NASDAQ$STGW

Stagwell Inc · Q3 2022 earnings

Q3 2022 earnings · · Investor relations

Briefing

Delivered double-digit revenue growth and record net new business in Q3 2022 and shared roadmap for Stagwell Marketing Cloud

Stagwell reported strong third quarter results with GAAP revenue of $664 million, net revenue of $556 million and Adjusted EBITDA of $115 million. Pro Forma organic net revenue increased 11.3%. The company won a record $86 million of net new business during the quarter and reduced net debt by $125 million.

  • 3Q GAAP revenue grew 42.3% and 16.8% on a Pro Forma basis; YTD Pro Forma growth of 22.8%
  • 3Q Pro Forma organic net revenue growth of 11.3% and 16.7% YTD
  • 3Q net income of $35.3M; 3Q EPS of $0.08 and adjusted EPS of $0.21 per share
  • Adjusted EBITDA of $115.1M in 3Q representing a 20.7% margin on net revenue

Headline financials

Total Revenue

$664M

Previous: $467M+42.3%
EPS (adj)

$0.21

Previous: $0.02+950.0%
Adjusted EBITDA Margin

20.7%

Previous: 20.1%+3.0%
Net New Business

$86M

No prior period
Capital Expenditures

-$25.5M

Previous: -$13.7M-86.6%
Free Cash Flow

-$14.9M

Previous: -$15.7M+5.4%
Net Income

$10.6M

Previous: -$2.07M+612.3%
Operating Income

$70.1M

Previous: -$19.6M+456.8%
Gross Profit

$247M

Previous: $142M+73.9%
Cash & Equivalents

$165M

Previous: $115M+43.1%
Total Assets

$3.97B

Previous: $3.94B+0.7%

Revenue & EPS history

Stagwell · Revenue · Quarterly

$664M

Q3 2022+42.3%vs Q3 2021
Beat estimate in 6 of 14 quarters(43%)
ActualEstimate

Revenue by segment

Stagwell · $78.6M total across 1 segment · Q3 2022

  • Communications
    $78.6M+45.0%

Forward guidance

2022 financial guidance is as follows:

Tailwinds

  • Pro Forma Organic Net Revenue growth of 16% – 20%, reflecting a more modest contribution from advocacy fundraising relative to the 2020 Presidential cycle due to a decline in closely contested races, persisting inflation, and hurricane impact in large markets.
  • Re-iterating Pro Forma Organic Net Revenue growth ex-Advocacy of 13% – 17%
  • Re-iterating Adjusted EBITDA of $450 million – $480 million
  • Adjusted EPS of $0.86 – $0.94
  • Re-iterating Pro Forma Free Cash Flow growth of approximately 30%

Headwinds

  • Guidance assumes no impact from foreign exchange
  • Guidance assumes no impact from acquisitions
  • Guidance assumes no impact from dispositions
  • Persisting inflation
  • Hurricane impact in large markets

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2022

Historical avgQ3 2022

+0.7%

Avg return

Earnings day

+0.2%

Avg return

5 days after

+1.3%

Avg return

30 days after

61%

38 / 62 earnings

Positive

+34.9%

Q1 2020

Best reaction

-59.3%

Q3 2016

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+1.1%+2.1%+11.8%
Q4 2025+17.8%+17.9%+23.9%
Q3 2025+16.9%+4.4%+19.3%
Q1 2025-14.0%-6.9%-22.7%
Q4 2024-5.4%-10.1%-11.6%
Q3 2024+10.1%+7.7%+7.0%
Q2 2024-8.1%-9.3%+7.6%
Q1 2024+19.5%+16.0%+16.5%
Q4 2023-26.0%-22.4%-11.4%
Q3 2023+5.6%+11.7%+26.5%
Q2 2023+1.3%-10.8%-14.3%
Q1 2023-5.3%-4.5%+32.9%
Q4 2022+11.6%+32.5%+9.3%
Q3 2022-5.0%-2.2%+1.4%
Q2 2022-9.7%-13.4%-9.4%
Q1 2022+6.0%+5.4%+19.7%
Q4 2021-0.7%+5.7%-7.7%
Q3 2021+15.1%+16.0%-8.0%
Q2 2021+3.1%+9.5%+46.3%
Q1 2021+9.3%+6.4%+10.6%
Q4 2020+2.2%-5.8%+5.8%
Q3 2020+10.4%+8.0%+10.8%
Q2 2020-7.3%-6.5%-4.3%
Q1 2020+34.9%+17.9%+24.5%
Q4 2019+20.1%+8.1%-34.9%
Q3 2019-13.1%-13.4%-28.3%
Q2 2019+10.1%-1.8%+9.2%
Q1 2019+27.2%+37.8%+31.3%
Q4 2018+3.0%-8.4%+4.4%
Q3 2018+6.8%+29.9%+1.7%
Q2 2018+9.1%+7.1%-2.0%
Q1 2018-31.2%-41.8%-34.0%
Q4 2017-6.4%-9.6%-28.9%
Q3 2017+6.5%+1.9%+9.3%
Q2 2017+12.4%+10.9%-3.1%
Q1 2017+2.3%-0.6%-6.3%
Q4 2016-2.2%+0.6%+4.5%
Q3 2016-59.3%-57.5%-25.7%
Q2 2016-29.8%-26.1%-32.4%
Q1 2016-13.9%
Q4 2015+10.7%
Q3 2015-3.4%
Q2 2015+16.2%
Q1 2015-28.9%
Q4 2014+5.7%
Q3 2014-3.3%
Q2 2014+3.7%
Q1 2014+1.5%
Q4 2013-6.3%
Q3 2013+10.8%
Q2 2013+6.4%
Q1 2013+0.1%
Q2 2012+6.5%
Q4 2012+6.3%
Q3 2012-3.2%
Q1 2011+2.2%
Q1 2012+2.2%
Q4 2011-8.1%
Q2 2011-8.1%
Q3 2011+7.3%
Q3 2010+7.3%
Q2 2010-8.6%

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