On November 2, 2023, Stagwell Inc (STGW, Financial) released its financial results for the three and nine months ended September 30, 2023. The company reported a Q3 net income of $3 million, a significant decrease from $35 million in the same period last year. Despite the drop in net income, Stagwell Inc (STGW) saw strong growth in its Stagwell Marketing Cloud Group and Performance Media Capabilities, with international revenue growing by 24% in Q3.
Financial Highlights
Stagwell Inc (STGW, Financial) reported Q3 revenue of $618 million, a decrease of 7% compared to the prior year period. The company's net revenue for Q3 was $535 million, a decrease of 4% compared to the same period last year. Despite the decrease in revenue, the company posted $81 million of net new business in Q3, with LTM net new business exceeding $250 million.
The company's Q3 Adjusted EBITDA was $102 million, a decrease of 12% compared to the prior year period. However, the Adjusted EBITDA Margin increased by 210 basis points sequentially to 19% on net revenue.
Company's Performance and Future Outlook
Stagwell Inc (STGW, Financial) completed the sale of non-core ConcentricLife for $245 million, which is expected to improve the company's balance sheet and prepare it for further growth and expansion. The company expects its 2023 Adjusted EBITDA to be between $390 to $410 million.
Despite the challenges faced, the company's CEO, Mark Penn, expressed optimism about the company's future. He stated,
Stagwell achieved over $100 million of EBITDA in Q3 and is on course to return to growth over the next two quarters as new business continues to flow in and the tech industry pauses and auto and entertainment strikes which have impacted this sector are ebbing."
Recent Acquisitions and Sales
Stagwell Inc (STGW, Financial) recently acquired Left Field Labs, LLC, a digital experience design and strategy company, for approximately $9.4 million in cash, and 825 thousand shares of Class A Common Stock. The company also completed the sale of its integrated healthcare marketing agency and pharmaceutical commercialization platform, ConcentricLife, for $245 million in cash. On November 1, 2023, the company acquired Movers and Shakers LLC, a business that provides social media marketing solutions, for approximately $15 million.
Explore the complete 8-K earnings release (here) from Stagwell Inc for further details.
