Stagwell Inc
For the period ended Mar 31, 2026. Filed May 1, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 1, 2026
STGW$11.64+7.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0000876883-25-000034
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-01.
0000876883-26-000017
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
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61 unchanged; 39 reworded; 49 added; 116 removed; 7 previous and 0 current paragraphs rearranged.
Tables are not compared: 47 previous and 25 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (49)
Current report
“Free Cash Flow” is defined as consolidated net cash flow from operations less cash outflow from capital expenditures and capitalized software, excluding material nonrecurring capital purchases.
Current report
Results of Operations and Reconciliation of Net Loss to Adjusted EBITDA:
Current report
Revenue for the three months ended March 31, 2026 was $704.1 million, compared to $651.7 million for the three months ended March 31, 2025, an increase of $52.4 million.
Current report
For the three months ended March 31, 2026, organic net revenue increased by $8.8 million, or 1.6% reflecting net growth across the Digital Transformation and Communications segments, partially offset by net declines in Media & Commerce and The Marketing Cloud. Growth in Digital Transformation was driven by new client wins, expanded scope with existing clients, and increased demand for AI enabled offerings in the technology sector. Communications growth was primarily attributable to higher corporate public affairs revenue, election cycle fundraising growth, and early primary activity related to the 2026 election cycle. Within Media & Commerce and The Marketing Cloud, organic net revenue benefited from higher integrated media, technology, and data offerings as well as increased platform utilization and subscription-based services, however, these gains were more than offset by revenue declines in those segments related to the conflict in the Middle East.
Current report
The increase in net acquisitions (divestitures) was impacted by the prior year acquisitions of JetFuel Studio LLC and Powered by JetFuel LLC (collectively, “Jetfuel”), Create Group Holding Limited (“Create”), and ADK Global (“ADK”) which expanded the Company’s capabilities in experiential marketing, digital communications, and integrated marketing in Asia-Pacific (“APAC”) region, partially offset by the divestiture of a Brand in the Marketing Services segment.
Current report
Cost of services increased by $47.4 million. Excluding the increase in Billable costs of $32.0 million and the addition of expenses from acquired entities of $3.5 million, Cost of services increased $12.0 million primarily due to a $3.7 million increase in severance to reorganize the business, and higher staff costs to support the growth of the business.
Current report
Office and general expenses increased by $11.3 million. Excluding the addition of expenses of acquired entities of $4.7 million, Office and general expenses increased $6.6 million, primarily attributable to higher software license fees due to investments in automation and AI intended to improve workflow efficiency and support future margin expansion and higher staff costs to support the growth in the business and an increase in Deferred acquisition consideration expense as explained below.
Current report
Stock-based compensation increased by $2.7 million, primarily due to an increase in the fair value of certain profit interest awards driven by strong performance in certain Brands.
Current report
Deferred acquisition consideration increased by $3.6 million, primarily attributable to strong performance in certain acquired Brands, causing an increase in the fair value of the deferred acquisition consideration liability of those Brands, partially offset by a reduction in the fair value of the deferred acquisition consideration liability associated with certain other Brands driven by performance timing.
Current report
Operating income decreased by $8.6 million, as declines in the Media & Commerce segment and Corporate segment totaling $13.4 million were partially offset by a $6.0 million increase in the Communications segment. The decrease in Media & Commerce of $6.1 million was driven primarily by an $8.4 million increase in deferred acquisition consideration expense. The increase in Corporate’s Operating loss was primarily attributable to higher software license fees related to investments in automation and AI as well as higher staff costs to support business growth. These declines were partially offset by higher Operating income in Communications, reflecting an $8.7 million improvement, driven by corporate public affairs consulting revenue, election-cycle fundraising growth, early primary activity, and operational savings from a prior-year leadership restructuring.
Current report
Income Tax (Benefit) Expense
Current report
The effective tax rate increased by 65.1 percentage points compared to the prior‑year period, primarily due to a 49.1 percentage point increase from additional pre-tax losses, which were not subject to valuation allowances, for which we recorded a $3.9 million tax benefit, a 4.2 percentage point increase related to a corporate restructure for which the Company recorded a $0.7 million tax benefit, and an 11.8 percentage point increase from changes to other discrete tax items totaling less than $0.1 million tax impact.
Current report
Net Loss Attributable to Stagwell Inc. Common Shareholders
Current report
Adjusted EBITDA increased by $7.4 million, or 9.0% and Adjusted EBITDA margin as a percentage of Net revenue expanded to 15.3% from 14.6%, driven primarily by improved performance in the Communications, Digital Transformation, and Media & Commerce segments, partially offset by higher costs in Corporate. Communications contributed $7.5 million of the increase, reflecting Net revenue growth of $5.8 million and a 5.2 percentage point improvement in the staff cost ratio as a percentage of Net Revenue, which drove margin expansion to 25.9% from 19.3%. This improvement was primarily attributable to operating leverage, where higher corporate public affairs consulting revenue, early-cycle fundraising growth, and early primary activity were delivered through a variable cost base. Digital Transformation contributed a $2.4 million increase in Adjusted EBITDA, supported by a $4.9 million increase in organic net revenue from AI-related services, and $3.2 million of incremental revenue from the acquisition of Create, partially offset by a $5.3 million increase in Staff costs. Media & Commerce contributed $2.1 million of incremental Adjusted EBITDA, with margin expanding to 10.3% from 9.1%, reflecting disciplined cost management. These increases were partially offset by a $6.7 million decline in Corporate, primarily due to higher software license fees related to investments in automation and AI and higher Staff costs to support standardized shared services platform to optimize cost structures and to support business growth.
Current report
(2)Represents the difference between the income tax benefit of $2.9 million at an effective tax rate of 17.3% on a GAAP basis and the income tax expense of $15.6 million at an effective tax rate of 26.5% on a non-GAAP basis. The difference reflects the tax impact of non-GAAP adjustments.
Current report
(2)Represents the difference between the income tax expense of $1.7 million at an effective tax rate of (47.8)% on a GAAP basis and the income tax expense of $12.5 million at an effective tax rate of 26.5% on a non-GAAP basis. The difference reflects the tax impact of non-GAAP adjustments.
Current report
Revenue for the three months ended March 31, 2026 was $250.8 million, compared to $248.0 million for the three months ended March 31, 2025, an increase of $2.8 million.
Current report
The increase in organic net revenue of $0.6 million, or 0.3%, was primarily attributable to an increase in the Research service line due to new client wins and expanded client relationships in the business services and automotive sectors driven by the accelerating adoption of AI, partially offset by broader industry headwinds on pricing. The decrease in net acquisitions (divestitures) was primarily driven by the divestiture of a Brand, partially offset by the prior year acquisition of Jetfuel, an experiential marketing services agency.
Current report
Cost of services increased $8.5 million. Excluding the increase in Billable costs of $0.4 million and the decrease of expenses from acquired/divested entities of $0.9 million, Cost of services increased $9.0 million. This increase was primarily attributable to higher staff costs to support growth of business, increase in severance to reorganize the business and increase in stock-based compensation discussed below.
Current report
Stock-based compensation expense increased $2.5 million, primarily due to an increase in the fair value of certain profit interest awards driven by strong performance in certain Brands and a greater proportion of the annual incentive compensation being allocated to stock-based awards compared to last year.
Current report
Deferred acquisition consideration decreased $2.6 million, primarily attributable to a reduction in the fair value of the deferred acquisition consideration liability associated with certain Brands driven by the performance timing of those Brands.
Current report
Operating income decreased $2.7 million, primarily due to a non-recurring gain on lease termination of $3.5 million in the three months ended March 31, 2025, an increase in Staff costs of $4.3 million to support growth of business and higher Stock-based compensation expense of $2.5 million, partially offset by an increase in Net revenue primarily due to foreign currency fluctuations of $2.6 million and non-recurrence of $2.6 million in deferred acquisition consideration expense recognized in the prior year period.
Current report
Adjusted EBITDA increased by $0.7 million, or 1.7%, reflecting Net revenue growth of $2.4 million, or 1.1% partially offset only by an increase in expenses.
