By

Keira Wingate
Reporter, Ad Age
This piece originally appeared in Ad Age

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7 takeaways following Stagwell’s second-quarter report, including how creativity and media agencies are joining forces

Stagwell Inc. released its second-quarter earnings today and maintained its annual forecast.

During the company’s conference call, Stagwell CEO Mark Penn shared news regarding creative agencies Crispin Porter Bogusky, Forsman Bodenfors, Observatory, and Vitro joining Stagwell’s media network and the holding company launching Stagwell Media Studios.

Ad Age spoke to Penn following the call to discuss those plans and hear more about the industry, including Stagwell’s financial outlook versus those of its rivals, staffing and where clients are spending.  

This interview is edited for clarity and length.

What does it mean for the agencies that are now part of the media network? Will the agencies be changing or consolidating? 

We won’t be consolidating or changing cultures because we create groups, but we keep the culture separate. We’ll be renaming the media group to something kind of broader, named to be revealed soon.

What it means is that they will be in a much better position to meet the emerging trend, particularly in online advertising, of coordinating media and creativity into a single contract and single account.

Unlike television media, which became doing the TV spot and handing it over to people for media, doing online media really requires understanding data and the funnel and a target audience, and then doing creativity that really fits those mediums [where the target audience is].

And because I think a lot of the companies haven’t really adapted to that change, we’re bringing back together media and creativity so that we can really hit those online trends and do even better, tighter online marketing, which also can open it up to more performance pricing because we’re doing both the creative and the data work.

During today’s earning call you also mentioned Stagwell Media Studio. Can you explain exactly what that is and who will be involved?

That’s an offering so that for those creative agencies that have their own networks like Anomaly, Alliance or Constellation, they will also have within them now a media capability that they will be able to staff and operate so that they can also bring media closer to creativity whenever that makes sense.

The individual networks will staff the technology suite and [have] access that they’ll be given so that they can go ahead and buy media. So they will hire some planners and other folks to staff that individually and make that their brand media.

How do you think your competitors are doing? They seemed to all increase their projections in terms of revenue.

Well, look, I think that we came out with kind of very bold projection of 18% to 22% growth. And I think that remains a bold projection. So I don’t ever really see, you know, any need or appropriateness given the marketplace to change that. I think a lot of them had and still have projections that are just far lower than our 20% growth. So I think they’re looking at mostly 6, 7 or 8% growth. And we’re looking at 18% to 22% growth. So, they may be increasing that, but they’re not coming anywhere close to our projections.

How do you think Stagwell is doing compared to the other holding companies right now and is there a big point of difference?

Well, I think our digital-first nature and its advantages are really becoming clearer and clearer. I think everybody had strong growth rates coming out of the pandemic. Now that we’ve come out of the pandemic, for all practical purposes, you’re seeing them normalize back to much lower growth rates and us continue to separate out at a higher growth rate, particularly this year where there’s going to be an advocacy component as well.

S4 recently reduced its full-year earnings estimates and paused hiring. What are your thoughts about that?

Well, we’ve successfully hired several 1,000 people and yet we’ve kept our count-to-revenue ratio in check. In fact, it declined. So I think that it looks to me that, S4 was struggling to kind of find the right balance and keep that in check. Whereas in contrast, I think you look at what we’ve done, and we have grown. And we’ve been able to add the team as we needed to service the work. But we have managed to keep the count-to-revenue ratio in line. And that’s why we’re able to, I think, meet these rather bold projections for the year.

Where do you see Stagwell going? Where doy ou want to see the most growth?

Our goal is to continue to be the real challenger network against the majors. So, we have really grown significantly. If you look at the counts that might have started with four brands, like J&J, we’re up to 12 brands.

We’re looking to get into bigger global pitches as our network expands and grows so that we will become the ultimate digital-first challenger. You know, that’s our goal. And I think in addition, by mid-next year, we’ll be coming out with a series of products for the do-it-yourself marketer called the Stagwell marketing cloud. I think that will introduce another critical differentiation between us and the others.

Do you foresee any layoffs and ad spending cuts from clients?

