QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | ||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Large accelerated Filer | ☐ | ☒ | |||||||||
Non-accelerated Filer | ☐ | Smaller reporting company | |||||||||
Emerging growth company |
Page | ||||||||
PART I. FINANCIAL INFORMATION | ||||||||
Item 1. | ||||||||
Unaudited Consolidated Statements of Comprehensive Income (Loss) for the Three Months Ended March 31, 2024 and 2023 | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II. OTHER INFORMATION | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Revenue | $ | $ | ||||||||||||
Operating Expenses | ||||||||||||||
Cost of services | ||||||||||||||
Office and general expenses | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Impairment and other losses | ||||||||||||||
Operating Income | ||||||||||||||
Other income (expenses): | ||||||||||||||
Interest expense, net | ( | ( | ||||||||||||
Foreign exchange, net | ( | ( | ||||||||||||
Other, net | ( | |||||||||||||
( | ( | |||||||||||||
Income (loss) before income taxes and equity in earnings of non-consolidated affiliates | ( | |||||||||||||
Income tax expense | ||||||||||||||
Loss before equity in earnings of non-consolidated affiliates | ( | ( | ||||||||||||
Equity in income (loss) of non-consolidated affiliates | ( | |||||||||||||
Net loss | ( | ( | ||||||||||||
Net (income) loss attributable to noncontrolling and redeemable noncontrolling interests | ( | |||||||||||||
Net income (loss) attributable to Stagwell Inc. common shareholders | $ | ( | $ | |||||||||||
Earnings (Loss) Per Common Share: | ||||||||||||||
Basic | $ | ( | $ | |||||||||||
Diluted | $ | ( | $ | — | ||||||||||
Weighted Average Number of Common Shares Outstanding: | ||||||||||||||
Basic | ||||||||||||||
Diluted |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
COMPREHENSIVE INCOME (LOSS) | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Other comprehensive income (loss) - Foreign currency translation adjustment | ( | ||||||||||
Comprehensive income (loss) for the period | ( | ||||||||||
Comprehensive loss attributable to the noncontrolling and redeemable noncontrolling interests | |||||||||||
Comprehensive income (loss) attributable to Stagwell Inc. common shareholders | $ | ( | $ |
March 31, 2024 | December 31, 2023 | ||||||||||
ASSETS | |||||||||||
Current Assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net | |||||||||||
Expenditures billable to clients | |||||||||||
Other current assets | |||||||||||
Total Current Assets | |||||||||||
Fixed assets, net | |||||||||||
Right-of-use lease assets - operating leases | |||||||||||
Goodwill | |||||||||||
Other intangible assets, net | |||||||||||
Other assets | |||||||||||
Total Assets | $ | $ | |||||||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS ("RNCI"), AND SHAREHOLDERS’ EQUITY | |||||||||||
Current Liabilities | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued media | |||||||||||
Accruals and other liabilities | |||||||||||
Advance billings | |||||||||||
Current portion of lease liabilities - operating leases | |||||||||||
Current portion of deferred acquisition consideration | |||||||||||
Total Current Liabilities | |||||||||||
Long-term debt | |||||||||||
Long-term portion of deferred acquisition consideration | |||||||||||
Long-term lease liabilities - operating leases | |||||||||||
Deferred tax liabilities, net | |||||||||||
Other liabilities | |||||||||||
Total Liabilities | |||||||||||
Redeemable Noncontrolling Interests | |||||||||||
Commitments, Contingencies and Guarantees (Note 10) | |||||||||||
Shareholders’ Equity | |||||||||||
Common shares - Class A & B | |||||||||||
Common shares - Class C | |||||||||||
Paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Stagwell Inc. Shareholders’ Equity | |||||||||||
Noncontrolling interests | |||||||||||
Total Shareholders’ Equity | |||||||||||
Total Liabilities, Redeemable Noncontrolling Interests and Shareholders’ Equity | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | ( | $ | ( | |||||||
Adjustments to reconcile net income to cash used in operating activities: | |||||||||||
Stock-based compensation | |||||||||||
Depreciation and amortization | |||||||||||
Amortization of right-of-use lease assets and lease liability interest | |||||||||||
Impairment and other losses | |||||||||||
Deferred income taxes | ( | ( | |||||||||
Adjustment to deferred acquisition consideration | |||||||||||
Other, net | ( | ||||||||||
Changes in working capital: | |||||||||||
Accounts receivable | ( | ( | |||||||||
Expenditures billable to clients | ( | ||||||||||
Other assets | ( | ( | |||||||||
Accounts payable | ( | ||||||||||
Accrued expenses and other liabilities | ( | ( | |||||||||
Advance billings | ( | ( | |||||||||
Current portion of lease liabilities - operating leases | ( | ( | |||||||||
Deferred acquisition related payments | ( | ||||||||||
Net cash used in operating activities | ( | ( | |||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | ( | ( | |||||||||
Acquisitions, net of cash acquired | ( | ( | |||||||||
Capitalized software | ( | ( | |||||||||
Other | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Repayment of borrowings under revolving credit facility | ( | ( | |||||||||
Proceeds from borrowings under revolving credit facility | |||||||||||
Shares repurchased and cancelled | ( | ( | |||||||||
Distributions to noncontrolling interests | ( | ( | |||||||||
Payment of deferred consideration | ( | ||||||||||
Net cash provided by financing activities | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | ||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
Supplemental Cash Flow Information: | |||||||||||
Cash income taxes paid | $ | $ | |||||||||
Cash interest paid | |||||||||||
Non-cash investing and financing activities: |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Acquisitions of business | — | ||||||||||
Acquisitions of noncontrolling interest | — | ||||||||||
Share issuances | — | ||||||||||
Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Shares - Class A | Common Shares - Class C | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Stagwell Inc. Shareholders’ Equity | Noncontrolling Interests | Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | $ | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) | — | — | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Total other comprehensive loss | — | — | — | — | — | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Purchases of noncontrolling interest | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in redemption value of RNCI | — | — | — | — | — | ( | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Restricted awards granted or vested | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares repurchased and cancelled | ( | ( | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Restricted shares forfeited | ( | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in ownership held by Class C shareholders | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued, acquisitions | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2024 | $ | $ | $ | $ | $ | ( | $ | $ | $ |
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Shares - Class A & B | Common Shares - Class C | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Stagwell Inc. Shareholders’ Equity | Noncontrolling Interests | Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total other comprehensive income (loss) | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions to noncontrolling interests | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Changes in redemption value of RNCI | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Restricted awards granted or vested | — | — | ( | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares repurchased and cancelled | ( | ( | — | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Change in ownership held by Class C shareholders | — | — | — | — | ( | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | $ | $ | ( | $ | $ | $ |
Amount | |||||
(dollars in thousands) | |||||
Cash and cash equivalents | $ | ||||
Accounts receivable, net | |||||
Expenditures billable to clients | |||||
Other current assets | |||||
Right-of-use lease assets | |||||
Fixed assets | |||||
Identifiable intangible assets | |||||
Accounts payable | ( | ||||
Accruals and other liabilities | ( | ||||
Advance billings | ( | ||||
Current portion of lease liabilities - operating leases | ( | ||||
Long-term lease liabilities - operating leases | ( | ||||
Net assets assumed | |||||
Goodwill | |||||
Purchase price consideration | $ |
Estimated Fair Value | Estimated Useful Life in Years | |||||||||||||
(dollars in thousands) | ||||||||||||||
Customer relationships | $ | |||||||||||||
Trade names | ||||||||||||||
Total acquired intangible assets | $ |
Three Months Ended March 31, 2023 | ||||||||
(dollars in thousands) | ||||||||
Revenue | $ | |||||||
Net loss | $ | ( |
Three Months Ended March 31, | |||||||||||||||||
Principal Capabilities | Reportable Segment | 2024 | 2023 | ||||||||||||||
(dollars in thousands) | |||||||||||||||||
Digital Transformation | All segments | $ | $ | ||||||||||||||
Creativity and Communications | All segments | ||||||||||||||||
Performance Media and Data | Brand Performance Network | ||||||||||||||||
Consumer Insights and Strategy | Integrated Agencies Network | ||||||||||||||||
Stagwell Marketing Cloud Group | All segments | ||||||||||||||||
$ | $ |
Three Months Ended March 31, | |||||||||||||||||
Geographical Location | Reportable Segment | 2024 | 2023 | ||||||||||||||
(dollars in thousands) | |||||||||||||||||
United States | All | $ | $ | ||||||||||||||
United Kingdom | All | ||||||||||||||||
Other | All | ||||||||||||||||
$ | $ |
Three Months Ended March 31, | |||||
2024 | |||||
Loss Per Share - Basic | |||||
Numerator: | |||||
Net loss | $ | ( | |||
Net loss attributable to Class C shareholders | |||||
Net income attributable to other equity interest holders | ( | ||||
Net income attributable to noncontrolling and redeemable noncontrolling interests | ( | ||||
Net loss attributable to Stagwell Inc. common shareholders | $ | ( | |||
Denominator: | |||||
Weighted average number of common shares outstanding | |||||
Loss Per Share - Basic | $ | ( | |||
Loss Per Share - Diluted | |||||
Numerator: | |||||
Net loss attributable to Stagwell Inc. common shareholders | $ | ( | |||
Adjustment to net loss: | |||||
Fair value adjustment for deferred acquisition obligations (net of income tax expense) | ( | ||||
$ | ( | ||||
Denominator: | |||||
Basic - Weighted Average number of common shares outstanding | |||||
Dilutive shares: | |||||
Class A Shares to settle deferred acquisition obligations | |||||
Dilutive - Weighted average number of common shares outstanding | |||||
Loss Per Share - Diluted | $ | ( | |||
Anti-dilutive: | |||||
Class C Shares | |||||
Stock Appreciation Rights and Restricted Awards | |||||
Employee Stock Purchase Plan shares |
Three Months Ended March 31, | |||||
2023 | |||||
Earnings Per Share - Basic | (amounts in thousands, except per share amounts) | ||||
Numerator: | |||||
Net loss | $ | ( | |||
Net loss attributable to Class C shareholders | |||||
Net loss attributable to other equity interest holders | |||||
Net loss attributable to noncontrolling and redeemable noncontrolling interests | $ | ||||
Net income attributable to Stagwell Inc. common shareholders | $ | ||||
Denominator: | |||||
Weighted Average number of common shares outstanding | |||||
Earnings Per Share - Basic | $ | ||||
Earnings Per Share - Diluted | |||||
Numerator: | |||||
Net income attributable to Stagwell Inc. common shareholders | $ | ||||
Net loss attributable to Class C shareholders | ( | ||||
$ | ( | ||||
Denominator: | |||||
Basic - Weighted Average number of common shares outstanding | |||||
Dilutive shares: | |||||
Stock appreciation right awards | |||||
Restricted share and restricted unit awards | |||||
Class C Shares | |||||
Dilutive - Weighted average number of common shares outstanding | |||||
Earnings Per Share - Diluted | $ | — | |||
March 31, 2024 | December 31, 2023 | ||||||||||
(dollars in thousands) | |||||||||||
Beginning balance | $ | $ | |||||||||
Payments (1) | ( | ( | |||||||||
Adjustments to deferred acquisition consideration (2) | |||||||||||
Additions (3) | |||||||||||
Currency translation adjustment | ( | ||||||||||
Other | ( | ||||||||||
Ending balance (4) | $ | $ | |||||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Lease Cost: | (dollars in thousands) | ||||||||||
Operating lease cost | $ | $ | |||||||||
Variable lease cost | |||||||||||
Sublease rental income | ( | ( | |||||||||
Total lease cost | $ | $ | |||||||||
Additional information: | |||||||||||
Cash paid for amounts included in the measurement of lease liabilities for operating leases | |||||||||||
Operating cash flows | $ | $ | |||||||||
Right-of-use lease assets obtained in exchange for operating lease liabilities and other non-cash adjustments (1) | $ | $ | |||||||||
Maturity Analysis | |||||
(dollars in thousands) | |||||
2024 | $ | ||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 | |||||
Thereafter | |||||
Total | |||||
Less: Present value discount | ( | ||||
Lease liability | $ |
March 31, 2024 | December 31, 2023 | ||||||||||
(dollars in thousands) | |||||||||||
Credit Agreement | $ | $ | |||||||||
Debt issuance costs | ( | ( | |||||||||
5.625% Notes, net of debt issuance costs | |||||||||||
Total long-term debt | $ | $ | |||||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(dollars in thousands) | |||||||||||
Net loss attributable to Class C shareholders | $ | ( | $ | ( | |||||||
Net income attributable to other equity interest holders | |||||||||||
Net loss attributable to noncontrolling interests | ( | ( | |||||||||
Net income (loss) attributable to redeemable noncontrolling interests | ( | ||||||||||
Net income (loss) attributable to noncontrolling and redeemable noncontrolling interests | $ | $ | ( |
March 31, 2024 | December 31, 2023 | ||||||||||
(dollars in thousands) | |||||||||||
Noncontrolling interest of Class C shareholders | $ | $ | |||||||||
