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    STAGWELL INC. (NASDAQ: STGW) REPORTS RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2024

    5/1/24 7:00:00 AM ET
    $STGW
    Advertising
    Consumer Discretionary
    Get the next $STGW alert in real time by email

    Revenue Growth of 8%, Led by 13% Growth from Performance Media & Data

    Net Loss Attributable to Stagwell Inc. Common Shareholders of $1.3 million

    Adjusted EBITDA of $90 million, An Increase of 25% Year-Over-Year

    Adjusted EBITDA Margin of 17%, An Increase of 320 Basis Points Year-Over-Year

    EPS of $(0.01); Adjusted EPS of $0.16, An Increase of 14% Year-Over-Year

    Net New Business of $66 million in Q1; LTM Net New Business of $284 million

    Reaffirm Guidance for 2024 of Organic Net Revenue Growth of 5% to 7%; Adjusted EBITDA of $400 million to $450 million; Free Cash Flow Conversion of ~50%

    NEW YORK, May 1, 2024 /PRNewswire/ -- (NASDAQ:STGW) – Stagwell Inc. ("Stagwell") today announced financial results for the three months ended March 31, 2024.

    Mark Penn, Chairman and CEO, said,

    FIRST QUARTER RESULTS:

    • Q1 Revenue of $670 million, an increase of 8% versus the prior year period.
    • Q1 Net Loss attributable to Stagwell Inc. Common Shareholders of $1.3 million versus Income of $1.4 million in the prior year period.
    • Q1 Adjusted EBITDA of $90 million, an increase of 25% versus the prior year period.
    • Q1 Adjusted EBITDA Margin of 17% on net revenue, an improvement of 320 basis points versus the prior year period.
    • Q1 Earnings Per Share Attributable to Stagwell Inc. Common Shareholders of $(0.01) versus $0.00 in the prior year period.
    • Q1 Adjusted Earnings Per Share attributable to Stagwell Inc. Common Shareholders of $0.16 versus $0.14 in the prior year period.
    • Net new business wins of $66 million in the first quarter, last twelve-month net new business wins of $284 million.
    • Q1 Net Revenue of $532 million, an increase of 2% versus the prior year period.
    • Q1 Organic Net Revenue increased 2% versus the prior year period, led by 54% increase in Advocacy.

    Mark Penn, Chairman and CEO, said, "We are on target for 2024 with a return to growth and strong margin expansion led by the double-digit growth of the Performance Media & Data Capability. We see tailwinds of record new business, growth in advertising generally, and a strengthened market position given growing industry accolades for our work."

    "We continue to invest in technology with the Stagwell Marketing Cloud setting the pace for innovation and we believe that we will see growth in AI-related digital transformation assignments building in the second half of the year along with a strong advocacy season. At the same time, we are successfully expanding our global presence, and we are seeing that pay dividends with enhanced growth."

    Frank Lanuto, Chief Financial Officer, commented: "Revenue in Q1 grew by 8% year-over-year to $670 million. Cost actions taken in 2023 contributed to 25% growth in adjusted EBITDA or $90 million, representing a 17% adjusted EBITDA margin, an improvement of 320 basis points over the prior year. We are well positioned to achieve our 2024 targets, as we continue to focus on efficiency, especially through the implementation of AI on our shared services platform." 

    Financial Outlook

    2024 financial guidance is reiterated as follows:

    • Organic Net Revenue growth of 5% to 7%
    • Organic Net Revenue excluding Advocacy growth of 4% to 5%
    • Adjusted EBITDA of $400 million to $450 million
    • Free Cash Flow Conversion of approximately 50%
    • Adjusted EPS of $0.75 - $0.88
    • Guidance assumes no impact from foreign exchange, acquisitions or dispositions.

    * The Company has excluded a quantitative reconciliation with respect to the Company's 2024 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 Wednesday, May 1, 2024, at 8:30 a.m. (ET) to discuss results for Stagwell Inc. for the three months ended March 31, 2024. The video webcast will be accessible at https://stgw.io/Earnings. 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 challenger network built to transform marketing. 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 34+ countries are unified under a single purpose: to drive effectiveness and improve business results for their clients. Join us at www.stagwellglobal.com.

    Contacts

    For Investors: 

    Ben Allanson

    [email protected]

    For Press:

    Beth Sidhu

    [email protected]

    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 Revenue: "Organic revenue growth" and "Organic 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 prior year net revenue for the same period during which we owned it in the current year as impact of the acquisition in the current year; and (b) for an entity acquired in the prior year, we present the entity's prior year net revenue for the period during which we did not own the entity in the prior year as 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: 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.