We’re not really seeing that happening. I’m not saying it couldn’t happen. I think there’s been a very strong travel and entertainment season. I think what you had here that’s created some dislocation is that people were buying basically goods, and they weren’t able to buy services because they were at home, they didn’t go anywhere. And now people are buying services, travel, entertainment, all of those things in reducing purchases and goods.

So I think you’ll see some of those changes, then cutting CPG spending, but maybe increasing spending, balancing that out with spending and travel and other areas. So our travel business, for example, is back, our advocacy business is going to show strong growth as the political season heats up and we’re not really seeing clients cutting back right now. I don’t know, they may come back next year, but they seem to be pretty much on autopilot right now.

We’ve continued to add significant staff. Look, I think we’re a great place to come, I think showing the kind of growth and opportunity. And a great mix of client work here. So, there’s no hiring pause or freeze at this time.

By Keira Wingate. Published August 04, 2022. 

Originally released on

Delivers Double-Digit 2Q 2022 Revenue Growth; Reiterates guidance driven by global media performance and continued digital acceleration

• 2Q GAAP Revenue grew 221.1% and 21.2% on a Pro Forma basis; YTD Pro Forma growth of 26.0%
• Pro-Forma Organic Net Revenue grew 16.0% in 2Q and 19.1% YTD
• Net Income of $24.5M in 2Q and Diluted EPS of $0.08 per share
• Net Income attributable to Stagwell of $10.5M in 2Q
• Adjusted EBITDA of $111.3M in 2Q representing a 20.0% margin on Net Revenue
• 57% of 2Q Net Revenue came from high-growth digital services
• Reaffirming 2022 full-year organic net revenue growth outlook of 18%-22%

New York, NY, August 4, 2022 (NASDAQ: STGW) – Stagwell Inc. (“Stagwell”) today announced financial results for the three and six months ended June 30, 2022.

SECOND QUARTER AND YTD HIGHLIGHTS:

• Second quarter revenue of $672.9 million, an increase of 221.1% versus the prior year period; YTD revenue of $1,315.8 million, an increase of 236.7% versus the prior year period.
• Second quarter Pro Forma GAAP revenue growth of 21.2% versus the prior year period and 19.3% ex-Advocacy; YTD Pro Forma GAAP revenue growth of 26.0% versus the prior year period and 24.4% ex-Advocacy
• Second quarter net revenue of $556.3 million, an increase of 205.9% versus the prior period; YTD net revenue of $1,083.0 million, an increase of 218.6% versus the prior year period.
• Second quarter Pro Forma net revenue growth of 15.8% versus the prior year period and 14.6% ex-Advocacy; YTD Pro Forma net revenue growth of 19.1% versus the prior year period and 18.3% ex-Advocacy
• Second quarter Pro Forma organic net revenue growth of 16.0% versus the prior year period and 14.8% ex-Advocacy; YTD Pro Forma organic net revenue growth of 19.6% versus the prior year period and 18.8% ex-Advocacy.
• Second quarter net income of $24.5 million versus $18.7 million in the prior year period; YTD net income of $58.1 million versus $23.3 million in the prior year period.
• Second quarter net income attributable to Stagwell Inc. common shareholders of $10.5 million versus $17.3 million in the prior year period; YTD net income attributable to Stagwell Inc. common shareholders of $23.1 million versus $21.7 million in the prior year period.
• Second quarter adjusted EBITDA of $111.3 million, an increase of 187.5% versus the prior year period; YTD adjusted EBITDA of $212.7 million, an increase of 240.0% versus the prior year period.
• Pro Forma adjusted EBITDA growth of 13.0% versus the prior period and 11.4% ex-Advocacy; YTD adjusted EBITDA growth of 22.0% versus the prior period and 20.5% ex-Advocacy.
• Second quarter Adjusted EBITDA Margin of 20.0% of net revenue; YTD Adjusted EBITDA Margin of 19.6% of net revenue.
• Net New Business wins totaled $31 million in the quarter.

