Stagwell Inc. · NASDAQ:STGW
Stagwell — Q2 2024 Earnings Presentation
28 slides from Stagwell's earnings presentation, Aug 1, 2024
Slide 1: Second Quarter 2024 Earnings Presentation
Second Quarter 2024 EARNINGS PRESENTATION August 1 | 2024
Slide 2: Forward Looking Statements & Other Information
FORWARD LOOKING STATEMENTS & OTHER INFORMATION 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
Slide 3: Definitions of Non-GAAP Financial Measures
DEFINITIONS OF NON-GAAP FINANCIAL MEASURES In addition to its reported results, Stagwell Inc. has included in this earnings presentation certain financial results that the Securities and Exchange Commission (SEC) defines as "non-GAAP Financial Measures." Management believes that such non-GAAP financ
Slide 4: Reiterating Full-Year 2024 Outlook
Reiterating Full-Year 2024 Outlook 5% - 7% Organic Net Revenue Growth FINANCIAL Outlook 4% - 5% Organic Net Revenue Growth ex. Advocacy $400M - $450M Adjusted EBITDA ~ 50% EBITDA Conversion on Free Cash Flow $0.75 - $0.88 In Adjusted Earnings Per Share Note: Guidance as of 08/01/2024. The Company ha
Slide 5: Second Quarter Highlights
SECOND QUARTER HIGHLIGHTS NET REVENUE: $554M | NET LEVERAGE RATIO: 3.48x | ADJ. EBITDA: $86M Continuing TO GROW Accelerating NEW BUSINESS Revenue growth of 6% year-over-year to $671 million Record $113M of net new business wins in 2Q24, bringing LTM to $324M Creativity & Communications grew 9% over
Slide 6: Summary Combined Financials
SUMMARY COMBINED FINANCIALS Three Months Ended June 30, Six Months Ended June 30, $ in Thousands 2024 2023 2024 2023 Net Revenue $ 554,392 $ 544,861 $ 1,086,846 $ 1,066,523 Billable Costs 116,776 87,404 254,381 188,186 Revenue $ 671,168 $ 632,265 $ 1,341,227 $ 1,254,709 Billable Costs 116,776 87,404
Slide 7: 2Q24 Net Revenue
2Q24 NET REVENUE Three Months Ended June 30, 2024 Six Months Ended June 30, 2024 $ in Thousands Net Revenue Change Net Revenue Change June 30, 2023 $ 544,861 $ 1,066,523 Organic revenue 6,603 1.2% 15,771 1.5% Acquisitions 3,977 0.7% 3,909 0.4% (divestitures), net Foreign currency (1,049) (0.2)% 643
Slide 8: 2Q24 Net Revenue by Geography
2Q24 NET REVENUE BY GEOGRAPHY % OF NET REVENUE Organic Growth Y/Y Geography 2Q24 YTD 2Q 12.5% United States 2.4% 2.1% 7.0% United Kingdom (6.5)% 2.0% Other (1.5)% (2.7)% 80.5% TOTAL 1.2% 1.5% TOTAL EX-ADVOCACY (0.5)% (0.8)% Note: Figures may not foot due to rounding. 8
Slide 9: Global Network
GLOBAL NETWORK Stagwell’s Affiliate Network Significantly Expands Our Global Footprint Europe North America • Austria • Ukraine • Belgium • France • Bulgaria • Germany • Italy • Netherlands • Canada • Latvia • Poland • USA • Romania • Spain • Mexico • Slovak Republic • Sweden Asia Pacific • Slovenia
Slide 10: Our Principal Capabilities
OUR PRINCIPAL CAPABILITIES 1 Stagwell Marketing Cloud Group SaaS and DaaS Tools for the Modern Marketer 56% 2Q24 2 Digital Transformation Building & Designing Digital Platforms & Technology 3 Performance Media & Data Addressable on a Global Scale 4 Consumer Insights & Strategy Tracking Across the En
Slide 11: Revenue Growth by Capability
REVENUE GROWTH BY CAPABILITY % REVENUE OF 2Q24 YTD Principal Organic Revenue Organic Revenue Revenue Revenue Capability Growth Growth Growth Growth Stagwell Marketing 10% 14.0% 13.4% 10.3% 10.3% Cloud Group 2Q 24% Digital Transformation 0.3% 2.1% 1.9% 4.0% 12% 7% Performance 4.4% 4.6% 8.0% 8.7% Medi
Slide 12: Net Revenue Growth by Capability
NET REVENUE GROWTH BY CAPABILITY % REVENUE OF NET 2Q24 YTD Principal Organic Net Net Organic Net Net Revenue Revenue Revenue Revenue Capability Growth Growth Growth Growth 9% Stagwell Marketing 8.5% 7.8% 5.0% 5.0% Cloud Group 2Q 24% Digital Transformation (1.2)% 1.0% (1.2)% 1.4% 14% 9% Performance 5
Slide 13: Adj EBITDA Growth by Capability
ADJ EBITDA GROWTH BY CAPABILITY Adj. EBITDA* Growth Y/Y % OF ADJ. EBITDA* Principal Capability 2Q24 YTD 2% Stagwell Marketing Cloud Group (57.9)% (38.4)% 34% 2Q Digital Transformation 7.5% 5.9% 5% 11% Performance Media & Data (52.9)% 8.9% 48% Consumer Insights & Strategy 0.7% 4.4% Creativity & Commu
