Clear Channel Outdoor Holdings, Inc. Q1 FY2025 earnings call

• Focus on being a newly U.S. focused business, looking to the future rather than past performance.
• De-risked portfolio, with European and Latin American businesses classified as discontinued operations. Successfully sold Mexico, Chile, Peru, and Europe-North segments, with $745 million in purchase consideration received.
• Reduced annualized interest expense by $37 million through prepayment of CCIBV term loans and bond repurchases. Eliminated approximately $35 million of annual corporate expenses and expects to reduce further.
• Q1 consolidated revenue growth of 2.2% in line with guidance. Signed and closed sales of international businesses, prepaid term loans, repurchased bonds, and launched sale process for Spain business.
• Optimistic about future of U.S. out-of-home advertising, with simplification of business allowing reduction of interest and corporate expenses, and strong pipeline for revenue.

For the Americas segment, first quarter revenue was $254 million, up 1.8%, in line with guidance. The increase was primarily driven by the MTA Roadside billboard contract with digital revenue up 6.4%, local sales up 2.2% and national sales up 1% on a comparable basis. Segment adjusted EBITDA was $88 million, down 8% as expected, with a segment adjusted EBITDA margin of 34.6%. For the Airports segment, first quarter revenue was $80 million, up 4%, also in line with guidance. The increase was driven by a 20% increase in national sales, partially offset by a 16.4% decline in local sales on a comparable basis. Digital was up 15.6% and Airports benefited from the Super Bowl. Segment adjusted EBITDA was $14 million, down 25% with a segment adjusted EBITDA margin of 17.9%.

• For Q2, consolidated revenue expected to be within $393 million to $408 million (4% to 8% increase year-over-year). America revenue expected to be within $302 million to $312 million, Airports revenue within $91 million to $96 million.
• Confirm full year 2025 revenue and adjusted EBITDA guidance provided in February, and increase AFFO guidance to $80 million to $90 million (36% to 54% increase over prior year) reflecting lower interest expense from bond repurchases. Anticipate cash interest payment obligations of $402 million in 2025 and $381 million in 2026.

• Macroeconomic factors such as potential recession and tariff impacts.
• AI-related privacy issues that could lead to increased ad blockers.
• City-by-city decisions regarding digital conversions, which are difficult to forecast and can impact revenue.
• Past dislocations in outdoor performance and how digital asset base might behave in future dislocations.

Q: Curious about visibility into the back half of the year and opportunities for corporate expense reductions?

A: Scott mentioned San Francisco is improving, seeing good progress in many markets, pipeline strong across verticals. On corporate expenses, transition services agreements will continue, and aiming for zero-based budget view on everything in U.S. when TSAs end.

Q: Talked about past dislocations in outdoor's performance, how digital asset base might behave now versus historical periods?

A: Scott said outdoor was last to go into and first/last to come out of dislocations historically, but with more digital, window is different. Digital came down first in COVID but came back faster than printed, automated customers showed closest tracking to market sentiment currently.

Q: Clarifier on America growth and impact of new MTA contract, and about minimum cash on hand and addressing '27 debt maturity?

A: Scott said not to draw too many conclusions on Q1 market strength due to February dynamics. Dave mentioned healthy liquidity position, cash on hand is $400 million, liquidity over $550 million. On '27 debt maturity, they will watch markets and address as 2026 approaches.

Q: AI creating privacy issues and impact of L.A. fires?

A: Scott said AI could make consumers uncomfortable leading to more ad blockers, our positioning in public square is advantage. Dave said L.A. fires in January impacted bookings, no specific number but didn't help first quarter.

Q: Conversations around digital conversion and RADAR capabilities?

A: Scott said municipalities being more open to digital conversion in some cases, but it's city-by-city. RADAR has been a positive, meeting marketers where they are with analytic insights, integrated with industry-specific specialists helping keep ad revenue strong.