Stagwell Inc. Reports First Quarter Results with Mixed Revenue Performance and Positive Outlook
Stagwell Inc. (NASDAQ: STGW) has recently published its financial outcomes for the first quarter ending March 31, 2025. The report highlights a revenue decline of 3% year-over-year, yet it also points to a 6% growth in net revenue in the same period. When excluding the advocacy segment, the growth becomes even more impressive at 9%, while revenues from its Digital Transformation segment have risen by 15% when advocacy is excluded.
Despite these positive strides in specific areas, Stagwell incurred a net loss of $3 million attributable to its common shareholders, compared to a loss of $1 million in the previous year. The company reported an adjusted EBITDA of $81 million, which represents an 11% decrease from the same period last year, leading to an adjusted EBITDA margin of 14%. The earnings per share (EPS) showed a similar downturn at a reported $(0.04), down from $(0.01) a year ago. Notably, the adjusted EPS stood at $0.12, although this was lower than last year’s figure of $0.16.
In terms of new business, Stagwell recorded net new business amounting to $130 million in Q1, contributing to a total of $446 million in net new business over the last twelve months. This achievement reflects the company's vigorous initiatives to expand its portfolio and tap into new market opportunities.
Mark Penn, the Chairman and CEO of Stagwell, commented on the performance, asserting that despite the various macroeconomic challenges, including tariffs, the results were largely in line with expectations. He noted that Q1 can often be a low point in the political cycle, and yet Stagwell managed to deliver solid growth in critical sectors such as digital transformation and creativity. He added that the records for net new business should inspire confidence for the remainder of the year.
Frank Lanuto, the company’s Chief Financial Officer, echoed these sentiments, emphasizing the solid first-quarter performance against a backdrop of effective cost management. He revealed that the company is making strides in simplifying its capital structure and refinancing its revolving credit facility, which positions it favorably for the upcoming quarters.
Looking forward, Stagwell has reiterated its guidance for 2025, forecasting an overall net revenue growth of approximately 8%, with adjusted EBITDA projected between $410 million and $460 million. Importantly, they anticipate a free cash flow conversion exceeding 45%, which indicates a robust financial health outlook moving forward. The adjusted EPS is expected to fall between $0.75 and $0.88, further underlining confidence in achieving favorable results throughout the year.
To elaborate further on the financial aspects, the first quarter revealed total revenue of $652 million, down 3% from $670 million reported in the prior year. Excluding advocacy-related revenues, the total revenue reached $610 million, marking a slight increase of about 1% year-over-year. The structured overview of results shows that while certain areas faced downward trends, the overall company growth mechanisms remain intact.
In summary, Stagwell Inc.'s financial report for Q1 2025 provides an intricate balance of cautiously optimistic signs amidst challenges. With the company's continued focus on innovation and strategic expansion, stakeholders will be watching closely for developments in the forthcoming quarters. The anticipated video webcast discussing these results is scheduled for May 8, 2025, providing further insights alongside investor presentations available at their official site.
Despite these positive strides in specific areas, Stagwell incurred a net loss of $3 million attributable to its common shareholders, compared to a loss of $1 million in the previous year. The company reported an adjusted EBITDA of $81 million, which represents an 11% decrease from the same period last year, leading to an adjusted EBITDA margin of 14%. The earnings per share (EPS) showed a similar downturn at a reported $(0.04), down from $(0.01) a year ago. Notably, the adjusted EPS stood at $0.12, although this was lower than last year’s figure of $0.16.
In terms of new business, Stagwell recorded net new business amounting to $130 million in Q1, contributing to a total of $446 million in net new business over the last twelve months. This achievement reflects the company's vigorous initiatives to expand its portfolio and tap into new market opportunities.
Mark Penn, the Chairman and CEO of Stagwell, commented on the performance, asserting that despite the various macroeconomic challenges, including tariffs, the results were largely in line with expectations. He noted that Q1 can often be a low point in the political cycle, and yet Stagwell managed to deliver solid growth in critical sectors such as digital transformation and creativity. He added that the records for net new business should inspire confidence for the remainder of the year.
Frank Lanuto, the company’s Chief Financial Officer, echoed these sentiments, emphasizing the solid first-quarter performance against a backdrop of effective cost management. He revealed that the company is making strides in simplifying its capital structure and refinancing its revolving credit facility, which positions it favorably for the upcoming quarters.
Looking forward, Stagwell has reiterated its guidance for 2025, forecasting an overall net revenue growth of approximately 8%, with adjusted EBITDA projected between $410 million and $460 million. Importantly, they anticipate a free cash flow conversion exceeding 45%, which indicates a robust financial health outlook moving forward. The adjusted EPS is expected to fall between $0.75 and $0.88, further underlining confidence in achieving favorable results throughout the year.
To elaborate further on the financial aspects, the first quarter revealed total revenue of $652 million, down 3% from $670 million reported in the prior year. Excluding advocacy-related revenues, the total revenue reached $610 million, marking a slight increase of about 1% year-over-year. The structured overview of results shows that while certain areas faced downward trends, the overall company growth mechanisms remain intact.
In summary, Stagwell Inc.'s financial report for Q1 2025 provides an intricate balance of cautiously optimistic signs amidst challenges. With the company's continued focus on innovation and strategic expansion, stakeholders will be watching closely for developments in the forthcoming quarters. The anticipated video webcast discussing these results is scheduled for May 8, 2025, providing further insights alongside investor presentations available at their official site.
Topics Financial Services & Investing）
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