Q3 FY2026
Filed Oct 29, 2026Q3 YoY Revenue Growth of 10% to $816 million; Q3 YoY Net Revenue Growth of 8% to $664 million; Raise Full-Year Adjusted EBITDA Guidance to $490 million to $540 million; Raise Full-Year Adjusted EPS Guidance to $1.07 to $1.21
Third-quarter revenue, net revenue, adjusted EBITDA and adjusted EPS grew year over year, led by Digital Transformation, Communications and The Marketing Cloud. GAAP operating income, net income attributable to common shareholders and diluted EPS declined, while full-year adjusted EBITDA and adjusted EPS guidance was raised.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 revenueGAAP | $816M | – | 10% |
| Nine months 2026 revenueGAAP | $2.31B | – | 10% |
| Q3 2026 net revenueother | $664M | – | 8% |
| Q3 2026 organic net revenue growthnon-GAAP | 7.4% | – | 7.4% |
| Nine months 2026 net revenueother | $1.88B | – | 6% |
| Nine months 2026 organic net revenue growthnon-GAAP | 4.8% | – | 4.8% |
| Q3 2026 operating incomeGAAP | $48.06M | – | – |
| Nine months 2026 operating incomeGAAP | $69.25M | – | – |
| Q3 2026 net income attributable to Stagwell Inc. common shareholdersGAAP | $18M | – | – |
| Nine months 2026 net loss attributable to Stagwell Inc. common shareholdersGAAP | $3M | – | – |
| Q3 2026 diluted earnings per common shareGAAP | $0.07 | – | – |
| Nine months 2026 diluted loss per common shareGAAP | $(0.01) | – | – |
| Q3 2026 adjusted EBITDAnon-GAAP | $145M | – | 25% |
| Nine months 2026 adjusted EBITDAnon-GAAP | $343M | – | 17% |
| Q3 2026 adjusted EBITDA margin on net revenuenon-GAAP | 22% | – | – |
| Nine months 2026 adjusted EBITDA margin on net revenuenon-GAAP | 18% | – | – |
| Q3 2026 adjusted diluted EPSnon-GAAP | $0.34 | – | 42% |
| Nine months 2026 adjusted diluted EPSnon-GAAP | $0.77 | – | – |
| Nine months 2026 net cash provided by operating activitiesGAAP | $152M | – | 396% |
| Nine months 2026 free cash flownon-GAAP | $52M | – | 227% |
| Q3 2026 net new businessnon-GAAP | $168M | – | – |
| Last twelve-month net new businessnon-GAAP | $586M | – | – |
| Year-to-date enterprise technology products contracted to dateother | $59M | – | more than double initial FY26 target |
| Q3 2026 cost of servicesGAAP | $511.7M | – | – |
| Q3 2026 office and general expensesGAAP | $206.9M | – | – |
| Q3 2026 depreciation and amortizationGAAP | $48.3M | – | – |
| Q3 2026 interest expense, netGAAP | −$23.99M | – | – |
| Q3 2026 income tax expenseGAAP | $10.88M | – | – |
| Nine months 2026 income tax expenseGAAP | $7.65M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Marketing ServicesQ3 net revenue declined organically by $18,108. | $217.7M | – | (7.5) % organic |
| Digital TransformationQ3 net revenue increased organically by $22,182. | $118.7M | – | 23.1 % organic |
| Media & CommerceQ3 net revenue declined organically by $(3,366). | $158.7M | – | (2.1) % organic |
| CommunicationsQ3 net revenue increased organically by $19,324. | $123.7M | – | 20.0 % organic |
| The Marketing CloudQ3 net revenue increased organically by $28,808. | $55.68M | – | 108.4 % organic |
| Corporate, eliminations and otherQ3 net revenue change included an organic decline of $(3,152). | −$10.43M | – | 43.2 % organic |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
2026 outlook
- RevenueTotal Net Revenue growth of 8% to 12%
- NoteAdjusted EBITDA of $490 million to $540 million
- NoteAdjusted EPS of $1.07 - $1.21
- NoteFree Cash Flow Conversion of 50% to 60%
- NoteGuidance includes anticipated impact from acquisitions or dispositions.
Capital returns
- Shares repurchased and cancelled of $(90,716) for the nine months ended September 30, 2026.
What drove it
- Digital Transformation Q3 net revenue was $118,659 and organic net revenue growth was 23.1%.
- The Marketing Cloud Q3 net revenue was $55,683 and organic net revenue growth was 108.4%.
- Communications Q3 net revenue was $123,684 and organic net revenue growth was 20.0%.
- Net new business was $168 million in Q3 and $586 million over the last twelve months.
- The company cited its largest multi-agency deal in history with ServiceNow, its first major federal government win, and an expanded partnership with Palantir.
Concerns
- Marketing Services Q3 organic net revenue declined 7.5% to $217,681.
- Media & Commerce Q3 organic net revenue declined 2.1% to $158,744.
