Stagwell Inc. (STGW) Earnings Call Transcript & Summary

Hello, everyone, and welcome to Stagwell's 2025 Investor Day. My name is Beth Sidhu, and I'm the Chief Brand and Communications Officer at Stagwell. We're so glad you've joined us today. We're excited to share our progress to date and news about what to come. Today, you'll hear first from our Chairman and CEO, Mark Penn, followed by leaders from across our C-suite and our agencies. You'll learn about our plans for what Mark calls our Phase II growth various innovations and how we're set up for success in the next 5 years. You can see the agenda from our call here, and we'll be taking live questions after the presentations. If you have a question, please put it in the chart at the top of the screen or e-mail it to [email protected]. Before turning the call over to our CEO and Chairman, I'd like to remind you that today's remarks include forward-looking statements and non-GAAP financial measures. Forward-looking statements about the company, including those related to earnings guidance are subject to uncertainties and risk factors addressed in the company's SEC filings, including Stagwell's Form 10-K filed on March 11, 2025. This morning's press release provides definitions and explanations of non-GAAP financial measures used by the company. Definitions, explanations and reconciliations of historical non-GAAP financial measures can be found in the company's most recent earnings release, dated February 27, 2025, and on our Form 10-K available on Stagwell's investor website, stagwell.global.com investors. A recording of today's virtual Investor Day will be available on the website after the conclusion of the webcast. With that, please welcome Stagwell's Chairman and CEO, Mark Penn.

Good morning, and welcome to Stagwell's 2025 Investor Day. Just over 9 years ago, I started this company with an assistant and an investment from Steve Ballmer and here we are today with over $2.8 billion in revenue and having built a Machine for the modern marketer spanning over 50 countries and over 12,000 employees. Today, I, and the incredible Stagwell team, will share with you our plans for the next phase of growth to hit $5 billion in revenue in the next 5 years or 5x5 campaigns, $5 billion in 5 years with no expansion of debt ratios and hitting a 20% margin or $1 billion in adjusted EBITDA. Three years ago, many doubted we would be here at this level. We proved them wrong. We are today the world's fastest-growing major advertising holding company. Investors should ask themselves three simple questions as they listen to the presentations today. One, can Stagwell continue to grow? Two, can Stagwell continue to achieve greater scale? And three, can Stagwell continue to innovate for the marketplace? If you believe as I do that we meet the test of having huge runways for growth, scale and innovation, then you should be as enthusiastic about joining our efforts as I am. Let me put our accomplishments and contacts. It took Meta 7 years to reach $ 3 billion in revenue. It took Microsoft 18, and it took IPG 36 years. We are nudging $3 billion in just 9 years. Let me start off by saying that today, Steve Ballmer and I have converted all of our C shares to A shares which means there is now one single class of common shares in a simplified structure, making us eligible for inclusion in more stock indexes and purchases by an expanded list of funds. We're holding this Investor Day today because I think Phase 1 of our growth is now complete, and we are beginning Phase 2 that will take us to the next level. In Phase I , we acquired and grew best-in-class companies like 72andSunny, the Harris Poll and Targeted Victory. In Phase II, we're becoming truly scaled marketing network capable of servicing the largest clients holistically with the best combination of creativity and technology in the market. Phase 2 is already underway. Our second half of 2024, total net revenue growth of 11% was more than 400 basis points stronger than our nearest competitor. In the last 9 months, we won significant accounts, including big brands like Chevy and Cadillac from General Motors and new assignments from Visa, Adobe, Starbucks and Target, many of these wins came from legacy players. We are taking share. And in just the last few weeks, 2 of our agencies 72 and Anomaly landed on the coveted A-List and 2 more Code and Theory and GALE were named top B2B agency and top of business transformation agency. Stagwell's momentum is building. At this Investor Day, you will learn about the key industry trends that Stagwell is positioned to benefit from as well as plans we're executing today for increased growth and profits tomorrow. So what further steps will Stagwell take in Phase 2? First, we're embracing AI smartly. In many ways, AI is a huge boost to Stagwell. Clients want a seamless combination of creativity and technology and AI lets us create a new approach, combining the best that people could create and the best that AI can do in targeting and distribution. Our digital information businesses now consolidated into the Code and Theory Network bring together a diverse set of design and engineering assets that specialize in the last mile. Technology touched by and used by consumers. We believe that every digital experience will need to be reimagined over the next few years to incorporate AI, Code and Theory is on the front lines of helping even tech companies utilize and deploy this AI technology. You'll see some of the latest applications of a Agentic AI, a powerful technology that will have to be customized and incorporated into virtually every consumer brand experience. And we are widening our by offering Adobe Marketing integration as a new service, which brings together companies internal marketing software into one coherent system. At an Adobe conference 2 weeks ago, we drew almost 700 demos and leads for this new line of business. I firmly believe that AI is set to change the world over the next decade, and we are set to take advantage of it. Today, we are appointing John Kahan as our Chief AI Officer. John headed Data and Analytics at Microsoft, where he worked with me and at IBM and has a deep background in the use and application of marketing data. He will spearhead many of our AI initiatives. Second, we are in the process of reorganizing our lines of business internally and externally into marketing services, media and commerce, advocacy digital transformation and finally, the Stagwell Marketing Cloud. These new ways of organizing the business are in line with how clients buy the services and products. Each is organized to present scaled global operations to the marketplace. This puts our organization in line with how clients want their services delivered. As we organize into these 5 divisions, we're going to DOME, call it Department of Marketing Efficiency, if you will. Many of you may remember my recent interview with Elon Musk at CES. He may be taking out $1 trillion worth of costs from federal government but we've identified approximately $80 million to $100 million of annual cost that we can take out of Stagwell as AI and other automation systems built increased efficiency, consistent with the delivery of A-class game-changing products like our flagship Super Bowl commercials. We expect that $60 million to $70 million of those costs will be taken out by the end of this year and help bring home a robust 2026 with expanded margins. Importantly, we are paid typically on the basis of delivering outputs. So increased efficiency results in lower costs and higher margins against fixed price deliverable contracts and retainers. The kind of work we do for top clients will continue to be of top value. Third, we are innovating internally, leveraging emerging technologies to develop solutions for improving the efficiency and output of our talent. Our media and commerce operations are undergoing major transformations this year. We recently rolled out version 1 of the Stagwell ID graph for with 130 million unique e-mails. We're working throughout this year to add another 10 new sources our proprietary data from our operations that will take this number to over 1 billion. These data sources include everything from the 50,000 survey interviews, our research business like BERA, Harris Poll and NRG to [indiscernible] each week to the location and shopping data we have from the people platform. Our ID Graph team is also starting to work with Palantir to pilot deploying advanced targeting using military-grade AI platforms that will, if successful, be incorporated into our client offerings. We're working hand in hand with Adobe to build a state-of-the-art content management machine that combines as many as 20 different agency operations to create, manage and deliver the right content to the right person. This together gives us a content flywheel competitive with anyone in the marketplace, including Publicis and Dentsu. When it comes to our marketing services, which are just under 40% of the company's overall work, we will soon unveil our new central production operation. We spend hundreds of millions of dollars on outside production and more of those costs will be captured internally by this new group. While others are treating creativity as disposable, we are making major inroads in the industry with top-level award-winning human creativity, the one service that can never be duplicated by computers. Together, when these tools are completed later this year, our marketing services and media and commerce divisions will be well positioned to gain share and up-level clients to win bigger contracts. Fourth, we've opened up major initiatives in Asia and the Middle East to enhance our global coverage in a smart way. Consulum and LEADERS, 2 of our newest Mid-east firms are enabling a steady stream of new opportunities in the region, while acquiring 10 offices in Asia from ADK will greatly expand our footprint on the other side of the world. Geographic expansion opens us up to bigger, more extensive global contracts for integrated, creative and media accounts. We'll continue to grow our international presence and we'll use our powerful M&A platform to do it. Effective M&A is a key part of our growth strategy. It's why you need to focus when you analyze us not just on organic growth, but also on total growth. We have the capability of reinvesting our free cash flow at low multiples and making strategic dispositions to accelerate our growth and climb the ladder of scale. Fifth, the advocacy group includes our communication, public affairs and campaign operations. In the last 2 years, we've built our own text messaging platform, Wonder Cave, and are now expanding into more digital services for campaigns in what continues to be a secular growth market. 2026 and 2028 are going to be big likely the biggest political years in U.S. history, with a 50-50 Congress and 2 presidential primaries. We're already well positioned with leading candidates in some of the biggest races while growing our online fundraising capability. Sixth, the Stagwell Marketing Cloud is coming together with great new products for research, communications and AI and augmented reality experiences. The Harris Quest, Brand Terminal has over 150 corporate clients. Now BERA which monitors brand value, recently won a multiyear multi-country assignment from Visa. We added global media intelligence with UNICEPTA, and will soon announce 2 major multiyear contracts including one with the European Commission's Director General for Communications. The cloud will demo some of their latest innovations today. We anticipate software sales being about 5% of the business this year, up from less than 2% in 2024. I expect revenue to more than double during Phase 2 and to show profitability by the 2026 when development costs will go down by about 50%. There are significant margin and investor value opportunities in the future of the Marketing Cloud business. So why should you believe we can achieve this kind of growth? We're already doing it. The overall Stagwell brand is growing in value. We regularly have 3 or 4x our market share and share of voice and have developed successful brand programs such as Sport Beach, bringing together name, athletes and brands and the future of news, which has brought together much of the news industry behind quality news advertising. As for marketing today, if they've heard of Stagwell and they'll generally talk enviously of the company that is the fast challenging but conventional way of doing things. They may be one of the behemoth that got too big and is shedding employee companies or at a company that's too small to keep clients of scale. We pride ourselves on being the goldilocks company. Combined this, we're expanding geographical presence, and you can see why we are being invited to and winning even larger, more global pitches. In 2022, our new business pipeline was about $1 billion. It was about $1.2 billion in 2023, and last year it grew to $1.4 billion. Our net new business wins have grown significantly in the last 4 quarters to $382 billion, $111 million larger than figure in 2023, $169 million larger than '22. Last year, we didn't just win multiple $10 million contract. We started to win $20 million and $30 million contract. Larger pitches growing net new business means that our customer relationships are growing too. Our top 10 clients generate more than $400 million in net revenue annually and our average top 25 relationship is now worth approximately $25 million, an 18% increase from 2021. You don't achieve this growth and this kind of momentum by accident. I know I've shared a lot today. But I want to reinforce our key message. Stagwell is on an unstoppable path to being a $5 billion company by the end of 2029. You can be the judge of what a company with $1 billion in adjusted EBITDA would be worth compared to its present value. We're confident of our ability to achieve this goal. It's based on solid growth projections of about 5% a year for marketing services, 10% for media and commerce, 15% for digital transformation and 20% for the Stagwell marketing. This, combined with our platform for strategic acquisitions and needed geographies and key growth markets gets us there. This path to $5 billion has started off well. And with 2 months of the data behind us, we're confident to reiterate our full year 2025 guidance today. And you can see the ramp building into 2026 with the new technology, cost savings and political cycle. We're just a teenager as a company and are investing and growing up. There may be external events that sometimes slow us down or speed us up. But in a world of firecracker companies, we're the sure-footed grower on a clearly defined mission. In the end, all you have to believe is that we have successfully defined all the odds for almost 10 years now, and we'll keep right on doing that. I believe that we can continue to be a successful challenger building market share with A-List services, continue to implement and sell AI-based marketing and products. And our strategy affords us the ability to grow to scale and to keep on innovating. Thank you for listening and now take a moment also to listen to my core founding investor, Steve Ballmer.

Hi. I'm Steve Ballmer, and 9 years ago, I made a bet on Mark Penn to start the first digital-first marketing services agency, I couldn't be more pleased by what has become stag well and the great results, inspiring results that we've had with Stagwell. As we look to the future, I'm very convinced that Mark and his team have a great handle on what it's going to take to use AI other technologies to continue to transform the marketing services business. I'm excited for that future. I'm excited for Stagwell's future, and I hope you are too. Thanks.