    (4) Adjusted Diluted EPS is defined as (i) Net income (loss) attributable to Stagwell Inc. common shareholders, plus net income attributable to Class C shareholders, excluding amortization expense, impairment and other losses, stock-based compensation, deferred acquisition consideration adjustments, discrete tax items, and other items, divided by (ii) (a) the per weighted average number of common shares outstanding plus (b) the weighted average number of Class C shares outstanding, (if dilutive). Other items includes restructuring costs, acquisition-related expenses, and non-recurring items, and subject to the anti-dilution rules.

    (5) Free Cash Flow: defined as Adjusted EBITDA less capital expenditures, change in net working capital, cash taxes, interest, and distributions to minority interests, but excludes contingent M&A payments. 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 acquisitions, anticipated 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 "aim," "anticipate," "assume," "believe," "continue," "could," "create," "estimate," "expect," "focus," "forecast," "foresee," "future," "goal," "guidance," "in development," "intend," "likely," "look," "maintain," "may," "ongoing," "opportunity," "outlook," "plan," "possible," "potential," "predict," "project," "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 that could affect the Company or its clients;
    • and 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 and deferred acquisition consideration;
    • the Company's ability to manage its growth effectively, including the successful completion and integration of acquisitions that complement and expand the Company's business capabilities;
    • the Company's ability to develop products incorporating new technologies, including augmented reality, artificial intelligence, and virtual reality, and realize benefits from such products;
    • adverse tax consequences for the Company, its operations and its stockholders, that may differ from the expectations of the Company, including that future changes in tax laws, potential increases to corporate tax rates in the United States and disagreements with tax authorities on the Company's determinations may result in increased tax costs;
    • adverse tax consequences in connection with the Transactions, including the incurrence of material Canadian federal income tax (including material "emigration tax");
    • the Company's unremediated material weaknesses in internal control over financial reporting and its ability to establish and maintain an effective system of internal control over financial reporting;
    • the Company's ability to protect client data from security incidents or cyberattacks;
    • economic disruptions resulting from war and other geopolitical tensions (such as the ongoing military conflicts between Russia and Ukraine and in Israel and Gaza), terrorist activities and natural disasters;
    • stock price volatility; and
    • foreign currency fluctuations.

    Investors should carefully consider these risk factors, other risk factors described herein, and the additional risk factors outlined in more detail in our 2023 Form 10-K, filed with the Securities and Exchange Commission (the "SEC") on March 11, 2024, and accessible on the SEC's website at www.sec.gov, under the caption "Risk Factors," and in the Company's other SEC filings.

    SCHEDULE 1



    STAGWELL INC.

    UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

    (amounts in thousands, except per share amounts)







    Three Months

    Ended March 31,





    2024



    2023

    Revenue



    $        670,059



    $        622,444

    Operating Expenses









    Cost of services



    444,526



    413,898

    Office and general expenses



    163,343



    158,836

    Depreciation and amortization



    34,836



    33,477

    Impairment and other losses



    1,500



    —





    644,205



    606,211

    Operating Income (Loss)



    25,854



    16,233

    Other income (expenses):









    Interest expense, net



    (20,965)



    (18,189)

    Foreign exchange, net



    (2,258)



    (670)

    Other, net



    (1,267)



    220





    (24,490)



    (18,639)

    Income (loss) before income taxes and equity in earnings of non-consolidated affiliates



    1,364



    (2,406)

    Income tax expense



    2,585



    236

    Income (loss) before equity in earnings of non-consolidated affiliates



    (1,221)



    (2,642)

    Equity in income (loss) of non-consolidated affiliates



    508



    (227)

    Net income (loss)



    (713)



    (2,869)

    Net (income) loss attributable to noncontrolling and redeemable noncontrolling interests



    (569)



    4,258

    Net income (loss) attributable to Stagwell Inc. common shareholders



    $          (1,282)



    $            1,389

    Earnings (Loss) Per Common Share:









       Basic



    $             (0.01)



    $               0.01

       Diluted



    $             (0.01)



    $                  —

    Weighted Average Number of Common Shares Outstanding:









       Basic



    112,633



    125,199

       Diluted



    116,405



    289,806

     

    SCHEDULE 2



    STAGWELL INC.

