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OUTFRONT Media Inc. (OUT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $460.2M, essentially in line with S&P consensus ($461.0M*), while Primary EPS topped expectations (actual 0.239* vs 0.183* estimate); Adjusted OIBDA was $124.1M and AFFO was $85.3M .
  • Segment mix: Billboard revenue declined 2.5% YoY to $351.3M amid exits of marginally profitable NY/LA contracts; Transit grew 5.6% to $106.3M with notable MTA strength; consolidated Adjusted OIBDA margin was 27.0% (vs 26.4% YoY) .
  • Restructuring charge of $19.8M for ~120 reductions offsets near-term EPS, but management expects $18–$20M annualized savings (about half realized in 2H25) and reiterated full‑year AFFO growth in the mid‑single digits .
  • Q3 outlook: management guides consolidated revenue up low single digits (Transit double‑digit growth; Billboard low single‑digit decline, but up low single digits ex‑exited contracts), framing a near-term acceleration narrative; dividend maintained at $0.30 per share .
  • Potential stock catalysts: visible cost saves, transit momentum, programmatic growth (~+20%), and Q3 revenue acceleration versus Q2 pacing .

What Went Well and What Went Wrong

What Went Well

  • Transit revenue grew 5.6% YoY; Transit Adjusted OIBDA rose by $2.7M (+60%) on stronger yield and MTA performance, despite higher franchise expenses .
  • Programmatic and automated digital sales up nearly 20%, with digital revenue representing >34% of organic revenues; combined digital revenue grew 1.5% (≈5% ex‑NY/LA exits) .
  • CFO: “We expect an annualized expense savings of approximately $18,000,000 to $20,000,000… about half should be realized over the balance of this year,” reinforcing margin support in 2H25 and 2026 .

What Went Wrong

  • Billboard revenue down 2.5% YoY driven by exits of large marginally profitable contracts in NY and LA; digital billboard revenues declined 4.5% YoY and traffic/other down 1.6% .
  • Entertainment vertical softness: despite spend from major studios (Universal, HBO, Disney, Warner Bros.), the absence of other studios weighed; management expects better in Q3 .
  • Structural decline in static transit formats; CFO characterized static transit weakness as “structural,” with demand shifting to digital .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$477.3 $390.7 $460.2
GAAP Diluted EPS$1.04 ($0.14) $0.10
Adjusted OIBDA ($USD Millions)$126.0 $64.2 $124.1
Adjusted OIBDA Margin (%)26.4% 16.4% 27.0%
AFFO ($USD Millions)$84.8 $23.9 $85.3

Segment breakdown:

Segment MetricQ2 2024Q1 2025Q2 2025
Billboard Revenue ($M)$360.2 $310.7 $351.3
Billboard Adjusted OIBDA ($M)$136.0 $99.0 $134.4
Billboard Adjusted OIBDA Margin (%)37.8% 31.9% 38.3%
Transit Revenue ($M)$100.7 $77.7 $106.3
Transit Adjusted OIBDA ($M)$4.5 ($14.2) $7.2
Transit Adjusted OIBDA Margin (%)4.5% (18.3%) 6.8%
Other Revenue ($M)$16.4 $2.3 $2.6
Other Adjusted OIBDA ($M)$1.6 $0.5 $0.5

Consensus vs actual (S&P Global):

MetricPeriodEstimateActual
Revenue ($USD)Q2 2025$461.0M*$460.2M
Primary EPS ($USD)Q2 20250.183*0.239*

Values retrieved from S&P Global.
Note: GAAP diluted EPS was $0.10; S&P “Primary EPS” reflects analyst-normalized EPS metrics *.

KPIs and balance sheet highlights:

KPIQ2 2024Q2 2025
Digital revenue share of organic revenues (%)~33% >34%
Programmatic + automated digital share of total digital (%)14.8% 16.5%
Programmatic + automated digital growth (%)~20% ~20%
Billboard yield ($/month)n/a~$3,000 (+0.5% YoY)
CapEx ($M)n/a$26 (Q2); FY plan $85
Maintenance CapEx ($M)$7.7 (Q2) $7 (Q2); FY plan $35
AFFO ($M)$84.8 $85.3
Weighted avg cost of debt (%)5.6% 5.4%
Liquidity (cash + revolver + AR facility)n/a>$600M ($28.5M cash; $494.7M revolver; $80M AR)
Net leverage (x)n/a4.8x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated AFFO growthFY 2025Mid-single digit Mid-single digit; includes ~$35M maintenance CapEx, ~$145M interest, small cash taxes Maintained
CapExFY 2025~$85M ($35M maintenance) ~$85M ($35M maintenance) Maintained
DividendQ3 2025$0.30/share (Q2 declared) $0.30/share payable Sept 30, 2025 Maintained
Q3 Revenue (directional)Q3 2025n/aConsolidated up low single digits; Transit double-digit growth; Billboard down low single digits; ex‑exited contracts: Billboard up low single digits, consolidated up low‑mid single digits New
Cost savings (RIF)FY 2025–2026n/a$18–$20M annualized; ~50% realized over 2H25 New
Term loan refinanceLate 2026Intend to refinance later in 2025 Intend to refinance “in the coming months” Timing clarified

