Stagwell reports major growth in Q3

The former MDC Partners is reporting 22.8% pro forma revenue growth, helped by its integrated and media agencies.

Stagwell’s performance in Q3 has its chief executive certain that its recent business combination is paying off.

The company – formed by the merger of MDC Partners and private equity firm Stagwell Group, a deal that closed over the summer – is reporting a 53.8% organic revenue increase for the three months ended Sept. 30, with 31.8% organic growth for the year to date.

On a pro forma basis, organic revenue grew by 22.8% in Q3 and 15.6% for the year-to-date, helped by net-new business wins totaling $63.7 million. Compared to the same quarter in 2019, revenue grew by 14%.

While the growth figures are helped by comparison to a weak baseline – both due to the COVID-19 pandemic and the previous MDC’s business struggles – chairman and CEO Mark Penn said that the results showed that the merger of the two businesses “is working.”

Breaking it down further, Stagwell’s largest segment – its Integrated Agency Network – delivered 26.5% organic pro forma revenue growth in Q3, while its Media Network grew by 31%. The Communications Network, however, dipped by 6.1% year-over-year.

Digital work made up 37% of the company’s Q3 revenue, with creative making up 34%, public relations 13%, research 9% and media 4%.

Like other holding companies, Stagwell’s results in Q3 have led to it increasing its full-year guidance. It is expecting pro forma revenues for 2021 to be between $2.15 and $2.18 billion.