Emerald Holding, Inc. (EEX)·Q1 2024 Earnings Summary

Executive Summary

• Q1 2024 was solid: revenue rose 9.1% to $133.4M on organic growth (+11.7%), with net income of $11.0M and Adjusted EBITDA ex-insurance of $39.8M; management reaffirmed FY24 guidance of $415–$425M revenue and $110–$115M Adjusted EBITDA .
• Pricing tailwinds and higher exhibitors/attendance drove the beat vs prior periods; adjusted EBITDA margin ran at “approximately 30%,” supported by operating leverage despite integration and restructuring costs .
• Liquidity remains strong ($186.8M cash; undrawn $110M revolver); net debt / EBITDA was 2.2x; post-quarter, the mandatory conversion of preferred simplified the capital structure (~203.8M common shares outstanding as of May 2) — a potential stock re-rating catalyst as all shareholders now participate equally in FCF .
• FY24 outlook maintained; management flagged quarterly growth variability (Q1 and Q4 strongest) due to mix/seasonality; continued focus on value-based pricing, international exhibitor mix, and M&A pipeline (Hotel Interactive added in Jan) .

What Went Well and What Went Wrong

• What Went Well

  • Strong organic momentum: Organic revenue +11.7% YoY to $128.6M, led by Connections segment (+13.0%) with higher exhibitors and improved pricing .
  • Pricing power and margin: “Pricing up better than mid-single-digit” YTD; Q1 Adjusted EBITDA margin ~30% with leverage expected to improve over time .
  • Strategic simplification: Post-Q1, completed conversion of all preferred shares to common; CFO: “We expect our shareholders will benefit from our newly simplified capital structure and improved free cash flow” .

• What Went Wrong

  • SG&A elevated: Q1 SG&A up to $55.5M (+13.7% YoY) on Hotel Interactive consolidation, severance, integration, and contingent consideration remeasurement (+$1.5M) .
  • Content softness persisted YoY: Content revenue fell to $4.7M from $5.5M; management sees stabilization and bookings improvement, but Q1 still declined .
  • Free cash flow impacted by one-time items: FCF ex-insurance was $3.8M (vs $5.2M in Q1’23), reflecting $5.4M of one-time costs (transactions, integration/restructuring, legal/consulting) .

Financial Results

Note: “Vs. estimates” not shown because S&P Global consensus data was unavailable at the time of analysis (see Estimates Context).

Segment and revenue-type breakdown:

Key balance sheet and cash KPIs:

Context/Why:

• Revenue growth: +$11.1M YoY driven primarily by organic growth (+$13.5M) and acquisitions (+$2.8M), partially offset by scheduling and discontinued events .
• Profitability: Operating income improved to $24.3M; Adjusted EBITDA ex-insurance increased to $39.8M (insurance proceeds of $1.0M recorded in “other income”) .
• Costs: SG&A increased from $48.8M to $55.5M due to Hotel Interactive, severance from de-layering management, integration, and contingent consideration remeasurement .

Non-GAAP and adjustments:

• “Other items” in Adjusted EBITDA add-backs totaled $6.9M: $0.3M acquisition costs; $4.8M integration/restructuring (incl. $3.0M severance); $0.3M non-recurring legal/audit/consulting; $1.5M contingent consideration remeasurement .
• FCF ex-insurance reflected the above non-recurring items ($5.4M in Q1’24 vs $4.2M in Q1’23) .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO (press release): “2024 is off to a strong start… hosted successful shows with record attendance… we believe the company is on track to deliver… $415–$425 million of revenue and $110–$115 million of Adjusted EBITDA” .
• CFO (call): “We continue to see a strong opportunity on the pricing front… pricing up better than mid-single-digit so far, year-to-date… would expect at least a mid-single-digit pricing improvement over the course of the year” .
• CFO (call): “We completed the conversion of all of our outstanding preferred shares… total outstanding share count is ~203.8 million… We expect our shareholders will benefit from our newly simplified capital structure and improved free cash flow” .
• CEO (call): “We’re positioning Emerald to be a reliable, free cash flow generator and earnings compounder… sustain this trajectory and deliver meaningful growth in excess of our industry” .

Q&A Highlights

• Quarterly variability: Growth rates vary by quarter due to show mix; Q1 and Q4 expected to be strongest, with mid-year growth more muted but positive .
• Hotel Interactive acquisition: About 15 hosted-buyer events spread across the year; contribution run-rate similar across quarters; no additional acquisitions embedded in guidance .
• Pricing & volume: Pricing up better than mid-single-digit; NSF up a few percent; international exhibitor mix improving .
• Visas/international: Industry lobbying to modernize visa processing; progress underway and viewed as a sector tailwind .
• Content & 365 engagement: Content bookings up after reorg; Elastic expanding into kitchen/bath; Bulletin powering NY NOW Online; strategy to drive year-round engagement and pricing for value .

Estimates Context

• Wall Street consensus (S&P Global) for Q1 2024 revenue/EPS/EBITDA and counts of estimates were unavailable at the time of analysis due to access limits. We therefore do not present beat/miss versus consensus for this quarter. Management did reaffirm FY24 guidance of $415–$425M revenue and $110–$115M Adjusted EBITDA .

Key Takeaways for Investors

• Near-term: Reaffirmed FY24 outlook with Q1 momentum and ~30% quarterly EBITDA margin in seasonally largest quarter; capital structure simplified post-Q1 — potential multiple support .
• Pricing power: Value-based pricing and improving exhibitor mix (including international) underpin mid-single-digit pricing gains, supporting margin expansion as scale improves .
• Mix & seasonality: Expect intra-year variability (Q1/Q4 strongest); focus on event mix and operating leverage to progress toward pre-COVID margin levels over time .
• Portfolio evolution: Tuck-in M&A (Hotel Interactive) and new launches expected to add 1–2 pts of organic growth annually; pipeline remains active .
• Content turnaround: Reorganized and modernized; bookings up; could shift from headwind to incremental contributor through 2024 .
• Liquidity/FCF: Strong cash ($186.8M) and low capex model; FCF temporarily weighed by integration/reorg costs but structurally robust with advance collections and working capital dynamics .
• Watch items: SG&A normalization post restructuring, content recovery trajectory, international visa processing progress, execution on pricing and adoption of on-site matchmaking/lead tools .

Citations

• Q1 2024 8-K and Exhibits:
• Q1 2024 Earnings Call Transcript:
• Q1 2024 10-Q:
• Q4 2023 8-K and Presentation:
• Q3 2023 8-K and Presentation: