UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K


			☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, ~~2024~~2025


			☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission File Number: 001-13718

Stagwell Inc.

(Exact name of registrant as specified in its charter)


Delaware		86-1390679
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

One World Trade Center, Floor 65
New York,	New York	10007
(Address of principal executive offices)		(Zip Code)

(646) 429-1800

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.001 per share	STGW	NASDAQ

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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Large accelerated Filer	☐	Accelerated Filer	☒
Non-accelerated Filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The aggregate market value of the voting and non-voting common stock of the registrant held by non-affiliates as of June 30, ~~2024~~2025, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $~~594~~389.05 million, computed upon the basis of the closing sales price of $4.50 of the Class A Common Stock on that date.

The number of shares of common stock outstanding as of March 35, ~~2025~~2026, was ~~115~~253,~~014~~452,~~948~~554 shares of Class A Common Stock ~~and 151,648,741 shares of Class C Common Stock~~.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s Proxy Statement relating to the ~~2025~~2026 Annual Meeting of Stockholders are incorporated by reference in Part III of this Annual Report on Form 10-K where indicated.

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STAGWELL INC.

TABLE OF CONTENTS

		Page
	PART I
Item 1.	Business	2
Item 1A.	Risk Factors	11
Item 1B.	Unresolved Staff Comments	26
Item 1C.	Cybersecurity	26
Item 2.	Properties	27
Item 3.	Legal Proceedings	27
Item 4.	Mine Safety Disclosures	27
	PART II
Item 5.	Market for Registrant’s Common Equity, and Related Stockholder Matters and Issuer Purchases of Equity Securities	27
Item 6.	[Reserved]	28
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2928
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	5154
Item 8.	Financial Statements and Supplementary Data	5254
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	~~101~~103
Item 9A.	Controls and Procedures	~~101~~103
Item 9B.	Other Information	103
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	103
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	103
Item 11.	Executive Compensation	~~104~~105
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~104~~105
Item 13.	Certain Relationships and Related Transactions and Director Independence	105
Item 14.	Principal Accounting Fees and Services	105
	PART IV
Item 15.	Exhibits and Financial Statement Schedules	106
Item 16.	Form 10-K Summary	106
Signatures		109

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EXPLANATORY NOTE

References in this Form 10-K to “Stagwell,” “we,” “us,” “our” and the “Company” refer to Stagwell Inc. and its direct and indirect subsidiaries, unless the context otherwise requires or otherwise is expressly stated.

All dollar amounts are stated in U.S. dollars unless otherwise stated.

Forward-Looking Statements

This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company’s representatives may also make forward-looking statements orally or in writing from time to time. Statements in this document that are not historical facts, including, statements about the Company’s beliefs and expectations, future financial performance, growth, and future prospects, the Company’s strategy, business and economic trends and growth, technological leadership and differentiation, potential and completed acquisitions, anticipated and actual operating efficiencies and synergies and estimates of amounts for redeemable noncontrolling interests and deferred acquisition consideration, constitute forward-looking statements. Forward-looking statements, which are generally denoted by words such as “ability,” “aim,” “anticipate,” “assume,” “believe,” “better,” “build,” “consider,” “continue,” “could,” “~~create~~develop,” “~~develop~~drive,” “~~drive~~enhance,” “estimate,” “expect,” “focus,” “forecast,” “~~foresee,” “~~future,” “~~goal~~grow,” “guidance,” “~~in development~~improve,” “intend,” “likely,” “~~look,” “~~maintain,” “may,” “ongoing,” “~~opportunity~~outlook,” “~~outlook~~plan,” “~~plan~~position,” “possible,” “potential,” “~~predict~~probable,” “~~probable~~project,” “~~project~~seek,” “should,” “target,” “will,” “would” or the negative of such terms or other variations thereof and terms of similar substance used in connection with any discussion of current plans, estimates and projections are subject to change based on a number of factors, including those outlined in this section.

Forward-looking statements in this document are based on certain key expectations and assumptions made by the Company. Although the management of the Company believes that the expectations and assumptions on which such forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. The material assumptions upon which such forward-looking statements are based include, among others, assumptions with respect to general business, economic and market conditions, the competitive environment, anticipated and unanticipated tax consequences and anticipated and unanticipated costs. These forward-looking statements are based on current plans, estimates and projections, and are subject to change based on a number of factors, including those outlined in this section. These forward-looking statements are subject to various risks and uncertainties, many of which are outside the Company’s control. Therefore, you should not place undue reliance on such statements. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update publicly any of them in light of new information or future events, if any.

Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. Such risk factors include, but are not limited to, the following:

•risks associated with international, national and regional unfavorable economic conditions, including the effect of changing tariff and other trade policies, inflation and other macroeconomic factors that could affect the Company or its clients;

•demand for the Company’s services, which may precipitate or exacerbate other risks and uncertainties;

•inflation and actions taken by central banks to counter inflation;

•the Company’s ability to attract new clients and retain existing clients;

•the impact of a reduction in client spending and changes in client advertising, marketing and corporate communications requirements;

•financial failure of the Company’s clients;

•the Company’s ability to retain and attract key employees;

•the Company’s ability to compete in the markets in which it operates;

•the Company’s ability to achieve its cost saving initiatives;

•the Company’s implementation of strategic initiatives;

•the Company’s ability to remain in compliance with its debt agreements and the Company’s ability to finance its contingent payment obligations when due and payable, including but not limited to those relating to redeemable noncontrolling interests, ~~and~~ deferred acquisition consideration and profit interests;

•the Company’s ability to manage its growth effectively;

•the Company’s ability to identify and complete acquisitions or other strategic transactions that complement and expand the Company’s business capabilities and successfully integrate newly acquired businesses into the Company’s operations, retain key employees, and realize ~~expected~~ cost savings, synergies and other related anticipated benefits within the expected time period;

•the Company’s ability to identify and complete divestitures and to achieve the anticipated benefits therefrom;

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•the Company’s ability to develop products incorporating new technologies, including augmented reality, artificial intelligence, and virtual reality, and realize benefits from such products;

•the Company’s use of artificial intelligence, including generative artificial intelligence;

•adverse tax consequences for the Company, its operations and its stockholders, that may differ from the expectations of the Company, including that recent or future changes in tax laws, potential ~~increases~~changes to corporate tax rates in the United States and disagreements with tax authorities on the Company’s determinations that may result in increased tax costs;

•adverse tax consequences in connection with the business combination that formed the Company in August 2021, including the incurrence of material Canadian federal income tax (including material “emigration tax”);

•the Company’s ability to maintain an effective system of internal control over financial reporting, including the risk that the Company’s internal controls will fail to detect misstatements in its financial statements;

•the Company’s ability to accurately forecast its future financial performance and provide accurate guidance;

•the Company’s ability to protect client data from security incidents or cyberattacks;

•economic disruptions resulting from war and other economic and geopolitical tensions (such as the ongoing military conflicts ~~between~~in ~~Russia~~Iran and ~~Ukraine~~the Middle East, and inbetween ~~the~~Russia ~~Middle~~and ~~East~~Ukraine), terrorist activities, natural disasters, ~~and~~ public health events, and tariff and trade policies;

•stock price volatility; and

•foreign currency fluctuations.

Investors should carefully consider these risk factors, the additional risk factors outlined under the caption “Risk Factors” in this Form 10-K, and in the Company’s other filings with the Securities and Exchange Commission (the “SEC”) which are accessible on the SEC’s website at www.sec.gov.

PART I

Item 1. Business

About Us

Stagwell Inc. is the global challenger network ~~built~~transforming tomarketing ~~transform~~through ~~marketing~~artificial intelligence (“AI”). Stagwell delivers scaled creative performance for ~~some of~~ the world’s most ambitious brands, connecting culture-moving creativity with leading-edge technology to harmonize the art and science of marketing. Led by entrepreneurs, our specialists in over 4034 countries ~~are~~have ~~unified under~~ a ~~single~~unified purpose: to drive effectiveness and improve business results for our more than 4,500 clients as of December 31, ~~2024~~2025.

Since 2021, Stagwell’s standing in the industry has grown as customers have increasingly recognized our agencies’ outstanding work —- leading to accelerating net new business trends —- and as we have invested in augmenting our capabilities and geographical reach. Throughout our growth, we have maintained a collaborative spirit that is integral to the Stagwell DNA. We believe our ability to work across business lines and geographies gives us a competitive advantage relative to many of the legacy holding company competitors. While Stagwell is still focused on growth, we believe we have the right scale, scope, and size to meet the needs of marketers worldwide. Our award-winning work and new business wins are evidence that our ~~“Goldilocks” (not too big, not too small)~~ offering resonates with clients.

Stagwell offers the capabilities marketers need in the digital age: Marketing Services, Digital Transformation, ~~Performance~~ Media & ~~Data~~Commerce, ~~Consumer~~Communications ~~Insights~~(which &includes ~~Strategy,~~Advocacy ~~Creativity & Communications~~services), and “software as a service” (“SaaS”) and “data as a service” (“DaaS”) technology tools within ~~the~~The ~~Stagwell~~ Marketing Cloud ~~Group~~. Our increasing global scale allows us to compete for many of the largest marketing contracts available, including multi-~~regional~~region contracts with annual fees ofin ~~more~~excess ~~than~~of $10 million. Stagwell operates in a highly competitive and fragmented industry, but we believe we have a distinct advantage given our digital composition and its alignment with evolving trends in the broader marketplace. Additionally, ~~the~~The ~~Stagwell~~ Marketing Cloud, our proprietary suite of SaaS and DaaS technology solutions, is designed for modern marketers and includes applications across the marketing value chain—research and insights, communications technology, ~~media studios~~ and ~~advanced~~ media ~~platforms (including augmented reality (“AR”))~~. Stagwell provides a suite of marketing services that serve marketers’ needs as well as self-service AI technology-driven solutions for in-house marketers. Through ~~the~~The ~~Stagwell~~ Marketing Cloud, Stagwell is investing in the frontiers of marketing, ~~with~~developing technology products that ~~fuel~~leverage ~~artificial~~AI ~~intelligence~~and ~~(“AI”)~~data for content creation, “instant” market research, and ~~for~~ communications ~~professionals and AR experiences for stadium goers and live events~~. This is a key part of the future strategy for the ~~company~~Company.

Stagwell has grown through a combination of organic growth and investment. ~~Beginning~~to ~~with~~enhance aits ~~single~~capabilities ~~company in 2015, Stagwell focused on the fastest-growing area of marketing: digital services. Between 2015~~ and ~~2021, we acquired companies including digital transformation and digital media groups like Code and Theory and ForwardPMX~~scale. In 2019, Stagwell Media LP (“Stagwell Media”) made a $100 million investment into MDC Partners, Inc. (“MDC”), the parent company of creative powerhouses including 72andSunny, Anomaly, Crispin, Porter & Bogusky, Doner and Forsman & Bodenfors. Recognizing the potential of those companies, Stagwell’s reorganization and careful management of the portfolio turned MDC around. In

Stagwell’s unified corporate team is the foundation of a powerful value creation platform focused on scaling our portfolio of marketing services and communications firms, which we refer to as “Brands,” and driving continual product and service evolution. We plan to continue investing in our core digital platforms, developing our suite of digital products in The Marketing Cloud, increasing our technology leadership through innovation and strategically investing in new solutions, technologies and capabilities to deliver value for our clients, employees, and shareholders.

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August 2021, Stagwell Media’s operating business and subsidiaries completed a business combination with MDC to become Stagwell Inc. (“the Transactions”).

Stagwell’s unified corporate team is the foundation of a powerful value creation platform focused on scaling our portfolio of marketing services firms, which we refer to as “Brands,” and driving continual network evolution. We plan to continue investing in our core digital platforms, developing our suite of digital products in the Stagwell Marketing Cloud, increasing our technology leadership through investment and innovation, and further expanding our international footprint both organically and via our Global Affiliate Network to deliver value for our clients, employees, and shareholders.

Our Market

Industry Trends

The digital revolution has changed where and how brands relate to consumers and has created an entirely new, highly complex content and commerce ecosystem. Historically, marketing was characterized by television and brand advertising targeted at broad audiences: everyone saw the same advertisement at the same time. Over the last ~~two~~three decades, digital innovation has created new, personalized ways to reach targeted consumers and spurred a fundamental shift in the marketing services landscape. Growth in the marketing services industry now comes primarily from digital ~~marketing~~mediums, helping brands meet customers across the entire online ecosystem. We believe every company today at its core is a digital marketing company.

We believe five key trends describe the industry today:

First, ~~online~~data ~~advertising~~is ~~now~~everywhere, ~~accounts~~making ~~for~~precise targeting even more ~~than~~important. ~~half~~Platform and channel growth has created an explosion of ~~global~~addressable ~~advertising~~data ~~spend~~that can be used to better understand consumer desires, habits, and ~~two~~needs in real-~~thirds~~time, allowing the delivery of ~~spend~~content inthat ~~the~~consumers ~~United~~want, ~~States~~when ~~alone~~they want it, ~~with~~and ~~the~~where ~~shift~~they ~~further~~want ~~accelerating~~it. asSources ~~new~~of ~~media~~online ~~channels~~data ~~like~~include ~~connected~~web, ~~television~~mobile, email, social, and ~~platforms~~connected ~~diversify~~TV ~~the~~- ~~digital~~in ~~channels~~addition ~~dominating~~to ~~content~~emerging products, apps and ~~commerce~~wearables that enhance day-to-day experiences. ~~Online~~The ~~now~~emergence ~~means~~of ~~virtually~~vast ~~everywhere:~~amounts ~~website~~of data spans behavioral, ~~mobile~~transactional, ~~social media~~demographic, ~~television~~psychographic and geographic categories. As connectivity grows, ~~out-~~the value of raw data declines -~~home~~ but we believe the ability to derive actionable insights from the data, as Stagwell businesses do, becomes increasingly important. We believe the most successful platforms will be ones that anticipate consumer demands and ~~immersive~~offer relevant and actionable analysis in digestible forms. This is why Stagwell has partnered with Palantir to develop a new AI marketing platform that brings the industry closer to “The Holy Grail of Marketing” - delivering the right advertisement, to the right person, ~~experiences.~~at the right time.

Second, ~~advertising~~companies ishave ~~commerce~~begun to build applications incorporating AI. ~~Digital~~Frontier ~~platforms~~technologies ~~provide~~such ~~ways~~as ~~for~~AI ~~brands~~are togaining ~~reach~~critical ~~consumers~~footholds, ~~directly~~reshaping ~~through~~the ~~e-commerce.~~marketing ~~Platforms~~ecosystem asand ~~diverse~~how asbusiness ~~Instagram,~~connects ~~Instacart,~~with stakeholders (including customers and ~~LinkedIn~~employees). ~~have~~These ~~created~~transformative ~~new~~technologies ~~ways~~are ~~for~~now ~~brands~~widely accessible to ~~interact~~consumer audiences as well, as seen with ~~their~~generative ~~customers~~AI tools like Open AI’s ChatGPT and Google’s Gemini. ~~Brands~~We ~~can~~believe ~~sell~~Stagwell ~~their~~is ~~products~~at ~~directly~~the onforefront ~~their~~of ~~sites~~innovating these technologies within our industry, ~~via~~collaborating ~~digital~~with ~~platforms~~companies such as ~~Amazon~~Adobe oron ~~through~~AI ~~interactive~~solutions, ~~experiences~~and ~~enabled~~incubating byoriginal ~~social~~and ~~media~~proprietary technology to drive business results. ~~Digital~~As ~~platforms~~AI ~~also~~drives ~~allow~~cross-sector ~~advocacy~~transformation, ~~groups~~we are helping clients build applications incorporating AI, delivering solutions that expand generative and ~~political~~content ~~campaigns~~capabilities, toand ~~reach~~reimagining ~~constituents~~how toAI ~~mobilize~~can ~~support~~transform orconsumer ~~raise~~and ~~funds~~digital ~~online~~experiences. ~~Retail~~Stagwell ~~media~~is ~~networks~~building ~~add~~an ~~complexity~~array ~~and~~of ~~opportunity~~solutions designed to ~~brands’~~engage ~~consumer~~with ~~engagement~~this ~~strategies~~key trend, ~~and~~including ~~influencer~~The ~~marketing~~Machine, ~~strategies~~Stagwell’s ~~allow~~agentic ~~brands~~operating system. These solutions are being sold to ~~reach~~customers ~~consumers~~and ~~through~~deployed ~~trusted,~~internally ~~individualized~~to ~~storytelling~~deliver strong outcomes for customers.

Third, ~~data~~online advertising is ~~everywhere,~~estimated ~~making~~to ~~precise~~have ~~targeting~~accounted ~~even~~for more ~~important.~~than ~~Platform~~half ~~and channel growth has created an explosion~~ of ~~addressable~~global ~~data~~advertising ~~that~~spend ~~can~~in ~~be used to better understand consumer desires~~2025, ~~habits,~~ and ~~needs in real~~two-~~time,~~thirds ~~allowing the delivery~~ of ~~content~~spend ~~that~~in ~~consumers~~the ~~want,~~United ~~when they want it~~States, ~~and~~with ~~where~~the ~~they~~shift ~~want~~further ~~it.~~accelerating ~~Sources~~as ofnew ~~online~~media ~~data~~channels ~~include~~like ~~web,~~connected ~~mobile,~~television ~~email, social,~~ and ~~connected~~platforms TVdiversify –the indigital ~~addition~~channels todominating ~~emerging~~content ~~products, apps~~ and ~~wearables that enhance day-to-day experiences~~commerce. ~~The~~Online ~~emergence~~now ofmeans ~~vast~~virtually ~~amounts~~everywhere: ~~of data spans behavioral~~website, ~~transactional~~mobile, ~~demographic~~social media, ~~psychographic and geographic categories. As connectivity grows~~television, ~~the value~~ out-of ~~raw data declines – but we believe the ability to derive actionable insights from the data~~-home, ~~as Stagwell businesses do, increases. We believe the most successful platforms will be ones that anticipate consumer demands~~ and ~~offer~~immersive ~~relevant analysis~~ in-person ~~digestible forms~~experiences.

Fourth, ~~companies~~advertising ~~have~~is ~~begun~~commerce. toDigital ~~build~~platforms ~~applications~~provide ~~around~~ways ~~AI.~~for ~~Frontier~~brands ~~technologies~~to ~~such~~reach asconsumers AIdirectly ~~and~~through ARe-commerce. ~~are~~Platforms ~~beginning~~as todiverse ~~gain~~as ~~critical~~Instagram, ~~foothold~~Instacart, ~~reshaping creative processes~~ and ~~how~~LinkedIn ~~businesses~~have ~~connect.~~created ~~Both~~new ~~technologies~~ways ~~are~~for ~~now~~brands ~~widely accessible~~ to ~~consumer~~interact ~~audiences as well, as seen~~ with ~~generative~~their AIcustomers. ~~tools~~Brands ~~like~~can ~~ChatGPT~~sell ~~and~~their ARproducts ~~tools~~directly ~~like~~on ~~Stagwell~~their ~~Marketing~~sites, ~~Cloud’s~~via ~~ARound.~~digital Weplatforms ~~believe~~such ~~Stagwell~~as isAmazon ator ~~the~~through ~~forefront~~interactive ofexperiences ~~innovating~~enabled ~~these~~by ~~technologies~~social ~~within~~media. ~~our~~Digital ~~industry,~~platforms ~~collaborating~~also ~~with~~allow ~~companies~~advocacy ~~such~~groups ~~as Adobe on AI solutions,~~ and ~~incubating~~political ~~original~~campaigns ~~and~~to ~~proprietary~~reach ~~technology~~constituents to ~~drive~~mobilize ~~business~~support ~~results.~~or Asraise AIfunds inonline. ~~particular~~Retail ~~drives~~media ~~cross-sector~~networks ~~transformation,~~add wecomplexity ~~are~~and ~~helping~~opportunity ~~clients~~to ~~build~~brands’ ~~applications~~consumer ~~around~~engagement AIstrategies, ~~delivering solutions that expand generative~~ and ~~content~~influencer ~~capabilities,~~marketing ~~and~~strategies ~~reimagining~~allow ~~how~~brands AIto ~~can~~reach ~~transform~~consumers ~~consumer~~through ~~and~~trusted, ~~digital~~individualized ~~experiences~~storytelling.

Finally, marketing technology is transforming the industry. SaaS and DaaS products are increasing the efficiency of marketing campaigns and in-house marketing operations, utilizing cutting edge technologies such as AI and automated media modeling, scaled consumer insights, campaign and asset management, brand reputation tracking, and more.

Competitive Landscape

Stagwell operates in a highly competitive and fragmented industry. Stagwell’s Brands compete for business and talent with the operating subsidiaries of large global holding companies such as Omnicom Group Inc., ~~Interpublic Group of Companies, Inc.,~~ WPP plc, Publicis Groupe SA, Dentsu Inc. and Havas SA, as well as with numerous independent agencies that operate in multiple markets. Our Brands also face competition from consultancies, such as Accenture and Deloitte, tech platforms, media companies and other services firms that offer related services. Stagwell’s Brands must compete with these other companies to maintain and grow existing client relationships and to obtain new clients and assignments. Individual products within ~~the~~The Marketing Cloud also typically compete with offerings that may be provided within broader service offerings at large global holding companies or provided on a standalone basis by technology startups or other industry participants such as Infosys, Wipro and Cognizant.

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Stagwell Marketing Cloud also typically compete with offerings that may be provided within broader service offerings at large global holding companies or provided on a standalone basis by technology startups or other industry participants such as Infosys, Wipro and Cognizant.

During the decades when marketing was dominated by television, the marketing services industry experienced significant consolidation as legacy advertising holding companies built substantial portfolios of often overlapping creative, communications, PR, and media businesses to achieve financial efficiencies by centralizing administrative operations. These holding companies grew significantly in size and market share.

The rapid rise of digital channels, convergence of advertising and commerce, and explosion in addressable data and marketing technology created a paradigm shift in the industry. While legacy models still accounted for a significant share of the market in ~~2024~~2025, we see the traditional holding company model as outdated in this rapidly evolving industry landscape. The marketing services industry has become more complex in recent years, with new market participants emerging in many different areas of the marketing ecosystem. This includes new platforms for advertisers, such as TikTok, and media buying participants, including DSP’s like The Trade Desk. In recent years, a number of large consulting firms with information technology implementation backgrounds have entered the marketing services market and, collectively, achieved significant market share. However, we believe these firms’ lack of creative, and media expertise limits their long-term growth potential as true challengers to the legacy marketing holding companies. ~~With~~Additionally, amajor ~~combination of talent and~~ technology companies, wesuch ~~believe~~as ~~that~~Amazon ~~Stagwell~~and isMeta, ~~well~~have ~~positioned~~entered ~~to take advantage of~~ the ~~continued transformation~~market, ~~sweeping~~offering ~~the~~alternative marketing ~~ecosystem~~solutions ~~and~~ to ~~disrupt the marketing services landscape~~clients. ~~Stagwell~~To ~~was~~date, ~~born~~these ~~digital~~solutions ~~and~~appear ~~now~~more ~~has~~geared atowards ~~global~~addressing ~~network of entrepreneurial companies that deliver~~ the ~~right~~needs ~~combination~~ of ~~creativity~~small and ~~technology~~medium ~~for~~size ~~the modern~~businesses, ~~digital~~rather ~~marketer~~than ~~through~~the ~~a model that emphasizes flexibility and integration. In addition~~large, ~~as AI drives transformation across marketing sectors, we believe our focus on digital transformation and AI~~multi-~~enabled~~national ~~product~~companies ~~development~~that inform the ~~Stagwell~~majority ~~Marketing~~of ~~Cloud~~Stagwell’s ~~sets~~customer ~~us apart~~base.

~~Our~~With ~~Offering~~a combination of talent and technology, we believe that Stagwell is well positioned to take advantage of the continued transformation sweeping the marketing ecosystem and disrupt the marketing services landscape. Stagwell was born digital and now has a global network of entrepreneurial companies that deliver the right combination of creativity and technology for the modern, digital marketer through a model that emphasizes flexibility and integration. In addition, as AI drives transformation across marketing sectors, we believe our focus on digital transformation and AI-enabled product development in The Marketing Cloud sets us apart.

~~Principal~~Segments ~~Capabilities~~& Service Lines

Stagwell’s Brands provide differentiated, digital-first marketing and related services to a diverse client base across many industries. Our array of capabilities provide an integrated suite of marketing services for our blue-chip customer base.

~~Our~~Stagwell ~~principal~~holds ~~capabilities~~a ~~fall~~100% ~~into~~ownership ~~five~~position ~~categories:~~in 1)substantially ~~Stagwell~~all ~~Marketing~~of ~~Cloud~~its ~~Group~~Brands, 2)and ~~Digital~~the ~~Transformation~~remainder 3)are ~~Performance~~majority ~~Media~~owned &with ~~Data~~management 4)of ~~Consumer~~the ~~Insights~~Brands &owning ~~Strategy~~the ~~and~~remaining 5)equity. Stagwell ~~Creativity~~generally &has ~~Communications.~~rights ~~Taken~~to ~~together,~~increase ~~these~~ownership ~~capabilities~~of ~~provide~~non-wholly anowned ~~integrated~~subsidiaries ~~suite~~to of100% ~~marketing~~over ~~services~~a ~~for~~defined ~~our~~period ~~blue-chip~~of ~~customer base~~time.

WeThe ~~group~~Company ~~our~~brings ~~Brands~~itself ~~into~~to ~~these~~market ~~principal~~and ~~capability~~organizes ~~categories~~its ~~based~~Brands oninto ~~the~~five ~~source~~reportable ofsegments: ~~most~~“Marketing ofServices,” ~~their revenue. We also classify~~ “Digital Transformation,” ~~Performance~~ “Media & ~~Data~~Commerce,” ~~Consumer Insights & Strategy~~“Communications,” and ~~Stagwell~~“The Marketing Cloud .”

We group our Brands into these reportable segments based on the source of most of their revenue. All segments derive a meaningful portion of revenues through Digital Channels. We believe our concentration of digital capabilities today provides a competitive advantage in the marketplace and positions us to benefit from continued digital disruption in the marketing services industry. We plan to continue to invest in our core digital platforms as well as emerging technologies to effectively support marketing transformation for our clients.

The reportable segments are:

•The Marketing Services segment delivers a broad range of services across four closely related client needs: creative, research, experiential, and social media solutions designed to build and elevate brands. Capabilities include developing breakthrough brand campaigns, providing consumer insights through advanced research methodologies, creating immersive experiential marketing programs and social engagement strategies that connect brands with audiences across digital platforms. By combining creative excellence, data-driven insights, and innovative experiences, Marketing Services empowers organizations to differentiate themselves in the marketplace, drive audience engagement, and achieve measurable business results. These services employ a wide variety of AI-powered services in the delivery, such as AI-powered creative production and data analysis. Brands in this segment include, but are not limited to, creative agencies 72 and Sunny and Anomaly, research agencies NRG and Harris Insights, experiential agency TEAM, and social agency Movers & Shakers.

•The Digital Transformation segment designs, implements and activates modern digital ecosystems that enable brand and customer experiences through the integration of strategy, design, and technology. This segment helps clients modernize their digital infrastructure, enhance customer engagement, and accelerate enterprise transformation. Its capabilities span the delivery of digital products and experiences that connect brand storytelling with technology, including website and content development, digital campaigns, product and platform design, AI-native strategies and integration, and implementation of marketing technology (“MarTech”) products and solutions for customers. It also provides managed services, staff augmentation, and engineering expertise across various delivery models, offering system integration, full-stack development, and ongoing platform management. Additionally, Digital Transformation connects digital ecosystems to physical experiences through innovative, technology-driven customer engagements,

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~~Group~~such as business-to-business (“~~Digital~~B2B”) ~~though~~platforms ~~Brands~~and ~~categorized~~multimodal asactivations ~~Creativity~~that &blend ~~Communications~~physical ~~also generate a significant portion of revenue from creativity~~ and ~~content delivered on~~ digital ~~channels~~environments ~~and~~using ~~some~~augmented ~~agencies~~reality (“AR”), ~~such~~virtual asreality ~~72andSunny~~(“VR”), and ~~Anomaly,~~emerging ~~do meaningful amounts of digital work that fluctuates as a percentage of revenue~~technologies. WeTogether, ~~believe~~these ~~our concentration of digital~~ capabilities ~~today~~empower ~~provides~~organizations ato ~~competitive~~transform ~~advantage~~their indigital ~~the~~presence ~~marketplace~~ and ~~positions~~drive ussustained tobusiness ~~benefit~~growth. ~~from~~Brands ~~continued digital disruption~~ in ~~the~~this ~~marketing~~segment ~~services~~include, ~~industry.~~but Weare ~~plan~~not limited to, ~~continue~~strategy toand ~~invest~~design inagencies ~~our~~Code ~~core~~and ~~digital~~Theory ~~platforms~~and asInstrument, ~~well~~development asand ~~emerging~~implementation ~~technologies~~agency toTrueLogic, ~~effectively~~and ~~support~~digital ~~marketing~~activation ~~transformation~~agency ~~for~~Left ~~our~~Field ~~clients~~Labs.

~~Stagwell~~•The Media ~~Marketing~~& ~~Cloud~~Commerce segment ~~Group.~~delivers Weintegrated ~~develop~~AI-based ~~proprietary,~~data ~~in-house~~solutions ~~software~~that drive audience engagement and ~~related~~business ~~technology~~growth ~~products~~through media buying, ~~including~~owned ~~AI-enabled~~media ~~communications~~platforms, ~~research~~commerce enablement, and Customer Relationship Management (“CRM”) strategies. Its capabilities include planning and executing media ~~technology~~campaigns across global platforms, ~~cookie-less~~leveraging data-driven ~~platforms~~approaches ~~for~~to ~~advanced~~optimize ~~targeting~~reach and ~~activation~~effectiveness across first-party data, ~~software~~second-party ~~tools~~data, ~~for~~and ethird-~~commerce~~party ~~applications~~data, ~~specialty~~and providing commerce and CRM tools that connect brands with consumers throughout the purchase journey. The segment also offers specialized media ~~solutions~~platforms and translation services to support targeted communication and market expansion. By combining expertise in ~~the~~media ~~fast-growing~~strategy, ~~augmented~~commerce ~~reality~~activation, ~~space~~and audience analytics, Media & Commerce empowers organizations to maximize their marketing investments and ~~innovative~~achieve ~~applications~~measurably ofefficient ~~text-messaging~~commercial ~~for~~outcomes. ~~consumer~~Brands ~~engagement~~in this segment include, ~~which~~but weare ~~license~~not limited to, ~~clients~~media ~~using~~buying, owned ~~subscription-based~~media ~~SaaS~~platforms Reach TV, and ~~DaaS~~strategy ~~models~~agency Assembly Global, commerce and CRM agency Gale.

~~Digital~~•The ~~Transformation.~~Communications segment Weprovides ~~build~~a ~~digital~~leading ~~services~~edge ~~and~~set ~~products~~of ~~for~~solutions ~~clients.~~designed Weto ~~design~~help ~~and~~organizations build, ~~digital~~protect, ~~platforms~~ and ~~experiences~~enhance ~~that~~their ~~support~~reputation ~~the~~across ~~delivery~~diverse ofaudiences ~~content, commerce, services~~ and ~~sales~~channels. WeIts ~~create~~capabilities ~~websites,~~include ~~mobile~~strategic ~~applications~~communications, ~~back-end~~public ~~systems~~relations, ~~content~~ and ~~data~~advocacy ~~management~~services ~~systems,~~that ~~and~~leverage ~~other~~AI ~~digital~~and ~~environments~~data-driven ~~enabling~~insights ~~clients~~ to ~~engage~~craft ~~with~~compelling ~~consumers~~narratives ~~across~~and ~~the~~influence ~~digital~~public ~~ecosystem~~perception. WeThe ~~steer~~segment ~~significant~~also ~~digital~~offers ~~transformations~~expertise ~~for~~in ~~businesses~~targeted communications, ~~blending~~crisis ~~data~~management, ~~analytics~~and &stakeholder ~~research~~engagement, ~~and~~ensuring ~~organizational~~clients ~~consulting~~can respond effectively to ~~drive~~emerging ~~impact~~issues ~~with~~and ~~technology~~opportunities. WeAdvocacy ~~design~~services ~~and~~encompass ~~implement~~strategic ~~technology~~political ~~and~~campaign ~~data~~management, ~~strategies~~grassroots tomobilization, ~~support~~and ~~digital~~fundraising ~~services~~expertise ~~needed~~that ~~for~~reach ~~our~~across ~~clients.~~the Wepolitical ~~also~~spectrum. ~~implement~~By ~~technology~~combining ~~and~~deep ~~strategies~~industry ~~for~~knowledge ~~utilizing~~with innovative digital ~~channels~~approaches to ~~mobilize~~media and ~~raise~~advocacy, ~~funds~~Communications ~~from~~empowers ~~proponents~~organizations ~~and constituents~~ to ~~support~~connect ~~political~~with ~~candidates~~key audiences, ~~non-profit~~shape ~~groups~~conversations, and ~~issue~~achieve ~~organizations~~their instrategic ~~the~~objectives. ~~public~~Brands ~~arena.~~in Asthis ~~businesses~~segment ~~across~~include, ~~sectors~~but are ~~likely~~not limited to, ~~grapple~~strategic ~~with~~communications ~~the~~agencies ~~impact~~Allison ofand AIConsulum, weand ~~implement~~advocacy AIservices toagencies ~~enhance~~SKDK ~~operations for our clients, more efficient marketing,~~ and ~~new~~Targeted ~~engagement methods with consumers~~Victory.

~~Performance~~•The ~~Media~~Marketing &Cloud ~~Data.~~segment Wedelivers ~~develop~~a ~~omnichannel~~comprehensive ~~media~~suite ~~strategies~~of technology solutions for in-house marketers, combining SaaS and ~~provide~~DaaS ~~coordinated~~offerings. ~~execution~~Its ~~for~~key ~~the~~products ~~placement~~cover a range of ~~advertisements~~areas. ~~across~~Advanced ~~the~~research ~~media~~tools ~~funnel~~that ~~including~~enable ~~digital~~real-time ~~channels,~~customer ~~performance~~insights ~~marketing~~through syndicated and ~~analog~~Do ~~placements~~It ~~globally.~~Yourself ~~Unlike~~(“DIY”) ~~legacy~~generative ~~holding~~AI-drafted ~~companies~~surveys, AI-driven text analysis, and predictive analytics. Communications technology that ~~own~~aggregates ~~large~~data ~~amounts~~from millions of ~~television~~sources, ~~inventory~~including ~~and~~news, ~~therefore~~social ~~must~~media, ~~sell it~~print, weand ~~take~~TV/radio broadcasts, on a ~~media-agnostic~~daily ~~approach~~basis ~~leveraging~~to ~~digital~~monitor, ~~technologies~~analyze, AIand respond to market trends. Media studio products that leverage first-~~powered~~party, ~~targeting~~third-party, and ~~media~~proprietary indata ~~addition~~ to ~~analog~~provide ~~advertising.~~actionable ~~Our~~audience ~~media~~insights ~~services~~and ~~include~~attribution analytics and advanced media platforms that encompass audience engagement solutions such as ~~audience~~AR, ~~analysis~~quick response (“QR”) codes, and ~~media~~loyalty ~~buying~~programs, all designed to collect consumer data and ~~planning~~generate actionable insights. Together, ~~ranging~~these ~~across~~capabilities ~~the~~empower ~~platforms~~marketers ato ~~modern~~understand, ~~marketer~~engage, ~~needs~~and influence their audiences with precision and agility. Brands in this segment include, but are not limited to, ~~engage~~QUEST, ~~consumers~~Unicepta and Smart Assets.

Consumer Insights & Strategy. We perform large-scale online surveys, specialized research, and data analytics across the consumer journey to provide strategic insights and guidance that informs business content, product, communications and media strategies for many of the world’s largest companies, including numerous Fortune 100 clients. We have differentiated specializations in brand and corporate reputation tracking, theatrical and streaming content and strategy, and technology product design and marketing. Our proprietary AI-powered marketing solutions continue to provide real-time insight into consumer sentiments and brand performance with precision and at scale.

Creativity & Communications. We develop holistic, creativity-based content strategies and campaigns from concept to execution through to optimization. These services include strategy development, advertising creation, live events, immersive digital experiences, cross platform engagement, and social media content. We also provide strategic communications, public relations and public affairs services including media relations, thought leadership, investor and financial relations, social media, executive positioning and visibility. We’re also working with brands to integrate AI into creative processes, streamlining campaign development and saving on costs.

Network Structure & Reportable Segments

Stagwell maintains a 100% ownership position in substantially all of its Brands, and the remainder are majority owned with management of the Brands owning the remaining equity. Stagwell generally has rights to increase ownership of non-wholly owned subsidiaries to 100% over a defined period of time.

The Company organizes its Brands into three reportable segments: “Integrated Agencies Network,” “Brand Performance Network” and the “Communications Network.”

The reportable segments are:

•The Integrated Agencies Network includes five operating segments: the Anomaly Alliance, Constellation, the Doner Partner Network, Code and Theory Network, 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, Stagwell Marketing Cloud Group and Creativity & Communications. The Brands included in the operating segments that comprise the Integrated Agencies Network reportable segment includes: Anomaly Alliance (Anomaly, What’s Next Partners), Constellation (72andSunny, Crispin LLC, Colle McVoy, Hunter, Redscout, Team Enterprises, Harris Insights, Movers and Shakers, and Team Epiphany), the Doner Partner Network (Doner, KWT Global, Harris X, Veritas, Doner North, and Yamamoto), Code and Theory Network (Code and Theory, Instrument, Left Field Labs), and National Research Group.

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~~These~~Go-To-Market 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.Approach

~~•The Brand~~Our ~~Performance~~global ~~Network (“BPN”)~~go-to-market ~~comprises~~strategy ais ~~single~~key ~~operating~~to ~~segment.~~our ~~BPN~~objective ~~includes~~of aproviding ~~unified~~our ~~media~~clients ~~and data management structure~~ with ~~omnichannel~~a ~~media~~balanced ~~placement,~~combination ~~creative~~of ~~media~~leading-edge ~~consulting,~~technology ~~influencer~~ and ~~business-to-business~~creative ~~marketing capabilities~~talent. ~~Our~~We ~~Brands~~go ~~in this segment aim~~ to ~~provide~~market ~~scaled~~in ~~creative~~four ~~performance~~main ~~through~~ways: ~~developing~~as ~~and~~individual ~~executing sophisticated omnichannel campaign strategies leveraging significant amounts of consumer data. BPN’s~~ Brands, ~~provide media solutions such~~ as ~~audience~~service ~~analysis,~~lines ~~media~~where ~~planning,~~collaboration ~~and buying~~ across aservices ~~range~~is ~~of digital and traditional platforms (out-of-home~~needed, ~~paid~~as ~~search,~~Stagwell ~~social~~Global ~~media,~~when ~~lead~~we ~~generation,~~create ~~programmatic~~multi-region, ~~television,~~Stagwell-wide ~~broadcast~~teams, ~~among others)~~ and ~~includes~~as ~~multichannel~~The ~~Brands~~Marketing ~~Assembly~~Cloud, ~~CPB~~which ~~International,~~delivers ~~Stagwell~~SaaS ~~Production, Vitro, Forsman & Bodenfors, Goodstuff, Bruce Mau, digital creative & transformation consultancy Gale, B2B specialist Multiview, CX specialists Kenna,~~ and ~~travel~~DaaS ~~media~~products ~~experts~~for ~~Ink~~in-house marketers.