Noncontrolling interest of other equity interest holders (1) | |||||||||||
Total noncontrolling interests | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||
(dollars in thousands) | |||||||||||
Beginning balance | $ | $ | |||||||||
Redemptions (1) | ( | ||||||||||
Distributions | ( | ( | |||||||||
Changes in redemption value | |||||||||||
Net income (loss) attributable to redeemable noncontrolling interests | ( | ||||||||||
Other | ( | ||||||||||
Ending balance | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
5.625% Notes | $ | $ | $ | $ |
Total Transaction Value | Revenue | Due From Related Party | |||||||||||||||||||||||||||||||||
Three Months Ended March 31, | March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||||||
Services | 2024 | 2023 | |||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||
Marketing and advertising services (1) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||
Marketing and advertising services (2) | $ | ||||||||||||||||||||||||||||||||||
Marketing and website development services (3) | $ Continuous (6) | ||||||||||||||||||||||||||||||||||
Polling services (4) | $ | ||||||||||||||||||||||||||||||||||
Polling services (5) | $ | ||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(dollars in thousands) | |||||||||||
Revenue: | |||||||||||
Integrated Agencies Network | $ | $ | |||||||||
Brand Performance Network | |||||||||||
Communications Network | |||||||||||
All Other | |||||||||||
Total Revenue | $ | $ | |||||||||
Adjusted EBITDA: | |||||||||||
Integrated Agencies Network | $ | $ | |||||||||
Brand Performance Network | |||||||||||
Communications Network | |||||||||||
All Other | ( | ( | |||||||||
Corporate | ( | ( | |||||||||
Total Adjusted EBITDA | $ | $ | |||||||||
Depreciation and amortization | $ | ( | $ | ( | |||||||
Impairment and other losses | ( | ||||||||||
Stock-based compensation | ( | ( | |||||||||
Deferred acquisition consideration | ( | ( | |||||||||
Other items, net | ( | ( | |||||||||
Total Operating Income | $ | $ | |||||||||
Other Income (expenses): | |||||||||||
Interest expense, net | $ | ( | $ | ( | |||||||
Foreign exchange, net | ( | ( | |||||||||
Other, net | ( | ||||||||||
Income (loss) before income taxes and equity in earnings of non-consolidated affiliates | ( | ||||||||||
Income tax expense | |||||||||||
Loss before equity in earnings of non-consolidated affiliates | ( | ( | |||||||||
Equity in income (loss) of non-consolidated affiliates | ( | ||||||||||
Net loss | ( | ( | |||||||||
Net (income) loss attributable to noncontrolling and redeemable noncontrolling interests | ( | ||||||||||
Net income (loss) attributable to Stagwell Inc. common shareholders | $ | ( | $ |
Unaudited Consolidated Statements of Operations and | |||||||||||||||||
Unaudited Consolidated Statements of Comprehensive Income (Loss) | |||||||||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||
As reported | Adjustment | As revised | |||||||||||||||
Income tax expense | $ | $ | ( | $ | |||||||||||||
Loss before equity in earnings of non-consolidated affiliates | ( | ( | |||||||||||||||
Net loss | ( | ( | |||||||||||||||
Net loss attributable to noncontrolling and redeemable noncontrolling interests | ( | ||||||||||||||||
Net income attributable to Stagwell Inc. common shareholders | |||||||||||||||||
Earnings (Loss) Per Common Share | |||||||||||||||||
Basic | |||||||||||||||||
Diluted | ( | ||||||||||||||||
Other comprehensive income - foreign currency translation adjustment | |||||||||||||||||
Other comprehensive income | |||||||||||||||||
Comprehensive income (loss) for the period | ( | ||||||||||||||||
Comprehensive loss attributable to the noncontrolling and redeemable noncontrolling interests | ( | ||||||||||||||||
Comprehensive income attributable to Stagwell Inc. common shareholders | ( |
Unaudited Consolidated Statements of Shareholders' Equity | |||||||||||||||||
Three Months Ended March 31, 2023 | |||||||||||||||||
As reported | Adjustment | As revised | |||||||||||||||
Net income attributable to Stagwell Inc. common shareholders | $ | $ | $ | ||||||||||||||
Net income (loss) attributable to Noncontrolling Interests | ( | ( | |||||||||||||||
Other comprehensive income | ( | ||||||||||||||||
Other comprehensive income (loss) attributable to Noncontrolling Interests | ( | ||||||||||||||||
Total other comprehensive income | $ | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(dollars in thousands) | |||||||||||
Revenue: | |||||||||||
Integrated Agencies Network | $ | 352,719 | $ | 341,205 | |||||||
Brand Performance Network | 213,962 | 201,928 | |||||||||
Communications Network | 93,746 | 66,459 | |||||||||
All Other | 9,632 | 12,852 | |||||||||
Total Revenue | $ | 670,059 | $ | 622,444 | |||||||
Operating Income | $ | 25,854 | $ | 16,233 | |||||||
Other Income (Expenses): | |||||||||||
Interest expense, net | $ | (20,965) | $ | (18,189) | |||||||
Foreign exchange, net | (2,258) | (670) | |||||||||
Other, net | (1,267) | 220 | |||||||||
Income (loss) before income taxes and equity in earnings of non-consolidated affiliates | 1,364 | (2,406) | |||||||||
Income tax expense | 2,585 | 236 | |||||||||
Loss before equity in earnings of non-consolidated affiliates | (1,221) | (2,642) | |||||||||
Equity in income (loss) of non-consolidated affiliates | 508 | (227) | |||||||||
Net loss | (713) | (2,869) | |||||||||
Net (income) loss attributable to noncontrolling and redeemable noncontrolling interests | (569) | 4,258 | |||||||||
Net income (loss) attributable to Stagwell Inc. common shareholders | $ | (1,282) | $ | 1,389 | |||||||
Reconciliation to Adjusted EBITDA: | |||||||||||
Net income (loss) attributable to Stagwell Inc. common shareholders | $ | (1,282) | $ | 1,389 | |||||||
Non-operating items (1) | 27,136 | 14,844 | |||||||||
Operating income | 25,854 | 16,233 | |||||||||
Depreciation and amortization | 34,836 | 33,477 | |||||||||
Impairment and other losses | 1,500 | — | |||||||||
Stock-based compensation | 16,116 | 12,004 | |||||||||
Deferred acquisition consideration | 154 | 4,088 | |||||||||
Other items, net | 11,856 | 6,420 | |||||||||
Adjusted EBITDA | $ | 90,316 | $ | 72,222 | |||||||
(1) Non-operating items includes items within the Statements of Operations, below Operating Income, and above Net income (loss) attributable to Stagwell Inc. common shareholders. |
Three Months Ended March 31, | ||||||||||||||||||||||||||
2024 | 2023 | Change | ||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||
$ | % | |||||||||||||||||||||||||
Revenue | $ | 670,059 | $ | 622,444 | $ | 47,615 | 7.6 | % | ||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||
Cost of services | 444,526 | 413,898 | 30,628 | 7.4 | % | |||||||||||||||||||||
Office and general expenses | 163,343 | 158,836 | 4,507 | 2.8 | % | |||||||||||||||||||||
Depreciation and amortization | 34,836 | 33,477 | 1,359 | 4.1 | % | |||||||||||||||||||||
Impairment and other losses | 1,500 | — | 1,500 | 100.0 | % | |||||||||||||||||||||
$ | 644,205 | $ | 606,211 | $ | 37,994 | 6.3 | % | |||||||||||||||||||
Operating Income | $ | 25,854 | $ | 16,233 | $ | 9,621 | 59.3 | % |
Three Months Ended March 31, | |||||||||||||||||||||||
2024 | 2023 | Change | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
$ | % | ||||||||||||||||||||||
Net Revenue | $ | 532,454 | $ | 521,662 | $ | 10,792 | 2.1 | % | |||||||||||||||
Billable costs | 137,605 | 100,782 | 36,823 | 36.5 | % | ||||||||||||||||||
Revenue | 670,059 | 622,444 | 47,615 | 7.6 | % | ||||||||||||||||||
Billable costs | 137,605 | 100,782 | 36,823 | 36.5 | % | ||||||||||||||||||
Staff costs | 342,157 | 349,613 | (7,456) | (2.1) | % | ||||||||||||||||||
Administrative costs | 67,163 | 68,240 | (1,077) | (1.6) | % | ||||||||||||||||||
Unbillable and other costs, net | 32,818 | 31,587 | 1,231 | 3.9 | % | ||||||||||||||||||
Adjusted EBITDA | 90,316 | 72,222 | 18,094 | 25.1 | % | ||||||||||||||||||
Stock-based compensation | 16,116 | 12,004 | 4,112 | 34.3 | % | ||||||||||||||||||
Depreciation and amortization | 34,836 | 33,477 | 1,359 | 4.1 | % | ||||||||||||||||||
Deferred acquisition consideration | 154 | 4,088 | (3,934) | (96.2) | % | ||||||||||||||||||
Impairment and other losses | 1,500 | — | 1,500 | 100.0 | % | ||||||||||||||||||
Other items, net | 11,856 | 6,420 | 5,436 | 84.7 | % | ||||||||||||||||||
Operating Income (1) | $ | 25,854 | $ | 16,233 | $ | 9,621 | 59.3 | % | |||||||||||||||
(1) See the Results of Operations section above for a reconciliation of Operating Income to Net income (loss) attributable to Stagwell Inc. common shareholders. |
Net Revenue - Components of Change | Change | ||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2023 | Foreign Currency | Net Acquisitions (Divestitures) | Organic | Total Change | Three Months Ended March 31, 2024 | Organic | Total | ||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Integrated Agencies Network | $304,187 | $369 | $(357) | $(11,429) | $(11,417) | $292,770 | (3.8)% | (3.8)% | |||||||||||||||||||||||||||||||||||||||
Brand Performance Network | 151,652 | 1,708 | 1,708 | 7,496 | 10,912 | 162,564 | 4.9% | 7.2% | |||||||||||||||||||||||||||||||||||||||
Communications Network | 52,971 | (49) | 273 | 14,292 | 14,516 | 67,487 | 27.0% | 27.4% | |||||||||||||||||||||||||||||||||||||||
All Other | 12,852 | (202) | (1,691) | (1,326) | (3,219) | 9,633 | (10.3)% | (25.0)% | |||||||||||||||||||||||||||||||||||||||
$521,662 | $1,826 | $(67) | $9,033 | $10,792 | $532,454 | 1.7% | 2.1% | ||||||||||||||||||||||||||||||||||||||||
Component % change | 0.4% | —% | 1.7% | 2.1% |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(dollars in thousands) | |||||||||||
United States | $ | 432,271 | $ | 424,318 | |||||||
United Kingdom | 37,153 | 32,490 | |||||||||
Other | 63,030 | 64,854 | |||||||||
Total | $ | 532,454 | $ | 521,662 |
GAAP | Adjustments(1) | Non-GAAP | ||||||||||||||||||
(amounts in thousands, except per share amounts) | ||||||||||||||||||||
Net income (loss) attributable to Stagwell Inc. common shareholders | $ | (1,506) | $ | 19,480 | $ | 17,974 | ||||||||||||||
Net income attributable to Class C shareholders | — | 24,554 | 24,554 | |||||||||||||||||
Net income (loss) attributable to Stagwell Inc. and Class C and adjusted net income | $ | (1,506) | $ | 44,034 | $ | 42,528 | ||||||||||||||
Weighted average number of common shares outstanding | 116,405 | 4,534 | 120,939 | |||||||||||||||||
Weighted average number of common Class C shares outstanding | — | 151,649 | 151,649 | |||||||||||||||||
Weighted average number of shares outstanding | 116,405 | 156,183 | 272,588 | |||||||||||||||||
Diluted EPS and Adjusted Diluted EPS | $ | (0.01) | $ | 0.16 | ||||||||||||||||
Adjustments to Net Income (loss) (1) | ||||||||||||||||||||
Amortization | $ | 28,203 | ||||||||||||||||||
Impairment and other losses | 1,500 | |||||||||||||||||||
Stock-based compensation | 16,116 | |||||||||||||||||||
Deferred acquisition consideration | 154 | |||||||||||||||||||
Other items, net | 11,856 | |||||||||||||||||||
57,829 | ||||||||||||||||||||
Adjusted tax expense | (12,748) | |||||||||||||||||||
45,081 | ||||||||||||||||||||
Net loss attributable to Class C shareholders | (1,047) | |||||||||||||||||||
$ | 44,034 | |||||||||||||||||||
Allocation of adjustments to net income (loss) 1 | ||||||||||||||||||||
Net income attributable to Stagwell Inc. common shareholders | $ | 19,480 | ||||||||||||||||||
Net income attributable to Class C shareholders | 25,601 | |||||||||||||||||||
Net loss attributable to Class C shareholders | (1,047) | |||||||||||||||||||
24,554 | ||||||||||||||||||||
$ | 44,034 | |||||||||||||||||||
GAAP | Adjustments(1) | Non-GAAP | ||||||||||||||||||
(amounts in thousands, except per share amounts) | ||||||||||||||||||||
Net income attributable to Stagwell Inc. common shareholders | $ | 1,389 | $ | 18,055 | $ | 19,444 | ||||||||||||||
Net income (loss) attributable to Class C shareholders | (1,963) | 22,399 | 20,436 | |||||||||||||||||
Net income (loss) attributable to Stagwell Inc. and Class C and adjusted net income | $ | (574) | $ | 40,454 | $ | 39,880 | ||||||||||||||
Weighted average number of common shares outstanding | 128,897 | — | 128,897 | |||||||||||||||||
Weighted average number of common Class C shares outstanding | 160,909 | — | 160,909 | |||||||||||||||||
Weighted average number of shares outstanding | 289,806 | — | 289,806 | |||||||||||||||||
Diluted EPS and Adjusted Diluted EPS | $ | — | $ | 0.14 | ||||||||||||||||
Adjustments to Net income (loss) (1) | ||||||||||||||||||||
Amortization | $ | 26,732 | ||||||||||||||||||
Impairment and other losses | — | |||||||||||||||||||
Stock-based compensation | 12,004 | |||||||||||||||||||
Deferred acquisition consideration | 4,088 | |||||||||||||||||||
Other items, net | 6,420 | |||||||||||||||||||
49,244 | ||||||||||||||||||||
Adjusted tax expense | (8,790) | |||||||||||||||||||
$ | 40,454 | |||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||||||||||
2024 | 2023 | Change | ||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||
$ | % | |||||||||||||||||||||||||
Revenue | $ | 352,719 | $ | 341,205 | $ | 11,514 | 3.4 | % | ||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||
Cost of services | 240,481 | 227,398 | 13,083 | 5.8 | % | |||||||||||||||||||||
Office and general expenses | 69,007 | 71,319 | (2,312) | (3.2) | % | |||||||||||||||||||||
Depreciation and amortization | 19,381 | 18,950 | 431 | 2.3 | % | |||||||||||||||||||||
Impairment and other losses | 1,500 | — | 1,500 | 100.0 | % | |||||||||||||||||||||
$ | 330,369 | $ | 317,667 | $ | 12,702 | 4.0 | % | |||||||||||||||||||
Operating Income | $ | 22,350 | $ | 23,538 | $ | (1,188) | (5.0) | % |
Three Months Ended March 31, | |||||||||||||||||||||||
2024 | 2023 | Change | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
$ | % | ||||||||||||||||||||||
Net Revenue | $ | 292,772 | $ | 304,187 | $ | (11,415) | (3.8) | % | |||||||||||||||
Billable costs | 59,947 | 37,018 | 22,929 | 61.9 | % | ||||||||||||||||||
Revenue | 352,719 | 341,205 | 11,514 | 3.4 | % | ||||||||||||||||||
Billable costs | 59,947 | 37,018 | 22,929 | 61.9 | % | ||||||||||||||||||
