Stagwell (US:STGW)2025-11-06 12:15Financial Performance - Q3 2025 revenue of $743 million, a 4% increase year-over-year; year-to-date revenue of $2,102 million, a 2% increase year-over-year[4] - Q3 net income attributable to Stagwell Inc. common shareholders of $25 million, compared to $3 million in the prior year period; year-to-date net income of $16 million, compared to a net loss of $1 million in the prior year[4] - Q3 adjusted EBITDA of $115 million, a 3% increase year-over-year; adjusted EBITDA margin of 19% on net revenue[8] - Q3 adjusted EPS of $0.24, a 9% year-over-year increase; year-to-date adjusted EPS remains at $0.53[8] - Operating income for the three months ended September 30, 2025, was $60.913 million, up 45.8% from $41.779 million in the prior year[24] - The company reported an adjusted EBITDA of $114.582 million for the three months ended September 30, 2025[31] - Adjusted EBITDA for the same period was $288,019,000, with a margin of approximately 16.2%[34] - The diluted earnings per share (EPS) for the same period was $0.04, while the adjusted diluted EPS was $0.53[45] Revenue Growth - Net new business of $122 million in Q3; last twelve-month net new business totaled $472 million[3] - Guidance for 2025 includes total net revenue growth of approximately 8% and adjusted EBITDA between $410 million and $460 million[9] - Digital transformation net revenue growth of 12% in Q3[2] - Strong organic growth in nearly all areas, with non-advocacy work showing double-digit growth[6] - Organic net revenue growth for the three months ended September 30, 2025, was 5.9%, with total net revenue reaching $614.522 million[26] - Marketing Services segment generated $246.094 million in net revenue for the three months ended September 30, 2025, reflecting a 6.5% increase[31] - Digital Transformation segment reported net revenue of $95.376 million, representing an 11.9% increase year-over-year[31] - Media & Commerce segment's net revenue was $154.157 million, a 5.9% increase compared to the previous year[31] - For the nine months ended September 30, 2025, total net revenue was $2.101556 billion, a 2.4% increase from $2.052508 billion in the same period of 2024[24] Cash Flow and Costs - Free cash flow conversion expected to exceed 45% in 2025[9] - Total staff costs for the nine months ended September 30, 2025, amounted to $1,136,742,000, reflecting a strategic investment in human resources[34] - The company incurred $222,775,000 in administrative costs during the nine months ended September 30, 2025[34] - Billable costs for the nine months ended September 30, 2025, totaled $324,718,000, indicating effective cost management[34] - The company reported $15,627,000 in stock-based compensation for the nine months ended September 30, 2025[34] - Stock-based compensation for the nine months ended September 30, 2025, was $44,143,000, compared to $38,926,000 in the same period of 2024[52] Assets and Liabilities - Total assets increased to $4,261,895,000 as of September 30, 2025, compared to $3,908,221,000 at the end of 2024, reflecting a growth of approximately 9%[50] - Cash and cash equivalents at the end of the period were $132,238,000, slightly up from $131,339,000 at the beginning of the period[52] - The company reported net cash provided by operating activities of $30,713,000 for the nine months ended September 30, 2025, compared to a net cash used of $69,230,000 in the same period of 2024[52] - Stagwell Inc. had total current liabilities of $1,376,240,000 as of September 30, 2025, which is relatively stable compared to $1,367,296,000 at the end of 2024[50] - The company’s long-term debt increased to $1,526,291,000 as of September 30, 2025, up from $1,353,624,000 at the end of 2024[50] Future Outlook - Future outlook includes continued focus on market expansion and new product development to drive revenue growth[34] - Announced a groundbreaking partnership with Palantir, enhancing Stagwell's leadership in AI for marketing[6]