Q1 YoY Revenue Decline of 3%, Q1 YoY Net Revenue Growth of 6%

Q1 YoY Net Revenue Growth excluding Advocacy of 9%, Digital Transformation Net Revenue ex. Advocacy Growth of 15%

Q1 Net Loss Attributable to Stagwell Inc. Common Shareholders of $3 million; Q1 Adjusted EBITDA of $81 million; Adjusted EBITDA Margin of 14%

Q1 EPS of $(0.04); Adjusted EPS of $0.12

Net New Business of $130 million in Q1; LTM Net New Business of $446 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, May 8, 2025 /PRNewswire/ -- (NASDAQ: STGW) – Stagwell Inc. ("Stagwell") today announced financial results for the quarter and three months ended March 31, 2025.STAGWELL INC. (NASDAQ: STGW) REPORTS RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2025

FIRST QUARTER RESULTS:

Q1 Revenue of $652 million, a decrease of 3% versus the prior year period; Q1 Revenue ex. Advocacy of $610 million, an increase of 1% versus the prior year period; Q1 Net Revenue of $564 million, an increase of 6% versus the prior year period; Q1 Net Revenue ex. Advocacy of $535 million, an increase of 9% versus the prior year period; Q1 Net Loss attributable to Stagwell Inc. Common Shareholders of $3 million versus $1 million in the prior year period; Q1 Adjusted EBITDA of $81 million, a decrease of 11% versus the prior year period; Q1 Adjusted EBITDA Margin of 14% on net revenue; Q1 Earnings Per Share Attributable to Stagwell Inc. Common Shareholders of $(0.04) versus $(0.01) in the prior year period; Q1 Adjusted Earnings Per Share attributable to Stagwell Inc. Common Shareholders of $0.12 versus $0.16 in the prior year period; Net new business of $130 million in the first quarter, last twelve-month net new business of $446 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, "Despite the macro noise from tariffs, Stagwell's first quarter results were in-line with our expectations, setting us up for a strong year ahead. Q1 is a low point in the political cycle and yet we delivered solid growth in the quarter, led by double-digit increases in our Digital Transformation, Creativity and Stagwell Marketing Cloud capabilities. We hit a record $130M of net new business and, consequently, we remain optimistic about our outlook for the rest of the year."

Frank Lanuto, Chief Financial Officer, commented: "Stagwell delivered solid first quarter results. We reported 9% total net revenue growth excluding advocacy, while posting $81 million in adjusted EBITDA as we effectively managed costs. Additionally, we have made significant progress in simplifying our capital structure and refinancing our revolving credit facility. Our results and these actions position us well for the year ahead."

Story Continues

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, May 8, 2025, at 8:30 a.m. (ET) to discuss results for Stagwell Inc. for the quarter and three months ended March 31, 2025. The video webcast will be accessible at https://bit.ly/436rkSP. 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
[email protected]

For Press: Beth Sidhu
[email protected]

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) Net New Business: Estimate of annualized revenue for new wins less annualized revenue for losses incurred in the period.

(2) 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.

(3) 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," "opportunity," "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 future changes in tax laws, potential increases 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 March 31, 2025  2024 Revenue $         651,740  $         670,059 Operating Expenses  Cost of services 412,087  444,526 Office and general expenses 179,362  163,343 Depreciation and amortization 42,006  34,836 Impairment and other losses —  1,500 633,455  644,205 Operating Income 18,285  25,854 Other income (expenses):  Interest expense, net (23,356)  (20,965) Foreign exchange, net 1,220  (2,258) Other, net 249  (1,267) (21,887)  (24,490) Income (loss) before income taxes and equity in earnings of non-consolidated affiliates (3,602)  1,364 Income tax expense 1,722  2,585 Loss before equity in earnings of non-consolidated affiliates (5,324)  (1,221) Equity in income (loss) of non-consolidated affiliates (1)  508 Net loss (5,325)  (713) Net (income) loss attributable to noncontrolling and redeemable noncontrolling interests 2,408  (569) Net loss attributable to Stagwell Inc. common shareholders $            (2,917)  $            (1,282) Loss Per Common Share:  Basic $              (0.03)  $              (0.01) Diluted $              (0.04)  $              (0.01) Weighted Average Number of Common Shares Outstanding:  Basic  112,088  112,633 Diluted 263,737  116,405