Good morning. I'm Jason Reid, EVP and Chief Investment Officer at Stagwell Global. Thank you for joining us today. Over the past decade, Stagwell became a $2.8 billion company by leading the industry in agency and technology acquisitions. Today, Stagwell is the premier partner to innovative and challenger brands looking to compete on a global scale, disrupt the legacy holding companies and build a brighter future for our clients, employees and shareholders alike. The founding principles of our strategy are threefold. Acquire best-in-class teams with digital-first capabilities. Address the convergence of enterprise budgets between the CMO and the CTO as the connective tissue to the consumer becomes increasingly holistic and create internal alignment in our go-to-market. So we build a lasting and durable organization that is not internally competitive and best serves clients and talent. We combine our acquisitions with industry-leading strategists and creators throughout the network to deliver the best possible outcomes for enterprises. The result is a platform that accelerates the trajectory of new partners, expands the relationships with our biggest clients and delivers best-in-class organic growth. Stagwell started in 2015 and 2016 with acquisitions that are core to our capability set, SKDK, a leading democratic public affairs firm planted our flag in the swiftly growing political marketplace. NRG and the Harris Poll added best-in-class market research and strategies. PMX began the formation of our brand performance group and our global media buying operation. And Code and Theory are now digital transformation flagship added expertise in reaching the consumer through stunning UI and UX. Over the next 4 years, we added to these formative platform, we address new mediums and media through MMI, Forward 3D, the Search Agency, Multiview and Ink travel. We expanded our presence in political with Targeted Victory and Wonder Cave on the right and the addition of Sloan and C-word square to SKDK on the left. We delve deeper into research and strategy with Harris X and NRG United. And we continued our investment in digital transformation with the addition of Rhythm, Kettle and True Logic to the Code and Theory network. In 2021, we completed the acquisition of MDC Partners, a $1 billion-plus agency group, which thrust Stagwell into a different league, allowing the company to compete on a global scale with any legacy holding group. We added significant billings to our media operation through Assembly and GALE. We expanded in digital transformation through instrument on the West Coast and most importantly, we brought an award-winning creativity and communication with Anomaly, 72andSunny, Crispin, F&B Allison and Hunter. These remarkable strategic brands drive billions in RFPs through Stagwell with deep relationships at blue-chip clients like General Motors, Starbucks and Adobe. Our new scale and pipeline only added to our appeal as acquisition partners to emerging brands. We continue to invest in the following years. We added social, digital, experiential, multicultural and AI capabilities with the acquisitions of Movers and Shakers, Left Field Labs, Team Epiphany and BERA.AI, respectively. We charted the course for international expansion with brand-new Galaxy and Warsaw, Huskies in Dublin, WMP in Paris, Frozen in Sao Paulo, UNICEPTA in Cologne, LEADERS in Tel-Aviv, Create in Dubai, Consulum in Riyadh and the global assets of ADK, a transformative deal, which brings us 10 new offices in key Asian markets to punctuate our efforts just weeks ago, campaign highlighted that Stagwell completed the largest number of deals in 2024 compared to the other holding groups. We intend to keep leading the industry by scaling with new partners, both domestically and globally. Our strategy begins with a top-down view of the global economy. We believe that X technology coefficients and population changes that revenue growth is zero-sum game. We intend to grow the digital mix of our offerings to 65% by investing against these macro revenue growth trends. We are impressed by the growth in social and influencer communities and are playing close attention to fast-growing platforms like Reddit. Social and influencer makes creative and communications full funnel by producing rich audience data allowing for improved targeting and conversion through the buyer journey. We also find the growth of large retailers in the U.S. remarkable. We're developing end-to-end marketing ecosystems for retailers, closing the loop between in-store, online, loyalty and shopper to drive growth through data and AI-enabled customer optimization. Retail media and e-commerce will be a fundamental driver of our business in the future. We see strong growth across cloud platforms and AI implementation, the need to extract, analyze and implement customer data is of paramount importance. In Agentic AI will fundamentally change user interfaces for all websites and applications that touch the consumer where we have the deepest expertise. We believe these drivers will provide secular tailwinds to our digital transformation business over the next decade. While these areas of investment may seem disparate, we believe that each provided connection and understanding of the digitally connected consumer. We envision a future of highly personalized, efficiently targeted and beautifully crafted creative campaigns and user interfaces that best serve the interest of both the customer and the enterprise. Stagwell has the capabilities and integration across offerings to deliver upon this promise to the world. But the world is a big place. And to serve it, we need to continue to increase our geographic footprint. We are targeting approximately 40% of our revenue to be outside of North America, which is the right mix to win the largest global mandates. We will remain diligent about our selection of geographies. As sentiment towards national and grows in the world's largest economies, we expect to modestly tempered GDP growth, but we see incredible optimism in others. Our investments in the Middle East have grown organically over 50% as we see increased appetite from the [ Kingdom ] and others in the region to globalize and investing long-term visions for the future with the acquisitions of Consulum, Create, and LEADERS. We have now have more than 500 people in the region, providing a broad range of services. We have seen a revitalization in Southeast Asia, led by deregulation and stimulus in Japan and others following suit. We remain bullish on the area and now have over 2,000 people in the region following the acquisition of ADK Global. For those tempered markets, we'll be valuation sensitive while we seek to complete our footprint. And for those in acceleration, we'll increase the volume of opportunity that we consider. Stagwell's investment team looks at more than 400 opportunities a year to find the right companies that align with our strategic priorities and challenger culture. We believe the best companies have several attributes. Best-in-class leadership teams who have developed economic flywheels for growth and profitability and who have the right strategic vision for what those businesses can become on the Stagwell platform. Capabilities which have large addressable markets and strong secular tailwinds. And the staff and intellectual property to offer them. We seek to serve the best companies in the world and a demonstration of long-term engagements with blue chip clients are also marks of success. Once we bring a new partner into the network, we accelerate their business on the Stagwell platform. Each new investment brings on board a leadership team with a vision for the future. We harness that vision and empower operators with growth service, investment support and centralized back office functions. Most important and distinct from our competition is the work we do to ensure consistent, noncompetitive, go-to-market approach that puts the client and talent first, getting the right companies to service the right work from the top down. Stagwell is built to generate returns on investments for the long term, not the duration of an earn-out and our services platform ensures that success. Take our media buying business as an example. We first bought a series of high growth, digital stand-alone media capabilities. We then achieved vitally important scale through the merger with MDC. We unified our operations under the Assembly brand flagship to provide clear internal alignment and back the division with international acquisitions in U.K., Continental Europe and Asia. We were able to integrate and manage these disparate assets, creating a unified go-to-market proposition for our clients. The result is a global business of $5 billion in managed media with over 80% digital capabilities. Code and Theory is another prime example. Since 2015, we have tucked in a half dozen entities under this flagship to add significant client presence, digital capability and engineering with over 1,200 developers as part of the network. Two great examples of this are True Logic and Kettle. True Logic is a LatAm-based engineering and software development group that has grown at a 42% CAGR under the custodianship of the Code network. True Logic was able to significantly scale its engineering base to service Code's client pipeline efficiently and with great talent. Kettle is a digital design engineering business with a focus on servicing one of the biggest technology companies in the world. The Code network unlocked the value of that relationship and tripled revenues with that single client alone. While these efforts took many years as the platform grows so does its power and we are observing assets that see more immediate uplift after joining Stagwell. We acquired BERA.AI in the second half of last year, and within a few months, the company closed a multiyear, multimillion dollar deal with a large global payments company. The validation of joining Stagwell, coupled with new client introductions provided for this success story. When our partners succeed, we succeed. On average, delivering IRR in excess of 25% during an earn-out. To further cement this partnership, our deals are 50% paid in stock, creating mutual alignment and interest in the success of the overall platform. The net effect is that for every $100 million of revenue acquired we immediately recognized $0.30 of stock accretion and $0.75 of stock accretion over the course of these deals. For context, over the last decade, we have acquired over $2 billion in revenue, and we still have ample runway for growth. We do not believe that Wall Street has appropriately layered this value creation into its models, but we will continue to deliver upon this accretive flywheel. Occasionally, in our journey of growth, there are companies we deem noncore to our long-term success. The sales of ConcentricLife and Reputation Defender represent these instances and tell a story of underlying asset value. We acquired ConcentricLife as part of the MDC merger and combined it with Scout, a rare disease marketing specialist, creating a market-leading pharmaceutical business. The scale and scarcity of this asset created significant demand. We made a strategic decision to prioritize other verticals and sold these combined assets for a 4x MOIC after unlocking their combined potential. In the case of Reputation Defender, we identified a consumer technology product that had a suboptimal marketing mix across legacy channels. We identified better areas for media investment through our core digital marketing capabilities and sold the business for a 9x MOIC after improving targeting. Most importantly, we sold these assets for 18 to 30x EBITDA, respectively which speaks volumes to the stand-alone value of the underlying assets in Stagwell's portfolio and potential future monetization. Over the past decade, we have created a simple and scalable platform for investment under the Stagwell umbrella. This accretive economic flywheel has gotten us to almost $3 billion in revenue, and we expect it will get us to $5 billion. We are the premier partner to agencies of the future and believe that we'll continue to outpace our competitors in acquisitions for the next 5 years after delivering record results in 2024. We seek to bring in new partners who fit our strategic need and challenger culture, delivering the right mix of services to connect consumers and the enterprise in innovative ways that drive efficiencies and success over the long term. And we will do so with discipline, structuring strong deals and offering shared services that create economic value and alignment for all parties or select dispositions from time to time should remind investors of the value of our underlying assets at Stagwell. And while we achieve our strategic goals, we estimate we can also create immediate accretion of $1.50 in stock price on down payments and almost $4 in value over the duration of our deals or more than 50% upside to current prices through acquisition. Our earliest investors made a substantial bet on our ability to generate value through investment and have been rewarded for that belief. We hope that you join us for this next chapter in Stagwell's growth, and thank you for your trust in us for the future.

Thanks so much, Jason. The success of our M&A approach has been crucial to Stagwell's growth and change the tools we have to pitch, win and serve our growing client roster. Here to tell us more about how our portfolio comes to life for clients and share why Stagwell wins, Ryan Linder, Chief Growth Officer; and Julia Hammond, President of our Global Solutions Group.

Hello, everyone. My name is Ryan Linder, Executive Vice President, Global Chief Marketing Officer of Stagwell. There's one thing you should know about me and it's this. I spent about 340 days per year in the field, listening to clients, talking to prospects and winning business. For our friends in the investor community, I think it's important to establish the baseline. This is a story of David and Goliath of the underdog, those who win against all odds. Stagwell is the definition of a challenger. I've been marketing and marketing services for 2 decades. Over a decade of my career tenure has been spent right here. And I have never seen what I see happening here at Stagwell today. Let me pause for a minute and explain the most of the time, new relationships are created through the pitch process, albeit through opportunities that we create or when we receive RFPs. Once we win a significant assignment, it is an opportunity for us to nurture and grow that client relationship. 3 years ago, when we launched the Stagwell of today the annual net new business wins for marketing services was $213 million. Today, after closing the books on 2024 as we reported a few weeks back, net new business for 2024 was $382 million. We were lucky to bring in $50 million a quarter in net new business, and now we're hitting $100 million. That is a doubling of our ability to win new business. We've seen dramatic increases in the opportunities across creative, media and digital and business transformation. Let's look at the growth of our pipeline over the last 3 years to put things into perspective and how the total opportunities have grown year after year. In 2022, our papered pipeline, real opportunities in which we were invited to pitch was $1 billion. In 2023, we hit $1.1 billion in change. In 2024, we had a real deal flow of papered opportunities of $1.3 billion, remarkable. And we have also improved our conversion rate as we are winning over 30% of the opportunities we pitch significantly up over time. So what's been happening? First, we offer a unique blend of creativity and technology, exactly the blend that we created to transform marketing and our agencies at the absolute tip top of their profession. Second, the Stagwell brand has been steadily rising in the marketplace, brave, fierce creativity. Search consultants and intermediaries who pre-screen us for their clients increasingly see us as competitive to the outdated behemoths in the marketplace and are recommending us now more than ever. We are considered a modern, highly competitive alternative to the big 6, soon to be the big 5 who have monopolized the marketing services landscape for far too long. Third, we are making a transition from marketing individual companies to bringing together teams of agencies against business problems. And the results are bigger contracts and deeper relationships with clients. Our culture of collaboration, is a hallmark, okay? Our culture of collaboration means clients get real teams who work together. Voluntary collaboration versus forced integration. We now have top 25 client relationships of $25 million. And we continue to grow that by hosting what we call inspiration days which allow clients to learn more about the depth of stable offerings outside of the pitch process. Several of our most significant client partnerships have resulted from these very inspiration sessions. Later, you're going to hear from some clients. But let me say that this year, we are working towards a goal of amassing a $1.5 billion pipeline and adding new opportunities to bring in government contracts as well. We set up an operation called Stagwell Government, which has put us in a position to content for the largest government and public sector contracts available, remarkable momentum happening here. Can't wait to share more. And let me say that the opportunities for hitting the 5x5 plan, $5 billion in 5 years are shiny bright and can be driven by the growing success of Stagwell in the marketplace today and its combination of creativity and technology for the modern marketer. Now I want to tighten up the aperture on a couple of points. Potent creativity and technology. Our agencies are creative powerhouses, led by practitioners by not holding company bureaucracy. That means clients get teams that are hungry, inventive and I'll look in to punch above their fighting weight. We are not safe. We are not comfortable. We are not predictable. We are brave enough to push boundaries, fierce enough to fight for breakthrough ideas and creative enough to deliver with impact. Our rising profile in the market, whether it be search consultants, clients reaching out direct referrals, you name it. Our profile, an increasingly prominent position in the market has never been stronger. Ask around, I'm sure you'll hear the same. Collaboration by choice, not by force. Our agencies choose to work together, very hard to find. They collaborate because they see shared opportunity in shared ambition. There's no forced integration. No centralization that kills soul and speed. Instead, our model respects and preserves the entrepreneurial drive that built each agency in the first place and clients feel that energy. These things are driving a real shift in the market, my friends, and clients are saying it themselves, that's the power of relationships, the power of showing up brave, fierce to client first. We're not just growing. We're transforming what modern marketing looks like and clients are rewarding us for it. I'm going to wrap it out here with 4 quotes. These 4 quotes were put out into the Ether, whether it be on LinkedIn or industry social channels and in our -- reading -- this gentleman's post are read and consumed by people on both sides of the desk, clients and agency industry alike, okay? And this is what he had to say about Stagwell. The digital first challenger that refuses to lose. Three names are emerging as the future and Stagwell is one of them. Stagwell is the challenger that is changing the game. Stagwell is architecting something so unique and special that clients love plus they have the scrappy, street smart disruptive mentality that has proven to help them win. Definitely worth an encore, plus they have the scrappy street smart disruptive mentality that has now proven to help them win. So no, don't take our word for it anymore. I'd like to introduce 6 of our good friends, our client partners to talk about why they have chose Stagwell and the work that they are doing with some of our agencies. Thank you for your time. Goodbye for now.

I'm Tressie Lieberman, I'm the Global Chief Brand Officer for Starbucks, and I am a proud client of the team at Stagwell Anomaly. A few months ago, we had the opportunity to work on a campaign to reintroduce Starbucks to the world. And I can tell you that there is no better partner, fresh insights, incredible creative but also just a deep partnership. I know they care about Starbucks as much as I do, they're always seeking ways to solve new challenges, bringing us fresh ideas and keeping us one step ahead. So I appreciate the team so much. They have incredible talent, and I can't say enough good things.

Hi. I'm Julia Hammond. I'm the President of Legal Solutions. What that means is I get to answer some of the biggest global RFPs that come in from clients. I put together teams from our agencies, digital transformation, media, creative. We compete against the biggest networks like Omnicom, Publicis, Accenture. And I'm here to talk to you about why we win? What we hear from clients about the reasons why they choose us over the competition. So here's what we hear. Number one, we are the most creative, hands down, the most creative agencies. And our clients when they see us, they leave the room inspired. They tell us when we show up differently. And to them, that means we're extremely refreshing. They say, "We're going to push them to be better." What that says to us, we are a challenger. So I'll top line that we are an inspiring, refreshing challenger, and that's exactly what happened when we won Adobe. Number one, first thing we learned, creativity, well, it still matters. We might hear left and write all the time that it's all about personalization at scale. But guess what? You're scaling content, if you're pushing out a ton of staff and versioning and versioning and versioning. If the create is not good, it doesn't matter because it's not going to resonate. It's not going to move the needle on business. It's not going to create distinctive brands and draw consumers in to move the needle on business. So no one is better than us when it comes to building brands that drive distinctive brand value. That is exactly what put us over the finish line when it came to Adobe. Number two, culture, it is absolutely part of our IP. It's one of the biggest things that make us different. So we've got a couple of fun pictures in here from our very lengthy journey that came to winning Adobe. We traveled 4 continents to get that one over the finish line and built a team of people from 6 different agencies that liked each other, trusted each other, but really what makes us different is that we have a relentless focus on creating the right outcomes for clients because we don't have the problem our competition has, which is reconstructing the empires that have been built since the time before the iPhone was invented. We are the only network that was created post the digital era. Our competition is over 100 years old, and we're in the process of reconstructing and fixing. We're in the process of building up. And so we don't have anyone taking their eye off the ball trying to maintain power. We had to just focus on solving client problems and that really comes through. We are able to focus on innovation and really think about what it's going to take to move the needle on client business, and that shows when we show up. Finally, when I say we challenge everything, that is a core value that's inside of us Stagwell that every client, I can tell you right now, it came through an Adobe and it's coming through in every client that we are talking to at the moment because every client wants to be a challenger. Why is that important? Well, because challengers play to win and incumbents play to not lose. It is the difference between playing it safe and trying to grow, and everybody needs to grow right now. And when they see our challenger spirit that absolutely comes through. So when we hear clients tell us that they know we're going to push them to get to a better place, it means that they see that value in us. And they're going to choose us because we share those core values. And really, that's the client telling us that's a team that they want to be a part of. That's an energy, they want to infuse into their organization. When we want Adobe, yes, we want it on creative. We want it on culture. But really challenging a traditional agency partnership, we didn't just go to them with a, hey, come buy from us mindset. We challenged the traditional agency partnership and said, it might make sense for us to not just sell to you our services but what if we created a partnership where we sell to clients together. So what really put us over the finish line was setting up a joint business plan. Yes, we are the creative and social agency of record globally for Adobe, but we are also a go-to-market joint business partner. We are co-selling together to some of Adobe's biggest clients, digital transformation capabilities and scaled content capabilities, digital transformation, that is the future, and Adobe is working with us to really bring us into the clients that they're talking to day in and day out. And we see that as a much more interesting and valuable business model that we can continue to replicate as we go bigger into some of these kinds of forward-leaning contracts. So that's showing up as business results already in the first couple of months of our relationship. We are already overdelivering. We are seeing a 30% upside ahead of plan within 6 months of our contract. We've already identified 20% growth of pipeline for the first half of this year. Our joint business plan and go-to-market model is creating massive amount of traction and we are specifically targeting places where we both want to extend in key markets like the Middle East and Asia Pacific. So this is mutually beneficial, and that is a very refreshing and different way of showing up for our clients. So I hope that gave you a little bit of an idea of what makes us different and why we are winning in the marketplace. Thank you for your time today. It was an absolute pleasure.

