Stagwell NASDAQ: STGW executives used the company’s fourth-quarter and full-year 2025 earnings call to highlight accelerating organic momentum exiting the year, expanding margins and sharply higher free cash flow, while outlining a 2026 outlook built around a political cycle tailwind, increased new business, and a growing suite of AI-enabled products.
2025 performance and momentum into 2026
Founder, Chairman and CEO Mark Penn said Stagwell delivered “accelerating ex-advocacy growth,” record net new business, expanding margins, firm cost controls, and “doubled free cash flow” in 2025. He said the company posted 6% growth for the year, driven by 13% growth in digital transformation and 6% growth in marketing services, with organic growth of 9% and 5%, respectively.
Penn noted the company’s two-year organic net revenue growth stack in the fourth quarter exceeded 10%, which he described as a sequential improvement that demonstrated momentum entering 2026. CFO Ryan Greene added that the fourth quarter set records for revenue and net revenue, with revenue up 2.4% year-over-year to $807 million and net revenue up 3.4% to $651 million.
Greene said that, excluding advocacy, fourth-quarter net revenue was $609 million, up 8.1% year-over-year (4% organically), and that all five segments delivered net revenue growth on both a total and organic basis. He also pointed to strength in integrated creative, performance media, and technology-enabled marketing.
Segment highlights: marketing cloud, digital transformation, media and creative
Management emphasized rapid growth in the marketing cloud and confidence in continued expansion. Penn said the Marketing Cloud segment exceeded $105 million of revenue in 2025 and grew 34% organically for the full year, including more than 41% organic growth in the fourth quarter. Greene reported that marketing cloud net revenue grew 111.2% in the fourth quarter (41.2% organically) and 230% for the full year (34.3% organically).
Penn highlighted product traction, citing Quest and BERA research tools (up 58% in 2025) and UNICEPTA, which he said grew 168% organically in the fourth quarter. Greene said the marketing cloud generated a positive margin for the first time in the fourth quarter, reaching an adjusted EBITDA margin of 10.8%.
On digital transformation, Penn told analysts the company expects “even stronger double-digit growth” in 2026. He attributed the outlook to rising AI-related enterprise investment and changes at Code and Theory, including a realigned business model focused more on large-scale systems integration and expanded sales capacity.
For media, Penn said the company expects the media segment to return to high single-digit organic growth, citing a surge at GALE and the rollout of new media technology products. Greene said media and commerce delivered 10.2% total net revenue growth in the fourth quarter.
On creative, Penn argued that demand for “premium creative” remains strong despite broader discussions about AI disruption. He said Anomaly and 72andSunny were expected to be at record revenues for their size and history in 2025, and he reiterated that premium content creation remains in demand.
AI product strategy and new partnerships
Penn said Stagwell slowed planned acquisitions in 2025 to pivot capital toward AI application development, calling the shift a key strategic move. He described a growing portfolio of AI-based offerings, including an “agentic targeting system” developed in partnership with Palantir, and said the company had signed two proofs of concept and one $5 million full deployment, with an SMB version under development.
He also discussed the company’s Marketing Operations Operating System (MOOS), introduced at CES, describing it as a way for clients to run their marketing technology stack independently. Penn said Stagwell had already signed two major customers and was building out sales capacity to commercialize the products.
In the Q&A, Penn said management believed it could reach at least $25 million in first-year revenue for the product set being commercialized, while adding that the company was “just getting off the ground” and hiring sales teams. He also said Stagwell would preview its agentic targeting system to Palantir’s top 200 clients in the coming days.
Penn highlighted two recent initiatives in media and advertising technology: Assembly’s launch of Stagwell Search+, which he described as an “agentic platform for AI search,” and a newly announced partnership with AppLovin to integrate AppLovin’s mobile advertising platform into Stagwell’s media offering, aimed at enhancing measurement and reporting for mobile campaigns.
Margins, cost actions, cash flow, and balance sheet
Stagwell reported adjusted EBITDA of $422 million for 2025. Penn said the result topped the prior year despite roughly $50 million of EBITDA “dropping off” related to the biannual rotation of campaign-related work. Excluding advocacy, he said adjusted EBITDA rose 16% to $377 million, a company record. Greene reported full-year adjusted EBITDA margin of 17.4%, and an ex-advocacy margin of 16.5%.
Greene said the company is executing a multi-year cost program announced previously, targeting $80 million to $100 million of cost actions by the end of 2026. He said $51 million had been actioned since May and the company remains on track to complete the remaining initiatives by the end of 2026. In Q&A, Penn added management believes there may be an additional ~$50 million of potential savings beyond the current program, which he characterized as potential upside not fully reflected in current budget guidance.
Free cash flow was a central focus of the call. Penn said Stagwell more than doubled free cash flow in 2025 to $187 million. Greene said this represented nearly 45% conversion of adjusted EBITDA and was driven by faster billing through centralized systems and shared services, improved collections discipline, and better commercial terms. Management guided to 50% to 60% free cash flow conversion in 2026, with Greene citing further automation on the billing side and anticipated margin expansion in an advocacy year.
Greene said the company ended 2025 with a net leverage ratio of 2.92x and expects it to decline to the mid-2s in 2026 even while remaining “aggressive in share repurchases.” He also said deferred acquisition consideration was reduced to about $40 million at year-end and is expected to be negligible by the end of 2026.
2026 outlook, advocacy rebound, and expanded buyback
Management guided to 2026 total net revenue growth of 8% to 12%, adjusted EBITDA of $475 million to $525 million, adjusted EPS of $0.98 to $1.12 per share, and free cash flow conversion of 50% to 60%. Penn said the year is expected to start slower and build into the third and fourth quarters as marketing and political seasons accelerate.
On advocacy, Penn said early trends for 2026 are “good” and described the next three years as a political “super cycle,” citing heightened competitiveness and spending dynamics. He also noted that Stagwell recently took an “almost 40% stake” in RealClearPolitics and that Zac Moffatt is the new head of the Advocacy and Communications division.
Penn said the communications segment was a “sore spot” in 2025, describing weakness as industry-wide and noting the segment’s exposure to advocacy. He said the company appointed Wendy Lund as CEO of Allison and expects improvement, including strength tied to healthcare expertise.
Stagwell’s board approved a $350 million expansion of its buyback authorization. Penn said the company now has $400 million of repurchase capacity and intends to use it “aggressively” while management believes the stock is undervalued. Greene said Stagwell repurchased about 23 million shares during 2025, and that the company ended the year with roughly 252 million Class A shares outstanding following the exchange of approximately 152 million Class C shares into Class A shares in April 2025.
Looking at demand, Penn said the company’s top client relationships are expanding, with the top 25 customers up 20% year-over-year and the top 100 up 16%. He also reported that trailing twelve-month net new business grew 25% to $476 million, a record, and said first-quarter 2026 net new business is shaping up to be the strongest in company history, including a recent $40 million win with an existing client.
About Stagwell NASDAQ: STGW
Stagwell Inc is a modern marketing and communications network that partners with global organizations to drive brand growth through data-driven insights and creative solutions. The company operates a diversified portfolio of specialized agencies and technology platforms, offering services that span digital marketing, advertising, public relations, consumer and market research, social media strategy, and commerce consulting. By integrating research, creative, media, and technology under a unified network, Stagwell aims to deliver end-to-end marketing solutions tailored to the evolving needs of clients in sectors such as technology, healthcare, consumer goods, and financial services.
Founded in 2015 by long-time political strategist and pollster Mark Penn, Stagwell has expanded organically and through strategic acquisitions to build capabilities across the marketing value chain.
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