Financial Data and Key Metrics Changes - Stagwell reported net revenue of $564 million for Q1 2025, an increase of 6% over the prior period, with a 9% growth excluding advocacy [22][23] - Adjusted EBITDA for the quarter was $81 million, with a margin of 14.3%, an improvement of approximately 50 basis points over the same period in 2023 [28] - The company achieved a net revenue ratio of 65.3%, an improvement of 175 basis points over the same period in 2023 [6] Business Line Data and Key Metrics Changes - Digital transformation net revenue grew 8% to $106 million, with a 15% growth excluding advocacy [23] - Stagwell Marketing Cloud posted $63 million in net revenue, a 32% year-over-year increase, with a 45% growth excluding advocacy [23] - Creativity and communications delivered $242 million in net revenue, a 7% increase, with a 10% growth excluding advocacy [24] - Performance Media and Data reported $104 million in net revenue, a decline of 10% over the prior period [25] Market Data and Key Metrics Changes - Technology customers increased their spend by 18%, while retail customers saw a 52% increase [10] - The Middle East market experienced over 250% year-over-year net revenue growth in Q1 [13] - The company noted a significant increase in revenue from technology clients, driven by expansions at Apple and Google [23] Company Strategy and Development Direction - Stagwell aims to grow, scale, and innovate, focusing on digital transformation and creative capabilities [4][5] - The company is pursuing M&A as a key driver for international expansion and strengthening capabilities, with recent acquisitions including Jet Fuel and Unicepta [11][12] - Stagwell is committed to investing in technology, with $17 million allocated in Q1 to enhance data and software development [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, reiterating guidance for 2025 with expected total net revenue growth of approximately 8% [31] - The impact of tariffs was deemed minimal, with management stating that only one customer reduced spending due to tariffs [48][49] - The company anticipates that new business wins will start reflecting in revenue growth in the second half of the year [42] Other Important Information - Stagwell's trailing twelve months net new business reached $446 million, significantly higher than the previous year [9] - The company has a strong focus on AI and technology integration, appointing a Chief AI Officer to enhance capabilities [17] - The company completed the refinancing of its revolving credit facility, increasing capacity and improving terms [30] Q&A Session Summary Question: Can you provide more color on why you're winning more despite a cautious macro? - Management attributed success to the rise of AI and the ability to meet client challenges, while larger agencies are reorganizing and deemphasizing creativity [34][35] Question: Are you getting new clients due to consolidation among larger players? - Management indicated that Stagwell is well-positioned to compete against larger firms, leveraging its nimble and tech-infused approach [40][41] Question: When will new business wins start reflecting in net revenue growth? - Management expects to see the impact of new wins in the second half of the year, as Q1 reflects prior wins [42] Question: Can you provide details on the turnaround for Performance Media and Data in Q2? - Management noted that a significant client reduced spending in Q1, but expects new clients to follow a more typical seasonal pattern [44] Question: Have you seen changes in client behavior amid macro uncertainty? - Management reported minimal direct impacts from tariffs and emphasized that the company is not on the front lines of tariff issues [48][49]

Financial Data and Key Metrics Changes - Stagwell reported net revenue of $564 million for Q1 2025, an increase of 6% over the prior period, with a 9% growth excluding advocacy [23][24] - Adjusted EBITDA for the quarter was $81 million, with a margin of 14.3%, an improvement of approximately 50 basis points over the same period in 2023 [29] - The company achieved a net revenue ratio of 65.3%, an improvement of 175 basis points compared to the same period in 2023 [6] Business Line Data and Key Metrics Changes - Digital transformation net revenue grew 8% to $106 million, with a 15% growth excluding advocacy [24] - Stagwell Marketing Cloud posted $63 million in net revenue, a 32% year-over-year increase, and 45% growth excluding advocacy [24] - Creativity and communications generated $242 million in net revenue, a 7% increase, with a 10% growth excluding advocacy [25] - Performance Media and Data reported $104 million in net revenue, a decline of 10% compared to the prior period [27] Market Data and Key Metrics Changes - Technology clients increased their spending by 18%, while retail clients saw a 52% increase in spending [10] - The Middle East market experienced over 250% year-over-year net revenue growth in Q1 [13] - The company noted a significant increase in revenue from technology clients, driven by expansions at Apple and Google [24] Company Strategy and Development Direction - Stagwell aims to grow, scale, and innovate, focusing on digital transformation and creative capabilities [4][5] - The company is actively pursuing M&A opportunities to expand internationally and strengthen its capabilities [11] - Stagwell is investing in AI and technology solutions to enhance its service offerings and operational efficiency [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, reiterating guidance for 2025 with expected total net revenue growth of approximately 8% [32] - The impact of tariffs on business has been minimal, with management emphasizing that the company is not directly affected by tariff-related issues [49][50] - Management anticipates that new business wins will start reflecting in revenue growth in the second half of the year [44] Other Important Information - The company completed the refinancing of its revolving credit facility, increasing capacity to $750 million [31] - Stagwell's recent acquisitions, including Jet Fuel and Unicepta, are expected to enhance its capabilities in experiential marketing and analytics [12] Q&A Session Summary Question: Can you provide more color on why you're winning more despite a cautious macro environment? - Management noted that the AI era is driving increased assignments to remake consumer experiences, and Stagwell's creative capabilities are being recognized as top-tier amidst industry reorganizations [36][38] Question: Are you getting new clients due to consolidation among larger players? - Management indicated that Stagwell is well-positioned to meet client needs as larger holding companies struggle with their offerings, allowing Stagwell to capture new business [41][42] Question: When will new wins start to be reflected in net revenue growth? - Management expects to see the impact of new wins in the second half of the year, as the first quarter reflects wins from the previous half-year [44] Question: Can you provide details on the turnaround for Performance Media and Data in Q2? - Management explained that a reduction in spend from a single client affected Q1 results, but expects a rebound in Q2 as new clients come on board [46] Question: Have you seen changes in client behavior amid macro uncertainty? - Management reported minimal direct impacts from tariffs and emphasized that the company is not on the front lines of tariff issues, maintaining confidence in their full-year guidance [49][50]