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Item 7. Management’s Discussion and Analysis

2026-03-13 compared with 2025-03-11 · 330 added, 234 removed, 422 unchanged (57% of the section changed)

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Executive Summary

Stagwell conducts its business through its networks, which provide marketing and business solutions that realize the potential of combining data and creativity.

Stagwell conducts its business through its segments, which provide marketing and business solutions that realize the potential of combining data and creativity.

Stagwell’s strategy is to build, grow, and acquire market-leading businesses that deliver the modern suite of services that marketers need to thrive in a rapidly evolving business environment.

We believe Stagwell’s differentiation lies in its creative roots and proven entrepreneurial leaders, which together with innovations in technology and data, bring transformational marketing, activation, communications and strategic consulting services to clients.

We believe Stagwell’s differentiation lies in its digital-first and technology-based roots and proven entrepreneurial leaders, which together with innovations in technology and data, bring transformational marketing, activation, communications and strategic consulting services to clients.

Stagwell leverages its range of services in an integrated manner, offering strategic, creative and innovative solutions that are technologically forward and media-agnostic.

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Stagwell manages its business by monitoring several financial and non-financial performance indicators.

The key indicators that we focus on are revenue, operating expenses, capital expenditures and the non-GAAP financial measures described below.

The key indicators that we focus on are revenue, operating expenses, staff cost ratio, capital expenditures, net income (loss), net income (loss) attributable to Stagwell Inc.

common shareholders, net income (loss) per share and the non-GAAP financial measures including Adjusted EBITDA, Free cash flow and Adjusted EPS, described below.

Revenue growth is analyzed by reviewing a mix of measurements, including (i) growth by major geographic location, (ii) growth from existing clients and the addition of new clients, (iii) growth by principal capability, (iv) growth from currency changes, and (v) growth from acquisitions.

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Recent Developments

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.

On January 30, 2026, the Company acquired Wavelength, a digital advocacy and communications company, for an estimated purchase price of $10.2 million, of which approximately $4.6 million was paid in cash and approximately $5.6 million was paid in 863,624 shares of the Company’s Class A Common Stock subject to post-closing adjustments.

In connection with the acquisition, the sellers are eligible to earn contingent consideration up to a maximum value of $24.8 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 4, 2026, the Board authorized an extension and a $350.0 million increase in the size of our previously approved stock repurchase program (the “Repurchase Program”).

Under the Repurchase Program, as amended, we may repurchase up to an aggregate of $725.0 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 March 4, 2029.

On March 11, 2026, pursuant to a resolution approved by the Board, the Company repurchased 6,198,425 shares of Class A Common Stock at a price of $6.1677 per share, for a total of $38.2 million.

The shares were purchased from executive officers and other employees to satisfy their tax obligations resulting from the Class C Exchange as described in Note 12 included in Item 8 of this Form 10-K.

Significant Factors Affecting our Business and Results of Operations

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Historically, we typically generate the highest quarterly revenue during the fourth quarter of each year.

In addition, within our Communications Network, client concentration increases during election years due to the cyclical nature of our advocacy Brands.

The highest volumes of retail related consumer marketing increase with the back-to-school season through the end of the holiday season.

In addition, within our Communications segment, client concentration increases during election years due to the cyclical nature of our advocacy Brands.

Non-GAAP Financial Measures

The Company reports its financial results in accordance with accounting principles generally accepted in the United States (“GAAP”).

The Company reports its financial results in accordance with GAAP.

In addition, the Company has included non-GAAP financial measures and ratios, which management uses to operate the business, which it believes provide useful supplemental information to both management and readers of this report in making period-to-period comparisons in measuring the financial performance and financial condition of the Company.

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The net impact of acquisitions (divestitures) reflects the year-over-year change in the Company’s reported net revenue attributable to the impact of all individual entities that were acquired or divested in the current and prior year.

We calculate impact of an acquisition as follows:

(a) for an entity acquired during the current year, we present the entity’s prior year net revenue for the same period during which we owned it in the current year as impact of the acquisition in the current year;

and (b) for an entity acquired in the prior year, we present the entity’s prior year net revenue for the period during which we did not own the entity in the prior year as impact of the acquisition in the current year.

Beginning with the quarter ended September 30, 2025, we calculate the impact of an acquisition as follows:

(a) for an entity acquired during the current year, we present the entity’s current period reported revenue as the impact of the acquisition in the current year;

and (b) for an entity acquired in the prior year, we present an amount equal to the entity’s current year net revenue for the same period during which we didn’t own the entity in the prior year as the impact of the acquisition in the current year.

Previously, we calculated the impact of an acquisition as follows:

(a) for an entity acquired during the current year, we presented the entity’s prior year net revenue for the same period during which we owned it in the current year as impact of the acquisition in the current year;

and (b) for an entity acquired in the prior year, we presented the entity’s prior year net revenue for the period during which we did not own the entity in the prior year as impact of the acquisition in the current year.

We believe that this change in the method of calculating the impact of an acquisition results in a measurement of organic net revenue growth (decline) that better reflects the effect of our management of an acquired entity by including the revenue of the acquired entity in such measurement after we have owned it for 12 months.

We calculate impact of a divestiture as follows:

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“Adjusted EBITDA” is defined as Net income (loss) attributable to Stagwell Inc.

common shareholders excluding non-operating income or expense to achieve operating income (loss), plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, and other items.

Other items primarily includes restructuring, certain system implementation and acquisition-related expenses.

common shareholders excluding non-operating income or expense to achieve Operating income (loss), plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, impairment and other losses, and other items.

Other items primarily includes restructuring, certain system implementation, working capital administrative fees and acquisition-related expenses.

Adjusted EBITDA for our reportable segments is reconciled to Operating income (loss), as Net income (loss) is not a relevant reportable segment financial metric.

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common shareholders, plus net income (loss) attributable to Class C shareholders, excluding the impact of amortization expense, impairment and other losses, stock-based compensation, deferred acquisition consideration adjustments, discrete tax items, and other items (as defined above), based on total consolidated amounts, then allocated to Stagwell Inc.

common shareholders and Class C shareholders, based on their respective income allocation percentage using a normalized effective income tax rate divided by (ii) (a) the weighted average number of common shares outstanding plus (b) the weighted average number of outstanding shares of Class C common stock par value $0.00001 per share (the “Class C Common Stock”).

The diluted weighted average shares outstanding include shares of Class C Common Stock as if converted to shares of Class A Common Stock to calculate Adjusted Diluted EPS.

common shareholders and Class C shareholders, based on their respective income allocation percentage using a normalized effective income tax rate divided by (ii) the diluted weighted average shares outstanding.

The diluted weighted average shares outstanding is calculated as (a) the diluted weighted average number of common shares outstanding plus (b) the shares of Class C common stock, par value $0.00001 per share (the “Class C Common Stock”) as if converted to shares of Class A Common Stock if not included because they were anti-dilutive.

All amounts are in U.S.

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The percentage changes included in the tables in Item 7 herein that are not considered meaningful are presented as “NM.”

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.

Once operating segments are identified, the Company performs an analysis to determine if aggregation of operating segments is applicable.

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.

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 defined above) 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.

The Company has three reportable segments as follows:

“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 Network, 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, Stagwell Marketing Cloud Group and Creativity & Communications.

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;

(ii) the type of clients and the methods used to provide services;

and (iii) the extent to which they may be impacted by global economic and geopolitical risks.

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”) 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, 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.

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.

Periods presented prior to the first quarter of 2024 have been recast to reflect the reclassification of certain reporting units (Brands) between operating segments.

The Company’s Chief Operating Decision Maker (“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.

On September 30, 2025, the Company reorganized its organizational structure to better reflect how the Company manages its business and goes to market, to simplify reporting and to provide clearer visibility into performance trends across its service offerings.

The reorganization also seeks to enhance consistency in the Company’s portfolio of services and improve the transparency and comparability of financial information provided to investors.

As a result of the reorganization, the Company now has five operating and reportable segments:

“Marketing Services,” “Digital Transformation,” “Media & Commerce,” “Communications,” and “The Marketing Cloud.” Prior years presented have been recast to reflect the reclassification of Brands within the reportable segments.

Based on the segment analysis, management concluded that the operating segments do not exhibit similar economic characteristics or share other aggregation criteria.

As a result, none of our operating segments are aggregated for reporting purposes.

Further, as a result of the reorganization, certain reporting units have been redefined, and the composition of others has changed.

The new structure fairly reflects the allocation of the Company’s resources, thereby improving comparability for investors and supporting the Company’s long-term strategic objectives.

The composition of these segments is as follows:

• The Marketing Services segment delivers a broad range of services across four closely related client needs:

creative, research, experiential, and social media solutions designed to build and elevate brands.

Capabilities include developing breakthrough brand campaigns, providing consumer insights through advanced research methodologies, creating immersive experiential marketing programs and social engagement strategies that connect brands with audiences across digital platforms.

By combining creative excellence, data-driven insights, and innovative experiences, Marketing Services empowers organizations to differentiate themselves in the marketplace, drive audience engagement, and achieve measurable business results.

