Stagwell Inc. · NASDAQ:STGW
Stagwell — Q1 2024 Earnings Presentation
28 slides from Stagwell's earnings presentation, May 1, 2024
Slide 1: First Quarter 2024 Earnings Presentation
First Quarter 2024 EARNINGS PRESENTATION MAY 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 05/01/2024. The Company ha
Slide 5: First Quarter Highlights
FIRST QUARTER HIGHLIGHTS NET REVENUE: $532M | NET LEVERAGE RATIO: 3.05x | ADJ. EBITDA: $90M Returning TO GROWTH Managing OUR COSTS Revenue growth of 8% year-over-year to $670 million Adj. EBITDA grew to $90 million, a 25% increase year-over-year Performance Media & Data grew 13% versus 1Q23, Advocac
Slide 6: Summary Combined Financials
SUMMARY COMBINED FINANCIALS Three Months Ended March 31, $ in Thousands 2024 2023 Net Revenue $ 532,454 $ 521,662 Billable Costs 137,605 100,782 Revenue $ 670,059 $ 622,444 Billable Costs 137,605 100,782 Staff costs 342,157 349,613 Administrative costs 67,163 68,240 Unbillable and other costs, net 3
Slide 7: 1Q24 Net Revenue
1Q24 NET REVENUE Three Months Ended March 31, 2024 $ in Thousands Net Revenue Change March 31, 2023 $ 521,662 Organic revenue 9,029 1.7% Acquisitions (63) (0.0%) (divestitures), net Foreign currency 1,826 0.4% Total Change $ 10,792 2.1% March 31, 2024 $ 532,454 Note: Figures may not foot due to roun
Slide 8: Net Revenue by Geography
NET REVENUE BY GEOGRAPHY % OF NET REVENUE Organic Growth Y/Y Geography 1Q24 1Q 11.8% United States 1.9% 7.0% United Kingdom 10.3% Other (3.9%) 81.2% TOTAL 1.7% TOTAL EX-ADVOCACY (1.2)% 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 In-House Marketer 58% 1Q24 2 Digital Transformation Building & Designing Digital Platforms & Technology 3 Performance Media & Data Addressable on a Global Scale 4 Consumer Insights & Strategy Tracking Across the
Slide 11: Revenue Growth by Capability
REVENUE GROWTH BY CAPABILITY % OF REVENUE 1Q24 Organic Revenue Principal Capability Growth Revenue Growth 9% 9% Stagwell Marketing Cloud Group 6.7% 7.2% 24% 1Q 29% 14% Digital Transformation 3.3% 5.5% 11% Performance 7% 11.7% 13.3% Media & Data 46% 44% Consumer Insights (7.3%) (7.1%) & Strategy Crea
Slide 12: Net Revenue Growth by Capability
NET REVENUE GROWTH BY CAPABILITY % OF NET REVENUE 1Q24 Organic Net Net Principal Capability Revenue Growth Revenue Growth 9% 9% Stagwell Marketing Cloud Group 1.5% 2.1% 24% 1Q 26% 14% Digital Transformation (1.2%) 1.7% 14% Performance 9% 10.7% 12.2% Media & Data 46% 42% Consumer Insights (8.4%) (8.2
Slide 13: Adj EBITDA Growth by Capability
ADJ EBITDA GROWTH BY CAPABILITY Adj. EBITDA* Growth Y/Y % OF ADJ. EBITDA* Principal Capability 1Q24 2% Stagwell Marketing Cloud Group (17.6)% 30% 1Q 38% Digital Transformation 4.6% 9% Performance Media & Data 212.4% 11% 46% 40% Consumer Insights & Strategy 8.4% Creativity & Communications 41.9% TOTA
Slide 14: Ex-Advocacy Revenue, Net Revenue & Adjusted EBITDA
EX-ADVOCACY REVENUE, NET REVENUE & ADJUSTED EBITDA Three Months Ended, $ in Millions REVENUE March 31, 2024 March 31, 2023 % Change Total Revenue $670 $622 7.6% Advocacy Revenue 65 36 80.4% Total Ex Advocacy 605 586 3.2% Three Months Ended, NET March 31, 2024 March 31, 2023 % Change REVENUE Total Ne
Slide 15: New Business Update
NEW BUSINESS UPDATE Notable Business WINS & EXPANSIONS Net New Business 1Q24 $66M LTM $284M Avg. Net Revenue 1Q24 $6.0M PER CLIENT AT TOP 25 15
Slide 16: Stagwell Marketing Cloud Group
STAGWELL MARKETING CLOUD GROUP Net Revenue1 Adj. Net EBITDA Revenue Margin $48M Advanced $47M $38.6 17.2% Media Platforms Stagwell $9.4 (45.5)% Marketing Cloud TOTAL $47.9 4.6% 1Q23 1Q24 GROWTH (y/y) 2.1% 1. Defined as GAAP Revenue minus Billable Costs – Includes both the Advanced Media Platform and
Slide 17: Liquidity
LIQUIDITY $ in Millions Available Liquidity (as of 3/31/2024) Commitment Under Credit Facility $ 640 Drawn 182 Letters of Credit 16 Undrawn Commitments Under Facility $ 442 Total Cash & Cash Equivalents 130 Total Available Liquidity $ 572 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 $65M FROM 1Q23 QUARTER-END BALANCE $166M $101M 1Q23 1Q24 Note: Numbers may not foot due to rounding. 18
Slide 19: Adjusted Earnings Per Share
ADJUSTED EARNINGS PER SHARE Three Months Ended March 31, 2024 $ and Shares in Thousands Reported (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 (los
Slide 20: GAAP Consolidated Operating Performance
GAAP CONSOLIDATED OPERATING PERFORMANCE Three Months Ended March 31, $ and Shares in Thousands 2024 2023 Revenue $ 670,059 $ 622,444 Cost of services 444,526 413,898 Office & general expenses 163,343 158,836 Depreciation & amortization 34,836 33,477 Impairment & other losses 1,500 - Total operating
Slide 21: Capital Structure
CAPITAL STRUCTURE Net Debt & Debt-Like ($M, as of 3/31/2024) Share Count5 (Thousands, as of 4/24/2024) Revolving Credit Facility $ 182 Class A 117,739 Bonds 1,100 NCI1 23 DAC2 101 Class C 151,649 (equal voting & economic rights to Class A) RNCI3 31 Less: Investments4 15 Share-based awards6 8,447 Les
Slide 22: Stagwell Marketing Cloud Product Spotlights
STAGWELL MARKETING CLOUD SMC PRODUCT SPOTLIGHTS SaaS & DaaS Tools For The In-House Marketer Augmented Building complementary software solutions leveraging the domain Reality expertise and distribution channels already in place at Stagwell Bringing a whole new level of stadium entertainment and fan e
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: Real-Time Insights Product Spotlight
REAL-TIME INSIGHTS Product Spotlight Customer Benefit Unlocking continuous brand tracking on an affordable, global, modern basis for research professionals 24
Slide 25: Artificial Intelligence Product Spotlight
ARTIFICAL INTELLIGENCE Product Spotlight Customer Benefit Revolutionizing the PR process through AI, saving PR professionals from millions of tedious working hours 25
Slide 26: Augmented Reality Product Spotlight
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, in-house 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