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
AI/technology, automation, programmaticQ4: Digital/programmatic uplift noted; consolidated margins up . Q1: Accelerate digital-first strategy; strengthen ad-tech stack (SSPs/DSPs), programmatic up ~20% Programmatic and automated digital up ~20%; >34% of organic revenue; Cannes activation with generative AI “moment in Cannes” demo; focus on automation/digitization Strengthening
Transit (MTA) and ridershipQ4: Transit +9.1% YoY . Q1: MTA pacing strong; MAG to $156M; ridership improving Transit +5.6% YoY; CFO: ridership up a little; task force boosting NY performance Improving
Static vs digital transitQ1: Digital transit +11%, static ‑3.4% Static transit decline deemed structural; digital focus continues; DC digital bus test starting Structural shift to digital
Macro/category mixQ1: Uncertain macro; postponements not cancellations; local softness Entertainment vertical weak due to absent studio support; legal/financial/insurance strong categories Mixed
Portfolio optimization (NY/LA exits)Q1: Announced exit of large marginally profitable LA billboard contract (‑200bp billboard revenue run-rate) Impact in Q2; headwind greatest in Q3; ex‑exits, billboard revenue up low single digits in Q3 Margin-accretive repositioning
Regional trendsQ1: West challenging; MTA carrying transit; South/Midwest solid No significant regional variation beyond NY/CA scale; focus on independent agencies and digital in LA market Stabilizing

Management Commentary

  • Nick Brien (Interim CEO): “Organic revenues were essentially flat… OIBDA was $124,000,000 and AFFO was 85,000,000… Encouragingly, we are seeing top line acceleration… in the second half.” .
  • On transformation: “We have begun optimizing our sales strategy… modernize workflow… generate new demand… demanding operational excellence… business has picked up recently.” .
  • On Q3 outlook: “Consolidated revenues up low single digits, driven by double digit growth in transit and a low single digit decline in billboard… Excluding nearly $13,000,000 of billboard revenue from exited contracts… consolidated revenue would be up low to mid single digits.” .
  • Matthew Siegel (CFO): “We incurred a $19,800,000 restructuring charge… expect annualized expense savings of approximately $18,000,000 to $20,000,000 of which about half should be realized over the balance of this year.” .
  • Liquidity and leverage: “Committed liquidity is over $600,000,000… net leverage was 4.8x… we intend to refinance [the $400M term loan] in the coming months.” .

Q&A Highlights

  • Transformation progress: Management believes they have “cracked the back” of major transformation changes, with ongoing work in RevOps, sales enablement, tech stack, and transit leadership .
  • Entertainment vertical: Weakness due to absent studio support despite spend from major brands; expecting stronger Q3 slate .
  • Transit drivers: MTA performance, management focus/incentives; billboard headwind from NY/LA exits ~1.5% each of overall revenues; biggest headwind in Q3, lapping begins in Q4 .
  • Static transit shift: CFO calls decline “structural,” with customer preference for “shiny new” digital; small DC test for digital buses starting .
  • Margins and AFFO: Continued portfolio optimization and cost levers available; AFFO guided mid‑single digit for FY25; some benefit from lower rates on floating debt .

Estimates Context

  • Q2 2025: Revenue matched consensus ($460.2M actual vs $461.0M* estimate); Primary EPS beat (0.239* actual vs 0.183* estimate). Primary EPS reflects analyst-normalized EPS and differs from GAAP diluted EPS ($0.10) *.
  • FY 2025/2026: Street models FY25 revenue ~$1.831B* and EPS ~0.735*; FY26 revenue ~$1.898B* and EPS ~1.080*, implying upward trajectory as cost saves and transit momentum build*.
    Values retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term acceleration setup: Management’s low single-digit consolidated revenue growth guide for Q3, with Transit double-digit, points to improving trajectory vs Q2 pacing .
  • Margin support from cost actions: $18–$20M annualized savings from Q2 restructuring, about half recognized in 2H25; billboard OIBDA margin up 50 bps YoY to 38.3% .
  • Programmatic/digital flywheel: Automated/programmatic up ~20% and share of digital rising; >34% of organic revenues tied to digital, reinforcing structurally better yield .
  • Portfolio optimization de-risking: Exiting marginal NY/LA contracts pressures near-term billboard revenue but supports margins/AFFO; Q3 headwind peaks then begins to lap in Q4 .
  • Transit structural shift to digital: Static transit declines are structural; focus on digitization (tests like DC digital buses) and MTA yield improvements .
  • Balance sheet/liquidity: >$600M committed liquidity, 4.8x net leverage, and intent to refinance $400M term loan in coming months, reducing near-term refinancing uncertainty .
  • Dividend stability: $0.30/share maintained; supports yield case while transformation and revenue acceleration play out .