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VC

VIAD CORP (VVI)·Q2 2024 Earnings Summary

Executive Summary

  • Q2 delivered a clean beat versus company guidance: revenue $378.5M, adjusted EBITDA $64.3M, and adjusted diluted EPS $0.97; Pursuit came in near the high end and GES materially outperformed, prompting a $5M raise to GES full-year adjusted EBITDA guidance .
  • Management cut full-year consolidated and Pursuit guidance due to Jasper National Park wildfire closures (estimated Pursuit EBITDA impact ~$20–$25M), while raising GES; consolidated FY adjusted EBITDA now $151–$176M (from $171–$191M), GES $85–$95M (from $80–$90M), Pursuit $80–$95M (from $105–$115M) .
  • Near-term catalysts: (1) Q3 major non-annual shows (IMTS, MINExpo) adding ~$85–$90M revenue to GES and driving Q3 GES EBITDA $15–$19M vs -$2M in Q3’23; (2) clarity on insurance recovery and Jasper reopening (targeted Sept 3) .
  • S&P Global consensus estimates were unavailable for VVI due to a CIQ mapping issue; comparisons are anchored to company guidance and prior periods (note explicitly) [SpgiEstimatesError].

What Went Well and What Went Wrong

What Went Well

  • GES outperformed on both growth and profitability; adjusted EBITDA $44.4M (+65% YoY) with strong flow-through from revenue, benefitting from corporate client spend and disciplined cost management; full-year GES adjusted EBITDA guidance raised to $85–$95M .
  • Pursuit attractions strength: ticket revenue +20% on 15% visitor growth and higher effective ticket prices; FlyOver Chicago contributed meaningfully after its March launch, with Q2 Pursuit adjusted EBITDA $23.7M (+$4.2M YoY) .
  • Liquidity and leverage improved: debt $490.9M, liquidity $128.4M, net leverage ratio 2.4x, below the low end of the 2.5–3.5x target range .

Management quotes:

  • “We achieved a 12% adjusted EBITDA margin for the first half of the year, up 290 bps YoY…raising GES’s adjusted EBITDA guidance by $5 million to $85–$95 million” .
  • “Pursuit’s attractions ticket revenue grew 20% due to a 15% increase in visitors and higher effective ticket prices” .

What Went Wrong

  • Jasper wildfire forced a full-year guidance cut; Pursuit FY adjusted EBITDA now $80–$95M (vs $92.6M in 2023), with estimated $20–$25M EBITDA impact tied to reopening timing and property damage assessment criteria for insurance .
  • Business interruption recovery is tied to property damage (e.g., smoke, water), requiring lengthy assessment; management cautioned the process may take “many months,” delaying visibility on proceeds .
  • Non-annual show timing created Q2 headwinds at GES (major non-annual revenue down ~$10–11M YoY in Q2), although Q3 tailwind is expected; Q2 total major non-annual show revenue was just $2.6M .

Financial Results

Consolidated results vs prior periods and guidance

MetricQ2 2023Q1 2024Q2 2024Q2 2024 vs Company Guidance
Revenue ($USD Millions)$320.3 $273.5 $378.5 Guided $352–$377; actual beat (top end)
Diluted EPS ($USD)$0.33 $(1.29) $0.97 No EPS guidance provided
Adjusted Diluted EPS ($USD)$0.36 $(1.13) $0.97 No EPS guidance provided
Consolidated Adjusted EBITDA ($USD Millions)$42.9 $4.3 $64.3 Guided $51–$59; actual beat

Segment performance

Segment MetricQ2 2023Q2 2024
Pursuit Revenue ($USD Millions)$88.5 $101.2
Pursuit Adjusted EBITDA ($USD Millions)$19.5 $23.7
GES Revenue ($USD Millions)$231.8 $277.3
GES Adjusted EBITDA ($USD Millions)$26.8 $44.4
Spiro Revenue ($USD Millions)$80.368 $99.132
GES Exhibitions Revenue ($USD Millions)$154.534 $180.977

Pursuit revenue mix and KPIs

MetricQ1 2024Q2 2024
Attractions Visitors (000s)451.8 1,054.4
Same-Store Attraction ETP ($)$41 $44
Same-Store Hospitality RevPAR ($)$65 $150
Ticket Revenue ($USD Millions)$17.8 $43.7
Room Revenue ($USD Millions)$7.6 $24.6
Food & Beverage ($USD Millions)$6.5 $15.0
Retail Operations ($USD Millions)$1.7 $10.1
Transportation & Other ($USD Millions)$3.6 $7.8

GES operating KPIs

MetricQ1 2024Q2 2024
U.S. Exhibition Same-Show Revenue ($USD Millions)$66.1 $34.4
Major Non-Annual Show Revenue ($USD Millions)$15.9 $2.6

