Slide 1: Third Quarter 2024 Earnings Presentation
Third Quarter 2024 EARNINGS PRESENTATION November 7 | 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 11/07/2024. The Company ha
Slide 5: Third Quarter Highlights
THIRD QUARTER HIGHLIGHTS NET REVENUE: $580M | NET LEVERAGE RATIO: 3.5x | ADJ. EBITDA: $111M Accelerating GROWTH Achieving NEW BUSINESS RECORDS Revenue growth of 15% year-over-year to $711 million Record $101M of net new business wins in 3Q24, bringing LTM to $345M Digital Transformation grew 25% ove
Slide 6: Summary Combined Financials
SUMMARY COMBINED FINANCIALS Three Months Ended September 30, Nine Months Ended September 30, $ in Thousands 2024 2023 2024 2023 Net Revenue $ 580,193 $ 534,864 $ 1,667,039 $ 1,601,387 Billable Costs 131,088 82,709 385,469 270,895 Revenue $ 711,281 $ 617,573 $ 2,052,508 $ 1,872,282 Billable Costs 131
Slide 7: 3Q24 Net Revenue
3Q24 NET REVENUE Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024 $ in Thousands Net Revenue Change Net Revenue Change Sept 30, 2023 $ 534,864 $ 1,601,387 Organic revenue 40,910 7.6% 56,679 3.5% Acquisitions 3,612 0.7% 7,522 0.5% (divestitures), net Foreign currency 807 0.2
Slide 8: 3Q24 Net Revenue by Geography
3Q24 NET REVENUE BY GEOGRAPHY % OF NET REVENUE Organic Growth Y/Y Geography 3Q24 YTD 3Q 12.3% United States 10.8% 5.2% 6.9% United Kingdom (10.1)% (2.4)% Other (0.9)% (3.9)% 80.8% TOTAL 7.6% 3.5% TOTAL EX-ADVOCACY 4.6% 1.0% Note: Figu res may not foot due to roun din g. 8
Slide 9: Global Network
GLOBAL NETWORK Stagwell’s Affiliate Network Significantly Expands Our Global Footprint Europe • Austria • Ukraine North America • Belgium • France • Bulgaria • Germany • Italy • Netherlands • Canada • Latvia • Poland • USA • Romania • Spain • Mexico • Slovak Republic • Sweden • Slovenia • United Kin
Slide 10: Our Principal Capabilities
OUR PRINCIPAL CAPABILITIES 1 Stagwell Marketing Cloud Group SaaS and DaaS Tools for the Modern Marketer 57% 3Q24 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 % OF REVENUE 3Q24 YTD Organic Organic Revenue Revenue Revenue Revenue Principal Capability Growth Growth Growth Growth Stagwell Marketing 10% 27.7% 29.5% 16.2% 16.8% Cloud Group 3Q 25% Digital Transformation 22.0% 24.8% 7.7% 10.0% 11% 7% Performance 8.2% 9.2% 8.1% 8.9% M
Slide 12: Net Revenue Growth by Capability
NET REVENUE GROWTH BY CAPABILITY % OF NET REVENUE 3Q24 YTD Organic Net Net Organic Net Net Revenue Revenue Revenue Revenue Principal Capability Growth Growth Growth Growth 10% Stagwell Marketing 23.3% 25.6% 11.1% 11.8% Cloud Group 3Q 26% Digital Transformation 14.5% 17.7% 3.8% 6.6% 13% 8% Performanc
Slide 13: Adj EBITDA Growth by Capability
ADJ EBITDA GROWTH BY CAPABILITY Adj. EBITDA* Growth Y/Y % OF ADJ. EBITDA* Principal Capability 3Q24 YTD 4% Stagwell Marketing Cloud Group 16.3% (17.3)% 36% Digital Transformation 3Q 27.5% 13.3% 7% 8% Performance Media & Data (24.0)% (6.4)% 45% Consumer Insights & Strategy (11.2)% (1.0)% Creativity &
Slide 14: Ex-Advocacy Revenue, Net Revenue & Adjusted EBITDA
EX-ADVOCACY REVENUE, NET REVENUE & ADJUSTED EBITDA $ in Millions Three Months Ended, Nine Months Ended, REVENUE Sept 30, Sept 30, % Change Sept 30, Sept 30, % Change 2024 2023 2024 2023 Total Revenue $711 $618 15.2% $2,053 $1,872 9.6% Advocacy Revenue 99 54 84.6% 236 141 67.9% Total Ex Advocacy 612
Slide 15: New Business Update
NEW BUSINESS UPDATE Notable Business WINS & EXPANSIONS Net New Business 3Q24 $101M LTM $345M Avg. Net Revenue 3Q24 $6.4M 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 $59M Advanced $47M $44.5 15.5% Media Platforms Stagwell $14.7 (18.2)% Marketing Cloud TOTAL $59.3 7.2% 3Q23 3Q24 GROWTH (y/y) 25.3% 1. Defined as GAAP Revenue minus Billabl e Costs – Includes both the Advanced M
Slide 17: Liquidity
LIQUIDITY $ in Millions Available Liquidity (as of 9/30/2024) Commitment Under Credit Facility $ 640 Drawn 375 Letters of Credit 16 Undrawn Commitments Under Facility $ 249 Total Cash & Cash Equivalents 146 Total Available Liquidity $ 395 Note: Numbers may not foo t due to ro unding. 17
Slide 18: Maintaining Discipline Around Deferred Acquisition Costs
MAINTAINING DISCIPLINE AROUND Deferred Acquisition Costs REDUCED DAC BY $39M FROM FY23 YEAR-END BALANCE $134M $62M 3Q23 3Q24 Note: Numbers may not foo t due to ro unding. 18
Slide 19: Adjusted Earnings Per Share
ADJUSTED EARNINGS PER SHARE Three Months Ended Sept 30, 2024 Nine Months Ended Sept 30, 2024 Reported Reported $ and Shares in Thousands (GAAP) Adjustments Non-GAAP (GAAP) Adjustments Non-GAAP Net income attributable to Stagwell Inc. common shareholders $ 3,271 $ 19,762 $ 23,033 $ (976) $ 58,177 $ 5
Slide 20: GAAP Consolidated Operating Performance
GAAP CONSOLIDATED OPERATING PERFORMANCE Three Months Ended Sept 30, Nine Months Ended Sept 30, $ and Shares in Thousands 2024 2023 2024 2023 Revenue $ 711,281 $ 617,573 $ 2,052,508 $ 1,872,282 Cost of services 457,018 384,980 1,340,456 1,201,309 Office & general expenses 176,440 160,021 507,916 481,
Slide 21: Capital Structure
CAPITAL STRUCTURE Net Debt & Debt-Like ($M, as of 9/30/2024) Share Count5 (Thousands, as of 10/31/2024) Revolving Credit Facility $ 375 Class A 111,549 Bonds 1,100 NCI1 23 DAC2 62 Class C 151,649 (equal voting & economic rights to Class A) RNCI3 34 Less: Investments4 15 Share-based awards6 8,602 Les
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