These services employ a wide variety of AI-powered services in the delivery, such as AI-powered creative production and data analysis.

Brands in this segment include, but are not limited to, creative agencies 72 and Sunny and Anomaly, research agencies NRG and Harris Insights, experiential agency TEAM, and social agency Movers & Shakers.

• The Digital Transformation segment designs, implements and activates modern digital ecosystems that enable brand and customer experiences through the integration of strategy, design, and technology.

This segment helps clients modernize their digital infrastructure, enhance customer engagement, and accelerate enterprise transformation.

Its capabilities span the delivery of digital products and experiences that connect brand storytelling with technology, including website and content development, digital campaigns, product and platform design, AI-native strategies and integration, and implementation of marketing technology (“MarTech”) products and solutions for customers.

It also provides managed services, staff augmentation, and engineering expertise across various delivery models, offering system integration, full-stack development, and ongoing platform management.

Additionally, Digital Transformation connects digital ecosystems to physical experiences through innovative, technology-driven customer engagements, such as business-to-business (“B2B”) platforms and multimodal activations that blend physical and digital environments using augmented reality (“AR”), virtual reality (“VR”), and emerging technologies.

Together, these capabilities empower organizations to transform their digital presence and drive sustained business growth.

Brands in this segment include, but are not limited to, strategy and design agencies Code and Theory and Instrument, development and implementation agency TrueLogic, and digital activation agency Left Field Labs.

• The Media & Commerce segment delivers integrated AI-based data solutions that drive audience engagement and business growth through media buying, owned media platforms, commerce enablement, and Customer Relationship Management (“CRM”) strategies.

Its capabilities include planning and executing media campaigns across global platforms, leveraging data-driven approaches to optimize reach and effectiveness across first-party data, second-party data, and third-party data, and providing commerce and CRM tools that connect brands with consumers throughout the purchase journey.

The segment also offers specialized media platforms and translation services to support targeted communication and market expansion.

By combining expertise in media strategy, commerce activation, and audience analytics, Media & Commerce empowers organizations to maximize their marketing investments and achieve measurably efficient commercial outcomes.

Brands in this segment include, but are not limited to, media buying, owned media platforms Reach TV, and strategy agency Assembly Global, commerce and CRM agency Gale.

• The Communications segment provides a leading edge set of solutions designed to help organizations build, protect, and enhance their reputation across diverse audiences and channels.

Its capabilities include strategic communications, public relations, and advocacy services that leverage AI and data-driven insights to craft compelling narratives and influence public perception.

The segment also offers expertise in targeted communications, crisis management, and stakeholder engagement, ensuring clients can respond effectively to emerging issues and opportunities.

Advocacy services encompass strategic political campaign management, grassroots mobilization, and fundraising expertise that reach across the political spectrum.

By combining deep industry knowledge with innovative digital approaches to

media and advocacy, Communications empowers organizations to connect with key audiences, shape conversations, and achieve their strategic objectives.

Brands in this segment include, but are not limited to, strategic communications agencies Allison and Consulum, and advocacy services agencies SKDK and Targeted Victory.

• The Marketing Cloud segment delivers a comprehensive suite of technology solutions for in-house marketers, combining SaaS and DaaS offerings.

Its key products cover a range of areas.

Advanced research tools that enable real-time customer insights through syndicated and Do It Yourself (“DIY”) generative AI-drafted surveys, AI-driven text analysis, and predictive analytics.

Communications technology that aggregates data from millions of sources, including news, social media, print, and TV/radio broadcasts, on a daily basis to monitor, analyze, and respond to market trends.

Media studio products that leverage first-party, third-party, and proprietary data to provide actionable audience insights and attribution analytics and advanced media platforms that encompass audience engagement solutions such as AR, quick response (“QR”) codes, and loyalty programs, all designed to collect consumer data and generate actionable insights.

Together, these capabilities empower marketers to understand, engage, and influence their audiences with precision and agility.

Brands in this segment include, but are not limited to, QUEST, Unicepta and Smart Assets.

“Corporate, eliminations and other” consists of revenue generated by the Other business components, strategic investments in new technologies, elimination of certain intercompany revenue and expenses, and 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 corporate 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.

The following discussion focuses on the operating performance of the Company for the years ended December 31, 2025 and 2024 and the financial condition of the Company as of December 31, 2025.

Results of Operations:

Results of Operations and Reconciliation of Net Income to Adjusted EBITDA:

Year Ended December 31,

(dollars in thousands)

Integrated Agencies Network $ 1,535,445 $ 1,418,711

Brand Performance Network 751,884 728,174

Communications Network 515,140 333,707

All Other 38,747 46,585

Marketing Services $ 1,134,821 $ 1,077,607

Digital Transformation 393,499 335,656

Media & Commerce 690,675 695,402

Communications 592,577 703,065

The Marketing Cloud 106,537 32,265

Corporate, eliminations and other (9,109) (2,779)

Total revenue $ 2,909,000 $ 2,841,216

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Foreign exchange, net (1,640) (1,656)

Gain on sale of business

(1,372) (359)

Loss on sale of business

Bargain purchase gain 9,937 —

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

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Income before equity in earnings of non-consolidated affiliates 30,515 24,541

24,541 50,512

Equity in income (loss) of non-consolidated affiliates

25,044 41,642

Equity in income of non-consolidated affiliates

Net income 30,626 25,044

Net income attributable to noncontrolling and redeemable noncontrolling interests (1,525) (22,785)

(22,785) (41,508)

Net income attributable to Stagwell Inc.

common shareholders $ 29,101 $ 2,259

$ 2,259 $ 134

Reconciliation to Adjusted EBITDA:

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common shareholders $ 29,101 $ 2,259

$ 2,259 $ 134

Non-operating items (1)

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Adjusted EBITDA $ 421,853 $ 417,448

(1) Non-operating items includes items within the Statements of Operations, below Operating Income, and above Net income (loss) attributable to Stagwell Inc.

(1) Non-operating items includes items within the Statements of Operations, below Operating income, and above Net income attributable to Stagwell Inc.

common shareholders.

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Depreciation and amortization 171,249 151,652 19,597 12.9 %

Deferred acquisition consideration 22,995 13,060 9,935 76.1 %

Deferred acquisition consideration (7,467) 22,995 (30,462) NM

Impairment and other losses 466 1,715 (1,249) (72.8) %

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$ 159,001 $ 133,068 $ 25,933 19.5 %

(1) See the Results of Operations section above for a reconciliation of Operating Income to Net income (loss) attributable to Stagwell Inc.

(1) See the Results of Operations section above for a reconciliation of Operating income to Net income attributable to Stagwell Inc.

common shareholders.

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(dollars in thousands)

Integrated Agencies Network $1,232,798 $226 $7,208 $32,521 $39,955 $1,272,753 2.6% 3.2%

Brand Performance Network 627,810 2,220 2,252 18,948 23,420 651,230 3.0% 3.7%

Communications Network 245,261 (28) 22,177 66,385 88,534 333,795 27.1% 36.1%

All Other 46,585 (984) (609) (6,108) (7,701) 38,884 (13.1)% (16.5)%

Marketing Services $ 905,117 $ 3,491 $ 9,788 $ 41,280 $ 54,559 $ 959,676 4.6 % 6.0 %

Digital Transformation 324,183 (405) 13,615 29,779 42,989 367,172 9.2 % 13.3 %

Media & Commerce 601,503 3,396 5,829 (708) 8,517 610,020 (0.1) % 1.4 %

Communications 435,626 547 29,002 (71,744) (42,195) 393,431 (16.5) % (9.7) %

The Marketing Cloud 32,265 941 62,229 11,051 74,221 106,486 34.3 % 230.0 %

Corporate, eliminations and other (2,032) — — (7,082) (7,082) (9,114) NM NM

$ 2,296,662 $ 7,970 $ 120,463 $ 2,576 $ 131,009 $ 2,427,671 0.1 % 5.7 %

Component % change 0.3 % 5.2 % 0.1 % 5.7 %

For the year ended December 31, 2024, organic net revenue increased $111.7 million, or 5.2%.

The increase was primarily attributable to new wins and increased spending by clients in the retail, technology, and consumer products sectors.

This increase was further driven by new wins and increased revenue in the public affairs sector as a result of the current political campaign year.

This increase was partially offset by losses and a decrease in client spending due to budget cuts in the business services sector.

The increase in net acquisitions (divestitures) was impacted by acquisitions and dispositions, including the acquisitions of Team Epiphany, LLC (“Epiphany”), Movers and Shakers LLC (“Movers and Shakers”), Left Field Labs LLC (“Left Field Labs”), What’s Next Partners (“WNP”), Huskies, Ltd.

(“Huskies”), PROS Agency (“PROS”), Sidekick Live Limited (“Sidekick”), Consulum (Cayman) Limited (“Consulum”), and L.D.R.S.

