S4 Capital raises guidance again as net revenue accelerates 66% in Q2

Dive Brief:

S4 Capital reported its net revenue was up 49% in the first half of 2021, and up 66% in the second quarter, per an earnings report. The company announced revenue of $386.6 million.
As a result of the "very strong" first half, the company increased its net revenue guidance for 2021 for the third time, from 35% to 40%.
The company is poised to continue adding to its data, content and digital media capabilities through further acquisitions, with a possible move into technology services, executive chairman Sir Martin Sorrell said in a statement.

Dive Insight:

S4 Capital's strong first half — with net revenue growth doubling from 33% in Q1 to 66% in Q2 — demonstrates how the acceleration of digital transformation due to pandemic-related disruptions has benefited the digital-first holding company.

"We are clearly in a disruptive, growth sweet spot and our digital only, faster, better, cheaper, unitary, 'holy trinity' model, which combines first party data with digital content, data and digital media is gaining traction, particularly in a cookieless world," Sorrell said in a statement.

The continued growth and revised guidance for 2021 put S4 and its unitary brand Media.Monks in a position to continue its acquisitive streak; the earnings report lists its "firepower" for such combinations at around $553.6 million. The earnings come on the heels of one such deal, as S4 merged Media.Monks with Los Angeles creative agency Cashmere last week to boost its offering around culture.

On an earnings call, Sorrell announced the formation of a performance marketing service called Performance.Monks that joins search engine marketing, social and commerce capabilities to help challenger brands, per The Drum. The earnings report suggests future acquisitions could beef up not only its data, content and digital media capabilities, but see the company move into technology services.

"We don't tend to deal with chief information officers or chief technology officers ... there is a need to provide that end-to-end offer," Sorrell said on an earnings call.