- Q3 operating income declined to $48,059 from $60,913.
- Q3 net income attributable to Stagwell Inc. common shareholders declined to $18 million from $25 million.
- Nine-month net loss attributable to Stagwell Inc. common shareholders was $3 million, versus income of $16 million.
- Long-term debt increased to $1,414,574 at September 30, 2026 from $1,326,013 at December 31, 2025.
What to watch
- Delivery against 2026 total net revenue growth guidance of 8% to 12%.
- Delivery against raised 2026 adjusted EBITDA guidance of $490 million to $540 million and adjusted EPS guidance of $1.07 - $1.21.
- Whether Digital Transformation and The Marketing Cloud sustain their reported organic net revenue growth rates of 23.1% and 108.4%, respectively.
- Whether Marketing Services and Media & Commerce return to organic growth.
- Progress in converting $59 million of year-to-date enterprise technology products contracted to date into reported revenue and cash flow.
Balance sheet and cash flow
- Cash and cash equivalents were $132,197 at September 30, 2026, versus $104,537 at December 31, 2025.
- Long-term debt was $1,414,574 at September 30, 2026, versus $1,326,013 at December 31, 2025.
- Net cash provided by operating activities was $152,279 for the nine months ended September 30, 2026, versus $30,713.
- Capitalized software was $(75,855) and capital expenditures were $(27,405) for the nine months ended September 30, 2026.
- Net cash used in investing activities was $(113,910) and net cash used in financing activities was $(11,606) for the nine months ended September 30, 2026.
- Net leverage now stands at 2.7x, a 0.7x improvement year-over-year.
Analysis
Stagwell reported Q3 revenue of $816 million, up 10%, and net revenue of $664 million, up 8%. Organic net revenue growth was 7.4%. The nine-month period produced revenue of $2,306 million, up 10%, net revenue of $1,880 million, up 6%, and organic net revenue growth of 4.8%. Net new business was $168 million in the quarter and $586 million over the last twelve months.
Growth was concentrated in technology-oriented and communications activities. Digital Transformation generated Q3 net revenue of $118,659, with 23.1% organic growth, while The Marketing Cloud generated $55,683, with 108.4% organic growth. Communications net revenue grew 20.0% organically to $123,684. These gains offset a 7.5% organic decline in Marketing Services and a 2.1% organic decline in Media & Commerce.
Adjusted EBITDA rose 25% to $145 million in Q3, and adjusted EBITDA margin was 22% on net revenue. Adjusted diluted EPS increased to $0.34 from $0.24. The GAAP earnings picture was weaker: operating income was $48,059 versus $60,913, net income attributable to common shareholders was $18 million versus $25 million, and diluted EPS was $0.07 versus $0.09. For the nine months, Stagwell reported a net loss attributable to common shareholders of $3 million, despite adjusted EBITDA increasing 17% to $343 million.
Cash conversion improved materially. Nine-month operating cash flow was $152 million versus $31 million, and the release reported free cash flow of $52 million, up 227%. Cash and cash equivalents were $132,197, while long-term debt was $1,414,574. The company repurchased and cancelled $(90,716) of shares during the nine months. Management raised 2026 adjusted EBITDA guidance to $490 million to $540 million and adjusted EPS guidance to $1.07 - $1.21, while reiterating total net revenue growth of 8% to 12% and free cash flow conversion of 50% to 60%.
Management, verbatim
This is the biggest quarter in Stagwell’s history. It shows we are on track to become number one in marketing transformation.
Mark Penn, Chairman and CEO of Stagwell
Software products, like our agentic Stagwell Machines, and the Digital Transformation segment are driving our business as we pivot from primarily marketing services to AI-powered marketing transformation. We have more than doubled our initial Enterprise Technology Bookings goal for the year, saw 23% organic net revenue growth in Digital Transformation, and 108% organic growth in The Marketing Cloud.
Mark Penn, Chairman and CEO of Stagwell
The third quarter was Stagwell’s largest ever on virtually every metric. Organic net revenue for the company grew more than 7% year-over-year to $664 million, while our adjusted EBITDA grew 25% to $145 million, and our adjusted EPS grew 42% to $0.34. These improved earnings also contributed to a more than 400% increase in operating cash flow year to date. Net leverage now stands at 2.7x, a 0.7x improvement year-over-year, and our lowest ever third quarter ratio. Results through the first three quarters give us the confidence to raise our adjusted EBITDA and adjusted EPS guidance today.
Ryan Greene, Chief Financial Officer
Not in the filing
stated, not guessed- Prior outlook was not provided, so no comparison of actual results with prior guidance is available.
- Gross margin was not reported.
- Quarterly operating cash flow was not reported.
- Quarterly free cash flow was not reported.
- Prior-year free cash flow was not reported.
- Dividend information was not reported.
- A quantitative reconciliation of 2026 non-GAAP guidance to the most directly comparable GAAP measures was not provided.
- Prior-quarter comparisons were not reported for the listed metrics.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.