Stagwell Inc. (NASDAQ:STGW) Reports Results for the Three and Nine Months Ended September 30, 2026

Enterprise technology products contracted year to date reached $59 million, more than double the initial FY26 target.

Rhea-AI Summary

Stagwell (NASDAQ:STGW) reported third-quarter revenue of $816 million, up year over year, and raised its full-year adjusted earnings guidance. Revenue rose 10%, while net revenue increased 8% to $664 million, including 7% organic growth, which excludes acquisition, disposal and currency effects. Adjusted EBITDA, a non-GAAP earnings measure, rose 25% to $145 million. Common-shareholder net income fell to $18.119 million from $24.619 million; diluted earnings per share declined to $0.07 from $0.09.

Nine-month revenue grew 10% to $2,306 million, and operating cash flow increased to $152 million from $31 million. The period produced a $2.970 million common-shareholder loss versus $16.441 million income. Stagwell raised 2026 adjusted EBITDA guidance to $490 million–$540 million and adjusted EPS guidance to $1.07–$1.21, while retaining its 8%–12% net revenue growth outlook.

20 points · 1 major

PositiveiHow this balance works

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0 major · 8 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Major point. Forward-looking: it has not happened yet and may not happen.2026 adjusted EBITDA guidance raised to $490 million–$540 million.
• Moderate pointQ3 revenue increased 10% year over year to $816 million, including 11% organic growth.
• Moderate pointQ3 net revenue increased 8% year over year to $664 million, including 7% organic growth.
• Moderate pointQ3 Digital Transformation net revenue reached $119 million, with 23% organic growth year over year.
• Moderate pointEnterprise technology products contracted year to date totaled $59 million, more than double the initial FY26 target. 2.7% of market cap
• Moderate pointQ3 adjusted EBITDA rose 25% year over year to $145 million, with a 22% net revenue margin.
• Moderate pointQ3 adjusted EPS increased to $0.34 from $0.24 a year earlier.
• Moderate pointNine-month operating cash flow increased to $152 million from $31 million a year earlier.
• Moderate pointNet leverage stood at 2.7x, improving 0.7x year over year.
• Moderate pointNet new business totaled $168 million in Q3 and $586 million over the last twelve months.

10 minor points

• Minor pointNine-month revenue increased 10% year over year to $2,306 million, including 9% organic growth.
• Minor pointNine-month net revenue increased 6% year over year to $1,880 million, including 5% organic growth.
• Minor pointDigital Transformation two-year net revenue growth was 38%; two-year organic growth was 30%.
• Minor pointQ3 Marketing Cloud net revenue reached $56 million, with 108% organic growth year over year.
• Minor pointNine-month adjusted EBITDA rose 17% year over year to $343 million, with an 18% net revenue margin.
• Minor pointNine-month adjusted EPS increased to $0.77 from $0.54 a year earlier.
• Minor point. Forward-looking: it has not happened yet and may not happen.2026 adjusted EPS guidance raised to $1.07–$1.21.
• Minor point. Forward-looking: it has not happened yet and may not happen.2026 net revenue growth guidance reiterated at 8%–12%.
• Minor point. Forward-looking: it has not happened yet and may not happen.2026 free cash flow conversion guidance reiterated at 50%–60% of adjusted EBITDA.
• Minor pointNet interest expense fell year over year: Q3 to $23.993 million; nine months to $69.587 million.

Negative

• Moderate pointQ3 common-shareholder net income fell to $18.119 million from $24.619 million a year earlier.
• Moderate pointQ3 operating income fell to $48.059 million from $60.913 million a year earlier.
• Moderate pointQ3 operating expenses increased to $767.968 million from $682.085 million a year earlier.
• Minor pointNine-month common-shareholder loss was $2.970 million, versus $16.441 million income a year earlier.
• Minor pointQ3 diluted EPS declined to $0.07 from $0.09 a year earlier.

3 minor points

• Minor pointNine-month diluted loss per share was $0.01, versus earnings of $0.04 a year earlier.
• Minor pointNine-month operating income fell to $69.247 million from $102.370 million a year earlier.
• Minor pointNine-month operating expenses increased to $2,237.230 million from $1,999.186 million a year earlier.

News Explained

The cash-conversion range remains guidance, while reported net leverage is 2.7x, down 0.7x year over year.

Stagwell has reported third-quarter results and reiterated 2026 free cash flow conversion guidance of 50% to 60%; that range is an outlook, not cash already generated.

Free cash flow conversion is defined as a percentage of adjusted EBITDA, so the range describes a cash-flow target relative to that earnings measure, not a dollar amount.

The company reports net leverage of 2.7x, down 0.7x year over year, and describes it as its lowest third-quarter ratio.

