Stagwell announced today that it has set a goal of reaching $5 billion in annual revenue by the end of 2029, including $1 billion in pre-tax earnings and a plan to implement $80 to $100 million of cost savings by 2026. The announcement came at the company’s “Investor Day” presentation that was held virtually.  

If the $5 billion figure is reached that would be up from $2.8 billion at the end of 2024. M&A will be an important growth driver, combined with organic growth. While the industry tends to focus more on the latter as a key metric for assessing the health of overall business, Stagwell CEO Mark Penn revealed last month that the company will stop reporting organic growth for the company. 

On a call with analysts Penn explained the rationale. “It’s important to look not just at organic growth but at our total growth,” including M&A, he said, noting that the company is “aggressively adding new geographies and we are still a relative teenager on the way up the ladder of scale.”   

During the Investor Day conference, Penn also announced that the company was reorganizing into five divisions including Marketing Services, Media & Commerce, Advocacy, Digital Transformation and Stagwell Marketing Cloud.  

Penn said the reorganization is “aligned with how clients buy products.” 

The company is also working on a centralized production operation that will be completed soon.  

Penn founded Stagwell nine years ago with his former boss at Microsoft—Steve Ballmer. Ballmer made brief remarks at the conference indicating that he was hugely impressed with Stagwell’s performance during its first nine years. “I’m excited about Stagwell’s future and I hope you are too,” he said.  

"We are holding this Investor Day because I think Phase I of our growth is now complete,“ said Penn. “And we are entering Phase II that will take us to the next level. Three years ago, many doubted we would be at this nearly $3 billion level. We proved them wrong. We are today the world's fastest-growing major advertising holding company." 

The cost savings will be achieved with the implementation of AI-driven technologies that the company believes will allow employees to work more efficiently. These initiatives are expected to be fully implemented over the next 18 to 24 months. Separately today, the company announced the appointment of John Kahan as the network’s first chief AI officer. Kahan will spearhead the integration and development of artificial intelligence across Stagwell's global network.    

Penn also told the gathering that he and Balmer had converted their Class C shares in the company to Class A shares. The change to a single class structure, he said, would make the stock more attractive to additional indexes and funds. 

The firm also announced that it is partnering with data and analytics company Palantir to combine the capabilities of the Stagwell ID Graph with Palantir's tools to enhance performance media targeting.  This follows a partnership with Adobe to deploy advanced content management that together will be part of the suite of new data and content production services that will be offered to clients later this year. 

The company also reaffirmed guidance that total 2025 revenue growth will reach 8% with adjusted pre-tax earnings of between $410 million and $460 million.