Question-and-Answer SessionGreat. Well, maybe starting with an industry question. Out-of-home has been pretty stable over the years at about 2% to 3% of the total U.S. ad market. Over time, do you expect the industry to grow a share of the pie? And what do you view as the drivers of unlocking that upside?Sean ReillyCEO & President Yes, good question. I'll start with Lamar is 80% local, right, and 20% national. Meaning that I think a lot about what's going on with the share of the pie at the local level. And ...

Summary of Lamar Advertising Company FY Conference Call Industry Overview - The out-of-home advertising industry has maintained a stable market share of approximately 2-3% of the total US ad market, with expectations for growth driven by the decline of traditional media such as newspapers and radio [3][4] - Lamar Advertising's revenue composition is 80% local and 20% national, indicating a focus on local advertising dynamics [3] Key Insights and Arguments - The shift from traditional media to out-of-home advertising is expected to provide a tailwind for Lamar over the next 3 to 10 years, particularly as local advertisers transition from declining mediums [3][4] - National advertising is showing a positive trend, with a more optimistic outlook for 2026 compared to 2025, driven by a recovery in sectors like auto insurance [5][6] - The introduction of third-party data providers, such as CrossX, has facilitated significant national advertising buys, particularly in the pharmaceutical sector [6][11] - The company is beta testing an automated buying platform for local customers, aiming to enhance self-service capabilities [10] Financial Performance and Projections - Lamar's pacings for 2026 are reportedly stronger than the previous year, indicating a positive outlook for local advertising [21] - Political advertising is expected to contribute positively, with projections of $25 million in political ad revenue for 2026, compared to $30 million in 2024 [22][28] - The company anticipates a GDP-plus growth in top-line revenue, with expense growth expected to remain around 2.5% [29][31] - The completion of an ERP conversion is expected to normalize operating expenses and improve efficiency [33] Capital Allocation and M&A Strategy - Lamar has over $1 billion available for acquisitions and is actively seeking opportunities in both digital conversions and M&A [35][36] - The company is focused on smaller tuck-in acquisitions, which are expected to yield predictable synergies and enhance top-line growth [38][39] - There is a willingness to increase leverage for a significant acquisition, provided there is a clear path to reduce it afterward [41] Market Trends and Strategic Focus - The company aims to expand its inventory in desirable zip codes within larger DMAs, leveraging programmatic advertising capabilities [42] - Lamar is committed to maintaining a disciplined approach to acquisitions, particularly in competitive markets [43] Additional Considerations - The integration of AI tools is being explored to enhance productivity and client engagement [34] - The company is optimistic about the evolving landscape of advertising measurement, particularly with the involvement of third-party vendors [14][15][17] This summary encapsulates the key points discussed during the conference call, highlighting the strategic direction, financial outlook, and market dynamics affecting Lamar Advertising Company.

Core Insights - Lamar Advertising Company is scheduled to participate in a Q&A session at the 9th Annual Wells Fargo TMT Conference on November 18, 2025 [1] - The session will be available via live audio webcast and archived for 30 days on the company's website [1] Company Overview - Founded in 1902, Lamar Advertising Company is one of the largest outdoor advertising companies in North America, operating over 362,000 displays across the United States and Canada [2] - The company provides a variety of advertising formats, including billboards, interstate logos, transit, and airport advertising, catering to both local businesses and national brands [2] - Lamar boasts the largest network of digital billboards in the United States, with over 5,400 displays [2]

Core Insights - Lamar Advertising Company (LAMR) reported third-quarter 2025 adjusted funds from operations (AFFO) per share of $2.20, exceeding the Zacks Consensus Estimate of $2.14 and up from $2.15 in the prior-year quarter [1][8] - The company experienced year-over-year growth in net revenues, which reached $585.5 million, a 3.8% increase compared to the previous year, and also surpassed the consensus mark of $583.8 million [2][8] - LAMR reaffirmed its full-year 2025 guidance, expecting AFFO to be between $8.10 and $8.20 per diluted share, aligning with the Zacks Consensus Estimate of $8.14 [5][8] Financial Performance - Operating income for the third quarter was $189.1 million, reflecting a 1.3% increase from $186.6 million in the same period last year [3] - Adjusted EBITDA rose 3.5% to $280.8 million, while acquisition-adjusted net revenues increased by 2.9% year over year [3] - Free cash flow decreased by 4.5% year over year to $189.2 million [3] Balance Sheet Position - Cash flow from operating activities for the three months ended September 30, 2025, was $235.7 million, up from $227.4 million in the previous year [4] - As of September 30, 2025, total liquidity stood at $834.2 million, which includes $742.2 million available for borrowing under the revolving senior credit facility, $70 million under the Accounts Receivable Securitization Program, and $22 million in cash and cash equivalents [4] Market Sentiment - Following the positive earnings report, shares of Lamar Advertising gained 1.25% during the trading session [1] - The company currently holds a Zacks Rank 3 (Hold) [6]

