Stagwell Inc. Reports Results for the Three and Six Months Ended June 30, 2026

Q2 YoY Revenue Growth of 11% to $786 million; Q2 YoY Net Revenue Growth of 6% to $632 million

Q2 YoY Digital Transformation Organic Net Revenue Growth of 18%; Two-Year Digital Transformation Organic Net Revenue Growth Stack of 29%

Q2 EPS of $(0.03); Q2 Adjusted EPS Growth YoY of 39% to $0.25

Q2 Net Loss Attributable to Stagwell Inc. Common Shareholders of $8 million; Q2 Adjusted EBITDA Growth YoY of 15% to $109 million

Record Net New Business of $171 million in Q2; LTM Net New Business of $540 million

Raise Full-Year 2026 Adjusted EPS Guidance to $1.03 to $1.17

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

SECOND QUARTER RESULTS:

• Q2 Revenue of $786 million, an increase of 11% versus the prior year period; YTD Revenue of $1,490 million, an increase of 10%;

• Q2 Revenue increased 10% organically versus the prior year period; YTD Revenue increased 8% organically;

• Q2 Net Revenue of $632 million, an increase of 6% versus the prior year period; YTD Net Revenue of $1,216 million, an increase of 5%;

• Q2 Net Revenue increased 5% organically versus the prior year period; YTD Net Revenue increased 3% organically;

• Q2 Digital Transformation Net Revenue of $107 million, an organic increase of 18% versus the prior year period;

• Two-Year Net Revenue Growth Stack for Digital Transformation of 34%, Two-Year Organic Net Revenue Growth Stack for Digital Transformation of 29%;

• Q2 Net Loss attributable to Stagwell Inc. Common Shareholders of $8 million versus $5 million in the prior year period; YTD Net Loss attributable to Stagwell Inc. Common Shareholders of $21 million versus $8 million in the prior year period;

• Q2 Adjusted EBITDA of $109 million, an increase of 15% versus the prior year period; YTD Adjusted EBITDA of $198 million an increase of 12%;

• Q2 Adjusted EBITDA Margin of 17% on net revenue; YTD Adjusted EBITDA Margin of 16%;

• Q2 Loss Per Share attributable to Stagwell Inc. Common Shareholders of $(0.03) versus $(0.02); YTD Loss Per Share attributable to Stagwell Inc. Common Shareholders of $(0.08) versus $(0.06) in the prior year period;

• Q2 Adjusted Earnings Per Share attributable to Stagwell Inc. Common Shareholders of $0.25 versus $0.18; YTD Adjusted Earnings Per Share attributable to Stagwell Inc. Common Shareholders of $0.42 versus $0.30 in the prior year period;

• YTD Net Cash provided by Operating Activities of $64 million versus $55 million in the prior year period;

• Net new business of $171 million in the second quarter, last twelve-month net new business of $540 million

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

"Our second quarter results demonstrate Stagwell is thriving in today's AI era. Stagwell's unique combination of software, services and engineers is being embraced by the industry leading to another record-breaking Net New Business quarter of $171 million, highlighted by recent wins with IBM, Adobe, Mondelez and Heineken," said Mark Penn, Chairman and CEO of Stagwell. "Our organic net revenue growth continues to accelerate, led by 18% growth in our Digital Transformation segment, and 12% growth in Communications as the political cycle starts to ramp up. Strong growth, combined with proactive cost management and share repurchases, means we are raising our adjusted EPS outlook for the year today, and we expect to deliver double-digit growth in the second half, the lions' share of which will be organic."

Ryan Greene, Chief Financial Officer, added: "This was Stagwell's biggest ever second quarter. As we grew our top-line, we controlled costs to expand adjusted EBITDA 15% year-over-year to $109 million. These strong results, combined with continued share repurchases, resulted in 39% growth in adjusted EPS to $0.25. We are firmly on course to deliver on our full-year outlook, including our raised adjusted EPS guidance."

Financial Outlook

2026 financial guidance is updated as follows:

• Adjusted EPS guidance is raised to $1.03 - $1.17 (from $0.98 - $1.12)

• Total Net Revenue growth of 8% to 12% is reiterated

• Adjusted EBITDA of $475 million to $525 million is reiterated

• Free Cash Flow Conversion of 50% to 60% is reiterated

• 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, July 30, 2026, at 8:30 a.m. (ET) to discuss results for Stagwell Inc. for the three and six months ended June 30, 2026. The video webcast will be accessible at https://edge.media-server.com/mmc/p/zd4zz6jw/. 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 45+ 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
[e-mail]

For Press:
Lena Petersen
[e-mail]

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" and "Organic net revenue 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 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 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 includes restructuring, certain system implementation costs, working capital administrative fees and acquisition-related expenses. Adjusted EBITDA for our reportable segments is reconciled to Operating income (loss), as Net income (loss) is not relevant for 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," "develop," "depend," "drive," "enhance," "estimate," "expect," "focus," "forecast," "future," "grow," "guidance," "improve," "intend," "likely," "maintain," "may," "ongoing," "outlook," "plan," "position," "possible," "potential," "probable," "project," "seek," "should," "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 counter inflation;

• 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;

• 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;

• 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;

• stock price volatility; and

• foreign currency fluctuations.