    UNAUDITED COMPONENTS OF NET REVENUE CHANGE

    (amounts in thousands)









    Net Revenue - Components of Change











    Change



    Three Months

    Ended March

    31, 2023



    Foreign

    Currency



    Net Acquisitions

    (Divestitures)



    Organic



    Total Change



    Three Months

    Ended March

    31, 2024



    Organic



    Total













    Integrated Agencies Network

    $        304,187



    $               369



    $             (357)



    $       (11,429)



    $       (11,417)



    $       292,770



    (3.8) %



    (3.8) %

    Brand Performance Network

    151,652



    1,708



    1,708



    7,496



    10,912



    162,564



    4.9 %



    7.2 %

    Communications Network

    52,971



    (49)



    273



    $         14,292



    14,516



    67,487



    27.0 %



    27.4 %

    All Other

    12,852



    (202)



    (1,687)



    (1,330)



    (3,219)



    9,633



    (10.3) %



    (25.0) %



    $        521,662



    $           1,826



    $               (63)



    $           9,029



    $         10,792



    $       532,454



    1.7 %



    2.1 %



    (1)  See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA and Other items, net.



    Note: The Company made changes to its internal management and reporting structure in the first quarter of 2024, resulting in a change to its reportable segments (Networks). Specifically, certain agencies previously within the Brand Performance Network are now in the Integrated Agencies Network. Periods presented prior to the first quarter of 2024 have been recast to reflect the reclassification of certain reporting units (Brands) between operating segments.

     

    SCHEDULE 3



    STAGWELL INC.

    UNAUDITED SEGMENT OPERATING RESULTS

    (amounts in thousands)



    For the Three Months Ended March 31, 2024





    Integrated

    Agencies

    Network



    Brand

    Performance

    Network



    Communications

    Network



    All Other



    Corporate



    Total

    Net Revenue

    $    292,772



    $        162,562



    $                 67,488



    $      9,632



    $              —



    $     532,454

    Billable costs

    59,947



    51,400



    26,258



    —



    —



    137,605

    Revenue

    352,719



    213,962



    93,746



    9,632



    —



    670,059

























    Billable costs

    59,947



    51,400



    26,258



    —



    —



    137,605

    Staff costs

    186,534



    98,431



    39,264



    7,821



    10,107



    342,157

    Administrative costs

    30,602



    22,071



    8,704



    3,209



    2,577



    67,163

    Unbillable and other costs, net

    15,528



    14,566



    136



    2,588



    —



    32,818

    Adjusted EBITDA (1)

    60,108



    27,494



    19,384



    (3,986)



    (12,684)



    90,316

























    Stock-based compensation

    9,321



    2,043



    1,049



    98



    3,605



    16,116

    Depreciation and amortization

    19,381



    7,514



    2,894



    2,421



    2,626



    34,836

    Deferred acquisition consideration

    2,045



    (777)



    (1,114)



    —



    —



    154

    Impairment and other losses

    1,500



    —



    —



    —



    —



    1,500

    Other items, net (1)

    5,511



    5,019



    282



    174



    870



    11,856

    Operating income (loss)

    $      22,350



    $          13,695



    $                 16,273



    $    (6,679)



    $    (19,785)



    $       25,854



    (1) See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA and Other items, net.



    Note: The Company made changes to its internal management and reporting structure in the first quarter of 2024, resulting in a change to its reportable segments (Networks). Specifically, certain agencies previously within the Brand Performance Network are now in the Integrated Agencies Network. Periods presented prior to the first quarter of 2024 have been recast to reflect the reclassification of certain reporting units (Brands) between operating segments.

     

    SCHEDULE 4



    STAGWELL INC.

    UNAUDITED SEGMENT OPERATING RESULTS

    (amounts in thousands)



    For the Three Months Ended March 31, 2023





    Integrated

    Agencies

    Network



    Brand

    Performance

    Network



    Communications

    Network



    All Other



    Corporate



    Total

    Net Revenue

    $    304,187



    $        151,652



    $                  52,971



    $    12,852



    $              —



    $     521,662

    Billable costs

    37,018



    50,276



    13,488



    —



    —



    100,782

    Revenue

    341,205



    201,928



    66,459



    12,852



    —



    622,444

























    Billable costs

    37,018



    50,276



    13,488



    —



    —



    100,782

    Staff costs

    196,165



    96,060



    40,077



    10,487



    6,824



    349,613

    Administrative costs

    31,381



    20,931



    8,756



    3,195



    3,977



    68,240

    Unbillable and other costs, net

    16,782



    11,713



    126



    2,975



    (9)