“Stagwell is executing exactly as we said we would, and doing so profitably. We delivered significant organic net revenue growth of 16% in the second quarter, which has the toughest comparisons of the year. Our high-growth digital capabilities expanded to 57% of net revenue and grew 28% organically versus the prior year period. Due to our unique mix of digital and creative capabilities, clients now recognize Stagwell as a serious alternative to legacy incumbents – and we are now a regular contender in many of the largest global pitches,” said Mark Penn, Chairman and Chief Executive Officer of Stagwell. “Our disciplined financial management and strong cost controls allow us to maintain leading margins, even while making smart investments in our corporate infrastructure to scale the network. We are optimistic about the back half of the year as our world-class advocacy businesses prepare for a record cycle of US political advertising spend and our year-over-year comparisons ease. We remain very confident in our full-year guidance of 18-22% organic net revenue growth and $450-$480 million of adjusted EBITDA.”

Frank Lanuto, Chief Financial Officer, commented: “The Company reported strong second quarter results with GAAP revenue of $673 million, net revenue of $556 million and Adjusted EBITDA of $111 million. Pro forma organic net revenue increased 16% over the prior period and Adjusted EBITDA margins remained strong at 20% of net revenue as we remain diligent around cost controls. Our balance sheet is in a good position and should benefit as we head into the seasonally strong back half of the year when we expect cash flow to increase significantly.”

FINANCIAL OUTLOOK

2022 financial guidance is as follows:

• Pro Forma Organic Net Revenue growth of 18% – 22%

• Pro Forma Organic Net Revenue growth ex-Advocacy of 13% – 17%

• Adjusted EBITDA of $450 million – $480 million, excluding the contribution from 2022 acquisitions

• Pro Forma Free Cash Flow growth of approximately 30%

• Guidance assumes no impact from foreign exchange, acquisitions or dispositions.

CONFERENCE CALL

Management will host a video webcast and conference call on Thursday, August 4, 2022, at 8:30 a.m. (ET) to discuss results for Stagwell Inc. for the three and six months ended June 30, 2022.  The video webcast will be accessible at https://bit.ly/STGWEarningsQ2. An investor presentation has been posted on our website at www.stagwellglobal.com and may be referred to during the conference call.

A recording of the conference call will be accessible one hour after the call 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 13,000+ specialists in 34+ countries are unified under a single purpose: to drive effectiveness and improve business results for their clients. Join us at www.stagwellglobal.com.

BASIS OF PRESENTATION

The acquisition of MDC Partners (MDC) by Stagwell Marketing Group (SMG) was completed on August 2, 2021. The results of MDC are included within the Statements of Operations for the period beginning on the date of the acquisition through the end of the respective period presented and the results of SMG are included for the entirety of all periods presented.

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:

Pro Forma Results: The Pro Forma amounts presented for each period were prepared by combining the historical standalone statements of operations for each of legacy MDC and SMG. The unaudited pro forma results are provided for illustrative purposes only and do not purport to represent what the actual consolidated results of operations or consolidated financial condition would have been had the combination actually occurred on the date indicated, nor do they purport to project the future consolidated results of operations or consolidated financial condition for any future period or as of any future date. The Company has excluded a quantitative reconciliation of adjusted Pro Forma EBITDA to net income under the “unreasonable efforts” exception in Item 10(e)(1)(i)(B) of Regulation S-K.

(1) Organic Revenue: “Organic revenue growth” and “organic revenue decline” refer to the positive or negative results, respectively, of subtracting both the foreign exchange and acquisition (disposition) components from total revenue growth. The acquisition (disposition) component is calculated by aggregating prior period revenue for any acquired businesses, less the prior period revenue of any businesses that were disposed of during the current period. The organic revenue growth (decline) component reflects the constant currency impact of (a) the change in revenue of the partner firms that the Company has held throughout each of the comparable periods presented, and (b) “non-GAAP acquisitions (dispositions), net”. Non-GAAP acquisitions (dispositions), net consists of (i) for acquisitions during the current year, the revenue effect from such acquisition as if the acquisition had been owned during the equivalent period in the prior year and (ii) for acquisitions during the previous year, the revenue effect from such acquisitions as if they had been owned during that entire year (or same period as the current reportable period), taking into account their respective pre-acquisition revenues for the applicable periods, and (iii) for dispositions, the revenue effect from such disposition as if they had been disposed of during the equivalent period in the prior year.

