Clear Channel Outdoor - Earnings Call - Q2 2025

Executive Summary

• Q2 2025 revenue rose 7.0% year over year to $402.8M, with Airports up 15.6% and America up 4.4%; Adjusted EBITDA increased 7.7% to $128.6M and AFFO to $27.8M.
• Guidance mix shifted: FY25 Airports revenue raised to $390–$400M while America lowered to $1,180–$1,200M; consolidated revenue range narrowed to $1.57–$1.60B; AFFO reduced to $75–$85M; Adjusted EBITDA maintained at $490–$505M.
• Balance sheet actions: $2.05B senior secured notes issued post-quarter (due 2031/2033), redeeming 2027/2028 secured notes; $229.7M of senior notes repurchased in Q2; maturities pushed out and annual cash interest reduced, with 90% of Q3 revenue guidance already under contract, reinforcing near-term visibility.
• Company reiterated a technology-driven sales story (InFlight Insights attribution, RADAR analytics) and cited strong demand from technology, banking and insurance; regional strength included San Francisco/Northeast; Southern California lagged.
• Near-term catalysts: Q3 guide ($395–$410M) with high contracted coverage, Airports momentum, Investor Day (Sept 9) framing multi‑year deleveraging and growth plan; ongoing Spain/Brazil sales provide additional de‑levering capacity.

What Went Well and What Went Wrong

What Went Well

• Airports segment delivered another “terrific quarter,” revenue up 15.6% to $99.7M, with Segment Adjusted EBITDA up 27.6% and margins ~24.4%, supported by national and local sales strength and digital expansion.
• Strategic refinancing and note repurchases extended ~40% of maturities to 2031/2033 and reduced annual cash interest; liquidity of $351M at quarter end (cash plus revolver availability) supports flexibility.
• Technology and measurement narrative gaining traction: rollout of InFlight Insights and RADAR analytics; Kantar study shows OOH outperforms CTV/digital on ad awareness (+13% lift), brand favorability, purchase intent; management emphasized “measurement-forward” positioning.

Quotes:

• “Nearly 90% of our Q3 2025 revenue guidance is under contract… well‑positioned to generate strong growth in our cash flow this year”.
• “We delivered solid financial results within our guidance range… our leadership in innovating and driving the digital transformation of our industry”.
• “Investor interest in the [notes] offering was very strong… increased our weighted average maturity… and reduced our annualized cash interest”.

What Went Wrong

• America segment margin pressure: Segment Adjusted EBITDA up just 0.5% with site lease expense ramp from the MTA contract; large format production revenue also diluted margin mix.
• Full‑year guidance revisions reflect mix and higher interest: America revenue range lowered; AFFO reduced to $75–$85M; CapEx trimmed, implying tighter cash management and timing effects.
• National accounts timing: a significant national contract slipped from May into late June, leaving America revenue “a touch short” vs the May midpoint and impacting national mix optics.

Transcript

Alex Winkelman (VP - Legal & Assistant Secretary)

Good morning, and thank you for joining our call. On the call today are Scott Wells, our CEO and David Saylor, our CFO. They will provide an overview of the second quarter twenty twenty five operating performance of Clear Channel Outdoor Holdings, Inc. We recommend you download the second quarter twenty twenty five earnings presentation located in the Financial Information section of our Investor Relations website and review that presentation during this call. After an introduction and a review of our results, we'll open the line for questions.

Before we begin, I'd like to remind everyone that during this call, we may make forward looking statements regarding the company, including statements about its future financial performance and its strategic goals. All forward looking statements involve risks and uncertainties, and there can be no assurance that management's expectations, beliefs or projections will be achieved or that actual results will not differ from expectations. Please review the statements of risk contained in our earnings press release and our filings with the SEC. During today's call, we will also refer to certain measures that do not conform to Generally Accepted Accounting Principles. We provide schedules that reconcile these non GAAP measures with our reported results on a GAAP basis as part of the earnings presentation.

When reviewing our earnings presentation, it is important to reiterate that all European and Latin American operations are reported as discontinued operations for all periods presented. This includes our current businesses in Spain and Brazil as well as our former businesses in Mexico, Chile and Peru, which were sold on 02/05/2025, and our former Europe North segment, which was sold on 03/31/2025. The reported consolidated results include the America and Airport segments in Singapore. Also, please note that the information provided on this call speaks only to management's views as of today, 08/05/2025, and may no longer be accurate at the time of a replay. Please see Slide four in the earnings presentation, and I will now turn the call over to Scott.