(“Leaders”), partially offset by the sale of ConcentricLife (“Concentric”) in the fourth quarter of 2023 and the derecognition of a certain noncontrolling interest in the first quarter of 2024.

The geographic mix in net revenues for the year ended December 31, 2024 and 2023 was as follows:

For the year ended December 31, 2025, organic net revenue increased by $2.6 million, or 0.1%.

The increase was driven by growth in the Marketing Services and Digital Transformation segments, reflecting new client wins, expanded scope with existing clients, and increased demand for AI enabled offerings across the retail, financial, technology, and communications sectors.

Growth was further supported by higher integrated media, technology, and data offerings within the Media Buying service line in Media & Commerce and increased platform utilization and subscription-based services within The Marketing Cloud.

These increases were partially offset by a decrease in the Communications segment, primarily reflecting lower Advocacy revenue due to political seasonality following the 2024 presidential election cycle, as well as more measured client spending and timing of project activity.

Organic net revenue in Media & Commerce was relatively flat, as growth in the Media Buying service line was offset by lower revenue in the Commerce & CRM service line during a period of leadership transition and organizational realignment.

The increase in net acquisitions (divestitures) was impacted by the acquisitions of Jetfuel, Create, ADK, Consulum (Cayman) Limited (“Consulum”), L.D.R.S.

(“Leaders”), and Unicepta, which expanded the Company’s capabilities in experiential marketing, digital communications, integrated marketing in APAC, government advisory services in MENA, influencer marketing and social commerce, and media monitoring and analytics.

The geographic mix in Net revenue for the years ended December 31, 2025 and 2024 was as follows:

Year Ended December 31,

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Total $ 2,427,671 $ 2,296,662

Cost of services increased by $3.0 million.

Excluding the decline in Billable costs of $63.2 million and the addition of expenses from acquired entities of $62.2 million, Cost of services increased $4.0 million.

Office and general expenses increased by $20.5 million.

Excluding the addition of expenses of acquired entities of $12.0 million, Office and general expenses increased $10.2 million, primarily attributable to higher software license fees due to investments in automation and AI intended to improve workflow efficiency and support future margin expansion and higher staff costs to support the growth in the business.

This was partially offset by a decrease in Deferred acquisition consideration expense as explained below and a decrease in occupancy costs reflecting the Company’s real estate consolidation efforts including a lease termination during the first quarter of 2025 that resulted in a gain on termination of $3.5 million and the expiration of office leases in 2024.

Stock-based compensation increased by $1.9 million, primarily due to a greater proportion of the annual incentive compensation being allocated to stock-based awards compared to last year and a reversal of expense in the second quarter of 2024 associated with stock-based performance awards for which the performance targets were not met.

Deferred acquisition consideration decreased by $30.5 million, primarily attributable to a reduction in the fair value of the deferred acquisition consideration liability associated with certain Brands driven by performance timing, partially offset by the strong performance in certain Brands, causing an increase in the fair value of the deferred acquisition consideration liability of those Brands .

Depreciation and amortization increased by $19.6 million, primarily attributable to higher amortization related to increased investments in AI and automation to expand our offerings and services, improve workflow efficiency, and support future margin expansion of $15.4 million, and the amortization of intangible assets resulting from the acquisition of businesses of $8.4 million.

Operating Income

Operating income for the year ended December 31, 2025, was $159.0 million, compared to $133.1 million for the year ended December 31, 2024, representing an increase of $25.9 million.

The increase in Operating Income was primarily attributable to an increase in Revenue and a decrease in Impairment and other losses, partially offset by an increase in Cost of services, Office and general expenses, and Depreciation and amortization.

The increase in Cost of services was primarily attributable to higher billable costs and staff costs, commensurate with the increase in revenue as well as the inclusion of costs from acquired entities.

The increase in Office and general expenses was primarily attributable to an increase in staff costs, commensurate with the increase in revenue, the inclusion of costs from acquired entities and an increase in deferred acquisition consideration, partially offset by a decrease in stock-based compensation.

Stock-based compensation decreased $5.0 million, primarily due to a decrease in the fair value and number of awards, partially offset by an increase in the fair value of profits interest awards.

Deferred acquisition consideration increased $9.9 million, primarily attributable to acquisitions, the change in the fair value of certain obligations, as well as the earn out period of certain brands ending during 2024.

Depreciation and amortization increased $8.8 million, primarily attributable to the Company’s acquisitions of businesses and the acceleration of amortization of certain tradenames during the year ended December 31, 2024, as the Company ceased use of these Brand names.

Impairment and other losses for the year ended December 31, 2024 was $1.7 million.

This was attributable to charges to reduce the carrying value of right-of-use lease assets and related leasehold improvements within the Integrated Agencies Network and Corporate.

Impairment and other losses for the year ended December 31, 2023 was $11.4 million, primarily related to the impairment of right-of-use lease assets totaling $6.9 million and the associated leasehold improvements totaling $3.1 million.

The increase in Operating income was primarily attributable to an increase in Net revenue partially offset by an increase in expenses, as discussed above.

Operating margin for the year ended December 31, 2025 was 5.5%, compared to 4.7% for the year ended December 31, 2024, representing an increase of 0.8%, reflecting improved operational efficiency.

Interest Expense, Net

Interest expense, net for the year ended December 31, 2024 was $92.3 million, compared to $90.6 million for the year ended December 31, 2023, an increase of $1.7 million, primarily attributable to higher levels of debt outstanding under the Credit Agreement (as defined and discussed in Note 11 of the Notes to the Audited Consolidated Financial Statements included herein), and a higher interest rate on amounts outstanding under the Credit Agreement.

Interest expense, net for the year ended December 31, 2025 was $96.4 million, compared to $92.3 million for the year ended December 31, 2024, an increase of $4.1 million.

This increase was primarily attributable to higher levels of debt outstanding under the Credit Agreement (as defined and discussed in Note 11 of the Notes to the Audited Consolidated Financial Statements included herein) used to support the growth in working capital attributable to the growth of Net revenue of the business, partially offset by a lower average interest rate.

Foreign Exchange, Net

The foreign exchange loss for the year ended December 31, 2024, was $1.7 million, compared to a loss of $3.0 million for the year ended December 31, 2023, primarily attributable to the movement in the British Pound.

Gain on Sale of Business

The Company recognized a pre-tax gain of $94.5 million related to the sale of Concentric for the year ended December 31, 2023.

Other, net for the year ended December 31, 2024 was an expense of $1.4 million, compared to an expense of $0.4 million for the year ended December 31, 2023.

I ncome Tax Expense

The Company had an income tax expense for the year ended December 31, 2024 of $13.2 million (on a pre-tax income of $37.7 million resulting in an effective tax rate of 34.9%), compared to income tax expense of $40.6 million (on pre-tax income of $91.1 million resulting in an effective tax rate of 44.5%) for the year ended December 31, 2023.

The difference in the effective tax rate of 34.9% in the year ended December 31, 2024, compared to 44.5% in the year ended December 31, 2023, is primarily due to a decrease on gain related to sale of business, and a change in prior period adjustments offset by an increase in foreign tax and a reduction in tax benefits for share based compensation

The foreign exchange loss for the year ended December 31, 2025, was $1.6 million, compared to a loss of $1.7 million for the year ended December 31, 2024, nearly flat despite increased volatility in the primary currencies in which we operate.

Loss on Sale of Business

Loss on sale of business for the year ended December 31, 2025 was $2.2 million due to the sale of a Brand that was non-core to our prospective business operations in the Marketing Services segment.

Bargain Purchase Gain

Bargain purchase gain for the year ended December 31, 2025 was $9.9 million due to the acquisition of ADK to assist in expending our global footprint in APAC in the Media & Commerce segment.

The Bargain purchase gain resulted primarily from acquiring ADK at a purchase price below the fair value of the identifiable assets acquired due to the sellers’ decision to expedite its exit from the market.

In come Tax Expense

The Company had an Income tax expense for the year ended December 31, 2025 of $38.3 million (on a pre-tax income of $68.8 million resulti ng in an effective tax rate of 55 .6%) compared to Income tax expense of $13.2 million (on pre-tax income of $37.7 million resulting in an effective tax rate of 34.9%) for the year ended December 31, 2024.

The difference in the effective tax rate of 55.6% in the year ended December 31, 2025, as compared to 34.9% in the year ended December 31, 20 24, was primarily due to a decrease in benefits from expired foreign tax credits, an increase in valuation allowance, and a decrease in the benefit of the disregarded entity structure due to the full exchange in April 2025.

Noncontrolling and Redeemable Noncontrolling Interests

The effect of noncontrolling and redeemable noncontrolling interests for the year ended December 31, 2024 was income of $22.8 million, compared to an income of $41.5 million for the year ended December 31, 2023.

The amounts are driven by the mix of income and loss derived from entities not entirely owned by the Company.

Net Income (Loss) Attributable to Stagwell Inc.

The effect of Noncontrolling and redeemable noncontrolling interests for the year ended December 31, 2025 was an income of $1.5 million, compared to an income of $22.8 million for the year ended December 31, 2024.