Key Figures

Q3 revenue: $816 million; +10% Q3 net income attributable to common shareholders: $18 million versus $25 million Q3 adjusted EBITDA: $145 million; +25% +5 more

Q3 revenue

$816 million; +10%

Three months ended September 30, 2026; versus prior-year period

Q3 net income attributable to common shareholders

$18 million versus $25 million

Third quarter; versus prior-year period

Q3 adjusted EBITDA

$145 million; +25%

Third quarter; versus prior-year period

Q3 diluted EPS

$0.07 versus $0.09

Third quarter; versus prior-year period

Q3 adjusted EPS

$0.34 versus $0.24

Third quarter; versus prior-year period

YTD net cash provided by operating activities

$152 million versus $31 million

Nine months ended September 30; versus prior-year period

2026 adjusted EBITDA guidance

$490 million to $540 million

Raised guidance

2026 adjusted EPS guidance

$1.07 to $1.21

Raised guidance

Key Terms

adjusted ebitda, adjusted eps, free cash flow conversion, non-gaap financial measures

4 terms

adjusted ebitda financial

"Q3 Adjusted EBITDA of $145 million, an increase of 25%"

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

adjusted eps financial

"Q3 Adjusted Earnings Per Share attributable to Stagwell Inc."

Adjusted earnings per share (adjusted eps) is a measure of a company's profit per share that has been modified to exclude certain one-time or unusual items, such as costs from restructuring or asset sales. It provides a clearer picture of the company’s core performance by removing events that may distort the usual earnings. Investors use adjusted eps to better understand a company's ongoing profitability and compare it more accurately over time.

free cash flow conversion financial

"Reiterate Free Cash Flow Conversion of 50% to 60%"

Free cash flow conversion measures how effectively a company turns its reported profits into actual cash that can be used for growth, debt repayment, or dividends. It compares the cash generated after expenses to the company's net income, similar to how a person might compare their savings to their paycheck. High conversion indicates the company is efficient at translating profits into cash, which is important for investors assessing its financial health and flexibility.

non-gaap financial measures financial

"certain financial results that the Securities and Exchange Commission defines as"

Non-GAAP financial measures are numbers companies use to show their financial performance that exclude certain expenses or income. They help investors see how the company might perform without one-time costs or other unusual items, giving a different perspective from official reports. However, since they can be adjusted, they don’t always tell the full story and should be looked at alongside standard financial figures.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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NEW YORK CITY, NY / ACCESS Newswire / October 29, 2026 / (NASDAQ:STGW) - Stagwell Inc. ("Stagwell") today announced financial results for the three and nine months ended September 30, 2026.

THIRD QUARTER RESULTS:

• Q3 Revenue of $816 million, an increase of 10% versus the prior year period; YTD Revenue of $2,306 million, an increase of 10%;
• Q3 Revenue increased 11% organically versus the prior year period; YTD Revenue increased 9% organically;
• Q3 Net Revenue of $664 million, an increase of 8% versus the prior year period; YTD Net Revenue of $1,880 million, an increase of 6%;
• Q3 Net Revenue increased 7% organically versus the prior year period; YTD Net Revenue increased 5% organically;
• Q3 Digital Transformation Net Revenue of $119 million, an organic increase of 23% versus the prior year period;
• Two-Year Net Revenue Growth Stack for Digital Transformation of 38%, Two-Year Organic Net Revenue Growth Stack for Digital Transformation of 30%;
• Q3 The Marketing Cloud Net Revenue of $56 million, an organic increase of 108% versus the prior year period;
• YTD enterprise technology products contracted to date of $59 million, more than double initial FY26 target;
• Q3 Net Income attributable to Stagwell Inc. Common Shareholders of $18 million versus $25 million in the prior year period; YTD Net Loss attributable to Stagwell Inc. Common Shareholders of $3 million versus income of $16 million in the prior year period;
• Q3 Adjusted EBITDA of $145 million, an increase of 25% versus the prior year period; YTD Adjusted EBITDA of $343 million an increase of 17%;
• Q3 Adjusted EBITDA Margin of 22% on net revenue; YTD Adjusted EBITDA Margin of 18%;
• Q3 Earnings Per Share attributable to Stagwell Inc. Common Shareholders of $0.07 versus $0.09; YTD Loss Per Share attributable to Stagwell Inc. Common Shareholders of $(0.01) versus Earnings Per Share of $0.04 in the prior year period;
• Q3 Adjusted Earnings Per Share attributable to Stagwell Inc. Common Shareholders of $0.34 versus $0.24; YTD Adjusted Earnings Per Share attributable to Stagwell Inc. Common Shareholders of $0.77 versus $0.54 in the prior year period;
• YTD Net Cash provided by Operating Activities of $152 million versus $31 million in the prior year period;
• Net new business of $168 million in the third quarter, last twelve-month net new business of $586 million

See "Non-GAAP Financial Measures" below for explanations and reconciliations of the Company's non-GAAP financial measures.

"This is the biggest quarter in Stagwell's history. It shows we are on track to become number one in marketing transformation," said Mark Penn, Chairman and CEO of Stagwell. "Software products, like our agentic Stagwell Machines, and the Digital Transformation segment are driving our business as we pivot from primarily marketing services to AI-powered marketing transformation. We have more than doubled our initial Enterprise Technology Bookings goal for the year, saw 23% organic net revenue growth in Digital Transformation, and 108% organic growth in The Marketing Cloud."

Ryan Greene, Chief Financial Officer, added: "The third quarter was Stagwell's largest ever on virtually every metric. Organic net revenue for the company grew more than 7% year-over-year to $664 million, while our adjusted EBITDA grew 25% to $145 million, and our adjusted EPS grew 42% to $0.34. These improved earnings also contributed to a more than 400% increase in operating cash flow year to date. Net leverage now stands at 2.7x, a 0.7x improvement year-over-year, and our lowest ever third quarter ratio. Results through the first three quarters give us the confidence to raise our adjusted EBITDA and adjusted EPS guidance today."

