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.
markpenn

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.