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Item 8. Financial Statements and Supplementary Data

2025-03-11 compared with 2024-03-11 · 541 added, 908 removed, 1114 unchanged (57% of the section changed)

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Report of Independent Registered Public Accounting Firm (PCAOB ID No.

R eport of Independent Registered Public Accounting Firm (P CAOB ID No.

Report of Independent Registered Public Accounting Firm (PCAOB ID No.

Consolidated Statements of Operations for each of the Three Years in the Period Ended December 31, 2024

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Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheet of Stagwell Inc.

and subsidiaries (the “Company”) as of December 31, 2023, and the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity and cash flows for the year ended December 31, 2023, including the related notes and schedule of valuation and qualifying accounts for the year ended December 31, 2023 appearing under Item 15(a) (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of Stagwell Inc.

and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity and cash flows for the years then ended, including the related notes and schedule of valuation and qualifying accounts for the years ended December 31, 2024 and 2023 appearing under Item 15(a) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company did not maintain, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO because material weaknesses in internal control over financial reporting existed as of that date as the Company (i) lacked a sufficient complement of resources with an appropriate level of accounting knowledge, experience and training;

(ii) did not design and maintain an effective risk assessment process at a precise enough level;

(iii) did not design and maintain effective controls over information and communication;

(iv) did not design and maintain effective monitoring controls;

and (v) did not design and maintain effective control activities that address relevant risks across all business processes covering all significant accounts, including controls over the review of journal entries, account reconciliations and segregation of duties in the finance and accounting functions.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

The material weaknesses referred to above are described in Management's Report on Internal Control Over Financial Reporting appearing under Item 9A.

We considered these material weaknesses in determining the nature, timing, and extent of audit tests applied in our audit of the 2023 consolidated financial statements, and our opinion regarding the effectiveness of the Company’s internal control over financial reporting does not affect our opinion on those consolidated financial statements.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in management's report referred to above.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audit.

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audit of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinions.

Our audits also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded UNICEPTA Holding GmbH (“Unicepta”) and Consulum (Cayman) Limited (“Consulum”) from its assessment of internal control over financial reporting as of December 31, 2024 because they were acquired by the Company in purchase business combinations during 2024.

We have also excluded Unicepta and Consulum from our audit of internal control over financial reporting.

Unicepta and Consulum are wholly-owned subsidiaries whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting collectively represent less than 2% and 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2024.

Definition and Limitations of Internal Control over Financial Reporting

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The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill Impairment Assessments – Brand Performance Network Reporting Unit and Certain Reporting Units in the Integrated Agencies Network, Communications Network, and All Other Segments

As described in Notes 2 and 8 to the consolidated financial statements, the Company’s goodwill balance was $1,499 million as of December 31, 2023, and the goodwill associated with the Brand Performance Network Reporting Unit, Integrated Agencies Network segment, Communications Network segment, and All Other segment was $442 million, $881 million, $137 million, and $39 million, respectively.

Management tests goodwill for impairment, at the reporting unit level, annually as of October 1st of each year, or more frequently if indicators of potential impairment exist.

Goodwill Impairment Assessments –Certain Reporting Units in the Integrated Agencies Network and Communications Network Segments and the All Other Category

As described in Notes 2 and 8 to the consolidated financial statements, the Company’s goodwill balance was $1,554 million as of December 31, 2024, and the goodwill associated with the Integrated Agencies Network segment, the Communications Network segment, and the All Other category was $892 million, $159 million, and $69 million, respectively.

Management tests goodwill for impairment, at the reporting unit level, annually as of October 1 of each year, or more frequently if indicators of potential impairment exist.

For reporting units for which the qualitative assessment concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, management performs a quantitative impairment test, which compares the fair value of the reporting unit to its carrying amount.

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Determining the fair value of a reporting unit involves the use of significant estimates and assumptions.

Management generally uses a combination of the income approach, which incorporates the use of the discounted cash flow method, and the market approach, which incorporates the use of earnings multiples based on market data and comparable companies, and applies an equal weighting to the income and market approaches for the impairment test.

The income approach and the market approach both require the exercise of significant judgment, including judgment about the amount and timing of expected future cash flows, assumed terminal value and appropriate discount rates.

Management uses a combination of the income approach (a discounted cash flow method) and the market approach, and applies an equal weighting to the approaches for the impairment test.

The income approach requires the exercise of significant judgment, including the amount and timing of expected future cash flows, terminal value and discount rates.

The expected cash flows are developed from the Company’s long-range planning process using projections of operating results and related cash flows based on assumed revenue growth rates, EBITDA margin, long-term growth rates, and discount rates based on a reporting unit’s weighted average cost of capital.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessments for the Brand Performance Network reporting unit and certain reporting units in the Integrated Agencies Network, Communications Network, and All Other segments (collectively the “aforementioned reporting units”) is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the aforementioned reporting units;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, EBITDA margin, long-term growth rates, discount rates, comparable companies, and earnings multiples for the aforementioned reporting units;

The market approach requires the exercise of significant judgment as it relates to the use of earnings multiples based on market data and comparable companies.

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessments for certain reporting units in the Integrated Agencies Network and Communications Network segments and the All Other category (collectively the “aforementioned reporting units”) is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the aforementioned reporting units;

(ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, EBITDA margin, long-term growth rates, and discount rates used in the income approach, as well as earnings multiples and comparable companies used in the market approach;

and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

As described in the “Opinions on the Financial Statements and Internal Control over Financial Reporting” section, material weaknesses were identified that impacted this matter.

As previously disclosed by management, material weaknesses existed during the year that impacted this matter.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included, among others, (i) evaluating and determining the nature and extent of audit procedures performed and evidence obtained that are responsive to the material weaknesses identified;

(ii) testing management’s process for developing the fair value estimate of the aforementioned reporting units;

(iii) evaluating the appropriateness of the income and market approaches used by management;

(iv) testing the completeness and accuracy of underlying data used in the income and market approaches;

and (v) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, EBITDA margin, long-term growth rates, discount rates,

comparable companies, and earnings multiples.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessments, including controls over the valuation of the aforementioned reporting units.

These procedures also included (i) testing management’s process for developing the fair value estimate of the aforementioned reporting units;

(ii) evaluating the appropriateness of the income and market approaches used by management;

(iii) testing the completeness and accuracy of underlying data used in the income and market approaches;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, EBITDA margin, long-term growth rates, and discount rates used in the income approach, as well as earnings multiples and comparable companies used in the market approach.

Evaluating management’s assumptions related to revenue growth rates, EBITDA margin, and long-term growth rates involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the aforementioned reporting units;

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(ii) the weighting of the approaches;

and (iii) the reasonableness of the long-term growth rates, discount rates, comparable companies, and earnings multiples assumptions for each of the reporting units.

and (iii) the reasonableness of the long-term growth rates, discount rates, comparable companies, and earnings multiples assumptions.

/s/ PricewaterhouseCoopers LLP

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Stagwell, Inc.

and subsidiaries (the “Company”) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the two years in the period ended December 31, 2022, and the related notes and schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for the period ended December 31, 2022, and the related notes and schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”) of Stagwell Inc.

and subsidiaries (the “Company”).

In our opinion, the financial statements present fairly, in all material respects, the results of the Company’s operations and its cash flows for the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

March 6, 2023 (March 11, 2024 as to the effects of the restatement discussed in Note 21)

March 6, 2023 (March 11, 2024 as to the effects of the restatement of the 2022 financial statements to correct errors identified in 2023)

We began serving as the Company’s auditor in 2020.

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( 95,345 ) 542 ( 83,643 )

542 ( 83,643 ) 14,832

Income before income taxes and equity in earnings of non-consolidated affiliates

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24,541 50,512 50,123

Equity in (loss) of non-consolidated affiliates

Equity in income (loss) of non-consolidated affiliates

503 ( 8,870 ) ( 79 )

25,044 41,642 50,044

Net (income) loss attributable to noncontrolling and redeemable noncontrolling interests ( 41,508 ) ( 30,125 ) ( 14,884 )

Net income attributable to noncontrolling and redeemable noncontrolling interests

( 22,785 ) ( 41,508 ) ( 30,125 )

Net income attributable to Stagwell Inc.

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$ 2,259 $ 134 $ 19,919

Earnings (Loss) Per Common Share:

Earnings Per Common Share:

Basic $ 0.02 $ — $ 0.16

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$ 25,044 $ 41,642 $ 50,044

Other comprehensive (loss) - Foreign currency translation adjustment 7,996 ( 37,773 ) ( 6,000 )

Other comprehensive income - Benefit plan adjustment

Other comprehensive income (loss) - Foreign currency translation adjustment

( 27,699 ) 7,996 ( 37,773 )

Other comprehensive (loss)

Other comprehensive income - Benefit plan adjustment, net of tax

1,424 338 4,088

Comprehensive income for the period

Comprehensive income (loss) for the period ( 1,231 ) 49,976 16,359

Comprehensive income attributable to the noncontrolling and redeemable noncontrolling interests

( 7,216 ) ( 47,431 ) ( 6,640 )

Comprehensive (income) loss attributable to the noncontrolling and redeemable noncontrolling interests ( 47,431 ) ( 6,640 ) ( 14,884 )

Comprehensive income (loss) attributable to Stagwell Inc.

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Total Assets $ 3,908,221 $ 3,767,047

LIABILITIES, RNCI, AND SHAREHOLDERS’ EQUITY

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS (“RNCI”), AND SHAREHOLDERS’ EQUITY

Current Liabilities

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Shareholders’ Equity

331,731 356,695

Noncontrolling interests 445,174 468,577

Total Shareholders’ Equity

776,905 825,272

Total Liabilities, Redeemable Noncontrolling Interests and Shareholders’ Equity

$ 3,908,221 $ 3,767,047

See Notes to the Audited Consolidated Financial Statements .

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Other ( 5,212 ) ( 7,781 ) ( 6,604 )

Net cash provided by (used in) investing activities

Net cash (used in) provided by investing activities

( 162,472 ) 155,951 ( 116,275 )

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Purchase of noncontrolling interest ( 3,316 ) — ( 3,600 )

Proceeds from issuance of the 5.625% Notes — — 1,100,000

Debt issuance costs — ( 844 ) —

Distributions — — ( 233,203 )

Repurchase of 7.50% Senior Notes — — ( 884,398 )

Net cash used in financing activities

Net cash provided by (used in) financing activities

36,938 ( 339,864 ) ( 186,736 )

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Net increase (decrease) in cash and cash equivalents 11,602 ( 100,852 ) 36,580

Cash and cash equivalents at beginning of period 119,737 220,589 184,009

Cash and cash equivalents at end of period $ 131,339 $ 119,737 $ 220,589

Supplemental Cash Flow Information:

STAGWELL INC.

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2024 2023 2022

Cash and cash equivalents at beginning of period 220,589 184,009 92,457

Cash and cash equivalents at end of period $ 119,737 $ 220,589 $ 184,009

Supplemental Cash Flow Information:

Cash income taxes paid $ 23,906 $ 45,538 $ 41,235

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Acquisitions of noncontrolling interest 27,207 22,172 1,000

Issuance of redeemable noncontrolling interest — — 27,820

Share issuances

Establishment of a deferred tax asset related to the exchange — — 30,556

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Finalization of Stagwell Inc’s tax basis in Stagwell Global, LLC — — 119,470

Non-cash contributions — — 12,372

Non-cash distributions to Stagwell Media LP — — 13,000

Non-cash payment of deferred acquisition consideration 18,208 32,820 989

Conversion of preferred shares — — 209,947

See Notes to the Audited Consolidated Financial Statements .

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Common Shares -

Class A & B Common Shares -

Class C Paid-in Capital Retained Earnings Accumulated Other Comprehensive (Loss) Income

Common Shares -

Class C Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss

Stagwell Inc.

Shareholders' Equity Noncontrolling Interests Shareholders' Equity

Shareholders’ Equity

Noncontrolling Interests Shareholders’ Equity

Shares Amount Shares Amount

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— — — — — 2,259 — 2,259 22,785 25,044

Other comprehensive income

— — — — — — 2,411 2,411 5,923 8,334

Total other comprehensive income

Other comprehensive loss

— — — — — — ( 10,706 ) ( 10,706 ) ( 15,569 ) ( 26,275 )

Total other comprehensive income (loss) — — — — — 2,259 ( 10,706 ) ( 8,447 ) 7,216 ( 1,231 )

Distributions to noncontrolling interests (1)

— — — — — — — — ( 23,843 ) ( 23,843 )

Purchases of noncontrolling interest — — — — ( 3,069 ) — — ( 3,069 ) ( 10,226 ) ( 13,295 )

Changes in redemption value of RNCI — — — — — ( 442 ) — ( 442 ) — ( 442 )

Changes in redemption value of RNCI, net of tax

— — — — — ( 11,669 ) — ( 11,669 ) — ( 11,669 )

Restricted awards granted or vested 3,856 4 — — 1,109 — — 1,113 — 1,113

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Stock-based compensation — — — — 45,509 — — 45,509 — 45,509

Change in ownership held by Class C holders — — — — ( 10,858 ) — — ( 10,858 ) 10,858 —

Change in ownership held by Class C shareholders

— — — — ( 5,886 ) — — ( 5,886 ) 6,380 494

Shares issued, acquisitions 9,567 10 — — 65,283 — — 65,293 — 65,293

Conversion of Class C to Class A shares 9,260 9 ( 9,260 ) — ( 9 ) — — — — —

53 — — — 439 2 — 441 ( 2,930 ) ( 2,489 )

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114,847 $ 115 151,649 $ 2 $ 343,647 $ 11,740 $ ( 23,773 ) $ 331,731 $ 445,174 $ 776,905

(1) The Other line within Paid-in Capital includes $ 1.6 million resulting from the modification of certain stock-appreciation rights from equity to cash settled that were subsequently exercised in equity.

(1) Distributions to noncontrolling interests include approximately $ 21.6 million to Class C shareholders.

See Notes to the Audited Consolidated Financial Statements .

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Class A & B Common Shares -

Class C Paid-in Capital Retained Earnings Accumulated Other ComprehensiveLoss

Class C Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss

Stagwell Inc.

Shareholders' Equity Noncontrolling Interests Shareholders' Equity

Shareholders’ Equity

Noncontrolling Interests Shareholders’ Equity

Shares Amount Shares Amount

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Net income — — — — — 134 — 134 41,508 41,642

Other comprehensive loss

Other comprehensive income

— — — — — — 2,411 2,411 5,923 8,334

Total other comprehensive income (loss) — — — — — 19,919 ( 10,200 ) 9,719 6,640 16,359

Total other comprehensive income

— — — — — 134 2,411 2,545 47,431 49,976

Distributions to noncontrolling interests — — — — — — — — ( 19,164 ) ( 19,164 )

Purchases of noncontrolling interests — — — — ( 1,000 ) — — ( 1,000 ) ( 3,600 ) ( 4,600 )

Acquisition of noncontrolling interest — — — — — — — — 2,667 2,667

Purchases of noncontrolling interest — — — — 3,257 — — 3,257 — 3,257

Changes in redemption value of RNCI — — — — — ( 442 ) — ( 442 ) — ( 442 )

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Shares issued, acquisitions 7,530 8 — — 41,152 — — 41,160 — 41,160

Conversion of Class C to Class A shares 19,061 19 ( 19,061 ) — 47,911 — — 47,930 ( 47,930 ) —

Finalization of Stagwell Inc’s tax basis in Stagwell Global, LLC

Change in ownership held by Class C shareholders

— — — — ( 10,858 ) — — ( 10,858 ) 10,858 —

Finalization of MDC acquisition accounting and associated impact on Stagwell Inc.

Conversion of Class C to Class A shares 9,260 9 ( 9,260 ) — ( 9 ) — — — — —

1 ( 1 ) — — ( 1,614 ) ( 639 ) — ( 2,254 ) ( 712 ) ( 2,966 )

Other 242 1 — — ( 6,960 ) 447 — ( 6,512 ) ( 8,244 ) ( 14,756 )

Balance at December 31, 2023 118,469 $ 118 151,649 $ 2 $ 348,494 $ 21,148 $ ( 13,067 ) $ 356,695 $ 468,577 $ 825,272

(1) The Other line within Paid-in Capital includes $ 1.6 million in connection with the modification of certain stock-appreciation rights from equity to cash-settled that were subsequently exercised in equity.

See Notes to the Audited Consolidated Financial Statements.

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Year Ended December 31, 2022

Members' capital Convertible Preference Shares Common Shares -

Common Shares -

Class A & B Common Shares -

Class C Paid-in Capital Retained Earnings

Accumulated Other Comprehensive Loss

Stagwell Inc.

Shareholders' Equity Noncontrolling Interests Shareholders' Equity

Shares Amount Shares Amount Shares Amount

Class C Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Stagwell Inc.

Shareholders’ Equity

Noncontrolling Interests Shareholders’ Equity

Shares Amount Shares Amount

Balance at December 31, 2021 118,252 $ 118 179,970 $ 2 $ 382,893 $ ( 6,982 ) $ ( 5,278 ) $ 370,753 $ 508,287 $ 879,040

Net income prior to reorganization 24,742 — — — — — — — — — 24,742 14,884 39,626

— — — — — 19,919 — 19,919 30,125 50,044

Other comprehensive loss

Total other comprehensive income

— — — — — — ( 10,200 ) ( 10,200 ) ( 23,485 ) ( 33,685 )

Contributions 250 — — — — — — — — — 250 — 250

Distributions, net ( 204,929 ) — — — — — — — — — ( 204,929 ) — ( 204,929 )

Distributions to noncontrolling interests — — — — — — — — — — — ( 11,936 ) ( 11,936 )

Changes in redemption value of RNCI ( 72 ) — — — — — — — — — ( 72 ) — ( 72 )

Other — — — — — — — — — — — ( 300 ) ( 300 )

Effect of reorganization ( 178,372 ) 123,849 209,980 78,794 77 179,970 2 110,555 — — 142,242 636,416 778,658

Reclass NCI to liability — — — — — — — — — — ( 8,475 ) ( 8,475 )

Impact of PPA adjustment to noncontrolling interests — — — — 1 — — 8,845 — — 8,846 ( 1,549 ) 7,297

Net income (loss) attributable to Stagwell Inc.

Total other comprehensive income (loss)

— — — — — 19,919 ( 10,200 ) 9,719 6,640 16,359

Other comprehensive loss — — — — — — — — — ( 5,278 ) ( 5,278 ) — ( 5,278 )

Distributions to noncontrolling interests — — — — — — — — ( 29,957 ) ( 29,957 )

Purchases of noncontrolling interests — — — — ( 1,000 ) — — ( 1,000 ) ( 3,600 ) ( 4,600 )

Acquisition of noncontrolling interests — — — — — — — — 2,667 2,667

Changes in redemption value of RNCI — — — — — 8,711 — 8,711 — 8,711

Restricted awards granted or vested 3,940 4 — — ( 4 ) — — — — —

Shares acquired and cancelled — — — ( 14 ) — — — ( 841 ) — — ( 841 ) — ( 841 )

Shares repurchased and cancelled ( 9,725 ) ( 10 ) — — ( 70,269 ) — — ( 70,279 ) — ( 70,279 )

Restricted shares forfeited ( 221 ) — — — — — — — — —

Stock-based compensation — — — — 34,974 — — 34,974 — 34,974

Reclass noncontrolling interests to RNCI — — — — — — — ( 25,236 ) — — ( 25,236 ) ( 2,719 ) ( 27,955 )

Purchases of noncontrolling interests — — — 4,476 5 — — ( 14,138 ) — — ( 14,133 ) ( 143,134 ) ( 157,267 )

Tax impact on step up transactions — — — — — — — 23,108 — — 23,108 — 23,108

Conversion of shares — ( 123,849 ) ( 209,980 ) 33,035 33 — — 209,947 — — — — —

Shares issued, acquisitions 175 — — — 1,178 — — 1,178 — 1,178

Conversion of Class C to Class A shares 19,061 19 ( 19,061 ) — 47,911 — — 47,930 ( 47,930 ) —

Finalization of Stagwell Inc's tax basis in Stagwell Global, LLC — — — — 119,470 — — 119,470 — 119,470

Finalization of MDC acquisition accounting and associated impact on Stagwell Inc.