Financial Outlook

2026 financial guidance is updated as follows:

• Raise Adjusted EBITDA to $490 million to $540 million
• Raise Adjusted EPS to $1.07 - $1.21
• Reiterate Total Net Revenue growth of 8% to 12%
• Reiterate Free Cash Flow Conversion of 50% to 60%
• Guidance includes anticipated impact from acquisitions or dispositions.

* The Company has excluded a quantitative reconciliation with respect to the Company's 2026 guidance under the "unreasonable efforts" exception in Item 10(e)(1)(i)(B) of Regulation S-K. See "Non-GAAP Financial Measures" below for additional information.

Video Webcast

Management will host a video webcast on Thursday, October 29, 2026, at 8:30 a.m. (ET) to discuss results for Stagwell Inc. for the three and nine months ended September 30, 2026. The video webcast will be accessible at https://edge.media-server.com/mmc/p/qudoyxam/. An investor presentation has been posted on our website at www.stagwellglobal.com and may be referred to during the webcast.

A recording of the webcast will be accessible one hour after the webcast and available for ninety days at www.stagwellglobal.com.

Stagwell Inc.

Stagwell is the global challenger network transforming marketing through AI. We deliver scaled creative performance for the world's most ambitious brands, connecting culture-moving creativity with leading-edge technology to harmonize the art and science of marketing. Led by entrepreneurs, our specialists in 40+ countries are unified under a single purpose: to drive effectiveness and improve business results for our clients. Join us at www.stagwellglobal.com.

Contacts

For Investors:
Ben Allanson
IR@stagwellglobal.com

For Press:
Lena Petersen
PR@stagwellglobal.com

Non-GAAP Financial Measures

In addition to its reported results, Stagwell Inc. has included in this earnings release certain financial results that the Securities and Exchange Commission ("SEC") defines as "non-GAAP Financial Measures." Management believes that such non-GAAP financial measures, when read in conjunction with the Company's reported results, can provide useful supplemental information for investors analyzing period to period comparisons of the Company's results. Such non-GAAP financial measures include the following:

(1) Organic Net Revenue: "Organic net revenue growth (decline)" reflects the year-over-year change in the Company's reported net revenue attributable to the Company's management of the entities it owns. We calculate organic net revenue growth (decline) by subtracting the net impact of acquisitions (divestitures) and the impact of foreign currency exchange fluctuations from the aggregate year-over-year increase or decrease in the Company's reported net revenue. The net impact of acquisitions (divestitures) reflects the year-over-year change in the Company's reported net revenue attributable to the impact of all individual entities that were acquired or divested in the current and prior year. We calculate the impact of an acquisition as follows: (a) for an entity acquired during the current year, we present the entity's current period reported revenue as the impact of the acquisition in the current year; and (b) for an entity acquired in the prior year, we present an amount equal to the entity's current year net revenue for the same period during which we didn't own the entity in the prior year as the impact of the acquisition in the current year. We calculate the impact of a divestiture as follows: (a) for a divestiture in the current year, we present the entity's prior year net revenue for the same period during which we no longer owned it in the current year as impact of the divestiture in the current year; and (b) for a divestiture in the prior year, we present the entity's prior year net revenue for the period during which we owned it in the prior year as impact of the divestiture in the current year. We calculate the impact of any acquisition or divestiture without adjusting for foreign currency exchange fluctuations. The impact of foreign currency exchange fluctuations reflects the year-over-year change in the Company's reported net revenue attributable to changes in foreign currency exchange rates. We calculate the impact of foreign currency exchange fluctuations for the portion of the reporting period in which we recognized revenue from a foreign entity in both the current year and the prior year. The impact is calculated as the difference between (1) reported prior period net revenue (converted to U.S. dollars at historical foreign currency exchange rates) and (2) prior period net revenue converted to U.S. dollars at current period foreign exchange rates.

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

(3) Adjusted EBITDA: is defined as Net income (loss) attributable to Stagwell Inc. common shareholders excluding non-operating income or expense, income tax expense or benefit, equity in income or loss of non-consolidated entities and net income or loss attributable to noncontrolling and redeemable noncontrolling interest holders 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 include restructuring, certain system implementation costs, working capital administrative fees, acquisition-related expenses, and other non-recurring income and expenses. Adjusted EBITDA for our reportable segments is reconciled to Operating income (loss), as Net income (loss) is not relevant for a reportable segment financial metric.

(4) Adjusted Diluted EPS: is defined as Adjusted Net Income (loss) attributable to Stagwell Inc. common and Class C shareholders, divided by the diluted weighted average shares outstanding. Adjusted Net Income represents net income (loss) attributable to Stagwell Inc. common and Class C shareholders, excluding amortization, impairment and other losses, stock-based compensation, deferred acquisition consideration adjustments, discrete tax items, and other items (as defined above), allocated between the two share classes based on their respective income allocation percentages using a normalized effective tax rate. The diluted weighted average shares outstanding includes the diluted weighted average common shares outstanding plus 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.

(5) Free Cash Flow: defined as consolidated net cash flow from operations less cash outflow from capital expenditures and capitalized software, excluding material nonrecurring capital purchases. Free Cash Flow Conversion is the percentage of adjusted EBITDA.