Revenue Performance - Net revenues increased by $42.7 million or 2.6% to $1.67 billion for the nine months ended September 30, 2025, compared to $1.63 billion for the same period in 2024[174]. - Billboard net revenues contributed an increase of $37.9 million, transit net revenues increased by $0.8 million, and logo net revenues increased by $4.1 million over the same period in 2024[174]. - Net revenues for the three months ended September 30, 2025, increased by $21.4 million, or 3.8%, to $585.5 million compared to $564.1 million in 2024[190]. - Net revenues for the three months ended September 30, 2025, increased by 3.8% to $585.5 million from $564.1 million in 2024, driven by a $22.2 million increase in billboard net revenues[273]. Operating Income and Expenses - Total operating expenses increased by $16.1 million, or 1.8%, to $926.2 million for the nine months ended September 30, 2025, from $910.1 million for the same period in 2024[176]. - Operating income increased by $82.6 million to $578.0 million for the nine months ended September 30, 2025, compared to $495.4 million for the same period in 2024[178]. - Operating income for the three months ended September 30, 2025, increased by $2.5 million to $189.1 million compared to $186.6 million in 2024[194]. - Total operating expenses for the three months ended September 30, 2025, increased by $7.4 million, or 2.4%, to $312.3 million compared to $304.9 million in 2024[192]. Net Income - Net income for the nine months ended September 30, 2025, was $438.3 million, compared to $363.9 million for the same period in 2024[182]. - Net income for the nine months ended September 30, 2025, increased by $74.4 million, or 20.4%, to $438.3 million compared to $363.9 million in 2024[185]. - Net income for the three months ended September 30, 2025, was $144.1 million, a decrease of 2.5% from $147.8 million in 2024[206]. - Net income for the nine months ended September 30, 2025, increased by 20.4% to $438.7 million compared to $364.3 million for the same period in 2024[272]. Cash Flow and Capital Expenditures - Cash provided by operating activities for the nine months ended September 30, 2025, was $592.9 million, slightly down from $594.3 million in 2024[210]. - Cash flows used in investing activities increased to $128.1 million for the nine months ended September 30, 2025, compared to $108.0 million for the same period in 2024[252]. - Total capital expenditures for the nine months ended September 30, 2025, were $117.9 million, compared to $82.3 million for the same period in 2024[165]. - Capital expenditures for the nine months ended September 30, 2025, were approximately $117.9 million, with an anticipated total of $180.0 million for the year[243]. Debt and Interest Expense - Interest expense decreased by $11.5 million to $120.2 million for the nine months ended September 30, 2025, due to repayment of Term A loans and a decrease in interest rates[179]. - Interest expense decreased by $1.7 million for the three months ended September 30, 2025, to $41.2 million, primarily due to lower interest rates[195]. - As of September 30, 2025, the company had approximately $878.3 million in outstanding indebtedness under its senior credit facility and Accounts Receivable Securitization Program, representing about 26.0% of its long-term debt[292]. - The aggregate interest expense for 2025 related to these borrowings was $50.2 million, with a weighted average interest rate of 5.7%[292]. Dividends and Share Repurchase - The Company declared a quarterly cash dividend of $1.55 per share on multiple occasions in 2025, with expected aggregate quarterly distributions of at least $6.20 per share for the year[244]. - The Board of Directors authorized a stock repurchase program of up to $400.0 million, with $150.0 million added on May 15, 2025[246]. Acquisitions and Investments - The company completed multiple acquisitions for a total cash purchase price of approximately $133.9 million during the nine months ended September 30, 2025[164]. - The Company recognized a gain on disposition of assets and investments of $76.1 million, primarily from the sale of equity interest in Vistar Media, Inc.[178]. Adjusted Metrics - Adjusted EBITDA for the nine months ended September 30, 2025, rose 2.0% to $769.4 million, primarily due to a $29.3 million increase in gross margin[188]. - Billboard adjusted EBITDA for the nine months ended September 30, 2025, increased by $20.4 million to $815.7 million, while other adjusted EBITDA decreased by $2.5 million[186]. - Adjusted EBITDA for the three months ended September 30, 2025, increased by 3.5% to $280.8 million, driven by a $16.4 million increase in gross margin[201]. - AFFO for the nine months ended September 30, 2025, increased by 4.0% to $616.1 million compared to $592.5 million in 2024[189].

