S4 Capital reported third quarter net revenue of 249.9 million GBP (approximately $294 million), an increase of 73% compared to Q3 2021.
Organic net revenue growth, which excludes the impact of M&A activity and currency fluctuations, was about 29%.
Net revenue for the first nine months totaled 625 GBP ($732 million) with organic growth of 28%.
In the Americas, Q3 net revenue was 193.5 GBP ($227 million) with organic growth of 30.5%.
In July the company lowered its profit expectations and said it was taking steps to lower costs including a hiring slow down. Today the firm said total staff had “stabilized” in Q3 to 8,956, down about 1% from the previous quarter.
CFO Mary Basterfield told analysts Monday that the company was not imposing a hiring freeze but that it was redoubling its efforts to optimize hiring to insure it is properly aligned with company growth opportunities.
The firm also said it remained on target to deliver full-year organic net revenue growth of 25% and full-year pre-tax earnings of 120 million GBP ($140 million).
Investors applauded, sending S4’s shares on the London Exchange up as much as 9% Monday.
S4 chief Martin Sorrell said that "despite the current macro political and economic gloom and slowing tech growth, our top-line momentum has been more than maintained in the third quarter and remains relatively strong into the fourth quarter.”
He noted that the company is halfway toward its goal of obtaining 20 so-called “whopper” clients, or clients that pay at least $20 million annually in fees for the company’s services.
The firm did not provide financial guidance for 2023, although S4 executives acknowledged on today’s investor call that growth is likely to be slower next year. The firm is currently developing its three-year plan for 2023 through 2025.
“Despite the current economic uncertainties, the leading technology platforms are still forecast by [sell side financial analysts] to grow by up to 10% next year and digital transformation spending is forecast to continue to grow in the range of 20%,” said Sorrell.
He said that given the predicted slowdown in GDP growth over the next year, clients would be focused on performance and ROI “which plays to our strengths. We believe this changing market environment will continue to offer significant growth opportunities given our client profile, relative size and disruptive model."