Cameron McVeigh

Cameron McVeigh asked about Lamar's primary growth drivers and M&A environment expectations for 2026, and the potential influence of AI on national advertising growth.

Answer

CEO Sean Reilly highlighted M&A momentum from $300 million spent in 2025, stronger pacings for 2026, and political tailwinds as key growth drivers. He also noted that an enterprise conversion will enable AI benefits by 2027, expecting AI to naturally support out-of-home advertising given its focus on words and pictures.

Cameron McVeigh of Morgan Stanley inquired about the updated guidance's implication for full-year top-line growth and the specific quarterly political revenue comps Lamar is facing, including current pricing trends for boards that previously featured political ads.

Answer

CEO Sean Reilly stated that advertising rates are holding up well, citing a 4% increase for static bulletins in Q2. EVP & CFO Jay Johnson quantified the political headwind as a 100 basis point impact in Q3 and a 200 basis point impact in Q4, noting that approximately $20 million in political revenue was booked in the second half of the prior year.

Cameron McVeigh inquired about the full-year organic revenue growth outlook, the expected trend across quarters, and the underlying reasons for the softness observed in national advertising during the first quarter.

Answer

Executive Sean Reilly confirmed that Lamar is approximately 75% booked towards its goal of around 3% revenue growth, which is typical for this time of year. He attributed the national advertising weakness to shifts in buying habits from certain large customers but noted that growing programmatic revenue helps offset this. Reilly also expressed increased optimism for national advertising's performance for the remainder of the year following a recent industry conference.

Cameron McVeigh of Morgan Stanley asked about the drivers for the recent strength in national ad spending and questioned if the 2025 AFFO guidance, which was below consensus, was primarily due to the 3% revenue growth forecast or higher anticipated costs.

Answer

Sean Reilly (executive) explained the AFFO guidance reflects headwinds from the loss of Vistar income and higher maintenance CapEx. He also noted peak spending on an ERP system conversion would continue until early 2026. Jay Johnson (executive) added that these factors create a $0.13 per share headwind and that muted 2024 acquisition activity provides less of a tailwind for 2025.

Cameron McVeigh inquired about the current state of programmatic ad spending in the out-of-home sector and its potential long-term industry impacts.

Answer

Executive Sean Reilly explained that Lamar currently limits its programmatic channel to a growing universe of national, digital-specialist buyers. He projects that digital and traditional advertising will merge within 3-5 years, increasing programmatic's importance. Reilly noted the most exciting future development will be opening the programmatic channel to Lamar's local and regional advertisers, a process expected to take 3-5 years.

Cameron McVeigh inquired about Omnicom's perspective on the Walmart-OpenAI partnership, its potential implications for Flywheel's business around sponsored listings on Amazon, and broader impacts on the retail media advertising industry.

Answer

CTO Paolo Yuvienco stated that Omnicom views the partnership positively, as it helps clients drive sales by facilitating connections on platforms like OpenAI. He emphasized working closely with Walmart and OpenAI to understand how to achieve optimal client outcomes.

Cameron McVeigh from Morgan Stanley asked for Omnicom's perspective on the Walmart-OpenAI partnership, its potential implications for Flywheel's business around Amazon sponsored listings, and the broader retail media advertising industry.

Answer

CTO Paolo Yuvienco explained that Omnicom's role is to help clients drive sales on various platforms, including OpenAI and Walmart, by facilitating connective tissue. He views such partnerships as a positive development for the industry.

Cameron McVeigh of Morgan Stanley asked about where AI agents will provide the most significant immediate and long-term value, and whether their financial impact will be a top-line driver or a margin efficiency play.

Answer

EVP & CTO Paolo Yuvienco explained that AI agents infuse intelligence from Omnicom's proprietary dataset into the entire marketing workflow. Chairman & CEO John Wren added that while the full financial impact is still unfolding, the immediate benefit is empowering employees. He noted that future costs like compute and storage have not been fully factored in by the market, but the key is providing tools to professionals to invent new services.

Cameron McVeigh of Morgan Stanley requested the organic growth for the Precision Marketing segment excluding the Flywheel acquisition and asked for an update on the Interpublic deal's regulatory review, integration timing, and any potential client conflicts.

Answer

CFO Phil Angelastro stated that in Q1, Flywheel's growth was below the Precision Marketing category average, while the rest of the group grew faster than the average. CEO John Wren reported that 5 of 18 jurisdictions, including China, have approved the transaction, and he expressed high confidence in the ongoing regulatory process and the company's legal guidance.

Cameron McVeigh of Morgan Stanley inquired about the impact of big tech's campaign management tools on client growth and sought details on recent partnerships with platforms like Google and Amazon.