The amounts were driven by the mix of income and loss derived from entities not entirely owned by the Company.

Additionally, the change was driven by the Class C Exchange during the second quarter of 2025, which increased the income allocated to Stagwell Inc.’s common shareholders.

Net Income Attributable to Stagwell Inc.

Common Shareholders

As a result of the foregoing, Net income attributable to Stagwell Inc.

common shareholders for the year ended December 31, 2024, was $2.3 million, compared to net income of $0.1 million for the year ended December 31, 2023.

common shareholders for the year ended December 31, 2025 was $29.1 million, compared to a net income of $2.3 million for the year ended December 31, 2024.

Adjusted EBITDA

Adjusted EBITDA for the year ended December 31, 2025 was $421.9 million, compared to $417.4 million for the year ended December 31, 2024, representing an increase of $4.4 million, primarily driven by an increase in Net revenue, partially offset by an increase in expenses, as discussed above.

Earnings Per Share

4 unchanged sentences

common shareholders $ 29,101 $ 198,129 $ 227,230

Net loss attributable to Class C shareholders

(6,637) — (6,637)

Net income attributable to Class C shareholders — 123,942 123,942

Net income attributable to Stagwell Inc.

and Class C and adjusted net income

and Class C shareholders and adjusted net income $ 22,464 $ 198,129 $ 220,593

Diluted - Weighted average number of common shares outstanding

225,468 — 225,468

Weighted average number of common shares outstanding 115,752 2,234 117,986

Weighted average number of common Class C shares outstanding — 151,649 151,649

Weighted average number of shares outstanding 115,752 153,883 269,635

Weighted average number of shares of Class C Common Stock outstanding

39,055 — 39,055

Diluted - Weighted average number of shares outstanding

264,523 — 264,523

Diluted EPS and Adjusted Diluted EPS (1)

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Adjusted tax expense (41,263)

Net income attributable to Class C shareholders

Allocation of adjustments to Net income

Net income attributable to Stagwell Inc.

common shareholders - add-backs $ 80,403

Net income attributable to Class C shareholders - add-backs 106,798

Net income attributable to Class C shareholders 17,144

(1) Adjusted Diluted EPS is defined within the Non-GAAP Financial Measures section of the Executive Summary.

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Net income attributable to Stagwell Inc.

and Class C and adjusted net income

and Class C shareholders and adjusted net income

$ 2,259 $ 209,241 $ 211,500

Weighted average number of common shares outstanding 122,170 3,628 125,798

Weighted average number of common Class C shares outstanding — 154,972 154,972

Weighted average number of shares outstanding 122,170 158,600 280,770

Diluted - Weighted average number of common shares outstanding

115,752 — 115,752

Weighted average number of shares of Class C Common Stock outstanding — 151,649 151,649

Diluted - Weighted average number of shares outstanding

115,752 151,649 267,401

Diluted EPS and Adjusted Diluted EPS (1)

$ 0.02 $ 0.79

Adjustments to Net income

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Deferred acquisition consideration 22,995

Gain on sale of business (94,505)

Other items, net 55,857

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Net income attributable to Stagwell Inc.

common shareholders - add-backs $ 52,712

Net income to attributable to Class C shareholders - add-backs 67,087

Net income attributable to Class C shareholders

Net income attributable to Stagwell Inc.

common shareholders $ 82,506

Net income attributable to Class C shareholders - add-backs

Net income attributable to Class C shareholders 17,144

(1) Adjusted Diluted EPS is defined within the Non-GAAP Financial Measures section of the Executive Summary.

Adjusted EBITDA

Adjusted EBITDA for the year ended December 31, 2024, was $410.8 million, compared to $360.1 million for the year ended December 31, 2023, representing an increase of $50.6 million, primarily driven by an increase in Operating Income, as discussed above.

Integrated Agencies Network

Marketing Services

The components of operating results for the year ended December 31, 2025 compared to the year ended December 31, 2024 were as follows:

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Depreciation and amortization 52,295 53,106 (811) (1.5) %

Deferred acquisition consideration 13,290 11,931 1,359 11.4 %

Deferred acquisition consideration (4,784) 5,379 (10,163) NM

Impairment and other losses — 1,500 (1,500) (100.0) %

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(dollars in thousands)

Integrated Agencies Network $1,232,798 $226 $7,208 $32,521 $39,955 $1,272,753 2.6% 3.2%

Marketing Services $ 905,117 $ 3,491 $ 9,788 $ 41,280 $ 54,559 $ 959,676 4.6 % 6.0 %

Component % change 0.4 % 1.1 % 4.6 % 6.0 %

The increase in organic net revenue was primarily attributable to new client wins and higher spending in the technology and retail sectors, partially offset by budget cuts and client losses in the food and beverage and business services sectors.

The increase in net acquisitions (divestitures) was primarily driven by acquisitions and dispositions, including the acquisitions of Epiphany, Movers and Shakers, Left Field Labs, and WNP, partially offset by the sale of Concentric in the fourth quarter of 2023.

The strong increase in organic net revenue of $41.3 million, or 4.6%, was primarily attributable to increases in the Creative, Research, and Experiential service lines.

The Creative and Research service lines increased $39.0 million due to new client wins and expanded client relationships in the retail, financial, and technology sectors driven by the accelerating adoption of AI.

The Experiential service line increased $7.9 million due to the Sport Beach event that connects athletes, brands, and creatives through lived experiences.

The increase in net acquisitions (divestitures) was primarily driven by the acquisition of Jetfuel, an experiential marketing services agency.

Cost of services increased $19.3 million.

Excluding the increase in Billable costs of $2.7 million and the addition of expenses from acquired entities of $1.9 million, Cost of services increased $14.8 million, or only 2.7% compared to organic net revenue growth of 4.6%, reflecting strong operating leverage.

This increase was primarily attributable to higher staff costs due to the growth in Net revenue, partially offset by a decrease in staff costs due to business optimization efforts through the use of AI and restructuring of agency teams.

The decrease in Office and general expenses of $14.5 million was primarily attributable to cost optimization initiatives related to the consolidation of our real estate footprint and a decrease in Deferred acquisition consideration.

Stock-based compensation expense increased $2.6 million, primarily due to an increase in the fair value of certain profit interest awards driven by strong performance in certain Brands and a greater proportion of the annual incentive compensation being allocated to stock-based awards compared to last year.

Deferred acquisition consideration decreased $10.2 million, primarily attributable to a reduction in the fair value of the deferred acquisition consideration liability associated with certain Brands driven by the performance timing of those Brands.

Other items, net decreased $10.0 million, primarily attributable to a lease termination during the first quarter of 2025 as part of the real estate consolidation initiatives resulting in a gain of $3.5 million and a decrease in severance of $4.5 million.

Operating Income

Operating income for the year ended December 31, 2025, was $132.6 million, compared to $77.9 million for the year ended December 31, 2024, representing an increase of $54.7 million.

The increase in Operating Income was primarily attributable to an increase in Revenue and a decrease in Impairment and other losses and Depreciation and amortization, partially offset by an increase in Cost of services and Office and general expenses.

The increase in Cost of sales was primarily attributable to higher billable costs and staff costs, commensurate with the increase in revenue as well as the inclusion of costs from acquired entities.

The increase in Office and general expenses was primarily attributable to an increase in staff and other business development related costs, commensurate with the increase in revenue, as well as the inclusion of costs from acquired entities.

Deferred acquisition consideration increased $1.4 million, primarily attributable to the Company’s acquisitions.

Impairment and other losses for the year ended December 31, 2024 was $1.5 million.

This was attributable to a charge to reduce the carrying value of a right-of-use lease asset and related leasehold improvements.

Impairment and other losses for the year ended December 31, 2023, was $11.3 million, primarily related to right-of-use lease assets totaling $6.8 million and the associated leasehold improvements totaling $3.1 million.

Depreciation and amortization decreased $3.9 million, primarily attributable to the acceleration of amortization of a tradename in the third quarter of 2023.

As a result, amortization expense of $3.1 million was recorded in the year ended December 31, 2023, representing the remaining amortization expense associated with this tradename.

Adjusted EBITDA increased $9.4 million, primarily driven by an increase in Revenue, partially offset by an increase in expenses, as discussed above.

Brand Performance Network

The increase in Operating income was primarily attributable to an increase in Net revenue, partially offset by an increase in expenses, as discussed above.

Operating margin for the year ended December 31, 2025 was 11.7%, compared to 7.2% for the year ended December 31, 2024, representing an increase of 4.5%, reflecting improved operational efficiency.

Adjusted EBITDA

Adjusted EBITDA increased by $34.8 million, primarily driven by an increase in Operating income and an increase in operating margin, as discussed above.

