Company: STGW
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000876883-25-000034
Chunk: 198

Company: Stagwell Inc
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 8
Chunk 198
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 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.

Income Tax Expense

The