Current report
Revenue for the three months ended March 31, 2026 was $101.5 million, compared to $90.9 million for the three months ended March 31, 2025, an increase of $10.6 million.
Current report
The strong increase in organic net revenue of $4.9 million, or 5.6%, was attributable to an increase in the technology sector in the Development and Implementation and Digital Activation service lines, which grew $4.5 million driven by AI-related services. The increase in net acquisitions (divestitures) was primarily driven by the prior year acquisition of Create, a digital communications group in the Middle East.
Current report
Cost of services increased $7.2 million. Excluding the increase in Billable costs of $2.6 million and the addition of expenses from acquired entities of $2.1 million, Cost of services increased $2.5 million, or only 4.8% compared to organic net revenue growth of 5.6%, reflecting strong operating leverage. This increase was primarily due to higher staff costs due to the growth in Net revenue, partially offset by the restructuring of agency teams to support business optimization efforts and the impact of competition in the labor market.
Current report
Operating income increased $1.3 million, or 10.3%, primarily attributable to organic net revenue growth of $4.9 million or 5.6% from an increase in AI-related services in the technology sector and the additional Net revenue from the Create acquisition of $3.2 million, or 3.6%. This increase was partially offset by an increase in Staff costs of $5.3 million or 9.0% to support the growth in Net revenue, and by an increase in Other items, net of $1.1 million, primarily due to restructuring costs. Operating margin increased from 14.4% to 14.6%, reflecting improved operating leverage.
Current report
Adjusted EBITDA increased by $2.4 million or 10.2%. Adjusted EBITDA margin as a percentage of Net revenue expanded from 26.1% to 26.4% primarily driven by an increase in Net revenue of $8.0 million or 9.0%, partially offset by the increase in Staff costs of $5.3 million, or 9.0%.
Current report
Revenue for the three months ended March 31, 2026 was $174.5 million, compared to $160.4 million for the three months ended March 31, 2025, an increase of $14.1 million.
Current report
Organic net revenue decreased by $1.0 million or 0.7%. Increases in the Media Buying service line were driven by integrated media, technology, and data offerings that contributed to new wins and expanded scope with existing clients and were offset by a decrease due to the conflict in the Middle East. The increase in net acquisitions (divestitures) was primarily driven by the prior year acquisition of ADK, an integrated marketing company that expands our global footprint in the APAC region.
Current report
Cost of services increased by $11.2 million. Excluding the increase in Billable costs of $10.8 million and the addition of expenses from acquired entities of $2.0 million, Cost of services decreased $1.6 million, or 1.8%, compared to organic net revenue decrease of 0.7%.
Current report
Office and general expenses increased $8.3 million. Excluding the addition of costs from acquired entities of $2.4 million, Office and general expenses increased $5.9 million, primarily due to higher Deferred acquisition consideration as explained below.
Current report
Operating loss for the three months ended March 31, 2026 was $3.9 million, compared to income of $2.2 million for the three months ended March 31, 2025, representing a decrease of $6.1 million. The decrease in Operating income (loss) was primarily driven by the increase in Deferred acquisition consideration expense of $8.4 million driven by the strong performance of a certain Brand. Excluding the increase in Billable costs of $10.8 million and the addition of expenses from acquired entities of $2.0 million, Cost of services decreased $1.6 million, or 1.8%, compared to organic net revenue decrease of 0.7%, reflecting disciplined cost management.
Current report
Adjusted EBITDA increased by $2.1 million, or 15.6%, primarily due to an increase in Net revenue, partially offset by an increase in Staff costs, as discussed above. Adjusted EBITDA margin as a percentage of Net revenue increased from 9.1% to 10.3%, reflecting disciplined cost management.
Current report
Revenue for the three months ended March 31, 2026 was $153.1 million compared to $129.1 million for the three months ended March 31, 2025, an increase of $24.0 million.
Current report
The increase in organic net revenue of $4.8 million, or 5.3%, was primarily attributable to growth in corporate public affairs consulting and the commencement of primary campaigns ahead of the 2026 U.S. election cycle, new client wins and expanded scope with existing clients. This was partially offset by reduced client spending and competitive account losses in the consumer products vertical, delayed new engagement activity driven by geopolitical uncertainty in the Middle East and the non-recurrence of a prior year project timing benefits.
Current report
Cost of services increased $19.1 million, primarily driven by $18.2 million increase in Billable costs reflecting higher pass-through activity. Excluding Billable costs, Cost of services increased only $0.8 million, or 1.6% compared to organic net revenue growth of 5.3%, reflecting deliberate headcount optimization and operational restructuring across the segment’s Brands, including the transition of certain functions to shared services and AI-driven workflow efficiencies.
Current report
Operating income increased $6.0 million, or 72.5%. The increase was primarily attributable to $8.7 million of improvement due to corporate public affairs consulting, election-cycle fundraising growth and early primary activity, as well as operational savings from a prior-year leadership restructuring, and the non-recurrence of $1.2 million in deferred acquisition consideration expense recognized in the prior year period. These increases were partially offset by $2.6 million in combined Operating income declines at our consumer-focused integrated communications and international strategic advisory services, reflecting the revenue headwinds discussed above.
Current report
Adjusted EBITDA increased by $7.5 million, or 42.4%, reflecting Net revenue growth of $5.8 million, or 6.4%, combined with a 5.2 percentage point improvement in the staff cost ratio as a percentage of Net revenue, consistent with the expense efficiencies described above. Adjusted EBITDA margin as a percentage of Net revenue expanded to 25.9% from 19.3%, driven primarily by the operating leverage, where higher revenue from corporate public affairs consulting, election-cycle fundraising growth and early primary activity was delivered against a variable cost base.
Current report
Revenue for the three months ended March 31, 2026 was $26.5 million compared to $25.2 million for the three months ended March 31, 2025, an increase of $1.4 million.
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Removed paragraphs (116)
Previous report
Recent Developments
Previous report
On October 30, 2025, the Company sold a Brand, which was included in the Marketing Services segment, for $12.6 million in cash resulting in an estimated pre-tax loss of approximately $3 million. The divestiture did not represent a strategic shift that would have a major effect on the Company’s consolidated results of operations, and therefore its results of operations were not reported as discontinued operations.
Previous report
Results of Operations:
Previous report
Revenue for the three months ended September 30, 2025 was $743.0 million, compared to $711.3 million for the three months ended September 30, 2024, an increase of $31.7 million.
Previous report
For the three months ended September 30, 2025 organic net revenue decreased $2.3 million, or 0.4%. The decrease was primarily attributable to lower advocacy services following the 2024 election season and a decrease in client spending in the consumer products sectors, partially offset by new wins and increased spending by clients in the retail sector. The increase in net acquisitions (divestitures) was impacted by the acquisitions of JetFuel Studio LLC and Powered by JetFuel LLC (“Jetfuel”), Create Group Holding Limited (“Create”), ADK Global (“ADK”), Consulum (Cayman) Limited (“Consulum”), L.D.R.S. Group Ltd. (“Leaders”), and UNICEPTA Holding GmbH (“Unicepta”).
Previous report
The geographic mix in net revenues for the three months ended September 30, 2025 and 2024 is as follows:
Previous report
Operating Income for the three months ended September 30, 2025 was $60.9 million, compared to $41.8 million for the three months ended September 30, 2024, representing an increase of $19.1 million. The change in Operating Income was primarily attributable to an increase in Net revenue of $34.3 million and a decrease in Office and general expenses, partially offset by an increase in Cost of services excluding Billable costs, and Depreciation and amortization.
Previous report
Cost of services increased by $13.9 million. Excluding the decline in Billable costs of $2.6 million, Cost of services increased $16.5 million, primarily attributable to higher staff costs due to the inclusion of costs from acquired entities.
Previous report
The decrease in Office and general expenses of $10.0 million was primarily attributable to a decrease in deferred acquisition consideration expense, partially offset by an increase in staff costs due to the inclusion of costs from acquired entities and increase in technology related expenses.
Previous report
Stock-based compensation decreased by $4.3 million, primarily due to an increase in the fair value of profit interest awards in the third quarter of 2024, partially offset by an increase in the fair value and number of awards expensed compared to last year.