Staff costs | 186,534 | 196,165 | (9,631) | (4.9) | % | ||||||||||||||||||
Administrative costs | 30,602 | 31,381 | (779) | (2.5) | % | ||||||||||||||||||
Unbillable and other costs, net | 15,528 | 16,782 | (1,254) | (7.5) | % | ||||||||||||||||||
Adjusted EBITDA | 60,108 | 59,859 | 249 | 0.4 | % | ||||||||||||||||||
Stock-based compensation | 9,321 | 8,288 | 1,033 | 12.5 | % | ||||||||||||||||||
Depreciation and amortization | 19,381 | 18,950 | 431 | 2.3 | % | ||||||||||||||||||
Deferred acquisition consideration | 2,045 | 5,991 | (3,946) | (65.9) | % | ||||||||||||||||||
Impairment and other losses | 1,500 | — | 1,500 | 100.0 | % | ||||||||||||||||||
Other items, net | 5,511 | 3,092 | 2,419 | 78.2 | % | ||||||||||||||||||
Operating Income | $ | 22,350 | $ | 23,538 | $ | (1,188) | (5.0) | % |
Net Revenue - Components of Change | Change | ||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2023 | Foreign Currency | Net Acquisitions (Divestitures) | Organic | Total Change | Three Months Ended March 31, 2024 | Organic | Total | ||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Integrated Agencies Network | $304,187 | $369 | $(357) | $(11,429) | $(11,417) | $292,770 | (3.8)% | (3.8)% | |||||||||||||||||||||||||||||||||||||||
Component % change | 0.1% | (0.1)% | (3.8)% | (3.8)% |
Three Months Ended March 31, | ||||||||||||||||||||||||||
2024 | 2023 | Change | ||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||
$ | % | |||||||||||||||||||||||||
Revenue | $ | 213,962 | $ | 201,928 | $ | 12,034 | 6.0 | % | ||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||
Cost of services | 139,787 | 132,048 | 7,739 | 5.9 | % | |||||||||||||||||||||
Office and general expenses | 52,966 | 48,245 | 4,721 | 9.8 | % | |||||||||||||||||||||
Depreciation and amortization | 7,514 | 7,937 | (423) | (5.3) | % | |||||||||||||||||||||
$ | 200,267 | $ | 188,230 | $ | 12,037 | 6.4 | % | |||||||||||||||||||
Operating Income | $ | 13,695 | $ | 13,698 | $ | (3) | — | % |
Three Months Ended March 31, | |||||||||||||||||||||||
2024 | 2023 | Change | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
$ | % | ||||||||||||||||||||||
Net Revenue | $ | 162,562 | $ | 151,652 | $ | 10,910 | 7.2 | % | |||||||||||||||
Billable costs | 51,400 | 50,276 | 1,124 | 2.2 | % | ||||||||||||||||||
Revenue | 213,962 | 201,928 | 12,034 | 6.0 | % | ||||||||||||||||||
Billable costs | 51,400 | 50,276 | 1,124 | 2.2 | % | ||||||||||||||||||
Staff costs | 98,431 | 96,060 | 2,371 | 2.5 | % | ||||||||||||||||||
Administrative costs | 22,071 | 20,931 | 1,140 | 5.4 | % | ||||||||||||||||||
Unbillable and other costs, net | 14,566 | 11,713 | 2,853 | 24.4 | % | ||||||||||||||||||
Adjusted EBITDA | 27,494 | 22,948 | 4,546 | 19.8 | % | ||||||||||||||||||
Stock-based compensation | 2,043 | 567 | 1,476 | NM | |||||||||||||||||||
Depreciation and amortization | 7,514 | 7,937 | (423) | (5.3) | % | ||||||||||||||||||
Deferred acquisition consideration | (777) | (1,179) | 402 | (34.1) | % | ||||||||||||||||||
Other items, net | 5,019 | 1,925 | 3,094 | NM | |||||||||||||||||||
Operating Income | $ | 13,695 | $ | 13,698 | $ | (3) | — | % |
Net Revenue - Components of Change | Change | ||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2023 | Foreign Currency | Net Acquisitions (Divestitures) | Organic | Total Change | Three Months Ended March 31, 2024 | Organic | Total | ||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Brand Performance Network | $151,652 | $1,708 | $1,708 | $7,496 | $10,912 | $162,564 | 4.9% | 7.2% | |||||||||||||||||||||||||||||||||||||||
Component % change | 1.1% | 1.1% | 4.9% | 7.2% |
Three Months Ended March 31, | ||||||||||||||||||||||||||
2024 | 2023 | Change | ||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||
$ | % | |||||||||||||||||||||||||
Revenue | $ | 93,746 | $ | 66,459 | $ | 27,287 | 41.1 | % | ||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||
Cost of services | 58,504 | 46,881 | 11,623 | 24.8 | % | |||||||||||||||||||||
Office and general expenses | 16,075 | 17,217 | (1,142) | (6.6) | % | |||||||||||||||||||||
Depreciation and amortization | 2,894 | 2,713 | 181 | 6.7 | % | |||||||||||||||||||||
$ | 77,473 | $ | 66,811 | $ | 10,662 | 16.0 | % | |||||||||||||||||||
Operating Income (Loss) | $ | 16,273 | $ | (352) | $ | 16,625 | NM |
Three Months Ended March 31, | |||||||||||||||||||||||
2024 | 2023 | Change | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
$ | % | ||||||||||||||||||||||
Net Revenue | $ | 67,488 | $ | 52,971 | $ | 14,517 | 27.4 | % | |||||||||||||||
Billable costs | 26,258 | 13,488 | 12,770 | 94.7 | % | ||||||||||||||||||
Revenue | 93,746 | 66,459 | 27,287 | 41.1 | % | ||||||||||||||||||
Billable costs | 26,258 | 13,488 | 12,770 | 94.7 | % | ||||||||||||||||||
Staff costs | 39,264 | 40,077 | (813) | (2.0) | % | ||||||||||||||||||
Administrative costs | 8,704 | 8,756 | (52) | (0.6) | % | ||||||||||||||||||
Unbillable and other costs, net | 136 | 126 | 10 | 7.9 | % | ||||||||||||||||||
Adjusted EBITDA | 19,384 | 4,012 | 15,372 | NM | |||||||||||||||||||
Stock-based compensation | 1,049 | 507 | 542 | NM | |||||||||||||||||||
Depreciation and amortization | 2,894 | 2,713 | 181 | 6.7 | % | ||||||||||||||||||
Deferred acquisition consideration | (1,114) | 539 | (1,653) | NM | |||||||||||||||||||
Other items, net | 282 | 605 | (323) | (53.4) | % | ||||||||||||||||||
Operating Income (Loss) | $ | 16,273 | $ | (352) | $ | 16,625 | NM |
Net Revenue - Components of Change | Change | ||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2023 | Foreign Currency | Net Acquisitions (Divestitures) | Organic | Total Change | Three Months Ended March 31, 2024 | Organic | Total | ||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
Communications Network | $52,971 | $(49) | $273 | $14,292 | $14,516 | $67,487 | 27.0% | 27.4% | |||||||||||||||||||||||||||||||||||||||
Component % change | (0.1)% | 0.5% | 27.0% | 27.4% |
Three Months Ended March 31, | ||||||||||||||||||||||||||
2024 | 2023 | Change | ||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||
$ | % | |||||||||||||||||||||||||
Revenue | $ | 9,632 | $ | 12,852 | $ | (3,220) | (25.1) | % | ||||||||||||||||||
Operating Expenses | ||||||||||||||||||||||||||
Cost of services | 5,754 | 7,680 | (1,926) | (25.1) | % | |||||||||||||||||||||
Office and general expenses | 8,136 | 7,746 | 390 | 5.0 | % | |||||||||||||||||||||
Depreciation and amortization | 2,421 | 1,948 | 473 | 24.3 | % | |||||||||||||||||||||
$ | 16,311 | $ | 17,374 | $ | (1,063) | (6.1) | % | |||||||||||||||||||
Operating Loss | $ | (6,679) | $ | (4,522) | $ | (2,157) | 47.7 | % |
Three Months Ended March 31, | |||||||||||||||||||||||
2024 | 2023 | Change | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
$ | % | ||||||||||||||||||||||
Net Revenue | $ | 9,632 | $ | 12,852 | $ | (3,220) | (25.1) | % | |||||||||||||||
Revenue (1) | 9,632 | 12,852 | (3,220) | (25.1) | % | ||||||||||||||||||
Staff costs | 7,821 | 10,487 | (2,666) | (25.4) | % | ||||||||||||||||||
Administrative costs (1) | 3,209 | 3,195 | 14 | 0.4 | % | ||||||||||||||||||
Unbillable and other costs, net | 2,588 | 2,975 | (387) | (13.0) | % | ||||||||||||||||||
Adjusted EBITDA | (3,986) | (3,805) | (181) | 4.8 | % | ||||||||||||||||||
Stock-based compensation | 98 | 32 | 66 | NM | |||||||||||||||||||
Depreciation and amortization | 2,421 | 1,948 | 473 | 24.3 | % | ||||||||||||||||||
Deferred acquisition consideration | — | (1,263) | 1,263 | (100.0) | % | ||||||||||||||||||
Other items, net | 174 | — | 174 | 100.0 | % | ||||||||||||||||||
Operating Loss | $ | (6,679) | $ | (4,522) | $ | (2,157) | 47.7 | % |
Net Revenue - Components of Change | Change | ||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2023 | Foreign Currency | Net Acquisitions (Divestitures) | Organic | Total Change | Three Months Ended March 31, 2024 | Organic | Total | ||||||||||||||||||||||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||
All Other | $12,852 | $(202) | $(1,691) | $(1,326) | $(3,219) | $9,633 | (10.3)% | (25.0)% | |||||||||||||||||||||||||||||||||||||||
Component % change | (1.6)% | (13.2)% | (10.3)% | (25.0)% |
Three Months Ended March 31, | |||||||||||||||||||||||
2024 | 2023 | Change | |||||||||||||||||||||
(dollars in thousands) | |||||||||||||||||||||||
$ | % | ||||||||||||||||||||||
Staff costs | $ | 10,107 | $ | 6,824 | $ | 3,283 | 48.1 | % | |||||||||||||||
Administrative costs | 2,577 | 3,977 | (1,400) | (35.2) | % | ||||||||||||||||||
Unbillable and other costs, net | — | (9) | 9 | (100.0) | % | ||||||||||||||||||
Adjusted EBITDA | (12,684) | (10,792) | (1,892) | 17.5 | % | ||||||||||||||||||
Stock-based compensation | 3,605 | 2,610 | 995 | 38.1 | % | ||||||||||||||||||
Depreciation and amortization | 2,626 | 1,929 | 697 | 36.1 | % | ||||||||||||||||||
Other items, net | 870 | 798 | 72 | 9.0 | % | ||||||||||||||||||
Operating Loss | $ | (19,785) | $ | (16,129) | $ | (3,656) | 22.7 | % |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(dollars in thousands) | |||||||||||
Net cash used in operating activities | $ | (53,121) | $ | (85,113) | |||||||
Net cash used in investing activities | (26,124) | (10,815) | |||||||||
Net cash provided by financing activities | 91,086 | 12,923 |
March 31, 2024 | |||||
Total Leverage Ratio | 3.21 | ||||
Maximum per covenant | 4.25 |
Period | Total Number of Shares Purchased (1) | Average Price Paid Per Share (1) | Total Number of Shares Purchased as Part of Publicly Announced Program (2) | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (2) | ||||||||||||||||||||||
1/1/2024 - 1/31/2024 | 1,034,693 | $ | 6.56 | 1,029,540 | $ | 131,839,608 | ||||||||||||||||||||
2/1/2024 - 2/28/2024 | 1,587,444 | $ | 6.47 | 1,114,223 | $ | 124,812,923 | ||||||||||||||||||||
3/1/2024 - 3/31/2024 | 2,205,730 | $ | 5.83 | 1,877,200 | $ | 113,953,763 | ||||||||||||||||||||
Total | 4,827,867 | $ | 6.20 | 4,020,963 | $ | 113,953,763 |
Exhibit No. | Description | |||||||
Second Amended and Restated Certificate of Incorporation of Stagwell Inc., as amended (incorporated by reference to Exhibit 3.1 to the Company’s Form 10-Q filed on May 9, 2023). | ||||||||
Amended and Restated Bylaws of Stagwell Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K filed on August 2, 2021). | ||||||||
Certification by Chief Executive Officer pursuant to Rules 13a - 14(a) and 15d - 14(a) under the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002.* | ||||||||
Certification by Chief Financial Officer pursuant to Rules 13a - 14(a) and 15d - 14(a) under the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002.* | ||||||||
Certification by Chief Executive Officer pursuant to 18 USC. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** | ||||||||
Certification by Chief Financial Officer pursuant to 18 USC. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.** | ||||||||
101 | Interactive Data File, for the period ended March 31, 2024. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.* | |||||||
104 | Cover Page Interactive Data File. The cover page XBRL tags are embedded within the inline XBRL document and are included in Exhibit 101.* |
STAGWELL INC. | |||||
/s/ Mark Penn | |||||
Mark Penn | |||||
Chairman of the Board and Chief Executive Officer (Principal Executive Officer) | |||||
May 2, 2024 | |||||
/s/ Frank Lanuto | |||||
Frank Lanuto | |||||
Chief Financial Officer (Principal Financial Officer) | |||||
May 2, 2024 | |||||
Date: May 2, 2024 | /s/ MARK PENN | |||||||
By: | Mark Penn | |||||||
Title: | Chairman and Chief Executive Officer | |||||||
(Principal Executive Officer) |
Date: May 2, 2024 | /s/ FRANK LANUTO | |||||||
By: | Frank Lanuto | |||||||
Title: | Chief Financial Officer | |||||||
(Principal Financial Officer) |
Date: May 2, 2024 | ||||||||
/s/ MARK PENN | ||||||||
By: | Mark Penn | |||||||
Title: | Chairman and Chief Executive Officer | |||||||
(Principal Executive Officer) | ||||||||
Date: May 2, 2024 | ||||||||
/s/ FRANK LANUTO | ||||||||
By: | Frank Lanuto | |||||||
Title: | Chief Financial Officer | |||||||
(Principal Financial Officer) | ||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Comprehensive income (loss) | ||
Net Income (Loss), Including Portion Attributable to Nonredeemable Noncontrolling Interest | $ (713) | $ (2,869) |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Other comprehensive income (loss) - Foreign currency translation adjustment | (7,146) | 4,447 |
Comprehensive income (loss) for the period | (7,859) | 1,578 |
Comprehensive loss attributable to the noncontrolling and redeemable noncontrolling interests | 3,713 | 2,036 |
Comprehensive income (loss) attributable to Stagwell Inc. common shareholders | $ (4,146) | $ 3,614 |
