Emerald Holding(EEX) - 2025 Q2 - Quarterly Report

Cautionary Note Regarding Forward-Looking Statements The report contains forward-looking statements identifiable by specific terms, with actual results potentially differing due to various known and unknown risks and uncertainties - The report contains forward-looking statements identifiable by terms such as "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "plan," "potential," "predict," "seek," or "should"[8] - Actual results may differ materially due to known and unknown risks and uncertainties, many beyond the company's control[9] - Key risk factors include event cancellations (e.g., natural disasters, communicable diseases), potential impairment of intangible assets, general economic conditions (inflation, interest rates), ability to secure desirable dates/locations, failure to attract exhibitors/attendees, competition, reliance on top five trade shows for revenue, shifts to online marketing, retention of senior management, acquisition strategy risks, and IT system disruptions[9][12] Part I. Financial Information This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements of Emerald Holding, Inc. and its wholly-owned subsidiaries, prepared in conformity with GAAP for interim financial information Condensed Consolidated Balance Sheets This section provides a snapshot of the company's assets, liabilities, and equity at specific reporting dates, highlighting key financial positions | Metric | June 30, 2025 (millions) | December 31, 2024 (millions) | Change (millions) | Change (%) | | :--------------------------- | :----------------------- | :--------------------------- | :---------------- | :--------- | | Cash and cash equivalents | $156.4 | $194.8 | $(38.4) | -19.7% | | Total current assets | $279.0 | $306.9 | $(27.9) | -9.1% | | Intangible assets, net | $184.5 | $155.9 | $28.6 | 18.3% | | Goodwill, net | $726.7 | $573.8 | $152.9 | 26.7% | | Total assets | $1,202.1 | $1,048.7 | $153.4 | 14.6% | | Total current liabilities | $264.7 | $241.3 | $23.4 | 9.7% | | Deferred revenues | $199.9 | $190.5 | $9.4 | 4.9% | | Term loan, net (noncurrent) | $501.6 | $398.5 | $103.1 | 25.9% | | Total liabilities | $812.7 | $662.8 | $149.9 | 22.6% | | Total stockholders' equity | $389.4 | $385.9 | $3.5 | 0.9% | Condensed Consolidated Statements of (Loss) Income This section details the company's revenues, expenses, and net income or loss over specific reporting periods, reflecting operational profitability | Metric (millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change ($) | YoY Change (%) | | :------------------ | :--------------------------- | :--------------------------- | :------------- | :------------- | | Revenues | $105.5 | $86.0 | $19.5 | 22.7% | | Operating income | $10.2 | $6.4 | $3.8 | 59.4% | | Net (loss) income | $(1.4) | $(2.8) | $1.4 | NM | | Basic EPS | $(0.01) | $(0.03) | $0.02 | NM | | Diluted EPS | $(0.01) | $(0.03) | $0.02 | NM | | Metric (millions) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change ($) | YoY Change (%) | | :------------------ | :--------------------------- | :--------------------------- | :------------- | :------------- | | Revenues | $253.2 | $219.4 | $33.8 | 15.4% | | Operating income | $46.0 | $30.7 | $15.3 | 49.8% | | Net (loss) income | $13.9 | $8.2 | $5.7 | 69.5% | | Basic EPS | $0.07 | $(0.04) | $0.11 | NM | | Diluted EPS | $0.07 | $(0.04) | $0.11 | NM | Condensed Consolidated Statements of Comprehensive Income (Loss) This section presents the company's comprehensive income or loss, including net income and other comprehensive income items not recognized in net income | Metric (millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net (loss) income attributable to Emerald Holding, Inc. | $(1.4) | $(2.8) | $13.9 | $8.2 | | Foreign currency translation adjustments | $5.5 | — | $5.5 | — | | Comprehensive income (loss) attributable to common stockholders | $4.1 | $(4.8) | $19.4 | $(4.5) | Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) This section outlines changes in the company's equity, including preferred stock conversions, stock-based compensation, dividends, and repurchases - Total stockholders' equity increased from $385.9 million at December 31, 2024, to $389.4 million at June 30, 2025[24] - Key changes in equity for the six months ended June 30, 2025, include $5.6 million in stock-based compensation, $6.0 million in common stock dividends, $15.7 million in common stock repurchases, and $13.9 million in net income[24] - For the six months ended June 30, 2024, 71,403 thousand shares of redeemable convertible preferred stock were converted into 140,782 thousand shares of common stock, eliminating preferred stock from the balance sheet[27] Condensed Consolidated Statements of Cash Flows This section details the company's cash inflows and outflows from operating, investing, and financing activities over specific periods | Cash Flow Activity (millions) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | YoY Change ($) | YoY Change (%) | | :---------------------------- | :--------------------------- | :--------------------------- | :------------- | :------------- | | Net cash provided by operating activities | $28.5 | $17.1 | $11.4 | 66.7% | | Net cash used in investing activities | $(148.1) | $(16.9) | $(131.2) | 776.3% | | Net cash provided by (used in) financing activities | $80.6 | $(11.2) | $91.8 | NM | | Net decrease in cash and cash equivalents | $(38.4) | $(11.0) | $(27.4) | 249.1% | - Non-cash