Previous report
Deferred acquisition consideration decreased by $13.9 million, primarily attributable to a reduction in the fair value of the deferred acquisition consideration liability associated with certain Brands.
Previous report
Depreciation and amortization increased by $8.2 million, primarily attributable to the Company’s acquisition of businesses.
Previous report
Income Tax Expense
Previous report
The difference in the effective tax rate of 28.7% in the three months ended September 30, 2025, as compared to 29.1% in the three months ended September 30, 2024, was primarily due to a reduction in interest related to uncertain tax positions and a reduction in shortfall of deductions for share based compensation expense vested during the period, offset by an increase in current losses subject to valuation allowance.
Previous report
Adjusted EBITDA
Previous report
Adjusted EBITDA for the three months ended September 30, 2025 was $114.6 million, compared to $111.2 million for the three months ended September 30, 2024, representing an increase of $3.4 million, primarily driven by an increase in Net revenue, partially offset by an increase in Staff costs due to the inclusion of costs from acquired entities, as discussed above.
Previous report
Revenue for the three months ended September 30, 2025 was $297.2 million, compared to $267.7 million for the three months ended September 30, 2024, an increase of $29.5 million.
Previous report
The increase in organic net revenue was primarily attributable to new client wins and increased spending in the retail and financials sectors, partially offset by lower spending due to budget cuts by large clients in the consumer products sectors. The increase in net acquisitions (divestitures) was primarily driven by the acquisition of Jetfuel.
Previous report
Operating Income for the three months ended September 30, 2025 was $37.5 million, compared to $21.0 million for the three months ended September 30, 2024, representing an increase of $16.5 million. The increase in Operating Income was primarily attributable to an increase in Net revenue of $20.7 million, partially offset by an increase in Cost of services excluding Billable costs. Cost of services increased $12.2 million. Excluding the decline in Billable costs of $8.8 million, Cost of services increased $3.4 million, primarily attributable to higher staff costs.
Previous report
Revenue for the three months ended September 30, 2025 was $103.7 million, compared to $88.3 million for the three months ended September 30, 2024, an increase of $15.4 million.
Previous report
The components of the fluctuations in net revenue for the three months ended September 30, 2025, compared to the three months ended September 30, 2024 were as follows:
Previous report
The increase in organic net revenue was primarily attributable to new client wins and increased spending in the communications and consumer products sectors. The increase in net acquisitions (divestitures) was primarily driven by the acquisition of Create.
Previous report
Operating Income for the three months ended September 30, 2025 was $16.7 million, compared to $13.6 million for the three months ended September 30, 2024, representing an increase of $3.2 million. The increase in Operating Income was primarily attributable to an increase in Net revenue of $10.1 million, partially offset by an increase in Cost of services excluding Billable costs. Cost of services increased $10.7 million. Excluding the decline in Billable costs of $5.3 million, Cost of services increased $5.4 million, primarily attributable to higher staff costs and the inclusion of costs from acquired entities.
Previous report
Revenue for the three months ended September 30, 2025 was $174.7 million, compared to $159.6 million for the three months ended September 30, 2024, an increase of $15.1 million.
Previous report
The increase in organic net revenue was primarily attributable to new client wins in the financials and technology sectors, partially offset by lower spending due to budget cuts by large clients in the food and beverage and retail sectors. The increase in net acquisitions (divestitures) was primarily driven by the acquisition of ADK.
Previous report
Operating Income for the three months ended September 30, 2025 was $11.1 million, compared to $11.9 million for the three months ended September 30, 2024, representing a decrease of $0.8 million. The change in Operating Income was primarily attributable to an increase in Net revenue of $8.6 million more than offset by an increase in Cost of services excluding Billable costs and Office and general expenses. Cost of services increased $8.7 million. Excluding the decline in Billable costs of $6.5 million, Cost of services increased $2.2 million, primarily attributable to higher staff costs due to the inclusion of costs from acquired entities.
Previous report
The increase in Office and general expenses of $6.5 million was primarily attributable to an increase in Deferred acquisition consideration.
Previous report
Deferred acquisition consideration increased $8.4 million, primarily as a result of reduction in expenses in the third quarter of 2024 due to decrease in the fair value of a certain Brand.
Previous report
Adjusted EBITDA increased $4.0 million, primarily due to an increase in Net revenue partially offset by an increase in expenses, as discussed above.
Previous report
Revenue for the three months ended September 30, 2025 was $144.9 million, compared to $184.7 million for the three months ended September 30, 2024, a decrease of $39.7 million.
Previous report
The components of the fluctuations in net revenue for the three months ended September 30, 2025, compared to the three months ended September 30, 2024 were as follows:
Previous report
The decrease in organic net revenue was primarily attributable to decreased spending, primarily due to lower advocacy services as compared to higher spending in 2024 associated with the 2024 elections, and decreased spending in the consumer products sector due to client losses and budget cuts. The increase in net acquisitions (divestitures) was primarily driven by the acquisition of Consulum.
Previous report
Operating Income for the three months ended September 30, 2025 was $19.0 million, compared to $26.0 million for the three months ended September 30, 2024, representing a decrease of $7.0 million. The decrease in Operating Income was primarily attributable to a decrease in Net Revenue of $16.1 million partially offset by a decrease in Office and general expenses. Cost of services decreased by $24.4 million. Excluding the decline in Billable costs of $23.6 million, Cost of services decreased by $0.8 million.
Previous report
The decrease in Office and general expenses of $10.4 million was primarily attributable to a decrease in Deferred acquisition consideration.
Previous report
Deferred acquisition consideration decreased $10.5 million, primarily as a result of a decrease in the fair value of a certain Brand.
Previous report
Adjusted EBITDA decreased $17.4 million, primarily due to a decrease in Net revenue, as discussed above.
Previous report
Revenue for the three months ended September 30, 2025 was $27.2 million, compared to $11.4 million for the three months ended September 30, 2024, an increase of $15.7 million.
Previous report
The increase in net acquisitions (divestitures) was primarily driven by the acquisitions of Leaders and Unicepta.
Previous report
Operating Income for the three months ended September 30, 2025 was $3.2 million, compared to a loss of $6.1 million for the three months ended September 30, 2024. The increase in Operating Income was primarily attributable to an increase in Net revenue and a decrease in Office and general expenses, partially offset by an increase in Costs of services.
Previous report
The increase in Cost of services of $8.6 million was primarily attributable to higher staff costs and unbillable costs primarily due to the inclusion of costs from acquired entities.
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Reworded paragraphs (39)
Previous wording
The following discussion and analysis are based on and should be read in conjunction with our Unaudited Consolidated Financial Statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the period ended September 30, 2025 (the “Form 10-Q”). The following discussion and analysis contain forward-looking statements and should be read in conjunction with the disclosures and information contained and referenced under the captions “Forward-Looking Statements” and “Risk Factors” in this Form 10-Q. The following discussion and analysis also include a discussion of certain non-GAAP financial measures. A description of the non-GAAP financial measures discussed in this section and reconciliations to the comparable GAAP measures are below.
Current wording
The following discussion and analysis are based on and should be read in conjunction with our Unaudited Consolidated Financial Statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the period ended March 31, 2026 (the “Form 10-Q”). The following discussion and analysis contain forward-looking statements and should be read in conjunction with the disclosures and information contained and referenced under the captions “Forward-Looking Statements” and “Risk Factors” in this Form 10-Q. The following discussion and analysis also include a discussion of certain non-GAAP financial measures. A description of the non-GAAP financial measures discussed in this section and reconciliations to the comparable United States (“U.S.”) generally accepted accounting principles (“GAAP”) measures are below.
Previous wording
Stagwell conducts its business through its networks, which provide marketing and business solutions that realize the potential of combining data and creativity. Stagwell’s strategy is to build, grow, and acquire market-leading businesses that deliver the modern suite of services that marketers need to thrive in a rapidly evolving business environment. We believe Stagwell’s differentiation lies in its creative roots and proven entrepreneurial leaders, which together with innovations in technology and data, bring transformational marketing, activation, communications and strategic consulting services to clients. Stagwell leverages its range of services in an integrated manner, offering strategic, creative and innovative solutions that are technologically forward and media-agnostic. The Company’s strategy is intended to challenge the industry status quo, realize returns on investment, and drive transformative growth and business performance for its clients and stakeholders.