— — — — ( 16,294 ) — — ( 16,294 ) 2,301 ( 13,993 )

Other 242 1 — — ( 6,960 ) 447 — ( 6,512 ) ( 8,244 ) ( 14,756 )

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Actual results could differ from these estimates and assumptions.

On December 21, 2020, MDC Partners Inc.

(“MDC”) and Stagwell Media LP (“Stagwell Media”) announced that they had entered into the Transaction Agreement, providing for the combination of MDC with the operating businesses and subsidiaries of Stagwell Media (the “Stagwell Subject Entities”).

The Stagwell Subject Entities comprised Stagwell Marketing and its direct and indirect subsidiaries.

On August 2, 2021, we completed the combination of MDC and the operating businesses and subsidiaries of Stagwell Media and a series of related transactions (such combination and transactions, the “Transactions”).

The Transactions were treated as a reverse acquisition for financial reporting purposes, with MDC treated as the legal acquirer and Stagwell Marketing treated as the accounting acquirer.

The results of MDC are included within the Consolidated Statements of Operations for the period beginning on the date of the acquisition through the end of the respective period presented and the results of SMG are included for the entire period presented.

See Note 4 of the Notes included herein for information in connection with the acquisition of MDC.

Revision of Previously Issued Consolidated Financial Statements

In connection with the preparation of the consolidated financial statements during 2023, the Company identified the following errors in the areas of income taxes, noncontrolling interests, and accumulated other comprehensive loss related to its previously filed 2022 annual consolidated financial statements.

• In the first quarter of 2023, we identified an error related to foreign currency gains and losses not being allocated from Accumulated other comprehensive loss to noncontrolling interest shareholders.

Noncontrolling interests and Accumulated other comprehensive loss was overstated by approximately $ 23.5 million .

There was no impact to Total Shareholders’ Equity as of December 31, 2022.

Also, we identified a $ 2.1 million understatement of income tax expense, and overstatement to income tax payable (Accruals and Other Liabilities) and deferred tax asset (Other Current Assets) of $ 2.4 million and $ 4.5 million , respectively, relating to an error in the calculation of valuation allowances.

These errors were originally corrected within the first quarter of 2023 as management determined the errors were not material to the quarterly financial statements as of and for the three months ended March 31, 2023.

• In the second quarter of 2023, we identified an error related to an understatement of income tax expense and income tax payable (Accruals and Other Liabilities) by $ 5.3 million due to incorrect applications of tax payments.

The Company also identified a misclassification of $ 12.9 million as a result of improper netting of income tax receivables (Other Current Assets) and payables (Accruals and Other Liabilities).

This error resulted in an incremental $ 7.3 million misclassification of income tax receivables and payables as of March 31, 2023, which was originally corrected within the second quarter of 2023 as management determined the errors were not material to the quarterly financial statements as of and for the three and six months ended June 30, 2023.

• In the fourth quarter of 2023, we identified an incremental $ 10.4 million understatement of tax expense as well as balance sheet misclassification between income tax accounts included within Other Current Assets, Other Assets, Accruals and Other Liabilities, and Deferred Tax Liabilities.

These errors were related to the incorrect applications of tax payments, and the incorrect calculation of deferred tax balances for items mainly associated with interest expense, intangible assets, fixed assets, state tax, basis adjustment for partnership, and the related valuation allowance.

We also identified an error in our tax receivable agreement (TRA) liability calculation which resulted in a $ 2.1 million overstatement of other expenses and of Other Liabilities.

The Company evaluated the impact of all errors identified throughout 2023 individually and in the aggregate and concluded they are not material to its previously issued 2022 annual consolidated financial statements.

As a result, the Company has revised its 2022 consolidated financial statements to reflect the effects of these adjustments, which were originally recorded out-of-period in the 2023 interim financial statements.

See Note 21 of the Notes included herein for additional information.

The 2022 balances presented within the 2023 Form 10-K reflect the effects of the corrections.

The Company will effect the revision of the 2023 interim consolidated financial statements the next time such financial statements are presented.

See Note 22 of the Notes included herein for additional information regarding the unaudited quarterly financial information.

The 2022 interim consolidated financial statements previously issued through September 30, 2022 were not affected by these errors.

The accompanying financial statements reflect all adjustments, consisting of normal recurring accruals, which in the opinion of management are necessary for a fair statement, in all material respects, of the information contained therein.

Intercompany balances and transactions have been eliminated in consolidation.

Certain reclassifications have been made to the prior year financial information to conform to the current year’s presentation.

Recent Developments

On January 2, 2024, the Company acquired 100% of the interests in Team Epiphany, LLC., for $ 15.8 million of which $ 10.8 million was paid in cash and 798,000 shares of Class A Common Stock, par value $0.001 per share (the “Class A Common Stock”), subject to post-closing adjustments.

In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of $ 17.0 million, subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion.

On March 1, 2024, the Company acquired 100% of the interests in Sidekick Live Limited., for £ 4.5 million of which £ 3.6 million (approximately $ 4.6 million) was paid in cash and 195,000 shares of Class A Common Stock, par value $0.001 per share, subject to post-closing adjustments.

In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of £ 8.0 million (approximately $ 10.2 million), subject to continued employment requirements and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion.

On January 1, 2025, the Company entered into a stock purchase agreement to acquire ADK Group, an integrated marketing solutions company.

The purchase price is dependent on the closing balance sheet but is estimated to be approximately $24 million.

The acquisition is expected to close in the second quarter of 2025.

On December 23, 2024, the Company entered into a sale purchase agreement to acquire Create Group Holding Limited, a strategic digital communications group in Middle East, for approximately $ 16 million, subject to post-closing adjustments.

Under the agreement, the sellers are entitled to contingent consideration up to a maximum value of approximately $ 24 million, subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of Class A common stock, par value $0.001 per share (the “ Class A Common Stock ” ) at the Company’s discretion.

The acquisition is expected to close in the second quarter of 2025.

Significant Accounting Policies

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Due to the diversified nature of the Company’s client base, the Company does not believe that it is exposed to a concentration of credit ris k.

No sales to an individual client accounted for more than 4 % of revenue for the years ended December 31, 2023 and 2022.

No sales to an individual client accounted for more than 3 % and 4 % for the years ended December 31, 2024, and 2023, respectively.

Cash and Cash Equivalents .

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The Allowance for doubtful accounts is based on expected future uncollectible accounts receivable and is estimated considering forecasts of future economic conditions in addition to information about past events and current conditions.

Allowance for doubtful accounts was $ 7.1 million and $ 10.4 million at December 31, 2023 and December 31, 2022, respectively.

Allowance for doubtful accounts was $ 6.1 million and $ 7.1 million as of December 31, 2024, and December 31, 2023, respectively.

Transfer of Accounts Receivable.

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The trade receivables transferred to the third parties were $ 435.6 million, $ 393.9 million and $ 176.5 million, during the years ended December 31, 2024, 2023, and 2022, respectively.

The amount collected and due to the third parties under these arrangements was $ 1.8 million as of December 31, 2023 and $ 5.7 million as of December 31, 2022.

No amounts were collected and due to third parties as of December 31, 2021.

The trade receivables collected by the Company that were not remitted to the third parties under these arrangements were recorded in Accruals and other liabilities on the Consolidated Balance Sheets and total $ 19.5 million as of December 31, 2024, $ 1.8 million as of December 31, 2023, and $ 5.7 million as of December 31, 2022.

Fees for these arrangements were recorded in Office and general expenses in the Consolidated Statements of Operations and totaled $ 5.8 million, $ 5.4 million, and $ 1.8 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Expenditures Billable to Clients .

Expenditures billable to clients consist principally of outside vendor costs incurred on behalf of clients when providing services that have not yet been invoiced to clients.

Expenditures billable to clients consist principally of outside vendor costs incurred on behalf of clients when providing services, in arrangements in which we are acting as agent, that have not yet been invoiced to clients.

Such amounts are invoiced to clients at various times over the course of the period.

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Fixed assets are stated at cost, net of accumulated depreciation.

Computers and furniture and fixtures are depreciated on a straight-line basis over periods of three to ten years .

Computer equipment and furniture and fixtures are depreciated on a straight-line basis over periods of three to ten years .

Leasehold improvements are depreciated on a straight-line basis over the lesser of the term of the related lease or the estimated useful life of the asset.

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If this comparison indicates that there is an impairment, the amount of the impairment is typically calculated using discounted expected future cash flows where observable fair values are not readily determinable.

The discount rate applied to these cash flows is based on the Company’s weighted average cost of capital (“WACC”), risk adjusted where appropriate, or other appropriate discount rate.

The discount rate applied to these cash flows is based on the Company’s weighted average cost of capital (“WACC”), risk adjusted where appropriate, or another appropriate discount rate.

Goodwill (the excess of the acquisition cost over the fair value of the net assets acquired) acquired as a result of a business combination is not amortized but rather tested for impairment, at the reporting unit level, annually as of October 1st of each year, or more frequently if indicators of potential impairment exist.

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If the Company elects to perform the qualitative assessment and concludes that it is more likely than not that the fair value of the reporting unit is more than its carrying amount, then goodwill is not considered impaired, and the quantitative impairment test is not necessary.

For reporting units for which the qualitative assessment concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, the Company will perform the quantitative impairment test, which compares the fair value of the reporting unit to its carrying amount.

For reporting units for which the qualitative assessment concludes that it is more likely than

not that the fair value of the reporting unit is less than its carrying amount, the Company will perform the quantitative impairment test, which compares the fair value of the reporting unit to its carrying amount.

If the fair value of the reporting unit exceeds the carrying amount of the net assets assigned to that reporting unit, goodwill is not considered impaired.

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The Company applies an equal weighting to the income and market approaches for the impairment test.

The income approach

and the market approach both require the exercise of significant judgment, including judgment about the amount and timing of expected future cash flows, assumed terminal value and appropriate discount rates.

The DCF estimates incorporate expected cash flows that represent a spectrum of the amount and timing of possible cash flows of each reporting unit from a market participant perspective.

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The amount of consideration under these contractual arrangements is not a fixed amount, but rather is dependent upon various valuation formulas, such as the average earnings of the relevant subsidiary through the date of exercise or the growth rate of the earnings of the relevant subsidiary during that period.

In the event that an incremental purchase may be required by the Company, the amounts are recorded in Redeemable Noncontrolling Interests in mezzanine equity on the Consolidated Balance Sheets at their acquisition date fair value and adjusted for changes to their estimated redemption value through Retained earnings or Paid-in capital (if at an accumulated deficit) in the Consolidated Balance Sheets (but not less than their initial redemption value), except for foreign currency translation adjustments.

In the event that noncontrolling shareholders have a right to require the

Company to purchase their ownership interest, the amounts are recorded in Redeemable Noncontrolling Interests in mezzanine equity on the Consolidated Balance Sheets at their acquisition date fair value and adjusted for changes to their estimated redemption value through Retained earnings or Paid-in capital (if at an accumulated deficit) in the Consolidated Balance Sheets (but not less than their initial redemption value), except for foreign currency translation adjustments.

These adjustments will not impact the calculation of earnings (loss) per share if the redemption values are less than the estimated fair values.

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Any difference between the purchase price and noncontrolling interest is recorded to Paid-in capital in the Consolidated Balance Sheets.

In circumstances where the purchase of shares of an equity investment results in obtaining

control, the existing carrying value of the investment is remeasured to the acquisition date fair value and any gain or loss is recognized in the Consolidated Statement of Operations.

In circumstances where the purchase of shares of an equity investment results in obtaining control, the existing carrying value of the investment is remeasured to the acquisition date fair value and any gain or loss is recognized in the Consolidated Statement of Operations.

Revenue Recognition .

The Company’s revenue is recognized when control of the promised services are transferred to our clients, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

The Company’s revenue is recognized when control of the promised services is transferred to our clients, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

See Note 5 of the Notes included herein for additional information.

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Deferred Financing Costs .

The Company uses the straight-line method, which approximates the effective interest method, to amortize deferred financing costs.

The Company uses the straight-line method, which approximates the effective interest method, to amortize deferred financing costs within Interest expense, net on the Consolidated Statements of Operations.

Income Taxes.

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Stock-Based Compensation .

Compensation cost is measured at fair value at the date of grant and is expensed over the service period, generally the award’s vesting period.

Certain of our awards are settled in cash (stock appreciation awards) and are recorded at fair value on the date of grant and remeasured at each reporting period.

The measurement of the compensation cost for these awards is based on using the Black-Scholes option pricing model and is recorded in Operating income over the service period, in this case the award’s vesting period.

The assumption for expected volatility is based on a blended rate which includes historical volatility of a peer group of market participants and historical volatility of the Company as the Company has limited historical volatility.

Compensation cost for awards such as restricted stock and restricted stock units is measured at fair value at the date of grant and is expensed over the service period, generally the award’s vesting period.

The Company has adopted the straight-line attribution method for determining the compensation cost to be recorded during each accounting period.

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The Company commences recording compensation expense related to awards that are based on performance conditions under the straight-line attribution method when it is probable that such performance conditions will be met.

Certain of our awards are settled in cash (stock appreciation awards) and are recorded at fair value on the date of grant and remeasured at each reporting period.

The measurement of the compensation cost for these awards is based on using the Black-Scholes option pricing model and is recorded in Operating income (loss) over the service period, in this case the award’s vesting period.

The assumption for expected volatility is based on a blended rate which includes historical volatility of a peer group of market participants and historical volatility of the Company.

Certain of the Company’s subsidiaries grant awards to their employees providing them with an equity interest in the respective subsidiary (the “profits interests awards”).

The awards generally provide the employee the right, but not the obligation, to sell their profits interest in the subsidiary to the Company based on a performance-based formula and, in certain cases, receive a profit share distribution.

The awards generally provide the employee with the right, but not the obligation, to sell their profits interest in the subsidiary to the Company based on a performance-based formula and, in certain cases, receive a profit share distribution.

The profits interests awards are primarily settled in cash, with certain awards having stock-settlement provisions at the Company’s discretion.

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The Company may purchase shares of Class A Common Stock under its stock repurchase program (the “Repurchase Program”) as well as repurchases outside of the Repurchase Program.

The Company accounts for these repurchases by reducing the value of our Class A Common Stock for the par value of the shares repurchased and account for the difference between the price paid for the Class A Common Stock, excluding fees, and the par value of such stock to Paid-in capital.

The Company accounts for these repurchases by reducing the value of our Class A Common Stock for the par value of the shares repurchased and account for the

difference between the price paid for the Class A Common Stock, excluding fees, and the par value of such stock to Paid-in capital.

See Note 15 of the Notes included herein for further details of our share buyback plan .

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Basic earnings (loss) per common share is based upon the weighted average number of common shares outstanding during each period.

Diluted earnings (loss) per common share is based on the above, in addition,

if dilutive, common share equivalents, which include stock appreciation rights, and unvested restricted stock and restricted stock units as well as shares of Class C Common stock, par value $0.00001 per share (the “Class C Common Stock”).

In periods of net loss, all potentially issuable common shares are excluded from diluted net loss per common share because they are anti-dilutive.

Foreign Currency Translation .

Diluted earnings (loss) per common share is based on the above, in addition, if dilutive, common share equivalents, which include stock appreciation rights, unvested restricted stock and restricted stock units, as well as shares of Class C common stock, par value $0.00001 per share (the “Class C Common Stock”).

Foreign Currency .

The functional and reporting currency of the Company is the U.S.

Generally, the Company’s subsidiaries use their local currency as their functional currency.

Assets and liabilities are translated at the exchange rates in effect at the balance sheet date, and revenues and expenses are translated at the average exchange rates during the period presented.

The resulting translation adjustments are recorded as a component of Accumulated other comprehensive income (loss) in the Shareholders’ equity section of our Consolidated Balance Sheets.

Foreign currency transaction unrealized and realized gains or losses are recognized as incurred in the Consolidated Statements of Operations in Foreign, exchange, net.

Translation of intercompany transactions, which are not intended to be settled, are included in cumulative translation adjustments.

Assets and liabilities are translated at the exchange rates in effect at the balance sheet date, and revenues and expenses are translated at the average exchange rates during the periods presented.

The resulting translation adjustments are recorded as a component of Accumulated other comprehensive income (loss) in the Shareholders’ equity section of the Consolidated Balance Sheets.

Translation of intercompany transactions, which are not intended to be settled, are included within cumulative translation adjustments.

When transactions are denominated or settled in currencies other than the entity’s functional currency, foreign currency transaction unrealized and realized gains or losses are recognized.

These gains and losses are recognized as incurred in the Consolidated Statements of Operations in Foreign, exchange, net.

New Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board, (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures (“ASU 2023-09”), to enhance the transparency and decision usefulness of income tax disclosures by requiring disaggregated information about an entity’s effective tax rate reconciliation, as well as information on taxes paid.

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement—Reporting Comprehensive Income (Topic 220) Disaggregation of Income Statement Expenses (“ASU 2024-03”), to enhance the transparency and decision usefulness of financial information presented in the income statement by requiring disaggregated information about certain income statement expense line items.

ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

The Company is evaluating the impact of these new requirements on its income statement presentation and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures (“ASU 2023-09”), to enhance the transparency and decision usefulness of income tax disclosures by requiring disaggregated information about an entity’s effective tax rate reconciliation, as well as information on taxes paid.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024.

The Company is evaluating the impact of the adoption of this guidance on the Company’s financial statements and disclosures.

In November 2023, the FASB issued Accounting Standards Update ASU 2023-07, Segment Reporting (Topic 280) Improvements to Segment Disclosures (“ASU 2023-07”), to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

The Company is evaluating the impact of the new requirements, effective for the Company’s 2024 Financial Statements, to determine the level of disclosure of segment expenses.

2023 Acquisitions

On November 1, 2023, the Company acquired Movers and Shakers, a digital creative company, for $ 15.0 million, of which $ 10.2 million was paid in cash and 1.0 million shares of Class A common stock, par value $0.001 per share (the “Class A Common Stock”), subject to post-closing adjustments.

In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of $ 35.0 million, subject to meeting certain future earnings targets and continued employment, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion.

The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Movers and Shakers and expected growth related to new customer relationships.

Goodwill of $ 8.2 million was assigned to the Integrated Agencies Network reportable segment.

The goodwill is fully deductible for income tax purposes.

The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments.

On October 2, 2023, the Company acquired Left Field Labs (“LFL”), a digital experience design and strategy company, for $ 13.2 million, of which $ 9.4 million was paid in cash and 825 thousand shares of Class A Common Stock, subject to post-closing adjustments.

In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of $ 51.0 million, subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion.

The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of LFL and expected growth related to new customer relationships.

Goodwill of $ 8.7 million was assigned to the Integrated Agencies Network reportable segment.

The goodwill is fully deductible for income tax purposes.

The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments.

On July 3, 2023, the Company acquired Tinsel Experiential Design LLC (“Tinsel”), a marketing and design company, for $ 2.5 million in cash consideration, subject to post-closing adjustments.

In connection with the acquisition, the sellers are entitled to contingent consideration, subject to continued employment, and meeting certain future earnings targets.

The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Tinsel and expected growth related to new customer relationships.

Goodwill of $ 1.6 million was assigned to the Integrated Agencies Network reportable segment.

The goodwill is fully deductible for income tax purposes.

The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments.

