OUTFRONT Media Inc. (OUT)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue of $390.7M declined 4.4% YoY and missed S&P Global consensus by ~$5.3M (~1.3%); Primary EPS missed consensus (S&P) by ~$$0.03, driven by softer billboard volumes and higher corporate costs tied to severance and search fees . Revenue Consensus Mean: $396.0M*; Primary EPS Consensus Mean: -$0.09*; Primary EPS Actual (S&P): -$0.12*; Company diluted EPS: -$0.14 .
• Operating leverage held up: Billboard Adjusted OIBDA rose 2% and margin expanded 100 bps to 31.9%, while consolidated Adjusted OIBDA fell 3.5% to $64.2M; AFFO improved 3% YoY to $23.9M .
• Guidance: Management sees Q2 revenue “similar to Q1, perhaps a bit better,” with billboard flattish-to-slightly down and transit up low-to-mid single digits; 2025 AFFO expected to grow mid-single digits; CapEx held at ~$85M with ~$35M maintenance; dividend maintained at $0.30 per share .
• Catalysts: Execution of digital-first strategy (programmatic/digital automated sales +~20%; digital revenue 33% of total organic), portfolio optimization (contract exits), and planned refinancing of the $400M 2026 term loan later this year .

What Went Well and What Went Wrong

What Went Well

• Billboard profitability: Adjusted OIBDA up ~$2M YoY with margin +100 bps to 31.9% from portfolio management and lower lease costs .
• Digital momentum: Combined digital revenues +~7% YoY; programmatic and digital direct automated +~20% and now 16% of digital; digital mix rose to ~33% of organic revenue (from ~31% LY) .
• MTA/transit resilience: Transit revenues +2.6% YoY, with New York MTA up ~10% and signs congestion pricing is accretive per on-the-ground metrics and higher ridership .
• Quote: “We expect that second quarter revenues will look similar to the first quarter, perhaps a bit better… Notably, our Q2 guidance includes the revenue headwinds created by the exits of the two large Billboard contracts” — Interim CEO Nick Brien .

What Went Wrong

• Top-line miss and YoY decline: Reported revenue -4.4% YoY to $390.7M from lost billboards and lower condemnation proceeds; consolidated Adjusted OIBDA -3.5% to $64.2M .
• Local softness and regional headwinds: Local -3% YoY, weakness in LA buses; West region challenged (LA, San Francisco recovering) .
• Elevated corporate costs: Corporate expense +~$5M, largely severance and executive search fees; SG&A +3.8% on compensation and consulting, pressuring margins .
• Analyst concern: While billboard exits are only marginally profitable and should have limited OIBDA/AFFO impact, management expects a ~200 bps run-rate headwind to billboard revenue growth until lapped next year .

Financial Results

Segment breakdown (Q1 YoY):

KPIs and operating trends (YoY unless noted):

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• Strategic imperatives: “Optimizing our sales strategies… modernize our workflow and processes… drive new demand from non-out-of-home advertisers… highest standards of operational excellence” — Interim CEO Nick Brien .
• Digital-first push: “Accelerate our digital-first strategy to enable first-party data integrations… leverage partnerships with leading ad tech platforms… deliver dynamic content… proven ROI” — Nick Brien .
• Portfolio discipline: Exiting marginally profitable billboard contracts (NY exited late 2024; LA exit mid-Q2 2025) to improve margin profile with minimal impact to OIBDA/AFFO — CFO Matthew Siegel .

Q&A Highlights

• Macro mix and resilience: Book skewed toward services; tariff-related impacts largely postponements rather than cuts; local underperformed for a second quarter .
• LA/media & entertainment: Category remains critical; exits driven by profitability discipline, not fire-related; Q2 slate looks promising .
• MTA MAG and congestion pricing: MAG increased to $156M (from $150M); congestion pricing appears accretive; ridership higher; near-daily subway observation supports strength .
• Efficiency and tech stack: Focused on cost efficiencies across the business; modernizing order management/data integrations; strengthening SSP/DSP programmatic links and reseller relationships .
• Geography: West challenged (LA/SF), South/Midwest doing well; East buoyed by MTA .

Estimates Context

Q1 2025 vs consensus (S&P Global):

Notes:

• Company reported Adjusted OIBDA of $64.2M (non-GAAP) vs S&P Global “EBITDA” actual of $42.2M; definitions differ (company OIBDA excludes D&A, stock comp, impairments, and certain gains/losses) .
• Values retrieved from S&P Global.*

Implications:

• Revenue missed consensus by ~$5.3M (~1.3%). EPS missed by ~$0.03. Estimate revisions may turn modestly negative near term, especially for billboard top line and EBITDA, while AFFO trajectory remains mid-single-digit per management .

Key Takeaways for Investors

• Near-term setup: Q2 revenue guide “similar to Q1, perhaps slightly better,” with transit offsetting billboard headwinds; watch pacing and the impact of contract exits (~200 bps billboard revenue growth headwind until lapped) .
• Margin defense: Portfolio pruning is expanding billboard margins (+100 bps YoY) despite revenue pressure; expect limited OIBDA/AFFO impact from exits .
• Digital flywheel: Programmatic/digital automated momentum (+~20%) and rising digital mix (33%) underpin yield +~2% and support medium-term growth and measurement-led ROI narratives .
• Transit tailwinds: MTA MAG step-up to $156M and congestion pricing appear supportive; ridership trend improving; watch NYC pace vs other franchises (LA buses weakness) .
• Cost discipline: Elevated Q1 corporate costs (severance/search) are transitory; management is targeting efficiencies and modernization of the tech stack .
• Balance sheet/liquidity: >$600M committed liquidity; plan to refinance $400M 2026 term loan later this year—monitor timing and market conditions .
• Income profile: Dividend maintained at $0.30/share; AFFO expected mid-single-digit growth in 2025—supportive for yield-focused holders if execution on transit/digital continues .