Scott Wells (CEO)

Good morning, everyone, and thank you for taking the time to join us today. During the second quarter, we delivered solid financial results within our guidance range and continued to make good progress in executing on our strategic plan. Our transition into a US focused organization has allowed us to direct our attention to maximizing ROI from our digital footprint, data analytics resources, and sales force to scale our business and increase cash generation. Our outlook remains positive, and we expect a good second half of the year, attesting to the strength of out of home advertising and our leadership in innovating and driving the digital transformation of our industry. Turning to our results.

On a consolidated basis, we generated revenue of $402,800,000 during the second quarter, representing an increase of 7%. Our Americas segment delivered record second quarter revenue of $303,100,000 representing a year over year increase of 4.4%, driven by strength in digital and local sales as well as the planned ramp up in the MTA roadside billboard contract. We saw growth across the majority of our markets with continued strength in San Francisco as we benefit from the recovery in the market and the surge in AI related investments. And airports delivered a 15.6% increase in revenue for the second quarter, a record of $99,700,000, a substantial gain compared to a strong performance in the prior year comparable period. Categories that continue to perform well across the company include business services, technology, banking, and insurance.

In addition to our financial results, we also took some important capital structure actions during q two and shortly after, extending both our cash flow revolver and asset backed credit line to June 2030, refinancing approximately 40% of our debt maturities in two tranches of senior secured notes to 2031 and 2033 with our nearest maturity now in 2028, and continuing to buy back senior notes. Thus far, our buybacks have reduced our annual interest by 17 and a half million dollars, generating a yield of 12.4%. Through the refinancing and the debt buybacks, we have maintained essentially flat cash interest, and this does not include interest savings of approximately $28,000,000 from the prepayment of the CCI BV term loans. Dave will dive a little deeper on this in his section. Now let me talk a bit more about the future and how we are continuing to leverage technology to make our media more compelling to advertisers.

We are now in the process of rolling out our in flight insights campaign attribution solution. We have been testing this technology for a couple of years, and we're now ready to arm our company wide sales force with this groundbreaking tool. The tool allows brands to assess the impact of their out of home campaigns while they are still alive with previously unavailable insights into audience visits in a privacy conscious way. These insights allow customers to evaluate ways to optimize their out of home campaign performance to drive more store traffic. As we expand access to this solution, we're finding that consumers travel much farther than expected after seeing an out of home ad.

This is key as it underscores the influence of our platform on much larger audiences well beyond a specific geographic location. In a world of declining search efficacy, we believe our physical presence is a distinct advantage. A great example of this scale benefit is our progress with the pharma category, where recent campaigns have been executed across a wide swath of our markets. We are demonstrating success in reaching targeted audiences at scale, selling audiences more than locations. Our vertical sales force has been invaluable in this regard as they leverage their relationships and sector knowledge to educate advertisers on the scope of our reach and impact.

So we've made substantial progress in developing what is now a very dynamic, addressable, and measurable platform integrated with the broader digital advertising world. This is demonstrated by the results of our recently released five year study of data with market research leader, Kantar, which demonstrated that out of home advertising outperforms CTV and digital channels in key metrics such as ad awareness, brand favorability, and purchase intent. Among the positive findings, out of home delivers over a 13% lift in ad awareness, surpassing even linear TV, confirming it as a powerful solution for reaching audiences at scale. The study validates our strategic investment in innovation and attribution via platforms like CCO Radar Proof that position our company as the industry's most measurement forward media partner. As I noted, our business remains healthy entering the second half of the year, and we are reiterating the midpoint of our consolidated revenue and adjusted EBITDA guidance for the year.

We are confident as we now have nearly 90% of our Q3 revenue guidance under contract, and our business pipeline remains solid. We called a strong second half when we gave full year guidance in February, and we are seeing that come in. With regard to our remaining business sales, we still expect to close the sale of our business in Brazil this year, and the sale process for our business in Spain is ongoing. As we complete these transactions, we are deep in the process of zero based budgeting, and we'll share details on that work at our Investor Day on September 9. Summing it up, we're feeling good about the remainder of the year and, more importantly, the direction we're headed longer term as we confidently execute on our plan and work to enhance shareholder value.

And with that, I'll hand the call over to Dave.

David Sailer (EVP & CFO)

Thanks, Scott. Please see Slide five for an overview of our results. The amounts I referred to are for the 2025, and the percent changes are second quarter twenty twenty five compared to the 2024, unless otherwise noted. Consolidated revenue for the quarter was $402,800,000 a 7% increase, which was in line with our guidance. Income from continuing operations was $6,300,000 Adjusted EBITDA for the quarter was $128,600,000 up 7.7%, driven in part by strong digital revenue and local sales performance across both segments.