Basis of Presentation and Recent Developments |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Recent Developments | 1. Business and Basis of Presentation Stagwell Inc. (the “Company,” “we,” or “Stagwell”), incorporated under the laws of Delaware, conducts its business through its networks and its portfolio of marketing services firms (“Brands”), 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. The accompanying Unaudited Consolidated Financial Statements include the accounts of Stagwell and its subsidiaries. Stagwell has prepared the unaudited consolidated interim financial statements included herein in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for reporting interim financial information on Form 10-Q. Accordingly, pursuant to these rules, the footnotes do not include certain information and disclosures. The preparation of financial statements in conformity with GAAP requires us to make judgments, assumptions and estimates about current and future results of operations and cash flows that affect the amounts reported and disclosed. Actual results could differ from these estimates and assumptions. The consolidated reports for interim periods are not necessarily indicative of results for the full year and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 Form 10-K”). The accompanying financial statements reflect all adjustments, consisting of normal recurring accruals, which in the opinion of management are necessary for a fair statement, in all material respects, of the information contained therein. Intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications have been made to the prior year financial information to conform to the current year presentation. Revision of Previously Issued Unaudited Consolidated Financial Statements In connection with the preparation of the consolidated financial statements during 2023, the Company identified the following errors in the areas of income taxes, noncontrolling interests, and accumulated other comprehensive loss related to its previously filed 2022 annual consolidated financial statements. •In the first quarter of 2023, we identified an error related to foreign currency gains and losses not being allocated from Accumulated other comprehensive loss to noncontrolling interest shareholders. Noncontrolling interests and Accumulated other comprehensive loss was overstated by $23.5 million. There was no impact to Total Shareholders’ Equity as of December 31, 2022. Also, we identified a $2.1 million understatement of income tax expense, and overstatement to income tax payable (Accruals and Other Liabilities) and deferred tax asset (Other Current Assets) of $2.4 million and $4.5 million, respectively, relating to an error in the calculation of valuation allowances. These errors were originally corrected within the first quarter of 2023 as management determined the errors were not material to the quarterly financial statements as of and for the three months ended March 31, 2023. •In the second quarter of 2023, we identified an error related to an understatement of income tax expense and income tax payable (Accruals and Other Liabilities) by $5.3 million due to incorrect applications of tax payments. The Company also identified a misclassification of $12.9 million as a result of improper netting of income tax receivables (Other Current Assets) and payables (Accruals and Other Liabilities). This error resulted in an incremental $7.3 million misclassification of income tax receivables and payables as of March 31, 2023, which was originally corrected within the second quarter of 2023 as management determined the errors were not material to the quarterly financial statements as of and for the three and six months ended June 30, 2023. •In the fourth quarter of 2023, we identified an incremental $10.4 million understatement of tax expense as well as balance sheet misclassification between income tax accounts included within Other Current Assets, Other Assets, Accruals and Other Liabilities, and Deferred Tax Liabilities. These errors were related to the incorrect applications of tax payments, and the incorrect calculation of deferred tax balances for items mainly associated with interest expense, intangible assets, fixed assets, state tax, basis adjustment for partnership, and the related valuation allowance. We also identified an error in our tax receivable agreement (“TRA”) liability calculation which resulted in a $2.1 million overstatement of other expenses and of Other Liabilities. As a result of the above, the Company’s previously filed first quarter of 2023 interim consolidated financial statements have been revised. See Note 17 of the Notes included herein for additional information. The remaining 2023 interim financial statements will be presented as revised when such financial statements are issued. Recent Developments On April 3, 2024, the Company acquired What’s Next Partners (“WNP”), for 4.3 million Euros (“€”) (approximately $5 million) in cash. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of €8.5 million (approximately $9 million), partially subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of the Company's Class A common stock, par value $0.001 per share (the “Class A Common Stock”), at the Company’s discretion. On April 5, 2024, the Company acquired PROS Agency (“PROS”), for 26.5 million Brazilian reals (“R$”) (approximately $5 million) of which R$21.2 million (approximately $4 million) was paid in cash and R$5.3 million (approximately $1 million) in 182,256 shares of Class A Common Stock, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of R$72.5 million (approximately $14 million), partially subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion.
|
Acquisitions and Dispositions |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions and Dispositions | Acquisitions 2024 Acquisitions Acquisition of Team Epiphany On January 2, 2024, the Company acquired Team Epiphany, LLC (“Epiphany”), for $15.8 million, of which $10.8 million was paid in cash and $5.0 million in 797,916 shares of Class A Common Stock, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of $17.0 million, subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion. The consideration has been allocated to the assets acquired and assumed liabilities of Epiphany based upon fair values. The preliminary purchase price allocation is as follows:
The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Epiphany. Goodwill of $7.2 million was assigned to the Integrated Agencies Network reportable segment. The goodwill is deductible for income tax purposes. Intangible assets consist of trade names and customer relationships. We amortize purchased intangible assets on a straight-line basis over their respective useful lives. The weighted average life of the total acquired identifiable intangible assets is three years. The following table presents the details of identifiable intangible assets acquired:
Pro Forma Financial Information The unaudited pro forma information for the periods set forth below gives effect to the acquisition as if it occurred as of January 1, 2023. The pro forma revenue and net income (loss) for the three months ended March 31, 2024 would not be materially different from the actual revenue and net income (loss) reported. The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisition been consummated as of that time.
Revenue and Net income attributable to Epiphany, included within the Unaudited Consolidated Statements of Operations for the three months ended March 31, 2024 was $13.4 million and less than $0.1 million, respectively. The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments. Other 2024 Acquisitions On March 1, 2024, the Company acquired Sidekick Live Limited (“Sidekick”), for 4.6 million British pounds (“£”) (approximately $6 million) of which £3.6 million (approximately $5 million) was paid in cash, £0.1 million (approximately $0.2 million) was incurred as a certain payable to sellers, and £0.9 million (approximately $1 million) in 195,431 shares of Class A Common Stock, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of £8.0 million (approximately $10 million), subject to continued employment requirements and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion. The excess of purchase consideration over the fair value of the net assets acquired was mainly recorded as goodwill, which is primarily attributable to the assembled workforce of Sidekick and expected growth related to new customer relationships. Goodwill of $2.0 million was assigned to the Communications Network reportable segment. The goodwill is not fully deductible for income tax purposes. The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments. 2023 Acquisitions On November 1, 2023, the Company acquired Movers and Shakers LLC (“Movers and Shakers”), a digital creative company, for $14.7 million, of which $10.2 million was paid in cash and $4.5 million in 1.0 million shares of Class A Common Stock, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of $35.0 million, subject to meeting certain future earnings targets and continued employment, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion. The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Movers and Shakers and expected growth related to new customer relationships. Goodwill of $8.2 million was assigned to the Integrated Agencies Network reportable segment. The goodwill is fully deductible for income tax purposes. The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments. On October 2, 2023, the Company acquired Left Field Labs LLC (“LFL”), a digital experience design and strategy company, for $13.2 million, of which $9.4 million was paid in cash and $3.8 million in 825,402 of Class A Common Stock, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of $51.0 million, subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion. The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of LFL and expected growth related to new customer relationships. Goodwill of $8.0 million was assigned to the Integrated Agencies Network reportable segment. The goodwill is fully deductible for income tax purposes. The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments. On July 3, 2023, the Company acquired Tinsel Experiential Design LLC (“Tinsel”), a marketing and design company, for $2.5 million in cash consideration, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration, subject to continued employment, and meeting certain future earnings targets. The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Tinsel and expected growth related to new customer relationships. Goodwill of $1.6 million was assigned to the Integrated Agencies Network reportable segment. The goodwill is fully deductible for income tax purposes. The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments. On April 25, 2023, the Company acquired Huskies, Ltd. (“Huskies”), for €5.2 million (approximately $6 million) of cash consideration, of which €0.9 million (approximately $1 million) is deferred, subject to post-closing adjustments. The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Huskies and expected growth related to new customer relationships and geographic expansion. Goodwill of $2.6 million was assigned to the Brand Performance Network reportable segment. The goodwill is non-deductible for income tax purposes. The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments. 2023 Dispositions On October 31, 2023, the Company sold ConcentricLife (“Concentric”), which was included in Integrated Agencies Network, to a strategic buyer for $245.0 million in cash resulting in a pre-tax gain of $94.5 million. The gain was recognized within Gain on sale of business within the Consolidated Statements of Operations. The divestiture did not represent a strategic shift that would have a major effect on the Company’s consolidated results of operations, and therefore its results of operations were not reported as discontinued operations. 6. Deferred Acquisition Consideration Deferred acquisition consideration on the Unaudited Consolidated Balance Sheet consists of deferred obligations related to contingent and fixed purchase price payments, and contingent and fixed retention payments tied to continued employment of specific personnel. Arrangements that are not contingent upon future employment are initially measured at the acquisition date fair value and are remeasured at each reporting period within Office and general expenses on the Unaudited Consolidated Statements of Operations. Arrangements that are contingent upon future employment are expensed as earned over the respective vesting (employment) period within Office and general expenses on the Unaudited Consolidated Statements of Operations. The following table presents changes in deferred acquisition consideration and a reconciliation to the amounts reported on the Unaudited Consolidated Balance Sheet as of March 31, 2024 and Consolidated Balance Sheet as of December 31, 2023:
(1) Includes deferred acquisition consideration payments settled in shares of Class A Common Stock of $32.8 million for the period ended December 31, 2023. (2) Adjustments to deferred acquisition consideration contains fair value changes from the Company’s initial estimates of deferred acquisition payments and accretion of expense as awards are earned over the vesting period. (3) In 2021, the Company entered into an agreement to purchase the remaining 26.7% interest in Targeted Victory it did not previously own. The agreement provided for the purchase of 50% of the interest on October 1, 2021 (paid in October 2023) and 50% on July 31, 2023 (payable in October 2025 with a seller’s right to defer until October 2027). In connection with the purchase, the estimated amount payable in October 2025, was reclassified from redeemable noncontrolling interest to deferred acquisition consideration in 2023. (4) The contingent and fixed deferred acquisition consideration obligation was $56.8 million and $44.0 million, respectively, as of March 31, 2024 and $57.5 million and $43.6 million, respectively, as of December 31, 2023. The deferred acquisition consideration as of March 31, 2024 and December 31, 2023, includes $30.3 million and $29.3 million, respectively, expected to be settled in shares of Class A Common Stock.
|
Revenue |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | 4. Revenue Disaggregated Revenue Data The Company provides a broad range of services to a large base of clients across the full spectrum of verticals globally. The primary source of revenue is from Brand arrangements in the form of fees for services performed, commissions, and from performance incentives or bonuses. Certain clients may engage with the Company in various geographic locations, across multiple disciplines, and through multiple Brands. Representation of a client rarely means that Stagwell handles marketing communications for all Brands or product lines of the client in every geographical location. The Company’s Brands often cooperate with one another through referrals and the sharing of both services and expertise, which enables Stagwell to service clients’ varied marketing needs by crafting custom integrated solutions. The following table presents revenue disaggregated by our principal capabilities for the three months ended March 31, 2024 and 2023. We reclassified certain brands into the Stagwell Marketing Cloud Group (software-as-a-service and data-as-a-service tools for in-house marketers) principal capability in the third quarter of 2023. All prior periods presented have been revised to reflect these changes.
