Segment Information

3 Months Ended

Mar. 31, 2025

Segment Reporting [Abstract]

Segment Information

16. 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. All segments follow the same basis of presentation and accounting policies as those described throughout the Notes included herein.

The CODM uses Adjusted EBITDA 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 primarily includes restructuring, certain system implementation and acquisition-related expenses.

The Company has three reportable segments as follows: “Integrated Agencies Network,” “Brand Performance Network,” and the “Communications Network.” The composition of these segments are as follows:

•The Integrated Agencies Network includes five operating segments: the Anomaly Alliance, Constellation, the Doner Partner Network, Code and Theory Network, 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, Stagwell Marketing Cloud Group and Creativity & Communications. The Brands included in the operating segments that comprise the Integrated Agencies Network reportable segment includes: Anomaly Alliance (Anomaly, What’s Next Partners), Constellation (72andSunny, Crispin LLC, Colle McVoy, Hunter, Redscout, Team Enterprises, Harris Insights, Movers and Shakers, and Team Epiphany), the Doner Partner Network (Doner, KWT Global, Harris X, Veritas, Doner North, and Yamamoto), Code and Theory Network (Code and Theory, Instrument, Left Field Labs), 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”) comprises 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, CPB International, Stagwell Production, Vitro, Forsman & Bodenfors, Goodstuff, Bruce Mau, digital creative & transformation consultancy Gale, B2B specialist Multiview, CX specialists Kenna, and travel media experts Ink.

•The Communications Network reportable segment comprises 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 includes Allison, SKDK, Targeted Victory, and Consulum.

The Company combines and discloses operating segments that do not meet the aggregation criteria and includes the elimination of certain intercompany services and revenue, within “All Other.” All Other consists of the Company’s “software as a service” (“SaaS”) and “data as a service” (“DaaS”) technology tools.

The Company reports corporate expenses as “Corporate.” 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.

	Three Months Ended March 31, 2025
	Integrated Agencies Network		Brand Performance Network		Communications Network		Total
	(dollars in thousands)
Revenue (1)	$	377,354	$	162,218	$	87,628	$	627,200
Billable costs	51,560		15,360		20,630		87,550
Staff costs	199,882		96,450		44,577		340,909
Administrative costs	31,644		23,407		10,174		65,225
Unbillable and other costs *	17,099		15,458		490		33,047
Adjusted EBITDA	77,169		11,543		11,757		100,469
Adjusted EBITDA - All Other							(6,330)
Adjusted EBITDA - Corporate							(13,557)
Total Consolidated Adjusted EBITDA							80,582
Stock-based compensation							11,543
Depreciation and amortization							42,006
Deferred acquisition consideration							6,657
Other items, net							2,091
Operating Income							18,285
Other income (expenses):
Interest expense, net							(23,356)
Foreign exchange, net							1,220
Other, net							249
							(21,887)
Loss before income taxes and equity in earnings of non-consolidated affiliates							(3,602)
Income tax expense							1,722
Loss before equity in earnings of non-consolidated affiliates							(5,324)
Equity in loss of non-consolidated affiliates							(1)
Net loss							(5,325)
Net loss attributable to noncontrolling and redeemable noncontrolling interests							2,408
Net loss attributable to Stagwell Inc. common shareholders							$	(2,917)

(1) Total consolidated revenue of $651,740 also includes revenue of $24,540 associated with operating segments that do not meet the aggregation criteria and elimination of certain intercompany service and revenue.

*For each reportable segment, Unbillable and other costs includes costs to fulfill customer contract requirements such as research and subscription related costs, audience measurement, data and analytics, and panels and survey costs; and also includes travel related expenses associated with contract fulfillment.

	Three Months Ended March 31, 2024
	Integrated Agencies Network		Brand Performance Network		Communications Network		Total
	(dollars in thousands)
Revenue (1)	$	352,719	$	213,962	$	93,746	$	660,427
Billable costs	59,947		51,400		26,258		137,605
Staff costs	186,534		98,431		39,264		324,229
Administrative costs	30,602		22,071		8,704		61,377
Unbillable and other costs *	15,528		14,566		136		30,230
Adjusted EBITDA	60,108		27,494		19,384		106,986
Adjusted EBITDA - All Other							(3,986)
Adjusted EBITDA - Corporate							(12,684)
Total Consolidated Adjusted EBITDA							90,316
Stock-based compensation							16,116
Depreciation and amortization							34,836
Deferred acquisition consideration							154
Impairment and other losses							1,500
Other items, net							11,856
Operating Income							25,854
Other income (expenses):
Interest expense, net							(20,965)
Foreign exchange, net							(2,258)
Other, net							(1,267)
							(24,490)
Income before income taxes and equity in earnings of non-consolidated affiliates							1,364
Income tax expense							2,585
Loss before equity in earnings of non-consolidated affiliates							(1,221)
Equity in income of non-consolidated affiliates							508
Net loss							(713)
Net income attributable to noncontrolling and redeemable noncontrolling interests							(569)
Net loss attributable to Stagwell Inc. common shareholders							$	(1,282)

(1) Total consolidated revenue of $670,059 also includes revenue of $9,632 associated with operating segments that do not meet the aggregation criteria and elimination of certain intercompany service and revenue.

*For each reportable segment, Unbillable and other costs includes costs to fulfill customer contract requirements such as research and subscription related costs, audience measurement, data and analytics, and panels and survey costs; and also includes travel related expenses associated with contract fulfillment.

The Company’s long-lived assets (i.e., Right-of-use lease assets-operating leases and Fixed asset, net) was $278.7 million ($208.4 million in the United States and $70.3 million in all other countries) as of March 31, 2025 and $292.1 million ($231.9 million in the United States and $60.2 million in all other countries) as of December 31, 2024.

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 4 of the Notes included herein for a summary of the Company’s revenue by geographic region for the three months ended March 31, 2025 and 2024.