AFFO was $27,800,000 up 75.9%, within our expectations. On to Slide six for the Americas segment second quarter results. America revenue was $303,100,000 up 4.4%, in line with guidance. The increase was primarily driven by digital revenue, which was up 11.1%, the MTA roadside billboard contract and continued improvement in the San Francisco Bay Area. Local sales were up 7.4% and national sales were down 1% on a comparable basis.

This is the seventeenth consecutive quarter Local has grown year over year. Segment adjusted EBITDA was $127,600,000 up 0.5% with a segment adjusted EBITDA margin of 42.1%, impacted by the ramp up in site lease expense primarily related to the MTA contract. Please see Slide seven for a review of the second quarter results for Airports. I am pleased to say Airports has delivered another terrific quarter with revenue of $99,700,000 up 15.6%, outperforming our second quarter guidance. The increase was driven by strong performance across both sales channels with national sales up 15.4% and local sales up 15.9% on a comparable basis.

Segment adjusted EBITDA was $24,300,000 up 27.6% with a segment adjusted EBITDA margin of 24.4% driven by revenue growth. Moving on to Slide eight. CapEx totaled 12,800,000 in the second quarter, down 21.4% driven by lower digital spend and less contractual spend on shelters. Now on to Slide nine. We ended the quarter with liquidity of $351,000,000 which includes $139,000,000 of cash and $212,000,000 available under the revolvers.

This strong liquidity position complements the various balance sheet initiatives we have taken just prior to and since our last earnings call. With the proceeds from the sale of our international businesses and cash on hand, we prepaid the three seventy five million dollars of CCI BV term loans and repurchased approximately $230,000,000 aggregate principal amount of outstanding senior notes in the open market. At the end of the second quarter, we amended our revolving credit facilities to extend maturities through June 2030, and more recently, we completed a new senior secured notes offering. Investor interest in the offering was very strong, attesting to the underlying fundamentals of our business, outlook, and access to the capital markets. These collective efforts have secured our access to our credit facilities through mid twenty thirty, pushed approximately 40 of our debt maturities to 2031 and beyond, increased our weighted average maturity from three point two years to four point eight years, and reduced our annualized cash interest by 28,000,000. Our work to strengthen and derisk our maturity profile is ongoing, and we will continue to actively manage our balance sheet with the goal of ensuring we maintain flexibility while prioritizing debt reduction. Now on to Slide 10 and our guidance for the third quarter and the full year of 2025.

For the third quarter, we expect our consolidated revenue to be within $395,000,000 to $410,000,000 representing a 5% to 9% increase over the same period in the prior year. We expect third quarter America revenue to be within $3.00 $3,000,000 to $313,000,000 and airports revenue is expected to be within 92,000,000 to $97,000,000 As Scott mentioned, we are again confirming our midpoint for the consolidated full year revenue guidance and adjusted EBITDA that we provided in February. We expect full year AFFO to be within $75,000,000 to $85,000,000 representing an increase of 28% to 45% over the prior year. Following the prepayment of the CCI BV term loans, the second quarter purchases of senior notes and the recent refinancings, we anticipate future annualized interest of approximately $390,000,000 assuming no further capital markets activity. And now let me turn the call back to Scott.

Scott Wells (CEO)

Thanks, Dave. As we wrap up, I'd like to thank our company wide team for their continued commitment and contributions as we build on our momentum and pursue value creation for our investors. Our more focused portfolio is giving us ever greater opportunities to connect with our frontline and amplify the things that are working. Thank you. To recap, we continue to make real progress executing on our strategic plan, and our outlook remains positive.

We remain on track to deliver growth in consolidated revenue and adjusted EBITDA in the year ahead, along with significant compound growth in AFFO, putting us in a strong position to pursue debt reduction. To put a finer point on this, we expect AFFO to cover growth CapEx and also allow for excess cash available to pay down debt. We also are starting to see some movement in the marketing environment as advertisers are beginning to appreciate the value of our physical assets in a world where search performance is degrading and AI is changing the dynamic in pure digital channels. It's still early innings in this shift, but we are going to drive our message about physical presence married to digital insights hard in the months ahead. That's a great lead in to remind you all that we will host an Investor Day on September 9, where we will give a multiyear view on our business plans and share more details on the topics about which our investors have been asking.

And now let me turn the call over to the operator.

Operator (participant)

Thank you. At this time, if you would like to ask a question, please click on the raise hand button, which can be found on the black bar at the bottom of your screen. When it is your turn, you will receive a message on your screen from the host allowing you to talk, and then you will hear your name called. Please accept, unmute your audio, and ask your question. If you are on a mobile device using the app, simply tap into the three dots or more button to find the raised hand feature.

