STAGWELL INC. (NASDAQ: STGW) REPORTS RESULTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025
Q2 YoY Revenue Growth of 5%, Q2 YoY Net Revenue Growth of 8%
Q2 YoY Net Revenue Growth excluding Advocacy of 10%, Digital Transformation Net Revenue ex. Advocacy Growth of 12%
Q2 Net Loss Attributable to Stagwell Inc. Common Shareholders of $5 million; Q2 Adjusted EBITDA of $93 million; Q2 Adjusted EBITDA ex. Advocacy YoY Growth of 23% to $80 million
Q2 EPS of $(0.02); Adjusted EPS of $0.17
YTD Increase in Cash Flow from Operations of $122 million Over Prior Year Period
Net New Business of $117 million in Q2; LTM Net New Business of $451 million
Reiterate Guidance for 2025 of Total Net Revenue Growth of ~8%; Adjusted EBITDA of $410 million to $460 million; Free Cash Flow Conversion in excess of 45%
NEW YORK, July 31, 2025 /PRNewswire/ -- (NASDAQ:STGW), Stagwell Inc. ("Stagwell") today announced financial results for the three and six months ended June 30, 2025.
SECOND QUARTER RESULTS:
Q2 Revenue of $707 million, an increase of 5% versus the prior year period; YTD Revenue of $1,359 million, an increase of 1% versus the prior year period;
Q2 Revenue ex. Advocacy of $651 million, an increase of 9% versus the prior year period; YTD Revenue ex. Advocacy of $1,261 million, an increase of 5% versus the prior year period;
Q2 Net Revenue of $598 million, an increase of 8% versus the prior year period; YTD Net Revenue of $1,162 million, an increase of 7% versus the prior year period;
Q2 Net Revenue ex. Advocacy of $560 million, an increase of 10% versus the prior year period; YTD Net Revenue of $1,095 million, an increase of 10% versus the prior year period;
Q2 Net Loss attributable to Stagwell Inc. Common Shareholders of $5 million versus $3 million in the prior year period; YTD Net Loss attributable to Stagwell Inc. Common Shareholders of $8 million versus $4 million in the prior year period;
Q2 Adjusted EBITDA of $93 million, an increase of 8% versus the prior year period; YTD Adjusted EBITDA of $173 million, a decrease of 2% versus the prior year period;
Q2 Adjusted EBITDA Margin of 16% on net revenue; YTD Adjusted EBITDA Margin of 15% on net revenue;
Q2 Earnings Per Share Attributable to Stagwell Inc. Common Shareholders of $(0.02) versus $(0.03) in the prior year period; YTD Earnings Per Share Attributable to Stagwell Inc. Common Shareholders of $(0.06) versus $(0.04) in the prior year period;
Q2 Adjusted Earnings Per Share attributable to Stagwell Inc. Common Shareholders of $0.17 versus $0.14 in the prior year period; YTD Adjusted Earnings Per Share attributable to Stagwell Inc. Common Shareholders of $0.29 versus $0.30 in the prior year period;
YTD Net Cash provided by Operating Activities of $55 million versus net cash used in Operating Activities of $68 million in the prior year period;
Net new business of $117 million in the second quarter, last twelve-month net new business of $451 million
See "Non-GAAP Financial Measures" below for explanations and reconciliations of the Company's non-GAAP financial measures.
Mark Penn, Chairman and CEO of Stagwell, said, "With 10% ex advocacy net revenue growth, Stagwell is taking share and building momentum across all key metrics this quarter. In Q2, we posted net new business of $117 million, strong performance at our Digital Transformation businesses, 26% growth among our Top 25 customers, and our first major Government win. Stagwell's differentiated approach is resonating."
Ryan Greene, Chief Financial Officer, commented: "I am proud to take on the role of Chief Financial Officer at Stagwell. The second quarter has seen us deliver strong results, hitting $93 million in Adjusted EBITDA, which includes a 23% increase in ex-advocacy EBITDA. Importantly, we have made significant progress on two key initiatives: improving our year-to-date cash flow from operations by $122 million versus the same period last year, and taking actions amounting to $20 million in annualized cost savings, putting us firmly ahead of schedule to deliver the $80 to $100 million in cost savings by the end of 2026 that we promised at our Investor Day in April."
