Company: STGW
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000876883-25-000034
Chunk: 26

Company: Stagwell Inc
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 2
Chunk 26
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 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, 20252024(dollars in thousands)United States$1,379,268 $1,350,022 United Kingdom113,346 116,040 Other284,224 200,977 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