And lastly, if you are calling in today, star nine will activate the raised hand and use star six to mute and unmute. We will wait one moment to allow the queue to form. Our first question will come from Benjamin Swinburne with Morgan Stanley.

Cameron McVeigh (VP - Equity Research)

Hey, guys. Can you hear me?

Scott Wells (CEO)

Yeah.

Cameron McVeigh (VP - Equity Research)

Great. This is Cameron McVeigh. Just had a couple to start. You know, Scott, as you continue to transition to a US focused business, just curious how you're thinking about the trade off between paying down debt, versus investing internally in digital boards and more of your Salesforce. You know, what's what's the priority and if you can do both at the same time?

And then secondly, yeah, I wanted to ask about the current status of any future JV plans and other partnerships to increase EBITDA as I know that has come up in the past. Thanks.

Scott Wells (CEO)

Thanks, Cameron. I'm gonna start on your first question and then see if Dave wants to to fill anything in, on it, since you directed it to me. But the the the trade off I mean, this this is, in every business, a a consideration. Obviously, one that's 10 times levered, the bank out of debt has a, a value that is, greater than a a less levered company. But we are very mindful of continuing to invest in our our asset base, continuing to drive conversions.

It's obviously one of the key underpinnings of our growth strategy. So investing in innovation for the Salesforce, investing in things that make us more effective, investing in insights and research that that that let us tap new parts of of marketplace, new verticals. All of those things are things that we're gonna do. And as we get that growth, we will we will then use that to pay down to pay down debt. I mean, I think I think one of the things that everyone needs to remember, and I know many of our investors are acutely aware of this, is that at 4%, you know, when you're not onboarding a big contract, but at 4%, you get some operating leverage.

At 6%, this is revenue growth, you get a lot of operating leverage. And so it is incredibly important for us to be driving, particularly the America part of the business, for that 6% growth level. Not saying we're gonna get that routinely, not saying that that's easy, but that is incredibly important overall because that operating leverage is then what gives you the AFFO that that ultimately lets you pay down debt. Dave, what else would you add to to that dynamic?

David Sailer (EVP & CFO)

No. No. I think you have it covered. I mean, I I don't look at it as a trade off. I I look at it as a balance, and you have to do both.

And I I wanna be clear, you know, paying down debt is an absolute priority. But what Scott mentioned is we're absolutely gonna invest in the business. We're gonna invest in our digital. We have to grow the And by investing in the top line, we'll be able to pay down debt.

So to me, it goes hand in hand as opposed to a trade off when I'm thinking of, you know, paying down debt versus just go invest in.

Scott Wells (CEO)

Great.

And then on on the second part, Cameron, I think we've done enough deal related question answering over the last three years as we've divested markets for you to know that we're gonna tell you just as soon as we have news. Really, all I would tell you is that the, the dialogues are ongoing. We are looking into, creative commercial solutions, broadly, and, we will, we will absolutely share good news as we as we have it, but there's nothing, nothing to report right now.

Cameron McVeigh (VP - Equity Research)

Great. Thank you both.

Scott Wells (CEO)

Thanks, Cam.

Operator (participant)

Our next question will come from Abby Abby Steiner with JPMorgan. You may now unmute your audio and ask your question.

Avi Steiner (Managing Director)

Hi. Good morning. Thank you. Couple of questions here. So first off, knowing that nearly 90% of the third quarter revenue guide is under contract is, definitely very helpful, particularly given, you know, some thoughts around the ad ad environment here.

Curious how that contracted amount compares maybe to prior years at this time. And just given we're here in early August, does that suggest I'm not trying to put you on the spot here, but does does that suggest potential upside? And then I've got a couple more.

Scott Wells (CEO)

Thank you. Thanks, Avi. Yeah. You got a shiny new metric, and you and I need to unpack it. I'm I'm amazed that we got to the second question before we got one on on this. So I I think what the way I would characterize it is it's, you know, plus or minus a few percent, pretty pretty typical of where we would be at this stage in the quarter. You know, we're we're a month into q three. And so, you know, I I I would not I would not take it as certainly, it's not a sign of of weakness, but I don't think that you should think that we, like, sandbag our guidance. I think our guidance takes into account that that 90%.

And, you know, on the more broad ad environment question that is that is posed, I think we have seen things, you know, perk up as we got into the latter part of June and into July, in a way that has been encouraging for how the how the second half is gonna is gonna come in.

Avi Steiner (Managing Director)

Terrific. My second question here, the in flight insights campaign attribution rollout that you talked about, is that Clear Channel specific? And if it is, maybe talk about how that compares to what some of your competitors are doing, if you could. And relatedly, would it make sense maybe for the industry to get together to offer something like this as a whole to drive continued share gain from other mediums? And then I have one more. Thank you.