Stagwell’s Brands are located in the United States and United Kingdom, and more than 32 other countries around the world. The Company continues to expand its global footprint to support clients in international markets. Historically, some clients have responded to weakening economic conditions with reductions to their marketing budgets, which included discretionary components that are easier to reduce in the short term than other operating expenses. The following table presents revenue disaggregated by geography for the three months ended March 31, 2024 and 2023:
Contract Assets and Liabilities Contract assets consist of fees and reimbursable outside vendor costs incurred on behalf of clients when providing advertising, marketing and corporate communications services that have not yet been invoiced to clients. Such amounts are invoiced to clients at various times over the course of providing services. In arrangements in which we are acting as principal, contract assets are included as a component of Accounts receivable on the Unaudited Consolidated Balance Sheet. These assets were $186.6 million and $141.9 million as of March 31, 2024 and December 31, 2023, respectively. In arrangements in which we are acting as agent, contract assets are included on the Unaudited Consolidated Balance Sheet as Expenditures billable to clients. These assets were $111.7 million and $114.1 million as of March 31, 2024 and December 31, 2023, respectively. Contract liabilities represent advanced billings to customers for fees and reimbursements of third-party costs, whether we act as principal or agent. Such fees and reimbursements of third-party costs are classified as Advance billings on the Company’s Unaudited Consolidated Balance Sheet. In arrangements in which we are acting as an agent, the recognition related to the contract liability is presented on a net basis within the Unaudited Consolidated Statements of Operations. Advance billings at March 31, 2024 and December 31, 2023 were $302.5 million and $301.7 million, respectively. The increase in Advance billings of $0.8 million for the three months ended March 31, 2024 was primarily driven by $185.8 million of revenue recognized that was included in the Advance billings balances as of December 31, 2023, the incurrence of third-party costs, offset by cash payments received or due in advance of satisfying our performance obligations. The Company acquired $5.5 million in contact assets and $8.8 million in contact liabilities in connection with the acquisition of Epiphany. See Note 3 of the Notes included herein for additional information related to this acquisition. Changes in the contract asset and liability balances during the three months ended March 31, 2024 were not materially impacted by write offs, impairment losses or any other factors. Unsatisfied Performance Obligations The majority of our contracts are for periods of one year or less. For those contracts with a term of more than one year, we had $93.4 million of unsatisfied performance obligations as of March 31, 2024 of which we expect to recognize approximately 76% in 2024, 23% in 2025 and 1% in 2026.
|
Earnings Per Share |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | 5. Earnings (Loss) Per Share The following table set forth the computations of basic and diluted loss per common share for the three months ended March 31, 2024 (amounts in thousands, except per share amounts):
The following table sets forth the computations of basic and diluted earnings per common share for the three months ended March 31, 2023:
Restricted stock awards of 4.6 million and 0.7 million as of March 31, 2024 and 2023, respectively, were excluded from the computation of diluted earnings (loss) per common share because the performance contingencies necessary for vesting were not met as of the reporting date.
|
Deferred Acquisition Consideration |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Acquisition Consideration | Acquisitions 2024 Acquisitions Acquisition of Team Epiphany On January 2, 2024, the Company acquired Team Epiphany, LLC (“Epiphany”), for $15.8 million, of which $10.8 million was paid in cash and $5.0 million in 797,916 shares of Class A Common Stock, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of $17.0 million, subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion. The consideration has been allocated to the assets acquired and assumed liabilities of Epiphany based upon fair values. The preliminary purchase price allocation is as follows:
The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Epiphany. Goodwill of $7.2 million was assigned to the Integrated Agencies Network reportable segment. The goodwill is deductible for income tax purposes. Intangible assets consist of trade names and customer relationships. We amortize purchased intangible assets on a straight-line basis over their respective useful lives. The weighted average life of the total acquired identifiable intangible assets is three years. The following table presents the details of identifiable intangible assets acquired:
Pro Forma Financial Information The unaudited pro forma information for the periods set forth below gives effect to the acquisition as if it occurred as of January 1, 2023. The pro forma revenue and net income (loss) for the three months ended March 31, 2024 would not be materially different from the actual revenue and net income (loss) reported. The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisition been consummated as of that time.
Revenue and Net income attributable to Epiphany, included within the Unaudited Consolidated Statements of Operations for the three months ended March 31, 2024 was $13.4 million and less than $0.1 million, respectively. The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments. Other 2024 Acquisitions On March 1, 2024, the Company acquired Sidekick Live Limited (“Sidekick”), for 4.6 million British pounds (“£”) (approximately $6 million) of which £3.6 million (approximately $5 million) was paid in cash, £0.1 million (approximately $0.2 million) was incurred as a certain payable to sellers, and £0.9 million (approximately $1 million) in 195,431 shares of Class A Common Stock, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of £8.0 million (approximately $10 million), subject to continued employment requirements and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion. The excess of purchase consideration over the fair value of the net assets acquired was mainly recorded as goodwill, which is primarily attributable to the assembled workforce of Sidekick and expected growth related to new customer relationships. Goodwill of $2.0 million was assigned to the Communications Network reportable segment. The goodwill is not fully deductible for income tax purposes. The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments. 2023 Acquisitions On November 1, 2023, the Company acquired Movers and Shakers LLC (“Movers and Shakers”), a digital creative company, for $14.7 million, of which $10.2 million was paid in cash and $4.5 million in 1.0 million shares of Class A Common Stock, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of $35.0 million, subject to meeting certain future earnings targets and continued employment, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion. The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Movers and Shakers and expected growth related to new customer relationships. Goodwill of $8.2 million was assigned to the Integrated Agencies Network reportable segment. The goodwill is fully deductible for income tax purposes. The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments. On October 2, 2023, the Company acquired Left Field Labs LLC (“LFL”), a digital experience design and strategy company, for $13.2 million, of which $9.4 million was paid in cash and $3.8 million in 825,402 of Class A Common Stock, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration up to a maximum value of $51.0 million, subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock at the Company’s discretion. The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of LFL and expected growth related to new customer relationships. Goodwill of $8.0 million was assigned to the Integrated Agencies Network reportable segment. The goodwill is fully deductible for income tax purposes. The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments. On July 3, 2023, the Company acquired Tinsel Experiential Design LLC (“Tinsel”), a marketing and design company, for $2.5 million in cash consideration, subject to post-closing adjustments. In connection with the acquisition, the sellers are entitled to contingent consideration, subject to continued employment, and meeting certain future earnings targets. The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Tinsel and expected growth related to new customer relationships. Goodwill of $1.6 million was assigned to the Integrated Agencies Network reportable segment. The goodwill is fully deductible for income tax purposes. The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments. On April 25, 2023, the Company acquired Huskies, Ltd. (“Huskies”), for €5.2 million (approximately $6 million) of cash consideration, of which €0.9 million (approximately $1 million) is deferred, subject to post-closing adjustments. The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Huskies and expected growth related to new customer relationships and geographic expansion. Goodwill of $2.6 million was assigned to the Brand Performance Network reportable segment. The goodwill is non-deductible for income tax purposes. The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments. 2023 Dispositions On October 31, 2023, the Company sold ConcentricLife (“Concentric”), which was included in Integrated Agencies Network, to a strategic buyer for $245.0 million in cash resulting in a pre-tax gain of $94.5 million. The gain was recognized within Gain on sale of business within the Consolidated Statements of Operations. The divestiture did not represent a strategic shift that would have a major effect on the Company’s consolidated results of operations, and therefore its results of operations were not reported as discontinued operations. 6. Deferred Acquisition Consideration Deferred acquisition consideration on the Unaudited Consolidated Balance Sheet consists of deferred obligations related to contingent and fixed purchase price payments, and contingent and fixed retention payments tied to continued employment of specific personnel. Arrangements that are not contingent upon future employment are initially measured at the acquisition date fair value and are remeasured at each reporting period within Office and general expenses on the Unaudited Consolidated Statements of Operations. Arrangements that are contingent upon future employment are expensed as earned over the respective vesting (employment) period within Office and general expenses on the Unaudited Consolidated Statements of Operations. The following table presents changes in deferred acquisition consideration and a reconciliation to the amounts reported on the Unaudited Consolidated Balance Sheet as of March 31, 2024 and Consolidated Balance Sheet as of December 31, 2023:
(1) Includes deferred acquisition consideration payments settled in shares of Class A Common Stock of $32.8 million for the period ended December 31, 2023. (2) Adjustments to deferred acquisition consideration contains fair value changes from the Company’s initial estimates of deferred acquisition payments and accretion of expense as awards are earned over the vesting period. (3) In 2021, the Company entered into an agreement to purchase the remaining 26.7% interest in Targeted Victory it did not previously own. The agreement provided for the purchase of 50% of the interest on October 1, 2021 (paid in October 2023) and 50% on July 31, 2023 (payable in October 2025 with a seller’s right to defer until October 2027). In connection with the purchase, the estimated amount payable in October 2025, was reclassified from redeemable noncontrolling interest to deferred acquisition consideration in 2023. (4) The contingent and fixed deferred acquisition consideration obligation was $56.8 million and $44.0 million, respectively, as of March 31, 2024 and $57.5 million and $43.6 million, respectively, as of December 31, 2023. The deferred acquisition consideration as of March 31, 2024 and December 31, 2023, includes $30.3 million and $29.3 million, respectively, expected to be settled in shares of Class A Common Stock.
|
Leases |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | 7. Leases The Company leases office space in North America, Europe, Asia, South America, Africa, and Australia. This space is primarily used for office and administrative purposes by the Company’s employees in performing professional services. These leases are classified as operating leases and expire between years 2024 through 2034. The Company’s finance leases are immaterial. Lease costs are recognized in the Unaudited Consolidated Statements of Operations over the lease term on a straight-line basis. Leasehold improvements are depreciated on a straight-line basis over the lesser of the term of the related lease or the estimated useful life of the asset. Some of the Company’s leases include options to extend or renew the leases through 2044. The renewal and extension options are not included in the lease term as the Company is not reasonably certain that it will exercise its option. From time to time, the Company enters into sublease arrangements with unrelated third parties. These subleases are classified as operating leases and expire between years 2024 through 2032. Sublease income is recognized over the lease term on a straight-line basis. Currently, the Company subleases office space in North America and Europe. As of March 31, 2024, the Company entered into two operating leases for which the commencement date has not yet occurred primarily because of the premises being prepared for occupancy by the landlord. Accordingly, these two leases represent an obligation of the Company that is not reflected within the Unaudited Consolidated Balance Sheet as of March 31, 2024. The aggregate future liability related to these leases is $2.9 million. The discount rate used for leases accounted for under ASC 842 is the Company’s collateralized credit adjusted borrowing rate. The following table presents lease costs and other quantitative information for the three months ended March 31, 2024 and 2023:
(1) Includes Right-of-use lease assets obtained in exchange for operating lease liabilities related to acquisitions. As of March 31, 2024, the weighted average remaining lease term was 6.3 years and the weighted average discount rate was 5.5%. Operating lease expense is included in Office and general expenses in the Unaudited Consolidated Statements of Operations. The Company’s lease expense for leases with a term of 12 months or less is immaterial. In the three months ended March 31, 2024, the company ceased using certain office space and as such recognized a charge of $1.5 million to reduce the carrying value of one of its right-of-use lease assets and related leasehold improvements. The right-of-use lease assets and related leasehold improvements related to an agency within the Integrated Agencies Network. With regard to the aforementioned impairments, the Company evaluated the facts and circumstances related to the use of the assets which indicated that they may not be recoverable. Using estimated sublease income to develop expected future cash flows, it was determined that the fair value of the assets were less than their carrying value. The impairment charge is included in Impairment and other losses within the Unaudited Consolidated Statements of Operations. The following table presents minimum future rental payments under the Company’s leases as of March 31, 2024 and their reconciliation to the corresponding lease liabilities:
|
Debt |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | 8. Debt As of March 31, 2024 and December 31, 2023, the Company’s indebtedness was comprised as follows:
Interest expense related to long-term debt included in Interest expense, net on the Unaudited Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023, was $20.4 million and $18.3 million, respectively. The amortization of debt issuance costs included in Interest expense, net on the Unaudited Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023 was $0.7 million and $0.6 million, respectively. Revolving Credit Agreement The Company is party to a senior secured revolving credit facility with a five-year maturity with a syndicate of banks (the “Credit Agreement”). The Credit Agreement provides revolving commitments of up to $640.0 million and permits restricted payments for share repurchases or redemptions from certain of its stockholders in an aggregate principal amount of up to $150.0 million. The Credit Agreement contains a number of financial and nonfinancial covenants and is guaranteed by substantially all of our present and future subsidiaries, subject to customary exceptions. The Company was in compliance with all covenants as of March 31, 2024. A portion of the Credit Agreement in an amount not to exceed $50.0 million is available for the issuance of standby letters of credit. As of March 31, 2024 and December 31, 2023, the Company had issued undrawn outstanding letters of credit of $15.8 million and $16.2 million, respectively. Senior Notes The Company had $1.1 billion aggregate principal amount of 5.625% senior notes (“5.625% Notes”) outstanding as of March 31, 2024. The 5.625% Notes are due August 15, 2029 and bear annual interest of 5.625% to be paid semiannually on February 15 and August 15 of each year. The 5.625% Notes are also subject to certain covenants, customary events of default, including cross-payment default and cross-acceleration provisions. The Company was in compliance with all covenants as of March 31, 2024.
