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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025
or

| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________
Commission File Number: 001-13718
Stagwell Inc.
(Exact name of registrant as specified in its charter)

Delaware |  | 86-1390679
(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)
One World Trade Center, Floor 65 |  |
New York, | New York |  | 10007
(Address of principal executive offices) |  | (Zip Code)

(646) 429-1800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class | Trading Symbol(s) | Name of each exchange on which registered
Class A Common Stock, par value $0.001 per share | STGW | NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated Filer | ☐ | Accelerated Filer | ☒
Non-accelerated Filer | ☐ | Smaller reporting company | ☐
Emerging growth company | ☐ |  |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The number of common shares outstanding as of October 30, 2025, was 252,118,245 shares of Class A Common Stock.

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STAGWELL INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS

|  | Page
| PART I. FINANCIAL INFORMATION |
Item 1. | Financial Statements | 3
| Unaudited Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 | 3
| Unaudited Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2025 and 2024 | 4
| Unaudited Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 | 5
| Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 | 6
| Unaudited Consolidated Statements of Shareholders’ Equity for the Three and Nine Months Ended September 30, 2025 and 2024 | 8
| Notes to the Unaudited Consolidated Financial Statements | 12
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 34
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 69
Item 4. | Controls and Procedures | 69
| PART II. OTHER INFORMATION |
Item 1. | Legal Proceedings | 69
Item 1A. | Risk Factors | 70
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 70
Item 3. | Defaults Upon Senior Securities | 70
Item 4. | Mine Safety Disclosures | 70
Item 5. | Other Information | 71
Item 6. | Exhibits | 71
Signatures | 73

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EXPLANATORY NOTE
References in this Form 10-Q to “Stagwell,” “we,” “us,” “our” and the “Company” refer to Stagwell Inc. and its direct and indirect subsidiaries, unless the context otherwise requires or otherwise is expressly stated.
All dollar amounts are stated in U.S. dollars unless otherwise stated.
Forward-Looking Statements
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:
•risks associated with international, national and regional unfavorable economic conditions, including the effect of changing tariff and other trade policies, inflation and other macroeconomic factors that could affect the Company or its clients;
•demand for the Company’s services, which may precipitate or exacerbate other risks and uncertainties;
•inflation and actions taken by central banks to counter inflation;
•the Company’s ability to attract new clients and retain existing clients;
•the impact of a reduction in client spending and changes in client advertising, marketing and corporate communications requirements;
•financial failure of the Company’s clients;
•the Company’s ability to retain and attract key employees;
•the Company’s ability to compete in the markets in which it operates;
•the Company’s ability to achieve its cost saving initiatives;
•the Company’s implementation of strategic initiatives;
•the Company’s ability to remain in compliance with its debt agreements and the Company’s ability to finance its contingent payment obligations when due and payable, including but not limited to those relating to redeemable noncontrolling interests, deferred acquisition consideration and profit interests;
•the Company’s ability to manage its growth effectively;
•the Company’s ability to identify and complete acquisitions or other strategic transactions that complement and expand the Company’s business capabilities and successfully integrate newly acquired businesses into the Company’s operations, retain key employees, and realize cost savings, synergies and other related anticipated benefits within the expected time period;
•the Company’s ability to identify and complete divestitures and to achieve the anticipated benefits therefrom;
1

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•the Company’s ability to develop products incorporating new technologies, including augmented reality, artificial intelligence, and virtual reality, and realize benefits from such products;
•the Company’s use of artificial intelligence, including generative artificial intelligence;
•adverse tax consequences for the Company, its operations and its stockholders, that may differ from the expectations of the Company, including that recent or future changes in tax laws, potential changes to corporate tax rates in the United States and disagreements with tax authorities on the Company’s determinations that may result in increased tax costs;
•adverse tax consequences in connection with the business combination that formed the Company in August 2021, including the incurrence of material Canadian federal income tax (including material “emigration tax”);
•the Company’s ability to maintain an effective system of internal control over financial reporting, including the risk that the Company’s internal controls will fail to detect misstatements in its financial statements;
•the Company’s ability to accurately forecast its future financial performance and provide accurate guidance;
•the Company’s ability to protect client data from security incidents or cyberattacks;
•economic disruptions resulting from war and other economic and geopolitical tensions (such as the ongoing military conflicts between Russia and Ukraine and in the Middle East), terrorist activities, natural disasters, public health events and tariff and trade policies;
•stock price volatility; and
•foreign currency fluctuations.
Investors should carefully consider these risks and the additional risk factors described in more detail in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “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 filing.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
STAGWELL INC. AND SUBSIDIARIES
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) |  |  | 18 |  |  | 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 |  |  |

See Notes to the Unaudited Consolidated Financial Statements.
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STAGWELL INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(amounts in thousands)

| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024 |  |
COMPREHENSIVE INCOME (LOSS) |  |  |  |  |  |  |  |  |
Net income | $ | 23,763 |  |  | $ | 13,864 |  |  | $ | 13,804 |  |  | $ | 9,197 |  |  |
Other comprehensive income (loss) - Foreign currency translation adjustment | (1,515) |  |  | 11,666 |  |  | 33,051 |  |  | (959) |  |  |
Comprehensive income for the period | 22,248 |  |  | 25,530 |  |  | 46,855 |  |  | 8,238 |  |  |
Comprehensive (income) loss attributable to the noncontrolling and redeemable noncontrolling interests | 856 |  |  | (17,385) |  |  | (3,390) |  |  | (9,203) |  |  |
Comprehensive income (loss) attributable to Stagwell Inc. common shareholders | $ | 23,104 |  |  | $ | 8,145 |  |  | $ | 43,465 |  |  | $ | (965) |  |  |

See Notes to the Unaudited Consolidated Financial Statements.
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STAGWELL INC. AND SUBSIDIARIES
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 lease 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 (Note 10) |  |  |
Shareholders’ Equity |  |  |
Common shares - Class A | 254 |  |  | 115 |
Common shares - Class C | — |  |  | 2 |
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 |

See Notes to the Unaudited Consolidated Financial Statements.
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STAGWELL INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(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 |  |  |

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STAGWELL INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - (continued)
(amounts in thousands)

| Nine Months Ended September 30,
| 2025 |  | 2024 |  |
Supplemental Cash Flow Information: |  |  |  |  |
Cash income taxes paid | $ | 18,291 |  |  | $ | 15,660 |  |  |
Cash interest paid | 86,302 |  |  | 83,046 |  |  |
Non-cash investing and financing activities: |  |  |  |  |
Shares issued for business acquisitions | 15,300 |  |  | 8,143 |  |  |
Acquisitions of noncontrolling interest | — |  |  | 10,167 |  |  |
Share issuances | — |  |  | 341 |  |  |
Addition to deferred tax asset related to exchange of Paired Units | 203,418 |  |  | — |  |  |
Addition to Tax Receivables Agreement liability related to exchange of Paired Units | 200,274 |  |  | — |  |  |
Conversion of Class C to Class A shares | 447,562 |  |  | — |  |  |
Shares issued as payment for deferred acquisition consideration | — |  |  | 18,208 |  |  |

See Notes to the Unaudited Consolidated Financial Statements.
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STAGWELL INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(amounts in thousands)

|  | Three Months Ended September 30, 2025
|  | Common Shares - Class A |  |  |  | Paid-in Capital |  | Retained Earnings |  | Accumulated Other Comprehensive Loss |  | Stagwell Inc. Shareholders’ Equity |  | Noncontrolling Interests |  | Shareholders’ Equity
|  | Shares |  | Amount |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Balance at June 30, 2025 | 261,236 |  |  | $ | 261 |  |  |  |  |  |  | $ | 765,898 |  |  | $ | 4,923 |  |  | $ | (20,936) |  |  | $ | 750,146 |  |  | $ | 21,802 |  |  | $ | 771,948 |
| Net income (loss) | — |  |  | — |  |  |  |  |  |  | — |  |  | 24,619 |  |  | — |  |  | 24,619 |  |  | (856) |  |  | 23,763 |
| Other comprehensive income | — |  |  | — |  |  |  |  |  |  | — |  |  | — |  |  | (1,515) |  |  | (1,515) |  |  | — |  |  | (1,515) |
| Total other comprehensive income (loss) | — |  |  | — |  |  |  |  |  |  | — |  |  | 24,619 |  |  | (1,515) |  |  | 23,104 |  |  | (856) |  |  | 22,248 |
| Distributions to noncontrolling interests | — |  |  | — |  |  |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (129) |  |  | (129) |
| Restricted awards granted or vested | 159 |  |  | — |  |  |  |  |  |  | 287 |  |  | — |  |  | — |  |  | 287 |  |  | — |  |  | 287 |
| Shares repurchased and cancelled | (7,067) |  |  | (7) |  |  |  |  |  |  | (37,272) |  |  | — |  |  | — |  |  | (37,279) |  |  | — |  |  | (37,279) |
| Restricted shares forfeited | (14) |  |  | — |  |  |  |  |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
| Stock-based compensation | — |  |  | — |  |  |  |  |  |  | 13,078 |  |  | — |  |  | — |  |  | 13,078 |  |  | — |  |  | 13,078 |
| Other | 1 |  |  | — |  |  |  |  |  |  | (289) |  |  | — |  |  | — |  |  | (289) |  |  | 617 |  |  | 328 |
| Balance at September 30, 2025 | 254,315 |  |  | $ | 254 |  |  |  |  |  |  | $ | 741,702 |  |  | $ | 29,542 |  |  | $ | (22,451) |  |  | $ | 749,047 |  |  | $ | 21,434 |  |  | $ | 770,481 |

See Notes to the Unaudited Consolidated Financial Statements.
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STAGWELL INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - (continued)
(amounts in thousands)

|  | Nine Months Ended September 30, 2025
|  | Common Shares - Class A |  | Common Shares - Class C |  | Paid-in Capital |  | Retained Earnings |  | Accumulated Other Comprehensive Loss |  | Stagwell Inc. Shareholders’ Equity |  | Noncontrolling Interests |  | Shareholders’ Equity
|  | Shares |  | Amount |  | Shares |  | Amount |  |  |  |  |  |  |  |  |  |  |  |
| Balance at December 31, 2024 | 114,847 |  |  | $ | 115 |  |  | 151,649 |  |  | $ | 2 |  |  | $ | 343,647 |  |  | $ | 11,740 |  |  | $ | (23,773) |  |  | $ | 331,731 |  |  | $ | 445,174 |  |  | $ | 776,905 |
| Net income (loss) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 16,441 |  |  | — |  |  | 16,441 |  |  | (2,637) |  |  | 13,804 |
| Other comprehensive income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 27,024 |  |  | 27,024 |  |  | 6,027 |  |  | 33,051 |
| Total other comprehensive income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 16,441 |  |  | 27,024 |  |  | 43,465 |  |  | 3,390 |  |  | 46,855 |
| Distributions to noncontrolling interests | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (3,169) |  |  | (3,169) |
| Changes in redemption value of RNCI, net of tax | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,360 |  |  | — |  |  | 1,360 |  |  | — |  |  | 1,360 |
| Restricted awards granted or vested | 5,492 |  |  | 5 |  |  | — |  |  | — |  |  | 849 |  |  | — |  |  | — |  |  | 854 |  |  | — |  |  | 854 |
| Shares repurchased and cancelled | (20,072) |  |  | (20) |  |  | — |  |  | — |  |  | (105,442) |  |  | — |  |  | — |  |  | (105,462) |  |  | — |  |  | (105,462) |
| Restricted shares forfeited | (271) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
| Stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 37,304 |  |  | — |  |  | — |  |  | 37,304 |  |  | — |  |  | 37,304 |
| Shares issued, acquisitions | 2,672 |  |  | 3 |  |  | — |  |  | — |  |  | 15,297 |  |  | — |  |  | — |  |  | 15,300 |  |  | — |  |  | 15,300 |
| Change in ownership held by Class C shareholders | — |  |  | — |  |  | — |  |  | — |  |  | (1,509) |  |  | — |  |  | — |  |  | (1,509) |  |  | 1,509 |  |  | — |
| Conversion of Class C to Class A shares | 151,649 |  |  | 152 |  |  | (151,649) |  |  | (2) |  |  | 447,412 |  |  | — |  |  | (25,701) |  |  | 421,861 |  |  | (421,861) |  |  | — |
| Other (1) | (2) |  |  | (1) |  |  | — |  |  | — |  |  | 4,144 |  |  | 1 |  |  | (1) |  |  | 4,143 |  |  | (3,609) |  |  | 534 |
| Balance at September 30, 2025 | 254,315 |  |  | $ | 254 |  |  | — |  |  | $ | — |  |  | $ | 741,702 |  |  | $ | 29,542 |  |  | $ | (22,451) |  |  | $ | 749,047 |  |  | $ | 21,434 |  |  | $ | 770,481 |

(1) The Other line within Paid-in Capital includes $3.1 million in connection with the conversion of Class C to Class A shares as this resulted in an adjustment between the deferred tax asset and the accrued TRA liability.
See Notes to the Unaudited Consolidated Financial Statements.
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STAGWELL INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - (continued)
(amounts in thousands)

| Three Months Ended September 30, 2024
| Common Shares - Class A & B |  | Common Shares - Class C |  | Paid-in Capital |  | Retained Earnings |  | Accumulated Other Comprehensive Loss |  | Stagwell Inc. Shareholders’ Equity |  | Noncontrolling Interests |  | Shareholders’ Equity
| Shares |  | Amount |  | Shares |  | Amount |  |  |  |  |  |  |  |  |  |  |  |
Balance at June 30, 2024 | 111,965 |  |  | $ | 112 |  |  | 151,649 |  |  | $ | 2 |  |  | $ | 292,616 |  |  | $ | 16,771 |  |  | $ | (17,931) |  |  | $ | 291,570 |  |  | $ | 438,354 |  |  | $ | 729,924 |
Net income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,271 |  |  | — |  |  | 3,271 |  |  | 10,593 |  |  | 13,864 |
Other comprehensive income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,874 |  |  | 4,874 |  |  | 6,792 |  |  | 11,666 |
Total other comprehensive income | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,271 |  |  | 4,874 |  |  | 8,145 |  |  | 17,385 |  |  | 25,530 |
Distributions to noncontrolling interests | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (231) |  |  | (231) |
Changes in redemption value of RNCI | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (8,626) |  |  | — |  |  | (8,626) |  |  | — |  |  | (8,626) |
Restricted awards granted or vested | 505 |  |  | 1 |  |  | — |  |  | — |  |  | 288 |  |  | — |  |  | — |  |  | 289 |  |  | — |  |  | 289 |
Shares repurchased and cancelled | (2,137) |  |  | (2) |  |  | — |  |  | — |  |  | (14,104) |  |  | — |  |  | — |  |  | (14,106) |  |  | — |  |  | (14,106) |
Restricted shares forfeited | (9) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 10,492 |  |  | — |  |  | — |  |  | 10,492 |  |  | — |  |  | 10,492 |
Shares issued, acquisitions | 135 |  |  | — |  |  | — |  |  | — |  |  | 950 |  |  | — |  |  | — |  |  | 950 |  |  | — |  |  | 950 |
Change in ownership held by Class C shareholders | — |  |  | — |  |  | — |  |  | — |  |  | (2,300) |  |  | — |  |  | — |  |  | (2,300) |  |  | 2,300 |  |  | — |
Other | 1 |  |  | (1) |  |  | — |  |  | — |  |  | (1) |  |  | — |  |  | — |  |  | (2) |  |  | 52 |  |  | 50 |
Balance at September 30, 2024 | 110,460 |  |  | $ | 110 |  |  | 151,649 |  |  | $ | 2 |  |  | $ | 287,941 |  |  | $ | 11,416 |  |  | $ | (13,057) |  |  | $ | 286,412 |  |  | $ | 457,860 |  |  | $ | 744,272 |

See Notes to the Unaudited Consolidated Financial Statements.
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STAGWELL INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY - (continued)
(amounts in thousands)

| Nine Months Ended September 30, 2024
| Common Shares - Class A & B |  | Common Shares - Class C |  | Paid-in Capital |  | Retained Earnings |  | Accumulated Other Comprehensive Loss |  | Stagwell Inc. Shareholders’ Equity |  | Noncontrolling Interests |  | Shareholders’ Equity
| Shares |  | Amount |  | Shares |  | Amount |  |  |  |  |  |  |  |  |  |  |  |
Balance at December 31, 2023 | 118,469 |  |  | $ | 118 |  |  | 151,649 |  |  | $ | 2 |  |  | $ | 348,494 |  |  | $ | 21,148 |  |  | $ | (13,067) |  |  | $ | 356,695 |  |  | $ | 468,577 |  |  | $ | 825,272 |
Net income (loss) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (976) |  |  | — |  |  | (976) |  |  | 10,173 |  |  | 9,197 |
Other comprehensive income (loss) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 11 |  |  | 11 |  |  | (970) |  |  | (959) |
Total other comprehensive income (loss) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (976) |  |  | 11 |  |  | (965) |  |  | 9,203 |  |  | 8,238 |
Distributions to noncontrolling interests (1) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (21,305) |  |  | (21,305) |
Purchases of noncontrolling interest | — |  |  | — |  |  | — |  |  | — |  |  | (3,069) |  |  | — |  |  | — |  |  | (3,069) |  |  | (10,226) |  |  | (13,295) |
Changes in redemption value of RNCI | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (8,761) |  |  | — |  |  | (8,761) |  |  | — |  |  | (8,761) |
Restricted awards granted or vested | 3,606 |  |  | 4 |  |  | — |  |  | — |  |  | 816 |  |  | — |  |  | — |  |  | 820 |  |  | — |  |  | 820 |
Shares repurchased and cancelled | (15,941) |  |  | (16) |  |  | — |  |  | — |  |  | (101,365) |  |  | — |  |  | — |  |  | (101,381) |  |  | — |  |  | (101,381) |
Restricted shares forfeited | (93) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Stock-based compensation | — |  |  | — |  |  | — |  |  | — |  |  | 29,500 |  |  | — |  |  | — |  |  | 29,500 |  |  | — |  |  | 29,500 |
Shares issued, acquisitions | 4,366 |  |  | 4 |  |  | — |  |  | — |  |  | 26,350 |  |  | — |  |  | — |  |  | 26,354 |  |  | — |  |  | 26,354 |
Change in ownership held by Class C shareholders | — |  |  | — |  |  | — |  |  | — |  |  | (13,128) |  |  | — |  |  | — |  |  | (13,128) |  |  | 13,128 |  |  | — |
Other | 53 |  |  | — |  |  | — |  |  | — |  |  | 343 |  |  | 5 |  |  | (1) |  |  | 347 |  |  | (1,517) |  |  | (1,170) |
Balance at September 30, 2024 | 110,460 |  |  | $ | 110 |  |  | 151,649 |  |  | $ | 2 |  |  | $ | 287,941 |  |  | $ | 11,416 |  |  | $ | (13,057) |  |  | $ | 286,412 |  |  | $ | 457,860 |  |  | $ | 744,272 |

(1) Distributions to noncontrolling interests include approximately $19.1 million to Class C Shareholders.
See Notes to the Unaudited Consolidated Financial Statements.
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STAGWELL INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. Business and Basis of Presentation
Stagwell Inc. (together with its consolidated subsidiaries, unless the context requires otherwise, the “Company,” “we,” or “Stagwell”), incorporated under the laws of Delaware, operates a global network of technology-enabled marketing & advertising, media, data, and technology businesses (“Brands”). We help clients grow by delivering both discrete and integrated products and services, including self-service Software-as-a-Service (“SaaS”) and Data-as-a-Service (“DaaS”). Our offerings address needs such as creative, communications strategy, digital transformation, experiences, technology solutions, and market research across its Marketing Services, Communications, Digital Transformation, Media & Commerce, and the Marketing Cloud segments that support clients in navigating change and achieving measurable results in a rapidly evolving business environment.
During the three months ended September 30, 2025, the Company reorganized its organizational structure that aligned our segments as described above. Refer to Note 15 of the Notes included herein for additional information.
The accompanying Unaudited Consolidated Financial Statements include the accounts of Stagwell and its subsidiaries. Stagwell has prepared the unaudited consolidated interim financial statements included herein in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for reporting interim financial information on Form 10-Q. Accordingly, pursuant to these rules, the footnotes do not include certain information and disclosures. The preparation of financial statements in conformity with GAAP requires us to make judgments, assumptions and estimates about current and future results of operations and cash flows that affect the amounts reported and disclosed. Actual results could differ from these estimates and assumptions. The consolidated reports for interim periods are not necessarily indicative of results for the full year and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”).
The accompanying financial statements reflect all adjustments, consisting of normal recurring accruals, which in the opinion of management are necessary for a fair statement, in all material respects, of the information contained therein. Intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to the prior year financial information to conform to the current year’s presentation.
Recent Development
On October 30, 2025, the Company sold a Brand, which was included in the Marketing Services segment, for $12.6 million in cash resulting in an estimated pre-tax loss of approximately $3 million. The divestiture did not represent a strategic shift that would have a major effect on the Company’s consolidated results of operations, and therefore its results of operations were not reported as discontinued operations.
2. New Accounting Pronouncements
In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”), to clarify the scope, capitalization criteria, and disclosure requirements for software costs that are accounted for under Subtopic 350-40 (referred to as “internal-use software”). ASU 2025-06 is effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. The Company is evaluating the impact of these new requirements on the accounting for its internal-use software.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) Disaggregation of Income Statement Expenses (“ASU 2024-03”), to enhance the transparency and decision usefulness of financial information presented in the income statement by requiring disaggregated information about certain income statement expense line items. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is evaluating the impact of these new requirements on its income statement presentation and disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures (“ASU 2023-09”), which enhances transparency by requiring more detailed disclosures of an entity’s effective tax rate reconciliation and income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, and does not affect interim disclosures. The Company does not expect these amendments to have a material impact on its income tax balances. However, they will affect the format of the Company’s income tax disclosures and require the inclusion of additional disaggregated information.
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3. Acquisitions
Acquisition of ADK
On June 2, 2025, the Company acquired ADK Global (“ADK”), a network of marketing solutions companies operating in APAC region, for a purchase price of $21.7 million in cash.
The consideration has been allocated to the assets acquired and assumed liabilities of ADK based upon fair values. The purchase price accounting is not yet final as the Company has not yet finalized its valuation procedures and may still make adjustments. The preliminary purchase price allocation is as follows:

|  | Amount
|  | (dollars in thousands)
Cash and cash equivalents |  | $ | 34,200 |
Accounts receivable, net |  | 19,798 |
Other current assets |  | 3,025 |
Fixed assets |  | 1,241 |
Right of use lease assets |  | 1,111 |
Identifiable intangible assets |  | 103 |
Other assets |  | 591 |
Accounts payable |  | (6,989) |
Accrued media |  | (1,526) |
Accruals and other liabilities |  | (20,315) |
Advance billings |  | (7,378) |
Current portion of lease liabilities - operating leases |  | (532) |
Long-term lease liabilities - operating leases |  | (565) |
Other liabilities |  | (1,092) |
Purchase price consideration |  | $ | 21,672 |