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

(3) Adjusted EBITDA: defined as Net income excluding non-operating income or expense to achieve operating income, plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, and other items. Other items include restructuring costs, acquisition-related expenses, and non-recurring items.

(4) 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.

(5) Financial Guidance:  The Company provides guidance on a non-GAAP basis as it cannot predict certain elements which are included in reported GAAP results.

Included in this earnings release are tables reconciling reported Stagwell Inc. results to arrive at certain of these non-GAAP financial measures.

This press release contains forward-looking statements. Statements in this press release that are not historical facts, including without limitation the information under the heading “Financial Outlook” and statements about the Company’s beliefs and expectations, earnings (loss) guidance, recent business and economic trends, potential acquisitions, and estimates of amounts for redeemable noncontrolling interests and deferred acquisition consideration, constitute forward-looking statements. Words such as “estimates”, “expects”, “contemplates”, “will”, “anticipates”, “projects”, “plans”, “intends”, “believes”, “forecasts”, “may”, “should”, and variations of such words or similar expressions are intended to identify forward-looking statements. These 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.  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.

Some of the factors that could materially and adversely affect our business, financial condition, results of operations and cash flows include, but are not limited to, the following:

• risks associated with international, national and regional unfavorable economic conditions that could affect the Company or its clients;
• the continued impact of the coronavirus pandemic (“COVID-19”), and evolving strains of COVID-19 on the economy and demand for the Company’s services, which may precipitate or exacerbate other risks and uncertainties;
• an inability to realize expected benefits of the combination of the Company’s business with the business of MDC (the “Business Combination” and, together with the related transactions, the “Transactions”);
• adverse tax consequences in connection with the Transactions for the Company, its operations and its shareholders, that may differ from the expectations of the Company, including that future changes in tax law, potential increases to corporate tax rates in the United States and disagreements with the tax authorities on the Company’s determination of value and computations of its attributes may result in increased tax costs;
• the occurrence of material Canadian federal income tax (including material “emigration tax”) as a result of the Transactions;
• 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, including the successful completion and integration of acquisitions which complement and expand the Company’s business capabilities;
• the Company’s material weaknesses in internal control over financial reporting and its ability to establish and maintain an effective system of internal control over financial reporting;
• the Company’s ability to protect client data from security incidents or cyberattacks;
• economic disruptions resulting from war and other geopolitical tensions (such as the ongoing military conflict between Russia and Ukraine), terrorist activities and natural disasters;
• 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 2021 Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on March 17, 2022, and accessible on the SEC’s website at www.sec.gov, under the caption “Risk Factors,” and in the Company’s other SEC filings.

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FEATURING

Record first quarter financial results driven by high-growth digital transformation, consumer insights & strategy, and large client wins in media

• GAAP Revenue grew 254.7% in 1Q and 31.5% on a Pro Forma basis

• Pro-Forma Organic Net Revenue grew 23.6% in 1Q

• Net Income of $33.6M in 1Q or Diluted EPS of $0.10 per share

• Net Income attributable to Stagwell of $12.7M in 1Q

• Adjusted EBITDA of $101.4M in 1Q representing a 19.3% margin on Net Revenue

• Record first quarter Net New Business of $54M

• 56% of 1Q Net Revenue came from high-growth digital services

• Reaffirms 2022 full-year outlook

New York, NY, May 6, 2022 (NASDAQ: STGW) – Stagwell Inc. (“Stagwell”) today announced financial results for the three months ended March 31, 2022.