~~•The~~Unlike ~~Communications~~legacy ~~Network reportable~~holding ~~segment~~companies ~~comprises~~who ahave ~~single~~focused ~~operating~~on ~~segment~~achieving cost synergies by consolidating brands within their networks, Stagwell focuses on collaboration. We believe it is important for our ~~specialist~~Brands ~~network~~to ~~that~~maintain ~~provides~~their ~~advocacy,~~individual ~~strategic~~identities ~~corporate~~to ~~communications,~~attract ~~investor~~the ~~relations,~~highest ~~public~~quality ~~relations,~~talent ~~online~~within ~~fundraising~~their capabilities of expertise. Maintaining strong brand identities within our integrated Brands and ~~other~~specialist ~~services~~service tolines provides a structure supporting both ~~corporations~~individual and ~~political~~joint ~~and~~go-to-market ~~advocacy~~approaches. ~~organizations~~Maintaining ~~and~~separate ~~includes~~Brands ~~Allison,~~with ~~SKDK,~~flexibility ~~Targeted~~to ~~Victory,~~integrate ~~and~~also ~~Consulum~~enables effective management of potential conflicts of interest. Go-to-market collaboration typically occurs on larger engagements requiring services across multiple capabilities or geographies.

~~The~~To ~~Company~~further ~~combines~~support ~~and~~collaboration, ~~discloses~~Stagwell ~~operating~~provides ~~segments~~financial ~~that~~incentives dofor ~~not~~Brands ~~meet~~to ~~the~~collaborate ~~aggregation~~with ~~criteria~~one ~~and~~another, ~~includes~~including through referrals and the ~~elimination~~sharing of ~~certain~~both ~~intercompany~~ services and ~~revenue,~~expertise. ~~within~~Segment ~~“All~~and ~~Other.”~~Brand ~~All~~leaders ~~Other~~have ~~consists~~components of ~~the~~incentive ~~Company~~compensation that are based on Stagwell’s ~~“software~~overall asperformance aand ~~service”~~the ~~(“SaaS”)~~overall ~~and~~performance ~~“data~~of astheir aintegrated or specialist service” ~~(“DaaS”)~~lines ~~technology~~to ~~tools.~~incentivize go-to-market collaboration.

~~The~~In ~~Company~~addition ~~reports~~to ~~corporate~~our ~~expenses~~owned asBrands, ~~“Corporate.”~~we ~~Corporate~~maintain ~~consists~~a network of ~~corporate~~go-to-market ~~office~~alliances ~~expenses incurred in connection~~ with ~~the~~like-minded ~~strategic~~independent ~~resources provided to the operating segments~~brands, astech ~~well~~companies asand ~~certain~~marketing ~~other~~services ~~centrally~~firms ~~managed~~in ~~expenses~~key ~~that~~markets ~~are~~around ~~not fully allocated to~~ the ~~operating segments~~world. These ~~office~~partners, ~~and~~which ~~general~~we ~~expenses~~refer ~~include~~to ~~(i)~~as ~~salaries~~Global ~~and related expenses for corporate office employees~~Affiliates, ~~including~~enable ~~employees~~us ~~dedicated~~ to ~~supporting~~increase ~~the~~our ~~operating~~local ~~segments,~~market ~~(ii)~~reach ~~occupancy~~and ~~expenses~~qualify ~~relating~~for tobusiness ~~properties~~opportunities ~~occupied~~that byrequire ~~all~~enhanced ~~corporate~~capabilities ~~office~~in ~~employees,~~specific ~~(iii)~~local ~~other~~markets ~~office~~without ~~and~~taking ~~general~~on ~~expenses~~additional ~~including~~costs. ~~professional~~As ~~fees~~of ~~for~~December ~~the~~31, ~~financial~~2025, ~~statement~~our ~~audits~~Global ~~and~~Affiliate ~~other~~Network ~~public~~included ~~company~~more ~~costs,~~than ~~and~~70 ~~(iv)~~affiliates ~~certain~~and ~~other~~added ~~professional~~coverage ~~fees~~for ~~managed~~Stagwell byin ~~the~~20 ~~corporate~~additional ~~office~~countries.

~~Go-To-Market~~Our ~~Strategy~~distinct Brand structure enables us to work with multiple clients within the same business sector, and many of our largest clients are served by multiple Brands within our portfolio. The Brands’ work is supported by a centralized marketing and new business team that fosters collaboration, sources new business opportunities and communicates across industries to drive awareness of our offerings. Additionally, a centralized corporate innovation team develops and invests in proprietary digital marketing products that are distributed by Brands across Stagwell, further enhancing the value proposition Stagwell’s Brands offer to clients.

Our global go-to-market strategy is key to our objective of providing our clients with a balanced combination of leading-edge technology and creative talent. We go to market in four main ways: as individual Brands, as networks where collaboration across services is needed, as Stagwell Global when we create multi-region, Stagwell-wide teams, and as the Stagwell Marketing Cloud, which delivers SaaS and DaaS products for in-house marketers. Strategy

~~Unlike~~Stagwell’s ~~legacy~~strategic ~~holding~~approach ~~companies~~is ~~who have~~ focused on ~~achieving~~delivering ~~cost~~a ~~synergies by consolidating brands within their networks~~sustainable, ~~Stagwell~~long-term ~~focuses~~path onto ~~collaboration.~~significant Wegrowth ~~believe~~and itsupports ~~is important for~~ our ~~Brands~~primary toobjectives ~~maintain~~which ~~their~~are ~~individual~~achieving ~~identities~~strong tolevels ~~attract the highest quality talent within their capabilities~~ of ~~expertise.~~organic ~~Maintaining~~growth, ~~strong~~increasing ~~brand identities within~~ our ~~integrated~~digital ~~Brands~~revenue ~~and~~mix, ~~specialist~~increasing networks provides a structure supporting both individual and joint go-to-market approaches. Maintaining separate Brands with flexibility to integrate also enables effective management of potential conflicts of interest. Go-to-market collaboration typically occurs on larger engagements requiring services across multiple capabilities or geographies.

To further support collaboration, Stagwell provides financial incentives for Brands to collaborate with one another through referrals and the sharing of both services and expertise. Network and Brand leaders have components of incentive compensation that are based on Stagwell’s overall performance and the overall performance of their integrated or specialist networks to incentivize go-to-market collaboration.

In addition to our owned Brands, we maintain a network of go-to-market alliances with like-minded independent brands, tech companies and marketing services firms in key markets around the world. These partners, which we refer to as Global Affiliates, enable us to increase our local market reach and qualify for business opportunities that require enhanced capabilities in specific local markets without taking on additional costs. As of December 31, 2024, our Global Affiliate Network included more than 80 affiliates and added coverage for Stagwell in 26 additional countries.

Our distinct Brand structure enables us to work with multiple clients within the same business sector, and many of our largest clients are served by multiple Brands within our portfolio. The Brands’ work is supported by a centralized marketing and new business team that fosters collaboration, sources new business opportunities and communicates across industries to drive awareness of our offerings. Additionally, a centralized corporate innovation team develops and invests in proprietary digital marketing products that are distributed by Brands across the network, further enhancing the value proposition Stagwell’s Brands offer to clients.

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~~Our~~international ~~Strategy~~scale, expanding the average client relationship size, and improving strong margins and free cash flow. We believe pursuing these objectives will increase value for our shareholders.

The key components of the Stagwell strategy are Digital, Integrated, Global, and Strategic (“DIGS”). We believe the DIGS model gives us a sustainable, long-term path to significant growth and supports our primary objectives which are achieving strong levels of organic growth, increasing our digital revenue mix, increasing international scale, expanding the average client relationship size, and improving strong margins and free cash flow. We believe pursuing these objectives will increase value for our shareholders.

Our strategy is focused on six specific initiatives: 1) Investing in Digital Capabilities, 2) Expanding Addressable Markets, 3) Effective Integration at Scale, 4) Strategic Value Creation Platform, 5) Maintaining a Highly Variable Cost Structure, and 6) Efficient Capital Allocation.

Investing in Digital Capabilities

Our digital businesses serve the areas where we expect the fastest growth in the marketing space and position us to lead the wave of transformation in the industry. By investing in our core digital platforms and introducing proprietary SaaS and DaaS ~~marketing~~MarTech ~~technology (“martech”)~~ products, we aim to increase the digital proportion of our net revenue. We aim to expand our digital capabilities in three main ways:

•First, with our Digital Transformation segment, we united all of our leading ~~digital~~ Brands into the Code and Theory Network, including those that focus heavily on technology, design and creativity more than media. Brands such as Instrument, Kettle, Left Field Labs, Mediacurrent and others make up the network, which works with ~~one~~several ~~out of four~~ Fortune 500 companies, asincluding ~~well as~~ every one of the FAANG platforms (Facebook, Amazon, Apple, Netflix and Google). This consolidation and investment include funding new capabilities and supporting cross-selling ~~via~~with ~~our~~other ~~Integrated~~Brands ~~Agencies~~and ~~Network~~across Segments, which has already created additional opportunities. We intend to continue to invest in these Brands’ emerging technologies, including AI solutions, to remain at the forefront of the transformation of marketing services.

•Second, we are pursuing complementary acquisition opportunities to bolster our existing assets in areas such as digital transformation and digital media buying. For example, we acquired Create. Group Holding Limited (“Create”), a leading strategic digital communications group in the Middle East, in April 2025 to join the Code and Theory Network to help regional clients navigate the complexity of changing consumer behaviors, emerging technologies and AI. Throughout ~~the year~~2025, we continued to build on our track record of “bolt-on” digital-first acquisitions, including ~~What’s~~JetFuel ~~Next~~Studio ~~Partners,~~LLC aand ~~French~~Powered ~~digital~~by ~~brand~~JetFuel ~~and~~LLC (collectively, “Jetfuel”), an innovative experiential marketing ~~consultancy~~services agency, and ~~PROS~~in ~~Agency~~January 2026, we acquired Wavelength Strategy, Inc. (“Wavelength”), a leading digital PRadvertising ~~leader~~firm operating in ~~Brazil~~the advocacy sphere, combining the business with SKDK, a premier public affairs and political consulting firm.

•Third, we intend to continue to invest in ~~the~~The ~~Stagwell~~ Marketing Cloud, a suite of technology products in development or early-stage commercialization. These include AI-enabled solutions in communications technology, research ~~and insights~~, ~~media,~~ and ~~advanced~~ media ~~solutions~~. These products are licensed to our clients using subscription-based SaaS and DaaS models and distributed by Brands across our network. We believe ~~the~~The ~~Stagwell~~ Marketing Cloud positions us to serve in-house marketing departments and create recurring, high-value revenue streams in the future. WeIn prior years, we have also made strategic acquisitions for ~~the~~The ~~Stagwell~~ Marketing Cloud, including ~~LEADERS/IM.AI~~UNICEPTA ~~(which~~Holding ~~will~~GmbH ~~strengthen PRophet’s influencer marketing capabilities~~(“Unicepta”), ~~UNICEPTA~~a ~~(which~~leading ~~will expand PRophet’s~~ media monitoring ~~toolkit and the platform’s global reach)~~company, and BERA.ai, a leading predictive brand technology platform ~~that will elevate Stagwell Marketing Cloud’s market research capabilities~~.

Expanding Addressable Markets

We are focused on expanding our addressable markets through investments that increase our global footprint as well as adding emerging marketing technologies in areas expected to have strong secular growth. We believe increasing our geographic presence and breadth of capabilities will allow us to significantly grow our average client relationship size over time.

•International Markets: Our strategy for growing our international operations is focused on expanding our media buying, content creation and digital capabilities in new markets, which will improve our qualifications for large multi-regional contracts with the largest global marketers. In ~~2024~~2025, we acquired orADK ~~signed~~Global ~~agreements~~(“ADK”), toan ~~acquire~~integrated ~~nine~~marketing ~~international~~services ~~businesses:~~company ~~Create.~~with ~~Group~~10 ~~(MENA),~~markets ~~UNICEPTA~~around ~~(Germany)~~the world, ~~Consulum~~but ~~(MENA),~~predominantly ~~LEADERS~~in ~~(Israel),~~Asia ~~Business~~Pacific. ~~Traveller~~This ~~(Global),~~follows ~~Luxine~~the ~~Relations~~acquisition ~~Publiques~~of nine international businesses in 2024, including: Consulum (~~Canada~~MENA), PROS Agency (Brazil), What’s Next Partners (France) and Sidekick (U.K.).

•We maintain a Global Affiliate network that enables us to deliver creative, performance, media and technology capabilities at the scale required to serve the world’s largest marketers. Our affiliates provide local talent and insights for regional engagements without requiring investment capital. We believe our Global Affiliates will be a valuable source for acquisitions, allowing Stagwell to vet companies before formal investment. Brand New Galaxy was our first affiliate and affiliate acquisition. As of December 31, ~~2024~~2025, we had over 9070 Global Affiliate partners in our network.

•Emerging Marketing Technologies: In addition to the advertising and marketing services market, we believe our investments in ~~the~~The ~~Stagwell~~ Marketing Cloud will position us to address new, rapidly expanding market opportunities, including marketing data, and artificial intelligence.

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including marketing data, campaign martech, the metaverse, and AR and VR applications. For example, Stagwell’s audience insights tool, CUE, helps brands and agencies maximize first-party data with integrated identity resolution and Stagwell’s proprietary data, enhancing audience understanding in a world increasingly less reliant on cookies. And Stagwell’s shared-AR product ARound launched a major activation with the Los Angeles Rams at the team’s SoFi Stadium this past NFL season, partnering with sponsors such as Uber Eats and Princess Cruises to introduce innovative marketing experiences into the live sports environment in an entirely new way.

Effective Integration at Scale

We have continued to drive significant long-term operating efficiencies and pay close attention to costs.

Within our client-facing integrated and specialist networks we see further opportunity to achieve operating efficiencies by increasing our non-U.S. based engineering footprint. We are focused on scaling our development capabilities in lower-cost markets, specifically nearshore in Latin America and offshore in Egypt, India, and Southeast Asia. Our engineering talent is concentrated within our Digital Transformation brands and is primarily focused on developing digital platforms, applications, tools, and experiences for our clients. We already have a substantial engineering presence globally – approximately 1 in 10 Stagwell employees were engineers as of December 31, 2024 – and have developed the necessary skills to support hiring, training and managing large teams outside the United States. We believe these markets offer a significant supply of quality technical talent to meet increasing client demand for high-speed delivery of digital transformation and production services.7

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Within our client-facing integrated and specialist service lines we see further opportunity to achieve operating efficiencies by increasing our non-U.S. based engineering footprint. We are focused on scaling our development capabilities in lower-cost markets, specifically nearshore in Latin America and offshore in Egypt, India, and Southeast Asia. Our engineering talent is concentrated within our Digital Transformation brands and is primarily focused on developing digital platforms, applications, tools, and experiences for our clients. We already have a substantial engineering presence globally and have developed the necessary skills to support hiring, training and managing large teams outside the United States. We believe these markets offer a significant supply of quality technical talent to meet increasing client demand for high-speed delivery of digital transformation and production services.

Stagwell Value Creation Platform

We believe our engaged, unified corporate team provides a growth platform for value creation through both revenue and cost synergies for our existing Brands and prospective investments. We are led by a management team with deep industry expertise and a track record of growing and managing marketing services businesses. The Stagwell platform provides a foundation to support efficient, accretive scaling of our global ~~network~~business and our high-growth digital transformation and digital media capabilities. Our corporate objective is to accelerate growth and improve the profitability of our Brands, and we believe Brands see strategic value in being part of the Stagwell network.

Our value creation platform has three layers: Client Services, Growth Investment and Shared Services.

Our Client Services layer aims to facilitate revenue growth through go-to-market support. Our Global Solutions team provides a single point of contact for key clients, coordinating our go-to-market strategies for large, multi-regional contracts or business opportunities requiring cross-Brand, cross-capability or cross-market services. Our Global Growth team provides prospecting and new business services to our Brands, working in partnership with our Brand team which supports messaging and communications efforts. At the ~~network~~service line level, the Stagwell ~~Brand~~Media ~~Performance~~Platform Network provides a corporate structure to cost-effectively coordinate our global media placement capabilities, while our Global Affiliate Network positions our Brands to pitch for and win opportunities requiring capabilities in specific local markets.

Our Growth Investment layer is designed to drive continual ~~network~~product and service evolution and bolsters competitive advantages in key markets, capabilities, and emerging technologies and consists of two teams: centralized investment and innovation. Our central investment team, which has a strong track record of accretive investments, provides expertise in sourcing, negotiating and structuring investments in close partnership with our Brand leadership, to drive efficient scaling of our ~~networks~~capabilities and accelerate growth. In addition to our investment team, a centralized innovation team provides development capabilities for ~~the~~The ~~Stagwell~~ Marketing Cloud and bespoke client needs.

Our Shared Services layer provides unified back-office systems via Stagwell CORE (“CORE”), a platform that focuses on transitioning away from disparate teams, processes and systems and establishing a standardized platform. CORE provides centralized services across back office operational functions, including information technology (“IT”), accounting, payroll, accounts payable and receivable, human resources, real estate, enterprise-level contract administration, and accounting services. With a focus on driving shareholder value by optimizing cost structures and facilitating efficient integration of acquired businesses, CORE’s services are highly standardized with an emphasis on scalability to support Stagwell’s growth.

Maintaining a Highly Variable Cost Structure

We are focused on maintaining a business model that has attractive cash flow, revenue growth and margin expansion and plan to maintain a highly variable cost structure that allows us to be nimble. We aim to focus our investments on people-based businesses that operate with a high percentage of variable costs. ~~Our~~The majority of our employees have at-will employment arrangements. This predominantly at-will employment structure positions us to respond rapidly to changing market conditions in order to maintain margins. We also strive to diligently deploy low capital investment strategies. For example, we believe our Global Affiliate Network strategy for expanding international capabilities positions us to maintain a high level of flexibility through macroeconomic cycles.

Our management team has successfully demonstrated an ability to efficiently operate, manage and grow a profitable portfolio of diverse advertising businesses through periods of dramatic changes in consumer behavior, technological advancement and economic cycles. The team has a successful track record of investing, acquisition execution and integration as well as recruiting and retaining the key talent that drives our operating businesses.

Efficient Capital Allocation

We are focused on delivering strong organic growth and free cash flow to support efficient capital allocation. Our capital allocation approach is designed to be flexible, supporting the needs of the business and generating value for shareholders. Primary uses of capital are expected to include funding diligently structured, highly accretive investments in businesses that we believe will support sustainable future growth by increasing the breadth and depth of our capabilities, and repurchasing shares to reduce shareholder dilution and return capital to shareholders. We also expect more modest capital allocation towards

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~~advancement~~reducing ~~and~~leverage ~~economic~~in ~~cycles.~~order ~~The~~to ~~team~~provide ~~has~~increased afinancial ~~successful track record of investing~~flexibility, ~~acquisition execution~~ and ~~integration~~funding asdevelopment ~~well~~of asproprietary ~~recruiting~~technology and ~~retaining~~products ~~the~~for ~~key~~The ~~talent~~Marketing ~~that drives our operating businesses~~Cloud.

Efficient Capital Allocation

We are focused on delivering strong organic growth and free cash flow to support efficient capital allocation that generates value for our shareholders. Our primary use of capital is expected to be funding diligently structured, highly accretive investments in businesses that we believe will support sustainable future growth by increasing the breadth and depth of our capabilities. We also expect more modest capital allocation towards reducing shareholder dilution, reducing leverage in order to provide increased financial flexibility, and funding development of proprietary technology and products for the Stagwell Marketing Cloud.

Our Clients

~~As of December 31, 2024,~~ Stagwell ~~served~~services over 4,500 clients across a wide range of sectors, representing some of the world’s most recognized brands including: Google, Amazon, Diageo, Nike, Apple, P&G, United Airlines, Salesforce and more. In many cases, we serve the same clients in various geographic locations, across multiple disciplines, and through multiple Stagwell 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. In ~~2024~~2025, net revenue from our top 100 clients increased byapproximately ~~over 6~~16% year-over-year as we saw record last twelve months new business and increasing interest in both specific Brand capabilities as well as cross-Brand, integrated solutions that address multi-discipline client needs.

Stagwell’s Brands have written contracts with many of their clients. As is customary in the industry, these contracts generally provide for termination by either party on relatively short notice. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations —- Executive Summary” for a further discussion of Stagwell’s arrangements with its clients.

Sources of Revenue

Stagwell provides a broad range of services to a large base of clients across a wide spectrum of verticals globally. Stagwell has historically been largely focused in North America where the Company was founded, as well as the United Kingdom, but has expanded its global footprint to support clients globally and has aoperations ~~presence~~ in more than 4034 countries, and anmore ~~additional~~than 2620 additional countries through our Global Affiliate Network, as of December 31, ~~2024~~2025. The primary source of revenue is from agency arrangements in the form of fees for services performed, commissions, and from performance incentives or bonuses. Stagwell’s Brands have written contracts with many of their clients.

Human Capital

As of December 31, ~~2024~~2025, we employed approximately 1110,~~857~~951 full-time employees and approximately 21,~~750~~678 contractors and part-time employees. The following table provides a breakdown of the approximate number of full-time employees across Stagwell’s ~~three~~five reportable segments, ~~the All Other category,~~ and Corporate:

Segment						Total
Integrated Agencies Network						5,460
Marketing Services						3,007
Brand Performance Network						4,368
Digital Transformation						1,370
Communications Network						1,206
Media & Commerce						3,996
All Other						290
Communications						1,410
Corporate						533
The Marketing Cloud						484
Total						11,857
Corporate						684
Total						10,951

Because of the personal service nature of the marketing and communications business, our talent is of significance to our success. Human capital management strategies are developed by senior management, including the management teams of our Brands, and are overseen at the corporate level.

Our human capital management priorities include providing competitive benefits &and compensation, attracting and retaining talent, supporting learning &and development across the network, ~~promoting diversity,~~ increasing employee engagement, and ensuring workplace safety. At the corporate level, centralized human capital management processes include the development of human resources governance and policy, executive compensation for senior leaders, benefits programs, and succession planning focusing on the performance, development, and retention of key senior executives.

Benefits & Compensation

Stagwell participates in industry-wide salary surveys and utilizes AI-powered compensation software to obtain real-time compensation survey data and analytics and to support data-driven compensation decisions. In addition, we offer various stock ownership programs for eligible Stagwell employees.

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Benefits & Compensation

Stagwell provides a range of competitive benefits including medical, dental, vision, employer-funded health savings accounts, commuter assistance, 401 (k) plans, employee stock programs and more. Health benefits are offered to full-time employees and their dependents, inclusive of domestic and/or same-sex partners. We offer flexible paid time off as well as accommodation for civic duties, bereavement, and leaves of absence. Stagwell participates in industry-wide salary surveys and utilizes AI-powered compensation software to obtain real-time compensation survey data and analytics and support data-driven compensation decisions. In addition, we have various stock ownership programs for eligible Stagwell employees.

Attracting & Retaining Talent

Hiring ~~and~~high-impact, ~~retaining~~AI ~~transformative~~focused talent is ~~key~~foundational to Stagwell’s ~~mission.~~ability Weto ~~supplement~~innovate, ~~agency-led recruiting with central recruiting support. Leveraging our scale~~compete, weand ~~have developed a broad database of global talent that further enhances our recruiting activities~~scale. InOur ~~addition~~model topairs ~~utilizing~~Brand-led ~~central~~hiring ~~resources~~with ~~and technology~~shared, ~~Brand~~technology-~~level~~forward recruiting ~~activities~~capabilities ~~include~~to ~~partnerships~~create ~~with~~a ~~colleges/universities~~flexible, ~~internship~~global ~~programs,~~talent ~~referral~~engine ~~programs~~- ~~and~~expanding ~~diversity~~access ~~programs.~~to ~~Stagwell’s~~top ~~internal transfer policy and career portal on our intranet~~talent, ~~The~~accelerating ~~Hive~~time-to-hire, ~~also~~and ~~enables~~improving ~~employees~~hiring ~~to explore new positions with other Brands at the Company to support retention of talent within the broader network~~quality.

WeThrough ~~have~~automation, ~~regular~~AI ~~learning~~and analytics, and continuously refreshed talent ~~events~~pipelines, sowe ~~employees~~proactively ~~across~~build ~~our~~and ~~network~~engage ~~can~~talent ~~feel~~ahead ~~connected~~of todemand. Strategic university partnerships, internship and referral programs - as well as an internal career marketplace - ensure the ~~broader~~right ~~portfolio~~talent ofis ~~Stagwell~~matched ~~companies~~to ~~and~~the ~~enhance~~right ~~collaboration~~opportunities at speed.

Learning & Development

~~At the corporate level,~~ Stagwell invests in both ~~our~~ senior leadership and ~~up-and-coming~~emerging leaders through a professional development ~~partnership~~partnerships ~~with a globally recognized leadership development organization. The program is~~ designed to align individual growth with organizational strategy ~~to help achieve success across both~~. ~~Furthermore,~~Eligible ~~Stagwell provides eligible~~ employees ~~with~~also receive an annual, flexible professional development budget to ~~utilize~~support ifskill ~~they~~development ~~want to explore more opportunities within their field, acquire new skills,~~ and ~~enhance~~career ~~their contributions to their department and the organization~~growth.  In addition, each Brand maintains ~~its own policies and~~ development programs tailored to ~~address~~ its workforce and leadership goals. Stagwell has also launched Next Dimension, an intensive experiential learning opportunity to cultivate global client leaders who are transformative partners to our clients. We welcomed the program’s second cohort in 2024.

Stagwell has launched Next Dimension, an experiential learning program focused on developing global client leaders capable of delivering transformational outcomes for clients. To expand access to this learning, we are introducing a Global Mentor Program that enables broader leadership development, knowledge sharing, and cross-network collaboration.

We have also deployed a learning platform that provides on-demand training focused on AI tools, emerging technologies, and their practical applications across our business.

In addition, Stagwell has launched a monthly Stagwell Strategy Talks series, with AI at its core, designed to promote cross-network collaboration and support ongoing learning related to innovation and the evolving role of AI in our work.

Corporate Culture

We believe the ~~cultures~~culture of Stagwell’s individual Brands contribute to what sets working at Stagwell apart; ~~however~~from competitors. At the same time, we believe the connective tissue that ~~we believe~~ unites us is our shared vision for our Brands and people to work collaboratively across disciplines in an inclusive and open environment ~~for all~~. ~~Stagwell supports its Brands through access to high-quality education, resources and technology, which they can use based on their individual Brand’s needs.~~

Stagwell supports its Brands through access to high-quality education, resources, and technology, which can be leveraged based on individual Brand needs. We believe that promoting an inclusive and ~~open~~collaborative environment, ~~from~~- by building internal and external partnerships, fostering ~~the~~ collaboration ~~amongst~~across our Brands, and ~~promoting~~encouraging ~~excellence,~~ innovation and initiative by- ~~trying~~supports ~~out ideas and programs from~~ our ~~teams and Brands, will support our~~ ability to attract and retain a creative workforce with diversity of thought that positively impacts our clients globally.

Employee Engagement

Regular communication is a focus at Stagwell. We ~~have~~host quarterly global ~~Town~~town ~~Halls~~halls to ensure ~~staff~~employees are engaged and organizational goals are shared. ~~And~~As ~~with~~ in-person ~~events~~engagement ~~returning~~has ~~in earnest~~increased, our Brand and Talent teams collaborate to host ~~a variety of~~ experiential, wellness, and professional development/ and thought leadership programs at our New York City ~~“HUB”~~hub locations at the World Trade Center and in ~~other~~ offices around the world. Our global CEO sends out regular emails to all staff with key updates ranging from new business wins to client work. In addition, the Hive intranet serves as a resource portal for all Stagwell employees. We additionally maintain several global communities organized around discrete disciplines (“Technology,” “Growth,” “Communications,” etc.) to foster collaboration and engagement.

Our global CEO regularly communicates with employees regarding key updates ranging from new business wins to client work. In addition, The Hive intranet serves as a central resource portal for all Stagwell employees. We also maintain global communities organized around discrete disciplines, including Technology, Growth, and Communications, to foster collaboration and engagement across the organization.

Significant Factors Affecting our Business and Results of Operations

The most significant factors affecting our business and results of operations include national, regional, and local economic conditions, our clients’ profitability and marketing budgets, mergers and acquisitions of our clients, changes in top management of our clients and our ability to retain and attract key employees. New business wins and client losses occur due to a variety of factors. We believe the two most significant factors are (i) our clients’ desire to change marketing communication firms and (ii) the digital and data-driven products and services that our Brands offer. A client may choose to change marketing communication firms for several reasons, such as a change in leadership where new management wants to retain a firm that it may have previously worked with. In addition, if the client is merged or acquired by another company, the marketing communication firm is often changed. Clients also change firms as a result of the firm’s failure to meet marketing performance targets or other expectations in client service delivery.

Regulatory Environment

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~~Regulatory~~shared ~~Environment~~between countries in which we operate. Our international operations are also subject to broad anti-corruption laws. While these laws and regulations could impact our operations, we believe compliance in the normal course of the Company’s business has not significantly impacted the services we provide or had a material effect on our business, results of operations or financial position. Additional information regarding the impact of laws and regulations on our business is included in Item 1A. Risk Factors.

The marketing and communications services that our Brands provide are subject to laws and regulations in all of the jurisdictions in which we operate. These include laws and regulations that affect the form and content of marketing and communications activities that we produce for our clients and, for our digital services, laws and regulations concerning user privacy, use of personal information, data protection and online tracking technologies. We are also subject to laws and regulations that govern whether and how we can receive, transfer or process data that we use in our operations, including data shared between countries in which we operate. Our international operations are also subject to broad anti-corruption laws. While these laws and regulations could impact our operations, we believe compliance in the normal course of the Company’s business has not significantly impacted the services we provide or had a material effect on our business, results of operations or financial position. Additional information regarding the impact of laws and regulations on our business is included in Item 1A. Risk Factors.

Available Information

Stagwell Inc.’s website address is www.stagwellglobal.com. The Company’s Annual Reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to the Exchange Act, will be made available free of charge through the Company’s investor relations website (www.stagwellglobal.com/investors) as soon as reasonably practical after those reports are electronically filed with, or furnished to, the SEC. The Company announces material information to the public through a variety of means, including filings with the SEC, press releases, public conference calls, and its website. The Company uses these channels, as well as social media, including its ~~Twitter~~X account (formerly Twitter) (@stagwell) and (@Mark_Penn), Instagram (@stagwellglobal) and its LinkedIn page (https://www.linkedin.com/company/stagwell/), to communicate with investors and the public about the Company, its products and services, and other matters. Therefore, investors, the media, and others interested in the Company are encouraged to review the information the Company makes public in these locations, as such information could be deemed to be material information. The information found on, or otherwise accessible through, the Company’s website and social media channels is not incorporated into, and does not form a part of, this Form 10-K, and the inclusion of the Company’s website address and social media channels are inactive textual references only.

Item 1A. Risk Factors

You should carefully consider the risk factors set forth below, as well as the other information contained in this Form 10-K, including our Audited Consolidated Financial Statements and related notes. Any of the following risks could materially and adversely affect our business, results of operations, financial condition, cash flows, projected results and future prospects. Additional risks and uncertainties not currently known to us or those we currently view to be immaterial may also materially and adversely affect our business, results of operations, financial condition, cash flows, projected results and future prospects. These risks are not exclusive and additional risks to which we are subject include the factors listed under “Note About Forward-Looking Statements” and the risks discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-K.

Risks Related to Our Business and Industry

Our revenues are highly susceptible to declines as a result of unfavorable economic conditions.

Advertising, marketing and communications expenditures are sensitive to global, national and regional macroeconomic conditions, including inflationary pressures, currency fluctuations, geopolitical uncertainty and elevated interest rates, as well as specific budgeting levels and buying patterns. Adverse developments such as inflation, evolving tariff and trade policies, or heightened economic uncertainty can reduce the demand for our services and pose a risk that clients may reduce, postpone or cancel spending on advertising, marketing and corporate communications projects. For example, inflation rates have increased in recent years, and the effects of increased inflation and other adverse conditions on our customers have in the past resulted and may in the future result in decreased demand for our products and services, decreased revenue, ~~increases~~increased ~~in our~~ operating costs (including our labor costs), and decreased profitability, and may result in reduced liquidity and limits on our ability to access credit or otherwise raise capital. In cases of sustained inflation across several of our major markets, it becomes increasingly difficult to effectively control increases to our costs. If we are unable to increase our fees or take other actions to mitigate the effect of the resulting higher costs, our business, results of operations and financial position could be negatively impacted. In addition, in the past, some clients have responded to weakening economic conditions with reductions to their marketing budgets, which include discretionary components that are easier to reduce in the short term than other operating expenses. This pattern may recur in the future and could have a material adverse effect on our revenue, results of operations, cash flows and financial condition. In addition, elevated interest rates have had and may continue to have the effect of further increasing economic uncertainty and heightening these risks, as well as increasing the cost of capital.

Our business depends on generating and maintaining ongoing, profitable client demand for our services and solutions.

Our revenue and profitability depend on the demand for our services and favorable margins, which have been and may continue to be negatively affected by numerous factors, many of which are beyond our control and unrelated to our work product. To increase our revenues and achieve favorable margins, we will need to attract additional clients or generate demand for additional services and products from existing clients, and such demand will depend on factors including clients’ and potential clients’ requirements, pre-existing vendor relationships, financial condition, strategic plans, internal resources and satisfaction with our work product and services, as well as broader economic conditions, competition and the quality of our Brands’ employees, services and reputation and the breadth of our services. In addition, developments in the markets we serve, which may be rapid, could shift demand to services and solutions where we are less competitive, or might require significant investment by us to upgrade, enhance or expand our services and solutions to meet that demand. To the extent that we are

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~~Our~~unable to generate sufficient and profitable client demand, our ability to grow our business, ~~depends~~increase onour ~~generating~~revenues and ~~maintaining~~achieve ~~ongoing~~favorable margins will be limited, ~~profitable~~which ~~client~~could ~~demand~~have ~~for~~a material adverse effect on our ~~services~~business, results of operations, financial condition and ~~solutions~~prospects.

Our revenue and profitability depend on the demand for our services and favorable margins, which have been and may continue to be negatively affected by numerous factors, many of which are beyond our control and unrelated to our work product. To increase our revenues and achieve favorable margins, we will need to attract additional clients or generate demand for additional services and products from existing clients, and such demand will depend on factors including clients’ and potential clients’ requirements, pre-existing vendor relationships, financial condition, strategic plans, internal resources and satisfaction with our work product and services, as well as broader economic conditions, competition and the quality of our Brands’ employees, services and reputation. In addition, developments in the markets we serve, which may be rapid, could shift demand to services and solutions where we are less competitive, or might require significant investment by us to upgrade, enhance or expand our services and solutions to meet that demand. To the extent that we are unable to generate sufficient and profitable client demand, our ability to grow our business, increase our revenues and achieve favorable margins will be limited, which could have a material adverse effect on our business, results of operations, financial condition and prospects.

Our business could be adversely affected if we fail to retain our existing clients.

Our ~~clients may terminate or reduce the scope of their relationships with us on short notice. Our~~ ability to attract and retain clients is an important aspect of our competitiveness, and client loss, including due to competitors, as a consequence of client consolidation, insolvency or a reduction in marketing budgets due to recessionary economic conditions, or a shift in client spending could have a material adverse effect on our business, results of operations, financial condition and prospects. Many companies, including companies with which we have long-standing relationships, put their advertising and marketing communications business up for competitive review from time to time, and we have lost client accounts in the past as a result of such reviews. Our clients may choose to terminate their contracts, or reduce their relationships with us, on a relatively short time frame and for any reason, including as a result of such competitive reviews, a reduction in marketing budgets due to external factors such as economic conditions or their own financial distress or insolvency, competition from other marketing services providers, clients’ consolidation, a shift in their spending or clients’ dissatisfaction with our services, reputation or personnel.

A relatively small number of clients contributes a significant portion of our revenue, which magnifies this risk. In the aggregate, our top ten clients based on revenue accounted for approximately 2118% of our revenue for the year ended December 31, ~~2024~~2025. No customer represented more than 4% of total revenue. Historically, client concentration has increased during election years due to the cyclical nature of our advocacy Brands. A substantial decline in a large client’s advertising and marketing spending, the loss of a significant part of their business or the loss of one or more of our largest clients could have a material adverse effect on our business, prospects, results of operations and financial condition.

We face significant competition.

The advertising and marketing services business is highly competitive and constantly changing. We compete on the basis of many factors, including the quality (and clients’ perceptions of the quality) of our work, our ability to protect the confidentiality of clients’ and their customers’ data, our relationships with key client personnel, our expertise in particular areas or disciplines, the differentiation of our offerings and our ability to provide integrated services at the scale clients require. Our Brands compete with a diverse and growing set of marketing services firms and consultancies including other large multinational companies. We are smaller than many of our larger industry competitors, and an agency’s ability to serve clients, particularly large international clients, on a broad geographic basis and across a range of services and technologies is an important competitive consideration. We also compete with smaller businesses that operate in local or regional markets, and because an agency’s principal asset is often its people, barriers to entry are minimal, and relatively small brands are, on occasion, able to take all or some portion of a client’s business from a larger competitor. Consolidation of companies in our industry, including through strategic mergers or acquisitions, may also result in new competitors with greater scale than ours. Competitive challenges also arise from rapidly evolving and new technologies in the marketing and advertising space, which create opportunities for new and existing competitors and a need for continued significant investment in tools, technologies and process improvements.

In addition, our competitors may compete for client engagements by significantly discounting their services. Price competition could force us to choose between lowering our prices (and suffering reduced operating margins) or losing a client’s business.

Our future financial performance is largely dependent upon our ability to compete successfully in the markets we serve. If we are unable to compete successfully, we could lose market share and clients to competitors or be forced to accept engagements with unfavorable economic terms, which could have a material adverse effect on our business, results of operations, financial condition and prospects.

Our success depends in part on our ability to adapt to ongoing changes in technology and offerings.

Our success depends in part upon our ability to continue to develop and implement services and solutions that anticipate and respond to rapid and continuing changes in marketing technology, consumer habits and industry developments, as well as offerings by new entrants, to serve the evolving needs of our clients. Current areas of significant change include search engine optimization, bots, search engine marketing, social media and influencer and affiliate marketing, email marketing, AR and VR applications, customer relationship and programmatic advertising, which involve the use of mobility-based software platforms, cloud computing, SaaS, and DaaS solutions, AI and generative AI content creation tools, machine learning and the processing and analyzing of large amounts of data. Technological developments such as these may materially affect the cost and use of technology by our clients and demand for our services, and if we do not sufficiently invest in new technology and industry developments, or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our services and solutions, our ability to generate demand for our services, and to attract and retain clients, and our ability to develop and achieve a competitive advantage and growth could be negatively affected.

