Stagwell Inc. (NASDAQ:STGW) Q2 2023 Earnings Conference Call August 8, 2023 8:30 AM ET

Company Participants

Ben Allanson - Investor Relations

Mark Penn - Chairman and Chief Executive Officer

Frank Lanuto - Chief Financial Officer

Conference Call Participants

Ben Allanson

Good morning from Stagwell's global headquarters at One World Trade Center in New York City and welcome to Stagwell Inc's Earnings Webcast for Q2 2023. My name is Ben Allanson and I lead the Investor Relations function here at Stagwell.

With me today are Mark Penn, Stagwell's Chairman and Chief Executive Officer; and Frank Lanuto, the Chief Financial Officer. Mark will provide a business update and Frank will share a financial review. After the prepared remarks, we will open the floor for Q&A. You're welcome to submit questions through the chat function.

Before we begin, I'd like to remind you that the following remarks include forward-looking statements and non-GAAP financial data. Forward-looking statements about the company, including those related to earnings guidance are subject to uncertainties and risk factors addressed in our earnings release, slide presentation and the company's SEC filings.

Please refer to our website stagwellglobal.com/investors for an investor presentation and additional resources. This morning's press release and slide deck provide definitions, explanations and reconciliations of non-GAAP financial data.

And with that, I'd like to turn the call over to our Chairman and CEO, Mark Penn.

Mark Penn

Thank you, Ben, and thank you to everyone for joining us for our earnings call. In the face of significant industry and sector headwinds, Stagwell posted sequential quarter-over-quarter improvements in revenue, EBITDA and margin.

We expect to continue to improve on all metrics throughout the rest of the year as new business wins have continued to accelerate. As promised for the first time, we'll be breaking out the Stagwell Marketing Cloud Group results this quarter, which shows that our investments in that area are paying off and have great potential to enhance our value proposition as we strive for a leadership position in marketing AI. Our reputation within the industry continues to grow or being invited to record numbers of new business pitches.

We delivered second quarter net revenue of $535 million, down about 3% from the prior year which had increased by 16%. This means that we continue to maintain a strong two-year stack of growth against our long-term targets as we power through this challenging economic environment.

In this quarter, we continued to deliver sequentially improving net new business of $75 million, following $53 million in the first quarter and $42 million in the fourth quarter of 2022. This brings our last 12 months net new business to more than $0.25 billion, a record for Stagwell. This net new business win during these periods should stack up over the remainder of the year.