Breaking from the rosy results at some of its peers, agency holding company Stagwell reported a revenue dip in Q1 due to a mixture of lower client spending and a decline in one of its key focus areas for the future.

Organic net revenue declined by 3% over the three months ended March 31, though revenue grew by 1% when excluding its advocacy business.

Chairman and CEO Mark Penn emphasized that the year-over-year comparison is against a quarter in which it had experienced 24% growth; compared against 2021, organic revenue in Q1 is up 21%. In addition, the performance was in line with the company’s expectations, and it is maintaining its guidance of 7.5% to 10% organic growth through the rest of the year, helped by onboarding more recent business wins it valued at $53 million USD.

Stagwell’s revenue is now 58% from its digital business, a high-priority shift at the company. However, organic revenue declined by 9% year-over-year in its digital transformation segment, typically its most profitable, attributed to a “cyclical decline” in business that it expects to turn around. The rest of its digital business fared better, with 5.4% organic revenue growth in its performance media and data division, and 1.4% growth it is consumer insights business.

On the traditional front, organic revenue in Stagwell’s creative and communications business – which still represents 42% of its total revenue – declined by 3.5%.

Despite the optimistic outlook for the rest of the year, Stagwell said in a call with investors that it had eliminated roughly 300 positions over the course of Q1, which it expected to generate $25 million USD in annualized savings, with more cuts planned for Q2.