Stagwell Inc.

Second-quarter revenue was $786 million, up 11%, and net revenue was $632 million, up 6%. Organic revenue grew 10% and organic net revenue grew 5%, which management said was the strongest growth in six quarters. Adjusted EBITDA was $108.7 million, up 15% year over year, with margin up 143 basis points to 17.2%; adjusted EPS was $0.25, up $0.07 or 39%. On guidance, Stagwell reiterated full-year net revenue growth of 8% to 12%, adjusted EBITDA of $475 million to $525 million, and free cash flow conversion of 50% to 60% of adjusted EBITDA, while raising adjusted EPS guidance to $1.03 to $1.17 from $1.03 previously.

Mark Penn said the quarter validated Stagwell’s tech-forward model and argued the company is benefiting from the shift to AI-driven marketing and higher-value digital work. He highlighted strong new business momentum, saying the pipeline is at a record level and expecting cumulative year-end pipeline to be about 30% higher than last year. His tone was confident and long-term oriented, describing 2026 as a pivotal year and framing 2027-2028 as the start of a multiyear growth cycle.

Ryan Green emphasized broad-based growth, with all five operating segments delivering organic revenue and net revenue growth. He pointed to Digital Transformation’s 30% margin, cost actions that have delivered about $70 million of annualized savings so far versus a year-end target of $80 million to $100 million, and staff costs falling to 60.9% of net revenue, down 280 basis points year over year. He also cited year-to-date operating cash flow of $63.7 million, revolver balance of $360 million, unused borrowing capacity of $374 million, net leverage of 3.04x, and 14.4 million shares repurchased year to date for $88 million at an average price of $6.10.

In Q&A, analysts focused on whether Digital Transformation’s growth and 30% margin are sustainable, and management said the AI transition should support the business for years, with pipeline strength, higher-value work, and agentic coding improving efficiency. Questions also probed new business conditions, where Penn said Stagwell is winning by combining premium creativity with AI rather than relying on commoditized services, and that many wins came from legacy competitors. On capital allocation and CapEx, management said the year will be mostly organic, with continued buybacks, some acquisitions, and debt reduction toward the mid-2s leverage range by year-end; they also said the enterprise tech products are on track for the $25 million first-year bookings goal.