Company: STGW
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0000876883-25-000017
Chunk: 84

Company: Stagwell Inc
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 1
Chunk 84
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 quoted on active markets, but corroborated by market data.•Level 3 - Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.Financial Instruments that are not Measured at Fair Value on a Recurring BasisThe following table presents certain information for our financial liability that is not measured at fair value on a recurring basis as of March 31, 2025 and December 31, 2024: March 31, 2025December 31, 2024 CarryingAmountFair ValueCarryingAmountFair Value(dollars in thousands)5.625% Notes$1,100,000 $1,047,750 $1,100,000 $1,048,311 The fair value of this instrument is based on quoted market prices in markets that are not active. Therefore, this debt is classified as Level 2 within the fair value hierarchy.Financial Instruments Measured at Fair Value on a Recurring BasisContingent deferred acquisition consideration (Level 3 fair value measurement) is initially recorded at the acquisition date fair value and adjusted at each reporting period. The estimated liability is determined in accordance with models of each business’ future performance, including revenue growth and free cash flows. These models are dependent upon significant assumptions, such as the growth rate of the earnings of the relevant subsidiary during the contractual period and the discount rate. These growth rates are consistent with the Company’s long-term forecasts. As of March 31, 2025, the discount rate used to measure these liabilities ranged from 4.7% to 7.4%.As these estimates require the use of assumptions about future performance, which are uncertain at the time of estimation, the fair value measurements presented on the Unaudited Consolidated Balance Sheets are subject to uncertainty.See Note 6 of the Notes included herein for additional information regarding contingent deferred acquisition consideration.As of March 31, 2025, and December 31, 2024, the carrying amount of the Company’s financial instruments, including cash, cash equivalents, accounts receivable and accounts payable, approximated fair value because of their short-term maturity. Non-financial Assets and Liabilities that are Measured at Fair Value on a Nonrecurring BasisCertain non-financial assets are measured at fair value on a nonrecurring basis, primarily goodwill, intangible assets (Level 3 fair value measurements) and right-of-use lease assets (Level