We are making investments in new product offerings and technologies that are inherently risky.

We have made investments to develop new marketing services products and technologies, including ~~the~~The ~~Stagwell~~Machine, our Palantir partnership, products at The Marketing Cloud and other marketing data, campaign ~~martech~~MarTech, AR and VR applications, and AI and generative AI offerings, and we intend to continue investing significant resources in developing and/or acquiring new technologies, tools, features, services, products and offerings. Our new initiatives are inherently risky, as each involves development of new software platforms or other product offerings, unproven business strategies and technologies with which we may have limited prior

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and AI and generative AI offerings, and we intend to continue investing significant resources in developing and/or acquiring new technologies, tools, features, services, products and offerings. Our new initiatives are inherently risky, as each involves development of new software platforms or other product offerings, unproven business strategies and technologies with which we may have limited prior development or operating experience. We may also encounter significant technical or other challenges with respect to the development of these products. They may also involve additional claims and liabilities (including intellectual property claims), expenses, regulatory challenges, and other risks that we do not currently anticipate.

There can be no assurance that client demand for our new products, and technologies will exist or be sustained at the levels that we anticipate, or that any of these initiatives will gain sufficient traction or market acceptance to generate sufficient revenue to offset any new expenses or liabilities associated with these new investments. It is also possible that products and offerings developed by others will render our new products and offerings noncompetitive or obsolete. If we do not realize the expected benefits of our investments, our business, financial condition, results of operations and prospects may be harmed.

We are subject to risks related to our use of AI, including generative AI.

We are increasingly building generative AI features into some of our offerings, such as generative AI content creation tools, and are making investments in expanding our generative AI capabilities. As part of this process, we also utilize generative AI tools offered by third-party providers in the development and testing of our offerings. Generative AI is ~~a new and emerging technology~~ in ~~its~~the relatively early stages of commercial use and presents certain inherent risks. Generative AI algorithms are based on machine ‑learning and predictive analytics, which can create or amplify unintended biases and discriminatory outcomes, and, their outputs ~~can~~may be ~~completely~~incomplete, ~~fabricated~~inaccurate or ~~false~~misleading. There is a risk that ~~our~~the ~~algorithms~~generative AI tools we deploy could produce such outcomes or other unexpected results or behaviors that could harm our reputation, business, or clients.

In addition, the use of AI and generative AI involves significant technical complexity and requires specialized expertise. Any disruption or failure in our AI and generative AI offerings, or those of our third-party providers, could result in delays or errors in our operations, which could harm our business and financial results. The use of generative AI tools could also result in a greater likelihood of cybersecurity incidents, privacy violations and inadvertent disclosures of our intellectual property or other confidential information, any of which could directly or indirectly harm our business, operations and reputation.

The AI regulatory landscape is still uncertain and evolving, and the development and use of AI technologies, including generative AI, in new or existing content creation tools and other offerings may result in new or enhanced governmental or regulatory scrutiny, litigation, ethical concerns or other complications that could be costly and time-consuming and could adversely affect our business, reputation or financial results. Furthermore, the use of AI by bad actors presents increasingly complex and sophisticated security threats to our confidential Company data, and we must make additional efforts to maintain network security.

Our international operations are exposed to a number of risks.

We are a global business, with Brands operating in 35over 34 countries as of December 31, ~~2024~~2025. Operations outside the United States represent a significant portion of our revenues and represented approximately 1823% of our revenues in ~~2024~~2025. The operational and financial performance of our international businesses are affected by global and regional economic conditions, competition for new business and staff, political conditions, differing regulatory environments and other issues associated with extensive international operations. Conducting our business internationally, particularly in developing markets in which we have limited experience, subjects us to risks that we do not face to the same degree in the United States. These risks include, among others:

•operational and compliance challenges caused by distance, language, and cultural differences, including, in some markets, longer billing collection cycles;

•the resources required to adapt our operations to local practices, laws, and regulations and any changes in such practices, laws, and regulations;

•laws and regulations that may be more restrictive than those in the United States, including commercial laws that can be undeveloped, vague, inconsistently enforced, retroactively applied or frequently changed, laws governing competition, pricing, payment methods, ~~Internet~~internet activities, real estate tenancy laws, tax and social security laws, employment and labor laws, email messaging, privacy, location services, collection, use, processing, or sharing of personal data, ownership of intellectual property, and other activities important to our business;

•competition with companies or other services that understand local markets better than we do or that have pre-existing relationships with potential clients in those markets;

•exposure to business cultures in which improper business practices may be prevalent;

•difficulties in managing, growing, and staffing international operations, including in countries in which foreign employees may become part of labor unions, employee representative bodies, or collective bargaining agreements, and challenges relating to work stoppages or slowdowns;

•fluctuations in currency exchange rates;

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•adverse tax consequences, including the complexities of foreign value added tax systems, and restrictions on the repatriation of earnings;

•increased financial accounting and reporting burdens, and complexities associated with implementing and maintaining adequate internal controls;

•difficulties in implementing and maintaining the financial systems and processes needed to enable compliance across multiple jurisdictions;

•potential changes to import and export restrictions, ~~changes~~duties, in trade regulation and economic sanctions ~~compliance~~;

•public health concerns or emergencies, such as the COVID-19 pandemic or other outbreaks of communicable disease, which have occurred in parts of the world in which we operate;

13•war, conflict, geopolitical tensions and other political, social, and economic instability abroad, terrorist attacks and security concerns, such as escalating tensions in the Taiwan Strait and the ongoing conflicts in Iran and the Middle East, and between Russia and Ukraine; and

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•war, geopolitical tensions and other political, social, and economic instability abroad, terrorist attacks and security concerns, such as escalating tensions in the Taiwan Strait and the ongoing conflicts between Russia and Ukraine and in Israel and Gaza; and

•reduced or varied protection for intellectual property rights in some markets.

These risks could adversely affect our international operations, which could in turn adversely affect our business, financial condition, results of operations and prospects. In addition, in developing countries or regions, we may face further risks, such as slower receipt of payments, nationalization, social and economic instability, currency repatriation restrictions and undeveloped or inconsistently enforced commercial laws. These risks may limit our ability to grow our business and effectively manage our operations in the countries that are affected.

We are exposed to the risk of client defaults.

Certain of our Brands often enter into contractual commitments with media providers and production companies and incur expenses on behalf of our clients for productions and in order to secure a variety of media time and space, in exchange for which they receive a fee. The difference between the gross production costs and media purchases and the revenue earned by us can be significant, and primarily affects our levels of accounts receivable, expenditures billable to clients, accounts payable and accrued liabilities.

We are generally paid in arrears for our services, and if we are unable to meet our contractual requirements, we may experience delays in collection of and/or be unable to collect our client balances. While we take precautions against default on payment for these services (such as credit analysis, advance billing of clients, purchasing credit insurance and in some cases acting as an agent for a disclosed principal), such precautions may fail to mitigate our exposure to clients’ credit risk, and we may experience significant uncollectible receivables from our clients. If we are unable to collect our receivables or unbilled services, our business, results of operations, financial condition and cash flows could be materially and adversely affected.

We are impacted by geopolitical events, international hostilities, terrorist attacks and natural disasters.

Geopolitical events, international hostilities, acts of terrorism or natural disasters could negatively impact our business through, among other things, disruption of our and our Brands’ business operations, decreased demand for our or our clients’ services, disruption in the credit markets, heightened risk of cybersecurity attacks and disruptions to our information technology infrastructure, increased energy costs and labor and supply chain disruptions. This could result in suspension of our or our clients’ businesses in the affected region, which could impact client spending on our services. Any of these occurrences could have a material adverse impact on our business, results of operations, financial condition and prospects. For example, ~~following~~the ~~Russia’s~~conflict ~~invasion~~in ofIran ~~Ukraine~~ and the ~~imposition~~Middle ofEast ~~economic~~has ~~sanctions~~disrupted ~~targeting~~travel ~~Russia~~to byand ~~the~~from ~~United~~our ~~States~~Brands’ ~~and~~offices ~~other~~in ~~countries~~the Middle East, wecould ~~suspended~~disrupt our ~~business~~Brands’ operations, and could result in ~~Ukraine~~a ~~and~~decrease ~~disposed~~in ofdemand ~~all~~for our ~~businesses~~services in ~~Russia~~the region. The ~~war~~conflict in ~~Ukraine~~Iran and the Middle East is ongoing, and its duration is uncertain. We ~~cannot~~may not be able to accurately predict the impact of the ~~war~~conflict ~~in Ukraine~~ or other international hostilities on our businesses and operations.

We are impacted by seasonal fluctuations in marketing, research, communications and advertising activity.

Our revenue, cash flow, operating results and other key operating and performance metrics vary from quarter to quarter due to the seasonal nature of our clients’ spending on the services we provide. For example, clients tend to devote more of their advertising budgets to the fourth calendar quarter to coincide with consumer holiday spending, and we typically generate our highest quarterly revenue during the fourth quarter in each year. Political advertising and related activity have also historically caused our revenue to increase during election cycles, which is most pronounced in even years, in particular during the third and fourth quarters of such years, and to decrease during other periods. Seasonality could have a more significant impact on our revenue, cash flow and operating results from period to period inas ~~the~~a ~~event~~result of declines in our growth rate or if seasonal spending becomes more pronounced.

Risks Related to Strategic Transactions

We may not realize the expected benefits from strategic transactions.

Our business strategy includes engaging in acquisitions, investments and strategic mergers to enhance the services and solutions we provide, enter new industries, expand our client base, and strengthen our global presence and scale of operations. We may be unable to realize the benefits we expect from our past and future acquisitions and other strategic transactions for a variety of reasons, including due to our failure to effectively integrate newly acquired businesses into our operations, ~~errors in our forecasting or factors that we do not control, such as the reactions of existing and potential clients, employees, investors and regulators.~~

Our integration efforts are subject to significant risks and uncertainties, including with respect to our ability to realize our anticipated synergies and cost savings, our ability to retain and attract executives, employees and clients, the acquired company’s technology that is not easily compatible with ours, difficulty in retaining the clients of any acquired business due to changes in management, and undisclosed, unknown or potential legal liabilities, including litigation against the companies we may acquire, for example from failure to identify all of the significant risks or liabilities associated with the target business. In addition, we may not accurately forecast the financial impact of a strategic transaction, and may incur substantial depreciation or amortization expenses, impairment of goodwill and/or purchased long-lived assets, restructuring charges, deferred compensation or other acquisition-related accounting charges. We may also become subject to adverse tax consequences. Any of these risks could materially and adversely affect our business, financial condition, results of operations and prospects.

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errors in our forecasting or factors that we do not control, such as the reactions of existing and potential clients, employees, investors and regulators.

Our integration efforts are subject to significant risks and uncertainties, including with respect to our ability to realize our anticipated synergies and cost savings, our ability to retain and attract executives, employees and clients, the acquired company’s technology that is not easily compatible with ours, or difficulty in retaining the clients of any acquired business due to changes in management, the diversion of management’s attention from other business concerns, and undisclosed, unknown or potential legal liabilities, including litigation against the companies we may acquire, for example from failure to identify all of the significant risks or liabilities associated with the target business. In addition, we may not accurately forecast the financial impact of an acquisition transaction, including accounting charges. Our failure to address these risks or other problems could cause us to incur unanticipated liabilities and harm our business generally.

Strategic transactions may result in dilution to our stockholders and consume resources that are necessary to sustain our business.

InOur ~~the~~business ~~past~~strategy weincludes ~~have~~engaging ~~issued additional equity securities~~ in ~~connection~~strategic ~~with~~mergers, acquisitions and investments ~~and~~to webolster ~~intend~~our tocapabilities ~~continue~~or toexpand ~~issue~~our ~~additional~~reach ~~equity~~in ~~securities~~particular inareas. ~~connection~~Through ~~with~~the ~~strategic~~acquisitions ~~transactions.~~we ~~These~~pursue, ~~issuances~~we ofmay ~~equity~~seek ~~securities~~opportunities ~~dilute~~to ~~our~~add ~~stockholders’~~to ~~ownership~~or ~~interests.~~enhance ~~For~~the ~~example,~~services and solutions we ~~issued~~provide, ~~9.6~~to ~~million~~enter ~~shares~~new ofindustries ~~our~~or ~~Class~~expand Aour ~~Common~~client ~~Stock~~base, asor ~~consideration~~to ~~for~~strengthen ~~acquisitions~~our ~~that~~global ~~occurred~~presence inand ~~2024~~scale of operations. InOur ~~addition,~~ability weto complete these transactions may ~~use~~be ~~cash~~subject to conditions or approvals that weare ~~may~~beyond ~~need~~our incontrol, ~~the~~including ~~future~~anti-takeover toand ~~operate~~antitrust ~~our~~laws ~~business~~in orvarious ~~incur~~jurisdictions. ~~debt~~Consequently, orthese ~~other~~transactions, ~~substantial~~even ~~liabilities~~if ~~that~~undertaken and announced, may ~~place~~not ~~burdensome~~close. ~~restrictions~~In onaddition, ~~our~~an ~~operations~~acquisition, investment or ~~cash~~new ~~flows~~business relationship may result in unforeseen operating difficulties and expenditures.

Mergers or acquisitions may disrupt our business, divert our resources and require significant management attention that would otherwise be available for the development of our business. For one or more of those transactions, we may issue additional equity securities that would dilute our stockholders. For example, we issued 2.7 million shares of our Class A common stock, par value $0.001 per share (“Class A Common Stock”) as consideration for acquisitions that occurred in 2025. In addition, we may:

•use cash that we may need in the future to operate our business;

•incur debt that may place burdensome restrictions on our operations or cash flows;

•incur large charges or substantial liabilities; or

•become subject to adverse tax consequences, substantial depreciation or amortization expenses, impairment of goodwill and/or purchased long-lived assets, restructuring charges, deferred compensation or other acquisition-related accounting charges.

Any of these risks could materially and adversely affect our business, financial condition, results of operations and prospects.

Risks Related to Our Employees and Human Resources

Our business is highly dependent on the services of Mark Penn, our CEO and Chairman.

We depend on the continued services and performance of our key personnel, including our CEO and Chairman, Mark Penn. Although we have entered into an employment agreement with Mr. Penn, the agreement has no specific duration and constitutes at-will employment. The loss of key personnel, including Mr. Penn, could disrupt our operations and have an adverse effect on our business.

Our business is dependent on our ability to keep our supply of skills and resources in balance with client demand.

Employees, including creative, research and data acquisition, analytics and data science, media, technology development, content development, account and practice group specialists, and their skills and relationships with clients, are among our most important assets. Our success is dependent, in large part, on our ability to keep our supply of marketing services skills and capabilities in balance with client demand around the world and our ability to attract, retain, and motivate personnel with the knowledge and skills to lead our business and serve clients globally, respond quickly to rapid and ongoing changes in demand and the macroeconomic environment, and continuously innovate to grow our business. There is competition for scarce talent with market-leading skills and capabilities in new technologies, and our competitors have directly targeted our employees with such skills and will likely continue to do so. At certain times and in certain geographies, we have found and may continue to find it difficult to hire and retain a sufficient number of employees with the skills or backgrounds to meet current and/or future demand in a cost-effective manner. In these cases, we might need to redeploy existing personnel or increase our reliance on subcontractors to fill our labor needs, and if not done effectively, our profitability could be negatively impacted. Additionally, we may be unable to hire and retain people with the skills necessary to meet the increasing client demand, and we have in the past experienced and may continue to experience wage inflation and other increases to compensation expense, which puts upward pressure on our costs and may adversely affect our profitability if we are unable to recover these increased costs.

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We are particularly dependent on retaining management and leadership of our Brands with critical capabilities. Our ability to expand in our key markets depends, in large part, on our ability to attract, develop, retain and integrate both leaders for the local business and people with critical capabilities. If we are not successful in these initiatives, our business, results of operations, financial condition and prospects could be adversely affected.

Risks Related to Data Privacy and Cybersecurity

We face legal, reputational and financial risks from any failure to protect client data from security incidents or cyberattacks.

We and our third-party service providers, such as our cloud service providers that store, transmit and process data, rely on information technologies and infrastructure, which we use to manage our business, including digital storage of client marketing and advertising information and developing new business opportunities. Increased cybersecurity threats and attacks, such as security breaches, are constantly expanding, evolving, and becoming more sophisticated and pose a risk to our systems and networks. In addition, given the increasing difficulty of detecting cybersecurity threats, undiscovered vulnerabilities in our products or services could expose us or our clients to hackers or other unscrupulous third parties who develop and deploy viruses and other malicious software programs that could attack our products, services and business.

We are dependent on information technology networks and systems to securely process, transmit and store electronic information and to communicate among our locations around the world and with our people, clients, Global Affiliates partners and vendors. As the breadth and complexity of this infrastructure continues to grow, including as a result of the increasing reliance on, and use of, mobile technologies, social media and cloud-based services, the risk of security incidents and cyberattacks has increased. Such incidents could lead to shutdowns or disruptions of or damage to our systems and those of our clients, Global Affiliates partners and vendors, and unauthorized disclosure of sensitive or confidential information, including personal data and proprietary business information. Also, given the unpredictability of the timing, nature and scope of such cybersecurity threats and attacks, we may be unable to anticipate attempted security breaches and, in turn, implement adequate preventative measures. Our systems and processes to protect against, detect, prevent, respond to and mitigate cybersecurity incidents and our organizational training for employees to develop an understanding of cybersecurity risks and threats may be unable to prevent material security breaches, theft, modification or loss of data, employee malfeasance (including improper use of social media) and additional known and unknown threats. We have experienced, and may again experience, data security incidents resulting from unauthorized access to our and our service providers’ systems, misconfiguration of systems, phishing ransomware or malware attacks. In addition, certain of our clients may experience breaches of systems and cloud-based services enabled by or provided by us.

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of social media) and additional known and unknown threats. We have experienced, and may again experience, data security incidents resulting from unauthorized access to our and our service providers’ systems and unauthorized acquisition of our data and our clients’ data, including inadvertent disclosure, misconfiguration of systems, phishing ransomware or malware attacks. In addition, certain of our clients may experience breaches of systems and cloud-based services enabled by or provided by us.

In providing services and solutions to clients, we often manage, utilize and store sensitive or confidential client or other data, including personal data and proprietary information, and we expect these activities to increase, including through the use of AI, bots and cloud-based analytics. Security breaches, improper use of our systems and other types of unauthorized access to our systems, data, and information by employees and others may pose a risk that data may be exposed to unauthorized persons or to the public. We have access to sensitive data, personal data, and information that is subject to various data privacy laws and regulations, which have obligations that are triggered in the event of a breach. Unauthorized disclosure of, denial of access to, or other incidents involving sensitive or confidential client, vendor, Global Affiliates partner or our own data, whether through systems failure, employee negligence, fraud, misappropriation, or cybersecurity, ransomware or malware attacks, or other intentional or unintentional acts, could damage our reputation and our competitive positioning in the marketplace, disrupt our or our clients’ business, cause us to lose clients and result in significant financial exposure and legal liability. Similarly, unauthorized access to or through, denial of access to, or other incidents involving, our software and IT supply chain or SaaS providers, our service providers’ information systems or those we develop for our clients, whether by our employees or third parties, including a cyberattack by computer programmers, hackers, members of organized crime and/or state-sponsored organizations, who continuously develop and deploy viruses, ransomware, malware or other malicious software programs or social engineering attacks, could result in negative publicity, significant remediation costs, legal liability, damage to our reputation and government sanctions and could have a material adverse effect on our results of operations.

We are subject to extensive data privacy laws and regulations.

Laws and regulations related to consumer privacy, processing of personal data and use of digital tracking technologies have been proposed or enacted in the United States and certain international markets (including the European Union’s General Data Protection Regulation, or “GDPR” and the California Consumer Privacy Act, as amended by the California Privacy Rights Act, or “CCPA”). Further in the United States, both Congress and state legislatures, along with federal regulatory authorities, have continued to increase their attention on advertising and the collection and use of data, including personal data. The SEC has issued rules governing disclosures regarding cybersecurity incident response, governance and risk management. At the state level, consumer data privacy laws continue to be proposed and passed in a number of states across the country. As more privacy legislation continues to be introduced, the Company could be subject to such laws regardless of whether the Company has operations or a physical presence in the applicable state. In the United States, the Federal Trade Commission (the “FTC”) and other regulators continue to seek greater regulation of the collection and processing of personal data, as well as restrictions and requirements for certain targeted advertising practices. We are also subject to evolving privacy laws on data processing activities related to cookies and online marketing. In the European Union, regulators actively enforce privacy requirements related to online behavioral advertising.

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requirements for certain targeted advertising practices. We are also subject to evolving privacy laws on data processing activities related to cookies and online marketing. In the European Union, regulators actively enforce privacy requirements related to online behavioral advertising.

We continue to face increasing costs of compliance in an uncertain regulatory environment and while we have taken steps to comply with data privacy laws, we cannot guarantee that our efforts will meet the evolving standards imposed by governmental and regulatory agencies, and any failure or perceived failure to comply with these legal requirements could result in regulatory inquiries and penalties, governmental investigations and proceedings, potential consumer, business partner, or securities litigation, damage to our reputation, or other legal liabilities, as well as divert management’s time and attention, all of which could have a material adverse effect on our business and results of operations. Also, any such laws may also have potentially conflicting requirements that would make compliance challenging, as well as potentially resulting in further uncertainty and requiring the Company to incur additional costs and expenses in an effort to comply. Furthermore, these laws and regulations may impact our ability to collect and commercialize data, as well as the efficacy and profitability of certain digital marketing and analytics services we provide to clients, making it difficult to achieve our clients’ goals. These and other related factors could affect our business and reduce demand for certain of our services, which could have a material adverse effect on our results of operations and financial condition.

Risks Related to Litigation and Regulation

Litigation, investigations or other legal proceedings could expose us to significant liabilities and have a negative impact on our reputation or business.

From time to time, we have been and may in the future be party to various claims, litigation proceedings and regulatory inquiries. We evaluate these claims and litigation proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, the amount of potential losses. Based on these assessments and estimates, we establish reserves, as appropriate. These assessments and estimates are based on the information available to management at the time and involve a significant amount of management judgment. Although we are not currently party to any litigation that we consider material, actual outcomes or losses may differ materially from our assessments and estimates. In addition, from time to time we receive and respond to regulatory inquiries and may be subject to regulatory or other government investigations, the outcomes of which are inherently uncertain.

16We and certain of our Brands produce AI, software and e-commerce tools for clients, including The Machine, our partnership with Palantir, The Marketing Cloud and other marketing data, campaign MarTech, AR and VR applications, and AI and generative AI offerings, and such types of software and e-commerce product offerings have become increasingly subject to litigation based on allegations of patent infringement or other violations of intellectual property rights. In addition, the intellectual property ownership and license rights, including copyrights, surrounding AI technologies, including generative AI, have not been fully addressed by U.S. courts or other federal, state, or international laws or regulations, and the use or adoption of third-party generative AI technologies into our offerings may result in exposure to claims of copyright infringement or other intellectual property claims, which could harm our business and financial results. As we expand these product offerings, the possibility of an intellectual property claim against us grows.

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respond to regulatory inquiries and may be subject to regulatory or other government investigations, the outcomes of which are inherently uncertain.

We and certain of our Brands produce software and e-commerce tools for clients, including the Stagwell Marketing Cloud and other martech products, and such types of software and e-commerce product offerings have become increasingly subject to litigation based on allegations of patent infringement or other violations of intellectual property rights. In addition, the intellectual property ownership and license rights, including copyrights, surrounding AI technologies, including generative AI, have not been fully addressed by U.S. courts or other federal, state, or international laws or regulations, and the use or adoption of third-party generative AI technologies into our offerings may result in exposure to claims of copyright infringement or other intellectual property claims, which could harm our business and financial results. As we expand these product offerings, the possibility of an intellectual property claim against us grows.

In addition, regulatory investigations, putative securities class action lawsuits and derivative lawsuits and other stockholder claims are often brought against public companies for a variety of reasons, including but not limited to claims arising out of stock price declines, alleged breaches of fiduciary duties, and acquisition, merger or other business combination agreements. We have been and may in the future be the target of securities and stockholder litigation or regulatory investigations.

Any such claims or investigations or other claims against us, with or without merit, could result in costly litigation or other proceedings and divert management from day-to-day operations and resources from our business. We cannot be certain that we would be successful in defending against or resolving any such claims or other proceedings. Any such matters may result in an onerous or unfavorable judgment that may not be reversed on appeal, or we may decide to settle such matters on similarly unfavorable terms. If we are not successful in defending or resolving such matters, we could be required to rebrand, redesign or stop offering these products or services, pay monetary damages or fines, enter into or terminate royalty or licensing arrangements, satisfy indemnification obligations that we have with some of our clients or make changes to our business practices, any of which could have an adverse effect on our business, reputation, results of operations, financial condition and prospects.

Even when these matters are without basis, the defense of these matters may divert our management’s attention and may result in significant expenses. The results and timing of litigation, investigations and other legal proceedings are inherently uncertain, and adverse judgments or settlements in some of these matters may result in adverse monetary damages, penalties or injunctive relief against us, as well as adverse publicity and reputational harm, which could have a material adverse effect on our financial condition, cash flows or results of operations. Any such matters, even if fully indemnified or insured, could damage our reputation and make it more difficult to compete effectively or to obtain adequate insurance in the future.

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Furthermore, while we maintain insurance for certain potential liabilities, such insurance does not cover all types and amounts of potential liabilities and is subject to various exclusions as well as caps on amounts recoverable. Even if we believe a claim is covered by insurance, insurers may dispute our entitlement to recovery for a variety of potential reasons, which may affect the timing and, if the insurers prevail, the amount of our recovery.

We are subject to industry regulations and other legal or reputational risks that could restrict our activities or negatively impact our performance or financial condition.

Our industry is subject to government regulation and other governmental action, both in the United States and internationally. We and our clients are subject to specific rules, prohibitions, media restrictions, labeling disclosures and warning requirements applicable to advertising for certain products. Governmental entities, self-regulatory bodies and consumer groups may also challenge advertising through legislation, regulation, judicial actions or otherwise, for example on the grounds that the advertising is false and deceptive or injurious to public welfare. Moreover, there has recently been an expansion of specific rules, prohibitions, media restrictions, labeling disclosures, and warning requirements with respect to advertising for certain products. Any regulatory or judicial action that affects our ability to meet our clients’ needs or reduces client spending on our services could have a material adverse effect on our business, results of operations, financial condition and prospects.

Existing and proposed laws and regulations, in particular in the European Union and the United States, concerning user privacy, use of personal data and online tracking technologies could also affect the efficacy and profitability of internet-based, digital and targeted marketing. We are subject to laws and regulations that govern whether and how we can transfer, process or receive certain data that we use in our operations. For example, federal laws and regulations governing privacy and security of consumer information generally apply to our clients and/or to us as a service provider. These laws and regulations include, but are not limited to, the federal Fair Credit Reporting Act, the Gramm-Leach-Bliley Act and regulations implementing its information safeguarding requirements, the Junk Fax Prevention Act of 2005, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, the Telephone Consumer Protection Act, the Do-Not-Call-Implementation Act, applicable Federal Communications Commission telemarketing rules (including the declaratory ruling affirming the blocking of unwanted robocalls), the Federal Trade Commission Privacy Rule, Safeguards Rule, Consumer Report Information Disposal Rule, Telemarketing Sales Rule, Risk-Based Pricing Rule, Red Flags Rule, and the CCPA. Laws of foreign jurisdictions, such as Canada’s Anti-Spam Law and Personal Information Protection and Electronic Documents Act, and the GDPR similarly apply to our collection, processing, storage, use, and transmission of protected data. The European Union, for example, has tightened its rules on the transferability of data to the United States. Additional laws, such as the European Union’s Artificial Intelligence Act (Regulation (EU) 2024/1689) entered into force in August 2024 and has become applicable on a phased basis, including with respect to prohibited AI practices and, subsequently, broad compliance obligations for certain ‘high-risk’ AI systems and specified transparency requirements. Accordingly, these laws could require us to alter, restrict, or incur additional costs to process personal data or use AI-enabled tools and services, could increase our compliance, monitoring, documentation, and governance costs, expose us to enforcement actions or civil claims, and adversely affect our results of operations.

17Collection, processing, and storage of biometric identifiers has come under increasing regulation and is the subject of class action litigation. Any failure on our part to comply with these legal requirements, or their application in an unanticipated manner, could harm our business and result in penalties or significant legal liability. The imposition of restrictions on certain technologies by private market participants in response to privacy concerns could also have a negative impact on our digital business. If we are unable to transfer data between countries and regions in which we operate, or if we are prohibited from sharing data among our products and services, it could affect the manner in which we provide our services or adversely affect our financial results.

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apply to our collection, processing, storage, use, and transmission of protected data. The European Union, for example, has tightened its rules on the transferability of data to the United States. Collection, processing, and storage of biometric identifiers has come under increasing regulation and is the subject of class action litigation. Any failure on our part to comply with these legal requirements, or their application in an unanticipated manner, could harm our business and result in penalties or significant legal liability. The imposition of restrictions on certain technologies by private market participants in response to privacy concerns could also have a negative impact on our digital business. If we are unable to transfer data between countries and regions in which we operate, or if we are prohibited from sharing data among our products and services, it could affect the manner in which we provide our services or adversely affect our financial results.

Legislators, agencies and other governmental entities, as well as consumer groups, may also continue to initiate proposals to ban the advertising of specific products, such as alcohol, tobacco or marijuana products, and to impose taxes on or deny deductions for advertising, which, if successful, may hinder our ability to accomplish our clients’ goals and have an adverse effect on advertising expenditures and, consequently, on our revenues. Governmental action, including judicial rulings, on the relative responsibilities of clients and their marketing agencies for the content of their marketing can also impact our operations. We could also suffer reputational risk as a result of governmental or legal action or from undertaking work that may be challenged by consumer groups or considered controversial.

We are subject to export restrictions, economic sanctions, the FCPA, and similar anti-corruption laws.

We are subject to many laws and regulations in the United States and other countries in which we operate that restrict our international operations, ~~including~~such ~~laws~~as ~~that~~applicable ~~prohibit~~economic ~~activities~~sanctions ~~involving~~and ~~restricted~~export ~~countries,~~control ~~organizations,~~laws ~~entities~~and regulations administered and ~~persons~~enforced ~~that~~by ~~have~~the ~~been~~U.S. ~~identified~~Department asof ~~unlawful~~Treasury ~~actors~~Office orof ~~that~~Foreign ~~are~~Assets ~~subject~~Control to(“OFAC”), the U.S. ~~sanctions.~~Department of State, The U.S. ~~Office~~Department of ~~Foreign~~Commerce, ~~Assets~~the ~~Control~~United ~~(“OFAC”),~~Nations Security Council and other ~~international~~relevant ~~bodies~~authorities. ~~have~~Such ~~imposed~~laws ~~sanctions~~and ~~that~~regulations prohibit or restrict us from engaging in ~~trade~~certain oroperations, ~~financial~~investment ~~transactions~~decisions ~~with~~and sales activities, including dealings involving certain countries, businesses, organizations and individuals. Despite our efforts to ~~ensure~~promote compliance with applicable ~~law~~laws and regulations, it is difficult to anticipate the effect such economic sanctions and export controls may have on us, and compliance with any further sanctions imposed or actions taken by the United States or other countries, as well as the ~~effect of current or further economic sanctions (and any retaliatory responses thereto) may otherwise have an adverse effect on our operations.~~

We are also subject to the Foreign Corrupt Practices Act (“FCPA”) and anti-bribery and anti-corruption laws in other countries. The FCPA prohibits U.S. businesses and their representatives from offering to pay, paying, promising to pay or authorizing the payment of money or anything of value to a foreign official in order to influence any act or decision of the foreign official in his or her official capacity or to secure any other improper advantage in order to obtain or retain business. Globally, other countries have enacted anti-bribery and anti-corruption laws similar to the FCPA, such as the U.K. Bribery Act 2010, all of which prohibit companies and their intermediaries from bribing government officials for the purpose of obtaining or keeping business or otherwise obtaining favorable treatment. We operate in many parts of the world that have experienced government corruption to some degree, and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices, although adherence to local customs and practices is generally not a defense under U.S. and other anti-bribery laws.18

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effect of current or further economic sanctions (and any retaliatory responses thereto) may otherwise have an adverse effect on our operations.

We are also subject to the U.S. Foreign Corrupt Practices Act (“FCPA”) and anti-bribery and anti-corruption laws in the countries where we do business. The FCPA prohibits covered parties from offering, promising, authorizing or giving anything of value, directly or indirectly, to a “foreign government official” with the intent of improperly influencing the official’s act or decision, inducing the official to act or refrain from acting in violation of lawful duty, or obtaining or retaining an improper business advantage. The FCPA also requires publicly traded companies to maintain records that accurately and fairly represent their transactions and to have an adequate system of internal accounting controls. In addition, other countries have enacted anti-bribery and anti-corruption laws similar to the FCPA, such as the U.K. Bribery Act 2010. Some laws that may apply to our operations prohibit commercial bribery, including giving or receiving improper payments to or from non-government parties, as well as so-called “facilitation” payments. We operate in many parts of the world that have experienced government corruption to some degree, and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices, although adherence to local customs and practices is generally not a defense under U.S. and other anti-bribery laws.

Any violations of these or other laws, regulations and procedures by our employees, independent contractors, subcontractors and agents, including third parties we associate with or companies we acquire, could expose us to administrative, civil or criminal penalties, fines or business restrictions, or other remedial measures, which could have a material and adverse effect on our results of operations and financial condition and would adversely affect our reputation and the market for shares of our Class A Common Stock.

Risks Related to Intellectual Property

Our business operations could suffer if we fail to adequately protect and enforce our intellectual property and other proprietary rights.

We rely on trademark, patent, copyright, trade secret and other intellectual property laws, as well as contractual provisions such as confidentiality clauses, to establish and protect our intellectual property and other proprietary rights, including in our Brands (and the trademark rights thereto) and our proprietary technologies. We cannot be sure that the actions we have taken to establish and protect our trademarks and other intellectual property rights will adequately protect us, and if our existing intellectual property rights are rendered invalid or unenforceable, or narrowed in scope, the intellectual property protections afforded our Brands, products and services would be impaired. Such impairment could impede our ability to market our products and services, negatively affect our competitive position, and harm our business and operating results. Even if we successfully maintain our intellectual property rights, we may be unable to enforce those rights against third parties.

We also rely on patents to protect our products, services and designs. We have applied for, and expect to continue to apply for, additional patent protection for proprietary aspects of existing and proposed processes, services and products. Our patent applications may not result in issued patents, and any patents issued as a result of our patent applications may not be of sufficient scope or strength to provide us with any meaningful protection or commercial advantage. Additionally, we seek to maintain the confidentiality of certain trade secrets and other proprietary information to preserve our position in the market. We employ various methods to protect such intellectual property, such as entering into confidentiality agreements with certain third parties and our employees, and controlling access to, and distribution of, our proprietary information. However, our efforts may not be effective in controlling access to our proprietary information, and we may not have adequate remedies for the misappropriation of such information.

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maintain the confidentiality of certain trade secrets and other proprietary information to preserve our position in the market. We employ various methods to protect such intellectual property, such as entering into confidentiality agreements with certain third parties and our employees, and controlling access to, and distribution of, our proprietary information. However, our efforts may not be effective in controlling access to our proprietary information, and we may not have adequate remedies for the misappropriation of such information.

As we expand our service offerings and the geographic scope of our sales and marketing, we may face additional intellectual property challenges. Certain foreign countries do not protect intellectual property rights as fully as they are protected in the United States and, accordingly, intellectual property protection may be limited or unavailable in some foreign countries where we choose to do business. It may therefore be more difficult for us to successfully challenge the use of our intellectual property rights by other parties in these countries, which could diminish the value of our Brands, products or services and cause our competitive position and growth to suffer. The lack of adequate legal protections of intellectual property or failure of legal remedies for related actions in jurisdictions outside of the United States could have an adverse effect on our business, results of operations, and financial condition.

We may be subject to an intellectual property infringement or misappropriation ~~claims~~claim.

We may in the future be the subject of patent or other litigation. Our products and services, including products and services that we may develop in the future, may infringe, or third parties may claim that they infringe, intellectual property rights covered by patents or patent applications under which we do not hold licenses or other rights. Third parties may own or control these patents and patent applications in the United States and abroad. These third parties could bring claims against us that would cause us to incur substantial expenses and, if successfully asserted against us, could cause us to pay substantial damages. Further, if a patent infringement or other intellectual property-related lawsuit were brought against us, we could be forced to stop or delay production or sales of the product that is the subject of the suit. From time to time, we may receive letters from third parties drawing our attention to their patent rights. While we take steps to ensure that we do not infringe upon, misappropriate or otherwise violate the rights of others, there may be other more pertinent rights of which we are currently unaware. The defense and prosecution of intellectual property lawsuits could result in substantial expense to us. An adverse determination of any litigation or interference proceeding to which we may become a party could subject us to significant liabilities. As a result of patent infringement claims, or in order to avoid potential claims, we may choose or be required to seek a license from the third party and be required to pay significant license fees, royalties or both. Licenses may not be available on commercially reasonable terms, or at all, in which event our business would be materially and adversely affected. Even if we were able to obtain a license, the rights may be nonexclusive, which could result in our competitors gaining access to the same intellectual property. Ultimately, if we are unable to obtain such licenses, we could be forced to cease some aspects of our business operations, which could harm our business significantly.

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misappropriate or otherwise violate the rights of others, there may be other more pertinent rights of which we are currently unaware. The defense and prosecution of intellectual property lawsuits could result in substantial expense to us. An adverse determination of any litigation or interference proceeding to which we may become a party could subject us to significant liabilities. As a result of patent infringement claims, or in order to avoid potential claims, we may choose or be required to seek a license from the third party and be required to pay significant license fees, royalties or both. Licenses may not be available on commercially reasonable terms, or at all, in which event our business would be materially and adversely affected. Even if we were able to obtain a license, the rights may be nonexclusive, which could result in our competitors gaining access to the same intellectual property. Ultimately, if we are unable to obtain such licenses, we could be forced to cease some aspects of our business operations, which could harm our business significantly.

Our products and services use open source software.