On April 25, 2023, the Company acquired Huskies, Ltd.

(“Huskies”), for € 5.2 million ($ 5.6 million) of cash consideration, of which € 0.9 million ($ 1.0 million) is deferred, subject to post-closing adjustments.

The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Huskies and expected growth related to new customer relationships and geographic expansion.

Goodwill of $ 2.6 million was assigned to the Brand Performance Network reportable segment.

The goodwill is non-deductible for income tax purposes.

The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments.

Interim disclosures are not impacted by this update.

The Company is evaluating the impact of these amendments on its annual disclosures.

2024 Acquisitions

Acquisition of Brand New Galaxy

On April 19, 2022, the Company acquired Brand New Galaxy (“BNG”), for $ 20.9 million of cash consideration, as well as contingent consideration up to a maximum value of $ 50.0 million.

The contingent consideration is due upon meeting certain future earnings targets through 2024, with approximately 67 % payable in cash and 33 % payable in shares of Class A Common Stock.

The consideration has been allocated to the assets acquired and assumed liabilities of BNG based upon fair values, with any excess purchase price allocated to goodwill.

The purchase price allocation is as follows:

Acquisition of Unicepta

On December 19, 2024, the Company acquired UNICEPTA Holding GmbH (“Unicepta”), a global media monitoring and analytics platform, for 60.1 million Euros (“€”) (approximately $ 62 million), of which € 23.8 million (approximately $ 24 million) was paid in cash, € 25.0 million (approximately $ 26 million) in 3,390,788 shares of the Company’s Class A Common Stock , € 0.7 million in a deferred cash payment (approximately $ 1 million), which was paid in January 2025, and € 10.6 million (approximately $ 11 million) attributable to contingent consideration which is considered part of the purchase price, subject to post-closing adjustments.

In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of € 40.0 million (approximately $ 42 million) subject to meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion.

The consideration has been allocated to the assets acquired and assumed liabilities of Unicepta based upon fair values.

The preliminary purchase price allocation is as follows:

(dollars in thousands)

Cash and cash equivalents

Accounts receivable 10,147

Accounts receivable, net

Other current assets

Fixed assets 1,587

Right-of-use lease assets

Identifiable intangible assets

Other assets 1,583

Accounts payable

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Advance billings

Current portion of lease liabilities - operating leases

Long-term lease liabilities - operating leases

Deferred tax liabilities, net ( 11,445 )

Other liabilities ( 3,460 )

Net assets assumed

Goodwill 24,643

Purchase price consideration

The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of BNG.

Goodwill of $ 24.6 million was assigned to the Brand Performance Network reportable segment.

The majority of the goodwill is non-deductible for income tax purposes.

The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Unicepta.

Goodwill of $ 33.3 million was assigned to the Stagwell Marketing Cloud Group reported within All Other.

The goodwill is not deductible for income tax purposes.

Intangible assets consist of trade names, customer relationships, and developed technology.

We amortize purchased intangible assets on a straight-line basis over their respective useful lives.

The weighted average life of the total acquired identifiable intangible assets is approximately ten years .

The weighted average life of the total acquired identifiable intangible assets is 10 years.

The following table presents the details of identifiable intangible assets acquired:

Fair Value Estimated Useful Life in Years

Estimated Fair Value Estimated Useful Life in Years

(dollars in thousands)

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The unaudited pro forma information for the periods set forth below gives effect to the acquisition as if it occurred as of January 1, 2023.

The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisition been consummated as of that time.

The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisition been consummated as of that time.

Year Ended December 31, 2024 Year Ended December 31, 2023

(dollars in thousands)

Revenue $ 2,698,018 $ 1,501,568

Net income $ 49,299 $ 36,864

Revenue attributable to BNG, included within the Consolidated Statements of Operations for the year ended December 31, 2023 was $ 30.1 million, and Net loss was $ 1.5 million.

Revenue attributable to BNG, included within the Consolidated Statements of Operations for the year ended December 31, 2022 was $ 20.5 million, and Net income was $ 0.1 million.

Acquisition of TMA Direct, Inc.

On May 31, 2022, the Company acquired approximately 87 % of TMA Direct, Inc.

(“TMA Direct”) for $ 17.2 million of cash consideration and $ 0.5 million of deferred acquisition payments.

The Company was also granted an option to purchase the remaining 13 % minority interest in TMA Direct for up to $ 13.3 million.

The consideration has been allocated to the assets acquired and assumed liabilities of TMA Direct based upon fair values, with any excess purchase price allocated to goodwill.

The purchase price allocation is as follows:

$ 2,892,586 $ 2,579,374

$ 5,216 $ 33,939

Revenue attributable to Unicepta, included within the Consolidated Statements of Operations for the year ended December 31, 2024, was $ 1.7 million.

Net income attributable to Unicepta, included within the Consolidated Statements of Operations for the year ended December 31, 2024, was $ 0.4 million.

The purchase price accounting is not yet final as the Company has not yet finalized its valuation processes and therefore may still make adjustments.

Acquisition of Consulum

On October 1, 2024, the Company acquired Consulum (Cayman) Limited (“Consulum”), a government advisory firm that provides public relations management and media and marketing services, for $ 82.8 million, of which $ 58.3 million was paid in cash, $ 12.9 million in 1,810,274 shares of the Company’s Class A Common Stock, and $ 11.3 million was attributed to contingent consideration which is considered part of the purchase price, subject to post-closing adjustments.

In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of $ 90.0 million, partially subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion.

The consideration has been allocated to the assets acquired and assumed liabilities of Consulum based upon fair values.

The preliminary purchase price allocation is as follows:

(dollars in thousands)

Accounts receivable $ 582

Cash and cash equivalents

Accounts receivable, net

Other current assets

Right-of-use lease assets

Identifiable intangible assets

Accounts payable

Other liabilities ( 270 )

Noncontrolling interests ( 2,667 )

Accruals and other liabilities

Advance billings

Current portion of lease liabilities - operating leases

Long-term lease liabilities - operating leases

Deferred tax liabilities, net ( 8,618 )

Net assets assumed

Goodwill 6,569

Purchase price consideration

The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of TMA Direct.

The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Consulum.

Goodwill of $ 16.6 million was assigned to the Communications Network reportable segment.

The majority of the goodwill is deductible for income tax purposes.

The goodwill is not deductible for income tax purposes.

Intangible assets consist of trade names and customer relationships.

We amortize purchased intangible assets on a straight-line basis over their respective useful lives.

The weighted average life of the total acquired identifiable intangible assets is ten years .

The weighted average life of the total acquired identifiable intangible assets is nine years .

The following table presents the details of identifiable intangible assets acquired:

Fair Value Estimated Useful Life in Years

Estimated Fair Value Estimated Useful Life in Years

(dollars in thousands)

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The unaudited pro forma information for the periods set forth below gives effect to the acquisition as if it occurred as of January 1, 2023.

Year Ended December 31, 2024 Year Ended December 31, 2023

(dollars in thousands)

Revenue $ 2,691,622 $ 1,481,727

Net income $ 51,397 $ 39,386

Revenue attributable to TMA Direct, included within the Consolidated Statements of Operations for the year ended December 31, 2023 was $ 11.0 million, and Net income was $ 1.1 million.

Revenue attributable to TMA Direct, included within the Consolidated Statements of Operations for the year ended December 31, 2022 was $ 7.7 million, and Net income was $ 0.9 million.

Acquisition of Maru Group Limited Ltd.

On October 3, 2022, the Company acquired Maru Group Limited Ltd.

(“Maru”) for £ 23.0 million ($ 25.8 million) in cash consideration.

The consideration has been allocated to the assets acquired and assumed liabilities of Maru based upon fair values, with any excess purchase price allocated to goodwill.

$ 2,893,599 $ 2,585,024

$ 19,346 $ 49,039

Revenue attributable to Consulum, included within the Consolidated Statements of Operations for the year ended December 31, 2024, was $ 14.7 million.

Net loss attributable to Consulum included within the Consolidated Statements of Operations for the year ended December 31, 2024, was $ 1.6 million.

The purchase price accounting is not yet final as the Company has not yet finalized its valuation processes and therefore may still make adjustments.

Acquisition of Team Epiphany

On January 2, 2024, the Company acquired Team Epiphany, LLC (“Epiphany”), a consumer marketing company, for $ 16.7 million, of which $ 11.7 million was paid in cash and $ 5.0 million in 797,916 shares of Class A Common Stock, subject to post-closing adjustments.

The goodwill is deductible for income tax purposes.

The consideration has been allocated to the assets acquired and assumed liabilities of Epiphany based upon fair values.

The purchase price allocation is as follows:

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Cash and cash equivalents

Accounts receivable 7,374

Accounts receivable, net

Expenditures billable to clients

Other current assets

Fixed assets 157

Right-of-use lease assets

Identifiable intangible assets

Other assets 1,920

Accounts payable

1 unchanged sentence

Advance billings

Deferred tax liability ( 3,328 )

Other liabilities ( 2,891 )

Current portion of lease liabilities - operating leases

Long-term lease liabilities - operating leases

Net assets assumed

Goodwill 26,033

Purchase price consideration

The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Maru and expected growth related to new customer relationships and geographic expansion.

Goodwill of $ 26.0 million was assigned to the All Other reportable segment.

The goodwill is partially deductible for income tax purposes.

Intangible assets consist of trade names, customer relationships, and developed technology.

The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Epiphany.

Goodwill of $ 8.5 million was assigned to the Integrated Agencies Network reportable segment.

Intangible assets consist of trade names and customer relationships.

We amortize purchased intangible assets on a straight-line basis over their respective useful lives.

The weighted average life of the total acquired identifiable intangible assets is approximately eight years .

The weighted average life of the total acquired identifiable intangible assets is three years .

The following table presents the details of identifiable intangible assets acquired:

Estimated Fair Value

Estimated Useful Life in Years

1 unchanged sentence

Customer relationships

Trade names 4,000 10

Developed technology 5,400 2 - 7

Total acquired intangible assets

1 unchanged sentence

The unaudited pro forma information for the periods set forth below gives effect to the acquisition as if it occurred as of January 1, 2023.

The pro forma revenue and net income (loss) for the year ended December 31, 2024 would not be materially different from the actual revenue and net income (loss) reported.

Year Ended December 31, 2023

(dollars in thousands)

Revenue $ 2,717,667 $ 1,512,791

Net income $ 36,043 $ 15,167

Revenue attributable to Maru, included within the Consolidated Statements of Operations for the year ended December 31, 2023 was $ 32.1 million and Net loss was $ 10.8 million.

Revenue attributable to Maru, included within the Consolidated Statements of Operations for the year ended December 31, 2022 was $ 8.8 million, and Net loss was $ 2.1 million.

Acquisition of Wolfgang, LLC.

On October 3, 2022, the Company acquired the remaining 80 % interest that it did not already own in Wolfgang, LLC (“Wolfgang”) for $ 3.8 million in cash consideration and 175 thousand shares of Class A Common Stock with a fair value of $ 1.2 million.

The consideration has been allocated to the assets acquired and assumed liabilities of Wolfgang based upon fair values, with any excess purchase price allocated to goodwill.

The purchase price allocation is as follows:

(dollars in thousands)

Cash and cash equivalents $ 1,606

Accounts receivable 1,180

Other current assets 100

Identifiable intangible assets 1,055

Other assets 46

Current liabilities ( 278 )

Net assets assumed 3,709

Goodwill 2,451

Purchase price consideration including fair value of previously owned interest $ 6,160

The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Wolfgang.

Revenue attributable to Epiphany, included within the Consolidated Statements of Operations for the year ended December 31, 2024, was $ 47.4 million.

Net income attributable to Epiphany, included within the Consolidated Statements of Operations for the year ended December 31, 2024, was $ 2.0 million.

Other 2024 Acquisitions

On July 19, 2024, the Company acquired L.D.R.S.

(“Leaders”), for 25.2 million Israeli New Shekels (“ILS”) (approximately $ 7 million), of which 10.9 million ILS (approximately $ 3 million) was paid in cash, 3.5 million ILS (approximately $ 1 million) in 135,010 shares of the Company’s Class A Common stock, and 10.9 million ILS (approximately $ 3 million) was attributed to contingent consideration which is considered part of the purchase price.

In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of 24.2 million ILS (approximately $ 7 million), partially subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion.

The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Leaders and expected growth related to new customer relationships.

Goodwill of $ 4.9 million was assigned to the All Other category.

The goodwill is not fully deductible for income tax purposes.

The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments.

On April 5, 2024, the Company acquired PROS Agency (“PROS”), for 42.1 million Brazilian reals (“R$”) approximately $ 8.5 million) of which R$ 23.3 million ($ 4.7 million) was paid in cash, R$ 5.3 million ($ 1.1 million) was paid in 182,256 shares of Class A Common Stock, and R$ 13.5 million ($ 2.7 million) was attributed to contingent consideration which is considered part of the purchase price.

In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of R$ 72.5 million ($ 14.4 million), partially subject to continued employment, and meeting certain future earnings targets, of which a portion may be settled in shares of the Company’s Class A Common Stock, at the Company’s discretion.

The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of PROS and expected growth related to new customer relationships.

Goodwill of $ 5.4 million was assigned to the Communications Network reportable segment.

The goodwill is not fully deductible for income tax purposes.

On April 4, 2024, the Company acquired What’s Next Partners (“WNP”), for € 4.3 million (approximately $ 5 million) in cash.

In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of € 8.5 million (approximately $ 9 million), partially subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of the Company’s Class A Common Stock, at the Company’s discretion.

The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of WNP and expected growth related to new customer relationships.

Goodwill of $ 5.4 million was assigned to the Integrated Agencies Network reportable segment.

The majority of the goodwill is deductible for income tax purposes.

Intangible assets consist of customer relationships.

We amortize purchased intangible assets on a straight-line basis over their respective useful lives.

The weighted average life of the total acquired identifiable intangible assets is approximately five years .

Pro Forma Financial Information

The unaudited pro forma information for the periods set forth below gives effect to the acquisition as if it occurred as of January 1, 2021.

Year Ended December 31,

(dollars in thousands)

Revenue $ 2,696,733 $ 1,474,303

Net income $ 51,398 $ 36,538

Revenue attributable to Wolfgang, included within the Consolidated Statements of Operations for the year ended December 31, 2023 was $ 5.7 million, and Net income was $ 0.7 million.

Revenue attributable to Wolfgang, included within the Consolidated Statements of Operations for the year ended December 31, 2022 was $ 2.1 million, and Net loss was $ 0.3 million.

Acquisition of Epicenter Experience LLC.

On October 3, 2022, the Company acquired the assets of Epicenter Experience LLC (“Epicenter”) for $ 9.9 million in cash consideration, as well as contingent consideration up to a maximum value of $ 5.0 million.

The contingent consideration is subject to meeting certain future earnings targets through 2024 and can be paid up to 25% in shares of Class A Common Stock.

The consideration has been allocated to the assets acquired and assumed liabilities of Epicenter based upon fair values.

The purchase price allocation is as follows:

(dollars in thousands)

Accounts receivable $ 901

Other current assets 45

Identifiable intangible assets 7,300

Accounts payable ( 148 )

Other current liabilities ( 650 )

Net assets assumed 7,448

Goodwill 4,416

Purchase price consideration $ 11,864

The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Epicenter.

Goodwill of $ 4.4 million was assigned to the All Other reportable segment.

The majority of the goodwill is deductible for income tax purposes.

The intangible asset acquired was developed technology.

We amortize purchased intangible assets on a straight-line basis over their respective useful lives.

The weighted average life of the total acquired identifiable intangible assets is approximately five years .

Pro Forma Financial Information

The unaudited pro forma information for the periods set forth below gives effect to the acquisition as if it occurred as of January 1, 2021.

Year Ended December 31,

(dollars in thousands)

Revenue $ 2,690,969 $ 1,473,183

Net income $ 49,652 $ 35,810

Revenue attributable to Epicenter, included within the Consolidated Statements of Operations for the year ended December 31, 2023 was $ 4.3 million, and Net loss was $ 0.7 million.

Revenue attributable to Epicenter, included within the Consolidated Statements of Operations for the year ended December 31, 2022 was $ 1.0 million, and Net loss was $ 1.2 million.

The goodwill is not fully deductible for income tax purposes.

On March 1, 2024, the Company acquired Sidekick Live Limited (“Sidekick”), for 4.6 million British pounds (“£”) (approximately $ 6 million) of which £ 3.6 million (approximately $ 5 million) was paid in cash, £ 0.1 million (approximately less than $ 0 million) was incurred as a certain payable to sellers, and £ 0.9 million (approximately $ 1 million) in 195,431 shares of Class A Common Stock, subject to post-closing adjustments.

In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of £ 8.0 million (approximately $ 10 million), subject to continued employment requirements and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion.

The excess of purchase consideration over the fair value of the net assets acquired was mainly recorded as goodwill, which is primarily attributable to the assembled workforce of Sidekick and expected growth related to new customer relationships.

Goodwill of $ 2.0 million was assigned to the Communications Network reportable segment.

The goodwill is not fully deductible for income tax purposes.

The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments.

2023 Acquisitions

Acquisition of MDC

On December 21, 2020, MDC and Stagwell Media announced that they had entered into the Transaction Agreement, providing for the combination of MDC with the operating businesses and subsidiaries of the Stagwell Subject Entities.

The Stagwell Subject Entities comprised Stagwell Marketing and its direct and indirect subsidiaries.

On August 2, 2021 (the “Closing Date”), we completed the combination of MDC and the Stagwell Subject Entities and a series of steps and related transactions (such combination and transactions, the “Transactions”).

In connection with the Transactions, among other things, (i) MDC completed a series of transactions pursuant to which it emerged as a wholly owned subsidiary of the Company, converted into a Delaware limited liability company and changed its name to Midas OpCo Holdings LLC (“OpCo”), (which name was subsequently to Stagwell Global LLC);

(ii) Stagwell Media contributed the equity interests of Stagwell Marketing and its direct and indirect subsidiaries to OpCo;

and (iii) the Company converted into a Delaware corporation, succeeded MDC as the publicly-traded company and changed its name to Stagwell Inc.

In respect of the Transactions, the acquired assets and assumed liabilities, together with acquired processes and employees, represent a business as defined in the FASB’s Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”).

The Transactions were accounted for as a reverse acquisition using the acquisition method of accounting, pursuant to ASC Topic 805-10, Business Combinations, with MDC treated as the legal acquirer and SMG treated as the accounting acquirer.

In identifying SMG as the acquiring entity for accounting purposes, MDC and SMG took into account a number of factors, including the relative voting rights and the corporate governance structure of the Company.

SMG is considered the accounting acquirer since Stagwell Media controls the board of directors of the Company following the Transactions and received an indirect ownership interest in the Company’s only operating subsidiary, OpCo, of 69.55 % ownership of OpCo’s common units.

However, no single factor was the sole determinant in the overall conclusion that Stagwell is the acquirer for accounting purposes;

rather all factors were considered in arriving at such conclusion.

Under the acquisition method of accounting, the assets and liabilities of MDC, as the accounting acquiree, were recorded at their respective fair value as of the date the Transactions were completed.

On August 2, 2021, an aggregate of 180.0 million shares of the Company’s Class C Common Stock were issued to Stagwell Media in exchange for $ 1.80 .

The Class C Common Stock does not participate in the earnings of the Company.

Additionally, an aggregate of 180.0 million OpCo common units were issued to Stagwell Media in exchange for the equity interests of the Stagwell Subject Entities (the “Stagwell OpCo Contribution”).

The fair value of the purchase consideration was $ 429.1 million, consisting of 80.0 million shares of the Company’s Class A Common Stock, Class B common stock, par value $ 0.001 per share (the “Class B Common Stock”), and common stock equivalents based on a per share price of $ 5.42 , the closing stock price on the date of the combination.