investing and financing activities for the six months ended June 30, 2024, included the conversion of $501.2 million of redeemable convertible preferred stock to common stock[32] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, clarifying accounting policies and specific transactions 1. Basis of Presentation This note describes the accounting principles and consolidation policies used in preparing the unaudited condensed financial statements - The unaudited condensed consolidated financial statements include Emerald Holding, Inc. and its wholly-owned subsidiaries, prepared in conformity with GAAP for interim financial information[35] - Foreign currency translation adjustments for international acquisitions are recorded in accumulated other comprehensive income (loss)[38] 2. Recent Accounting Pronouncements This note outlines recently issued accounting standards and their potential impact on the company's financial reporting - ASU 2024-03 (Expense Disaggregation Disclosures) is effective for fiscal years beginning after December 15, 2026, requiring disaggregated expense information[39] - ASU 2023-09 (Improvements to Income Tax Disclosures) is effective for fiscal years beginning after December 15, 2024, requiring disaggregated effective tax rate reconciliation and income taxes paid information[40] 3. Revenues This note details the company's revenue recognition policies and disaggregates revenue by type and period - Revenue is recognized as performance obligations are satisfied, typically upon staging of trade shows/conferences, over subscription periods for software, or when digital products/publications are provided[42][48][49][50] - Trade show and other events generated approximately 90.4% and 87.2% of total revenues for the three months ended June 30, 2025 and 2024, respectively[43] | Revenue Type (millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Connections | $95.4 | $75.0 | $233.7 | $198.4 | | Content | $4.9 | $5.9 | $9.1 | $10.6 | | Commerce | $5.2 | $5.1 | $10.4 | $10.4 | | Total revenues | $105.5 | $86.0 | $253.2 | $219.4 | - Current deferred revenues were $199.9 million as of June 30, 2025, up from $190.5 million at December 31, 2024[46] 4. Business Acquisitions This note provides information on recent business acquisitions, including purchase prices, financial impact, and pro-forma data - Acquired This is Beyond Limited on May 2, 2025, for an estimated $165.5 million, including an initial cash payment of $122.1 million and $9.5 million in contingent consideration. This acquisition generated $17.1 million in revenue and $6.3 million in net income for the three months ended June 30, 2025[57][59] - Acquired Insurtech Insights Limited on March 13, 2025, for an estimated $27.9 million, including an initial cash payment of $19.4 million and $4.8 million in contingent consideration. This acquisition generated $6.4 million in revenue and $2.2 million in net income for the three months ended June 30, 2025[64][66] | Pro-forma Data (millions) | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2024 | | :------------------------ | :--------------------------- | :--------------------------- | | Total pro-forma revenues | $104.4 | $242.2 | | Total pro-forma net (loss) income | $(0.1) | $8.2 | 5. Property and Equipment This note presents the net book value of property and equipment and related depreciation expenses | Metric (millions) | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Property and equipment, net | $1.7 | $1.8 | - Depreciation expense for property and equipment was $0.4 million for the six months ended June 30, 2025, down from $0.5 million in the comparable period of 2024[73] 6. Intangible Assets and Goodwill This note details the carrying values of intangible assets and goodwill, including changes from acquisitions and amortization expenses | Metric (millions) | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Net intangible assets | $184.5 | $155.9 | - Amortization expense for intangible assets was $13.6 million for both the six months ended June 30, 2025 and 2024[74] | Goodwill (millions) | December 31, 2024 | Acquired Goodwill | Foreign Currency Translation | June 30, 2025 | | :------------------ | :---------------- | :---------------- | :--------------------------- | :------------ | | Connections Segment | $538.2 | $148.0 | $4.9 | $691.1 | | All Other | $35.6 | — | — | $35.6 | | Total | $573.8 | $148.0 | $4.9 | $726.7 | - No impairment charges were recorded for indefinite-lived intangible assets, long-lived assets, or goodwill during the three and six months ended June 30, 2025 and 2024[75][76][78] 7. Debt This note describes the company's debt facilities, outstanding balances, interest rates, and related interest expenses - On January 30, 2025, Emerald X, Inc. entered into Second Amended and Restated Senior Secured Credit Facilities, including a $515.0 million term loan facility (maturing January 30, 2032) and a $110.0 million revolving credit facility (maturing January 30, 2030)[80] - As of June 30, 2025, the outstanding principal of the term loan was approximately $515.0 million, with an interest rate of SOFR plus 3.75% (8.08% effective rate)[81] - The new term loan proceeds were used to repay the previous extended term loan facility and cover third-party fees[82] | Interest Expense (millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Second Amended and Restated Term Loan Facility | $10.5 | — | $20.7 | — | | Previous Extended Term Loan Facility | — | $10.8 | — | $21.7 | | Third party fees | — | — | $6.4 | — | | Total interest expense | $10.9 | $12.0 | $28.3 | $24.1 | 8. Fair Value Measurements and Financial Risk This note provides fair value measurements for financial instruments and discusses exposures to financial risks | Fair Value Item (millions) | June 30, 2025 | December 31, 2024 | | :------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $156.4 | $194.8 | | Market-based share awards liability | $0.5 | $0.5 | | Contingent consideration | $29.1 | $10.7 | - Contingent consideration liabilities increased significantly from $10.7 million at December 31, 2024, to $29.1 million at June 30, 2025, primarily due to business acquisitions ($14.8 million) and fair value remeasurement adjustments ($3.6 million)[98][100] - The market-based share awards liability of $0.5 million is for performance-based awards tied to specific share price targets[97] 9. Stockholders' Equity (Deficit) and Redeemable Convertible Preferred Stock This note details changes in stockholders' equity, including preferred stock conversions, dividends, and share repurchase programs - On May 2, 2024, all 71,402,607 shares of redeemable convertible preferred stock were mandatorily converted into 140,781,525 shares of common stock[103] | Common Stock Dividends (millions) | Q1 2025 | Q2 2025 | | :-------------------------------- | :------ | :------ | | Dividend per share | $0.0150 | $0.0150 | | Cash dividend paid | $3.0 | $3.0 | - The Board approved an expansion of the share repurchase program on April 30, 2025, allowing for $25.0 million in repurchases through December 31, 2025[110] - During the six months ended June 30, 2025, the company repurchased 3,660,124 shares for $15.7 million, with $20.8 million remaining available under the program[111] 10. Stock-Based Compensation This note outlines the types of stock-based awards, related compensation expenses, and unrecognized compensation costs | Stock-Based Compensation (millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Stock options | $0.8 | $1.3 | $2.5 | $3.3 | | Restricted Stock Units (RSUs) | $2.2 | Not material | $3.1 | $0.6 | | Market-based share awards | $0.0 | $0.0 | $0.0 | $0.0 | - Unrecognized stock-based compensation expense for unvested stock options was $7.2 million at June 30, 2025, to be recognized over 1.72 years[116] - Unrecognized stock-based compensation expense for unvested RSUs was $9.5 million at June 30, 2025, to be recognized over 2.4 years[117] 11. Earnings Per Share This note presents basic and diluted earnings per share calculations and the weighted average shares outstanding | EPS (dollars) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Basic EPS | $(0.01) | $(0.03) | $0.07 | $(0.04) | | Diluted EPS | $(0.01) | $(0.03) | $0.07 | $(0.04) | - Weighted average common shares outstanding for diluted EPS increased significantly from 109,477 thousand in the six months ended June 30, 2024, to 200,089 thousand in the comparable 2025 period, partly due to preferred stock conversion[123] 12. Income Taxes This note details the provision for income taxes, effective tax rates, and liabilities for unrecognized tax benefits | Income Tax Metric (millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Provision for (benefit from) income taxes | $2.0 | $(0.7) | $7.4 | $2.8 | | Effective tax rate | 333.3% | 20.0% | 34.7% | 25.5% | - The increase in income tax expense for both periods is attributable to higher pre-tax income[125] - Liabilities for unrecognized tax benefits were $1.8 million as of June 30, 2025, up from $1.5 million at December 31, 2024[126] 13. Commitments and Contingencies This note discloses the company's operating lease obligations, contractual commitments, and ongoing legal or regulatory matters - The company has operating leases for office space and equipment, and contractual obligations for trade show venues[127] - Management believes current legal proceedings and regulatory matters are not expected to have a material adverse impact on the financial statements[128][129] 14. Accounts payable and other current liabilities This note provides a breakdown of various current liabilities, including accrued event costs and trade payables | Liability (millions) | June 30, 2025 | December 31, 2024 | | :------------------- | :------------ | :---------------- | | Accrued event costs | $18.3 | $7.4 | | Trade payables | $13.8 | $17.3 | | Other current liabilities | $9.6 | $11.3 | | Accrued personnel costs | $7.9 | $4.7 | | Total | $49.6 | $40.7 | 15. Segment Information This note presents financial data for the company's reportable segments, including revenues and Adjusted EBITDA by segment and geography - The company has one reportable segment, 'Connections' (trade shows and live events), and an 'All Other' category for diverse media services and e-commerce software solutions[132] - Operating segment performance is evaluated by the CODM based on Adjusted EBITDA, excluding general corporate expenses, stock-based compensation, impairments, and other non-core items[132] | Segment Revenues (millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Connections Segment | $95.4 | $75.0 | $233.7 | $198.4 | | All Other Category | $10.1 | $11.0 | $19.5 | $21.0 | | Total revenues | $105.5 | $86.0 | $253.2 | $219.4 | | Segment Adjusted EBITDA (millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Connections Segment | $35.2 | $26.4 | $101.3 | $82.6 | | All Other Category | $1.8 | $1.8 | $2.5 | $2.1 | | Revenues by Geography (millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | United States | $96.3 | $81.6 | $237.2 | $213.4 | | All other countries | $9.2 | $4.4 | $16.0 | $6.0 | 16. Related Party Transactions This note discloses transactions with related parties, including ownership by affiliated investment funds and payments for services - Investment funds affiliated with Onex Corporation owned approximately 93.2% of the Company's common stock as of June 30, 2025[137] - The company made $0.1 million in payments to Convex Group Ltd. (an Onex affiliate) for insurance coverage during the three and six months ended June 30, 2025[137] 17. Subsequent Events This note reports significant events occurring after the balance sheet date, such as new legislation and dividend declarations - The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025, with potential impacts on the company's financial statements currently being assessed[138] - On July 29, 2025, the board declared a dividend of $0.015 per share for the quarter ending September 30, 2025[139] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Emerald Holding, Inc.'s financial performance, condition, and cash flows for the periods presented Recent Events This section highlights significant recent developments, including board-declared dividends - On July 29, 2025, the board of directors declared a dividend of $0.015 per share for the quarter ending September 30, 2025[141] Overview This section provides a general description of Emerald's business as a leading operator of B2B trade shows and integrated event services - Emerald is a leading operator of business-to-business trade shows, primarily in the U.S., with expanding international operations[142] - The company integrates live events with media content, industry insights, digital tools, data-focused solutions, and e-commerce platforms (Elastic Suite and Bulletin) to create comprehensive customer experiences[142][144] - Trade show franchises typically hold market-leading positions, attracting high-quality exhibitors and attendees[143] Reportable Segments This section describes the company's operating segments, including Connections, Content, Commerce, and Corporate-Level Activity - The business is organized into three operating segments: Connections (reportable segment), Content, and Commerce (both in 'All Other' category)[145][146][147] - Connections segment includes all trade shows and live events[146] - Corporate-Level Activity includes finance, legal, IT, and administrative functions[147] Organic Growth Drivers This section outlines strategies to enhance exhibitor and attendee participation and strengthen value propositions for sustained growth - Focus on increasing exhibitor and attendee participation by providing year-round services and demonstrating tangible return-on-investment[148] - Strategies include creating new market influence opportunities, strengthening value propositions, and modestly increasing booth space pricing[148] Acquisitions This section discusses the company's acquisition strategy, focusing on market-leading events and the tax benefits of asset deals - The company aims to grow its national footprint by acquiring high-quality, market-leading events[149] - Historically, acquisitions have been structured as asset deals, generating long-lived tax assets that reduce purchase multiples[149] Trends and Other Factors Affecting Our Business This section addresses industry fragmentation, economic correlations, and the seasonal nature of the company's business operations - The trade show industry is highly fragmented, offering acquisition opportunities[150] - Business performance is correlated with the economic performance of industry sectors and the overall economy, including inflationary pressures and interest rates[150] - There is a lag time between changes in economic conditions and their effect on results, potentially causing counter-cyclical impacts[150] - The business is seasonal, with highest revenues typically in the first and fourth quarters, though this can vary due to event timing or external circumstances[151] How We Assess the Performance of Our Business This section explains the key financial and non-GAAP measures used by management to evaluate the company's operational and financial performance Revenues This section describes the primary sources of revenue, including trade show exhibit space, conferences, and digital media - Primary revenue sources include trade show exhibit space, conferences, sponsorships, ancillary fees, attendee registration, digital media, and print publications[153] - Exhibitors contract for space up to a year in advance, with fees typically invoiced and collected prior to the event[153] Organic Revenue This section defines organic revenue as a non-GAAP measure, adjusted for acquisitions and other non-recurring items, to assess core growth - Organic revenue growth/decline is a non-GAAP measure, adjusted for the revenue impact of acquisitions, dispositions, discontinued events, and material show scheduling adjustments[154][155] - It helps investors and analysts compare operating performance consistently by excluding items not indicative of ongoing trends[154] Other Income This section details other income sources, primarily from event cancellation insurance claims and litigation settlements - Other income primarily consists of event cancellation insurance claim and insurance litigation settlement proceeds[157] - Renewed event cancellation insurance policies starting in 2022 do not cover losses due to