Stagwell 2025 Q2 Earnings Mixed Results as Net Loss Widens 17.2%

Stagwell (STGW) reported its fiscal 2025 Q2 earnings on July 31, 2025. The company experienced a mixed performance overall. Revenue of $706.82 million beat expectations, reflecting a 5.3% increase from the prior year. However, net loss widened to $4.63 million, missing targets. Stagwell reaffirmed its guidance for 2025, projecting an 8% growth in net revenue and adjusted EBITDA between $410 million and $460 million, signaling confidence in its strategic direction.

Revenue

Stagwell saw a revenue increase of 5.3% in Q2 2025, reaching $706.82 million compared to $671.17 million in Q2 2024. This growth reflects the company's positive momentum and its ability to capture market share across various segments.

Earnings/Net Income

Stagwell reported a loss of $0.02 per share in Q2 2025, an improvement from the $0.03 loss per share in Q2 2024. Despite the narrower per-share loss, the company's net loss widened to $4.63 million from $3.95 million last year, suggesting continued financial challenges.

Price Action

The stock price of Stagwell has increased by 2.69% during the latest trading day, jumped 9.98% during the most recent full trading week, and surged 27.33% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Stagwell (STGW) shares after a revenue increase quarter-over-quarter on the financial report release date and holding for 30 days has delivered moderate returns but underperformed the benchmark over the past three years. The strategy’s compound annual growth rate (CAGR) was 10.82%, trailing the benchmark by 19.04 percentage points. Though exhibiting a low-risk profile with a maximum drawdown of 0.00% and a Sharpe ratio of 0.19, it indicated significant volatility risk with a 56.54% volatility. This reflects that while the strategy may offer some stability, it does not capture the full potential of market gains and is subject to high fluctuations in stock performance.

CEO Commentary

Mark Penn, Chairman and CEO of Stagwell, emphasized that the company achieved a 10% net revenue growth excluding advocacy, indicating strong momentum across key metrics. He highlighted the $117 million in net new business, robust performance in Digital Transformation, and 26% growth among the Top 25 customers, alongside a significant government contract win. Penn noted that Stagwell’s unique approach is resonating in the market, showcasing the company’s effective strategies for capturing market share.

Guidance

Stagwell reiterates its 2025 guidance, projecting total net revenue growth of approximately 8%, adjusted EBITDA between $410 million and $460 million, and free cash flow conversion exceeding 45%. Additionally, the company expects adjusted EPS in the range of $0.75 to $0.88, with guidance reflecting anticipated impacts from potential acquisitions or dispositions.

Additional News

In the past three weeks, Stagwell has been active in enhancing its executive leadership and strategic initiatives. On July 8, 2025, Stagwell announced the advancement of its executive team with four key appointments, further strengthening its leadership capabilities. Additionally, the company launched the Stagwell Media Platform (SMP) on July 9, 2025, aiming to centralize global media, technology, and data investment expertise. Furthermore, Stagwell unveiled its official news network, as part of its Future of News initiative, providing clients direct access to leading news publishers. These developments highlight Stagwell's commitment to growth and innovation in the marketing and communication services industry.