Financial Outlook
2025 financial guidance is reiterated as follows:
Total Net Revenue growth of approximately 8%
Adjusted EBITDA of $410 million to $460 million
Free Cash Flow Conversion in excess of 45%
Adjusted EPS of $0.75 - $0.88
Guidance includes anticipated impact from acquisitions or dispositions.
* The Company has excluded a quantitative reconciliation with respect to the Company's 2025 guidance under the "unreasonable efforts" exception in Item 10(e)(1)(i)(B) of Regulation S-K. See "Non-GAAP Financial Measures" below for additional information.
Video Webcast
Management will host a video webcast on Thursday, July 31, 2025, at 8:30 a.m. (ET) to discuss results for Stagwell Inc. for the three and six months ended June 30, 2025. The video webcast will be accessible at https://edge.media-server.com/mmc/p/fwa9mu68/. An investor presentation has been posted on our website at www.stagwellglobal.com and may be referred to during the webcast.
A recording of the webcast will be accessible one hour after the webcast and available for ninety days at www.stagwellglobal.com.
Stagwell Inc.
Stagwell is the challenger network built to transform marketing. We deliver scaled creative performance for the world's most ambitious brands, connecting culture-moving creativity with leading-edge technology to harmonize the art and science of marketing. Led by entrepreneurs, our specialists in 45+ countries are unified under a single purpose: to drive effectiveness and improve business results for their clients. Join us at www.stagwellglobal.com.
Contacts
For Investors: Ben Allanson
For Press: Beth Sidhu
Non-GAAP Financial Measures
In addition to its reported results, Stagwell Inc. has included in this earnings release certain financial results that the Securities and Exchange Commission (SEC) defines as "non-GAAP Financial Measures." Management believes that such non-GAAP financial measures, when read in conjunction with the Company's reported results, can provide useful supplemental information for investors analyzing period to period comparisons of the Company's results. Such non-GAAP financial measures include the following:
(1) Organic Net Revenue: "Organic net revenue growth" and "Organic net revenue decline" reflects the year-over-year change in the Company's reported net revenue attributable to the Company's management of the entities it owns. We calculate organic net revenue growth (decline) by subtracting the net impact of acquisitions (divestitures) and the impact of foreign currency exchange fluctuations from the aggregate year-over-year increase or decrease in the Company's reported net revenue. The net impact of acquisitions (divestitures) reflects the year-over-year change in the Company's reported net revenue attributable to the impact of all individual entities that were acquired or divested in the current and prior year. We calculate impact of an acquisition as follows: (a) for an entity acquired during the current year, we present the entity's prior year net revenue for the same period during which we owned it in the current year as impact of the acquisition in the current year; and (b) for an entity acquired in the prior year, we present the entity's prior year net revenue for the period during which we did not own the entity in the prior year as impact of the acquisition in the current year. We calculate impact of a divestiture as follows: (a) for a divestiture in the current year, we present the entity's prior year net revenue for the same period during which we no longer owned it in the current year as impact of the divestiture in the current year; and (b) for a divestiture in the prior year, we present the entity's prior year net revenue for the period during which we owned it in the prior year as impact of the divestiture in the current year. We calculate the impact of any acquisition or divestiture without adjusting for foreign currency exchange fluctuations. The impact of foreign currency exchange fluctuations reflects the year-over-year change in the Company's reported net revenue attributable to changes in foreign currency exchange rates. We calculate the impact of foreign currency exchange fluctuations for the portion of the reporting period in which we recognized revenue from a foreign entity in both the current year and the prior year. The impact is calculated as the difference between (1) reported prior period net revenue (converted to U.S. dollars at historical foreign currency exchange rates) and (2) prior period net revenue converted to U.S. dollars at current period foreign exchange rates.
(2) Net New Business: Estimate of annualized revenue for new wins less annualized revenue for losses incurred in the period.
(3) Adjusted EBITDA: defined as Net income excluding non-operating income or expense to achieve operating income, plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, and other items. Other items include restructuring costs, acquisition-related expenses, and non-recurring items.
(4) Adjusted Diluted EPS is defined as (i) Net income (loss) attributable to Stagwell Inc. common shareholders, plus net income attributable to Class C shareholders, excluding amortization expense, impairment and other losses, stock-based compensation, deferred acquisition consideration adjustments, discrete tax items, and other items, divided by (ii) (a) the per weighted average number of common shares outstanding plus (b) the weighted average number of Class C shares outstanding, (if dilutive). Other items includes restructuring costs, acquisition-related expenses, and non-recurring items, and subject to the anti-dilution rules.
