STAGWELL INC. (NASDAQ: STGW) REPORTS RESULTS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025

Q3 YoY Revenue Growth of 4%, Q3 YoY Net Revenue Growth of 6%

Q3 YoY Net Revenue Growth excluding Advocacy of 10%, Digital Transformation Net Revenue Growth of 12%, Marketing Services Net Revenue Growth of 9%

Q3 Net Income Attributable to Stagwell Inc. Common Shareholders of $25 million; Q3 Adjusted EBITDA of $115 million; Q3 Adjusted EBITDA ex. Advocacy YoY Growth of 23% to $103 million

Q3 EPS of $0.09; Adjusted EPS of $0.24

YTD Increase in Cash Flow from Operations of $100 million Over Prior Year Period

Net New Business of $122 million in Q3; LTM Net New Business of $472 million

Announced a Groundbreaking Partnership with Palantir

Guidance for 2025 of Total Net Revenue Growth of ~8%; Adjusted EBITDA of $410 million to $460 million; Free Cash Flow Conversion in excess of 45%

NEW YORK, Nov. 6, 2025 /PRNewswire/ -- (NASDAQ: STGW) -- Stagwell Inc. ("Stagwell") today announced financial results for the three and nine months ended September 30, 2025.

THIRD QUARTER RESULTS:

See "Non-GAAP Financial Measures" below for explanations and reconciliations of the Company's non-GAAP financial measures.

Mark Penn, Chairman and CEO of Stagwell, said, "With double-digit growth in non-advocacy work, strong organic growth in nearly all areas, enhanced cash flow and increased non-advocacy margin, this quarter again demonstrates how Stagwell is a winner in an industry undergoing significant transformation. Our newly announced partnership with Palantir is yet another example of how Stagwell is a leader in the application of AI for marketing."

Ryan Greene, Chief Financial Officer, commented: "While achieving significant growth, we're successfully trimming our costs. An active focus on labor efficiency and cost discipline resulted in a 19% adjusted EBITDA margin, and drove an impressive 9% year-over-year increase in adjusted EPS to $0.24, even with the cyclical advocacy pullback. The momentum we've built through the third quarter gives us confidence in a strong finish to the year."

Financial Outlook

2025 financial guidance is as follows:

* The Company has excluded a quantitative reconciliation with respect to the Company's 2025 guidance under the "unreasonable efforts" exception in Item 10(e)(1)(i)(B) of Regulation S-K. See "Non-GAAP Financial Measures" below for additional information.

Video Webcast

Management will host a video webcast on Thursday, November 6, 2025, at 8:30 a.m. (ET) to discuss results for Stagwell Inc. for the three and nine months ended September 30, 2025. The video webcast will be accessible at https://edge.media-server.com/mmc/p/xtchu5qq/. An investor presentation has been posted on our website at www.stagwellglobal.com and may be referred to during the webcast.

A recording of the webcast will be accessible one hour after the webcast and available for ninety days at www.stagwellglobal.com.

Stagwell Inc.

Stagwell is the challenger network built to transform marketing. We deliver scaled creative performance for the world's most ambitious brands, connecting culture-moving creativity with leading-edge technology to harmonize the art and science of marketing. Led by entrepreneurs, our specialists in 45+ countries are unified under a single purpose: to drive effectiveness and improve business results for their clients. Join us at www.stagwellglobal.com.

Contacts

For Investors:

Ben Allanson

IR@stagwellglobal.com

For Press:

Beth Sidhu

PR@stagwellglobal.com

Non-GAAP Financial Measures

In addition to its reported results, Stagwell Inc. has included in this earnings release certain financial results that the Securities and Exchange Commission (SEC) defines as "non-GAAP Financial Measures." Management believes that such non-GAAP financial measures, when read in conjunction with the Company's reported results, can provide useful supplemental information for investors analyzing period to period comparisons of the Company's results. Such non-GAAP financial measures include the following:

