so. What was clear and apparent last night, and these dozens or so CMOs and CDOs, was that agility has been ratcheted up inside their organizations. That third point, when you move from consumer to media to enterprise, that third point around enterprise, that we think is going to be a very, very significant change that CEOs, CMOs, CFOs will now start to push. There is no status quo anymore. That's gone. Q2 is a good illustration of that. Change will be very, very violent and significant in terms of transformation and particularly digital transformation.
Thank you for that. Can I just take you on to working capital with regards to changes?
Sure.
Do you think we will see a step change in the way that media payments are handled now because of what's happened, or do you think that the market has settled on that approach?
I don't. Peter, do you want to talk about what we see on media payments? We made reference to it in the RNS statement because we thought it was a matter that people in the industry had commented on, that there had been significant changes. A couple of the holding companies pointed to that, although when you looked at their working capital flows, it didn't seem that there had been sort of extensive activity of that nature. Peter, do you want to say what you see?
Yeah. Like I mentioned at the start, is that we are in a very, let's say, good position also with our client portfolio. 53% is technology, and they remain to pay in these typical technology sort of payment terms, which is somewhere around 30 and 45 days. Our inflows are strong, and it's not, of course, only technology. Maybe on some of the business segments, we see some delay.
That's true. It's absolutely true. There is some delay where we're increasing slightly in our working capital. I would say so far so good. We are not confronted, at least not yet, although I would expect some in Q2 or maybe even slightly more in Q3, that we will have some more pressure on our working capital because as a result of delayed inflows. I would say so far so good. That's what we have seen till date.
I would just add, as Peter was answering the question, I was thinking about this in relation to the ISBA report that we saw overnight, which we may get further questions on this call, and I'm sure Pete would like to respond to that. I think we're seen as a different category, in relation to this issue around working capital and media. Our model is much more, well, not much more, it is transparent, and much more flexible, and therefore, I think we're sort of in a different category, maybe to others, in the way that clients view us and what we do. The model is, as I say, transparent, and flexible. I think that's where we are. I think we've seen a little bit of pressure, but not to the extent that other people seem to be indicating.
Thank you very much.
Okay, next question.
Okay, the next question is from Joe Spooner from HSBC. Your line is now open.
Morning, guys. Could you talk a little bit more about the GBP 18 million of cost savings? Where was that coming from? Is that a lot of growth plans that aren't now going ahead, or is there quite a lot of focus on the existing cost base within that? Secondly, can you talk a little bit more about the challenges of winning new business in this environment? Are clients more tempted to stick with existing suppliers, or is there a willingness to try the specialists like yourself? I have a follow-up question maybe if I wait till the end. Thanks.
Okay, fine. Okay, Joe. Thank you. Peter, do you want to deal with the cost question?
Yeah, sure. Joe, coming back to your question. The GBP 18 million, that's relative to the budget. Like I tried to explain, it's a combination of a reduction in compensation, offices, OPEX reductions. It's relative to the budget. If you would look, for example, compared to, and of course this is again relative to the budget where we were growing or expected to grow at high levels, but if you would compare it to our pro forma numbers last year, let's say our operating expenses, our personnel, and indirect costs, it would represent approximately 10% of that cost base. For 2020 on the budgeted base, it would be slightly lower, of course, because of the expected increase. Basically, it's a waterfall of measures that we've taken, precautionary, as I mentioned. Then the categories I already addressed.
Basically, that's what we did, but I'm not sure if that answers your question.
Yeah, perfect. Thank you.
Okay. On winning business, just before I ask maybe Wes to have it, this partner is on the line as well. Maybe he can respond on the new business one. I just make comment that I think we tend to do best when clients have within them change agents. I can put it like that. When clients want to change their model, that might be to increase agility, to increase speed, accelerate. I think we tend to do better in those circumstances. As I said before, we think the sort of penetration or extent of change agents is increasing. I mean, COVID-19 is going to accelerate change, particularly in digital transformation, and therefore, I think the atmosphere or the climate will be favorable to us.
Wes, do you want to try and answer the question on how does winning business, and then maybe Pete can come in from MightyHive's side?
