Stagwell (STGW) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $671.2 million, up 6.2% year-over-year, driven by strong communications, advocacy, and US performance, with net new business wins of $113 million including the largest in company history with GM.

• Adjusted EBITDA for Q2 was $86 million (margin 15.5–16%), down 5.6% year-over-year, with operating income at $21.9 million.

• Net loss attributable to common shareholders was $3 million for Q2 2024, compared to $3.2 million in Q2 2023.

• Multiple acquisitions in 2024 expanded global, digital, and influencer capabilities.

• Company is positioned for renewed growth as client pullbacks have ended and the political season boosts advocacy opportunities.

Financial highlights

• Q2 net revenue was $554 million, up 2% year-over-year; total revenue was $671.2 million, up 6.2%.

• Adjusted EBITDA for Q2 was $86 million, with a margin of 15.5–16%; H1 Adjusted EBITDA was $176 million, up 8% year-over-year.

• Adjusted diluted EPS for Q2 was $0.14; Q2 EPS was $(0.03).

• Cash and cash equivalents at June 30, 2024, were $136.1 million.

• Net leverage ratio at quarter end was 3.43–3.56x; net debt and debt-like items totaled $1.7 billion.

Outlook and guidance

• 2024 guidance reaffirmed: organic net revenue growth of 5–7%, adjusted EBITDA of $400–$450 million, adjusted EPS of $0.75–$0.88, and ~50% free cash flow conversion.

• Guidance excludes impact from foreign exchange, acquisitions, or dispositions.

• Management expects to maintain sufficient liquidity and compliance with debt covenants over the next twelve months.

• Confidence in H2 acceleration driven by recent large wins, media margin, and political seasonality.