|
Noncontrolling and Redeemable Noncontrolling Interests |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling and Redeemable Noncontrolling Interests | 9. Noncontrolling and Redeemable Noncontrolling Interests When acquiring less than 100% ownership of an entity, the Company may enter into agreements that give the Company an option to purchase, or require the Company to purchase, the incremental ownership interests under certain circumstances. Where the option to purchase the incremental ownership is within the Company’s control, the amounts are recorded as Noncontrolling interests within Shareholders’ Equity in the Unaudited Consolidated Balance Sheet. Where the incremental purchase may be required of the Company, the amounts are recorded as Redeemable noncontrolling interests in mezzanine equity in the Unaudited Consolidated Balance Sheet at their estimated acquisition date redemption value and adjusted at each reporting period for changes to their estimated redemption value through Retained earnings (but not less than their initial redemption value), except for foreign currency translation adjustments. The following table presents Net income (loss) attributable to noncontrolling and redeemable noncontrolling interests between Class C shareholders and other equity interest holders for the three months ended March 31, 2024 and 2023:
The following table presents noncontrolling interests between Class C shareholders and other equity interest holders as of March 31, 2024 and December 31, 2023:
(1) In January 2024, the Company entered into an agreement to purchase the remaining ownership interest in a subsidiary it previously controlled, the consideration for which was a portion of the subsidiary that was transferred to the noncontrolling interest owner. The non-cash purchase resulted in a reduction of the subsidiary noncontrolling interest by approximately $10 million. The following table presents changes in redeemable noncontrolling interests:
(1) Redemptions for the year ended December 31, 2023, is associated with redeemable noncontrolling interest of a certain brand we did not previously own. The amount was reclassified as a deferred acquisition contingent obligation (see Note 6). The noncontrolling shareholders’ ability to exercise any such option right is subject to the satisfaction of certain conditions, including conditions requiring notice in advance of exercise and specific employment termination conditions. In addition, these rights cannot be exercised prior to specified staggered exercise dates. The exercise of these rights at their earliest contractual date would result in obligations of the Company to fund the related amounts during 2024 to 2028. It is not determinable, at this time, if or when the owners of these rights will exercise all or a portion of these rights. The redeemable noncontrolling interest of $11.3 million as of March 31, 2024, consists of $7.8 million, assuming that the subsidiaries meet certain performance metrics, and $3.5 million upon termination of such owner’s employment with the applicable subsidiary or death. These adjustments will not impact the calculation of earnings (loss) per share if the redemption values are less than the estimated fair values. As such, there is no related impact on the Company’s earnings (loss) per share calculations for the three months ended March 31, 2024 and 2023. Comprehensive Income (Loss) Attributable to Noncontrolling and Redeemable Noncontrolling Interests For the three months ended March 31, 2024, comprehensive loss attributable to the noncontrolling and redeemable noncontrolling interests was $3.7 million, which consists of $0.6 million of net income and $4.3 million of other comprehensive loss. For the three months ended March 31, 2023, comprehensive loss attributable to the noncontrolling and redeemable noncontrolling interests was $2.0 million, which consists of $4.3 million of net loss and $2.2 million of other comprehensive income.
|
Commitments, Contingencies and Guarantees |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Guarantees | 10. Commitments, Contingencies, and Guarantees Legal Proceedings. The Company’s operating entities are involved in legal proceedings and regulatory inquiries of various types. While any litigation or investigation contains an element of uncertainty, the Company has no reason to believe that the outcome of such proceedings or claims will have a material adverse effect on the financial condition or results of operations of the Company. Guarantees. Generally, the Company has indemnified the purchasers of certain assets in the event that a third party asserts a claim against the purchaser that relates to a liability retained by the Company. These types of indemnification guarantees typically extend for a number of years. Historically, the Company has not made any significant indemnification payments under such agreements and no amount has been accrued in the accompanying Unaudited Consolidated Financial Statements with respect to these indemnification guarantees. The Company continues to monitor the conditions that are subject to guarantees and indemnifications to identify whether it is probable that a loss has occurred and would recognize any such losses under any guarantees or indemnifications in the period when those losses are probable and estimable. Commitments. At March 31, 2024, the Company had $15.8 million of undrawn letters of credit outstanding. See Note 8 of the Notes included herein for additional information. The Company entered into two operating leases for which the commencement date has not yet occurred as of March 31, 2024. See Note 7 of the Notes included herein for additional information. In the ordinary course of business, the Company may enter into long-term, non-cancellable contracts with partner associations that include revenue or profit-sharing commitments related to the provision of its services. These contracts may also include provisions that require the partner associations to meet certain performance targets prior to any obligation to the Company. As of March 31, 2024, the Company estimates its future minimum commitments under these non-cancellable agreements to be: $5.2 million for the remainder of 2024, and $6.9 million, $4.2 million, $3.0 million, $3.1 million and $3.8 million for 2025, 2026, 2027, 2028, and thereafter, respectively. The Company has also entered into a certain long-term, non-cancellable contract with a certain vendor for cloud services that requires the Company to commit to minimum spending over the contract term. As of March 31, 2024, the Company estimates its future minimum commitments under this agreement to be: $5.5 million for the remainder of 2024, and $6.9 million, $8.7 million, $10.4 million, $12.7 million and $15.3 million for 2025, 2026, 2027, 2028, and thereafter, respectively.
|
Share Capital |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Equity [Abstract] | |
Share Capital | 11. Share Capital The authorized and outstanding share capital of the Company is below. Class A Common Stock There are 1.0 billion shares of Class A Common Stock authorized, of which 114.8 million shares were issued and outstanding as of March 31, 2024. Each share of Class A Common Stock carries one vote and represents an economic interest in the Company. Class C Common Stock There are 250.0 million shares of Class C Common Stock authorized, par value $0.00001 per share (the “Class C Common Stock”) of which 151.6 million shares were issued and outstanding as of March 31, 2024. Each share of Class C Common Stock carries one vote and does not represent an economic interest in the Company. Each share of Class C Common Stock is paired with a corresponding common unit of OpCo (each such paired share of Class C Common Stock and common unit of OpCo, a “Paired Unit”). Each holder of Paired Units may, at its option, exchange such Paired Units for shares of Class A Common Stock on a one-to-one basis (i.e., one Paired Unit for one share of Class A Common Stock). Class A Common Stock Repurchases The Company may purchase up to an aggregate of $250.0 million of shares of outstanding Class A Common Stock under its stock repurchase program (the “Repurchase Program”). The Repurchase Program expires on March 1, 2026. 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 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 of Directors (the “Board”) will review the Repurchase Program periodically and may authorize adjustments of its terms. During the three months ended March 31, 2024, 4.0 million shares of Class A Common Stock were repurchased pursuant to the Repurchase Program at an aggregate value, excluding fees, of $24.6 million. These shares were repurchased at an average price of $6.11 per share. The remaining value of shares of Class A Common Stock permitted to be repurchased under the Repurchase Program was $114.0 million as of March 31, 2024. Employee Stock Purchase Plan A total of 3.0 million shares of Class A Common Stock are reserved for sale under the Employee Stock Purchase Plan (the “ESPP”) to eligible employees as defined in the plan. Under the ESPP, eligible employees can elect to withhold up to 15% of their earnings, subject to certain maximums, to purchase shares of Class A Common Stock on certain plan-defined dates. The purchase price for each offering period is 92.5% of the fair market value of shares of Class A Common Stock at the end of the offering period. The plan is considered compensatory resulting in the fair value of the discount being expensed over the service period. The total number of shares authorized that remained available to be issued was 2.9 million as of March 31, 2024. During the three months ended March 31, 2024, there were no material expenses incurred by the Company related to the ESPP and contributions to the ESPP were nominal.
|
Fair Value Measurements |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | 12. Fair Value Measurements A fair value measurement assumes a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. The hierarchy for observable and unobservable inputs used to measure fair value into three broad levels are described below: •Level 1 - Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. •Level 2 - Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. •Level 3 - Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. Financial Instruments that are not Measured at Fair Value on a Recurring Basis The following table presents certain information for our financial liability that is not measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023:
The fair value of this instrument is based on quoted market prices in markets that are not active. Therefore, this debt is classified as Level 2 within the fair value hierarchy. Financial Instruments Measured at Fair Value on a Recurring Basis Contingent deferred acquisition consideration (Level 3 fair value measurement) is initially recorded at the acquisition date fair value and adjusted at each reporting period. The estimated liability is determined in accordance with models of each business’ future performance, including revenue growth and free cash flows. These models are dependent upon significant assumptions, such as the growth rate of the earnings of the relevant subsidiary during the contractual period and the discount rate. These growth rates are consistent with the Company’s long-term forecasts. As of March 31, 2024, the discount rate used to measure these liabilities ranged from 9.1% to 9.9%. As these estimates require the use of assumptions about future performance, which are uncertain at the time of estimation, the fair value measurements presented on the Unaudited Consolidated Balance Sheet are subject to material uncertainty. See Note 6 of the Notes included herein for additional information regarding contingent deferred acquisition consideration. As of March 31, 2024 and December 31, 2023, the carrying amount of the Company’s financial instruments, including cash, cash equivalents, accounts receivable and accounts payable, approximated fair value because of their short-term maturity. Non-financial Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis Certain non-financial assets are measured at fair value on a nonrecurring basis, primarily goodwill, intangible assets (Level 3 fair value measurements) and right-of-use lease assets (Level 2 fair value measurement). Accordingly, these assets are not measured and adjusted to fair value on an ongoing basis but are subject to periodic evaluations for potential impairment. See Note 7 of the Notes included herein for additional information on right-of-use lease assets.
|
Supplemental Information |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Information | 13. Supplemental Information Stock Based Awards Stock-based compensation recognized for awards authorized under the Company’s employee stock incentive plans during the three months ended March 31, 2024 and 2023 was $12.8 million and $7.4 million, respectively. This was included as a component of stock-based compensation in Office and general expenses and Cost of services within the Unaudited Consolidated Statements of Operations. Certain of the Company’s subsidiaries grant awards to their employees providing them with an equity interest in the respective subsidiary (the “profits interests awards”). The awards generally provide the employee the right, but not the obligation, to sell their profits interest in the subsidiary to the Company based on a performance-based formula and, in certain cases, receive a profit share distribution. The profits interests awards are primarily settled in cash, with certain awards having stock-settlement provisions at the Company’s discretion. The corresponding liability associated with these profits interests awards was $19.8 million and $20.3 million at March 31, 2024 and December 31, 2023, respectively, and is included as a component of Accruals and other liabilities and Other liabilities on the Unaudited Consolidated Balance Sheet. Stock-based compensation recognized for these awards was $1.7 million and $4.6 million for the three months ended March 31, 2024 and 2023, respectively. This was included as a component of stock-based compensation in Cost of services within the Unaudited Consolidated Statements of Operations. Transfer of Accounts Receivable 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 $69.8 million and $56.2 million for the three months ended March 31, 2024 and 2023, respectively. The amount collected and due to the third parties under these arrangements was $3.7 million as of March 31, 2024 and $1.8 million as of December 31, 2023. Fees for these arrangements were recorded in Office and general expenses in the Unaudited Consolidated Statements of Operations and totaled $0.9 million and $1.0 million for the three months ended March 31, 2024 and 2023, respectively.