Hi, everyone, Maggie Schmerin, Chief Advertising Officer at United Airlines. Now I just celebrated 8 years with the company. But prior to that, I spent my entire career agency side. So trust me when I say, I know about the opportunities and the challenges that come when you're a holding company and you're in the client service sector. It's still something I place a lot of stock in when I'm evaluating the types of partners that we want to bring on and it's why I'm excited to share with all of you just how different and special our relationship is with Stagwell. Now of course, it starts with best in class work. We get the smartest strategic thinking out of the various Stagwell agencies that we work with than anywhere else I have seen in my career. And it results in best-in-class creative that really helps differentiate our brand. But beyond that, it's all about the relationships, the best agency client experience happens when you don't know when the client, when the brand ends and the agency or the holding company begins, and we live that every single day. I personally feel so supported and cared for. My brand is cared for. I know that we aren't just a line item in a spreadsheet or a logo in a deck. It's been a wonderful 4 years working with Stagwell and I'm excited about everything to come.

The challenger mindset is a core part of how we show up, and it is particularly evident within the Code and Theory Network. The digital transformation unit of Stagwell marrying creativity and technology, the Code and Theory network is a superpower for many of the successful C-suites in the world. Let's hear more about how Code and Theory makes it happen.

I'm Dan Gardner, Executive Chairman and Co-Founder of the Code and Theory Network.

Mike Treff, CEO, Code and Theory.

So let's set the stage of the Code and Theory network, which is the digital transformation arm of Stagwell. We have double-digit CAGR since going public. A couple of stats around that, which I think our client makeup is really unparalleled of a 1/4 of the Fortune 100 are client partners. We work with 100% of the FAANG. So we are the technology companies technology company where it's not the largest companies in the world. We have worked with 18 start-ups that have either IPO-ed or have billion-dollar valuation. We do a tremendous amount in the media and publishing industry with over 200 newsroom transformations, and we have over 1 trillion transactions that flow through our clients on work that we have done and designed for our financial services.

And while doing so, we've evolved the way in which we partner with clients and how we engage with them in order to drive new revenue streams and new ways to engage. As an example, over the past few years, we've built out through our network, managed services and embedded team capabilities, a few examples of that. For T. Rowe price, we are their embedded design team working on their global design system for all touch points. In media and publishing, for Time Magazine, we are their product and technology managed service. In the e-commerce space, we are the e-commerce design team for all of Stanley Black & Decker and all of their family of brands across their e-commerce landscape. So let's talk for a second about where digital transformation is and where it's going. So today's state of play is quite different with respect to digital transformation than it was, call it, a decade ago. A decade ago, it was very much focused around making technology decisions, driven mostly by CTO organizations and then pushing that through over time to the rest of the organization. Today, we are seeing much more of a pan C-suite merging of those briefs and of those teams. So for example, when we think about our clients today and digital transformation landscape, it's a combination of the CMO, the CIO, the CTO, all working together to drive full automation transformation across the business in an integrated and a coordinated way. And this is being mandated by CEOs and CFOs who want to see a return on those types of investments. So while the landscape is in a state of constant play and fast-moving change driven by technology, and certainly, whenever that happens, there's a change in customer behaviors. And those changes in customer behaviors have historically been a very good thing for digital transformation. Even further, we're moving beyond 3 screens and a steering wheel. We're moving to a world where a brand can engage with its customers at any point, anywhere, things like voice, things like chat, things like GPT, things like glasses. It's all changing what we need to be able to reach and engage and why digital transformation at the core is allowing and building more capability within our client organizations. So with that said, before we get into a few key themes that we're seeing, let's just show you a little bit of our work. [Presentation]

So there are 3 key shifts that we think are happening in the digital transformation market, and we are responding to them. First, as Mike mentioned, the isolated organization buyer is turning into a horizontally integrated client team. That means across the C-suite, they are looking to buy services to transform their organizations. We have responded and launched our EXT practice, our enterprise experience transformation practice. This is really at the heart of true transformation, changing organizations, changing the products and services, changing the marketing and everything that supports it to reach customers in a different way. This allows a scaled opportunity to have a CX first, meaning customer-first approach to solving technology opportunities and challenges and problems. There are 3 unique things why we think we are different than our competition. Firstly, we are closer to the customer. So traditional consultants do not touch the customer the way we do at Stagwell from the media buying arm to the scaled creativity we have, we are as close as you can get. We understand how to find the customer and drive the customer. Second, we have 2.5 decades of experience of creating experiences that actually drive lifetime value. That is crucial at a time where technology is changing behaviors. And lastly, we have the technology scale to deliver the technology results. What do I mean by that? We have the balance of technology and creativity that is required in today's market to actually come up with the correct solutions and execute on them. We are the only company at scale that has that balance within the Code and Theory and digital transformation network. Of the over 2,000 people we have, half of them are engineers and half of them are creative. That is a unique balance that you can see by the people and the process that we implement that transforms our clients' business. There is no better example of this practice than what we demonstrated at Adobe Summit just a couple of weeks ago. We demonstrated how we can activate, how we bring culture and we bring customers front and center on the main floor of the Adobe Summit Conference. We were right next to Adobe in a scaled way, demonstrating our solutions on bringing content supply chain solutions to the market and showing how unified brand systems can really transform what a brand is, how a brand can act and how a brand will leverage technology for the future. This is just the first of many solutions that we are bringing to the market over the next year.

Which takes us to key shift, too. It is clear regardless of what research you read, it could be Forrester Research, it could be McKinsey Research. It doesn't really matter that there is significant dissatisfaction amongst many large organizations who have invested tremendous amount in software, tremendous amount in Martech and a tremendous amount in data and have not reaped the ROI they want for it. So dissatisfaction with the historically huge spends on technology and infrastructure and software are at an all-time high. And we have to ask ourselves, why is that? And one of the reasons we believe is building on what Dan just said, that these decisions were made sort of isolation from a tech-only perspective versus starting with the customer, starting with people, starting with your organization and working backwards from that. So it's very clear that when you do a transformation that starts with your end customer and your business goals, moves into your organization and how people will work, how they will operate, what is the way of working we want to build for the future and then back into what is the technology that enables that, you can unlock far greater ROI than by making the technology decision first and trying to force it through and then retrofit it to customer experiences. And that's why we've built the practice again on starting with humans, starting with the end customer, starting with the organization that's going to carry it out and the ways of working. Now this leverages pretty significantly a lot of Stagwell's sort of unique research assets, which we think is very important to drive insights against consumer behavior, to drive insights against new patterns, new opportunities, new customer segments and using technology-enabled experience solutions to bring those together. So using AI as an example beyond just efficiency, but using it more as, yes, what can we do to unlock new experiences? How can we leverage this data in a unique way? How can we target and segment and differentiate the experiences we want for different customers? How can we create unique experiences that can be AI-powered that we couldn't do before, but that's built on a technology that is better used by humans allows for better business results. And a great example of this would be context blends. Context blends was a secondary experience that we built on top of an existing website for RealClear Polling. RealClear Polling has tremendous amounts of data, huge volumes of information, and especially during an election year, this is critical information but users often very overwhelmed by that. Don't know how to start, don't know how to go deeper. What we did was built a secondary layer that's set on top of the site, all powered by AI that would move contextually with you as you went through the site, offering you a way to get deeper more content, surrounded context, different polls, different opinions and allow you to both be prompted in an anticipatory way, additional information in context. But also engage directly should you want to prompt it in GPT-like experience to bring you further information and drive depth. This is an experience that could not have happened previously without differences in consumer behavior and then having a technology stack that enabled you to bring this to consumers. Another great example of leveraging emerging in new technologies especially AI to create new experiences is with Google. So Google I/O, huge conference, very important, Google's -- one of Google's marquee events, especially to the advertising industry. We built a game, a custom game, that sort of rode with you, was AI-powered -- you go deeper, get better experiences, learn about Google's offerings in a totally interactive and engaging way rather than sitting there and listening to keynote after keynote, after keynote, after keynote. So even something as simple as a B2B conference to drive revenue for a great client in Google, how can we make that experience more engaging and bring digital transformation from a CX first perspective. We built a game using AI that drove understanding, knowledge, depth and a great experience at Google's marquee event.

So this brings us to the third shift, which is service-based models are changing to tech-enabled orchestration service-based models. What do I mean by that? It's not enough to just say, here are the people in our process. It needs to be powered by technology. We think we have a 3-pillar solution that really tackles the market appropriately. Pillar #1 is actually small AI. What is small AI? That means, it means bringing AI to the individual employee to empower them to come up with ideas and transform their role to truly get the return on the workforce in the proper way. So that's everything from small tasks to bigger processes to new insights that drive different ways that we can work. That's the first pillar. The second pillar is the midsized transformation. This is where we see gaps in the market, it could be through execution. It could be a process that we do. It could be a way that we could harness data in different ways, but it's not the biggest transformation, but it really empowers us to utilize everything across Stagwell in really interesting ways.

And as an example, on the medium-tier piece. We have 2 examples of POCs of ideas, of accelerators that we are building. We are building and leveraging Stagwell's already existing proprietary technology, whether it's SMC, whether it's all the proprietary research assets, et cetera, or our investment in Adobe and our own systems on content supply chain and automation and acceleration, and we're building functionality that we can use for ourselves and that we can use for our clients. Two examples of this would be, one, what we're calling Marketing Savant. Marketing Savant is a tool where ultimately, I can go, I maybe on a small business, maybe it's a low spend campaign, maybe it's a self-service tool, where I can go in, put in my documents, put in my audience, put in my objectives, put in materials that will help our LLM generate campaign concepts. I will get campaign concepts. I can interact with the tool, I can refine them, I can ask for a new ones, I could give it further instruction, I could creative direct the generative aspects of this. And from there, we can get an additional layer. So now we've gone deeper into a concept. Great. I like the concept. We feel good about it. I can now decide my distribution channels. Maybe I want it on social, I want it on paid and I want it to an e-mail. The tool will create those for you. And at the end of this, you kind of have an all-in-one campaign that's ready to flight. It's flight-ready. And then ultimately, the data will come back to this, back to Marketing Savant. So whether it's a day or 3 weeks later, I can look at performance in real time as the results come in. That's one example. A second example, something we're calling brand personified. Brand personified, the idea is ultimately, eventually, and this isn't too far away, brand guidelines and brand behaviors are not going to be governed by PDFs. They're not going to be governed by like rigid guidelines that don't apply in the real world, especially as touch points proliferate, especially as some of my interactions are now going to be in perplexity or in ChatGPT. So brand personified is basically building your brand personified in a tool and in a bot that can live anywhere in an ecosystem. Eventually, could it engage directly with consumers? Absolutely. Could it also govern creative development? Tell you what's on brand, what's not on brand? Could it act as sort of your partner in making sure you're bringing the best of a brand forward, work with you through creative development processes? Help you with insights around different target audiences, how you might reach them deeper where the brand can play and where it can not play? Of course. When you think about these 2 examples, and there's far more, you have sort of end-to-end creative generation and execution and then you have the living, breathing personification of a brand that can be expressed multiple touch points across both internal and customer-facing work.

And the last pillar of our transformation and thinking about how technology aligns with services is the idea that we can have disparate pieces but they need to come together. Now we talked about how we have AI changing our relationships with the consumer, like Context Lens was a good example of that. We talked about how we have AI transforming the individual employee and empowering them. We just talked about how we think about AI, solving discrete specific tasks. But the last one is how we think about Agentic AI from an enterprise level. And this is where the digital transformation network really comes together with the entire Stagwell network to really take the power in ways we never could even have imagined before Agentic AI came on the screen. The idea is we are building an orchestration layer. Think of it as an operating orchestration layer. It's an operating system that takes everything from the small AI initiatives, to the mid-level initiatives to the discrete challenges, brings it together, brings all our people together in an Agentic-first way to understand data, understand insights, understand what's happening across the media landscape, understanding what's happening from our experience -- experiences that we're building, bring it together to make us efficient as a smart and effective as possible. So that orchestration layer that we are calling the machine that's going to be debuted in a couple of months really is the bringing together of the power of everything Stagwell has with the power of the advanced technology that we are building under one modern roof that will be unparalleled across the industry.

And to sum all this up, the digital transformation network driven by the Code and Theory network has a very simple thesis. It's in the name Code and Theory. It's the bringing together a creativity and technology to solve problems. We have a staff makeup that is unique in the market that no one else has that drives to that, half creatives, half technology, delivering solutions. We then layer on top of that a tech solution, tech platforms that orchestrate everything from the innovation at the employee level to discrete opportunities and gaps that we see in the market to really be the challenger and disruptor to the industry that is meeting the expectations of the new opportunities, the new transformations, the new disruptions that are happening in the market. We are the only company with that balance to deliver the right solutions.

Thanks both. As Dan and Treff mentioned, the platforms and partnerships, the Code and Theory network is building with clients didn't exist 10 years ago or even 5. They're built for the modern C-suite by cohesive teams of creatives and technologists. Let's keep going with creativity with Evin Shutt, CEO of 72andSunny. She will share more about how our best-in-class creative agencies are adapting to a changing world.