FIRST QUARTER HIGHLIGHTS:

• Revenue of $642.9 million, an increase of 254.7% versus the prior year period.
• Pro Forma GAAP revenue growth of 31.5% versus the prior year period and 30.2% ex-Advocacy.
• First quarter net revenue of $526.6 million, an increase of 233.2% versus the prior period.
• Pro Forma net revenue growth of 22.8% versus the prior year period and 22.3% ex-Advocacy.
• Pro Forma organic net revenue growth of 23.6% versus the prior year period and 23.2% ex-Advocacy.
• First quarter net income of $33.6 million versus $4.6 million in the prior year period.
• First quarter net income attributable to Stagwell Inc. common shareholders of $12.7 million versus $4.4 million in the prior year period.
• First quarter adjusted EBITDA of $101.4 million, an increase of 325.4% versus the prior year period.
• Pro Forma adjusted EBITDA growth of 33.8% versus the prior period and 32.4% ex-Advocacy.
• First quarter Adjusted EBITDA Margin of 19.3% of net revenue.
• Net New Business wins totaled $54 million in the quarter.

“While the GDP may be contracting, Stagwell is growing strongly. The merger has spurred revenue synergies immediately apparent in the big wins, significant industry awards, and integration of talent and technology across our network,” said Mark Penn, Chairman and Chief Executive Officer of Stagwell. “We grew first quarter net revenue 24% versus the prior year, more than double the pace of legacy holding companies, and grew Adjusted EBITDA at an even faster rate of 34% year-over-year. We also made a key e-commerce acquisition in April with Brand New Galaxy, which connects to our media and digital transformation offerings and provides increased scale in Europe. Our record quarter continues to build on our post-combination track record of delivering growth, free-cash-flow, and growing profitability.”

Frank Lanuto, Chief Financial Officer, commented: “The Company reported strong first quarter results with GAAP revenue of $643 million, net revenue of $527 million and Adjusted EBITDA of $101 million. Organic pro forma net revenue increased 24% over the prior period quarter and also increased sequentially in a typically smaller seasonal quarter. Adjusted EBITDA margin expanded 160 bps year-over-year on a Pro Forma basis to 19.3% of net revenue as the Company began to see the benefits of expected cost synergies.”

Financial Outlook

2022 financial guidance is as follows:

• Pro Forma Organic Net Revenue growth of 18% – 22%

• Pro Forma Organic Net Revenue growth ex-Advocacy of 13% – 17%

• Adjusted EBITDA of $450 million – $480 million, excluding the contribution from 2022 acquisitions

• Pro Forma Free Cash Flow growth of approximately 30%

• Guidance assumes no impact from foreign exchange, acquisitions or dispositions.

Conference Call

Management will host a video webcast and conference call on Friday, May 6, 2022, at 8:30 a.m. (ET) to discuss results for Stagwell Inc. for the three months ended March 31, 2022.  The video webcast will be accessible at https://stagwellq12022earnings.open-exchange.net/. An investor presentation has been posted on our website at www.stagwellglobal.com and may be referred to during the conference call.

A recording of the conference call will be accessible one hour after the call 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 10,000+ specialists in 34+ countries are unified under a single purpose: to drive effectiveness and improve business results for their clients. Join us at www.stagwellglobal.com.

Basis of Presentation

The acquisition of MDC Partners (MDC) by Stagwell Marketing Group (SMG) was completed on August 2, 2021. The results of MDC are included within the Statements of Operations for the period beginning on the date of the acquisition through the end of the respective period presented and the results of SMG are included for the entirety of all periods presented.

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:

Pro Forma Results: The Pro Forma amounts presented for each period were prepared by combining the historical standalone statements of operations for each of legacy MDC and SMG. The unaudited pro forma results are provided for illustrative purposes only and do not purport to represent what the actual consolidated results of operations or consolidated financial condition would have been had the combination actually occurred on the date indicated, nor do they purport to project the future consolidated results of operations or consolidated financial condition for any future period or as of any future date. The Company has excluded a quantitative reconciliation of adjusted Pro Forma EBITDA to net income under the “unreasonable efforts” exception in Item 10(e)(1)(i)(B) of Regulation S-K.