(1) Organic Net Revenue: "Organic net revenue growth" and "Organic net revenue decline" reflects the year-over-year change in the Company's reported net revenue attributable to the Company's management of the entities it owns. We calculate organic net revenue growth (decline) by subtracting the net impact of acquisitions (divestitures) and the impact of foreign currency exchange fluctuations from the aggregate year-over-year increase or decrease in the Company's reported net revenue. The net impact of acquisitions (divestitures) reflects the year-over-year change in the Company's reported net revenue attributable to the impact of all individual entities that were acquired or divested in the current and prior year. We calculate impact of an acquisition as follows: (a) for an entity acquired during the current year, we present the entity's current period reported revenue as the impact of the acquisition in the current year; and (b) for an entity acquired in the prior year, we present an amount equal to the entity's current year net revenue for the same period during which we didn't own the entity in the prior year as the impact of the acquisition in the current year. We calculate impact of a divestiture as follows: (a) for a divestiture in the current year, we present the entity's prior year net revenue for the same period during which we no longer owned it in the current year as impact of the divestiture in the current year; and (b) for a divestiture in the prior year, we present the entity's prior year net revenue for the period during which we owned it in the prior year as impact of the divestiture in the current year. We calculate the impact of any acquisition or divestiture without adjusting for foreign currency exchange fluctuations. The impact of foreign currency exchange fluctuations reflects the year-over-year change in the Company's reported net revenue attributable to changes in foreign currency exchange rates. We calculate the impact of foreign currency exchange fluctuations for the portion of the reporting period in which we recognized revenue from a foreign entity in both the current year and the prior year. The impact is calculated as the difference between (1) reported prior period net revenue (converted to U.S. dollars at historical foreign currency exchange rates) and (2) prior period net revenue converted to U.S. dollars at current period foreign exchange rates.

(2) Net New Business: Estimate of annualized revenue for new wins less annualized revenue for losses incurred in the period.

(3) Adjusted EBITDA: defined as Net income excluding non-operating income or expense to achieve operating income, plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, and other items. Other items include restructuring costs, acquisition-related expenses, and non-recurring items.

(4) Adjusted Diluted EPS is defined as (i) Net income (loss) attributable to Stagwell Inc. common shareholders, plus net income attributable to Class C shareholders, excluding amortization expense, impairment and other losses, stock-based compensation, deferred acquisition consideration adjustments, discrete tax items, and other items, divided by (ii) the diluted weighted average shares outstanding. The diluted weighted average shares outstanding is calculated as (a) the diluted weighted average number of common shares outstanding plus (b) the shares of Class C Common Stock as if converted to shares of Class A Common Stock if not yet included because they were anti-dilutive. Other items includes restructuring costs, acquisition-related expenses, and non-recurring items, and subject to the anti-dilution rules.

(5) Free Cash Flow: defined as Adjusted EBITDA less capital expenditures, change in net working capital, cash taxes, interest, and distributions to minority interests, but excludes contingent M&A payments. Free Cash Flow Conversion is the percentage of adjusted EBITDA.

Included in this earnings release are tables reconciling reported Stagwell Inc. results to arrive at certain of these non-GAAP financial measures.

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 representatives may also make forward-looking statements orally or in writing from time to time. Statements in this document that are not historical facts, including, statements about the Company's beliefs and expectations, future financial performance, growth, and future prospects, the Company's strategy, business and economic trends and growth, technological leadership and differentiation, potential and completed acquisitions, anticipated and actual operating efficiencies and synergies and estimates of amounts for redeemable noncontrolling interests and deferred acquisition consideration, constitute forward-looking statements. Forward-looking statements, which are generally denoted by words such as "ability," "aim," "anticipate," "assume," "believe," "better," "build," "consider," "continue," "could," "develop," "drive," "enhance," "estimate," "expect," "focus," "forecast," "future," "grow," "guidance," "improve," "intend," "likely," "maintain," "may," "ongoing,", "outlook," "plan," "position," "possible," "potential," "probable," "project," "seek," "should," "target," "will," "would" or the negative of such terms or other variations thereof and terms of similar substance used in connection with any discussion of current plans, estimates and projections are subject to change based on a number of factors, including those outlined in this section.

Forward-looking statements in this document are based on certain key expectations and assumptions made by the Company. Although the management of the Company believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. The material assumptions upon which such forward-looking statements are based include, among others, assumptions with respect to general business, economic and market conditions, the competitive environment, anticipated and unanticipated tax consequences and anticipated and unanticipated costs. These forward-looking statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined in this section. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company's control. Therefore, you should not place undue reliance on such statements. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events, if any.

Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. Such risk factors include, but are not limited to, the following:

Investors should carefully consider these risk factors, other risk factors described herein, and the additional risk factors outlined in more detail in our 2024 Form 10-K, filed with the Securities and Exchange Commission (the "SEC") on March 11, 2025, and accessible on the SEC's website at www.sec.gov, under the caption "Risk Factors," and in the Company's other SEC filings.

SCHEDULE 1

STAGWELL INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands, except per share amounts)

Three Months Ended

September 30,

Nine Months Ended

September 30,

2025

2024

2025

2024

Revenue

$ 742,998

$ 711,281

$ 2,101,556

$ 2,052,508

Operating Expenses

Cost of services

470,937

457,018

1,342,240

1,340,456

Office and general expenses

166,422

176,440

528,845

507,916

Depreciation and amortization

44,260

36,044

127,635

112,881

Impairment and other losses

466

—

466

1,715

682,085

669,502

1,999,186

1,962,968

Operating Income

60,913

41,779

102,370

89,540

Other income (expenses):

Interest expense, net

(25,196)

(23,781)

(72,007)

(68,279)

Foreign exchange, net

(366)

1,312

(484)

(2,301)

Other, net

(2,032)

249

(2,143)

(825)

(27,594)

(22,220)

(74,634)

(71,405)

Income before income taxes and equity in earnings of non-consolidated affiliates

33,319

19,559

27,736

18,135

Income tax expense

9,555

5,691

13,950

9,441

Income before equity in earnings of non-consolidated affiliates

23,764

13,868

13,786

8,694

Equity in income (loss) of non-consolidated affiliates

(1)

(4)

503

Net income

23,763

13,864

13,804

9,197

Net (income) loss attributable to noncontrolling and redeemable noncontrolling interests

856

(10,593)

2,637

(10,173)

Net income (loss) attributable to Stagwell Inc. common shareholders

$ 24,619

$ 3,271

$ 16,441

$ (976)

Earnings (Loss) Per Common Share:

Basic

$ 0.10

$ 0.03

$ 0.08

$ (0.01)

Diluted

$ 0.09

$ 0.03

$ 0.04

$ (0.01)

Weighted Average Number of Common Shares Outstanding:

Basic

255,952

108,198

210,139

111,436

Diluted

259,583

112,190

266,773

111,436

SCHEDULE 2

STAGWELL INC.

UNAUDITED COMPONENTS OF NET REVENUE CHANGE

(amounts in thousands)

Net Revenue - Components of Change

Change

Three Months

Ended

September 30,

2024

Foreign

Currency

Net

Acquisitions

(Divestitures)

Organic (1)

Total Change

Three Months

Ended

September 30,

2025

Organic

Total

Marketing Services

$ 225,411

$ 989

$ 4,970

$ 14,724

$ 20,683

$ 246,094

6.5 %

9.2 %

Digital Transformation

85,270

(99)

4,356

5,849

10,106

95,376

6.9 %

11.9 %

Media & Commerce

145,558

1,109

2,782

4,708

8,599

154,157

3.2 %

5.9 %

Communications

112,563

214

7,291

(23,576)

(16,071)

96,492

(20.9) %

(14.3) %

The Marketing Cloud

11,443

416

14,567

756

15,739

27,182

6.6 %

137.5 %

Eliminations

(52)

—

(4,727)

(4,779)

$ 580,193

$ 2,629

$ 33,966

$ (2,266)

$ 34,329

$ 614,522

(0.4) %

5.9 %

(1) See Non-GAAP Financial Measures section above for the definition of Organic Net Revenue.

SCHEDULE 3

STAGWELL INC.