Scott Wells (CEO)

So, In Flight Insights is is specific to us. There are variations on measurement that our competitors are offering. And, certainly, in programmatic channel, there is some reporting that DSPs offer. But I think we've got a a leg up in terms of the timeliness of the information flow. The challenge with with out of home historically has been the lag, from the the data reporting.

And within Flight Insights, we have, you know, made that made that quite tight. We do, as an industry, do a lot of work together on measurement. And I think, you know, over time, it would be beneficial for the industry to to standardize on things, but there are, you know, significant disagreements among the different players about what the appropriate level of investment is, what the priority should be. You know, anytime that you get a lot of entities involved working on things, it's, it it's challenging. So our our view is that we try to get things that are, like, core core counts done at an industry level because that's something that that it's important that everybody is sort of on the same level.

And you're seeing this in retail media right now. I don't think there's a day that goes by that there's not a discussion of the fact that every retailer has a different measurement system, and gee, isn't that frustrating. So it'll be interesting how those players, some of them are very large and opinionated, work, working out of their space. We're not as large, but I suspect we're probably similarly opinionated in the outdoor space. So I think you'll see us continue to work as an industry on things that support the industry as a whole, but I think you'll also see us all work to innovate and drive individual enhancements that will ultimately do good things.

I think, you know, the second half of this year, you're gonna see pharmaceutical move money in the outdoor industry at a broader level than you've seen in the past. And I'm definitely gonna take a victory lap on that one and expect a drink from my fellow CEOs because of the work that we've done to, you know, bring bring that category in, and now the agencies are working to, you know, broaden the, the footprint that it's covering. So we we are a, we are an industry of frenemies. We definitely all watch what each other are doing. I I think in flight insights is something that is gonna be helpful to us in the, in the near term, but I'm sure that, our competitors will come up with innovations to help drive the industry forward too.

Avi Steiner (Managing Director)

Great. My last one, and thank you for that, just on the balance sheet. You guys did a great job moving front end maturities. Just curious how you're thinking about next steps here and maybe addressing the unsecureds. Obviously, EBITDA growth, Scott, that you touched on the cash flow plus remaining asset sale proceeds.

But I'm curious maybe if you wanna talk a little bit about the toolkit. I I don't know that you will. And then, relatedly, Dave, if you could just remind us, your minimum cash balance comfort level. And thanks for the questions again.

David Sailer (EVP & CFO)

Sure. Look. I appreciate the call out on maturities. I, I think we're really happy with the deal, you know, that we did and, you know, pushing out of maturities, you know, $2,000,000,000 out to 2031 and 2033, with our weighted average, you know, up roughly four point eight years. So very happy with that.

As far as the senior notes, I mean, look, we're gonna be generating free cash flows. I think it's a combination of generating free cash flow, you know, to your question, you know, excess cash on the balance sheet utilizing to pay them down. And then, also, we have asset sale proceeds that that will be coming in. Obviously, we're we're talking about Brazil. The same process is ongoing.

You know, we're gonna utilize those to pay down debt, you know, within what our our credit docs, you know, allow for. I mean, I guess going back to your question on on cash balances, I know that we've mentioned before. You know, we've we're probably in the 50 to $75,000,000 range cash balance. So right there, there there's cash that we can utilize as well. And then, you know, one last lever, you know, that Scott has talked about a lot is, you know, we're still evaluate evaluating potential for your commercial solutions.

So, you know, that could be a lever to us as well. Thank you all.

Scott Wells (CEO)

Thanks a

Operator (participant)

Our next question will come from Jonathan Navret with TD Cowen. You may now unmute your audio and ask your question.

Jonnathan Navarrete (VP - Equity Research)

Hey. How are you? My first question is on America. Revenue grew 4%, but segment EBITDA was flat year over year, implying some margin compression there. Beyond the MTA side lease ramp, what were the other cost pressures impacting flow through this quarter, if at all?

And should we expect similar dynamics in the second half?

David Sailer (EVP & CFO)

Yeah. I'll I'll I'll take that. The MTA is really the the majority of it. We've we've talked about in the past, and that contract started, you know, November 1. So you're gonna see that as we get into the fourth quarter as well and the third quarter.

So that's definitely having the the base impact. The only other thing I I probably mentioned, which was in the second quarter, you know, we, you know, built a large format sign, which is production revenue. It's it's lower margin. So when you put those two together, that's really what's driving it in the second quarter. But there's really nothing suspended or something going forward, you know, that I'd point out.

It's really the the MTA. And, you know, we'll lap that contract as we get into November. You know, I think December of next year, you'll you'll see, you know, the the the margin, you know, you know, benefit of that of that contract.