|
Income Taxes |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Tax Disclosure | 14. Income Taxes Our tax provision for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items arising in interim periods. The Company had an income tax expense for the three months ended March 31, 2024 of $2.6 million (on a pre-tax income of $1.4 million resulting in an effective tax rate of 189.5%) compared to income tax expense of $0.2 million (on pre-tax loss of $2.4 million resulting in an effective tax rate of (9.8)%) for the three months ended March 31, 2023. The difference in the effective tax rate of 189.5% in the three months ended March 31, 2024, as compared to (9.8)% in the three months ended March 31, 2023, is due to the change in the pretax income, a reduction in benefit from the disregarded entity structure, and an increase in non-deductible share-based compensation, offset by uncertain tax positions added in 2023. The OECD (Organisation for Economic Co-operation and Development) has proposed a global minimum tax of 15% of reported profits (Pillar 2) that has been agreed upon in principle by over 140 countries. During 2023, many countries took steps to incorporate Pillar 2 model rule concepts into their domestic laws. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar 2 slightly differently than the model rules and on different timelines and may adjust domestic tax incentives in response to Pillar 2. Accordingly, we are still evaluating the potential consequences of Pillar 2 on our longer-term financial position. In 2024, we expect to incur insignificant tax expenses in connection with Pillar 2. Although it is reasonably possible that a change in the balance of unrecognized tax benefits may occur within the next 12 months, based on the information currently available, we do not expect any change to be material to our unaudited consolidated financial statements. Tax Receivables Agreement In connection with the Tax Receivable Agreement (“TRA”), the Company is required to make cash payments to Stagwell Media LP (“Stagwell Media”) equal to 85% of certain U.S. federal, state and local income tax or franchise 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 (defined in Note 11) for shares of Class A Common Stock or cash, as applicable, and (ii) certain other tax benefits related to us making payments under the TRA. The TRA liability is an estimate and actual amounts payable under the TRA could differ from this estimate. There were no exchanges of Paired Units for shares of Class A Common Stock during 2024. As of March 31, 2024, the Company has recorded a TRA liability of $26.7 million, and an associated deferred tax asset, net of amortization, of $29.0 million, in connection with the exchange of Paired Units and the projected obligations under the TRA
|
Related Party Transactions |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | 15. Related Party Transactions In the ordinary course of business, the Company enters into transactions with related parties, including its affiliates. The transactions may range in the nature and value of services underlying the arrangements. The following table presents significant related party transactions where a related party receives services from the Company:
(1) A member of the Company's Board was the President of a client. This person retired from his position, and is no longer an employee of the client effective January 2, 2024 (2) Brands’ partners and executives either hold a key leadership position in or are on the board of directors of the client. (3) Client has a significant interest in the Company. (4) A family member of the Company’s Chief Executive Officer holds a key leadership position in the client. (5) A family member of the Company’s President holds a key leadership position in the client. (6) Certain of the contractual arrangements within these transactions were entered into for an indefinite term and are invoiced as services are provided, while others have a fixed definitive contract value. In 2019, a Brand entered into a loan agreement with a related party who holds a minority interest in the Brand. The loan receivable of $0.4 million and $0.8 million due from the third party is included within Other current assets in the Company’s Unaudited Consolidated Balance Sheet as of March 31, 2024 and Consolidated Balance Sheet as of December 31, 2023, respectively. The Company recognized less than $0.1 million and less than $0.1 million for the three months ended March 31, 2024 and 2023, respectively, of interest income within Interest expense, net on its Unaudited Consolidated Statements of Operations. In addition, in 2021, the Brand entered into an arrangement to obtain sales and management services from the same third party. Under the arrangement, the Brand has incurred $0.4 million and $0.2 million of related party expense for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024 and December 31, 2023, $0.6 million and $0.6 million, respectively, was due to the third party. In 2018, a Brand entered into an agreement to provide marketing and advertising services to a related party whose partners hold executive leadership positions in the Brand. Under the arrangement, the Brand recognized $0.2 million and $0.3 million of revenue for the three months ended March 31, 2024 and 2023, respectively. No revenue was due from the related party as of March 31, 2024 and December 31, 2023, respectively. In addition, on behalf of the related party, the Brand serves as an agent to transfer funds from one of the related party’s customers to the related party. The Brand does not receive revenue from this arrangement. No funds were due to the related party as of March 31, 2024. As of December 31, 2023, $0.7 million was due to the related party. In 2022, the Company made loans to three employees of a subsidiary each in the amount of $0.9 million, together with interest on the unpaid principal balance at a fixed interest rate equal to 3.5% per annum, compounding quarterly. The cash from the loan was used by the employees to purchase the noncontrolling interest of 13.3% in TMA Direct.
|
Segment Information |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | 16. Segment Information 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. The CODM uses Adjusted EBITDA (defined below) as a key metric, to evaluate the operating and financial performance of a segment, identify trends affecting the segments, develop projections and make strategic business decisions. Adjusted EBITDA is defined as Net income excluding non-operating income or expense to achieve operating income, plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, and other items. Other items include restructuring costs, acquisition-related expenses, and non-recurring items. The Company made changes to its internal management and reporting structure in the first quarter of 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 has three reportable segments as follows: “Integrated Agencies Network,” “Brand Performance Network” and the “Communications Network.” In addition, the Company combines and discloses operating segments that do not meet the aggregation criteria, and includes the elimination of certain intercompany services, as “All Other.” This segment also includes the elimination of intercompany revenue. The Company also reports corporate expenses, as further detailed below, as “Corporate.” All segments follow the same basis of presentation and accounting policies as those described throughout the Notes included herein. •The Integrated Agencies Network includes five operating segments: the Anomaly Alliance, Constellation, the Doner Partner Network, Code and Theory, and National Research Group. The operating segments offer an array of complementary services spanning our core capabilities of Digital Transformation, Performance Media & Data, Consumer Insights & Strategy, and Creativity & Communications. The Brands included in the operating segments that comprise the Integrated Agencies Network reportable segment are as follows: Anomaly Alliance (Anomaly), Constellation (72andSunny, Crispin LLC, Colle McVoy, Hunter, Instrument, Redscout, Team Enterprises, Harris Insights, Left Field Labs, Movers and Shakers, and Team Epiphany), the Doner Partner Network (Doner, KWT Global, Harris X, Veritas, Doner North, and Yamamoto), Code and Theory, 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”) is comprised of a single operating segment. BPN includes a unified media and data management structure with omnichannel media placement, creative media consulting, influencer and business-to-business marketing capabilities. Our Brands in this segment aim to provide scaled creative performance through developing and executing sophisticated omnichannel campaign strategies leveraging significant amounts of consumer data. BPN’s Brands provide media solutions such as audience analysis, media planning, and buying across a range of digital and traditional platforms (out-of-home, paid search, social media, lead generation, programmatic, television, broadcast, among others) and includes multichannel Brands Assembly, Brand New Galaxy, 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 is comprised of a single operating segment, our specialist network that provides advocacy, strategic corporate communications, investor relations, public relations, online fundraising and other services to both corporations and political and advocacy organizations and consists of our Allison brands, SKDK brands, and Targeted Victory brands. •All Other consists of the Company’s digital innovation group and Stagwell Marketing Cloud Group, including Maru and Epicenter, and products such as ARound, PRophet and SmartAssets. •Corporate consists of corporate office expenses incurred in connection with the strategic resources provided to the operating segments, as well as certain other centrally managed expenses that are not fully allocated to the operating segments. These office and general expenses include (i) salaries and related expenses for corporate office employees, including employees dedicated to supporting the operating segments, (ii) occupancy expenses relating to properties occupied by all corporate office employees, (iii) other office and general expenses including professional fees for the financial statement audits and other public company costs, and (iv) certain other professional fees managed by the corporate office. Additional expenses managed by the corporate office that are directly related to the operating segments are allocated to the appropriate reportable segment and the All Other category.
The Company’s long-lived assets (i.e., Right-of-use-lease assets-operating leases and Fixed asset, net) was $318.9 million ($260.4 million in the United States and $58.5 million in all other countries) as of March 31, 2024, and $332.1 million ($268.5 million in the United States and $63.6 million in all other countries) as of December 31, 2023. The Company’s CODM does not use segment assets to allocate resources or to assess performance of the segments and therefore, total segment assets have not been disclosed. See Note 4 of the Notes included herein for a summary of the Company’s revenue by geographic region for the three months ended March 31, 2024 and 2023.
|
Interim Reporting |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information | 17. Revision of previously issued Unaudited Consolidated Financial Statements for the first quarter of 2023 The following table presents selected unaudited revised financial information for the three months ended March 31, 2023, in connection with the revision detailed in Note 1 included herein. There were no changes to previously issued cash flows generated from (used by) operating, investing, or financing activities for any of the impacted periods. The quarterly interim consolidated balance sheet was only impacted by the effects of the balance sheet adjustments discussed in Note 1 of the Notes included herein. For the three months ended March 31, 2023, we have included the line items that were impacted by the correction of errors originally adjusted as out-of-period in the 2023 interim financial statements. The impact of the revision on the previously issued unaudited quarterly financial information is as follows:
|
Accounting Policies (Policies) |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | 2. New Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures (“ASU 2023-09”), to enhance the transparency and decision usefulness of income tax disclosures by requiring disaggregated information about an entity’s effective tax rate reconciliation, as well as information on taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company is evaluating the impact of the adoption of this guidance on the Company’s financial statements and disclosures. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) Improvements to Segment Disclosures (“ASU 2023-07”), to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company is evaluating the impact of the new requirements, effective for the Company’s 2024 Financial Statements, to determine the level of disclosure of segment expenses.
|
Acquisitions and Dispositions (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition | The preliminary purchase price allocation is as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | The following table presents the details of identifiable intangible assets acquired:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition, Pro Forma Information | The pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisition been consummated as of that time.
|
Revenue (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
By Location | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table presents revenue disaggregated by geography for the three months ended March 31, 2024 and 2023:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Principal Capability | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The following table presents revenue disaggregated by our principal capabilities for the three months ended March 31, 2024 and 2023. We reclassified certain brands into the Stagwell Marketing Cloud Group (software-as-a-service and data-as-a-service tools for in-house marketers) principal capability in the third quarter of 2023. All prior periods presented have been revised to reflect these changes.
|
Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Calculation of Numerator and Denominator in Earnings Per Share | The following table set forth the computations of basic and diluted loss per common share for the three months ended March 31, 2024 (amounts in thousands, except per share amounts):
The following table sets forth the computations of basic and diluted earnings per common share for the three months ended March 31, 2023:
|
Deferred Acquisition Consideration (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Contingent Deferred Acquisition Consideration | The following table presents changes in deferred acquisition consideration and a reconciliation to the amounts reported on the Unaudited Consolidated Balance Sheet as of March 31, 2024 and Consolidated Balance Sheet as of December 31, 2023:
(1) Includes deferred acquisition consideration payments settled in shares of Class A Common Stock of $32.8 million for the period ended December 31, 2023. (2) Adjustments to deferred acquisition consideration contains fair value changes from the Company’s initial estimates of deferred acquisition payments and accretion of expense as awards are earned over the vesting period. (3) In 2021, the Company entered into an agreement to purchase the remaining 26.7% interest in Targeted Victory it did not previously own. The agreement provided for the purchase of 50% of the interest on October 1, 2021 (paid in October 2023) and 50% on July 31, 2023 (payable in October 2025 with a seller’s right to defer until October 2027). In connection with the purchase, the estimated amount payable in October 2025, was reclassified from redeemable noncontrolling interest to deferred acquisition consideration in 2023. (4) The contingent and fixed deferred acquisition consideration obligation was $56.8 million and $44.0 million, respectively, as of March 31, 2024 and $57.5 million and $43.6 million, respectively, as of December 31, 2023. The deferred acquisition consideration as of March 31, 2024 and December 31, 2023, includes $30.3 million and $29.3 million, respectively, expected to be settled in shares of Class A Common Stock.
|
Leases (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Costs and Other Quantitative Information | The following table presents lease costs and other quantitative information for the three months ended March 31, 2024 and 2023:
(1) Includes Right-of-use lease assets obtained in exchange for operating lease liabilities related to acquisitions.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Minimum Future Rental Payments | The following table presents minimum future rental payments under the Company’s leases as of March 31, 2024 and their reconciliation to the corresponding lease liabilities:
|
Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | As of March 31, 2024 and December 31, 2023, the Company’s indebtedness was comprised as follows:
|
Noncontrolling and Redeemable Noncontrolling Interests (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest | The following table presents Net income (loss) attributable to noncontrolling and redeemable noncontrolling interests between Class C shareholders and other equity interest holders for the three months ended March 31, 2024 and 2023:
The following table presents noncontrolling interests between Class C shareholders and other equity interest holders as of March 31, 2024 and December 31, 2023:
(1) In January 2024, the Company entered into an agreement to purchase the remaining ownership interest in a subsidiary it previously controlled, the consideration for which was a portion of the subsidiary that was transferred to the noncontrolling interest owner. The non-cash purchase resulted in a reduction of the subsidiary noncontrolling interest by approximately $10 million.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable Noncontrolling Interest | The following table presents changes in redeemable noncontrolling interests:
(1) Redemptions for the year ended December 31, 2023, is associated with redeemable noncontrolling interest of a certain brand we did not previously own. The amount was reclassified as a deferred acquisition contingent obligation (see Note 6).