SCHEDULE 3 STAGWELL INC. UNAUDITED SEGMENT OPERATING RESULTS (amounts in thousands)  For the Three Months Ended March 31, 2025  Integrated 
Agencies 
Network  Brand 
Performance 
Network  Communications 
Network  All Other  Corporate  Total Net Revenue $    325,794  $        146,858  $                 66,998  $    24,537  $              —  $     564,187 Billable costs  51,560  15,360  20,630  3  —  87,553 Revenue 377,354  162,218  87,628  24,540  —  651,740  Billable costs 51,560  15,360  20,630  3  —  87,553 Staff costs 199,882  96,450  44,577  15,455  11,898  368,262 Administrative costs 31,644  23,407  10,174  8,225  1,659  75,109 Unbillable and other costs, net 17,099  15,458  490  7,187  —  40,234 Adjusted EBITDA (1) 77,169  11,543  11,757  (6,330)  (13,557)  80,582  Stock-based compensation 4,145  1,368  693  229  5,108  11,543 Depreciation and amortization 21,364  7,722  5,175  4,301  3,444  42,006 Deferred acquisition consideration 5,863  (1,282)  1,213  863  —  6,657 Other items, net (1) (2,246)  3,654  128  311  244  2,091 Operating income (loss) $      48,043  $                  81  $                    4,548  $  (12,034)  $    (22,353)  $       18,285

(1)  See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA and Other items, net.

SCHEDULE 4 STAGWELL INC. UNAUDITED SEGMENT OPERATING RESULTS (amounts in thousands)  For the Three Months Ended March 31, 2024  Integrated 
Agencies 
Network  Brand 
Performance 
Network  Communications 
Network  All Other  Corporate  Total Net Revenue $    292,772  $        162,562  $                  67,488  $      9,632  $              —  $     532,454 Billable costs  59,947  51,400  26,258  —  —  137,605 Revenue 352,719  213,962  93,746  9,632  —  670,059  Billable costs 59,947  51,400  26,258  —  —  137,605 Staff costs 186,534  98,431  39,264  7,821  10,107  342,157 Administrative costs 30,602  22,071  8,704  3,209  2,577  67,163 Unbillable and other costs, net 15,528  14,566  136  2,588  —  32,818 Adjusted EBITDA (1) 60,108  27,494  19,384  (3,986)  (12,684)  90,316  Stock-based compensation 9,321  2,043  1,049  98  3,605  16,116 Depreciation and amortization 19,381  7,514  2,894  2,421  2,626  34,836 Deferred acquisition consideration 2,045  (777)  (1,114)  —  —  154 Impairment and other losses 1,500  —  —  —  —  1,500 Other items, net (1) 5,511  5,019  282  174  870  11,856 Operating income (loss) $      22,350  $          13,695  $                  16,273  $    (6,679)  $    (19,785)  $       25,854

(1)  See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA and Other items, net.

SCHEDULE 5 STAGWELL INC. UNAUDITED RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP MEASURE) (amounts in thousands, except per share amounts)  For the Three Months Ended March 31, 2025  GAAP  Adjustments  Non-GAAP Net income (loss) attributable to Stagwell Inc. common shareholders  $            (2,917)  $            18,439  $            15,522 Net income (loss) attributable to Class C shareholders  (6,637)  24,513  17,876 Net income (loss) attributable to Stagwell Inc. and Class C shareholders and adjusted net income  $            (9,554)  $            42,952  $            33,398  Weighted average number of common shares outstanding  112,088  9,462  121,550 Weighted average number of shares of Class C Common Stock outstanding  151,649  —  151,649 Weighted average number of shares outstanding  263,737  9,462  273,199  Diluted EPS and Adjusted Diluted EPS (1)  $              (0.04)    $                0.12  Adjustments to Net Income (loss) Amortization    $            32,981  Stock-based compensation    11,543  Deferred acquisition consideration    6,657  Other items, net    2,091  53,272  Adjusted tax expense    (10,320)  $            42,952

(1)  Adjusted Diluted EPS is defined within the Non-GAAP Financial Measures section of the Executive Summary.

SCHEDULE 6 STAGWELL INC. UNAUDITED RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP MEASURE) (amounts in thousands, except per share amounts)  For the Three Months Ended March 31, 2024  GAAP  Adjustments  Non-GAAP Net income (loss) attributable to Stagwell Inc. common shareholders  $            (1,506)  $            19,480  $            17,974 Net income attributable to Class C shareholders  —  24,554  24,554 Net income (loss) attributable to Stagwell Inc. and Class C shareholders and adjusted net income  $            (1,506)  $            44,034  $            42,528  Weighted average number of common shares outstanding  116,405  4,534  120,939 Weighted average number of shares of Class C Common Stock outstanding  —  151,649  151,649 Weighted average number of shares outstanding  116,405  156,183  272,588  Diluted EPS and Adjusted Diluted EPS (1)  $              (0.01)    $                0.16  Adjustments to Net income (loss) Amortization    $            28,203  Impairment and other losses    1,500  Stock-based compensation    16,116  Deferred acquisition consideration    154  Other items, net    11,856  57,829  Adjusted tax expense    (12,748)  45,081  Net loss attributable to Class C shareholders    (1,047)  $            44,034   Allocation of adjustments to Net income  Net income attributable to Stagwell Inc. common shareholders    $            19,480   Net income attributable to Class C shareholders - add-backs    25,601  Net loss attributable to Class C shareholders    (1,047)  24,554  $            44,034

(1)  Adjusted Diluted EPS is defined within the Non-GAAP Financial Measures section of the Executive Summary.

