Financial Analysis

Acquisition Acquisition of Wavelength On January 30, 2026, the Company acquired the net assets of Wavelength Strategy LLC (Wavelength), a digital advocacy and communications company, for $10.2 million, consisting of $4.6 million paid in cash, and $5.6 million paid in 863,624 shares of the Companys Class A Common Stock, subject to post-closing adjustments. In connection with the acquisition, the sellers are eligible to receive contingent consideration up to a maximum value of $24.8 million, subject to continued employment and meeting certain future earnings targets, of which a portion may be settled in shares of Class A Common Stock, at the Companys discretion. The excess of purchase consideration over the fair value of the net assets acquired was recorded as goodwill, which is primarily attributable to the assembled workforce of Wavelength and expected growth related to new customer relationships. Trade names of less than $1.0 million, Customer relationships of $3.4 million, and Goodwill of $6.3 million were assigned to the Communications reportable segment. The goodwill is fully deductible for income tax purposes. The purchase price accounting is not yet final as the Company may still make adjustments due to changes in post-closing adjustments. The unaudited pro forma revenue and net income in 2026 was not materially different from the actual amounts of revenue and net income reported for the three and six months ended June 30, 2026. Further, there were no material post-clos …

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7. Debt The following tables present the Companys indebtedness as reported on the Unaudited Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 (dollars in thousands) Credit Agreement $ 359,979 $ 237,326 5.625% Notes 1,100,000 1,100,000 Debt issuance costs (9,867) (11,313) Total long-term debt $ 1,450,112 $ 1,326,013 Interest expense related to long-term debt included in Interest expense, net on the Unaudited Consolidated Statements of Operations for the three and six months ended June 30, 2026 was $22.6 million , and $45.0 million , respectively, and for the three and six months ended June 30, 2025 was $23.7 million, and $46.4 million, respectively. The amortization of debt issuance costs included in Interest expense, net on the Unaudited Consolidated Statements of Operations for the three and six months ended June 30, 2026 was $0.7 million , and $1.4 million , respectively, and for the three and six months ended June 30, 2025 was $0.7 million, and $1.4 million, respectively. Revolving Credit Agreement The Company is party to a senior secured revolving credit facility with a five-year maturity with a syndicate of banks (as amended the Credit Agreement). On March 27, 2026, the Company entered into Amendment No. 2 to the Second Amended and Restated Credit Agreement that modified certain provisions of the Credit Agreement to expand the Companys ability to borrow under its revolving credit facility in non-U.S. dollar currencies. …

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10. Share Capital Class A Common Stock There are 1.0 billion shares of Class A Common Stock authorized, of which 244.4 million shares were issued and outstanding as of June 30, 2026. Each share of Class A Common Stock carries one vote and represents an economic interest in the Company. Class C Common Stock There are 250.0 million shares of Class C Common Stock authorized as of June 30, 2026. There were no shares of Class C Common Stock outstanding as of June 30, 2026 . Class A Common Stock Repurchases 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, provided they are determined to be in the best interests of our Company and our stockholders and subject to compliance with the provisions of applicable law, including the Delaware General Corporate Law and securities laws. 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, dilution, including from our equity incentive plans and employee stock purchase plan, and ot …

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11. Fair Value Measurements A fair value measurement assumes a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value. The hierarchy for observable and unobservable inputs used to measure fair value into three broad levels are described below: Level 1 - Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2 - Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3 - Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. Financial Instruments that are not Measured at Fair Value on a Recurring Basis The following table presents certain information for our financial liability that is not measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 Carrying Amount Fair Value Carrying Amount Fair Value (dollars in thousands) 5.625% Notes $ …

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13. Income Taxes Our tax provision for interim periods is determined using an estimated annual effective tax rate, adjusted for discrete items arising in interim periods. For the three months ended June 30, 2026, the Company had an income tax benefit of $0.3 million (on a pre-tax loss of $9.2 million resulting in an effective tax rate of 3.8%) compared to income tax expense for the three months ended June 30, 2025 of $2.7 million (on a pre-tax loss of $2.0 million resulting in an effective tax rate of (134.9)%). The effective tax rate increased by 138.7 percentage points compared to the prior year period, primarily due to (i) a 73.3 percentage point increase from additional pre-tax losses, which were not subject to valuation allowances, for which we recorded an additional $1.4 million tax benefit; (ii) a 31.9 percentage point increase related to a reduction in shortfall of deductions for stock-based compensation expense vested during the year for which we recorded $0.9 million less tax expense and (iii) a 33.5 percentage point increase related to a decrease in interest and penalties for which we recorded $0.7 million less tax expense. For the six months ended June 30, 2026, the Company had an income tax benefit of $3.2 million (on a pre-tax loss of $26.0 million resulting in an effective tax rate of 12.5%) compared to income tax expense for the six months ended June 30, 2025 of $4.4 million (on a pre-tax loss of $5.6 million resulting in an effective tax rate of (78.7)%). The …

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2. New Accounting Pronouncements In December 2025, the Financial Accounting Standards Board (FASB) issued ASU 2025-11, Interim Reporting (Topic 270): Improvements to Interim Disclosure Requirements (ASU 2025-11), to enhance the transparency and consistency of interim financial reporting by clarifying and expanding certain disclosure requirements in interim periods. ASU 2025-11 is effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. The Company does not expect the adoption of ASU 2025-11 to have a material impact on its consolidated financial statements or related disclosures, as the Company already complies with the applicable interim disclosure requirements of Regulation S-X. In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06), to clarify the scope, capitalization criteria, and disclosure requirements for software costs that are accounted for under Subtopic 350-40 (referred to as internal-use software). ASU 2025-06 is effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. The Company is evaluating the impact of these new requirements on the accounting for its internal-use software. In November 2024, the FASB issued ASU 2024-03, Income StatementReporting Comprehensive Income - …

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4. Revenue Disaggregated Revenue Data The Company provides a broad range of services to a large base of clients across each of its segments globally. The primary source of revenue is from Brand arrangements in the form of fees for services performed, commissions, and performance incentives or bonuses. Certain clients may engage with the Company in various geographic locations, across multiple disciplines, and through multiple 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. The Companys Brands often cooperate with one another through referrals and the sharing of economics, services and expertise, which enables Stagwell to service clients varied marketing needs by crafting custom integrated solutions. As of June 30, 2026, Stagwells Brands were located in the United States, the United Kingdom, and at least 33 other countries around the world. The Company continues to expand its global footprint to support clients in international markets. The following table presents revenue disaggregated by geography based on where the services are performed for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, Geographical Location Reportable Segment 2026 2025 2026 2025 (dollars in thousands) United States All $ 623,876 $ 557,395 $ 1,168,423 $ 1,070,013 United Kingdom All (except Digital Transformation) 45,652 38 …

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14. Segment Information The Company 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 is Mark Penn, Chief Executive Officer and Chairman, to make decisions regarding resource allocation for the segment and assess 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 with a qualitative assessment to determine if operating segments have similar operating characteristics. All segments follow the same basis of presentation and accounting policies as those described throughout the Notes included herein. The CODM uses Adjusted EBITDA as a key metric to evaluate the operating and financial performance of a segment, identify trends affecting the segments, develop projections and make strategic business decisions. Adjusted EBITDA is defined as Net income (loss) attributable to Stagwell Inc. common shareholders excluding non-operating income or expense, income tax expense or benefit, equity in income or loss of non-consolidated entities and net income or loss attributable to noncontrolling and redeemable noncontrolling interest holde …

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