ASC 805 requires the allocation of the purchase price consideration to the fair value of the identified assets acquired and liabilities assumed upon consummation of a business combination.

For this purpose, fair value shall be determined in accordance with the fair value concepts defined in ASC 820, “Fair Value Measurements and Disclosures,” (“ASC 820”).

Fair value is defined in ASC 820 as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” Fair value measurements can be highly subjective and can involve a high degree of estimation.

The purchase price valuation was completed during the third quarter of 2022.

The purchase price allocation is as follows:

(dollars in thousands)

Cash and cash equivalents $ 130,197

Accounts receivable 398,736

Other current assets 41,291

Fixed assets 81,343

Right-of-use lease assets - operating leases 252,739

Identifiable intangible assets 810,900

Other assets 18,282

Accounts payable ( 139,590 )

Accruals and other liabilities ( 307,439 )

Advance billings ( 211,212 )

Current portion of lease liabilities ( 54,009 )

Current portion of deferred acquisition consideration ( 53,054 )

Long-term debt ( 901,736 )

Revolving credit facility ( 109,954 )

Long-term portion of deferred acquisition consideration ( 8,056 )

Long-term portion of lease liabilities ( 283,637 )

Other liabilities ( 139,026 )

Redeemable noncontrolling interests ( 25,990 )

Preferred shares ( 209,980 )

Noncontrolling interests ( 151,090 )

Net liabilities assumed ( 861,285 )

Goodwill 1,290,347

Purchase price consideration $ 429,062

The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributed to the assembled workforce of MDC.

Goodwill of $ 932.6 million, $ 285.4 million and $ 72.4 million was assigned to the Integrated Agencies Network, the Brand Performance Network and the Communications Network reportable segments, respectively.

The majority of the goodwill is non-deductible for income tax purposes.

Goodwill has been updated from the previously reported amount of $ 1,299.4 million as of December 31, 2021 to reflect a change in certain assets and liabilities.

There has been no change that impacts the Consolidated Statement of Operations.

Intangible assets consist of trade names and customer relationships.

We amortize purchased intangible assets on a straight-line basis over their respective useful lives.

The weighted average life of the total acquired identifiable intangible assets is approximately thirteen years .

The following table presents the details of identifiable intangible assets acquired:

Fair Value Estimated Useful Life in Years

(dollars in thousands)

Trade Names $ 98,000 10

Customer Relationships 712,900 6 - 15

Total Acquired Intangible Assets $ 810,900

Pro Forma Financial Information (unaudited)

The unaudited pro forma information for the periods set forth below gives effect to the acquisition as if it occurred as of January 1, 2020.

Years Ended December 31,

(dollars in thousands)

Revenue $ 2,224,343 $ 2,087,025

The pro forma net loss was nominal for the years ended December 31, 2021 and 2020.

Revenue attributable to MDC, included within the year ended December 31, 2021 Consolidated Statements of Operations was $ 605.4 million.

The net loss included within the year ended December 31, 2021 Consolidated Statements of Operations was nominal.

Transaction expenses were $ 15.0 million for the twelve months ended December 31, 2021.

Acquisition of GoodStuff Holdings Limited

On December 31, 2021, the Company acquired GoodStuff Holdings Limited (“Goodstuff”) for £ 21.0 million ($ 28.2 million) of cash consideration as well as contingent consideration up to a maximum of £ 22.0 million.

The cash consideration included an initial payment of £ 8.0 million, an excess working capital payment of £ 9.0 million and £ 4.0 million of deferred payments.

The contingent consideration is tied to employees’ service and will be recognized as deferred acquisition consideration expense through 2026.

Therefore, only the cash consideration has been allocated to the $ 23.8 million of assets acquired and assumed liabilities of Goodstuff based upon their fair values, with any excess purchase price allocated to goodwill.

The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributed to the assembled workforce of Goodstuff.

On November 1, 2023, the Company acquired Movers and Shakers LLC (“Movers and Shakers”), a digital creative company, for $ 14.7 million, of which $ 10.2 million was paid in cash and $ 4.5 million in 1,006,711 shares of Class A Common Stock, subject to post-closing adjustments.

Goodwill of $ 8.2 million was assigned to the Integrated Agencies Network reportable segment.

The goodwill is fully deductible for income tax purposes.

On October 2, 2023, the Company acquired Left Field Labs LLC (“LFL”), a digital experience design and strategy company, for $ 13.2 million, of which $ 9.4 million was paid in cash and $ 3.8 million in 825,402 of Class A Common Stock, subject to post-closing adjustments.

Goodwill of $ 7.9 million was assigned to the Integrated Agencies Network reportable segment.

The goodwill is fully deductible for income tax purposes.

On July 3, 2023, the Company acquired Tinsel Experiential Design LLC (“Tinsel”), a marketing and design company, for $ 2.5 million in cash consideration, subject to post-closing adjustments.

In connection with the acquisition, the sellers are entitled to contingent consideration, subject to continued employment, and meeting certain future earnings targets.

Goodwill of $ 1.6 million was assigned to the Integrated Agencies Network reportable segment.

The goodwill is fully deductible for income tax purposes.

On April 25, 2023, the Company acquired Huskies, Ltd.

(“Huskies”), for € 5.2 million ($ 5.6 million) of cash consideration, of which € 0.9 million ($ 1.0 million) is deferred, subject to post-closing adjustments.

Goodwill of $ 2.6 million was assigned to the Brand Performance Network reportable segment.

The majority of the goodwill is non-deductible for income tax purposes.

Intangible assets consist of trade names and customer relationships.

We amortize purchased intangible assets on a straight-line basis over their respective useful lives.

The weighted average life of the total acquired identifiable intangible assets is approximately ten years.

Trade names had a fair value of $ 1.3 million with an estimated useful life of fifteen years , and customer relationships had a fair value of $ 13.6 million with an estimated useful life of ten years .

Pro Forma Financial Information (unaudited)

The unaudited pro forma information for the periods set forth below gives effect to the acquisition as if it occurred as of January 1, 2020.

For the years ended December 31, 2021 and 2020, pro forma revenue was $ 1,488.5 million and $ 902.6 million, respectively, and net income was $ 38.7 million and $ 72.7 million, respectively.

Other Acquisitions

On July 12, 2022, the Company acquired PEP Group Holdings B.V., an omnichannel content creation and adaption production company for $ 0.5 million in cash consideration, as well as contingent consideration up to a maximum value of € 2.6 million.

The contingent consideration is subject to meeting certain future earnings targets through 2025.

On July 15, 2022, the Company acquired Apollo Program II Inc., a real-time artificial intelligence-powered software-as-a-service platform, for $ 2.3 million in cash consideration, as well as guaranteed deferred payments of $ 1.0 million and $ 1.5 million on or prior to July 1, 2023 and July 1, 2024, respectively.

On October 31, 2023, the Company sold ConcentricLife, which was included in Integrated Agencies Network, to a strategic buyer for $ 245.0 million in cash resulting in a pre-tax gain of $ 94.5 million.

The gain was recognized within Gain on sale of business within the Consolidated Statements of Operations.

The divestiture did not represent a strategic shift that would have a major effect on the Company’s consolidated results of operations, and therefore its results of operations were not reported as discontinued operations.

On September 15, 2021, the Company sold Reputation Defender, which was included in All Other Network, to a strategic buyer for $ 40.0 million resulting in a gain of $ 43.0 million.

The goodwill is non-deductible for income tax purposes.

2023 Dispositions

On October 31, 2023, the Company sold ConcentricLife (“Concentric”), which was included in Integrated Agencies Network, to a strategic buyer for $ 245.0 million in cash resulting in a pre-tax gain of $ 94.5 million.

The gain was recognized within Gain on sale of business within the Consolidated Statements of Operations.

2022 Purchases of Noncontrolling Interests

On April 1, 2022, the Company acquired the remaining interest in Hello Design, LLC (“Hello Design”) that it did not already own for an aggregate purchase price of $ 4.6 million, comprised of a closing cash payment of $ 3.6 million and a contingent deferred acquisition payment of $ 1.0 million.

The contingent deferred payment of $ 1.0 million was paid in the second quarter of 2023.

2021 Purchases of Noncontrolling Interests

On October 1, 2021, the Company entered into an agreement to purchase the approximate 27 % remaining interest of Targeted Victory it did not already own, stipulating the purchase of 13.3 % on October 1, 2021 and the remaining 13.3 % on July 31, 2023.

The purchase price of $ 73.9 million was comprised of a contingent deferred acquisition payment and redeemable noncontrolling interest with estimated present values at the acquisition date of $ 46.6 million and $ 27.3 million, respectively.

The contingent deferred payment and redeemable noncontrolling interest were based on the financial results of the underlying business through July 2023 and July 2025, respectively.

In addition, at the option of the Company, up to 50 % of the total purchase price can be paid in shares of Class A Common Stock and in no event may the purchase price exceed $ 135.0 million.

On December 1, 2021, the Company acquired the approximate 27 % remaining interest of ConcentricLife it did not already own for an aggregate purchase price of $ 8.1 million, comprised of a closing cash payment of $ 1.6 million and contingent deferred acquisition payments with an estimated present value at the acquisition date of $ 6.5 million.

The contingent deferred payments were based on the financial results of the underlying business.

On December 31, 2021, the Company acquired the approximate 49 % remaining interest of Instrument it did not already own for an aggregate purchase price of $ 157.1 million, comprised of a closing payment of $ 37.5 million in cash and $ 37.5 million in shares of Class A Common Stock and deferred acquisition payments with an estimated present value at the acquisition date of $ 82.1 million, with approximately 40 % to be paid in shares of Class A Common Stock.

The deferred payments are not contingent.

2022 Acquisitions

The Company acquired the entities below in the year ended December 31, 2022.

Pro forma revenue and net income related to these acquisitions are as follows:

Brand New Galaxy

The pro forma revenue and net income for the year ended December 31, 2022, was $ 2,698.0 million and $ 49.3 million, respectively.

TMA Direct, Inc.

The pro forma revenue and net income for the year ended December 31, 2022, was $ 2,691.6 million and $ 51.4 million, respectively.

Maru Group Limited

The pro forma revenue and net income for the year ended December 31, 2022, was $ 2,717.7 million and $ 36.0 million, respectively.

Wolfgang, LLC.

The pro forma revenue and net income for the year ended December 31, 2022, was $ 2,696.7 million and $ 51.4 million, respectively.

Epicenter Experience LLC.

The pro forma revenue and net income for the year ended December 31, 2022, was $ 2,691.0 million and $ 49.7 million, respectively.

The Company’s revenue recognition policies are established in accordance with ASC 606, and accordingly, revenue is recognized when control of the promised goods or services is transferred to our clients, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.

The Stagwell network provides an extensive range of services to our clients, offering a variety of marketing and communication capabilities including strategy, creative and production for advertising campaigns across a variety of platforms (print, digital, social media, television broadcast), public relations services including strategy, editorial, crisis support or issues management, online fundraising, media training, influencer engagement and events management, and subscription-based software-as-a-service and data-as-a service models.

The Stagwell network provides an extensive range of services to our clients, offering a variety of marketing and communication capabilities including strategy, creative and production for advertising campaigns across a variety of platforms (digital, social media, television broadcast, and print), public relations services including strategy, editorial, crisis support or issues management, online fundraising, media training, influencer engagement and events management, and subscription-based software-as-a-service and data-as-a service models.

We also provide media-based solutions to drive brand performance, including buying and planning across a range of platforms (out-of-home, paid search, social media, lead generation, programmatic, television broadcast), experiential marketing and application/website design and development.

6 unchanged sentences

Based on a client’s requirements within the contract, and how these services are provided, multiple services could represent separate performance obligations or be combined and considered one performance obligation.

Contracts that contain services that can be provided on a stand-alone basis, that are not significantly integrated or interdependent, and that do not significantly modify or customize each other, are typically considered separate performance obligations.

Contracts that contain services that can be provided on a stand-alone basis, which are not significantly integrated or interdependent, and that do not significantly modify or customize each other, are typically considered separate performance obligations.

Typically, these services are creative (or strategy), production, experiential marketing and media planning and media buying arrangements.

Certain of the Company’s contracts consist of a single performance obligation.

In these instances, the Company does not consider the underlying activities as separate or distinct performance obligations because its services are highly interrelated, and the integration of the various components is essential to the overall promise to the Company’s customer.

In these instances, the Company does not consider the underlying activities separate or distinct performance obligations because its services are highly interrelated, and the integration of the various components is essential to the overall promise to the Company’s customer.

Typically, these services are public relations, and application/website design and development.

1 unchanged sentence

We typically satisfy our performance obligations over time, as services are performed.

Fees for services are typically recognized using input methods (direct labor hours, materials and third-party costs) that correspond with efforts incurred to date in relation to total estimated efforts to complete the contract.

Fees for services are typically recognized using input methods (direct labor hours, materials and third-party costs) that correspond with efforts incurred to date

in relation to total estimated efforts to complete the contract.

To a lesser extent, revenue is recognized using output measures, such as impressions or ongoing reporting.

For client contracts when the Company has a stand-ready obligation to perform services, the Company recognizes revenue ratably using a time-based measure.

In addition, for client contracts where the Company is providing online subscription-based hosted services, it recognizes revenue ratably over the contract term.

In addition, for client contracts where the Company provides online subscription-based hosted services, it recognizes revenue ratably over the contract term.

Point in time recognition primarily relates to certain commission-based contracts, which are recognized upon the placement of advertisements in various media when the Company has no further performance obligation.

Revenue is recognized net of sales and other taxes due to be collected and remitted to governmental authorities.

Revenue is recognized net of sales and other taxes due to be collected and remitted to government authorities.

The Company’s contracts typically provide for termination by either party within 30 to 90 days.

20 unchanged sentences

The Company’s Brands often cooperate with one another through referrals and the sharing of both services and expertise, which enables Stagwell to service clients’ varied marketing needs by crafting custom integrated solutions.

The following table presents revenue disaggregated by our principal capabilities for the years ended December 31, 2023, 2022, and 2021.

We reclassified certain brands into the Stagwell Marketing Cloud Group (software-as-a-service and data-as-a-service tools for the in-house marketers) principal capability in the third quarter of 2023.

All prior periods presented have been revised to reflect these changes.

Year Ended December 31,

We reclassified certain brands between principal capabilities in 2024.

The prior year (2023) amounts presented have been revised to reflect this change.

The following table presents revenue disaggregated by our principal capabilities for the years ended December 31,:

Principal Capabilities Reportable Segment 2024 2023 2022

2 unchanged sentences

Creativity and Communications All segments 1,328,916 1,167,432 1,222,289

Performance Media and Data Brand Performance Network 295,247 279,903 193,476

Performance Media and Data Integrated Agencies Network and Brand Performance Network 323,978 295,304 279,903

Consumer Insights and Strategy Integrated Agencies Network 190,133 192,209 212,869

1 unchanged sentence

$ 2,841,216 $ 2,527,177 $ 2,687,792

Stagwell’s Brands are located in the United States and United Kingdom, and more than 28 other countries around the world.

Stagwell’s Brands are located in the United States, the United Kingdom, and 33 other countries around the world.

The Company continues to expand its global footprint to support clients in international markets.

Historically, some clients have responded to weakening economic conditions with reductions to their marketing budgets, which included discretionary components that are easier to reduce in the short term than other operating expenses.

The following table presents revenue disaggregated by geography for the years ended December 31, 2023, 2022, and 2021:

Year Ended December 31,

The following table presents revenue disaggregated by geography for the years ended December 31,:

Geographical Location Reportable Segment 2024 2023 2022

7 unchanged sentences

Such amounts are invoiced to clients at various times over the course of providing services.

Unbilled service fees were $ 141.9 million and $ 116.4 million at December 31, 2023 and December 31, 2022, respectively, and are included as a component of Accounts receivable, net on the Consolidated Balance Sheets.

Outside vendor costs incurred on behalf of clients which have yet to be invoiced were $ 114.1 million and $ 93.1 million at December 31, 2023 and December 31, 2022, respectively, and are included on the Consolidated Balance Sheets as Expenditures billable to clients.

In arrangements in which we are acting as principal, contract assets are included as a component of Accounts receivable on the Consolidated Balance Sheets.

These assets were $ 135.9 million and $ 141.9 million as of December 31, 2024, and December 31, 2023, respectively.

In arrangements in which we are acting as agent, contract assets are included on the Consolidated Balance Sheets as Expenditures billable to clients.

These assets were $ 173.2 million and $ 114.1 million as of December 31, 2024, and December 31, 2023, respectively.

Contract liabilities represent advanced billings to customers for fees and reimbursements of third-party costs, whether we act as principal or agent.

Such fees and reimbursements of third-party costs are classified as Advance billings on the Company’s Consolidated Balance Sheets.

In arrangements in which we are acting as an agent, the recognition related to the contract liability is presented on a net basis within the Consolidated Statements of Operations.

Advance billings at December 31, 2024, and December 31, 2023, were $ 294.6 million and $ 301.7 million, respectively.

The decrease in Advance billings of $ 35.4 million for the year ended December 31, 2023 was primarily driven by $ 320.0 million of revenue recognized that was included in the Advance billings balances as of December 31, 2022, the incurrence of third-party costs, offset by cash payments received or due in advance of satisfying our performance obligations.

The change in Advance billings of $ 7.1 million for the year ended December 31, 2024, was primarily driven by $ 290.7 million of revenue recognized that was included in the Advance billings balances as of December 31, 2023, the incurrence of third-party costs, and cash payments received or due in advance of satisfying our performance obligations.

In arrangements in which we are acting as an agent, the revenue recognized related to the contract liability is presented on a net basis within the Consolidated Statements of Operations.

The Company acquired $ 10.2 million in contract assets and $ 15.7 million in contract liabilities in connection with the acquisition of Epiphany, Consulum, and Unicepta.

See Note 4 of the Notes included herein for additional information related to these acquisitions.

Changes in the contract asset and liability balances during the year ended December 31, 2024, were not materially impacted by write-offs, impairment losses or any other factors.

1 unchanged sentence

The majority of our contracts are for periods of one year or less.

For those contracts with a term of more than one year, we had $ 97.7 million of unsatisfied performance obligations as of December 31, 2023 of which we expect to recognize approximately 86 % in 2024, 11 % in 2025 and 3 % in 2026.

For those contracts with a term of more than one year, we had $ 118.8 million of unsatisfied performance obligations as of December 31, 2024, of which we expect to recognize approximately 80 % in 2025, 16 % in 2026 and 4 % in 2027, and thereafter .

Earnings (Loss) Per Share

The following tables set forth the computations of basic and diluted income per common share for the year ended December 31, 2023 (amounts in thousands, except per share amounts):

The following table presents the computations of basic and diluted earnings per common share for the year ended December 31, 2024 (amounts in thousands, except per share amounts):

Year Ended December 31,

Earnings Per Share - Basic

Net income $ 25,044

Net income attributable to Class C shareholders ( 17,144 )

10 unchanged sentences

Dilutive shares:

Stock appreciation right awards 421

Stock appreciation rights 461

Restricted share and restricted unit awards 4,395

Employee Stock Purchase Plan shares 6

Dilutive - Weighted average number of common shares outstanding 122,170

Diluted - Weighted average number of common shares outstanding 115,752

Earnings Per Share - Diluted $ 0.02

2 unchanged sentences

Class A Shares to settle deferred acquisition obligations

The following table sets forth the computations of basic and diluted earnings per common share for the year ended December 31, 2022:

The following table presents the computations of basic and diluted earnings per common share for the year ended December 31, 2023 (amounts in thousands, except per share amounts):

Year Ended December 31,

Earnings Per Share - Basic (amounts in thousands, except per share amounts)

Net income $ 50,044

Earnings Per Share - Basic

Net income attributable to Class C shareholders

5 unchanged sentences

Earnings Per Share - Basic

Earnings Per Share - Diluted

Loss Per Share - Diluted

Net income attributable to Stagwell Inc.

common shareholders

Net income attributable to Class C shareholders 16,004

Basic - Weighted Average number of common shares outstanding 117,259

Dilutive shares:

Stock appreciation right awards 1,896

Stock appreciation rights 421

Restricted share and restricted unit awards 4,485

Class C Shares 165,971

Dilutive - Weighted average number of common shares outstanding 296,596

Employee Stock Purchase Plan shares 5

Diluted - Weighted average number of common shares outstanding 122,170

Earnings Per Share - Diluted

Restricted stock awards of 2.9 million and 2.3 million as of December 31, 2023 and 2022, respectively, were excluded from the computation of diluted earnings (loss) per common share because the performance contingencies necessary for vesting were not met as of the reporting date.

