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Segment Information | 9 Months Ended
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Sep. 30, 2022
Segment Reporting [Abstract] |
Segment Information | 16. 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. Due to changes in the Company’s internal management and reporting structure in the second quarter of 2022, reportable segment results for periods presented prior to the second quarter of 2022 have been recast to reflect the reclassification of certain reporting units (brands) between operating segments. The changes in reportable segments were that the Forsman & Bodenfors, Observatory, Crispin Porter Bogusky, Bruce Mau and Vitro brands, previously within the Integrated Agencies Network, are now within the Brand Performance Network. The Company has three reportable segments as follows: “Integrated Agencies Network,” “Brand Performance 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 Unaudited Condensed Consolidated Financial Statements included herein. •The Integrated Agencies Network includes five operating segments: the Anomaly Alliance, Constellation, the Doner Partner Network, Code and Theory, and National Research Group. The operating segments offer an array of complementary services spanning our core capabilities of Digital Transformation, Performance Media & Data, Consumer Insights & Strategy, and Creativity & Communications. The brands 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 (brands), Constellation (72andSunny, Colle McVoy, Instrument, Redscout, Hello Design, Team Enterprises, and Harris Insights), the Doner Partner Network (Doner, KWT Global, Harris X, Veritas, Doner North, Northstar, which is currently sunsetting, and Yamamoto (brands)), Code and Theory and National Research Group. These 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 Brand Performance Network (“BPN”), previously referred to as the “Media Network” reportable segment, is comprised of a single operating segment. BPN includes a unified media and data management structure with omnichannel media placement, creative media consulting, influencer and business-to-business marketing capabilities. Our Brands in this segment aim to provide scaled creative performance through developing and executing sophisticated omnichannel campaign strategies leveraging significant amounts of consumer data. BPN’s Brands 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 brands Assembly, Brand New Galaxy, Crispin Porter Bogusky, Forsman & Bodenfors, Bruce Mau Design, Goodstuff, MMI Agency, digital creative & transformation consultancy Gale, B2B specialist Multiview, Observatory, Vitro, 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 brands. •All Other consists of the Company’s digital innovation group and Stagwell Marketing Cloud products such as PRophet and Reputation Defender (which was sold in September 2021). •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.
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Revenue: | (Dollars in Thousands)
Integrated Agencies Network | $ | 367,122 |  |  | $ | 269,071 |  |  | $ | 1,095,761 |  |  | $ | 419,659 |
Brand Performance Network | 171,463 |  |  | 122,826 |  |  | 563,546 |  |  | 257,109 |
Communications Network | 121,770 |  |  | 67,348 |  |  | 311,075 |  |  | 157,794 |
All Other | 3,436 |  |  | 7,389 |  |  | 9,225 |  |  | 22,874 |
Total Revenue | $ | 663,791 |  |  | $ | 466,634 |  |  | $ | 1,979,607 |  |  | $ | 857,436 |
Adjusted EBITDA: |  |  |  |  |  |  |
Integrated Agencies Network | $ | 76,224 |  |  | $ | 66,063 |  |  | $ | 215,920 |  |  | $ | 100,264 |
Brand Performance Network | 24,312 |  |  | 17,664 |  |  | 89,259 |  |  | 30,485 |
Communications Network | 25,462 |  |  | 10,312 |  |  | 58,630 |  |  | 28,302 |
All Other | (363) |  |  | 419 |  |  | (972) |  |  | (1,316) |
Corporate | (10,543) |  |  | (6,940) |  |  | (35,014) |  |  | (7,656) |
Total Adjusted EBITDA | $ | 115,092 |  |  | $ | 87,518 |  |  | $ | 327,823 |  |  | $ | 150,079 |
Depreciation and amortization | $ | (32,207) |  |  | $ | (24,790) |  |  | $ | (95,642) |  |  | $ | (46,122) |
Impairment and other losses | (25,211) |  |  | (14,926) |  |  | (28,034) |  |  | (14,926) |
Stock-based compensation | (12,258) |  |  | (53,465) |  |  | (33,410) |  |  | (53,465) |
Deferred acquisition consideration | 29,789 |  |  | (3,422) |  |  | 14,420 |  |  | (9,456) |
Other items, net | (5,152) |  |  | (10,549) |  |  | (12,112) |  |  | (15,298) |
Total Operating Income (Loss) | $ | 70,053 |  |  | $ | (19,634) |  |  | $ | 173,045 |  |  | $ | 10,812 |
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
| (Dollars in Thousands)
Other Income (expenses): |  |  |  |  |  |  |
Interest expense, net | $ | (19,672) |  |  | $ | (11,912) |  |  | $ | (56,552) |  |  | $ | (15,197) |
Foreign exchange, net | (3,927) |  |  | (893) |  |  | (4,163) |  |  | (1,955) |
Other, net | 147 |  |  | 45,621 |  |  | 182 |  |  | 46,806 |
Income before income taxes and equity in earnings of non-consolidated affiliates | 46,601 |  |  | 13,182 |  |  | 112,512 |  |  | 40,466 |
Income tax expense | 11,540 |  |  | 5,183 |  |  | 20,150 |  |  | 9,205 |
Income before equity in earnings of non-consolidated affiliates | 35,061 |  |  | 7,999 |  |  | 92,362 |  |  | 31,261 |
Equity in income (loss) of non-consolidated affiliates | 213 |  |  | (76) |  |  | 1,053 |  |  | (75) |
Net income | 35,274 |  |  | 7,923 |  |  | 93,415 |  |  | 31,186 |
Net income attributable to noncontrolling and redeemable noncontrolling interests | (24,665) |  |  | (9,994) |  |  | (59,668) |  |  | (10,987) |
Net income (loss) attributable to Stagwell Inc. common shareholders | $ | 10,609 |  |  | $ | (2,071) |  |  | $ | 33,747 |  |  | $ | 20,199 |
Depreciation and amortization: |  |  |  |  |  |  |
Integrated Agencies Network | $ | 18,316 |  |  | $ | 13,494 |  |  | $ | 55,206 |  |  | $ | 18,787 |
Brand Performance Network | 8,205 |  |  | 7,499 |  |  | 25,044 |  |  | 18,070 |
Communications Network | 2,654 |  |  | 2,110 |  |  | 7,718 |  |  | 5,087 |
All Other | 1,206 |  |  | 493 |  |  | 2,457 |  |  | 2,013 |
Corporate | 1,826 |  |  | 1,194 |  |  | 5,217 |  |  | 2,165 |
Total | $ | 32,207 |  |  | $ | 24,790 |  |  | $ | 95,642 |  |  | $ | 46,122 |
Stock-based compensation |  |  |  |  |  |  |
Integrated Agencies Network | $ | 5,308 |  |  | $ | 32,431 |  |  | $ | 15,044 |  |  | $ | 32,431 |
Brand Performance Network | 2,923 |  |  | 2,620 |  |  | 9,152 |  |  | 2,620 |
Communications Network | 671 |  |  | 15,384 |  |  | 1,077 |  |  | 15,384 |
All Other | 7 |  |  | 16 |  |  | 15 |  |  | 16 |
Corporate | 3,349 |  |  | 3,014 |  |  | 8,122 |  |  | 3,014 |
Total | $ | 12,258 |  |  | $ | 53,465 |  |  | $ | 33,410 |  |  | $ | 53,465 |
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 4 of the Notes included herein for a summary of the Company’s revenue by geographic region for the three and nine months ended September 30, 2022 and 2021.

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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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&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 https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI https://asc.fasb.org/topic&trid=2134510 + Details
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