Investors should carefully consider these risk factors, the additional risk factors outlined under the caption "Risk Factors" in this Form 10-K, and in the Company's other filings with the Securities and Exchange Commission (the "SEC") which are accessible on the SEC's website at www.sec.gov.

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

		Three Months Ended June 30,								Six Months Ended June 30,
		2026				2025				2026				2025
Revenue		$	786,307			$	706,818			$	1,490,450			$	1,358,558
Operating expenses
Cost of services			517,064				459,216				976,595				871,303
Office and general expenses			213,742				183,061				404,381				362,423
Depreciation and amortization			43,955				41,369				88,286				83,375
			774,761				683,646				1,469,262				1,317,101
Operating Income			11,546				23,172				21,188				41,457
Other income (expenses):
Interest expense, net			(22,328	)			(23,455	)			(45,594	)			(46,811	)
Foreign exchange, net			605				(1,338	)			(2,416	)			(118	)
Other, net			937				(360	)			868				(111	)
			(20,786	)			(25,153	)			(47,142	)			(47,040	)
Loss before income taxes and equity in earnings of non-consolidated affiliates			(9,240	)			(1,981	)			(25,954	)			(5,583	)
Income tax (benefit) expense			(348	)			2,673				(3,236	)			4,395
Loss before equity in earnings of non-consolidated affiliates			(8,892	)			(4,654	)			(22,718	)			(9,978	)
Equity in income of non-consolidated affiliates			191				20				70				19
Net loss			(8,701	)			(4,634	)			(22,648	)			(9,959	)
Net (income) loss attributable to noncontrolling and redeemable noncontrolling interests			585				(627	)			1,559				1,781
Net loss attributable to Stagwell Inc. common shareholders		$	(8,116	)		$	(5,261	)		$	(21,089	)		$	(8,178	)
Loss per common share:
Basic		$	(0.03	)		$	(0.02	)		$	(0.08	)		$	(0.04	)
Diluted		$	(0.03	)		$	(0.02	)		$	(0.08	)		$	(0.06	)
Weighted average number of common shares outstanding:
Basic			245,908				260,774				248,328				186,843
Diluted			245,908				260,774				248,328				265,600

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

						Net Revenue - Components of Change																				Change
		Three Months Ended June 30, 2025				Foreign Currency				Net Acquisitions (Divestitures)				Organic (1)				Total Change				Three Months Ended June 30, 2026				Organic				Total
Marketing Services		$	235,304			$	624			$	(2,868	)		$	1,182			$	(1,062	)		$	234,242				0.5	%			(0.5)	%
Digital Transformation			91,100				(251	)			-				16,575				16,324				107,424				18.2	%			17.9	%
Media & Commerce			150,964				(73	)			2,221				1,558				3,706				154,670				1.0	%			2.5	%
Communications			97,632				229				2,373				11,855				14,457				112,089				12.1	%			14.8	%
The Marketing Cloud			25,272				1,072				-				1,034				2,106				27,378				4.1	%			8.3	%
Corporate, eliminations and other			(2,143	)			3				-				(2,080	)			(2,077	)			(4,220	)			97.1	%			96.9	%
		$	598,129			$	1,604			$	1,726			$	30,124			$	33,454			$	631,583				5.0	%			5.6	%

⁽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
		Six Months Ended June 30, 2025				Foreign Currency				Net Acquisitions (Divestitures)				Organic (1)				Total Change				Six Months Ended June 30, 2026				Organic				Total
Marketing Services		$	451,534			$	3,263			$	(3,744	)		$	765			$	284			$	451,818				0.2	%			0.1	%
Digital Transformation			179,604				(385	)			3,227				21,487				24,329				203,933				12.0	%			13.5	%
Media & Commerce			297,152				2,286				4,185				542				7,013				304,165				0.2	%			2.4	%
Communications			188,613				969				2,613				16,668				20,250				208,863				8.8	%			10.7	%
The Marketing Cloud			49,371				2,540				-				1,966				4,506				53,877				4.0	%			9.1	%
Corporate, eliminations and other			(3,958	)			1				-				(2,492	)			(2,491	)			(6,449	)			63.0	%			62.9	%
		$	1,162,316			$	8,674			$	6,281			$	38,936			$	53,891			$	1,216,207				3.3	%			4.6	%

