Stagwell (STGW) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue grew 8% year-over-year to $704 million, with net revenue up 4% to $585 million, driven by strong Digital Transformation and Communications segments and record net new business wins of $141 million.

• Adjusted EBITDA rose 9% to $90 million, with margin expanding to 15.3% of net revenue, supported by improved performance in Communications and Digital Transformation.

• Adjusted EPS increased 31% to $0.17, while GAAP net loss attributable to shareholders was $13 million, reflecting higher operating expenses and deferred acquisition consideration.

• Top 100 customers grew 15% year-over-year, and client churn reduced by over 10%.

• New enterprise tech products and expanded partnerships with Adobe, Google, and others supported growth.

Financial highlights

• Revenue: $704 million (+8% YoY); Net revenue: $585 million (+4% YoY); Adjusted EBITDA: $90 million (+9% YoY), margin 15.3%.

• Net loss attributable to common shareholders: $13 million (Q1 2025: $3 million loss).

• Cash flow from operations improved by $34 million YoY; net cash used in operating activities was $26 million.

• Share buybacks: 7.3 million shares repurchased for $45 million in Q1; shares outstanding reduced to under 250 million.

• Net leverage ratio at 3.11x; available liquidity as of March 31, 2026, was $499 million.

Outlook and guidance

• Full-year 2026 guidance reiterated: net revenue growth of 8%–12%, adjusted EBITDA of $475M–$525M, adjusted EPS of $0.98–$1.12, and free cash flow conversion of 50%–60%.

• Growth expected to accelerate to double digits by Q3 and Q4, driven by new business, advocacy supercycle, and AI product adoption.

• Guidance includes anticipated impact from acquisitions or dispositions.

• Management expects to maintain sufficient liquidity and borrowing capacity for the next twelve months and beyond.