Current wording
Stagwell conducts its business through its segments, which provide marketing and business solutions that realize the potential of combining data and creativity. Stagwell’s strategy is to build, grow, and acquire market-leading businesses that deliver the modern suite of services that marketers need to thrive in a rapidly evolving business environment. We believe Stagwell’s differentiation lies in its digital-first and technology-based roots and proven entrepreneurial leaders, which together with innovations in technology and data, bring transformational marketing, activation, communications and strategic consulting services to clients. Stagwell leverages its range of services in an integrated manner, offering strategic, creative and innovative solutions that are technologically forward and media-agnostic. The Company’s strategy is intended to challenge the industry status quo, realize returns on investment, and drive transformative growth and business performance for its clients and stakeholders.
Previous wording
Stagwell manages its business by monitoring several financial and non-financial performance indicators. The key indicators that we focus on are revenue, operating expenses, capital expenditures, net income (loss), net income (loss) attributable to Stagwell Inc. common shareholders, net income (loss) per share and the non-GAAP financial measures described below. Revenue growth is analyzed by reviewing a mix of measurements, including (i) growth by major geographic location, (ii) growth from existing clients and the addition of new clients, (iii) growth by principal capability, (iv) growth from currency changes, and (v) growth from acquisitions. In addition to monitoring the foregoing financial indicators, the Company assesses and monitors several non-financial performance indicators relating to the business performance of our networks. These indicators may include a network’s recent new client win/loss record; the depth and scope of a pipeline of potential new client account activity; the overall quality of the services provided to clients; and the relative strength of the network’s next generation team that is in place as part of a potential succession plan to succeed the current senior executive team.
Current wording
Stagwell manages its business by monitoring several financial and non-financial performance indicators. The key indicators that we focus on are revenue, operating expenses, staff cost ratio, capital expenditures, net income (loss), net income (loss) attributable to Stagwell Inc. common shareholders, net income (loss) per share and the non-GAAP financial measures including Adjusted EBITDA, Free cash flow at consolidated level, and Adjusted EPS, as defined and described below. Revenue growth is analyzed by reviewing a mix of measurements, including (i) growth by major geographic location, (ii) growth from existing clients and the addition of new clients, (iii) growth by service line, (iv) growth from currency changes, and (v) growth from acquisitions. In addition to monitoring the foregoing financial indicators, the Company assesses and monitors several non-financial performance indicators relating to the business performance of our segments. These indicators may include the Company’s recent new client win/loss record; the depth and scope of a pipeline of potential new client account activity; the overall quality of the services provided to clients; and the relative strength of the Company’s next generation team that is in place as part of a potential succession plan to succeed the current senior executive team.
Previous wording
Historically, we typically generate the highest quarterly revenue during the fourth quarter of each year. In addition, within our Communications segment, client concentration increases during election years due to the cyclical nature of our advocacy Brands. The highest volumes of retail related consumer marketing increase with the back-to-school season through the end of the holiday season.
Current wording
Historically, we typically generate the highest quarterly revenue during the fourth quarter of each year. The highest volumes of retail related consumer marketing increase with the back-to-school season through the end of the holiday season. In addition, within our Communications segment, client concentration increases during election years due to the cyclical nature of our advocacy services.
Previous wording
The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). In addition, the Company has included non-GAAP financial measures and ratios, which management uses to operate the business, which it believes provide useful supplemental information to both management and readers of this report in making period-to-period comparisons in measuring the financial performance and financial condition of the Company. These measures do not have a standardized meaning prescribed by GAAP and should not be construed as an alternative to other titled measures determined in accordance with GAAP. The non-GAAP financial measures included are “net revenue,” “organic net revenue growth (decline),” “Adjusted EBITDA,” and “Adjusted Diluted EPS.”
Current wording
The Company reports its financial results in accordance with GAAP. In addition, the Company has included non-GAAP financial measures and ratios, which management uses to operate the business, which it believes provide useful supplemental information to both management and readers of this report in making period-to-period comparisons in measuring the financial performance and financial condition of the Company. These measures do not have a standardized meaning prescribed by GAAP and should not be construed as an alternative to other titled measures determined in accordance with GAAP. The non-GAAP financial measures included are “net revenue,” “organic net revenue growth (decline),” “Adjusted EBITDA,” and “Adjusted Diluted EPS.”
Previous wording
“Adjusted EBITDA” is defined as Net income (loss) attributable to Stagwell Inc. common shareholders excluding non-operating income or expense to achieve operating income (loss), plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, impairment and other losses, and other items. Other items primarily includes restructuring, certain system implementation and acquisition-related expenses. Adjusted EBITDA for our reportable segments is reconciled to Operating Income (Loss), as Net Income (Loss) is not a relevant reportable segment financial metric.
Current wording
“Adjusted EBITDA” is defined as Net income (loss) attributable to Stagwell Inc. common shareholders excluding non-operating income or expense to achieve Operating income (loss), plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, impairment and other losses, and other items. Other items primarily includes restructuring, certain system implementation, working capital administrative fees and acquisition-related expenses. Adjusted EBITDA for our reportable segments is reconciled to Operating income (loss), as Net income (loss) is not relevant for reportable segment financial metric.
Previous wording
“Adjusted Diluted EPS” is defined as (i) Net income (loss) attributable to Stagwell Inc. common shareholders, plus net income (loss) attributable to Class C shareholders, excluding the impact of amortization expense, impairment and other losses, stock-based compensation, deferred acquisition consideration adjustments, discrete tax items, and other items (as defined above), based on total consolidated amounts, then allocated to Stagwell Inc. common shareholders and Class C shareholders, based on their respective income allocation percentage using a normalized effective income tax rate divided by (ii) the diluted weighted average shares outstanding. The diluted weighted average shares outstanding is calculated as (a) the diluted weighted average number of common shares outstanding plus (b) the shares of Class C Common Stock as if converted to shares of Class A Common Stock if not included because they were anti-dilutive.
Current wording
“Adjusted Diluted EPS” is defined as (i) Net income (loss) attributable to Stagwell Inc. common shareholders, plus net income (loss) attributable to Class C shareholders, excluding the impact of amortization expense, impairment and other losses, stock-based compensation, deferred acquisition consideration adjustments, discrete tax items, and other items (as defined above), based on total consolidated amounts, then allocated to Stagwell Inc. common shareholders and Class C shareholders, based on their respective income allocation percentage using a normalized effective income tax rate divided by (ii) the diluted weighted average shares outstanding. The diluted weighted average shares outstanding is calculated as (a) the diluted weighted average number of common shares outstanding plus (b) the shares of Class C common stock, par value $0.00001 per share (the “Class C Common Stock”) as if converted to shares of Class A Common Stock if not included because they were anti-dilutive.
Previous wording
During the three months ended September 30, 2025, the Company reorganized its organizational structure to better reflect how the Company manages its business and goes to market, to simplify reporting and to provide clearer visibility into performance trends across its service offerings. The reorganization also seeks to enhance consistency in the Company’s portfolio of services and improve the transparency and comparability of financial information provided to investors.
Current wording
On September 30, 2025, the Company reorganized its organizational structure to better reflect how the Company manages its business and goes to market, to simplify reporting and to provide clearer visibility into performance trends across its service offerings. The reorganization also seeks to enhance consistency in the Company’s portfolio of services and improve the transparency and comparability of financial information provided to investors.