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

This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The Company's representatives may also make forward-looking statements orally or in writing from time to time. Statements in this document that are not historical facts, including, statements about the Company's beliefs and expectations, future financial performance, growth, and future prospects, the Company's strategy, business and economic trends and growth, technological leadership and differentiation, potential and completed acquisitions, anticipated and actual operating efficiencies and synergies and estimates of amounts for redeemable noncontrolling interests and deferred acquisition consideration, constitute forward-looking statements. Forward-looking statements, which are generally denoted by words such as "ability," "aim," "anticipate," "assume," "believe," "better," "build," "consider," "continue," "could," "depend," "develop, "drive," "enhance," "estimate," "evaluate," "expand," "expect," "focus," "forecast," "future," "grow," "guidance," "illustrative," "improve," "intend," "likely," "maintain," "may," "objective," "ongoing," "opportunity," "optimize," "outlook," "plan," "position," "possible," "potential," "probable," "project," "realize," "remain," "scenario," "seek," "should," "strategy," "sufficient," "support," "target," "will," "would" or the negative of such terms or other variations thereof and terms of similar substance used in connection with any discussion of current plans, estimates and projections are subject to change based on a number of factors, including those outlined in this section.

Forward-looking statements in this document are based on certain key expectations and assumptions made by the Company. Although the management of the Company believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. The material assumptions upon which such forward-looking statements are based include, among others, assumptions with respect to general business, economic and market conditions, the competitive environment, anticipated and unanticipated tax consequences and anticipated and unanticipated costs. These forward-looking statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined in this section. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company's control. Therefore, you should not place undue reliance on such statements. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events, if any.

Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. Such risk factors include, but are not limited to, the following:

• risks associated with international, national and regional unfavorable economic conditions, including the effect of changing tariffs and other trade policies, inflation and other macroeconomic factors that could affect the Company or its clients;
• demand for the Company's services, which may precipitate or exacerbate other risks and uncertainties;
• inflation and actions taken by central banks to address inflation, including changes in interest rates;
• 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, deferred acquisition consideration and profit interests;
• the Company's ability to manage its growth effectively;
• the Company's ability to identify and complete acquisitions or other strategic transactions that complement and expand the Company's business capabilities and successfully integrate newly acquired businesses into the Company's operations, retain key employees, and realize cost savings, synergies and other related anticipated benefits within the expected time period;
• the Company's ability to identify and complete divestitures and to achieve the anticipated benefits therefrom;
• the Company's ability to develop products incorporating new technologies, including augmented reality, artificial intelligence, and virtual reality, and realize benefits from such products;
• the Company's use of artificial intelligence, including generative artificial intelligence, and its ability to realize anticipated efficiencies and other benefits from its investments in artificial intelligence and automation technologies, and changes in client demand for artificial intelligence-related services;
• adverse tax consequences for the Company, its operations and its stockholders, that may differ from the expectations of the Company, including that recent or future changes in tax laws, potential changes to corporate tax rates in the United States and disagreements with tax authorities on the Company's determinations that may result in increased tax costs;
• adverse tax consequences in connection with the business combination that formed the Company in August 2021, including the incurrence of material Canadian federal income tax (including material "emigration tax");
• the Company's ability to maintain an effective system of internal control over financial reporting, including the risk that the Company's internal controls will fail to detect misstatements in its financial statements, such as errors requiring out-of-period adjustments;
• the Company's ability to accurately forecast its future financial performance and provide accurate guidance;
• the Company's ability to protect client data from security incidents or cyberattacks;
• economic disruptions resulting from war and other economic and geopolitical tensions (such as the ongoing military conflicts in Iran and the Middle East, and between Russia and Ukraine), terrorist activities, natural disasters, public health events, and tariff and trade policies, including the resulting effects on client marketing spend in affected regions;
• stock price volatility; and
• foreign currency fluctuations.

Investors should carefully consider these risks and the additional risk factors described in more detail in our Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K"), filed with the Securities and Exchange Commission (the "SEC") on March 13, 2026, and accessible on the SEC's website at www.sec.gov, under the caption "Risk Factors," in our subsequent Quarterly Reports on Form 10-Q and in the Company's other SEC filings.

SCHEDULE 1
STAGWELL INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(amounts in thousands, except per share amounts)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
Revenue		$	816,027			$	742,998			$	2,306,477			$	2,101,556
Operating expenses
Cost of services			511,698				470,937				1,488,293				1,342,240
Office and general expenses			206,942				166,422				611,323				528,845
Depreciation and amortization			48,300				44,260				136,395				127,635
Impairment and other losses			1,028				466				1,219				466
			767,968				682,085				2,237,230				1,999,186
Operating Income			48,059				60,913				69,247				102,370
Other income (expenses):
Interest expense, net			(23,993	)			(25,196	)			(69,587	)			(72,007	)
Foreign exchange, net			2,244				(366	)			(172	)			(484	)
Other, net			2,526				(2,032	)			3,394				(2,143	)
			(19,223	)			(27,594	)			(66,365	)			(74,634	)
Income before income taxes and equity in earnings of non-consolidated affiliates			28,836				33,319				2,882				27,736
Income tax expense			10,882				9,555				7,646				13,950
Income (loss) before equity in earnings of non-consolidated affiliates			17,954				23,764				(4,764	)			13,786
Equity in income (loss) of non-consolidated affiliates			442				(1	)			512				18
Net income (loss)			18,396				23,763				(4,252	)			13,804
Net (income) loss attributable to noncontrolling and redeemable noncontrolling interests			(277	)			856				1,282				2,637
Net income (loss) attributable to Stagwell Inc. common shareholders		$	18,119			$	24,619			$	(2,970	)		$	16,441
Earnings (loss) per common share:
Basic		$	0.07			$	0.10			$	(0.01	)		$	0.08
Diluted		$	0.07			$	0.09			$	(0.01	)		$	0.04
Weighted average number of common shares outstanding:
Basic			244,666				255,952				247,131				210,139
Diluted			250,989				259,583				247,131				266,773