Jonnathan Navarrete (VP - Equity Research)

Got it. And my last one is just you reiterated the financial '25 adjusted EBITDA guidance. But just given the $395,000,000 of cash interest, are you at all confident that you can generate the free cash flow positive this year? And if so, what levers do you find more most critical?

David Sailer (EVP & CFO)

No. I mean, I yes. I so the answer to that would be yes. Look. The biggest thing is really is EBITDA.

So we we really need to, you know, drive the top line, you know, to to drive EBITDA, which is gonna, you know, fall through the AFFO to cash flow. I mean, I I would talk to, you know, working capital to a certain standpoint. I mean, it's more on the collection side, just making sure we're collecting the revenue that we're driving. That's probably a big deal. You know, from you mentioned CapEx.

I I said, look. We're gonna manage, as I said earlier on the call, that we're gonna invest in the business that makes sense. You gotta you gotta drive investment to drive the top line, to drive EBITDA. So there's always a balance there, but to me, then it's not gonna be a huge lever when I'm looking to, you know, drive free cash flow for the year.

Jonnathan Navarrete (VP - Equity Research)

Got it. Thank you.

Operator (participant)

Our next question will come from Aaron Watts with Deutsche Bank. You may now unmute your audio and ask your question.

Aaron Watts (Managing Director, Media, Entertainment, Cable, & Satellite Credit Analyst)

Hi. Thanks for having me on. Dave, I'll assume the switch to this new Zoom call format accrues to the bottom line, and we'll be adjusting my model accordingly. Just two questions for me. The first one, sales in the airport segment have obviously been quite strong, but I wanted to ask about the margins there, which continue to remain elevated above where we thought they might trend to.

What what factors would you point to that are that are propping them up? And and how should we think about the progression on airport margins going forward? Then I've got one more. Next.

David Sailer (EVP & CFO)

I mean, look, the top line has been great on on airports, and that's obviously helping. We we talked about, you know, the site lease relief, which we actually a little bit trick trickled in the second quarter, which helped it's helping margins. You know, the remainder of this year, you know, third, fourth quarter, you know, they're gonna be in the low, you know, 20 percents, from a margin standpoint. Like, I think the the team has done a really nice job, you know, monetizing our assets. It's it's a premium buy.

A lot of the verticals, banking, technology have performed, you know, extremely well. We were up, you know, in the second quarter last year pretty well, and, you know, we've we've lapped that. So, you know, the team has performed. So when I'm thinking about margins in the business, you know, the the back half of this year, you know, we're we're we're gonna be in the in the low 20 percents.

Aaron Watts (Managing Director, Media, Entertainment, Cable, & Satellite Credit Analyst)

Okay. That's helpful. And then, Dave, perhaps more of a housekeeping type question. But with regards to the big beautiful bill, will any of the changes in there benefit the company materially from a cash flow standpoint, whether it's interest deductibility or tax depreciation considerations?

David Sailer (EVP & CFO)

Yeah. No. I think you you you answered the question for me. It's not a huge impact for for us. And, you know, obviously, we're still working through the beautiful bill, but a lot of it is going to be there'll be a little bit more from an interest standpoint.

We file the one sixty three j, so that will increase slightly. And from a depreciation standpoint, you know, they were obviously phasing out what you can appreciate, and that that goes back to a 100%. So that absolutely will have an impact from a cash, you know, my cash net when really on taxes. We're not really a material taxpayer. It will help, but it it's it's not a it's not a huge deal at the moment.

Aaron Watts (Managing Director, Media, Entertainment, Cable, & Satellite Credit Analyst)

Okay. Appreciate the time. Thanks again.

David Sailer (EVP & CFO)

Thanks, Aaron.

Operator (participant)

Our next question will come from David Karnovsky with JPMorgan. You may now unmute your audio and ask your question.

David Sailer (EVP & CFO)

Is that clear? It's not clear.

David Karnovsky (Senior Research Analyst)

Hey. Thanks. Just within, America, Q2 growth for local looks Co's event model too. Can you hear me? Okay.

Scott Wells (CEO)

Yes. Yeah. I guess I crossed off there, but

David Karnovsky (Senior Research Analyst)

Yeah. Sure. No. I was just saying for the for the second quarter, local looks a little bit better than national. Scott, don't know if you could just talk to kinda how local versus national marketers are kind of or have responded to the macro volatility we've seen.

And then just for America, the the revenue was a touch short of the midpoint of the guide you gave back from May. Maybe you can just talk to what track different from expectation and then some of the factors that led you to reduce the the full year America guide to the, I think, the prior low end. Thank you.