Previous wording
As a result of the reorganization, the Company now has five operating and reportable segments: “Marketing Services,” “Digital Transformation,” “Media & Commerce,” “Communications,” and “The Marketing Cloud.” Periods presented prior to the third quarter of 2025 have been recast to reflect the reclassification of Brands within the reportable segments. Based on the segment analysis, management concluded that the operating segments do not exhibit similar economic characteristics or share other aggregation criteria. As a result, none of our operating segments are aggregated for reporting purposes. Further, as a result of the reorganization, certain reporting units have been redefined, and the composition of others has changed. In accordance with ASC 350-20, Intangibles—Goodwill and Other: Goodwill, when changes occur in the composition of reporting units, the Company is required to reallocate goodwill to the affected reporting units using a relative fair value approach and perform goodwill impairment testing for impacted reporting units both immediately before and after the reorganization. As part of the reorganization, goodwill was reallocated. The Company performed the required goodwill impairment assessments as of the date of the reorganization. The assessment indicated that the estimated fair value of each impacted reporting unit exceeded its carrying amount both immediately prior to and immediately subsequent to the reallocation of goodwill. Accordingly, no goodwill impairment was recognized. The goodwill balance as of September 30, 2025, for Marketing Services, Digital Transformation, Media & Commerce, Communications and The Marketing Cloud was $529.7 million, $308.7 million, $419.9 million, $252.9 million and $86.1 million, respectively. The new structure fairly reflects the allocation of the Company’s resources, thereby improving comparability for investors and supporting the Company’s long-term strategic objectives. The composition of these segments is as follows:
Current wording
As a result of the reorganization, the Company now has five operating and reportable segments: “Marketing Services,” “Digital Transformation,” “Media & Commerce,” “Communications,” and “The Marketing Cloud.” Prior period presented has been recast to reflect the reclassification of Brands within the reportable segments. Based on the segment analysis, management concluded that the operating segments do not exhibit similar economic characteristics or share other aggregation criteria. As a result, none of our operating segments are aggregated for reporting purposes. Further, as a result of the reorganization, certain reporting units have been redefined, and the composition of others has changed. The new structure fairly reflects the allocation of the Company’s resources, thereby improving comparability for investors and supporting the Company’s long-term strategic objectives. The composition of these segments is as follows:
Previous wording
•The Marketing Services segment delivers a broad range of services across four closely related client needs: creative, research, experiential, and social media solutions designed to build and elevate brands. Capabilities include developing breakthrough brand campaigns, providing consumer insights through advanced research methodologies, creating immersive experiential marketing programs and social engagement strategies that connect brands with audiences across digital platforms. By combining creative excellence, data-driven insights, and innovative experiences, Marketing Services empowers organizations to differentiate themselves in the marketplace, drive audience engagement, and achieve measurable business results. These services employ a wide variety of artificial intelligence (AI) powered services in the delivery such as AI-powered creative production and data analysis. Brands in this segment include, but are not limited to, creative agencies 72&Sunny and Anomaly, research agencies NRG and Harris Insights, experiential agency TEAM, and social agency Crispin.
Current wording
•The Marketing Services segment delivers a broad range of services across four closely related client needs: creative, research, experiential, and social media solutions designed to build and elevate brands. Capabilities include developing breakthrough brand campaigns, providing consumer insights through advanced research methodologies, creating immersive experiential marketing programs and social engagement strategies that connect brands with audiences across digital platforms. By combining creative excellence, data-driven insights, and innovative experiences, Marketing Services empowers organizations to differentiate themselves in the marketplace, drive audience engagement, and achieve measurable business results. These services employ a wide variety of artificial intelligence (“AI”)-powered services in the delivery, such as AI-powered creative production and data analysis. Brands in this segment include, but are not limited to, creative agencies 72 and Sunny and Anomaly, research agencies NRG and Harris Insights, experiential agency TEAM, and social agency Movers & Shakers.
Previous wording
•The Digital Transformation segment designs, implements and activates modern digital ecosystems that enable brand and customer experiences through the integration of strategy, design, and technology. This segment helps clients modernize their digital infrastructure, enhance customer engagement, and accelerate enterprise transformation. Its capabilities span the delivery of digital products and experiences that connect brand storytelling with technology, including website and content development, digital campaigns, product and platform design, AI-native strategies and implementation, and Martech integration. It also provides managed services, staff augmentation, and engineering expertise across various delivery models, offering system integration, full-stack development, and ongoing platform management. Additionally, Digital Transformation connects digital ecosystems to physical experiences through innovative, technology-driven customer engagements, such as business-to-business (B2B) platforms and multimodal activations that blend physical and digital environments using augmented reality (AR), virtual reality (VR), and emerging technologies. Together, these capabilities empower organizations to transform their digital presence and drive sustained business growth. Brands in this segment include, but are not limited to, strategy and design agencies Code and Theory and Instrument, development and implementation agency TrueLogic, and digital activation agency Left Field Labs.
Current wording
•The Digital Transformation segment designs, implements and activates modern digital ecosystems that enable brand and customer experiences through the integration of strategy, design, and technology. This segment helps clients modernize their digital infrastructure, enhance customer engagement, and accelerate enterprise transformation. Its capabilities span the delivery of digital products and experiences that connect brand storytelling with technology, including website and content development, digital campaigns, product and platform design, AI-native strategies and integration, and implementation of marketing technology (“MarTech”) products and solutions for customers. It also provides managed services, staff augmentation, and engineering expertise across various delivery models, offering system integration, full-stack development, and ongoing platform management. Additionally, Digital Transformation connects digital ecosystems to physical experiences through innovative, technology-driven customer engagements, such as business-to-business (“B2B”) platforms and multimodal activations that blend physical and digital environments using augmented reality (“AR”), virtual reality (“VR”), and emerging technologies. Together, these capabilities empower organizations to transform their digital presence and drive sustained business growth. Brands in this segment include, but are not limited to, strategy and design agencies Code and Theory and Instrument, development and implementation agency TrueLogic, and digital activation agency Left Field Labs.
Previous wording
•The Media & Commerce segment delivers integrated AI-based data solutions that drive audience engagement and business growth through media buying, commerce enablement, and Customer Relationship Management (CRM) strategies. Its capabilities include planning and executing media campaigns across global platforms, leveraging data-driven approaches to optimize reach and effectiveness across first-party data, second-party data, and third-party data, and providing commerce and customer relationship management tools that connect brands with consumers throughout the purchase journey. The segment also offers specialized media platforms and translation services to support targeted communication and market expansion. By combining expertise in media strategy, commerce activation, and audience analytics, Media & Commerce empowers organizations to maximize their marketing investments and achieve measurably efficient commercial outcomes. Brands in this segment include, but are not limited to, media buying and strategy agency Assembly Global, commerce and CRM agency Gale, and media platform Ink.
Current wording
•The Media & Commerce segment delivers integrated AI-based data solutions that drive audience engagement and business growth through media buying, owned media platforms, commerce enablement, and Customer Relationship Management (“CRM”) strategies. Its capabilities include planning and executing media campaigns across global platforms, leveraging data-driven approaches to optimize reach and effectiveness across first-party data, second-party data, and third-party data, and providing commerce and CRM tools that connect brands with consumers throughout the purchase journey. The segment also offers specialized media platforms and translation services to support targeted communication and market expansion. By combining expertise in media strategy, commerce activation, and audience analytics, Media & Commerce empowers organizations to maximize their marketing investments and achieve measurably efficient commercial outcomes. Brands in this segment include, but are not limited to, media buying and strategy agency Assembly Global, owned media platforms Reach TV, and commerce and CRM agency Gale.
Previous wording
•The Communications segment provides a leading edge set of solutions designed to help organizations build, protect, and enhance their reputation across diverse audiences and channels. Its capabilities include strategic communications, public relations, and advocacy services that leverage AI and data-driven insights to craft compelling narratives and influence public perception. The segment also offers expertise in targeted communications, crisis management, and stakeholder engagement, ensuring clients can respond effectively to emerging issues and opportunities. Advocacy services encompass strategic political campaign management, grassroots mobilization, and fundraising expertise that reach across the political spectrum. By combining deep industry knowledge with innovative digital approaches to media and advocacy, Communications empowers organizations to connect with key audiences, shape conversations, and achieve their strategic objectives. Brands in this segment include, but are not limited to, strategic communications agencies Allison and Consulum, and advocacy services agencies SKDK and Targeted Victory.
Current wording
•The Communications segment provides a leading edge set of solutions designed to help organizations build, protect, and enhance their reputation across diverse audiences and channels. Its capabilities include strategic communications, public relations, and advocacy services that leverage AI and data-driven insights to craft compelling narratives and influence public perception. The segment also offers expertise in targeted communications, corporate public affairs consulting, crisis management, and stakeholder engagement, ensuring clients can respond effectively to emerging issues and opportunities. Advocacy services encompass strategic political campaign management, grassroots mobilization, and fundraising expertise that reach across the political spectrum. By combining deep industry knowledge with innovative digital approaches to media and advocacy, Communications empowers organizations to connect with key audiences, shape conversations, and achieve their strategic objectives. Brands in this segment include, but are not limited to, Allison, Consulum, SKDK and Targeted Victory.