⁽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)

For the Three Months Ended June 30, 2026

		Marketing Services			Digital Transformation			Media & Commerce			Communications			The Marketing Cloud			Corporate, Elimination and Other			Total
Revenue		$	277,256		$	117,672		$	179,943		$	188,426		$	27,380		$	(4,370	)	$	786,307
Billable costs			43,014			10,248			25,273			76,337			2			(150	)		154,724
Net revenue			234,242			107,424			154,670			112,089			27,378			(4,220	)		631,583
Staff costs			131,354			67,316			98,710			61,197			18,085			7,720			384,382
Administrative costs			25,999			7,720			24,738			14,179			7,201			2,516			82,353
Unbillable and other costs, net			31,673			169			15,130			1,819			7,370			-			56,161
Adjusted EBITDA (1)			45,216			32,219			16,092			34,894			(5,278	)		(14,456	)		108,687
Stock-based compensation			7,929			3,656			497			2,513			391			3,581			18,567
Depreciation and amortization			12,426			5,907			7,994			6,189			6,222			5,217			43,955
Deferred acquisition consideration			(1,969	)		6,949			1,537			1,760			560			-			8,837
Other items, net (1)			3,101			277			4,821			2,091			44			15,448			25,782
Operating income (loss)		$	23,729		$	15,430		$	1,243		$	22,341		$	(12,495	)	$	(38,702	)	$	11,546

⁽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 Six Months Ended June 30, 2026

		Marketing Services			Digital Transformation			Media & Commerce			Communications			The Marketing Cloud			Corporate, eliminations and other			Total
Revenue		$	528,034		$	219,138		$	354,454		$	341,528		$	53,895		$	(6,599	)	$	1,490,450
Billable costs			76,216			15,205			50,289			132,665			18			(150	)		274,243
Net revenue			451,818			203,933			304,165			208,863			53,877			(6,449	)		1,216,207
Staff costs			263,543			131,883			195,935			118,147			34,888			20,172			764,568
Administrative costs			48,731			14,108			47,911			26,926			12,391			6,648			156,715
Unbillable and other costs, net			49,353			292			28,812			3,843			14,252			-			96,552
Adjusted EBITDA (1)			90,191			57,650			31,507			59,947			(7,654	)		(33,269	)		198,372
Stock-based compensation			12,932			4,693			1,641			4,910			506			8,133			32,815
Depreciation and amortization			24,908			11,755			15,909			13,047			12,950			9,717			88,286
Deferred acquisition consideration			(1,969	)		10,102			8,638			1,760			560			-			19,091
Other items, net (1)			5,924			1,620			7,980			3,504			700			17,264			36,992
Operating income (loss)		$	48,396		$	29,480		$	(2,661	)	$	36,726		$	(22,370	)	$	(68,383	)	$	21,188

⁽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 June 30, 2025

		Marketing Services			Digital Transformation			Media & Commerce			Communications			The Marketing Cloud			Corporate, eliminations and other			Total
Revenue		$	275,888		$	97,592		$	164,025		$	146,180		$	25,276		$	(2,143	)	$	706,818
Billable costs			40,584			6,492			13,061			48,548			4			-			108,689
Net revenue			235,304			91,100			150,964			97,632			25,272			(2,143	)		598,129
Staff costs			134,397			63,537			98,038			57,311			17,136			10,851			381,270
Administrative costs			29,393			7,176			24,325			11,530			3,313			(1,299	)		74,438
Unbillable and other costs, net			26,745			3			13,395			2,584			5,403			-			48,130
Adjusted EBITDA (1)			44,769			20,384			15,206			26,207			(580	)		(11,695	)		94,291
Stock-based compensation			8,111			759			868			4,133			132			5,951			19,954
Depreciation and amortization			12,422			5,873			7,538			6,390			5,923			3,223			41,369
Deferred acquisition consideration			(6,867	)		2,575			2,812			(2,376	)		636			-			(3,220	)
Other items, net (1)			3,476			836			3,127			1,652			1,211			2,714			13,016
Operating income (loss)		$	27,627		$	10,341		$	861		$	16,408		$	(8,482	)	$	(23,583	)	$	23,172

⁽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)