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Acquisition of Jetfuel
On May 1, 2025, the Company acquired JetFuel Studio LLC and Powered by JetFuel LLC (collectively, “Jetfuel”), an experiential marketing company, for $22.2 million, consisting of $10.3 million paid in cash, $11.3 million paid in 2,017,857 shares of the Company’s Class A common stock, par value $0.001 per share (“Class A Common Stock”) and $0.7 million that will be paid in a deferred cash payment, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of $59.5 million, subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock, at the Company’s discretion. The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Jetfuel and expected growth related to new customer relationships. Trade name of 1.0 million, Customer relationships of $6.5 million, and Goodwill of $11.9 million were assigned to the Marketing Services reportable segment. The goodwill is fully deductible for income tax purposes. The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments.
Acquisition of Create
On April 2, 2025, the Company acquired Create Group Holding Limited (“Create”), a strategic digital communications group in the Middle East, for $15.7 million, consisting of $11.5 million paid in cash, $4.0 million paid in 653,663 shares of the Company’s Class A Common Stock and $0.2 million paid in a deferred cash payment, subject to post-closing adjustments. On August 11, 2025, the Company paid $0.3 million to the sellers as a post-closing adjustment, which included the settlement of the $0.2 million deferred cash payment. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of approximately $24.0 million, subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock, at the Company’s discretion. The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Create and expected growth related to new customer relationships. Trade name of $0.6 million, Customer relationships of $3.8 million, and Goodwill of $6.2 million were assigned to the Digital Transformation reportable segment. The goodwill is not deductible for income tax purposes. The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments.
The unaudited pro forma revenue and net income for the three and nine months ended September 30, 2025 for the individual acquisitions and in the aggregate were not materially different from the actual amounts of revenue and net income reported for these periods. Further, there were no material post-closing adjustments for the nine months ended September 30, 2025.
4. Revenue
Disaggregated Revenue Data
The Company provides a broad range of services to a large base of clients across each of our segments globally. The primary source of revenue is from Brand arrangements in the form of fees for services performed, commissions, and from performance incentives or bonuses. Certain clients may engage with the Company in various geographic locations, across multiple disciplines, and through multiple Brands. Representation of a client rarely means that Stagwell handles marketing communications for all Brands or product lines of the client in every geographical location. The Company’s Brands often cooperate with one another through referrals and the sharing of economics, services and expertise, which enables Stagwell to service clients’ varied marketing needs by crafting custom integrated solutions.
As of September 30, 2025, Stagwell’s Brands were located in the United States, the United Kingdom, and at least 33 other countries around the world. The Company continues to expand its global footprint to support clients in international markets.
The following table presents revenue disaggregated by geography based on where the services are performed for the three and nine months ended September 30, 2025 and 2024:

|  |  | Three Months Ended September 30, |  | Nine Months Ended September 30, |  |
Geographical Location | Reportable Segment |  | 2025 |  | 2024 |  | 2025 |  | 2024 |  |
|  |  | (dollars in thousands)
United States | All |  | $ | 569,244 |  |  | $ | 584,734 |  |  | $ | 1,638,659 |  |  | $ | 1,699,464 |  |  |
United Kingdom | All |  | 44,933 |  |  | 41,718 |  |  | 120,868 |  |  | 119,994 |  |  |
Other | All |  | 128,821 |  |  | 84,829 |  |  | 342,029 |  |  | 233,050 |  |  |
|  |  | $ | 742,998 |  |  | $ | 711,281 |  |  | $ | 2,101,556 |  |  | $ | 2,052,508 |  |  |

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See Note 15 of the Notes included herein for further discussion on disaggregated revenue data.
Unbilled Receivables and Contract Liabilities
Unbilled receivables consist of fees and reimbursable outside vendor costs incurred on behalf of clients when providing advertising, marketing and corporate communications services that have not yet been invoiced to clients. Such amounts are invoiced to clients at various times over the course of providing services. In arrangements in which we are acting as principal, unbilled receivables are included as a component of Accounts receivable on the Unaudited Consolidated Balance Sheets. These receivables were $198.3 million and $135.9 million as of September 30, 2025 and December 31, 2024, respectively. In arrangements in which we are acting as agent, unbilled receivables pertaining to reimbursable vendor costs are included on the Unaudited Consolidated Balance Sheets as Expenditures billable to clients. These assets were $150.3 million and $173.2 million as of September 30, 2025 and December 31, 2024, respectively.
Contract liabilities represent advanced billings to customers for fees and reimbursements of third-party costs, whether we act as principal or agent. Such fees and reimbursements of third-party costs are classified as Advance billings on the Company’s Unaudited Consolidated Balance Sheets. Advance billings as of September 30, 2025 and December 31, 2024, were $375.8 million and $294.6 million, respectively. For the nine months ended September 30, 2025 the Company recognized $251.4 million of revenue that was included in the Advance billings balances as of December 31, 2024. In arrangements in which we are acting as an agent, the revenue recognized related to the contract liability is presented on a net basis within the Unaudited Consolidated Statements of Operations.
The Company acquired an aggregate of $10.1 million in unbilled receivables in connection with the acquisitions of ADK and Create, and $7.4 million in contract liabilities in connection with the acquisition of ADK. See Note 3 of the Notes included herein for additional information related to these acquisitions.
Unsatisfied Performance Obligations
The majority of our contracts are for periods of one year or less. For those contracts with a term of more than one year, we had $23.2 million of unsatisfied performance obligations as of September 30, 2025, of which we expect to recognize approximately 34% in the remainder of 2025, 56% in 2026, 9% in 2027, 1% in 2028, and thereafter.
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5. Earnings Per Share
The following table presents the computations of basic and diluted earnings per common share for the three months ended September 30, 2025 (amounts in thousands, except per share amounts):

| Three Months Ended September 30, |
| 2025 |
Earnings Per Share - Basic |  |
Numerator: |  |
Net income | $ | 23,763 |  |
Net income attributable to noncontrolling and redeemable noncontrolling interests | 856 |  |
Net income attributable to Stagwell Inc. common shareholders | $ | 24,619 |  |
Denominator: |  |
Weighted average number of common shares outstanding | 255,952 |  |
Earnings Per Share - Basic | $ | 0.10 |  |
Earnings Per Share - Diluted |  |
Numerator: |  |
Net income attributable to Stagwell Inc. common shareholders | $ | 24,619 |  |
Denominator: |  |
Basic - Weighted average number of common shares outstanding | 255,952 |  |
Dilutive shares: |  |
Stock Appreciation Rights and Restricted Awards | 3,631 |  |
Diluted - Weighted average number of common shares outstanding | 259,583 |  |
Earnings Per Share - Diluted | $ | 0.09 |  |
Anti-dilutive: |  |
Class A Shares to settle deferred acquisition obligations | 6,423 |  |

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The following table presents the computations of basic and diluted earnings per common share for the nine months ended September 30, 2025 (amounts in thousands, except per share amounts):

| Nine Months Ended September 30, |
| 2025 |
Earnings Per Share - Basic |  |
Numerator: |  |
Net income | $ | 13,804 |  |
Net loss attributable to Class C shareholders | 6,637 |  |
Net income attributable to other equity interest holders | (4,000) |  |
Net loss attributable to noncontrolling and redeemable noncontrolling interests | 2,637 |  |
Net income attributable to Stagwell Inc. common shareholders | $ | 16,441 |  |
Denominator: |  |
Weighted average number of common shares outstanding | 210,139 |  |
Earnings Per Share - Basic | $ | 0.08 |  |
Earnings Per Share - Diluted |  |
Numerator: |  |
Net income attributable to Stagwell Inc. common shareholders | $ | 16,441 |  |
Net loss attributable to Class C shareholders | (6,637) |  |
| $ | 9,804 |  |
Denominator: |  |
Basic - Weighted average number of common shares outstanding | 210,139 |  |
Dilutive shares: |  |
Class C Shares | 52,216 |  |
Stock Appreciation Rights and Restricted Awards | 4,418 |  |
| 56,634 |  |
Diluted - Weighted average number of common shares outstanding | 266,773 |  |
Earnings Per Share - Diluted | $ | 0.04 |  |
Anti-dilutive: |  |
Class A Shares to settle deferred acquisition obligations | 6,163 |  |

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The following table presents the computations of basic and diluted earnings per common share for the three months ended September 30, 2024 (amounts in thousands, except per share amounts):

|  | Three Months Ended September 30,
|  | 2024
Earnings Per Share - Basic |  |
Numerator: |  |
Net income |  | $ | 13,864 |
Net income attributable to Class C shareholders |  | (9,432) |
Net income attributable to other equity interest holders |  | (1,161) |
Net income attributable to noncontrolling and redeemable noncontrolling interests |  | (10,593) |
Net income attributable to Stagwell Inc. common shareholders |  | $ | 3,271 |
Denominator: |  |
Weighted average number of common shares outstanding |  | 108,198 |
Earnings Per Share - Basic |  | $ | 0.03 |
Earnings Per Share - Diluted |  |
Numerator: |  |
Net income attributable to Stagwell Inc. common shareholders |  | $ | 3,271 |
Denominator: |  |
Basic - Weighted average number of common shares outstanding |  | 108,198 |
Dilutive shares: |  |
Restricted share and restricted unit awards |  | 3,990
Employee Stock Purchase Plan shares |  | 2
Dilutive - Weighted average number of common shares outstanding |  | 112,190 |
Earnings Per Share - Diluted |  | $ | 0.03 |
Anti-dilutive: |  |
Class C Shares |  | 151,649 |
Class A Shares to settle deferred acquisition obligations |  | 3,346 |

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The following table presents the computations of basic and diluted loss per common share for the nine months ended September 30, 2024 (amounts in thousands, except per share amounts):

|  | Nine Months Ended September 30,
|  | 2024
Loss Per Share - Basic and Diluted |  |
Numerator: |  |
Net income |  | $ | 9,197 |
Net income attributable to Class C shareholders |  | (5,850) |
Net income attributable to other equity interest holders |  | (4,323) |
Net income attributable to noncontrolling and redeemable noncontrolling interests |  | (10,173) |
Net loss attributable to Stagwell Inc. common shareholders |  | $ | (976) |
Denominator: |  |
Weighted average number of common shares outstanding |  | 111,436 |
Loss Per Share - Basic and Diluted |  | $ | (0.01) |
Anti-dilutive: |  |
Class C Shares |  | 151,649 |
Stock Appreciation Rights and Restricted Awards |  | 4,205 |
Class A Shares to settle deferred acquisition obligations |  | 3,515 |
Employee Stock Purchase Plan shares |  | 45 |

Restricted stock awards of 3.5 million and 4.6 million shares as of September 30, 2025 and 2024, respectively, were excluded from the computation of diluted earnings per common share because the performance contingencies necessary for vesting were not met as of the reporting date.
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6. Deferred Acquisition Consideration
Deferred acquisition consideration on the Unaudited Consolidated Balance Sheets consists of deferred obligations related to contingent purchase price payments and retention payments tied to continued employment of specific personnel. Arrangements that are not contingent upon future employment are initially measured at the acquisition date fair value and are remeasured at each reporting period within Office and general expenses on the Unaudited Consolidated Statements of Operations. Arrangements that are contingent upon future employment are expensed as earned over the respective vesting (employment) period within Office and general expenses on the Unaudited Consolidated Statements of Operations.
The following table presents changes in deferred acquisition consideration for the nine months ended September 30, 2025 and the year ended December 31, 2024 and a reconciliation to the amounts reported on the Unaudited Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 :

| 2025 |  | 2024
| (dollars in thousands)
Beginning balance | $ | 102,115 |  |  | $ | 101,058 |
Payments (1) | (17,279) |  |  | (67,895) |
Adjustments to deferred acquisition consideration (2) | (9,911) |  |  | 23,005 |
Additions (3) | — |  |  | 46,598 |
Currency translation adjustment | 2,122 |  |  | (651) |
Ending balance (4) | $ | 77,047 |  |  | $ | 102,115 |

(1) Includes deferred acquisition consideration payments settled in shares of Class A Common Stock of $18.2 million for the year ended December 31, 2024.
(2) Adjustments to deferred acquisition consideration contains fair value changes from the Company’s initial estimates of deferred acquisition payments and accretion of expense as awards are earned over the vesting period.
(3) Additions in 2024 of $46.6 million include $28.1 million related to the Company’s acquisitions. It also includes $17.0 million related to a reclassification from redeemable noncontrolling interest to deferred acquisition consideration in connection with the purchase of the remaining 40% interest the Company did not previously own in a certain Brand. In relation to this transaction, the Company paid $0.9 million in 2024 and $16.1 million in cash during the nine months ended September 30, 2025.
(4) The deferred acquisition consideration as of September 30, 2025 and December 31, 2024 includes $31.7 million and $38.4 million, respectively, expected to be settled in shares of Class A Common Stock. On November 5, 2025, the Company issued 3,209,970 shares of Class A Common Stock in fulfillment of $16.8 million of its payment obligation with respect to the purchase of additional interests in its Targeted Victory subsidiary.
7. Leases
The Company leases office space in North America, Europe, Asia, South America, the Middle East, Africa and Australia. These spaces are primarily used for office and administrative purposes by the Company’s employees in performing professional services. These leases are classified as operating leases and expire between years 2025 through 2036. The Company’s finance leases are immaterial.
Lease costs are recognized in the Unaudited Consolidated Statements of Operations over the lease term on a straight-line basis. Leasehold improvements are depreciated on a straight-line basis over the lesser of the term of the related lease or the estimated useful life of the asset.
Some of the Company’s leases include options to extend or renew the leases through 2044. The renewal and extension options are not included in the lease term as the Company is not reasonably certain that it will exercise its option.
From time to time, the Company enters into sublease arrangements with unrelated third parties. These subleases are classified as operating leases and expire between years 2025 and 2032. Sublease income is recognized over the lease term on a straight-line basis. Currently, the Company subleases office space in North America and Europe.
The discount rate used for leases accounted for under the FASB’s Accounting Standards Codification 842 (“ASC 842”) is the Company’s collateralized credit adjusted borrowing rate.
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The following table presents lease costs and other quantitative information for the three and nine months ended September 30, 2025 and 2024:

| Three Months Ended September 30, |  | Nine Months Ended September 30, |  |
| 2025 |  | 2024 |  | 2025 |  | 2024 |  |
Lease Cost: | (dollars in thousands)
Operating lease cost | $ | 17,133 |  | $ | 18,589 |  | $ | 51,208 |  | $ | 58,237 |  |
Variable lease cost | 5,465 |  | 6,528 |  | 16,610 |  | 18,354 |  |
Sublease rental income | (2,029) |  | (2,001) |  | (6,325) |  | (6,416) |  |
Total lease cost | $ | 20,569 |  | $ | 23,116 |  | $ | 61,493 |  | $ | 70,175 |  |
Additional information: |  |  |  |  |  |  |  |  |
Cash paid for amounts included in the measurement of lease liabilities for operating leases |  |  |  |  |  |  |  |  |
Operating cash flows | $ | 19,208 |  | $ | 21,588 |  | $ | 59,375 |  | $ | 65,407 |  |
Right-of-use lease assets obtained in exchange for operating lease liabilities and other non-cash adjustments | $ | 11,686 |  | $ | 3,311 |  | $ | 33,322 |  | $ | 16,449 |  |

As of September 30, 2025, the weighted average remaining lease term was 5.5 years, and the weighted average discount rate was 5.8%.
Operating lease expense is included in Office and general expenses in the Unaudited Consolidated Statements of Operations. The Company’s lease expense for leases with a term of 12 months or less was immaterial.
For the three and nine months ended September 30, 2025, the Company recognized an impairment charge of $0.5 million to reduce the carrying value of two of its right-of-use lease assets within the Communications and The Marketing Cloud segments.
As of September 30, 2025, the Company had entered into one operating lease for which the commencement date had not yet occurred because the premises were being prepared for occupancy by the landlords. Accordingly, this lease represents obligations of the Company that was not reflected within the Unaudited Consolidated Balance Sheets as of September 30, 2025. The aggregate future liability related to this lease was $11.3 million as of September 30, 2025.
The following table presents minimum future rental payments under the Company’s leases as of September 30, 2025 and their reconciliation to the corresponding lease liabilities:

| Maturity Analysis
| (dollars in thousands)
2025 | $ | 14,474 |
2026 | 70,773 |
2027 | 63,036 |
2028 | 54,421 |
2029 | 49,038 |
Thereafter | 83,156 |
Total | 334,898 |
Less: Present value discount | (50,584) |
Lease liability | $ | 284,314 |

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8. Debt
The following tables present the Company’s indebtedness as reported on the Unaudited Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024:

| September 30, 2025 |  | December 31, 2024
| (dollars in thousands)
Credit Agreement | $ | 438,326 |  |  | $ | 264,000 |
5.625% Notes | 1,100,000 |  |  | 1,100,000 |
Debt issuance costs | (12,035) |  |  | (10,376) |
Total long-term debt | $ | 1,526,291 |  |  | $ | 1,353,624 |

Interest expense related to long-term debt included in Interest expense, net on the Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2025 was $24.8 million and $71.2 million, respectively, and for the three and nine months ended September 30, 2024 was $24.4 million and $67.9 million, respectively.
The amortization of debt issuance costs included in Interest expense, net on the Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 2025 was $0.7 million and $2.1 million, respectively, and for the three and nine months ended September 30, 2024 was $0.7 million and $2.1 million, respectively.
Revolving Credit Agreement
The Company is party to a senior secured revolving credit facility with a five-year maturity with a syndicate of banks (the “Credit Agreement”). On April 23, 2025, the Company entered into the Second Amended and Restated Credit Agreement, which increased the limit of borrowing from $640 million to $750 million and extended the maturity date from August 3, 2026 to April 30, 2030. The Company recorded deferred financing cost related to the amendment of $3.6 million, which was included in Long-term debt on the Unaudited Consolidated Balance Sheets.
The Credit Agreement contains a number of financial and non-financial covenants and is guaranteed by substantially all of our present and future subsidiaries, subject to customary exceptions. The Company was in compliance with all covenants as of September 30, 2025.
A portion of the Credit Agreement in an amount not to exceed $50.0 million is available for the issuance of standby letters of credit. As of September 30, 2025 and December 31, 2024, the Company had issued undrawn outstanding letters of credit of $14.9 million and $15.3 million, respectively.
Senior Notes
The Company had $1.1 billion aggregate principal amount of 5.625% senior notes (“5.625% Notes”) outstanding as of September 30, 2025. The 5.625% Notes are due August 15, 2029, and bear annual interest of 5.625% to be paid semiannually on February 15 and August 15 of each year.
The 5.625% Notes are also subject to certain covenants and customary events of default, including cross-payment default and cross-acceleration provisions. The Company was in compliance with all covenants as of September 30, 2025.
9. Noncontrolling and Redeemable Noncontrolling Interests
When acquiring less than 100% ownership of an entity, the Company may enter into agreements that give the Company an option to purchase, or require the Company to purchase, the incremental ownership interests under certain circumstances. Where the option to purchase incremental ownership is within the Company’s control, the amounts are recorded as Noncontrolling interests within Shareholders’ Equity in the Unaudited Consolidated Balance Sheets. Where the incremental purchase may be required of the Company, the amounts are recorded as Redeemable noncontrolling interests in mezzanine equity in the Unaudited Consolidated Balance Sheets at their estimated acquisition date redemption value and adjusted at each
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reporting period for changes to their estimated redemption value through Retained earnings (but not less than their initial redemption value), except for foreign currency translation adjustments.
The following table presents Net income (loss) attributable to noncontrolling and redeemable noncontrolling interests between Class C shareholders and other equity interest holders for the three and nine months ended September 30, 2025 and 2024:

| Three Months Ended September 30, |  | Nine Months Ended September 30, |  |
| 2025 |  | 2024 |  | 2025 |  | 2024 |  |
| (dollars in thousands)
Net income (loss) attributable to Class C shareholders | $ | — |  |  | $ | 9,432 |  |  | $ | (6,637) |  |  | $ | 5,850 |  |  |
Net income (loss) attributable to other equity interest holders | (248) |  |  | 1,208 |  |  | 378 |  |  | 2,804 |  |  |
Net income (loss) attributable to noncontrolling interests | $ | (248) |  |  | $ | 10,640 |  |  | $ | (6,259) |  |  | $ | 8,654 |  |  |
Net income (loss) attributable to redeemable noncontrolling interests | (608) |  |  | (47) |  |  | 3,622 |  |  | 1,519 |  |  |
Net income (loss) attributable to noncontrolling and redeemable noncontrolling interests | $ | (856) |  |  | $ | 10,593 |  |  | $ | (2,637) |  |  | $ | 10,173 |  |  |

The following table presents noncontrolling interests between Class C shareholders and other equity interest holders as of September 30, 2025 and December 31, 2024:

| September 30, 2025 |  | December 31, 2024
| (dollars in thousands)
Noncontrolling interest of Class C shareholders (1) | $ | — |  |  | $ | 423,428 |
Noncontrolling interest of other equity interest holders (2) | 21,434 |  |  | 21,746 |
Total noncontrolling interests | $ | 21,434 |  |  | $ | 445,174 |

(1) On April 4, 2025, Stagwell Media LP (“Stagwell Media”) exercised in full its right to exchange all of its 151,648,741 shares of Class C common stock, par value $0.00001 per share (“Class C Common Stock”) for an equal number of newly issued shares of Class A Common Stock (the “Class C Exchange”). Following the Class C Exchange, the Company no longer has any Noncontrolling interest of Class C shareholders as of September 30, 2025.
(2) In January 2024, the Company entered into an agreement to purchase the remaining noncontrolling ownership interest in a subsidiary it previously controlled, the consideration for which was a portion of the subsidiary that was transferred to the noncontrolling interest owner. The non-cash purchase resulted in a reduction of the subsidiary noncontrolling interest by approximately $10.2 million.
The following table presents changes in redeemable noncontrolling interests for the nine months ended September 30, 2025 and year ended December 31, 2024:

| September 30, 2025 |  | December 31, 2024
| (dollars in thousands)
Beginning balance | $ | 8,412 |  |  | $ | 10,792 |
Redemptions (1) | — |  |  | (17,039) |
Additions | — |  |  | 1,127 |
Distributions | (1,849) |  |  | (2,880) |
Changes in redemption value (2) | (1,360) |  |  | 13,363 |
Net income attributable to redeemable noncontrolling interests | 3,622 |  |  | 3,005 |
Currency translation adjustment | (236) |  |  | 44 |
Ending balance | $ | 8,589 |  |  | $ | 8,412 |

