Stagwell reported Q3 2025 revenue of $743 million, a 4 % year‑over‑year increase that surpassed the consensus estimate of $742.62 million by $0.38 million. Adjusted earnings per share rose to $0.24, beating the $0.23 estimate by $0.01, or 4.3 %. The earnings beat was driven by disciplined cost management and a stronger mix of high‑margin digital transformation and marketing services work, offsetting a modest decline in advocacy revenue.
Net revenue excluding advocacy climbed 10 % to $578 million, while total net revenue grew 6 %. Digital Transformation revenue expanded 12 % and Marketing Services grew 9 %, reflecting robust demand for data‑driven marketing solutions and the continued adoption of Stagwell’s technology platform. The advocacy segment, which is more cyclical, lagged behind, but its decline was largely neutralized by the growth in the non‑advocacy business.
Adjusted EBITDA reached $115 million, giving an overall margin of 19 %. When advocacy is excluded, adjusted EBITDA was $103 million, a 23 % increase and a margin of 18.6 %. The margin expansion was largely a result of higher pricing power in the digital transformation segment and effective labor‑efficiency initiatives highlighted by CFO Ryan Greene, who noted that cost discipline helped maintain profitability even as the company invested in new AI capabilities.
Stagwell reaffirmed its 2025 guidance, projecting net revenue growth of roughly 8 %, adjusted EBITDA between $410 million and $460 million, and a free‑cash‑flow conversion above 45 %. The guidance reflects management’s confidence that the company’s AI‑driven platform and the Palantir partnership will sustain demand and margin growth, while the company remains cautious about the cyclical nature of advocacy work.
The announcement of a partnership with Palantir to launch an AI‑driven marketing platform was a key headline. The collaboration is expected to accelerate the monetization of Stagwell’s data and analytics assets, positioning the firm at the forefront of the industry’s shift toward AI‑powered marketing solutions. The partnership also signals a strategic pivot away from the more volatile advocacy business toward higher‑margin, recurring revenue streams.
Mark Penn, Chairman and CEO, said the quarter demonstrated that “Stagwell is a winner in an industry undergoing significant transformation,” citing double‑digit growth in non‑advocacy work and enhanced cash flow. CFO Ryan Greene added that the company’s focus on labor efficiency and cost discipline drove a 9 % year‑over‑year increase in adjusted EPS to $0.24, giving the company confidence in a strong finish to the year.
Investors responded positively to the earnings beat, the revenue beat, the robust non‑advocacy growth, and the strategic Palantir partnership, underscoring confidence in Stagwell’s ability to navigate headwinds while capitalizing on AI‑driven opportunities.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.