SCHEDULE 7 STAGWELL INC. UNAUDITED CONSOLIDATED BALANCE SHEETS (amounts in thousands)  March 31, 2025  December 31, 2024  ASSETS  Current Assets  Cash and cash equivalents $                  137,653  $                  131,339 Accounts receivable, net 772,974  716,415 Expenditures billable to clients 163,702  173,194 Other current assets 147,163  114,200 Total Current Assets 1,221,492  1,135,148 Fixed assets, net 69,017  72,706 Right-of-use assets - operating leases 209,720  219,400 Goodwill 1,562,490  1,554,146 Other intangible assets, net 822,964  836,783 Other assets 96,671  90,038 Total Assets $               3,982,354  $               3,908,221 LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS ("RNCI"), AND SHAREHOLDERS' EQUITY  Current Liabilities  Accounts payable $                  420,779  $                  449,347 Accrued media 295,964  245,883 Accruals and other liabilities 219,047  265,356 Advance billings 311,329  294,609 Current portion of lease liabilities - operating leases 56,390  60,195 Current portion of deferred acquisition consideration 37,336  51,906 Total Current Liabilities 1,340,845  1,367,296 Long-term debt 1,465,323  1,353,624 Long-term portion of deferred acquisition consideration 55,941  50,209 Long-term lease liabilities - operating leases 224,323  245,397 Deferred tax liabilities, net 47,323  47,239 Other liabilities 57,850  59,139 Total Liabilities 3,191,605  3,122,904 Redeemable Noncontrolling Interests 10,856  8,412 Commitments, Contingencies and Guarantees  Shareholders' Equity  Common shares - Class A 114  115 Common shares - Class C 2  2 Paid-in capital 343,082  343,647 Retained earnings 10,504  11,740 Accumulated other comprehensive loss (19,302)  (23,773) Stagwell Inc. Shareholders' Equity 334,400  331,731 Noncontrolling interests 445,493  445,174 Total Shareholders' Equity 779,893  776,905 Total Liabilities, Redeemable Noncontrolling Interests and Shareholders' Equity $               3,982,354  $               3,908,221

SCHEDULE 8 STAGWELL INC. UNAUDITED SUMMARY CASH FLOW DATA (amounts in thousands)  Three Months Ended March 31, 2025  2024 Cash flows from operating activities:  Net loss $                   (5,325)  $                      (713) Adjustments to reconcile net income to cash used in operating activities:  Stock-based compensation 11,543  16,116 Depreciation and amortization 42,006  34,836 Amortization of right-of-use lease assets and lease liability interest 17,118  20,912 Impairment and other (gains) losses (3,529)  1,500 Deferred income taxes (747)  (655) Adjustment to deferred acquisition consideration 6,657  154 Other, net (2,060)  292 Changes in working capital:  Accounts receivable (44,701)  (42,976) Expenditures billable to clients 11,095  6,681 Other assets (32,778)  (19,584) Accounts payable (35,287)  22,206 Accrued expenses and other liabilities (19,075)  (63,856) Advance billings 15,628  (6,124) Current portion of lease liabilities - operating leases (20,558)  (21,660) Deferred acquisition related payments —  (250) Net cash used in operating activities (60,013)  (53,121) Cash flows from investing activities:  Capitalized software (11,966)  (8,794) Capital expenditures (3,912)  (5,439) Acquisitions, net of cash acquired (1,090)  (11,673) Other (3,391)  (218) Net cash used in investing activities (20,359)  (26,124) Cash flows from financing activities:  Repayment of borrowings under revolving credit facility (432,000)  (417,000) Proceeds from borrowings under revolving credit facility 543,000  540,000 Shares repurchased and cancelled (11,068)  (29,698) Distributions to noncontrolling interests (581)  (559) Payment of deferred consideration (16,103)  (1,657) Net cash provided by financing activities 83,248  91,086 Effect of exchange rate changes on cash and cash equivalents 3,438  (1,754) Net increase in cash and cash equivalents 6,314  10,087 Cash and cash equivalents at beginning of period 131,339  119,737 Cash and cash equivalents at end of period $                 137,653  $                 129,824Stagwell is the challenger network built to transform marketing. (PRNewsfoto/Stagwell Inc.)Cision

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