The following table sets forth the computations of basic and diluted earnings per common share for the year ended December 31, 2021:

Anti-dilutive:

Class C Shares 154,972

Class A Shares to settle deferred acquisition obligations 5,127

The following table presents the computations of basic and diluted earnings per common share for the year ended December 31, 2022 (amounts in thousands, except per share amounts):

Year Ended December 31,

Net loss attributable to Stagwell Inc.

Earnings Per Share - Basic

Net income $ 50,044

Net income attributable to Class C shareholders ( 16,004 )

Net income attributable to other equity interest holders ( 14,121 )

Net income attributable to noncontrolling and redeemable noncontrolling interests ( 30,125 )

Net income attributable to Stagwell Inc.

common shareholders $ 19,919

Weighted Average number of common shares outstanding 124,262

Loss Per Share - Basic & Diluted $ ( 0.04 )

Anti-dilutive:

Earnings Per Share - Basic

Earnings Per Share - Diluted

Net income attributable to Stagwell Inc.

common shareholders $ 19,919

Net income attributable to Class C shareholders 16,004

Basic - Weighted Average number of common shares outstanding 124,262

Dilutive shares:

Stock appreciation rights 1,896

Restricted share and restricted unit awards 4,467

Class C shares 165,971

Stock Appreciation Rights and Restricted Awards 9,509

On September 23, 2021, the Company provided notices of conversion to each holder of record of each share of the Company’s Series 6 and Series 8 Preferred Stock.

Pursuant to the notices, the 50,000 issued and outstanding shares of Series 6 Preferred Stock were converted into 12,087 shares of Class A Common Stock, in the aggregate, on October 7, 2021, and the 73,849 issued and outstanding shares of Series 8 Preferred Stock were converted into 20,949 shares of Class A Common Stock, in the aggregate, on November 8, 2021.

SMG’s equity structure, prior to the combination with MDC, was a non-unitized single member limited liability company, resulting in all components of equity attributable to the member being reported within Members’ Capital.

Given that SMG was a non-unitized single member limited liability company, net income (loss) prior to the combination is not applicable for purposes of calculating earnings per share.

Therefore, the net income (loss) in the table above includes the income or loss for the period beginning on the acquisition date through the end of the respective reporting period and as such will not reconcile to the respective amounts presented within the Consolidated Statements of Operations.

The following is a summary of the Company’s fixed assets as of December 31,:

Diluted - Weighted average number of common shares outstanding 296,596

Earnings Per Share - Diluted $ 0.12

Restricted stock awards of 3.1 million, 2.9 million and 2.3 million as of December 31, 2024, 2023, and 2022, respectively, were excluded from the computation of diluted earnings (loss) per common share because the performance contingencies necessary for vesting were not met as of the reporting date.

The following table presents the Company’s fixed assets as reported on the Consolidated Balance Sheets as of December 31,:

Cost Accumulated Depreciation Net Book Value Cost Accumulated Depreciation Net Book Value

Computers, furniture and fixtures $ 60,131 $ ( 36,535 ) $ 23,596 $ 56,788 $ ( 27,689 ) $ 29,099

Computer equipment, furniture and fixtures

$ 70,627 $ ( 47,424 ) $ 23,203 $ 60,131 $ ( 36,535 ) $ 23,596

Leasehold improvements 106,380 ( 56,877 ) 49,503 99,127 ( 44,898 ) 54,229

$ 177,007 $ ( 104,301 ) $ 72,706 $ 159,258 $ ( 81,433 ) $ 77,825

Depreciation expense for the years ended December 31, 2023, 2022, and 2021 were $ 29.0 million, $ 26.5 million and $ 15.4 million, respectively.

Depreciation expense for the years ended December 31, 2024, 2023, and 2022 was $ 29.2 million, $ 29.0 million and $ 26.5 million, respectively.

Goodwill and Intangible Assets

As of December 31, goodwill was as follows:

The following table presents the Company’s goodwill as reported on the Consolidated Balance Sheets as of December 31,:

Integrated Agencies Network Brand Performance Network Communications Network All Other Total

1 unchanged sentence

Acquired goodwill 3,330 26,176 6,569 29,387 65,462

Disposition — — — ( 935 ) ( 935 )

Impairment ( 49,840 ) ( 49,314 ) — ( 17,560 ) ( 116,714 )

Transfer of goodwill between segments (1)

( 111,065 ) 111,065 — — —

Foreign currency translation ( 11,422 ) ( 13,467 ) ( 753 ) — ( 25,642 )

( 15,682 ) 685 6,124 — ( 8,873 )

Balance at December 31, 2022 $ 968,394 $ 433,758 $ 127,717 $ 37,087 $ 1,566,956

Acquired goodwill

Impairment ( 49,840 ) ( 49,314 ) — ( 17,560 ) ( 116,714 )

18,451 2,626 — — 21,077

( 98,779 ) — — — ( 98,779 )

Transfer of goodwill between segments (1)

5 unchanged sentences

— — — ( 7,699 ) ( 7,699 )

Disposition - ConcentricLife

( 98,779 ) — — — ( 98,779 )

Transfer of goodwill between segments (1)

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The Company recognized an impairment and other losses charge of $ 122.2 million for the year ended December 31, 2022, primarily related to the impairment of goodwill totaling $ 116.7 million.

The goodwill impairment was to write-down the carrying value in excess of the fair value at eight reporting units, two in the Integrated Agencies Network, five in the Brand Performance Network and one within the All Other category.

The goodwill impairment was to write down the carrying value in excess of the fair value at eight reporting units, three in the Integrated Agencies Network, four in the Brand Performance Network and one within the All Other category.

The charge was recorded within Impairment and other losses on the Consolidated Statements of Operations.

The gross and net amounts of intangible assets other than goodwill as of December 31, are as follows:

The following presents the Company’s gross and net amounts of intangible assets other than goodwill as reported on the Consolidated Balance Sheets as of December 31,:

Intangible Assets 2024 2023

3 unchanged sentences

Customer relationships, net $ 645,646 $ 652,179

$ 652,179 $ 724,505

Trade names, gross $ 208,549 $ 188,820

$ 188,820 $ 197,037

Accumulated amortization ( 94,687 ) ( 74,141 )

Trade names, net $ 113,862 $ 114,679

$ 114,679 $ 143,887

Capitalized software, gross $ 104,017 $ 70,622

$ 70,622 $ 42,234

Accumulated amortization ( 49,597 ) ( 30,928 )

Capitalized software, net $ 54,420 $ 39,694

$ 39,694 $ 23,643

Developed technology and other, gross $ 37,890 $ 21,583

$ 21,583 $ 21,331

Accumulated amortization ( 15,035 ) ( 9,915 )

Developed technology and other, net $ 22,855 $ 11,668

$ 11,668 $ 15,494

Total intangible assets, gross $ 1,289,683 $ 1,152,012

$ 1,152,012 $ 1,135,762

Accumulated amortization ( 452,900 ) ( 333,792 )

Total intangible assets, net $ 836,783 $ 818,220

$ 818,220 $ 907,529

T he Company recognized an impairment and other losses charge of $ 16.2 million for the year ended December 31, 2021, primarily related to intangible assets.

The impairment was to reduce the carrying values of intangible assets within one reporting unit in the Integrated Agencies Network and two in the Media Network reportable segments in connection with the abandonment of certain trade names as part of the rebranding of certain Brands.

The charge was recorded within Impairment and other losses on the Consolidated Statements of Operations.

The weighted average amortization period for customer relationships is thirteen years , trade names is twelve years , capitalized software is three years , and developed technology and other intangible assets is six years .

In total, the weighted average amortization period is twelve years .

The weighted average amortization period for customer relationships is thirteen years , trade names is twelve years , capitalized software is four years , and developed technology and other intangible assets is two years .

In total, the weighted average amortization period is thirteen years .

Amortization expense related to amortizable intangible assets for the years ended December 31, 2024, 2023, and 2022 was $ 121.6 million, $ 112.2 million, and $ 103.1 million, respectively.

5 unchanged sentences

Deferred acquisition consideration on the Consolidated Balance Sheets consists of deferred obligations related to contingent and fixed purchase price payments, and contingent and fixed retention payments tied to continued employment of specific personnel.

Arrangements that are not contingent upon future employment are initially measured at the acquisition date fair value and are remeasured at each reporting period within Office and general expenses on the Consolidated Statements of

Arrangements that are contingent upon future employment are expensed as earned over the respective vesting (employment) period within Office and general expenses on the Consolidated Statements of Operations.

The following table presents changes in deferred acquisition consideration and a reconciliation to the amounts reported on the Consolidated Balance Sheets as of December 31, 2023 and December 31, 2022:

2023 December 31,

Arrangements that are contingent upon future employment are initially measured at the acquisition date fair value, remeasured at each reporting period and are expensed as earned over the respective vesting (employment) period within Office and general expenses on the Consolidated Statements of Operations.

The following table presents changes in deferred acquisition consideration and a reconciliation to the amounts reported on the Consolidated Balance Sheets as of December 31,:

(dollars in thousands)

8 unchanged sentences

$ 102,115 $ 101,058

(1) Includes deferred acquisition consideration payments settled in shares of Class A Common Stock of $ 32.8 million and $ 1.0 million, respectively, for the period ended December 31, 2023 and December 31, 2022.

(1) Includes deferred acquisition consideration payments settled in shares of Class A Common Stock of $ 18.2 million and $ 32.8 million, respectively, for the periods ended December 31, 2024, and December 31, 2023.

(2) Adjustments to deferred acquisition consideration contains fair value changes from the Company’s initial estimates of deferred acquisition payments and accretion of expense as awards are earned over the vesting period.

(3) In 2021, the Company entered into an agreement to purchase the remaining 26.7 % interest in Targeted Victory it did not previously own.

The agreement provided for the purchase of 50 % of the interest on October 1, 2021 (paid in October 2023) and 50 % on July 31, 2023 (payable in October 2025 with a seller’s right to defer until October 2027).

In connection with the purchase, the estimated amount payable in October 2025, was reclassified from redeemable noncontrolling interest to deferred acquisition consideration.

(3) Additions in 2024 of $ 46.6 million include $ 28.1 million related to the Company’s acquisitions (See Note 4 for further information).

It also includes $ 17.0 million related to a reclassification from redeemable noncontrolling interest to deferred acquisition consideration in connection with the purchase of the remaining 40 % interest the Company did not previously own in a certain Brand.

This amount will be paid in cash in 2025.

Additions of $ 22.2 million in 2023 represents a reclassification from redeemable noncontrolling interest to deferred acquisition consideration.

Specifically, in 2021, the Company entered into an agreement to purchase the remaining 26.7 % interest in Targeted Victory it did not previously own.

The agreement provided for the purchase of 50 % of the interest on October 1, 2021 (paid in October 2023) and 50 % on July 31, 2023 (payable in October 2025).

In connection with the purchase, the estimated amount payable in October 2025, was reclassified from redeemable noncontrolling interest to deferred acquisition consideration in 2023.

(4) The contingent and fixed deferred acquisition consideration obligation was $ 102.1 million and $ 0.0 million , respectively, as of December 31, 2024, and $ 57.5 million and $ 43.6 million, respectively, as of December 31, 2023.

1 unchanged sentence

The Company leases office space in North America, Europe, Asia, South America, Africa, and Australia.

This space is primarily used for office and administrative purposes by the Company’s employees in performing professional services.

These spaces are primarily used for office and administrative purposes by the Company’s employees in performing professional services.

These leases are classified as operating leases and expire between years 2025 through 2034.

4 unchanged sentences

As the Company’s implicit rate in its leases is not readily determinable, in determining the present value of lease payments, the Company uses its incremental borrowing rate based on the information available at the commencement date.

Lease payments included in the measurement of the lease liability are comprised of non-cancellable lease payments, payments based upon an index or rate, payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and payments for early termination options unless it is reasonably certain the lease will not be terminated early.

Lease payments included in the measurement of the lease liability comprise of non-cancellable lease payments, payments based upon an index or rate, payments for optional renewal periods where it is reasonably certain the renewal period will be exercised, and payments for early termination options unless it is reasonably certain the lease will not be terminated early.

Lease costs are recognized in the Consolidated Statements of Operations over the lease term on a straight-line basis.

3 unchanged sentences

Lease liabilities are not remeasured as a result of changes in the index or rate, rather changes in these types of payments are recognized in the period in which the obligation for those payments is incurred.

addition, some of our leases contain variable payments for utilities, insurance, real estate tax, repairs and maintenance, and other variable operating expenses.

In addition, some of our leases contain variable payments for utilities, insurance, real estate tax, repairs and maintenance, and

other variable operating expenses.

Such amounts are not included in the measurement of the lease liability and are recognized in the period when the facts and circumstances which the variable lease payments are based upon occur.

2 unchanged sentences

From time to time, the Company enters into sublease arrangements with unrelated third parties.

These leases are classified as operating leases and expire between years 2024 through 2032.

These subleases are classified as operating leases and expire between years 2025 through 2032.

Sublease income is recognized over the lease term on a straight-line basis.

Currently, the Company subleases office space in North America and Europe.

As of December 31, 2023, the Company entered into three operating leases for which the commencement date has not yet occurred primarily because of the premises being prepared for occupancy by the landlord.

Accordingly, these three leases represent an obligation of the Company that is not reflected within the Consolidated Balance Sheets as of December 31, 2023.

The aggregate future liability related to these leases is $ 5.9 million.

As of December 31, 2024, the Company had entered into one operating lease for which the commencement date had not yet occurred because the premises is being prepared for occupancy by the landlord.

Accordingly, this one lease represents an obligation of the Company that is not reflected within the Consolidated Balance Sheets as of December 31, 2024.

The aggregate future liability related to this lease was $ 0.1 million.

The discount rate used for leases accounted for under ASC 842 is the Company’s collateralized credit adjusted borrowing rate.

The following table presents lease costs and other quantitative information for the years ended December 31, 2023, 2022, and 2021:

Year Ended December 31,

The following table presents lease costs and other quantitative information for the years ended December 31,:

2024 2023 2022

10 unchanged sentences

(1) Includes Right-of-use lease assets obtained in exchange for operating lease liabilities related to acquisitions.

As of December 31, 2023, the weighted average remaining lease term (in years) and weighted average discount rate were 6.41 years and 5.5 %, respectively.

As of December 31, 2024, the weighted average remaining lease term was 5.8 years, and the weighted average discount rate was 5.6 %.

Operating lease expense is included in Office and general expenses in the Consolidated Statements of Operations.

The Company’s lease expense for leases with a term of 12 months or less is immaterial.

In the year ended December 31, 2023, as a result of subleasing or ceasing use of office spaces, the Company recognized a charge of $ 10.0 million to reduce the carrying value of four of its right-of-use lease assets and related leasehold improvements.

The right-of-use lease assets and related leasehold improvements related to agencies within the Integrated Agencies Network and the Brand Performance Network.

In the year ended December 31, 2024, the Company ceased using certain office space and as such recognized a charge of $ 1.7 million to reduce the carrying value of two of its right-of-use lease assets and related leasehold improvements.

The right-of-use lease assets and related leasehold improvements were related to an agency within the Integrated Agencies Network and to Corporate.

In the year ended December 31, 2023, the Company ceased using certain office space and as such recognized a charge of $ 10.0 million to reduce the carrying value of four of its right-of-use assets and related leasehold improvements.

The right-of-use lease assets were related to agencies within the Integrated Agencies Network and the Brand Performance Network.

In the year ended December 31, 2022, the Company recognized a charge of $ 2.6 million, to reduce the carrying value of three of its right-of-use lease assets and related leasehold improvements.

The right-of-use lease assets and related leasehold improvements related to agencies within the Integrated Agencies Network and the Brand Performance Network.

The Company evaluated the facts and circumstances related to the use of the assets which indicated that they may not be recoverable.

Using estimated and actual sublease income to develop expected future cash flows, it was determined that the fair

value of the assets were less than their carrying value.

The aforementioned impairment charges are included in Impairment and other losses within the Consolidated Statements of Operations.

With regard to the aforementioned impairments, the Company evaluated the facts and circumstances related to the use of the assets which indicated that they may not be recoverable.

Using sublease income to develop expected future cash flows, it was determined that the fair value of the assets was less than their carrying value.

The impairment charge is included in Impairment and other losses within the Consolidated Statements of Operations.

The following table presents minimum future rental payments under the Company’s leases as of December 31, 2024, and their reconciliation to the corresponding lease liabilities:

6 unchanged sentences

Lease liability $ 305,592

As of December 31, 2023 and December 31, 2022, the Company’s indebtedness was comprised as follows:

2023 December 31,

The following tables present the Company’s indebtedness as reported on the Consolidated Balance Sheets as of December 31,:

(dollars in thousands)

11 unchanged sentences

The Company is party to a senior secured revolving credit facility with a five-year maturity with a syndicate of banks (the “Credit Agreement”).

On May 4, 2023, the Company amended the Credit Agreement to, among other things, increase the revolving commitments under the Credit Agreement by $ 140.0 million from $ 500.0 million to $ 640.0 million and permit restricted payments for share repurchases or redemptions from certain of its stockholders in an aggregate principal amount of up to $ 150.0 million.

The Credit Agreement provides revolving commitments of up to $ 640.0 million and permits restricted payments for share repurchases or redemptions from certain of its stockholders in an aggregate principal amount of up to $ 150.0 million.

The Credit Agreement contains sub-limits for revolving loans denominated in pounds and euros not to exceed the U.S.

5 unchanged sentences

Principal amounts outstanding under the Credit Agreement are due and payable in full at maturity on August 3, 2026.

The Credit Agreement contains a number of financial and nonfinancial covenants and is guaranteed by substantially all of our present and future subsidiaries, subject to customary exceptions.

The Credit Agreement contains a number of financial and non-financial covenants and is guaranteed by substantially all of our present and future subsidiaries, subject to customary exceptions.

The Company was in compliance with all covenants as of December 31, 2024.

2 unchanged sentences

The Company had $ 1.1 billion aggregate principal amount of 5.625 % senior notes (“ 5.625 % Notes”) outstanding as of December 31, 2024.

The 5.625 % Notes are due August 15, 2029 and bear interest of 5.625 % to be paid on February 15 and August 15 of each year.

The 5.625 % Notes are due August 15, 2029, and bear annual interest of 5.625 % to be paid semiannually on February 15 and August 15 of each year.

The 5.625 % Notes are guaranteed on a senior unsecured basis by substantially all of the Company’s subsidiaries.

3 unchanged sentences

The Company may, at its option, redeem the 5.625 % Notes in whole at any time or in part from time to time, on and after August 15, 2024 at a redemption price of 102.813 % of the principal amount thereof if redeemed during the twelve-month period beginning on August 15, 2024, at a redemption price of 101.406 % of the principal amount thereof if redeemed during the twelve-month period beginning on August 15, 2025 and at a redemption price of 100 % of the principal amount thereof if redeemed on August 15, 2026 and thereafter.