(1) Redemptions for the year ended December 31, 2024 was associated with redeemable noncontrolling interest of a certain Brand we did not previously own. The amount was reclassified as a deferred acquisition contingent obligation (see Note 6).
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(2) Changes in redemption value are the fair value changes from the acquisition date redemption value based on the options held by the minority interest holders, adjusted through Retained earnings.
The noncontrolling shareholders’ ability to exercise any such option right is subject to the satisfaction of certain conditions, including conditions requiring notice in advance of exercise and specific employment termination conditions. In addition, these rights cannot be exercised prior to specified staggered exercise dates. The exercise of these rights at their earliest contractual date would result in obligations of the Company to fund the related amounts between 2025 and 2031. It is not determinable, at this time, if or when the owners of these rights will exercise all or a portion of these rights.
These adjustments will not impact the calculation of earnings (loss) per share if the redemption values are less than the estimated fair values. As such, there is no related impact on the Company’s earnings (loss) per share calculations for the three and nine months ended September 30, 2025 and 2024.
10. Commitments, Contingencies, and Guarantees
Legal Proceedings. The Company’s operating entities are involved in legal proceedings and regulatory inquiries of various types. While any litigation or investigation contains an element of uncertainty, the Company has no reason to believe that the outcome of such proceedings or claims will have a material adverse effect on the financial condition and results of operations of the Company.
Guarantees. Generally, the Company has indemnified the purchasers of certain assets in the event that a third party asserts a claim against the purchaser that relates to a liability retained by the Company. These types of indemnification guarantees typically extend for a number of years. Historically, the Company has not made any significant indemnification payments under such agreements and no amount has been accrued in the accompanying Unaudited Consolidated Financial Statements with respect to these indemnification guarantees. The Company continues to monitor the conditions that are subject to guarantees and indemnifications to identify whether it is probable that a loss has occurred and would recognize any such losses under any guarantees or indemnifications in the period when those losses are probable and estimable.
Commitments. In the ordinary course of business, the Company enters into certain commitments. The following details the significant commitments of the Company at September 30, 2025:
The Company had $14.9 million of undrawn letters of credit outstanding. See Note 8 of the Notes included herein for additional information.
The Company entered into one operating lease for which the commencement date has not yet occurred. See Note 7 of the Notes included herein for additional information.
The Company enters into long-term, non-cancellable contracts with partner associations that include revenue or profit-sharing commitments related to the provision of its services. These contracts may also include provisions that require the partner associations to meet certain performance targets prior to any obligation to the Company. At September 30, 2025, the Company estimates its future minimum commitments under these non-cancellable agreements to be $2.7 million for the remainder of 2025, $5.4 million, $4.1 million, $3.0 million, $2.8 million and $1.0 million for 2026, 2027, 2028, 2029 and 2030, respectively.
The Company is party to a long-term, non-cancellable contract with a certain vendor for cloud services that requires the Company to commit to minimum spending over the contract term. At September 30, 2025, the Company estimates its future minimum commitments under this agreement to be $6.6 million for the remainder of 2025 and $8.7 million, $10.4 million, $12.7 million and $15.3 million for 2026, 2027, 2028 and 2029, respectively.
The Company is party to a long-term, non-cancellable contract with a certain vendor for a software license agreement that requires the Company to commit to minimum spending over the contract term. At September 30, 2025, the Company estimates its future minimum commitments under this agreement to be $6.8 million for the remainder of 2025 and $28.5 million and $21.8 million for 2026 and 2027, respectively.
11. Share Capital
The authorized and outstanding share capital of the Company is below.
Class A Common Stock
There are 1.0 billion shares of Class A Common Stock authorized, of which 254.3 million shares were issued and outstanding as of September 30, 2025. Each share of Class A Common Stock carries one vote and represents an economic interest in the Company.
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Class C Common Stock
On April 4, 2025, Stagwell Media exercised in full its right to exchange all of its 151,648,741 shares of Class C Common Stock for an equal number of newly issued shares of Class A Common Stock. Following the Class C Exchange, the Company no longer has any shares of Class C Common Stock outstanding as of September 30, 2025.
Class A Common Stock Repurchases
The Company may repurchase up to an aggregate of $375 million of shares of our outstanding Class A Common Stock under its stock repurchase program (the “Repurchase Program”). The Repurchase Program will expire on November 6, 2027.
Under the Repurchase Program, share repurchases may be made at our discretion from time to time in open market transactions at prevailing market prices, including through trading plans that may be adopted in accordance with Rule 10b5-1 of the Exchange Act, as amended, in privately negotiated transactions, or through other means. The timing and number of shares repurchased under the Repurchase Program will depend on a variety of factors, including the performance of our stock price, general market and economic conditions, regulatory requirements, the availability of funds, and other considerations we deem relevant. The Repurchase Program may be suspended, modified, or discontinued at any time without prior notice. Our Board of Directors will review the Repurchase Program periodically and may authorize adjustments of its terms.
During the nine months ended September 30, 2025, 17.6 million shares of Class A Common Stock were repurchased pursuant to the Repurchase Program at an average price of $5.12 per share, for an aggregate value, excluding fees, of $90.0 million. Additionally, during the nine months ended September 30, 2025, 2.5 million shares were withheld for taxes from the Class A Common Stock vested during the period.
The remaining value of shares of Class A Common Stock permitted to be repurchased under the Repurchase Program was $79.6 million as of September 30, 2025.
12. Fair Value Measurements
A fair value measurement assumes a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability.
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. The hierarchy for observable and unobservable inputs used to measure fair value into three broad levels are described below:
•Level 1 - Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
•Level 2 - Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.
•Level 3 - Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.
Financial Instruments that are not Measured at Fair Value on a Recurring Basis
The following table presents certain information for our financial liability that is not measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024:

| September 30, 2025 |  | December 31, 2024
| Carrying Amount |  | Fair Value |  | Carrying Amount |  | Fair Value
| (dollars in thousands)
5.625% Notes | $ | 1,100,000 |  |  | $ | 1,070,608 |  |  | $ | 1,100,000 |  |  | $ | 1,048,311 |

The fair value of this instrument is based on quoted market prices in markets that are not active. Therefore, this debt is classified as Level 2 within the fair value hierarchy.
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Financial Instruments Measured at Fair Value on a Recurring Basis
Contingent deferred acquisition consideration, redeemable noncontrolling interests, and profits interest awards are considered Level 3 fair value measurement and are measured and adjusted at each reporting period at fair value. The estimated liability is determined in accordance with models of each business’ future performance, including revenue growth and free cash flows. These models are dependent upon significant assumptions, such as the growth rate of the earnings of the relevant subsidiary during the contractual period and the discount rate. These growth rates are consistent with the Company’s long-term forecasts. As of September 30, 2025, the discount rate used to measure these liabilities ranged from 3.4% to 7.9%.
As these estimates require the use of assumptions about future performance, which are uncertain at the time of estimation, the fair value measurements presented on the Unaudited Consolidated Balance Sheets are subject to uncertainty.
See Note 6, Note 9, and Note 13 of the Notes included herein for additional information regarding contingent deferred acquisition consideration, redeemable non-controlling interests, and profits interest awards, respectively.
As of September 30, 2025, and December 31, 2024, the carrying amount of the Company’s financial instruments, including cash, cash equivalents, accounts receivable and accounts payable, approximated fair value because of their short-term maturity.
Non-financial Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis
Certain non-financial assets are measured at fair value on a nonrecurring basis, primarily goodwill, intangible assets (Level 3 fair value measurements) and right-of-use lease assets (Level 2 fair value measurement). Accordingly, these assets are not measured and adjusted to fair value on an ongoing basis but are subject to periodic evaluations for potential impairment.
See Note 7 of the Notes included herein for additional information on right-of-use lease assets.
13. Supplemental Information
Stock-Based Awards
Stock-based compensation recognized for awards authorized under the Company’s employee stock incentive plans during the three and nine months ended September 30, 2025 was $13.1 million and $37.3 million, respectively, and $10.4 million and $29.5 million during the three and nine months ended September 30, 2024, respectively. This was included as a component of stock-based compensation in Office and general expenses and Cost of services within the Unaudited Consolidated Statements of Operations.
Certain of the Company’s subsidiaries grant awards to their employees providing them with an equity interest in the respective subsidiary (the “profits interests awards”). The profits interests awards generally provide the employee with the right, but not the obligation, to sell their profits interest in the subsidiary to the Company based on a performance-based formula and, in certain cases, receive a profit share distribution. The profits interests awards are primarily settled in cash, with certain awards having stock-settlement provisions at the Company’s discretion. The corresponding liability associated with these profits interests awards was $17.6 million and $18.5 million as of September 30, 2025 and December 31, 2024, respectively, and was included as a component of Accruals and other liabilities and Other Liabilities on the Unaudited Consolidated Balance Sheets. For the three months ended September 30, 2025, there was no stock-based compensation expense recorded for these awards. For the nine months ended September 30, 2025, the change in the fair value of these awards resulted in stock-based compensation expense of $8.0 million. The change in the fair value of these awards resulted in stock-based compensation expense for the three and nine months ended September 30, 2024 of $4.3 million and $3.3 million, respectively. This was included as a component of stock-based compensation in Cost of services within the Unaudited Consolidated Statements of Operations.
Transfer of Accounts Receivable
The Company transfers certain of its trade receivable assets to third parties under certain agreements. Per the terms of these agreements, the Company surrenders control over its trade receivables upon transfer.
The trade receivables transferred to the third parties were $122.6 million and $366.1 million for the three and nine months ended September 30, 2025, respectively, and $78.3 million and $224.8 million for the three and nine months ended September 30, 2024, respectively. The amount collected and due to the third parties under these arrangements was $14.6 million as of September 30, 2025 and $19.5 million as of December 31, 2024. Fees for these arrangements were recorded in Office and general expenses in the Unaudited Consolidated Statements of Operations and totaled $1.3 million and $4.1 million for the three and nine months ended September 30, 2025, respectively, and $1.0 million and $3.0 million for the three and nine months ended September 30, 2024, respectively.
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Related Party Transactions
In the ordinary course of business, the Company enters into transactions with related parties, including its affiliates. The transactions may range in the nature and value of services underlying the arrangements. The Company provides marketing and advertising services to a client where the founder of the client has a significant interest in the Company and recorded $1.1 million and $3.0 million of related party revenue for the three and nine months ended September 30, 2025, respectively, and $0.3 million for the three and nine months ended September 30, 2024.
14. Income Taxes
Our tax provision for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items arising in interim periods.
The Company had an income tax expense for the three months ended September 30, 2025 of $9.6 million (on a pre-tax income of $33.3 million resulting in an effective tax rate of 28.7%) compared to income tax expense of $5.7 million (on pre-tax income of $19.6 million resulting in an effective tax rate of 29.1%) for the three months ended September 30, 2024.
The difference in the effective tax rate of 28.7% in the three months ended September 30, 2025, as compared to 29.1% in the three months ended September 30, 2024, was primarily due to a reduction in interest related to uncertain tax positions and reduction in shortfall of deductions for share based compensation expense vested during the period, offset by an increase in current losses subject to valuation allowance.
The Company had an income tax expense for the nine months ended September 30, 2025 of $14.0 million (on a pre-tax income of $27.7 million resulting in an effective tax rate of 50.3%) compared to income tax expense of $9.4 million (on pre-tax income of $18.1 million resulting in an effective tax rate of 52.1%) for the nine months ended September 30, 2024.
The difference in the effective tax rate of 50.3% in the nine months ended September 30, 2025, as compared to 52.1% in the nine months ended September 30, 2024, was primarily due to a reduction in interest related to uncertain tax positions and a reduction in shortfall of deductions for share based compensation expense vested during the period, offset by a decrease in the benefit of the disregarded entity structure due to the full exchange in April 2025.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted by the U.S. government. OBBBA amends U.S. tax law including provision related to bonus depreciation, research and development, and interest deduction limitations. This has an immaterial impact to our estimated annual effective tax rate in the current quarter.
The OECD (Organisation for Economic Co-operation and Development) has proposed a global minimum tax of 15% of reported profits (Pillar 2) that has been agreed upon in principle by over 140 countries. Many countries have taken steps to incorporate Pillar 2 model rule concepts into their domestic laws. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar 2 slightly differently than the model rules and on different timelines and may adjust domestic tax incentives in response to Pillar 2. Accordingly, we have included an estimate of the impact of Pillar 2 in our estimated annual effective tax rate and continue to evaluate the potential consequences of Pillar 2 on our longer-term financial position.
Although it is reasonably possible that a change in the balance of unrecognized tax benefits may occur within the next 12 months, based on the information currently available, we do not expect any change to be material to our unaudited consolidated financial statements.
Tax Receivables Agreement
In connection with the Company’s Tax Receivable Agreement (“TRA”), the Company was required to make cash payments to Stagwell Media equal to 85% of certain U.S. federal, state and local income tax or franchise tax savings, if any, that we actually realize, or in certain circumstances are deemed to realize, as a result of (i) increases in the tax basis of the assets of Stagwell Global LLC, the Company’s only operating subsidiary (“OpCo”) resulting from exchanges of Paired Units (each share of Class C Common Stock was paired with a corresponding common unit of OpCo and each such paired share of Class C Common Stock and common unit of OpCo, a “Paired Unit”), for shares of Class A Common Stock or cash, as applicable, and (ii) certain other tax benefits related to us making payments under the TRA. The TRA liability is an estimate and actual amounts payable under the TRA could differ from this estimate.
Effective April 4, 2025, all Paired Units were exchanged for Class A Shares in the Class C Exchange (see Note 11). As a result of the Class C Exchange, the Company recorded an increase to deferred tax asset of $203.4 million and an increase to TRA liability of $200.3 million. As of September 30, 2025, the Company has recorded a TRA liability of $225.9 million, and an associated deferred tax asset, net of amortization, of $256.7 million, in connection with the exchange of Paired Units and the projected obligations under the TRA.
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15. 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. 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, impairment and other losses, and other items. Other items primarily includes restructuring, certain system implementation costs and acquisition-related expenses.
During the three months ended September 30, 2025, the Company reorganized its organizational structure to better reflect how the Company manages its business and goes to market, to simplify reporting and to provide clearer visibility into performance trends across its service offerings. The reorganization also seeks to enhance consistency in the Company’s portfolio of services and improve the transparency and comparability of financial information provided to investors.
As a result of the reorganization, the Company now has five operating and reportable segments: “Marketing Services,” “Digital Transformation,” “Media & Commerce,” “Communications,” and “The Marketing Cloud.” Periods presented prior to the third quarter of 2025 have been recast to reflect the reclassification of Brands within the reportable segments. Based on the segment analysis, management concluded that the operating segments do not exhibit similar economic characteristics or share other aggregation criteria. As a result, none of our operating segments are aggregated for reporting purposes. Further, as a result of the reorganization, certain reporting units have been redefined, and the composition of others has changed. In accordance with ASC 350-20, Intangibles—Goodwill and Other: Goodwill, when changes occur in the composition of reporting units, the Company is required to reallocate goodwill to the affected reporting units using a relative fair value approach and perform goodwill impairment testing for impacted reporting units both immediately before and after the reorganization. As part of the reorganization, goodwill was reallocated. The Company performed the required goodwill impairment assessments as of the date of the reorganization. The assessment indicated that the estimated fair value of each impacted reporting unit exceeded its carrying amount both immediately prior to and immediately subsequent to the reallocation of goodwill. Accordingly, no goodwill impairment was recognized. The goodwill balance as of September 30, 2025, for Marketing Services, Digital Transformation, Media & Commerce, Communications and The Marketing Cloud was $529.7 million, $308.7 million, $419.9 million, $252.9 million and $86.1 million, respectively. The new structure fairly reflects the allocation of the Company’s resources, thereby improving comparability for investors and supporting the Company’s long-term strategic objectives. The composition of these segments is as follows:
•The Marketing Services segment delivers a broad range of services across four closely related client needs: creative, research, experiential, and social media solutions designed to build and elevate brands. Capabilities include developing breakthrough brand campaigns, providing consumer insights through advanced research methodologies, creating immersive experiential marketing programs and social engagement strategies that connect brands with audiences across digital platforms. By combining creative excellence, data-driven insights, and innovative experiences, Marketing Services empowers organizations to differentiate themselves in the marketplace, drive audience engagement, and achieve measurable business results. These services employ a wide variety of artificial intelligence (AI) powered services in the delivery such as AI-powered creative production and data analysis. Brands in this segment include, but are not limited to, creative agencies 72&Sunny and Anomaly, research agencies NRG and Harris Insights, experiential agency TEAM, and social agency Crispin.
•The Digital Transformation segment designs, implements and activates modern digital ecosystems that enable brand and customer experiences through the integration of strategy, design, and technology. This segment helps clients modernize their digital infrastructure, enhance customer engagement, and accelerate enterprise transformation. Its capabilities span the delivery of digital products and experiences that connect brand storytelling with technology, including website and content development, digital campaigns, product and platform design, AI-native strategies and implementation, and Martech integration. It also provides managed services, staff augmentation, and engineering expertise across various delivery models, offering system integration, full-stack development, and ongoing platform management. Additionally, Digital Transformation connects digital ecosystems to physical experiences through innovative, technology-driven customer engagements, such as business-to-business (B2B) platforms and multimodal activations that blend physical and digital environments using augmented reality (AR), virtual reality (VR), and emerging technologies. Together, these capabilities empower organizations to transform their digital presence and
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drive sustained business growth. Brands in this segment include, but are not limited to, strategy and design agencies Code and Theory and Instrument, development and implementation agency TrueLogic, and digital activation agency Left Field Labs.
•The Media & Commerce segment delivers integrated AI-based data solutions that drive audience engagement and business growth through media buying, commerce enablement, and Customer Relationship Management (CRM) strategies. Its capabilities include planning and executing media campaigns across global platforms, leveraging data-driven approaches to optimize reach and effectiveness across first-party data, second-party data, and third-party data, and providing commerce and customer relationship management tools that connect brands with consumers throughout the purchase journey. The segment also offers specialized media platforms and translation services to support targeted communication and market expansion. By combining expertise in media strategy, commerce activation, and audience analytics, Media & Commerce empowers organizations to maximize their marketing investments and achieve measurably efficient commercial outcomes. Brands in this segment include, but are not limited to, media buying and strategy agency Assembly Global, commerce and CRM agency Gale, and media platform Ink.
•The Communications segment provides a leading edge set of solutions designed to help organizations build, protect, and enhance their reputation across diverse audiences and channels. Its capabilities include strategic communications, public relations, and advocacy services that leverage AI and data-driven insights to craft compelling narratives and influence public perception. The segment also offers expertise in targeted communications, crisis management, and stakeholder engagement, ensuring clients can respond effectively to emerging issues and opportunities. Advocacy services encompass strategic political campaign management, grassroots mobilization, and fundraising expertise that reach across the political spectrum. By combining deep industry knowledge with innovative digital approaches to media and advocacy, Communications empowers organizations to connect with key audiences, shape conversations, and achieve their strategic objectives. Brands in this segment include, but are not limited to, strategic communications agencies Allison and Consulum, and advocacy services agencies SKDK and Targeted Victory.
•The Marketing Cloud segment delivers a comprehensive suite of technology solutions for in-house marketers, combining SaaS and DaaS offerings. Its key products cover a range of areas. Advanced research tools that enable real-time customer insights through syndicated and Do It Yourself (DIY) generative AI-drafted surveys, AI-driven text analysis, and predictive analytics. Communications technology that aggregates data from millions of sources, including news, social media, print, and TV/radio broadcasts, on a daily basis to monitor, analyze, and respond to market trends. Media studio products that leverage first-party, third-party, and proprietary data to provide actionable audience insights and attribution analytics and advanced media platforms that encompass audience engagement solutions such as AR, quick response (QR) codes, and loyalty programs, all designed to collect consumer data and generate actionable insights. Together, these capabilities empower marketers to understand, engage, and influence their audiences with precision and agility. Brands in this segment include, but are not limited to, QUEST, Unicepta, Smart Assets and ARound.
The Company reports corporate expenses as “Corporate and eliminations” which consists of 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, (iv) certain other professional fees managed by the corporate office, and v) the elimination of certain intercompany services and revenue.
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|  | Three Months Ended September 30, 2025
|  | Marketing Services |  | Digital Transformation |  | Media & Commerce |  | Communications |  | The Marketing Cloud |  | Total
|  | (dollars in thousands)
Revenue (1) |  | $ | 297,195 |  |  | $ | 103,710 |  |  | $ | 174,738 |  |  | $ | 144,947 |  |  | $ | 27,187 |  |  | $ | 747,777 |
Billable costs |  | 51,101 |  |  | 8,334 |  |  | 20,581 |  |  | 48,455 |  |  | 5 |  |  | 128,476 |
Staff costs |  | 144,354 |  |  | 62,123 |  |  | 91,365 |  |  | 56,650 |  |  | 18,763 |  |  | 373,255 |
Administrative costs |  | 27,919 |  |  | 6,981 |  |  | 22,966 |  |  | 12,516 |  |  | 3,663 |  |  | 74,045 |
Unbillable and other costs * |  | 17,227 |  |  | 387 |  |  | 15,196 |  |  | 2,245 |  |  | 5,883 |  |  | 40,938 |
Adjusted EBITDA |  | 56,594 |  |  | 25,885 |  |  | 24,630 |  |  | 25,081 |  |  | (1,127) |  |  | 131,063 |
Adjusted EBITDA - Corporate and eliminations |  |  |  |  |  |  |  | (16,481) |
Total Consolidated Adjusted EBITDA |  |  |  |  |  |  |  | 114,582 |
Stock-based compensation |  |  |  |  |  |  |  | 12,646 |
Depreciation and amortization |  |  |  |  |  |  |  | 44,260 |
Deferred acquisition consideration |  |  |  |  |  |  |  | (13,348) |
Impairment and other losses |  |  |  |  |  |  |  | 466 |
Other items, net |  |  |  |  |  |  |  | 9,645 |
Operating Income |  |  |  |  |  |  |  | 60,913 |
Other income (expenses): |  |  |  |  |  |  |  |
Interest expense, net |  |  |  |  |  |  |  | (25,196) |
Foreign exchange, net |  |  |  |  |  |  |  | (366) |
Other, net |  |  |  |  |  |  |  | (2,032) |
|  |  |  |  |  |  |  |  |  |  |  | (27,594) |
Income before income taxes and equity in earnings of non-consolidated affiliates |  |  |  | 33,319 |
Income tax expense |  |  |  |  |  |  |  | 9,555 |
Income before equity in earnings of non-consolidated affiliates |  |  |  |  |  | 23,764 |
Equity in loss of non-consolidated affiliates |  |  |  |  |  | (1) |
Net income |  |  |  |  |  |  |  | 23,763 |
Net loss attributable to noncontrolling and redeemable noncontrolling interests |  |  |  | 856 |
Net income attributable to Stagwell Inc. common shareholders |  |  |  | $ | 24,619 |