Previous wording
•The Marketing Cloud segment delivers a comprehensive suite of technology solutions for in-house marketers, combining SaaS and DaaS offerings. Its key products cover a range of areas. Advanced research tools that enable real-time customer insights through syndicated and Do It Yourself (DIY) generative AI-drafted surveys, AI-driven text analysis, and predictive analytics. Communications technology that aggregates data from millions of sources, including news, social media, print, and TV/radio broadcasts, on a daily basis to monitor, analyze, and respond to market trends. Media studio products that leverage first-party, third-party, and proprietary data to provide actionable audience insights and attribution analytics and advanced media platforms that encompass audience engagement solutions such as AR, quick response (QR) codes, and loyalty programs, all designed to collect consumer data and generate actionable insights. Together, these capabilities empower marketers to understand, engage, and influence their audiences with precision and agility. Brands in this segment include, but are not limited to, QUEST, Unicepta, Smart Assets and ARound.
Current wording
•The Marketing Cloud segment delivers a comprehensive suite of technology solutions for in-house marketers, combining SaaS and DaaS offerings. Its key products cover a range of areas. Advanced research tools that enable real-time customer insights through syndicated and Do It Yourself (“DIY”) generative AI-drafted surveys, AI-driven text analysis, and predictive analytics. Communications technology that aggregates data from millions of sources, including news, social media, print, and TV/radio broadcasts, on a daily basis to monitor, analyze, and respond to market trends. Media studio products that leverage first-party, third-party, and proprietary data to provide actionable audience insights and attribution analytics and advanced media platforms that encompass audience engagement solutions such as AR, quick response (“QR”) codes, and loyalty programs, all designed to collect consumer data and generate actionable insights. Together, these capabilities empower marketers to understand, engage, and influence their audiences with precision and agility. Brands in this segment include, but are not limited to, QUEST, Unicepta, Holy Grail and Smart Assets.
Previous wording
The Company reports corporate expenses as “Corporate and eliminations” which consists of office expenses incurred in connection with the strategic resources provided to the operating segments, as well as certain other centrally managed expenses that are not fully allocated to the operating segments. These office and general expenses include (i) salaries and related expenses for corporate office employees, including employees dedicated to supporting the operating segments, (ii) occupancy expenses relating to properties occupied by all corporate office employees, (iii) other office and general expenses including professional fees for the financial statement audits and other public company costs, (iv) certain other professional fees managed by the corporate office, and v) the elimination of certain intercompany services and revenue.
Current wording
“Corporate, eliminations and other” consists of revenue generated by the Other business components, elimination of certain intercompany revenue and expenses, and corporate office expenses incurred in connection with the strategic resources provided to the operating segments, as well as certain other centrally managed expenses that are not fully allocated to the operating segments. These corporate office and general expenses include (i) salaries and related expenses for corporate office employees, including employees dedicated to supporting the operating segments, (ii) occupancy expenses relating to properties occupied by all corporate office employees, (iii) other office and general expenses including professional fees for the financial statement audits and other public company costs, and (iv) certain other professional fees managed by the corporate office.
Previous wording
The following discussion focuses on the operating performance of the Company for the three and nine months ended September 30, 2025 and 2024 and the financial condition of the Company as of September 30, 2025.
Current wording
The following discussion focuses on the operating performance of the Company for the three months ended March 31, 2026 and 2025 and the financial condition of the Company as of March 31, 2026.
Previous wording
The geographic mix in Net revenue for the nine months ended September 30, 2025 and 2024 was as follows:
Current wording
The geographic mix in Net revenue for the three months ended March 31, 2026 and 2025 was as follows:
Previous wording
Interest expense, net for the three months ended September 30, 2025 was $25.2 million, compared to $23.8 million for the three months ended September 30, 2024, an increase of $1.4 million, primarily attributable to higher levels of debt outstanding under the Credit Agreement (as defined and discussed in Note 8 of the Notes to the Unaudited Consolidated Financial Statements included herein), partially offset by a lower average interest rate.
Current wording
Interest expense, net for the three months ended March 31, 2026 was $23.3 million, compared to $23.4 million for the three months ended March 31, 2025, a decrease of $0.1 million. This decrease was primarily attributable to a lower average interest rate, partially offset by higher levels of debt outstanding under the Credit Agreement (as defined and discussed in Note 7 of the Notes to the Unaudited Consolidated Financial Statements included herein) used to support the growth in working capital attributable to the growth of Net revenue of the business.
Previous wording
The foreign exchange loss for the three months ended September 30, 2025 was $0.4 million, compared to a gain of $1.3 million for the three months ended September 30, 2024, primarily attributable to the movement in the British Pound and Euro.
Current wording
The foreign exchange loss for the three months ended March 31, 2026, was $3.0 million, compared to a gain of $1.2 million for the three months ended March 31, 2025, primarily attributable to the movement in the British Pound, Canadian dollar and Euro.
Previous wording
The Company had an income tax expense for the three months ended September 30, 2025 of $9.6 million (on a pre-tax income of $33.3 million resulting in an effective tax rate of 28.7%) compared to income tax expense of $5.7 million (on pre-tax income of $19.6 million resulting in an effective tax rate of 29.1%) for the three months ended September 30, 2024.
Current wording
For the three months ended March 31, 2026, the Company recorded an income tax benefit of $2.9 million on a pre-tax loss of $16.7 million, resulting in an effective tax rate of 17.3%, compared to an income tax expense of $1.7 million on a smaller pre-tax loss of $3.6 million in the prior-year period, which resulted in an effective tax rate of negative 47.8%.
Previous wording
The effect of noncontrolling and redeemable noncontrolling interests for the nine months ended September 30, 2025 was a loss of $2.6 million, compared to an income of $10.2 million for the nine months ended September 30, 2024. The amounts are driven by the mix of income and loss derived from entities not entirely owned by the Company. Additionally, the change was driven by the Class C Exchange during the second quarter of 2025.
Current wording
The effect of Noncontrolling and redeemable noncontrolling interests for the three months ended March 31, 2026 was a loss of $1.0 million, compared to a loss of $2.4 million for the three months ended March 31, 2025. The amounts were driven by the mix of income and loss derived from entities not entirely owned by the Company. Additionally, the change was driven by the Class C Exchange during the second quarter of 2025, which increased the loss allocated to Stagwell Inc.’s common shareholders.
Previous wording
As a result of the foregoing, net income attributable to Stagwell Inc. common shareholders for the three months ended September 30, 2025 was $24.6 million, compared to net income of $3.3 million for the three months ended September 30, 2024.
Current wording
As a result of the foregoing, Net loss attributable to Stagwell Inc. common shareholders for the three months ended March 31, 2026 was $13.0 million, compared to a net loss of $2.9 million for the three months ended March 31, 2025.
Previous wording
Other items, net decreased $7.1 million, primarily attributable to a lease termination during the first quarter of 2025 resulting in a gain on termination of $3.5 million and a decrease in severance of $1.5 million.
Current wording
Other items, net increased $5.4 million, primarily attributable to a lease termination during the first quarter of 2025 as part of the real estate consolidation initiatives resulting in a gain of $3.5 million and an increase in severance of $1.3 million.
Previous wording
The components of operating results for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, were as follows:
Current wording
The components of operating results for the three months ended March 31, 2026 compared to the three months ended March 31, 2025, were as follows:
Previous wording
Deferred acquisition consideration increased by $9.4 million, primarily attributable to an increase in the fair value of a certain Brand in 2025 and a decrease in the fair value of a certain Brand in 2024.
Current wording
Deferred acquisition consideration increased $8.4 million, primarily attributable to the strong performance of a certain Brand in 2026, causing an increase in the fair value of the deferred acquisition consideration liability associated with that Brand.
