• by Larissa Faw , October 30, 2017

MDC Partners' third quarter revenue increased 7.6% to $375.8 million beating Wall Street estimates by nearly $4 million.

Organic revenue grew 7.8%. Adjusted EBITDA increased 16.4% to $53.8 million, with margins of 14.3%.

Net new business revenue for the quarter totaled $25.6 million as the network "capitalizes on the changing marketing and communications landscape," said company CEO Scott Kauffman during a call with investors.

Revenue for the first nine months of 2017 was $1.11 billion, up 11.6% year-over-year. Organic revenue growth for the same period was 8.4%, driven by 8.8% growth in the U.S. and 15.6% internationally.

"We are increasingly playing at the highest level of global markets," said Kauffman, citing IKEA as an example of a major global account win. Canada continues to lag, however, reporting a drop of 3.2% in organic revenue.

MDC saw double digital gains in the client categories of communications, financial, consumer products and  food and beverage.

Net new business wins through nine months otaled $77.2 million (revenue) aided by Carnival Cruise, McDonald's local co-op and an expansion of the Hershey's account.

"Clients aren't satisfied with the status quo," said Kauffman, adding that clients want agencies that "collaborate well with others." Hershey's, for instance, has now brought several of its brands under MDC's umbrella via new or expanded assignments with CP+B, Anomaly, and mono. Competitor struggles "represent opportunity for us" as brands look to consolidate for efficiency, says Kauffman. There are also the on-going issues with zero-based budgeting and transparency. "All of this disruption plays to our benefit," he says.

MDC's balance sheet is healthier than it has been in recent years. Net income attributable to common shareholders in Q3 increased to $14.8 million versus a loss of $54.9 million last year.

The network sold its digital platform LBN (LocalBizNow) at the end of August which will bolster its balance sheet by $25 million, though it will have a net impact of -1% on revenue. "It was nicely profitable, just not core to our strategy," said chief financial officer David Doft.

MDC remains on track with its full-year financial targets, including 7% organic growth and a profit margin improvement of 60 basis points.