Company: STGW
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0000876883-25-000034
Chunk: 27

Company: Stagwell Inc
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 2
Chunk 27
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 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 Company had an income tax expense for the nine months ended September 30, 2025 of $14.0 million (on a pre-tax income of $27.7 million resulting in an effective tax rate of 50.3%) compared to income tax expense of $9.4 million (on pre-tax income of $18.1 million resulting in an effective tax rate of 52.1%) for the nine months ended September 30, 2024.

The difference in the effective tax rate of 50.3% in the nine months ended September 30, 2025, as compared to 52.1% in the nine months ended September 30, 2024, was primarily due to a reduction in interest related to uncertain tax positions and a reduction in shortfall of deductions for share based compensation expense vested during the period, offset by a decrease in the benefit of the disregarded entity structure due to the full exchange in April 2025. 

Noncontrolling and Redeemable Noncontrolling Interests 

The effect of noncontrolling and redeemable noncontrolling interests for the nine months ended September 30, 2025 was a loss of $2.6 million, compared to an income of $10.2 million for the nine months ended September 30, 2024. The amounts are driven by the mix of income and loss derived from entities not entirely owned by the Company. Additionally, the change was driven by the Class C Exchange during the second quarter of