Hi. I'm Evin Shutt, Global CEO of 72andSunny. I'm here and happy to share with you more about the Creative Services division inside Stagwell or as we also like to call them the demand creation agencies. As you can see, we have some of the best world-class agencies in the world that cover brand, social, influencer, experiential and research. All of these agencies have a history of driving business results for some of the world's biggest companies, including United Airlines, Visa, Google, Microsoft, Adobe, NFL Unilever, Target and more. I'm going to speak to you a bit about creative agency landscape through the lens of what we see at 72andSunny. Brand marketing is meant to create demand to spark consumer desire for the product and what it does or says about them. That's the business we're in. What we've seen through the pandemic was a rise in direct response marketing, which is meant to capture demand that really took off. But now in the last 1.5 years, we're seeing brands see diminishing returns from over-focusing on DR. DR has contributed to eroding brand value over harvesting of prospects and addiction to low-margin promotion. Nike and Starbucks are examples of this. You see it not only in the experience of those brands, but also in their stock prices. We're starting to see the shift now back to brand marketing, which positions us in a very strong position. We're seeing a shift more towards a 60-40 mix of brand versus DR. Stagwell agencies, the ones we showed before are helping to build these powerful brands and generate demand using a mix of proven and innovative strategies. United Airlines was the opposite of a Nike and Starbucks. As part of the United next plan that they launched their first brand campaign in 10 years in 2021 with 72andSunny called, Good Leads the Way. It helps consumers see the brand in a new light. We'll take a look at that work now. [Presentation]

While the brand focused on DR, 72andSunny as we were building brands like United, we also took proactive steps to improve our performance and create a best-in-class creative organization for 2024, 2025 and beyond. We did that by focusing on efficiency. We consolidated our real estate costs and our back office functions, became way more efficient there. We focused on talent optimization, leaning into more senior talent who can land ideas faster than earlier and a young talent development program to make sure we're growing best-in-class talent for the future. We also did a culture reset. It's no longer just about coming up with the idea and finding people to make it. We need makers and doers who can come up with the ideas and make the work and the product faster. And of course, we're using AI. We're optimizing that use in production and back office efficiency, everything from drafting MSAs to how we look at the use of photoshop and editorial. At the same time, we partnered with the NFL. We're a partner of them for over 6 years, helping transform them from the no fun league to the most profitable sports league in the world, one with record fandom, up 12 million fans year-over-year and a record brand favorability of 24% versus 2019. We'll take a look at that work now. [Presentation]

As we look ahead for the next 3 to 5 years in the world of creativity and creative agencies or demand creation agencies, we see a very bright future. We see a world of more data-driven brand marketing, developed using the amazing research and data we have at our hands at Stagwell to make sure we are zeroing in on demand generation and conversion. We approach this in 2 ways as we look at our growth audience for our brands, demand harvesters where we convert audiences who already show signals to buy and demand generators. We bring in growth audiences who might not have thought to buy before and ensure the market isn't over harvested. We also know that this is a relationship-based decision that marketers make. We're often their second biggest line item after media. The trust founders and leaders with a track record of success. Luckily, we have many of those strong relationships, and they look to other CEOs and CMOs for recommendations and trust, and we continue to build that network. We also have a diverse portfolio of clients. We don't have a house style or a house category. You saw it on the slide earlier. We have tech. We have support. We have food. We have travel. We cover all the categories. We've also developed a strategic consultancy a business consultancy that moves us higher in the organization often funded by a CEO and a COO, not the CMO, which allows us to essentially write our own briefs and show how we can apply our creative strategy with creative thinkers to big business problems, very action-oriented. We've also dug into our sports partnership practice. As many of you know, sports are the #1 live media for audiences, and we're at the center of that universe given our track record with sports brands and helping non-sports brands play in support. We're continuing to consult and lead the way with brands and how to engage in negotiating those deals. Think about what those deals are and it has put us in the pole position for the content and activations around those partnerships that also need to be made and implemented. And last but not least, Adobe. Adobe is the largest creative technology company in the world and they chose us as their agency and Stagwell as their holding company. We're leveraging their tech as customers 0, taking ideas from humans and scaling them to create efficiencies at a global scale, putting us upfront of our competitors. One of the big questions we get is how are we using AI. I've talked about it in terms of back office and how we use it in pitch process, but in and of itself, it is not yet creative. So the most important role it has for us right now is it frees up time to let our most senior creative leaders and others create and we're prepared for what's next as we continue to evolve.

I was talking to somebody the other about how we started working with Stagwell, and I love the story. And we didn't even go through a pitch with Stagwell. We knew the capabilities and we knew the portfolio of amazing agencies or brands that they hold alone. They gave us the confidence and the trust to know that it was the right partner. And we've had a great relationship so far were 72andSunny to help us with our brand work and now have this collaboration where we can go right to any of the other agencies in the Stagwell house. And we've already started to work with Code and Theory and their expertise from a technical side to help us redo our website. So it's just a really unique different place with unbelievable teams and great talent.

Our creative agencies are truly some of the best in the business, and it's clear why. They are laser-focused on delivering ideas that move people meeting the demand moment wherever it is for the consumer and delivering brand moments that stick. On the advocacy side of the business, we see much of the same, a clear understanding of what people care about and why and scaled innovative ways to deliver the right message to the right person at the right time. Our depth of experience in the advocacy arena is unusual for a marketing holding company, and we believe it is a key differentiator for us every day, not just every 4 years. Now let's turn to Zac Moffatt and Doug Thornell, CEOs of Targeted Victory and SKDK, respectively.

I'm Muzak Moffatt, CEO of Target Victory. Today, you're going to hear from me about how we're currently positioned. I'll share a couple of case studies that illustrate the scale and innovation of our company and why I think that in the next 4 years, marketing will be more important than ever. [Presentation]

We have built the largest political business in the United States by serving as the foundational layer of the fastest-growing segment of the political market, direct response. We also have a substantial public affairs business serving multiple Fortune 50 companies, both in D.C. and at the state level. And our fastest-growing sector is our corporate work, providing strategic guidance and crisis communications to companies looking to navigate the risk and reputation challenges that reflect the world we live in today. We believe our ability to function at the speed of a campaign but at the scale of a publicly traded agency is a unique differentiator and provides a huge opportunity for growth over the coming 4 years. In order to understand our business, it is important to understand the dynamics of the political market. Federal ad spend numbers do not capture billions and additional campaign activity, but does serve as a good proxy for the overall growth. You can see the huge step up between 2016 and 2020 as well as the continued increases after. However, these top line numbers don't show the massive potential within the industry for digital activations over the next decade. As we will see a massive shift from broadcast first mindset to one that more accurately reflect voter consumption habits. Market growth alone is not what's going to drive Targeted Victory and to offset a core business that is historically both seasonal and cyclical means we are constantly developing business lines that are always on and built on technical capabilities that create moat in our industry. We differentiate through our stack that is powered by the leaders in the marketing data and AI space. By marrying the most powerful data platforms in the world with our decade-plus historical first-party data insights, we have built the most comprehensive digital marketing program in politics. We have more than 16 billion data points on 56 million voters. We're able to deploy across thousands of organizations. 600,000-plus campaign activities last year drew upon 120 million data points, and we use those insights to auto generate real-time AI optimized audiences. Additionally, our role as a platform in the market means we can leverage our scaled client demand needs into additional revenue opportunities. This drives our capital investments and acquisition strategy. And what that allows us to do is to turn cost centers into profit centers. Nothing better captures this approach than our venture Wonder Cave. In response to a market partners failure during the final 100 days of the 2020 campaign, we developed a proprietary platform in 2021 that over the following year set 1.6 billion messages, but that was just the start. In 2023, we added multi-tenant capabilities along with additional feature sets and the capacity for 2-way conversations that start to achieve the goal of true one-to-one mobile communications. With that foundation in place in 2024, we scaled to 600-plus organizations sending over 4 billion messages in a year. In less than 4 years, we've built a platform that has 40-plus self-serve clients, send 7.1 billion messages and serviced 600-plus clients. Our second example showcase is the journey we've been on as a firm to leverage AI within an industry where any mistake could be front page news item. We started by asking the question, which task is the most fixed? Our most obvious pain point was the task of generating marketing content. From ingesting of new sources and client content to training data sets and deployment, we were able to experiment quickly and iterate constantly. [Presentation]

By the 2024 cycle, fundraising copy was performing at a 25% improvement which represents tens of millions of net revenue dollars for our clients, onboarding time for new staff had been reduced by 6 weeks, and staff have, on average 15% more time in their week to focus on other client-related tasks. Cicero in 2025 and beyond will become the engine underpinning our entire marketing effort. It will allow us to seamlessly go from content creation to capturing and analyzing real-time performance which in turn will be fed back into the updated models for new audience generation, then rinse and repeat, all our proprietary data that separates us from our competition. Presidential campaign years are so interesting because they provide a snapshot of the future due to the size, scale and intensity of the efforts. The trends that will drive the coming years make it obvious that the landscape is only getting harder to navigate. The role of the marketer is to be able to move between the micro and the macro of the engagement and take the massive amounts of data being generated and deliver one-to-one marketing at scale. We now have the ability to tailor the right message to the right audience at the right time and capture those outcomes and use them to optimize the next deployment. Yet while this is possible to achieve, it is also extremely difficult to execute, and the delta between words and action is only becoming more apparent. Firms without access to proprietary first-party data will struggle, and systems that are not built from the customer will fail. However, once you have the plumbing in place, you will then have the ability to take that infrastructure and leverage it against larger opportunities. The stable marketing and PR vertical provides a substantial set of growth drivers for these tools to be reconfigured and deployed to drive margin and results. The application of AI on top of this creates further operational leverage, allowing organizations to invest in expertise and higher-quality execution while reducing costs associated with middle management. 2024 was a wake-up call for recalibrating strategies to meet new coalitions and execution realities. The traditional playbook is dead and disruption will bring opportunities for those that can seize it. The size of the U.S. economy will continue the expansion of political spending. And the reality is that DC today is the center of everything and that will continue to drive corporate and public fares growth at a substantial rate. Thank you.

When people ask me, why do I love working at SKDK the answer is simple. We do impactful work that matters. I'm Doug Thornell, CEO of SKDK, and for the last 40 years, we've been helping our clients achieve victories, avoid crises and tell their stories. While our firm was born in the political world, we have grown and scaled to work with Fortune 500 companies, startups, philanthropies and nonprofits while still bringing that campaign mindset to everything that we do. That means speed, innovation, senior-level engagement and an obsession with winning. No firm combines strategy, storytelling and integrated media better than we do. We're the trusted partner to solve your toughest challenges, be it in business, culture, sports or media. We're proud to be Stagwell's very first acquisition. And we channel that very same challenger mindset in how we compete, adapt and deliver for our clients. Behind every success is a strategy, a message and a team that knows how to deliver. Whether it was strengthening community support for Disney or driving awareness, for engagement for Americas Semiquincentennial, say that 3 times. Our work didn't just make headlines, it made an impact. Here's how we did it. [Presentation]

We're proud of our history, but the future we are building is even brighter. Our goal to be the leading strategic communications and integrated media firm in the country and help drive Stagwell's march to be a $5 billion company in the next 5 years. To do this, we plan to expand our public affairs and advisory work into high-growth markets all across the U.S. that will help our business continue to scale, ensuring we are in the front lines of the most important policy and business conversations in all parts of the country. Our integrated media team is best-in-class and only getting better. SKDK, creative studios is using innovative AI-driven tools to help our storytellers and creators produce more authentic, compelling content. In advocacy, we're positioned to deliver more strategy, content and advertising for some of the biggest companies, nonprofits and campaign in the country. We're launching a new proprietary text messaging platform, creating another tool for candidates, causes and companies for reach and mobilize their audiences. Sloan and company, our cutting-edge corporate communications firm is focused on 4 areas. The rapid convergence of sports, entertainment, media and technology, healthcare solutions, the burgeoning crypto industry, intelligence and AI-driven media tools that will help fuel business success. Sports is a key investment for us. And our advisory practice, Jasper Sports is quickly becoming a leader, advising some of the biggest brands, teams and athletes in the industry. And we will continue to attract and develop the best strategists and storytellers in the business. While a lot has changed in our industry, one thing remains constant, the kind of people who make SKDK and our work so impactful. I'm so proud that SKDK is a part of the Stagwell network where we can tackle any challenge together.

Thank you, Zac and Doug. Now we'll go to James Townsend, who leads our is our Media and Commerce segment. Nowhere does our promise of growth, scale and innovation come to life as clearly as within our media work. where a combination of successful, multinational acquisitions, marquee clients and connected solutions allows us to work smarter and faster. JT, over to you.

Hello, and welcome, everybody. My name is James Townsend, and I'm the Global CEO of the Data Media portfolio here at Stagwell. I'm going to talk about the market we see why it's suited to our challenger proposition, the foundations we've laid a little bit of work and the 5 growth engines we're going to bring to bear and into the future. The market is growing. It will exceed $1 trillion for the first time this year and we've been investing in the highest growth part of that growing market with digital data and tech assets that we've been choreographing ever since in service to our clients. And those clients are looking to consolidate. They're looking to put more into less, which we consider to be an opportunity for business partnership. We also see a media landscape that's growing and fragmenting. That is an opportunity for media choreography. The wools of the wool gardens will continue to go up. And we need to be able to help our clients navigate that in service to their consumers. And a consequence of that is a huge content explosion needing production and distribution, optimization and measurement. This is, again, is a massive business opportunity for us. And a significant need for those modern marketeers. And our base is good. It's a strong base. It's $5 billion in EMEA. It's over $200 million of one business, it's 23% EBITDA growth last year at a healthy margin of 20%, all under a strong top line performance. Scale, growth and innovation has stable foundations. And those foundations have been built deliver with complementary not duplicative propositions, helping us grow internationally as we are with the acquisition of ADK most recently or equally with adjacent services that support our data and media spine, pleasingly, the portfolio having grown more than double since 2020. But it's the organization and the proposition of how we bring that to market that's most important, connected solutions are what our clients are seeking. And so having our people and our clients be able to navigate against those now scaled assets is absolutely essential. $200 million in one business is also complemented by $200 million in shared revenues, suggesting that, that consolidating client is looking to us as a business partner. And scale is both geographic and also in our media investments. When we think about geography, it used to be a badge of honor for our competitors to look about the amount of people and the amount of places they had, not so much now. We want to build the right amount of teams in hub and center of excellence designed orgs to marry up and match reflect that of our clients and use technology to deploy media all around the world. We have 35 offices in 25 countries where we're in enough places and the right places to help serve those modern clients. And those modern clients have come in great numbers, and we expect those relationships to grow and also for more to continue to join Stagwell. They are seeing an alternative, they're seeing a different proposition and a data, digital and tech-based one. And what does that look like? It looks like technologies that we've built and designed ourselves and with clients Stage and Assembly, data-driven, tech-enabled and AI infused more than 70% of the apps on the operating system, AI driven or equally, their modern media mix with more than 75% of our investments now digital. We were investing ahead of our competition in high-growth areas like CTV or social environments like TikTok or helping win in that retail media explosion and deliberate M&A that complements that data and need spine like Pet Group, helping us with content distribution globally or equally, brand-new Galaxy helping us win in e-commerce. And all of this wrapped up in more than 70% of our engagements now some form of performance-based outcome driven model gives us confidence that we're reflecting a client-centric business that absolutely reflects that modern marketers need. Let's look at some work from Lenovo team to bring this to life. [Presentation]

Now let's look at some of the work we've been doing to Ralph Lauren to help them enrich and drive maturity in their digital environment, bringing brand and performance dollars together to increase profitability for the business all around Europe. [Presentation]

I'm now going to finish with our 5 growth engines that are going to take us into the future and build on the foundations laid, high-growth media, trading innovation, scaled adjacent services, retail media and scale, AI-driven ID graph. We'll continue to double down in the high-growth areas of the market where our clients are looking to invest more, not less, and we'll do so ahead of our competitors. Be that increasing our spend in digital and social video, now 50% of our investment by 100% this year on environments such as Meta, YouTube and TikTok. Applying performance, media methodology to this at the core and all the way through the funnel is what's helping us win with our clients. Trading innovation where many of our competitors think about high volumes of low-cost media and show an offering impressions. We want to talk about business outcomes and tying our remuneration to that. And only we can do that here at Stagwell because of our data advantage and we look forward to working with our clients, financial imperatives and in service to them, not against them. Adjacent Services, we see the opportunity to continue to bring in clients through a media or data doorway, but then bring them into other opportunities such as CRM with GALE or business-to-business with MultiView or experiential activity with vitro. And as I said earlier, $200 million of shared revenues suggest the organizational model is speaking clearly to our clients. Retail Media, we launched a joint venture with [indiscernible] Poland last week, where we took the biggest retailer and all of their data across their 6,000 stores and the app usage and put that into against the collection of 8 products that we're bringing to BERA are data-driven and help CPG brands win in that market with a greater understanding of their audiences and their habits. And finally, and perhaps most importantly, and something the team will talk about next, is the scale, AI-driven ID graph, comparative in scale to our competition and existing ID graph, but unique in the data sets its uses because only Stagwell has the research companies and the research propositions that Harris X, BERA, UNICEPTA, the National Research Group can bring to give us a unique perspective of that consumer and what their needs and wants may be. So there you have it, 5 growth engines built on solid foundations with our digital data and tech-centric media and data proposition. Thank you.

