OUTFRONT Media Inc. Q1 FY2025 earnings call

• Nick Brien shared thoughts on his first few months leading OUTFRONT, emphasizing focus on four strategic imperatives: optimizing sales strategies, modernizing workflows, driving new demand from non-OOH advertisers, and ensuring operational excellence.
• Quarter one results were broadly in line with expectations; organic revenues grew slightly, OIBDA was $64 million, and AFFO was $24 million.
• Billboard expenses were down over $5 million, with lease costs down over $6 million and posting/maintenance down about $1 million. Billboard adjusted OIBDA rose about $2 million, margin increasing to 31.9%.
• Transit expenses were up almost $1 million, but transit adjusted OIBDA improved. Corporate expense rose due to severance payments and executive search fees.
• Q1 CapEx was $17 million; 2025 CapEx expected at $85 million. AFFO improved due to higher OIBDA and lower debt, with full year AFFO expected to grow mid-single digits.
• Board maintained a $0.30 cash dividend; 2025 deal activity expected to focus on opportunistic tuck-ins.
• Nick highlighted the need to accelerate digital-first strategy at the OAAA conference to meet advertiser demands.

Billboard revenues were down 1%, with digital billboard revenues up 5.4% and static down about 3.5%. Transit grew 2.6%, with nearly 11% growth in digital revenues offset by a 3.4% decline in static revenues. Other revenues (low-margin digital equipment sales) grew by about $2 million. On a consolidated revenue basis, stronger categories were legal, utilities, and financial; weaker were health and medical, government and political, and CPG. Digital revenue grew almost 7% in the quarter, representing nearly 33% of total organic revenues. Programmatic and digital direct automated sales were up nearly 20% and represented 16% of total digital revenues. Local was down 3% year-on-year, while national grew 4% driven by Super Bowl creative efforts. Billboard yield growth was up about 2% to over $2,600 per month.

• Second quarter revenues expected to be similar to first quarter, maybe a bit better, with billboard flattish to slightly down and transit up low to mid-single digits.
• Exits of large marginally profitable billboard contracts will have little to no impact on OIBDA or AFFO.
• Full year 2025 consolidated AFFO expected to grow in the mid-single-digit range.

• Uncertain economic climate poses a risk to revenue and performance.
• Exits of marginally profitable billboard contracts could impact billboard revenue growth in the short term.

Q: Given the broader concerns on the macro, can you give us a general sense of what percentage of your ad categories are goods versus services? And then also, in the current environment, would you expect local or national advertisers to be more resilient?

A: Nick Brien said they've seen mostly postponements in ad categories, with most being services. Local has underperformed but national grew 4% driven by Super Bowl; unclear which will be more resilient long term.

Q: I noticed a picture of your billboards in LA on the first slide of the deck. And curious, any more color on how spend in LA and in particular, media and entertainment-related spend is trending. And I was curious if the exit of the LA contract is related to the fire?

A: Nick Brien said entertainment/media and entertainment is important in LA, but they're focusing on profitable leases, not related to fire; quarter two slate looks promising.

Q: Curious the latest on the MTA contract, where the MAG stands? And if you've seen any impact from the New York City congestion pricing on transit growth so far?

A: Matthew Siegel said MAG went up from $150 million last year to $156 million (3% increase). Congestion pricing seems accretive, and MTA metrics show higher ridership.