Prior to August 15, 2024, the Company may, at its option, redeem some or all of the 5.625 % Notes at a price equal to 100 % of the principal amount of the 5.625 % Notes plus a “make whole” premium and accrued and unpaid interest.

The Company may also redeem, at its option, prior to August 15, 2024, up to 40 % of the 5.625 % Notes with the net proceeds from one or more equity offerings at a redemption price of 105.625 % of the principal amount thereof.

If the Company experiences certain kinds of changes of control (as defined in the indenture), holders of the 5.625 % Notes may require the Company to repurchase any 5.625 % Notes held by them at a price equal to 101 % of the principal amount of the 5.625 % Notes plus accrued and unpaid interest.

9 unchanged sentences

These covenants are subject to a number of limitations and exceptions.

The 5.625 % Notes are also subject to customary events of default, including cross-payment default and cross-acceleration provisions.

The 5.625 % Notes are also subject to certain covenants, customary events of default, including cross-payment default and cross-acceleration provisions.

The Company was in compliance with all covenants as of December 31, 2024.

Employee Benefit Plan

A subsidiary of the Company, sponsors a defined benefit plan with benefits based on each employee’s years of service and compensation.

A subsidiary of the Company sponsors a defined benefit pension plan with benefits based on each employee’s years of service and compensation.

The benefits under the defined benefit pension plan are frozen.

1 unchanged sentence

Net periodic pension benefit consists of the following components for the years ended December 31,:

Pension Benefits

2024 2023 2022

2 unchanged sentences

Amortization of actuarial (gain)

( 85 ) ( 67 ) —

Net periodic benefit (income) loss

3 unchanged sentences

Total periodic benefit income $ ( 152 ) $ ( 300 ) $ ( 753 )

The above components are included within O ther, net on the Consolidated Statements of Operations.

The above components are included within Other, net on the Consolidated Statements of Operations.

The weighted average discount rate and expected return on plan assets that were used to determine net periodic costs were 5.34 % and 6.50 %, respectively, as of December 31, 2024, 5.47 % and 6.50 %, respectively, as of December 31, 2023, and 2.82 % and 6.50 %, respectively, as of December 31, 2022.

1 unchanged sentence

Other changes in plan assets and benefit obligation recognized in Other comprehensive income (loss) consist of the following components for the years ended December 31,:

Pension Benefits

2024 2023 2022

4 unchanged sentences

The following table summarizes the change in benefit obligation and fair values of plan assets for the years ended December 31,:

Pension Benefits

2024 2023 2022

13 unchanged sentences

Unfunded status $ 1,324 $ 4,065 $ 8,809

(1) Benefit obligation assumed in connection with the acquisition of MDC.

Beginning balance is as of July 31, 2021.

Amounts recognized in the Consolidated Balance Sheets at December 31, consist of the following:

Pension Benefits

Non-current liability $ 1,324 $ 4,065

1 unchanged sentence

Amounts recognized in Accumulated other comprehensive loss before income taxes consists of the following components for the years ended December 31,:

Pension Benefits

2024 2023 2022

22 unchanged sentences

The pension plan contributions are deposited into a trust, and the pension plan benefit payments are made from trust assets.

The Company made contributions to the pension plan totaling $ 4.1 million during 2023 and did not make contributions in 2022 or 2021.

The Company made contributions to the pension plan totaling $ 1.0 million during 2024, $ 4.1 million during 2023, and did not make contributions in 2022.

The Company estimates that it will make $ 1.0 million in contributions to the pension plan in 2025.

Fluctuations in

actual market returns as well as changes in general interest rates will result in changes in the market value of plan assets and may result in increased or decreased retirement benefit costs and contributions in future periods.

Fluctuations in actual market returns as well as changes in general interest rates will result in changes in the market value of plan assets and may result in increased or decreased retirement benefit costs and contributions in future periods.

The estimated benefit payments, which reflect expected future service, as appropriate, are expected to be paid in the amount of $ 1.7 million in 2025, $ 1.8 million in 2026, $ 1.7 million in 2027, $ 1.7 million in 2028, $ 1.9 million in 2029, and $ 9.4 million thereafter.

1 unchanged sentence

When acquiring less than 100% ownership of an entity, the Company may enter into agreements that give the Company an option to purchase, or require the Company to purchase, the incremental ownership interests under certain circumstances.

Where the option to purchase the incremental ownership is within the Company’s control, the amounts are recorded as Noncontrolling interests within Shareholders’ Equity in the Consolidated Balance Sheets.

Where the incremental purchase may be required of the Company, the amounts are recorded as Redeemable noncontrolling interests in mezzanine equity in the Consolidated Balance Sheets at their estimated acquisition date redemption value and adjusted at each reporting period for changes to their estimated redemption value through Retained earnings (but not less than their initial redemption value), except for foreign currency translation adjustments.

The following table presents Net income attributable to noncontrolling and redeemable noncontrolling interests between holders of Class C Common Stock and other equity interest holders for the years ended December 31, 2023, 2022, and 2021:

Year Ended December 31,

Where the option to purchase incremental ownership is within the Company’s control, the amounts are recorded as Noncontrolling interests within Shareholders’ Equity in the Consolidated Balance Sheets.

changes to their estimated redemption value through Retained earnings (but not less than their initial redemption value), except for foreign currency translation adjustments.

The following table presents Net income (loss) attributable to noncontrolling and redeemable noncontrolling interests between Class C shareholders and other equity interest holders for the years ended December 31,:

2024 2023 2022

9 unchanged sentences

$ 22,785 $ 41,508 $ 30,125

The following table presents noncontrolling interests between holders of Class C Common Stock and other equity interest holders as of December 31, 2023 and December 31, 2022:

2023 December 31,

The following table presents noncontrolling interests between Class C shareholders and other equity interest holders as of December 31,:

(dollars in thousands)

1 unchanged sentence

Noncontrolling interest of other equity interest holders (1)

21,746 32,362

Total noncontrolling interests $ 445,174 $ 468,577

The following table presents changes in redeemable noncontrolling interests:

2023 December 31,

(1) In January 2024, the Company entered into an agreement to purchase the remaining noncontrolling ownership interest in a subsidiary it previously controlled, the consideration for which was a portion of the subsidiary that was transferred to the noncontrolling interest owner.

The non-cash purchase resulted in a reduction of the subsidiary noncontrolling interest by approximately $ 10.2 million.

The following table presents changes in redeemable noncontrolling interests for the years ended December 31,:

(dollars in thousands)

5 unchanged sentences

Net income (loss) attributable to redeemable noncontrolling interests 3,005 ( 634 )

Other ( 155 ) 545

Currency translation adjustment 44 ( 155 )

Ending balance $ 8,412 $ 10,792

(1) Redemptions for the year ended December 31, 2023, is associated with redeemable noncontrolling interest of a certain brand we did not previously own.

(1) Redemptions for the years ended December 31, 2024, and 2023 is associated with redeemable noncontrolling interest of certain brands we did not previously own.

The amount was reclassified as a deferred acquisition contingent obligation (see Note 9).

(2) Changes in redemption value are the fair value changes from the acquisition date redemption value based on the options held by the minority interest holders, adjusted through Retained earnings.

The noncontrolling shareholders’ ability to exercise any such option right is subject to the satisfaction of certain conditions, including conditions requiring notice in advance of exercise and specific employment termination conditions.

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It is not determinable, at this time, if or when the owners of these rights will exercise all or a portion of these rights.

The redeemable noncontrolling interest of $ 10.8 million as of December 31, 2023, consists of $ 7.3 million, assuming that the subsidiaries meet certain performance metrics, and $ 3.5 million upon termination of such owner’s employment with the applicable subsidiary or death.

These adjustments will not impact the calculation of earnings (loss) per share if the redemption values are less than the estimated fair values.

As such, there is no related impact on the Company’s earnings per share calculations for the year ended December 31, 2023 and 2022.

Comprehensive Loss Attributable to Noncontrolling and Redeemable Noncontrolling Interests

As such, there is no related impact on the Company’s earnings (loss) per share calculations for the years ended December 31, 2024, and 2023.

Comprehensive Income (Loss) Attributable to Noncontrolling and Redeemable Noncontrolling Interests

For the year ended December 31, 2024, comprehensive income attributable to the noncontrolling and redeemable noncontrolling interests was $ 7.2 million, which consists of $ 22.8 million of net income and $ 15.6 million of other comprehensive loss.

For the year ended December 31, 2023, comprehensive income attributable to the noncontrolling and redeemable noncontrolling interests was $ 47.4 million, which consists of $ 41.5 million of net income and $ 5.9 million of other comprehensive income.

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The Company’s operating entities are involved in legal proceedings and regulatory inquiries of various types.

While any litigation or investigation contains an element of uncertainty, the Company has no reason to believe that the outcome of such proceedings or claims will have a material adverse effect on the financial condition or results of operations of the Company.

Generally, the Company has indemnified the purchasers of certain assets in the event that a third party asserts a claim against the purchaser that relates to a liability retained by the Company.

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The Company continues to monitor the conditions that are subject to guarantees and indemnifications to identify whether it is probable that a loss has occurred and would recognize any such losses under any guarantees or indemnifications in the period when those losses are probable and estimable.

At December 31, 2023, the Company had $ 16.2 million of undrawn letters of credit outstanding.

The Company entered into three operating leases for which the commencement date has not yet occurred as of December 31, 2023.

In the ordinary course of business, the Company enters into certain commitments.

The following details the significant commitments of the Company at December 31, 2024:

The Company had $ 15.3 million of undrawn letters of credit outstanding.

See Note 11 of the Notes included herein for additional information.

In the ordinary course of business, the Company may enter into long-term, non-cancellable contracts with partner associations that include revenue or profit-sharing commitments related to the provision of its services.

The Company entered into one operating lease for which the commencement date has not yet occurred.

See Note 10 of the Notes included herein for additional information.

The Company enters into long-term, non-cancellable contracts with partner associations that include revenue or profit-sharing commitments related to the provision of its services.

These contracts may also include provisions that require the partner associations to meet certain performance targets prior to any obligation to the Company.

As of December 31, 2023, the Company estimates its future minimum commitments under these non-cancellable agreements to be:

$ 7.3 million, $ 7.0 million, $ 4.2 million, $ 3.0 million, $ 3.1 million and $ 3.8 million for 2024, 2025, 2026, 2027, 2028, and thereafter, respectively.

The Company has also entered into a certain long-term, non-cancellable contract with a certain vendor for cloud services that requires the Company to commit to minimum spending over the contract term.

As of December 31, 2023, the Company estimates its future minimum commitments under this agreement to be:

$ 5.7 million, $ 6.9 million, $ 8.7 million, $ 10.4 million, $ 12.7 million and $ 15.3 million for 2024, 2025, 2026, 2027, 2028, and thereafter, respectively.

At December 31, 2024, the Company estimates its future minimum commitments under these non-cancellable agreements to be $ 10.5 million, $ 5.5 million, $ 4.0 million, $ 3.2 million, $ 2.9 million and $ 1.0 million for 2025, 2026, 2027, 2028, 2029, and thereafter, respectively.

The Company entered into a certain long-term, non-cancellable contract with a certain vendor for cloud services that requires the Company to commit to minimum spending over the contract term.

At December 31, 2024, the Company estimates its future minimum commitments under this agreement to be $ 9.7 million, $ 8.7 million, $ 10.4 million, $ 12.7 million and $ 15.3 million for 2025, 2026, 2027, 2028, and 2029, respectively.

The Company entered into a certain long-term, non-cancellable contract with a certain vendor for a software license agreement that requires the Company to commit to minimum spending over the contract term.

At December 31, 2024, the Company estimates its future minimum commitments under this agreement to be $ 14.1 million, $ 28.5 million and $ 21.8 million for 2025, 2026, and 2027, respectively.

Share Capital

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Class C Common Stock

There are 250.0 million shares of Class C Common Stock authorized, of which 151.6 million shares were issued and outstanding as of December 31, 2023.

There are 250.0 million authorized shares of Class C common stock, of which 151.6 million shares were issued and outstanding as of December 31, 2024.

Each share of Class C Common Stock carries one vote and does not represent an economic interest in the Company.

Each share of Class C Common Stock is paired with a corresponding common unit of OpCo (each such paired share of Class C Common Stock and common unit of OpCo, a “Paired Unit”).

Each share of Class C Common Stock is paired with a corresponding common unit of Stagwell Global LLC (“OpCo”), the Company’s only operating subsidiary (each such paired share of Class C Common Stock and common unit of OpCo, a “Paired Unit”).

Each holder of Paired Units may, at its option, exchange such Paired Units for shares of Class A Common Stock on a one-to-one basis (i.e., one Paired Unit for one share of Class A Common Stock).

In the year ended December 31, 2023, holders of the Paired Units exchanged 9.3 million Paired Units for the same number of shares of Class A Common Stock.

Class A Common Stock Repurchases

The Company may purchase shares of Class A Common Stock under its stock repurchase program (the “Repurchase Program”) as well as repurchases outside of the Repurchase Program.

On March 1, 2023, the Company’s board of directors (the “Board”) authorized an extension and a $ 125.0 million increase in the size of the Repurchase Program to an aggregate of $ 250.0 million, with any previous purchases under the Repurchase Program continuing to count against that limit.

The Repurchase Program, as amended, will expire on March 1, 2026.

The Company may purchase shares of outstanding Class A Common Stock under its Repurchase Program.

On November 6, 2024, the board of directors (the “Board”) authorized an extension and a $ 125.0 million increase in the size of our Repurchase Program.

Under the Repurchase Program, as amended, we may repurchase up to an aggregate of $ 375.0 million of shares of our outstanding Class A Common Stock, with any previous purchases under the Repurchase Program continuing to count against that limit.

The Repurchase Program will expire on November 6, 2027.

Under the Repurchase Program, share repurchases may be made at our discretion from time to time in open market transactions at prevailing market prices, including through trading plans that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, in privately negotiated transactions, or through other means.

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Our Board will review the Repurchase Program periodically and may authorize adjustments of its terms.

During the year ended December 31, 2023, 9.9 million shares of Class A Common Stock were repurchased pursuant to the Repurchase Program at an aggregate value, excluding fees, of $ 59.5 million.

These shares were repurchased at an average price of $ 6.00 per share.

During the year ended December 31, 2024, 14.8 million shares of Class A Common Stock were repurchased pursuant to the Repurchase Program at an average price of $ 6.31 per share, for an aggregate value, excluding fees, of $ 93.5 million.

The repurchased shares included 4 million shares of Class A Common Stock repurchased from certain affiliates of The Goldman Sachs Group, Inc.

at a price of $ 6.34 per share, for an aggregate purchase price of $ 25.4 million.

The remaining value of shares of Class A Common Stock permitted to be repurchased under the Repurchase Program was $ 169.9 million as of December 31, 2024.

In addition to the repurchases under the Repurchase Program, on May 23, 2023, the Company repurchased 23.3 million shares of Class A Common Stock from certain affiliates of AlpInvest Partners B.V.

at a price of $ 6.43 per share, for an aggregate total repurchase price of $ 150.0 million.

Employee Stock Purchase Plan

The Company’s 2023 Employee Stock Purchase Plan (the “ESPP”) was approved by stockholders and adopted by the Board in 2023.

A total of 3.0 million shares of Class A Common Stock was reserved for sale under the ESPP to eligible employees as defined in the plan.

A total of 3.0 million shares of Class A Common Stock are reserved for sale under the Company’s 2023 Employee Stock Purchase Plan (the “ESPP”) to eligible employees as defined in the plan.

Under the ESPP, eligible employees can elect to withhold up to 15 % of their earnings, subject to certain maximums, to purchase shares of Class A Common Stock on certain plan-defined dates.

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The plan is considered compensatory resulting in the fair value of the discount being expensed over the service period.

The total number of shares authorized that remained available to be issued was 2.9 million as of December 31, 2023.

During the year ended December 31, 2023, there were no material expenses incurred by the Company related to the ESPP and contributions to the ESPP were nominal.

The total number of shares authorized that remain available to be issued was 2.7 million as of December 31, 2024.

During the years ended December 31, 2024, and 2023, there were no material expenses incurred by the Company related to the ESPP, and contributions to the ESPP were nominal.

Stock-based Awards

The Company ’ s stock-based awards outstanding consist of restricted stock units, restricted stock and stock appreciation rights (“SAR awards”).

The total number of shares authorized that remained available to be issued for future awards was 6.5 million as of December 31, 2023 and 12.9 million as of December 31, 2022.

The Company ’ s outstanding stock-based awards consist of restricted stock units, restricted stock and stock appreciation rights (“SAR awards”).

The total number of shares authorized that remained available to be issued for future awards was 2.3 million as of December 31, 2024.

For the years ended December 31, 2024, 2023, and 2022, the Company recognized total stock-based compensation expense related to all stock compensation awards of $ 44.9 million, $ 51.2 million, and $ 36.7 million, respectively.

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The following tables summarize stock-based activity of awards authorized under our employee stock incentive plans and awards (such as inducement awards) and other share-based commitments that have met the requirements to be issued separate from shareholder-approved stock incentive plans.

The following table summarizes information about time-based and performance-based restricted stock and restricted stock unit awards:

The following table presents information about time-based and performance-based restricted stock and restricted stock unit awards:

Time-Based Awards Performance-Based Awards

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Balance at December 31, 2024 6,645 $ 6.43 4,537 $ 6.55

The weighted average grant date fair value of time-based awards granted in 2022 and 2021 was $ 7.38 and $ 5.51 , respectively.

The weighted average grant date fair value of performance-based awards granted in 2022 and 2021 was $ 8.68 and $ 7.03 , respectively.

The weighted average grant date fair value of time-based awards granted in 2023 and 2022 was $ 7.19 and $ 7.38 per share, respectively.

The weighted average grant date fair value of performance-based awards granted in 2023 and 2022 was $ 7.24 and $ 8.68 per share, respectively.

The vesting of the performance-based awards is contingent primarily upon the Company meeting certain cumulative revenue and earnings targets, primarily three years, and continued employment through the vesting date.

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The total fair value of restricted stock and restricted stock unit awards, which vested during the years ended December 31, 2024, 2023, and 2022, was $ 33.3 million, $ 38.4 million, and $ 77.3 million respectively.

At December 31, 2023, the weighted average remaining contractual life for time-based and performance-based awards was 0.67 and 1.33 years, respectively.

At December 31, 2024, the weighted average remaining contractual life for time-based and performance-based awards was 0.48 years and 1.28 years, respectively.

At December 31, 2024, the unrecognized compensation expense for time-based awards was $ 11.9 million and will be recognized over a weighted average period of 0.48 years.

At December 31, 2024, the unrecognized compensation expense for performance-based awards was $ 11.7 million and will be recognized over a weighted average period of 1.28 years.

The following table summarizes information about SAR awards:

The following table presents information about SAR awards:

Shares Weighted Average Grant Date Fair Value Weighted Average Exercise Price

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Balance at December 31, 2024 2,622 $ 2.44 $ 6.42

The weighted average grant date fair value of SAR awards granted in 2021 was $ 2.39 .

There were no SAR awards granted in 2022.

We use the Black-Scholes option-pricing model to estimate the fair value of SAR awards.

The grant date fair value of the SAR awards granted in 2023 ranged from $ 2.10 to $ 2.35 per share.

The assumptions used to value the SAR awards granted in 2021 were as follows:

expected life ranging from 2.8 to 4 years, risk free interest rate of approximately 1.0 %, expected volatility ranging from 35.5 % to 38.1 %, and dividend yield of 0 %.

The grant date fair value of the SAR awards granted in 2023 ranged from $ 2.10 to $ 2.35 per share.

The assumptions used to value the SARS granted in 2023 were as follows:

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The term of these awards is 5 years.

There were no SAR awards granted or forfeited in 2022 and 2024.