SCHEDULE 2
STAGWELL INC.
UNAUDITED COMPONENTS OF NET REVENUE CHANGE
(amounts in thousands)

				Net Revenue - Components of Change															Change
	Three Months Ended September 30, 2025			Foreign Currency			Net Acquisitions (Divestitures)			Organic (1)			Total Change			Three Months Ended September 30, 2026			Organic		Total
Marketing Services	$	239,961		$	(176	)	$	(3,996	)	$	(18,108	)	$	(22,280	)	$	217,681		(7.5)	%	(9.3)	%
Digital Transformation		96,111			(233	)		599			22,182			22,548			118,659		23.1	%	23.5	%
Media & Commerce		162,542			(432	)		-			(3,366	)		(3,798	)		158,744		(2.1)	%	(2.3)	%
Communications		96,631			72			7,657			19,324			27,053			123,684		20.0	%	28.0	%
The Marketing Cloud		26,571			304			-			28,808			29,112			55,683		108.4	%	109.6	%
Corporate, eliminations and other		(7,294	)		12			-			(3,152	)		(3,140	)		(10,434	)	43.2	%	43.0	%
	$	614,522		$	(453	)	$	4,260		$	45,688		$	49,495		$	664,017		7.4	%	8.1	%

⁽¹⁾ See Non-GAAP Financial Measures section above for the definition of Organic Net Revenue.

SCHEDULE 3
STAGWELL INC. AND SUBSIDIARIES
UNAUDITED COMPONENTS OF NET REVENUE CHANGE
(amounts in thousands)

					Net Revenue - Components of Change															Change
		Nine Months Ended September 30, 2025			Foreign Currency			Net Acquisitions (Divestitures)			Organic (1)			Total Change			Nine Months Ended September 30, 2026			Organic		Total
Marketing Services		$	692,760		$	3,086		$	(7,740	)	$	(15,436	)	$	(20,090	)	$	672,670		(2.2)	%	(2.9)	%
Digital Transformation			277,091			(617	)		3,826			45,734			48,943			326,034		16.5	%	17.7	%
Media & Commerce			459,911			1,855			4,185			(191	)		5,849			465,760		-	%	1.3	%
Communications			285,447			1,041			10,271			36,114			47,426			332,873		12.7	%	16.6	%
The Marketing Cloud			77,364			2,863			-			30,576			33,439			110,803		39.5	%	43.2	%
Corporate, eliminations and other			(15,735	)		(8	)		-			(12,173	)		(12,181	)		(27,916	)	77.4	%	77.4	%
		$	1,776,838		$	8,220		$	10,542		$	84,624		$	103,386		$	1,880,224		4.8	%	5.8	%

⁽¹⁾ See Non-GAAP Financial Measures section above for the definition of Organic Net Revenue.

SCHEDULE 4
STAGWELL INC.
UNAUDITED SEGMENT OPERATING RESULTS
(amounts in thousands)

		Marketing Services			Digital Transformation			Media & Commerce			Communications			The Marketing Cloud			Corporate, Elimination and Other			Total
Revenue		$	255,445		$	127,176		$	176,857		$	210,913		$	55,825		$	(10,189	)	$	816,027
Billable costs			37,764			8,517			18,113			87,229			142			245			152,010
Net revenue			217,681			118,659			158,744			123,684			55,683			(10,434	)		664,017
Staff costs			126,795			73,620			95,403			59,939			16,572			13,288			385,617
Administrative costs			24,677			6,830			26,650			13,432			5,291			5,878			82,758
Unbillable and other costs, net			24,254			71			16,917			2,455			9,165			(2,056	)		50,806
Adjusted EBITDA (1)			41,955			38,138			19,774			47,858			24,655			(27,544	)		144,836
Stock-based compensation			11,717			3,675			1,230			4,221			400			7,677			28,920
Depreciation and amortization			11,841			6,256			8,601			6,925			5,995			8,682			48,300
Deferred acquisition consideration			-			3,433			1,216			3,013			13			-			7,675
Impairment and other losses			-			-			-			-			1,028			-			1,028
Other items, net (1)			3,161			318			3,712			701			986			1,976			10,854
Operating income (loss)		$	15,236		$	24,456		$	5,015		$	32,998		$	16,233		$	(45,879	)	$	48,059

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

SCHEDULE 5
STAGWELL INC. AND SUBSIDIARIES
UNAUDITED SEGMENT OPERATING RESULTS
(amounts in thousands)

