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Segment Information | 12 Months Ended
--- | ---
Dec. 31, 2021
Segment Reporting [Abstract] |
Segment Information | Segment Information The Company determines an operating segment if a component (i) engages in business activities from which it earns revenues and incurs expenses, (ii) has discrete financial information, and is (iii) regularly reviewed by the Chief Operating Decision Maker (“CODM”), who is Mark Penn, Chief Executive Officer and Chairman, to make decisions regarding resource allocation for the segment and assess its performance. Once operating segments are identified, the Company performs an analysis to determine if aggregation of operating segments is applicable. This determination is based upon a quantitative analysis of the expected and historic average long-term profitability for each operating segment, together with a qualitative assessment to determine if operating segments have similar operating characteristics. The CODM uses Adjusted EBITDA (defined below) as a key metric, to evaluate the operating and financial performance of a segment, identify trends affecting the segments, develop projections and make strategic business decisions. Adjusted EBITDA is 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. The Company has three reportable segments as follows: “Integrated Agencies Network,” “Media Network” and the “Communications Network.” In addition, the Company combines and discloses operating segments that do not meet the aggregation criteria as “All Other.” The Company also reports corporate expenses, as further detailed below, as “Corporate.” All segments follow the same basis of presentation and accounting policies as those described throughout the Notes to the Audited Consolidated Financial Statements included herein. •The Integrated Agencies Network includes four integrated operating segments: the Anomaly Alliance, Constellation, the Code and Theory Network, and the Doner Partner Network. These operating networks are organized for go-to-market and collaboration incentive purposes and to facilitate integrated and flexible offerings for our clients. Each integrated network consists of agencies that offer an array of complementary services spanning our core capabilities of Digital Transformation, Performance Media & Data, Consumer Insights & Strategy, and Creativity & Communications. The Agencies included in the operating segments that comprise the Integrated Agencies Network reportable segment are as follows: Anomaly Alliance (Anomaly, Concentric, Hunter, Mono, YML and Scout agencies), the Code & Theory Network (Code and Theory, Forsman & Bodenfors, National Research Group, Observatory, Hello Design and Colle McVoy agencies), Constellation (72andSunny, Crispin Porter Bogusky, Instrument, Team Enterprises, Harris and Redscout agencies) and the Doner Partner Network (Doner, KWT Global, Bruce Mau Design, Vitro, Harris X, Northstar, Veritas and Yamamoto agencies). These integrated network operating segments share similar characteristics related to (i) the nature of their services; (ii) the type of clients and the methods used to provide services; and (iii) the extent to which they may be impacted by global economic and geopolitical risks. In addition, these operating segments may occasionally compete with each other for new business or have business move between them. •The Media Network reportable segment is comprised of a single operating segment, our specialist network branded the Stagwell Media Network (“SMN”). SMN serves as a unified media and data management structure with omni-channel media placement, creative media consulting, influencer and business-to-business marketing capabilities. Our Agencies in this segment aim to provide scaled creative performance through developing and executing sophisticated omnichannel campaign strategies leveraging significant amounts of consumer data. SMN’s Agencies combine media buying and planning across a range of digital and traditional platforms (out-of-home, paid search, social media, lead generation, programmatic, television, broadcast, among others) and includes multichannel agencies Assembly, Goodstuff, MMI Agency, digital creative & transformation consultancy GALE, B2B specialist Multiview, CX specialists Kenna, and travel media experts Ink. •The Communications Network reportable segment is comprised of a single operating segment, our specialist network that provides advocacy, strategic corporate communications, investor relations, public relations, online fundraising and other services to both corporations and political and advocacy organizations and consists of our Allison & Partners SKDK (including Sloane & Company), and Targeted Victory Agencies. •All Other consists of the Company’s digital innovation group, Reputation Defender (which was sold in September 2021) and Stagwell Marketing Cloud products such as PRophet. •Corporate consists of corporate office expenses incurred in connection with the strategic resources provided to the operating segments, as well as certain other centrally managed expenses that are not fully allocated to the operating segments. These office and general expenses include (i) salaries and related expenses for corporate office employees, including employees dedicated to supporting the operating segments, (ii) occupancy expenses relating to properties occupied by all corporate office employees, (iii) other office and general expenses including professional fees for the financial statement audits and other public company costs, and (iv) certain other professional fees managed by the corporate office. Additional expenses managed by the corporate office that are directly related to the operating segments are allocated to the appropriate reportable segment and the All Other category.
