Jonnathan Navarrete

Jonnathan Navarrete inquired about Lamar's demand expectations for the 2026 World Cup and the specifics of the Vistar distribution to shareholders.

Answer

CEO Sean Reilly expressed strong optimism for 2026, citing the World Cup combined with political tailwinds. CFO Jay Johnson confirmed the Vistar distribution would be all cash, paid in Q4 on December 31st alongside the regular dividend, estimated at around $0.25 per share.

Jonnathan Navarrete asked why AFFO per share guidance remained unchanged despite share repurchases, sought details on the drivers of expense growth that led to a slight EBITDA dip, and requested more color on the Q1 acquisitions.

Answer

Executive Jay Johnson explained the AFFO guidance was affirmed conservatively, as the share repurchases occurred late in the quarter and their full impact was not yet included. He attributed higher Q1 expenses to a one-time sales contest, elevated health insurance costs, and some non-recurring regional expenses. Executive Sean Reilly added that the Q1 acquisitions were typical 'fill-in' deals, consisting of high-quality assets within Lamar's existing footprint.

Jonnathan Navarrete from TD Cowen asked for more details on the cross-selling potential of the CheckMatch acquisition and questioned how much of the Data Solutions segment's growth was attributable to existing client expansion versus new client wins.

Answer

CEO Barry McCarthy explained that adding CheckMatch to the Deluxe Payment Network (DPN) increases the network's value by adding more endpoints, which facilitates more digital payments and creates opportunities for broader B2B payment and receivables solutions. Regarding Data Solutions, McCarthy confirmed growth came from both expanding with existing FI clients and adding new non-FI clients but did not provide a specific breakdown. CFO Chip Zint added that the segment's momentum is expected to continue in Q3, supporting a low-double-digit full-year growth outlook despite a tough Q4 comparison.

Jonnathan Navarrete inquired about the potential impact from the Trump administration's commentary on phasing out physical government checks and asked if Deluxe had observed any spending pull-forward related to recent tariff announcements.

Answer

President and CEO Barry McCarthy stated that Deluxe has no direct exposure to the federal government check announcement as it is not a customer. He emphasized that most remaining B2B checks require remittance advice, for which there are no viable electronic substitutes. On tariffs, he noted a very small pull-forward in promo but no material evidence of broader customer stockpiling, as the business is largely transactional.

Jonnathan Navarrete of TD Cowen asked about potential tariff-related headwinds on the supply chain and the degree of pricing flexibility within the Merchant business, including the expected contribution from pricing versus volume for 2025 growth.

Answer

CEO Barry McCarthy stated that the company does not anticipate a material impact from tariffs, as most Print materials are sourced domestically and the internationally sourced promotional items are a low-margin part of the business, creating a natural hedge. Regarding the Merchant business, McCarthy explained that while they routinely take price increases, growth is driven by a combination of new logo wins, volume, price, and new features from the Deluxe Payment platform. He emphasized that they compete on differentiated customer experience rather than just price.

Jonnathan Navarrete from TD Cowen asked about any remaining cost levers in the billboard segment if revenue weakness persists and whether AFFO growth is expected to continue in the second half of the year.

Answer

EVP & CFO Matthew Siegel noted that while cost levers like portfolio optimization always exist, the current focus is on realizing the benefits of recent changes. He affirmed the company's full-year guidance for mid-single-digit AFFO growth, which implies an acceleration in the second half, supported by stable interest expense and CapEx.

Jonnathan Navarrete of TD Cowen questioned the flat year-over-year EBITDA in the Americas segment despite revenue growth, asking about cost pressures beyond the MTA contract. He also asked about the company's confidence in achieving positive free cash flow for the year.

Answer

CFO David Sailer attributed the margin pressure almost entirely to the MTA site lease expense ramp-up, which will be lapped in November, and a lower-margin production revenue item in Q2. He affirmed confidence in generating positive free cash flow for the full year, citing top-line growth driving EBITDA as the most critical lever.

Jonnathan Navarrete of TD Cowen questioned the flat year-over-year Americas segment EBITDA despite revenue growth, asking about cost pressures beyond the MTA contract. He also asked about the company's confidence in achieving positive free cash flow for the year.