For the Nine Months Ended September 30, 2026

		Marketing Services			Digital Transformation			Media & Commerce			Communications			The Marketing Cloud			Corporate, eliminations and other			Total
Revenue		$	786,650		$	349,756		$	534,561		$	552,767		$	110,963		$	(28,220	)	$	2,306,477
Billable costs			113,980			23,722			68,801			219,894			160			(304	)		426,253
Net revenue			672,670			326,034			465,760			332,873			110,803			(27,916	)		1,880,224
Staff costs			390,338			208,901			291,338			178,086			51,460			30,062			1,150,185
Administrative costs			74,036			20,966			74,902			40,634			18,003			10,932			239,473
Unbillable and other costs, net			75,327			381			45,820			6,291			23,962			(4,423	)		147,358
Adjusted EBITDA (1)			132,969			95,786			53,700			107,862			17,378			(64,487	)		343,208
Stock-based compensation			24,649			8,368			2,871			9,131			906			15,810			61,735
Depreciation and amortization			36,749			18,011			24,319			19,972			18,945			18,399			136,395
Deferred acquisition consideration			(1,969	)		13,535			9,854			4,773			573			-			26,766
Impairment and other losses			-			-			191			-			1,028			-			1,219
Other items, net (1)			9,085			1,938			11,692			4,205			1,686			19,240			47,846
Operating income (loss)		$	64,455		$	53,934		$	4,773		$	69,781		$	(5,760	)	$	(117,936	)	$	69,247

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

SCHEDULE 6
STAGWELL INC. AND SUBSIDIARIES
UNAUDITED SEGMENT OPERATING RESULTS
(amounts in thousands)

For the Three Months Ended September 30, 2025

		Marketing Services			Digital Transformation			Media & Commerce			Communications			The Marketing Cloud			Corporate, eliminations and other			Total
Revenue		$	291,089		$	104,445		$	183,112		$	145,086		$	26,576		$	(7,310	)	$	742,998
Billable costs			51,128			8,334			20,570			48,455			5			(16	)		128,476
Net revenue			239,961			96,111			162,542			96,631			26,571			(7,294	)		614,522
Staff costs			138,310			62,845			98,212			56,650			17,969			13,224			387,210
Administrative costs			26,835			6,981			24,225			12,516			3,068			(3,238	)		70,387
Unbillable and other costs, net			17,187			401			15,554			2,344			6,898			(1,446	)		40,938
Adjusted EBITDA (1)			57,629			25,884			24,551			25,121			(1,364	)		(15,834	)		115,987
Stock-based compensation			4,240			934			1,111			1,594			200			4,567			12,646
Depreciation and amortization			12,820			5,932			7,524			6,363			6,455			5,166			44,260
Deferred acquisition consideration			(500	)		1,874			1,413			(3,716	)		(12,419	)		-			(13,348	)
Impairment and other losses			-			-			-			222			244			-			466
Other items, net (1)			2,200			432			4,153			1,624			1,284			1,357			11,050
Operating income (loss)		$	38,869		$	16,712		$	10,350		$	19,034		$	2,872		$	(26,924	)	$	60,913

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

SCHEDULE 7
STAGWELL INC.
UNAUDITED SEGMENT OPERATING RESULTS
(amounts in thousands)

For the Nine Months Ended September 30, 2025

		Marketing Services			Digital Transformation			Media & Commerce			Communications			The Marketing Cloud			Corporate, Elimination and Other			Total
Revenue		$	817,294		$	294,301		$	509,416		$	420,556		$	77,380		$	(17,391	)	$	2,101,556
Billable costs			124,534			17,210			49,505			135,109			16			(1,656	)		324,718
Net Revenue			692,760			277,091			459,911			285,447			77,364			(15,735	)		1,776,838
Staff costs			401,036			186,972			291,228			172,273			52,001			33,232			1,136,742
Administrative costs			83,338			19,599			70,963			37,042			11,582			(4,301	)		218,223
Unbillable and other costs, net			61,801			1,178			44,486			7,103			18,399			(3,665	)		129,302
Adjusted EBITDA (1)			146,585			69,342			53,234			69,029			(4,618	)		(41,001	)		292,571
Stock-based compensation			14,832			3,081			3,302			6,760			541			15,627			44,143
Depreciation and amortization			39,556			17,250			22,211			19,349			17,436			11,833			127,635
Deferred acquisition consideration			(4,784	)		7,729			2,942			(4,879	)		(10,919	)		-			(9,911	)
Impairment and other losses			-			-			-			222			244			-			466
Other items, net (1)			3,133			1,493			11,210			3,686			2,609			5,737			27,868
Operating income (loss)		$	93,848		$	39,789		$	13,569		$	43,891		$	(14,529	)	$	(74,198	)	$	102,370

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

SCHEDULE 8
STAGWELL INC.
UNAUDITED RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP MEASURE)
(amounts in thousands, except per share amounts)

For the Three Months Ended September 30, 2026

		GAAP				Adjustments (1)				Non-GAAP
Net income attributable to Stagwell Inc. common shareholders		$	18,119			$	67,859			$	85,978
Diluted - Weighted average number of shares outstanding			250,989				-				250,989
Diluted EPS and Adjusted Diluted EPS (1)		$	0.07							$	0.34
Adjustments to Net income
Amortization						$	42,884
Impairment and other losses							1,028
Stock-based compensation							28,920
Deferred acquisition consideration							7,675
Other items, net (2)							7,409
							87,916
Adjustment to GAAP income tax expense (3)							(20,057	)
						$	67,859

¹⁾ See Non-GAAP Financial Measures section above for the definition of Adjusted Diluted EPS.