I'm Yin Woon Rani, CEO of MilkPEP. We're probably best known and people behind the iconic Got Milk. We've enjoyed a great relationship with GALE over the last 4 years. I'm proud to report that 2024 was the first year of growth for dairy milk in over 15 years, and we could not have done without GALE. We knew right from the pitch process that GALE was very unique, has ability to plan data and creativity and really solve business problems for us collectively and being very fluid across the entire complicated channel ecosystem. As someone who has worked both agency and client side for now almost 30 years, I really appreciate how unique GALE is. I know now and always that I have the access to talent and the capabilities that I need when I need them. And been really appreciative of the support from the executive leadership team at both GALE and Stagwell on this amazing journey of milk, working with a modern agency built for today has truly been a game changer for myself, my team and for the entire milk industry.

As the media landscape continues to evolve its focus from volume to outcomes, the data underpinning the system is more important than ever, which is why the ID graph that JT mentioned is a priority for us here at Stagwell. Unlike our competition, Stagwell was founded on the thesis that both data and technology are central to the modern marketing landscape. It's why we are well positioned to innovate with the agility of the company, building solutions that grow and change to meet the demands of both our clients and our internal workflows. I'll now pass it over to some of our innovation leaders to hear more about how this works in practice. We'll start with Mansoor Basha, CTO of the Stagwell Marketing Cloud, who will share more on ID Graph.

Hi. My name is Mansoor Basha and I am the CTO of the Stagwell Marketing Cloud. I'm excited to share with you one of Stagwell's most valuable and innovative core assets, the Stagwell ID Graph. In our rapidly evolving digital landscape, where privacy regulations are tightening and third party cookies are disappearing, the ability to understand consumers while respecting their privacy has never been more crucial or more challenging. At its core, the Stagwell ID Graph... [Technical Difficulty]

Okay, alright, Ben? Ben is on the way over to ask the question.

Ben, why don't you start with the questions.

So of course, in the world of technology, there are a couple of different things going on. So we're going to take some questions now in the middle, and then we'll play the rest of the stream, and then we'll come back when the video player that has got down has come back. So Ben, over to you.

Thank you very much, Mark. And yes, we're going to jump into a couple of things here. And maybe a question for you first off, Mark. Obviously, a lot of conversation going on in the market today, a lot of rumblings around macro uncertainty in general, tariffs obviously being a key topic of conversation. Could you maybe talk a little bit about that, maybe give your own personal perspective on kind of what's going on as well as any customer commentary you might be able to share? And then the other piece of the puzzle is what's going to be the impact on Stagwell that we think?

Well, I think there's no question that some economic uncertainty, at least among the high-level economic communities is out there. I detect much less so among the consumers themselves in the surveys that we're doing. Look, I think Wall Street, as usual, tends to overblow things and under blow them at the same time. Only about 11% of our economy is imported. If tariffs hit 50% of that by 25%, that would be a 1% impact on the economy, something that happens in a month of inflation. So I don't really know why there's been such exaggerated reaction to it. Hopefully, the President's comments today at 4:00 will have increased certainty because we know that the uncertainty from day-to-day has certainly been driving a lot of questions. In terms of our clients, I think, obviously, the auto industry will be affected by tariffs. They seem to be the primary target of that. I don't know that there's a lot of other big impacts of the tariffs depending upon what we actually see. Again, I think a lot of this has been overblown in the marketplace, considering the size of the economy, the size of the tariffs that -- what they actually affect. So I think that what we still have here to come into play are the deregulation effects and the tax cuts, which were really always meant to be the primary drivers of the economy. And you're going to have to take that in totality as we see all of these policy measures. I would not -- if I were Trump have gone with tariffs first, I would have done the other things first as he did last time. But clearly, that's what he's decided to do.

Great. Perfect. Let's maybe pivot a little bit and talk a little bit about digital transformation, both Michael and Dan. A lot of questions about, obviously, challenging 2023, but kind of moving into 2024, saw a really nice recovery in the back half of the year, in particular. And looking into '25, some real sort of, I think, optimism might be the right way of putting it. Could you both maybe just expand a little bit about that? What is it that gets you so excited about where we're going in '25 and beyond on the digital transformation side of things?

Yes. I'll start. We're at the point of a technology cycle where it's not good enough to just talk, you actually have to deliver results. And we are finally seeing sort of companies realizing they have to do something. It's not an option anymore, and it's not theoretical. We see that companies have spent a lot in tech, and we saw that bad impact 2 years ago where they had to pull back, but now they're realizing we have to spend, things are changing, behaviors are changing. The way we do work is changing, and they're expecting ROI on that. We believe our CX first approach to digital transformation and the balance of half our company being technologies and half being creatives is the right mix and solutions to really solve what are the unique opportunities, which are behaviors have changed, that means platforms have the opportunity to be differentiated and deliver new exceptional value, new ways to do a content supply chain that allows us to have messages reach consumers in new and innovative ways. So to us, this is the golden era of creativity and especially where creativity means technology, that's really we're built to do that. So it's an exciting time.

JT, I think a really interesting question kind of coming here. Evin, you talked in your section about effectively the dip in direct response, this change towards brand marketing. And I think it's for both of you here is sort of maybe you could give a little bit more color on that. For JT, what's the impact going to be on media mix moving forward of that particular change? But Evin, does it shift the way we think about doing business? Or is this sort of that brand-first approach sort of our bread and butter, what we feel most confident about? So maybe, Evin, we can start with you just sort of expanding on that topic. [Technical Difficulty]

Yes. Thanks, Evin. I mean I think I'll really speak to the $5 billion I talked about and the fact that 80% of that is some form of digital plan or buy. I think Evin makes an excellent point, which is that so much of those environments now, those channels now, really seen a collapsing of the funnel. There is now coming together of both brand and performance in single environment, specifically in social, which is becoming the larger part of the media ecosystem. So the opportunity to give a brand experience and then deliver a direct response is really the marriage of brand and performance marketing coming together. And I think when you look at the ingredients we've got in terms of our investment profile, but also the assets we've acquired over the last 4 or 5 years, it really is in service to this trend coming to maturity now. So we feel like we've got the right balance in terms of the geographic footprint, but more importantly, in terms of the products and services and the brand performance mix and investments.

Fantastic. Let's shift a little bit towards the financials, if that's okay. And I think this question is for both Mark and for Frank. The guidance we have out there, the long-term guidance, the $5 billion 5x 5 plan includes $1 billion of EBITDA in the conversation. Could we maybe spend a little bit of time talking through that pathway to sort of margin expansion over time, a little bit of kind of how we're kind of going to get to what is effectively a 20% margin on GAAP revenue moving forward. What are some of the key drivers that we're kind of excited about in that particular area? And maybe we'll go Frank first and then Mark can elaborate.

Well, I think you heard -- there are a couple of things. One thing I think you heard Ryan talk about the initiatives that we're embarking on right now. We expect that those initiatives by deploying more AI into the organization will increase employee productivity and should drive the margins up. We're thinking that for 2026, we should see north of 150 basis point improvement just from that and that there will be further accretion in 2027, pushing it even further up. I think as you start to see you add up to 250 basis points, 300 basis points, we're starting to close in on the $1 billion as a percentage of revenue that we're talking about here.

But Mark, anything you'd like to add on that in terms of the margin expansion side of the story.

It is really critical and in line with the progress we have made from 0 to here. I think it's predicated when you look at it at continuing to push forward and scale. That scale means that the central overhead will then get amortized over a larger spread of business to improve margin. It's based on implementing AI. And as we've outlined a significant reduction in cost to produce our work. I think it's also predicated on an improved revenue mix, right, as we'll continue to grow digital transformation faster. Digital transformation tends to be on the higher end of the margin business. Our software products also will be in market during this period, all of which I think give us an improving margin picture. And I think that what we really set is the goal, I call it the 5x5 1 plan, right, where we get $1 billion of EBITDA out of $5 billion of revenue, given where we're going. And then finally, I think what you get is a bigger mix of more global clients as we continue to scale. Again, I ask the 3 questions. Do you believe that we can continue to grow? Do you believe that we can continue to scale? We have an incredible 9-year record on that? And can we continue to innovate and as we continue to innovate, these 3 factors, I think, make us highly investable.

Good news. I believe the stream is back up and running and almost ready.

[Technical Difficulty] Video, now 50% of our investment by 100% this year on environments such as now 50% of our investment by 100% this year on environments such as Meta, YouTube and TikTok applying performance, media methodology is at the core and all the way through the funnel is what's helping us win with our clients. Trading innovation, where many of our competitors think about high volumes of low-cost media and show an offering impressions, we want to talk about business outcomes and tying our remuneration to that. And only we can do that here at Stagwell because of our data advantage, and we look forward to working with our clients, financial imperatives and in service to them, not against them. Adjacent Services, we see the opportunity to continue to bring in clients through a media or data doorway, but then bring them into other opportunities such as CRM with GALE or business-to-business with MultiView or experiential activity with vitro. And as I said earlier, $200 million of shared revenues suggest the organizational model is speaking clearly to our clients. Retail Media, we launched a joint venture with [indiscernible] in Poland last week where we took the biggest retailer and all of their data across their 6,000 stores and their app usage and put that into against the collection of 8 products that we're bringing to BERA are data-driven and help CPG brands win in that market with a greater understanding of their audiences and their habits. And finally, and perhaps most importantly, and something the team will talk about next, is the scaled AI-driven ID graph. Comparative in scale to our competition and existing ID graph, but unique in datasets its used because only Stagwell has the research companies and the research propositions that HarrisX, BERA, UNICEPTA, the National Research Group can bring to give us a unique perspective of that consumer and what their needs and wants may be. So they have it, 5 growth engines built on solid foundations with our digital data and tech-centric media and data proposition. Thank you.

Hi. I'm Yin Woon Rani, CEO of MilkPEP. We're probably best known as the people behind the iconic Got Milk celebrating milk mustache ads. We've enjoyed a great relationship with GALE over the last 4 years. I'm proud to report that 2024 was the first year of growth for dairy Milk in over 15 years, and we could not have done it without GALE. We knew right from the pitch process that GALE was very unique in its ability to blend data and creativity and really solve business problems for us collectively and being very fluid across the entire complicated channel ecosystem. As someone who has worked both agency and client side for now almost 30 years, I really appreciate how unique GALE is. I know now and always that I have the access to the talent and the capabilities that I need when I need them. I've been really appreciative of the support from the executive leadership team at both GALE and Stagwell on this amazing journey of milk. Working with a modern agency built for today has truly been a game changer for myself, my team and for the entire milk industry.

[indiscernible] As the media landscape continues to evolve its focus from volume to outcomes, the data underpinning the system is more important than ever, which is why the ID graph that JT mentioned is a priority for us here at Stagwell. Unlike our competition, Stagwell was founded on the thesis that both data and technology are central to the modern marketing landscape. It's why we are well positioned to innovate with the agility of the company, building solutions that grow and change to meet the demands of both our clients and our internal workflows. I'll now pass it over to some of our innovation leaders to hear more about how this works in practice. We'll start with Mansoor Basha, CTO of the Stagwell Marketing Cloud who will share more on ID Graph.

Hi. My name is Mansoor Basha and I am the CTO of the Stagwell Marketing Cloud. I'm excited to share with you one of Stagwell's most valuable and innovative core assets, the Stagwell ID Graph. In our rapidly evolving still landscape, where privacy regulations are tightening, the cookies are disappearing. The ability to understand consumers while respecting their privacy has never been more crucial or more challenging. At its core, the Stagwell ID Graph is our proprietary identity resolution platform that connects disparate data points into a cohesive, actionable understanding of consumers. Unlike conventional data platforms, our ID graph doesn't just store information, it creates intelligent connections across touch points, channels and devices. The ID Graph serves as our central nervous system that offers our data infrastructure processing and connecting billions of signals to create a privacy-compliant holistic view of consumer behavior. The innovation of our ID Graph lies in 3 key differentiators. First, our hybrid approach to identity resolution. While competitors rely heavily on either probabilistic or deterministic matching, we've engineered a sophisticated system that leverages both methodologies. This means we can identify connections with the confidence of deterministic matches while maintaining the scale of probabilistic approaches. Second, our persistent identity framework is built to thrive in a cookieless world. When Google finally deprecates third-party cookies in Chrome, many competitors might struggle. We've been preparing for years, developing alternative identity markers and contextual intelligence that doesn't rely on conventional tracking mechanisms. Third, our real-time processing capability sets us apart, the Stagwell ID Graph doesn't just provide historical insights. It processes data in milliseconds, allowing our clients to act on insights instantly, whether that's adjusting a programmatic bid or personalizing a website experience. We are in the phase of growing our data build-out, but we are seeing some early proof points. A global CPG client leveraged our ID graph to reduce media waste significantly while increasing conversion rates by 25%. A DTC retailer identified roughly 3 million high-value prospects that were invisible in their previous targeting approach. What makes the Stagwell ID Graph a differentiated asset versus our competitors is our unique combination of proprietary data, technical infrastructure and strategic applications that are difficult to replicate. Looking ahead, we are continuing to invest in the ID Graph through: one, expanded international coverage, particularly in emerging markets; two; exploring a partnership with Palantir for enhanced AI and machine learning capabilities for predictive modeling; three, specialized vertical solutions for high-growth sectors like financial services and the technology sector; four, strategic data acquisition to strengthen our proprietary assets. The Stagwell ID Graph represents not just a technology investment, but a fundamental strategic asset that differentiates us in the market. It powers our better outcomes for our clients, creates barriers to competition and positions us for sustained growth as the digital landscape continues to evolve. Thank you for your time.

