MDC Partners reported a 17.3% decline in revenue in the 3Q to $283.4 million. For the first nine months of the year, revenues fell 15.8% to $870.80 million. Like other holding companies, MDC’s numbers reflect ongoing negative impact from the pandemic.
Organic revenue decreased 16.4% in the quarter and 14.1% for the first nine months.
Net New Business wins totaled $31.9 million in Q3, and $60.8 million in the nine months ended September 30.
Despite these financial results, MDC CEO Mark Penn put a positive spin on MDC’s performance during a Thursday morning earnings call, pointing out that the company delivered 9% sequential revenue growth from the second quarter of 2020. Other ad groups have also reported some narrowing of declines in the third quarter compared to the second.
Penn mentioned the negative financial performance was due to paused or delayed revenue from sectors hit particularly hard from COVID-19, specifically experiential, transportation, and travel. He added there was reduced spend in the tech sector due to delays with new product launches.
“Our results are not because of normal client churn,” he states. “We know they will be back.”
“We continue to implement and make progress on our strategic plan that has brought our partners together into newly formed networks and collaborative holding company pitches,” he says. “We launched our first major digital marketing product, and expanded profitability and margins as we continued to centralize back-office operations and consolidate real estate.” By the end of the year, 13 agencies will be relocated to one campus located in downtown New York.
Two weeks ago MDC Partners announced an agreement “in principle” on certain key aspects of the proposed merger with The Stagwell Group. “The special committee, working closely with its independent advisors, continues to proceed diligently towards an outcome that will maximize value to our shareholders,” stated Lead Independent Director and Special Committee Chairman Irwin Simon.