Some of our solutions use software made available under open source licenses, and we expect to continue to incorporate open source software in our solutions in the future. Open source software is typically freely available. While this may reduce development costs and speed up the development process, it may also present certain risks that may be greater than those associated with the use of third-party commercial software. For example, open source software is generally provided without any warranties or other contractual protections regarding infringement or the quality of the code, including the existence of security vulnerabilities. We cannot guarantee we comply with all obligations under these licenses. If the owner of the copyright in the relevant open source software were to allege that we had not complied with the conditions of one or more open source licenses, we could be required to incur significant expenses defending against such allegations and could be subject to the payment of damages, enjoined from further use of the software, required to comply with conditions of the license (which may include releasing the source code of our proprietary software to third parties without charge), or forced to devote additional resources to re-engineer all or a portion of our solutions to avoid using the open source software. Any of these events could create liability for us, damage our reputation, and have an adverse effect on our business, ~~result~~results of operations, financial condition and prospects.

Risks Related to Our Capital Structure and Financing

Our substantial indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or in our industry, expose us to interest rate risk to the extent of our variable rate debt, and prevent us from meeting our obligations under our indebtedness.

~~We are highly leveraged.~~ As of December 31, ~~2024~~2025, we had $1.43 billion of total consolidated indebtedness outstanding. Our outstanding credit agreement and notes are guaranteed by substantially all of our material domestic subsidiaries, and our outstanding credit agreement is secured by substantially all of the assets and stock of such subsidiaries. Our business may not generate sufficient cash flow from operations, and future borrowings may not be available to us in an amount sufficient to enable us to service all our debt, to refinance all our debt or to fund our other liquidity needs. If we are unable to meet all our debt service obligations or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt. Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants that could further restrict our business operations. If we cannot make scheduled payments on our debt, we will be in default and, as a result, our debt holders could declare all outstanding principal and interest to be due and payable; the lenders under our outstanding credit agreement could terminate their commitments to loan us money and foreclose against the assets securing our borrowings; and we could be forced into bankruptcy or liquidation, which could adversely affect our business, results of operations, financial condition and prospects.

19Our leverage could have important consequences for us, including:

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Any refinancing of our indebtedness could be at higher interest rates and may require us to comply with more onerous covenants that could further restrict our business operations. If we cannot make scheduled payments on our debt, we will be in default and, as a result, our debt holders could declare all outstanding principal and interest to be due and payable; the lenders under our outstanding credit agreement could terminate their commitments to loan us money and foreclose against the assets securing our borrowings; and we could be forced into bankruptcy or liquidation, which could adversely affect our business, results of operations, financial condition and prospects.

Our high degree of leverage could have important consequences for us, including:

•requiring us to utilize a substantial portion of our cash flows from operations to make payments on our indebtedness, reducing the availability of our cash flows to fund working capital, capital expenditures, development activity, and other general corporate purposes;

•increasing our vulnerability to adverse economic, industry, or competitive developments;

•exposing us to the risk of increased interest rates ~~because~~as ~~substantially~~borrowings ~~all~~under of our ~~borrowings,~~credit ~~other~~agreement ~~than the $1,100,000 aggregate principal amount of 5.625% senior notes due 2029 (the “5.625% Notes”),~~ are at a variable ~~rates~~rate of interest;

•making it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the agreements governing our indebtedness;

•restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;

•limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions, and general corporate or other purposes; and

•limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who are less ~~highly~~ leveraged and who, therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting.

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Our outstanding credit agreement is floating rate debt. If interest rates increase, our debt service obligations on such indebtedness will increase even though the amount borrowed remained the same, and our net income and cash flows, including cash available for servicing our indebtedness, will correspondingly decrease.

In addition, we may be able to incur substantial additional indebtedness in the future. As of December 31, ~~2024~~2025, we had $~~360~~497.76 million of availability under our revolving credit agreement. In addition, we will be permitted to add, under such credit agreement, incremental facilities, subject to certain conditions being satisfied. Although the agreements governing our indebtedness contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions and, under certain circumstances, the amount of indebtedness that could be incurred in compliance with these restrictions could be substantial. These restrictions also will not prevent us from incurring obligations that do not constitute indebtedness as defined under our debt instruments. To the extent new debt is added to our current debt levels, the substantial leverage risks described above would increase.

We may need additional capital in the future, which may not be available to us. The raising of any additional capital may dilute holders’ ownership percentage in our stock.

As of December 31, ~~2024~~2025, we had unrestricted cash and cash equivalents totaling $~~131~~104.35 million and a borrowing capacity under our credit facility of $~~640~~750.0 million, with $~~360~~497.76 million of unused capacity available. We intend to continue to make investments to support our business growth and may require additional funds if our capital is insufficient to pursue business opportunities and respond to business challenges. Accordingly, we may need to engage in equity, equity-linked or debt financings to secure additional funds. Any issuances of equity or convertible debt securities could cause our existing stockholders to suffer dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our Class A Common Stock. Any debt financing secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. In addition, we may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, our ability to continue to support our business growth and to respond to business challenges could be significantly limited.

In addition, credit ratings are an important factor influencing our ability to access capital and the terms of any new indebtedness, including covenants and interest rates. If our credit ratings were downgraded, withdrawn or significantly weaker than those of our competitors, our ability to raise additional capital at acceptable cost could be harmed and as a result, our business, results of operations, financial condition and prospects could be adversely affected. Additionally, credit ratings may not reflect the potential effect of risks relating to the structure or marketing of our debt. Our clients and vendors may also consider our credit profile when considering whether to contract with us or negotiating contract terms, and if they were to change the terms on which they deal with us, it could have a further adverse effect on our business, prospects, results of operations and financial condition.

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If our available liquidity is insufficient, our financial condition could be adversely affected and we may be unable to fund contingent deferred acquisition liabilities, and any put options if exercised.

We maintain our credit agreement, together with cash flow from operations and proceeds from our ~~recent~~ notes financing, to fund our working capital needs and to fund the exercise of put option obligations and contingent deferred acquisition payments. If credit were unavailable or insufficient under our credit agreement, our liquidity could be adversely affected, and our ability to fund our working capital needs and any contingent obligations with respect to put options or contingent deferred acquisition payments could be adversely affected. We have made acquisitions for which we have deferred payment of a portion of the purchase price, with the deferred acquisition consideration generally payable based on achievement of certain thresholds of future earnings of the acquired company. In addition, a noncontrolling equity holder in an acquired business sometimes has the right to require ~~the~~ us to purchase all or part of such holder’s interest, either at specified dates or upon the termination of such holder’s employment with the subsidiary or death (put rights). Payments we are required to make in respect of deferred acquisition consideration and noncontrolling equity holder put rights may be significantly higher than the amounts we estimate because the actual obligation adjusts based on the performance of the acquired businesses over time. If available liquidity is insufficient, we may be unable to fund contingent deferred acquisition payments.

Our Up-C structure places significant limitations on our cash flow and, accordingly, we depend on distributions from OpCo to pay our taxes and expenses, including payments under the Tax Receivables Agreement.

As part of our umbrella partnership-C corporation (“Up-C”) structure, we are a holding company and our principal asset is our ownership of common units of our operating subsidiary, OpCo. This structure is designed to enable us to obtain certain tax benefits, and 85% of such tax benefits are payable to Stagwell Media under our Tax Receivables Agreement with Stagwell Media and OpCo. However, we have no independent means of generating revenue or cash flow, and our ability to pay taxes and operating expenses, and to service our liabilities, is dependent upon the financial results and cash flows of OpCo and its subsidiaries, along with the distributions we receive from OpCo. ~~OpCo~~We ~~intends to make payments to us out of available funds~~intend, and subject to limitations imposed under the agreements governing our indebtedness, and there can be no assurance that OpCo and its subsidiaries will generate sufficient cash flow to distribute funds to us or that applicable state law and contractual restrictions will permit such distributions. Moreover, because of our Up-C structure, this financing arrangement can give rise to U.S. corporate income tax liabilities for us in respect of the formation of OpCo, and subsequently as OpCo’s ~~makes~~sole ~~cash distributions to us to the extent they are subject to certain technical regulations regarding disguised sales~~manager, ~~subject~~ to ~~certain~~cause ~~exceptions including for distributions of operating cash flows and leveraged distributions. In such an event, we would depend on further cash distributions from~~ OpCo ~~in order~~ to ~~enable~~make ~~us to pay such tax liabilities.~~

We also incur expenses related to our operations, which may be significant. We intend, as OpCo’s sole manager, to cause OpCo to make cash distributions to the owners of OpCo membership interests so that we receive (i) an amount sufficient to allow us to fund all of our tax obligations in respect of taxable income allocated to us and (ii) distributions to cover our operating expenses, including any obligations to make payments under the Tax Receivables Agreement. When OpCo makes distributions, Stagwell Media and the other members of OpCo besides us are and will be entitled to receive proportionate distributions based on their economic interests in OpCo’s common units at the time of such distributions. OpCo’s ability to make such distributions may be subject to various limitations and restrictions, such as restrictions on distributions that would either violate any contract or agreement to which OpCo is then a party, or any applicable law, or that would have the effect of rendering OpCo insolvent or exceed the amounts that OpCo is permitted to distribute under the agreements governing our indebtedness. If we do not have sufficient funds to pay tax or other liabilities or to fund our operations, we may have to borrow funds, which could materially and adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such indebtedness. To the extent that we are unable to make payments under the Tax Receivables Agreement for any reason, such payments generally will be deferred and will accrue interest until paid, but nonpayment for a specified period may constitute a material breach of a material obligation under the Tax Receivables Agreement and therefore accelerate payments due under the Tax Receivables Agreement. Any inability to pay tax or other liabilities or to fund our operations could have a material and adverse effect on our business, results of operations, financial condition and prospects.

Our Tax Receivables Agreement with Stagwell Media requires us to make cash payments to Stagwell Media in respect of certain tax benefits to which we may become entitled, and we expect the payments we are required to make to be substantial, may be required to be made prior to the time that we recognize any associated tax benefits and may make our company a less attractive target to potential acquirers.

In connection with the closing of the Transactions, we entered into the Tax Receivables Agreement with OpCo and Stagwell Media, pursuant to which we are required to make cash payments to 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 redemptions or exchanges by the other holders of OpCo’s common units, together with a corresponding number of shares of our Class C Common Stock, for shares of our Class A Common Stock or cash, as applicable, and (ii) certain other tax benefits related to us making payments under the Tax Receivables Agreement. We expect the amount of cash payments that we are required to make under the Tax

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~~Receivables~~cash ~~Agreement~~distributions to beus ~~significant.~~out ~~Any~~of ~~payments~~its ~~made~~available funds as required for our operations as a holding company subject only to ~~Stagwell~~limitations ~~Media~~imposed under the ~~Tax~~agreements ~~Receivables~~governing ~~Agreement~~our indebtedness. Nevertheless, there can be no assurance that OpCo and its subsidiaries will ~~generally~~generate ~~reduce~~sufficient cash flow to distribute funds to us or that applicable state law and contractual restrictions will permit such distributions. Moreover, because of our Up-C structure, this financing arrangement can give rise to U.S. corporate income tax liabilities for us in respect of assets deemed contributed to OpCo on the ~~amount~~formation of ~~overall~~OpCo as OpCo makes cash ~~flow~~distributions ~~that~~to ~~may~~us ~~have~~to ~~otherwise~~the ~~been~~extent ~~available~~such distributions are subject to certain technical regulations regarding disguised sales, subject to certain exceptions in such regulations including for distributions of operating cash flows and leveraged distributions. In such an event, we would depend on further cash distributions from OpCo to enable us to pay such tax liabilities.

~~The~~We ~~actual~~also ~~increase~~incur inexpenses ~~tax~~related ~~basis~~to our operations, aswhich ~~well~~may asbe ~~the~~significant. ~~amount~~We ~~and~~intend, ~~timing~~as ofOpCo’s ~~any~~sole ~~payments~~manager, ~~under~~to ~~the~~cause ~~Tax~~OpCo ~~Receivables~~to ~~Agreement,~~make ~~varies~~cash ~~depending~~distributions onto aus ~~number~~as the owner of ~~factors,~~all ~~including,~~OpCo ~~but~~membership ~~not~~interests ~~limited~~so ~~to,~~that ~~the~~we ~~timing~~receive of(i) ~~any~~an ~~future~~amount ~~redemptions~~sufficient orto ~~exchanges,~~allow ~~the~~us ~~price~~to fund all of our ~~Class~~tax Aobligations ~~Common~~in ~~Stock~~respect atof ~~the~~taxable ~~time~~income ofallocated ~~such~~to ~~redemptions~~us orfrom ~~exchanges,~~OpCo ~~the~~and ~~extent~~(ii) distributions to ~~which~~cover ~~redemptions~~our oroperating ~~exchanges~~expenses, ~~are~~including ~~taxable,~~any ~~the~~obligations ~~amount~~to ~~and~~make ~~timing~~payments ofunder the ~~taxable~~Tax ~~income~~Receivables ~~that~~Agreement. weOpCo’s ~~generate~~ability into ~~the~~make ~~future,~~such ~~the~~distributions ~~timing~~may be subject to various limitations and ~~amount~~restrictions, ofsuch ~~any~~as ~~earlier~~restrictions ~~payments~~on wedistributions ~~make~~that ~~under~~would ~~the~~either ~~Tax~~violate ~~Receivables~~any ~~Agreement~~contract ~~itself,~~or ~~the~~agreement ~~tax~~to ~~rates~~which OpCo is then ~~applicable~~a ~~and~~party, ~~the~~or ~~portion~~any ofapplicable ~~our~~law, ~~payments~~or ~~under~~that would have the ~~Tax~~effect ~~Receivables~~of ~~Agreement~~rendering ~~constituting~~OpCo ~~imputed~~insolvent ~~interest.~~or Weexceed ~~expect~~the amounts that, asOpCo ais ~~result~~permitted ofto ~~the~~distribute ~~increases~~under in the ~~tax~~agreements ~~basis~~governing ofour ~~OpCo’s~~indebtedness. ~~tangible~~If ~~and~~we ~~intangible~~do ~~assets~~not ~~attributable~~have sufficient funds to ~~the~~pay ~~redeemed~~tax or ~~exchanged~~other ~~OpCo~~liabilities ~~common~~or ~~units,~~to ~~the~~fund ~~payments~~our ~~that~~operations, we may ~~make~~have to ~~Stagwell~~borrow ~~Media~~funds, which could bematerially ~~substantial~~and adversely affect our liquidity and financial condition and subject us to various restrictions imposed by any such indebtedness. ~~The~~To ~~amounts~~the weextent ~~may~~that bewe ~~required~~are unable to ~~pay~~make payments under the Tax Receivables Agreement for any reason, such payments generally will be ~~calculated~~deferred ~~based~~and inwill ~~part~~accrue oninterest ~~the~~until ~~market~~paid, ~~value~~but ofnonpayment ~~our~~for ~~Class~~a Aspecified ~~Common~~period ~~Stock~~may atconstitute ~~the~~a ~~time~~material breach of ~~redemption~~a ormaterial ~~exchange~~obligation ~~and~~under the ~~prevailing~~Tax ~~federal~~Receivables ~~tax~~Agreement ~~rates~~and ~~applicable~~therefore toaccelerate uspayments ~~over~~due ~~the~~under ~~life of~~ the Tax Receivables Agreement. ~~(as~~Any ~~well~~inability asto ~~the~~pay ~~assumed~~tax ~~combined~~or ~~state~~other ~~and~~liabilities ~~local~~or ~~tax~~to ~~rate),~~fund ~~and~~our ~~will~~operations ~~generally~~could behave ~~dependent~~a onmaterial ~~our~~and ~~ability~~adverse toeffect ~~generate~~on ~~sufficient~~our ~~future~~business, ~~taxable~~results ~~income~~of tooperations, ~~realize~~financial ~~all~~condition ofand ~~these tax savings~~prospects.

~~Under~~Our ~~its~~Tax ~~amended~~Receivables ~~and~~Agreement ~~restated~~with ~~operating~~Stagwell ~~agreement,~~Media ~~subject~~requires tous ~~availability of funds and limitations imposed under the agreements governing our indebtedness, OpCo is generally required from time~~ to ~~time to~~ make ~~distributions in~~ cash topayments ~~us in amounts that are intended~~ to be sufficient to cover the taxes on our allocable share of the taxable income of OpCo, and OpCo is also required to make pro rata distributions at such time to the other holders of its common units, including Stagwell Media, ~~without~~(or ~~taking~~its ~~into~~assignees) ~~account the tax savings realized by us that result~~ in ~~our~~respect ~~obligations under the Tax Receivables Agreement. There is no guarantee that the amounts or timing~~ of ~~such~~certain distributions will be sufficient to cover payments required under the Tax Receivables Agreement, including in the event payments under the Tax Receivables Agreement are due prior to the time that we realize the associated tax benefits. Into ~~particular,~~which ~~the Tax Receivables Agreement provides that in the case of a change in control, a material breach of our obligations under the Tax Receivables Agreement, or if, at any time,~~ we ~~elect~~have anbecome ~~early termination of the Tax Receivables Agreement~~entitled, ~~then the Tax Receivables Agreement will terminate~~ and ~~our~~we ~~obligations~~expect ~~under~~ the ~~Tax~~payments ~~Receivables Agreement would accelerate and become due and payable. In such a case,~~ we ~~would~~are be required to make ~~an immediate cash payment~~ to ~~Stagwell~~be ~~Media~~substantial, inmay anbe ~~amount~~required ~~equal~~ to ~~the~~be ~~present~~made ~~value~~prior ~~of all future payments (calculated using a discount rate equal~~ to the ~~Secured~~time ~~Overnight Financing Rate (“SOFR”) plus 100 basis points) under the Tax Receivables Agreement, which payment would be based on certain assumptions, including~~ that we ~~would~~recognize ~~have~~any ~~sufficient~~associated ~~taxable income to fully utilize all potential future~~ tax benefits ~~that are subject to the Tax Receivables Agreement~~ and ~~that~~may ~~Stagwell~~make ~~Media had exchanged any remaining outstanding common units of OpCo, together with shares of~~ our ~~Class~~company Ca ~~Common~~less ~~Stock,~~attractive ~~for~~target ~~shares~~to ofpotential ~~our Class A Common Stock~~acquirers.

In ~~addition,~~connection with the ~~distributions~~closing weof ~~receive~~the ~~from~~Transactions, ~~OpCo~~we ~~may~~entered atinto ~~times~~the ~~exceed~~Tax ~~our~~Receivables ~~tax~~Agreement ~~liabilities~~with OpCo and ~~our~~Stagwell ~~obligations~~Media, pursuant to ~~make~~which ~~payments~~we ~~under~~are ~~the~~required ~~Tax~~to ~~Receivables~~make ~~Agreement.~~cash Inpayments ~~the~~to ~~event~~Stagwell ~~excess~~Media ~~cash~~equal ~~is distributed~~ to ~~us,~~85% ~~our board~~ of ~~directors~~certain ~~(our~~U.S. ~~“Board”)~~federal, ~~will~~state ~~determine~~and ~~the~~local ~~appropriate~~income ~~uses~~tax ~~for~~or ~~any~~franchise ~~excess~~tax ~~cash so accumulated~~savings, ~~which~~if ~~may include~~any, ~~among~~that ~~other~~we ~~uses~~actually realize, ~~the~~or ~~payment~~in ~~obligations~~certain ~~under~~circumstances ~~the~~are ~~Tax~~deemed ~~Receivables~~to ~~Agreement~~realize, ~~and~~as ~~the~~a ~~payment~~result of ~~other~~(i) ~~expenses.~~increases Wein ~~have~~the notax ~~obligation~~basis toof ~~distribute~~OpCo’s ~~such~~assets ~~cash~~resulting (from redemptions or ~~other~~exchanges ~~available~~by ~~cash~~the other ~~than~~holders ~~any~~of ~~declared~~OpCo’s ~~dividend)~~common tounits, ~~our~~together ~~stockholders.~~with Noa ~~adjustments~~corresponding tonumber ~~the~~of ~~redemption~~shares orof ~~exchange~~our ~~ratio~~Class ofC common ~~units of OpCo~~stock, ~~together~~par ~~with~~value ~~shares~~$0.00001 ofper ~~our~~share (the “Class C Common Stock”), for shares of our Class A Common Stock or cash, as applicable, ~~will~~and be(ii) ~~made~~certain asother atax ~~result~~benefits ofrelated ~~either~~to ~~any~~us ~~cash~~making ~~distribution~~payments weunder ~~receive~~the ~~from~~Tax ~~OpCo~~Receivables ~~or any cash that we retain and do not distribute to our stockholders~~Agreement. ToAs ~~the~~of ~~extent~~April ~~that~~4, ~~we do not utilize any excess cash to fund our other expenditures~~2025, ~~the~~all ~~other members~~ of OpCo’s ~~would~~units ~~benefit~~and ~~from any value attributable to such cash balances as a result of their ownership of shares of~~ our Class AC Common Stock ~~following~~formerly aheld ~~redemption~~by orStagwell ~~exchange~~Media ofhave ~~their~~been ~~common~~exchanged ~~units~~for ~~of OpCo and shares of~~ our Class CA Common Stock. ~~Additionally,~~We noexpect ~~adjustments to~~ the ~~redemption~~amount orof ~~exchange~~cash ~~ratio~~payments ofthat ~~common~~we ~~units~~are ofrequired ~~OpCo~~to ~~and~~make ~~shares~~under ofthe ~~our~~Tax ~~Class~~Receivables CAgreement ~~Common~~(or ~~Stock~~to ~~for~~assignees ~~shares~~ of ~~our~~its ~~Class~~rights Athereunder) ~~Common~~to ~~Stock~~be orsignificant. ~~cash~~Any ~~will~~payments be made into ~~the~~Stagwell ~~event~~Media ~~that~~under wethe ~~incur~~Tax ~~liabilities~~Receivables orAgreement ~~expenses~~will ~~but~~generally doreduce ~~not~~the ~~receive~~amount ~~cash~~of ~~distributions~~overall ~~from~~cash ~~OpCo~~flow inthat ~~sufficient~~may ~~amount~~have tootherwise ~~fund~~been ~~such~~available ~~liabilities~~to ~~or expenses~~us.

The amount and timing of any payments under the Tax Receivables Agreement, will vary depending on a number of factors, including, but not limited to, the amount and timing of the taxable income that we generate in the future, the timing and amount of any payments we make under the Tax Receivables Agreement itself, the tax rates applicable for the year in which tax benefits arising from prior redemptions or exchanges of OpCo common units are utilized and the portion of our payments under the Tax Receivables Agreement constituting imputed interest. We expect that, as a result of the increases in the tax basis of OpCo’s tangible and intangible assets attributable to the redeemed or exchanged OpCo common units, the payments that we may make to Stagwell Media could be substantial. The amounts we may be required to pay under the Tax Receivables Agreement will be calculated based on the prevailing federal tax rates applicable to us over the life of the Tax Receivables Agreement (as well as the assumed combined state and local tax rate), and will generally be dependent on our ability to generate sufficient future taxable income to realize all of these tax savings.

Under its amended and restated operating agreement, subject to availability of funds and limitations imposed under the agreements governing our indebtedness, OpCo is generally required from time to time to make distributions in cash to us in amounts that are intended to be sufficient to cover the taxes on our allocable share of the taxable income of OpCo, without taking into account the tax savings realized by us that result in our obligations under the Tax Receivables Agreement. There is no guarantee that the amounts or timing of such distributions will be sufficient to cover payments required under the Tax Receivables Agreement, including in the event payments under the Tax Receivables Agreement are due prior to the time that we realize the associated tax benefits. In particular, the Tax Receivables Agreement provides that in the case of a change in control, a material breach of our obligations under the Tax Receivables Agreement, or if, at any time, we elect an early termination of the Tax Receivables Agreement, then the Tax Receivables Agreement will terminate and our obligations under

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the Tax Receivables Agreement would accelerate and become due and payable. In such a case, we would be required to make an immediate cash payment to Stagwell Media in an amount equal to the present value of all future payments (calculated using a discount rate equal to the Secured Overnight Financing Rate (“SOFR”) plus 100 basis points) under the Tax Receivables Agreement, which payment would be based on certain assumptions, including that we would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the Tax Receivables Agreement.

In addition, the distributions we receive from OpCo may at times exceed our tax liabilities and our obligations to make payments under the Tax Receivables Agreement. In the event excess cash is distributed to us, our board of directors (our “Board”) will determine the appropriate uses for any excess cash so accumulated, which may include, among other uses, repurchases of our Class A Stock under our stock repurchase program and the payment of other expenses. We have no obligation to distribute such cash (or other available cash other than any declared dividend) to our stockholders.

Risks Related to Accounting and Tax Issues

Our results of operations are subject to foreign currency exchange fluctuation risks.

Although our financial results are reported in U.S. dollars, a portion of our revenues and operating costs is denominated in currencies other than the U.S. dollar, and the functional currency of our foreign operations is generally their respective local currency. As a result, we must translate revenues and expenses, as well as assets and liabilities, into U.S. dollars at exchange rates in effect during or at the end of each reporting period. Therefore, changes in the value of the U.S. dollar against other currencies, particularly the Canadian dollar, the British Pound and the Euro, will affect our revenues, operating income and the value of balance-sheet items, including intercompany payables and receivables, which are denominated in other currencies. These changes could cause our revenue and net income in U.S. dollars to be higher or lower than our results in local currency when compared against other periods and as a result may affect our financial results and competitive position.

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In addition, certain of our expenses are incurred in currencies other than those in which we bill for the related services. An increase in the value of certain currencies, such as those listed above, could increase costs for delivery of services overseas by increasing labor and other costs that are denominated in local currency. Our contractual provisions or cost management efforts may not be able to offset their impact, and our currency hedging activities, which are designed to partially offset this impact, may not be successful. This could result in a decrease in the profitability of our contracts that are denominated in such currencies.

Our goodwill, intangible assets and right-of-use lease assets may become impaired.

We have recorded a significant amount of goodwill and intangible assets in our Audited Consolidated Financial Statements resulting from our acquisition activities, and we have in the past recorded, and may in the future record, significant charges for impairment of goodwill and intangible assets. We also have recorded a significant amount of right-of-use lease assets in our Audited Consolidated Financial Statements, and we have in the past recorded, and may in the future record charges for impairment of these assets. We test, at least annually, the carrying value of goodwill for impairment. The estimates and assumptions about future results of operations and cash flows made in connection with the impairment testing could differ from future actual results of operations and cash flows. If we conclude that any further intangible asset, goodwill and right-of-use lease asset values are impaired, whether as a result of underperformance in one or more reporting units, a potential recession or other disruption, interest rate increases or other factors, any resulting non-cash impairment charge could have a material adverse effect on our business, results of operations and financial condition.

We previously identified and remediated material weaknesses in our internal control over financial reporting and there can be no assurance that additional material weaknesses will not be identified in the future.

AsManagement ~~discussed in Item 9A. “Controls and Procedures” of this Form 10-K, management~~ previously identified material weaknesses in our internal control over financial reporting for the fiscal year ended December 31, 2023. ~~The~~We ~~material~~remediated ~~weaknesses~~the related to our lack of a sufficient complement of resources with an appropriate level of accounting knowledge, experience and training, ineffective risk assessment process, ineffective controls over information and communication relating to communicating accurate information internally and externally and ineffective monitoring controls. These material weaknesses ~~contributed~~during to2024 anand ~~additional~~concluded ~~material~~that ~~weakness~~our ~~relating~~internal ~~to ineffective~~ control ~~activities~~over ~~that~~financial ~~address~~reporting ~~relevant~~was ~~risks~~effective atas ~~the appropriate level~~ of ~~precision.~~December We31, ~~remediated the material weaknesses during~~ 2024 byand ~~implementing~~December ~~several~~31, ~~enhancements to our internal control over financial reporting~~2025. However, there can be no assurance that additional material weaknesses in our internal control over financial reporting will not be identified in the future.

If we fail to maintain effective internal control over financial reporting, our ability to record, process and report financial information timely and accurately could be adversely affected, and we may fail to detect or prevent material misstatements in our annual or interim consolidated financial statements that may require prospective or retrospective changes to our financial statements. In addition, our past and any future misstatements or restatements of financial information could also expose us to increased risk of litigation or regulatory inquiries and could cause investors to lose confidence in the accuracy and completeness of our reported financial information, which could negatively affect the market price of our Class A Common Stock.

Our disclosure controls and procedures and internal controls may not prevent or detect all errors or acts of fraud.

We designed our disclosure controls and procedures to reasonably assure that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. WeAny ~~believe~~control ~~that any disclosure controls and procedures or internal controls and procedures~~system, no matter how well~~-conceived~~ and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the reality that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected.

Our judgments or estimates relating to our critical accounting policies are based on assumptions that could change or be incorrect.

The preparation of our financial statements in conformity with GAAP requires management to make judgments, estimates, and assumptions that affect the amounts reported in the Audited Consolidated Financial Statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets, liabilities, and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our Class A Common Stock. Significant judgments, estimates, and assumptions used in preparing our Audited

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~~Consolidated~~designed ~~Financial~~and ~~Statements~~operated, ~~include~~is based upon certain assumptions and can provide only reasonable, ornot ~~may~~absolute, inassurance ~~the~~that ~~future~~its objectives will be met. These inherent limitations include, ~~those~~the ~~related~~reality tothat ~~revenue~~judgments ~~recognition,~~in ~~business~~decision-making ~~combinations,~~can ~~deferred~~be ~~acquisition~~faulty ~~consideration~~and that breakdowns can occur because of simple error or mistake. Additionally, ~~noncontrolling~~controls ~~and~~can ~~redeemable~~be ~~noncontrolling~~circumvented ~~interests~~by the individual acts of some persons, ~~goodwill~~by ~~and~~collusion ~~intangible~~of ~~assets~~two or more people or by an unauthorized override of the controls. Accordingly, ~~right-~~because of~~-use~~ ~~lease~~the ~~assets~~inherent limitations in our control system, misstatements due to error or fraud may occur and ~~income~~not ~~taxes~~be detected.

Our judgments or estimates relating to our critical accounting policies are based on assumptions that could change or be incorrect.

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make judgments, estimates, and assumptions that affect the amounts reported in the Audited Consolidated Financial Statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets, liabilities, and equity, and the amount of revenue and expenses that are not readily apparent from other sources. Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our Class A Common Stock. Significant judgments, estimates, and assumptions used in preparing our Audited Consolidated Financial Statements include, or may in the future include, those related to revenue recognition, business combinations, deferred acquisition consideration, noncontrolling and redeemable noncontrolling interests, goodwill and intangible assets, right-of-use lease assets, and income taxes.

We may be subject to adverse tax consequences.

We and OpCo are subject to tax in multiple tax jurisdictions. Significant judgment is required in determining our global provision for income taxes, deferred tax assets or liabilities and in evaluating our tax positions on a worldwide basis. While we believe our tax positions are consistent with the tax laws in the jurisdictions in which we conduct our business, it is possible that jurisdictional tax authorities may take a contrary view, which may have a significant impact on our global provision for income taxes. Additionally, asunder aOpCo’s ~~pass-through~~LLC ~~entity for U.S. tax purposes~~Agreement, OpCo is required to make periodic distributions to ~~(i)~~ us, to enable us to pay taxes allocable to our investment in OpCo~~, and (ii) the holders of OpCo’s common units and corresponding shares of our Class C Common Stock~~. If our or OpCo’s effective tax rate were to increase, such obligations to make tax distributions will correspondingly increase. See “—Risks Related to Our Capital Structure and Financing—Our Up-C structure places significant limitations on our cash flow and accordingly, we depend on distributions from OpCo to pay our taxes and expenses, including payments under the Tax Receivables Agreement.”

Tax laws are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied. If the U.S. or other foreign tax authorities change applicable tax laws, our overall taxes could increase, as well as OpCo’s obligations to make tax distributions, and our business, financial condition or results of operations may be adversely impacted.

We may face material adverse tax consequences resulting from the Transactions in Canada, the United States or other jurisdictions.

In connection with the completion of the Transactions, MDC completed a redomiciliation from the federal jurisdiction of Canada to the State of Delaware (the “Redomiciliation”). We believe that the Redomiciliation qualifies as a “reorganization” under section 368(a) of the Internal Revenue Code (the “Code”) and treated, for U.S. federal income tax purposes, as if MDC (i) transferred all of its assets and liabilities to a new U.S. corporation (“New MDC”) in exchange for all of such new corporation’s outstanding stock and (ii) then distributed the stock of New MDC that it received in the transaction to its stockholders in liquidation of MDC. Additionally, we believe the Transactions should be treated for tax purposes as a deemed transfer by New MDC of its assets to OpCo and an assumption of New MDC’s liabilities by OpCo in a transaction intended to qualify as a contribution to OpCo in exchange for OpCo’s common units or preferred units under section 721 of the Code, and that Stagwell Media’s contribution of its businesses to OpCo is similarly subject to section 721 of the Code.

We may face material adverse U.S. tax consequences as a result of the Transactions, and the Internal Revenue Service may not agree with or may otherwise challenge our position on the tax treatment of the Transactions or of internal restructuring transactions undertaken prior to, after, or in connection with the Transactions, which could result in higher U.S. federal tax costs than we anticipate, including a reduction in the net operating loss carryforwards of certain of our subsidiaries. We have not applied for a ruling related to the Transactions and do not intend to do so. Any adverse tax consequences resulting from the Transactions or our operations as a combined company could have an adverse effect on our business, results of operations, financial condition and cash flows. Moreover, U.S. tax laws significantly limit our ability to redomicile outside of the United States.

In addition, as a result of the Redomiciliation, we incurred a significant Canadian corporate tax liability and recorded a tax receivable of $10.4 9 million included in Other Assets in our Audited Consolidated Financial Statements. For purposes of the Canadian Tax Act, MDC’s taxation year was deemed to have ended immediately prior to it ceasing to be a resident of Canada as a result of the Redomiciliation. Immediately prior to the time of this deemed year end, MDC was deemed to have disposed of each of its properties for proceeds of disposition equal to the fair market value of such properties at that time and was deemed to have reacquired such properties for a cost amount equal to that fair market value. MDC was subject to income tax under Part I of the Canadian Tax Act on any income and net taxable capital gains which arise as a result of this deemed disposition (after the utilization of any available capital losses or non-capital losses) and was also subject to “emigration tax” under Part XIV of the Canadian Tax Act on the amount by which the fair market value, immediately before MDC’s deemed year end, of all of its properties exceeded the total of certain of its liabilities and the paid-up capital, determined for purposes of that emigration tax, of all the issued and outstanding shares of MDC immediately before such deemed year end.

The quantum of Canadian federal income tax payable by MDC as a result of the Redomiciliation depends upon a number of considerations including the fair market value of its properties, the amount of its liabilities, the Canada-U.S. dollar exchange rate, MDC’s stockholder composition, as well as certain Canadian tax attributes, accounts and balances of the Company, each as of the effective time of the Redomiciliation. We have not applied to the Canadian federal tax authorities for a tax ruling relating to the Redomiciliation and do not intend to do so, and the Canadian federal tax authorities may not agree with or may otherwise challenge our position on the tax treatment of the Redomiciliation, which could result in higher Canadian corporate

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~~tax~~Canadian ~~liabilities~~Tax ~~than~~Act, weMDC’s ~~anticipate~~taxation year was deemed to have ended immediately prior to it ceasing to be a resident of Canada as a result of the Redomiciliation. ~~Any~~Immediately prior to the time of this deemed year end, MDC was deemed to have disposed of each of its properties for proceeds of disposition equal to the fair market value of such ~~adverse~~properties at that time and was deemed to have reacquired such properties for a cost amount equal to that fair market value. MDC was subject to income tax ~~consequences~~under ~~could~~Part ~~adversely~~I ~~affect~~of ~~our~~the ~~business~~Canadian Tax Act on any income and net taxable capital gains which arise as a result of this deemed disposition (after the utilization of any available capital losses or non-capital losses) and was also subject to “emigration tax” under Part XIV of the Canadian Tax Act on the amount by which the fair market value, ~~results~~immediately before MDC’s deemed year end, of ~~operation~~all of its properties exceeded the total of certain of its liabilities and the paid-up capital, ~~financial~~determined ~~condition~~for purposes of that emigration tax, of all the issued and ~~cash~~outstanding ~~flows~~shares of MDC immediately before such deemed year end.

Risks Related to Ownership of Our Class A Common Stock and Our Status as a Public Company

Our stock price may be volatile.

The trading price of our Class A Common Stock has fluctuated and may in the future fluctuate substantially and may be lower than its current price. For example, since August 2, 2021 (the closing date of the Transactions), the trading price of our Class A Common Stock on the Nasdaq Global Select Market has ranged from a low of $3.83 per share to a high of $11.04 per share. The trading price of our securities depends on many factors, including those described elsewhere in this “Risk Factors” section, many of which are beyond our control and may not be related to our operating performance. These fluctuations could cause you to lose all or part of your investment in our securities since you might be unable to sell them at or above the price you paid for them.

If our operating and financial performance in any given period does not meet any guidance that we provide to the public, the market price for our Class A Common Stock may decline.

We have in the past provided, and may from time to time provide, guidance regarding our future performance that represents our management’s estimates as of the date such guidance is provided. Any such guidance is based upon a number of assumptions with respect to future business decisions (some of which may change) and estimates that, while presented with numerical specificity, are inherently subject to significant business, economic and competitive uncertainties and contingencies (many of which are beyond our control). Guidance is necessarily speculative in nature, and it can be expected that some or all of the assumptions that inform such guidance will not materialize or will vary significantly from actual results. Accordingly, our guidance is only an estimate of what management believes is realizable as of the date such guidance is provided. Actual results have in the past varied, and may in the future vary from such guidance, and the variations may be material. Investors should also recognize that the reliability of any forecasted financial data diminishes the farther in the future that the data is forecast. In light of the foregoing, investors should not place undue reliance on our financial guidance and should carefully consider any guidance we may publish in context. In addition, in recent periods our operating or financial results have not met our guidance, or we have reduced our guidance. If in the future our operating or financial results for a particular period do not meet any guidance we provide or the expectations of investment analysts, or if we reduce our guidance for future periods, the market price of our Class A Common Stock may decline significantly. In addition, even though we have issued public guidance in the past, we are not obligated to and may determine not to continue to do so in the future.

A significant portion of our Class A Common Stock is held by our affiliates and these shares of Class A Common Stock may be sold into the market in the future, or should allow the affiliates to control decisions requiring stockholder approval, either of which could negatively affect our stock price.

As of December 31, ~~2024~~2025, ~~Stagwell~~affiliates ~~Media~~of the Company beneficially owned approximately 5764% of our outstanding shares of Class A Common Stock ~~on an as-converted basis~~. Although the shares ~~held by Stagwell Media~~ are subject to securities law restrictions on sales by affiliates, we, ~~Stagwell Media~~ and certain ~~other~~of ~~parties~~the affiliates are party to a registration rights agreement and a securities purchase agreement pursuant to which, among other things and subject to certain restrictions, we are required to file (and have filed) with the SEC a registration statement registering for resale the shares of our Class A Common Stock that are held by, ~~or are issuable upon exchange of units of OpCo (in combination with corresponding shares of our Class C Common Stock) held by,~~ such ~~parties~~affiliates, and to conduct certain underwritten offerings upon the request of holders of registrable securities, including direct and indirect transferees of such ~~holders~~affiliates. In addition, we are party to a securities purchase agreement pursuant to which we are required to register for resale the shares of Class A Common Stock issued to certain of our stockholders upon the conversion of our previously outstanding Series 8 convertible preferred stock.

