Outfront Media Inc. Q4 FY2025 earnings call

• Optimized sales strategy by reorganizing sales force into distinct enterprise and commercial go-to-market teams with experienced leadership.
• Modernized workflow and processes by centralizing back office functions and investing in sales tools like Salesforce and AWS, including an exclusive commercial arrangement in Adquick.
• Generated new demand from existing and new clients, with transit business accelerating revenues, especially the New York MTA up nearly 20% in 2025.
• Teams responded to operational excellence demands, with strong fourth quarter and full year results, and positive trends in 2026.

Consolidated revenues were up 4.1%. Consolidated EBITDA was up 12% to $174 million, and AFFO was up 8% to $130 million. Billboard revenues were up 0.5% due to higher demand, partially offset by exits of two large marginally profitable billboard contracts; excluding those contracts' revenue in 2024, billboard revenues would have grown 3.7%. Transit grew an impressive 16%, led by the New York MTA up over 20% during the quarter. Digital transit revenues were up 37% to $73 million, while static transit revenues were down a little over 2%. Billboard expenses were down about $3 million or 1.4% year over year. Transit expenses were up about $6 million or a little over 6% year over year.

Expect first quarter revenue growth to accelerate from fourth quarter, with consolidated reported revenues up in the high single digits driven by high teens growth in transit and mid single digit growth in billboard, impacted by a billboard condemnation contributing ~$10 million and a strategic exit of a marginally profitable billboard contract contributing ~$4.5 million; adjusted first quarter consolidated revenue growth in mid to high single digit range. Expect to spend approximately $90 million of CapEx in 2026, with much of it earmarked for digital development and 30 to $35 million for maintenance. Currently expect reported consolidated ASFO growth comfortably in the double-digit range in 2026.

Q: Just looking at the growth that you've continued to put up at the enterprise or national segment, are you starting to see a structural shift in the way large advertisers are engaging? And how do the measurement announcements with AdQuik and AWS tie in here?

A: These are significant strategic agreements. Partnership with AWS is for Agency Connect to integrate inventory and data sets into whole code systems. AdQuik is for SMB and mid-market.

Q: I wanted to ask about your pacings on transit so far, maybe your visibility into the rest of the year. Curious if this might be the year we see MTA results above the MAG. And then, secondly, I noticed an AI-related billboard slide on your earnings deck. I was curious how much of an impact on growth the AI vertical is driving.

A: Transit books relatively later, hard to give color on rest of year but transit is in great shape led by MTA. AI campaigns are significant, with many AI and SaaS brands like Anthropic, Code Rabbit, etc., engaging and a dedicated team in San Francisco working on it.

Q: with two months already into the year, can you maybe talk about how national is trending perhaps in the first quarter and then what you guys are seeing in the second half? And lastly, can you help us quantify the benefit that the World Cup, that you guys will have from the World Cup this year?

A: National advertisers are important, with strong brand names supporting. Enterprise team is doing well. FIFA World Cup is a tailwind, with direct agreements with six host committee partnerships of cities, tracking enterprise revenue from big brands, more detail on next earnings call.

Q: Hi, thanks for taking the question. I just have maybe a follow-up on CapEx, you know, beyond the maintenance CapEx guidance, the digital. Is there any, like, is that primarily digital boards, or are there other digital investments that would be included in that? And then maybe just to follow up on the AI and other tech ad spending commentary, on advertisers like Anthropic and other prediction markets, Is that group within tech, or is that kind of viewed similar to, I think, gambling a few years ago when that was ramping up in certain states? And I guess do you kind of see that as – is that not really meaningful, or do you see that as kind of different and potentially more sustainable? And then lastly, MTA, is there any sort of comp issue from the transition from MetroCorp with government advertising around that, or is that pretty much all informational board stuff?

A: CapEx increase is primarily for digital conversions and new digital boards. AI is grouped within tech. No comp issues with MTA transition, ridership is around 80-85% of 2019 levels, Metro card change not impacting.

Q: Can you talk about your contract again? What revenue do you expect for 2026? So your 20% full-year growth that you disclosed, I think, implies around mid-20s growth for fourth quarter. Can you talk what is driving this strong momentum again? And the second question will be on A44 outlook for this year. Obviously, World Cup and strong momentum in New York MTA are two big tailwinds. Perhaps you could help understand between these two factors, what is more important for you to execute in order to achieve the double digit growth in ASFO4?

A: ASFO is expected to be strong with World Cup, election year help, condemnation in first quarter, and strong transit growth. Revenue growth details not given, but MTA contract will step up 3% to ~$161 million this year. ASFO guidance is helpful, but full year revenue guidance not provided.