Yeah, I have to admit, six weeks ago when the sharp shock to the system happened, I think it would have been overly positive to predict the pipeline we actually currently have. I've seen a huge uptick in new business. We had a really interesting quote from a key client yesterday in an all hands meeting. He said our 2024 roadmap just got compressed to 2021. Everybody has moved digital transformation from the it's important but not urgent category to it's urgent and it needs to happen now because COVID-19 is putting immense pressure on everybody's digital ecosystem. We're seeing sales cycles shorten, people moving quicker. I think we've said many times that digital transformation does not happen in PowerPoint slides. It happens in projects. It happens with implementing process with people.
I think we are positioning against the sort of traditional, slower nature of consultancies with urgency, and that urgency has never been more important. We're also seeing the forming of completely new industries and businesses. You look at the event industry, which is huge, all of that money is now being reframed and retrofitted into digital native experiences, which is where we are at our strongest.
We're actually seeing some of the bigger pitches this year are forming purely because of these new sort of needs being pulled together from both companies and consumers. New business is actually very active. I have to say, I said this yesterday in a pitch call, we hate that some of these briefs exist for all of the reasons we are aware of, but it's very exciting to actually talk about these things because it's the reason we started MediaMonks originally, why we all joined S4. From a new business perspective, very exciting.
All right, Pete. I think we've got Chris Martin. Pete is in Arizona.
Yeah.
Chris is in Colorado. Godforsaken hour, but if you're still awake, Pete or Chris, go ahead.
Yeah, this is Pete. I think it's pretty clear to everyone that times of great change require new approaches, and our clients realize that. We have seen, as we mentioned, a strong uptick in interest in our digital transformation and, in particular, our data businesses. The best clients that are out there just are realizing that the vast changes that have been pushed forward and pushed to the fore by COVID-19 require new partners and new ways of working and new methods. All of these things have resulted in an uptick on our side. What we're seeing is, yes, a much greater willingness to reexamine relationships sometimes that have been decades long.
In the harsh light of reality and what we're all going through now, may no longer make sense, and therefore, it creates room for new partnerships and new ways of working, all of which are benefiting S4 broadly.
Yeah. Just to add to that, Pete, do you want to say anything about what you see on the data and analytics side? I think there is, and those are budgets which sometimes are not just marketing budgets, they're IT budgets, too. Do you want to say a little bit about, you touched on it?
Yeah, sure.
A little bit more. Yeah.
I think that it's pretty clear, and once again, I'll just mention this, some of the discussions that Sir Martin, Wes, and I had last night. One of the emerging themes was definitely agility, but also just this notion that agility must be paired with insight because agility on its own or speed on its own may actually just encourage you to run in the wrong direction even faster. You have to not only be able to move fast, but also to know where to move, and insight definitely is the key factor in that. Insight comes from data, and I think people know that. If things were a minefield before COVID-19 and people were creeping through it, now they're sprinting through them, and insight matters more than ever before, and I think that's obvious.
What we are seeing is a very, very strong uptick in data programs, really trying to figure out just a very simple sequence of events, which is you must take a look at all of the different data sources that you have. You must clean them up and standardize them and then combine them, and then you must analyze them and take action. These data insights must be pervasive, not only into the marketing and the advertising, but into all aspects of customer interaction. Customers these days do expect seamless interactions, whether they be online, offline, in store, on the phone, anywhere. Data is your memory. Data is the ability to actually mesh those experiences together. We do absolutely see an uptick in that foundational element.
The best marketers in the world are really kind of pushing in this direction and we're the beneficiaries of that. Sir Martin?
Okay. Joe, you had a follow-up.
Just a final quick one. The statement this morning referenced that you had seen some shift in terms of customer spend from the first half to the second half. I just wondered how significant that was and if there are any particular trends within that. Thank you.
We were talking generally about the two buckets, as we put it, the tech bucket and the CPG, pharma, retail, auto, travel, hospitality buckets. I think on the tech side, we have seen a number of tech clients had plans to invest heavily in Tokyo 2020, which is now not going to be renamed 2021, but goes to 2021, with a question mark over whether they will be able to deliver an Olympic Games in the classic sense given the phased lockdowns, because planning takes a long time. That's Euro 2020, also investments in baseball and basketball, the Premier League here. What we saw was money freed up by the cancellation or postponement of those events. What we saw was money switched to purpose.
