Stagwell (STGW) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 15.2% year-over-year to $711.3 million, with net revenue at $580 million, up 8.5% year-over-year, and net income attributable to common shareholders of $3.3 million, up from $0.7 million in Q3 2023.

• Adjusted EBITDA for Q3 2024 was $111.2 million, up 9.2% year-over-year, with a margin of 19.2%.

• Net new business wins reached $101 million in Q3, including the largest win in company history with Adobe, and LTM new business at a record $345 million.

• Digital transformation revenue grew 25%, Stagwell Marketing Cloud 30%, and advocacy revenue 85% year-over-year.

• Board authorized a $125 million increase in the stock repurchase program, now totaling $375 million through November 2027.

Financial highlights

• Q3 2024 revenue was $711.3 million (up 15.2% year-over-year); net revenue was $580 million (up 8.5% year-over-year); adjusted EBITDA was $111.2 million with a 19.2% margin.

• Advocacy revenue grew 85% year-over-year; digital transformation up 25%; Stagwell Marketing Cloud up 30%.

• Adjusted diluted EPS for Q3 was $0.22; reported EPS was $0.03.

• Cash and cash equivalents at quarter-end were $146 million; net leverage ratio stood at 3.5x.

• Net debt and debt-like items totaled $1.46 billion as of September 30, 2024.

Outlook and guidance

• 2024 guidance reaffirmed: organic net revenue growth of 5% to 7% (4% to 5% ex-advocacy), adjusted EBITDA of $400–$450 million, adjusted EPS of $0.75–$0.88, and free cash flow conversion of ~50%.

• Guidance assumes no impact from FX, acquisitions, or dispositions.

• Management expects to maintain sufficient liquidity and compliance with debt covenants.