UNAUDITED COMPONENTS OF NET REVENUE CHANGE

(amounts in thousands)

Net Revenue - Components of Change

Change

Nine Months

Ended

September 30,

2024

Foreign

Currency

Net

Acquisitions

(Divestitures)

Organic (1)

Total Change

Nine Months

Ended

September 30,

2025

Organic

Total

Marketing Services

$ 658,175

$ 1,473

$ 2,916

$ 52,303

$ 56,692

$ 714,867

7.9 %

8.6 %

Digital Transformation

239,613

(275)

8,196

27,444

35,365

274,978

11.5 %

14.8 %

Media & Commerce

439,783

1,651

2,675

(12,254)

(7,928)

431,855

(2.8) %

(1.8) %

Communications

303,890

162

29,002

(47,948)

(18,784)

285,106

(15.8) %

(6.2) %

The Marketing Cloud

25,823

455

53,523

(1,032)

52,946

78,769

(4.0) %

Eliminations

(245)

—

(8,492)

(8,737)

$ 1,667,039

$ 3,466

$ 96,312

$ 10,021

$ 109,799

$ 1,776,838

0.6 %

6.6 %

(1) See Non-GAAP Financial Measures section above for the definition of Organic Net Revenue.

SCHEDULE 4

STAGWELL INC.

UNAUDITED SEGMENT OPERATING RESULTS

(amounts in thousands)

For the Three Months Ended September 30, 2025

Marketing

Services

Digital

Transformation

Media &

Commerce

Communications

The

Marketing

Cloud

Corporate

Eliminations

Total

Net Revenue

$ 246,094

$ 95,376

$ 154,157

$ 96,492

$ 27,182

$ (4,779)

$ 614,522

Billable costs

51,101

8,334

20,581

48,455

—

128,476

Revenue

297,195

103,710

174,738

144,947

27,187

(4,779)

742,998

Billable costs

51,101

8,334

20,581

48,455

—

128,476

Staff costs

144,354

62,123

91,365

56,650

18,763

13,955

387,210

Administrative costs

27,919

6,981

22,966

12,516

3,663

(2,253)

71,792

Unbillable and other costs, net

17,227

387

15,196

2,245

5,883

—

40,938

Adjusted EBITDA (1)

56,594

25,885

24,630

25,081

(1,127)

(16,481)

114,582

Stock-based compensation

4,346

934

1,005

1,594

200

4,567

12,646

Depreciation and amortization

13,012

5,932

7,332

6,363

6,455

5,166

44,260

Deferred acquisition consideration

(500)

1,874

1,413

(3,716)

(12,419)

—

(13,348)

Impairment and other losses

—

222

244

—

466

Other items, net (1)

2,241

432

3,780

1,624

1,196

372

9,645

Operating income (loss)

$ 37,495

$ 16,713

$ 11,100

$ 18,994

$ 3,197

$ (26,586)

$ 60,913

(1) See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA and Other items, net.

SCHEDULE 5

STAGWELL INC.

UNAUDITED SEGMENT OPERATING RESULTS

(amounts in thousands)

For the Nine Months Ended September 30, 2025

Marketing

Services

Digital

Transformation

Media &

Commerce

Communications

The

Marketing

Cloud

Corporate

Eliminations

Total

Net Revenue

$ 714,867

$ 274,978

$ 431,855

$ 285,106

$ 78,769

$ (8,737)

$ 1,776,838

Billable costs

124,590

17,210

47,793

135,109

—

324,718

Revenue

839,457

292,188

479,648

420,215

78,785

(8,737)

2,101,556

Billable costs

124,590

17,210

47,793

135,109

—

324,718

Staff costs

421,226

184,886

269,318

172,273

53,683

35,356

1,136,742

Administrative costs

86,433

19,599

67,097

37,042

13,531

(927)

222,775

Unbillable and other costs, net

60,230

1,151

43,833

6,910

17,178

—

129,302

Adjusted EBITDA (1)

146,978

69,342

51,607

68,881

(5,623)

(43,166)

288,019

Stock-based compensation

15,069

3,081

3,065

6,760

541

15,627

44,143

Depreciation and amortization

40,141

17,250

21,626

19,349

17,436

11,833

127,635

Deferred acquisition consideration

(4,784)

7,729

2,942

(4,879)

(10,919)

—

(9,911)

Impairment and other losses

—

222

244

—

466

Other items, net (1)

3,296

1,493

10,030

3,686

2,448

2,363

23,316

Operating income (loss)

$ 93,256

$ 39,789

$ 13,944

$ 43,743

$ (15,373)

$ (72,989)

$ 102,370

(1) See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA and Other items, net.

SCHEDULE 6

STAGWELL INC.

