Stagwell reported third-quarter revenue growth and raised its full-year outlook for adjusted EBITDA and adjusted earnings per share. Growth was especially strong in its Digital Transformation and Marketing Cloud businesses, while reported net income attributable to common shareholders fell from a year earlier.
The marketing and communications company also cited new business wins, including its largest multi-agency deal to date, and said year-to-date cash generation had improved sharply.
Key details
- Third-quarter revenue reached $816 million, up 10% year over year. Revenue grew 11% organically. Net revenue was $664 million, up 8%, or 7% organically.
- Year-to-date revenue through September was $2.306 billion, up 10%. Organic revenue growth was 9%. Net revenue totaled $1.880 billion, up 6%, with 5% organic growth.
- Digital Transformation continued to grow quickly. Third-quarter net revenue was $119 million, up 23% organically. Its two-year net revenue growth was 38%, and its two-year organic net revenue growth was 30%.
- The Marketing Cloud’s third-quarter net revenue was $56 million, up 108% organically. Stagwell said enterprise technology products contracted year to date totaled $59 million—more than double its initial full-year 2026 target.
- Adjusted profitability improved, though reported net income declined. Third-quarter adjusted EBITDA rose 25% to $145 million, and adjusted EPS increased 42% to $0.34. EPS was $0.07. Net income attributable to Stagwell common shareholders was $18 million, compared with $25 million a year earlier.
- Year-to-date reported earnings were weaker. Stagwell recorded a $3 million net loss attributable to common shareholders through September, versus net income of $16 million in the same period last year.
- Cash flow increased substantially year over year. Cash provided by operating activities rose 396% to $152 million for the first nine months, while free cash flow increased 227% to $52 million.
- New business momentum included several notable wins. Stagwell generated $168 million in net new business in the quarter and $586 million over the trailing 12 months. It secured its largest multi-agency deal in company history with ServiceNow, its first major federal government win, and an expanded partnership with Palantir.
- Stagwell raised its full-year outlook. It now expects adjusted EBITDA of $490 million to $540 million and adjusted EPS of $1.07 to $1.21. The prior guidance ranges were not included in the announcement.
Plain-English implications
Stagwell’s adjusted earnings and cash flow improved even as reported common-shareholder income declined in the quarter and turned to a small loss for the year to date. The raised full-year targets reflect a stronger outlook for adjusted profitability; the announcement did not provide the previous forecast ranges for comparison.