(1) Organic Revenue: “Organic revenue growth” and “organic revenue decline” refer to the positive or negative results, respectively, of subtracting both the foreign exchange and acquisition (disposition) components from total revenue growth. The acquisition (disposition) component is calculated by aggregating prior period revenue for any acquired businesses, less the prior period revenue of any businesses that were disposed of during the current period. The organic revenue growth (decline) component reflects the constant currency impact of (a) the change in revenue of the partner firms that the Company has held throughout each of the comparable periods presented, and (b) “non-GAAP acquisitions (dispositions), net”. Non-GAAP acquisitions (dispositions), net consists of (i) for acquisitions during the current year, the revenue effect from such acquisition as if the acquisition had been owned during the equivalent period in the prior year and (ii) for acquisitions during the previous year, the revenue effect from such acquisitions as if they had been owned during that entire year (or same period as the current reportable period), taking into account their respective pre-acquisition revenues for the applicable periods, and (iii) for dispositions, the revenue effect from such disposition as if they had been disposed of during the equivalent period in the prior year.

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

(3) Adjusted EBITDA: defined as Net income excluding non-operating income or expense to achieve operating income, plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, and other items. Other items include restructuring costs, acquisition-related expenses, and non-recurring items.

(4) 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.

(5) Financial Guidance:  The Company provides guidance on a non-GAAP basis as it cannot predict certain elements which are included in reported GAAP results.

Included in this earnings release are tables reconciling reported Stagwell Inc. results to arrive at certain of these non-GAAP financial measures.

This press release contains forward-looking statements. Statements in this press release that are not historical facts, including without limitation the information under the heading “Financial Outlook” and statements about the Company’s beliefs and expectations, earnings (loss) guidance, recent business and economic trends, potential acquisitions, and estimates of amounts for redeemable noncontrolling interests and deferred acquisition consideration, constitute forward-looking statements. Words such as “estimates”, “expects”, “contemplates”, “will”, “anticipates”, “projects”, “plans”, “intends”, “believes”, “forecasts”, “may”, “should”, and variations of such words or similar expressions are intended to identify forward-looking statements. These 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.  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.

Some of the factors that could materially and adversely affect our business, financial condition, results of operations and cash flows include, but are not limited to, the following:

• risks associated with international, national and regional unfavorable economic conditions that could affect the Company or its clients;
• the effects of the coronavirus pandemic (“COVID-19”), and the impact on the economy and demand for the Company’s services, which may precipitate or exacerbate other risks and uncertainties;
• an inability to realize expected benefits of the combination of the Company’s business with the business of MDC (the “Business Combination” and, together with the related transactions, the “Transactions”);
• adverse tax consequences in connection with the Transactions for the Company, its operations and its shareholders, that may differ from the expectations of the Company, including that future changes in tax law, potential increases to corporate tax rates in the United States and disagreements with the tax authorities on the Company’s determination of value and computations of its attributes may result in increased tax costs;
• the occurrence of material Canadian federal income tax (including material “emigration tax”) as a result of the Transactions;
• 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, including the successful completion and integration of acquisitions which complement and expand the Company’s business capabilities;
• the Company’s material weaknesses in internal control over financial reporting and its ability to establish and maintain an effective system of internal control over financial reporting;
• the Company’s ability to protect client data from security incidents or cyberattacks;
• economic disruptions resulting from war and other geopolitical tensions (such as the ongoing military conflict between Russia and Ukraine), terrorist activities and natural disasters;
• 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 2021 Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on March 17, 2022, and accessible on the SEC’s website at www.sec.gov, under the caption “Risk Factors,” and in the Company’s other SEC filings.

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CONTACT

Beth Sidhu
pr@stagwellglobal.com
202-423-4414

NEW YORK – May 3, 2022 – Stagwell (NASDAQ: STGW), the challenger network built to transform marketing, today released its 2021 Annual Report, highlighting substantial growth propelled by a uniquely high concentration of digital capabilities; strategic investments and acquisitions supporting digital and global growth; and a collaborative organizational model designed to meet the demands of larger clients in need of true integrated marketing services. Download the report here.

“In a digital economy, every screen is a canvas, every experience a data collection point, and every platform a new place for brand interaction. Brands deserve a digital-first alternative marketing network that drives business growth by connecting culture-moving creativity with leading-edge technology,” said Stagwell Chairman and CEO Mark Penn. “We strongly believe the steps we have taken to align Stagwell’s operations to support this transformation created a lasting platform for growth and shareholder value.”