Answer

CFO David Sailer attributed the margin pressure primarily to the MTA site lease ramp-up and, to a lesser extent, a lower-margin large format sign build during the quarter. He confirmed confidence in generating positive free cash flow for the year, identifying top-line growth driving EBITDA as the most critical lever, supplemented by working capital management.

Jonnathan Navarrete of TD Cowen asked about the Americas segment's margin compression, where revenue grew 4% but EBITDA was flat, seeking reasons beyond the MTA contract ramp. He also questioned the company's confidence in generating positive free cash flow for the year given the stated cash interest expense.

Answer

CFO David Saylor attributed the margin pressure primarily to the ramp-up in site lease expense for the MTA contract, which will be lapped in November. He also noted a lower-margin large format sign production project impacted the quarter. Saylor affirmed confidence in achieving positive free cash flow for the year, stating that the most critical lever is driving top-line revenue to grow EBITDA, which then flows through to cash flow.

Jonnathan Navarrete from TD Cowen inquired about the New York MTA billboard contract, asking about its expected growth contribution to the Americas segment and the associated CapEx and EBITDA ramp. He also questioned the reason for the year-over-year decrease in airports' local revenue in Q4.

Answer

CFO David Sailer explained that the MTA contract is expected to add a couple of percentage points of growth to the Americas segment for the full year, with a slower ramp in early 2025. He noted that the related CapEx is incorporated into the company's normal spending guidance and will not cause a spike. Regarding airports' local revenue, he clarified the Q4 decrease was due to tough year-over-year comparisons and not a negative trend, pointing to substantial double-digit growth for the full year.

Jonnathan Navarrete asked about the broader macro environment's potential to cause pipeline opportunities to slip, the quantifiable revenue upside from the T-Mobile Partner Plus Program, and the expected cadence of free cash flow for 2025.

Answer

CEO Juho Sarvikas stated that Inseego is not seeing any movement in its pipeline from its large North American carrier customers. He also explained that the T-Mobile Partner Program allows Inseego to receive subsidies for its channel portfolio, which creates pull for those products. CFO Steven Gatoff confirmed that the company still targets positive free cash flow for the full year 2025, noting that investments in the first half will be outweighed by positive cash flow in the second half.

Jonnathan Navarrete from TD Cowen sought confirmation on the Chicago database growth, asked for the current revenue and EBITDAR run rates at the temporary facility, and inquired about the quarterly EBITDAR impact from the Rhode Island bridge disruption.

Answer

CEO Robeson Reeves confirmed the Chicago database has grown to over 100,000 players. President George Papanier provided a GGR run rate of around $13 million for the temporary casino but declined to provide an EBITDAR figure, stating the focus is on database growth. He also quantified the quarterly EBITDAR impact from the Rhode Island bridge issue at approximately $2 million.

Sought confirmation on the Chicago database growth, asked for the current revenue and EBITDAR run rates for the temporary Chicago facility, and inquired about the quarterly EBITDAR impact from the Rhode Island bridge closure.

Answer

The company confirmed the Chicago database has grown to 100,000 members. The GGR run rate is around $13 million, but they declined to provide an EBITDAR run rate for the property. The quarterly EBITDAR impact from the Rhode Island bridge issue is estimated to be about $2 million.

Jonnathan Navarrete from TD Cowen asked for the current revenue and EBITDAR run rates at the temporary Chicago facility and sought quantification of the quarterly EBITDAR impact from the Rhode Island bridge closure.

Answer

President George Papanier stated the GGR run rate for the Chicago facility was around $13 million but declined to provide an EBITDAR run rate at this time. He confirmed the database has grown to over 100,000 players. Papanier also quantified the impact from the Rhode Island bridge issue at approximately $2 million of EBITDAR per quarter.

Asked about the state of the U.K. consumer, a breakdown of the 2024 CapEx guidance, the potential size of demolition costs not included in CapEx, and the company's current status in the New York casino license process.

Answer

The U.K. consumer shows stable spending patterns. The $165M CapEx is split between maintenance (~$65-70M), growth projects (~$35-40M), and interactive/tech investments. Demolition costs for Chicago and Tropicana are not yet quantified as they are out for bid. For New York, Bally's is actively participating in the process and believes it has a compelling proposal but is awaiting the state's timeline.