Certain of the Company’s SAR awards are settled in cash.

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As of December 31, 2024, the assumptions for the Black-Scholes model for these awards were as follows:

expected life ranging from 0 to 3 years, risk free interest rate of approximately 5 %, expected volatility ranging from 26.7 % to 42.1 %, and dividend yield of 0.0 %.

expected life ranging from 1 to 2.2 years, risk free interest rate of approximately 4 %, expected volatility ranging from 27.9 % to

31.0 %, and dividend yield of 0.0 %.

The remaining term of these awards as of December 31, 2024, ranges from approximately 2.0 years to 3.2 years.

During the year ended December 31, 2023, certain SAR awards were modified from equity to cash settled.

The SAR awards were fair valued on the date of modification, reclassed from equity to liability and resulted in incremental stock-based compensation expense of $ 4.4 million.

For the year ended December 31, 2024, 0.6 million SAR awards vested.

As of December 31, 2024, 2.5 million SAR awards vested and were exercisable.

The total intrinsic value of SAR awards exercised during the years ended December 31, 2023 and 2022 was $ 8.1 million and $ 0.1 million, respectively.

There were no SAR awards exercised during the year ended December 31, 2021.

The total intrinsic value of SAR awards exercised during the years ended December 31, 2024, 2023 and 2022 was $ 2.2 million, $ 8.1 million, and $0.1 million respectively.

As of December 31, 2024, the aggregate intrinsic value of the SAR awards outstanding was $ 3.0 million and the weighted average remaining contractual life for these awards was 1.8 years.

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The weighted average exercise price of SAR awards exercisable as of December 31, 2024, was $ 6.40 .

At December 31, 2023, the unrecognized compensation expense for these awards was $ 0.4 million, to be recognized over a weighted average period of 1.02 years.

At December 31, 2024, the unrecognized compensation expense for these awards was nominal and will be recognized over a weighted average period of 0.7 years.

Subsidiary Awards

Certain of the Company’s subsidiaries grant awards to their employees providing them with an equity interest in the respective subsidiary (the “profits interests awards”).

The profits interests awards generally provide the employee the right, but not the obligation, to sell its profits interest in the subsidiary to the Company based on a performance-based formula and, in certain cases, receive a profit share distribution.

The profits interests awards generally provide the employee with the right, but not the obligation, to sell its profits interest in the subsidiary to the Company based on a performance-based formula and, in certain cases, receive a profit share distribution.

The profits interests awards are settled in cash and the corresponding liability was $ 18.5 million and $ 20.3 million at December 31, 2024, and 2023, respectively and is included as a component of Accruals and other liabilities and Other liabilities on the Consolidated Balance Sheets.

The change in the profits interest liabilities for the years ended December 31, 2023 and 2022 was an increase of $ 3.9 million and a decrease of $ 4.2 million, respectively and was recorded as stock-based compensation in Cost of Services within the Statements of Operations.

The change in fair value of these awards resulted in an increase in stock-based compensation for the years ended December 31, 2024, and 2023 of $ 7.1 million and $ 3.9 million, respectively.

This was included as a component of stock-based compensation in Cost of Services within the Statements of Operations.

Changes in Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive income (loss) for the years ended December 31, were:

The following table presents changes in accumulated other comprehensive income (loss) for the years ended December 31,:

Defined Benefit Pension Foreign Currency Translation Total

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$ 4,810 $ ( 20,288 ) $ ( 15,478 )

Other comprehensive income (loss) before reclassifications

Other comprehensive income before reclassifications

338 2,073 2,411

Other comprehensive income (loss)

Other comprehensive income

338 2,073 2,411

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$ 5,148 $ ( 18,215 ) $ ( 13,067 )

Other comprehensive income before reclassifications

Other comprehensive loss before reclassifications

( 2,186 ) ( 8,520 ) ( 10,706 )

Other comprehensive income

Other comprehensive loss

( 2,186 ) ( 8,520 ) ( 10,706 )

Balance at December 31, 2024 $ 2,962 $ ( 26,735 ) $ ( 23,773 )

$ 5,148 $ ( 18,215 ) $ ( 13,067 )

The components of the Company’s income before income taxes and equity in earnings of non-consolidated affiliates by taxing jurisdiction for the years ended December 31, were:

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Valuation allowance 5,198 11,791 4,932

Deferred acquisition consideration adjustments

( 2,079 ) 1,299 ( 72 )

Revaluation of TRA step up — ( 424 ) ( 5,109 )

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Prior year adjustments ( 3,464 ) 5,617 ( 17,205 )

5,617 ( 17,205 ) —

Goodwill impairments — — 14,645

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Effective income tax rate 34.9 % 44.5 % 33.7 %

Prior to merger, the Company was a limited liability company classified as a disregarded entity for U.S.

federal income tax purposes, and as such was not subject to taxes from a U.S.

federal income tax perspective.

After the merger, the Company is a corporation with an investment in a limited liability company classified as a partnership for U.S.

The Company is a corporation with an investment in a limited liability company classified as a partnership for U.S.

federal income tax purposes, and as such a portion of the consolidated income is not subject to taxes from a U.S.

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In August 2022, the United States enacted to the Inflation Reduction Act of 2022 (“IRA”), which creates a new book minimum tax of at least 15% of consolidated GAAP pre-tax income for corporations with average book income in excess of $1 billion.

We do not expect an increase in our tax liability from this new book minimum tax in 2023.

Income taxes receivable were $ 21.6 million and $ 5.2 million at December 31, 2023 and 2022, respectively, and were included in other current assets on the balance sheet.

Long-term income taxes receivable were $ 12.5 million at December 31, 2023 and 2022, and were included in other assets on the balance sheet.

Income taxes payable were $ 5.7 million and $ 13.5 million at December 31, 2023 and 2022, respectively, and were included in accrued and other liabilities on the balance sheet.

The tax effects of significant temporary differences representing deferred tax assets and liabilities at December 31, were as follows:

The Company’s tax liability has not increased as a result of this new book minimum tax.

Income taxes receivable were $ 27.0 million and $ 21.6 million as of December 31, 2024, and 2023, respectively, and were included in Other current assets on the Consolidated Balance Sheets.

Long-term income taxes receivable were $ 10.4 million and $ 12.5 million as of December 31, 2024, and 2023, and were included in Other assets on the Consolidated Balance Sheets.

Income taxes payable were $ 12.1 million and $ 5.7 million as of December 31, 2024, and 2023, respectively, and were included in Accruals and other liabilities on the Consolidated Balance Sheets.

The tax effects of significant temporary differences representing deferred tax assets and liabilities as of December 31, were as follows:

2024 2023 2022

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$ ( 313 ) $ 6,650 $ 27,496

The preliminary deferred tax liability for the Company’s residual basis difference in OpCo of $ 102.3 million reflected in the table above as of December 31, 2021 was adjusted to zero as of December 31, 2022 to reflect the finalization of the Company’s book and tax basis in OpCo.

This deferred tax liability had a balance of $ 119.5 million as of September 30, 2022 that should have been zero.

In addition, a deferred tax liability of $ 16.7 million, and the associated reduction to additional paid-in-capital was not recorded when the exchanges of Paired Units for Class A Common Stock occurred in February 2022.

The correction has been reflected as of December 31, 2022.

Tax Receivables Agreement

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In the first quarter of 2022, the Company had its first exchange of Paired Units for shares of Class A Common Stock and recorded its initial TRA liability.

Further exchanges have been made in the subsequent quarters in 2022 and no further exchanges in 2023.

As of December 31, 2023, and 2022, the Company has recorded a TRA liability of $ 26.9 million and

$ 26.6 million, respectively, and a deferred tax asset, net of amortization of $ 29.0 million and $ 30.6 million, respectively, in connection with the exchanges of the Paired Units and the projected obligations under the TRA.

Further exchanges have been made in the subsequent quarters in 2022 and no further exchanges in 2023 or 2024.

As of December 31, 2024, and 2023, the Company has recorded a TRA liability of $ 26.7 million and $ 26.9 million, respectively, and a deferred tax asset, net of amortization of $ 27.3 million and $ 29.0 million, respectively, in connection with the exchanges of the Paired Units and the projected obligations under the TRA.

Stagwell Inc.

itself has net operating loss carryforwards of $ 62.1 million relating to U.S.

states which expire years 2026 through 2042.

Stagwell Inc.

also had indefinite net operating loss carryforwards less than $ 0.1 million relating to states.

states which expire years 2025 through 2042 and indefinite net operating loss carryforwards of $ 4.5 million relating to U.S.

Stagwell Inc.

also has foreign and state tax credits and general business carryovers of $ 6.4 million which expire between 2024 and 2031.

also has foreign and state tax credits of $ 6.7 million which expire between 2025 and 2034.

Stagwell Inc.’s consolidated corporate subsidiaries also have net operating loss carryforwards which expire in years 2025 through 2044.

These definite lived net operating loss carryforwards consist of $ 12.5 million relating to U.S.

federal, $ 8.0 million relating to states and $ 32.9 million relating to non-U.S.

federal, $ 14.4

million relating to states and $ 44.4 million re lating to non-U.S.

The corporate subsidiaries also have indefinite net operating loss carryforwards which consist of $ 24.2 million relating to U.S.

federal, and $ 48.6 million relating to states, and $ 46.3 million relating to non-U.S.

federal, and $ 2.0 million relating to U.S.

states, and $ 69.3 million relating to non-U.S.

The majority of the consolidated corporate subsidiaries’ U.S.

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As of December 31, 2024, and 2023, the Company recorded a liability for unrecognized tax benefits as well as applicable penalties and interest in the amount of $ 2.1 million and $ 1.8 million, respectively.

It is the Company’s policy to classify interest and penalties arising in connection with unrecognized tax benefits as a component of income tax expense.

As of December 31, 2023 and 2022, accrued penalties and interest included in unrecognized tax benefits were $ 1.8 million and less than $ 0.1 million, respectively.

If these unrecognized tax benefits were to be recognized, it would affect the Company’s effective tax rate.

It is the Company’s policy to classify interest and penalties arising in connection with unrecognized tax benefits as a component of income tax expense.

As of December 31, 2024, and 2023, accrued penalties and interest included in unrecognized tax benefits were $ 2.1 million and $ 1.8 million, respectively.

A reconciliation of the change in unrecognized tax benefits exclusive of penalties and interest is as follows:

A reconciliation of the change in unrecognized tax benefits is as follows:

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Unrecognized tax benefits - Ending Balance $ 9 $ 9

It is reasonably possible that the amount of unrecognized tax benefits could decrease by a range of $ — to less than $ 0.1 million in the next twelve months as a result of expiration of certain statute of limitations.

It is reasonably possible that the amount of unrecognized tax benefits could decrease by less than $ 0.1 million in the next twelve months as a result of expiration of certain statute of limitations.

The Company is subject to taxation and files income tax returns in the U.S.

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Financial Instruments that are not Measured at Fair Value on a Recurring Basis

The following table presents certain information for our financial liability that is not measured at fair value on a recurring basis as of December 31, 2023 and December 31, 2022:

December 31, 2023 December 31, 2022

The following table presents certain information for our financial liability that is not measured at fair value on a recurring basis as of December 31,:

Amount Fair Value Carrying

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These growth rates are consistent with the Company’s long-term forecasts.

As of December 31, 2023, the discount rate used to measure these liabilities was 5.1 %.

As these estimates require the use of assumptions about future performance, which are uncertain at the time of estimation, the fair value measurements presented on the Consolidated Balance Sheets are subject to material uncertainty.

As of December 31, 2024, the discount rate used to measure these liabilities ranged from 4.7 % to 7.2 %.

See Note 9 of the Notes included herein for additional information regarding contingent deferred acquisition consideration.

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The transactions may range in the nature and value of services underlying the arrangements.

The following table presents significant related party transactions where a third party receives services from the Company:

Total Transaction Value Revenue Due From

The following table presents significant related party transactions where a related party receives services from the Company:

Revenue Due From

Related Party

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Services 2024 2023 2022 2024 2023

(dollars in thousands)

Marketing and advertising services (1)

$ 465 and Continuous (7)

$ — $ 2,576 $ 2,240 $ — $ 1,518

Marketing and advertising services (2)

$ 3,576 and Continuous (7)

3,752 894 7,449 — 4,381

Marketing and website development services (3)

Continuous (7)

3,034 3,566 7,185 601 694

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828 1,042 379 192 160

Polling services (5)

Polling and public relation services (5)

361 350 339 55 39

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— 1,046 3,450 — —

Marketing and advertising services (6)

4,917 — — — —

Total $ 12,892 $ 9,474 $ 21,042 $ 848 $ 6,792

(1) A member of the Company’s Board holds an executive leadership position or is on the Board of the client.

(2) Brands’ partners and executives either hold a key leadership position in or are on the Board of the client.

(3) Client has a significant interest in the Company.

(1) A member of the Company’s Board was the President of a client.

This person retired from his position and is no longer an employee of the client effective January 2, 2024.

(2) Brands’ partners and executives either hold a key leadership position in or are on the board of directors of the client.

(3) A member of the Company's Board is the managing director of a client.

(4) A family member of the Company’s Chief Executive Officer holds a key leadership position in the client.

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(6) Founder of the client has significant interest in the Company.

(7) Certain of the contractual arrangements within these transactions were entered into for an indefinite term and are invoiced as services are provided, while others have a fixed definitive contract value.

In 2019, a Brand entered into a loan agreement with a related party who holds a minority interest in the Brand.

The loan receivable of $ 0.8 million and $ 3.6 million due from the third party is included within Other current assets in the Company’s Consolidated Balance Sheets as of December 31, 2023 and December 31, 2022, respectively.

The Company recognized $ 0.3 million, $ 0.5 million and $ 0.3 million for the year ended December 31, 2023, 2022, and 2021 respectively, of interest income within Interest expense, net on its Consolidated Statements of Operations.

In addition, in 2021, the Brand entered into an arrangement to obtain sales and management services from the same third party.

Under the arrangement, the Brand has incurred $ 2.4 million, $ 2.0 million and $ 0.8 million of related party expense for the year ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023 and December 31, 2022, $ 0.6 million and $ 1.4 million, respectively, was due to the third party.

In 2018, a Brand entered into an agreement to provide marketing and advertising services to a related party whose partners hold executive leadership positions in the Brand.

Under the arrangement, the Brand recognized $ 0.8 million, $ 1.0 million, and $ 0.7 million of revenue for the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023 nothing was from the related party, and as of December 31, 2022, $ 0.8 million was due from the related party.

In addition, on behalf of the related party, the Brand serves as an agent to transfer funds from one of the related party ’ s customers to the related party.

The Brand does not receive revenue from this arrangement.

As of December 31, 2023 $ 0.7 million was due to the related party, and nothing was due as of December 31, 2022.

In 2022, the Company made loans to three employees of a subsidiary each in the amount of $ 0.9 million, together with interest on the unpaid principal balance at a fixed interest rate equal to 3.5 % per annum, compounding quarterly.

The cash from the loan was used by the employees to purchase the noncontrolling interest of 13.3% in TMA Direct.

As of December 31, 2024, and December 31, 2023, $ 2.7 million and $ 2.7 million, respectively, was due from the related parties and included in Other assets on the Consolidated Balance Sheets.

Segment Information

The Company adopted ASU 2023-07, Segment Reporting (Topic 280) Improvements to Segment Disclosures (“ASU 2023-07”), in the fourth quarter of 2024, which requires enhanced disclosure about significant segment expenses.

The Company determines an operating segment if a component (i) engages in business activities from which it earns revenues and incurs expenses, (ii) has discrete financial information, and is (iii) regularly reviewed by the Chief Operating Decision Maker (“CODM”), who is Mark Penn, Chief Executive Officer and Chairman, to make decisions regarding resource allocation for the segment and assess its performance.

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This determination is based upon a quantitative analysis of the expected and historic average long-term profitability for each operating segment, together with a qualitative assessment to determine if operating segments have similar operating characteristics.

The CODM uses Adjusted EBITDA (defined below) as a key metric, to evaluate the operating and financial performance of a segment, identify trends affecting the segments, develop projections and make strategic business decisions.

All segments follow the same basis of presentation and accounting policies as those described throughout the Notes included herein.

The CODM uses Adjusted EBITDA as a key metric, to evaluate the operating and financial performance of a segment, identify trends affecting the segments, develop projections and make strategic business decisions.

Adjusted EBITDA is defined as Net income excluding non-operating income or expense to achieve operating income, plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, and other items.

Other items include restructuring costs, acquisition-related expenses, and non-recurring items.

The Company made changes to its internal management and reporting structure in the first quarter of 2023, resulting in an update to our reportable segments (Networks).

The change in reportable segments was that Mono, previously in the Integrated Agencies Network, is now within Allison & Partners in the Communications Network, Storyline (a Brand specializing in research and survey generation), previously in the Communications Network, is now within Constellation in the Integrated Agencies Network.

Periods presented prior to the first quarter of 2023 have been recast to reflect the reclassification of certain reporting units (Brands) between operating segments.

Other items primarily includes restructuring, certain system implementation and acquisition-related expenses.

The Company has three reportable segments as follows:

“Integrated Agencies Network,” “Brand Performance Network” and the “Communications Network.” In addition, the Company combines and discloses operating segments that do not meet the aggregation criteria, and includes the elimination of certain intercompany services, as “All Other.” This segment also includes the elimination of intercompany revenue.

The Company also reports corporate expenses, as further detailed below, as “Corporate.” All segments follow the same basis of presentation and accounting policies as those described throughout the Notes included herein.

“Integrated Agencies Network”, “Brand Performance Network”, and the “Communications Network”.

The composition of these segments are as follows:

• The Integrated Agencies Network includes five operating segments:

the Anomaly Alliance, Constellation, the Doner Partner Network, Code and Theory, and National Research Group.

The operating segments offer an array of complementary services spanning our core capabilities of Digital Transformation, Performance Media & Data, Consumer Insights & Strategy, and Creativity & Communications.

The Brands included in the operating segments that comprise the Integrated Agencies Network reportable segment are as follows:

Anomaly Alliance (Anomaly), Constellation (72andSunny, Colle McVoy, Hunter, Instrument, Redscout, Team Enterprises, Harris Insights, Left Field Labs, and Movers and Shakers), the Doner Partner Network (Doner, KWT Global, Harris X, Veritas, Doner North, and Yamamoto (Brands)), Code and Theory, and National Research Group.

ConcentricLife, which was part of Anomaly Alliance was sold on October 31, 2023.

the Anomaly Alliance, Constellation, the Doner Partner Network, Code and Theory Network, and National Research Group.

The Brands included in the operating segments that comprise the Integrated Agencies Network reportable segment includes:

Anomaly Alliance (Anomaly, What’s Next Partners), Constellation (72andSunny, Crispin LLC, Colle McVoy, Hunter, Redscout, Team Enterprises, Harris Insights, Movers and Shakers, and Team Epiphany), the Doner Partner Network (Doner, KWT Global, Harris X, Veritas, Doner North, and Yamamoto), Code and Theory Network (Code and Theory, Instrument, Left Field Labs), and National Research Group.

These operating segments share similar characteristics related to (i) the nature of their services;

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In addition, these operating segments may occasionally compete with each other for new business or have business move between them.

• The Brand Performance Network (“BPN”) is comprised of a single operating segment.

• The Brand Performance Network (“BPN”) comprises a single operating segment.

BPN includes a unified media and data management structure with omnichannel media placement, creative media consulting, influencer and business-to-business marketing capabilities.

Our Brands in this segment aim to provide scaled creative performance through developing and executing sophisticated omnichannel campaign strategies leveraging significant amounts of consumer data.