⁽²⁾ Other items, net, primarily includes restructuring, certain system implementation costs, working capital administrative fees, acquisition-related expense, and other non-recurring expenses.

⁽³⁾ Represents the difference between the income tax expense of $10.9 million at an effective tax rate of 37.7% on a GAAP basis and the income tax expense of $30.9 million at an effective tax rate of 26.5% on a non-GAAP basis. The difference reflects the tax impact of non-GAAP adjustments.

SCHEDULE 9
STAGWELL INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP MEASURE)
(amounts in thousands, except per share amounts)

For the Nine Months Ended September 30, 2026

		GAAP				Adjustments (1)				Non-GAAP
Net (loss) income attributable to Stagwell Inc. common shareholders		$	(2,970	)		$	193,633			$	190,663
Diluted - Weighted average number of common shares outstanding			247,131				-				247,131
Diluted EPS and Adjusted Diluted EPS (1)		$	(0.01	)						$	0.77
Adjustments to Net (loss) income
Amortization						$	119,962
Impairment and other losses							1,219
Stock-based compensation							61,735
Deferred acquisition consideration							26,766
Other items, net (2)							44,401
							254,083
Adjustment to GAAP income tax expense (3)							(60,450	)
						$	193,633

¹⁾ See Non-GAAP Financial Measures section above for the definition of Adjusted Diluted EPS.

⁽²⁾ Other items, net, primarily includes restructuring, certain system implementation costs, working capital administrative fees, acquisition-related expense, and other non-recurring expenses.

⁽³⁾ Represents the difference between the income tax expense of $7.6 million at an effective tax rate of 265.3% on a GAAP basis and the income tax expense of $68.1 million at an effective tax rate of 26.5% on a non-GAAP basis. The difference reflects the tax impact of non-GAAP adjustments.

SCHEDULE 10
STAGWELL INC.
UNAUDITED RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP MEASURE)
(amounts in thousands, except per share amounts)

For the Three Months Ended September 30, 2025

		GAAP				Adjustments (1)				Non-GAAP
Net income attributable to Stagwell Inc. common shareholders		$	24,619			$	38,575			$	63,194
Diluted - Weighted average number of common shares outstanding			259,583				-				259,583
Diluted EPS and Adjusted Diluted EPS (1)		$	0.09							$	0.24
Adjustments to Net income
Amortization						$	38,707
Impairment and other losses							466
Stock-based compensation							12,646
Deferred acquisition consideration							(13,348	)
Other items, net (2)							13,333
							51,804
Adjustment to GAAP income tax expense (3)							(13,229	)
							38,575

⁽¹⁾ See Non-GAAP Financial Measures section above for the definition of Adjusted Diluted EPS.

⁽²⁾ Other items, net, primarily includes restructuring, certain system implementation costs, working capital administrative fees, acquisition-related expense, and other non-recurring expenses.

⁽³⁾ Represents the difference between the income tax expense of $9.6 million at an effective tax rate of 28.7% on a GAAP basis and the income tax expense of $22.8 million at an effective tax rate of 26.5% on a non-GAAP basis. The difference reflects the tax impact of non-GAAP adjustments.

SCHEDULE 11
STAGWELL INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP MEASURE)
(amounts in thousands, except per share amounts)

For the Nine Months Ended September 30, 2025

		GAAP				Adjustments (1)				Non-GAAP
Net income attributable to Stagwell Inc. common shareholders		$	16,441			$	134,175			$	150,616
Net loss attributable to Class C shareholders			(6,637	)			-				(6,637	)
Net income attributable to Stagwell Inc. and Class C shareholders and adjusted net income		$	9,804			$	134,175			$	143,979
Diluted - Weighted average number of common shares outstanding			214,557				-				214,557
Weighted average number of shares of Class C Common Stock outstanding			52,216				-				52,216
Diluted - Weighted average number of shares outstanding			266,773				-				266,773
Diluted EPS and Adjusted Diluted EPS (1)		$	0.04							$	0.54
Adjustments to Net income
Amortization						$	107,281
Impairment and other losses							466
Stock-based compensation							44,143
Deferred acquisition consideration							(9,911	)
Other items, net (2)							30,151
							172,130
Adjustment to GAAP income tax expense (3)							(37,955	)
						$	134,175

¹⁾ See Non-GAAP Financial Measures section above for the definition of Adjusted Diluted EPS.

⁽²⁾ Other items, net, primarily includes restructuring, certain system implementation costs, working capital administrative fees, acquisition-related expense, and other non-recurring expenses.

⁽³⁾ Represents the difference between the income tax expense of $14.0 million at an effective tax rate of 50.3% on a GAAP basis and the income tax expense of $51.9 million at an effective tax rate of 26.5% on a non-GAAP basis. The difference reflects the tax impact of non-GAAP adjustments.

