LAMAR ADVERTISING CO/NEW Q1 FY2025 earnings call

• Revenue: Delivered 16th consecutive quarter of acquisition-adjusted revenue growth with a 1.1% increase. Local and programmatic revenue up, national slightly down. Categories of strength: services, retail, construction, oil and gas; weakness: gaming, restaurants, amusement. • M&A: Closed 10 deals in Q1 for ~$22 million, year-to-date spend over $70 million, expect to exceed $150 million in M&A spend. • Share Repurchases: Repurchased $150 million of stock at an average price a little over $108, with $100 million remaining under the program and plan to increase authorization. • Financial Results: Q1 results exceeded internal expectations, with AFFO growing, adjusted EBITDA $210.2 million, AFFO per share $1.60. • Balance Sheet: Well-laddered debt maturity, total debt $3.2 billion, weighted average interest rate 4.6%, total leverage 2.85 times, liquidity strong. • Dividend: Paid $1.55 per share in Q1, recommendation to declare same for Q2, full year dividend expected at least $6.20 per share.

Acquisition-adjusted revenue increased 1.1% in Q1 2025. Local and programmatic revenue were higher, while national was slightly down year-over-year. Billboard regions had low-single-digit top-line growth except the Southwest was flat. Airport and logos divisions outpaced the broader portfolio, growing 2.8% and 2.3% respectively. Programmatic revenue saw year-over-year increases of about $2 million, translating to nearly 30% growth. Digital billboard revenue was up 4% and accounted for approximately 30% of billboard revenue. Local and regional sales, which accounted for approximately 82% of billboard revenue, grew for the 16th consecutive quarter.

• Affirmed full year AFFO guidance of $8.13 to $8.28 per share. • Cash interest projected at $152 million, assuming SOFR remains flat for the balance of the year. • Maintenance CapEx budgeted at $60 million, cash taxes projected around $10 million. • Expect total leverage at or below 3 times net debt to EBITDA, with secured leverage consistent at or below 1 times net debt to EBITDA.

• General economic conditions and inflationary pressures could impact the company's business, financial condition, and results of operations.

Q: Cameron McVeigh asks if still expecting 3% organic revenue growth for the year and about national softness.

A: Sean Reilly states they are 75% booked to the goal, national weakness due to customer buying habits changing, with programmatic growth helping offset some of the national softness.

Q: Jason Bazinet inquires about the disconnect between investor view and ground and early indicators.

A: Sean Reilly mentions shorter-cycle digital sales as an indicator, stating it's steady as she goes.

Q: David Karnovsky asks about M&A deals, inorganic contribution, and expense growth.

A: Sean Reilly says pacing around 3% expense growth, expects over $200 million in M&A activity by year-end, with more color on inorganic contribution in August.

Q: Daniel Osley asks about addressing national weakness and digital conversion pace.

A: Sean Reilly says pacing over 350 digital deployments, national weakness due to CMO turnover, with local dollar being steady overall.

Q: Jonnathan Navarrete asks about AFFO guidance and expense drivers.

A: Jay Johnson explains repurchases not included in the guide, expenses include sales contest, health insurance, and one-time items, with full year acquisition-adjusted consolidated expenses expected around 3%.

Q: Jonnathan Navarrete asks about Q1 M&A asset profile.

A: Sean Reilly describes the acquisitions as high-quality, requalified assets within existing footprint.