Stagwell (STGW -2.62%), a global marketing and communications company, released its earnings for the second quarter of fiscal 2025 on July 31, 2025. Top-line GAAP revenue reached $707 million, ahead of the $693.77 million analyst estimate, representing a 5% increase from the same period last year. Adjusted EPS (non-GAAP) of $0.17 also surpassed expectations by $0.01, posting a 21.4% rise over the prior year period. However, the company reported a GAAP net loss of $0.02 per share, slightly improved from a $0.03 loss in the prior-year quarter. The results reflect continued growth in digital business lines and strong client wins, supporting management’s reaffirmation of full-year 2025 guidance. Overall, the quarter showed progress in priority areas like digital transformation, efficiency initiatives, and the new business pipeline, despite uneven segment performance and another period of GAAP net losses.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| Adjusted Earnings Per Share (Non-GAAP) | $0.17 | $0.16 | $0.14 | 21.4 % |
| EPS (GAAP) | $(0.02) | $(0.03) | $0.01 | |
| Revenue (GAAP) | $707 million | $693.77 million | $671 million | 5.4% |
| Net Revenue (Non-GAAP) | $598 million | $554 million | 8.0 % | |
| Adjusted EBITDA | $93 million | $86 million | 8.1% |
Source: Analyst estimates provided by FactSet. Management expectations based on management’s guidance, as provided in Q1 2025 earnings report.
About Stagwell and Its Business Focus
Stagwell is a technology-focused marketing network that offers advertising, digital transformation, strategic communications, and data-driven services for brands globally. The company’s operations include major business lines such as Integrated Agencies, Brand Performance, and Communications, as well as technology platforms like Stagwell Marketing Cloud, which delivers software-as-a-service (SaaS) marketing tools.
In recent years, Stagwell has prioritized accelerating digital transformation. This means investing in AI-enabled marketing, proprietary technology, and cloud platforms. The company’s strategy also involves expanding its global footprint via acquisitions and forming partnerships, like its Global Affiliate Network. Key drivers for success include growth in digital services, acquiring new business wins, efficient cost management, and successfully integrating acquisitions.
Quarterly Performance and Key Developments
During Q2 2025, Stagwell posted higher-than-expected GAAP revenue and non-GAAP adjusted earnings, fueled by double-digit net revenue growth in its digital transformation offerings. Digital Transformation Net Revenue (excluding Advocacy services, which tend to be cyclical and tied to political events) rose 12% year over year. The company also delivered 10% net revenue growth from its core digital-first segments (net revenue excluding Advocacy), showing continued momentum as it gains market share.
Segment results varied across the business. The Integrated Agencies Network segment, which provides full-service marketing solutions, posted a 7.2% year-over-year increase in net revenue and a 14.0% rise in segment adjusted EBITDA. In contrast, the Brand Performance Network saw a 1.4% decline in net revenue and a 12.0% decrease in adjusted EBITDA compared to the prior year period, reflecting some pressure on margins and client spending. The Communications Network reported a small increase in revenue and a 12.7% drop in profitability compared to the prior year period. The All Other segment, while having a much smaller base, increased net revenue nearly sevenfold for the three months ended June 30, 2025, but continued to operate at a loss.
Stagwell highlighted continued momentum in business development, as evidenced by record net new business of $117 million in Q2 2025 and $130 million in Q1 2025, with last twelve-month net new business reaching $451 million as of Q2 2025. It recorded $117 million in net new client wins (net new business, a non-GAAP metric) in Q2 2025, following a near-record $130 million in Q1 2025. The company also continued its campaign of acquisitions and strategic cost savings, reporting $20 million in annualized cost reductions year-to-date as of Q2 2025, and remains ahead of its goal to reach $80–$100 million in run-rate cost savings by the end of 2026.
In terms of digital and technology offerings, Stagwell continued investment in proprietary AI and cloud-based tools. Its Stagwell Marketing Cloud platform, which bundles SaaS tools for marketers, and investments in augmented reality and customer data platforms, remain central to its growth plans. The company also highlighted strong performance among its top 25 customers, where revenue grew 26% in Q2 2025. These digital and technology products are aimed at helping clients automate, personalize, and optimize marketing at scale, supporting Stagwell’s strategy to become a leading provider of advanced marketing solutions.
STGW does not currently pay a dividend.
Financial Outlook and Future Considerations
Management reiterated guidance for FY2025, projecting approximately 8% net revenue growth, adjusted EBITDA of $410–$460 million, adjusted EPS of $0.75–$0.88, and free cash flow conversion above 45%. These targets include the expected impact of further acquisitions or divestitures. The leadership team pointed to the strong pipeline of new business and continued demand for digital transformation services in supporting the guidance outlook.
For future quarters, investors may want to monitor progress towards profitability, segment-level margin recovery, and execution of cost savings. Key metrics include net business wins, top 25 client growth, digital revenue mix, and cash flow trends. While adjusted profits and EBITDA improved in Q2 2025, GAAP net losses and leverage remain areas to watch closely.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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