(1) Total consolidated revenue of $742,998 reflects an intercompany elimination of $4,779.
*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, panels and survey costs, and also includes travel related expenses.
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|  | Nine Months Ended September 30, 2025
|  | Marketing Services |  | Digital Transformation |  | Media & Commerce |  | Communications |  | The Marketing Cloud |  | Total
|  | (dollars in thousands)
Revenue (1) |  | $ | 839,457 |  |  | $ | 292,188 |  |  | $ | 479,648 |  |  | $ | 420,215 |  |  | $ | 78,785 |  |  | $ | 2,110,293 |
Billable costs |  | 124,590 |  |  | 17,210 |  |  | 47,793 |  |  | 135,109 |  |  | 16 |  |  | 324,718 |
Staff costs |  | 421,226 |  |  | 184,886 |  |  | 269,318 |  |  | 172,273 |  |  | 53,683 |  |  | 1,101,386 |
Administrative costs |  | 86,433 |  |  | 19,599 |  |  | 67,097 |  |  | 37,042 |  |  | 13,531 |  |  | 223,702 |
Unbillable and other costs * |  | 60,230 |  |  | 1,151 |  |  | 43,833 |  |  | 6,910 |  |  | 17,178 |  |  | 129,302 |
Adjusted EBITDA |  | 146,978 |  |  | 69,342 |  |  | 51,607 |  |  | 68,881 |  |  | (5,623) |  |  | 331,185 |
Adjusted EBITDA - Corporate and eliminations |  |  |  |  |  | (43,166) |
Total Consolidated Adjusted EBITDA |  |  |  |  |  | 288,019 |
Stock-based compensation |  |  |  |  |  | 44,143 |
Depreciation and amortization |  |  |  |  |  | 127,635 |
Deferred acquisition consideration |  |  |  |  |  | (9,911) |
Impairment and other losses |  |  |  |  |  |  |  | 466 |
Other items, net |  |  |  |  |  |  |  | 23,316 |
Operating Income |  |  |  |  |  |  |  | 102,370 |
Other income (expenses): |  |  |  |  |  |  |  |
Interest expense, net |  |  |  |  |  |  |  | (72,007) |
Foreign exchange, net |  |  |  |  |  |  |  | (484) |
Other, net |  |  |  |  |  |  |  | (2,143) |
|  |  |  |  |  |  |  |  |  |  |  | (74,634) |
Income before income taxes and equity in earnings of non-consolidated affiliates |  |  |  | 27,736 |
Income tax expense |  |  |  | 13,950 |
Income before equity in earnings of non-consolidated affiliates |  |  |  | 13,786 |
Equity in income of non-consolidated affiliates |  |  |  | 18 |
Net income |  |  |  | 13,804 |
Net loss attributable to noncontrolling and redeemable noncontrolling interests |  |  |  | 2,637 |
Net income attributable to Stagwell Inc. common shareholders |  |  |  | $ | 16,441 |

(1) Total consolidated revenue of $2,101,556 reflects an intercompany elimination of $8,737.
*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, panels and survey costs, and also includes travel related expenses.
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|  | Three Months Ended September 30, 2024
|  | Marketing Services |  | Digital Transformation |  | Media & Commerce |  | Communications |  | The Marketing Cloud |  | Total
|  | (dollars in thousands)
Revenue (1) |  | $ | 267,675 |  |  | $ | 88,292 |  |  | $ | 159,595 |  |  | $ | 184,665 |  |  | $ | 11,443 |  |  | $ | 711,670 |
Billable costs |  | 42,264 |  |  | 3,022 |  |  | 14,037 |  |  | 72,102 |  |  | — |  |  | 131,425 |
Staff costs |  | 139,694 |  |  | 56,384 |  |  | 88,390 |  |  | 55,518 |  |  | 8,887 |  |  | 348,873 |
Administrative costs |  | 26,825 |  |  | 5,036 |  |  | 20,171 |  |  | 11,668 |  |  | 3,505 |  |  | 67,205 |
Unbillable and other costs * |  | 15,435 |  |  | 368 |  |  | 16,357 |  |  | 2,848 |  |  | 2,481 |  |  | 37,489 |
Adjusted EBITDA |  | 43,457 |  |  | 23,482 |  |  | 20,640 |  |  | 42,529 |  |  | (3,430) |  |  | 126,678 |
Adjusted EBITDA - Corporate and eliminations |  |  |  |  |  | (15,509) |
Total Consolidated Adjusted EBITDA |  |  |  |  |  | 111,169 |
Stock-based compensation |  |  |  |  |  | 16,935 |
Depreciation and amortization |  |  |  |  |  | 36,044 |
Deferred acquisition consideration |  |  |  |  |  | 560 |
Other items, net |  |  |  |  |  | 15,851 |
Operating Income |  |  |  |  |  | 41,779 |
Other income (expenses): |  |  |  |  |  |  |  |
Interest expense, net |  |  |  |  |  | (23,781) |
Foreign exchange, net |  |  |  |  |  | 1,312 |
Other, net |  |  |  |  |  | 249 |
|  |  |  |  |  |  |  |  |  |  |  | (22,220) |
Income before income taxes and equity in earnings of non-consolidated affiliates |  |  |  | 19,559 |
Income tax expense |  |  |  | 5,691 |
Income before equity in earnings of non-consolidated affiliates |  |  |  | 13,868 |
Equity in loss of non-consolidated affiliates |  |  |  | (4) |
Net income |  |  |  | 13,864 |
Net income attributable to noncontrolling and redeemable noncontrolling interests |  |  |  | (10,593) |
Net income attributable to Stagwell Inc. common shareholders |  |  |  | $ | 3,271 |

(1) Total consolidated revenue of $711,281 reflects an intercompany elimination of $389.
*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, panels and survey costs, and also includes travel related expenses.
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|  | Nine Months Ended September 30, 2024
|  | Marketing Services |  | Digital Transformation |  | Media & Commerce |  | Communications |  | The Marketing Cloud |  | Total
|  | (dollars in thousands)
Revenue (1) |  | $ | 782,371 |  |  | $ | 248,976 |  |  | $ | 521,963 |  |  | $ | 473,957 |  |  | $ | 25,823 |  |  | $ | 2,053,090 |
Billable costs |  | 124,196 |  |  | 9,363 |  |  | 82,180 |  |  | 170,067 |  |  | — |  |  | 385,806 |
Staff costs |  | 407,948 |  |  | 166,965 |  |  | 265,576 |  |  | 162,715 |  |  | 21,024 |  |  | 1,024,228 |
Administrative costs |  | 74,293 |  |  | 15,707 |  |  | 61,509 |  |  | 33,689 |  |  | 9,659 |  |  | 194,857 |
Unbillable and other costs * |  | 53,176 |  |  | 788 |  |  | 46,244 |  |  | 7,958 |  |  | 5,547 |  |  | 113,713 |
Adjusted EBITDA |  | 122,758 |  |  | 56,153 |  |  | 66,454 |  |  | 99,528 |  |  | (10,407) |  |  | 334,486 |
Adjusted EBITDA - Corporate and eliminations |  |  |  |  |  | (46,898) |
Total Consolidated Adjusted EBITDA |  |  |  |  |  | 287,588 |
Stock-based compensation |  |  |  |  |  | 38,926 |
Depreciation and amortization |  |  |  |  |  | 112,881 |
Deferred acquisition consideration |  |  |  |  |  | 7,950 |
Impairment and other losses |  |  |  |  |  | 1,715 |
Other items, net |  |  |  |  |  | 36,576 |
Operating Income |  |  |  |  |  | 89,540 |
Other income (expenses): |  |  |  |  |  |
Interest expense, net |  |  |  |  |  | (68,279) |
Foreign exchange, net |  |  |  |  |  | (2,301) |
Other, net |  |  |  |  |  | (825) |
|  |  |  |  |  |  |  |  |  |  |  | (71,405) |
Income before income taxes and equity in earnings of non-consolidated affiliates |  |  |  | 18,135 |
Income tax expense |  |  |  | 9,441 |
Income before equity in earnings of non-consolidated affiliates |  |  |  | 8,694 |
Equity in income of non-consolidated affiliates |  |  |  | 503 |
Net income |  |  |  | 9,197 |
Net loss attributable to noncontrolling and redeemable noncontrolling interests |  |  |  | (10,173) |
Net loss attributable to Stagwell Inc. common shareholders |  |  |  | $ | (976) |

(1) Total consolidated revenue of $2,052,508 reflects an intercompany elimination of $582.
*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, panels and survey costs, and also includes travel related expenses.
The Company’s long-lived assets (i.e., Right-of-use lease assets-operating leases and Fixed asset, net) was $282.3 million ($212.9 million in the United States and $69.4 million in all other countries) as of September 30, 2025 and $292.1 million ($231.9 million in the United States and $60.2 million in all other countries) as of December 31, 2024.
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, 2025 and 2024.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Th e following discussion and analysis are based on and should be read in conjunction with our Unaudited Consolidated Financial Statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the period ended September 30, 2025 (the “Form 10-Q”). The following discussion and analysis contain forward-looking statements and should be read in conjunction with the disclosures and information contained and referenced under the captions “Forward-Looking Statements” and “Risk Factors” in this Form 10-Q. The following discussion and analysis also include a discussion of certain non-GAAP financial measures. A description of the non-GAAP financial measures discussed in this section and reconciliations to the comparable GAAP measures are below.
In this section, the terms “Stagwell,” “we,” “us,” “our” and the “Company” refer to Stagwell Inc. and its direct and indirect subsidiaries. References to a “fiscal year” mean the Company’s year commencing on January 1 of that year and ending December 31 of that year (e.g., fiscal 2025 means the period beginning January 1, 2025, and ending December 31, 2025).
Executive Summary
Overview
Stagwell conducts its business through its networks, which provide marketing and business solutions that realize the potential of combining data and creativity. Stagwell’s strategy is to build, grow, and acquire market-leading businesses that deliver the modern suite of services that marketers need to thrive in a rapidly evolving business environment. We believe Stagwell’s differentiation lies in its creative roots and proven entrepreneurial leaders, which together with innovations in technology and data, bring transformational marketing, activation, communications and strategic consulting services to clients. Stagwell leverages its range of services in an integrated manner, offering strategic, creative and innovative solutions that are technologically forward and media-agnostic. The Company’s strategy is intended to challenge the industry status quo, realize returns on investment, and drive transformative growth and business performance for its clients and stakeholders.
Stagwell manages its business by monitoring several financial and non-financial performance indicators. The key indicators that we focus on are revenue, operating expenses, capital expenditures, net income (loss), net income (loss) attributable to Stagwell Inc. common shareholders, net income (loss) per share and the non-GAAP financial measures described below. Revenue growth is analyzed by reviewing a mix of measurements, including (i) growth by major geographic location, (ii) growth from existing clients and the addition of new clients, (iii) growth by principal capability, (iv) growth from currency changes, and (v) growth from acquisitions. In addition to monitoring the foregoing financial indicators, the Company assesses and monitors several non-financial performance indicators relating to the business performance of our networks. These indicators may include a network’s recent new client win/loss record; the depth and scope of a pipeline of potential new client account activity; the overall quality of the services provided to clients; and the relative strength of the network’s next generation team that is in place as part of a potential succession plan to succeed the current senior executive team.
Recent Developments
On October 30, 2025, the Company sold a Brand, which was included in the Marketing Services segment, for $12.6 million in cash resulting in an estimated pre-tax loss of approximately $3 million. The divestiture did not represent a strategic shift that would have a major effect on the Company’s consolidated results of operations, and therefore its results of operations were not reported as discontinued operations.
Significant Factors Affecting our Business and Results of Operations
The most significant factors affecting our business and results of operations include national, regional, and local economic conditions, our clients’ profitability, mergers and acquisitions of our clients, changes in top management of our clients and our ability to retain and attract key employees. New business wins and client losses occur due to a variety of factors. We believe the two most significant factors are (i) our clients’ desire to change marketing communication firms, and (ii) the digital and data-driven products that our portfolio of marketing services firms, which we refer to as “Brands,” offer. A client may choose to change marketing communication firms for several reasons, such as a change in leadership where new management wants to retain a Brand that it may have previously worked with. In addition, if the client is merged or acquired by another company, the marketing communication firm is often changed. Clients also change firms as a result of the firm’s failure to meet marketing performance targets or other expectations in client service delivery.
Seasonality
Historically, we typically generate the highest quarterly revenue during the fourth quarter of each year. In addition, within our Communications segment, client concentration increases during election years due to the cyclical nature of our advocacy Brands. The highest volumes of retail related consumer marketing increase with the back-to-school season through the end of the holiday season.
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Non-GAAP Financial Measures
The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”). In addition, the Company has included non-GAAP financial measures and ratios, which management uses to operate the business, which it believes provide useful supplemental information to both management and readers of this report in making period-to-period comparisons in measuring the financial performance and financial condition of the Company. These measures do not have a standardized meaning prescribed by GAAP and should not be construed as an alternative to other titled measures determined in accordance with GAAP. The non-GAAP financial measures included are “net revenue,” “organic net revenue growth (decline),” “Adjusted EBITDA,” and “Adjusted Diluted EPS.”
“Net revenue” refers to revenue excluding billable costs. The Company believes billable costs and their fluctuations are not indicative of the operating performance of its underlying business.
“Organic net revenue growth (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. Beginning with the quarter ended September 30, 2025, we calculate the 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. Previously, we calculated the impact of an acquisition as follows: (a) for an entity acquired during the current year, we presented the entity’s prior year net revenue for the same period during which we owned it in the current year as impact of the acquisition in the current year; and (b) for an entity acquired in the prior year, we presented the entity’s prior year net revenue for the period during which we did not own the entity in the prior year as impact of the acquisition in the current year. We believe that this change in the method of calculating the impact of an acquisition results in a measurement of organic net revenue growth (decline) that better reflects the effect of our management of an acquired entity by including the revenue of the acquired entity in such measurement after we have owned it for 12 months. 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.
“Adjusted EBITDA” is defined as Net income (loss) attributable to Stagwell Inc. common shareholders excluding non-operating income or expense to achieve operating income (loss), plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, impairment and other losses, and other items. Other items primarily includes restructuring, certain system implementation and acquisition-related expenses. Adjusted EBITDA for our reportable segments is reconciled to Operating Income (Loss), as Net Income (Loss) is not a relevant reportable segment financial metric.
“Adjusted Diluted EPS” is defined as (i) Net income (loss) attributable to Stagwell Inc. common shareholders, plus net income (loss) attributable to Class C shareholders, excluding the impact of amortization expense, impairment and other losses, stock-based compensation, deferred acquisition consideration adjustments, discrete tax items, and other items (as defined above), based on total consolidated amounts, then allocated to Stagwell Inc. common shareholders and Class C shareholders, based on their respective income allocation percentage using a normalized effective income tax rate 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 included because they were anti-dilutive.
All amounts are in U.S. dollars unless otherwise stated. Amounts reported in millions herein are computed based on the amounts in thousands. As a result, the sum of the components, and related calculations, reported in millions may not equal the total amounts due to rounding.
The percentage changes included in the tables in Item 2 herein that are not considered meaningful are presented as “NM.”
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Segments
The Company’s Chief operating decision maker 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.
During the three months ended September 30, 2025, the Company reorganized its organizational structure to better reflect how the Company manages its business and goes to market, to simplify reporting and to provide clearer visibility into performance trends across its service offerings. The reorganization also seeks to enhance consistency in the Company’s portfolio of services and improve the transparency and comparability of financial information provided to investors.
As a result of the reorganization, the Company now has five operating and reportable segments: “Marketing Services,” “Digital Transformation,” “Media & Commerce,” “Communications,” and “The Marketing Cloud.” Periods presented prior to the third quarter of 2025 have been recast to reflect the reclassification of Brands within the reportable segments. Based on the segment analysis, management concluded that the operating segments do not exhibit similar economic characteristics or share other aggregation criteria. As a result, none of our operating segments are aggregated for reporting purposes. Further, as a result of the reorganization, certain reporting units have been redefined, and the composition of others has changed. In accordance with ASC 350-20, Intangibles—Goodwill and Other: Goodwill, when changes occur in the composition of reporting units, the Company is required to reallocate goodwill to the affected reporting units using a relative fair value approach and perform goodwill impairment testing for impacted reporting units both immediately before and after the reorganization. As part of the reorganization, goodwill was reallocated. The Company performed the required goodwill impairment assessments as of the date of the reorganization. The assessment indicated that the estimated fair value of each impacted reporting unit exceeded its carrying amount both immediately prior to and immediately subsequent to the reallocation of goodwill. Accordingly, no goodwill impairment was recognized. The goodwill balance as of September 30, 2025, for Marketing Services, Digital Transformation, Media & Commerce, Communications and The Marketing Cloud was $529.7 million, $308.7 million, $419.9 million, $252.9 million and $86.1 million, respectively. The new structure fairly reflects the allocation of the Company’s resources, thereby improving comparability for investors and supporting the Company’s long-term strategic objectives. The composition of these segments is as follows:
•The Marketing Services segment delivers a broad range of services across four closely related client needs: creative, research, experiential, and social media solutions designed to build and elevate brands. Capabilities include developing breakthrough brand campaigns, providing consumer insights through advanced research methodologies, creating immersive experiential marketing programs and social engagement strategies that connect brands with audiences across digital platforms. By combining creative excellence, data-driven insights, and innovative experiences, Marketing Services empowers organizations to differentiate themselves in the marketplace, drive audience engagement, and achieve measurable business results. These services employ a wide variety of artificial intelligence (AI) powered services in the delivery such as AI-powered creative production and data analysis. Brands in this segment include, but are not limited to, creative agencies 72&Sunny and Anomaly, research agencies NRG and Harris Insights, experiential agency TEAM, and social agency Crispin.
•The Digital Transformation segment designs, implements and activates modern digital ecosystems that enable brand and customer experiences through the integration of strategy, design, and technology. This segment helps clients modernize their digital infrastructure, enhance customer engagement, and accelerate enterprise transformation. Its capabilities span the delivery of digital products and experiences that connect brand storytelling with technology, including website and content development, digital campaigns, product and platform design, AI-native strategies and implementation, and Martech integration. It also provides managed services, staff augmentation, and engineering expertise across various delivery models, offering system integration, full-stack development, and ongoing platform management. Additionally, Digital Transformation connects digital ecosystems to physical experiences through innovative, technology-driven customer engagements, such as business-to-business (B2B) platforms and multimodal activations that blend physical and digital environments using augmented reality (AR), virtual reality (VR), and emerging technologies. Together, these capabilities empower organizations to transform their digital presence and drive sustained business growth. Brands in this segment include, but are not limited to, strategy and design agencies Code and Theory and Instrument, development and implementation agency TrueLogic, and digital activation agency Left Field Labs.
•The Media & Commerce segment delivers integrated AI-based data solutions that drive audience engagement and business growth through media buying, commerce enablement, and Customer Relationship Management (CRM) strategies. Its capabilities include planning and executing media campaigns across global platforms, leveraging data-driven approaches to optimize reach and effectiveness across first-party data, second-party data, and third-party data, and providing commerce and customer relationship management tools that connect brands with consumers throughout the purchase journey. The segment also offers specialized media platforms and translation services to support targeted communication and market expansion. By combining expertise in media strategy, commerce activation, and audience
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analytics, Media & Commerce empowers organizations to maximize their marketing investments and achieve measurably efficient commercial outcomes. Brands in this segment include, but are not limited to, media buying and strategy agency Assembly Global, commerce and CRM agency Gale, and media platform Ink.
•The Communications segment provides a leading edge set of solutions designed to help organizations build, protect, and enhance their reputation across diverse audiences and channels. Its capabilities include strategic communications, public relations, and advocacy services that leverage AI and data-driven insights to craft compelling narratives and influence public perception. The segment also offers expertise in targeted communications, crisis management, and stakeholder engagement, ensuring clients can respond effectively to emerging issues and opportunities. Advocacy services encompass strategic political campaign management, grassroots mobilization, and fundraising expertise that reach across the political spectrum. By combining deep industry knowledge with innovative digital approaches to media and advocacy, Communications empowers organizations to connect with key audiences, shape conversations, and achieve their strategic objectives. Brands in this segment include, but are not limited to, strategic communications agencies Allison and Consulum, and advocacy services agencies SKDK and Targeted Victory.
•The Marketing Cloud segment delivers a comprehensive suite of technology solutions for in-house marketers, combining SaaS and DaaS offerings. Its key products cover a range of areas. Advanced research tools that enable real-time customer insights through syndicated and Do It Yourself (DIY) generative AI-drafted surveys, AI-driven text analysis, and predictive analytics. Communications technology that aggregates data from millions of sources, including news, social media, print, and TV/radio broadcasts, on a daily basis to monitor, analyze, and respond to market trends. Media studio products that leverage first-party, third-party, and proprietary data to provide actionable audience insights and attribution analytics and advanced media platforms that encompass audience engagement solutions such as AR, quick response (QR) codes, and loyalty programs, all designed to collect consumer data and generate actionable insights. Together, these capabilities empower marketers to understand, engage, and influence their audiences with precision and agility. Brands in this segment include, but are not limited to, QUEST, Unicepta, Smart Assets and ARound.
The Company reports corporate expenses as “Corporate and eliminations” which consists of 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, (iv) certain other professional fees managed by the corporate office, and v) the elimination of certain intercompany services and revenue.
The following discussion focuses on the operating performance of the Company for the three and nine months ended September 30, 2025 and 2024 and the financial condition of the Company as of September 30, 2025.
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Results of Operations:

| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
| (dollars in thousands)
Revenue: |  |  |  |  |  |  |
Marketing Services | $ | 297,195 |  |  | $ | 267,675 |  |  | $ | 839,457 |  |  | $ | 782,371 |
Digital Transformation | 103,710 |  |  | 88,292 |  |  | 292,188 |  |  | 248,976 |
Media & Commerce | 174,738 |  |  | 159,595 |  |  | 479,648 |  |  | 521,963 |
Communications | 144,947 |  |  | 184,665 |  |  | 420,215 |  |  | 473,957 |
The Marketing Cloud | 27,187 |  |  | 11,443 |  |  | 78,785 |  |  | 25,823 |
Eliminations | (4,779) |  |  | (389) |  |  | (8,737) |  |  | (582) |
Total Revenue | $ | 742,998 |  |  | $ | 711,281 |  |  | $ | 2,101,556 |  |  | $ | 2,052,508 |
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) |
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) |  |  | 18 |  |  | 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) |
Reconciliation to Adjusted EBITDA: |  |  |  |  |  |  |
Net income (loss) attributable to Stagwell Inc. common shareholders | $ | 24,619 |  |  | $ | 3,271 |  |  | $ | 16,441 |  |  | $ | (976) |
Non-operating items (1) | 36,294 |  |  | 38,508 |  |  | 85,929 |  |  | 90,516 |
Operating income | 60,913 |  |  | 41,779 |  |  | 102,370 |  |  | 89,540 |
Depreciation and amortization | 44,260 |  |  | 36,044 |  |  | 127,635 |  |  | 112,881 |
Impairment and other losses | 466 |  |  | — |  |  | 466 |  |  | 1,715 |
Stock-based compensation | 12,646 |  |  | 16,935 |  |  | 44,143 |  |  | 38,926 |
Deferred acquisition consideration | (13,348) |  |  | 560 |  |  | (9,911) |  |  | 7,950 |
Other items, net | 9,645 |  |  | 15,851 |  |  | 23,316 |  |  | 36,576 |
Adjusted EBITDA | $ | 114,582 |  |  | $ | 111,169 |  |  | $ | 288,019 |  |  | $ | 287,588 |
(1) Non-operating items includes items within the Statements of Operations, below Operating Income, and above Net income (loss) attributable to Stagwell Inc. common shareholders.

