Company: STGW
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000876883-25-000024
Chunk: 26

Company: Stagwell Inc
Filing Date: 2025-07-31
Form: 10-Q
Item: Item 2
Chunk 26
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658$56,040$670,6826.9%9.1%Component % change—%2.2%6.9%9.1%

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 a decrease in client spending due to budget cuts in the consumer products sector. The increase in net acquisitions (divestitures) was primarily driven by the acquisitions of Jetfuel and Create.

Operating Income

Operating Income for the six months ended June 30, 2025, was $94.1 million, compared to $59.5 million for the six months ended June 30, 2024, representing an increase of $34.7 million. The increase in Operating Income was primarily attributable to an increase in Net revenue and decrease in Office and general expenses, partially offset by higher Cost of services, excluding Billable costs. 

Cost of services increased $13.9 million. Excluding the decline in Billable costs of $10.3 million, Cost of services increased $24.2 million, primarily attributable to higher staff costs due to growth in revenue and inclusion of costs from acquired entities and higher Stock-based compensation.

Stock-based compensation increased by $2.3 million, primarily due to an increase in the fair value of profit interest awards.

Deferred acquisition consideration decreased $3.0 million, primarily attributable to a reduction in the fair value of the deferred acquisition consideration liability associated with certain Brands.

Other items, net decreased 8.5 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 $3.5 million.

Adjusted EBITDA increased by $26.6 million, primarily driven by higher Net revenue, partially offset by an increase in expenses, as discussed above.

Brand Performance Network

The components of operating results for the six months ended June 30, 2025, compared to the six months ended June 30, 2024 were as follows: 

Six Months Ended June 30,20252024Change(dollars in thousands)$%Revenue$332,317 $391,207 $(58,890)(15.1)%Operating ExpensesCost of services204,370 249,205 (44,835)(18.0)%Office and general expenses111,897 109,072 2,825