Digital Transformation

The components of operating results for the year ended December 31, 2025 compared to the year ended December 31, 2024 were as follows:

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Depreciation and amortization 23,174 22,398 776 3.5 %

Impairment and other losses — 96 (96) (100.0) %

$ 344,292 $ 302,218 $ 42,074 13.9 %

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Depreciation and amortization 23,174 22,398 776 3.5 %

Deferred acquisition consideration (7,744) 2,851 (10,595) NM

Impairment and other losses — 96 (96) (100.0) %

Deferred acquisition consideration 12,271 7,911 4,360 55.1 %

Other items, net 1,859 3,090 (1,231) (39.8) %

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(dollars in thousands)

Brand Performance Network $627,810 $2,220 $2,252 $18,948 $23,420 $651,230 3.0% 3.7%

Digital Transformation $ 324,183 $ (405) $ 13,615 $ 29,779 $ 42,989 $ 367,172 9.2 % 13.3 %

Component % change (0.1) % 4.2 % 9.2 % 13.3 %

The increase in organic net revenue was primarily attributable to new clients and increased spending by existing clients in the consumer products and food and beverage sectors.

The increase in net acquisitions (divestitures) was driven by the acquisition of Huskies.

The strong increase in organic net revenue of $29.8 million, or 9.2%, was attributable to increases in technology and communications sectors in the Strategy and Design and Development and Implementation service lines.

The Strategy and Design and Development and Implementation service lines grew $28.7 million driven by AI-related services.

The increase in net acquisitions (divestitures) was primarily driven by the acquisition of Create, a digital communications group in the Middle East.

Cost of services increased $32.8 million.

Excluding the increase in Billable costs of $14.9 million and the addition of expenses from acquired entities of $6.8 million, Cost of services increased $11.1 million, or only 5.6% compared to organic net revenue growth of 9.2%, reflecting strong operating leverage.

This increase was primarily due to higher staff costs due to the growth in Net revenue, partially offset by the restructuring of agency teams to support business optimization efforts and the impact of competition in the labor market.

Office and general expenses increased $8.5 million.

Excluding the addition of costs from acquired entities of $4.4 million, Office and general expenses increased $4.1 million, primarily due to higher Deferred acquisition consideration as explained below.

Stock-based compensation expense decreased $2.5 million, primarily due to a decrease in the fair value of awards granted in 2025 compared to 2024 and a decrease in the expense associated with awards issued in prior years that vested during 2025.

Deferred acquisition consideration increased $4.4 million, primarily attributable to the strong performance of a certain Brand, causing an increase in the fair value of the deferred acquisition consideration liability associated with that Brand.

Operating Income

Operating Income for the year ended December 31, 2024, was $41.5 million, compared to $43.2 million for the year ended December 31, 2023, representing a decrease of $1.7 million, primarily attributable to an increase in Cost of services and Office and general expenses, partially offset by an increase in Revenue.

The increase in Cost of services was primarily attributable to higher unbillable costs and staff costs, commensurate with the increase in revenue.

The increase in Office and general expenses was primarily attributable to an increase in staff costs, commensurate with the increase in revenue, partially offset by a decrease in deferred acquisition consideration.

Deferred acquisition consideration decreased $10.6 million, primarily attributable to a reduction in the fair value of the deferred acquisition consideration liabilities associated with certain Brands.

Adjusted EBITDA decreased $2.9 million, primarily driven by an increase in Revenue, more than offset by an increase in expenses, as discussed above.

Communications Network

Operating income for the year ended December 31, 2025 was $49.2 million, compared to $33.4 million for the year ended December 31, 2024, representing an increase of $15.8 million.

The increase in Operating income was primarily attributable to an increase in Net revenue of $43.0 million, partially offset by an increase in expenses, as discussed above.

Operating margin for the year ended December 31, 2025 was 12.5%, compared to 10.0% for the year ended December 31, 2024, representing an increase of 2.5%, reflecting improved operational efficiency.

Adjusted EBITDA

Adjusted EBITDA increased by $17.2 million, primarily driven by an increase in Operating income and an increase in operating margin, as discussed above.

Media & Commerce

The components of operating results for the year ended December 31, 2025 compared to the year ended December 31, 2024, were as follows:

8 unchanged sentences

$ 656,535 $ 646,416 $ 10,119 1.6 %

Operating Income $ 77,354 $ 35,904 $ 41,450 NM

Operating income $ 34,140 $ 48,986 $ (14,846) (30.3) %

Year Ended December 31,

2 unchanged sentences

Net revenue $ 610,020 $ 601,503 $ 8,517 1.4 %

Billable costs 181,345 88,446 92,899 NM

Billable costs 80,655 93,899 (13,244) (14.1) %

Revenue 690,675 695,402 (4,727) (0.7) %

Billable costs 181,345 88,446 92,899 NM

Billable costs 80,655 93,899 (13,244) (14.1) %

Staff costs 363,031 356,684 6,347 1.8 %

Administrative costs 93,003 83,572 9,431 11.3 %

Unbillable and other costs, net 2,235 613 1,622 NM

Adjusted EBITDA 116,874 51,819 65,055 NM

Unbillable and other costs, net 64,833 65,188 (355) (0.5) %

Adjusted EBITDA 89,153 96,059 (6,906) (7.2) %

Stock-based compensation 4,191 6,265 (2,074) (33.1) %

1 unchanged sentence

Deferred acquisition consideration 3,010 (7,745) 10,755 NM

Other items, net 3,250 1,535 1,715 NM

Operating Income $ 77,354 $ 35,904 $ 41,450 NM

Revenue for the year ended December 31, 2024 was $515.1 million, compared to $333.7 million for the year ended December 31, 2023, an increase of $181.4 million.

Other items, net 17,549 17,103 446 2.6 %

Operating income $ 34,140 $ 48,986 $ (14,846) (30.3) %

Revenue for the year ended December 31, 2025 was $690.7 million, compared to $695.4 million for the year ended December 31, 2024, a decrease of $4.7 million.

The components of the fluctuations in Net revenue for the year ended December 31, 2025 compared to the year ended December 31, 2024 were as follows:

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(dollars in thousands)

Communications Network $245,261 $(28) $22,177 $66,385 $88,534 $333,795 27.1% 36.1%

Media & Commerce $ 601,503 $ 3,396 $ 5,829 $ (708) $ 8,517 $ 610,020 (0.1) % 1.4 %

Component % change 0.6 % 1.0 % (0.1) % 1.4 %

The increase in organic net revenue was primarily attributable to new clients and increased spending in the retail and public affairs sectors.

The public affairs sector gained new clients and increased spending as a result of the current political campaign year.

The increase in net acquisitions (divestitures) was primarily driven by the acquisitions of PROS, Sidekick, and Consulum.

Organic net revenue decreased by $0.7 million or 0.1%.

Organic net revenue in the Media Buying service line increased $22.6 million driven by integrated media, technology, and data offerings that contributed to new wins and expanded scope with existing clients.

This was offset by a decrease of $24.8 million in the Commerce & CRM service line that was primarily attributable to leadership transitions and organizational realignment.

The increase in net acquisitions (divestitures) was primarily driven by the acquisition of ADK, an integrated marketing company that expands our global footprint in the APAC region.

Cost of services decreased by $8.7 million.

Excluding the decline in Billable costs of $13.2 million and the addition of expenses from acquired entities of $4.7 million, Cost of services decreased $0.2 million, or less than 0.1%, compared to organic net revenue growth of 0.1%, reflecting consistent operating leverage.

Office and general expenses increased $20.0 million.

Excluding the addition of costs from acquired entities of $7.7 million, Office and general expenses increased $12.4 million, primarily due to higher Deferred acquisition consideration as explained below.

Stock-based compensation expense decreased $2.1 million, primarily due to a decrease in the fair value of awards granted in 2025 compared to 2024 and a decrease in the expense associated with awards issued in prior years that vested during 2025.

Deferred acquisition consideration increased $10.8 million, primarily attributable to the strong performance of a certain Brand in 2025, causing an increase in the fair value of the deferred acquisition consideration liability associated with that Brand, and a decrease in the fair value of a certain Brand in 2024.

Operating Income

Operating Income for the year ended December 31, 2024, was $77.4 million, compared to $35.9 million for the year ended December 31, 2023, representing an increase of $41.5 million.

The change in Operating Income was primarily attributable to an increase in Revenue, partially offset by an increase in Cost of services and Office and general expenses.

The increase in Cost of services was primarily attributable to an increase in billable costs and staff cost, commensurate with higher revenue as well as the inclusion of costs from acquired entities.

The increase in Office and general expenses was primarily attributable to an increase in deferred acquisition consideration as well as the inclusion of costs from acquired entities.

Deferred acquisition consideration increased $18.7 million, primarily attributable to an increase in the fair value of a certain obligation.

Adjusted EBITDA increased $65.1 million, primarily driven by an increase in Revenue, partially offset by an increase in expenses, as discussed above.

Operating income for the year ended December 31, 2025 was $34.1 million, compared to $49.0 million for the year ended December 31, 2024, representing a decrease of $14.8 million.

The decrease in Operating income was primarily attributable to an increase in expenses partially offset by an increase in Net revenue, as discussed above.

Adjusted EBITDA

Adjusted EBITDA decreased by $6.9 million, primarily due to a decrease in Operating income, as discussed above.