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THREE MONTHS ENDED SEPTEMBER 30, 2025 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2024
Consolidated Results of Operations
The components of operating results for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 were as follows:

|  | Three Months Ended September 30, |
|  | 2025 |  | 2024 |  | Change |
|  | (dollars in thousands) |
|  |  |  |  |  | $ |  | % |
Revenue |  | $ | 742,998 |  |  | $ | 711,281 |  |  | $ | 31,717 |  |  | 4.5 | % |
Operating Expenses |  |  |  |  |  |  |  |  |
Cost of services |  | 470,937 |  |  | 457,018 |  |  | 13,919 |  |  | 3.0 | % |
Office and general expenses |  | 166,422 |  |  | 176,440 |  |  | (10,018) |  |  | (5.7) | % |
Depreciation and amortization |  | 44,260 |  |  | 36,044 |  |  | 8,216 |  |  | 22.8 | % |
Impairment and other losses |  | 466 |  |  | — |  |  | 466 |  |  | 100.0 | % |
|  | $ | 682,085 |  |  | $ | 669,502 |  |  | $ | 12,583 |  |  | 1.9 | % |
Operating Income |  | $ | 60,913 |  |  | $ | 41,779 |  |  | $ | 19,134 |  |  | 45.8 | % |

| Three Months Ended September 30, |
| 2025 |  | 2024 |  | Change |
| (dollars in thousands) |
|  |  |  |  | $ |  | % |
Net Revenue | $ | 614,522 |  |  | $ | 580,193 |  |  | $ | 34,329 |  |  | 5.9 | % |
Billable costs | 128,476 |  |  | 131,088 |  |  | (2,612) |  |  | (2.0) | % |
Revenue | 742,998 |  | 711,281 |  | 31,717 |  |  | 4.5 | % |
Billable costs | 128,476 |  |  | 131,088 |  |  | (2,612) |  |  | (2.0) | % |
Staff costs | 387,210 |  |  | 361,979 |  |  | 25,231 |  |  | 7.0 | % |
Administrative costs | 71,792 |  |  | 69,556 |  |  | 2,236 |  |  | 3.2 | % |
Unbillable and other costs, net | 40,938 |  |  | 37,489 |  |  | 3,449 |  |  | 9.2 | % |
Adjusted EBITDA | 114,582 |  |  | 111,169 |  |  | 3,413 |  |  | 3.1 | % |
Stock-based compensation | 12,646 |  |  | 16,935 |  |  | (4,289) |  |  | (25.3) | % |
Depreciation and amortization | 44,260 |  |  | 36,044 |  |  | 8,216 |  |  | 22.8 | % |
Deferred acquisition consideration | (13,348) |  |  | 560 |  |  | (13,908) |  |  | NM |
Impairment and other losses | 466 |  |  | — |  |  | 466 |  |  | 100.0 | % |
Other items, net | 9,645 |  |  | 15,851 |  |  | (6,206) |  |  | (39.2) | % |
Operating Income (1) | $ | 60,913 |  |  | $ | 41,779 |  |  | $ | 19,134 |  |  | 45.8 | % |
(1) See the Results of Operations section above for a reconciliation of Operating Income to Net income (loss) attributable to Stagwell Inc. common shareholders. |

Revenue
Revenue for the three months ended September 30, 2025 was $743.0 million, compared to $711.3 million for the three months ended September 30, 2024, an increase of $31.7 million.
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Net Revenue
The components of the fluctuations in net revenue for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 were as follows:

|  |  | Net Revenue - Components of Change |  |  |  |  |  | Change
| Three Months Ended September 30, 2024 |  | Foreign Currency |  | Net Acquisitions (Divestitures) |  | Organic |  | Total Change |  | Three Months Ended September 30, 2025 |  | Organic |  | Total
| (dollars in thousands) |  |  |  |
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) |  |  | (4,727) |  |  | (4,779) |  |  | NM |  | NM
| $ | 580,193 |  |  | $ | 2,629 |  |  | $ | 33,966 |  |  | $ | (2,266) |  |  | $ | 34,329 |  |  | $ | 614,522 |  |  | (0.4) | % |  | 5.9 | %
Component % change |  |  | 0.5% |  | 5.9% |  | (0.4)% |  | 5.9% |  |  |  |  |  |

For the three months ended September 30, 2025 organic net revenue decreased $2.3 million, or 0.4%. The decrease was primarily attributable to lower advocacy services following the 2024 election season and a decrease in client spending in the consumer products sectors, partially offset by new wins and increased spending by clients in the retail sector. The increase in net acquisitions (divestitures) was impacted by the acquisitions of JetFuel Studio LLC and Powered by JetFuel LLC (“Jetfuel”), Create Group Holding Limited (“Create”), ADK Global (“ADK”), Consulum (Cayman) Limited (“Consulum”), L.D.R.S. Group Ltd. (“Leaders”), and UNICEPTA Holding GmbH (“Unicepta”).
The geographic mix in net revenues for the three months ended September 30, 2025 and 2024 is as follows:

| Three Months Ended September 30,
| 2025 |  | 2024
| (dollars in thousands)
United States | $ | 474,343 |  |  | $ | 469,092 |
United Kingdom | 40,488 |  |  | 39,854 |
Other | 99,691 |  |  | 71,247 |
Total | $ | 614,522 |  |  | $ | 580,193 |

Operating Income
Operating Income for the three months ended September 30, 2025 was $60.9 million, compared to $41.8 million for the three months ended September 30, 2024, representing an increase of $19.1 million. The change in Operating Income was primarily attributable to an increase in Net revenue of $34.3 million and a decrease in Office and general expenses, partially offset by an increase in Cost of services excluding Billable costs, and Depreciation and amortization.
Cost of services increased by $13.9 million. Excluding the decline in Billable costs of $2.6 million, Cost of services increased $16.5 million, primarily attributable to higher staff costs due to the inclusion of costs from acquired entities.
The decrease in Office and general expenses of $10.0 million was primarily attributable to a decrease in deferred acquisition consideration expense, partially offset by an increase in staff costs due to the inclusion of costs from acquired entities and increase in technology related expenses.
Stock-based compensation decreased by $4.3 million, primarily due to an increase in the fair value of profit interest awards in the third quarter of 2024, partially offset by an increase in the fair value and number of awards expensed compared to last year.
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Deferred acquisition consideration decreased by $13.9 million, primarily attributable to a reduction in the fair value of the deferred acquisition consideration liability associated with certain Brands.
Depreciation and amortization increased by $8.2 million, primarily attributable to the Company’s acquisition of businesses.
Interest Expense, Net
Interest expense, net for the three months ended September 30, 2025 was $25.2 million, compared to $23.8 million for the three months ended September 30, 2024, an increase of $1.4 million, primarily attributable to higher levels of debt outstanding under the Credit Agreement (as defined and discussed in Note 8 of the Notes to the Unaudited Consolidated Financial Statements included herein), partially offset by a lower average interest rate.
Foreign Exchange, Net
The foreign exchange loss for the three months ended September 30, 2025 was $0.4 million, compared to a gain of $1.3 million for the three months ended September 30, 2024, primarily attributable to the movement in the British Pound and Euro.
Income Tax Expense
The Company had an income tax expense for the three months ended September 30, 2025 of $9.6 million (on a pre-tax income of $33.3 million resulting in an effective tax rate of 28.7%) compared to income tax expense of $5.7 million (on pre-tax income of $19.6 million resulting in an effective tax rate of 29.1%) for the three months ended September 30, 2024.
The difference in the effective tax rate of 28.7% in the three months ended September 30, 2025, as compared to 29.1% in the three months ended September 30, 2024, was primarily due to a reduction in interest related to uncertain tax positions and a reduction in shortfall of deductions for share based compensation expense vested during the period, offset by an increase in current losses subject to valuation allowance.
Noncontrolling and Redeemable Noncontrolling Interests
The effect of noncontrolling and redeemable noncontrolling interests for the three months ended September 30, 2025 was loss of $0.9 million, compared to income of $10.6 million for the three months ended September 30, 2024. The amounts are driven by the mix of income and loss derived from entities not entirely owned by the Company. Additionally, the change was driven by the Class C Exchange (as defined and discussed in Note 9 of the Notes included herein) during the second quarter of 2025.
Net Income (Loss) Attributable to Stagwell Inc. Common Shareholders
As a result of the foregoing, net income attributable to Stagwell Inc. common shareholders for the three months ended September 30, 2025 was $24.6 million, compared to net income of $3.3 million for the three months ended September 30, 2024.
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Earnings Per Share
Diluted EPS and Adjusted Diluted EPS for the three months ended September 30, 2025 were as follows:

|  | GAAP |  | Adjustments (1) |  | Non-GAAP
|  | (amounts in thousands, except per share amounts)
Net income attributable to Stagwell Inc. common shareholders and adjusted net income |  | $ | 24,619 |  |  | $ | 38,147 |  |  | $ | 62,766 |
Diluted - Weighted average number of common 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) Adjusted Diluted EPS is defined within the Non-GAAP Financial Measures section of the Executive Summary.
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Diluted EPS and Adjusted Diluted EPS for the three months ended September 30, 2024 were as follows:

|  | GAAP |  | Adjustments (1) |  | Non-GAAP
|  | (amounts in thousands, except per share amounts)
Net income attributable to Stagwell Inc. common shareholders |  | $ | 3,271 |  |  | $ | 19,762 |  |  | $ | 23,033 |
Net income attributable to Class C shareholders |  | — |  |  | 36,060 |  |  | 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 common Class C shares outstanding |  | — |  |  | 151,649 |  |  | 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 - add-backs |  |  |  | $ | 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) Adjusted Diluted EPS is defined within the Non-GAAP Financial Measures section of the Executive Summary.
Adjusted EBITDA
Adjusted EBITDA for the three months ended September 30, 2025 was $114.6 million, compared to $111.2 million for the three months ended September 30, 2024, representing an increase of $3.4 million, primarily driven by an increase in Net revenue, partially offset by an increase in Staff costs due to the inclusion of costs from acquired entities, as discussed above.
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Marketing Services
The components of operating results for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 were as follows:

|  | Three Months Ended September 30,
|  | 2025 |  | 2024 |  | Change
|  | (dollars in thousands)
|  |  |  |  |  | $ |  | %
Revenue |  | $ | 297,195 |  |  | $ | 267,675 |  |  | $ | 29,520 |  |  | 11.0 | %
Operating Expenses |  |  |  |  |  |  |  |
Cost of services |  | 191,902 |  |  | 179,668 |  |  | 12,234 |  |  | 6.8 | %
Office and general expenses |  | 54,786 |  |  | 53,447 |  |  | 1,339 |  |  | 2.5 | %
Depreciation and amortization |  | 13,012 |  |  | 13,572 |  |  | (560) |  |  | (4.1) | %
|  | $ | 259,700 |  |  | $ | 246,687 |  |  | $ | 13,013 |  |  | 5.3 | %
Operating Income |  | $ | 37,495 |  |  | $ | 20,988 |  |  | $ | 16,507 |  |  | 78.6 | %

| Three Months Ended September 30,
| 2025 |  | 2024 |  | Change
| (dollars in thousands)
|  |  |  |  | $ |  | %
Net Revenue | $ | 246,094 |  |  | $ | 225,411 |  |  | $ | 20,683 |  |  | 9.2 | %
Billable costs | 51,101 |  |  | 42,264 |  |  | 8,837 |  |  | 20.9 | %
Revenue | 297,195 |  |  | 267,675 |  |  | 29,520 |  |  | 11.0 | %
Billable costs | 51,101 |  |  | 42,264 |  |  | 8,837 |  |  | 20.9 | %
Staff costs | 144,354 |  |  | 139,694 |  |  | 4,660 |  |  | 3.3 | %
Administrative costs | 27,919 |  |  | 26,825 |  |  | 1,094 |  |  | 4.1 | %
Unbillable and other costs, net | 17,227 |  |  | 15,435 |  |  | 1,792 |  |  | 11.6 | %
Adjusted EBITDA | 56,594 |  |  | 43,457 |  |  | 13,137 |  |  | 30.2 | %
Stock-based compensation | 4,346 |  |  | 6,001 |  |  | (1,655) |  |  | (27.6) | %
Depreciation and amortization | 13,012 |  |  | 13,572 |  |  | (560) |  |  | (4.1) | %
Deferred acquisition consideration | (500) |  |  | (151) |  |  | (349) |  |  | 231.1 | %
Other items, net | 2,241 |  |  | 3,047 |  |  | (806) |  |  | (26.5) | %
Operating Income | $ | 37,495 |  |  | $ | 20,988 |  |  | $ | 16,507 |  |  | 78.6 | %

`
Revenue
Revenue for the three months ended September 30, 2025 was $297.2 million, compared to $267.7 million for the three months ended September 30, 2024, an increase of $29.5 million.
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Net Revenue
The components of the fluctuations in net revenue for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 were as follows:

|  |  | Net Revenue - Components of Change |  |  |  |  |  | Change
| Three Months Ended September 30, 2024 |  | Foreign Currency |  | Net Acquisitions (Divestitures) |  | Organic |  | Total Change |  | Three Months Ended September 30, 2025 |  | Organic |  | Total
| (dollars in thousands) |  |  |  |
Marketing Services | $ | 225,411 |  |  | $ | 989 |  |  | $ | 4,970 |  |  | $ | 14,724 |  |  | $ | 20,683 |  |  | $ | 246,094 |  |  | 6.5% |  | 9.2%
Component % change |  |  | 0.4 | % |  | 2.2 | % |  | 6.5 | % |  | 9.2 | % |  |  |  |  |  |

The increase in organic net revenue was primarily attributable to new client wins and increased spending in the retail and financials sectors, partially offset by lower spending due to budget cuts by large clients in the consumer products sectors. The increase in net acquisitions (divestitures) was primarily driven by the acquisition of Jetfuel.
Operating Income
Operating Income for the three months ended September 30, 2025 was $37.5 million, compared to $21.0 million for the three months ended September 30, 2024, representing an increase of $16.5 million. The increase in Operating Income was primarily attributable to an increase in Net revenue of $20.7 million, partially offset by an increase in Cost of services excluding Billable costs. Cost of services increased $12.2 million. Excluding the decline in Billable costs of $8.8 million, Cost of services increased $3.4 million, primarily attributable to higher staff costs.
Adjusted EBITDA increased by $13.1 million, primarily driven by an increase in Net revenue, as discussed above.
Digital Transformation
The components of operating results for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 were as follows:

|  | Three Months Ended September 30, |
|  | 2025 |  | 2024 |  | Change |
|  | (dollars in thousands) |
|  |  |  |  |  | $ |  | % |
Revenue |  | $ | 103,710 |  |  | $ | 88,292 |  |  | $ | 15,418 |  |  | 17.5 | % |
Operating Expenses |  |  |  |  |  |  |  |  |
Cost of services |  | 62,601 |  |  | 51,862 |  |  | 10,739 |  |  | 20.7 | % |
Office and general expenses |  | 18,464 |  |  | 17,339 |  |  | 1,125 |  |  | 6.5 | % |
Depreciation and amortization |  | 5,932 |  |  | 5,536 |  |  | 396 |  |  | 7.2 | % |
|  | $ | 86,997 |  |  | $ | 74,737 |  |  | $ | 12,260 |  |  | 16.4 | % |
Operating Income |  | $ | 16,713 |  |  | $ | 13,555 |  |  | $ | 3,158 |  |  | 23.3 | % |

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| Three Months Ended September 30, |
| 2025 |  | 2024 |  | Change |
| (dollars in thousands) |
|  |  |  |  | $ |  | % |
Net Revenue | $ | 95,376 |  |  | $ | 85,270 |  |  | $ | 10,106 |  |  | 11.9 | % |
Billable costs | 8,334 |  |  | 3,022 |  |  | 5,312 |  |  | 175.8 | % |
Revenue | 103,710 |  |  | 88,292 |  |  | 15,418 |  |  | 17.5 | % |
Billable costs | 8,334 |  |  | 3,022 |  |  | 5,312 |  |  | 175.8 | % |
Staff costs | 62,123 |  |  | 56,384 |  |  | 5,739 |  |  | 10.2 | % |
Administrative costs | 6,981 |  |  | 5,036 |  |  | 1,945 |  |  | 38.6 | % |
Unbillable and other costs, net | 387 |  |  | 368 |  |  | 19 |  |  | 5.2 | % |
Adjusted EBITDA | 25,885 |  |  | 23,482 |  |  | 2,403 |  |  | 10.2 | % |
Stock-based compensation | 934 |  |  | 2,617 |  |  | (1,683) |  |  | (64.3) | % |
Depreciation and amortization | 5,932 |  |  | 5,536 |  |  | 396 |  |  | 7.2 | % |
Deferred acquisition consideration | 1,874 |  |  | 1,265 |  |  | 609 |  |  | 48.1 | % |
Other items, net | 432 |  |  | 509 |  |  | (77) |  |  | (15.1) | % |
Operating Income | $ | 16,713 |  |  | $ | 13,555 |  |  | $ | 3,158 |  |  | 23.3 | % |

Revenue
Revenue for the three months ended September 30, 2025 was $103.7 million, compared to $88.3 million for the three months ended September 30, 2024, an increase of $15.4 million.
Net Revenue
The components of the fluctuations in net revenue for the three months ended September 30, 2025, compared to the three months ended September 30, 2024 were as follows:

|  |  | Net Revenue - Components of Change |  |  |  |  |  | Change
| Three Months Ended September 30, 2024 |  | Foreign Currency |  | Net Acquisitions (Divestitures) |  | Organic |  | Total Change |  | Three Months Ended September 30, 2025 |  | Organic |  | Total
| (dollars in thousands) |  |  |  |
Digital Transformation | $ | 85,270 |  |  | $ | (99) |  |  | $ | 4,356 |  |  | $ | 5,849 |  |  | $ | 10,106 |  |  | $ | 95,376 |  |  | 6.9% |  | 11.9%
Component % change |  |  | (0.1) | % |  | 5.1 | % |  | 6.9 | % |  | 11.9 | % |  |  |  |  |  |

The increase in organic net revenue was primarily attributable to new client wins and increased spending in the communications and consumer products sectors. The increase in net acquisitions (divestitures) was primarily driven by the acquisition of Create.
Operating Income
Operating Income for the three months ended September 30, 2025 was $16.7 million, compared to $13.6 million for the three months ended September 30, 2024, representing an increase of $3.2 million. The increase in Operating Income was primarily attributable to an increase in Net revenue of $10.1 million, partially offset by an increase in Cost of services excluding Billable costs. Cost of services increased $10.7 million. Excluding the decline in Billable costs of $5.3 million, Cost of services increased $5.4 million, primarily attributable to higher staff costs and the inclusion of costs from acquired entities.
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Media & Commerce
The components of operating results for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 were as follows:

|  | Three Months Ended September 30, |
|  | 2025 |  | 2024 |  | Change |
|  | (dollars in thousands) |
|  |  |  |  |  | $ |  | % |
Revenue |  | $ | 174,738 |  |  | $ | 159,595 |  |  | $ | 15,143 |  |  | 9.5 | % |
Operating Expenses |  |  |  |  |  |  |  |  |
Cost of services |  | 104,600 |  |  | 95,950 |  |  | 8,650 |  |  | 9.0 | % |
Office and general expenses |  | 51,706 |  |  | 45,237 |  |  | 6,469 |  |  | 14.3 | % |
Depreciation and amortization |  | 7,332 |  |  | 6,509 |  |  | 823 |  |  | 12.6 | % |
|  | $ | 163,638 |  |  | $ | 147,696 |  |  | $ | 15,942 |  |  | 10.8 | % |
Operating Income |  | $ | 11,100 |  |  | $ | 11,899 |  |  | $ | (799) |  |  | (6.7) | % |

| Three Months Ended September 30,
| 2025 |  | 2024 |  | Change
| (dollars in thousands)
|  |  |  |  | $ |  | %
Net Revenue | $ | 154,157 |  |  | $ | 145,558 |  |  | $ | 8,599 |  |  | 5.9 | %
Billable costs | 20,581 |  |  | 14,037 |  |  | 6,544 |  |  | 46.6 | %
Revenue | 174,738 |  |  | 159,595 |  |  | 15,143 |  |  | 9.5 | %
Billable costs | 20,581 |  |  | 14,037 |  |  | 6,544 |  |  | 46.6 | %
Staff costs | 91,365 |  |  | 88,390 |  |  | 2,975 |  |  | 3.4 | %
Administrative costs | 22,966 |  |  | 20,171 |  |  | 2,795 |  |  | 13.9 | %
Unbillable and other costs, net | 15,196 |  |  | 16,357 |  |  | (1,161) |  |  | (7.1) | %
Adjusted EBITDA | 24,630 |  |  | 20,640 |  |  | 3,990 |  |  | 19.3 | %
Stock-based compensation | 1,005 |  |  | 1,359 |  |  | (354) |  |  | (26.0) | %
Depreciation and amortization | 7,332 |  |  | 6,509 |  |  | 823 |  |  | 12.6 | %
Deferred acquisition consideration | 1,413 |  |  | (6,948) |  |  | 8,361 |  |  | NM
Other items, net | 3,780 |  |  | 7,821 |  |  | (4,041) |  |  | (51.7) | %
Operating Income | $ | 11,100 |  |  | $ | 11,899 |  |  | $ | (799) |  |  | (6.7) | %