UNAUDITED SEGMENT OPERATING RESULTS

(amounts in thousands)

For the Three Months Ended September 30, 2024

Marketing

Services

Digital

Transformation

Media &

Commerce

Communications

The

Marketing

Cloud

Corporate

Eliminations

Total

Net Revenue

$ 225,411

$ 85,270

$ 145,558

$ 112,563

$ 11,443

$ (52)

$ 580,193

Billable costs

42,264

3,022

14,037

72,102

—

(337)

131,088

Revenue

267,675

88,292

159,595

184,665

11,443

(389)

711,281

Billable costs

42,264

3,022

14,037

72,102

—

(337)

131,088

Staff costs

139,694

56,384

88,390

55,518

8,887

13,106

361,979

Administrative costs

26,825

5,036

20,171

11,668

3,505

2,351

69,556

Unbillable and other costs, net

15,435

368

16,357

2,848

2,481

—

37,489

Adjusted EBITDA (1)

43,457

23,482

20,640

42,529

(3,430)

(15,509)

111,169

Stock-based compensation

6,001

2,617

1,359

3,394

363

3,201

16,935

Depreciation and amortization

13,572

5,536

6,509

4,473

2,679

3,275

36,044

Deferred acquisition consideration

(151)

1,265

(6,948)

6,778

(384)

—

560

Other items, net (1)

3,047

509

7,821

1,850

2,581

15,851

Operating income (loss)

$ 20,988

$ 13,555

$ 11,899

$ 26,034

$ (6,131)

$ (24,566)

$ 41,779

(1) See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA and Other items.

SCHEDULE 7

STAGWELL INC.

UNAUDITED SEGMENT OPERATING RESULTS

(amounts in thousands)

For the Nine Months Ended September 30, 2024

Marketing

Services

Digital

Transformation

Media &

Commerce

Communications

The

Marketing

Cloud

Corporate

Eliminations

Total

Net Revenue

$ 658,175

$ 239,613

$ 439,783

$ 303,890

$ 25,823

$ (245)

$ 1,667,039

Billable costs

124,196

9,363

82,180

170,067

—

(337)

385,469

Revenue

782,371

248,976

521,963

473,957

25,823

(582)

2,052,508

Billable costs

124,196

9,363

82,180

170,067

—

(337)

385,469

Staff costs

407,948

166,965

265,576

162,715

21,024

35,257

1,059,485

Administrative costs

74,293

15,707

61,509

33,689

9,659

11,396

206,253

Unbillable and other costs, net

53,176

788

46,244

7,958

5,547

—

113,713

Adjusted EBITDA (1)

122,758

56,153

66,454

99,528

(10,407)

(46,898)

287,588

Stock-based compensation

15,002

8,102

4,399

5,467

648

5,308

38,926

Depreciation and amortization

40,426

16,813

24,149

13,544

9,309

8,640

112,881

Deferred acquisition consideration

2,000

3,690

(6,453)

9,097

(384)

—

7,950

Impairment and other losses

1,500

—

215

1,715

Other items, net (1)

10,372

2,889

15,113

3,457

542

4,203

36,576

Operating income (loss)

$ 53,458

$ 24,659

$ 29,246

$ 67,963

$ (20,522)

$ (65,264)

$ 89,540

(1) See Non-GAAP Financial Measures section above for the definition of Adjusted EBITDA and Other items, net.

SCHEDULE 8

STAGWELL INC.

UNAUDITED RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP MEASURE)

(amounts in thousands, except per share amounts)

For the Three Months Ended September 30, 2025

GAAP

Adjustments

Non-GAAP

Net income attributable to Stagwell Inc. common shareholders and adjusted net income

$ 24,619

$ 38,147

$ 62,766

Diluted - Weighted average number of shares outstanding

259,583

—

259,583

Diluted EPS and Adjusted Diluted EPS (1)

$ 0.09

$ 0.24

Adjustments to Net income

Amortization

$ 38,707

Impairment and other losses

466

Stock-based compensation

12,646

Deferred acquisition consideration

(13,348)

Other items, net

11,928

50,399

Adjusted tax expense

(12,252)

$ 38,147

(1) See Non-GAAP Financial Measures section above for the definition of Adjusted Diluted EPS.

SCHEDULE 9

STAGWELL INC.

