Lamar Advertising Company Q2 FY2025 earnings call

• Revenue growth accelerated to 1.9% in Q2 on an acquisition-adjusted basis, marking 17th consecutive quarter of acquisition-adjusted revenue growth. EBITDA increased 2% with margin improvement. • Operating environment solid but not spectacular, with increased RFP and proposal activity but cautious advertisers. • Back half growth expected better than Q2, but revised AFFO guidance due to non-operational factors like Vancouver transit contract exit. • M&A activity: Spent $87M in cash on 20 acquisitions by Q2, with YTD cash acquisitions ~$110M, including a UPREIT deal with Verde Outdoor. • Balance sheet: Well-laddered debt, total debt $3.4B, weighted avg interest rate 4.7%, liquidity strong with $363M total liquidity.

In Q2, acquisition-adjusted revenue grew 1.9%. Billboard operations had low single-digit top line growth. The airport and logos division saw revenue growth of 11.7% and 6.1% respectively. Local and regional sales accounted for approximately 79% of billboard revenue in Q2. Categories of strength included services, building and construction, financial and insurance. Weaker categories were beverages, education, and telecom.

• Revised full year AFFO per share to $8.10-$8.20, down $0.05 from prior range. • AFFO guidance includes onetime expenses from Vancouver exit. • Full year AFFO expected between $8.10-$8.20, cash interest $152M assuming SOFR flat, maintenance CapEx $60M, cash taxes ~$10M.

• Uncertain economic conditions and inflationary pressures. • Cautious advertiser approach impacting revenue. • Significant October comp related to political spend. • Vancouver transit contract exit and its impact on AFFO.

Q: Could you further quantify updated guidance implications for top line growth and comment on political comp and pricing?

A: Rate hanging in there nicely, e.g., static bulletin product Q2 rate up 4%. Q3 political comp headwind ~100bps, Q4 ~200bps. Q3 expected nicely, cautious on October comp which is substantial.

Q: Clarification on AFFO guidance reduction?

A: Partly softer operations, partly related to Vancouver exit. Reduction at midpoint about same as Vancouver impact with various ins and outs.

Q: Quantify M&A timeline, synergy realization, and pipeline?

A: Expense synergies quick on fill-in acquisitions, revenue magic takes longer. No guide assumptions past Verde, but Verde is baked in. Airport performance strong due to rebound in air travel; transit business different recovery profile from others.

Q: M&A pipeline and UPREIT structure?

A: UPREIT structure explored for years, legal/accounting work done. Verde deal is a win-win, expected to drive more M&A. Timeline for integration varies by acquisition type. Airport and transit holding up better due to air travel rebound and different transit business model.