Stagwell Inc. shares surged nearly 10% in morning trading Friday after the company reported Q1 results which included organic revenue growth of 23.6%.
Reported revenue for the period was $642.9 million, up 31.5% on a pro forma basis, which assumes that the merger with MDC Partners had occurred at the beginning of last year (it was actually completed in August).
The company reaffirmed its previous full-year outlook of achieving organic revenue growth of between 18% and 22% with adjusted pre-tax earnings of between $450 and $480 million.
Net income totaled $33 million, versus $4.6 million for the year ago period.
Stagwell Chairman and CEO Mark Penn stated that while there are growing concerns about the economic outlook, including predictions of contracting GDP, “Stagwell is growing strongly.” The merger with MDC Partners last year, he added “has spurred revenue synergies immediately apparent in the big wins, significant industry awards, and integration of talent and technology across our network.”
“Our record quarter continues to build on our post-combination track record of delivering growth, free-cash-flow, and growing profitability,” Penn asserted.
The firm’s digital transformation services accounted for 29% of revenue, performance media and data, 18%, consumer insights and strategy, 10% and creative and communications 44%.
The company said it generated net new business of $54 million (annualized revenue) in Q1.