Scott Wells (CEO)

Sure. Well, I'm gonna take your your second part first. And and, really, that that was a timing issue of a a large contract that we thought was gonna start in May that ended up starting in in very late June. And that that would have that would have pushed us well toward the upper end of the guide from from May. And, you know, that that happens.

It it was an account that is in transition at its agency, and it it just you know, they had a little they had a little longer ramp getting going, so there was nothing there was nothing deeper behind it. And it was a national account, so that also would have pushed us to a better national number for for America. You know, on your on your question on mix of national and local and and what's going on, I think the the thing I'd start with is if we didn't break out America and airports, what we would have reported was national up four and a half percent. That's what the blend between the the American segment and the airport segment is national. And Dave talked a little bit about some of the variables and some of the momentum in in airports, but I think it it is not the case that there's anything I'd point to saying that, you know, national is, you know, endemically weaker than local or it's it's it's more chunky, and it's it's less predictable than than local.

But, you know, obviously, we are having tremendous success with large advertisers in the airport segment, and we're having pretty good success with them in the the national segment in in America. And, you know, there probably was a stretch in the in the kind of late May, early mid June, where there were some lag lag effects, I think, for Liberation Day. Although, frankly, it might have just been this one contract that I talked about, you know, not showing up that we had we thought was gonna show up that that was causing us to perceive it. But we we really haven't heard from advertisers generally that that they're considering pullback or that they that they are pulling back. On the contrary, people are looking to invest in their their businesses.

You know, if I think about it at the vertical level, probably media entertainment has been a bit of a disappointment this year. That that has, you know, not not been commensurate with the the slate of releases that we expected, you know, that that probably hasn't been as good. You know, on a local front, restaurants and and hotels, although hotels sort of straddle, both of them straddle local national, but but a lot of business in restaurants and hotels is local national. You know, those verticals are not doing as well. And I think, you know, some of the reduction in travelers from foreign countries and things like that, although there has been an uplift in domestic travel.

So there there's a lot of there's a lot of competing factors going on, but I think the story of of our results so far correlates more with the geographies. And, you know, in the in the case with with airports, it's the geographies that are the big geographies, big airports. Big airports are, by and large, with with a couple exceptions, you know, firing on all cylinders. And in the in the markets, the America markets, you know, the Northeast, but that that is, you know, heavily influenced by the NPA contract. Northeast is is performing really well.

NORCAL, like we talked about, San Francisco, is performing really well. Southeast is performing really well. So there are, there are pockets of geographic strength. And and if I you know, I'll I have a lot of employees that listen to this earnings call. I'm just gonna, like, send a a PSA to them that if you're not one of the the regions that I just named, you should expect that you're you're gonna be getting some attention because we need to we need to pick it up and have and it's not that it's not that the other regions aren't growing.

It's just the other regions might not be growing as as much. Or in in the case of Southern California, we're we're, you know, flattish to flattish to a little bit down for the year, and and we need to pick that up. So it it that that to me is a lot more of the story than than the national local story. I don't know, Dave, if you're experiencing it different. Or

David Sailer (EVP & CFO)

No. No. I I agree. When I'm when I'm thinking about, you know, the when I'm thinking about the business, you know, from a revenue standpoint, I am looking at it from a geographic standpoint and, you know, kind of where we are in the second quarter, you know, there's a lot more markets that are up than are than are down. The ones that are up are are performing, you know, at at at a greater pace. But, yeah, there there are there are few markets, you know, that you kinda mentioned from a geographic standpoint that we need to get those to grow, and that's that's really where you get those growing. And then that goes back to the question on, you know, investing in the business, then when you when you get that top line growing, that's that's the cycle, and that's what we wanna get to. So we're investing in the business, and we're paying that debt at the same time.

Scott Wells (CEO)

So a little more than you bargained for, Aaron. But but since somebody else had asked about the geography or anything, I wanted to give a little little color on that because I I know that our investors are all very interested.

David Karnovsky (Senior Research Analyst)

No. That's fine. Maybe just one more for David. I don't know if you could just clarify on the on the lower AFFO guide and the and the driver there just given the reiterated EBITDA would be helpful. Thanks.

David Sailer (EVP & CFO)

Yeah. I mean, we're still, I would say from an AFFO standpoint, still in line with what we what we said in February, maybe slightly above. It's really the the the the refinancing, you know, that we did in July, you know, your your advertising, the interest expense.

Scott Wells (CEO)

So that that's really what what's driving that that difference. Nothing more than that.

David Karnovsky (Senior Research Analyst)

Good. Thank you.

Operator (participant)

Our last question will come from Patrick Scholl with Barrington Research. You may now unmute your audio and ask your question.