UNAUDITED RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP MEASURE)

(amounts in thousands, except per share amounts)

For the Nine Months Ended September 30, 2025

GAAP

Adjustments

Non-GAAP

Net income attributable to Stagwell Inc. common shareholders

$ 16,441

$ 131,430

$ 147,871

Net loss attributable to Class C shareholders

(6,637)

—

(6,637)

Net income attributable to Stagwell Inc. and Class C shareholders and adjusted net income

$ 9,804

$ 131,430

$ 141,234

Diluted - Weighted average number of common shares outstanding

214,557

—

214,557

Weighted average number of shares of Class C Common Stock outstanding

52,216

—

52,216

Diluted - Weighted average number of shares outstanding

266,773

—

266,773

Diluted EPS and Adjusted Diluted EPS (1)

$ 0.04

$ 0.53

Adjustments to Net Income

Amortization

$ 107,281

Impairment and other losses

466

Stock-based compensation

44,143

Deferred acquisition consideration

(9,911)

Other items, net

25,599

167,578

Adjusted tax expense

(36,148)

$ 131,430

(1) See Non-GAAP Financial Measures section above for the definition of Adjusted Diluted EPS.

SCHEDULE 10

STAGWELL INC.

UNAUDITED RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP MEASURE)

(amounts in thousands, except per share amounts)

For the Three Months Ended September 30, 2024

GAAP

Adjustments

Non-GAAP

Net income attributable to Stagwell Inc. common shareholders

$ 3,271

$ 19,762

$ 23,033

Net income attributable to Class C shareholders

—

36,060

Net income attributable to Stagwell Inc. and Class C and adjusted net income

$ 3,271

$ 55,822

$ 59,093

Diluted - Weighted average number of common shares outstanding

112,190

—

112,190

Weighted average number of shares of Class C Common Stock outstanding

—

151,649

Diluted - Weighted average number of shares outstanding

112,190

151,649

263,839

Diluted EPS and Adjusted Diluted EPS (1)

$ 0.03

$ 0.22

Adjustments to Net income

Amortization

$ 28,659

Stock-based compensation

16,935

Deferred acquisition consideration

560

Other items, net

15,851

62,005

Adjusted tax expense

(15,615)

46,390

Net income attributable to Class C shareholders

9,432

$ 55,822

Allocation of adjustments to Net income

Net income attributable to Stagwell Inc. common shareholders

$ 19,762

Net income attributable to Class C shareholders - add-backs

26,628

Net income attributable to Class C shareholders

9,432

36,060

$ 55,822

(1) See Non-GAAP Financial Measures section above for the definition of Adjusted Diluted EPS.

SCHEDULE 11

STAGWELL INC.

UNAUDITED RECONCILIATION OF ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP MEASURE)

(amounts in thousands, except per share amounts)

For the Nine Months Ended September 30, 2024

GAAP

Adjustments

Non-GAAP

Net income (loss) attributable to Stagwell Inc. common shareholders

$ (976)

$ 58,177

$ 57,201

Net income attributable to Class C shareholders

—

83,442

Net income (loss) attributable to Stagwell Inc. and Class C shareholders and adjusted net income

$ (976)

$ 141,619

$ 140,643

Diluted - Weighted average number of common shares outstanding

111,436

—

111,436

Weighted average number of shares of Class C Common Stock outstanding

—

151,649

Diluted - Weighted average number of shares outstanding

111,436

151,649

263,085

Diluted EPS and Adjusted Diluted EPS (1)

$ (0.01)

$ 0.53

Adjustments to Net income (loss)

Amortization

$ 91,870

Impairment and other losses

1,715

Stock-based compensation

38,926

Deferred acquisition consideration

7,950

Other items, net

36,576

177,037

Adjusted tax expense

(41,268)

135,769

Net income attributable to Class C shareholders

5,850

$ 141,619

Allocation of adjustments to Net income

Net income attributable to Stagwell Inc. common shareholders

$ 58,177

Net income attributable to Class C shareholders - add-backs

77,592

Net income attributable to Class C shareholders

5,850

83,442

$ 141,619

(1) See Non-GAAP Financial Measures section above for the definition of Adjusted Diluted EPS.

