Daniel Osley

Daniel Osley asked about the sustainability of the national advertising turnaround and Lamar's strategy for bidding on additional airport RFPs.

Answer

CEO Sean Reilly indicated strong confidence in the national turnaround, citing positive conversations with national accounts for 2026 and good momentum from the latter half of 2025. He also stated that Lamar will continue to pursue small and middle-market airport contracts (outside the top 20 DMAs), as this segment has been a robust growth vehicle for the company.

Daniel Osley from Wells Fargo & Company inquired about the typical timeline to integrate acquired assets and realize cost synergies. He also asked for the specific financial headwind from the Vancouver contract exit that is assumed in the second-half guidance.

Answer

CEO Sean Reilly detailed that integration speed depends on the deal type; for 'fill-in' acquisitions, expense synergies are realized very quickly, while revenue synergies take longer as existing contracts roll off. EVP & CFO Jay Johnson specified the full-year AFFO impact from the Vancouver exit is about $0.06 per share, with approximately $0.01 of that being an operational cash flow loss in the second half of the year.

Daniel Osley questioned how Lamar plans to address the ongoing weakness in national advertising beyond programmatic growth and asked for expectations on the pace of digital billboard conversions for the rest of the year.

Answer

Executive Sean Reilly acknowledged that national advertising can be 'fickle' due to factors like executive turnover at client companies, but noted it can also swing positive, citing Cracker Barrel as an example. He reiterated that over the long term, national and local growth rates are similar. For digital conversions, he confirmed Lamar is on pace to meet its goal of deploying over 350 new digital units for the year.

Daniel Osley of Wells Fargo & Company asked why Lamar's national advertising growth appears to be lagging its peers and whether there are structural reasons for this. He also followed up on the pricing environment, given high occupancy rates.

Answer

Sean Reilly (executive) attributed the national growth difference to Lamar's geographic footprint, which is less concentrated in top DMAs like New York and Los Angeles compared to peers. He also noted that Lamar receives a smaller share of recovering ad categories like entertainment. On pricing, he confirmed that recent gains were almost entirely driven by rate, as the company is operating at 'peak occupancy,' making rate increases the primary driver for future growth.

Daniel Osley of Wells Fargo inquired about the Q4 political revenue outlook and potential share gains from TV ad crowd-out. He also asked about the expected revenue uplift from accelerating digital billboard conversions in 2025.

Answer

Executive Sean Reilly projected Q4 political revenue to be around $15 million, bringing the full-year total to nearly $30 million. While he couldn't quantify the benefit from TV crowd-out, he noted it anecdotally happens. Regarding digital conversions, Reilly detailed the unit economics: a static board generating $3k/month is converted for ~$200k into a digital unit that produces 5-6x the revenue, or ~$15k/month, a return profile that has remained stable for decades.

Daniel Osley of Wells Fargo & Company inquired whether Outfront Media is past the most intensive phase of its organizational changes and asked for an explanation of the weakness in the entertainment vertical, given the strong box office performance.

Answer

Interim CEO Nick Brien confirmed that while the most significant restructuring is complete, work on modernizing workflows and improving demand will continue through the year. He explained the entertainment vertical's weakness was due to a lack of spending from specific studios, not an overall decline, and noted he is more optimistic for Q3.

Daniel Osley inquired about the composition of OUTFRONT's advertising categories between goods and services amid macroeconomic uncertainty, and asked for an outlook on the resilience of local versus national advertisers, noting local's recent underperformance.

Answer

Executive Nicolas Brien explained that the company is seeing more postponements than significant cuts in categories like auto and CPG. He clarified that OUTFRONT's advertising base is predominantly composed of services, which has provided some resilience.

Daniel Osley noted OUTFRONT's strong national ad growth contrasted with peer reports of choppiness and asked for drivers of this strength, as well as expectations for revenue growth beyond Q1.

Answer

CFO Matthew Siegel explained that OUTFRONT's national strength is supported by its specific DMA mix, a strong Super Bowl in New Orleans, and solid performance in Nashville and the MTA. While declining to give full-year revenue guidance, he indicated that the company's AFFO guidance implies stronger quarters ahead and that they see better pacing and visibility in the second half of the year.

Daniel Osley asked about the performance trend of the media and entertainment advertising vertical early in Q4 and whether the strong upcoming film slate was expected to provide a boost.

Answer

CEO Jeremy Male acknowledged that the media category's recovery from last year's Hollywood strikes has been slower than anticipated. However, he stated he feels 'okay' about the movie category for Q4 and noted strength in other entertainment sub-verticals. He expressed greater optimism for 2025, expecting a benefit from a stronger film slate and easier year-over-year comparisons.

Daniel Osley from Wells Fargo & Company asked about the typical cancellation terms for advertisers, any differences between local and national clients, and whether the low end of the company's guidance accounts for a potential macroeconomic slowdown.

Answer

CEO Scott Wells stated that standard cancellation terms are a 60-day notice period for printed advertising, with digital terms varying. He stressed that the company is not currently seeing any increase in cancellations. Wells clarified that the current guidance range is based on present business conditions and does not model the full spectrum of potential macroeconomic downturns.

Daniel Osley of Wells Fargo & Company asked for the 2025 outlook for national advertising, which was flat in Q4, and inquired about specific categories demonstrating notable strength or weakness.

Answer

CEO Scott Wells characterized national advertising in the roadside business as "choppy," contrasting it with strong double-digit growth in airports. For 2025, he identified several potential tailwinds, including a recovery in California, a stronger media and entertainment slate, and continued growth in the pharmaceutical and telecom verticals, viewing the T-Mobile acquisition of Vistar as a positive industry indicator.

Daniel Osley of Wells Fargo asked about the extent of the political advertising benefit in Q3 and Q4, and questioned the future growth trajectory for the Airports segment now that it has lapped tougher comparisons.

Answer

CEO Scott Wells stated that while political ad revenue has increased, the total dollar amount is only a few million and not a major driver for the business. Regarding the Airports segment, Wells confirmed that after a period of exceptional growth driven by the Port Authority contract, its future growth is expected to moderate to a more typical "GDP plus" rate seen in the broader out-of-home industry.