|  |  | Twelve Months Ended December 31,
|  |  |  |  | 2021 |  | 2020 |  |
Revenue: |  |  |  |  | (Dollars in Thousands)
Integrated Agencies Network |  |  |  |  | $ | 819,758 |  |  | $ | 229,646 |  |  |
Media Network |  |  |  |  | 374,930 |  |  | 254,311 |  |  |
Communications Network |  |  |  |  | 248,832 |  |  | 382,815 |  |  |
All Other |  |  |  |  | 25,843 |  |  | 21,260 |  |  |
Total Revenue |  |  |  |  | $ | 1,469,363 |  |  | $ | 888,032 |  |  |
Adjusted EBITDA: |  |  |  |  |  |  |  |  |
Integrated Agencies Network |  |  |  |  | $ | 166,768 |  |  | $ | 42,360 |  |  |
Media Network |  |  |  |  | 62,770 |  |  | 27,669 |  |  |
Communications Network |  |  |  |  | 45,527 |  |  | 78,562 |  |  |
All Other |  |  |  |  | (769) |  |  | (1,893) |  |  |
Corporate |  |  |  |  | (20,644) |  |  | (3,530) |  |  |
Total Adjusted EBITDA |  |  |  |  | $ | 253,652 |  |  | $ | 143,168 |  |  |
Depreciation and amortization |  |  |  |  | $ | (77,503) |  |  | $ | (41,025) |  |  |
Impairment and other losses |  |  |  |  | (16,240) |  |  | — |  |  |
Stock-based compensation |  |  |  |  | (75,032) |  |  | — |  |  |
Deferred acquisition consideration |  |  |  |  | (18,721) |  |  | (4,497) |  |  |
Other items, net |  |  |  |  | (21,430) |  |  | (13,906) |  |  |
Total Operating Income |  |  |  |  | $ | 44,726 |  |  | $ | 83,740 |  |  |
|  |  | Twelve Months Ended December 31,
|  |  |  |  | 2021 |  | 2020 |  |
|  |  |  |  | (Dollars in Thousands)
Other Income (expenses): |  |  |  |  |  |  |  |  |
Interest expense, net |  |  |  |  | $ | (31,894) |  |  | $ | (6,223) |  |  |
Foreign exchange, net |  |  |  |  | (3,332) |  |  | (721) |  |  |
Gain on sale of business and other, net |  |  |  |  | 50,058 |  |  | 544 |  |  |
Income before income taxes and equity in earnings of non-consolidated affiliates |  |  |  |  | 59,558 |  |  | 77,340 |  |  |
Income tax expense |  |  |  |  | 23,398 |  |  | 5,937 |  |  |
Income before equity in earnings of non-consolidated affiliates |  |  |  |  | 36,160 |  |  | 71,403 |  |  |
Equity in (income) losses of non-consolidated affiliates |  |  |  |  | (240) |  |  | 58 |  |  |
Net income |  |  |  |  | 35,920 |  |  | 71,461 |  |  |
Net income attributable to noncontrolling and redeemable noncontrolling interests |  |  |  |  | (14,884) |  |  | (15,105) |  |  |
Net income attributable to Stagwell Inc. common shareholders |  |  |  |  | $ | 21,036 |  |  | $ | 56,356 |  |  |
Depreciation and amortization: |  |  |  |  |  |  |  |  |
Integrated Agencies Network |  |  |  |  | $ | 40,087 |  |  | $ | 9,616 |  |  |
Media Network |  |  |  |  | 23,590 |  |  | 19,861 |  |  |
Communications Network |  |  |  |  | 7,553 |  |  | 5,903 |  |  |
All Other |  |  |  |  | 2,498 |  |  | 3,681 |  |  |
Corporate |  |  |  |  | 3,775 |  |  | 1,964 |  |  |
Total |  |  |  |  | $ | 77,503 |  |  | $ | 41,025 |  |  |
Stock-based compensation: |  |  |  |  |  |  |  |  |
Integrated Agencies Network |  |  |  |  | $ | 47,584 |  |  | $ | — |  |  |
Media Network |  |  |  |  | 4,857 |  |  | — |  |  |
Communications Network |  |  |  |  | 15,928 |  |  | — |  |  |
All Other |  |  |  |  | 39 |  |  | — |  |  |
Corporate |  |  |  |  | 6,624 |  |  | — |  |  |
Total |  |  |  |  | $ | 75,032 |  |  | $ | — |  |  |
The Company’s CODM does not use segment assets to allocate resources or to assess performance of the segments and therefore, total segment assets have not been disclosed. See Note 5 of the Notes included herein for a summary of the Company’s revenue by geographic region for the twelve months ended December 31, 2021 and 2020.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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