Stagwell Stock Earnings Reports

Stagwell reported a strong start to 2026 with record net new business (Q1 net new business $141M, last 12 months $486M), revenue up 8% to $704M and net revenue up 4% to $585M. All five segments grew, led by Digital Transformation (net revenue +9%; 2-year organic stack +22% in Q1). Management reiterated full-year guidance: net revenue growth 8–12%, adjusted EBITDA $475–525M, adjusted EPS $0.98–1.12 and free cash flow conversion 50–60%. Adjusted EBITDA rose 9% to $89.7M (15.3% margin); adjusted EPS was $0.17 (+31% YoY) helped by a $45M share buyback (7.3M shares). Key strategic priorities: (1) scaling AI-enabled enterprise products (The Machine, SATs, Stagwell Search+) with $12M booked toward an initial $25M sales goal, (2) expanding large-scale client wins including a nearly $60M five-year government contract and a growing government pipeline, (3) doubling the new business team and instituting a client-accountability program to reduce churn (already down >10% YoY in Q1) and (4) disciplined cost management (labor ratio down to 63.9%, G&A down) and aggressive buybacks to enhance EPS. Management expects accelerating growth into H2 driven by large client wins, the political/advocacy season, and commercialization of AI products. Financial priorities include reducing leverage (target mid-2x exit 2026), maintaining capex/software investment (~$33M Q1), and minimal deferred acquisition payouts by year-end.