Communications

The components of operating results for the year ended December 31, 2025 compared to the year ended December 31, 2024 were as follows:

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Depreciation and amortization 25,711 20,100 5,611 27.9 %

Impairment and other losses 222 — 222 100.0 %

$ 518,927 $ 609,161 $ (90,234) (14.8) %

Operating Loss $ (29,012) $ (18,937) $ (10,075) 53.2 %

Operating income $ 73,650 $ 93,904 $ (20,254) (21.6) %

Year Ended December 31,

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Billable costs 199,146 267,439 (68,293) (25.5) %

38,747 46,585 (7,838) (16.8) %

Revenue 592,577 703,065 (110,488) (15.7) %

Billable costs 199,146 267,439 (68,293) (25.5) %

1 unchanged sentence

Administrative costs 50,841 47,335 3,506 7.4 %

Unbillable and other costs, net 9,300 10,840 (1,540) (14.2) %

Adjusted EBITDA 103,934 145,355 (41,421) (28.5) %

Stock-based compensation 6,325 7,721 (1,396) (18.1) %

Depreciation and amortization 25,711 20,100 5,611 27.9 %

Deferred acquisition consideration (7,022) 18,770 (25,792) NM

Impairment and other losses 222 — 222 100.0 %

Other items, net 5,048 4,860 188 3.9 %

Operating income $ 73,650 $ 93,904 $ (20,254) (21.6) %

Revenue for the year ended December 31, 2025 was $592.6 million compared to $703.1 million for the year ended December 31, 2024, a decrease of $110.5 million.

The components of the fluctuations in Net revenue for the year ended December 31, 2025 compared to the year ended December 31, 2024 were as follows:

Net Revenue - Components of Change Change

Year Ended December 31, 2024 Foreign Currency Net Acquisitions (Divestitures) Organic Total Change Year Ended December 31, 2025 Organic Total

(dollars in thousands)

Communications $ 435,626 $ 547 $ 29,002 $ (71,744) $ (42,195) $ 393,431 (16.5) % (9.7) %

Component % change 0.1 % 6.7 % (16.5) % (9.7) %

The decrease in organic net revenue of $71.7 million, or 16.5%, was primarily attributable to a $62.7 million decrease in the Advocacy service line due to political seasonality following the 2024 presidential election cycle.

The decrease in organic net revenue for Communications excluding Advocacy was $9.0 million or 4.0%.

The decrease in Communications service line was primarily driven by broader industry headwinds, including client budget uncertainty, and delayed spending decisions during the pitch process.

The increase in net acquisitions (divestitures) was primarily driven by the acquisition of Consulum, a pan-MENA government advisory consultancy.

Cost of services decreased $71.0 million.

Excluding the decline in Billable costs of $68.3 million and the addition of costs from acquired entities of $14.6 million, Cost of services decreased $17.3 million, or 8.6%, primarily due to lower Net revenue.

The decrease in Office and general expenses of $25.0 million was primarily attributable to a decrease in Deferred acquisition consideration as explained below and lower Net revenue, partially offset by the addition of costs from acquired entities of $7.7 million.

Stock-based compensation expense decreased $1.4 million, primarily attributable to a decrease in the fair value of a certain profits interest award due to performance timing.

Deferred acquisition consideration decreased by $25.8 million, primarily attributable to a decrease in the fair value of certain Brands due to performance timing, partially offset by the strong performance of certain Brands, causing an increase in the fair value.

Depreciation and amortization increased by $5.6 million, primarily attributable to the amortization of intangible assets resulting from the acquisition of businesses.

Operating Income

Operating income for the year ended December 31, 2025 was $73.7 million, compared to $93.9 million for the year ended December 31, 2024, representing a decrease of $20.3 million.

The decrease in Operating income was primarily attributable to a decrease in Net revenue, partially offset by a decrease in expenses, as discussed above.

Adjusted EBITDA

Adjusted EBITDA decreased by $41.4 million, primarily due to a decrease in Operating income, as discussed above.

The Marketing Cloud

The components of operating results for the year ended December 31, 2025 compared to the year ended December 31, 2024 were as follows:

Year Ended December 31,

2025 2024 Change

(dollars in thousands)

Revenue $ 106,537 $ 32,265 $ 74,272 230.2 %

Operating expenses

Cost of services 52,921 15,762 37,159 235.8 %

Office and general expenses 49,416 28,932 20,484 70.8 %

Depreciation and amortization 23,514 12,502 11,012 88.1 %

Impairment and other losses 244 — 244 100.0 %

$ 126,095 $ 57,196 $ 68,899 120.5 %

Operating loss $ (19,558) $ (24,931) $ 5,373 (21.6) %

Year Ended December 31,

2025 2024 Change

(dollars in thousands)

Net revenue $ 106,486 $ 32,265 $ 74,221 230.0 %

Billable costs 51 — 51 100.0 %

Revenue 106,537 32,265 74,272 230.2 %

Billable costs 51 — 51 100.0 %

Staff costs 68,647 28,686 39,961 139.3 %

Administrative costs 17,613 9,777 7,836 80.1 %

Unbillable and other costs, net 22,689 6,117 16,572 270.9 %

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Deferred acquisition consideration (10,942) (1,320) (9,622) 728.9 %

Impairment and other losses 244 — 244 100.0 %

Other items, net 3,651 629 3,022 480.4 %

Operating loss $ (19,558) $ (24,931) $ 5,373 (21.6) %

(1) All Other Revenue and Administrative costs include approximately $8 million and $6 million of eliminations of intercompany services for the years ended December 31, 2024, and 2023, respectively.

Revenue for the year ended December 31, 2024, was $38.7 million, compared to $46.6 million for the year ended December 31, 2023, a decrease of $7.8 million.

Revenue for the year ended December 31, 2025 was $106.5 million compared to $32.3 million for the year ended December 31, 2024, an increase of $74.3 million.

The components of the fluctuations in Net revenue for the year ended December 31, 2025 compared to the year ended December 31, 2024 were as follows:

2 unchanged sentences

(dollars in thousands)

All Other $46,585 $(984) $(609) $(6,108) $(7,701) $38,884 (13.1)% (16.5)%

The Marketing Cloud $ 32,265 $ 941 $ 62,229 $ 11,051 $ 74,221 $ 106,486 34.3 % 230.0 %

Component % change 2.9 % 192.9 % 34.3 % 230.0 %

The decrease in organic net revenue was primarily attributable to budget cuts and client losses from clients in the food and beverage, travel and transportation, consumer products, healthcare, and financial services sectors.

The decrease in net acquisitions (divestitures) was primarily driven by the acquisition of Leaders, offset by the derecognition of a certain noncontrolling interest in the first quarter of 2024.

The increase in organic net revenue of $11.1 million, or 34.3%, was primarily attributable to growth in the Research service line due to increased demand from new and existing clients, including a significant new engagement in the financial sector and higher platform utilization including the successful introduction of additional service offerings within a subscription model.

The increase in net acquisitions (divestitures) was primarily driven by the acquisitions of Leaders, a digital agency specializing in influencer marketing, and Unicepta, a media monitoring and analytics platform.

Cost of services increased $37.2 million.

Excluding the addition of costs from acquired entities of $34.2 million, Cost of services increased $2.9 million or only 25.8% compared to organic net revenue of 34.3%, reflecting operating leverage.

Office and general expenses increased $20.5 million, primarily due to higher staff costs due to expansion of the business to support additional revenues and the addition of costs from acquired entities of $16.2 million, partially offset by a decrease in Deferred acquisition consideration expense as explained below.

Deferred acquisition consideration decreased by $9.6 million, primarily attributable to a decrease in the fair value of a certain Brand due to performance timing, partially offset by the strong performance of certain other Brands.

Depreciation and amortization increased by $11.0 million, primarily attributable to higher amortization related to increased investments in AI and automation to expand our offerings and services, improve workflow efficiency, and support future margin expansion, and the amortization of intangible assets from the acquisition of businesses.

Operating Loss

Operating Loss for the year ended December 31, 2024, was $29.0 million, compared to $18.9 million for the year ended December 31, 2023, representing an increase of $10.1 million.

The increase in Operating Loss was primarily attributable to a decrease in Revenue and an increase in Office and general expenses and Depreciation and amortization, partially offset by a decrease in Cost of services.

The decrease in Cost of Services was primarily attributable to lower unbillable costs and staff costs, commensurate with lower revenue.

The increase in Office and general expenses was primarily attributable to an increase in staff costs as a result of a change in the organization structure of certain Brands.

Depreciation and amortization increased $4.3 million, primarily attributable to the acceleration of amortization of certain tradenames.

As a result, amortization expense of $2.8 million was recorded in the year ended December 31, 2024, representing the remaining amortization expense associated with these tradenames.

Adjusted EBITDA decreased $5.2 million, primarily driven by a decrease in Revenue, offset by a decrease in expenses, as discussed above.

Operating loss for the year ended December 31, 2025 was $19.6 million compared to $24.9 million for the year ended December 31, 2024, as the segment approaches operating scale.

