LAMAR ADVERTISING CO/NEW (LAMR)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 delivered modest top-line growth with net revenues up 1.5% to $505.4M and AFFO/share up 3.9% to $1.60, while adjusted EBITDA dipped 0.8% to $210.2M; net income rose 77% driven by a $67.7M gain on the Vistar Media stake sale .
• Versus consensus: revenue modest miss ($508.8M* vs $505.4M), EPS slight beat ($1.34* vs $1.35), and EBITDA below consensus ($231.1M* vs $210.2M). Management reaffirmed FY25 diluted AFFO guidance of $8.13–$8.28/share .
• Mix trends supportive: local/regional strong (82% of Billboard revenue) and programmatic up ~30% (+$2M YoY); national slightly down; digital billboard revenue +4% and ~30% of Billboard revenue .
• Capital allocation remains a catalyst: $150M repurchased at ~$108/share in Mar–Apr, with authorization raised to $250M remaining as of May 15; dividend of $1.55 declared for Q2 and expectation of ≥$6.20 for 2025 regular dividends .
• Balance sheet healthy: total liquidity $491.3M at quarter end; net debt/EBITDA 2.85x, LTM interest coverage 6.6x; maturities well-laddered (no maturities until 2027) .

What Went Well and What Went Wrong

• What Went Well

  • Local and programmatic momentum: “16th consecutive quarter of acquisition-adjusted revenue growth … aided by increases in local and programmatic,” with programmatic up ~30% (+$2M YoY) .
  • Digital revenue and mix: Digital billboard revenue +4% and ~30% of Billboard revenue; categories strength included services (+11%), retail (+6%), and building & construction (+15%) .
  • Capital returns reaffirmed: $150M repurchased at ~$108/share, and Board expanded authorization to $250M remaining; Q2 dividend $1.55 and ≥$6.20 expected for 2025 regular dividends .

• What Went Wrong

  • Slight revenue miss vs consensus and EBITDA underperformance: revenue $505.4M vs $508.8M* and adj. EBITDA $210.2M vs $231.1M*; EBITDA margin ~41.6% (Q1) below typical 47–48% recent levels .
  • Free cash flow down 12.7% YoY to $121.1M, primarily due to current tax expense ($21.2M) from the Vistar sale .
  • National demand softness and expense pressures: national down slightly; consolidated expenses +2.6% with one-time items (sales contest, elevated health insurance, region-specific costs); corporate expenses elevated amid enterprise conversion .

Financial Results

Notes: Q4 2024 net loss driven by a revision to asset retirement obligation increasing D&A by $159.7M .

Estimates Comparison (Q1 2025)

Values marked with * retrieved from S&P Global. EBITDA consensus definition may differ from company “Adjusted EBITDA.”

Segment/Category and Mix KPIs (Q1 2025)

Balance Sheet and Liquidity (Quarter-end)

Capital Allocation

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We delivered our 16th consecutive quarter of acquisition-adjusted revenue growth, aided by increases in local and programmatic.” — Sean Reilly, CEO .
• “Our first quarter results exceeded internal expectations across revenue, adjusted EBITDA and AFFO… adjusted EBITDA margin remained strong at approximately 41.6%.” — Jay Johnson, CFO .
• “Programmatic grew almost 30% in Q1, and it continues to perform well as we move into Q2. Digital overall also continues to perform well.” — Sean Reilly .
• “We have repurchased 1.39 million shares at approximately $108 per share… returns well in excess of the company's cost of capital.” — Jay Johnson .
• “Categories of strength included services, retail, construction and oil and gas, while gaming, restaurants and amusement showed relative weakness.” — Sean Reilly .

Q&A Highlights

• Organic growth path: Management tracking to ~3% organic revenue growth for FY25; currently ~75% booked to that goal .
• National softness drivers: Changing buying habits among large customers; programmatic growth offsets; agencies indicate steady conditions .
• Digital conversion pace: Targeting >350 deployments in 2025; local more stable than national; examples of national customers re-engaging (e.g., Cracker Barrel) .
• Expense headwinds: One-time sales contest commissions, elevated health insurance, region-specific onetime costs; enterprise system conversion raising corporate costs; FY consolidated expenses ~3% .
• Share repurchases and guidance: Repurchases late in Q1/April; AFFO/share guidance affirmation excludes repurchase impact for conservatism .
• M&A contribution: High-quality, footprint-fill acquisitions; FY spend expected “well north of $200M,” further detail expected in August .

Estimates Context

• Q1 2025 vs S&P Global consensus: revenue modest miss ($508.8M* vs $505.4M), EPS slight beat ($1.34* vs $1.35 diluted), EBITDA below consensus ($231.1M* vs adjusted EBITDA $210.2M). Expect estimate adjustments to reflect mix resilience (local/programmatic) and near-term national softness, with EBITDA modeling converging toward ~3% consolidated expense growth and ~41–42% Q1 margin .
  Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

• Reaffirmed FY25 diluted AFFO guidance ($8.13–$8.28/share) despite national softness; near-term narrative anchored by local/programmatic strength and disciplined expense management .
• Capital returns likely supportive: $150M buyback executed at ~$108/share and authorization expanded to $250M remaining; Q2 dividend $1.55 and ≥$6.20 regular dividends for 2025 .
• Margin watch: Q1 adj. EBITDA margin ~41.6% vs mid/high-40s in recent quarters; one-time costs and mix weighed; monitor normalization toward ~3% expense growth .
• National demand remains variable, but programmatic/digital and category strength (services, construction, retail) offset; watch agency feedback and early-cycle digital pacing as indicators .
• M&A acceleration (> $200M expected in 2025) should augment footprint and digital mix; integration discipline and REIT-qualified asset profile remain key .
• Balance sheet robust (2.85x net debt/EBITDA; 6.6x interest coverage; 2027 maturities start), supporting optionality for acquisitions and buybacks through cycles .
• Model implications: modest revenue growth trajectory, stable local/programmatic, national recovery potential, and sustained dividend capacity; consensus may fine-tune EBITDA and revenue run-rate post Q1 miss vs estimates .