    31,587

    Adjusted EBITDA (1)

    59,859



    22,948



    4,012



    (3,805)



    (10,792)



    72,222

























    Stock-based compensation

    8,288



    567



    507



    32



    2,610



    12,004

    Depreciation and amortization

    18,950



    7,937



    2,713



    1,948



    1,929



    33,477

    Deferred acquisition consideration

    5,991



    (1,179)



    539



    (1,263)



    —



    4,088

    Other items, net (1)

    3,092



    1,925



    605



    —



    798



    6,420

    Operating income (loss)

    $      23,538



    $          13,698



    $                      (352)



    $    (4,522)



    $    (16,129)



    $       16,233



    (1) See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA and Other items, net.



    Note: The Company made changes to its internal management and reporting structure in the first quarter of 2024, resulting in a change to its reportable segments (Networks). Specifically, certain agencies previously within the Brand Performance Network are now in the Integrated Agencies Network. Periods presented prior to the first quarter of 2024 have been recast to reflect the reclassification of certain reporting units (Brands) between operating segments.

     

    SCHEDULE 5



    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 March 31, 2024







    GAAP



    Adjustments



    Non-GAAP

    Net income (loss) attributable to Stagwell Inc. common shareholders



    $            (1,506)



    $            19,480



    $            17,974

    Net income attributable to Class C shareholders



    —



    24,554



    24,554

    Net income (loss) attributable to Stagwell Inc. and Class C and adjusted net income 



    $            (1,506)



    $            44,034



    $            42,528















    Weighted average number of common shares outstanding



    116,405



    4,534



    120,939

    Weighted average number of common Class C shares outstanding



    —



    151,649



    151,649

    Weighted average number of shares outstanding



    116,405



    156,183



    272,588















    Diluted EPS and Adjusted Diluted EPS



    $              (0.01)







    $                0.16





























    Adjustments to Net income (loss) (1)

    Amortization







    $            28,203





    Impairment and other losses







    1,500





    Stock-based compensation







    16,116





    Deferred acquisition consideration







    154





    Other items, net







    11,856













    57,829





    Adjusted tax expense







    (12,748)













    45,081





    Net loss attributable to Class C shareholders







    (1,047)













    $            44,034



















    Allocation of adjustments to net income (loss) 1













    Net income attributable to Stagwell Inc. common shareholders







    $            19,480



















    Net income attributable to Class C shareholders







    25,601





    Net loss attributable to Class C shareholders







    (1,047)













    24,554













    $            44,034







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

     

    SCHEDULE 6



    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 March 31, 2023







    GAAP



    Adjustments



    Non-GAAP

    Net income attributable to Stagwell Inc. common shareholders



    $              1,389



    $            18,055



    $            19,444

    Net income (loss) attributable to Class C shareholders



    (1,963)



    22,399



    20,436

    Net income (loss) attributable to Stagwell Inc. and Class C and adjusted net income 



    (574)



    40,454



    39,880















    Weighted average number of common shares outstanding



    128,897



    —



    128,897

    Weighted average number of common Class C shares outstanding



    160,909



    —



    160,909

    Weighted average number of shares outstanding



    289,806



    —



    289,806





























    Diluted EPS and Adjusted Diluted EPS



    $                   —







    $                0.14















    Adjustments to Net income (loss) (1)

    Amortization







    $            26,732





    Impairment and other losses







    —





    Stock-based compensation







    12,004





    Deferred acquisition consideration







    4,088





    Other items, net







    6,420













    49,244





    Adjusted tax expense







    (8,790)













    $            40,454







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

     

    SCHEDULE 7



    STAGWELL INC.