I know one analyst was on earlier asking what purpose campaigns are. Basically, they're around the issues that we're facing with COVID-19, support for frontline workers and PPE and health and safety. We saw money switched into that. Again, the money being postponed into H2 because not all that money could be used, let's call it the live sports and related activity, live experiential stuff could not be moved into those purpose campaigns. We saw money being shifted into H2 on the understanding and the sort of deals were cut, if you like, between the CMOs and the CFOs, that that money would be spent, but would be spent in H2. I think there is a little bit of that. It's not pronounced. There are tech clients that are going the other way, without naming names, but it will be apparent.
There are a number of tech clients that are investing heavily, either in equity investments or in repositioning their companies. Because the tech companies have been exposed to a number of issues, the privacy issues, the brand safety issues, interference in election issues, and some of them are seeing this as an opportunity when they are relatively strong to invest in building their brands in different ways. I think the tech companies will emerge largely, and I'm referring to hardware, software, and platforms, will emerge from COVID-19 in a better position in terms of image and reputation because of the sorts of things that they're doing. Amazon hiring, as Scott said, 175,000 people. Google and Apple cooperating on apps for tracking and contact tracing.
Those sort of efforts, which have been seminal in terms of helping with the health and the safety issues around COVID-19, I think will rebound to the benefit of the platform companies, hardware and software companies.
That's great. Thank you very much.
Okay. All right. Okay. Any other questions, operator?
Okay, this is the final question now from Matthew Walker at Credit Suisse. Your line is now open.
Thanks. Good morning, everybody. Hi again, guys. Just a couple of questions. The first is, what do you think the range of outcomes realistically is? You talk about double-digit growth. Does that mean 10%? Does that mean 15%? Does that mean 20%? What do you mean by when you talk about your EBITDA margin? Can you give a bit of clarity around that as well. Finally, what's the anticipated shape of the quarters? I know it's uncertain, but you presented some data showing stability in the digital media volumes. Does that mean, I'm probably barking up the wrong tree, but does that mean we should expect a Q2 from you, which is broadly flat and then growth in Q3 and Q4? Just interested in your thoughts.
Well, you asked the really difficult question, Matthew. I'm so glad that we got to question three. Let me have a go. Peter can sort of come in on it. I don't want to be drawn or give definite scenarios because we've looked at the downside. We are forced, if that's the right word, as we issue our annual report to talk about liquidity, to talk about the adequacy of working capital, and bank facilities, et cetera. We go through, let me put it like this, the really negative cases. You tend, when you do these stress tests, to look at the downside. I think some of the holding companies have looked at nought, no growth as being their best case, which would not be our best case. Without naming percentages, you use the range.
You know what we did in Q1, you know that we did 19% on top line, in terms of like for like growth in gross profit, which is the key number. On a pro forma basis, it was bigger than that, 22% or whatever it was. we wouldn't go as low as zero. On the other hand, when we looked at stress tests, we would go lower than that. On the question of reasonably strong, what we're indicating is we do see margin pressure, as a result of what we've had to do and what's happened on the top line. Remember that when we budgeted, at the beginning of this year, pre-pandemic, we're budgeting for 30% growth.
If you push me to the wall on this call or beyond, I would say on our media side, we were seeing sort of 10%-15% declines from the budget of 30%. Remembering that media and data was about 30%, a little bit less, 25% of our business, and content was around 70%-75%. On the content side, I would say it was a little bit less. I think you heard from Victor and Wes that when we got into COVID-19 in mid-March, there was a shock to the system. I think the phrase that Victor used and Wes used. The shock has ameliorated, and I would say on the content side, it's not 10%-15%, it's probably 5%-10%. You can do the maths on that. If you ask me, again, pin me against the wall, what do I think?
That's roughly where I think we are on the basis of current knowledge. Margin will still be strong relative to what you're seeing in the rest of the industry. I think we've got to expect there will be some softening of the margin. I think we'll surprise ourselves by the end of the year in how well we do on margin. There's also a philosophical question here, Matthew, that if you look at the cost measures we've taken, there's sort of a waterfall of cost measures. We've done the easy stuff first. We've cut travel. Obviously, travel has gone. Non-essential business, freelance expenses, but without sort of cutting into our people. We've really maintained. We've altered the pattern of investment in people to client demand.