Hey, everybody. I'm Mike Treff, CEO of Code Theory, and I'm extremely excited to talk to you today about one of Stagwell's most boundary pushing new platforms. We call it the Machine. The Machine is our AI-powered end-to-end operating system that unifies software, data, collaboration environments and technology, enhancing our capabilities, streamlining our workflows and driving better results for us and most importantly, our clients. At its core, the machine unifies data, first-party, second-party, third-party data, any data source we can get. And of course, proprietary data across the Stagwell network to centralize all these workflows, deliver insights fast and, of course, support scaled content creation and real-time performance reporting. This accelerates outcomes for our clients. It allows all levels of our team and our business to elevate. We're going to leverage things that are proprietary to us. One of the things that's most important to leverage is the Stagwell Marketing Cloud, where we've built a portfolio of products fit for purpose that together become an incredible source of first-party and third-party data. So what we want to do with Stagwell Marketing Cloud is make it easy to use it. So the Machine will minimize setup time for any of the products across the Stagwell Marketing Cloud, so we can tailor solutions to client needs, drive progress with precision and orchestrate every phase of work from ideation to execution through one source of truth and a single unified interface. The result is smarter, more holistic, more precise insights and better performance from day 1. We put those insights to work to guide creative media and experience design, not just collecting data and reporting on data for the sake of it. If the data is not affecting real-time decisions, if it's not autonomously allowing our work to improve, and it's not doing the right thing. So our design, creative and media planning talent is the best in the world. We know that. And the Machine will just amplify that work, allowing them to move faster and more effectively. It's going to meet them where they are in their software. This is extremely important. We are not here to change everybody's workflows. We are not here to insist that ourselves and our clients operate in completely new ways that are foreign to them that would create almost a slowdown and more of a change management nightmare than you would want. We're here to meet people where they are in their software, connecting insights and feedback to design decisions and portability. We do this through mini machines. And the idea of a mini machine is an interface layer that sits on top of whatever software suite you might be in, be it the Adobe Suite, maybe you're in Salesforce, maybe you're in Figma, maybe you're in Stage, but we will bring our mini machines to the worker to bring to them real-time insights. performance information, potentially allow them to queue and pull information that might make their work better, get creative recommendations, targeting recommendations, segmentation options. These mini Machines are critical because they allow you to continue to do the things you do best in your craft and meeting you where you are while integrating to the larger machine architecture where collaboration and workflows unify between agencies, inter agencies and clients. So the only way to do this is to build from an open source and OpenStack perspective, and that's exactly how we built the machine to plug into wherever you are. The machine will make production seamless and scalable through connections with tools like, as we mentioned, Adobe's content supply chain ecosystem. We can allow for scaled resonant content creation at high velocity and high specificity. Because at the end of the day, it's about performance, and that's our business philosophy, performance. That's why the machine integrates with Stage, our real-time media distribution and analysis platform. So we can have real-time data, enabling precise and dynamic media placement, maximizing every dollar spent. Campaigns were fast. They scale across every channel. They are optimized at every touch point. They drive seamless engagement and real results. So unlike our competitors, and look, we know that our competitors have been building these systems for years and years and years. We are the first to build it starting in the AI era. Everyone else will be retrofitting their stacks, their machines, their operating systems to work for an Agentic world, to work for a world where data, data unification compossibility are the most important things. The legacy companies are built on outdated technology stacks. They're disconnected across CRMs, CDPs, workflows that weren't designed for the pace, the speed and the expectation of today. We're building it AI first where intelligence powers every workflow, every routine, every operation from the ground up. There's no retrofitting, there's no add-ons, just API-driven systems built for speed, interoperability and rapid scale. So looking ahead, the machine will continue to evolve with the incorporation of agents. We're going to get more and more Agentic as the technology allows us to do so to allow in specialized tasks from automation to insight generation to analysis and reporting. And why is this important? This is important because we want our people spending time on the most high-value tasks. We want our people focused on building technology, on great strategy, on breakthrough creativity. We don't want our staff focused on production tasks, things that can be automated. We want high-value time for our teams, not low-value productivity for our teams. So we want to build a system that allows for every minute spent to be a more valuable minute. This will obviously increase productivity. The automation of tasks to free up bandwidth is going to be an exponential value add to ourselves and to our client, whether it's in the volume of assets, the go-to-market pipelines, the real-time creative and execution, streamlining costs and driving greater ROI. That is the power of machine, both for ourselves and for our clients. And so we're not just trying to get to parity. We're not just trying to level the playing field. We are trying to redefine the standards of what agency performance and client satisfaction should be. This is a forward-thinking approach. It positions Stagwell at the forefront of innovation. It enables us to compete and win against industry giants and cement ourselves as the challenger network. Thank you so much for your time.

Hi, I'm John Kahan, the Chief AI Officer of Stagwell. Over the last 4 decades, I've been involved in every facet of data and AI from product development to marketing and sales. Working closely with the top executives at 2 iconic companies, IBM and Microsoft, I help shape strategy related to AI, including the building of the data platform that powers Microsoft Azure today. I've known Mark for many years and jumped at the opportunity to collaborate with him when the Stagwell team launched the Marketing Cloud a few years ago, serving as the Chairman of the Board of Advisors for SMC. Today, I'm delighted to join Stagwell as the first Chief AI Officer. Why is this role needed at Stagwell? The marketing services industry is ripe for AI-led disruption. My personal mission is to open up data and AI for shareholder and societal good. AI will enable marketers to achieve more than they've ever done before, eliminating repetitive tasks, developing actionable insights, creating more customized, scalable content and targeting capabilities. Stagwell is at the forefront of this AI-driven shift. My role is to spearhead the integration and development of AI across Stagwell's global network. The focus is on creating innovative solutions that allow our Stagwell agencies and most importantly, our customers to focus on what matters most, delivering unprecedented value for their business and our shareholders. You've just heard some of the innovations that the teams are working on to leverage the most advanced AI tools in the marketplace, our unique data sets and Stagwell's expertise across marketing services. The Stagwell's Marketing Cloud products are empowering the modern marketer today. I am pleased to be able to introduce Elspeth Rollert, the CEO of Stagwell Marketing Cloud to discuss these industry-leading tools.

Good morning. My name is Elspeth Rollert, and I'm the CEO of the Stagwell Marketing Cloud. Before joining Stagwell, I worked at IBM, Microsoft and Uber, where I saw firsthand the power of breakthrough technology to not only change how we work, but to change lives. I am here now at the Stagwell Marketing Cloud because we are delivering breakthrough SaaS and DaaS products across marketing disciplines to change modern marketers' lives for the better by changing how they harness the power of technology to drive outcomes. We are masters of our craft, and I deeply believe that our team's industry expertise, along with Stagwell's proprietary data, award-winning network and ambitious clients give us a competitive advantage in a competitive marketplace. Looking ahead, SMC's focus is shifting from pure development to more of a sales-driven mindset with our sales, not development team growing the fastest. And that is why I'm more bullish than ever, and I'm pleased to report that we are on track for double-digit growth in 2025, while driving EBITDA improvement with an aim of delivering positive EBITDA heading into 2027. And we've only just begun. We will continue to be a growth engine for Stagwell. We anticipate delivering approximately 25% total revenue growth on an annualized basis, resulting in more than $0.25 billion of revenue by year-end 2029. Now today, the solutions we go to market with are aligned with Stagwell's strengths across research, communications, creative and media. Our research suite of products, Harris Quest Research, is led by the Harris Poll, a leader in research for the past 60 years. In 2024, we've seen strong growth in our brand tracking and intelligence tools, 2 of which you will see demos of shortly. Blue-chip clients across industries from finance, to retail, to tech are expanding to new markets with these tools, relying on them to deliver trusted real-time AI-powered insights across the globe. Our communications suite of products named PRophet comms tech has expanded tremendously in size and capabilities in 2024 with the acquisition of Tel Aviv-based LEADERS and IMAI, a digital agency specializing in influencer marketing and social commerce and an influencer marketing SaaS platform, respectively; and cloud-based UNICEPTA, a global media intelligence provider. These acquisitions represent our commitment to growing our capabilities and geographic footprint. Our creative and media suite of products and platforms have 2 key components. The creative and media studio uses first, third and proprietary data to inform AI-driven insights that predict and fine-tune campaign outcomes. And our advanced media platforms, which offers a number of media channels that allow partners to target customers in unique ways, like our innovative around platform for live events, which we will demo shortly. Today, SMC's go-to-market motion is driven by a combination of digital channels, partners and our sales team. And we innovate with strategic tech partners like Google, who we work with as a strategic cloud partner and AI provider and Adobe, who are integrating their industry-leading creative tools into our products. Now I'd like to show you a few SMC product demos that demonstrate the range and power of our capabilities, the capabilities that attract and retain our customers. Let's start with Quest brand from the Harris Poll. QuestBrand deepens the understanding of your brand and its competition by allowing you to track progress over time with concrete metrics.

I am Justin Pincus as Managing Director of QuestBrand by the Harris Poll. Think Quest brand is a health tracker for your brand. Startups use it to build momentum, mature brands watch for warning signs backed by 60-plus years of equity research. It delivers real-time insights across awareness, perception, motion and conversion. We collect fresh data daily via online surveys with real people, balanced Gen Pop age 18 across 20 global markets, and we can launch new ones in just 2 to 4 weeks. For fast-growing brands like Celsius and Poppy, it's all about traction with QuestBrand, you can track familiarity and momentum week over week, especially among Gen Z and millennials. Looking at the end of this trend line, you can see a clear pot for liquid death, not only is looking at traction and how you're doing with the market, the use case for QuestBrand but so is campaign tracking measurement. After liquid Super Bowl ad, it's very clear to see a lift among Gen Z with daily tracking, you don't have to wait weeks to measure impact, you can see it now. And speaking of seeing things now, when the EV tariff news broke in Canada, Tesla's brand momentum dipped. Not only that, but if we look at the percentage of consumers in Canada that say that they would never consider purchasing the brand those rates also jumped overnight. With QuestBrand, you don't miss the moment. Once you see something you like, you can save that view down immediately into our report builder, where everything is live and easily exportable. Bottom line, brand health doesn't just live in spreadsheets, and evolve and so should your tracking that is QuestBrand.

BERA.ai revolutionizes the way brands track and measure the financial implications of brand investments. It bridges the gap between marketing and finance to create a company snapshot that is both deeply granular and widely comprehensive.

I'm Ryan Barker, CEO and founder of BERA.ai. BERA is the world's only predictive brand tech platform that links brand strategy directly to business outcomes. It helps you understand the real financial impact of brand investments, so you can make smarter, faster decisions that actually move the needle. Here's how first connect brand of business. Instead of just tracking brand metrics, BERA shows how those metrics impact real business outcomes like sales, growth and KPIs, making brand performance measurable and accountable. Second, explain brand changes, wondering why your brand score dipped last quarter, BERA helps you understand what's behind the shift. So you can act with clarity, not guesswork. Third, eliminate brand blind spots. With over 130 metrics across demographic, geographic attitudinal and behavioral data, BERA gives you a full 360-degree view of your brand's strengths weaknesses and opportunities. Who is this for? Marketing leaders, brand strategists, CMOs and growth teams at consumer-facing companies, especially those in retail CPG, hospitality and tech who need real-time insights to compete and win. BERA.ai delivers the intelligence you need to transform brand data into business results. No guesswork, no wasted spend, just smart predictive brand strategy faster than ever.

And now we'll hear about UNICEPTA's powerful AI-powered media analysis and intelligence tool that observes more than 460 million sources of information every single day by combining AI-powered technologies with human expertise and judgment.

Hi, everyone. I'm James, I'm an Account Director at UNICEPTA here in the U.K., and I'm going to give you a brief overview of our mind portal. Mind is an advanced media intelligence platform that transforms contract data into clear, actionable insights. It empowers com's team using both cutting-edge technology and human expertise, helping them analyze vast amounts of data. It enables fast, precise and relevant insights through advanced search, filtering, AI-powered analytics and automated reporting. Here's how it works. So mind has advanced search and filtering, meaning more targeted queries and automated tagging, streamline research and categorization, it has customizable baseboards and alerts. So personalized views and real-time notifications ensure key developments and never missed, has AI-powered analytics. So trend detection, sentiment analysis and predictive insights help identify relevant media dynamics early on, has flexible reporting to customizable reports with visual analytics for clearer communication. And all of this with seamless integration. So it works effortlessly with existing workflows and tools to increase efficiency. In terms of why a prospect will buy it? Well, in today's fast-paced media homescape, staying ahead requires intelligent tools. [indiscernible] helps professionals cut the noise, focus on critical insights and make smarter, faster decisions. It enhances efficiency, reduces manual effort and ensures communicators always have the most relevant data at their fingertips.

Smart assets is an AI-driven creative effectiveness platform that brings creative and media together, ensuring their ads hit the mark every time.

I'm [indiscernible] from Stagger Marketing Cloud. Today, I'm excited to introduce smart assets. The creative effective platform that helps brands drive higher return on ad spend by understanding exactly what makes impactful creative. The process is simple but powerful. Creative teams upload assets, the tools instantly score them based on media and branding best practices. It takes for things like local presence, key message clarity and whether the ad meets platform-specific requirements like Instagram or TikTok guidelines. Smart assets uses AI and behavioral psychology to tagging great creative elements, things like emotional tone product visibility or CTA strength. It helps since manage global assets in one place and avoid wasting media spend on underperforming content. Our users see measurable results one luxury beauty brand found 121% uplift in return on ad spend after using smart assets to optimize their creatives using insights derived from the previous year of performance data. So if you're looking to scale creative, improved brand governance or just stop wasting spend on weak assets, smart assets can help you make every piece of creative count.

Lastly, around bringing something very different to the SMC family with its B2B and B2C proposition. It's an entirely new way to layer augmented reality-based marketing on to live events.

Hi, my name is Josh Baty, and I'm the Founder and CEO of Around. Around is redefining live sports entertainment with shared augmented reality, connecting mobile and broadcast into a powerful new mass medium. Around is the first share our platform designed to engage every fan in the stadium, whether on the phone or on the video board, making the entire crowd part of the action. With Around stadiums aren't just venues, they become interactive playgrounds. Our technology turns the smartphone into a game controller connected to the rest of the stadium. Broadcast is also able to integrate our immersive experiences into their cameras for connected video board and streaming potential, creating moments for fans don't just watch the game. They are part of it. Around is frictionless, scalable and 100% browser-based. So fans can scan and localized at any stadium, instantly becoming part of a shared stadium wide experience. Why are teams like the Rams and Minnesota United and the athletics adopting around because this is the future of fan engagement, a fully interactive mass medium that transforms spectators into active participants and sponsor activations into real-time interactive moments. It's game on.

As demonstrated in the product demo videos, SMC is empowering modern marketers through technology leaning into the powerful ways in which AI and AR optimize workflows and more are fundamentally changing and enhancing the way they work. The team and I are relentlessly committed to delivering best-in-class solutions, ones that are seamlessly powered by Stagwell's proprietary data and enriched with cutting-edge AI-powered features that ensure our solutions are relevant and actionable today. And we're not stopping there. Our evolution will take us beyond stand-alone applications. This summer, we'll launch the first iteration of the Stagwell Marketing Cloud platform, a unified ecosystem, 1 place for our customers to package and purchase all of their products. This is more than just an upgrade. It reflects a key shift in how we work. Our vision for the platform is to continue to harness the power of our data, the oxygen to AI. Making it accessible and actionable for marketers no matter their specialty. By integrating AI into every facet of the platform, we aim to streamline repetitive tasks, create more scalable and performative content and ultimately build a 24/7 marketing platform with Stagwell AI agents that empower marketers to achieve more wherever they are. This is just the beginning of our journey as we lead the way in transforming the future of marketing.

It's Ed Pilkington here at Diageo. We really value the relationship that we have with Stagwell. We work across multiple Stagwell agencies across multiple disciplines and across many of our brands. And in some cases, those relationships actually go back many, many years and have been highly fruitful. And what do we value about working with Stagwell across those different partners, different agencies is we get great thinking, great strategy upfront based on insight and cultural or savviness and connectedness. And then we get a big creative ideas, some big thinking, which translates into great work, which is always really, really well executed. There's a real craft to the work that we get. And we also really appreciate just the relationships that we've got, the ability to pick up the phone to talk through issues and opportunities and get to great solutions for our brands and our business, and we appreciate that.

Thank you so much. That was great. Now we're going to move on to our next segment. Let's take a look.