communicable disease outbreaks[157] Cost of Revenues This section outlines the major components of cost of revenues, including decorating, sponsorship, venue, and other event-related expenses - Key components include decorating expenses (general service contractors), sponsorship costs (industry trade associations), venue costs (convention centers/hotels), costs of other marketing services (digital/print publications), and other event-related expenses (security, shuttle buses, speaker fees, food/beverage, insurance)[163] Selling, General and Administrative Expenses This section describes the primary components of SG&A expenses, such as compensation, marketing, IT, and consulting fees - These expenses primarily consist of compensation and employee-related costs, sales commissions, stock-based compensation, marketing, IT, travel, facilities, consulting fees, and public reporting costs[163] Depreciation and Amortization This section explains the amortization of significant intangible assets acquired through acquisitions and their tax implications - Significant intangible assets acquired through acquisitions are amortized over 3 to 30 years for GAAP and 15 years for tax purposes, reducing taxable income[161] Income Taxes This section covers the components of income tax expense and the deferred tax implications of book-to-tax differences - Income tax expense includes U.S. federal, state, local, and foreign taxes[162] - Deferred tax charges or benefits are associated with book-to-tax differences related to amortization of goodwill, intangible assets, depreciation, stock-based compensation, and interest expense limitation[164] Adjusted EBITDA This section defines Adjusted EBITDA as a non-GAAP measure used by management to assess core financial performance by excluding non-core items - Adjusted EBITDA is a non-GAAP measure defined as net (loss) income before interest expense, income taxes, depreciation and amortization, stock-based compensation, goodwill/intangible asset impairment, and other non-core items[165] - It is used by management and the board to assess financial performance and highlight trends by excluding items outside management's control or not indicative of core operations[166] Cash Flow Model This section highlights the company's favorable cash flow characteristics, including high profit margins and negative working capital - The company benefits from favorable cash flow characteristics due to high profit margins, low capital expenditures, and consistent negative working capital (excluding cash)[168] - Cash is typically received in advance of expenses for trade shows, creating a working capital benefit[169] Free Cash Flow This section defines Free Cash Flow as a non-GAAP liquidity indicator, representing cash available for strategic investments and shareholder returns - Free Cash Flow is a non-GAAP liquidity indicator, representing cash generated from core operations after capital expenditures, available for debt repayment, dividends, share repurchases, and strategic investments[170][171] Results of Operations This section provides a detailed comparative analysis of the company's financial performance for the three and six months ended June 30, 2025 and 2024 Three Months Ended June 30, 2025, Compared to Three Months Ended June 30, 2024 This section analyzes the company's financial performance for the second quarter of 2025 compared to the same period in the prior year Overall Financial Performance This section summarizes key financial metrics and their variances for the three-month period, including revenues, operating income, and Adjusted EBITDA | Metric (millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Variance ($) | Variance (%) | | :---------------------------------- | :--------------------------- | :--------------------------- | :----------- | :----------- | | Revenues | $105.5 | $86.0 | $19.5 | 22.7% | | Cost of revenues | $40.6 | $33.1 | $7.5 | 22.7% | | Selling, general and administrative expenses | $47.1 | $39.5 | $7.6 | 19.2% | | Operating income | $10.2 | $6.4 | $3.8 | 59.4% | | Income (loss) before income taxes | $0.6 | $(3.5) | $4.1 | NM | | Net loss | $(1.4) | $(2.8) | $1.4 | NM | | Adjusted EBITDA | $24.4 | $15.3 | $9.1 | 59.5% | | Organic revenue | $80.2 | $79.9 | $0.3 | 0.4% | - The increase in Adjusted EBITDA was primarily due to higher operating income and increased add-backs for non-recurring expenses, stock-based compensation, and depreciation/amortization, partially offset by lower net interest expense add-back[185] Connections Segment This section analyzes the revenue and cost performance of the Connections segment, highlighting impacts from acquisitions and organic growth | Metric (millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Variance ($) | Variance (%) | | :---------------------------------- | :--------------------------- | :--------------------------- | :----------- | :----------- | | Revenues | $95.4 | $75.0 | $20.4 | 27.2% | | Cost of revenues | $38.1 | $30.5 | $7.6 | 24.9% | | Selling, general and administrative expense | $22.1 | $18.5 | $3.6 | 19.5% | | Operating income | $30.7 | $21.8 | $8.9 | 40.8% | - Revenue increase was driven by $23.6 million from acquisitions and $1.2 million (1.7%) organic growth, offset by $2.8 million from discontinued events and $1.6 million from scheduling adjustments[187] - Cost of revenues increased due to $7.9 million from acquisitions and $1.5 million from recurring events, partially offset by savings from discontinued events