Slide 14: Ex-Advocacy Revenue, Net Revenue & Adjusted EBITDA
EX-ADVOCACY REVENUE, NET REVENUE & ADJUSTED EBITDA $ in Millions Three Months Ended, Six Months Ended, REVENUE June 30, June 30, % Change June 30, June 30, % Change 2024 2023 2024 2023 Total Revenue $671 $632 6.2% $1,341 $1,255 6.9% Advocacy Revenue 72 51 41.6% 137 87 57.6% Total Ex Advocacy 599 581
Slide 15: New Business Update
NEW BUSINESS UPDATE Notable Business WINS & EXPANSIONS Net New Business 2Q24 $113M LTM $324M Avg. Net Revenue 2Q24 $6.0M PER CLIENT AT TOP 25 15
Slide 16: Stagwell Marketing Cloud Group
STAGWELL MARKETING CLOUD GROUP Net Revenue1 Adj. Net EBITDA $ in Millions Revenue Margin $52M Advanced $41.9 13.1% Media Platforms $48M Stagwell $9.9 (38.4)% Marketing Cloud TOTAL $51.8 3.3% 2Q23 2Q24 GROWTH (y/y) 7.8% 1. Defined as GAAP Revenue minus Billable Costs – Includes both the Advanced Medi
Slide 17: Liquidity
LIQUIDITY $ in Millions Available Liquidity (as of 6/30/2024) Commitment Under Credit Facility $ 640 Drawn 334 Letters of Credit 16 Undrawn Commitments Under Facility $ 291 Total Cash & Cash Equivalents 136 Total Available Liquidity $ 427 Note: Numbers may not foot due to rounding. 17
Slide 18: Maintaining Discipline Around Deferred Acquisition Costs
MAINTAINING DISCIPLINE AROUND Deferred Acquisition Costs REDUCED DAC BY $43M FROM 1Q23 QUARTER-END BALANCE $114M $71M 2Q23 2Q24 Note: Numbers may not foot due to rounding. 18
Slide 19: Adjusted Earnings Per Share
ADJUSTED EARNINGS PER SHARE Three Months Ended June 30, 2024 Six Months Ended June 30, 2024 Reported Reported $ and Shares in Thousands (GAAP) Adjustments Non-GAAP (GAAP) Adjustments Non-GAAP Net income attributable to Stagwell Inc. common shareholders (2,965) $ 18,935 $ 15,970 (4,247) $ 38,415 $ 34
Slide 20: GAAP Consolidated Operating Performance
GAAP CONSOLIDATED OPERATING PERFORMANCE Three Months Ended June 30, Six Months Ended June 30, $ and Shares in Thousands 2024 2023 2024 2023 Revenue $ 671,168 $ 632,265 $ 1,341,227 $ 1,254,709 Cost of services 438,912 402,431 883,438 816,329 Office & general expenses 168,133 162,522 331,476 321,358 D
Slide 21: Capital Structure
CAPITAL STRUCTURE Net Debt & Debt-Like ($M, as of 6/30/2024) Share Count5 (Thousands, as of 7/25/2024) Revolving Credit Facility $ 334 Class A 111,731 Bonds 1,100 NCI1 22 DAC2 71 Class C 151,649 (equal voting & economic rights to Class A) RNCI3 23 Less: Investments4 15 Share-based awards6 8,699 Less
Slide 22: Applying a Proven Playbook to Scale Stagwell Marketing Cloud Group
APPLYING A PROVEN PLAYBOOK to scale Stagwell Marketing Cloud Group Building complementary software solutions leveraging the domain expertise and distribution channels already in place at Stagwell Digital Services Technology Digital Transformation Advanced Media Platforms 1 Building Digital Platforms
Slide 23: Product Incubation Playbook
STAGWELL MARKETING CLOUD GROUP Product Incubation Playbook We've developed a proven strategy to develop and incubate new technologies, making informed product roadmap decisions based off agency clients while leveraging our world-class tech team Faster WE BUILD Shared infrastructure + tech expertise
Slide 24: Product Spotlight: Real-Time Insights
REAL-TIME INSIGHTS Product Spotlight Customer Benefit Unlocking continuous brand tracking on an affordable, global, modern basis for research professionals 24
Slide 25: Product Spotlight: Artificial Intelligence
ARTIFICAL INTELLIGENCE Product Spotlight Customer Benefit Revolutionizing the PR process through AI, saving PR professionals from millions of tedious working hours 25
Slide 26: Product Spotlight: Augmented Reality
AUGMENTED REALITY Product Spotlight Customer Benefit Bringing a whole new level of stadium entertainment and fan engagement to sports and entertainment through shared AR 26
Slide 27: Pricing Model
STAGWELL MARKETING CLOUD GROUP Pricing Model Modern, flexible pricing models that fit the needs and budgets for the modern marketer Subscription Pricing Consumption Fee Advertising-Based Annual SaaS contract Data and media spend Sponsorship fees 27
Slide 28: Thank You
Thank You Contact Us: IR@StagwellGlobal.com