For example, in Australia, we have considerable resource around one of our partners, Adobe, which we want to keep in place, even though with physical distancing and the lockdown, contact on client premises is not possible. We've had to decide to keep in place resource, which in the current climate is under pressure because we think in a very short period of time, that scarce resource will be available to us again. I think we're already starting to see some take-up from that. I'll just finally say that at a time when nobody is willing to give you guidance, look at the number of companies that have just terminated any guidance. We're being a little bit braver. I think the reason we're being braver is that we see we have a little bit more visibility because of the nature of our client base.
Probably something to do with the relative sizes of our business. Our business is, to us, is complex and challenging, but against what others may have to wrestle with, we don't have the albatross of analog. We're operating in areas where there is more life and people are looking at the sky rather than looking at their boots. I think we can afford to be a little bit more realistic about it. That's without being highly specific. I've said all that, Peter. Is there anything you want to say in addition?
What should I add, Sir Martin? No, I really think, because otherwise I'm going to summarize what you said, but I think this is exactly what I would have said if I would have answered the question. I don't think there's anything to add from me at this very moment in time.
Is that precise enough for you, Matthew?
Well, I just wanted to come back on the Q2, notwithstanding what you said about the full year.
Yeah, I think what we've said is that we see some stabilization in April. I remember Facebook, not in their presentation, I think the CFO said that the first 21 days of April, they've seen flat. Is that right, Scott? Was it flat at Facebook?
Yeah, flat on last year.
Yeah. We've seen some stabilization. The slide that Scott showed you, where you had the numbers for January, February, and March, and it went into April, not with a number, but programmatic was flat and we were seeing content and data up. I think you got the tone from Victor and Wes and indeed from Pete, that that's pretty much what we're seeing. Qualitatively, I would say we're seeing sort of some stabilization. We meet daily, the Coronavirus Crisis Group, the CCG as we call it. The people on this call, plus one or two others, meet daily. If you were listening into those calls today as opposed to, say, four to six weeks ago when we initiated them, probably the tone is more upbeat.
Because as Victor and Wes said, and I think Wes said it very well, the inbound, and indeed our, I mean, it's not inbound, we go for it. It's inbound and outbound new business activities are running at very strong levels. In the release, we said our pipeline was at the same level as last year. Just so you understand, we track, for example, on the content side, our pipeline, and we look at the percentages at any point in the year that are committed and contracted work, and what we need in order to make budget or revise forecasts or whatever it happens to be. I think the pipelines are pretty strong given what we've seen for the impact of COVID-19. I think the guidance that we're giving, and we're continuing to give some guidance.
We haven't retreated behind the wall of it's so difficult and so uncertain that we're not going to give you any guidance. We're giving you some, I think, thoughtful guidance and really telling you what we know. Scott referred to transparency, and pretty much what we've said on this call is what we know.
Okay, thanks a lot.
Thank you.
Thank you. Anything else, operator, or are we done?
Yes, we have one more question that's been registered from Paul Richards at Dowgate.
Yeah.
Your line is now open.
Thank you. Morning. Two questions from me. The first is, there's been some suggestion from some of the other holding companies that there's been a slowdown in in-housing. Just be interested in your perspective on that. The second question is, could you provide a bit of color on Firewood? Obviously, one of the bigger mergers for S4.
Yeah.
Can you give us an update on how that is progressing over the last few months?
Okay. Scott, in-housing is your favorite subject, go ahead.
Yeah, sure. I'll take that one. Thanks for the question, Paul, and I hope you're feeling better. I think on that one, firstly, you have to define it, right? I think a lot of people make the mistake of thinking in-housing is a binary concept, so you've got outsourced or 100% insourced, and that's not at all as we see the industry. I think we've explained before that we see it as a spectrum and there are different ways that clients engage with agencies, whether that's hybrid or embedded or indeed in-house. We would counter that to what you were sort of questioning quite strongly, I think. We've explained that we've won significant new business in this area in Q1. We've got significant pitches out there both on the content and the media side.
All the statistics you see in surveys and in the marketplace, sort of talking about in-housing. Indeed, the CEO of the Association of National Advertisers did an interview with Campaign this morning saying that the in-house agencies have really come to the fore and shown their strength during this period. Don't agree with that at all. I mean, I'm not surprised that holding companies are saying that. It's a bit like asking turkeys if they've seen much demand for Christmas. They're probably not going to have much because we rarely compete against them on in-housing assignments. It's usually against other specialists or consulting companies. They might not be seeing it, but we certainly are.