As such, sales of a substantial number of shares of Class A Common Stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of Class A Common Stock.

We are a “controlled company” within the meaning of the applicable rules of Nasdaq.

Our CEO and Chairman, Mark Penn, beneficially owns or controls approximately 58% of the voting power of our Common Stock. As a result, we are a “controlled company” within the meaning of the Nasdaq rules and we qualify for exemptions from certain corporate governance requirements, including the requirements to have: (a) a majority of independent directors on the Board; (b) a nominating committee comprised solely of independent directors; (c) compensation of executive officers determined by a majority of the independent directors or a compensation committee comprised solely of independent directors; and (d) director nominees selected, or recommended for the selection by the Board, either by a majority of the independent directors or a nominating committee comprised solely of independent directors. We currently do not utilize any of these exemptions. However, if we elect to utilize one or more of these exemptions, our stockholders may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.

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InAs ~~addition~~such, ~~this~~sales ~~concentration~~ of ~~ownership~~a ~~and~~substantial ~~voting~~number ~~power~~of ~~allows~~shares ~~Mr.~~of ~~Penn~~Class toA ~~control~~Common ~~our~~Stock ~~decisions,~~in ~~including matters requiring approval by our stockholders (such as, subject to certain limitations,~~ the ~~election~~public ofmarket ~~directors~~could ~~and~~occur ~~the~~at ~~approval~~any oftime. ~~mergers~~These ~~or other extraordinary transactions)~~sales, ~~regardless of whether~~ or ~~not other stockholders believe that~~ the ~~transaction~~perception is in ~~their~~the ~~own~~market ~~best~~that ~~interests. Such concentration of voting power could also have~~ the ~~effect~~holders of ~~delaying, deterring or precluding~~ a ~~change~~large number of ~~control~~shares orintend ~~other business combination that might otherwise be beneficial~~ to ~~our~~sell ~~stockholders~~shares, could ~~deprive~~reduce ~~our stockholders of an opportunity to receive a premium for their Class A Common Stock as part of a sale of our company and might ultimately affect~~ the market price of ~~our~~ Class A Common Stock.

In addition, this concentration of ownership and voting power could allow the affiliates to control our decisions, including matters requiring approval by our stockholders (such as, subject to certain limitations, the election of directors and the approval of mergers or other extraordinary transactions), regardless of whether or not other stockholders believe that the transaction is in their own best interests. Such concentration of voting power could also have the effect of delaying, deterring or precluding a change of control or other business combination that might otherwise be beneficial to our stockholders, could deprive our stockholders of an opportunity to receive a premium for their Class A Common Stock as part of a sale of our company and might ultimately affect the market price of our Class A Common Stock.

Item 1B. Unresolved Staff Comments

None.

Item 1C. Cybersecurity

Risks from Cybersecurity Threats

Cybersecurity threats and attacks are becoming more sophisticated and pose a risk to our systems and information. While, to date, we have not been subject to cybersecurity incidents that, individually or in the aggregate, have been material to our operations or financial condition, there can be no guarantee that we will not experience such an incident in the future. For more information regarding the cybersecurity-related risks we face, see “Risk Factors - Risks Related to Data Privacy and Cybersecurity.”

Cybersecurity Risk Management and Strategy

Our approach to risk management is designed to identify, assess, prioritize and manage major risk exposures, including material risks from cybersecurity threats, which could affect our ability to execute our corporate strategy and fulfill our business objectives. We have implemented and incorporated into our operations, cybersecurity risk management processes and technologies to protect the integrity, availability and confidentiality of our critical systems and information.

Key aspects of our cybersecurity risk management program include:

•Risk assessments designed to identify risks to our systems and information;

•An internal security team principally responsible for managing our cybersecurity risk assessment processes, response to cybersecurity ~~incidents~~events, and information technology security controls;

•Engaging third-party service providers to assist with network, endpoint and cloud system monitoring;

•Monitoring emerging data protection laws and implementing responsive changes to our processes;

•Annual cybersecurity awareness training for employees and enhanced cybersecurity management and incident response training for employees involved in systems or processes that handle sensitive data;

•Regular audits and tests of our information systems (including review and assessment by independent third-party advisors, who help identify areas for continued focus and improvement);

•Regular phishing email simulations for employees and contractors with access to our email systems;

•A third-party risk management process for service providers, suppliers and vendors, including those with access to our customer data, employee data, or our systems; and

•A cybersecurity incident response plan that includes detailed procedures for responding to cybersecurity incidents, including processes to triage, assess severity, escalate, contain, investigate and remediate cybersecurity incidents, as well as to comply with potentially applicable legal obligations and mitigate brand and reputational damage.

In addition, we maintain insurance to protect against potential losses arising from cybersecurity incidents.

Cybersecurity Governance and Oversight

Our Board considers cybersecurity risk as part of its risk oversight function and has delegated to its Audit Committee oversight of our cybersecurity risk management program. The Audit Committee receives quarterly reports from management on cybersecurity risks, risk assessment and risk management, and discusses those matters with management. In addition, management updates the Audit Committee on cybersecurity incidents, if any. The Audit Committee also receives and discusses quarterly reports from management on the effectiveness of our information technology security controls.

~~Risks~~Our ~~from~~information ~~Cybersecurity~~security ~~Threats~~team, including our Chief Technology Officer and our Senior Vice President Information Security, is responsible for day-to-day identification, assessment and management of the cybersecurity risks we face. The information security team also has primary responsibility for our overall cybersecurity risk management program and

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~~Cybersecurity~~supervises ~~threats~~both ~~and~~our ~~attacks~~internal ~~are~~cybersecurity ~~becoming~~personnel ~~more~~and ~~sophisticated~~our ~~and~~retained ~~pose~~external acybersecurity ~~risk~~consultants. toThe leaders of our ~~systems~~information ~~and~~security team have over 40 years of combined experience in managing information. ~~While~~security, todeveloping ~~date,~~cybersecurity westrategy ~~have~~and ~~not~~implementing ~~been~~cybersecurity ~~subject~~programs. toThe ~~cybersecurity~~Chief ~~incidents~~Technology ~~that,~~Officer ~~individually~~is orinformed inof and monitors the ~~aggregate~~prevention, ~~have~~detection, ~~been~~mitigation ~~material~~and toremediation ~~our~~of ~~operations~~cybersecurity orincidents ~~financial~~through ~~condition,~~management ~~there~~of ~~can~~the becybersecurity norisk ~~guarantee~~management ~~that~~program wedescribed ~~will~~above, ~~not~~including ~~experience~~our ~~such~~cybersecurity anincident response plan. Our incident inresponse ~~the~~plan ~~future.~~is ~~For~~also ~~more~~designed, ~~information~~depending ~~regarding~~on the circumstances, to escalate cybersecurity~~-related~~ ~~risks~~incidents weto ~~face,~~other ~~see~~members ~~“Risk~~of ~~Factors~~management, -report ~~Risks~~cybersecurity ~~Related~~incidents to ~~Data~~the ~~Privacy~~Audit ~~and Cybersecurity~~Committee.”

Our information security team, including our Chief Technology Officer and our Senior Vice President Information Security, is responsible for day-to-day identification, assessment and management of the cybersecurity risks we face. The information security team also has primary responsibility for our overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our retained external cybersecurity consultants. The leaders of our information security team have over 40 years of combined experience in managing information security, developing cybersecurity strategy and implementing cybersecurity programs. The Chief Technology Officer is informed of and monitors the prevention, detection, mitigation and remediation of cybersecurity incidents through management of the cybersecurity risk management program described above, including our cybersecurity incident response plan. Our incident response plan is also designed, depending on the circumstances, to escalate cybersecurity incidents to other members of management, report cybersecurity incidents to the Audit Committee, and support public disclosure and reporting of material incidents.

Item 2. Properties

See Note 10 of the Notes included in this Form 10-K for a discussion of the Company’s lease commitments.

The Company maintains office space in North America, Europe, Asia, South America, the Middle East, Africa, and Australia. These spaces are primarily used for office and administrative purposes by the Company’s employees in performing professional services. These office spaces are in suitable and well-maintained condition for Stagwell’s current operations. Certain of these leases are subject to rent reviews or contain escalation clauses and certain of our leases require our payment of various operating expenses, which may also be subject to escalation. In addition, leases related to the Company’s non-U.S. businesses are denominated in currencies other than U.S. dollars and are therefore subject to changes in foreign exchange rates.

The table below provides a brief description of all locations in which office spaces are maintained and the related reportable segments.

Reportable Segment Office Locations ~~Integrated~~Marketing ~~Agencies~~Services ~~Network~~Argentina, Australia, ~~California,~~ Canada, China, ~~Florida,~~ France, Germany, ~~Illinois~~Ireland, ~~India~~Netherlands, ~~Michigan~~Singapore, ~~Minnesota~~Sweden, ~~Netherlands~~United Kingdom, ~~New~~and ~~York,~~United ~~Oregon,~~States ~~Pennsylvania~~Digital Transformation Argentina, Philippines, ~~Texas~~United Arab Emirates, and United ~~Kingdom~~States ~~Brand~~Media ~~Performance~~& ~~Network~~Commerce ~~Australia,~~ Brazil, Canada, China, ~~Colorado,~~ Egypt, ~~Florida~~France, ~~France~~Germany, Hong Kong, India, ~~Ireland~~Italy, Japan, ~~Korea,~~ Malaysia, ~~Maryland,~~ Mexico, ~~New York~~Netherlands, Poland, Saudi Arabia, Singapore, ~~Spain~~South Korea, ~~Sweden~~Spain, Taiwan, ~~Texas~~Thailand, Ukraine, United Arab Emirates, United ~~Kingdom~~States, and ~~Utah~~Vietnam Communications ~~Network Arizona,~~ Bahrain, Brazil, ~~California~~Canada, China, ~~Georgia,~~ Germany, Japan, ~~Massachusetts, Malaysia, Minnesota, North Carolina, New York,~~ Saudi Arabia, Singapore, ~~South Africa~~Thailand, United Arab Emirates, United Kingdom, ~~Virginia, Washington,~~ and ~~Washington~~United ~~D.C.~~States ~~All~~The ~~Other~~Marketing ~~Argentina,~~Cloud China, Germany, Israel, Switzerland, ~~United Kingdom~~ and ~~Washington~~United ~~D.C.~~States Corporate Canada, ~~Florida~~Singapore, ~~Illinois, New York, Texas,~~ United Kingdom, ~~Washington,~~ and ~~Washington~~United ~~D.C.~~States

Item 3. Legal Proceedings

In the ordinary course of business, we are involved in various legal proceedings. We do not currently expect that these proceedings will have a material adverse effect on our results of operations, cash flows or financial position.

Item 4. Mine Safety Disclosures

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information and Holders

Our Class A Common Stock is traded on the Nasdaq Global Select Market, under the symbol “STGW.” ~~There is no established public trading market for our Class C Common Stock.~~ As of March 35, ~~2025~~2026, the approximate number of holders of record of our Class A Common Stock ~~and Class C Common Stock,~~ was 12,~~770 and 1, respectively~~150.

Dividends

We have never declared ornor paid any cash dividends on our capital stock. We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our Board, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions, and other factors that the Board may deem relevant.

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Unregistered Sales of Equity Securities

In the three months ended December 31, ~~2024~~2025, the Company ~~granted~~issued 593,~~517~~209,970 ~~restricted stock units underlying~~ shares of Class A Common Stock as ~~inducement~~payments ~~for~~in ~~employment~~lieu ~~and~~of ~~issued~~cash ~~5,201,062~~for ~~shares~~the ofCompany’s ~~Class~~obligation Ato ~~Common~~make ~~Stock,~~deferred payments as ~~$38.9~~part ~~million~~ of ~~aggregate~~the purchase ~~consideration,~~price infor ~~connection~~a ~~with~~prior ~~acquisitions~~acquisition in transactions exempt from registration under Section 4(a)(2) of the Securities Act. The Company received no cash proceeds, and no commissions were paid to any person in connection with the sale of these shares.

Purchase of Equity Securities by the Issuer and Affiliated Purchasers

On ~~November~~March 64, ~~2024~~2026, the Board of Directors authorized an extension and a $~~125~~350.0 million increase in the size of our previously approved stock repurchase program (the “Repurchase Program”). Under the Repurchase Program, as amended, we may repurchase up to an aggregate of $~~375~~725.0 million of shares of our outstanding Class A Common Stock, with any previous purchases under the Repurchase Program continuing to count against that limit. The Repurchase Program will expire on ~~November~~March 64, ~~2027~~2029.

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 Exchange Act), 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. The Board will review the Repurchase Program periodically and may authorize adjustments of its terms. Pursuant to its Credit Agreement (as defined and discussed in Note 11 of the Notes included herein) and the indenture governing the 5.625% senior notes due 2029 (the “5.625% Notes”), the Company is currently limited as to the dollar value of shares it may repurchase in the open market.

The following table details our monthly shares repurchased during the fourth quarter of ~~2024~~2025 and the approximate dollar value of shares that may yet be purchased pursuant to the Repurchase Program:

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) (3)
10/1/2024 - 10/31/2024	898,210	$	6.62	879,140	$	45,939,193
10/1/2025 - 10/31/2025	2,741,865	$	5.13	2,700,455	$	65,674,197
11/1/2024 - 11/30/2024	162,878	6.66		154,100	169,919,697
11/1/2025 - 11/30/2025	2,400,333	5.03		2,376,772	53,666,662
12/1/2024 - 12/31/2024	—	—		—	169,919,697
12/1/2025 - 12/31/2025	469,498	5.47		469,498	51,089,668
Total	15,~~061~~611,~~088~~696	$	65.6311	15,~~033~~546,~~240~~725	$	~~169~~51,~~919~~089,~~697~~668

(1) Includes information for all shares repurchased by the Company, including shares repurchased as part of the Company’s publicly announced Repurchase Program, and 2764,~~848~~971 shares to settle employee tax withholding obligations related to the vesting of restricted stock awards and restricted stock units.

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(2) Only includes information for shares repurchased as part of the Company’s publicly announced Repurchase Program.

(3) Does not include $350.0 million increase authorized on March 4, 2026.

Item 6. [Reserved]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis are based on and should be read in conjunction with our Audited Consolidated Financial Statements and the notes thereto included elsewhere in this Form 10-K. The following discussion and analysis contain forward-looking statements and should be read in conjunction with the disclosures and information contained and referenced under the captions “Forward-Looking Statements” and “Risk Factors” in this Form 10-K. The following discussion and analysis also include a discussion of certain non-GAAP financial measures. A description of the non-GAAP financial measures discussed in this section and reconciliations to the comparable GAAP measures are below.

In this section, the terms “Stagwell,” “we,” “us,” “our” and the “Company” refer to Stagwell Inc. and its direct and indirect subsidiaries. References to a “fiscal year” mean the Company’s year commencing on January 1 of that year and ending December 31 of that year (e.g., fiscal ~~2024~~2025 means the period beginning January 1, ~~2024~~2025, and ending December 31, ~~2024~~2025).

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Executive Summary

Overview

Stagwell conducts its business through its ~~networks~~segments, 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. We believe Stagwell’s differentiation lies in its ~~creative~~digital-first and technology-based roots and proven entrepreneurial leaders, which together with innovations in technology and data, bring transformational marketing, activation, communications and strategic consulting services to clients. Stagwell leverages its range of services in an integrated manner, offering strategic, creative and innovative solutions that are technologically forward and media-agnostic. The Company’s strategy is intended to challenge the industry status quo, realize returns on investment, and drive transformative growth and business performance for its clients and stakeholders.

Stagwell manages its business by monitoring several financial and non-financial performance indicators. The key indicators that we focus on are revenue, operating expenses, staff cost ratio, capital expenditures, net income (loss), net income (loss) attributable to Stagwell Inc. common shareholders, net income (loss) per share and the non-GAAP financial measures including Adjusted EBITDA, Free cash flow and Adjusted EPS, described below. Revenue growth is analyzed by reviewing a mix of measurements, including (i) growth by major geographic location, (ii) growth from existing clients and the addition of new clients, (iii) growth by principal capability, (iv) growth from currency changes, and (v) growth from acquisitions. In addition to monitoring the foregoing financial indicators, the Company assesses and monitors several non-financial performance indicators relating to the business performance of our networks. These indicators may include a network’s recent new client win/loss record; the depth and scope of a pipeline of potential new client account activity; the overall quality of the services provided to clients; and the relative strength of the network’s next generation team that is in place as part of a potential succession plan to succeed the current senior executive team.

Recent Developments

On January 130, ~~2025~~2026, the Company ~~entered~~acquired ~~into~~Wavelength, a ~~stock~~digital ~~purchase~~advocacy ~~agreement~~and tocommunications ~~acquire~~company, ~~ADK~~for ~~Group~~an estimated purchase price of $10.2 million, anof ~~integrated~~which ~~marketing~~approximately ~~solutions~~$4.6 million ~~company~~was paid in cash and approximately $5.6 million ~~The~~was ~~purchase~~paid ~~price~~in is863,624 ~~dependent~~shares onof the Company’s Class A Common Stock subject to post-closing ~~balance~~adjustments. ~~sheet~~In ~~but~~connection iswith ~~estimated~~the acquisition, the sellers are eligible to beearn ~~approximately~~contingent consideration up to a maximum value of $24 ~~million~~.8 million, ~~The~~subject ~~acquisition~~to iscontinued ~~expected~~employment toand ~~close~~meeting incertain ~~the~~future ~~second~~earnings ~~quarter~~targets, of ~~2025~~which a portion may be settled in shares of Class A Common Stock, at the Company’s discretion.

On ~~December~~March 234, ~~2024~~2026, the ~~Company~~Board ~~entered~~authorized ~~into~~an aextension ~~sale~~and ~~purchase agreement to acquire Create Group Holding Limited,~~ a ~~strategic~~$350.0 million ~~digital~~increase ~~communications~~in ~~group~~the insize ~~Middle~~of ~~East,~~our ~~for~~previously ~~approximately~~approved ~~$16 million~~stock ~~subject~~repurchase toprogram ~~post-closing~~(the ~~adjustments~~“Repurchase Program”). Under the ~~agreement~~Repurchase Program, ~~the~~as ~~sellers~~amended, ~~are~~we ~~entitled~~may torepurchase ~~contingent consideration~~ up to aan ~~maximum~~aggregate ~~value~~ of ~~approximately~~ $24725.0 million, ~~subject to continued employment and meeting certain future earnings targets,~~ of ~~which a portion may be settled in~~ shares of our outstanding Class A ~~common~~Common ~~stock~~Stock, ~~par~~with ~~value~~any ~~$0.001~~previous ~~per~~purchases ~~share~~under (the ~~“Class~~Repurchase AProgram ~~Common~~continuing ~~Stock”)~~to atcount ~~the~~against ~~Company’s~~that ~~discretion~~limit. The ~~acquisition~~Repurchase isProgram ~~expected~~will toexpire ~~close~~on inMarch ~~the~~4, ~~second quarter of 2025~~2029.

On March 11, 2026, pursuant to a resolution approved by the Board, the Company repurchased 6,198,425 shares of Class A Common Stock at a price of $6.1677 per share, for a total of $38.2 million. The shares were purchased from executive officers and other employees to satisfy their tax obligations resulting from the Class C Exchange as described in Note 12 included in Item 8 of this Form 10-K.

Significant Factors Affecting our Business and Results of Operations

The most significant factors affecting our business and results of operations include national, regional, and local economic conditions, our clients’ profitability, mergers and acquisitions of our clients, changes in top management of our clients and our ability to retain and attract key employees. New business wins and client losses occur due to a variety of factors. We believe the two most significant factors are (i) our clients’ desire to change marketing communication firms, and (ii) the digital and data-driven products that our portfolio of marketing services firms, which we refer to as “Brands,” offer. A client may choose to change marketing communication firms for several reasons, such as a change in leadership where new management wants to retain a Brand that it may have previously worked with. In addition, if the client is merged or acquired by another company, the marketing communication firm is often changed. Clients also change firms as a result of the firm’s failure to meet marketing performance targets or other expectations in client service delivery.

Seasonality

Historically, we typically generate the highest quarterly revenue during the fourth quarter of each year. The highest volumes of retail related consumer marketing increase with the back-to-school season through the end of the holiday season. In addition, within our Communications segment, client concentration increases during election years due to the cyclical nature of our advocacy Brands.

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Seasonality

Historically, we typically generate the highest quarterly revenue during the fourth quarter of each year. In addition, within our Communications Network, client concentration increases during election years due to the cyclical nature of our advocacy Brands. The highest volumes of retail related consumer marketing increase with the back-to-school season through the end of the holiday season.

Non-GAAP Financial Measures

The Company reports its financial results in accordance with ~~accounting principles generally accepted in the United States (“~~GAAP”). In addition, the Company has included non-GAAP financial measures and ratios, which management uses to operate the business, which it believes provide useful supplemental information to both management and readers of this report in making period-to-period comparisons in measuring the financial performance and financial condition of the Company. These measures do not have a standardized meaning prescribed by GAAP and should not be construed as an alternative to other titled measures determined in accordance with GAAP. The non-GAAP financial measures included are “net revenue,” “organic net revenue growth (decline),” “Adjusted EBITDA,” and “Adjusted Diluted EPS.”

“Net revenue” refers to revenue excluding billable costs. The Company believes billable costs and their fluctuations are not indicative of the operating performance of its underlying business.

“Organic net revenue growth (decline)” reflects the year-over-year change in the Company’s reported net revenue attributable to the Company’s management of the entities it owns. We calculate organic net revenue growth (decline) by subtracting the net impact of acquisitions (divestitures) and the impact of foreign currency exchange fluctuations from the aggregate year-over-year increase or decrease in the Company’s reported net revenue.

The net impact of acquisitions (divestitures) reflects the year-over-year change in the Company’s reported net revenue attributable to the impact of all individual entities that were acquired or divested in the current and prior year. WeBeginning with the quarter ended September 30, 2025, we calculate the impact of an acquisition as follows: (a) for an entity acquired during the current year, we present the entity’s current period reported revenue as the impact of the acquisition in the current year; and (b) for an entity acquired in the prior year, we present an amount equal to the entity’s current year net revenue for the same period during which we didn’t own the entity in the prior year as the impact of the acquisition in the current year. Previously, we calculated the impact of an acquisition as follows: (a) for an entity acquired during the current year, we presented the entity’s prior year net revenue for the same period during which we owned it in the current year as impact of the acquisition in the current year; and (b) for an entity acquired in the prior year, we ~~present~~presented the entity’s prior year net revenue for the period during which we did not own the entity in the prior year as impact of the acquisition in the current year. We believe that this change in the method of calculating the impact of an acquisition results in a measurement of organic net revenue growth (decline) that better reflects the effect of our management of an acquired entity by including the revenue of the acquired entity in such measurement after we have owned it for 12 months. We calculate impact of a divestiture as follows: (a) for a divestiture in the current year, we present the entity’s prior year net revenue for the same period during which we no longer owned it in the current year as impact of the divestiture in the current year; and (b) for a divestiture in the prior year, we present the entity’s prior year net revenue for the period during which we owned it in the prior year as impact of the divestiture in the current year. We calculate the impact of any acquisition or divestiture without adjusting for foreign currency exchange fluctuations.

The impact of foreign currency exchange fluctuations reflects the year-over-year change in the Company’s reported net revenue attributable to changes in foreign currency exchange rates. We calculate the impact of foreign currency exchange fluctuations for the portion of the reporting period in which we recognized revenue from a foreign entity in both the current year and the prior year. The impact is calculated as the difference between (1) reported prior period net revenue (converted to U.S. dollars at historical foreign currency exchange rates) and (2) prior period net revenue converted to U.S. dollars at current period foreign exchange rates.

“Adjusted EBITDA” is defined as Net income (loss) attributable to Stagwell Inc. common shareholders excluding non-operating income or expense to achieve ~~operating~~Operating income (loss), plus depreciation and amortization, stock-based compensation, deferred acquisition consideration adjustments, impairment and other losses, and other items. Other items primarily includes restructuring, certain system implementation, working capital administrative fees and acquisition-related expenses. Adjusted EBITDA for our reportable segments is reconciled to Operating ~~Income~~income (~~Loss~~loss), as Net ~~Income~~income (~~Loss~~loss) is not a relevant reportable segment financial metric.

“Adjusted Diluted EPS” is defined as (i) Net income (loss) attributable to Stagwell Inc. common shareholders, plus net income (loss) attributable to Class C shareholders, excluding the impact of amortization expense, impairment and other losses, stock-based compensation, deferred acquisition consideration adjustments, discrete tax items, and other items (as defined above), based on total consolidated amounts, then allocated to Stagwell Inc. common shareholders and Class C shareholders, based on their respective income allocation percentage using a normalized effective income tax rate divided by (ii) ~~(a)~~ the diluted weighted average ~~number~~shares ofoutstanding. ~~common~~The diluted weighted average shares outstanding ~~plus~~is calculated as (ba) the diluted weighted average number of common shares outstanding plus (b) the shares of Class C common stock, par value $0.00001 per share (the “Class C Common Stock”). ~~The diluted weighted average shares outstanding include shares of Class C Common Stock~~ as if converted to shares of Class A Common Stock toif ~~calculate~~not ~~Adjusted~~included ~~Diluted~~because ~~EPS~~they were anti-dilutive.

All amounts are in U.S. dollars unless otherwise stated. Amounts reported in millions herein are computed based on the amounts in thousands. As a result, the sum of the components, and related calculations, reported in millions may not equal the total amounts due to rounding.

The percentage changes included in the tables in Item 7 herein that are not considered meaningful are presented as “NM.”

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The percentage changes included in the tables in Item 7 herein that are not considered meaningful are presented as “NM.”

Segments

The Company’s 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~~uses isAdjusted ~~Mark~~EBITDA ~~Penn,~~as ~~Chief~~a ~~Executive~~key ~~Officer~~metric ~~and Chairman,~~ to ~~make~~evaluate ~~decisions regarding resource allocation for~~ the ~~segment~~operating and ~~assess~~financial ~~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~~identify ~~with~~trends aaffecting ~~qualitative~~the ~~assessment to determine if operating~~ segments, ~~have~~develop ~~similar~~projections ~~operating characteristics. All segments follow the same basis of presentation~~ and ~~accounting~~make ~~policies~~strategic asbusiness ~~those described throughout the Notes included herein~~decisions.

~~The~~On ~~CODM~~September ~~uses~~30, ~~Adjusted~~2025, ~~EBITDA~~the ~~(as~~Company ~~defined~~reorganized ~~above)~~its asorganizational astructure ~~key~~to ~~metric,~~better toreflect ~~evaluate~~how the ~~operating~~Company ~~and~~manages ~~financial~~its ~~performance~~business ofand agoes ~~segment~~to market, ~~identify~~to simplify reporting and to provide clearer visibility into performance trends ~~affecting~~across its service offerings. The reorganization also seeks to enhance consistency in the ~~segments,~~Company’s ~~develop~~portfolio ~~projections~~of services and ~~make~~improve ~~strategic~~the ~~business~~transparency ~~decisions~~and comparability of financial information provided to investors.

~~The~~As a result of the reorganization, the Company now has ~~three~~five operating and reportable segments: as“Marketing ~~follows:~~Services,” “~~Integrated~~Digital ~~Agencies~~Transformation,” ~~Network~~“Media & Commerce,” “~~Brand~~Communications,” ~~Performance~~and ~~Network~~“The Marketing Cloud.” Prior years presented have been recast to reflect the reclassification of Brands within the reportable segments. Based on the segment analysis, management concluded that the operating segments do not exhibit similar economic characteristics or share other aggregation criteria. As a result, none of our operating segments are aggregated for reporting purposes. Further, as a result of the reorganization, certain reporting units have been redefined, and the ~~“Communications~~composition ~~Network~~of others has changed.” The new structure fairly reflects the allocation of the Company’s resources, thereby improving comparability for investors and supporting the Company’s long-term strategic objectives. The composition of these segments ~~are~~is as follows:

•The ~~Integrated~~Marketing ~~Agencies Network~~Services ~~includes~~segment ~~five~~delivers ~~operating~~a ~~segments:~~broad ~~the~~range ~~Anomaly~~of ~~Alliance,~~services ~~Constellation,~~across ~~the~~four ~~Doner~~closely ~~Partner~~related ~~Network,~~client ~~Code~~needs: ~~and~~creative, ~~Theory~~research, ~~Network~~experiential, and ~~National~~social ~~Research~~media ~~Group.~~solutions ~~The~~designed ~~operating~~to ~~segments~~build ~~offer~~and anelevate ~~array~~brands. ofCapabilities ~~complementary~~include ~~services~~developing ~~spanning~~breakthrough ~~our~~brand ~~core~~campaigns, ~~capabilities~~providing ofconsumer ~~Digital~~insights ~~Transformation~~through advanced research methodologies, ~~Performance~~creating ~~Media~~immersive &experiential ~~Data,~~marketing ~~Consumer~~programs ~~Insights~~and &social ~~Strategy,~~engagement ~~Stagwell~~strategies ~~Marketing~~that ~~Cloud~~connect ~~Group~~brands ~~and~~with ~~Creativity~~audiences &across ~~Communications~~digital platforms. ~~The~~By ~~Brands~~combining ~~included~~creative inexcellence, ~~the~~data-driven ~~operating~~insights, ~~segments~~and ~~that~~innovative ~~comprise~~experiences, ~~the~~Marketing ~~Integrated~~Services ~~Agencies~~empowers ~~Network~~organizations ~~reportable~~to ~~segment~~differentiate ~~includes:~~themselves ~~Anomaly~~in ~~Alliance~~the ~~(Anomaly~~marketplace, ~~What’s~~drive ~~Next~~audience ~~Partners)~~engagement, ~~Constellation~~and ~~(72andSunny,~~achieve ~~Crispin~~measurable ~~LLC,~~business ~~Colle~~results. ~~McVoy,~~These ~~Hunter,~~services ~~Redscout,~~employ ~~Team~~a ~~Enterprises,~~wide ~~Harris~~variety ~~Insights,~~of ~~Movers~~AI-powered ~~and~~services ~~Shakers~~in the delivery, such as AI-powered creative production and ~~Team~~data ~~Epiphany),~~analysis. ~~the~~Brands ~~Doner~~in ~~Partner~~this ~~Network~~segment ~~(Doner~~include, ~~KWT~~but ~~Global,~~are ~~Harris~~not X,limited ~~Veritas~~to, ~~Doner~~creative ~~North,~~agencies 72 and ~~Yamamoto),~~Sunny ~~Code~~ and ~~Theory~~Anomaly, ~~Network~~research ~~(Code~~agencies NRG and ~~Theory,~~Harris ~~Instrument~~Insights, ~~Left~~experiential ~~Field~~agency ~~Labs)~~TEAM, and ~~National~~social ~~Research~~agency ~~Group~~Movers & Shakers.

~~These~~•The Digital ~~operating~~Transformation ~~segments~~segment ~~share~~designs, ~~similar~~implements ~~characteristics~~and ~~related~~activates tomodern ~~(i)~~digital ecosystems that enable brand and customer experiences through the ~~nature~~integration of strategy, design, and technology. This segment helps clients modernize their ~~services;~~digital ~~(ii)~~infrastructure, enhance customer engagement, and accelerate enterprise transformation. Its capabilities span the ~~type~~delivery of ~~clients~~digital products and ~~the~~experiences ~~methods~~that ~~used~~connect tobrand ~~provide~~storytelling ~~services;~~with technology, including website and content development, digital campaigns, product and platform design, AI-native strategies and integration, and implementation of marketing technology (~~iii~~“MarTech”) ~~the~~products ~~extent~~and tosolutions ~~which~~for ~~they~~customers. ~~may~~It bealso ~~impacted~~provides bymanaged ~~global~~services, ~~economic~~staff augmentation, and ~~geopolitical~~engineering ~~risks~~expertise across various delivery models, offering system integration, full-stack development, and ongoing platform management. InAdditionally, ~~addition~~Digital Transformation connects digital ecosystems to physical experiences through innovative, technology-driven customer engagements, such as business-to-business (“B2B”) platforms and multimodal activations that blend physical and digital environments using augmented reality (“AR”), virtual reality (“VR”), and emerging technologies. Together, these ~~operating~~capabilities ~~segments~~empower ~~may~~organizations ~~occasionally~~to ~~compete~~transform ~~with~~their ~~each~~digital ~~other~~presence ~~for~~and ~~new~~drive sustained business orgrowth. ~~have~~Brands ~~business~~in ~~move~~this ~~between~~segment ~~them~~include, but are not limited to, strategy and design agencies Code and Theory and Instrument, development and implementation agency TrueLogic, and digital activation agency Left Field Labs.

•The ~~Brand~~Media ~~Performance~~& ~~Network~~Commerce ~~(“BPN”)~~segment ~~comprises~~delivers aintegrated ~~single~~AI-based ~~operating~~data ~~segment.~~solutions ~~BPN~~that ~~includes~~drive aaudience ~~unified~~engagement ~~media~~ and ~~data~~business ~~management~~growth ~~structure~~through ~~with omnichannel~~ media ~~placement~~buying, ~~creative~~owned media ~~consulting~~platforms, ~~influencer~~commerce enablement, and ~~business-to-business~~Customer ~~marketing~~Relationship ~~capabilities~~Management (“CRM”) strategies. ~~Our~~Its ~~Brands~~capabilities ininclude ~~this~~planning ~~segment~~and ~~aim~~executing media campaigns across global platforms, leveraging data-driven approaches to ~~provide~~optimize ~~scaled~~reach ~~creative~~and ~~performance~~effectiveness ~~through~~across ~~developing~~first-party data, second-party data, and ~~executing~~third-party ~~sophisticated~~data, ~~omnichannel~~and ~~campaign~~providing ~~strategies~~commerce ~~leveraging~~and ~~significant~~CRM ~~amounts~~tools ofthat ~~consumer~~connect ~~data.~~brands ~~BPN’s~~with ~~Brands~~consumers ~~provide~~throughout ~~media~~the ~~solutions~~purchase ~~such~~journey. asThe ~~audience~~segment ~~analysis,~~also offers specialized media ~~planning,~~platforms and ~~buying~~translation ~~across~~services ato ~~range~~support oftargeted ~~digital~~communication and ~~traditional~~market ~~platforms~~expansion. ~~(out-of-home,~~By ~~paid~~combining ~~search,~~expertise ~~social~~in media strategy, ~~lead~~commerce ~~generation~~activation, ~~programmatic,~~and ~~television,~~audience ~~broadcast~~analytics, ~~among~~Media ~~others)~~& ~~and~~Commerce ~~includes~~empowers ~~multichannel~~organizations ~~Brands~~to ~~Assembly,~~maximize ~~CPB~~their ~~International,~~marketing ~~Stagwell~~investments ~~Production,~~and ~~Vitro,~~achieve ~~Forsman~~measurably &efficient ~~Bodenfors,~~commercial ~~Goodstuff,~~outcomes. ~~Bruce~~Brands ~~Mau~~in this segment include, ~~digital~~but ~~creative~~are &not ~~transformation~~limited ~~consultancy~~to, ~~Gale~~media buying, owned ~~B2B~~media ~~specialist~~platforms ~~Multiview~~Reach TV, CXand ~~specialists~~strategy ~~Kenna~~agency Assembly Global, commerce and ~~travel~~CRM ~~media~~agency ~~experts Ink~~Gale.

•The Communications ~~Network reportable~~ segment ~~comprises~~provides a ~~single~~leading ~~operating~~edge ~~segment,~~set ~~our~~of ~~specialist~~solutions ~~network~~designed ~~that~~to ~~provides~~help ~~advocacy~~organizations build, ~~strategic~~protect, ~~corporate~~and ~~communications,~~enhance ~~investor~~their ~~relations~~reputation across diverse audiences and channels. Its capabilities include strategic communications, public relations, ~~online~~and ~~fundraising~~advocacy services that leverage AI and ~~other~~data-driven ~~services~~insights to ~~both~~craft ~~corporations~~compelling narratives and ~~political~~influence ~~and~~public ~~advocacy~~perception. ~~organizations~~The segment also offers expertise in targeted communications, crisis management, and ~~includes~~stakeholder ~~Allison~~engagement, ~~SKDK~~ensuring clients can respond effectively to emerging issues and opportunities. Advocacy services encompass strategic political campaign management, ~~Targeted~~grassroots ~~Victory~~mobilization, and ~~Consulum~~fundraising expertise that reach across the political spectrum. By combining deep industry knowledge with innovative digital approaches to

The Company combines and discloses operating segments that do not meet the aggregation criteria and includes the elimination of certain intercompany services and revenue, within “All Other.” All Other consists of the Company’s “software as a service” (“SaaS”) and “data as a service” (“DaaS”) technology tools.

The Company reports corporate expenses as “Corporate.” 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.

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

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~~are~~media ~~now~~and inadvocacy, ~~the~~Communications ~~Integrated~~empowers ~~Agencies~~organizations ~~Network.~~to ~~Periods~~connect ~~presented~~with ~~prior~~key toaudiences, ~~the~~shape ~~first~~conversations, ~~quarter~~and ofachieve ~~2024~~their ~~have~~strategic ~~been~~objectives. ~~recast~~Brands in this segment include, but are not limited to, ~~reflect~~strategic ~~the~~communications ~~reclassification~~agencies ofAllison ~~certain~~and ~~reporting~~Consulum, ~~units~~and ~~(Brands)~~advocacy ~~between~~services ~~operating~~agencies ~~segments~~SKDK and Targeted Victory.

•The ~~following~~Marketing ~~discussion~~Cloud ~~focuses~~segment ondelivers ~~the~~a ~~operating~~comprehensive ~~performance~~suite of ~~the~~technology ~~Company~~solutions for ~~the~~in-house ~~years~~marketers, ~~ended~~combining ~~December~~SaaS 31and DaaS offerings. Its key products cover a range of areas. Advanced research tools that enable real-time customer insights through syndicated and Do It Yourself (“DIY”) generative AI-drafted surveys, ~~2024~~AI-driven text analysis, and ~~2023~~predictive ~~and~~analytics. ~~the~~Communications ~~financial~~technology ~~condition~~that aggregates data from millions of ~~the~~sources, ~~Company~~including news, social media, print, and TV/radio broadcasts, on a daily basis to monitor, analyze, and respond to market trends. Media studio products that leverage first-party, third-party, and proprietary data to provide actionable audience insights and attribution analytics and advanced media platforms that encompass audience engagement solutions such as ofAR, ~~December~~quick 31response (“QR”) codes, ~~2024~~and loyalty programs, all designed to collect consumer data and generate actionable insights. Together, these capabilities empower marketers to understand, engage, and influence their audiences with precision and agility. Brands in this segment include, but are not limited to, QUEST, Unicepta and Smart Assets.

“Corporate, eliminations and other” consists of revenue generated by the Other business components, strategic investments in new technologies, elimination of certain intercompany revenue and expenses, and 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 corporate 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.

