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Segment Information
 12 Months Ended
Dec. 31, 2022
Segment Reporting [Abstract]  
Segment Information
20. Segment Information
The Company determines an operating segment if a component (i) engages in business activities from which it earns revenues and incurs expenses, (ii) has discrete financial information, and is (iii) regularly reviewed by the Chief Operating Decision Maker (“CODM”), who is Mark Penn, Chief Executive Officer and Chairman, to make decisions regarding resource allocation for the segment and assess its performance. Once operating segments are identified, the Company performs an analysis to determine if aggregation of operating segments is applicable. This determination is based upon a quantitative analysis of the expected and historic average long-term profitability for each operating segment, together with a qualitative assessment to determine if operating segments have similar operating characteristics.
The CODM uses Adjusted EBITDA (defined below) as a key metric, to evaluate the operating and financial performance of a segment, identify trends affecting the segments, develop projections and make strategic business decisions. Adjusted EBITDA is defined as Net income excluding non-operating income or expense to achieve operating income, plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, and other items. Other items include restructuring costs, acquisition-related expenses, and non-recurring items.
Due to changes in the Company’s internal management and reporting structure in the second quarter of 2022, reportable segment results for periods presented prior to the second quarter of 2022 have been recast to reflect the reclassification of certain reporting units (Brands) between operating segments. The changes in reportable segments were that the Forsman & Bodenfors, Observatory, Crispin Porter Bogusky, Bruce Mau and Vitro Brands, previously within the Integrated Agencies Network, are now within the Brand Performance Network.
The Company has three reportable segments as follows: “Integrated Agencies Network,” “Brand Performance Network” and the “Communications Network.” In addition, the Company combines and discloses operating segments that do not meet the aggregation criteria as “All Other.” The Company also reports corporate expenses, as further detailed below, as “Corporate.” All segments follow the same basis of presentation and accounting policies as those described throughout the Notes included herein.
•The Integrated Agencies Network includes five operating segments: the Anomaly Alliance, Constellation, the Doner Partner Network, Code and Theory, and National Research Group. The operating segments offer an array of complementary services spanning our core capabilities of Digital Transformation, Performance Media & Data, Consumer Insights & Strategy, and Creativity & Communications. The Brands included in the operating segments that comprise the Integrated Agencies Network reportable segment are as follows: Anomaly Alliance (Anomaly, Concentric, Hunter, Mono, YML and Scout (Brands), Constellation (72andSunny, Colle McVoy, Instrument,
Redscout, Hello Design, Team Enterprises, and Harris Insights), the Doner Partner Network (Doner, KWT Global, Harris X, Veritas, Doner North, Northstar, which is currently sunsetting, and Yamamoto (Brands)), Code and Theory and National Research Group.
These operating segments share similar characteristics related to (i) the nature of their services; (ii) the type of clients and the methods used to provide services; and (iii) the extent to which they may be impacted by global economic and geopolitical risks. In addition, these operating segments may occasionally compete with each other for new business or have business move between them.
•The Brand Performance Network (“BPN”), previously referred to as the “Media Network” reportable segment, is comprised of a single operating segment. BPN includes a unified media and data management structure with omnichannel media placement, creative media consulting, influencer and business-to-business marketing capabilities. Our Brands in this segment aim to provide scaled creative performance through developing and executing sophisticated omnichannel campaign strategies leveraging significant amounts of consumer data. BPN’s Brands provide media solutions such as audience analysis, media planning, and buying across a range of digital and traditional platforms (out-of-home, paid search, social media, lead generation, programmatic, television, broadcast, among others) and includes multichannel Brands Assembly, Brand New Galaxy, Crispin Porter Bogusky, Forsman & Bodenfors, Bruce Mau Design, Goodstuff, MMI Agency, digital creative & transformation consultancy Gale, B2B specialist Multiview, Observatory, Vitro, CX specialists Kenna, and travel media experts Ink.
