Stagwell reports 24% organic growth in Q1

The company now gets more than half of its revenue from digital services.
markpenn

Ongoing expansion of its digital operations have helped Stagwell bring in another quarter of hefty revenue growth.

The holding company reported 24% organic net revenue growth for the three months ended March 31.

CEO Mark Penn attributed some of the strength to the MDC-Stagwell merger, which he says is providing revenue synergies, new client wins and integration of talent. The company said it had $54 million USD in net new business last quarter, including Taco Bell, Lenovo, TikTok, Hulu and Equifax. In Canada, new wins included DonerNorth’s AOR duties for Edo Japan.

Like other holding companies, however, much of Stagwell’s growth came from the emphasis it is putting on its digital operations. Digital transformation services grew their organic revenue by 49%, and now makes up 29% of the company’s total net revenue. Consumer insights services grew by 56%, while performance media and data grew by 18%. In total, digital services now account for 56% of the company’s revenue.

Revenue in the company’s creative and communications services grew by 9% on an organic basis, and still represents 44% of its net revenue.

Other big important moves Stagwell made in Q1 include the acquisition of Dyversity Communications, which the company says will help its multicultural marketing capabilities in Canada in the short term before being scaled across the network.

The company reiterated its full-year performance outlook, expecting between 18% and 22% organic net revenue growth by year’s end.