SCHEDULE 12

STAGWELL INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(amounts in thousands)

September 30, 2025

December 31, 2024

ASSETS

Current Assets

Cash and cash equivalents

$ 132,238

$ 131,339

Accounts receivable, net

777,947

716,415

Expenditures billable to clients

150,255

173,194

Other current assets

170,011

114,200

Total Current Assets

1,230,451

1,135,148

Fixed assets, net

64,895

72,706

Right-of-use assets - operating leases

217,398

219,400

Goodwill

1,597,312

1,554,146

Other intangible assets, net

851,487

836,783

Deferred tax assets

250,360

46,926

Other assets

49,992

43,112

Total Assets

$ 4,261,895

$ 3,908,221

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS

("RNCI"), AND SHAREHOLDERS' EQUITY

Current Liabilities

Accounts payable

$ 408,149

$ 449,347

Accrued media

206,753

245,883

Accruals and other liabilities

275,227

265,356

Advance billings

375,768

294,609

Current portion of lease liabilities - operating leases

56,774

60,195

Current portion of deferred acquisition consideration

53,569

51,906

Total Current Liabilities

1,376,240

1,367,296

Long-term debt

1,526,291

1,353,624

Long-term portion of deferred acquisition consideration

23,478

50,209

Long-term lease liabilities - operating leases

227,540

245,397

Deferred tax liabilities

53,497

47,239

Long-term tax receivable agreement liability

223,600

25,493

Other liabilities

52,179

33,646

Total Liabilities

3,482,825

3,122,904

Redeemable Noncontrolling Interests

8,589

8,412

Commitments, Contingencies and Guarantees

Shareholders' Equity

Common shares - Class A

254

115

Common shares - Class C

—

Paid-in capital

741,702

343,647

Retained earnings

29,542

11,740

Accumulated other comprehensive loss

(22,451)

(23,773)

Stagwell Inc. Shareholders' Equity

749,047

331,731

Noncontrolling interests

21,434

445,174

Total Shareholders' Equity

770,481

776,905

Total Liabilities, Redeemable Noncontrolling Interests and Shareholders' Equity

$ 4,261,895

$ 3,908,221

SCHEDULE 13

STAGWELL INC.

UNAUDITED SUMMARY CASH FLOW DATA

(amounts in thousands)

Nine Months Ended September 30,

2025

2024

Cash flows from operating activities:

Net income

$ 13,804

$ 9,197

Adjustments to reconcile net income to cash provided by (used in) operating activities:

Stock-based compensation

44,143

38,926

Depreciation and amortization

127,635

112,881

Amortization of right-of-use lease assets and lease liability interest

51,208

58,052

Impairment and other (gains) losses

(3,063)

1,715

Deferred income taxes

3,216

(3,446)

Adjustment to deferred acquisition consideration

(9,911)

7,950

Other, net

1,319

6,371

Changes in working capital:

Accounts receivable

(3,477)

(6,212)

Expenditures billable to clients

26,266

(15,705)

Other assets

(53,377)

(9,068)

Accounts payable

(57,306)

(94,160)

Accrued expenses and other liabilities

(117,118)

(121,647)

Advance billings

67,964

23,984

Current portion of lease liabilities - operating leases

(59,414)

(63,956)

Deferred acquisition related payments

(1,176)

(14,112)

Net cash provided by (used in) operating activities

30,713

(69,230)

Cash flows from investing activities:

Capitalized software

(45,315)

(19,320)

Capital expenditures

(26,338)

(16,728)

Acquisitions, net of cash acquired

(6,179)

(23,781)

Other

(2,927)

(6,656)

Net cash used in investing activities

(80,759)

(66,485)

Cash flows from financing activities:

Repayment of borrowings under revolving credit facility

(1,412,000)

(1,176,000)

Proceeds from borrowings under revolving credit facility

1,586,326

1,492,000

Shares repurchased and cancelled

(105,183)

(101,249)

Distributions to noncontrolling interests

(5,018)

(23,583)

Payment of deferred consideration

(16,103)

(28,721)

Purchase of noncontrolling interest

—

(3,316)

Debt financing and other costs

(3,795)

—

Net cash provided by financing activities

44,227

159,131

Effect of exchange rate changes on cash and cash equivalents

6,718

2,654

Net increase in cash and cash equivalents

899

26,070

Cash and cash equivalents at beginning of period

131,339

119,737

Cash and cash equivalents at end of period

$ 132,238

$ 145,807

SOURCE Stagwell Inc.