Financial Data and Key Metrics Changes - Consolidated revenue growth improved to 2.9% on an acquisition-adjusted basis, with Adjusted EBITDA for the quarter at $280.8 million, an increase of 3.5% from $271.2 million in 2024 [3][9] - Adjusted funds from operations totaled $226.5 million, up 2.6% from $220.7 million last year, with diluted AFFO per share increasing 2.3% to $2.20 [9][10] - Acquisition-adjusted operating expenses increased 3.7%, influenced by one-time severance costs and technology implementation expenses [8][9] Business Line Data and Key Metrics Changes - National and programmatic advertising grew by 5.5%, while local advertising grew by 1.6% [4][17] - Digital billing grew 5%, representing about 31% of total billboard billing, with same-store digital revenue increasing 3.4% quarter-over-quarter [5][9] - Categories of strength included services, healthcare, and financial, while beverages and real estate were weaker [4] Market Data and Key Metrics Changes - Billboard regions grew in the low single-digit range, led by the Atlantic and Northeast, which improved by 3.8% and 3.3%, respectively [8] - Airport advertising grew by 5.8%, and logos increased by 5.2% [8] - Political advertising in Q3 was $2.7 million compared to $6.1 million in the previous year, indicating a significant decline [16] Company Strategy and Development Direction - The company is optimistic about 2026, expecting political advertising to act as a tailwind and benefiting from the Verde acquisition [3][24] - The integration of Verde assets is progressing well, and the company plans to continue pursuing acquisitions in the middle-market airport space [6][48] - The company is undergoing an extensive enterprise conversion to leverage AI benefits by 2027, which is expected to enhance operational efficiency [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in finishing 2025 successfully and carrying momentum into 2026, with encouraging pacings for November and December [3][7] - The company noted that the local and regional sales have shown resilience, growing for the 18th consecutive quarter [10] - Management highlighted the importance of political advertising in shaping revenue expectations for 2026, especially compared to previous years [33] Other Important Information - The company raised a total of $1.1 billion through capital market transactions, improving its balance sheet and liquidity [11][12] - Total leverage remained at 3x net debt to EBITDA, with secured leverage below 1x [10][11] - A regular cash dividend of $1.55 per share is recommended for the fourth quarter, subject to board approval [15] Q&A Session Summary Question: Growth opportunities and M&A environment for 2026 - Management indicated strong growth drivers for 2026, including the momentum from acquisitions and political advertising as a tailwind [22][23] Question: Impact of AI on national growth - Management noted that AI will enhance operational efficiency and is expected to benefit the out-of-home advertising space [24] Question: Political advertising during midterm cycles - Management provided historical context on political advertising revenue, indicating a significant increase expected in 2026 compared to 2022 [33] Question: Demand for World Cup advertising in 2026 - Management expressed optimism about the World Cup's impact on advertising revenue, especially when combined with political advertising [37][38] Question: Distribution from Vistar Media - Management confirmed that the distribution will be all cash, anticipated to be around $0.25 per share [39][40] Question: National customer spending trends - Management highlighted positive momentum from national accounts and expressed confidence in the sustainability of this growth [45][46]