		Marketing Services			Digital Transformation			Media & Commerce			Communications			The Marketing Cloud			Corporate, Elimination and Other			Total
Revenue		$	524,940		$	188,479		$	324,447		$	275,268		$	49,382		$	(3,958	)	$	1,358,558
Billable costs			73,406			8,875			27,295			86,655			11			-			196,242
Net Revenue			451,534			179,604			297,152			188,613			49,371			(3,958	)		1,162,316
Staff costs			262,726			122,764			192,986			115,623			34,033			21,400			749,532
Administrative costs			56,503			12,617			46,738			24,526			8,514			(1,062	)		147,836
Unbillable and other costs, net			43,571			765			28,890			4,665			10,473			-			88,364
Adjusted EBITDA (1)			88,734			43,458			28,538			43,799			(3,649	)		(24,296	)		176,584
Stock-based compensation			10,592			2,146			2,191			5,166			343			11,059			31,497
Depreciation and amortization			26,736			11,318			14,686			12,986			10,981			6,668			83,375
Deferred acquisition consideration			(4,284	)		5,855			1,530			(1,163	)		1,499			-			3,437
Other items, net (1)			933			1,062			7,058			2,061			1,325			4,379			16,818
Operating income (loss)		$	54,757		$	23,077		$	3,073		$	24,749		$	(17,797	)	$	(46,402	)	$	41,457

⁽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 June 30, 2026

		GAAP				Adjustments				Non-GAAP
Net income (loss) attributable to Stagwell Inc. common shareholders and adjusted net income		$	(8,116	)		$	69,381			$	61,265
Diluted - Weighted average number of shares outstanding			245,908				-				245,908
Diluted EPS and Adjusted Diluted EPS (1)		$	(0.03	)						$	0.25
Adjustments to Net income
Amortization						$	38,352
Stock-based compensation							18,567
Deferred acquisition consideration							8,837
Other items, net (2)							25,782
							91,538
Adjustment to GAAP income tax expense (3)							(22,157	)
						$	69,381

⁽¹⁾ Adjusted Diluted EPS is defined within the Non-GAAP Financial Measures section of the Executive Summary.

⁽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 benefit of $0.3 million at an effective tax rate of 3.8% on a GAAP basis and the income tax expense of $21.8 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 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 Six Months Ended June 30, 2026

		GAAP				Adjustments				Non-GAAP
Net income (loss) attributable to Stagwell Inc. common shareholders		$	(21,089	)		$	125,775			$	104,686
Diluted - Weighted average number of common shares outstanding			248,328				-				248,328
Diluted EPS and Adjusted Diluted EPS (1)		$	(0.08	)						$	0.42
Adjustments to Net income (loss)
Amortization						$	77,270
Stock-based compensation							32,815
Deferred acquisition consideration							19,091
Other items, net (2)							36,992
							166,168
Adjustment to GAAP income tax expense (3)							(40,393	)
						$	125,775

⁽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 benefit of $3.2 million at an effective tax rate of 12.5% on a GAAP basis and the income tax expense of $37.2 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 June 30, 2025

		GAAP				Adjustments				Non-GAAP
Net income (loss) attributable to Stagwell Inc. common shareholders		$	(5,261	)		$	51,386			$	46,125
Diluted - Weighted average number of common shares outstanding			260,774				-				260,774
Diluted EPS and Adjusted Diluted EPS (1)		$	(0.02	)						$	0.18
Adjustments to Net income
Amortization						$	35,593
Stock-based compensation							19,954
Deferred acquisition consideration							(3,220	)
Other items, net (2)							13,016
							65,343
Adjustment to GAAP income tax expense (3)							(13,957	)
							51,386

¹⁾ Adjusted Diluted EPS is defined within the Non-GAAP Financial Measures section of the Executive Summary.

⁽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 $2.7 million at an effective tax rate of (134.9)% on a GAAP basis and the income tax expense of $16.6 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 Six Months Ended June 30, 2025

		GAAP				Adjustments				Non-GAAP
Net income (loss) attributable to Stagwell Inc. common shareholders		$	(8,178	)		$	95,596			$	87,418
Net income (loss) attributable to Class C shareholders			(6,637	)			-				(6,637	)
Net income (loss) attributable to Stagwell Inc. and Class C shareholders and adjusted net income		$	(14,815	)		$	95,596			$	80,781
Diluted - Weighted average number of common shares outstanding			186,843				-				186,843
Weighted average number of shares of Class C Common Stock outstanding			78,757				-				78,757
Diluted - Weighted average number of shares outstanding			265,600				-				265,600
Diluted EPS and Adjusted Diluted EPS (1)		$	(0.06	)						$	0.30
	Adjustments to Net income (loss)
Amortization						$	68,574
Stock-based compensation							31,497
Deferred acquisition consideration							3,437
Other items, net (2)							16,818
							120,326
Adjustment to GAAP income tax expense (3)							(24,730	)
						$	95,596