•The Communications Network reportable segment is comprised of a single operating segment, our specialist network that provides advocacy, strategic corporate communications, investor relations, public relations, online fundraising and other services to both corporations and political and advocacy organizations and consists of our Allison & Partners SKDK (including Sloane & Company), and Targeted Victory brands.
•All Other consists of the Company’s digital innovation group and Stagwell Marketing Cloud, including Maru and Epicenter, and products such as PRophet, ARound and Reputation Defender (which was sold in September 2021).
•Corporate consists of corporate office expenses incurred in connection with the strategic resources provided to the operating segments, as well as certain other centrally managed expenses that are not fully allocated to the operating segments. These office and general expenses include (i) salaries and related expenses for corporate office employees, including employees dedicated to supporting the operating segments, (ii) occupancy expenses relating to properties occupied by all corporate office employees, (iii) other office and general expenses including professional fees for the financial statement audits and other public company costs, and (iv) certain other professional fees managed by the corporate office. Additional expenses managed by the corporate office that are directly related to the operating segments are allocated to the appropriate reportable segment and the All Other category.
Year Ended December 31,
202220212020
Revenue:
Integrated Agencies Network$1,479,802 $770,056 $221,595 
Brand Performance Network757,208 424,632 262,362 
Communications Network430,820 248,832 382,815 
All Other19,962 25,843 21,260 
Total Revenue$2,687,792 $1,469,363 $888,032 
Adjusted EBITDA:
Integrated Agencies Network$293,643 $163,596 $42,332 
Brand Performance Network115,835 65,942 27,697 
Communications Network85,684 45,527 78,562 
All Other(933)(769)(1,893)
Corporate(43,111)(20,644)(3,530)
Total Adjusted EBITDA$451,118 $253,652 $143,168 
Depreciation and amortization$(131,273)$(77,503)$(41,025)
Impairment and other losses(122,179)(16,240)— 
Stock-based compensation(33,152)(75,032)— 
Deferred acquisition consideration13,405 (18,721)(4,497)
Other items, net(18,691)(21,430)(13,906)
Total Operating Income
$159,228 $44,726 $83,740 
Year Ended December 31,
202220212020
Other Income (expenses):
Interest expense, net$(76,062)$(31,894)$(6,223)
Foreign exchange, net(2,606)(3,332)(721)
Other, net(7,059)50,058 544 
Income before income taxes and equity in earnings of non-consolidated affiliates73,501 59,558 77,340 
Income tax expense7,580 23,398 5,937 
Income before equity in earnings of non-consolidated affiliates65,921 36,160 71,403 
Equity in income (loss) of non-consolidated affiliates(79)(240)58 
Net income65,842 35,920 71,461 
Net income attributable to noncontrolling and redeemable noncontrolling interests(38,573)(14,884)(15,105)
Net income attributable to Stagwell Inc. common shareholders$27,269 $21,036 $56,356 
Depreciation and amortization:
Integrated Agencies Network$74,609 $37,646 $9,360 
Brand Performance Network33,674 26,031 20,117 
Communications Network10,831 7,553 5,903 
All Other5,234 2,498 3,681 
Corporate6,925 3,775 1,964 
Total depreciation and amortization$131,273 $77,503 $41,025 
Stock-based compensation:
Integrated Agencies Network$13,774 $47,190 $— 
Brand Performance Network5,830 5,251 — 
Communications Network1,797 15,928 — 
All Other41 39 — 
Corporate11,710 6,624 — 
Total stock-based compensation$33,152 $75,032 $— 

The Company recognized a severance charge of approximately $10,600 in 2022, the majority of which was at the Brand Performance Network.
The Company’s CODM does not use segment assets to allocate resources or to assess performance of the segments and therefore, total segment assets have not been disclosed.
See Note 5 of the Notes included herein for a summary of the Company’s revenue by geographic region for the years ended December 31, 2022, 2021, and 2020.