and non-recurring costs[188] All Other Category This section reviews the financial performance of the All Other category, including revenue changes in content and commerce businesses | Metric (millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Variance ($) | Variance (%) | | :---------------------------------- | :--------------------------- | :--------------------------- | :----------- | :----------- | | Revenues | $10.1 | $11.0 | $(0.9) | -8.2% | | Cost of revenues | $2.5 | $2.6 | $(0.1) | -3.8% | | Selling, general and administrative expense | $5.8 | $6.7 | $(0.9) | -13.4% | | Operating loss | $(0.6) | $(0.3) | $(0.3) | 100.0% | - Revenue decrease was primarily due to a $1.0 million (16.9%) decline in content revenues (lower print/digital advertising), partially offset by a $0.1 million (2.0%) increase in commerce revenues (Elastic Suite growth)[193] - Selling, general and administrative expense decreased due to lower salary expenses in both content and commerce businesses[195] Corporate Category This section details changes in corporate selling, general and administrative expenses, including contingent consideration and stock-based compensation | Metric (millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Variance ($) | Variance (%) | | :---------------------------------- | :--------------------------- | :--------------------------- | :----------- | :----------- | | Selling, general and administrative expense | $19.2 | $14.3 | $4.9 | 34.3% | | Depreciation and amortization expense | $0.7 | $0.8 | $(0.1) | -12.5% | - SG&A increase was mainly due to a $2.8 million increase in contingent consideration remeasurements, a $1.5 million increase in stock-based compensation, and higher transaction expenses[198] Interest Expense, Interest Income, Provision for Income Taxes, Net Loss This section analyzes changes in interest expense, interest income, income tax provision, and their combined impact on net loss - Interest expense decreased by $1.1 million (9.2%) to $10.9 million, driven by a lower effective interest rate (8.07% vs. 10.42%), despite a higher average debt balance[200] - Interest income decreased by $0.8 million to $1.3 million, due to lower cash balances from acquisitions and lower interest rates[201] - Provision for income taxes increased to $2.0 million (333.3% effective rate) from a $0.7 million benefit (20.0% effective rate), due to higher pre-tax income[202] - Net loss improved by $1.4 million to $(1.4) million, driven by higher income from operations (primarily acquisitions), partially offset by increased income tax provision[203] Six Months Ended June 30, 2025, Compared to Six Months Ended June 30, 2024 This section analyzes the company's financial performance for the first half of 2025 compared to the same period in the prior year Overall Financial Performance This section summarizes key financial metrics and their variances for the six-month period, including revenues, operating income, and Adjusted EBITDA | Metric (millions) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Variance ($) | Variance (%) | | :---------------------------------- | :--------------------------- | :--------------------------- | :----------- | :----------- | | Revenues | $253.2 | $219.4 | $33.8 | 15.4% | | Other income, net | — | $1.0 | $(1.0) | NM | | Cost of revenues | $92.0 | $80.6 | $11.4 | 14.1% | | Selling, general and administrative expenses | $101.2 | $95.0 | $6.2 | 6.5% | | Operating income | $46.0 | $30.7 | $15.3 | 49.8% | | Income before income taxes | $21.3 | $11.0 | $10.3 | 93.6% | | Net income | $13.9 | $8.2 | $5.7 | 69.5% | | Adjusted EBITDA | $78.0 | $56.1 | $21.9 | 39.0% | | Free Cash Flow | $24.6 | $11.9 | $12.7 | 106.7% | | Organic revenue | $222.9 | $214.6 | $8.3 | 3.9% | - The increase in Adjusted EBITDA was primarily due to acquisitions and improved operational results[215] Connections Segment This section analyzes the revenue and cost performance of the Connections segment for the six-month period, driven by acquisitions and organic growth | Metric (millions) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Variance ($) | Variance (%) | | :---------------------------------- | :--------------------------- | :--------------------------- | :----------- | :----------- | | Revenues | $233.7 | $198.4 | $35.3 | 17.8% | | Other income, net | — | $1.0 | $(1.0) | NM | | Cost of revenues | $86.9 | $75.8 | $11.1 | 14.6% | | Selling, general and administrative expenses | $45.5 | $40.9 | $4.6 | 11.2% | | Operating income | $93.4 | $74.0 | $19.4 | 26.2% | - Revenue increase was driven by $28.6 million from acquisitions and $9.8 million (5.1%) organic growth (higher recurring revenues and two new event launches), with a $1.5 million increase from scheduling adjustments, offset by $4.6 million from discontinued events[217] - Cost of revenues increased due to $10.1 million from acquisitions, $2.9 million from recurring events, $1.3 million from timing adjustments, and $0.7 million from new launches, partially offset by discontinued events and non-recurring cost reductions[219] - Depreciation and amortization expense decreased due to full amortization of intangible assets from historical acquisitions, partially offset by new acquisitions[221] All Other Category This section reviews the financial performance of the All Other category for the six-month period, including content and commerce revenue trends | Metric (millions) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Variance ($) | Variance (%) | | :---------------------------------- | :--------------------------- | :--------------------------- | :----------- | :----------- | | Revenues | $19.5 | $21.0 | $(1.5) | -7.1% | | Cost of revenues | $5.1 | $4.8 | $0.3 | 6.3% | | Selling, general and administrative expenses | $11.9 | $14.3 | $(2.4) | -16.8% | | Operating loss | $(2.1) | $(1.9) | $(0.2) | 10.5% | - Revenue decrease was primarily due to a $1.5 million (14.2%) decline in content revenues (lower print/digital advertising), while commerce revenues remained consistent[223] - Cost of revenues increased due to higher barter activity in content, partially offset by lower software maintenance in commerce[224] - Selling, general and administrative expense decreased due to lower salary and benefits, list rental, and contractual labor expense[225] Corporate Category This section details changes in corporate selling, general and administrative expenses for the six-month period, including contingent consideration and transaction costs | Metric (millions) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Variance ($) | Variance (%) | | :---------------------------------- | :--------------------------- | :--------------------------- | :----------- | :----------- | | Selling, general and administrative expenses | $43.8 | $39.8 | $4.0 | 10.1% | | Depreciation and amortization expense | $1.5 | $1.6 | $(0.1) | -6.3% | - SG&A increase was driven by a $4.3 million increase in contingent consideration remeasurements and a $3.7 million increase in acquisition-related transaction costs, partially offset by a $3.3 million decrease in non-recurring transition expenses and $0.6 million in foreign currency gains[228] Interest Expense, Interest Income, Provision for Income Taxes, Net Income This section analyzes changes in interest expense, interest income, income tax provision, and their combined impact on net income for the six-month period - Interest expense increased by $4.2 million (17.4%) to $28.3 million, primarily due to $6.4 million in third-party fees for the new term loan facility, partially offset by a lower effective interest rate (8.30% vs. 10.43%)[230] - Interest income decreased by $0.8 million (18.2%) to $3.6 million, due to lower cash balances from acquisitions and lower interest rates[231] - Provision for income taxes increased to $7.4 million (34.7% effective rate) from $2.8 million (25.5% effective rate), due to higher pre-tax income[232] - Net income improved by $5.7 million (69.5%) to $13.9 million, driven by improved operational results (primarily acquisitions), partially offset by increased net interest expense and higher income tax provision[233] Liquidity and Capital Resources This section discusses the company's ability to meet its short-term and long-term financial obligations, including cash position, debt, and capital allocation strategies Overview of Liquidity This section provides an overview of the company's primary liquidity needs, current cash position, debt facilities, and compliance with covenants - Primary liquidity needs include working capital, operating/capital expenditures (including acquisitions), and return of capital to stockholders (dividends/repurchases)[234] - As of June 30, 2025, the company had $515.0 million outstanding on its Second Amended and Restated Term Loan Facility, no borrowings on its $110.0 million revolving credit facility, and $156.4 million in cash and cash equivalents[235] - The company was in compliance with all debt covenants as of June 30, 2025[235] - Event cancellation insurance policies for 2024 and 2025 do not cover losses from communicable disease outbreaks[236] - Management believes current financial resources are sufficient to fund liquidity requirements for the next twelve months and long-term obligations[237] Share Repurchases This section details the company's share repurchase program, including board approvals, shares repurchased, and remaining authorization - The Board approved an expansion of the share repurchase program on April 30, 2025, allowing for $25.0 million in repurchases through December 31, 2025[241] - During the six months ended June 30, 2025, the company repurchased 3,660,124 shares for $15.7 million[242] - As of June 30, 2025, $20.8 million remained available for share repurchases[242] Mandatory Conversion of Preferred Stock This section describes the mandatory conversion of all outstanding redeemable convertible preferred stock into common stock - On May 2, 2024, all outstanding redeemable convertible preferred stock was mandatorily converted into common stock, resulting in 140,781,525 new common shares[243] Cash Flows This section provides a summary of cash flows from operating, investing, and financing activities for the reporting period Operating Activities This section details the net cash generated or used by the company's core business operations - Net cash provided by operating activities increased by $11.4 million to $28.5 million for the six months ended June 30, 2025, compared to $17.1 million in the prior year[246] - The increase primarily reflects a $5.7 million improvement in net income[246] Investing Activities This section details the net cash used for or provided by investment activities, primarily business acquisitions - Net cash used in investing activities increased by $131.2 million to $148.1 million for the six months ended June 30, 2025, primarily due to a $132.5 million increase in business acquisitions[248] Financing Activities This section details the net cash