Stagwell has had breakthrough performance since the combination with MDC Partners Inc., forming Stagwell Inc. in August 2021.  This includes $2 billion in combined pro forma revenue for 2021. Penn’s annual CEO letter discusses Stagwell’s 2021 financial performance in the context of five transformative approaches to global marketing services delivery:

• Digital transformation and innovation, helping clients reposition their enterprises for growth in the new digital economy. Innovation shops Code and Theory, GALE, Instrument, and YML spotlight path-breaking work for Amazon Ads, MilkPEP, Google TV, Polestar and more within the report.
• Scaling creative performance for modern brands, bringing world-class creativity and modern media together to drive powerful campaign results. Work from 72andSunny for Tinder/Match Group; Anomaly for Expedia; Assembly for Nike; Doner for CUE Health; Forsman & Bodenfors for Polestar; and more illustrate ways Stagwell unleashes creative effectiveness for the modern marketer.
• Building integrated marketing solutions that align the right mix of core marketing capabilities and specialist expertise for ever-more-complex clients, exemplified in Sloane & Co., KWT Global, TEAM Enterprises, and GALE’s collaborative marketing efforts supporting Hertz’s vision for the future of electric vehicles.
• Agile global expansion, fueled by Stagwell’s Affiliate Program spanning 50+ partners across Latin America, the Middle East, Africa, Asia-Pacific, and Eastern Europe, and investments in market leaders Instrument and Goodstuff.
• Product innovation through the Stagwell Marketing Cloud, a proprietary product suite of SaaS and DaaS solutions that leverage artificial intelligence, machine learning, and mixed-reality business transformation for in-house marketers. SMC’s services span audience segmentation, influencer marketing, public relations, immersive experiences, and brand insights. The newest platform in the Cloud, ARound, helps brands create, manage, and scale augmented reality experiences for live events and retail.

To read the full report, please visit Stagwell’s website. Viewers can use QR codes throughout the document to explore referenced case studies.

About 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 10,000+ specialists in 34+ countries are unified under a single purpose: to drive effectiveness and improve business results for their clients. Join us at www.stagwellglobal.com.

PR Contact:
Beth Sidhu
pr@stagwellglobal.com
+1. 202.423.4414

IR Contact:
Michaela Pewarski
ir@stagwellglobal.com
646-429-1812

Originally released on

NEW YORK, March 23, 2022 /PRNewswire/ — Stagwell (NASDAQ: STGW), the challenger network built to transform marketing, today announced its Board of Directors has authorized a stock repurchase program (the “Repurchase Program”) under which it may repurchase up to $125.0 million of shares of its outstanding Class A common stock. The Repurchase Program will expire on March 23, 2025.

Under the Repurchase Program, share repurchases may be made at the Company’s 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 Securities Exchange Act of 1934, as amended), in privately negotiated transactions, or through other means. The timing and number of shares repurchased under the program will depend on a variety of factors, including the performance of the Company’s stock price, general market and economic conditions, regulatory requirements, the availability of funds, and other relevant considerations, as determined by the Company. The Repurchase Program may be suspended, modified or discontinued at any time without prior notice. The Company’s Board of Directors will review the Repurchase Program periodically and may authorize adjustments of its terms if appropriate.

“This program reinforces the confidence of Stagwell’s Board in our financial strength, the transformative results of our combination, and the rigorous strategic management our team has applied to the business,” said Mark Penn, Chairman and CEO, Stagwell.

About Stagwell
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 10,000+ specialists in 34+ countries are unified under a single purpose: to drive effectiveness and improve business results for their clients. Join us at www.stagwellglobal.com.

Forward-Looking Statements
This press release contains forward-looking statements. The forward-looking statements in this release include statements regarding the Company’s stock repurchase program and expectations regarding such program and the Company’s ability to repurchase shares thereunder. These statements are based on current plans, estimates and projections, and are subject to change based on a number of factors that could adversely affect the Company’s business, financial condition, results of operations and cash flows, including those outlined in the Company’s Annual Report on Form 10-K, and the Company’s other filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov. 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.

Contact:
Michaela Pewarski
IR@stagwellglobal.com 
646-429-1812