The following discussion focuses on the operating performance of the Company for the years ended December 31, 2025 and 2024 and the financial condition of the Company as of December 31, 2025.

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Results of Operations and Reconciliation of Net Income to Adjusted EBITDA:

	Year Ended December 31,
		2024		2023
		2025		2024
		(dollars in thousands)
Revenue:
Integrated Agencies Network		$	1,535,445	$	1,418,711
Marketing Services		$	1,134,821	$	1,077,607
Brand Performance Network		751,884		728,174
Digital Transformation		393,499		335,656
Communications Network		515,140		333,707
Media & Commerce		690,675		695,402
All Other		38,747		46,585
Communications		592,577		703,065
Total Revenue		$	2,841,216	$	2,527,177
The Marketing Cloud		106,537		32,265
Operating Income		$	133,068	$	90,527
Corporate, eliminations and other		(9,109)		(2,779)
Other Income (Expenses):
Total revenue		$	2,909,000	$	2,841,216
Interest expense, net		$	(92,317)	$	(90,644)
Operating income		$	159,001	$	133,068
Foreign exchange, net		(1,656)		(2,960)
Other income (expenses):
Gain on sale of business		—		94,505
Interest expense, net		$	(96,438)	$	(92,317)
Other, net		(1,372)		(359)
Foreign exchange, net		(1,640)		(1,656)
Income before income taxes and equity in earnings of non-consolidated affiliates		37,723		91,069
Loss on sale of business		(2,245)		—
Income tax expense		13,182		40,557
Bargain purchase gain		9,937		—
Income before equity in earnings of non-consolidated affiliates		24,541		50,512
Other, net		171		(1,372)
Equity in income (loss) of non-consolidated affiliates		503		(8,870)
Income before income taxes and equity in earnings of non-consolidated affiliates		68,786		37,723
Net income		25,044		41,642
Income tax expense		38,271		13,182
Net income attributable to noncontrolling and redeemable noncontrolling interests		(22,785)		(41,508)
Income before equity in earnings of non-consolidated affiliates		30,515		24,541
Net income attributable to Stagwell Inc. common shareholders		$	2,259	$	134
Equity in income of non-consolidated affiliates		111		503
Net income		30,626		25,044
Net income attributable to noncontrolling and redeemable noncontrolling interests		(1,525)		(22,785)
Net income attributable to Stagwell Inc. common shareholders		$	29,101	$	2,259
Reconciliation to Adjusted EBITDA:
Net income attributable to Stagwell Inc. common shareholders		$	229,~~259~~101	$	~~134~~2,259
Non-operating items (1)		~~130~~129,~~809~~900		90130,~~393~~809
Operating income		~~133~~159,~~068~~001		90133,~~527~~068
Depreciation and amortization		~~151~~171,~~652~~249		~~142~~151,~~831~~652
Impairment and other losses		~~1,715~~466		111,~~395~~715
Stock-based compensation		5254,~~161~~095		5752,~~179~~161
Deferred acquisition consideration		22(7,~~995~~467)		1322,~~060~~995
Other items, net		4944,~~196~~509		4555,~~147~~857
Adjusted EBITDA		$	~~410~~421,~~787~~853	$	~~360~~417,~~139~~448
(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.
(1) Non-operating items includes items within the Statements of Operations, below Operating income, and above Net income attributable to Stagwell Inc. common shareholders.

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YEAR ENDED DECEMBER 31, ~~2024~~2025 COMPARED TO YEAR ENDED DECEMBER 31, ~~2023~~2024

Consolidated Results of Operations

The components of operating results for the year ended December 31, ~~2024,~~2025 compared to the year ended December 31, ~~2023,~~2024 were as follows:

	Year Ended December 31,
	2024		2023		Change
	2025		2024		Change
	(dollars in thousands)
					$		%
Revenue	$	2,~~841~~909,~~216~~000	$	2,~~527~~841,~~177~~216	$	~~314~~67,~~039~~784	122.4	%
Operating Expenses
Operating expenses
Cost of services	1,~~842~~845,~~978~~958		1,~~621~~842,~~174~~978		~~221~~2,~~804~~980		130.72	%
Office and general expenses	~~711~~732,~~803~~326		~~661~~711,~~250~~803		5020,~~553~~523		72.69	%
Depreciation and amortization	~~151~~171,~~652~~249		~~142~~151,~~831~~652		819,~~821~~597		612.29	%
Impairment and other losses	~~1,715~~466		111,~~395~~715		(91,~~680~~249)		(8472.98)	%
	$	2,~~708~~749,~~148~~999	$	2,~~436~~708,~~650~~148	$	~~271~~41,~~498~~851	~~11.~~1.5	%
Operating Income	$	133,068	$	90,527	$	42,541	47.0	%
Operating income	$	159,001	$	133,068	$	25,933	19.5	%

	Year Ended December 31,
	2024		2023		Change
	2025		2024		Change
	(dollars in thousands)
					$		%
Net Revenue	$	2,296,662	$	2,152,454	$	144,208	6.7	%
Net revenue	$	2,427,671	$	2,296,662	$	131,009	5.7	%
Billable costs	~~544~~481,~~554~~329		~~374~~544,~~723~~554		~~169~~(63,~~831~~225)		45(11.36)	%
Revenue	2,~~841~~909,~~216~~000		2,~~527~~841,~~177~~216		~~314~~67,~~039~~784		122.4	%
Billable costs	~~544~~481,~~554~~329		~~374~~544,~~723~~554		~~169~~(63,~~831~~225)		45(11.36)	%
Staff costs	1,~~449~~526,~~706~~896		1,~~389~~449,~~168~~706		6077,~~538~~190		45.43	%
Administrative costs	~~281~~302,~~707~~463		~~259~~275,~~780~~046		2127,~~927~~417		810.40	%
Unbillable and other costs, net	~~154~~176,~~462~~459		~~143~~154,~~367~~462		1121,~~095~~997		714.72	%
Adjusted EBITDA	~~410~~421,~~787~~853		~~360~~417,~~139~~448		504,~~648~~405		141.1	%
Stock-based compensation	5254,~~161~~095		5752,~~179~~161		(51,~~018)~~934		(83.8)7	%
Depreciation and amortization	~~151~~171,~~652~~249		~~142~~151,~~831~~652		819,~~821~~597		612.29	%
Deferred acquisition consideration	22(7,~~995~~467)		1322,~~060~~995		9(30,~~935~~462)		~~76.1~~NM	%
Impairment and other losses	~~1,715~~466		111,~~395~~715		(91,~~680~~249)		(8472.98)	%
Other items, net	4944,~~196~~509		4555,~~147~~857		4(11,~~049~~348)		9(20.03)	%
Operating Income (1)	$	133,068	$	90,527	$	42,541	47.0	%
Operating income (1)	$	159,001	$	133,068	$	25,933	19.5	%
(1) See the Results of Operations section above for a reconciliation of Operating Income to Net income (loss) attributable to Stagwell Inc. common shareholders.
(1) See the Results of Operations section above for a reconciliation of Operating income to Net income attributable to Stagwell Inc. common shareholders.

Revenue

Revenue for the year ended December 31, ~~2024~~2025 was $2,~~841~~909.20 million, compared to $2,~~527~~841.2 million for the year ended December 31, ~~2023~~2024, an increase of $~~314~~67.08 million.

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Net Revenue

The components of the fluctuations in ~~net~~Net revenue for the year ended December 31, ~~2024,~~2025 compared to the year ended December 31, ~~2023,~~2024 were as follows:

			Net Revenue - Components of Change														Change
	Year Ended December 31, 2023		Foreign Currency			Net Acquisitions (Divestitures)			Organic			Total Change			Year Ended December 31, 2024		Organic		Total
	Year Ended December 31, 2024		Foreign Currency			Net Acquisitions (Divestitures)			Organic			Total Change			Year Ended December 31, 2025		Organic		Total
	(dollars in thousands)
Integrated Agencies Network	$1,232,798		$226			$7,208			$32,521			$39,955			$1,272,753		2.6%		3.2%
Marketing Services	$	905,117	$	3,491		$	9,788		$	41,280		$	54,559		$	959,676	4.6	%	6.0	%
Brand Performance Network	627,810		2,220			2,252			18,948			23,420			651,230		3.0%		3.7%
Digital Transformation	324,183		(405)			13,615			29,779			42,989			367,172		9.2	%	13.3	%
Communications Network	245,261		(28)			22,177			66,385			88,534			333,795		27.1%		36.1%
Media & Commerce	601,503		3,396			5,829			(708)			8,517			610,020		(0.1)	%	1.4	%
All Other	46,585		(984)			(609)			(6,108)			(7,701)			38,884		(13.1)%		(16.5)%
Communications	435,626		547			29,002			(71,744)			(42,195)			393,431		(16.5)	%	(9.7)	%
	$2,152,454		$1,434			$31,028			$111,746			$144,208			$2,296,662		5.2%		6.7%
The Marketing Cloud	32,265		941			62,229			11,051			74,221			106,486		34.3	%	230.0	%
Component % change			0.1%			1.4%			5.2%			6.7%
Corporate, eliminations and other	(2,032)		—			—			(7,082)			(7,082)			(9,114)		NM		NM
	$	2,296,662	$	7,970		$	120,463		$	2,576		$	131,009		$	2,427,671	0.1	%	5.7	%
Component % change			0.3		%	5.2		%	0.1		%	5.7		%

For the year ended December 31, ~~2024~~2025, organic net revenue increased by $~~111~~2.76 million, or 50.21%. The increase was ~~primarily~~driven ~~attributable to new wins and increased spending~~ by ~~clients~~growth in the ~~retail,~~Marketing ~~technology,~~Services and ~~consumer~~Digital ~~products~~Transformation ~~sectors.~~segments, ~~This~~reflecting ~~increase was further driven by~~ new client wins, ~~and~~expanded ~~increased~~scope ~~revenue~~with inexisting ~~the~~clients, ~~public affairs sector as a result of the current political campaign year. This increase was partially offset by losses~~ and aincreased ~~decrease~~demand infor ~~client~~AI ~~spending~~enabled ~~due~~offerings toacross ~~budget cuts in~~ the ~~business services sector. The increase in net acquisitions (divestitures) was impacted by acquisitions and dispositions~~retail, ~~including the acquisitions of Team Epiphany~~financial, ~~LLC (“Epiphany”)~~technology, ~~Movers~~ and ~~Shakers~~communications ~~LLC (“Movers and Shakers”), Left Field Labs LLC (“Left Field Labs”), What’s Next Partners (“WNP”), Huskies, Ltd~~sectors. ~~(“Huskies”),~~Growth ~~PROS~~was ~~Agency~~further ~~(“PROS”),~~supported ~~Sidekick~~by ~~Live~~higher ~~Limited~~integrated ~~(“Sidekick”)~~media, ~~Consulum (Cayman) Limited (“Consulum”)~~technology, and ~~L.D.R.S.~~data ~~Group~~offerings ~~Ltd.~~within ~~(“Leaders”), partially offset by~~ the ~~sale~~Media ofBuying ~~ConcentricLife~~service ~~(“Concentric”)~~line in ~~the~~Media ~~fourth~~& ~~quarter~~Commerce ~~of 2023~~ and ~~the~~increased ~~derecognition~~platform ofutilization aand ~~certain~~subscription-based ~~noncontrolling~~services ~~interest~~within inThe ~~the~~Marketing ~~first quarter of 2024~~Cloud.

~~The~~These ~~geographic~~increases ~~mix~~were partially offset by a decrease in ~~net~~the ~~revenues~~Communications ~~for~~segment, primarily reflecting lower Advocacy revenue due to political seasonality following the ~~year~~2024 ~~ended~~presidential ~~December~~election 31cycle, ~~2024~~as well as more measured client spending and ~~2023~~timing of project activity. Organic net revenue in Media & Commerce was relatively flat, as ~~follows:~~growth in the Media Buying service line was offset by lower revenue in the Commerce & CRM service line during a period of leadership transition and organizational realignment.

	Year Ended December 31,
	2024		2023
	(dollars in thousands)
United States	$	1,844,887		$	1,727,412
United Kingdom	158,391			160,275
Other	293,384			264,767
Total	$	2,296,662		$	2,152,454

The increase in net acquisitions (divestitures) was impacted by the acquisitions of Jetfuel, Create, ADK, Consulum (Cayman) Limited (“Consulum”), L.D.R.S. Group Ltd. (“Leaders”), and Unicepta, which expanded the Company’s capabilities in experiential marketing, digital communications, integrated marketing in APAC, government advisory services in MENA, influencer marketing and social commerce, and media monitoring and analytics.

~~Operating~~The ~~Income~~geographic mix in Net revenue for the years ended December 31, 2025 and 2024 was as follows:

Operating Income for the year ended December 31, 2024, was $133.1 million, compared to $90.5 million for the year ended December 31, 2023, representing an increase of $42.5 million. The increase in Operating Income was primarily attributable to an increase in Revenue and a decrease in Impairment and other losses, partially offset by an increase in Cost of services, Office and general expenses, and Depreciation and amortization.


	Year Ended December 31,
	2025		2024
	(dollars in thousands)
United States	$	1,874,216		$	1,844,887
United Kingdom	159,076			158,391
Other	394,379			293,384
Total	$	2,427,671		$	2,296,662

The increase in Cost of services was primarily attributable to higher billable costs and staff costs, commensurate with the increase in revenue as well as the inclusion of costs from acquired entities.Expenses

~~The~~Cost ~~increase~~of inservices ~~Office~~increased ~~and~~by ~~general~~$3.0 ~~expenses~~million. ~~was~~Excluding ~~primarily~~the ~~attributable~~decline ~~to an increase~~ in ~~staff~~Billable costs, ~~commensurate~~of ~~with~~$63.2 ~~the~~million ~~increase~~and ~~in revenue,~~ the ~~inclusion~~addition of ~~costs~~expenses from acquired entities ~~and~~of an$62.2 ~~increase in deferred acquisition consideration~~million, ~~partially~~Cost ~~offset~~of byservices aincreased ~~decrease~~$4.0 ~~in stock-based compensation~~million.

Stock-based compensation decreased $5.0 million, primarily due to a decrease in the fair value and number of awards, partially offset by an increase in the fair value of profits interest awards.

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~~Deferred~~Office ~~acquisition~~and ~~consideration~~general expenses increased by $920.95 million. Excluding the addition of expenses of acquired entities of $12.0 million, Office and general expenses increased $10.2 million, primarily attributable to ~~acquisitions,~~higher software license fees due to investments in automation and AI intended to improve workflow efficiency and support future margin expansion and higher staff costs to support the ~~change~~growth in the ~~fair~~business. ~~value~~This ofwas ~~certain~~partially ~~obligations,~~offset asby ~~well~~a decrease in Deferred acquisition consideration expense as explained below and a decrease in occupancy costs reflecting the ~~earn~~Company’s ~~out~~real ~~period~~estate ofconsolidation ~~certain~~efforts ~~brands~~including ~~ending~~a lease termination during the first quarter of 2025 that resulted in a gain on termination of $3.5 million and the expiration of office leases in 2024.

~~Depreciation~~Stock-based ~~and~~compensation ~~amortization~~ increased by $81.89 million, primarily ~~attributable~~due to ~~the~~a ~~Company’s~~greater ~~acquisitions~~proportion of ~~businesses~~the ~~and~~annual ~~the~~incentive ~~acceleration~~compensation ofbeing ~~amortization~~allocated ofto ~~certain~~stock-based ~~tradenames~~awards ~~during~~compared ~~the~~to last year ~~ended~~and ~~December~~a ~~31,~~reversal ~~2024,~~of asexpense in the ~~Company~~second ~~ceased~~quarter ~~use~~ of ~~these~~2024 ~~Brand~~associated ~~names~~with stock-based performance awards for which the performance targets were not met.

~~Impairment~~Deferred ~~and~~acquisition ~~other~~consideration ~~losses~~decreased ~~for~~by ~~the year ended December 31, 2024 was~~ $130.7 5 million., ~~This~~primarily ~~was~~ attributable to ~~charges~~a toreduction ~~reduce~~in the ~~carrying~~fair value of ~~right-of-use~~the ~~lease~~deferred ~~assets~~acquisition ~~and~~consideration ~~related~~liability ~~leasehold~~associated ~~improvements~~with ~~within~~certain ~~the~~Brands ~~Integrated~~driven ~~Agencies~~by ~~Network~~performance ~~and~~timing, ~~Corporate.~~partially ~~Impairment~~offset ~~and~~by ~~other losses for~~ the ~~year~~strong ~~ended~~performance ~~December~~in ~~31,~~certain ~~2023 was $11.4 million~~Brands, ~~primarily~~causing ~~related~~an toincrease in the ~~impairment~~fair ofvalue ~~right-~~of~~-use~~ ~~lease~~the ~~assets~~deferred ~~totaling~~acquisition ~~$6.9 million~~consideration ~~and~~liability ~~the~~of ~~associated~~those ~~leasehold~~Brands ~~improvements totaling $3~~.~~1 million.~~

Depreciation and amortization increased by $19.6 million, primarily attributable to higher amortization related to increased investments in AI and automation to expand our offerings and services, improve workflow efficiency, and support future margin expansion of $15.4 million, and the amortization of intangible assets resulting from the acquisition of businesses of $8.4 million.

Operating Income

Operating income for the year ended December 31, 2025, was $159.0 million, compared to $133.1 million for the year ended December 31, 2024, representing an increase of $25.9 million. The increase in Operating income was primarily attributable to an increase in Net revenue partially offset by an increase in expenses, as discussed above. Operating margin for the year ended December 31, 2025 was 5.5%, compared to 4.7% for the year ended December 31, 2024, representing an increase of 0.8%, reflecting improved operational efficiency.

Interest Expense, Net

Interest expense, net for the year ended December 31, ~~2024~~2025 was $9296.34 million, compared to $9092.63 million for the year ended December 31, ~~2023~~2024, an increase of $14.71 million,. This increase was primarily attributable to higher levels of debt outstanding under the Credit Agreement (as defined and discussed in Note 11 of the Notes to the Audited Consolidated Financial Statements included herein), ~~and~~used ato ~~higher~~support ~~interest~~the ~~rate~~growth onin ~~amounts~~working ~~outstanding~~capital ~~under~~attributable to the ~~Credit~~growth ~~Agreement~~of Net revenue of the business, partially offset by a lower average interest rate.

Foreign Exchange, Net

The foreign exchange loss for the year ended December 31, ~~2024~~2025, was $1.76 million, compared to a loss of $31.07 million for the year ended December 31, ~~2023~~2024, ~~primarily~~nearly ~~attributable~~flat todespite ~~the~~increased ~~movement~~volatility in the ~~British~~primary ~~Pound~~currencies in which we operate.

~~Gain~~Loss on Sale of Business

~~The~~Loss ~~Company~~on ~~recognized~~sale aof ~~pre-tax~~business ~~gain~~for ofthe year ended December 31, 2025 was $942.5 2 million ~~related~~due to the sale of ~~Concentric~~a ~~for~~Brand ~~the~~that ~~year~~was ~~ended~~non-core ~~December~~to ~~31,~~our ~~2023~~prospective business operations in the Marketing Services segment.

~~Other,~~Bargain ~~Net~~Purchase Gain

~~Other,~~Bargain ~~net~~purchase gain for the year ended December 31, ~~2024~~2025 was ~~an expense of~~ $19.4 9 million, ~~compared~~due to anthe ~~expense~~acquisition of $0ADK to assist in expending our global footprint in APAC in the Media & Commerce segment.~~4 million~~ ~~for~~The Bargain purchase gain resulted primarily from acquiring ADK at a purchase price below the ~~year~~fair ~~ended~~value ~~December~~of ~~31,~~the ~~2023~~identifiable assets acquired due to the sellers’ decision to expedite its exit from the market.

Income Tax Expense

The Company had an ~~income~~Income tax expense for the year ended December 31, ~~2024~~2025 of $1338.23 million (on a pre-tax income of $3768.78 million resulting in an effective tax rate of 3455.96%), compared to ~~income~~Income tax expense of $4013.62 million (on pre-tax income of $9137.17 million resulting in an effective tax rate of 4434.59%) for the year ended December 31, ~~2023~~2024.

The difference in the effective tax rate of 3455.96% in the year ended December 31, ~~2024~~2025, as compared to 4434.59% in the year ended December 31, ~~2023~~2024, iswas primarily due to a decrease onin ~~gain~~benefits ~~related~~from toexpired ~~sale~~foreign oftax ~~business~~credits, ~~and~~an aincrease ~~change~~ in ~~prior~~valuation ~~period~~allowance, ~~adjustments~~and ~~offset~~a bydecrease anin ~~increase~~the inbenefit ~~foreign~~of ~~tax~~the ~~and~~disregarded aentity ~~reduction~~structure indue ~~tax~~to ~~benefits~~the ~~for~~full ~~share~~exchange ~~based~~in ~~compensation~~April 2025.

Noncontrolling and Redeemable Noncontrolling Interests

The effect of noncontrolling and redeemable noncontrolling interests for the year ended December 31, 2024 was income of $22.8 million, compared to an income of $41.5 million for the year ended December 31, 2023. The amounts are driven by the mix of income and loss derived from entities not entirely owned by the Company.

Net Income (Loss) Attributable to Stagwell Inc. Common Shareholders

As a result of the foregoing, net income attributable to Stagwell Inc. common shareholders for the year ended December 31, 2024, was $2.3 million, compared to net income of $0.1 million for the year ended December 31, 2023.

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Noncontrolling and Redeemable Noncontrolling Interests

The effect of Noncontrolling and redeemable noncontrolling interests for the year ended December 31, 2025 was an income of $1.5 million, compared to an income of $22.8 million for the year ended December 31, 2024. The amounts were driven by the mix of income and loss derived from entities not entirely owned by the Company. Additionally, the change was driven by the Class C Exchange during the second quarter of 2025, which increased the income allocated to Stagwell Inc.’s common shareholders.

Net Income Attributable to Stagwell Inc. Common Shareholders

As a result of the foregoing, Net income attributable to Stagwell Inc. common shareholders for the year ended December 31, 2025 was $29.1 million, compared to a net income of $2.3 million for the year ended December 31, 2024.

Adjusted EBITDA

Adjusted EBITDA for the year ended December 31, 2025 was $421.9 million, compared to $417.4 million for the year ended December 31, 2024, representing an increase of $4.4 million, primarily driven by an increase in Net revenue, partially offset by an increase in expenses, as discussed above.

Earnings Per Share

Diluted EPS and Adjusted Diluted EPS for the year ended December 31, ~~2024,~~2025 were as follows:

	GAAP		Adjustments~~(1)~~		Non-GAAP
	(amounts in thousands, except per share amounts)
Net income attributable to Stagwell Inc. common shareholders	$	229,~~259~~101	$	80198,~~403~~129	$	82227,~~662~~230
Net income attributable to Class C shareholders	—		123,942		123,942
Net loss attributable to Class C shareholders	(6,637)		—		(6,637)
Net income attributable to Stagwell Inc. and Class C and adjusted net income	$	2,259	$	204,345	$	206,604
Net income attributable to Stagwell Inc. and Class C shareholders and adjusted net income	$	22,464	$	198,129	$	220,593
Weighted average number of common shares outstanding	115,752		2,234		117,986
Diluted - Weighted average number of common shares outstanding	225,468		—		225,468
Weighted average number of common Class C shares outstanding	—		151,649		151,649
Weighted average number of shares of Class C Common Stock outstanding	39,055		—		39,055
Weighted average number of shares outstanding	115,752		153,883		269,635
Diluted - Weighted average number of shares outstanding	264,523		—		264,523
Diluted EPS and Adjusted Diluted EPS (1)	$	0.0208			$	0.7783
Adjustments to Net Income
Adjustments to Net income
Amortization			$	~~122~~145,~~442~~506
Impairment and other losses			~~1,715~~466
Stock-based compensation			5254,~~161~~095
Deferred acquisition consideration			22(7,~~995~~467)
Other items, net			4946,~~196~~792
			248,509
			239,392
Adjusted tax expense			(6141,~~308~~263)
			187,201
			$	198,129
Net income attributable to Class C shareholders			17,144
			$	204,345
Allocation of adjustments to Net income
Net income attributable to Stagwell Inc. common shareholders - add-backs			$	80,403
Net income attributable to Class C shareholders - add-backs			106,798
Net income attributable to Class C shareholders			17,144
			123,942
			$	204,345

(1) Adjusted Diluted EPS is defined within the Non-GAAP Financial Measures section of the Executive Summary.

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Diluted EPS and Adjusted Diluted EPS for the year ended December 31, ~~2023,~~2024 were as follows:

	GAAP		Adjustments~~(1)~~		Non-GAAP
	(amounts in thousands, except per share amounts)
Net income attributable to Stagwell Inc. common shareholders	$	~~134~~2,259	$	5282,~~712~~506	$	5284,~~846~~765
Net income attributable to Class C shareholders	—		~~106~~126,~~153~~735		~~106~~126,~~153~~735
Net income attributable to Stagwell Inc. and Class C and adjusted net income	$	134	$	158,865	$	158,999
Net income attributable to Stagwell Inc. and Class C shareholders and adjusted net income	$	2,259	$	209,241	$	211,500
Weighted average number of common shares outstanding	122,170		3,628		125,798
Diluted - Weighted average number of common shares outstanding	115,752		—		115,752
Weighted average number of common Class C shares outstanding	—		154,972		154,972
Weighted average number of shares of Class C Common Stock outstanding	—		151,649		151,649
Weighted average number of shares outstanding	122,170		158,600		280,770
Diluted - Weighted average number of shares outstanding	115,752		151,649		267,401
Diluted EPS and Adjusted Diluted EPS (1)	$	—0.02			$	0.5779
Adjustments to Net income
Amortization			$	~~113~~122,~~835~~442
Impairment and other losses			111,~~395~~715
Stock-based compensation			5752,~~179~~161
Deferred acquisition consideration			1322,~~060~~995
Gain on sale of business			(94,505)
Other items, net			55,857
Other items, net			45,147
			255,170
			146,111
Adjusted tax expense			(63,073)
Adjusted tax expense			(26,312)
			192,097
			119,799
Net income attributable to Class C shareholders			17,144
Net income attributable to Class C shareholders			39,066
			$	209,241
			$	158,865
Allocation of adjustments to Net income
Net income attributable to Stagwell Inc. common shareholders - add-backs			$	52,712
Net income attributable to Stagwell Inc. common shareholders			$	82,506
Net income to attributable to Class C shareholders - add-backs			67,087
Net income attributable to Class C shareholders - add-backs			109,591
Net income attributable to Class C shareholders			3917,~~066~~144
			106,153
			126,735
Net income attributable to Stagwell Inc. common shareholders			$	158,865
			$	209,241

(1) Adjusted Diluted EPS is defined within the Non-GAAP Financial Measures section of the Executive Summary.

Adjusted EBITDA

Adjusted EBITDA for the year ended December 31, 2024, was $410.8 million, compared to $360.1 million for the year ended December 31, 2023, representing an increase of $50.6 million, primarily driven by an increase in Operating Income, as discussed above.

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~~Integrated~~Marketing ~~Agencies Network~~Services

The components of operating results for the year ended December 31, ~~2024~~2025 compared to the year ended December 31, ~~2023~~2024 were as follows:

	Year Ended December 31,
	2024		2023		Change
	2025		2024		Change
	(dollars in thousands)
					$		%
Revenue	$	1,~~535~~134,~~445~~821	$	1,~~418~~077,~~711~~607	$	~~116~~57,~~734~~214	85.23	%
Operating Expenses
Operating expenses
Cost of services	1743,~~026,587~~624		~~928~~724,~~406~~308		9819,~~181~~316		102.67	%
Office and general expenses	~~290~~206,~~991~~299		~~280~~220,~~388~~752		10(14,~~603~~453)		3(6.85)	%
Depreciation and amortization	7852,~~076~~295		8153,~~957~~106		(~~3,881~~811)		(41.75)	%
Impairment and other losses	~~1,500~~—		111,~~299~~500		(91,~~799~~500)		(86100.70)	%
	$	1,~~397~~002,~~154~~218	$	1999,~~302,050~~666	$	952,~~104~~552	70.3	%
Operating Income	$	138,291	$	116,661	$	21,630	18.5	%
Operating income	$	132,603	$	77,941	$	54,662	70.1	%

	Year Ended December 31,
	2024		2023		Change
	2025		2024		Change
	(dollars in thousands)
					$		%
Net Revenue	$	1,272,753	$	1,232,798	$	39,955	3.2	%
Net revenue	$	959,676	$	905,117	$	54,559	6.0	%
Billable costs	~~262~~175,~~692~~145		~~185~~172,~~913~~490		762,~~779~~655		411.35	%
Revenue	1,~~535~~134,~~445~~821		1,~~418~~077,~~711~~607		~~116~~57,~~734~~214		85.23	%
Billable costs	~~262~~175,~~692~~145		~~185~~172,~~913~~490		762,~~779~~655		411.35	%
Staff costs	~~792~~565,~~041~~484		~~768~~557,~~846~~776		237,~~195~~708		31.04	%
Administrative costs	~~128~~105,~~954~~801		~~122~~101,~~618~~145		64,~~336~~656		54.26	%
Unbillable and other costs, net	7278,~~756~~333		7170,~~776~~924		~~980~~7,409		110.4	%
Adjusted EBITDA	~~279~~210,~~002~~058		~~269~~175,~~558~~272		934,~~444~~786		319.58	%
Stock-based compensation	2719,~~253~~716		2717,~~485~~095		~~(232)~~2,621		(015.8)3	%
Depreciation and amortization	7852,~~076~~295		8153,~~957~~106		(~~3,881~~811)		(41.75)	%
Deferred acquisition consideration	13(4,~~290~~784)		115,~~931~~379		1(10,~~359~~163)		~~11.4~~NM	%
Impairment and other losses	~~1,500~~—		111,~~299~~500		(91,~~799~~500)		(86100.70)	%
Other items, net	2010,~~592~~228		20,~~225~~251		~~367~~(10,023)		1(49.85)	%
Operating Income	$	138,291	$	116,661	$	21,630	18.5	%
Operating income	$	132,603	$	77,941	$	54,662	70.1	%

Revenue

Revenue for the year ended December 31, ~~2024~~2025 was $1,~~535~~134.48 million, compared to $1,~~418~~077.76 million for the year ended December 31, ~~2023~~2024, an increase of $~~116~~57.72 million.

Net Revenue

The components of the fluctuations in net revenue for the year ended December 31, 2024, compared to the year ended December 31, 2023, were as follows:

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		Net Revenue - Components of Change					Change
	Year Ended December 31, 2023	Foreign Currency	Net Acquisitions (Divestitures)	Organic	Total Change	Year Ended December 31, 2024	Organic	Total
	(dollars in thousands)
Integrated Agencies Network	$1,232,798	$226	$7,208	$32,521	$39,955	$1,272,753	2.6%	3.2%
Component % change		—%	0.6%	2.6%	3.2%

Net Revenue

The ~~increase~~components inof ~~organic net revenue was primarily attributable to new client wins and higher spending in~~ the ~~technology~~fluctuations ~~and retail sectors, partially offset by budget cuts and client losses~~ in ~~the~~Net ~~food~~revenue ~~and~~for ~~beverage and business services sectors. The increase in net acquisitions (divestitures) was primarily driven by acquisitions and dispositions, including~~ the ~~acquisitions~~year ofended ~~Epiphany,~~December ~~Movers and Shakers~~31, ~~Left~~2025 ~~Field~~compared ~~Labs,~~to ~~and WNP, partially offset by~~ the ~~sale~~year ofended ~~Concentric~~December in31, ~~the~~2024 ~~fourth~~were ~~quarter~~as offollows: ~~2023.~~


			Net Revenue - Components of Change														Change
	Year Ended December 31, 2024		Foreign Currency			Net Acquisitions (Divestitures)			Organic			Total Change			Year Ended December 31, 2025		Organic		Total
	(dollars in thousands)
Marketing Services	$	905,117	$	3,491		$	9,788		$	41,280		$	54,559		$	959,676	4.6	%	6.0	%
Component % change			0.4		%	1.1		%	4.6		%	6.0		%

The strong increase in organic net revenue of $41.3 million, or 4.6%, was primarily attributable to increases in the Creative, Research, and Experiential service lines. The Creative and Research service lines increased $39.0 million due to new client wins and expanded client relationships in the retail, financial, and technology sectors driven by the accelerating adoption of AI. The Experiential service line increased $7.9 million due to the Sport Beach event that connects athletes, brands, and creatives through lived experiences. The increase in net acquisitions (divestitures) was primarily driven by the acquisition of Jetfuel, an experiential marketing services agency.

Expenses

Cost of services increased $19.3 million. Excluding the increase in Billable costs of $2.7 million and the addition of expenses from acquired entities of $1.9 million, Cost of services increased $14.8 million, or only 2.7% compared to organic net revenue growth of 4.6%, reflecting strong operating leverage. This increase was primarily attributable to higher staff costs due to the growth in Net revenue, partially offset by a decrease in staff costs due to business optimization efforts through the use of AI and restructuring of agency teams.

The decrease in Office and general expenses of $14.5 million was primarily attributable to cost optimization initiatives related to the consolidation of our real estate footprint and a decrease in Deferred acquisition consideration.

Stock-based compensation expense increased $2.6 million, primarily due to an increase in the fair value of certain profit interest awards driven by strong performance in certain Brands and a greater proportion of the annual incentive compensation being allocated to stock-based awards compared to last year.

Deferred acquisition consideration decreased $10.2 million, primarily attributable to a reduction in the fair value of the deferred acquisition consideration liability associated with certain Brands driven by the performance timing of those Brands.

Other items, net decreased $10.0 million, primarily attributable to a lease termination during the first quarter of 2025 as part of the real estate consolidation initiatives resulting in a gain of $3.5 million and a decrease in severance of $4.5 million.

Operating Income

Operating ~~Income~~income for the year ended December 31, ~~2024~~2025, was $~~138~~132.36 million, compared to $~~116~~77.79 million for the year ended December 31, ~~2023~~2024, representing an increase of $2154.67 million. The increase in Operating ~~Income~~income was primarily attributable to an increase in ~~Revenue~~Net ~~and~~revenue, apartially ~~decrease~~offset by an increase in ~~Impairment~~expenses, ~~and~~as ~~other~~discussed ~~losses~~above. ~~and~~Operating ~~Depreciation~~margin ~~and~~for ~~amortization~~the year ended December 31, ~~partially~~2025 ~~offset~~was by11.7%, ancompared ~~increase~~to in7.2% ~~Cost~~for ofthe ~~services~~year ~~and~~ended ~~Office~~December ~~and~~31, ~~general~~2024, ~~expenses~~representing an increase of 4.5%, reflecting improved operational efficiency.

~~The~~Adjusted ~~increase in Cost of sales was primarily attributable to higher billable costs and staff costs, commensurate with the increase in revenue as well as the inclusion of costs from acquired entities.~~EBITDA

~~The~~Adjusted ~~increase~~EBITDA inincreased ~~Office~~by ~~and~~$34.8 million, ~~general expenses was~~ primarily ~~attributable~~driven toby an increase in ~~staff~~Operating income and ~~other~~an ~~business development related costs, commensurate with the~~ increase in ~~revenue~~operating margin, as ~~well~~discussed ~~as the inclusion of costs from acquired entities~~above.

Deferred acquisition consideration increased $1.4 million, primarily attributable to the Company’s acquisitions.

Impairment and other losses for the year ended December 31, 2024 was $1.5 million. This was attributable to a charge to reduce the carrying value of a right-of-use lease asset and related leasehold improvements. Impairment and other losses for the year ended December 31, 2023, was $11.3 million, primarily related to right-of-use lease assets totaling $6.8 million and the associated leasehold improvements totaling $3.1 million.

Depreciation and amortization decreased $3.9 million, primarily attributable to the acceleration of amortization of a tradename in the third quarter of 2023. As a result, amortization expense of $3.1 million was recorded in the year ended December 31, 2023, representing the remaining amortization expense associated with this tradename.

Adjusted EBITDA increased $9.4 million, primarily driven by an increase in Revenue, partially offset by an increase in expenses, as discussed above.

Brand Performance Network

The components of operating results for the year ended December 31, 2024, compared to the year ended December 31, 2023 were as follows:

	Year Ended December 31,
	2024		2023		Change
	(dollars in thousands)
					$		%
Revenue	$	751,884	$	728,174	$	23,710	3.3	%
Operating Expenses
Cost of services	461,447		441,836		19,611		4.4	%
Office and general expenses	214,333		209,820		4,513		2.2	%
Depreciation and amortization	34,595		33,250		1,345		4.0	%
Impairment and other losses	—		96		(96)		(100.0)	%
	$	710,375	$	685,002	$	25,373	3.7	%
Operating Income	$	41,509	$	43,172	$	(1,663)	(3.9)	%

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	Year Ended December 31,
	2024		2023		Change
	(dollars in thousands)
					$		%
Net Revenue	$	651,230	$	627,810	$	23,420	3.7	%
Billable costs	100,654		100,364		290		0.3	%
Revenue	751,884		728,174		23,710		3.3	%
Billable costs	100,654		100,364		290		0.3	%
Staff costs	397,301		386,803		10,498		2.7	%
Administrative costs	93,155		87,337		5,818		6.7	%
Unbillable and other costs, net	65,901		55,891		10,010		17.9	%
Adjusted EBITDA	94,873		97,779		(2,906)		(3.0)	%
Stock-based compensation	6,977		6,204		773		12.5	%
Depreciation and amortization	34,595		33,250		1,345		4.0	%
Deferred acquisition consideration	(7,744)		2,851		(10,595)		NM
Impairment and other losses	—		96		(96)		(100.0)	%
Other items, net	19,536		12,206		7,330		60.1	%
Operating Income	$	41,509	$	43,172	$	(1,663)	(3.9)	%

Digital Transformation

The components of operating results for the year ended December 31, 2025 compared to the year ended December 31, 2024 were as follows:


	Year Ended December 31,
	2025		2024		Change
	(dollars in thousands)
					$		%
Revenue	$	393,499	$	335,656	$	57,843	17.2	%
Operating expenses
Cost of services	241,236		208,457		32,779		15.7	%
Office and general expenses	79,882		71,363		8,519		11.9	%
Depreciation and amortization	23,174		22,398		776		3.5	%

	$	344,292	$	302,218	$	42,074	13.9	%
Operating income	$	49,207	$	33,438	$	15,769	47.2	%


	Year Ended December 31,
	2025		2024		Change
	(dollars in thousands)
					$		%
Net revenue	$	367,172	$	324,183	$	42,989	13.3	%
Billable costs	26,327		11,473		14,854		129.5	%
Revenue	393,499		335,656		57,843		17.2	%

Billable costs	26,327		11,473		14,854		129.5	%
Staff costs	247,967		227,522		20,445		9.0	%
Administrative costs	27,267		21,809		5,458		25.0	%
Unbillable and other costs, net	1,305		1,393		(88)		(6.3)	%
Adjusted EBITDA	90,633		73,459		17,174		23.4	%
Stock-based compensation	4,122		6,622		(2,500)		(37.8)	%
Depreciation and amortization	23,174		22,398		776		3.5	%
Deferred acquisition consideration	12,271		7,911		4,360		55.1	%

Other items, net	1,859		3,090		(1,231)		(39.8)	%
Operating income	$	49,207	$	33,438	$	15,769	47.2	%

Revenue

Revenue for the year ended December 31, ~~2024,~~2025 was $~~751~~393.95 million, compared to $~~728~~335.27 million for the year ended December 31, ~~2023~~2024, an increase of $2357.78 million.