generated or used by financing activities, including debt and equity transactions - Net cash provided by financing activities increased by $91.8 million to $80.6 million for the six months ended June 30, 2025, compared to cash used of $11.2 million in the prior year[250] - This increase was mainly due to $105.9 million in net proceeds from the new term loan facility, offset by increased common stock repurchases ($13.9 million), common stock dividends ($6.0 million), and debt issuance fees[250] Foreign Currency Risk This section discusses the company's exposure to foreign currency fluctuations from international operations, particularly the U.K. Pound Sterling - The company is exposed to foreign currency risk from international shows, particularly the U.S. dollar relative to the U.K. Pound Sterling[251] - Fluctuations can impact assets, liabilities, operating expenses, and cash flows upon translation[251] Free Cash Flow This section reports the company's Free Cash Flow, a non-GAAP measure indicating cash available after capital expenditures - Free Cash Flow increased by $12.7 million to $24.6 million for the six months ended June 30, 2025, compared to $11.9 million in the prior year[252] Contractual Obligations and Commercial Commitments This section updates on the company's contractual obligations, noting no material changes beyond new credit facilities - No material changes to contractual obligations since the Annual Report on Form 10-K, other than those related to the Second Amended and Restated Senior Secured Credit Facilities[253] Critical Accounting Policies and Estimates This section discusses the significant accounting policies and estimates requiring management judgment in financial statement preparation - The preparation of financial statements requires significant estimates and assumptions about future events[254] - Accounting policies and estimates are reevaluated ongoingly, with no significant changes reported since the Annual Report on Form 10-K[255][257] Recently Adopted Accounting Pronouncements This section refers to Note 2 for details on accounting pronouncements recently adopted by the company - Refers to Note 2 for details on recently adopted accounting pronouncements[258] Recently Issued Accounting Pronouncements This section refers to Note 2 for details on accounting pronouncements recently issued but not yet adopted by the company - Refers to Note 2 for details on recently issued accounting pronouncements[258] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section outlines the company's exposure to market risks, primarily interest rate risk associated with its variable-rate debt and foreign currency risk from international operations - As of June 30, 2025, the company had $515.0 million in variable-rate term loan borrowings, with a 0.25% increase in interest rate potentially leading to a $1.3 million increase in annual interest expense[260] - Foreign currency risk arises from international shows denominated in non-U.S. dollar currencies, with the largest exposure being the U.S. dollar relative to the U.K. Pound Sterling[261] - Historically, inflation has not materially affected the business, but sustained inflationary conditions could impact operating expenses and financing costs[262] Item 4. Controls and Procedures This section details the management's evaluation of the effectiveness of the company's disclosure controls and procedures, concluding they were effective as of June 30, 2025 - Management, under the supervision of the CEO and CFO, concluded that disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[264] - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting during the second fiscal quarter of 2025[265] Part II. Other Information This section provides additional disclosures on legal proceedings, risk factors, equity security sales, defaults, and other relevant information Item 1. Legal Proceedings This section states that the company is not currently involved in any legal proceedings that are expected to have a material adverse effect on its business, financial condition, or results of operations - The company is not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on its business, financial condition, or results of operations[268] Item 1A. Risk Factors This section refers to the detailed discussion of risk factors provided in the company's Annual Report on Form 10-K and confirms that there have been no material changes to these risk factors since that filing - There have been no material changes to the risk factors included in the Annual Report on Form 10-K filed on March 14, 2025[269] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section provides an update on the company's share repurchase programs, including the expansion approved in April 2025 and the details of common stock repurchases made during the second quarter of 2025 - In April 2025, the board approved an expansion of the share repurchase program, allowing for $25.0 million in repurchases through December 31, 2025[270] | Period (Q2 2025) | Total Number of Shares Purchased | Average Price Paid Per Share ($) | Approximate Dollar Value of Shares That May Yet Be Purchased ($ millions) | | :---------------- | :------------------------------- | :------------------------------- | :---------------------------------------------------------------------- | | April 1 - April 30 | 738,355 | 3.70 | 6.1 | | May 1 - May 31 | 480,658 | 4.60 | 22.8 | | June 1 - June 30 | 411,666 | 4.79 | 20.8 | | Total | 1,630,679 | |