Company: STGW
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000876883-25-000024
Chunk: 177

Company: Stagwell Inc
Filing Date: 2025-07-31
Form: 10-Q
Item: Item 8
Chunk 177
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 and higher stock-based compensation.

The increase in Office and general expenses was primarily attributable to an increase in staff costs and acquisition related expenses, partially offset by a decrease in deferred acquisition consideration expense.

Stock-based compensation increased by $14.1 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, and a reversal of expense in the second quarter of 2024 associated with stock-based performance awards for which the performance targets were not met.

Deferred acquisition consideration decreased by $10.5 million, primarily attributable to a reduction in the fair value of the deferred acquisition consideration liability associated with certain Brands. 

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Income Tax Expense

The Company had an income tax expense for the three months ended June 30, 2025 of 2.7 million (on a pre-tax loss of $2.0 million resulting in an effective tax rate of (134.9)%) primarily due to the tax benefit of the small pre-tax loss being more than offset by the current losses subject to valuation allowance, withholding taxes recorded in the period, and a shortfall in deductions for share based compensation expense vested during the period.

The Company had income tax expense for the three months ended June 30, 2024 of $1.2 million (on pre-tax loss of $2.8 million resulting in an effective tax rate of (41.8)%) primarily due to the tax benefit of the small pre-tax loss and a small windfall in deductions for share based compensation expense vested during the period, being more than offset by the current losses subject to valuation allowance.

Noncontrolling and Redeemable Noncontrolling Interests

The effect of noncontrolling and redeemable noncontrolling interests for the three months ended June 30, 2025 was income of $0.6 million, compared to loss of $1.0 million for the three months ended June 30, 2024. The amounts are driven by the mix of income and loss derived from entities not entirely owned by the Company.

Net Income (Loss) Attributable to Stagwell Inc. Common Shareholders 

As a result of the foregoing, net loss attributable to Stagwell Inc. common shareholders for the three months ended June 30, 2025 was $5.3 million, compared to net loss of $3.0 million for the three months ended June 30, 2024.

Earnings (Loss) Per Share

Diluted EPS