Previous wording
Adjusted EBITDA increased by $13.1 million, primarily driven by an increase in Net revenue, as discussed above.
Current wording
Adjusted EBITDA increased by $1.0 million and Adjusted EBITDA margin as a percentage of Net revenue improved 4.3 percentage points, primarily due to an increase in Net revenue, as discussed above, combined with a 5.5 percentage point improvement in the staff cost ratio as the benefit of lower underlying staff costs partially offset the increase in cost of services to support business expansion.
Previous wording
The Company had cash and cash equivalents of $132.2 million and $131.3 million as of September 30, 2025, and December 31, 2024, respectively.
Current wording
The Company had cash and cash equivalents of $114.9 million and $104.5 million as of March 31, 2026, and December 31, 2025, respectively.
Previous wording
The improvement in working capital was driven by an improved billing and collection process, which resulted in favorable changes in advance billings of $44.0 million and expenditures billable to clients of $42.0 million. Additionally, there were net favorable changes in accounts payable and accruals of $41.4 million as a result of improved payment terms with significant service providers. This was partially offset by an unfavorable change in other assets of $44.3 million due to certain media assets and deferred compensation arrangements. In aggregate, these and other immaterial changes in working capital resulted in a net increase of $103.2 million.
Current wording
Net cash used in operating activities for the three months ended March 31, 2026 was $26.5 million, a decrease of $33.5 million, or 55.9%, compared to the prior year. This was driven by a $27.5 million improvement in working capital primarily attributable to stronger working capital management driven by technology automation and improved billing and collection process, which resulted in favorable changes in advance billings of $47.4 million. Additionally, there were favorable changes in accounts payable of $17.3 million as a result of improved payment terms with significant service providers. This was partially offset by an unfavorable change in other current assets of $30.1 million due to an increase in certain prepaid media assets and unfavorable changes in expenditures billable to clients of $17.0 million and accruals of $36.5 million.
Previous wording
Changes in non-cash items included in operating income consisted primarily of a decrease of $17.9 million in the fair value of deferred acquisition liabilities driven by the lower than projected performance of acquisitions, partially offset by an increase of $14.8 million in depreciation and amortization resulting from higher capital investment, and increases in stock-based compensation and deferred income tax expense of $5.2 million and $6.7 million, respectively.
Current wording
Changes in non-cash items consisted primarily of an increase in stock-based compensation of $2.7 million due to an increase in the fair value of certain profit interest awards driven by strong performance in certain Brands, a$3.6 million increase in the fair value of deferred acquisition liabilities driven by the performance timing of certain acquisitions, and an increase of $2.3 million in depreciation and amortization resulting from higher capital investment in AI and automation related technologies.
Previous wording
Net cash used in investing activities for the nine months ended September 30, 2025 was $80.8 million, an increase of $14.3 million, or 21.5%, compared to the same period in the prior year. This increase was primarily driven by increases in capitalized software and capex expenditure of $26.0 million and $9.6 million, respectively. These increases were partially offset by a decrease in cash used for acquisitions by $17.6 million
Current wording
Net cash used in investing activities for the three months ended March 31, 2026 was $33.0 million, an increase of $12.7 million, or 62.3%, compared to the prior year. This increase was primarily driven by an increase in capital expenditures and capitalized software for investments in AI and process automation technologies of $4.9 million and $10.4 million, respectively.
Previous wording
The Company expects to maintain sufficient cash and/or available borrowings to fund operations for the next twelve months and subsequent periods. The Company has historically maintained and expanded its business using cash generated from operating activities, funds available under the Credit Agreement, and other initiatives, such as obtaining additional debt and equity financing. On April 23, 2025, the Company entered into an amendment to the Credit Agreement, which increased the limit of borrowing to $750 million and extended the maturity date to April 30, 2030, as described in more detail in Note 8 of the Notes included herein. As of September 30, 2025, the Company had $438.3 million of borrowings outstanding and $14.9 million of issued and undrawn letters of credit, resulting in $296.7 million unused borrowing capacity under the Credit Agreement.
Current wording
The Company expects to maintain sufficient cash and/or available borrowings to fund operations for the next twelve months and subsequent periods. The Company has historically maintained and expanded its business using cash generated from operating activities, funds available under the Credit Agreement, and other initiatives, such as obtaining additional debt, equity and receivable financing. The Credit Agreement provides revolving commitments of up to $750 million and permits restricted payments for share repurchases or redemptions from certain of its stockholders. On March 27, 2026, the Company entered into Amendment No. 2 to the Second Amended and Restated Credit Agreement that modified certain provisions of the Credit Agreement to expand the Company’s ability to borrow under its revolving credit facility in non-U.S. dollar currencies. Under the prior terms, borrowings denominated in British pounds sterling and Euros were each subject to individual sub-limits of $50.0 million, with an aggregate foreign currency sub-limit of $100.0 million. The amendment eliminated those individual currency sub-limits, allowing borrowings in U.S. dollars, British pounds sterling, Euros, and Canadian dollars up to the full revolving commitment, subject to overall facility availability. The amendment also established a framework for adding other currencies by mutual agreement among the Company and the lenders, subject to a sub-limit of $100.0 million. In addition, the amendment increased the annual limit on permitted restricted payments for repurchases or redemptions of the Company’s stock to $175.0 million per fiscal year from $100.0 million and increased the annual limit on permitted repurchases of equity interests from employees of the Company to $50.0 million per fiscal year from $15.0 million. As of March 31, 2026, the Company had $350.3 million of borrowings outstanding and $15.6 million of issued and undrawn letters of credit, resulting in $384.1 million unused borrowing capacity under the Credit Agreement.
Previous wording
The trade receivables transferred to the third parties were $122.6 million and $366.1 million for the three and nine months ended September 30, 2025, respectively, and $78.3 million and $224.8 million for the three and nine months ended September 30, 2024. The amount collected and due to the third parties under these arrangements was $14.6 million as of September 30, 2025 and $19.5 million as of December 31, 2024. Fees for these arrangements were recorded in Office and general expenses in the Unaudited Consolidated Statements of Operations and totaled $1.3 million and $4.1 million for the three and nine months ended September 30, 2025, respectively, and $1.0 million and $3.0 million for the three and nine months ended September 30, 2024.
Current wording
The trade receivables transferred to the third parties were $169.1 million and $129.3 million for the three months ended March 31, 2026 and 2025, respectively. The amount collected and due to the third parties under these arrangements was $16.7 million and $21.2 million as of March 31, 2026 and December 31, 2025, respectively. Fees for these arrangements were recorded in Office and general expenses in the Unaudited Consolidated Statements of Operations and totaled $1.8 million and $1.5 million for the three months ended March 31, 2026 and 2025, respectively.
Previous wording
Under the Repurchase Program, share repurchases may be made at our discretion from time to time in open market transactions at prevailing market prices, including through trading plans that may be adopted in accordance with Rule 10b5-1 of the Exchange Act, as amended, in privately negotiated transactions, or through other means. The timing and number of shares repurchased under the Repurchase Program will depend on a variety of factors, including the performance of our stock price, general market and economic conditions, regulatory requirements, the availability of funds, and other considerations we deem relevant. The Repurchase Program may be suspended, modified, or discontinued at any time without prior notice. Our Board of Directors will review the Repurchase Program periodically and may authorize adjustments of its terms.
Current wording
The Company may purchase shares of outstanding Class A Common Stock under its Repurchase Program. Under the Repurchase Program, share repurchases may be made at our discretion from time to time in open market transactions at prevailing market prices, including through trading plans that may be adopted in accordance with Rule 10b5-1 of the Exchange Act, as amended, in privately negotiated transactions, or through other means. The timing and number of shares repurchased under the Repurchase Program will depend on a variety of factors, including the performance of our stock price, general market and economic conditions, regulatory requirements, the availability of funds, and other considerations we deem relevant. The Repurchase Program may be suspended, modified, or discontinued at any time without prior notice. Our Board of Directors will review the Repurchase Program periodically and may authorize adjustments of its terms.
Previous wording
During the nine months ended September 30, 2025, 17.6 million shares of Class A Common Stock were repurchased pursuant to the Repurchase Program at an average price of $5.12 per share, for an aggregate value, excluding fees, of $90.0 million.