Revenue
Revenue for the three months ended September 30, 2025 was $174.7 million, compared to $159.6 million for the three months ended September 30, 2024, an increase of $15.1 million.
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Net Revenue
The components of the fluctuations in net revenue for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 were as follows:

|  |  | Net Revenue - Components of Change |  |  |  |  |  | Change
| Three Months Ended September 30, 2024 |  | Foreign Currency |  | Net Acquisitions (Divestitures) |  | Organic |  | Total Change |  | Three Months Ended September 30, 2025 |  | Organic |  | Total
| (dollars in thousands) |  |  |  |
Media & Commerce | $ | 145,558 |  |  | $ | 1,109 |  |  | $ | 2,782 |  |  | $ | 4,708 |  |  | $ | 8,599 |  |  | $ | 154,157 |  |  | 3.2% |  | 5.9%
Component % change |  |  | 0.8 | % |  | 1.9 | % |  | 3.2 | % |  | 5.9 | % |  |  |  |  |  |

The increase in organic net revenue was primarily attributable to new client wins in the financials and technology sectors, partially offset by lower spending due to budget cuts by large clients in the food and beverage and retail sectors. The increase in net acquisitions (divestitures) was primarily driven by the acquisition of ADK.
Operating Income
Operating Income for the three months ended September 30, 2025 was $11.1 million, compared to $11.9 million for the three months ended September 30, 2024, representing a decrease of $0.8 million. The change in Operating Income was primarily attributable to an increase in Net revenue of $8.6 million more than offset by an increase in Cost of services excluding Billable costs and Office and general expenses. Cost of services increased $8.7 million. Excluding the decline in Billable costs of $6.5 million, Cost of services increased $2.2 million, primarily attributable to higher staff costs due to the inclusion of costs from acquired entities.
The increase in Office and general expenses of $6.5 million was primarily attributable to an increase in Deferred acquisition consideration.
Deferred acquisition consideration increased $8.4 million, primarily as a result of reduction in expenses in the third quarter of 2024 due to decrease in the fair value of a certain Brand.
Adjusted EBITDA increased $4.0 million, primarily due to an increase in Net revenue partially offset by an increase in expenses, as discussed above.
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Communications
The components of operating results for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 were as follows:

|  | Three Months Ended September 30,
|  | 2025 |  | 2024 |  | Change
|  | (dollars in thousands)
|  |  |  |  |  | $ |  | %
Revenue |  | $ | 144,947 |  |  | $ | 184,665 |  |  | $ | (39,718) |  |  | (21.5) | %
Operating Expenses |  |  |  |  |  |  |  |
Cost of services |  | 99,977 |  |  | 124,354 |  |  | (24,377) |  |  | (19.6) | %
Office and general expenses |  | 19,391 |  |  | 29,804 |  |  | (10,413) |  |  | (34.9) | %
Depreciation and amortization |  | 6,363 |  |  | 4,473 |  |  | 1,890 |  |  | 42.3 | %
Impairment and other losses |  | 222 |  |  | — |  |  | 222 |  |  | 100.0 | %
|  | $ | 125,953 |  |  | $ | 158,631 |  |  | $ | (32,678) |  |  | (20.6) | %
Operating Income |  | $ | 18,994 |  |  | $ | 26,034 |  |  | $ | (7,040) |  |  | (27.0) | %

| Three Months Ended September 30,
| 2025 |  | 2024 |  | Change
| (dollars in thousands)
|  |  |  |  | $ |  | %
Net Revenue | $ | 96,492 |  |  | $ | 112,563 |  |  | $ | (16,071) |  |  | (14.3) | %
Billable costs | 48,455 |  |  | 72,102 |  |  | (23,647) |  |  | (32.8) | %
Revenue | 144,947 |  |  | 184,665 |  |  | (39,718) |  |  | (21.5) | %
Billable costs | 48,455 |  |  | 72,102 |  |  | (23,647) |  |  | (32.8) | %
Staff costs | 56,650 |  |  | 55,518 |  |  | 1,132 |  |  | 2.0 | %
Administrative costs | 12,516 |  |  | 11,668 |  |  | 848 |  |  | 7.3 | %
Unbillable and other costs, net | 2,245 |  |  | 2,848 |  |  | (603) |  |  | (21.2) | %
Adjusted EBITDA | 25,081 |  |  | 42,529 |  |  | (17,448) |  |  | (41.0) | %
Stock-based compensation | 1,594 |  |  | 3,394 |  |  | (1,800) |  |  | (53.0) | %
Depreciation and amortization | 6,363 |  |  | 4,473 |  |  | 1,890 |  |  | 42.3 | %
Deferred acquisition consideration | (3,716) |  |  | 6,778 |  |  | (10,494) |  |  | (154.8) | %
Impairment and other losses | 222 |  |  | — |  |  | 222 |  |  | 100.0 | %
Other items, net | 1,624 |  |  | 1,850 |  |  | (226) |  |  | (12.2) | %
Operating Income | $ | 18,994 |  |  | $ | 26,034 |  |  | $ | (7,040) |  |  | (27.0) | %

Revenue
Revenue for the three months ended September 30, 2025 was $144.9 million, compared to $184.7 million for the three months ended September 30, 2024, a decrease of $39.7 million.
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Net Revenue
The components of the fluctuations in net revenue for the three months ended September 30, 2025, compared to the three months ended September 30, 2024 were as follows:

|  |  | Net Revenue - Components of Change |  |  |  |  |  | Change
| Three Months Ended September 30, 2024 |  | Foreign Currency |  | Net Acquisitions (Divestitures) |  | Organic |  | Total Change |  | Three Months Ended September 30, 2025 |  | Organic |  | Total
| (dollars in thousands) |  |  |  |
Communications | $ | 112,563 |  |  | $ | 214 |  |  | $ | 7,291 |  |  | $ | (23,576) |  |  | $ | (16,071) |  |  | $ | 96,492 |  |  | (20.9) | % |  | (14.3) | %
Component % change |  |  | 0.2 | % |  | 6.5 | % |  | (20.9) | % |  | (14.3) | % |  |  |  |  |  |

The decrease in organic net revenue was primarily attributable to decreased spending, primarily due to lower advocacy services as compared to higher spending in 2024 associated with the 2024 elections, and decreased spending in the consumer products sector due to client losses and budget cuts. The increase in net acquisitions (divestitures) was primarily driven by the acquisition of Consulum.
Operating Income
Operating Income for the three months ended September 30, 2025 was $19.0 million, compared to $26.0 million for the three months ended September 30, 2024, representing a decrease of $7.0 million. The decrease in Operating Income was primarily attributable to a decrease in Net Revenue of $16.1 million partially offset by a decrease in Office and general expenses. Cost of services decreased by $24.4 million. Excluding the decline in Billable costs of $23.6 million, Cost of services decreased by $0.8 million.
The decrease in Office and general expenses of $10.4 million was primarily attributable to a decrease in Deferred acquisition consideration.
Deferred acquisition consideration decreased $10.5 million, primarily as a result of a decrease in the fair value of a certain Brand.
Adjusted EBITDA decreased $17.4 million, primarily due to a decrease in Net revenue, as discussed above.
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The Marketing Cloud
The components of operating results for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 were as follows:

|  | Three Months Ended September 30,
|  | 2025 |  | 2024 |  | Change
|  | (dollars in thousands)
|  |  |  |  |  | $ |  | %
Revenue |  | $ | 27,187 |  |  | $ | 11,443 |  |  | $ | 15,744 |  |  | 137.6 | %
Operating Expenses |  |  |  |  |  |  |  |
Cost of services |  | 14,136 |  |  | 5,554 |  |  | 8,582 |  |  | 154.5 | %
Office and general expenses |  | 3,155 |  |  | 9,341 |  |  | (6,186) |  |  | (66.2) | %
Depreciation and amortization |  | 6,455 |  |  | 2,679 |  |  | 3,776 |  |  | 140.9 | %
Impairment and other losses |  | 244 |  |  | — |  |  | 244 |  |  | 100.0 | %
|  | $ | 23,990 |  |  | $ | 17,574 |  |  | $ | 6,416 |  |  | 36.5 | %
Operating Income (Loss) |  | $ | 3,197 |  |  | $ | (6,131) |  |  | $ | 9,328 |  |  | (152.1) | %

| Three Months Ended September 30,
| 2025 |  | 2024 |  | Change
| (dollars in thousands)
|  |  |  |  | $ |  | %
Net Revenue | $ | 27,182 |  |  | $ | 11,443 |  |  | $ | 15,739 |  |  | 137.5 | %
Billable costs | 5 |  |  | — |  |  | 5 |  |  | 100.0 | %
Revenue | 27,187 |  |  | 11,443 |  |  | 15,744 |  |  | 137.6 | %
Billable costs | 5 |  |  | — |  |  | 5 |  |  | 100.0 | %
Staff costs | 18,763 |  |  | 8,887 |  |  | 9,876 |  |  | 111.1 | %
Administrative costs | 3,663 |  |  | 3,505 |  |  | 158 |  |  | 4.5 | %
Unbillable and other costs, net | 5,883 |  |  | 2,481 |  |  | 3,402 |  |  | 137.1 | %
Adjusted EBITDA | (1,127) |  |  | (3,430) |  |  | 2,303 |  |  | (67.1) | %
Stock-based compensation | 200 |  |  | 363 |  |  | (163) |  |  | (44.9) | %
Depreciation and amortization | 6,455 |  |  | 2,679 |  |  | 3,776 |  |  | 140.9 | %
Deferred acquisition consideration | (12,419) |  |  | (384) |  |  | (12,035) |  |  | NM
Impairment and other losses | 244 |  |  | — |  |  | 244 |  |  | 100.0 | %
Other items, net | 1,196 |  |  | 43 |  |  | 1,153 |  |  | NM
Operating Income (Loss) | $ | 3,197 |  |  | $ | (6,131) |  |  | $ | 9,328 |  |  | (152.1) | %

Revenue
Revenue for the three months ended September 30, 2025 was $27.2 million, compared to $11.4 million for the three months ended September 30, 2024, an increase of $15.7 million.
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Net Revenue
The components of the fluctuations in net revenue for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 were as follows:

|  |  | Net Revenue - Components of Change |  |  |  |  |  | Change
| Three Months Ended September 30, 2024 |  | Foreign Currency |  | Net Acquisitions (Divestitures) |  | Organic |  | Total Change |  | Three Months Ended September 30, 2025 |  | Organic |  | Total
| (dollars in thousands) |  |  |  |
The Marketing Cloud | $ | 11,443 |  |  | $ | 416 |  |  | $ | 14,567 |  |  | $ | 756 |  |  | $ | 15,739 |  |  | $ | 27,182 |  |  | 6.6 | % |  | NM
Component % change |  |  | 3.6 | % |  | NM |  | 6.6 | % |  | NM |  |  |  |  |  |

The increase in net acquisitions (divestitures) was primarily driven by the acquisitions of Leaders and Unicepta.
Operating Income (Loss)
Operating Income for the three months ended September 30, 2025 was $3.2 million, compared to a loss of $6.1 million for the three months ended September 30, 2024. The increase in Operating Income was primarily attributable to an increase in Net revenue and a decrease in Office and general expenses, partially offset by an increase in Costs of services.
The increase in Cost of services of $8.6 million was primarily attributable to higher staff costs and unbillable costs primarily due to the inclusion of costs from acquired entities.
The decrease in Office and general expenses of $6.2 million was primarily attributable to a decrease in Deferred acquisition consideration, partially offset by higher staff costs and the inclusion of costs from acquired entities.
Deferred acquisition consideration decreased $12.0 million, primarily as a result of a decrease in the fair value of a certain Brand.
Corporate
The components of operating results for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 were as follows:

| Three Months Ended September 30, |
| 2025 |  | 2024 |  | Change |
| (dollars in thousands) |
|  |  |  |  | $ |  | % |
Staff costs | $ | 16,362 |  |  | $ | 13,160 |  |  | $ | 3,202 |  |  | 24.3 | % |
Administrative costs | 47 |  |  | 2,351 |  |  | (2,304) |  |  | (98.0) | % |
Adjusted EBITDA | (16,409) |  |  | (15,511) |  |  | (898) |  |  | 5.8 | % |
Stock-based compensation | 4,567 |  |  | 3,201 |  |  | 1,366 |  |  | 42.7 | % |
Depreciation and amortization | 5,166 |  |  | 3,275 |  |  | 1,891 |  |  | 57.7 | % |
Other items, net | 372 |  |  | 2,581 |  |  | (2,209) |  |  | (85.6) | % |
Operating Loss | $ | (26,514) |  |  | $ | (24,568) |  |  | $ | (1,946) |  |  | 7.9 | % |

Operating Loss for the three months ended September 30, 2025 was $26.5 million, compared to $24.6 million for the three months ended September 30, 2024, representing an increase of $1.9 million. The increase in Operating Loss was primarily attributable to higher Staff costs, Stock-based compensation, and Depreciation and amortization, partially offset by a decrease in Administrative costs.
Staff costs increased by $3.2 million, primarily due to higher insurance claims.
Administrative costs decreased $2.3 million, primarily due to lower professional and legal fees due to a decrease in the number of acquisitions.
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NINE MONTHS ENDED SEPTEMBER 30, 2025 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30, 2024
Consolidated Results of Operations
The components of operating results for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 were as follows:

|  | Nine Months Ended September 30, |
|  | 2025 | 2024 | Change |
|  | (dollars in thousands) |
|  |  |  |  |  | $ |  | % |
Revenue |  | $ | 2,101,556 |  |  | $ | 2,052,508 |  |  | $ | 49,048 |  |  | 2.4 | % |
Operating Expenses |  |  |  |  |  |  |  |  |
Cost of services |  | 1,342,240 |  |  | 1,340,456 |  |  | 1,784 |  |  | 0.1 | % |
Office and general expenses |  | 528,845 |  |  | 507,916 |  |  | 20,929 |  |  | 4.1 | % |
Depreciation and amortization |  | 127,635 |  |  | 112,881 |  |  | 14,754 |  |  | 13.1 | % |
Impairment and other losses |  | 466 |  |  | 1,715 |  |  | (1,249) |  |  | (72.8) | % |
|  | $ | 1,999,186 |  |  | $ | 1,962,968 |  |  | $ | 36,218 |  |  | 1.8 | % |
Operating Income |  | $ | 102,370 |  |  | $ | 89,540 |  |  | $ | 12,830 |  |  | 14.3 | % |

| Nine Months Ended September 30, |
| 2025 |  | 2024 |  | Change |
| (dollars in thousands) |
|  |  |  |  | $ |  | % |
Net Revenue | $ | 1,776,838 |  |  | $ | 1,667,039 |  |  | $ | 109,799 |  |  | 6.6 | % |
Billable costs | 324,718 |  |  | 385,469 |  |  | (60,751) |  |  | (15.8) | % |
Revenue | 2,101,556 |  | 2,052,508 |  | 49,048 |  |  | 2.4 | % |
Billable costs | 324,718 |  |  | 385,469 |  |  | (60,751) |  |  | (15.8) | % |
Staff costs | 1,136,742 |  |  | 1,059,485 |  |  | 77,257 |  |  | 7.3 | % |
Administrative costs | 222,775 |  |  | 206,253 |  |  | 16,522 |  |  | 8.0 | % |
Unbillable and other costs, net | 129,302 |  |  | 113,713 |  |  | 15,589 |  |  | 13.7 | % |
Adjusted EBITDA | 288,019 |  |  | 287,588 |  |  | 431 |  |  | 0.1 | % |
Stock-based compensation | 44,143 |  |  | 38,926 |  |  | 5,217 |  |  | 13.4 | % |
Depreciation and amortization | 127,635 |  |  | 112,881 |  |  | 14,754 |  |  | 13.1 | % |
Deferred acquisition consideration | (9,911) |  |  | 7,950 |  |  | (17,861) |  |  | (224.7) | % |
Impairment and other losses | 466 |  |  | 1,715 |  |  | (1,249) |  |  | (72.8) | % |
Other items, net | 23,316 |  |  | 36,576 |  |  | (13,260) |  |  | (36.3) | % |
Operating Income (1) | $ | 102,370 |  |  | $ | 89,540 |  |  | $ | 12,830 |  |  | 14.3 | % |
(1) See the Results of Operations section above for a reconciliation of Operating Income to Net income (loss) attributable to Stagwell Inc. common shareholders. |

Revenue
Revenue for the nine months ended September 30, 2025 was $2,101.6 million, compared to $2,052.5 million for the nine months ended September 30, 2024, an increase of $49.0 million.
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Net Revenue
The components of the fluctuations in net revenue for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 were as follows:

|  |  | Net Revenue - Components of Change |  |  |  |  |  | Change |  |
| Nine Months Ended September 30, 2024 |  | Foreign Currency |  | Net Acquisitions (Divestitures) |  | Organic |  | Total Change |  | Nine Months Ended September 30, 2025 |  | Organic |  | Total |  |  |  |
| (dollars in thousands) |  |  |  |  |  |  |  |
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) | % |  | NM |  |  |  |
Eliminations | (245) |  |  | — |  |  | — |  |  | (8,492) |  |  | (8,492) |  |  | (8,737) |  |  | NM |  | NM |  |  |  |
| $ | 1,667,039 |  |  | $ | 3,466 |  |  | $ | 96,312 |  |  | $ | 10,021 |  |  | $ | 109,799 |  |  | $ | 1,776,838 |  |  | 0.6 | % |  | 6.6 | % |  |  |  |
Component % change |  |  | 0.2 | % |  | 5.8 | % |  | 0.6 | % |  | 6.6 | % |  |  |  |  |  |  |  |  |  |

For the nine months ended September 30, 2025, organic net revenue increased by $10.0 million, or 0.6%. The increase was primarily attributable to new wins and increased spending by clients in the technology, retail, automotive and financials sectors. This increase was partially offset by losses and a decrease in client spending due to budget cuts in the consumer products sector and lower advocacy services as compared to higher spending in 2024 associated with the 2024 elections. The increase in net acquisitions (divestitures) was impacted by the acquisitions of Jetfuel, Create, ADK, Consulum, Leaders, and Unicepta.
The geographic mix in Net revenue for the nine months ended September 30, 2025 and 2024 was as follows:

| Nine Months Ended September 30,
| 2025 |  | 2024
| (dollars in thousands)
United States | $ | 1,379,268 |  |  |  | $ | 1,350,022 |  |
United Kingdom | 113,346 |  |  |  | 116,040 |  |
Other | 284,224 |  |  |  | 200,977 |  |
Total | $ | 1,776,838 |  |  |  | $ | 1,667,039 |  |

Operating Income
Operating Income for the nine months ended September 30, 2025, was $102.4 million, compared to $89.5 million for the nine months ended September 30, 2024, representing an increase of $12.8 million. The increase in Operating Income was primarily attributable to an increase in Net revenue of $109.8 million partially offset by an increase in Cost of services, excluding Billable costs, Office and general expenses, and Depreciation and amortization.
Cost of services increased by $1.8 million. Excluding the decline in Billable costs of $60.8 million, Cost of services increased $62.6 million, primarily attributable to the inclusion of expenses of acquired entities.
Office and general expenses increased by $20.9 million, primarily attributable to higher software license fees and staff costs and the inclusion of expenses of acquired entities. This was partially offset by a decrease in deferred acquisition consideration expense and a decrease in occupancy costs primarily attributable to a lease termination during the first quarter of 2025 that resulted in a gain on termination of $3.5 million and the expiration of office leases in 2024.
Stock-based compensation increased by $5.2 million, primarily due to an increase in the fair value of profit interest awards and an increase in the number of awards expensed, compared to last year, partially offset by a reversal of expense in the second quarter of 2024 associated with stock-based performance awards for which the performance targets were not met.
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Deferred acquisition consideration decreased by $17.9 million, primarily attributable to a reduction in the fair value of the deferred acquisition consideration liability associated with certain Brands.
Depreciation and amortization increased by $14.8 million, primarily attributable to the Company’s acquisition of businesses.
Interest Expense, Net
Interest expense, net for the nine months ended September 30, 2025 was $72.0 million, compared to $68.3 million for the nine months ended September 30, 2024, an increase of $3.7 million, primarily attributable to higher levels of debt outstanding under the Credit Agreement (as defined and discussed in Note 8 of the Notes to the Unaudited Consolidated Financial Statements included herein), partially offset by a lower average interest rate.
Foreign Exchange, Net
The foreign exchange loss for the nine months ended September 30, 2025, was $0.5 million, compared to a loss of $2.3 million for the nine months ended September 30, 2024, primarily attributable to the movement in the British Pound and Euro.
In come Tax Expense
The Company had an income tax expense for the nine months ended September 30, 2025 of $14.0 million (on a pre-tax income of $27.7 million resulting in an effective tax rate of 50.3%) compared to income tax expense of $9.4 million (on pre-tax income of $18.1 million resulting in an effective tax rate of 52.1%) for the nine months ended September 30, 2024.
The difference in the effective tax rate of 50.3% in the nine months ended September 30, 2025, as compared to 52.1% in the nine months ended September 30, 2024, was primarily due to a reduction in interest related to uncertain tax positions and a reduction in shortfall of deductions for share based compensation expense vested during the period, offset by a decrease in the benefit of the disregarded entity structure due to the full exchange in April 2025.
Noncontrolling and Redeemable Noncontrolling Interests
The effect of noncontrolling and redeemable noncontrolling interests for the nine months ended September 30, 2025 was a loss of $2.6 million, compared to an income of $10.2 million for the nine months ended September 30, 2024. The amounts are driven by the mix of income and loss derived from entities not entirely owned by the Company. Additionally, the change was driven by the Class C Exchange during the second quarter of 2025.
Net Income (Loss) Attributable to Stagwell Inc. Common Shareholders
As a result of the foregoing, net income attributable to Stagwell Inc. common shareholders for the nine months ended September 30, 2025 was $16.4 million, compared to a net loss of $1.0 million for the nine months ended September 30, 2024.
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Earnings Per Share
Diluted EPS and Adjusted Diluted EPS for the nine months ended September 30, 2025 were as follows:

|  | GAAP |  | Adjustments |  | Non-GAAP
|  | (amounts in thousands, except per share amounts)
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) Adjusted Diluted EPS is defined within the Non-GAAP Financial Measures section of the Executive Summary.
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Diluted EPS and Adjusted Diluted EPS for the nine months ended September 30, 2024 were as follows:

|  | GAAP |  | Adjustments |  | Non-GAAP
|  | (amounts in thousands, except per share amounts)
Net income (loss) attributable to Stagwell Inc. common shareholders |  | $ | (976) |  |  | $ | 58,177 |  |  | $ | 57,201 |
Net income attributable to Class C shareholders |  | — |  |  | 83,442 |  |  | 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 |  |  | 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 loss attributable to Class C shareholders |  |  |  | 5,850 |  |  |
|  |  |  | $ | 141,619 |  |  |
Allocation of adjustments to Net income (loss) |  |  |  |  |  |
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) Adjusted Diluted EPS is defined within the Non-GAAP Financial Measures section of the Executive Summary.
Adjusted EBITDA
Adjusted EBITDA for the nine months ended September 30, 2025 was $288.0 million, compared to $287.6 million for the nine months ended September 30, 2024, representing an increase of $0.4 million, primarily driven by an increase in Net revenue, partially offset by an increase in expenses, as discussed above.
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Marketing Services
The components of operating results for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 were as follows:

|  | Nine Months Ended September 30, |
|  | 2025 |  | 2024 |  | Change |
|  | (dollars in thousands) |
|  |  |  |  |  | $ |  | % |
Revenue |  | $ | 839,457 |  |  | $ | 782,371 |  |  | $ | 57,086 |  |  | 7.3 | % |
Operating Expenses |  |  |  |  |  |  |  |  |
Cost of services |  | 547,744 |  |  | 530,492 |  |  | 17,252 |  |  | 3.3 | % |
Office and general expenses |  | 158,316 |  |  | 156,495 |  |  | 1,821 |  |  | 1.2 | % |
Depreciation and amortization |  | 40,141 |  |  | 40,426 |  |  | (285) |  |  | (0.7) | % |
Impairment and other losses |  | — |  |  | 1,500 |  |  | (1,500) |  |  | (100.0) | % |
|  | $ | 746,201 |  |  | $ | 728,913 |  |  | $ | 17,288 |  |  | 2.4 | % |
Operating Income |  | $ | 93,256 |  |  | $ | 53,458 |  |  | $ | 39,798 |  |  | 74.4 | % |

| Nine Months Ended September 30,
| 2025 |  | 2024 |  | Change
| (dollars in thousands)
|  |  |  |  | $ |  | %
Net Revenue | $ | 714,867 |  |  | $ | 658,175 |  |  | $ | 56,692 |  |  | 8.6 | %
Billable costs | 124,590 |  |  | 124,196 |  |  | 394 |  |  | 0.3 | %
Revenue | 839,457 |  |  | 782,371 |  |  | 57,086 |  |  | 7.3 | %
Billable costs | 124,590 |  |  | 124,196 |  |  | 394 |  |  | 0.3 | %
Staff costs | 421,226 |  |  | 407,948 |  |  | 13,278 |  |  | 3.3 | %
Administrative costs | 86,433 |  |  | 74,293 |  |  | 12,140 |  |  | 16.3 | %
Unbillable and other costs, net | 60,230 |  |  | 53,176 |  |  | 7,054 |  |  | 13.3 | %
Adjusted EBITDA | 146,978 |  |  | 122,758 |  |  | 24,220 |  |  | 19.7 | %
Stock-based compensation | 15,069 |  |  | 15,002 |  |  | 67 |  |  | 0.4 | %
Depreciation and amortization | 40,141 |  |  | 40,426 |  |  | (285) |  |  | (0.7) | %
Deferred acquisition consideration | (4,784) |  |  | 2,000 |  |  | (6,784) |  |  | NM
Impairment and other losses | — |  |  | 1,500 |  |  | (1,500) |  |  | (100.0) | %
Other items, net | 3,296 |  |  | 10,372 |  |  | (7,076) |  |  | (68.2) | %
Operating Income | $ | 93,256 |  |  | $ | 53,458 |  |  | $ | 39,798 |  |  | 74.4 | %

Revenue
Revenue for the nine months ended September 30, 2025 was $839.5 million, compared to $782.4 million for the nine months ended September 30, 2024, an increase of $57.1 million.
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Net Revenue
The components of the fluctuations in net revenue for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 were as follows:

|  |  | Net Revenue - Components of Change |  |  |  |  |  | Change
| Nine Months Ended September 30, 2024 |  | Foreign Currency |  | Net Acquisitions (Divestitures) |  | Organic |  | Total Change |  | Nine Months Ended September 30, 2025 |  | Organic |  | Total
| (dollars in thousands) |  |  |  |
Marketing Services | $ | 658,175 |  |  | $ | 1,473 |  |  | $ | 2,916 |  |  | $ | 52,303 |  |  | $ | 56,692 |  |  | $ | 714,867 |  |  | 7.9 | % |  | 8.6 | %
Component % change |  |  | 0.2 | % |  | 0.4 | % |  | 7.9 | % |  | 8.6 | % |  |  |  |  |  |

The increase in organic net revenue was primarily attributable to new client wins and higher spending in the technology, retail, automotive, and financials sectors. This increase was partially offset by losses and decrease in client spending due to budget cuts in the consumer products sector. The increase in net acquisitions (divestitures) was primarily driven by the acquisition of Jetfuel.
Operating Income
Operating Income for the nine months ended September 30, 2025, was $93.3 million, compared to $53.5 million for the nine months ended September 30, 2024, representing an increase of $39.8 million. The increase in Operating Income was primarily attributable to an increase in Net revenue, partially offset by higher Cost of services.
The increase in Cost of services of $17.3 million was primarily attributable to higher staff costs due to growth in revenue and inclusion of costs from acquired entities.
Deferred acquisition consideration decreased $6.8 million, primarily attributable to a reduction in the fair value of the deferred acquisition consideration liability associated with certain Brands.
Other items, net decreased $7.1 million, primarily attributable to a lease termination during the first quarter of 2025 resulting in a gain on termination of $3.5 million and a decrease in severance of $1.5 million.
Adjusted EBITDA increased by $24.2 million, primarily driven by higher Net revenue, partially offset by an increase in Cost of services, as discussed above.
Digital Transformation
The components of operating results for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 were as follows:

|  | Nine Months Ended September 30, |
|  | 2025 |  | 2024 |  | Change |
|  | (dollars in thousands) |
|  |  |  |  |  | $ |  | % |
Revenue |  | $ | 292,188 |  |  | $ | 248,976 |  |  | $ | 43,212 |  |  | 17.4 | % |
Operating Expenses |  |  |  |  |  |  |  |  |
Cost of services |  | 177,397 |  |  | 154,641 |  |  | 22,756 |  |  | 14.7 | % |
Office and general expenses |  | 57,752 |  |  | 52,863 |  |  | 4,889 |  |  | 9.2 | % |
Depreciation and amortization |  | 17,250 |  |  | 16,813 |  |  | 437 |  |  | 2.6 | % |
|  | $ | 252,399 |  |  | $ | 224,317 |  |  | $ | 28,082 |  |  | 12.5 | % |
Operating Income |  | $ | 39,789 |  |  | $ | 24,659 |  |  | $ | 15,130 |  |  | 61.4 | % |

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| Nine Months Ended September 30,
| 2025 |  | 2024 |  | Change
| (dollars in thousands)
|  |  |  |  | $ |  | %
Net Revenue | $ | 274,978 |  |  | $ | 239,613 |  |  | $ | 35,365 |  |  | 14.8 | %
Billable costs | 17,210 |  |  | 9,363 |  |  | 7,847 |  |  | 83.8 | %
Revenue | 292,188 |  |  | 248,976 |  |  | 43,212 |  |  | 17.4 | %
Billable costs | 17,210 |  |  | 9,363 |  |  | 7,847 |  |  | 83.8 | %
Staff costs | 184,886 |  |  | 166,965 |  |  | 17,921 |  |  | 10.7 | %
Administrative costs | 19,599 |  |  | 15,707 |  |  | 3,892 |  |  | 24.8 | %
Unbillable and other costs, net | 1,151 |  |  | 788 |  |  | 363 |  |  | 46.1 | %
Adjusted EBITDA | 69,342 |  |  | 56,153 |  |  | 13,189 |  |  | 23.5 | %
Stock-based compensation | 3,081 |  |  | 8,102 |  |  | (5,021) |  |  | (62.0) | %
Depreciation and amortization | 17,250 |  |  | 16,813 |  |  | 437 |  |  | 2.6 | %
Deferred acquisition consideration | 7,729 |  |  | 3,690 |  |  | 4,039 |  |  | 109.5 | %
Other items, net | 1,493 |  |  | 2,889 |  |  | (1,396) |  |  | (48.3) | %
Operating Income | $ | 39,789 |  |  | $ | 24,659 |  |  | $ | 15,130 |  |  | 61.4 | %

Revenue
Revenue for the nine months ended September 30, 2025 was $292.2 million, compared to $249.0 million for the nine months ended September 30, 2024, an increase of $43.2 million.
Net Revenue
The components of the fluctuations in net revenue for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 were as follows:

|  |  | Net Revenue - Components of Change |  |  |  |  |  | Change
| Nine Months Ended September 30, 2024 |  | Foreign Currency |  | Net Acquisitions (Divestitures) |  | Organic |  | Total Change |  | Nine Months Ended September 30, 2025 |  | Organic |  | Total
| (dollars in thousands) |  |  |  |
Digital Transformation | $ | 239,613 |  |  | $ | (275) |  |  | $ | 8,196 |  |  | $ | 27,444 |  |  | $ | 35,365 |  |  | $ | 274,978 |  |  | 11.5 | % |  | 14.8 | %
Component % change |  |  | (0.1) | % |  | 3.4 | % |  | 11.5 | % |  | 14.8 | % |  |  |  |  |  |

The increase in organic net revenue was primarily attributable to new client wins and higher spending in the technology and communications sectors. The increase in net acquisitions (divestitures) was primarily driven by the acquisition of Create.
Operating Income
Operating Income for the nine months ended September 30, 2025 was $39.8 million, compared to $24.7 million for the nine months ended September 30, 2024, representing an increase of $15.1 million. The increase in Operating Income was primarily attributable to an increase in Net revenue of $35.4 million, partially offset by an increase in Cost of services excluding Billable costs. Cost of services increased $22.8 million. Excluding the increase in Billable costs of $7.8 million, Cost of services increased $15.0 million, primarily due to higher staff costs as well as the inclusion of costs from acquired entities.
Deferred acquisition consideration increased $4.0 million, primarily attributable to an increase in the fair value of the deferred acquisition consideration liability associated with a certain Brand.
Adjusted EBITDA increased by $13.2 million, primarily driven by an increase in Operating Income, as discussed above.
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Media & Commerce
The components of operating results for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, were as follows:

|  | Nine Months Ended September 30, |
|  | 2025 |  | 2024 |  | Change |
|  | (dollars in thousands) |
|  |  |  |  |  | $ |  | % |
Revenue |  | $ | 479,648 |  |  | $ | 521,963 |  |  | $ | (42,315) |  |  | (8.1) | % |
Operating Expenses |  |  |  |  |  |  |  |  |
Cost of services |  | 289,048 |  |  | 323,772 |  |  | (34,724) |  |  | (10.7) | % |
Office and general expenses |  | 155,030 |  |  | 144,796 |  |  | 10,234 |  |  | 7.1 | % |
Depreciation and amortization |  | 21,626 |  |  | 24,149 |  |  | (2,523) |  |  | (10.4) | % |
|  | $ | 465,704 |  |  | $ | 492,717 |  |  | $ | (27,013) |  |  | (5.5) | % |
Operating Income |  | $ | 13,944 |  |  | $ | 29,246 |  |  | $ | (15,302) |  |  | (52.3) | % |

| Nine Months Ended September 30,
| 2025 |  | 2024 |  | Change
| (dollars in thousands)
|  |  |  |  | $ |  | %
Net Revenue | $ | 431,855 |  |  | $ | 439,783 |  |  | $ | (7,928) |  |  | (1.8) | %
Billable costs | 47,793 |  |  | 82,180 |  |  | (34,387) |  |  | (41.8) | %
Revenue | 479,648 |  |  | 521,963 |  |  | (42,315) |  |  | (8.1) | %
Billable costs | 47,793 |  |  | 82,180 |  |  | (34,387) |  |  | (41.8) | %
Staff costs | 269,318 |  |  | 265,576 |  |  | 3,742 |  |  | 1.4 | %
Administrative costs | 67,097 |  |  | 61,509 |  |  | 5,588 |  |  | 9.1 | %
Unbillable and other costs, net | 43,833 |  |  | 46,244 |  |  | (2,411) |  |  | (5.2) | %
Adjusted EBITDA | 51,607 |  |  | 66,454 |  |  | (14,847) |  |  | (22.3) | %
Stock-based compensation | 3,065 |  |  | 4,399 |  |  | (1,334) |  |  | (30.3) | %
Depreciation and amortization | 21,626 |  |  | 24,149 |  |  | (2,523) |  |  | (10.4) | %
Deferred acquisition consideration | 2,942 |  |  | (6,453) |  |  | 9,395 |  |  | NM
Other items, net | 10,030 |  |  | 15,113 |  |  | (5,083) |  |  | (33.6) | %
Operating Income | $ | 13,944 |  |  | $ | 29,246 |  |  | $ | (15,302) |  |  | (52.3) | %

Revenue
Revenue for the nine months ended September 30, 2025 was $479.6 million, compared to $522.0 million for the nine months ended September 30, 2024, a decrease of $42.3 million.
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Net Revenue
The components of the fluctuations in net revenue for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 were as follows:

|  |  | Net Revenue - Components of Change |  |  |  |  |  | Change
| Nine Months Ended September 30, 2024 |  | Foreign Currency |  | Net Acquisitions (Divestitures) |  | Organic |  | Total Change |  | Nine Months Ended September 30, 2025 |  | Organic |  | Total
| (dollars in thousands) |  |  |  |
Media & Commerce | $ | 439,783 |  |  | $ | 1,651 |  |  | $ | 2,675 |  |  | $ | (12,254) |  |  | $ | (7,928) |  |  | $ | 431,855 |  |  | (2.8) | % |  | (1.8) | %
Component % change |  |  | 0.4 | % |  | 0.6 | % |  | (2.8) | % |  | (1.8) | % |  |  |  |  |  |

The decrease in organic net revenue was primarily attributable to decreased spending by existing clients in the business services and food and beverage sectors.
Operating Income
Operating Income for the nine months ended September 30, 2025 was $13.9 million, compared to $29.2 million for the nine months ended September 30, 2024, representing a decrease of $15.3 million. The decrease in Operating Income was primarily attributable to a decrease in Net revenue of $7.9 million and an increase in Office and general expenses. Cost of services decreased $34.7 million. Excluding the decline in Billable costs of $34.4 million, Cost of services decreased $0.3 million.
The increase in Office and general expenses of $10.2 million was primarily attributable to an increase in deferred acquisition consideration expense.
Deferred acquisition consideration increased by $9.4 million, primarily attributable to an increase in the fair value of a certain Brand in 2025 and a decrease in the fair value of a certain Brand in 2024.
Adjusted EBITDA decreased by $14.8 million, primarily due to a decrease in Operating Income, as discussed above.
Communications
The components of operating results for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 were as follows:

|  | Nine Months Ended September 30, |
|  | 2025 |  | 2024 |  | Change |
|  | (dollars in thousands) |
|  |  |  |  |  | $ |  | % |
Revenue |  | $ | 420,215 |  |  | $ | 473,957 |  |  | $ | (53,742) |  |  | (11.3) | % |
Operating Expenses |  |  |  |  |  |  |  |  |
Cost of services |  | 292,889 |  |  | 318,241 |  |  | (25,352) |  |  | (8.0) | % |
Office and general expenses |  | 64,012 |  |  | 74,209 |  |  | (10,197) |  |  | (13.7) | % |
Depreciation and amortization |  | 19,349 |  |  | 13,544 |  |  | 5,805 |  |  | 42.9 | % |
Impairment and other losses |  | 222 |  |  | — |  |  | 222 |  |  | 100.0 | % |
|  | $ | 376,472 |  |  | $ | 405,994 |  |  | $ | (29,522) |  |  | (7.3) | % |
Operating Income |  | $ | 43,743 |  |  | $ | 67,963 |  |  | $ | (24,220) |  |  | (35.6) | % |

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| Nine Months Ended September 30,
| 2025 |  | 2024 |  | Change
| (dollars in thousands)
|  |  |  |  | $ |  | %
Net Revenue | $ | 285,106 |  |  | $ | 303,890 |  |  | $ | (18,784) |  |  | (6.2) | %
Billable costs | 135,109 |  |  | 170,067 |  |  | (34,958) |  |  | (20.6) | %
Revenue | 420,215 |  |  | 473,957 |  |  | (53,742) |  |  | (11.3) | %
Billable costs | 135,109 |  |  | 170,067 |  |  | (34,958) |  |  | (20.6) | %
Staff costs | 172,273 |  |  | 162,715 |  |  | 9,558 |  |  | 5.9 | %
Administrative costs | 37,042 |  |  | 33,689 |  |  | 3,353 |  |  | 10.0 | %
Unbillable and other costs, net | 6,910 |  |  | 7,958 |  |  | (1,048) |  |  | (13.2) | %
Adjusted EBITDA | 68,881 |  |  | 99,528 |  |  | (30,647) |  |  | (30.8) | %
Stock-based compensation | 6,760 |  |  | 5,467 |  |  | 1,293 |  |  | 23.7 | %
Depreciation and amortization | 19,349 |  |  | 13,544 |  |  | 5,805 |  |  | 42.9 | %
Deferred acquisition consideration | (4,879) |  |  | 9,097 |  |  | (13,976) |  |  | NM
Impairment and other losses | 222 |  |  | — |  |  | 222 |  |  | 100.0 | %
Other items, net | 3,686 |  |  | 3,457 |  |  | 229 |  |  | 6.6 | %
Operating Income | $ | 43,743 |  |  | $ | 67,963 |  |  | $ | (24,220) |  |  | (35.6) | %

Revenue
Revenue for the nine months ended September 30, 2025 was $420.2 million compared to $474.0 million for the nine months ended September 30, 2024, a decrease of $53.7 million.
Net Revenue
The components of the fluctuations in net revenue for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 were as follows:

|  |  | Net Revenue - Components of Change |  |  |  |  |  | Change
| Nine Months Ended September 30, 2024 |  | Foreign Currency |  | Net Acquisitions (Divestitures) |  | Organic |  | Total Change |  | Nine Months Ended September 30, 2025 |  | Organic |  | Total
| (dollars in thousands) |  |  |  |
Communications | $ | 303,890 |  |  | $ | 162 |  |  | $ | 29,002 |  |  | $ | (47,948) |  |  | $ | (18,784) |  |  | $ | 285,106 |  |  | (15.8) | % |  | (6.2) | %
Component % change |  |  | 0.1 | % |  | 9.5 | % |  | (15.8) | % |  | (6.2) | % |  |  |  |  |  |

The decrease in organic net revenue was primarily attributable to decreased spending, primarily due to lower advocacy services as compared to higher spending in 2024 associated with the 2024 elections and decreased spending in the healthcare and consumer products due to client losses and budget cuts. The increase in net acquisitions (divestitures) was primarily driven by the acquisition of Consulum.
Operating Income
Operating Income for the nine months ended September 30, 2025 was $43.7 million, compared to $68.0 million for the nine months ended September 30, 2024, representing a decrease of $24.2 million. The decrease in Operating Income was primarily attributable to a decrease in Net revenue of $18.8 million and an increase in Cost of services excluding Billable costs, and Depreciation and amortization, partially offset by a decrease in Office and general expenses.
Cost of services decreased $25.4 million. Excluding the decline in Billable costs of $35.0 million, Cost of services increased $9.6 million due to the inclusion of costs from acquired entities.
The decrease in Office and general expenses of $10.2 million was primarily attributable to a decrease in Deferred acquisition consideration.
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Deferred acquisition consideration decreased by $14.0 million, primarily attributable to a decrease in the fair value of a certain Brand, partially offset by an increase in the fair value of certain Brands.
Depreciation and amortization increased by $5.8 million, primarily attributable to the inclusion of costs from acquired entities.
Adjusted EBITDA decreased by $30.6 million, primarily due to a decrease in Operating Income, as discussed above.
The Marketing Cloud
The components of operating results for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 were as follows:

|  | Nine Months Ended September 30, |
|  | 2025 |  | 2024 |  | Change |
|  | (dollars in thousands) |
|  |  |  |  |  | $ |  | % |
Revenue |  | $ | 78,785 |  |  | $ | 25,823 |  |  | $ | 52,962 |  |  | 205.1 | % |
Operating Expenses |  |  |  |  |  |  |  |  |
Cost of services |  | 40,539 |  |  | 13,811 |  |  | 26,728 |  |  | 193.5 | % |
Office and general expenses |  | 35,939 |  |  | 23,225 |  |  | 12,714 |  |  | 54.7 | % |
Depreciation and amortization |  | 17,436 |  |  | 9,309 |  |  | 8,127 |  |  | 87.3 | % |
Impairment and other losses |  | 244 |  |  | — |  |  | 244 |  |  | 100.0 | % |
|  | $ | 94,158 |  |  | $ | 46,345 |  |  | $ | 47,813 |  |  | 103.2 | % |
Operating Loss |  | $ | (15,373) |  |  | $ | (20,522) |  |  | $ | 5,149 |  |  | (25.1) | % |

| Nine Months Ended September 30,
| 2025 |  | 2024 |  | Change
| (dollars in thousands)
|  |  |  |  | $ |  | %
Net Revenue | $ | 78,769 |  |  | $ | 25,823 |  |  | $ | 52,946 |  |  | 205.0 | %
Billable costs | 16 |  |  | — |  |  | 16 |  |  | 100.0 | %
Revenue | 78,785 |  |  | 25,823 |  |  | 52,962 |  |  | 205.1 | %
Billable costs | 16 |  |  | — |  |  | 16 |  |  | 100.0 | %
Staff costs | 53,683 |  |  | 21,024 |  |  | 32,659 |  |  | 155.3 | %
Administrative costs | 13,531 |  |  | 9,659 |  |  | 3,872 |  |  | 40.1 | %
Unbillable and other costs, net | 17,178 |  |  | 5,547 |  |  | 11,631 |  |  | 209.7 | %
Adjusted EBITDA | (5,623) |  |  | (10,407) |  |  | 4,784 |  |  | (46.0) | %
Stock-based compensation | 541 |  |  | 648 |  |  | (107) |  |  | (16.5) | %
Depreciation and amortization | 17,436 |  |  | 9,309 |  |  | 8,127 |  |  | 87.3 | %
Deferred acquisition consideration | (10,919) |  |  | (384) |  |  | (10,535) |  |  | NM
Impairment and other losses | 244 |  |  | — |  |  | 244 |  |  | 100.0 | %
Other items, net | 2,448 |  |  | 542 |  |  | 1,906 |  |  | 351.7 | %
Operating Loss | $ | (15,373) |  |  | $ | (20,522) |  |  | $ | 5,149 |  |  | (25.1) | %