Answer

Chairman and CEO John Wren stated that such tools primarily impact SMBs, not Omnicom's large clients, and highlighted Omnicom's own active testing of large language models. EVP and CFO Phil Angelastro added that the tech partnerships provide unique access to platform-specific data, benefiting clients.

Cameron McVeigh from Morgan Stanley asked about the path to achieving margin expansion and double-digit EPS growth alongside mid-single-digit revenue growth in the coming years. He also requested an update on the integration of Flywheel, its performance, and whether it is still expected to deliver double-digit top-line growth.

Answer

CEO John Wren explained that efficiencies from the new Omnicom Advertising Group and production initiatives will support performance, but margins are balanced against necessary investments in AI. He affirmed his bullish outlook and confirmed that Flywheel is expected to grow at a double-digit rate, citing the Amazon win as proof of its successful integration. CFO Philip Angelastro added that combining Omni's behavioral data with Flywheel's commerce data creates a powerful, in-demand client solution.

Cameron McVeigh of Morgan Stanley questioned if the decline in static transit revenue was a cyclical or structural issue and asked for the potential magnitude of margin expansion from recent cost-saving actions.

Answer

EVP & CFO Matthew Siegel characterized the decline in static transit as a structural shift, as advertisers increasingly prefer digital formats. He quantified the annualized savings from the restructuring at $18-20 million, with about half expected to be realized in 2025 and the full impact in 2026.

Cameron McVeigh of Morgan Stanley asked for an update on advertising spend in Los Angeles, particularly from the media and entertainment sector, and questioned if a recent L.A. contract exit was related to a specific event. He also inquired about the MTA contract's minimum annual guarantee (MAG) and the impact of NYC's congestion pricing.

Answer

Executive Nicolas Brien stated that while the entertainment category is vital in L.A., the company is exiting unprofitable contracts to maintain long-term financial health. Executive Matthew Siegel added that the MTA MAG increased to $156 million due to a CPI adjustment and that while direct attribution is difficult, NYC congestion pricing appears accretive to transit ridership and revenue.

Cameron McVeigh asked about the reasons for softer local ad growth in Q4 and inquired what new Interim CEO Nick Brien sees as the biggest near-term opportunities for OUTFRONT.

Answer

CFO Matthew Siegel attributed the soft local ad growth to challenging year-over-year comparisons and macro uncertainty, but noted that pacing for the second half of the year looks better. Interim CEO Nicolas Brien expressed excitement about leveraging the company's strong portfolio in top markets, its internal creative agency, and its rich data sets to deliver full-funnel marketing solutions for major brands.

Cameron McVeigh inquired about the progress of integrating programmatic ad technology into the MTA assets, its timing, and its expected impact on transit results. He also asked for the total political ad spend for the year and its trend in Q4.

Answer

CEO Jeremy Male reported that 7% of Q3 MTA revenue was from automated channels, with platform and entrance screens now connected and on-train screens to follow. He noted similar integrations are underway in Boston, D.C., and San Francisco, expecting further benefits in 2025. CFO Matthew Siegel quantified 2024 political ad spend at approximately $15 million, with about half of that recognized in Q4.

Cameron McVeigh of Morgan Stanley asked about the strategic trade-off between paying down debt versus internal investments in digital boards and the salesforce as Clear Channel becomes a US-focused entity. He also inquired about the current status of any future joint venture plans or partnerships aimed at increasing EBITDA.

Answer

CEO Scott Wells and CFO David Saylor characterized the approach as a 'balance' rather than a 'trade-off,' stating that both debt reduction and business investment are priorities. Wells explained that driving revenue growth, particularly in the Americas segment, creates operating leverage that generates the AFFO needed for debt repayment. Regarding JVs, Wells confirmed that dialogues for creative commercial solutions are ongoing but there was no specific news to report at this time.

Cameron McVeigh of Morgan Stanley inquired about the strategic trade-off between paying down debt versus internal investments in digital boards and the salesforce, and also asked for an update on any future joint venture plans or partnerships.

Answer

CEO Scott Wells and CFO David Sailer characterized the strategy as a balance, not a trade-off. They explained that investing in top-line growth is essential to generate the operating leverage and AFFO required to service debt, which remains an 'absolute priority'. Regarding partnerships, Mr. Wells confirmed that dialogues for creative commercial solutions are ongoing but there was no specific news to report at this time.

Cameron McVeigh of Morgan Stanley inquired about Clear Channel Outdoor's strategy regarding the balance between debt reduction and internal investments in digital assets and its salesforce, and also asked for an update on any future joint venture plans.