SCHEDULE 12
STAGWELL INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)

		September 30, 2026				December 31, 2025
ASSETS
Current Assets
Cash and cash equivalents		$	132,197			$	104,537
Accounts receivable, net			772,787				735,752
Expenditures billable to clients			144,015				164,694
Other current assets			174,932				157,309
Total Current Assets			1,223,931				1,162,292
Fixed assets, net			70,083				73,081
Right-of-use assets - operating leases			189,243				213,576
Goodwill			1,598,491				1,595,238
Other intangible assets, net			795,689				834,248
Deferred tax assets			280,193				281,057
Other assets			53,812				55,055
Total Assets		$	4,211,442			$	4,214,547
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS ("RNCI"), AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable		$	489,376			$	548,320
Accrued media			228,612				239,490
Accruals and other liabilities			330,142				291,554
Advance billings			365,529				329,815
Current portion of lease liabilities - operating leases			55,073				55,386
Current portion of deferred acquisition consideration			42,871				15,446
Total Current Liabilities			1,511,603				1,480,011
Long-term debt			1,414,574				1,326,013
Long-term portion of deferred acquisition consideration			21,494				24,598
Long-term lease liabilities - operating leases			195,482				224,397
Deferred tax liabilities			53,899				54,726
Long-term tax receivable agreement liability			252,390				252,390
Other liabilities			30,456				51,077
Total Liabilities			3,479,898				3,413,212
Redeemable Noncontrolling Interests			21,247				24,968
Commitments, contingencies and guarantees
Shareholders' Equity
Common shares - Class A			245				252
Paid-in capital			697,402				744,463
Retained earnings			31,203				32,930
Accumulated other comprehensive loss			(34,787	)			(19,252	)
Stagwell Inc. Shareholders' Equity			694,063				758,393
Noncontrolling interests			16,234				17,974
Total Shareholders' Equity			710,297				776,367
Total liabilities, RNCI, and shareholders' equity		$	4,211,442			$	4,214,547

SCHEDULE 13
STAGWELL INC. AND SUBSIDIARIES
UNAUDITED SUMMARY CASH FLOW DATA
(amounts in thousands)

		Nine Months Ended September 30,
		2026				2025
Cash flows from operating activities:
Net (loss) income		$	(4,252	)		$	13,804
Adjustments to reconcile net loss to cash provided by operating activities:
Stock-based compensation			61,735				44,143
Depreciation and amortization			136,395				127,635
Amortization of right-of-use lease assets and lease liability interest			47,471				51,208
Impairment and other (gains) losses			(2,226	)			(3,063	)
Deferred income taxes			476				3,216
Adjustment to deferred acquisition consideration			26,766				(9,911	)
Other, net			2,280				1,319
Changes in working capital:
Accounts receivable			(51,575	)			(3,477	)
Expenditures billable to clients			20,723				26,266
Other current assets			(22,408	)			(53,377	)
Accounts payable			(50,059	)			(57,306	)
Accrued expenses and other liabilities			5,297				(117,118	)
Advance billings			35,360				67,964
Current portion of lease liabilities - operating leases			(52,254	)			(59,414	)
Deferred acquisition related payments			(1,450	)			(1,176	)
Net cash provided by operating activities			152,279				30,713
Cash flows from investing activities:
Capitalized software			(75,855	)			(45,315	)
Capital expenditures			(27,405	)			(26,338	)
Acquisitions, net of cash acquired			(6,347	)			(6,179	)
Other			(4,303	)			(2,927	)
Net cash used in investing activities			(113,910	)			(80,759	)
Cash flows from financing activities:
Repayment of borrowings under revolving credit facility			(1,533,426	)			(1,412,000	)
Proceeds from borrowings under revolving credit facility			1,619,780				1,586,326
Shares repurchased and cancelled			(90,716	)			(105,183	)
Distributions to noncontrolling interests and RNCI			(3,903	)			(5,018	)
Payment of deferred consideration			(337	)			(16,103	)
Purchase of noncontrolling interest			(450	)			-
Tax Receivables Agreement payment			(2,554	)			-
Debt financing and other costs			-				(3,795	)
Net cash (used in) provided by financing activities			(11,606	)			44,227
Effect of exchange rate changes on cash and cash equivalents			897				6,718
Net increase in cash and cash equivalents			27,660				899
Cash and cash equivalents at beginning of period			104,537				131,339
Cash and cash equivalents at end of period		$	132,197			$	132,238

SOURCE: Stagwell

View the original press release on ACCESS Newswire

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Stagwell's Q3 2026 revenue and earnings?

Stagwell reported $816 million revenue and $0.07 diluted EPS for the quarter ended September 30, 2026. Revenue increased 10% year over year, while diluted EPS declined from $0.09. Net income attributable to common shareholders was $18.119 million, compared with $24.619 million a year earlier.

What is Stagwell's updated 2026 earnings guidance?

Stagwell raised its 2026 guidance to $490 million–$540 million adjusted EBITDA and $1.07–$1.21 adjusted EPS. It reiterated total net revenue growth guidance of 8%–12% and free cash flow conversion of 50%–60%.

Does Stagwell's 2026 guidance include acquisitions and dispositions?

Stagwell's 2026 guidance includes anticipated effects from acquisitions or dispositions.

How does Stagwell define net new business?

Stagwell defines net new business as estimated annualized revenue from new wins minus annualized revenue from losses incurred during the period. It reported $168 million for the third quarter and $586 million for the last twelve months.

How does Stagwell calculate free cash flow conversion?

Stagwell calculates free cash flow conversion as free cash flow divided by adjusted EBITDA. Free cash flow is operating cash flow less cash spent on capital expenditures and capitalized software, excluding material nonrecurring capital purchases.