(5) Free Cash Flow: defined as Adjusted EBITDA less capital expenditures, change in net working capital, cash taxes, interest, and distributions to minority interests, but excludes contingent M&A payments. Free Cash Flow Conversion is the percentage of adjusted EBITDA.
Included in this earnings release are tables reconciling reported Stagwell Inc. results to arrive at certain of these non-GAAP financial measures.
This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company's representatives may also make forward-looking statements orally or in writing from time to time. Statements in this document that are not historical facts, including, statements about the Company's beliefs and expectations, future financial performance, growth, and future prospects, the Company's strategy, business and economic trends and growth, technological leadership and differentiation, potential and completed acquisitions, anticipated and actual operating efficiencies and synergies and estimates of amounts for redeemable noncontrolling interests and deferred acquisition consideration, constitute forward-looking statements. Forward-looking statements, which are generally denoted by words such as "ability," "aim," "anticipate," "assume," "believe," "build," "consider," "continue," "could," "develop," "drive," "estimate," "expect," "focus," "forecast," "future," "guidance," "intend," "likely," "maintain," "may," "ongoing,", "outlook," "plan," "possible," "potential," "probable," "project," "seek," "should," "target," "will," "would" or the negative of such terms or other variations thereof and terms of similar substance used in connection with any discussion of current plans, estimates and projections are subject to change based on a number of factors, including those outlined in this section.
Forward-looking statements in this document are based on certain key expectations and assumptions made by the Company. Although the management of the Company believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. The material assumptions upon which such forward-looking statements are based include, among others, assumptions with respect to general business, economic and market conditions, the competitive environment, anticipated and unanticipated tax consequences and anticipated and unanticipated costs. These forward-looking statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined in this section. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company's control. Therefore, you should not place undue reliance on such statements. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events, if any.
Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. Such risk factors include, but are not limited to, the following:
risks associated with international, national and regional unfavorable economic conditions, including the effect of changing tariff and other trade policies, inflation and other macroeconomic factors that could affect the Company or its clients;
demand for the Company's services, which may precipitate or exacerbate other risks and uncertainties;
inflation and actions taken by central banks to counter inflation;
the Company's ability to attract new clients and retain existing clients;
the impact of a reduction in client spending and changes in client advertising, marketing and corporate communications requirements;
financial failure of the Company's clients;
the Company's ability to retain and attract key employees;
the Company's ability to compete in the markets in which it operates;
the Company's ability to achieve its cost saving initiatives;
the Company's implementation of strategic initiatives;
the Company's ability to remain in compliance with its debt agreements and the Company's ability to finance its contingent payment obligations when due and payable, including but not limited to those relating to redeemable noncontrolling interests and deferred acquisition consideration;
the Company's ability to manage its growth effectively;
the Company's ability to identify and complete acquisitions or other strategic transactions that complement and expand the Company's business capabilities and successfully integrate newly acquired businesses into the Company's operations, retain key employees, and realize cost savings, synergies and other related anticipated benefits within the expected time period;
the Company's ability to identify and complete divestitures and to achieve the anticipated benefits therefrom;
the Company's ability to develop products incorporating new technologies, including augmented reality, artificial intelligence, and virtual reality, and realize benefits from such products;
the Company's use of artificial intelligence, including generative artificial intelligence;
adverse tax consequences for the Company, its operations and its stockholders, that may differ from the expectations of the Company, including that recent or future changes in tax laws, potential changes to corporate tax rates in the United States and disagreements with tax authorities on the Company's determinations that may result in increased tax costs;
adverse tax consequences in connection with the business combination that formed the Company in August 2021, including the incurrence of material Canadian federal income tax (including material "emigration tax");
the Company's ability to maintain an effective system of internal control over financial reporting, including the risk that the Company's internal controls will fail to detect misstatements in its financial statements;
the Company's ability to accurately forecast its future financial performance and provide accurate guidance;
the Company's ability to protect client data from security incidents or cyberattacks;
economic disruptions resulting from war and other economic and geopolitical tensions (such as the ongoing military conflicts between Russia and Ukraine and in the Middle East), terrorist activities, natural disasters, public health events and tariff and trade policies;
stock price volatility; and
foreign currency fluctuations.