Good afternoon. I'm Ryan Linder, Stagwell's Chief Operating Officer. Stagwell has made meaningful progress on delivering the combined $65 million in cost savings since the merger over the next 18 to 24 months. We expect to implement further cost-saving measures, resulting in an additional $80 million to $100 million in savings. While some of these new savings will come from expanding our existing shared services and real estate consolidation initiatives, we anticipate the bulk will come from AI-driven technologies that will allow our employees to work more efficiently. We expect to find tech-driven efficiencies throughout nearly every step of the creative content production and delivery workflows, summarized into the following 5 key areas. First, in planning and asset management we can deliver more efficient production workflows and faster content delivery by centralizing the storage and organization of digital assets in automating the related production tasks second. Our newly engineered system will deliver significant time savings through AI-assisted content creation, faster revision processing and reduced time in asset discovery. Third, leveraging AI we can increase the speed of content variation for faster A/B testing. This, coupled with automated content publishing functionality will allow us to improve personalized digital experiences. Fourth, we will be able to increase collaboration and reduce project turnaround times by enabling easier management of client feedback, a more efficient review and approval process and faster access to content for client presentations. And finally, our technology will allow quicker access to content performance data. Leading to improved analysis and streamline content planning workflows. The result will be more strategic recommendations, faster campaign optimization and data-driven results. Through this process, we will be able to significantly improve the efficiency of our teams by eliminating repetitive tasks and streamlining day-to-day work. Ultimately, this will allow our teams to focus on what matters most, delivering best-in-class work that helps our customers transform their brands. We will be using a variety of Stagwell proprietary products and technologies, many of which are powered by Adobe and Google, implementation is currently underway, and we expect the power of these tools to increase over time, accuracy and usability will also improve, expanding the number of use cases, our technology enabled content supply chain can impact. We anticipate $60 million to $70 million of cost savings to be actioned by the end of 2025 and reflected in our 2026 results. The remainder of the savings will be actioned by the end of 2026 and will have a meaningful impact on our adjusted EBITDA. We believe our approach is both a tool for saving costs in a way to supercharge Stagwell delivery for our customers. We look forward to updating you on our progress in the coming quarters.

I'm Frank Lanuto, Chief Financial Officer of Stagwell. Good afternoon, and thank you for joining us with Stagwell's 2025 Investor Day. Just over 3 years ago, at our very first Investor Day, we outlined our growth and efficiency strategies as well as our financial targets for the ensuing 4 years. We exited 2024 with strong growth and are on track to achieve those goals as we continue to disrupt the legacy advertising industry and focus on becoming the best-in-class marketing services company in the world. Today, I'll provide a summary of our financial growth since the merger, dig into greater detail around implemented cost savings initiatives and then provide a view into the changes we're making to position us for future profitable growth. Starting with the 2024 annual results. We reported revenue of $2.8 billion, an increase of 12% over the prior year, led by 13% growth in digital transformation, 19% growth in Stagwell Marketing Cloud and 10% growth in outperformance media and data capability. We also reported adjusted EBITDA of $411 million, an increase of 14% over the prior year, with the margin as a percentage of net revenue of 18% an improvement of 120 basis points over 2023. In 2024, we also remediated the material weakness in internal controls as our efforts to build an efficient and streamlined financial reporting organization have succeeded. Looking at our progress over the last 3 years, in fiscal '21, Stagwell reported revenue of $2.2 billion, with 87% of our revenue derived in North America and more than 50% driven by our creativity and communications capabilities. The $2.8 billion in revenue reported at the end of '24 represents a total increase of more than 28% over fiscal '21, representing an annualized growth rate of approximately 9%. These results outpaced our peers in the U.S. with the annualized growth rate more than 350 basis points higher than our nearest competitor. Geographically, revenue outside of North America has grown 41% since '21, and the percentage of revenue contribution from outside of North America has increased to 16%. As Mark and Jason both noted in their remarks, international growth is a significant component of our future strategy. And we expect international as a percentage of total revenue to grow steadily over the next few years. Revenue contribution by capability has also shifted positively, with digital increasing to 53% and traditional creative and communications reflecting 47% our revenues in fiscal '24. The shift is a result of a combination of our focused M&A as well as stronger organic growth and our digital capabilities. Turning to costs. In 2021, we outlined a path to achieving $30 million in annualized cost savings following the merger. This figure was achieved by mid-'23 through a combination of actions, including the expansion of our shared services platform, real estate consolidation and benefits of scale with respect to technology and compensation-related costs. Along the way, we identified opportunities for further savings and announce a second initiative to reduce annual cost by an additional $35 million. In 2024, we closed offices and consolidate it further into campuses, in London, Toronto, Los Angeles and New York. The annualized impact of these moves will be approximately $14 million. We're also evaluating additional opportunities for consolidation in other markets over the next 24 months. Turning to technology. During 2024 our deployment of AI-driven automation combined with the real estate actions discussed above and the elimination of redundant technology will generate more than $5 million in annualized savings. And with respect to back office, we completed the implementation of various technologies, including a new management and reporting financial platform across our financial functions as well as continuing to roll out our global HR platform to our agencies. These actions will not only provide greater visibility into the business performance but will also help to deliver more than $11 million in annual savings. In total, our actions have resulted in the achievement of more than $30 million in the savings of the incremental $35 million we announced. Looking to the future. As Mark discussed, Stagwell is on a path to being a $5 billion revenue company with $1 billion in adjusted EBITDA by the end of 2029. This is our 5x5 plant. What does that mean for the company profile. Over the next 5 years, we expect to deliver 12% compounded annual total revenue growth building to annual adjusted EBITDA of $1 billion. There are 3 driving factors to delivering our plan, industry-leading organic growth in each of our new reporting segments. Accretive M&A, adding new capabilities and geographies and a laser focus on leveraging technology and scale to increase efficiency and reduce costs. Let me expand on each of these drivers. Starting with organic growth. We expect growth of approximately 9% compounded annually over the next 5 years. The foundation for growth is rooted in our digital-first customer-centric approach to servicing our clients. Stagwell is optimally positioned to redefine the way marketing is done. We are the Goldilocks company, not too big and needing to shed employees and not too small and struggling to keep scale clients. Our strategy is working. The value of the RFPs we've been invited to has grown from about $1 billion in fiscal '22 to north of $1.3 billion in fiscal '24. We are winning with some of the largest companies in the world, including General Motors, Starbucks and Adobe. And our trailing 12-month net new business wins are now in excess of $380 million almost 80% higher than in fiscal '22. Each of our new segments is poised to deliver industry-leading revenue growth over the next 5 years. And marketing services we expect revenue to grow at about 5% annually. Over the last 12 months, our creative businesses have demonstrated the ability to win larger global remits from some of the world's largest companies. As we continue to scale globally, we believe we are uniquely positioned to deliver best-in-class growth. In media and commerce, we anticipate annual growth of approximately 10%, becoming a more than $1 billion business line by the end of 2029. As we discussed with a focus on performance outcome-driven media buying approximately 80% of managed media and digital channels a major innovation in our tech stack, media and commerce is firmly established in the highest growth parts of the market. Digital transformation will grow more rapidly with annual growth approximately 15%. We are on the cusp of an AI-driven wave of digital transformation. All companies will need to reimagine the way they engage with the consumer and AI will power it. We believe our digital transformation businesses are uniquely positioned to help companies with this mission. The new advocacy segment is an exciting growth opportunity for Stagwell. The biannual political cycle will be somewhat leveled out by the addition of our public relations and public affairs businesses. This segment can deliver 20% revenue growth over 2-year period or roughly 10% per year. And finally, Stagwell Marketing Cloud is still in its early days, but as Elspeth discussed, we have significant momentum as we ramp up our sales force and our products continue to gain traction within the market, we expect to see annual organic revenue growth approach 25%. Turning to M&A. Stagwell will continue to focus on acquiring high-potential businesses that expand our capabilities and geographic reach. We have the ability to reinvest our free cash to accelerate growth and increased scale. Our goal is to acquire $100 million in revenue each year. This revenue should grow at approximately 15% annually. As Jason noted, we fundamentally believe that the Street is not fully recognizing the value our M&A platform delivers. And we are committed to lowering this growth while expanding adjusted EBITDA to $1 billion of annual revenue by year-end 2029. Increased scale throughout our business will drive some of this. Compensation and head count will expand more slowly than revenue, driving margins upward. But we will be proactive in taking additional steps to grow adjusted EBITDA margins with our dome initiative. As Ryan described, we are launching a new initiative that will deliver $80 million to $100 million in cost savings over the next 18 to 24 months. The majority of these savings will come from an increase in employee productivity, driven by the expanded deployment of AI-driven technologies. This should drive a step function improvement in adjusted EBITDA margin of more than 150 basis points in fiscal '26, followed by further improvement in '27. As our employees become more productive using these tools, our business scales and the business mix shifts towards higher-margin digital transformation and software we will drive adjusted EBITDA margins on revenue to approximately 20%, a figure that will lead the industry. The foundation for our ambitious 5x5 growth plan is in place. which leads us today to reiterate our full year guidance consisting of approximately 8% total growth in net revenue, adjusted EBITDA between $420 million and $460 million, free cash flow conversion in excess of 45% and adjusted earnings per share between $0.75 and $0.88. In summary, when I look at Stagwell, track record of superior growth its portfolio of services grounded in digital transformation, a best-in-class platform for accretive M&A, a growing list of major global customers and the innovation in delivering disruptive AI-based products. I am confident in Stagwell's ability to achieve the 5x5 goal that we have outlined here today. With that, I would like to hand the call over to Ben Allanson, our Head of Investor Relations for our Q&A session. If you would like to ask any questions, please drop them in the chat function. Thank you.

Thanks very much. We've got a number of questions here, and we obviously want to make sure it's open. Please do continue sending them through if you have any that you'd like us to last. Mark, let's kick it off here, a question from Laura Martin at Needham. Given your success as a challenger brand and taking on the big 6, soon to be big 5 agencies can you talk about what your mods are? What prevents that extent from potentially displacing Stagwell?

Well, first of all, since we're really the first company to get to this scale in suppliers, I can say, 40 or more years. I mean, there obviously is a moat to companies getting to full scale in marketing services and digital transformation and that we're breaking through that. And why are we breaking through that natural mode, we're breaking it through because -- we had the right combination, I think, across all services, whereas some people just pick one service and try to go with that. So we're across creativity, digital transformation and media and products. I think advocacy is a special moat in and of itself because I think it's a core service to what we provide, but it's also differentiating in terms of the way that we have approached it, particularly as a form of high innovation, digital-first marketing. And I think that we're now in kind of the right inflection point here as the racemic struggle to incorporate technology and AI and are on the way down, we're on the way up able to gobble up the latest of technology kind of at a lower cost curve and then a more nimble innovation curve. And I hope people have enjoyed the demos and the videos and the clarity of where we're going on all this. So I think all of those things really contribute to this being a moment for Stagwell and a unique moment at that.

Maybe we can just play out the advocacy point. I'd like to throw it to Zac quickly. We had some questions about sort of advocacy is a sort of a synergy point with the rest of the business. Maybe you could just ask about some of the innovations you are developing within targeting within the advocacy vertical which we think can ultimately makes expanded out to broader marketing services use cases.

Absolutely. I mean both cases that we highlighted specifically Wonder is the one that I would look to our capacity for our Texas team platform that really has the condition to scale definitely. And we put 7 billion metrics just through so far, and we think we're in the first inning of that. So that's a product that can be used by anyone in the equity space really activation as a core differential, but also leveraging [indiscernible] AI, everything is going to help you saw our 37% staff production this year relative to 2 years ago. So we're finding those successes for leveraging the platform using the technology to really drive the growth and efficiency of the efficacy market.

Let's stay on the AI side of things. And from an store and tree -- we've got a question about sort of given our focus on AI, how do we think about a hold and responsible use of data within the IT graph and we're going to kind of innovations as well as kind of more broadly the AI privacy side of things. Maybe Mansoor, you might have to handle some of that?

Yes, sure. Starting off with -- when you look at just the ID graph itself, our focus -- tantamount focus is on the privacy aspect of how do we bring external data sources, our internal data sources and mix them together. And to do that with client data, we have to be very careful about how we address what privacy standards are required for that. So we have based on privacy audits and we are also innovating and scaling it with differential privacy and other new techniques and methodologies for that. The focus of our innovative standard side that is that not just -- it's not just a plain room approach to it, but also an understanding of what is it that the customers are looking for in a privately secure manner for them. Now if you extend that into AI, what we are trying to do is not only work with the LLM providers to get enterprise-grade LLM. We work directly with the LM providers and say, this has to be super private. We are working on behalf of our clients. We want zero-proof possibility that any of this data goes back into your LMM training models. And then on top of that, the applications which we built to make sure that they are stock to compliant, we make sure that the way we present the data and approach that data and access for our clients are not differentiated in some way for other people to be able to capture some of that information. So we've tried to focus on providing clear houses, which are clean collected. And at the same time, we try to make sure that's a scalable solution across.

And I would just add from the client perspective, we're implementing AI forward solutions into our client organization. Certainly, our approach has been to meet our clients where they are with respect to their maturity on the AI curve. So many organizations are focused on experimentation. Many organizations are further along and focused on really implementing full end-to-end AI-enabled solutions. And our approach has been to meet them where they are. And certainly, you see in the market, the major software providers are moving forward very quickly in terms of adapting indemnification and privacy and making sure that, that works specifically, you can see that with Adobe, one of our key partners on this. which is tend to just move the wholeh market forward from a comfort perspective.

Maybe let's pivot to Elspeth quickly. And we had some questions coming in talking about the next couple of years for the Stagwell Marketing Cloud. Obviously, products are really beginning to gain some traction in the market as you biotin your presentation. As we look at the next couple of years, can you maybe elaborate on the shift to sort of maybe more of a sales like motion? As well as sort of the way we're thinking about that sort of pathway to a mission of being -- getting to profitability on an EBITDA basis by year-end 2026. Maybe you could elaborate on some of that?

Yes, absolutely. Look, you heard me say this in the presentation, but we're more bullish than ever that we're in market with industry-leading products. And we have strong momentum, and we're doubling down on that because we believe we can drive growth in the marketplace. So let me just give you like a few kind of proof points of that. You saw a presentation from QuestBrand and BERA.ai, 2 of our brand nitrogen products. We ran, we built in-house only a few years ago. Today, we track over 1,700 brands worldwide have more than 150 clients on the platform. With BERA.ai, an acquisition that we did last year, we've already won a multiyear, multimillion-dollar multi-market deal with a global payments provider. We are breaking through with strong revenue growth on these products with blue chip clients. And those investments that we've made in that product, again, we're going to continue to build off of that scale and really see that top line growth. With our recent acquisition of UNICEPTA that only happened in December, we've already landed a 6-figure deal with an insurance provider in the U.S. in -- already in Q1. UNICEPTA has been largely unknown in the U.S. or taking our sales and marketing capabilities, building out a team in the U.S., bringing a proposition that's been very, very strong in Europe to date in bringing that to the U.S. and capturing share. Again, driving growth based off of the investments that we've made in the products that we have today. Also, you didn't see this in the demo and something we haven't talked about as much, but our DaaS offerings. We have the people platform, which is very strong in location intelligence and audience measurement. We have a very strong retention and growth in this product, and you're going to continue to see a double down in sales, specialized sales in this category. So ultimately, we believe, over the past couple of years, Mark described us as that nature. We've only been around the block a little bit here, but you're going to see us take that shift from more of that investment in the product and engineering and really shift towards sales and marketing and drive that top line growth and scale off of the foundational work that we've done over the past few years to realize that hockey in growth that we are expecting.

Great. Shifting a little bit on the M&A side of things, Jason, we've got some questions particularly around international. Could you maybe elaborate a little bit on how we select different markets that we're going into? What are some of the key dynamics we're seeing in some of the international markets. And then the next piece of it is what might be the margin impact moving into some of these new markets as well?

