Lamar Advertising Company Q4 FY2025 earnings call

• Sales momentum: Ended 2025 with encouraging sales momentum, Q4 revenues grew excluding political on acquisition-adjusted basis. Sales strength continued in Q1 with promising pacings.
• Financial performance: Exceeded revised full year AFFO guidance in 2025. Anticipate full year AFFO 2026 between $8.50 - $8.70 per share (4.1% year-over-year growth at midpoint), midpoint implies ~3.5% acquisition-adjusted revenue growth and ~3% acquisition-adjusted expense growth, expense growth to taper in back half of 2026. Midpoint of range implies consolidated operating margins over 47%, best in company history.
• Acquisitions: Closed 13 acquisitions in Q4 for ~$57 million in cash, full year 2025 had 50 acquisitions for $191 million in cash. Off to good start in 2026 with 7 acquisitions since Jan 1 totaling ~$40 million. Integration of Verde assets and other 2025 acquisitions going well, anticipate active M&A year in 2026.
• Employees: Thanked employees for contributions in 2025, highlighting consistent growth on top and bottom line due to strong team.

In Q4, local was up 1.7%, national/programmatic grew 3.3% (third consecutive quarter of national growth; programmatic up ~19% year-over-year, excluding programmatic national's growth was 1.5%). Excluding political, revenues grew >4% on acquisition-adjusted basis in Q4. Digital billboards saw growth: added 111 digitals in Q4, ending year with 5,553 operating units; same-store digital revenue increased 3.7% in Q4. Categories of strength in Q4: services, health care, building and construction, financial; telecom and beer and wine were weaker. Full year acquisition-adjusted revenue increased 2.1% to $2.27 billion. Local and regional sales accounted for ~78% of billboard revenue in Q4, growing for 19th consecutive quarter. Digital grew to 31.6% of total revenues for full year. In Q4, national represented 22.4% of revenues, with a strong pharma buy helping health care category boost national's growth.

• Anticipate full year AFFO 2026 between $8.50 and $8.70 per share, year-over-year growth of 4.1% at midpoint.
• Midpoint implies acquisition-adjusted revenue growth of approximately 3.5% and acquisition-adjusted expense growth of approximately 3%, expense growth to taper in back half of 2026.
• Midpoint of range implies consolidated operating margins over 47%.
• Full year 2026 maintenance CapEx budget anticipated to be $64 million, cash taxes projected at ~$10 million.
• Management's recommendation to declare regular cash dividend of $1.60 per share for Q1 2026, expect $6.40 per share in 2026.

Q: Cameron McVeigh with Morgan Stanley asked about view on U.S. ad market macro and M&A multiples/trends.

A: Sean Reilly said on acquisition front, likely do at least as much cash acquisitions as 2025 (~$200 million), multiples in mid-teen range slightly below, arithmetic holding up, ad spend climate good with political tailwinds, World Cup spend and pharma outlook positive.

Q: Jason Bazinet with Citi asked about Clear Channel sale and M&A implications.

A: Sean Reilly said don't see change in industry structure, Clear Channel's go private and balance sheet work don't suggest need to sell assets to delever, likely not likely for Lamar to peel off assets for now.

Q: Daniel Osley with Wells Fargo asked about acquisition-adjusted growth in Q1 and growth cadence, and local vs national and World Cup benefit.

A: Sean Reilly said Q1 may be tad below guide then pick up momentum, political breaks late so pacings conservative and can get stronger, anticipating $3 - $4 million incremental World Cup business, positive on national with some verticals coming back, pharma lift in 2026 first half.

Q: David Karnovsky with JPMorgan asked about 3% cash OpEx growth delta.

A: Sean Reilly said some driven by ERP and health care (health insurance inflation ~0.5% above other expense side), Jay Johnson added ERP has driven it in past years, moderating this year with second phase of technology initiatives, corporate expenses to grow below 2% this year, health care expenses a headwind.

Q: Jonnathan Navarrete with TD Bank asked about political benefit in dollars and when most benefit comes.

A: Sean Reilly said political benefit this year conservatively around $12 - $14 million incremental over last year's political, most benefit to come in third or fourth quarter as political breaks late