Emerald Holding, Inc. Q4 FY2024 earnings call

• Launched aggressive portfolio optimization effort in 2024, pruning unprofitable events and focusing on high growth sectors. - Announced acquisitions of This is Beyond (luxury travel events) and Insurtech Insights (insurance technology conferences). The This is Beyond acquisition is pending regulatory approval in Morocco, expected to close in Q2 2025, and Insurtech Insights has already closed. Combined, the acquisitions are expected to contribute ~$40M revenue and ~$15M adjusted EBITDA in 2025. - Completed debt refinancing on January 30th, enhancing financial position and flexibility. - Strategy anchored in three pillars: value creation, customer centricity, 365-day engagements, and portfolio optimization, with emphasis on portfolio optimization.

For the fourth quarter of 2024, revenue was $106.8 million compared to $101.5 million in the prior year quarter, driven by $6.1 million organic revenue growth (6.5%) and $4.8 million from acquisitions, offset by $3.7 million scheduling adjustments and $1.9 million from discontinued events. Full-year 2024 revenue totaled $398.8 million, up 4.2% from prior year, with organic growth of $21.3 million (5.9%) and $13.5 million from acquisitions, offset by $18.2 million from prior year discontinued revenue and $0.6 million forfeited revenue. Fourth quarter adjusted EBITDA excluding insurance proceeds was $32.6 million, while full-year adjusted EBITDA excluding event cancellation insurance was $100.2 million, up from $95 million prior year. SG&A expenses for Q4 2024 were $34.6 million vs $36.1 million prior year, and full-year SG&A was $170.4 million vs $168.3 million prior year. Free cash flow for Q4 2024 was $17.9 million excluding insurance proceeds, and full-year free cash flow was $35.5 million including insurance recoveries.

• Expect 2025 revenue in the range of $450 million to $460 million and adjusted EBITDA in the range of $120 million to $125 million, implying a 200 basis points improvement in adjusted EBITDA margin to 27%. - Acquisitions are expected to be accretive to growth rate and margins, contributing ~$40M revenue and ~$15M adjusted EBITDA in 2025. - Monitor impact of tariffs, Las Vegas Convention Center construction (expected cycle to pass in 2026), and portfolio pruning.

• Regulatory approval for the This is Beyond acquisition in Morocco could be delayed. - Impact of ongoing Las Vegas Convention Center construction on certain Emerald events in the short term. - Potential underperforming elements in the portfolio that could require further optimization efforts.

Q: Explain how the acquisitions are being paid and funded, and about earn out components.

A: The acquisitions are funded with cash on hand, and there are deferred components based on performance through 2027, with incremental payments through 2028. Earn outs are based on performance, with more payments if the business grows, affecting the all-in multiple.

Q: How to think about seasonality and impact of shut down events?

A: The acquisitions don't meaningfully change overall seasonality, but moderately shift the mix with 1Q revenue slightly lower and 2Q slightly higher. Seasonality factors in shut down events as part of the overall Emerald mix.

Q: Discussion on EBITDA synergies and deferred payments?

A: No synergies built in for 2025, expected in 2026. Deferred payments are contingent on business growth, with earn outs based on growth rates affecting the all-in multiple.

Q: Free cash flow conversion and Las Vegas convention center impact?

A: Expect free cash flow of $50 million plus from EBITDA guidance. Las Vegas Convention Center construction will end in 2025, removing short-term impact in 2026 and beyond.

Q: Watch on underperforming trade shows in 2025?

A: Emerald will continuously assess portfolio performance and will take actions on underperforming elements similar to 2024 if needed.