Patrick Sholl (VP)

Hi. Thanks for taking the question. Just another question that I think might be timing related, but, the can you maybe talk about, like, the revision on the capital expenditure guidance? Like, if if that and if that that should be impacting the, like, pace of digital board installs in the near term, or just how to think about that?

David Sailer (EVP & CFO)

Yeah. Look. From a from a from a CapEx, from a guide standpoint, we had, you know, less contractual spend on some of our shelter deals, which was driving second quarter a little bit later in the year. From a timing standpoint, there's a little bit of timing. I mean, you had mentioned tariffs as well.

That that's not really an impact. But at the end of the day, we're gonna put in, you know, in in the ground the the amount of digitals that we we start after at the beginning of the year. But there may be a few more managed spaces, which are a little bit cheaper, and that that's gonna drive a a little bit up from a CapEx savings, but it it's not an initiative where we're we're trying to push out, you know, our digital spend. It's it's really more from a timing standpoint and and really when you're when you're looking at your pipeline and how they're playing out for the year. But, you know, but we're gonna be putting in the allotment that that we we had sought out, you know, early in the year from a digital standpoint.

Patrick Sholl (VP)

Okay. And then this may, go to the, large national client you talked about earlier. But could you talk about, like, the the different the trends within static? And I realize that it improved sequentially in both Americas and airports. You just maybe talk about like why that kind of continues to be lagging in the second quarter in terms of the pace of growth?

And just with the in flight, you maybe anticipate that impacting advertiser uptake and on static versus digital as you start presenting that to advertiser clients?

Scott Wells (CEO)

So the static versus digital is a is a many year. You you should with the capital that you're putting behind digital, you should expect that digital is going to be growing better than static. And I think that the fact that we have grown static as much as we have over the last bunch of years defies a lot of the conventional wisdom, on that. But it is it is just a fact that advertisers really like the flexibility of digital. They like, the the fact that you can, you know know, say you want a campaign to start on Friday, on Thursday, and the campaign can be up and and active.

They like, you know, a logistically simpler implementation where, you know, they don't they don't have to go through all of the all of the steps. But I think equally as well, we have a lot of advertisers that are very passionate about their their static signs, and and they're, you know, somewhat different use cases. Static is a a more powerful tool, when you're doing a directional. Static can be an incredibly powerful tool, you know, going to the most extreme static, which is painted when you're trying to make a statement on a nonconic location. So, you know, there are there are there are gives and takes.

But I I would say just in in general, and and you see this in our airports business, you know, as you make digital more available, you are able to do creative and interesting things with the digital to to grow the business. So I think it is it is in the interest of of the advertiser as well as the media owner to have a a robust digital offer. This is why the cities that are still resistant on having digital sites are so frustrating because they're holding back the development of our medium by not allowing us to have, you know, a a digital presence. But as I as I say that and I talk about the the preference, I'd be very remiss if I didn't say that that there were equally a a number of advertisers that are very passionate about owning locations, not sharing, and getting the really, really great resolution you can get on a on a printed asset. So I think you're gonna see I guess, to to wrap it up, Patrick, the the thing I'd say is you're you're gonna see that digital is gonna likely, you know, systemically outperform static, but better given the relative capital that we're putting into digital.

David Karnovsky (Senior Research Analyst)

Okay. Thank you.

Operator (participant)

There are no more questions, so I will now turn the call back over to Scott Wells for any closing remarks.

Scott Wells (CEO)

Great. Thank thank you very much, and thank you all for the the questions. Look. We're we're turning a big corner this year. With asset sales to date and in process, debt reduction and refinancing, all combined with organic growth in The US business, we're generating positive and growing AFFO after investing for growth in the business.

As we streamline costs in the simplified business, ramp that MTA contract, I would expect that revenue growth from this point forward is going to drive operating leverage, visibly operating leverage in 2026. We're dedicated to realizing value from the premier portfolio of assets that we operate, and we believe we're well on our way to moving highly our highly leveraged balance sheet. So all of that to say that we believe the value transfer from debt to equity is is inevitable and compelling in this business. We see it out on the horizon. I've been in this industry a long time, and I know these assets are worth a lot.

So given the trends that we're starting to see around the value of our physical presence, we are excited about what lies ahead. This management team and board are focused on realizing the value for all of our shareholders, and I'm proud of the progress we're making. All of this to say, get yourselves here in New York for our Investor Day on September 9 because we are excited to, tell you about our our long and midterm plans. With that, we'll wrap up, and I'll thank you for your interest and your time. Take care.

Operator (participant)

Thank you for joining Clear Channel Outdoor second quarter twenty twenty five earnings call. This concludes today's call. You may now disconnect.