BPN’s Brands provide media solutions such as audience analysis, media planning, and buying across a range of digital and traditional platforms (out-of-home, paid search, social media, lead generation, programmatic, television, broadcast, among others) and includes multichannel Brands Assembly, Brand New Galaxy, Crispin Porter Bogusky, Forsman & Bodenfors, Goodstuff, Bruce Mau, digital creative & transformation consultancy Gale, B2B specialist Multiview, CX specialists Kenna, and travel media experts Ink.

• The Communications Network reportable segment is comprised of a single operating segment, our specialist network that provides advocacy, strategic corporate communications, investor relations, public relations, online fundraising and other services to both corporations and political and advocacy organizations and consists of our Allison brands, SKDK brands, and Targeted Victory brands.

• All Other consists of the Company’s digital innovation group and Stagwell Marketing Cloud Group, including Maru and Epicenter, and products such as ARound, PRophet and SmartAssets.

• Corporate consists of corporate office expenses incurred in connection with the strategic resources provided to the operating segments, as well as certain other centrally managed expenses that are not fully allocated to the operating segments.

BPN’s Brands provide media solutions such as audience analysis, media planning, and buying across a range of digital and traditional platforms (out-of-home, paid search, social media, lead generation, programmatic, television, broadcast, among others) and includes multichannel Brands Assembly, CPB International, Stagwell Production, Vitro, Forsman & Bodenfors, Goodstuff, Bruce Mau, digital creative & transformation consultancy Gale, B2B specialist Multiview, CX specialists Kenna, and travel media experts Ink.

• The Communications Network reportable segment comprises a single operating segment, our specialist network that provides advocacy, strategic corporate communications, investor relations, public relations, online fundraising and other services to both corporations and political and advocacy organizations and includes Allison, SKDK, Targeted Victory, and Consulum.

The Company combines and discloses operating segments that do not meet the aggregation criteria and includes the elimination of certain intercompany services and revenue, within “All Other.” All Other consists of the Company’s “software as a service” (“SaaS”) and “data as a service” (“DaaS”) technology tools.

The Company reports corporate expenses as “Corporate.” Corporate consists of corporate office expenses incurred in connection with the strategic resources provided to the operating segments, as well as certain other centrally managed expenses that are not fully allocated to the operating segments.

These office and general expenses include (i) salaries and related expenses for corporate office employees, including employees dedicated to supporting the operating segments, (ii) occupancy expenses relating to properties occupied by all corporate office employees, (iii) other office and general expenses including professional fees for the financial statement audits and other public company costs, and (iv) certain other professional fees managed by the corporate office.

Additional expenses managed by the corporate office that are directly related to the operating segments are allocated to the appropriate reportable segment and the All Other category.

The Company made changes to its internal management and reporting structure in the first quarter of 2024, resulting in a change to its reportable segments (Networks).

Specifically, certain agencies previously within the Brand Performance Network are now in the Integrated Agencies Network.

The 2023 period has been recast to reflect the reclassification of certain reporting units (Brands) between operating segments.

Year Ended December 31, 2024

2023 2022 2021

Integrated Agencies Network Brand Performance Network Communications Network Total

(dollars in thousands)

Integrated Agencies Network $ 1,378,109 $ 1,474,970 $ 771,123

Brand Performance Network 768,776 757,208 424,632

Communications Network 333,707 435,652 247,766

All Other 46,585 19,962 25,842

Total Revenue $ 2,527,177 $ 2,687,792 $ 1,469,363

$ 1,535,445 $ 751,884 $ 515,140 $ 2,802,469

Billable costs 262,692 100,654 181,345 544,691

Staff costs 792,041 397,301 177,629 1,366,971

Administrative costs 128,954 93,155 37,057 259,166

Unbillable and other costs * 72,756 65,901 2,235 140,892

Adjusted EBITDA 279,002 94,873 116,874 490,749

Integrated Agencies Network $ 271,322 $ 292,293 $ 165,385

Brand Performance Network 96,015 115,835 65,942

Communications Network 51,819 87,032 43,741

All Other ( 10,607 ) ( 931 ) ( 772 )

Corporate ( 48,410 ) ( 43,111 ) ( 20,644 )

Total Adjusted EBITDA $ 360,139 $ 451,118 $ 253,652

Depreciation and amortization $ ( 142,831 ) $ ( 131,273 ) $ ( 77,503 )

Impairment and other losses ( 11,395 ) ( 122,179 ) ( 16,240 )

Adjusted EBITDA - All Other ( 15,824 )

Adjusted EBITDA - Corporate ( 64,138 )

Total Consolidated Adjusted EBITDA

Stock-based compensation 52,161

Depreciation and amortization 151,652

Deferred acquisition consideration 22,995

Impairment and other losses 1,715

Other items, net 49,196

Total Operating Income

$ 90,527 $ 159,228 $ 44,726

Other Income (expenses):

Operating Income

Interest expense, net ( 92,317 )

Foreign exchange, net ( 1,656 )

Gain on sale of business

94,505 — 43,038

( 359 ) ( 4,975 ) 7,020

Other, net ( 1,372 )

Income before income taxes and equity in earnings of non-consolidated affiliates 37,723

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Income before equity in earnings of non-consolidated affiliates 24,541

50,512 50,123 36,160

Equity in (loss) of non-consolidated affiliates

( 8,870 ) ( 79 ) ( 240 )

41,642 50,044 35,920

Net (income) loss attributable to noncontrolling and redeemable noncontrolling interests ( 41,508 ) ( 30,125 ) ( 14,884 )

Equity in income of non-consolidated affiliates 503

Net income 25,044

Net income attributable to noncontrolling and redeemable noncontrolling interests

Net income attributable to Stagwell Inc.

common shareholders $ 2,259

$ 134 $ 19,919 $ 21,036

The Company’s long-lived assets (i.e., Right-of-use-lease assets-operating leases and Fixed asset, net) was $ 332.1 million ($ 268.5 million in the United States and $ 63.6 million in all other countries) as of December 31, 2023, and $ 372.4 million ($ 315.8 million in the United States and $ 56.7 million in all other countries) as of December 31, 2022.

The Company’s CODM does not use segment assets to allocate resources or to assess performance of the segments and therefore, total segment assets have not been disclosed.

See Note 5 of the Notes included herein for a summary of the Company’s revenue by geographic region for the years ended December 31, 2023, 2022, and 2021.

Revision of 2022 Issued Consolidated Financial Statements

As described in Note 1, in connection with the preparation of the consolidated financial statements for the year ended December 31, 2023, the Company identified errors in the areas of income taxes, noncontrolling interests, and accumulated other comprehensive loss in its previously issued 2022 annual consolidated financial statements.

The Company has revised its financial statements as of and for the year ended December 31, 2022, to reflect the corrections in this Form 10-K.

There were no changes to previously issued cash flows generated from (used by) operating, investing, or financing activities for any of the impacted periods.

Line items impacted in the Consolidated Statements of Shareholders Equity have been reflected below within the Statements of Comprehensive Income (Loss) and Consolidated Balance Sheet below.

Presented below are the effects of the errors to the impacted financial statements as of and for the year ended December 31, 2022.

Consolidated Statements of Operations and

Consolidated Statements of Comprehensive Income (Loss)

(1) Total consolidated revenue of $ 2,841,216 also includes revenue associated with operating segments that do not meet the aggregation criteria and elimination of certain intercompany service and revenue, which amounted to $ 38,747 .

*For each reportable segment, Unbillable and other costs includes costs to fulfill customer contract requirements such as research and subscription related costs, audience measurement, data and analytics, and panels and survey costs;

and also includes travel related expenses associated with contract fulfillment.

Year Ended December 31, 2023

$ ( 7,059 ) $ 2,084 $ ( 4,975 )

Other income (expenses)

Integrated Agencies Network Brand Performance Network Communications Network Total

(dollars in thousands)

$ 1,418,711 $ 728,174 $ 333,707 $ 2,480,592

Billable costs 185,913 100,364 88,446 374,723

Staff costs 768,846 386,803 159,165 1,314,814

Administrative costs 122,618 87,337 33,664 243,619

Unbillable and other costs * 71,776 55,891 613 128,280

Adjusted EBITDA 269,558 97,779 51,819 419,156

Adjusted EBITDA - All Other ( 10,607 )

Adjusted EBITDA - Corporate ( 48,410 )

Total Consolidated Adjusted EBITDA 360,139

Stock-based compensation 57,179

Depreciation and amortization 142,831

Deferred acquisition consideration 13,060

Impairment and other losses 11,395

Other items, net 45,147

Operating Income

Interest expense, net ( 90,644 )

Foreign exchange, net ( 2,960 )

Gain on sale of business 94,505

Other, net ( 359 )

Income before income taxes and equity in earnings of non-consolidated affiliates 91,069

73,501 2,084 75,585

Income tax expense 40,557

7,580 17,882 25,462

Income before equity in earnings of non-consolidated affiliates 50,512

65,921 ( 15,798 ) 50,123

65,842 ( 15,798 ) 50,044

Equity in loss of non-consolidated affiliates ( 8,870 )

Net income 41,642

Net income attributable to noncontrolling and redeemable noncontrolling interests ( 41,508 )

( 38,573 ) 8,448 ( 30,125 )

Net income attributable to Stagwell Inc.

common shareholders $ 134

$ 27,269 $ ( 7,350 ) $ 19,919

Earnings Per Common Share:

0.22 ( 0.06 ) 0.16

0.17 ( 0.05 ) 0.12

(1) Total consolidated revenue of $ 2,527,177 also includes revenue associated with operating segments that do not meet the aggregation criteria and elimination of certain intercompany service and revenue, which amounted to $ 46,585 .

and also includes travel related expenses associated with contract fulfillment.

Year Ended December 31, 2022

Other comprehensive (loss) - foreign currency translation adjustment

$ ( 37,751 ) $ ( 22 ) $ ( 37,773 )

Other comprehensive (loss)

( 33,663 ) ( 22 ) ( 33,685 )

Comprehensive income for the period

32,179 ( 15,820 ) 16,359

Comprehensive (income) attributable to the noncontrolling and redeemable noncontrolling interest

( 38,573 ) 31,933 ( 6,640 )

Comprehensive income (loss) attributable to Stagwell Inc.

common shareholders

( 6,394 ) 16,113 9,719

Consolidated Balance Sheet

December 31, 2022

As reported Adjustment As revised

Other current assets

71,443 2,568 74,011

Total current assets

$ 1,030,955 $ 2,568 $ 1,033,523

115,447 691 116,138

$ 3,993,332 $ 3,259 $ 3,996,591

Accruals and other liabilities

248,477 20,394 268,871

Total current liabilities

1,349,802 20,394 1,370,196

Deferred tax liabilities, net

40,109 770 40,879

Other liabilities

69,780 ( 2,085 ) 67,695

Total liabilities

$ 3,009,587 $ 19,079 $ 3,028,666

Retained earnings

29,445 ( 7,350 ) 22,095

Accumulated other comprehensive loss

( 38,941 ) 23,463 ( 15,478 )

Stagwell Inc.

Shareholders' Equity

482,537 16,113 498,650

Noncontrolling interests

462,097 ( 31,933 ) 430,164

Total Shareholders' Equity

944,634 ( 15,820 ) 928,814

Total Liabilities, Redeemable Noncontrolling Interests and Shareholders' Equity

$ 3,993,332 $ 3,259 $ 3,996,591

Quarterly Financial Information (Unaudited)

The following table presents selected unaudited revised financial information for each of the four quarters during the year ended December 31, 2023.

See Note 1 of the Notes included herein for additional information on the revision.

There were no changes to previously issued cash flows generated from (used by) operating, investing, or financing activities for any of the impacted periods.

The quarterly interim consolidated balance sheets were only impacted by the effects of the balance sheet adjustments noted above.

For the three months ended March 31, 2023, we have included the line items that will be impacted by the correction of errors originally adjusted as out-of-period in the 2023 interim financial statements for the Consolidated Statements of Shareholders Equity.

The impact to the Consolidated Statements of Shareholders Equity for the periods ended June 30, 2023 and September 30, 2023 have been reflected below within the Consolidated Statements of Comprehensive Income (Loss).

Consolidated Statements of Operations and

Consolidated Statements of Comprehensive Income (Loss)

$ 622,444 $ 632,265 $ 617,573 $ 654,895

Cost of services

413,898 402,431 384,980 419,865

Income tax expense

236 437 4,324 35,560

Income (loss) before equity in earnings of non-consolidated affiliates

( 2,642 ) ( 4,749 ) 3,121 54,782

Net income (loss)

( 2,869 ) ( 4,965 ) 3,117 46,359

Net (income) loss attributable to noncontrolling and redeemable noncontrolling interests

4,258 1,771 ( 2,464 ) ( 45,073 )

Net income (loss) attributable to Stagwell Inc.

common shareholders

1,389 ( 3,194 ) 653 1,286

Earnings (Loss) Per Common Share

0.01 ( 0.03 ) 0.01 0.01

0.00 ( 0.03 ) 0.00 0.00

Other comprehensive income (loss) - foreign currency translation adjustment

4,447 2,945 ( 13,516 ) 14,120

Other comprehensive income (loss)

4,447 2,945 ( 13,516 ) 14,458

Comprehensive income (loss) for the period

1,578 ( 2,020 ) ( 10,399 ) 60,817

Comprehensive (income) loss attributable to the noncontrolling and redeemable noncontrolling interests

2,036 ( 1,158 ) 5,483 ( 53,792 )

Comprehensive income (loss) attributable to Stagwell Inc.

common shareholders

3,614 ( 3,178 ) ( 4,916 ) 7,025

The impact of the revision on the previously issued unaudited quarterly financial information is as follows:

Three Months Ended March 31, 2023

As reported Adjustment As revised

Income tax expense

$ 2,384 $ ( 2,148 ) $ 236

Loss before equity in earnings of non-consolidated affiliates

( 4,790 ) 2,148 ( 2,642 )

( 5,017 ) 2,148 ( 2,869 )

Net loss attributable to noncontrolling and redeemable noncontrolling interests

5,460 ( 1,202 ) 4,258

Net income attributable to Stagwell Inc.

common shareholders

443 946 1,389

Earnings (Loss) Per Common Share

0.00 0.01 0.01

( 0.01 ) 0.01 0.00

Other comprehensive income - foreign currency translation adjustment

4,425 22 4,447

Other comprehensive income

4,425 22 4,447

Comprehensive income (loss) for the period

( 592 ) 2,170 1,578

Comprehensive loss attributable to the noncontrolling and redeemable noncontrolling interests

26,723 ( 24,687 ) 2,036

Comprehensive income attributable to Stagwell Inc.

common shareholders

26,131 ( 22,517 ) 3,614

Three Months Ended June 30, 2023

As reported Adjustment As revised

Income tax expense

$ 5,717 $ ( 5,280 ) $ 437

Loss before equity in earnings of non-consolidated affiliates

( 10,029 ) 5,280 ( 4,749 )

( 10,245 ) 5,280 ( 4,965 )

Net loss attributable to noncontrolling and redeemable noncontrolling interests

5,552 ( 3,781 ) 1,771

Net loss attributable to Stagwell Inc.

common shareholders

( 4,693 ) 1,499 ( 3,194 )

Loss Per Common Share

( 0.04 ) 0.01 ( 0.03 )

Other comprehensive income - foreign currency translation adjustment

2,938 7 2,945

Other comprehensive income

2,938 7 2,945

Comprehensive loss for the period

( 7,307 ) 5,287 ( 2,020 )

Comprehensive (income) loss attributable to the noncontrolling and redeemable noncontrolling interests

2,623 ( 3,781 ) ( 1,158 )

Comprehensive loss attributable to Stagwell Inc.

common shareholders

( 4,684 ) 1,506 ( 3,178 )

Six Months Ended June 30, 2023

As reported Adjustment As revised

Income tax expense

$ 8,101 $ ( 7,428 ) $ 673

Loss before equity in earnings of non-consolidated affiliates

( 14,819 ) 7,428 ( 7,391 )

( 15,262 ) 7,428 ( 7,834 )

Net loss attributable to noncontrolling and redeemable noncontrolling interests

11,012 ( 4,983 ) 6,029

Net loss attributable to Stagwell Inc.

common shareholders

( 4,250 ) 2,445 ( 1,805 )

Loss Per Common Share

( 0.04 ) 0.03 ( 0.01 )

Other comprehensive income - foreign currency translation adjustment

7,363 29 7,392

Other comprehensive income

7,363 29 7,392

Comprehensive loss for the period

( 7,899 ) 7,457 ( 442 )

Comprehensive loss attributable to the noncontrolling and redeemable noncontrolling interests

29,346 ( 28,468 ) 878

Comprehensive income attributable to Stagwell Inc.

common shareholders

Integrated Agencies Network Brand Performance Network Communications

(dollars in thousands)

$ 1,474,970 $ 757,208 $ 435,652 $ 19,962 $ — $ 2,687,792

Nine Months Ended September 30, 2023

As reported Adjustment As revised

Adjusted EBITDA $ 292,293 $ 115,835 $ 87,032 $ ( 931 ) $ ( 43,111 ) $ 451,118

Stock-based compensation 33,152

Depreciation and amortization 131,273

Deferred acquisition consideration ( 13,405 )

Impairment and other losses 122,179

Other items, net 18,691

Operating Income 159,228

Interest expense, net ( 76,062 )

Foreign exchange, net ( 2,606 )

Other, net ( 4,975 )

Income before income taxes and equity in earnings of non-consolidated affiliates 75,585

Income tax expense 25,462

$ 12,425 $ ( 7,428 ) $ 4,997

Loss before equity in earnings of non-consolidated affiliates

( 11,698 ) 7,428 ( 4,270 )

( 12,145 ) 7,428 ( 4,717 )

Net loss attributable to noncontrolling and redeemable noncontrolling interests

8,548 ( 4,983 ) 3,565

Net loss attributable to Stagwell Inc.

common shareholders

( 3,597 ) 2,445 ( 1,152 )

Loss Per Common Share

( 0.03 ) 0.02 ( 0.01 )

Other comprehensive loss - foreign currency translation adjustment

( 6,153 ) 29 ( 6,124 )

Other comprehensive loss

( 6,153 ) 29 ( 6,124 )

Comprehensive loss for the period

( 18,298 ) 7,457 ( 10,841 )

Comprehensive loss attributable to the noncontrolling and redeemable noncontrolling interests

34,829 ( 28,468 ) 6,361

Comprehensive income (loss) attributable to Stagwell Inc.

common shareholders

16,531 ( 21,011 ) ( 4,480 )

Consolidated Statements of Shareholders' Equity

Three Months Ended March 31, 2023

As reported Adjustment As revised

Income before equity in earnings of non-consolidated affiliates 50,123

Equity in loss of non-consolidated affiliates ( 79 )

Net income 50,044

Net income attributable to noncontrolling and redeemable noncontrolling interests ( 30,125 )

Net income attributable to Stagwell Inc.

common shareholders $ 19,919

$ 443 $ 946 $ 1,389

Net income (loss) attributable to Noncontrolling Interests

( 2,917 ) 1,202 ( 1,715 )

Other comprehensive income

25,688 ( 23,463 ) 2,225

Other comprehensive income (loss) attributable to Noncontrolling Interests

( 21,263 ) 23,485 2,222

Total other comprehensive income

$ 4,425 $ 22 $ 4,447

The Company’s long-lived assets (i.e., Right-of-use lease assets-operating leases and Fixed asset, net) was $ 292.1 million ($ 231.9 million in the United States and $ 60.2 million in all other countries) as of December 31, 2024 and $ 332.1 million ($ 268.5 million in the United States and $ 63.6 million in all other countries) as of December 31, 2023.

The Company’s CODM does not use segment assets to allocate resources or to assess performance of the segments and therefore, total segment assets have not been disclosed.

See Note 5 of the Notes included herein for a summary of the Company’s revenue by geographic region for the years ended December 31, 2024, 2023, and 2022.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data