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated RevenueFY 2024Up high-single to low-double digits Up high-single digits Lowered
Consolidated Adjusted EBITDA ($M)FY 2024$171–$191 $151–$176 Lowered
Cash from Operations ($M)FY 2024$120–$140 $80–$100 Lowered
Capital Expenditures ($M)FY 2024$65–$70 (incl. ~$20 growth) $65–$70 (incl. ~$20 growth) Maintained
Effective Tax RateFY 202427%–28% 28%–29% Raised
Pursuit Adjusted EBITDA ($M)FY 2024$105–$115 $80–$95 Lowered
GES Adjusted EBITDA ($M)FY 2024$80–$90 $85–$95 Raised
GES Adjusted EBITDA ($M)Q3 2024n/a$15–$19 New disclosure
Pursuit Adjusted EBITDA ($M)Q3 2024n/a$75–$90 New disclosure
Consolidated Revenue ($M)Q3 2024n/a$418–$463 New disclosure

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2023 & Q1 2024)Current Period (Q2 2024)Trend
Jasper wildfire impact & insuranceNot present; no wildfire commentary in Q4/Q1 Park closure July 22; EBITDA impact estimated $20–$25M; reopening targeted Sept 3; BI tied to property damage; process lengthy New risk; near-term headwind
Spiro client momentum55 new client wins in 2023; strong corporate budgets 64 total client wins since 2022; robust spend from new/existing clients Strengthening
Same-show square footage recoveryAbout 10% below 2019; recovery expected through 2025 Still ~10% below 2019; tailwind into 2025 Improving
FlyOver ChicagoOpened Mar 1; strong initial EBITDA “Roaring start,” less competitive than Las Vegas; solid content/location Positive
Toronto FlyOver project“Ongoing progress” with landowner; permitting challenges Finalizing mutual lease termination with landowner (Canada Lands) Exiting
Iceland/Sky LagoonBenefited from competitor closures; strong demand Calm now; record visitation expected; expanding “Ritual” capacity Normalizing/growth
Major non-annual showsQ3 2024 to include IMTS/MINExpo; ~$85–$90M increment Tracking in line; Q3 guidance reflects tailwind Near-term tailwind

Management Commentary

  • “We achieved a 12% adjusted EBITDA margin for the first half…up 290 bps YoY. Based on strength…we are raising GES’s adjusted EBITDA guidance by $5 million…to $85 million to $95 million.” – Steven Moster .
  • “Assuming [Jasper] reopens Sept 3, we estimate the EBITDA impact to Pursuit could be somewhere around $20 million to $25 million.” – Ellen Ingersoll .
  • “FlyOver Chicago…off to a roaring start…content and story is compelling…market dynamics more similar to Vancouver than Las Vegas.” – David Barry .
  • “Business interruption [insurance] kicks in if we have property damage…we have to assess what, if any, damage we have…It’s going to be a long process.” – Ellen Ingersoll .

Q&A Highlights

  • Jasper wildfire: Management emphasized no material cancellations in Banff and potential compression benefits as itineraries shift; reiterated uncertainty and insurance dependency on property damage specifics .
  • Pursuit demand visibility: Tour partners enthusiastic to return immediately upon reopening; core municipal infrastructure intact; optimism for near-term resumption .
  • GES margins: No single one-time driver; broad-based wins (e.g., McDonald’s Worldwide Convention) and structural cost work underpin flow-through; reaffirmed 2025 outlook consistency .
  • FlyOver portfolio: Chicago strong; Toronto lease termination near finalization given cost escalation and permitting challenges .
  • Iceland: Strong summer; record visitation; Sky Lagoon capacity expansion underway .

Estimates Context

  • S&P Global consensus estimates for VVI were unavailable due to a CIQ mapping issue, so estimate comparisons cannot be provided for this quarter; performance is benchmarked against company-issued guidance ranges and prior periods (note explicitly) [SpgiEstimatesError].

Key Takeaways for Investors

  • Near-term setup favorable: Company beat Q2 guidance, raised GES for the year, and Q3 stands to benefit from ~$85–$90M of major non-annual show revenue; expect strong Q3 cash flow .
  • Pursuit guidance reset reflects wildfire uncertainty but core assets intact; reopening targeted Sept 3 could accelerate demand recovery given lodging compression (18% of Jasper rooms affected), potentially mitigating impact .
  • Insurance is a swing factor: BI coverage requires demonstrable property damage; disclosures suggest recovery process will be prolonged; avoid underwriting material near-term proceeds .
  • Structural margin story intact: GES operating leverage and lean initiatives support 8%+ margins beyond 2024, even as same-show square footage normalizes into 2025 .
  • Pursuit runway remains attractive: dynamic pricing, capacity expansions (Sky Lagoon), and FlyOver Chicago scale should sustain margin expansion toward long-term ~33% target once wildfire impact subsides .
  • Trading implications: Expect a narrative pivot around (1) Q3 executes on non-annual shows, (2) Jasper reopening milestones/insurance clarity; stock likely sensitive to updated Pursuit outcomes and any Q3 beats .
  • Medium-term thesis: Diversified experiential exposure with pricing power and barriers to entry (Pursuit) plus a transformed exhibitions/experiential platform (GES) supports multi-year EBITDA growth post 2024 reset .