Sure. Sure. I think a great example is what's taking place in the Middle East. You're seeing quite acceleration in GDP growth there. And it's the reason that we're targeting the market. And as I mentioned earlier on, organically, those business grew 50%, but it's really sort of a 2-way street. So you're thinking about both leaders in Tel Aviv and Consulum in Riyadh, these are companies and teams that have incredible relationships that we're able to sell in core capabilities like research, digital transformation that is really accelerating that growth. But it really goes both ways and Elspeth just touched upon this in UNICEPTA, which is based in Germany. That's an asset that's really well known in Europe and also in the U.K. that has no real U.S. presence, and we just landed our first huge contract. If you scope to market for what they do in the U.S., it's in the hundreds of millions of dollars. So I think that's just the beginning of where we can go. And on the margin front, I think it's less geographic, it's similar capability focused, right? So when you have technology platforms at leaders and UNICEPTA or a highly consultative approach at Consulum. This can actually lift margins. Those are above-average margins relative to the whole.

Another question that came up from an investor sort of more broadly about profile of the kind of company that we are in M&A moving forward. Any kind of thoughts on any steps that might happen there? Any particular areas that we're really, really going to be focused on over the next 12 to 24 months in those particular areas?

I think you'll just see us continue to be focused on high GDP growth areas and capabilities that we need to land and expand and really win global clients. I think the flywheel that we've created today, we can continue to simply expand upon.

I want to pivot to sort of 3 key announcements that we're making today. The first is around reorganizing some of our business lines to more accurately reflect the way our clients ultimately want to buy and the services to be delivered Jay, could you maybe sort of elaborate some of the rationale in a little bit more detail for making this change.

Yes. No, I think you've hit on the right point, then. I think when you think about sort of how to put the businesses together in a way that the clients think about how they buy. I think when you look at the verticals now marketing services, whether it's creative, social, research, experiential, that tends to be more CMO type of bucket. When you look at digital transformation, it can be a CMO, but it can also be a or any other type of player on any side of that realm. And so -- and then if you look at the media, it can be a CMO or a head of media as well. So I think and then digital transfer -- and then the Marketing Cloud can also be on the marketing side, but that's from full service down to sort of platform self-service. So I think overall, this is about sort of simplifying the business, making it easier for people to not on the right doors. But more importantly, as Mark mentioned from the beginning was this is about through the prism of growth and scale and innovation. And the growth in the scale innovation can happen in each of these 4 verticals and that growth can happen globally at scale for our creative businesses. It can happen globally at scale with our digital transformation businesses and the innovation happens in those businesses together at the larger size at a larger scale. So I think that's really why we did it. And we think it's important that clients have an easy, simplified way to understand where they go and the right way to buy our services.

And the time line on these changes, obviously, still working through. We've emphasized that we're progressing on all the...

Yes. I think second half of the year.

Yes. And I think second half of the year is right. And I think we'll work through that. But I think overall, you'll see the simplification takes a little bit of time, but I think just before the end of the year will be right.

Ryan, I want to ask a little bit about the $80 million to $100 million of cost savings that we've announced today. Big target, ambitious target, obviously driven by AI as a key driver of that is for our businesses. But we have a question, what are some of the barriers maybe to possibly achieving those over the course of the next 18 to 24 months of the time frame that we've got there. One of the things that might ultimately slow us down or speed up in being able to achieve these.

Sure. I believe it really comes down to 2 things, which is effectively the risk of managing change management, but also a full option and what we're deploying. We have to make sure these tools are implemented and used consistently across all of our workflows as a standard for our company. And that's why we're taking an approach of both a top-down change management perspective to support each of our brands in their adoption, but also ensuring that we're enabling a bottoms up here where we need or how we need to customize for each of our brands, they get the most out of the tool to realize the benefit. And I think we're also choosing technology that are also familiar with our teams in addition to what we're building that our teams are requesting functional use cases. We have things like Adobe and Google that are also powering a lot of our back-end AI tools. And so there's going to be a learning curve, but we're working towards minimizing the impact and really accelerating the adoption and supporting them through the change management to realize the full benefit.

Great. I wanted to go back to a question we'd asked a little bit earlier on, and now as of Evin and JT. It seemed like we had a little bit of an audio issue with Evin's answer. So I kind of wanted to just revisit that a little bit. just talking about the comments you made about the DR and brand and how customers are ultimately thinking about it, how we are recommending to customers. So maybe you could just reelaborate on kind of that shift that's going on in the market.

Right. And I think the solution is less of a clear line in a divide as you continue to innovate brand marketing looks like. There's very few pieces of brand marketing you put out in the world today that also don't drive consumers to action. That don't continue to help our clients grow, which ultimately helps us grow. So it's a balance between the 2, and I think it's more of a cycle, sometimes in the funnel where we need to make sure we're developing comps at the highest level that is consistent all the way through, which allows us as an agency to continue to create all the different tiers of content that does drive action while also building the value in the brand that ultimately drives decision-making. But a big piece of that is close partnership with a media company, which lucky to have James as a partner here and as we work with our clients of how we continue to do best-in-class and make sure creative and media are very close together to deliver the best impact. So I'll let James pick up on how the media works from there.

Yes. Thanks. I mean I think in building on what you said, yes, I mean, we are seeing, as I said, our investment profile now grows to $5 billion plus of investments we're making for our clients. And north of 80% of those are digital in some form or another. And many of those channels really do house the ability to deliver a brand experience and a conversion opportunity. So we have seen digitization, the maturity of the market develop in our favor, actually. The business was born in performance, but it's added brand assets along the way from a media group point of view. And I think part of the reason why we've seen that growth double over the last 3 years it's not just the scale of the media organization. It is what Evin talked about. It's the fact that the organizational design of Stagwell does deliver on and encourage that collaborative opportunity in terms of share revenues, shared scopes and shared knowledge. So I think the combination of our digital routes, the organizational design, and as Mark described earlier, the sort of Goldilocks scale that we've arrived at I think, is really giving us the advantage to be able to deliver on brand performance marketing, not brand and/or performance marketing.

Let's meet to Mark then I'm going to have a question for everyone, and then we'll go back to Mark. So we'll kick off with Mark about the conversion of Class A or Class Cs to Class A shares today. Question here, just a little bit on timing. When are we expecting this to happen? And just a little bit of maybe the support that it has from the various large shareholders yourself, Steve, et cetera, and sort of how we're thinking about it. Is there any to sell shares? What are we thinking about here? And could you maybe elaborate on the thought process time why now?

Sure. All our others agreed this was an opportune time to convert from C to A. Our primary motivation was to simplify the capital structure so that more funds and more indexes who look for a single class company would increase the liquidity. Look the focus here is Steve and I are long-term holders this reputation for the longest term holder. And I think you've heard my talk, I'm thrilled that we've got in Phase 1 and 0 to 1 trillion. And Phase 2, I think is the exciting next journey for this company in its value. We think shareholder value is undervalued right now. This was a good time for us to convert and continue to build value in the shares and attract liquidity so that people get real of this complex thing that they can't really analyze. Now there's one class, everybody is Class. Of course, everybody is the same boats and that's why we did it now under valuation and good opportunity to build liquidity.

I'm open this up a little bit more broader because I think it's a really interesting question. And so to Zac, to Evin, John to JT, it'd be great to kind of get an answer to this, which is our [ ML pit ] as well. what is the most pressing demand that customers are making of your businesses right now? What is that one thing that everyone is really [indiscernible] perhaps maybe we'll start if we can, and then we can move around.

Yes. I mean if I was to say the one thing is that in the last year or 2, there's been overspend on tech with not enough results and they are coming to us because we have the growth scale and innovation to actually drive actual usage of the emerging technology in a way that actually gets their growth scale and innovation. So that is the #1 thing that we see in the market that prove or coming to us.

Maybe on the Marketing Cloud side?

Yes. What I would say is analysis paralysis. There's more data than out there in the world, how do I quickly synthesize this data makes sense of it and take action. So again, going back to what we were talking about with some of our brand measurement products, what we're talking about with media analysis and intelligence. Hopefully makes sense of this and take action because the world couldn't be moving faster. And so how do you get tools and systems. And quite frankly, as we look to build out the Stagwell Marketing Cloud platform, bringing in various data sets to quickly integrate them together. They're going to come from a number of different sources and make the organization more intelligent. Intelligent work on a single -- more single sources of truth and move the strategy forward.

JT, media buying media strategy, how things?

Yes. I mean there's 2 requests and they're held on the same wait really help me change now and become the future forward and stop growing. So help me continue to grow and deliver quarter-on-quarter annually and drive our business forward, whilst also affecting change management within the client organization out media teams going to centers of excellence. Or bringing technology and the data literacy into those organizations. It's change and don't slow down on growth. So it absolutely is transformation and growth.

Evin, your thoughts on the creative side of things?

Yes. Brand relevance. Make my brand matter in the world to build a platform that has staying power, but it is also flexible for all the different types of communications we have to put out internal, external different levels of it is required and deliver results. We are here ultimately to deliver results for the CMOs and CEOs and the shareholders of those companies. And by doing so, that's where we grow our scope with them, but it's brand relevance and results.

And Zac, your thoughts on, particularly in the political and the advocacy side of things.

Look, I think on the political side, it's always performance. It's the capacity to leverage your first part data and actually perform. I mean it's why the business is kind of it's cold and it's calculated because there's always an output. I think on the efficacy side, people are trying to understand message dissemination of relevancy. I think what you have in a presidential is it gives you a step chunk to the future. I think everyone is trying to understand now how do we navigate this new world order of information or content creators parity with what you see networks. People are looking for people who have insight. I think that whether you ever think Mark and the team on risk and reputation because you get an opportunity to look into the future to make determinations to help drive your decisions. And I think everyone is trying to understand because we're watching in real time, a new execution occurring out of D.C is the center of so many decisions, I think, in the market right now in North America.

Were close to wrapping up, but I wanted to finally have the final question to Mark here. That was reiterating guidance today. We don't provide quarterly guidance, but you can just go into a little bit more detail about the cadence of the year, how we're thinking about Q1, Q2, Q3, how ultimately the case of the year is going to flow through and what we're thinking about, obviously, without a quarterly aspect.

Sure. I don't end the job of an analyst looking at our company in the sense that there are a lot of ebbs and flows going on all the time. Right? We have an ebb and flow in the political cycle. And so Q1 is going to be the lowest point in the political cycle. And then we have an ebb and flow of kind of the shopper marketing purchase cycle right, which also tends to be weighted towards Q3 and Q4. So we don't do quarter-by-quarter guidance, even though internally, we budget clearly on a monthly and quarterly basis. And so it's important to say coming off of a high-growth year then into the political cycle that doesn't -- there is a zero political cycle in the first quarter that typically you look for us to be slower in that first quarter of the nonpolitical cycle building in the second quarter and moving in the third and fourth quarter to what is the crescendo of the year. And then in particular, second business we win in the second quarter, it's still a business that's going to manifest itself in the third and fourth quarter, where this is we win in the third and fourth quarter really bumps into next year. So it's an enviable task to get the purchase and the combination of the purchase and the political cycle in needless to say, and I always like to point out, we started at 09 years ago, which here today have mentioned hedging $3 billion, and I think we have a very comprehensive plan to get from here in the next phase of this business.

Actually, one more for you, which just came through. And it's a little bit strategic in kind of how we're thinking about things. Question was, obviously, a little bit of volatility around the political cycle in advocacy and we have thought about maybe spinning that business off. And then also another question which kind of goes in similar vein, a lot of work we've done on the aggregated first, second, third party data. However, the seen world where we might sell some of our own dates for some of those services to external clients. I think there's a big question, but I would just like to get your thoughts on that.

Yes. First on advocacy. Advocacy is a critical part of our moat. It differentiates us. It builds on, I think, some of the great skills. And I think it also has a number of offshoot products like the test messaging platform. We're going to more of our commercial clients and say, hey, do you have to put it on TV to reach people when we can reach people through text message. So it puts us right in the heart in the sweet spot, understanding advanced digital-first communication. So I think it's an absolute critical part. When I look at things that could be spin-off, I will look at things that are really either not part of the model as we with consent or look at something like a fast-growing tech product. It can have a high value like something like around us around gets to more and more stadiums and more and more sports. Could that once that gets to 50 or 100 stadiums, is that something that we're not getting full value for that might be spun off much more likely to spin off a high-value tech products like that. The advocacy, which is really core to think the business and how it's going to grow and develop.

Great. And maybe just on the first second third-party data and how we may be thinking about that? Is there sort of an opportunity to maybe sell some of that in the future?

I mean, I think that number one, we generate a lot of proprietary data. We're doing over 40,000 interviews. We've got the people platform. We understand location of people where they go, how they shop, we really have a tremendous understanding of their attitudes. We have incredible databases of brand. Our ability to create targeted look like audiences through our data is now being fully harnessed through the creation of the Stagwell ID graph. And on top of that, which we're also testing now in a new -- as I announced with Palantir talent here, using Palantir's kind of advanced elements. But yes, we already sell some of our data. We have unique data sets coming on with the national research relative to entertainment, movie doors and streaming listeners. We're already beginning to put that on the marketplace as a first step. But we are going to both look to utilize our data in the most advanced ways teaming up with Palantir from these new test projects to use more military grade targeting on our data to make this a really integral part of the media offering that we are made. And three, we will put some of that on the marketplace as well.

That's the end of our questions. And Mark, I'd like to hand it back over to you just for some closing thoughts and closing comments.

First, thank you all for spending your time to learn something more about Stagwell, our plans, what we're doing. I hope you see that this is a really outstanding team of people. They have deep professional knowledge. These are not just managers. They're people who have come up through the industries that they're in. They are highly motivated. They are highly dedicated. Their stock owners themselves. One of our rules has been to fully invest the management team with the shareholders. We're going to put, I think, a very strong focus on building what we think should get the proper investor value as we grow here in this next phase of growth. I've tried to show you that we have really unlimited cast of growth, limited passive scale and an incredible store of innovation that we are applying in to an industry that has been transformation and transition mode to an all addressable notion of virtually have every ahead. I think that we've kind of outlined how we're going to organize our business simply the way customers look at it, marketing services, media and commerce. Digital transformation, advocacy and Stagwell Marketing Cloud. We're showing how software sales itself has gone from 2% to 5% of the business and we'll continue to grow. We are investing, as I've said in the earnings call, it's about $20 million a quarter. I expect to continue to do that. through this quarter and through this year and sometime half of midyear, be able to drop that investment as we're really fully in the marketplace. But that's a core element of growth. So is digital transformation. In a world of AI, we're virtually every website and every consumer experience that has to be read out. We are leaders and Dan and his group in authentic AI, which is exactly the technology that is going to be utilized for brands to communicate in incredible new ways, not just through as the technology experiences with their consumers. We are operating at the forefront of that. And then in general, we are scaling up our ability to handle bigger and bigger clients. And with that, from incredible economies of scale. But if you look at the clients we were in, in the last 6 months, whether it's Starbucks, Visa, General Motors, Panera Bread, these are incredible big names at 2 or 3 years ago, frankly, Stagwell wouldn't have been considered for. Today, we are right at the forefront of what marketers are looking for. We are right in the sweet spot of considered for. Today, we're moving forward with how we are building our technology spine to really be state-of-the-art for consumers, and we're going to cap it off with what I call the 5x5 by one plan to get to $5 billion in revenue within the next 5 years and to get to a margin that will generate $1 billion of EBITDA. I hope we come along with us on that journey. Thank you very much.