Current wording
During the three months ended March 31, 2026, 7.3 million shares of Class A Common Stock were repurchased pursuant to the Repurchase Program at an average price of $6.16 per share, for an aggregate value, excluding fees, of $44.9 million. The repurchased shares included 6.2 million shares of Class A Common Stock repurchased from executive officers and other employees at a price of $6.17 per share, for an aggregate purchase price of $38.2 million. Additionally, during the three months ended March 31, 2026, 1.2 million shares in the amount of $6.2 million were withheld for taxes from the Class A Common Stock vested during the period.
Previous wording
The remaining value of shares of Class A Common Stock permitted to be repurchased under the Repurchase Program was $79.6 million as of September 30, 2025.
Current wording
The remaining value of shares of Class A Common Stock permitted to be repurchased under the Repurchase Program was $356.2 million as of March 31, 2026.
Previous wording
The Company’s obligations extending beyond twelve months primarily consist of deferred acquisition consideration payments, purchases of noncontrolling interests, subsidiary awards, capital expenditures, scheduled lease obligation payments, and interest payments on borrowings under the Company’s 5.625% Notes (as defined in Note 8 of the Notes included herein) and Credit Agreement. The Company expects to make estimated cash payments in the future to satisfy obligations under our TRA, which remains in effect after the final exchange of Paired Units (see Note 14 of the Notes included herein for additional details). The amount and timing of any payments under the TRA are contingent on the Company achieving certain tax savings, if any, that we actually realize, or in certain circumstances are deemed to realize. Based on the current outlook, the Company believes future cash flows from operations, together with the Company’s existing cash balance and availability of funds under the Credit Agreement, will be sufficient to meet the Company’s anticipated cash needs for the next twelve months and subsequent periods. The Company’s ability to make payments will depend on future performance, which is subject to general economic conditions, the competitive environment and other factors, including those described in this Form 10-Q and in the Company’s other SEC filings.
Current wording
The Company’s obligations extending beyond twelve months primarily consist of deferred acquisition consideration payments, purchases of redeemable noncontrolling interests, subsidiary awards, capital expenditures, scheduled lease obligation payments, and interest payments on borrowings under the Company’s 5.625% Notes (as defined in Note 7 of the Notes included herein) and Credit Agreement. The Company expects to make estimated cash payments in the future to satisfy obligations under our Tax Receivables Agreement (“TRA”), which remains in effect after the final exchange of Class C Common Stock (see Note 13 of the Notes included herein for additional details). The amount and timing of any payments under the TRA are contingent on the Company achieving certain tax savings, if any, that we actually realize, or in certain circumstances are deemed to realize. Based on the current outlook, the Company believes future cash flows from operations, together with the Company’s existing cash balance and availability of funds under the Credit Agreement, will be sufficient to meet the Company’s anticipated cash needs for the next twelve months and subsequent periods. The Company’s ability to make payments will depend on future performance, which is subject to general economic conditions, the competitive environment and other factors, including those described in this Form 10-Q and in the Company’s other SEC filings.
Previous wording
As of September 30, 2025, Debt, net of debt issuance costs, was $1,526.3 million, compared to $1,353.6 million outstanding as of December 31, 2024. See Note 8 of the Notes included herein for information regarding the Company’s 5.625% Notes and the Credit Agreement.
Current wording
As of March 31, 2026, Debt, net of debt issuance costs, was $1,439.7 million, compared to $1,326.0 million outstanding as of December 31, 2025. See Note 7 of the Notes included herein for information regarding the Company’s 5.625% Notes and the Credit Agreement.
Previous wording
Certain of the Company’s subsidiaries grant awards to their employees providing them with an equity interest in the respective subsidiary (the “profits interests awards”). The awards generally provide the employee with the right, but not the obligation, to sell their profits interest in the subsidiary to the Company based on a performance-based formula and, in certain cases, receive a profit share distribution. The profits interests awards are primarily settled in cash, with certain awards having stock-settlement provisions at the Company’s discretion. The corresponding liability associated with these profits interests awards is included as a component of Accruals and other liabilities and Other liabilities on the Consolidated Balance Sheets.
Current wording
Certain of the Company’s subsidiaries grant awards to their employees providing them with an equity interest in the respective subsidiary (the “profits interests awards”). The awards generally provide the employee with the right, but not the obligation, to sell their profits interest in the subsidiary to the Company based on a performance-based formula and, in certain cases, receive a profit share distribution. The profits interests awards are primarily settled in cash, with certain awards having stock-settlement provisions at the Company’s discretion. The corresponding liability associated with these profits interests awards is included as a component of Accruals and other liabilities and Other liabilities on the Consolidated Balance Sheets. See Note 12 of the Notes included herein for additional information regarding these material commitments.
Previous wording
Stagwell Inc.’s Internet website address is www.stagwellglobal.com. The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to the Exchange Act, will be made available free of charge through the Company’s website as soon as reasonably practical after those reports are electronically filed with, or furnished to, the SEC. The Company announces material information to the public through a variety of means, including filings with the SEC, press releases, public conference calls, and its website. The Company uses these channels, as well as social media, including X (formerly Twitter) (@stagwell) and (@Mark_Penn), Instagram (@stagwellglobal) and its LinkedIn page (https://www.linkedin.com/company/stagwell/), to communicate with investors and the public about the Company, its products and services, and other matters. Therefore, investors, the media, and others interested in the Company are encouraged to review the information the Company makes public in these locations, as such information could be deemed to be material information. Information on or that can be accessed through the Company’s websites or these social media channels is not part of this Form 10-Q, and the inclusion of the Company’s website addresses and social media channels are inactive textual references only.
Current wording
Stagwell Inc.’s Internet website address is www.stagwellglobal.com. The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to the Exchange Act, will be made available free of charge through the Company’s website as soon as reasonably practical after those reports are electronically filed with, or furnished to, the SEC. The Company announces material information to the public through a variety of means, including filings with the SEC, press releases, public conference calls, and its website. The Company uses these channels, as well as social media, including X (formerly Twitter) (@stagwell) and (@Mark_Penn), Instagram (@stagwellglobal) and its LinkedIn page (https://www.linkedin.com/company/stagwell/), to communicate with investors and the public about the Company, its products and services, and other matters. Therefore, investors, the media, and others interested in the Company are encouraged to review the information the Company makes public in these locations, as such information could be deemed to be material information. Information on or that can be accessed through the Company’s websites or these social media channels is not part of this Form 10-Q, and the Company’s website addresses and social media channels are included herein as inactive textual references only.
Rearranged previous paragraphs (7)
Previous report — wording carried elsewhere
The effect of noncontrolling and redeemable noncontrolling interests for the three months ended September 30, 2025 was loss of $0.9 million, compared to income of $10.6 million for the three months ended September 30, 2024. The amounts are driven by the mix of income and loss derived from entities not entirely owned by the Company. Additionally, the change was driven by the Class C Exchange (as defined and discussed in Note 9 of the Notes included herein) during the second quarter of 2025.
Previous report — wording carried elsewhere
Net Income (Loss) Attributable to Stagwell Inc. Common Shareholders
Previous report — wording carried elsewhere
(1) Adjusted Diluted EPS is defined within the Non-GAAP Financial Measures section of the Executive Summary.
Previous report — wording carried elsewhere
(1) Adjusted Diluted EPS is defined within the Non-GAAP Financial Measures section of the Executive Summary.
Previous report — wording carried elsewhere
Interest expense, net for the nine months ended September 30, 2025 was $72.0 million, compared to $68.3 million for the nine months ended September 30, 2024, an increase of $3.7 million, primarily attributable to higher levels of debt outstanding under the Credit Agreement (as defined and discussed in Note 8 of the Notes to the Unaudited Consolidated Financial Statements included herein), partially offset by a lower average interest rate.
Previous report — wording carried elsewhere
The foreign exchange loss for the nine months ended September 30, 2025, was $0.5 million, compared to a loss of $2.3 million for the nine months ended September 30, 2024, primarily attributable to the movement in the British Pound and Euro.
Previous report — wording carried elsewhere
Net Income (Loss) Attributable to Stagwell Inc. Common Shareholders