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Net Revenue

The components of the fluctuations in ~~net~~Net revenue for the year ended December 31, ~~2024,~~2025 compared to the year ended December 31, ~~2023,~~2024 were as follows:

			Net Revenue - Components of Change														Change
	Year Ended December 31, 2023		Foreign Currency			Net Acquisitions (Divestitures)			Organic			Total Change			Year Ended December 31, 2024		Organic		Total
	Year Ended December 31, 2024		Foreign Currency			Net Acquisitions (Divestitures)			Organic			Total Change			Year Ended December 31, 2025		Organic		Total
	(dollars in thousands)
Brand Performance Network	$627,810		$2,220			$2,252			$18,948			$23,420			$651,230		3.0%		3.7%
Digital Transformation	$	324,183	$	(405)		$	13,615		$	29,779		$	42,989		$	367,172	9.2	%	13.3	%
Component % change			(0.4%1)		%	0.4%.2		%	39.0%2		%	313.7%3		%

The strong increase in organic net revenue ~~was~~of ~~primarily~~$29.8 million, or 9.2%, was attributable to ~~new~~increases ~~clients~~in technology and ~~increased~~communications ~~spending~~sectors byin ~~existing~~the ~~clients~~Strategy inand ~~the~~Design ~~consumer~~and ~~products~~Development and ~~food~~Implementation service lines. The Strategy and ~~beverage~~Design ~~sectors~~and Development and Implementation service lines grew $28.7 million driven by AI-related services. The increase in net acquisitions (divestitures) was primarily driven by the acquisition of ~~Huskies~~Create, a digital communications group in the Middle East.

Expenses

Cost of services increased $32.8 million. Excluding the increase in Billable costs of $14.9 million and the addition of expenses from acquired entities of $6.8 million, Cost of services increased $11.1 million, or only 5.6% compared to organic net revenue growth of 9.2%, reflecting strong operating leverage. This increase was primarily due to higher staff costs due to the growth in Net revenue, partially offset by the restructuring of agency teams to support business optimization efforts and the impact of competition in the labor market.

Office and general expenses increased $8.5 million. Excluding the addition of costs from acquired entities of $4.4 million, Office and general expenses increased $4.1 million, primarily due to higher Deferred acquisition consideration as explained below.

Stock-based compensation expense decreased $2.5 million, primarily due to a decrease in the fair value of awards granted in 2025 compared to 2024 and a decrease in the expense associated with awards issued in prior years that vested during 2025.

Deferred acquisition consideration increased $4.4 million, primarily attributable to the strong performance of a certain Brand, causing an increase in the fair value of the deferred acquisition consideration liability associated with that Brand.

Operating Income

Operating ~~Income~~income for the year ended December 31, ~~2024,~~2025 was $4149.52 million, compared to $4333.24 million for the year ended December 31, ~~2023~~2024, representing aan ~~decrease~~increase of $115.78 million,. The increase in Operating income was primarily attributable to an increase in ~~Cost~~Net revenue of ~~services~~$43.0 ~~and~~million, ~~Office~~partially ~~and~~offset ~~general~~by an increase in expenses, ~~partially~~as ~~offset~~discussed byabove. Operating margin for the year ended December 31, 2025 was 12.5%, compared to 10.0% for the year ended December 31, 2024, representing an increase inof ~~Revenue~~2.5%, reflecting improved operational efficiency.

~~The~~Adjusted ~~increase in Cost of services was primarily attributable to higher unbillable costs and staff costs, commensurate with the increase in revenue.~~ EBITDA

~~The~~Adjusted ~~increase~~EBITDA inincreased ~~Office~~by ~~and~~$17.2 million, ~~general expenses was~~ primarily ~~attributable~~driven toby an increase in ~~staff~~Operating ~~costs,~~income ~~commensurate~~and ~~with~~an ~~the~~ increase in ~~revenue~~operating margin, ~~partially~~as ~~offset~~discussed ~~by a decrease in deferred acquisition consideration~~above.

Deferred acquisition consideration decreased $10.6 million, primarily attributable to a reduction in the fair value of the deferred acquisition consideration liabilities associated with certain Brands.42

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~~Adjusted~~Media ~~EBITDA~~& ~~decreased $2.9 million, primarily driven by an increase in Revenue, more than offset by an increase in expenses, as discussed above.~~Commerce

~~Communications~~The ~~Network~~components of operating results for the year ended December 31, 2025 compared to the year ended December 31, 2024, were as follows:

The components of operating results for the year ended December 31, 2024, compared to the year ended December 31, 2023, were as follows:


	Year Ended December 31,
	2025		2024		Change
	(dollars in thousands)
					$		%
Revenue	$	690,675	$	695,402	$	(4,727)	(0.7)	%
Operating expenses
Cost of services	409,767		418,505		(8,738)		(2.1)	%
Office and general expenses	216,505		196,461		20,044		10.2	%
Depreciation and amortization	30,263		31,450		(1,187)		(3.8)	%

	$	656,535	$	646,416	$	10,119	1.6	%
Operating income	$	34,140	$	48,986	$	(14,846)	(30.3)	%

	Year Ended December 31,		~~Year Ended December 31,~~
			2024				2023				Change
	2025				2024				Change
	(dollars in thousands)		~~(dollars in thousands)~~
									$		$		%		%
Revenue			$	515,140			$	333,707			$	181,433			54.4	%
Net revenue	$	610,020			$	601,503			$	8,517			1.4	%
Operating Expenses
Billable costs	80,655				93,899				(13,244)				(14.1)	%
Cost of services			329,356				218,448				110,908				50.8	%
Revenue	690,675				695,402				(4,727)				(0.7)	%
Office and general expenses			94,304				68,339				25,965				38.0	%
Billable costs	80,655				93,899				(13,244)				(14.1)	%
Depreciation and amortization			14,126				11,016				3,110				28.2	%
Staff costs	363,031				356,684				6,347				1.8	%
			$	437,786			$	297,803			$	139,983			47.0	%
Administrative costs	93,003				83,572				9,431				11.3	%
Operating Income			$	77,354			$	35,904			$	41,450			NM
Unbillable and other costs, net	64,833				65,188				(355)				(0.5)	%
Adjusted EBITDA	89,153				96,059				(6,906)				(7.2)	%
Stock-based compensation	4,191				6,265				(2,074)				(33.1)	%
Depreciation and amortization	30,263				31,450				(1,187)				(3.8)	%
Deferred acquisition consideration	3,010				(7,745)				10,755				NM
Other items, net	17,549				17,103				446				2.6	%
Operating income	$	34,140			$	48,986			$	(14,846)			(30.3)	%

	Year Ended December 31,
	2024		2023		Change
	(dollars in thousands)
					$		%
Net Revenue	$	333,795	$	245,261	$	88,534	36.1	%
Billable costs	181,345		88,446		92,899		NM
Revenue	515,140		333,707		181,433		54.4	%
Billable costs	181,345		88,446		92,899		NM
Staff costs	177,629		159,165		18,464		11.6	%
Administrative costs	37,057		33,664		3,393		10.1	%
Unbillable and other costs, net	2,235		613		1,622		NM
Adjusted EBITDA	116,874		51,819		65,055		NM
Stock-based compensation	3,374		3,334		40		1.2	%
Depreciation and amortization	14,126		11,016		3,110		28.2	%
Deferred acquisition consideration	18,770		30		18,740		NM
Other items, net	3,250		1,535		1,715		NM
Operating Income	$	77,354	$	35,904	$	41,450	NM

Revenue

Revenue for the year ended December 31, ~~2024~~2025 was $~~515~~690.17 million, compared to $~~333~~695.74 million for the year ended December 31, ~~2023~~2024, ana ~~increase~~decrease of $~~181.~~4.7 million.

4243

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Net Revenue

The components of the fluctuations in ~~net~~Net revenue for the year ended December 31, ~~2024,~~2025 compared to the year ended December 31, ~~2023,~~2024 were as follows:

			Net Revenue - Components of Change														Change
	Year Ended December 31, 2023		Foreign Currency			Net Acquisitions (Divestitures)			Organic			Total Change			Year Ended December 31, 2024		Organic		Total
	Year Ended December 31, 2024		Foreign Currency			Net Acquisitions (Divestitures)			Organic			Total Change			Year Ended December 31, 2025		Organic		Total
	(dollars in thousands)
Communications Network	$245,261		$(28)			$22,177			$66,385			$88,534			$333,795		27.1%		36.1%
Media & Commerce	$	601,503	$	3,396		$	5,829		$	(708)		$	8,517		$	610,020	(0.1)	%	1.4	%
Component % change			—%0.6		%	91.0%		%	27(0.1%)		%	~~36.~~1%.4		%

~~The~~Organic ~~increase in organic~~ net revenue ~~was~~decreased ~~primarily~~by ~~attributable~~$0.7 tomillion ~~new~~or ~~clients~~0.1%. ~~and~~Organic ~~increased~~net ~~spending~~revenue in the ~~retail~~Media ~~and~~Buying ~~public~~service ~~affairs~~line ~~sectors~~increased $22.6 ~~The~~million ~~public~~driven ~~affairs~~by ~~sector~~integrated ~~gained~~media, technology, and data offerings that contributed to new ~~clients~~wins and ~~increased~~expanded ~~spending~~scope aswith existing clients. This was offset by a ~~result~~decrease of $24.8 million in the ~~current~~Commerce ~~political~~& ~~campaign~~CRM ~~year~~service line that was primarily attributable to leadership transitions and organizational realignment. The increase in net acquisitions (divestitures) was primarily driven by the ~~acquisitions~~acquisition of ~~PROS~~ADK, ~~Sidekick,~~an ~~and~~integrated ~~Consulum~~marketing company that expands our global footprint in the APAC region.

Expenses

Cost of services decreased by $8.7 million. Excluding the decline in Billable costs of $13.2 million and the addition of expenses from acquired entities of $4.7 million, Cost of services decreased $0.2 million, or less than 0.1%, compared to organic net revenue growth of 0.1%, reflecting consistent operating leverage.

Office and general expenses increased $20.0 million. Excluding the addition of costs from acquired entities of $7.7 million, Office and general expenses increased $12.4 million, primarily due to higher Deferred acquisition consideration as explained below.

Stock-based compensation expense decreased $2.1 million, primarily due to a decrease in the fair value of awards granted in 2025 compared to 2024 and a decrease in the expense associated with awards issued in prior years that vested during 2025.

Deferred acquisition consideration increased $10.8 million, primarily attributable to the strong performance of a certain Brand in 2025, causing an increase in the fair value of the deferred acquisition consideration liability associated with that Brand, and a decrease in the fair value of a certain Brand in 2024.

Operating Income

Operating ~~Income~~income for the year ended December 31, ~~2024,~~2025 was $7734.41 million, compared to $3549.90 million for the year ended December 31, ~~2023~~2024, representing ana ~~increase~~decrease of $4114.58 million. The ~~change~~decrease in Operating ~~Income~~income was primarily attributable to an increase in ~~Revenue,~~expenses partially offset by an increase in ~~Cost~~Net ofrevenue, ~~services~~as ~~and~~discussed ~~Office and general expenses~~above.

~~The~~Adjusted ~~increase in Cost of services was primarily attributable to an increase in billable costs and staff cost, commensurate with higher revenue as well as the inclusion of costs from acquired entities.~~EBITDA

~~The~~Adjusted ~~increase~~EBITDA indecreased ~~Office~~by ~~and~~$6.9 million, ~~general expenses was~~ primarily ~~attributable~~due to ana ~~increase~~decrease in ~~deferred~~Operating ~~acquisition~~income, ~~consideration~~ as ~~well~~discussed ~~as the inclusion of costs from acquired entities~~above.

~~Deferred acquisition consideration increased $18.7 million, primarily attributable to an increase in the fair value of a certain obligation.~~44

Adjusted EBITDA increased $65.1 million, primarily driven by an increase in Revenue, partially offset by an increase in expenses, as discussed above.

All Other

The components of operating results for the year ended December 31, 2024, compared to the year ended December 31, 2023 were as follows:

	Year Ended December 31,
	2024		2023		Change
	(dollars in thousands)
					$		%
Revenue	$	38,747	$	46,585	$	(7,838)	(16.8)	%
Operating Expenses
Cost of services	25,588		32,484		(6,896)		(21.2)	%
Office and general expenses	29,453		24,648		4,805		19.5	%
Depreciation and amortization	12,718		8,390		4,328		51.6	%
	$	67,759	$	65,522	$	2,237	3.4	%
Operating Loss	$	(29,012)	$	(18,937)	$	(10,075)	53.2	%

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	Year Ended December 31,
	2024		2023		Change
	(dollars in thousands)
					$		%
Net Revenue	$	38,884	$	46,585	$	(7,701)	(16.5)	%
Billable costs	(137)		—		(137)		(100.0)	%
Revenue (1)	38,747		46,585		(7,838)		(16.8)	%
Billable costs	(137)		—		(137)		(100.0)	%
Staff costs	34,999		37,416		(2,417)		(6.5)	%
Administrative costs (1)	6,139		4,689		1,450		30.9	%
Unbillable and other costs, net	13,570		15,087		(1,517)		(10.1)	%
Adjusted EBITDA	(15,824)		(10,607)		(5,217)		49.2	%
Stock-based compensation	904		518		386		74.5	%
Depreciation and amortization	12,718		8,390		4,328		51.6	%
Deferred acquisition consideration	(1,321)		(1,752)		431		(24.6)	%
Other items, net	887		1,174		(287)		(24.4)	%
Operating Loss	$	(29,012)	$	(18,937)	$	(10,075)	53.2	%

Communications

~~(1)~~The ~~All~~components ~~Other~~of ~~Revenue~~operating ~~and~~results ~~Administrative~~for ~~costs~~the ~~include~~year ~~approximately~~ended $8December ~~million~~31, ~~and~~2025 $6compared ~~million~~to ~~of eliminations of intercompany services for~~ the ~~years~~year ended December 31, 2024, ~~and~~were ~~2023,~~as ~~respectively.~~follows:


	Year Ended December 31,
	2025		2024		Change
	(dollars in thousands)
					$		%
Revenue	$	592,577	$	703,065	$	(110,488)	(15.7)	%
Operating expenses
Cost of services	406,470		477,488		(71,018)		(14.9)	%
Office and general expenses	86,524		111,573		(25,049)		(22.5)	%
Depreciation and amortization	25,711		20,100		5,611		27.9	%
Impairment and other losses	222		—		222		100.0	%
	$	518,927	$	609,161	$	(90,234)	(14.8)	%
Operating income	$	73,650	$	93,904	$	(20,254)	(21.6)	%


	Year Ended December 31,
	2025		2024		Change
	(dollars in thousands)
					$		%
Net revenue	$	393,431	$	435,626	$	(42,195)	(9.7)	%
Billable costs	199,146		267,439		(68,293)		(25.5)	%
Revenue	592,577		703,065		(110,488)		(15.7)	%

Billable costs	199,146		267,439		(68,293)		(25.5)	%
Staff costs	229,356		232,096		(2,740)		(1.2)	%
Administrative costs	50,841		47,335		3,506		7.4	%
Unbillable and other costs, net	9,300		10,840		(1,540)		(14.2)	%
Adjusted EBITDA	103,934		145,355		(41,421)		(28.5)	%
Stock-based compensation	6,325		7,721		(1,396)		(18.1)	%
Depreciation and amortization	25,711		20,100		5,611		27.9	%
Deferred acquisition consideration	(7,022)		18,770		(25,792)		NM
Impairment and other losses	222		—		222		100.0	%
Other items, net	5,048		4,860		188		3.9	%
Operating income	$	73,650	$	93,904	$	(20,254)	(21.6)	%

Revenue

Revenue for the year ended December 31, ~~2024,~~2025 was $38592.76 million, compared to $46703.61 million for the year ended December 31, ~~2023~~2024, a decrease of $7110.85 million.

4445

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Net Revenue

The components of the fluctuations in ~~net~~Net revenue for the year ended December 31, ~~2024,~~2025 compared to the year ended December 31, ~~2023,~~2024 were as follows:

			Net Revenue - Components of Change														Change
	Year Ended December 31, 2023		Foreign Currency			Net Acquisitions (Divestitures)			Organic			Total Change			Year Ended December 31, 2024		Organic		Total
	Year Ended December 31, 2024		Foreign Currency			Net Acquisitions (Divestitures)			Organic			Total Change			Year Ended December 31, 2025		Organic		Total
	(dollars in thousands)
All Other	$46,585		$(984)			$(609)			$(6,108)			$(7,701)			$38,884		(13.1)%		(16.5)%
Communications	$	435,626	$	547		$	29,002		$	(71,744)		$	(42,195)		$	393,431	(16.5)	%	(9.7)	%
Component % change			(20.1)%		%	(16.~~3)%~~7		%	(1316.15)%		%	(169.57)%		%

The decrease in organic net revenue of $71.7 million, or 16.5%, was primarily attributable to ~~budget~~a ~~cuts~~$62.7 ~~and~~million ~~client~~decrease ~~losses~~in ~~from~~the ~~clients~~Advocacy inservice line due to political seasonality following the ~~food~~2024 ~~and~~presidential ~~beverage,~~election ~~travel~~cycle. ~~and~~The ~~transportation,~~decrease ~~consumer~~in ~~products,~~organic ~~healthcare,~~net ~~and~~revenue ~~financial~~for ~~services~~Communications ~~sectors~~excluding Advocacy was $9.0 million or 4.0%. The decrease in ~~net~~Communications ~~acquisitions~~service ~~(divestitures)~~line was primarily driven by ~~the~~broader ~~acquisition~~industry ofheadwinds, ~~Leaders~~including client budget uncertainty, ~~offset~~and bydelayed ~~the~~spending ~~derecognition~~decisions ofduring athe ~~certain~~pitch ~~noncontrolling~~process. ~~interest~~The increase in ~~the~~net ~~first~~acquisitions ~~quarter~~(divestitures) was primarily driven by the acquisition of ~~2024~~Consulum, a pan-MENA government advisory consultancy.

Expenses

Cost of services decreased $71.0 million. Excluding the decline in Billable costs of $68.3 million and the addition of costs from acquired entities of $14.6 million, Cost of services decreased $17.3 million, or 8.6%, primarily due to lower Net revenue.

The decrease in Office and general expenses of $25.0 million was primarily attributable to a decrease in Deferred acquisition consideration as explained below and lower Net revenue, partially offset by the addition of costs from acquired entities of $7.7 million.

Stock-based compensation expense decreased $1.4 million, primarily attributable to a decrease in the fair value of a certain profits interest award due to performance timing.

Deferred acquisition consideration decreased by $25.8 million, primarily attributable to a decrease in the fair value of certain Brands due to performance timing, partially offset by the strong performance of certain Brands, causing an increase in the fair value.

Depreciation and amortization increased by $5.6 million, primarily attributable to the amortization of intangible assets resulting from the acquisition of businesses.

Operating Income

Operating income for the year ended December 31, 2025 was $73.7 million, compared to $93.9 million for the year ended December 31, 2024, representing a decrease of $20.3 million. The decrease in Operating income was primarily attributable to a decrease in Net revenue, partially offset by a decrease in expenses, as discussed above.

Adjusted EBITDA

Adjusted EBITDA decreased by $41.4 million, primarily due to a decrease in Operating income, as discussed above.

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The Marketing Cloud

The components of operating results for the year ended December 31, 2025 compared to the year ended December 31, 2024 were as follows:


	Year Ended December 31,
	2025		2024		Change
	(dollars in thousands)
					$		%
Revenue	$	106,537	$	32,265	$	74,272	230.2	%
Operating expenses
Cost of services	52,921		15,762		37,159		235.8	%
Office and general expenses	49,416		28,932		20,484		70.8	%
Depreciation and amortization	23,514		12,502		11,012		88.1	%
Impairment and other losses	244		—		244		100.0	%
	$	126,095	$	57,196	$	68,899	120.5	%
Operating loss	$	(19,558)	$	(24,931)	$	5,373	(21.6)	%


	Year Ended December 31,
	2025		2024		Change
	(dollars in thousands)
					$		%
Net revenue	$	106,486	$	32,265	$	74,221	230.0	%
Billable costs	51		—		51		100.0	%
Revenue	106,537		32,265		74,272		230.2	%

Billable costs	51		—		51		100.0	%
Staff costs	68,647		28,686		39,961		139.3	%
Administrative costs	17,613		9,777		7,836		80.1	%
Unbillable and other costs, net	22,689		6,117		16,572		270.9	%
Adjusted EBITDA	(2,463)		(12,315)		9,852		(80.0)	%
Stock-based compensation	628		805		(177)		(22.0)	%
Depreciation and amortization	23,514		12,502		11,012		88.1	%
Deferred acquisition consideration	(10,942)		(1,320)		(9,622)		728.9	%
Impairment and other losses	244		—		244		100.0	%
Other items, net	3,651		629		3,022		480.4	%
Operating loss	$	(19,558)	$	(24,931)	$	5,373	(21.6)	%

Revenue

Revenue for the year ended December 31, 2025 was $106.5 million compared to $32.3 million for the year ended December 31, 2024, an increase of $74.3 million.

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Net Revenue

The components of the fluctuations in Net revenue for the year ended December 31, 2025 compared to the year ended December 31, 2024 were as follows:


			Net Revenue - Components of Change														Change
	Year Ended December 31, 2024		Foreign Currency			Net Acquisitions (Divestitures)			Organic			Total Change			Year Ended December 31, 2025		Organic		Total
	(dollars in thousands)
The Marketing Cloud	$	32,265	$	941		$	62,229		$	11,051		$	74,221		$	106,486	34.3	%	230.0	%
Component % change			2.9		%	192.9		%	34.3		%	230.0		%

The increase in organic net revenue of $11.1 million, or 34.3%, was primarily attributable to growth in the Research service line due to increased demand from new and existing clients, including a significant new engagement in the financial sector and higher platform utilization including the successful introduction of additional service offerings within a subscription model. The increase in net acquisitions (divestitures) was primarily driven by the acquisitions of Leaders, a digital agency specializing in influencer marketing, and Unicepta, a media monitoring and analytics platform.

Expenses

Cost of services increased $37.2 million. Excluding the addition of costs from acquired entities of $34.2 million, Cost of services increased $2.9 million or only 25.8% compared to organic net revenue of 34.3%, reflecting operating leverage.

Office and general expenses increased $20.5 million, primarily due to higher staff costs due to expansion of the business to support additional revenues and the addition of costs from acquired entities of $16.2 million, partially offset by a decrease in Deferred acquisition consideration expense as explained below.

Deferred acquisition consideration decreased by $9.6 million, primarily attributable to a decrease in the fair value of a certain Brand due to performance timing, partially offset by the strong performance of certain other Brands.

Depreciation and amortization increased by $11.0 million, primarily attributable to higher amortization related to increased investments in AI and automation to expand our offerings and services, improve workflow efficiency, and support future margin expansion, and the amortization of intangible assets from the acquisition of businesses.

Operating Loss

Operating ~~Loss~~loss for the year ended December 31, ~~2024,~~2025 was $2919.06 million, compared to $1824.9 million for the year ended December 31, ~~2023~~2024, ~~representing~~as anthe ~~increase~~segment ofapproaches ~~$10.1~~operating ~~million~~scale. The ~~increase~~decrease in Operating ~~Loss~~loss was primarily attributable to ~~a decrease in Revenue and~~ an increase in ~~Office~~Net ~~and general expenses and Depreciation and amortization~~revenue, partially offset by aan ~~decrease~~increase in ~~Cost~~expenses, ofas ~~services~~discussed above.

~~The~~Adjusted ~~decrease~~EBITDA inincreased ~~Cost~~by of$9.9 ~~Services~~million, ~~was~~ primarily ~~attributable~~due to ~~lower~~a ~~unbillable~~decrease ~~costs~~in ~~and~~Operating ~~staff costs~~loss, ~~commensurate~~as ~~with~~discussed ~~lower revenue~~above.

~~The increase in Office and general expenses was primarily attributable to an increase in staff costs as a result of a change in the organization structure of certain Brands.~~48

Depreciation and amortization increased $4.3 million, primarily attributable to the acceleration of amortization of certain tradenames. As a result, amortization expense of $2.8 million was recorded in the year ended December 31, 2024, representing the remaining amortization expense associated with these tradenames.

Adjusted EBITDA decreased $5.2 million, primarily driven by a decrease in Revenue, offset by a decrease in expenses, as discussed above.

Corporate

The components of operating results for the year ended December 31, 2024, compared to the year ended December 31, 2023 were as follows:

	Year Ended December 31,
	2024		2023		Change
	(dollars in thousands)
					$		%
Staff costs	$	47,736	$	36,938	$	10,798	29.2	%
Administrative costs	16,402		11,472		4,930		43.0	%
Adjusted EBITDA	(64,138)		(48,410)		(15,728)		32.5	%
Stock-based compensation	13,653		19,638		(5,985)		(30.5)	%
Depreciation and amortization	12,137		8,218		3,919		47.7	%
Impairment and other losses	215		—		215		100.0	%
Other items, net	4,931		10,007		(5,076)		(50.7)	%
Operating Loss	$	(95,074)	$	(86,273)	$	(8,801)	10.2	%

Operating Loss for the year ended December 31, 2024, was $95.1 million, compared to $86.3 million for the year ended December 31, 2023, representing an increase of $8.8 million. The increase in Operating Loss was primarily attributable to an increase in Staff costs, partially offset by a decrease in Stock-based compensation.

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~~Staff~~Corporate ~~costs increased $10.8 million, primarily as a result of an increase in headcount, higher health insurance costs and a reduction in bonus expense in 2023 related to cost savings initiatives.~~

~~Stock-based~~The ~~compensation~~components ~~expense~~of ~~decreased~~operating ~~$6.0 million~~results for the year ended December 31, ~~primarily~~2025 ~~attributable~~compared to athe ~~decrease~~year inended ~~the~~December ~~fair~~31, ~~value~~2024 ~~and~~were ~~number~~as offollows: ~~awards.~~


	Year Ended December 31,
	2025		2024		Change
	(dollars in thousands)
					$		%
Staff costs	$	61,038	$	47,737	$	13,301	27.9	%
Administrative costs	8,444		11,408		(2,964)		(26.0)	%

Adjusted EBITDA	(69,482)		(59,145)		(10,337)		17.5	%
Stock-based compensation	19,113		13,653		5,460		40.0	%
Depreciation and amortization	16,261		12,137		4,124		34.0	%
Impairment and other losses	—		215		(215)		(100.0)	%
Other items, net	6,174		9,924		(3,750)		(37.8)	%
Operating loss	$	(111,030)	$	(95,074)	$	(15,956)	16.8	%

Expenses

Staff costs increased by $13.3 million, primarily attributable to an increase in headcount to support the implementation of a standardized shared services platform to optimize cost structures and support the future growth and unusually higher healthcare related insurance claims.

Administrative costs decreased $3.0 million, primarily due to our cost savings initiatives. The implementation of the shared services platform optimized cost structures and reduced Brands administrative costs. Due to a higher allocation of Corporate's administrative costs to the Brands, Corporate’s Administrative costs decreased $14.0 million These costs include rent, IT services, accounting services, financial operations services, and business applications. This decrease was partially offset by an increase of $11.1 million in computer software and licensing fees due to investments in automation and AI intended to improve workflow efficiency and support future margin expansion.

Stock-based compensation expense increased by $5.5 million, primarily due to a greater proportion of the annual incentive compensation being allocated to stock-based awards compared to last year and a reversal of expense in the second quarter of 2024 associated with stock-based performance awards for which the performance targets were not met.

Operating Loss

Operating loss for the year ended December 31, 2025 was $111.0 million compared to $95.1 million for the year ended December 31, 2024, representing an increase of $16.0 million, primarily attributable to higher expenses, as discussed above.

Liquidity and Capital Resources:

The following table provides summary information about the Company’s liquidity position and capital resources:

	Year Ended December 31,
	2024		2023
	2025		2024		Change
	(dollars in thousands)
Net cash provided by operating activities	$	142,859	$	81,007
					$		%
Net cash (used in) provided by investing activities	(162,472)		155,951
Net cash provided by operating activities	$	291,028	$	142,859	$	148,169	103.7	%
Net cash provided by (used in) financing activities	36,938		(339,864)
Net cash used in investing activities	(113,678)		(162,472)		48,794		(30.0)	%
Net cash provided by (used in) financing activities	(210,017)		36,938		(246,955)		NM

The Company had cash and cash equivalents of $~~131~~104.35 million and $~~119~~131.73 million as of December 31, ~~2024~~2025, and December 31, ~~2023~~2024, respectively. The Company expects to maintain sufficient cash and/or available borrowings to fund operations for the next twelve months and subsequent periods. The Company has historically maintained and expanded its business using cash generated from operating activities, funds available under the Credit Agreement, and other initiatives, such as obtaining additional debt and equity financing. 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. As of December 31, 2024, the Company had $264.0 million of borrowings outstanding and $15.3 million of issued and undrawn letters of credit resulting in $360.7 million unused amount under the Credit Agreement.

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 $435.6 million, $393.9 million, and $176.5 million, during the years ended December 31, 2024, 2023, and 2022, respectively. The amount collected and due to the third parties under these arrangements was $19.5 million as of December 31, 2024, $1.8 million as of December 31, 2023, and $5.7 million as of December 31, 2022. Fees for these arrangements were recorded in Office and general expenses in the Consolidated Statements of Operations and totaled $5.8 million, $5.4 million, and $1.8 million for the years ended December 31, 2024, 2023, and 2022, respectively.

On November 6, 2024, the Board authorized an extension and a $125.0 million increase in the size of our Repurchase Program. Under the Repurchase Program, as amended, we may repurchase up to an aggregate of $375.0 million of shares of our outstanding Class A Common Stock, with any previous purchases under the Repurchase Program continuing to count against that limit. The Repurchase Program will expire on November 6, 2027.

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 will review the Repurchase Program periodically and may authorize adjustments of its terms.

During the year ended December 31, 2024, 14.8 million shares of Class A Common Stock were repurchased pursuant to the Repurchase Program at an average price of $6.31 per share, for an aggregate value, excluding fees, of $93.5 million. The repurchased shares included 4 million shares of Class A Common Stock repurchased from certain affiliates of The Goldman Sachs Group, Inc. at a price of $6.34 per share, for an aggregate purchase price of $25.4 million.

The remaining value of shares of Class A Common Stock permitted to be repurchased under the Repurchase Program was $169.9 million as of December 31, 2024.

The Company’s obligations extending beyond twelve months primarily consist of deferred acquisition consideration payments, purchases of noncontrolling interests, subsidiary awards, capital expenditures, scheduled lease obligation payments, and interest payments on borrowings under the Company’s 5.625% Notes (as defined in Note 11 of the Notes included herein) and Credit Agreement. The Company expects to make estimated cash payments in the future to satisfy obligations under our

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Tax Receivables Agreement with Stagwell Media LP and OpCo (“TRA”) (see Note 17 of the Notes included herein for additional details). The amount and timing of payments are contingent on the Company achieving certain 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 (each as defined in Note 15 of the Notes included herein) for shares of Class A Common Stock or cash, as applicable, and (ii) certain other tax benefits related to the Company making payments under the TRA. Based on the current outlook, the Company believes future cash flows from operations, together with the Company’s existing cash balance and availability of funds under the Credit Agreement, will be sufficient to meet the Company’s anticipated cash needs for the next twelve months and subsequent periods. The Company’s ability to make payments will depend on future performance, which is subject to general economic conditions, the competitive environment and other factors, including those described in this Form 10-K and in the Company’s other SEC filings.

Cash Flows

Operating Activities

~~Cash~~Net ~~flows~~cash provided by operating activities for the year ended December 31, ~~2024~~2025 ~~were~~was $~~142~~291.90 million, ~~primarily~~an ~~driven~~increase byof ~~earnings~~$148.2 million, ~~partially~~or ~~offset~~103.7%, compared to the prior year. This improvement was driven by ~~unfavorable~~higher operating income of $25.9 million and $150.7 million improvement in working capital ~~requirements,~~primarily ~~including~~attributable ~~the~~to ~~timing~~stronger ofworking ~~media~~capital ~~supplier~~management ~~payments.~~driven by

Cash flows provided by operating activities for the year ended December 31, 2023 were $81.0 million, primarily driven by earnings, partially offset by unfavorable working capital requirements, including the timing of media supplier payments.49

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technology automation and improved billing and collection process, which resulted in favorable changes in advance billings of $48.2 million and expenditures billable to clients of $66.4 million. Additionally, there were net favorable changes in accounts payable and accruals of $35.5 million as a result of improved payment terms with significant service providers. This was partially offset by an unfavorable change in other current assets of $45.3 million due to an increase in certain prepaid media assets.

Changes in non-cash items included in operating income consisted primarily of a decrease of $30.5 million in the fair value of deferred acquisition liabilities driven by the performance timing of certain acquisitions and the Bargain purchase gain of $9.9 million from the ADK acquisition, partially offset by an increase of $19.6 million in depreciation and amortization resulting from higher capital investment in AI and automation related technologies as well as an increase in deferred income tax expense of $21.1 million, respectively.

Investing Activities

~~Cash~~Net ~~flows~~cash used in investing activities ~~were $162.5 million~~ for the year ended December 31, ~~2024~~2025 was $113.7 million, a decrease of $48.8 million, or 30.0%, compared to the prior year. This decrease was primarily driven by a $3597.1 million reduction in ~~capitalized~~acquisitions ~~software~~and ~~spend,~~ $1810.9 million in proceeds from the sale of a non-core asset. These decreases were partially offset by an increase in capital expenditures, and capitalized software for investments in AI and process automation technologies of $~~103~~24.38 million ~~for~~and ~~acquisitions~~$32.4 million, ~~net~~respectively. The capital expenditures include a $7.4 million purchase of ~~cash~~office ~~acquired~~space.

Cash flows provided by investing activities were $156.0 million for the year ended December 31, 2023, primarily driven by $229.5 million in proceeds from the sale of ConcentricLife, partially offset by $28.2 million in capitalized software spend, $14.2 million in capital expenditures, and $23.3 million in acquisitions, net of cash acquired.

Financing Activities

~~During~~Net cash used in financing activities for the year ended December 31, ~~2024,~~2025 ~~cash~~was ~~flows~~$210.0 ~~provided~~million, byan ~~financing~~increase ~~activities~~of ~~were~~ $36247.90 million, compared to the prior year. This increase was primarily driven by an increase of $~~205~~231.07 million in net ~~proceeds~~payments under the Credit Agreement, ~~partially~~ offset by ~~shares~~an ~~repurchased~~increase ~~and~~in ~~cancelled~~share repurchases of $~~108~~26.20 million,. ~~payments~~The ofincrease ~~deferred~~was ~~consideration~~partially ofoffset ~~$29.8~~by ~~million,~~a ~~and~~decrease in distributions to noncontrolling interests of $2617.7 1 million.

During the year ended December 31, 2023, cash flows used in financing activities were $339.9 million, primarily driven by $41.0 million in net borrowings under the Credit Agreement, shares repurchased and cancelled of $223.8 million, payments of deferred consideration of $49.2 million, and distributions to noncontrolling interests of $25.0 million. Liquidity

The Company expects to maintain sufficient cash and/or available borrowings to fund operations for the next twelve months and subsequent periods. The Company has historically maintained and expanded its business using cash generated from operating activities, funds available under the Credit Agreement, and other initiatives, such as obtaining additional debt, equity and receivable financing. On April 23, 2025, the Company entered into an amendment to the Credit Agreement, which increased the limit of borrowing to $750 million and extended the maturity date to April 23, 2030, as described in more detail in Note 11 of the Notes included herein. As of December 31, 2025, the Company had $237.3 million of borrowings outstanding and $15.1 million of issued and undrawn letters of credit, resulting in $497.6 million unused borrowing capacity under the Credit Agreement.

The trade receivables transferred to the third parties were $501.3 million and $435.6 million during the years ended December 31, 2025 and 2024, respectively. The trade receivables collected by the Company that were not remitted to the third parties under these arrangements were recorded in Accruals and other liabilities on the Audited Consolidated Balance Sheets and total $21.2 million as of December 31, 2025 and $19.5 million as of December 31, 2024. Fees for these arrangements were recorded in Office and general expenses in the Consolidated Statements of Operations and totaled $5.6 million and $5.8 million for the years ended December 31, 2025 and 2024, respectively.

The Company may purchase shares of outstanding Class A Common Stock under its Repurchase Program. 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 Exchange Act, 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 will review the Repurchase Program periodically and may authorize adjustments of its terms.

During the year ended December 31, 2025, 23.1 million shares of Class A Common Stock were repurchased pursuant to the Repurchase Program at an average price of $5.12 per share, for an aggregate value, excluding fees, of $118.4 million.

The remaining value of shares of Class A Common Stock permitted to be repurchased under the Repurchase Program was $51.1 million as of December 31, 2025. See Recent Developments above for information regarding the Board’s authorization to extend and increase the size of share repurchases under the Repurchase Program.

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The Company’s obligations extending beyond twelve months primarily consist of deferred acquisition consideration payments, purchases of redeemable noncontrolling interests, subsidiary awards, capital expenditures, scheduled lease obligation payments, and interest payments on borrowings under the Company’s 5.625% Notes (as defined in Note 11 of the Notes included herein) and Credit Agreement. The Company expects to make estimated cash payments in the future to satisfy obligations under our Tax Receivables Agreement (“TRA”), which remains in effect after the final exchange of Class C Common Stock (see Note 17 of the Notes included herein for additional details). The amount and timing of any payments under the TRA are contingent on the Company achieving certain tax savings, if any, that we actually realize, or in certain circumstances are deemed to realize. Based on the current outlook, the Company believes future cash flows from operations, together with the Company’s existing cash balance and availability of funds under the Credit Agreement, will be sufficient to meet the Company’s anticipated cash needs for the next twelve months and subsequent periods. The Company’s ability to make payments will depend on future performance, which is subject to general economic conditions, the competitive environment and other factors, including those described in this Form 10-K and in the Company’s other SEC filings.

Total Debt

As of December 31, 2025, Debt, net of debt issuance costs, ~~as of December 31, 2024,~~ was $1,~~353~~326.60 million, compared to $1,~~145~~353.86 million outstanding as of December 31, ~~2023~~2024. See Note 11 of the Notes included herein for information regarding the Company’s 5.625% Notes, and the Credit Agreement~~, which provides for a $640~~.~~0 million senior secured revolving credit facility maturing on August 3, 2026.~~

~~The~~As ~~Company~~of isDecember ~~currently~~31, 2025, the Company was in compliance with all of the terms and conditions of the Credit Agreement, and management believes, based on its current financial projections, that the Company will be in compliance with its covenants over the next twelve months.