The decrease in Operating loss was primarily attributable to an increase in Net revenue, partially offset by an increase in expenses, as discussed above.

Adjusted EBITDA increased by $9.9 million, primarily due to a decrease in Operating loss, as discussed above.

The components of operating results for the year ended December 31, 2025 compared to the year ended December 31, 2024 were as follows:

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Operating loss $ (111,030) $ (95,074) $ (15,956) 16.8 %

Operating Loss for the year ended December 31, 2024, was $95.1 million, compared to $86.3 million for the year ended December 31, 2023, representing an increase of $8.8 million.

The increase in Operating Loss was primarily attributable to an increase in Staff costs, partially offset by a decrease in Stock-based compensation.

Staff costs increased $10.8 million, primarily as a result of an increase in headcount, higher health insurance costs and a reduction in bonus expense in 2023 related to cost savings initiatives.

Stock-based compensation expense decreased $6.0 million, primarily attributable to a decrease in the fair value and number of awards.

Staff costs increased by $13.3 million, primarily attributable to an increase in headcount to support the implementation of a standardized shared services platform to optimize cost structures and support the future growth and unusually higher healthcare related insurance claims.

Administrative costs decreased $3.0 million, primarily due to our cost savings initiatives.

The implementation of the shared services platform optimized cost structures and reduced Brands administrative costs.

Due to a higher allocation of Corporate's administrative costs to the Brands, Corporate’s Administrative costs decreased $14.0 million These costs include rent, IT services, accounting services, financial operations services, and business applications.

This decrease was partially offset by an increase of $11.1 million in computer software and licensing fees due to investments in automation and AI intended to improve workflow efficiency and support future margin expansion.

Stock-based compensation expense increased by $5.5 million, primarily due to a greater proportion of the annual incentive compensation being allocated to stock-based awards compared to last year and a reversal of expense in the second quarter of 2024 associated with stock-based performance awards for which the performance targets were not met.

Operating Loss

Operating loss for the year ended December 31, 2025 was $111.0 million compared to $95.1 million for the year ended December 31, 2024, representing an increase of $16.0 million, primarily attributable to higher expenses, as discussed above.

Liquidity and Capital Resources:

The following table provides summary information about the Company’s liquidity position:

The following table provides summary information about the Company’s liquidity position and capital resources:

Year Ended December 31,

2025 2024 Change

(dollars in thousands)

Net cash provided by operating activities $ 291,028 $ 142,859 $ 148,169 103.7 %

Net cash (used in) provided by investing activities (162,472) 155,951

Net cash provided by (used in) financing activities 36,938 (339,864)

Net cash used in investing activities (113,678) (162,472) 48,794 (30.0) %

Net cash provided by (used in) financing activities (210,017) 36,938 (246,955) NM

The Company had cash and cash equivalents of $104.5 million and $131.3 million as of December 31, 2025, and December 31, 2024, respectively.

Operating Activities

Net cash provided by operating activities for the year ended December 31, 2025 was $291.0 million, an increase of $148.2 million, or 103.7%, compared to the prior year.

This improvement was driven by higher operating income of $25.9 million and $150.7 million improvement in working capital primarily attributable to stronger working capital management driven by

technology automation and improved billing and collection process, which resulted in favorable changes in advance billings of $48.2 million and expenditures billable to clients of $66.4 million.

Additionally, there were net favorable changes in accounts payable and accruals of $35.5 million as a result of improved payment terms with significant service providers.

This was partially offset by an unfavorable change in other current assets of $45.3 million due to an increase in certain prepaid media assets.

Changes in non-cash items included in operating income consisted primarily of a decrease of $30.5 million in the fair value of deferred acquisition liabilities driven by the performance timing of certain acquisitions and the Bargain purchase gain of $9.9 million from the ADK acquisition, partially offset by an increase of $19.6 million in depreciation and amortization resulting from higher capital investment in AI and automation related technologies as well as an increase in deferred income tax expense of $21.1 million, respectively.

Investing Activities

Net cash used in investing activities for the year ended December 31, 2025 was $113.7 million, a decrease of $48.8 million, or 30.0%, compared to the prior year.

This decrease was primarily driven by a $97.1 million reduction in acquisitions and $10.9 million in proceeds from the sale of a non-core asset.

These decreases were partially offset by an increase in capital expenditures and capitalized software for investments in AI and process automation technologies of $24.8 million and $32.4 million, respectively.

The capital expenditures include a $7.4 million purchase of office space.

Financing Activities

Net cash used in financing activities for the year ended December 31, 2025 was $210.0 million, an increase of $247.0 million compared to the prior year.

This increase was primarily driven by an increase of $231.7 million in net payments under the Credit Agreement offset by an increase in share repurchases of $26.0 million.

The increase was partially offset by a decrease in distributions to noncontrolling interests of $17.1 million.

The Company expects to maintain sufficient cash and/or available borrowings to fund operations for the next twelve months and subsequent periods.

The Company has historically maintained and expanded its business using cash generated from operating activities, funds available under the Credit Agreement, and other initiatives, such as obtaining additional debt and equity financing.

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.

As of December 31, 2024, the Company had $264.0 million of borrowings outstanding and $15.3 million of issued and undrawn letters of credit resulting in $360.7 million unused amount under the Credit Agreement.

On April 23, 2025, the Company entered into an amendment to the Credit Agreement, which increased the limit of borrowing to $750 million and extended the maturity date to April 23, 2030, as described in more detail in Note 11 of the Notes included herein.

As of December 31, 2025, the Company had $237.3 million of borrowings outstanding and $15.1 million of issued and undrawn letters of credit, resulting in $497.6 million unused borrowing capacity under the Credit Agreement.

The Company transfers certain of its trade receivable assets to third parties under certain agreements.

Per the terms of these agreements, the Company surrenders control over its trade receivables upon transfer.

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 $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.

On November 6, 2024, 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.

The trade receivables transferred to the third parties were $501.3 million and $435.6 million during the years ended December 31, 2025 and 2024, respectively.

The trade receivables collected by the Company t hat were not remitted to the third parties under these arrangements were recorded in Accruals and other liabilities on the Audited Consolidated Balance Sheets and total $21.2 million as of December 31, 2025 and $19.5 million as of December 31, 2024.

Fees for these arrangements were recorded in Office and general expenses in the Consolidated Statements of Operations and totaled $5.6 million and $5.8 million for the years ended December 31, 2025 and 2024 , respectively.

The Company may purchase shares of outstanding Class A Common Stock under its Repurchase Program.

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 Exchange Act, as amended, in privately negotiated transactions, or through other means.

The timing and number of shares repurchased under the Repurchase Program will depend on a variety of factors, including the performance of our stock price, general market and economic conditions, regulatory requirements, the availability of funds, and other considerations we deem relevant.

The Repurchase Program may be suspended, modified, or discontinued at any time without prior notice.

Our Board will review the Repurchase Program periodically and may authorize adjustments of its terms.

Our Board of Directors will review the Repurchase Program periodically and may authorize adjustments of its terms.

During the year ended December 31, 2025, 23.1 million shares of Class A Common Stock were repurchased pursuant to the Repurchase Program at an average price of $5.12 per share, for an aggregate value, excluding fees, of $118.4 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 $51.1 million as of December 31, 2025.

The Company’s obligations extending beyond twelve months primarily consist of deferred acquisition consideration payments, purchases of noncontrolling interests, subsidiary awards, capital expenditures, scheduled lease obligation payments, and interest payments on borrowings under the Company’s 5.625% Notes (as defined in Note 11 of the Notes included herein) and Credit Agreement.

The Company expects to make estimated cash payments in the future to satisfy obligations under our

Tax Receivables Agreement with Stagwell Media LP and OpCo (“TRA”) (see Note 17 of the Notes included herein for additional details).

The amount and timing of payments are contingent on the Company achieving certain tax savings, if any, that we actually realize, or in certain circumstances are deemed to realize as a result of (i) increases in the tax basis of OpCo’s assets resulting from exchanges of Paired Units (each as defined in Note 15 of the Notes included herein) for shares of Class A Common Stock or cash, as applicable, and (ii) certain other tax benefits related to the Company making payments under the TRA.

See Recent Developments above for information regarding the Board’s authorization to extend and increase the size of share repurchases under the Repurchase Program.

The Company’s obligations extending beyond twelve months primarily consist of deferred acquisition consideration payments, purchases of redeemable noncontrolling interests, subsidiary awards, capital expenditures, scheduled lease obligation payments, and interest payments on borrowings under the Company’s 5.625% Notes (as defined in Note 11 of the Notes included herein) and Credit Agreement.

The Company expects to make estimated cash payments in the future to satisfy obligations under our Tax Receivables Agreement (“TRA”) , which remains in effect after the final exchange of Class C Common Stock (see Note 17 of the Notes included herein for additional details).

The amount and timing of any payments under the TRA are contingent on the Company achieving certain tax savings, if any, that we actually realize, or in certain circumstances are deemed to realize.