|
Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Liability Measured on a Non-recurring Basis | The following table presents certain information for our financial liability that is not measured at fair value on a recurring basis as of March 31, 2024 and December 31, 2023:
|
Related Party Disclosures (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | The following table presents significant related party transactions where a related party receives services from the Company:
(1) A member of the Company's Board was the President of a client. This person retired from his position, and is no longer an employee of the client effective January 2, 2024 (2) Brands’ partners and executives either hold a key leadership position in or are on the board of directors of the client. (3) Client has a significant interest in the Company. (4) A family member of the Company’s Chief Executive Officer holds a key leadership position in the client. (5) A family member of the Company’s President holds a key leadership position in the client. (6) Certain of the contractual arrangements within these transactions were entered into for an indefinite term and are invoiced as services are provided, while others have a fixed definitive contract value. In 2019, a Brand entered into a loan agreement with a related party who holds a minority interest in the Brand. The loan receivable of $0.4 million and $0.8 million due from the third party is included within Other current assets in the Company’s Unaudited Consolidated Balance Sheet as of March 31, 2024 and Consolidated Balance Sheet as of December 31, 2023, respectively. The Company recognized less than $0.1 million and less than $0.1 million for the three months ended March 31, 2024 and 2023, respectively, of interest income within Interest expense, net on its Unaudited Consolidated Statements of Operations. In addition, in 2021, the Brand entered into an arrangement to obtain sales and management services from the same third party. Under the arrangement, the Brand has incurred $0.4 million and $0.2 million of related party expense for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024 and December 31, 2023, $0.6 million and $0.6 million, respectively, was due to the third party. In 2018, a Brand entered into an agreement to provide marketing and advertising services to a related party whose partners hold executive leadership positions in the Brand. Under the arrangement, the Brand recognized $0.2 million and $0.3 million of revenue for the three months ended March 31, 2024 and 2023, respectively. No revenue was due from the related party as of March 31, 2024 and December 31, 2023, respectively. In addition, on behalf of the related party, the Brand serves as an agent to transfer funds from one of the related party’s customers to the related party. The Brand does not receive revenue from this arrangement. No funds were due to the related party as of March 31, 2024. As of December 31, 2023, $0.7 million was due to the related party.
|
Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment |
|
Interim Reporting (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information | The impact of the revision on the previously issued unaudited quarterly financial information is as follows:
|
Acquisitions and Dispositions - Intangible Assets Acquired (Details) - Team Epiphany $ in Thousands |
Jan. 02, 2024
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 4,316 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years |
Trade Names | |
Business Acquisition [Line Items] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 549 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years |
Customer Relationships | |
Business Acquisition [Line Items] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 3,767 |
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years |
Acquisitions and Dispositions - Pro Forma (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Jan. 02, 2024 |
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Business Acquisition [Line Items] | |||
Revenues | $ 670,059 | $ 622,444 | |
Team Epiphany | |||
Business Combinations [Abstract] | |||
Business Acquisition, Pro Forma Revenue | $ 630,838 | ||
Business Acquisition, Pro Forma Net Income (Loss) | (2,121) | ||
Business Acquisition [Line Items] | |||
Business Acquisition, Pro Forma Revenue | 630,838 | ||
Business Acquisition, Pro Forma Net Income (Loss) | (2,121) | ||
Revenues | $ 13,400 |
Acquisitions and Dispositions - Disposition (Details) - ConcentricLife - Disposed of by Sale $ in Millions |
Oct. 31, 2023
USD ($)
|
---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Consideration received | $ 245.0 |
Other, net | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Gain (loss) on disposition of business | $ 94.5 |
Revenue - Additional Information (Details) $ in Millions |
Mar. 31, 2024
USD ($)
country
|
---|---|
Disaggregation of Revenue [Line Items] | |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current, Expenditures Billables | $ 5.5 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Advance Billings | $ 8.8 |
Non-US And UK | |
Disaggregation of Revenue [Line Items] | |
Number of countries in which entity operates | country | 32 |
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 670,059 | $ 622,444 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 561,317 | 514,828 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 70,981 | 74,483 |
UNITED KINGDOM | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 37,761 | 33,133 |
Digital Transformation | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 195,763 | 185,515 |
Creativity and Communications | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 291,653 | 263,882 |
Performance Media and Data | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 77,016 | 67,974 |
Consumer Insights and Strategy | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 45,769 | 49,255 |
Stagwell Marketing Cloud Group | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 59,858 | $ 55,818 |
Leases - Additional Information (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
lease
| |
Leases [Abstract] | |
Number of leases not yet commenced | lease | 2 |
Leases not yet commenced, liability | $ 2.9 |
ROU Lease and LHI, Impairment Loss | $ 1.5 |
Leases - Lease Costs and Other Quantitative Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Leases [Abstract] | ||
Operating lease cost | $ 20,946 | $ 19,578 |
Variable lease cost | 5,937 | 4,561 |
Sublease rental income | (2,480) | (3,052) |
Total lease cost | 24,403 | 21,087 |
Operating cash flows | 21,660 | 22,347 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 5,967 | $ 2,135 |
Weighted average remaining lease term (in years) - Operating leases | 6 years 3 months 18 days | |
Weighted average discount rate - Operating leases | 5.50% |
Leases - Minimum Future Rental Payments (Details) $ in Thousands |
Mar. 31, 2024
USD ($)
|
---|---|
Leases [Abstract] | |
2025 | $ 57,800 |
2026 | 69,480 |
2027 | 58,473 |
2028 | 52,943 |
2029 | 49,738 |
Thereafter | 113,932 |
Total | 402,366 |
Less: Present value discount | (66,947) |
Lease liability | $ 335,419 |
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
Aug. 20, 2021 |
---|---|---|---|
Debt [Line Items] | |||
Debt issuance costs | $ (12,473) | $ (13,172) | |
Total long-term debt | 1,269,527 | 1,145,828 | |
Combined Credit Agreement | |||
Debt [Line Items] | |||
Long-term Debt, Gross | 182,000 | 59,000 | |
5.625% Notes | Senior Notes | |||
Debt [Line Items] | |||
Long-term Debt, Gross | 1,100,000 | 1,100,000 | |
Total long-term debt | $ 1,087,527 | $ 1,086,828 | |
Interest rate, stated percentage | 5.625% |
Debt - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Aug. 20, 2021 |
Aug. 02, 2021 |
|
Debt [Line Items] | |||||
Line of Credit Facility, Current Borrowing Capacity | $ 640.0 | ||||
Maximum Restricted Payments under Credit Facility | 150.0 | ||||
Interest and Debt Expense | |||||
Debt [Line Items] | |||||
Interest expense, long-term debt | 20.4 | $ 18.3 | |||
Amortization of debt issuance costs | 0.7 | $ 0.6 | |||
Secured Debt | Combined Credit Agreement | Revolving Credit Facility | |||||
Debt [Line Items] | |||||
Long-term debt, term | 5 years | ||||
Letter of Credit | Combined Credit Agreement | Revolving Credit Facility | |||||
Debt [Line Items] | |||||
Maximum borrowing capacity | $ 15.8 | $ 16.2 | |||
Standby Letters of Credit | Combined Credit Agreement | Revolving Credit Facility | |||||
Debt [Line Items] | |||||
Maximum borrowing capacity | $ 50.0 | ||||
Senior Notes | 5.625% Notes | |||||
Debt [Line Items] | |||||
Aggregate principal amount | $ 1,100.0 | ||||
Interest rate, stated percentage | 5.625% |
Noncontrolling and Redeemable Noncontrolling Interests (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Noncontrolling Interest [Line Items] | ||||
Redeemable Noncontrolling Interest, Equity, Fair Value | $ 11,305 | $ 10,792 | $ 39,111 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest | 3,713 | $ 2,036 | ||
Net Income (Loss) Attributable to Noncontrolling Interest | (569) | 4,258 | ||
Other Comprehensive Income (Loss), Net of Tax, Portion Attributable to Noncontrolling Interest | 4,300 | $ (2,200) | ||
Reduction of noncontrolling and redeemable noncontrolling interest | (8,482) | |||
Vesting over period | ||||
Noncontrolling Interest [Line Items] | ||||
Redeemable Noncontrolling Interest, Equity, Fair Value | 7,800 | |||
Termination, disability, or death | ||||
Noncontrolling Interest [Line Items] | ||||
Redeemable Noncontrolling Interest, Equity, Fair Value | $ 3,500 |
Commitments, Contingencies and Guarantees (Details Textual) $ in Millions |
Mar. 31, 2024
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2023 | $ 5.2 |
2024 | 6.9 |
2025 | 4.2 |
2026 | 3.0 |
2027 | 3.1 |
Thereafter | 3.8 |
Cloud Purchase Obligation, to be Paid, Year One | 5.5 |
Cloud Purchase Obligation, to be Paid, Year Two | 6.9 |
Cloud Purchase Obligation, to be Paid, Year Three | 8.7 |
Cloud Purchase Obligation, to be Paid, Year Four | 10.4 |
Cloud Purchase Obligation, to be Paid, Year Five | 12.7 |
Cloud Purchase Obligation, to be paid, after Year Five | $ 15.3 |
Fair Value Measurements - Financial Instruments not measured at Fair Value on a Recurring Basis (Details) - Senior Notes - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | $ 1,100,000 | $ 1,100,000 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt Instrument | $ 1,002,496 | $ 1,010,658 |
Fair Value Measurements - Additional Information (Details) - Fair Value, Inputs, Level 3 |
Mar. 31, 2024 |
---|---|
Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration liability, measurement input | 0.091 |
Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Contingent consideration liability, measurement input | 0.099 |
Supplemental Information (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Share Capital [Line Items] | |||
Stock-based compensation | $ 16,116 | $ 12,004 | |
Trade Receivables Collected and Due to Third Party under Receivable Purchase Agreement | 3,700 | $ 1,800 | |
Trade Receivable Fees paid to Third Party under Receivable Purchase Agreement | 900 | 1,000 | |
Accounts Receivable, Sale | 69,800 | 56,200 | |
Other Awards | |||
Share Capital [Line Items] | |||
Profit interest award liability | 19,800 | $ 20,300 | |
Stock Compensation Award | |||
Share Capital [Line Items] | |||
Stock-based compensation | 12,800 | 7,400 | |
Profit interest | |||
Share Capital [Line Items] | |||
Stock-based compensation | $ 1,700 | $ 4,600 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Income Tax Disclosure [Abstract] | ||
Tax Receivable Agreement, Deferred Tax Asset | $ 29,000 | |
Tax Receivable Agreement, Deferred Tax Liability | 26,700 | |
Pre-tax income | 1,364 | $ (2,406) |
Income tax expense (benefit) | $ 2,585 | $ 236 |
Effective Income Tax Rate Reconciliation, Percent | 189.50% | (9.80%) |
N82CC- ]&]>G/#XDZ.!AP6&0T(L 8A7&>_#!D+M
ME6,+0]+@F<8'QDPC$LROZ%(++MB?CA ;FB>*R;[;4O'>B 7&FD( LBX.'8*HUZ<7!?#:9W^G=XXZ$FHU*ZKS!8_SZ,.@#;U+/!B">/9^/YT^>
M]CRUS[SC/G8JZ\-CNBWCR;&[M?DC8N'BX-G\GCB8'?_?!<(^\SX M/L^5QWV
MODR6"N+0]U>^L30A?J1L5]M/O(OX9;/;'K\/HY5=T^U H58@G4Z>/1D)%[^Y
MQH=@*_[.N;0AV))_;I2$@V@#WM/5 )
MGCL9.GC1J3I( S-^7K 1>$O)=893TM89J.JIELFS9K PNKO"QHX$G-&UA9[!
MLE!72853TA,714%AZ0CP#9/3=F=5^QC$E3>=30Z9+=/&7KBE2I85J]3 H4@SW/!B1#F_^=!NZX2;E.'$\=ZBD'KYW=)%RJ&U
M-=/\Z[%XU"_M?5C)O=X
M' ?A6#""1SC%V'9X3T?VG)/>$=PPDWQ!& ;C\PEF!L7%MBUZ/K+GG/2.50L3
M=1Q::&8\BT ,6<*])+95MQZ*S W%SW(E9=&>[3^J$I)-5ZK%(_E0PJZ6M>7)
MD
3V\II??.T:EM_
M+38LYF<]V+<%SW>\-_[G/W#H_6JR^4B3'7C KSW@NV8?WT 6NLIBL>;HT[4H
MBL\GZC+=+I03[D2N]_%$RCR9;R6;IQQ)@6Y$EO,%AV2EOH"K&*(D%VFJ!EUE
MDH.>TN2V4I=0ZZ*2UV[<'V)8R-V^.PQ") I'M=2!G4%M9^!EA<,.
M(8(&C:&T!$43Y=R9A);>)!SY[(=%;=
'I/YQKP*\J9WMMN+/T=/C%RVP'B%(
MG;WF.;^@\MK0_<1#F_2;R5TS#DOH=;SYCBF_*$@L4IQ@'XJ8%:@UAKG) #ST
MYND>0]05=PWT/4*7=
C4][
M(]P_C_K#^7XU":/C+KX_P(]=PB>]]U1%*"M^-7IN32:DIU4WVSU,K]-[;+\]
MO6KA[Q5?-#45$)V.3X]'PJ678AH$6\?7V=(&O/7B9XG'-3G>@/7"HJ6V U;0
M/=>O_@%02P,$% @ )6.B6.=?E!_#!@ !!( !D !X;"]W;W)K