If the Company loses all or a substantial portion of its lines of credit under the Credit Agreement, or if the Company uses the maximum available amount under the agreement, it will be required to seek other sources of liquidity. If the Company were unable to find these sources of liquidity, for example, through an equity offering or access to the capital markets, the Company’s ability to fund its working capital needs and any contingent obligations with respect to acquisitions and redeemable noncontrolling interests would be adversely affected.

Pursuant to the Credit Agreement, the Company must maintain a Total Leverage Ratio (as defined in the Credit Agreement) below an established threshold. For the period ended December 31, ~~2024~~2025, the Company’s calculation of this ratio, and the maximum permitted under the Credit Agreement, respectively, were calculated based on the trailing twelve months as follows:


			December 31, 2025
Total Leverage Ratio			2.98
Maximum per covenant			4.25

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and the maximum permitted under the Credit Agreement, respectively, were calculated based on the trailing twelve months as follows:

			December 31, 2024
Total Leverage Ratio			2.93
Maximum per covenant			4.25

These ratios and measures are not based on GAAP and are not presented as alternative measures of operating performance or liquidity. Some of these ratios and measures include, among other things, pro forma adjustments for acquisitions, one-time charges, and other items, as defined in the Credit Agreement. They are presented here to demonstrate compliance with the covenants in the Credit Agreement, as non-compliance with such covenants could have a material adverse effect on the Company.

Material Cash Requirements

~~The~~To ~~Company~~the extent required under a particular client engagement, Stagwell’s Brands enter into contractual commitments with media providers, ~~and~~production ~~agreements~~companies ~~with~~and ~~production~~other ~~companies~~third parties on behalf of their clients at levels that exceed the revenue from the services. ~~Some~~In most of ~~our~~these transactions, the Brands ~~purchase~~act ~~media~~as ~~for~~the clients’ ~~and~~“Agent ~~act~~for asa anDisclosed ~~agent~~Principal” ~~for~~where athe ~~disclosed~~Brands’ ~~principle~~risk is mitigated by sequential payment liability, i.e., ~~These~~the ~~commitments~~brands’ ~~are~~obligation ~~included~~to inpay ~~Accounts~~a ~~payable~~third ~~and~~party ~~Accrued~~is ~~media~~tolled ~~when~~until it receives the ~~media~~underlying ~~services~~payment ~~are~~from ~~delivered~~the byclient thereby safeguarding the ~~media~~Brand ~~providers~~in the event of a client default. ~~Stagwell~~To ~~takes~~further ~~precautions~~protect against client default, onStagwell ~~payment~~takes ~~for~~additional ~~these services~~precautions, including the procurement of credit insurance. While ~~and~~Stagwell has historically had a very low incidence of default., Stagwell is still exposed to the risk of significant uncollectible receivables from ~~our~~its clients. ~~The~~and the risk of a material loss could significantly increase in periods of severe economic downturn.

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The following table and discussion below summarize current and long-term material cash requirements of the Company as of December 31, 2025. Certain of these requirements vary in the ultimate future amount payable because they are dependent on the future results of operations of the subject subsidiaries and/or the timing of when certain rights are exercised. Management anticipates itthat ~~will~~the ~~finance~~obligations ~~these~~outstanding ~~requirements~~as ~~using~~of ~~available~~December ~~cash from operations~~31, ~~borrowings~~2025 ~~under~~will ~~the~~be ~~Credit~~repaid ~~Agreement~~with ~~(or~~new ~~any refinancings thereof)~~financing, ~~and,~~equity ~~if necessary~~offerings, ~~through~~asset ~~the~~sales ~~incurrence of additional debt~~ and/or ~~issuance~~cash offlow ~~additional~~from ~~equity.~~operations:

	Payments Due by Period
Material Cash Requirements	Total		Less than1 Year		1 – 3 Years		3 – 5 Years		After5 Years
	(dollars in thousands)
Indebtedness (1)	$	1,100,000	$	—	$	—	$	1,100,000	$	—
Operating lease obligations (2)	360,906		75,646		118,862		94,246		72,152
Operating lease obligations	327,967		67,812		124,392		94,320		41,443
Interest on debt	~~309~~247,~~375~~500		61,875		123,750		~~123~~61,~~750~~875		—
Deferred acquisition consideration (3)	63,675		34,890		23,913		4,872		—
Deferred acquisition consideration (2)	26,436		13,502		8,456		4,478		—
Total	$	1,~~833~~701,~~956~~903	$	~~172~~143,~~411~~189	$	~~266~~256,~~525~~598	$	1,~~322~~260,~~868~~673	$	7241,~~152~~443

(1) Includes the principal amount of the 5.625% Notes which are due in 2029 and does not include borrowings under the Credit Agreement.

(2) AsDeferred acquisition consideration on the Consolidated Balance Sheets consists of deferred obligations related to contingent purchase price payments. The $26.4 million reflected in the above table is included in the Consolidated Balance Sheet as of December 31, ~~2024~~2025, ~~the~~and ~~Company~~does ~~had~~not ~~entered~~include ~~into~~$13.6 million ~~one~~expected ~~operating~~to ~~lease~~be ~~for~~paid ~~which~~in ~~the~~shares ~~commencement~~of ~~date~~Class ~~had~~A ~~not~~Common ~~yet~~Stock. ~~occurred~~In ~~because~~addition, certain of the ~~premises~~Company’s deferred acquisition consideration is ~~being~~tied ~~prepared~~to ~~for~~continued ~~occupancy~~employment byof certain personnel of the ~~landlord~~acquired subsidiaries. ~~Accordingly,~~These ~~this~~arrangements ~~one~~are ~~lease~~expensed ~~represents~~over anthe ~~obligation~~respective ofvesting period (employment) period and therefore the ~~Company~~expected, ~~that~~entire amount of payment is not reflected ~~within~~in the Consolidated Balance ~~Sheets~~Sheet as of December 31, ~~2024~~2025. The ~~aggregate~~Company ~~future~~estimates ~~liability~~that the total amount to be paid related to ~~this~~such ~~lease~~obligations was $030.19 million as of December 31, 2025, of which $16.4 million is expected to be paid in cash and the remaining in Company’s Class A Common Stock. The total amount of cash expected to be paid in the next twelve months related to these arrangements is $3.0 million. See Note 9 of the Notes included in Item 8 of this Form 10-K for additional information regarding contingent deferred acquisition consideration.

~~(3)~~When ~~Deferred~~acquiring ~~acquisition~~less ~~consideration~~than on100% ~~the~~ownership ~~Consolidated Balance Sheets consists~~ of ~~deferred~~an ~~obligations~~entity, ~~related~~the toCompany ~~contingent~~may ~~purchase~~enter ~~price~~into ~~payments.~~agreements ~~The~~that ~~63.7~~give ~~million reflected in~~ the ~~above~~Company ~~table~~an isoption ~~included~~to ~~in the Consolidated Balance Sheet as of December 31~~purchase, ~~2024,~~or ~~and~~require ~~does~~the ~~not~~Company ~~include $38.4 million expected~~ to ~~be paid in shares of Class A Common Stock. In addition~~purchase, ~~certain of~~ the ~~Company’s~~incremental ~~deferred~~ownership ~~acquisition~~interests ~~consideration~~under ~~is tied to continued employment of~~ certain ~~personnel of the acquired subsidiaries~~circumstances. ~~These~~Where ~~arrangements are expensed over~~ the ~~respective~~incremental ~~vesting~~purchase ~~period~~may ~~(employment)~~be ~~period~~required ~~and therefore the expected, entire amount~~ of ~~payment is not reflected in~~ the ~~Consolidated Balance Sheet as of December 31~~Company, ~~2024 The Company estimates that~~ the ~~total~~amounts ~~amount~~are torecorded ~~be paid related to such obligations was $52.1 million~~ as ofredeemable ~~December~~noncontrolling ~~31,~~interests ~~2024, of which $27.7 million is expected to be paid~~ in ~~cash~~mezzanine ~~and the remaining in Company’s Class A Common Stock~~equity. ~~The total amount of cash expected to be paid in the next twelve months related to these arrangements was $0.4 million.~~ See Note 912 of the Notes ~~to the Consolidated Financial Statements~~ included in Item 8 of this Form 10-K for additional information regarding ~~contingent~~noncontrolling ~~deferred~~interests ~~acquisition~~and ~~consideration~~redeemable noncontrolling interests.

~~When~~Certain ~~acquiring~~of ~~less~~the ~~than~~Company’s ~~100%~~subsidiaries ~~ownership~~grant ofawards to their employees providing them with an ~~entity,~~equity interest in the ~~Company~~respective ~~may~~subsidiary ~~enter~~(the ~~into~~“profits ~~agreements~~interests ~~that~~awards”). ~~give~~The ~~the~~awards ~~Company~~generally anprovide ~~option~~the toemployee ~~purchase~~with the right, orbut ~~require~~not the ~~Company~~obligation, to ~~purchase,~~sell their profits interest in the ~~incremental~~subsidiary ~~ownership~~to ~~interests~~the ~~under~~Company based on a performance-based formula and, in certain ~~circumstances~~cases, receive a profit share distribution. ~~Where~~The ~~the~~profits ~~incremental~~interests ~~purchase~~awards ~~may~~are beprimarily ~~required~~settled ofin cash, with certain awards having stock-settlement provisions at the Company,’s ~~the~~discretion. ~~amounts~~The ~~are~~corresponding ~~recorded~~liability asassociated ~~redeemable~~with ~~noncontrolling~~these profits interests inawards ~~mezzanine~~is ~~equity.~~included as a component of Accruals and other liabilities and Other liabilities on the Consolidated Balance Sheets. See Note 1314 of the Notes included in Item 8 of this Form 10-K for additional information regarding ~~noncontrolling~~these ~~interests~~material ~~and redeemable noncontrolling interests~~commitments.

~~Certain~~The ~~of the~~ Company’s ~~subsidiaries~~enters ~~grant~~into ~~awards~~certain tolong-term ~~their~~non-cancellable ~~employees~~contracts ~~providing~~for ~~them~~services ~~with~~such anas ~~equity~~revenue ~~interest~~or inprofit ~~the~~share ~~respective subsidiary (the “profits interests awards”). The awards generally provide the employee with the right~~arrangements, ~~but not the obligation, to sell their profits interest in the subsidiary to the Company based on a performance~~cloud-based ~~formula and~~services, inor ~~certain~~software ~~cases, receive a profit share distribution~~licensing. ~~The~~See ~~profits~~Note ~~interests~~13 ~~awards~~of ~~are~~the ~~primarily~~Notes ~~settled~~included in ~~cash,~~Item ~~with~~8 ~~certain~~of ~~awards~~this ~~having~~Form ~~stock~~10-~~settlement~~K ~~provisions~~for atadditional ~~the~~information ~~Company’s~~regarding ~~discretion. The corresponding liability associated with~~ these ~~profits~~material ~~interests awards is included as a component of Accruals and other liabilities and Other liabilities on the Consolidated Balance Sheets~~commitments.

The Company enters into certain long-term non-cancellable contracts for services such as revenue or profit share arrangements, cloud-based services, or software licensing. See Note 14 of the Notes included in Item 8 of this Form 10-K for additional information regarding these material commitments.

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Critical Accounting Estimates

Stagwell has prepared the Audited Consolidated Financial Statements in accordance with GAAP and pursuant to the rules and regulations of the SEC for reporting financial information on Form 10-K. Preparation of the Audited Consolidated Financial Statements and related disclosures requires us to make judgments, assumptions and estimates that affect the amounts reported and disclosed in the accompanying financial statements and footnotes. Our significant accounting policies are discussed in Note 2 of the Notes included herein. Our critical accounting estimates are those that are considered by management to require significant judgment, use of estimates and that could have a significant impact on our financial statements. An understanding of our critical accounting estimates is necessary to analyze our financial results.

Our critical accounting estimates include our accounting for revenue recognition, business combinations, deferred acquisition consideration, goodwill and intangible assets, and income taxes. The financial statements are evaluated on an ongoing basis and estimates are based on historical experience, current conditions and various other assumptions believed to be reasonable under the circumstances. Actual results can differ from those estimates, and it is possible that the differences could be material.

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ongoing basis and estimates are based on historical experience, current conditions and various other assumptions believed to be reasonable under the circumstances. Actual results can differ from those estimates, and it is possible that the differences could be material.

Revenue Recognition. The Company’s revenue is recognized when control of the promised goods or services is transferred to our clients, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. See Note 5 of the Notes included herein for further information.

Business Combinations. Business combinations are accounted for using the acquisition method and accordingly, the assets acquired (including identified intangible assets), the liabilities assumed and any noncontrolling interest in the acquired business are recorded at their acquisition date fair values.

For each acquisition, the Company undertakes a detailed review to identify other intangible assets, and a valuation is performed for all such identified assets. The Company uses several market participant measurements to determine the estimated value. This approach includes consideration of similar and recent transactions, as well as utilizing discounted expected cash flow methodologies. A substantial portion of the intangible asset value that the Company acquires is the specialized know-how of the workforce, which is treated as part of goodwill and is not required to be valued separately. The majority of the value of the identifiable intangible assets acquired is derived from customer relationships, including the related customer contracts, trademarks, developed technology and other intangible assets.

Deferred Acquisition Consideration. Certain acquisitions include an initial payment at the time of closing and provide for future additional contingent purchase price payments. Contingent purchase price obligations for these transactions are recorded as deferred acquisition consideration liabilities on the balance sheet. Arrangements that are not contingent upon future employment are initially measured at the acquisition date fair value and are remeasured at each reporting period. Arrangements that are contingent upon future employment are expensed as earned over the respective vesting (employment) period. These liabilities are derived from the projected performance of the acquired entity. These arrangements may be dependent on future events, such as the growth rate of the earnings of the relevant subsidiary during the contractual period. At each reporting date, the Company models each business’ future performance, including revenue, EBITDA growth, to estimate the value of each deferred acquisition consideration liability. The liability is adjusted quarterly based on changes in current information affecting each subsidiary’s current operating results and the impact this information will have on future results included in the calculation of the estimated liability. These adjustments are recorded in the Consolidated Statements of Operations.

Goodwill. Goodwill (the excess of the acquisition cost over the fair value of the net assets acquired) acquired as a result of a business combination which is not subject to amortization is tested for impairment, at the reporting unit level, annually as of October 1st of each year, or more frequently if indicators of potential impairment exist.

For the annual impairment test, the Company has the option of assessing qualitative factors to determine whether it is more likely than not that the carrying amount of a reporting unit exceeds its fair value or performing a quantitative goodwill impairment test. Qualitative factors considered in the assessment include industry and market considerations, the competitive environment, overall financial performance, changing cost factors such as labor costs, and other factors specific to each reporting unit such as change in management or key personnel.

If the Company elects to perform the qualitative assessment and concludes that it is more likely than not that the fair value of the reporting unit is more than its carrying amount, then goodwill is not considered impaired, and the quantitative impairment test is not necessary. For reporting units for which the qualitative assessment concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, or if the Company elects not to perform the qualitative assessment, the Company will perform the quantitative impairment test, which compares the fair value of the reporting unit to its carrying amount. If the fair value of the reporting unit exceeds the carrying amount of the net assets assigned to that reporting unit, goodwill is not considered impaired. However, if the fair value of the reporting unit is lower than the carrying amount of the net assets assigned to the reporting unit, an impairment charge is recognized equal to the excess of the carrying amount over the fair value.

50Determining the fair value of a reporting unit involves the use of significant estimates and assumptions. The Company generally uses a combination of the income approach, which incorporates the use of the discounted cash flow (“DCF”) method, and the market approach, which incorporates the exercise of significant judgment about the use of earnings multiples based on market data and comparable companies. The Company applies an equal weighting to the income and market approaches for the impairment test. The income approach and the market approach both require the exercise of significant judgment, including judgment about the amount and timing of expected future cash flows, assumed terminal value and appropriate discount rates.

The DCF estimates incorporate expected cash flows that represent a spectrum of the amount and timing of possible cash flows of each reporting unit from a market participant perspective. The expected cash flows are developed from the Company’s long-range planning process using projections of operating results and related cash flows based on assumed revenue growth rates, EBITDA margins, long-term growth rates, and appropriate discount rates based on a reporting unit’s weighted average

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~~Determining~~cost ~~the fair value~~ of acapital ~~reporting unit involves the use of significant estimates and assumptions. The Company generally uses a combination of the income approach, which incorporates the use of the discounted cash flow~~ (“~~DCF~~WACC”) ~~method,~~as ~~and~~determined ~~the~~by ~~market~~considering ~~approach, which incorporates~~ the ~~exercise~~observable ofWACC ~~significant judgement about the use~~ of ~~earnings multiples based on market data and~~ comparable companies. ~~The~~and ~~Company~~factors ~~applies~~specific ~~an equal weighting~~ to the ~~income~~reporting ~~and~~unit. ~~market~~The ~~approaches~~terminal ~~for~~value ~~the~~is ~~impairment~~estimated ~~test.~~using ~~The~~a ~~income~~constant ~~approach~~growth ~~and~~method ~~the~~which ~~market~~requires ~~approach~~an ~~both~~assumption ~~require~~about the ~~exercise~~expected oflong-term ~~significant~~growth ~~judgment,~~rate. ~~including~~The ~~judgment~~estimates ~~about~~are ~~the~~based ~~amount~~on ~~and~~historical ~~timing~~data ofand ~~expected~~experience, ~~future~~industry ~~cash flows~~projections, ~~assumed~~economic ~~terminal~~conditions, ~~value~~ and ~~appropriate~~the ~~discount~~Company’s ~~rates~~expectations.

~~The~~At ~~DCF~~each ~~estimates~~reporting ~~incorporate~~period, ~~expected~~the ~~cash~~Company ~~flows~~assesses ~~that~~whether ~~represent~~it ais ~~spectrum~~more oflikely ~~the~~than ~~amount~~not ~~and~~that ~~timing~~the ofcarrying ~~possible~~amount ~~cash flows~~ of ~~each~~its reporting ~~unit~~units ~~from~~exceed atheir ~~market~~fair ~~participant perspective~~value. ~~The~~As ~~expected~~of ~~cash~~October ~~flows~~1, ~~are~~2025 ~~developed from~~ (the ~~Company’s~~annual ~~long-range~~impairment ~~planning~~test ~~process using projections of operating results and related cash flows based on assumed revenue growth rates~~date), ~~EBITDA~~the ~~margin,~~Company ~~long-term~~performed ~~growth~~this ~~rates,~~assessment and ~~appropriate~~determined ~~discount~~that ~~rates~~all ~~based on a~~ reporting ~~unit’s~~units ~~weighted average cost of capital~~ (~~“WACC”~~10) asdid ~~determined~~not byhave ~~considering~~an ~~the observable WACC of comparable companies and factors specific to the reporting unit~~impairment. The ~~terminal~~Company ~~value~~utilized ~~is estimated using~~ a ~~constant growth method which requires an assumption about the expected~~ long-term average growth rate. ~~The~~ranging ~~estimates~~from ~~are~~1.5% ~~based~~to on3% ~~historical data~~ and ~~experience,~~a ~~industry~~WACC ~~projections,~~ranging ~~economic~~from ~~conditions,~~14% ~~and~~to ~~the Company’s expectations~~20.5%.

At each reporting period, the Company assesses whether it is more likely than not that the carrying amount of its reporting units exceed their fair value. As of October 1, 2024 (the annual impairment test date), the Company performed this assessment and determined that all reporting units (11) did not have an impairment. The Company utilized a long-term average growth rate ranging from 1.5% to 4% and a WACC ranging from 12% to 30%.

The Company believes the estimates and assumptions used in the calculations are reasonable. However, if there were an adverse change in the facts and circumstances, then an impairment charge may be necessary in the future. As a result, to the extent that, among other factors, (i) there is underperformance in one or more reporting units, or (ii) disruptions in the macroeconomic environment, the fair value of one or more of these reporting units could fall below their carrying value, resulting in a goodwill impairment charge. The Company monitors its reporting units to determine if there is an indicator of potential impairment.

Income Taxes. We account for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets and liabilities are recognized based on the differences between the financial statement carrying value of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates and laws expected to be in effect when the differences are expected to reverse. The Company records associated interest and penalties as a component of income tax expense. The Company records a valuation allowance against deferred income tax assets when management believes it is more likely than not that some portion or all of the deferred income tax assets will not be realized. Management evaluates on a quarterly basis all available positive and negative evidence considering factors such as the reversal of deferred income tax liabilities, taxable income in eligible carryback years, projected future taxable income, the character of the income tax asset, tax planning strategies, changes in tax laws and other factors. The periodic assessment of the net carrying value of the Company’s deferred tax assets under the applicable accounting rules requires significant management judgment. A change to any of these factors could impact the estimated valuation allowance and income tax expense.

New Accounting Pronouncements

See Note 3 of the Notes included in Item 8 of this Form 10-K.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business, the Company is exposed to market risk related to interest rates, foreign currencies and impairment risk.

Debt Instruments: As of December 31, ~~2024~~2025, the Company’s debt obligations consisted of amounts outstanding under its Credit Agreement and the 5.625% Notes. The Credit Agreement bears interest at variable rates based upon SOFR, EURIBOR, and SONIA depending on the duration of the borrowing product. The Company’s ability to obtain the required bank syndication commitments depends in part on conditions in the bank market at the time of syndication.

With regard to our variable rate debt, a 10% increase or decrease in interest rates would change our annual interest expense by $2.9 million.

Foreign Exchange: While the Company primarily conducts business in markets that use the U.S. dollar, the Canadian dollar, the Euro and the British Pound, its non-U.S. operations transact business in numerous different currencies. The Company’s results of operations are subject to risk from the translation to the U.S. dollar of the revenue and expenses of its non-U.S. operations. The effects of currency exchange rate fluctuations on the translation of the Company’s results of operations are discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”. ~~and~~See in Note 2 of the ~~Company’s~~Notes ~~Audited~~included ~~Consolidated~~in ~~Financial~~Item ~~Statements~~8 ~~included~~of in this Form 10-K. For the most part, revenues and expenses incurred related to the non-U.S. operations are denominated in their functional currency. This reduces the impact that fluctuations in exchange rates will have on profit margins. Translation of intercompany debt, which is not intended to be repaid, is included in cumulative translation adjustments. Translation of current intercompany balances are included in net income (loss). From time to time, the Company may enter into foreign currency forward exchange contracts or other derivative financial instruments to hedge the effects of adverse fluctuations in foreign currency exchange rates.

51See the Significant Accounting Policies section in the “Notes to Audited Consolidated Financial Statements” of this Form 10-K for information related to impairment testing for Goodwill and long-lived assets and the risk of potential impairment charges in future periods. See the Critical Accounting Estimates section in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K for information related to the risk of potential impairment charges in future periods.

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and expenses incurred related to the non-U.S. operations are denominated in their functional currency. This reduces the impact that fluctuations in exchange rates will have on profit margins. Translation of intercompany debt, which is not intended to be repaid, is included in cumulative translation adjustments. Translation of current intercompany balances are included in net income (loss). From time to time, the Company may enter into foreign currency forward exchange contracts or other derivative financial instruments to hedge the effects of adverse fluctuations in foreign currency exchange rates.

Impairment Risk: For the year ended December 31, 2024, the Company recorded an impairment charge of $1.7 million to reduce the carrying value of its right-of-use lease assets and related leasehold improvements. See Note 10 of the Notes included herein for additional information.

See the Significant Accounting Policies section in the “Notes to Audited Consolidated Financial Statements” of this Form 10-K for information related to impairment testing for Goodwill, Right-of-use lease assets and long-lived assets and the risk of potential impairment charges in future periods. See the Critical Accounting Estimates section in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Form 10-K for information related to the risk of potential impairment charges in future periods.

Item 8. Financial Statements and Supplementary Data

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STAGWELL INC.

INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

			Page
Financial Statements:
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 238)			5356
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)			55
Consolidated Statements of Operations for each of the Three Years in the Period Ended December 31, 2025			58
Consolidated Statements of Operations for each of the Three Years in the Period Ended December 31, 2024			56
Consolidated Statements of Comprehensive Income (Loss) for each of the Three Years in the Period Ended December 31, 2025			59
Consolidated Statements of Comprehensive Income (Loss) for each of the Three Years in the Period Ended December 31, 2024			57
Consolidated Balance Sheets as of December 31, 2025, and 2024			60
Consolidated Balance Sheets as of December 31, 2024, and 2023			58
Consolidated Statements of Cash Flows for each of the Three Years in the Period Ended December 31, 2025			61
Consolidated Statements of Cash Flows for each of the Three Years in the Period Ended December 31, 2024			59
Consolidated Statements of Shareholders’ Equity for each of the Three Years in the Period Ended December 31, 2025			63
Consolidated Statements of Shareholders’ Equity for each of the Three Years in the Period Ended December 31, 2024			61
Notes to Audited Consolidated Financial Statements			66
Notes to Audited Consolidated Financial Statements			64
Financial Statement Schedules:
Schedule II — Valuation and Qualifying Accounts for each of the Three Years in the Period Ended December 31, 2024			106

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Stagwell Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Stagwell Inc. and its subsidiaries (the “Company”) as of December 31, ~~2024~~2025 and ~~2023~~2024, and the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity and cash flows for each of the three years ~~then~~in the period ended December 31, 2025, including the related notes and schedule of valuation and qualifying accounts ~~for the years ended December 31, 2024 and 2023~~ appearing under Item 15(a) (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, ~~2024~~2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, ~~2024~~2025 and ~~2023~~2024, and the results of its operations and its cash flows for each of the three years ~~then~~in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2024~~2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company'’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded UNICEPTA Holding GmbH (“Unicepta”) and Consulum (Cayman) Limited (“Consulum”) from its assessment of internal control over financial reporting as of December 31, 2024 because they were acquired by the Company in purchase business combinations during 2024. We have also excluded Unicepta and Consulum from our audit of internal control over financial reporting. Unicepta and Consulum are wholly-owned subsidiaries whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting collectively represent less than 2% and 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2024.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

~~Goodwill Impairment Assessments –Certain Reporting Units in the Integrated Agencies Network and Communications Network Segments and the All Other Category~~56

AsTable ~~described in Notes 2 and 8 to the consolidated financial statements, the Company’s goodwill balance was $1,554 million as~~ of December 31, 2024, and the goodwill associated with the Integrated Agencies Network segment, the Communications Network segment, and the All Other category was $892 million, $159 million, and $69 million, respectively. Management tests goodwill for impairment, at the reporting unit level, annually as of October 1 of each year, or more frequently if indicators of potential impairment exist. For reporting units for which the qualitative assessment concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, management performs a quantitative impairment test, which compares the fair value of the reporting unit to its carrying amount. If the fair value of the reporting unit exceeds the carrying amount of the net assets assigned to that reporting unit, goodwill is not considered impaired. Determining the fair value of a reporting unit involves the use of significant estimates and assumptions. Management uses a combination of the income approach (a discounted cash flow method) and the market approach, and applies an equal weighting to the approaches for the impairment test. The income approach requires the exercise of significant judgment, including the amount and timing of expected future cash flows, terminal value and discount rates. The expected cash flows are developed from the Company’s long-range planning process using projections of operating results and related cash flows based on assumed revenue growth rates, EBITDA margin, long-term growth rates, and discount rates based on a reporting unit’s weighted average cost of capital. The market approach requires the exercise of significant judgment as it relates to the use of earnings multiples based on market data and comparable companies.Contents

~~The~~disclosures ~~principal considerations for our determination~~ that ~~performing~~are ~~procedures~~material ~~relating~~ to the ~~goodwill~~consolidated ~~impairment~~financial ~~assessments~~statements ~~for certain reporting units in the Integrated Agencies Network~~ and ~~Communications~~(ii) ~~Network~~involved ~~segments~~our ~~and~~especially ~~the~~challenging, ~~All~~subjective, ~~Other~~or ~~category~~complex ~~(collectively~~judgments. ~~the~~The ~~“aforementioned~~communication ~~reporting~~of ~~units”) is a~~ critical audit ~~matter~~matters ~~are~~does ~~(i)~~not ~~the~~alter ~~significant~~in ~~judgment~~any byway ~~management~~our ~~when~~opinion ~~developing~~on the ~~fair~~consolidated ~~value~~financial ~~estimate~~statements, oftaken ~~the~~as ~~aforementioned reporting units; (ii)~~ a ~~high degree of auditor judgment~~whole, ~~subjectivity,~~ and ~~effort~~we inare ~~performing procedures and evaluating management’s significant assumptions related to revenue growth rates~~not, ~~EBITDA~~by ~~margin,~~communicating ~~long-term~~the ~~growth~~critical ~~rates,~~audit ~~and~~matter ~~discount rates used in the income approach~~below, asproviding ~~well~~a asseparate ~~earnings~~opinion ~~multiples~~on ~~and comparable companies used in~~ the ~~market~~critical ~~approach; and (iii) the~~ audit ~~effort~~matter ~~involved~~or on the ~~use~~accounts ofor ~~professionals~~disclosures ~~with~~to ~~specialized~~which ~~skill~~it ~~and knowledge~~relates. ~~As previously disclosed by management, material weaknesses existed during the year that impacted this matter.~~

~~Addressing~~Goodwill ~~the~~Reallocation ~~matter involved performing procedures~~ and ~~evaluating~~Annual ~~audit~~Goodwill ~~evidence~~Impairment inAssessments connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessments, including controls over the valuation of the aforementioned reporting units. These procedures also included (i) testing management’s process for ~~developing~~Certain ~~the~~Reporting fair value estimate of the aforementioned reporting units; (ii) evaluating the appropriateness of the income and market approaches used by management; (iii) testing the completeness and accuracy of underlying data used in the income and market approaches; and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, EBITDA margin, long-term growth rates, and discount rates used in the income approach, as well as earnings multiples and comparable companies used in the market approach. Evaluating management’s assumptions related to revenue growth rates, EBITDA margin, and long-term growth rates involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the aforementioned reporting units; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the income and market approaches; (ii) the weighting of the approaches; and (iii) the reasonableness of the long-term growth rates, discount rates, comparable companies, and earnings multiples assumptions.Units

As described in Notes 2, 8, and 18 to the consolidated financial statements, the Company’s goodwill balance was $1,595 million as of December 31, 2025, a majority of which related to certain reporting units. As of September 30, 2025, the Company reorganized its organizational structure, resulting in five operating and reportable segments. As a result of the reorganization, certain reporting units have been redefined, and the composition of others has changed. As part of the reorganization, goodwill was reallocated to the affected reporting units using the income approach (a discounted cash flow method). Management performed the required goodwill impairment assessments as of the date of the reorganization. The assessment indicated that the estimated fair value of each impacted reporting unit exceeded its carrying amount both immediately prior to and immediately subsequent to the reallocation of goodwill. Accordingly, no goodwill impairment was recognized. Management tests goodwill for impairment, at the reporting unit level, annually as of October 1 of each year, or more frequently if indicators of potential impairment exist. For reporting units for which a qualitative assessment concludes that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, or if the Company elects not to perform the qualitative assessment, the Company will perform a quantitative impairment test, which compares the fair value of the reporting unit to its carrying amount. If the fair value of the reporting unit exceeds the carrying amount of the net assets assigned to that reporting unit, goodwill is not considered impaired. Determining the fair value of a reporting unit involves the use of significant estimates and assumptions. Management uses a combination of the income approach (a discounted cash flow method) and the market approach and applies an equal weighting to the approaches for the impairment test. The income approach requires the exercise of significant judgment, including the amount and timing of expected future cash flows, terminal value, and discount rates. The expected cash flows are developed from the Company’s long-range planning process using projections of operating results and related cash flows based on assumed revenue growth rates, EBITDA margins, long-term growth rates, and discount rates based on a reporting unit’s weighted average cost of capital. The market approach requires the exercise of significant judgment as it relates to the use of earnings multiples based on market data and comparable companies.

The principal considerations for our determination that performing procedures relating to the goodwill reallocation assessment (for certain reporting units within the Marketing Services and Communications reportable segments) and annual goodwill impairment assessment (for certain reporting units within the Marketing Services, Digital Transformation, Communications, and The Marketing Cloud reportable segments) is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the certain reporting units; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, EBITDA margins, long-term growth rates, and discount rates used in the income approach for the goodwill reallocation and annual goodwill impairment assessments, and earnings multiples and comparable companies used in the market approach for the annual goodwill impairment assessment; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill reallocation and annual goodwill impairment assessments, including controls over the valuation of the certain reporting units. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the reporting units; (ii) evaluating the appropriateness of the income and market approaches used by management; (iii) testing the completeness and accuracy of the underlying data used in the income and market approaches; and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, EBITDA margins, long-term growth rates, discount rates, earnings multiples, and comparable companies. Evaluating management’s assumptions related to revenue growth rates and EBITDA margins involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting units; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the income and market approaches; (ii) the weighting of the approaches; and (iii) the reasonableness of the long-term growth rates, discount rates, earnings multiples, and comparable companies assumptions.

/s/PricewaterhouseCoopers LLP

New York, NYNew York

March 11 13, ~~2025~~2026

We have served as the Company’s auditor since 2023.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of Stagwell Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for the period ended December 31, 2022, and the related notes and schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”) of Stagwell Inc. and subsidiaries (the “Company”). In our opinion, the financial statements present fairly, in all material respects, the results of the Company’s operations and its cash flows for the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

New York, NY

March 6, 2023 (March 11, 2024 as to the effects of the restatement of the 2022 financial statements to correct errors identified in 2023)

We began serving as the Company’s auditor in 2020. In 2023 we became the predecessor auditor.

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STAGWELL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands, except per share amounts)

	Year Ended December 31,
		2024		2023		2022
		2025		2024		2023
Revenue		$	2,~~841~~909,~~216~~000	$	2,~~527~~841,~~177~~216	$	2,~~687~~527,~~792~~177
Operating Expenses
Operating expenses
Cost of services		1,~~842~~845,~~978~~958		1,~~621~~842,~~174~~978		1,~~673~~621,~~576~~174
Office and general expenses		~~711~~732,~~803~~326		~~661~~711,~~250~~803		~~601~~661,~~536~~250
Depreciation and amortization		~~151~~171,~~652~~249		~~142~~151,~~831~~652		~~131~~142,~~273~~831
Impairment and other losses		~~1,715~~466		111,~~395~~715		~~122~~11,~~179~~395
		2,708,148		2,436,650		2,528,564
		2,749,999		2,708,148		2,436,650
Operating Income		133,068		90,527		159,228
Operating income		159,001		133,068		90,527
Other income (expenses):
Interest expense, net		(9296,~~317~~438)		(9092,~~644~~317)		(7690,~~062~~644)
Foreign exchange, net		(1,~~656~~640)		(21,~~960~~656)		(2,~~606~~960)
Gain on sale of business		—		94,505		—
Gain (loss) on sale of business		(2,245)		—		94,505
Other, net		(1,372)		(359)		(4,975)
Bargain purchase gain		9,937		—		—
		(95,345)		542		(83,643)
Other, net		171		(1,372)		(359)
Income before income taxes and equity in earnings of non-consolidated affiliates		37,723		91,069		75,585
		(90,215)		(95,345)		542
Income tax expense		13,182		40,557		25,462
Income before income taxes and equity in earnings of non-consolidated affiliates		68,786		37,723		91,069
Income before equity in earnings of non-consolidated affiliates		24,541		50,512		50,123
Income tax expense		38,271		13,182		40,557
Equity in income (loss) of non-consolidated affiliates		503		(8,870)		(79)
Income before equity in earnings of non-consolidated affiliates		30,515		24,541		50,512
Net income		25,044		41,642		50,044
Equity in income (loss) of non-consolidated affiliates		111		503		(8,870)
Net income attributable to noncontrolling and redeemable noncontrolling interests		(22,785)		(41,508)		(30,125)
Net income		30,626		25,044		41,642
Net income attributable to Stagwell Inc. common shareholders		$	2,259	$	134	$	19,919
Net income attributable to noncontrolling and redeemable noncontrolling interests		(1,525)		(22,785)		(41,508)
Earnings Per Common Share:
Net income attributable to Stagwell Inc. common shareholders		$	29,101	$	2,259	$	134
Basic		$	0.02	$	—	$	0.16
Earnings per common share:
Diluted		$	0.02	$	—	$	0.12
Basic		$	0.13	$	0.02	$	—
Weighted Average Number of Common Shares Outstanding:
Diluted		$	0.08	$	0.02	$	—
Basic		110,890		117,259		124,262
Weighted average number of common shares outstanding:
Diluted		115,752		122,170		296,596
Basic		220,608		110,890		117,259
Diluted		264,523		115,752		122,170

See Notes to the Audited Consolidated Financial Statements.

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STAGWELL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(amounts in thousands)

	Year Ended December 31,
		2024		2023		2022
		2025		2024		2023
COMPREHENSIVE INCOME (LOSS)
Net income		$	2530,~~044~~626	$	4125,~~642~~044	$	5041,~~044~~642
Other comprehensive income (loss) - Foreign currency translation adjustment		~~(27~~38,~~699)~~055		7(27,~~996~~699)		~~(37~~7,~~773)~~996
Other comprehensive income - Benefit plan adjustment, net of tax		1,424		338		4,088
Other comprehensive income (loss) - Benefit plan adjustment, net of tax		(1,806)		1,424		338
Comprehensive income (loss) for the period		(166,~~231)~~875		49(1,~~976~~231)		1649,~~359~~976
Comprehensive income attributable to the noncontrolling and redeemable noncontrolling interests		(7,~~216~~552)		(477,~~431~~216)		(647,~~640~~431)
Comprehensive income (loss) attributable to Stagwell Inc. common shareholders		$	(859,~~447)~~323	$	2(8,~~545~~447)	$	92,~~719~~545

See Notes to the Audited Consolidated Financial Statements.

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STAGWELL INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(amounts in thousands)


	December 31, 2025		December 31, 2024
ASSETS
Current assets
Cash and cash equivalents	$	104,537	$	131,339
Accounts receivable, net	735,752		716,415
Expenditures billable to clients	164,694		173,194
Other current assets	157,309		114,200
Total current assets	1,162,292		1,135,148
Fixed assets, net	73,081		72,706
Right-of-use lease assets - operating leases	213,576		219,400
Goodwill	1,595,238		1,554,146
Other intangible assets, net	834,248		836,783
Deferred tax assets	281,057		46,926
Other assets	55,055		43,112
Total assets	$	4,214,547	$	3,908,221
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS (“RNCI”), AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	548,320	$	449,347
Accrued media	239,490		245,883
Accruals and other liabilities	291,554		265,356
Advance billings	329,815		294,609
Current portion of lease liabilities - operating leases	55,386		60,195
Current portion of deferred acquisition consideration	15,446		51,906
Total current liabilities	1,480,011		1,367,296
Long-term debt	1,326,013		1,353,624

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