    UNAUDITED CONSOLIDATED BALANCE SHEETS

    (amounts in thousands)





    March 31, 2024



    December 31, 2023









    ASSETS







    Current Assets







    Cash and cash equivalents

    $                  129,824



    $                  119,737

    Accounts receivable, net

    744,287



    697,178

    Expenditures billable to clients

    111,721



    114,097

    Other current assets

    119,215



    94,054

    Total Current Assets

    1,105,047



    1,025,066

    Fixed assets, net

    77,215



    77,825

    Right-of-use assets - operating leases

    241,709



    254,278

    Goodwill

    1,495,313



    1,498,815

    Other intangible assets, net

    800,691



    818,220

    Other assets

    95,144



    92,843

    Total Assets

    $               3,815,119



    $               3,767,047

    LIABILITIES, RNCI, AND SHAREHOLDERS' EQUITY







    Current Liabilities







    Accounts payable

    $                  437,021



    $                  414,980

    Accrued media

    270,491



    291,777

    Accruals and other liabilities

    194,967



    233,046

    Advance billings

    302,484



    301,674

    Current portion of lease liabilities - operating leases

    64,039



    65,899

    Current portion of deferred acquisition consideration

    64,907



    66,953

    Total Current Liabilities

    1,333,909



    1,374,329

    Long-term debt

    1,269,527



    1,145,828

    Long-term portion of deferred acquisition consideration

    35,897



    34,105

    Long-term lease liabilities - operating leases

    271,380



    281,307

    Deferred tax liabilities, net

    38,856



    40,509

    Other liabilities

    56,655



    54,905

    Total Liabilities

    3,006,224



    2,930,983

    Redeemable Noncontrolling Interests

    11,305



    10,792

    Commitments, Contingencies and Guarantees







    Shareholders' Equity







    Common shares - Class A & B

    115



    118

    Common shares - Class C

    2



    2

    Paid-in capital

    333,896



    348,494

    Retained earnings

    19,618



    21,148

    Accumulated other comprehensive loss

    (15,931)



    (13,067)

    Stagwell Inc. Shareholders' Equity

    337,700



    356,695

    Noncontrolling interests

    459,890



    468,577

    Total Shareholders' Equity

    797,590



    825,272

    Total Liabilities, Redeemable Noncontrolling Interests and Shareholders' Equity

    $               3,815,119



    $               3,767,047

     

    SCHEDULE 8



    STAGWELL INC.

    UNAUDITED SUMMARY CASH FLOW DATA

    (amounts in thousands)





    Three Months Ended March 31,



    2024



    2023

    Cash flows from operating activities:







    Net income

    $                      (713)



    $                   (2,869)

    Adjustments to reconcile net income to cash used in operating activities:







    Stock-based compensation

    16,116



    12,004

    Depreciation and amortization

    34,836



    33,477

    Amortization of right-of-use lease assets and lease liability interest

    20,912



    19,520

    Impairment and other losses

    1,500



    —

    Deferred income taxes

    (655)



    (792)

    Adjustment to deferred acquisition consideration

    154



    4,088

    Other, net

    2,337



    (10,412)

    Changes in working capital:







    Accounts receivable

    (42,976)



    (12,425)

    Expenditures billable to clients

    6,681



    (4,173)

    Other assets

    (19,584)



    (13,076)

    Accounts payable

    22,206



    (48,549)

    Accrued expenses and other liabilities

    (65,901)



    (36,642)

    Advance billings

    (6,124)



    (2,986)

    Current portion of lease liabilities - operating leases

    (21,660)



    (22,278)

    Deferred acquisition related payments

    (250)



    —

    Net cash used in operating activities

    (53,121)



    (85,113)

    Cash flows from investing activities:







    Capital expenditures

    (5,439)



    (3,435)

    Acquisitions, net of cash acquired

    (11,673)



    (220)

    Capitalized software

    (8,794)



    (6,735)

    Other

    (218)



    (425)

    Net cash used in investing activities

    (26,124)



    (10,815)

    Cash flows from financing activities:







    Repayment of borrowings under revolving credit facility

    (417,000)



    (426,500)

    Proceeds from borrowings under revolving credit facility

    540,000



    476,500

    Shares repurchased and cancelled

    (29,698)



    (26,129)

    Distributions to noncontrolling interests

    (559)



    (10,948)

    Payment of deferred consideration

    (1,657)



    —

    Net cash provided by financing activities

    91,086



    12,923

    Effect of exchange rate changes on cash and cash equivalents

    (1,754)



    945

    Net increase (decrease) in cash and cash equivalents

    10,087



    (82,060)

    Cash and cash equivalents at beginning of period

    119,737



    220,589

    Cash and cash equivalents at end of period

    $                 129,824



    $                 138,529

     

     

    Stagwell is the challenger network built to transform marketing. (PRNewsfoto/Stagwell Inc.)

    Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/stagwell-inc-nasdaq-stgw-reports-results-for-the-three-months-ended-march-31-2024-302132987.html

    SOURCE Stagwell Inc.

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