Answer

CEO Scott Wells characterized the approach as a balance, not a trade-off, emphasizing that investing in growth provides the operating leverage needed to generate cash for debt repayment. CFO David Sailer concurred, stating that paying down debt is a priority that goes hand-in-hand with investing in top-line growth. Regarding JVs, Mr. Wells noted that dialogues are ongoing for creative commercial solutions but there was no specific news to report.

Cameron McVeigh of Morgan Stanley inquired about Clear Channel's revenue visibility for the second half of 2025, specifically the trends for national versus local advertising, and asked about further opportunities for corporate expense reductions.

Answer

CEO Scott Wells expressed confidence in H2 2025 visibility, citing a strong pipeline, the recovery of the San Francisco market, and returning advertisers in key verticals like auto insurance. He noted that bookings are modestly ahead of schedule. Regarding cost savings, Wells explained that further reductions will come from the wind-down of transition services agreements and a future zero-based budgeting initiative across the U.S. business, with more details to be shared at the upcoming Investor Day.

Cameron McVeigh from Morgan Stanley questioned the wide Q1 2025 guidance range, asking if it reflected conservatism or increased uncertainty, and inquired about the underlying macroeconomic assumptions and expected margin trends for the year following recent divestitures.

Answer

CFO David Sailer responded that the guidance range is typical for the first quarter but acknowledged some uncertainty related to the ramp-up of the new MTA contract. He clarified that margins will be impacted by this new contract and the normalization of airport margins as COVID-era rent abatements expire, with margins expected to build throughout the year from a lower starting point in Q1.

Cameron McVeigh inquired about the financial details and strategic timing of the new New York MTA roadside contract and asked for the key drivers behind the recent improvement in national advertising spend.

Answer

CEO Scott Wells explained that the national ad spend improvement was driven by both company initiatives in CPG and pharma and mathematical comps, though the media and entertainment vertical remains soft. On the MTA contract, Wells noted it expands their core billboard footprint in the tri-state area, enhancing their ability to serve national advertisers. CFO David Sailer added that the contract, which has a high revenue share in the high 70s, will add a couple of points to revenue growth in 2025 but will temporarily impact margin percentages during the ramp-up period.

Cameron McVeigh of Morgan Stanley asked about the market opportunity for Stagwell in serving AI-native companies and questioned what specific value the company adds in that process.

Answer

Chairman and CEO Mark Penn responded, highlighting the Code and Theory Network's strong positioning for designing and engineering AI experiences for its major tech clients. Penn explained that AI will elevate advertising sophistication with personalized, advanced graphics and also create internal efficiencies and new services, ultimately up-leveling Stagwell's entire business.

Cameron McVeigh of Morgan Stanley asked about the current pricing environment and trends in pricing power, and also questioned if any client conflicts have emerged related to the pending acquisition by Omnicom.

Answer

CEO Philippe Krakowsky confirmed that five months into the merger process, they have not seen any client conflict issues and that clients are generally supportive. Regarding pricing, both Krakowsky and CFO Ellen Johnson described the environment as consistently competitive, in line with long-standing industry trends, with no significant new pressures observed.

Cameron McVeigh from Morgan Stanley asked about the performance trend of the healthcare sector when excluding the impact of recent large account losses. He also inquired about any recent shifts in CMO priorities during pitches and whether principal-based media buying is now the most critical capability for winning business.

Answer

CEO Philippe Krakowsky stated that independent of the one sizable account loss, the healthcare sector is expected to grow in the coming year. Regarding CMO priorities, he acknowledged that Principal Media has become an important factor in the decision matrix for large media accounts, but emphasized that winning business is more sophisticated, involving an integrated fusion of technology, data, and commerce.

Cameron McVeigh inquired about the primary areas for improving OpEx efficiency and asked about the initial market response to Roku's self-serve ad manager and the long-term opportunity with small and medium-sized businesses (SMBs).

Answer

CEO Anthony Wood outlined OpEx efficiency strategies including hiring in lower-cost regions, automation, and leveraging AI, while CFO Dan Jedda noted this allows for reinvestment into the platform. Regarding the self-serve platform, President of Roku Media Charlie Collier stated the response has been great, viewing it as a significant, incremental opportunity to diversify demand beyond top advertisers.

Cameron McVeigh asked if Roku has outsized exposure to any particular streaming service driving its distribution revenue and requested an update on international expansion plans and opportunities.

Answer

CEO Anthony Wood and CFO Dan Jedda responded. Wood described the streaming services distribution business as 'fairly diversified' across all major partners. On international strategy, they explained that expansion is progressing well in focus countries (Americas, UK), with a goal of reaching 100 million global households in 12-18 months. Jedda noted that Mexico and Canada are monetizing meaningfully, while other markets like Brazil and the UK are still in the scale-building phase before a larger monetization push.