Based on the current outlook, the Company believes future cash flows from operations, together with the Company’s existing cash balance and availability of funds under the Credit Agreement, will be sufficient to meet the Company’s anticipated cash needs for the next twelve months and subsequent periods.

The Company’s ability to make payments will depend on future performance, which is subject to general economic conditions, the competitive environment and other factors, including those described in this Form 10-K and in the Company’s other SEC filings.

Operating Activities

Cash flows provided by operating activities for the year ended December 31, 2024 were $142.9 million, primarily driven by earnings, partially offset by unfavorable working capital requirements, including the timing of media supplier payments.

Cash flows provided by operating activities for the year ended December 31, 2023 were $81.0 million, primarily driven by earnings, partially offset by unfavorable working capital requirements, including the timing of media supplier payments.

Investing Activities

Cash flows used in investing activities were $162.5 million for the year ended December 31, 2024, primarily driven by $35.1 million in capitalized software spend, $18.9 million in capital expenditures, and $103.3 million for acquisitions, net of cash acquired.

Cash flows provided by investing activities were $156.0 million for the year ended December 31, 2023, primarily driven by $229.5 million in proceeds from the sale of ConcentricLife, partially offset by $28.2 million in capitalized software spend, $14.2 million in capital expenditures, and $23.3 million in acquisitions, net of cash acquired.

Financing Activities

During the year ended December 31, 2024, cash flows provided by financing activities were $36.9 million, primarily driven by $205.0 million in net proceeds under the Credit Agreement, partially offset by shares repurchased and cancelled of $108.2 million, payments of deferred consideration of $29.8 million, and distributions to noncontrolling interests of $26.7 million.

During the year ended December 31, 2023, cash flows used in financing activities were $339.9 million, primarily driven by $41.0 million in net borrowings under the Credit Agreement, shares repurchased and cancelled of $223.8 million, payments of deferred consideration of $49.2 million, and distributions to noncontrolling interests of $25.0 million.

Debt, net of debt issuance costs, as of December 31, 2024, was $1,353.6 million, compared to $1,145.8 million outstanding as of December 31, 2023.

See Note 11 of the Notes included herein for information regarding the Company’s 5.625% Notes, and the Credit Agreement, which provides for a $640.0 million senior secured revolving credit facility maturing on August 3, 2026.

The Company is currently in compliance with all of the terms and conditions of the Credit Agreement, and management believes, based on its current financial projections, that the Company will be in compliance with its covenants over the next twelve months.

As of December 31, 2025, Debt, net of debt issuance costs, was $1,326.0 million, compared to $1,353.6 million outstanding as of December 31, 2024.

See Note 11 of the Notes included herein for information regarding the Company’s 5.625% Notes and the Credit Agreement.

As of December 31, 2025 , t he Company was in compliance with all of the terms and conditions of the Credit Agreement, and management believes, based on its current financial projections, that the Company will be in compliance with its covenants over the next twelve months.

If the Company loses all or a substantial portion of its lines of credit under the Credit Agreement, or if the Company uses the maximum available amount under the agreement, it will be required to seek other sources of liquidity.

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Pursuant to the Credit Agreement, the Company must maintain a Total Leverage Ratio (as defined in the Credit Agreement) below an established threshold.

For the period ended December 31, 2024, the Company’s calculation of this ratio,

and the maximum permitted under the Credit Agreement, respectively, were calculated based on the trailing twelve months as follows:

For the period ended December 31, 2025, the Company’s calculation of this ratio, and the maximum permitted under the Credit Agreement, respectively, were calculated based on the trailing twelve months as follows:

December 31, 2025

5 unchanged sentences

Material Cash Requirements

The Company’s Brands enter into contractual commitments with media providers and agreements with production companies on behalf of their clients at levels that exceed the revenue from services.

Some of our Brands purchase media for clients and act as an agent for a disclosed principle.

These commitments are included in Accounts payable and Accrued media when the media services are delivered by the media providers.

Stagwell takes precautions against default on payment for these services, including the procurement of credit insurance and has historically had a very low incidence of default.

Stagwell is still exposed to the risk of significant uncollectible receivables from our clients.

The risk of a material loss could significantly increase in periods of severe economic downturn.

The following table and discussion below summarize current and long-term material cash requirements of the Company.

To the extent required under a particular client engagement, Stagwell’s Brands enter into contractual commitments with media providers, production companies and other third parties on behalf of their clients at levels that exceed the revenue from the services.

In most of these transactions, the Brands act as the clients’ “Agent for a Disclosed Principal” where the Brands’ risk is mitigated by sequential payment liability, i.e., the brands’ obligation to pay a third party is tolled until it receives the underlying payment from the client thereby safeguarding the Brand in the event of a client default.

To further protect against client default, Stagwell takes additional precautions, including the procurement of credit insurance.

While Stagwell has historically had a very low incidence of default, Stagwell is still exposed to the risk of significant uncollectible receivables from its clients and the risk of a material loss could significantly increase in periods of severe economic downturn.

The following table and discussion below summarize current and long-term material cash requirements of the Company as of December 31, 2025.

Certain of these requirements vary in the ultimate future amount payable because they are dependent on the future results of operations of the subject subsidiaries and/or the timing of when certain rights are exercised.

Management anticipates it will finance these requirements using available cash from operations, borrowings under the Credit Agreement (or any refinancings thereof), and, if necessary, through the incurrence of additional debt and/or issuance of additional equity.

Management anticipates that the obligations outstanding as of December 31, 2025 will be repaid with new financing, equity offerings, asset sales and/or cash flow from operations:

Payments Due by Period

5 unchanged sentences

Operating lease obligations 327,967 67,812 124,392 94,320 41,443

360,906 75,646 118,862 94,246 72,152

Interest on debt 247,500 61,875 123,750 61,875

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(1) Includes the principal amount of the 5.625% Notes which are due in 2029 and does not include borrowings under the Credit Agreement.

(2) 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.

(2) Deferred acquisition consideration on the Consolidated Balance Sheets consists of deferred obligations related to contingent purchase price payments.

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In addition, certain of the Company’s deferred acquisition consideration is tied to continued employment of certain personnel of the acquired subsidiaries.

These arrangements are expensed over the respective vesting period (employment) period and therefore the expected, entire amount of payment is not reflected in the Consolidated Balance Sheet as of December 31, 2024 The Company estimates that the total amount to be paid related to such obligations was $52.1 million as of December 31, 2024, of which $27.7 million is expected to be paid in cash and the remaining in Company’s Class A Common Stock.

The total amount of cash expected to be paid in the next twelve months related to these arrangements was $0.4 million.

See Note 9 of the Notes to the Consolidated Financial Statements included in Item 8 of this Form 10-K for additional information regarding contingent deferred acquisition consideration.

The Company estimates that the total amount to be paid related to such obligations was $30.9 million as of December 31, 2025, of which $16.4 million is expected to be paid in cash and the remaining in Company’s Class A Common Stock.

The total amount of cash expected to be paid in the next twelve months related to these arrangements is $3.0 million.

See Note 9 of the Notes included in Item 8 of this Form 10-K for additional information regarding contingent deferred acquisition consideration.

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.

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The corresponding liability associated with these profits interests awards is included as a component of Accruals and other liabilities and Other liabilities on the Consolidated Balance Sheets.

See Note 14 of the Notes included in Item 8 of this Form 10-K for additional information regarding these material commitments.

The Company enters into certain long-term non-cancellable contracts for services such as revenue or profit share arrangements, cloud-based services, or software licensing.

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Our critical accounting estimates include our accounting for revenue recognition, business combinations, deferred acquisition consideration, goodwill and intangible assets, and income taxes.

The financial statements are evaluated on an ongoing basis and estimates are based on historical experience, current conditions and various other assumptions believed to be reasonable under the circumstances.

The financial statements are evaluated on an

ongoing basis and estimates are based on historical experience, current conditions and various other assumptions believed to be reasonable under the circumstances.

Actual results can differ from those estimates, and it is possible that the differences could be material.

23 unchanged sentences

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, or if the Company elects not to perform the qualitative assessment, 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.

1 unchanged sentence

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

The Company generally uses a combination of the income approach, which incorporates the use of the discounted cash flow (“DCF”) method, and the market approach, which incorporates the exercise of significant judgement about the use of earnings multiples based on market data and comparable companies.

The Company generally uses a combination of the income approach, which incorporates the use of the discounted cash flow (“DCF”) method, and the market approach, which incorporates the exercise of significant judgment about the use of earnings multiples based on market data and comparable companies.

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

1 unchanged sentence

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.

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 appropriate discount rates based on a reporting unit’s weighted average cost of capital (“WACC”) as determined by considering the observable WACC of comparable companies and factors specific to the reporting unit.

cost of capital (“WACC”) as determined by considering the observable WACC of comparable companies and factors specific to the reporting unit.

The terminal value is estimated using a constant growth method which requires an assumption about the expected long-term growth rate.

19 unchanged sentences

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 7. Management’s Discussion and Analysis