Key Highlights

  • Adjusted diluted EPS of USD 0.34 topped the consensus estimate of USD 0.31, while GAAP diluted EPS was USD 0.07.
  • Revenue of USD 816.03 million rose 9.8% but came in below the consensus estimate of USD 838.38 million.
  • Net Revenue grew 8.1% to USD 664.0 million, with 7.4% organic growth and a 108.4% jump at The Marketing Cloud.
  • Adjusted EBITDA climbed 24.9% to USD 144.8 million, lifting the Margin on net revenue to 21.8% from 18.9%.

Stagwell Inc. (NASDAQ:STGW) reported third quarter 2026 adjusted Diluted Earnings per Share of USD 0.34, ahead of a consensus estimate of USD 0.31, while GAAP diluted EPS was USD 0.07 compared with USD 0.09 a year earlier. Revenue of USD 816.03 million increased 9.8% from USD 743.0 million but landed below a consensus estimate of USD 838.38 million. Net Income attributable to common shareholders was USD 18.1 million versus USD 24.6 million, and Operating Income fell 21.1% to USD 48.1 million.

Segment Mix Shifts Toward Software and Digital Work

Net revenue, which strips out billable costs, rose 8.1% to USD 664.0 million, with organic growth of USD 45.7 million, or 7.4%, and USD 4.3 million from acquisitions. The Marketing Cloud more than doubled, up 108.4% organically, on software sales tied to The Machine and stronger Demand for research products. Digital Transformation grew 23.1% organically and Communications 20.0%, while Marketing Services declined 7.5% and Media and Commerce slipped 2.1%.

Adjusted EBITDA rose to USD 144.8 million from USD 116.0 million, aided by staff costs falling to 58.1% of net revenue from 63.0%. Operating profit moved the other way because stock based compensation more than doubled to USD 28.9 million and deferred Acquisition consideration swung to a USD 7.7 million charge from a USD 13.3 million credit. Office and general expenses rose 24.3%.

Cash Flow, Debt and Buyback Capacity

Net cash from Operating Activities reached USD 152.3 million for the nine months, up from USD 30.7 million, helped by USD 81.3 million of lower Working Capital usage that partly reflected timing and improved vendor payment terms. Capital spending on AI, automation and platforms such as The Machine lifted investing outflows to USD 113.9 million. Cash stood at USD 132.2 million.

The Balance Sheet carries USD 1.1 billion of 5.625% senior notes due August 15, 2029, and USD 323.7 million drawn on a USD 750 million revolving Credit Facility that matures April 23, 2030, leaving USD 410.3 million of available borrowing capacity. The share repurchase program was raised by USD 350.0 million to a USD 725.0 million ceiling and runs to March 4, 2029. During the nine months the company bought back 12.1 million shares for USD 75.3 million under the program, including 6.2 million shares bought from executives and employees for tax obligations tied to the Class C Exchange.

Management said Cash Flow from operations, existing cash and revolver capacity are sufficient to meet operating, investing and financing needs.

Data Points Behind the Next Report

Several items frame the next quarter. Segment trends are the first marker: The Marketing Cloud grew 108.4% against Marketing Services at negative 7.5%, so the mix between software and agency work continues to move the margin. Adjusted EBITDA margin on net revenue of 21.8% is the second.

Cost lines are a third area. Stock based compensation of USD 28.9 million and the deferred acquisition consideration charge of USD 7.7 million were both sharp swings from last year. The fourth is liquidity, with USD 410.3 million of revolver capacity, USD 132.2 million of cash and the buyback authority that remains under the USD 725.0 million ceiling.