Financial Data and Key Metrics Changes - Consolidated revenue growth improved to 2.9% on an acquisition-adjusted basis, with adjusted EBITDA for the quarter at $280.8 million, an increase of 3.5% year-over-year [3][9] - Adjusted funds from operations (AFFO) totaled $226.5 million, up 2.6% from the previous year, with diluted AFFO per share increasing 2.3% to $2.20 [9][14] - Acquisition-adjusted operating expenses increased by 3.7%, influenced by one-time severance costs and technology implementation expenses [8][9] Business Line Data and Key Metrics Changes - National and programmatic advertising grew by 5.5%, while local advertising saw a growth of 1.6% [4][16] - Digital billing grew by 5%, representing about 31% of total billboard billing, with same-store digital revenue increasing by 3.4% [5][9] - The company closed 18 acquisitions for nearly $47 million in Q3, bringing the year-to-date cash spend to nearly $134 million [6][12] Market Data and Key Metrics Changes - Billboard regions experienced low single-digit growth, with the Atlantic and Northeast regions improving by 3.8% and 3.3%, respectively [8] - Airport advertising grew by 5.8%, and logos increased by 5.2%, outperforming the broader portfolio [8] - Political advertising revenue for Q3 was $2.7 million, significantly lower than $6.1 million in the same quarter last year [15] Company Strategy and Development Direction - The company is optimistic about 2026, expecting political advertising to act as a tailwind and anticipating stronger pacing from national buyers [3][22] - The integration of Verde assets is progressing well, and the company plans to continue pursuing acquisitions in the middle-market airport space [5][49] - The company aims to maintain a strong balance sheet, with an investment capacity exceeding $1 billion while keeping leverage below 4 times net debt to EBITDA [11][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in finishing 2025 successfully and carrying momentum into 2026, despite macroeconomic uncertainties [6][10] - The company noted that the auto insurance vertical is showing signs of recovery, with large customers returning to spend [33] - Management highlighted the potential benefits of AI in enhancing operational efficiency and advertising effectiveness in the future [23] Other Important Information - The company anticipates total capital expenditures of $180 million for the year, with maintenance CapEx budgeted at $60 million [10][14] - A regular cash dividend of $1.55 per share is recommended for Q4, subject to board approval, with an expected total dividend of $6.20 per share for the year [14] Q&A Session Summary Question: Growth opportunities and M&A environment for 2026 - Management indicated strong growth drivers for 2026, including the momentum from acquisitions and improved pacing from national buyers [20][21] Question: Impact of AI on national growth - Management noted that while AI benefits will be realized in 2027, it is expected to enhance advertising effectiveness [23] Question: Political advertising during midterm cycles - Management provided historical context on political advertising revenue, indicating a significant increase expected in 2026 compared to 2022 [32] Question: Demand for World Cup advertising in 2026 - Management expressed optimism about the World Cup's impact on advertising revenue, especially when combined with political advertising [38] Question: Distribution from Vistar Media - Management confirmed that the distribution will be all cash, anticipated to be around $0.25 per share [39] Question: National customer spending trends - Management highlighted positive conversations with national accounts and a better outlook for 2026 compared to the previous year [46][47]

分组1 - Lamar Advertising reported quarterly funds from operations (FFO) of $2.2 per share, exceeding the Zacks Consensus Estimate of $2.14 per share, and showing an increase from $2.15 per share a year ago, resulting in an FFO surprise of +2.80% [1] - The company achieved revenues of $585.54 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.29% and increasing from $564.14 million year-over-year [2] - Over the last four quarters, Lamar has surpassed consensus FFO estimates three times, but has only topped consensus revenue estimates once [2] 分组2 - The stock has underperformed, losing about 2.7% since the beginning of the year, while the S&P 500 has gained 15.6% [3] - The future performance of Lamar's stock will depend on management's commentary during the earnings call and the outlook for FFO [3][4] - The current consensus FFO estimate for the upcoming quarter is $2.22 on revenues of $596.24 million, and for the current fiscal year, it is $8.14 on revenues of $2.26 billion [7] 分组3 - The Zacks Industry Rank indicates that the REIT and Equity Trust - Other industry is currently in the top 30% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in estimate revisions, which can be tracked by investors [5] - The estimate revisions trend for Lamar was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6]