Yeah. I'd just add to Scott's comment that the ANA, Liodice, who heads the ANA, the Association of National Advertisers, came out strongly, I think it was last night, with a presentation or speech around COVID-19 driving clients or encouraging clients to in-house. As Scott said, there are varied models here. You mentioned Firewood, we'll come onto that in a second. Firewood has an embedded model, which is where they embed people from their agency. Firewood is a part of MediaMonks, and they embed them from their agency in the client. You have outsourcing at one end of the spectrum, embedding, let's say, in the middle, and then in-housing at the other end. It's not, as we say, a binary choice. There are shades of it.
It's interesting that the ANA is saying, and this is our experience, that on that spectrum, we're seeing increased interest, certainly experimentation, and now I think you will see further implementation. I think I'd agree with the ANA that we're starting to see greater interest in that area, and particularly in two areas, embedded, where it's our people, but they're embedded in the client. They're working, obviously COVID-19 will impose restraints and constraints in that from a security and safety point of view. Embedded becomes more important, and I think in-housing will become a greater feature. I don't know, Chris, if you're on the line still, do you want to say anything about in-housing? Because you do a lot in that. Are you still there?
Actually, Chris had to drop off, so this is Pete. I can talk to that.
Okay. Go ahead, Pete.
I would agree that we have seen an uptick in the interest around in-housing, and that has been caused by the acceleration of trends and also just the ongoing realization of other factors that we have seen in the past. Notably, speed and agility is always important, has always been important, is even more important today, and just, I think it's not hard to claim that embedded or in-house teams can move faster, communicate better, and respond more quickly than teams that are outsourced. The other thing that I would say and point to is that the notion that first-party data must be both protected as well as used to drive revenues and profits represents a bit of a conundrum for folks.
I think it's very clear that the data must be used, but it must be protected, and the only place that that can happen is in a much more protected environment like in-house. As Scott notes, we do look at these things as not just a binary solution. You're not fully in-house or fully outsourced. There is a range of options in between. We do believe that every advertiser in the world is going to have to make some move along that spectrum, and we think that in keeping with the general notion that COVID-19 and recent events have accelerated these shifts, we certainly believe that that's the case here as well.
Okay. Just turning to Firewood. I would just say that Firewood had a tremendous first quarter, and that's continued. Wesley, do you want to comment on Firewood, seeing you're closest to that?
Yeah. Well, to your point, a very strong Q1.
I think their model, I agree the embedded sometimes the spectrum isn't that clear to people. I see a lot of clients looking at it as a more efficient model, because it is. We're seeing a healthy uptake of new business opportunities within the Firewood pipeline that sort of point at that being the case and one or two interesting deals that are very close to being signed. We're not seeing clients or the market pull back. I think it's more the definition of what it is. I think you should look at it as an idea of having great people that organize and operate in a flexible way around client needs. Sometimes that is partly in offices, which of course, at the moment, nobody pretty much has offices. Sometimes it's in lower cost production hubs that we have. Sometimes it's a mixture.
It's more about the agility and the structure to make it work together as a single team instead of the traditional, I would almost say, legacy model of briefing handovers and rapid out-of-hat creative processes. It's more about the way of working than it's this sort of really specific thing about people in offices. Overall, to Pete's comment, we're seeing that pipeline be super healthy, and I would expect more clients to move into it. I think there was a report that came out one or two days ago from Gartner, if I'm not mistaken, that shows that agency fees are probably the first thing being looked at. You should really look at the model that we're building is we're not a typical agency fee model, right? We feel a lot of what's happening in the market as a positive for our model, to be honest.
Okay. Thank you, Wes. Thanks everybody on our side for the call. Thanks everybody for listening. We'll try when we meet for the half year to put more flesh on the bone for Matthew's question and be more specific. I think we've given you a lot of specific guidance, certainly more that you're getting from others in the industry and beyond. Thanks for listening, and we'll see you at the end of Q2. Thank you.
This now concludes today's call. Thank you all for joining. You may now disconnect your lines.