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Segment Information
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
Segment Information
20. Segment Information
The Company adopted ASU 2023-07, Segment Reporting (Topic 280) Improvements to Segment Disclosures (“ASU 2023-07”), in the fourth quarter of 2024, which requires enhanced disclosure about significant segment expenses.
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. All segments follow the same basis of presentation and accounting policies as those described throughout the Notes included herein.
The CODM uses Adjusted EBITDA 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 primarily includes restructuring, certain system implementation and acquisition-related expenses.
The Company has three reportable segments as follows: “Integrated Agencies Network”, “Brand Performance Network”, and the “Communications Network”. The composition of these segments are as follows:
•The Integrated Agencies Network includes five operating segments: the Anomaly Alliance, Constellation, the Doner Partner Network, Code and Theory Network, 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, Stagwell Marketing Cloud Group and Creativity & Communications. The Brands included in the operating segments that comprise the Integrated Agencies Network reportable segment includes: Anomaly Alliance (Anomaly, What’s Next Partners), Constellation (72andSunny, Crispin LLC, Colle McVoy, Hunter, Redscout, Team Enterprises, Harris Insights, Movers and Shakers, and Team Epiphany), the Doner Partner Network (Doner, KWT Global, Harris X, Veritas, Doner North, and Yamamoto), Code and Theory Network (Code and Theory, Instrument, Left Field Labs), 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”) comprises 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 provide media solutions such as audience analysis, media planning, and buying 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, CPB International, Stagwell Production, Vitro, Forsman & Bodenfors, Goodstuff, Bruce Mau, digital creative & transformation consultancy Gale, B2B specialist Multiview, CX specialists Kenna, and travel media experts Ink.
•The Communications Network reportable segment comprises 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 includes Allison, SKDK, Targeted Victory, and Consulum.
The Company combines and discloses operating segments that do not meet the aggregation criteria and includes the elimination of certain intercompany services and revenue, within “All Other.” All Other consists of the Company’s “software as a service” (“SaaS”) and “data as a service” (“DaaS”) technology tools.
The Company reports corporate expenses as “Corporate.” 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.
The Company made changes to its internal management and reporting structure in the first quarter of 2024, resulting in a change to its reportable segments (Networks). Specifically, certain agencies previously within the Brand Performance Network are now in the Integrated Agencies Network. The 2023 period has been recast to reflect the reclassification of certain reporting units (Brands) between operating segments.
Year Ended December 31, 2024
Integrated Agencies NetworkBrand Performance NetworkCommunications NetworkTotal
(dollars in thousands)
Revenue (1)
$1,535,445 $751,884 $515,140 $2,802,469 
Billable costs262,692 100,654 181,345 544,691 
Staff costs792,041 397,301 177,629 1,366,971 
Administrative costs128,954 93,155 37,057 259,166 
Unbillable and other costs *72,756 65,901 2,235 140,892 
Adjusted EBITDA279,002 94,873 116,874 490,749 
Adjusted EBITDA - All Other(15,824)
Adjusted EBITDA - Corporate(64,138)
Total Consolidated Adjusted EBITDA
410,787 
Stock-based compensation52,161 
Depreciation and amortization151,652 
Deferred acquisition consideration22,995 
Impairment and other losses1,715 
Other items, net49,196 
Operating Income
133,068 
Interest expense, net(92,317)
Foreign exchange, net(1,656)
Other, net(1,372)
(95,345)
Income before income taxes and equity in earnings of non-consolidated affiliates37,723 
Income tax expense13,182 
Income before equity in earnings of non-consolidated affiliates24,541 
Equity in income of non-consolidated affiliates503 
Net income25,044 
Net income attributable to noncontrolling and redeemable noncontrolling interests
(22,785)
Net income attributable to Stagwell Inc. common shareholders$2,259 
(1) Total consolidated revenue of $2,841,216 also includes revenue associated with operating segments that do not meet the aggregation criteria and elimination of certain intercompany service and revenue, which amounted to $38,747.
*For each reportable segment, Unbillable and other costs includes costs to fulfill customer contract requirements such as research and subscription related costs, audience measurement, data and analytics, and panels and survey costs; and also includes travel related expenses associated with contract fulfillment.
Year Ended December 31, 2023
Integrated Agencies NetworkBrand Performance NetworkCommunications NetworkTotal
(dollars in thousands)
Revenue (1)
$1,418,711 $728,174 $333,707 $2,480,592 
Billable costs185,913 100,364 88,446 374,723 
Staff costs768,846 386,803 159,165 1,314,814 
Administrative costs122,618 87,337 33,664 243,619 
Unbillable and other costs *71,776 55,891 613 128,280 
Adjusted EBITDA269,558 97,779 51,819 419,156 
Adjusted EBITDA - All Other(10,607)
Adjusted EBITDA - Corporate(48,410)
Total Consolidated Adjusted EBITDA360,139 
Stock-based compensation57,179 
Depreciation and amortization142,831 
Deferred acquisition consideration13,060 
Impairment and other losses11,395 
Other items, net45,147 
Operating Income
90,527 
Interest expense, net(90,644)
Foreign exchange, net(2,960)
Gain on sale of business94,505 
Other, net(359)
542 
Income before income taxes and equity in earnings of non-consolidated affiliates91,069 
Income tax expense40,557 
Income before equity in earnings of non-consolidated affiliates50,512 
Equity in loss of non-consolidated affiliates(8,870)
Net income41,642 
Net income attributable to noncontrolling and redeemable noncontrolling interests(41,508)
Net income attributable to Stagwell Inc. common shareholders$134 
(1) Total consolidated revenue of $2,527,177 also includes revenue associated with operating segments that do not meet the aggregation criteria and elimination of certain intercompany service and revenue, which amounted to $46,585.
*For each reportable segment, Unbillable and other costs includes costs to fulfill customer contract requirements such as research and subscription related costs, audience measurement, data and analytics, and panels and survey costs; and also includes travel related expenses associated with contract fulfillment.
Year Ended December 31, 2022
Integrated Agencies NetworkBrand Performance Network
Communications
All Other
Corporate
Total
(dollars in thousands)
Revenue
$1,474,970 $757,208 $435,652 $19,962 $— $2,687,792 
Adjusted EBITDA$292,293 $115,835 $87,032 $(931)$(43,111)$451,118 
Stock-based compensation33,152 
Depreciation and amortization131,273 
Deferred acquisition consideration(13,405)
Impairment and other losses122,179 
Other items, net18,691 
Operating Income159,228 
Interest expense, net(76,062)
Foreign exchange, net(2,606)
Other, net(4,975)
(83,643)
Income before income taxes and equity in earnings of non-consolidated affiliates75,585 
Income tax expense25,462 
Income before equity in earnings of non-consolidated affiliates50,123 
Equity in loss of non-consolidated affiliates(79)
Net income50,044 
Net income attributable to noncontrolling and redeemable noncontrolling interests(30,125)
Net income attributable to Stagwell Inc. common shareholders$19,919 
The Company’s long-lived assets (i.e., Right-of-use lease assets-operating leases and Fixed asset, net) was $292.1 million ($231.9 million in the United States and $60.2 million in all other countries) as of December 31, 2024 and $332.1 million ($268.5 million in the United States and $63.6 million in all other countries) as of December 31, 2023.
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 years ended December 31, 2024, 2023, and 2022.