Financial Performance - Net revenues for Q3 2025 were $585.5 million, a 3.8% increase from $564.1 million in Q3 2024[4] - Net income for Q3 2025 was $144.1 million, a decrease of 2.5% from $147.8 million in Q3 2024[4][8] - Adjusted EBITDA for Q3 2025 was $280.8 million, reflecting a 3.5% increase from $271.2 million in Q3 2024[5][8] - Funds from operations (FFO) for Q3 2025 were $219.3 million, up 2.5% from $214.0 million in Q3 2024[6] - Adjusted funds from operations (AFFO) for Q3 2025 were $226.5 million, an increase of 2.6% compared to $220.7 million in Q3 2024[6] - For the nine months ended September 30, 2025, net revenues were $1.67 billion, a 2.6% increase from $1.63 billion in the same period of 2024[11] - Net income for the nine months ended September 30, 2025, was $438.3 million, a 20.4% increase from $363.9 million in the same period of 2024, primarily due to a $68.6 million gain from the sale of equity interest in Vistar Media[11] - Acquisition-adjusted net revenue for Q3 2025 increased 2.9% compared to Q3 2024, while acquisition-adjusted EBITDA rose 2.0%[10] - Net revenues for Q3 2025 were $585,541,000, an increase of 3.4% compared to $564,135,000 in Q3 2024[26] - Operating income for Q3 2025 was $189,084,000, slightly up from $186,556,000 in Q3 2024, reflecting a growth of 0.8%[26] - Net income for Q3 2025 decreased by 2.5% to $144,075 compared to $147,822 in Q3 2024, while net income for the nine months increased by 20.4% to $438,320 from $363,915[33] - Outdoor operating income for Q3 2025 was $307,808, a 4.2% increase from $295,307 in Q3 2024[33] Cash Flow and Liquidity - As of September 30, 2025, total liquidity was $834.2 million, including $742.2 million available for borrowing under the revolving credit facility[14] - The company completed a private placement of $400.0 million in Senior Notes due 2033, resulting in net proceeds of approximately $393.5 million[16] - Free cash flow for the nine months ended September 30, 2025, was $509,408,000, compared to $540,280,000 for the same period in 2024, a decrease of 5.7%[30] - Cash flows provided by operating activities for Q3 2025 were $235,657,000, up from $227,393,000 in Q3 2024, a growth of 3.3%[28] Assets and Liabilities - Total assets increased to $6,823,302,000 as of September 30, 2025, up from $6,586,549,000 at the end of 2024, representing a growth of 3.6%[28] - Total debt as of September 30, 2025, was $3,348,697,000, an increase from $3,210,864,000 at the end of 2024, reflecting a rise of 4.3%[28] Operational Metrics - Total operating expenses for Q3 2025 were $396,457, a 5.0% increase from $377,579 in Q3 2024[35] - Acquisition-adjusted consolidated expense for the nine months ended September 30, 2025, was $900,908, a 2.7% increase from $877,269 in the same period of 2024[35] Shareholder Metrics - The weighted average diluted shares outstanding for Q3 2025 were 101,309,203, compared to 102,617,515 in Q3 2024, a decrease of 1.3%[26] - Diluted AFFO per share for Q3 2025 was $2.20, up from $2.15 in Q3 2024[37] Other Notable Information - The company has the largest network of digital billboards in the U.S. with over 5,400 displays, enhancing its market presence[24] - The company reported a loss on extinguishment of debt of $2,012 for Q3 2025, consistent with the previous year[37]

Core Insights - Lamar Advertising Company reported solid third-quarter results with a year-over-year revenue growth of 3.8% to $585.5 million, driven by an increase in national sales and positive momentum heading into the holiday season [3][4][9] - The company achieved an adjusted EBITDA of $280.8 million, reflecting a 3.5% increase compared to the same period in 2024 [5][9] - For the nine months ended September 30, 2025, net revenues reached $1.67 billion, a 2.6% increase from the previous year, with net income rising 20.4% to $438.3 million, largely due to a gain from the sale of equity interest in Vistar Media [11][12][13] Third Quarter Highlights - Net revenues for Q3 2025 were $585.5 million, up from $564.1 million in Q3 2024, marking a 3.8% increase [4][9] - Operating income increased by $2.5 million to $189.1 million compared to $186.6 million in Q3 2024 [4] - Net income for Q3 2025 was $144.1 million, down from $147.8 million in Q3 2024, resulting in a decrease of 2.5% [4][9] Nine Month Results - For the nine months ended September 30, 2025, net revenues were $1.67 billion, compared to $1.63 billion in the same period of 2024, reflecting a 2.6% increase [11] - Operating income for the nine months increased by $82.6 million to $578.0 million [11] - Funds from operations (FFO) rose to $600.8 million, a 5.1% increase from $571.7 million in the prior year [13] Cash Flow and Liquidity - Cash flow from operating activities for Q3 2025 was $235.7 million, an increase of $8.3 million from $227.4 million in Q3 2024 [5][12] - Free cash flow for Q3 2025 was $189.2 million, down 4.5% from $198.1 million in Q3 2024 [5][12] - As of September 30, 2025, the company had total liquidity of $834.2 million, including $742.2 million available for borrowing under its revolving credit facility [14] Recent Developments - On September 23, 2025, Lamar Media Corp. entered into an amendment to its credit agreement, establishing $700 million in Term B Loans, which were fully drawn to refinance existing debt [15] - The company completed a private placement of $400 million in senior notes due 2033, with net proceeds used to pay down existing debt [16]