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 benefit of $4.4 million at an effective tax rate of (78.7)% on a GAAP basis and the income tax expense of $29.1 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 12
STAGWELL INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS
(amounts in thousands)

		June 30, 2026				December 31, 2025
ASSETS
Current Assets
Cash and cash equivalents		$	109,473			$	104,537
Accounts receivable, net			713,100				735,752
Expenditures billable to clients			159,320				164,694
Other current assets			211,279				157,309
Total Current Assets			1,193,172				1,162,292
Fixed assets, net			71,552				73,081
Right-of-use assets - operating leases			192,880				213,576
Goodwill			1,594,881				1,595,238
Other intangible assets, net			815,270				834,248
Deferred tax assets			280,161				281,057
Other assets			51,600				55,055
Total Assets		$	4,199,516			$	4,214,547
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS ("RNCI"), AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable		$	515,035			$	548,320
Accrued media			203,073				239,490
Accruals and other liabilities			299,293				291,554
Advance billings			369,465				329,815
Current portion of lease liabilities - operating leases			53,945				55,386
Current portion of deferred acquisition consideration			37,784				15,446
Total Current Liabilities			1,478,595				1,480,011
Long-term debt			1,450,112				1,326,013
Long-term portion of deferred acquisition consideration			19,083				24,598
Long-term lease liabilities - operating leases			201,597				224,397
Deferred tax liabilities			52,777				54,726
Long-term tax receivable agreement liability			252,390				252,390
Other liabilities			38,208				51,077
Total Liabilities			3,492,762				3,413,212
Redeemable Noncontrolling Interests			20,313				24,968
Commitments, contingencies and guarantees
Shareholders' Equity
Common shares - Class A			244				252
Paid-in capital			685,139				744,463
Retained earnings			13,320				32,930
Accumulated other comprehensive loss			(29,319	)			(19,252	)
Stagwell Inc. Shareholders' Equity			669,384				758,393
Noncontrolling interests			17,057				17,974
Total Shareholders' Equity			686,441				776,367
Total liabilities, RNCI, and shareholders' equity		$	4,199,516			$	4,214,547

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

		Six Months Ended June 30,
		2026				2025
Cash flows from operating activities:
Net loss		$	(22,648	)		$	(9,959	)
Adjustments to reconcile net loss to cash provided by operating activities:
Stock-based compensation			32,815				31,497
Depreciation and amortization			88,286				83,375
Amortization of right-of-use lease assets and lease liability interest			32,232				34,075
Lease termination gain			-				(3,529	)
Deferred income taxes			(338	)			(1,424	)
Adjustment to deferred acquisition consideration			19,091				3,437
Other, net			1,071				(7,517	)
Changes in working capital:
Accounts receivable			9,595				7,941
Expenditures billable to clients			5,082				27,021
Other current assets			(58,849	)			(41,375	)
Accounts payable			(15,944	)			25,333
Accrued expenses and other liabilities			(28,787	)			(89,393	)
Advance billings			39,278				35,765
Current portion of lease liabilities - operating leases			(35,717	)			(40,509	)
Deferred acquisition related payments			(1,450	)			-
Net cash provided by operating activities			63,717				54,738
Cash flows from investing activities:
Capitalized software			(62,446	)			(29,241	)
Capital expenditures			(21,623	)			(18,088	)
Acquisitions, net of cash acquired			(4,453	)			14,172
Other			(1,150	)			(1,779	)
Net cash used in investing activities			(89,672	)			(34,936	)
Cash flows from financing activities:
Repayment of borrowings under revolving credit facility			(972,100	)			(925,000	)
Proceeds from borrowings under revolving credit facility			1,096,100				1,038,000
Shares repurchased and cancelled			(87,956	)			(67,504	)
Distributions to noncontrolling interests and RNCI			(3,071	)			(4,761	)
Payment of deferred consideration			(337	)			(16,103	)
Tax Receivables Agreement payment			(2,554	)			-
Debt financing and other costs			-				(3,570	)
Net cash provided by financing activities			30,082				21,062
Effect of exchange rate changes on cash and cash equivalents			809				9,106
Net increase in cash and cash equivalents			4,936				49,970
Cash and cash equivalents at beginning of period			104,537				131,339
Cash and cash equivalents at end of period		$	109,473			$	181,309

SOURCE: Stagwell

View the original press release on ACCESS Newswire:
https://www.accessnewswire.com/newsroom/en/business-and-professional-services/stagwell-inc.-nasdaq-stgw-reports-results-for-the-three-and-six-1198670