Clear Channel Outdoor Holdings, Inc. Q4 FY2024 earnings call

• Significant progress in divesting Europe North segment and most Latin American businesses, with $120 million in closed deals and $625 million agreement for Europe North. - Americas segment had record revenue in Q4, airports performed well. - Expect strength in 2025 with healthy revenue, adjusted EBITDA, and AFFO growth. - Benefiting from diverse revenue profile, focusing on expanding digital footprint, strengthening data and analytics, and growing sales force. - Launched CCO in-flight insights measurement solution. - Expanded sales force and have verticalized focus, laying groundwork for growth in auto and beverage categories. - Once Europe North divestiture is complete, will address cost structure through zero-based budgeting.

In the fourth quarter, the Americas segment delivered record revenue of $311 million, an increase of 4.1% driven by strength in digital and local sales. Airport's revenue was $116 million, up 4.3% to a record level. Consolidated revenue for the fourth quarter was $427 million, an increase of 2.6%. For the full year, consolidated revenue was $1.505 billion, a 5% increase over the prior year. The Americas segment's digital revenue accounted for 39.5% of its revenue, local sales 62.3%, and national sales 37.7%. Airport's digital revenue accounted for 63.9% of its revenue, national sales 63.9%, and local sales 36.1%.

• First quarter consolidated revenue expected between $329 million and $344 million, a 1% to 5% increase over prior year. Americas revenue expected between $252 million and $262 million, airports revenue between $77 million and $82 million. - Full-year consolidated revenue expected between $1.562 billion and $1.607 billion, a 4% to 7% increase over prior year. Americas revenue expected between $1.19 billion and $1.22 billion, airports revenue between $372 million and $387 million. - Adjusted EBITDA expected between $490 million and $505 million. AFFO guidance $73 million to $83 million, an increase of 25% to 42% over prior year. - Capital expenditures expected in range of $75 million to $85 million. - Anticipate cash interest payment obligations of $77 million in Q1 2025 and $422 million in 2025.

• Uncertainty related to divestiture of businesses in Spain and Brazil. - Impact of economic environment on advertising spending. - Risks associated with debt, including leverage ratio and interest expense risks.

Q: You provided a relatively wide guidance range for the first quarter. Is this conservatism, or is there more uncertainty out there now? And secondly, walk through an update of how you are thinking margins should trend this year now that you have exited a few territories.

A: From a guidance range, it's our normal range, with uncertainties like LA situation and contract ramp. On margins, MTA contract ramps impact Americas margins, and airport rental abatements from COVID will go away in 2025, so airport margins will come back to more normal levels.

Q: You mentioned national ads were flat year over year in Q4. I was wondering what your expectation for national is in 2025 and what categories are seeing strength or weakness.

A: National is choppy, better in airports. Tailwinds include California strength, better media entertainment slate, pharmaceuticals ramp, and T-Mobile acquisition of Vistar as a positive for telecom.

Q: Should we still be expecting 2% growth there for the America segment related to the MTA billboard contract? And can we talk a little bit about the CapEx and EBITDA ramp related to the contract.

A: From a full year, you'll get couple of points of growth on Americas segment from MTA contract, which ramps slower in Q1. CapEx is part of normal CapEx, not a spike, and included in guidance.

Q: Curious what the implied guide for corporate is in 2025. And as more assets get sold here and you get down to your kind of core US focus, I am curious if there is upside to that corporate number.

A: Corporate expenses are roughly mid-thirties, will see savings as divestitures are made, more impact in 2026.

Q: Just had a question on capital spending plans. I was just wondering with the greater focus on the US, do you anticipate sort of accelerating the pace of digital board installations? And I was also curious on how trade uncertainty has kind of impacted those investment plans.

A: We have kept steady pace of adding signs, not anticipating acceleration principally, except for three or four underpenetrated cities in digital. Trade uncertainty hasn't significantly impacted investment plans yet.