Revenue
Revenue for the nine months ended September 30, 2025 was $78.8 million compared to $25.8 million for the nine months ended September 30, 2024, an increase of $53.0 million.
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Net Revenue
The components of the fluctuations in net revenue for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 were as follows:

|  |  | Net Revenue - Components of Change |  |  |  |  |  | Change
| Nine Months Ended September 30, 2024 |  | Foreign Currency |  | Net Acquisitions (Divestitures) |  | Organic |  | Total Change |  | Nine Months Ended September 30, 2025 |  | Organic |  | Total
| (dollars in thousands) |  |  |  |
The Marketing Cloud | $ | 25,823 |  |  | $ | 455 |  |  | $ | 53,523 |  |  | $ | (1,032) |  |  | $ | 52,946 |  |  | $ | 78,769 |  |  | (4.0) | % |  | NM
Component % change |  |  | 1.8 | % |  | NM |  | (4.0) | % |  | NM |  |  |  |  |  |

The increase in net acquisitions (divestitures) was primarily driven by the acquisitions of Leaders and Unicepta.
Operating Loss
Operating Loss for the nine months ended September 30, 2025 was $15.4 million compared to $20.5 million for the nine months ended September 30, 2024, representing a decrease of $5.1 million. The decrease in Operating Loss was primarily attributable to an increase in Net revenue, partially offset by an increase in Cost of Services, Office and general expenses, and Depreciation and amortization.
Cost of services increased $26.7 million, primarily attributable to the inclusion of costs from acquired entities.
Office and general expenses increased $12.7 million primarily due to higher staff costs and the inclusion of costs from acquired entities, partially offset by a decrease in deferred acquisition consideration expense.
Deferred acquisition consideration decreased by $10.5 million, primarily attributable to a decrease in the fair value of a certain Brand.
Depreciation and amortization increased by $8.1 million, primarily attributable to the inclusion of costs from acquired entities.
Adjusted EBITDA increased by $4.8 million, primarily due to a decrease in Operating Loss, as discussed above.
Corporate
The components of operating results for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 were as follows:

| Nine Months Ended September 30, |  |  |
| 2025 |  | 2024 |  | Change |  |  |
| (dollars in thousands) |  |  |
|  |  |  |  | $ |  | % |  |  |
Staff costs | $ | 41,238 |  |  | $ | 35,421 |  |  | $ | 5,817 |  |  | 16.4 | % |  |  |
Administrative costs | 1,373 |  |  | 11,396 |  |  | (10,023) |  |  | (88.0) | % |  |  |
Adjusted EBITDA | (42,611) |  |  | (46,817) |  |  | 4,206 |  |  | (9.0) | % |  |  |
Stock-based compensation | 15,627 |  |  | 5,308 |  |  | 10,319 |  |  | 194.4 | % |  |  |
Depreciation and amortization | 11,833 |  |  | 8,681 |  |  | 3,152 |  |  | 36.3 | % |  |  |
Impairment and other losses | — |  |  | 215 |  |  | (215) |  |  | (100.0) | % |  |  |
Other items, net | 2,363 |  |  | 4,203 |  |  | (1,840) |  |  | (43.8) | % |  |  |
Operating Loss | $ | (72,434) |  |  | $ | (65,224) |  |  | $ | (7,210) |  |  | 11.1 | % |  |  |

Operating Loss
Operating Loss for the nine months ended September 30, 2025 was $72.4 million compared to $65.2 million for the nine months ended September 30, 2024, representing an increase of $7.2 million, primarily attributable to higher Stock-based compensation.
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Stock-based compensation expense increased by $10.3 million, primarily attributable to an increase in the number of awards partially offset by a decrease in the fair value of the awards, and a reversal of expense in the second quarter of 2024 associated with stock-based performance awards for which the performance targets were not met.
Liquidity and Capital Resources:
The following table provides summary information about the Company’s liquidity position and capital resources:

| Nine Months Ended September 30,
| 2025 |  | 2024 |  | Change
| (dollars in thousands)
|  |  |  |  | $ |  | %
Net cash provided by (used in) operating activities | $ | 30,713 |  |  | $ | (69,230) |  |  | $ | 99,943 |  |  | (144.4) | %
Net cash used in investing activities | (80,759) |  |  | (66,485) |  |  | (14,274) |  |  | 21.5 | %
Net cash provided by financing activities | 44,227 |  |  | 159,131 |  |  | (114,904) |  |  | (72.2) | %

The Company had cash and cash equivalents of $132.2 million and $131.3 million as of September 30, 2025, and December 31, 2024, respectively.
Operating Activities
Net cash provided by operating activities for the nine months ended September 30, 2025 was $30.7 million, an increase of $99.9 million, or 144.4%, compared to the same period in the prior year. This improvement primarily reflected the increase in operating income of $12.8 million driven by an increase in revenue, as well as a $103.2 million increase in working capital primarily attributable to stronger working capital management and changes in non-cash items included in the operating income.
The improvement in working capital was driven by an improved billing and collection process, which resulted in favorable changes in advance billings of $44.0 million and expenditures billable to clients of $42.0 million. Additionally, there were net favorable changes in accounts payable and accruals of $41.4 million as a result of improved payment terms with significant service providers. This was partially offset by an unfavorable change in other assets of $44.3 million due to certain media assets and deferred compensation arrangements. In aggregate, these and other immaterial changes in working capital resulted in a net increase of $103.2 million.
Changes in non-cash items included in operating income consisted primarily of a decrease of $17.9 million in the fair value of deferred acquisition liabilities driven by the lower than projected performance of acquisitions, partially offset by an increase of $14.8 million in depreciation and amortization resulting from higher capital investment, and increases in stock-based compensation and deferred income tax expense of $5.2 million and $6.7 million, respectively.
Investing Activities
Net cash used in investing activities for the nine months ended September 30, 2025 was $80.8 million, an increase of $14.3 million, or 21.5%, compared to the same period in the prior year. This increase was primarily driven by increases in capitalized software and capex expenditure of $26.0 million and $9.6 million, respectively. These increases were partially offset by a decrease in cash used for acquisitions by $17.6 million
Financing Activities
Net cash provided by financing activities for the nine months ended September 30, 2025 was $44.2 million, a decrease of $114.9 million, or 72.2%, compared to the same period in the prior year. This decline was primarily driven by a decrease of $141.7 million in net proceeds borrowed under the Credit Agreement (as defined and discussed in Note 8 of the Notes included herein) and increases in debt financing cost and shares repurchases of $3.8 million and $3.9 million, respectively. The decline was partially offset by decreases in distributions to noncontrolling interests and payments of deferred consideration of $18.6 million and $12.6 million, respectively.
Liquidity
The Company expects to maintain sufficient cash and/or available borrowings to fund operations for the next twelve months and subsequent periods. The Company has historically maintained and expanded its business using cash generated from operating activities, funds available under the Credit Agreement, and other initiatives, such as obtaining additional debt and equity financing. On April 23, 2025, the Company entered into an amendment to the Credit Agreement, which increased the limit of borrowing to $750 million and extended the maturity date to April 30, 2030, as described in more detail in Note 8 of the Notes included herein. As of September 30, 2025, the Company had $438.3 million of borrowings outstanding and $14.9 million of issued and undrawn letters of credit, resulting in $296.7 million unused borrowing capacity under the Credit Agreement.
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The Company transfers certain of its trade receivable assets to third parties under certain agreements. Per the terms of these agreements, the Company surrenders control over its trade receivables upon transfer.
The trade receivables transferred to the third parties were $122.6 million and $366.1 million for the three and nine months ended September 30, 2025, respectively, and $78.3 million and $224.8 million for the three and nine months ended September 30, 2024. The amount collected and due to the third parties under these arrangements was $14.6 million as of September 30, 2025 and $19.5 million as of December 31, 2024. Fees for these arrangements were recorded in Office and general expenses in the Unaudited Consolidated Statements of Operations and totaled $1.3 million and $4.1 million for the three and nine months ended September 30, 2025, respectively, and $1.0 million and $3.0 million for the three and nine months ended September 30, 2024.
The Company may repurchase up to an aggregate of $375.0 million of shares of our outstanding Class A Common Stock under its stock repurchase program (the “Repurchase Program”). The Repurchase Program will expire on November 6, 2027.
Under the Repurchase Program, share repurchases may be made at our discretion from time to time in open market transactions at prevailing market prices, including through trading plans that may be adopted in accordance with Rule 10b5-1 of the Exchange Act, as amended, in privately negotiated transactions, or through other means. The timing and number of shares repurchased under the Repurchase Program will depend on a variety of factors, including the performance of our stock price, general market and economic conditions, regulatory requirements, the availability of funds, and other considerations we deem relevant. The Repurchase Program may be suspended, modified, or discontinued at any time without prior notice. Our Board of Directors will review the Repurchase Program periodically and may authorize adjustments of its terms.
During the nine months ended September 30, 2025, 17.6 million shares of Class A Common Stock were repurchased pursuant to the Repurchase Program at an average price of $5.12 per share, for an aggregate value, excluding fees, of $90.0 million.
The remaining value of shares of Class A Common Stock permitted to be repurchased under the Repurchase Program was $79.6 million as of September 30, 2025.
The Company’s obligations extending beyond twelve months primarily consist of deferred acquisition consideration payments, purchases of noncontrolling interests, subsidiary awards, capital expenditures, scheduled lease obligation payments, and interest payments on borrowings under the Company’s 5.625% Notes (as defined in Note 8 of the Notes included herein) and Credit Agreement. The Company expects to make estimated cash payments in the future to satisfy obligations under our TRA, which remains in effect after the final exchange of Paired Units (see Note 14 of the Notes included herein for additional details). The amount and timing of any payments under the TRA are contingent on the Company achieving certain tax savings, if any, that we actually realize, or in certain circumstances are deemed to realize. Based on the current outlook, the Company believes future cash flows from operations, together with the Company’s existing cash balance and availability of funds under the Credit Agreement, will be sufficient to meet the Company’s anticipated cash needs for the next twelve months and subsequent periods. The Company’s ability to make payments will depend on future performance, which is subject to general economic conditions, the competitive environment and other factors, including those described in this Form 10-Q and in the Company’s other SEC filings.
Total Debt
As of September 30, 2025, Debt, net of debt issuance costs, was $1,526.3 million, compared to $1,353.6 million outstanding as of December 31, 2024. See Note 8 of the Notes included herein for information regarding the Company’s 5.625% Notes and the Credit Agreement.
As of September 30, 2025, t he Company was in compliance with all of the terms and conditions of the Credit Agreement, and management believes, based on its current financial projections, that the Company will be in compliance with its covenants over the next twelve months.
If the Company loses all or a substantial portion of its lines of credit under the Credit Agreement, or if the Company uses the maximum available amount under the agreement, it will be required to seek other sources of liquidity. If the Company were unable to find these sources of liquidity, for example, through an equity offering or access to the capital markets, the Company’s ability to fund its working capital needs and any contingent obligations with respect to acquisitions and redeemable noncontrolling interests would be adversely affected.
Pursuant to the Credit Agreement, the Company must maintain a Total Leverage Ratio (as defined in the Credit Agreement) below an established threshold. For the period ended September 30, 2025, the Company’s calculation of this ratio,
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and the maximum permitted under the Credit Agreement, respectively, were calculated based on the trailing twelve months as follows:

| September 30, 2025
Total Leverage Ratio | 3.45
Maximum per covenant | 4.25

These ratios and measures are not based on GAAP and are not presented as alternative measures of operating performance or liquidity. Some of these ratios and measures include, among other things, pro forma adjustments for acquisitions, one-time charges, and other items, as defined in the Credit Agreement. They are presented here to demonstrate compliance with the covenants in the Credit Agreement, as non-compliance with such covenants could have a material adverse effect on the Company.
Material Cash Requirements
To the extent required under a particular client engagement, Stagwell’s Brands enter into contractual commitments with media providers, production companies and other third parties on behalf of their clients at levels that exceed the revenue from the services. In most of these transactions, the Brands act as the clients’ “Agent for a Disclosed Principal” where the Brands’ risk is mitigated by sequential payment liability, i.e., the brands’ obligation to pay a third party is tolled until it receives the underlying payment from the client thereby safeguarding the Brand in the event of a client default. To further protect against client default, Stagwell takes additional precautions, including the procurement of credit insurance. While Stagwell has historically had a very low incidence of default, Stagwell is still exposed to the risk of significant uncollectible receivables from its clients and the risk of a material loss could significantly increase in periods of severe economic downturn.
Deferred acquisition consideration on the balance sheet consists of deferred obligations related to contingent purchase price payments and retention payments tied to continued employment of specific personnel. See Note 6 of the Notes included herein for additional information regarding contingent deferred acquisition consideration.
When acquiring less than 100% ownership of an entity, the Company may enter into agreements that give the Company an option to purchase, or require the Company to purchase, the incremental ownership interests under certain circumstances. Where the incremental purchase may be required of the Company, the amounts are recorded as redeemable noncontrolling interests in mezzanine equity. See Note 9 of the Notes included herein for additional information regarding noncontrolling interests and redeemable noncontrolling interests.
Certain of the Company’s subsidiaries grant awards to their employees providing them with an equity interest in the respective subsidiary (the “profits interests awards”). The awards generally provide the employee with the right, but not the obligation, to sell their profits interest in the subsidiary to the Company based on a performance-based formula and, in certain cases, receive a profit share distribution. The profits interests awards are primarily settled in cash, with certain awards having stock-settlement provisions at the Company’s discretion. The corresponding liability associated with these profits interests awards is included as a component of Accruals and other liabilities and Other liabilities on the Consolidated Balance Sheets.
The Company enters into certain long-term non-cancellable contracts for services such as revenue or profit share arrangements, cloud-based services, or software licensing. See Note 10 of the Notes included herein for additional information regarding these material commitments.
Critical Accounting Estimates
See Note 2 of the Company’s 2024 Form 10-K for information regarding the Company’s critical accounting estimates.
Website Access to Company Reports and Information
Stagwell Inc.’s Internet website address is www.stagwellglobal.com. The Company’s Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to the Exchange Act, will be made available free of charge through the Company’s website as soon as reasonably practical after those reports are electronically filed with, or furnished to, the SEC. The Company announces material information to the public through a variety of means, including filings with the SEC, press releases, public conference calls, and its website. The Company uses these channels, as well as social media, including X (formerly Twitter) (@stagwell) and (@Mark_Penn), Instagram (@stagwellglobal) and its LinkedIn page (https://www.linkedin.com/company/stagwell/), to communicate with investors and the public about the Company, its products and services, and other matters. Therefore, investors, the media, and others interested in the Company are encouraged to review the information the Company makes public in these locations, as such information could be deemed to be material information. Information on or that can be accessed through the Company’s websites or these social media channels is not part of this Form 10-Q, and the inclusion of the Company’s website addresses and social media channels are inactive textual references only.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
In the normal course of business, the Company is exposed to market risk related to interest rates, foreign currencies and impairment risk.
Debt Instruments: As of September 30, 2025, the Company’s debt obligations consisted of amounts outstanding under its Credit Agreement and the 5.625% Notes. The Credit Agreement bears interest at variable rates based upon SOFR, EURIBOR, and SONIA depending on the duration of the borrowing product. The Company’s ability to obtain the required bank syndication commitments depends in part on conditions in the bank market at the time of syndication.
With regard to our variable rate debt, a 10% increase or decrease in interest rates would change our annual interest expense by $2.9 million.
Foreign Exchange: While the Company primarily conducts business in markets that use the U.S. dollar, the Canadian dollar, the Euro and the British Pound, its non-U.S. operations transact business in numerous different currencies. The Company’s results of operations are subject to risk from the translation to the U.S. dollar of the revenue and expenses of its non-U.S. operations. The effects of currency exchange rate fluctuations on the translation of the Company’s results of operations are discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in Note 2 of the Company’s Audited Consolidated Financial Statements included in the 2024 Form 10-K. For the most part, revenues and expenses incurred related to the non-U.S. operations are denominated in their functional currency. This reduces the impact that fluctuations in exchange rates will have on profit margins. Translation of intercompany debt, which is not intended to be repaid, is included in cumulative translation adjustments. Translation of current intercompany balances are included in net income (loss). From time to time, the Company may enter into foreign currency forward exchange contracts or other derivative financial instruments to hedge the effects of adverse fluctuations in foreign currency exchange rates.
Impairment Risk: For the nine months ended September 30, 2025, the Company recorded an impairment charge of $0.5 million to reduce the carrying value of its right-of-use lease assets. See Note 7 of the Notes included herein for additional information.
See the Significant Accounting Policies section in the “Notes to Audited Consolidated Financial Statements” of the 2024 Form 10-K for information related to impairment testing for Goodwill, Right-of-use lease assets and long-lived assets and the risk of potential impairment charges in future periods. See the Critical Accounting Estimates section in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2024 Form 10-K for information related to the risk of potential impairment charges in future periods.
Item 4. Controls and Procedures
We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”), who is our principal executive officer, and Chief Financial Officer (“CFO”), who is our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
We conducted an evaluation, under the supervision and with the participation of our management, including our CEO and CFO, of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rules 13a-15(b) and 15d-15(b) of the Exchange Act. Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2025.
There were no changes in our internal control over financial reporting during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
In the ordinary course of business, we are involved in various legal proceedings. We do not currently expect that these proceedings will have a material adverse effect on our results of operations, cash flows or financial position.
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Item 1A. Risk Factors
There have been no material changes to the risk factors in Part I, Item 1A “Risk Factors” of our 2024 Form 10-K. These risks could materially and adversely affect our business, results of operations, financial condition, cash flows, projected results and future prospects. These risks are not exclusive and additional risks to which we are subject to include the factors listed under note about “Forward-Looking Statements” and the risks described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-Q.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
In the three months ended September 30, 2025, there were no unregistered sales of equity securities.
Purchase of Equity Securities by the Issuer and Affiliated Purchasers
Under the Repurchase Program, share repurchases may be made at our discretion from time to time in open market transactions at prevailing market prices (including through trading plans that may be adopted in accordance with Rule 10b5-1 of the Exchange Act), in privately negotiated transactions, or through other means. The timing and number of shares repurchased under the Repurchase Program will depend on a variety of factors, including the performance of our stock price, general market and economic conditions, regulatory requirements, the availability of funds, and other considerations we deem relevant. The Repurchase Program may be suspended, modified or discontinued at any time without prior notice. The Board will review the Repurchase Program periodically and may authorize adjustments of its terms. Pursuant to its Credit Agreement (as defined and discussed in Note 8 of the Notes included herein) and the indenture governing the 5.625% Notes, the Company is currently limited as to the dollar value of shares it may repurchase in the open market.
The following table details our monthly shares repurchased during the third quarter of 2025 and the approximate dollar value of shares that may yet be purchased pursuant to the Repurchase Program:

Period |  | Total Number of Shares Purchased (1) |  | Average Price Paid Per Share (1) |  | Total Number of Shares Purchased as Part of Publicly Announced Program (2) |  | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (2)
7/1/2025 - 7/31/2025 |  | 3,277,788 |  |  | $ | 4.91 |  |  | 3,246,030 |  |  | $ | 100,373,306 |
8/1/2025 - 8/31/2025 |  | 2,047,388 |  |  | $ | 5.60 |  |  | 2,032,510 |  |  | $ | 88,949,618 |
9/1/2025 - 9/30/2025 |  | 1,741,005 |  |  | $ | 5.38 |  |  | 1,741,005 |  |  | $ | 79,555,575 |
Total |  | 7,066,181 |  |  | $ | 5.23 |  |  | 7,019,545 |  |  | $ | 79,555,575 |

(1) Includes information for all shares repurchased by the Company, including shares repurchased as part of the Company’s publicly announced Repurchase Program, and 46,636 shares to settle employee tax withholding obligations related to the vesting of restricted stock awards and restricted stock units. Under the Repurchase Program, which was announced in March 2022, was extended and increased in November 2024 and will expire on November 6, 2027, the Company may repurchase up to an aggregate of $375.0 million of shares of the Company’s Class A Common Stock.
(2) Only includes information for shares repurchased as part of the Company’s publicly announced Repurchase Program.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
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Item 5. Other Information
During the quarterly period covered by this Form 10-Q, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (each as defined in Item 408 of Regulation S-K).
Unregistered Sales of Equity Securities
On November 5, 2025, the Company issued 3,209,970 shares of Class A Common Stock in fulfillment of $16.8 million of its payment obligation with respect to the purchase of additional interests in its Targeted Victory subsidiary.
The issuance of the shares was exempt from registration under Section 4(a)(2) of the Securities Act, as amended. The Company will receive no cash proceeds and no commissions will be paid to any person in connection with the issuance.
Item 6. Exhibits
The exhibits required by this item are listed on the Exhibit Index.
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EXHIBIT INDEX

Exhibit No. |  | Description
3.1 |  | Second Amended and Restated Certificate of Incorporation of Stagwell Inc., as amended (incorporated by reference to Exhibit 3.1 to the Company’s Form 10-Q filed on May 9, 2023).
3.2 |  | Amended and Restated Bylaws of Stagwell Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed on August 2, 2021).
10.1 |  | Amendment No. 1, dated as of July 2, 2025, to Employment Agreement, by and between the Company and Ryan Greene (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on July 8, 2025).
10.2 |  | Amendment No. 1, dated as of July 2, 2025, to Employment Agreement, by and between the Company and Frank Lanuto (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed on July 8, 2025).
10.3 |  | Severance Agreement and General Release, dated September 9, 2025, between the Company and Vincenzo DiMaggio (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on September 12, 2025).
31.1 |  | Certification by Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2 |  | Certification by Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1 |  | Certification by Chief Executive Officer pursuant to 18 USC. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2 |  | Certification by Chief Financial Officer pursuant to 18 USC. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101 |  | Interactive Data File, for the period ended September 30, 2025. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.*
104 |  | Cover Page Interactive Data File. The cover page XBRL tags are embedded within the inline XBRL document and are included in Exhibit 101.*

* Filed herewith.
** Furnished herewith.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

STAGWELL INC.
/s/ Mark Penn
Mark Penn
Chairman of the Board and Chief Executive Officer (Principal Executive Officer)
November 6, 2025
/s/ Ryan J. Greene
Ryan J. Greene
Chief Financial Officer (Principal Financial Officer)
November 6, 2025

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