Investors should carefully consider these risk factors, other risk factors described herein, and the additional risk factors outlined in more detail in our 2024 Form 10-K, filed with the Securities and Exchange Commission (the "SEC") on March 11, 2025, and accessible on the SEC's website at www.sec.gov, under the caption "Risk Factors," and in the Company's other SEC filings.
SCHEDULE 1
STAGWELL INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share amounts)
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
2025
2024
Revenue
$ 706,818
$ 671,168
$ 1,358,558
$ 1,341,227
Operating Expenses
Cost of services
459,216
438,912
871,303
883,438
Office and general expenses
183,061
168,133
362,423
331,476
Depreciation and amortization
41,369
42,001
83,375
76,837
Impairment and other losses
—
215
—
1,715
683,646
649,261
1,317,101
1,293,466
Operating Income
23,172
21,907
41,457
47,761
Other income (expenses):
Interest expense, net
(23,455)
(23,533)
(46,811)
(44,498)
Foreign exchange, net
(1,338)
(1,355)
(118)
(3,613)
Other, net
(360)
193
(111)
(1,074)
(25,153)
(24,695)
(47,040)
(49,185)
Loss before income taxes and equity in earnings of non-consolidated affiliates
(1,981)
(2,788)
(5,583)
(1,424)
Income tax expense
2,673
1,165
4,395
3,750
Loss before equity in earnings of non-consolidated affiliates
(4,654)
(3,953)
(9,978)
(5,174)
Equity in income (loss) of non-consolidated affiliates
20
(1)
19
507
Net loss
(4,634)
(3,954)
(9,959)
(4,667)
Net (income) loss attributable to noncontrolling and redeemable noncontrolling interests
(627)
989
1,781
420
Net loss attributable to Stagwell Inc. common shareholders
$ (5,261)
$ (2,965)
$ (8,178)
$ (4,247)
Loss Per Common Share:
Basic
$ (0.02)
$ (0.03)
$ (0.04)
$ (0.04)
Diluted
$ (0.02)
$ (0.03)
$ (0.06)
$ (0.04)
Weighted Average Number of Common Shares Outstanding:
Basic
260,774
113,484
186,843
113,059
Diluted
260,774
113,484
265,600
113,059
SCHEDULE 2
STAGWELL INC.
UNAUDITED COMPONENTS OF NET REVENUE CHANGE
(amounts in thousands)
Net Revenue - Components of Change
Change
Three Months Ended June 30, 2024
Foreign Currency
Net Acquisitions (Divestitures)
Organic (1)
Total Change
Three Months Ended June 30, 2025
Organic
Total
Integrated Agencies Network
$ 321,870
$ 744
$ 9,037
$ 13,237
$ 23,018
$ 344,888
4.1 %
7.2 %
Brand Performance Network
157,108
2,289
142
(4,671)
(2,240)
154,868
(3.0) %
(1.4) %
Communications Network
72,393
144
10,855
(9,050)
1,949
74,342
(12.5) %
2.7 %
All Other
3,021
74
17,118
3,818
21,010
24,031
126.4 %
695.5 %
$ 554,392
$ 3,251
$ 37,152
$ 3,334
$ 43,737
$ 598,129
0.6 %
7.9 %
(1)
See Non-GAAP Financial Measures section above for the definition of Organic Net Revenue.
SCHEDULE 3
STAGWELL INC.
UNAUDITED COMPONENTS OF NET REVENUE CHANGE
(amounts in thousands)
Net Revenue - Components of Change
Change
Six Months Ended June 30, 2024
Foreign Currency
Net Acquisitions (Divestitures)
Organic (1)
Total Change
Six Months Ended June 30, 2025
Organic
Total
Integrated Agencies Network
$ 614,642
$ (198)
$ 13,580
$ 42,658
$ 56,040
$ 670,682
6.9 %
9.1 %
Brand Performance Network
319,670
1,011
142
(19,097)
(17,944)
301,726
(6.0) %
(5.6) %
Communications Network
139,881
101
25,203
(23,845)
1,459
141,340
(17.0) %
1.0 %
All Other
12,653
(80)
29,764
6,231
35,915
48,568
49.2 %
283.8 %
$ 1,086,846
$ 834
$ 68,689
$ 5,947
$ 75,470
$ 1,162,316
0.5 %
6.9 %
(1)
