Emerald Holding(EEX) - 2025 Q2 - Quarterly Results

Executive Summary Emerald reported strong Q2 2025 financial results with significant revenue and Adjusted EBITDA growth driven by acquisitions, while reaffirming full-year guidance and focusing on strategic portfolio streamlining Second Quarter 2025 Financial Highlights Emerald Holding, Inc. reported solid financial results for Q2 2025, with significant year-over-year growth in revenue and Adjusted EBITDA, primarily driven by recent acquisitions. Despite muted reported organic growth, pro-forma organic growth was strong, and the company reaffirmed its full-year 2025 guidance Q2 2025 Financial Highlights Summary | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | % Change | | :-------------------------------- | :----------------- | :----------------- | :---------------- | :------- | | Revenues | $105.5 | $86.0 | $19.5 | 22.7% | | Organic Revenues | $80.2 | $79.9 | $0.3 | 0.4% | | Net Loss | $(1.4) | $(2.8) | $1.4 | NM | | Adjusted EBITDA | $24.4 | $15.3 | $9.1 | 59.5% | | Diluted Loss Per Share | $(0.01) | $(0.03) | $0.02 | NM | - Revenues increased by 22.7% to $105.5 million, primarily due to $23.6 million from acquisitions and $1.6 million from scheduling adjustments, partially offset by discontinued events[4][5] - Pro-forma organic growth, including recent acquisitions (This is Beyond, Insurtech Insights, GRC World Forums) as if they were part of the portfolio in Q2 2024, would have been 4.6% year-over-year[3][4][5] - The company ended the quarter with $156.4 million in cash and full availability of its $110.0 million revolving credit facility[4] - Emerald reaffirmed its Full Year 2025 guidance of $450 - $460 million in Revenue and $120 - $125 million in Adjusted EBITDA[4] Operational and Capital Structure Updates Emerald's CEO highlighted focused execution, portfolio streamlining, and concentration on high-growth markets, aiming for a more performance-oriented platform. Strategic acquisitions like This is Beyond and Insurtech Insights are key to expanding reach and scaling the business. The CFO noted that reported organic growth was impacted by event timing, but underlying performance, adjusted for acquisitions, was stronger - The company is streamlining its portfolio, focusing on high-growth markets, and strengthening its value proposition to evolve into a more performance-oriented platform[3] - Acquisitions of This is Beyond and Insurtech Insights support the vision of a customer-centric platform, broadening reach in key growth markets and enhancing scalability[3] - Reported organic growth was 0.4% due to event timing and mix, but on a pro-forma basis (including recent acquisitions in Q2 2024), organic growth would have been 4.6%[3][4] - Underlying cash generation was stronger when adjusted for the timing impact of acquisitions on reported free cash flow, with expectations for improved free cash flow conversion post-transactions[3] Detailed Financial Performance Emerald's Q2 2025 saw substantial revenue and Adjusted EBITDA growth, a reduced net loss, and strong cash generation, primarily driven by strategic acquisitions and operational improvements Revenues Total revenues for Q2 2025 increased significantly year-over-year, primarily driven by recent acquisitions and scheduling adjustments. Organic revenues showed modest growth, with the Connections segment performing well, while the All Other category experienced a slight decline Q2 2025 Revenue Performance | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | % Change | | :-------------------------------- | :----------------- | :----------------- | :---------------- | :------- | | Total Revenues | $105.5 | $86.0 | $19.5 | 22.7% | | Organic Revenues | $80.2 | $79.9 | $0.3 | 0.4% | | Connections Organic Revenues | $70.1 | $68.9 | $1.2 | 1.7% | | All Other Organic Revenues | $10.1 | $11.0 | $(0.9) | (8.2%) | - The 22.7% increase in total revenues was primarily due to $23.6 million from acquisitions and $1.6 million from scheduling adjustments, offset by $2.8 million from discontinued events[5] - Organic Revenues from the Connections segment increased by 1.7% due to higher recurring revenues[7] - Organic Revenues from the All Other category decreased by 8.2%, mainly due to a $1.0 million decrease in Content revenues, partially offset by a $0.1 million increase in Commerce revenues[7] Net Income (Loss) Emerald significantly reduced its net loss in Q2 2025 compared to the prior year, driven by higher income from ongoing operations, largely attributable to acquisitions. This improvement was partially offset by increased non-recurring expenses and higher income tax provisions Q2 2025 Net Income (Loss) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | % Change | | :---------------- | :----------------- | :----------------- | :---------------- | :------- | | Net Loss | $(1.4) | $(2.8) | $1.4 | NM | | Diluted Loss Per Share | $(0.01) | $(0.03) | $0.02 | NM | - The reduction in net loss was principally due to higher income from ongoing operations, largely attributable to acquisitions[7] - Offsetting factors included higher non-recurring expenses, primarily related to contingent consideration remeasurement adjustments and increased provision for income taxes[7] Adjusted EBITDA Adjusted EBITDA saw substantial growth in Q2 2025, reflecting improved operational performance. This non-GAAP measure is used by management to assess core operating performance by excluding certain non-recurring items Q2 2025 Adjusted EBITDA | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | % Change | | :---------------- | :----------------- | :----------------- | :---------------- | :------- | | Adjusted EBITDA | $24.4 | $15.3 | $9.1 | 59.5% | - Adjusted EBITDA increased by 59.5% year-over-year, indicating strong operational momentum[4][5][7] Cash Flow and Free Cash Flow Emerald demonstrated strong cash generation in Q2 2025, with significant increases in net cash provided by operating activities and Free Cash Flow. While reported Free Cash Flow was impacted by acquisition timing, underlying cash generation was robust, and the company expects improved conversion going forward Q2 2025 Cash Flow Performance | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (Millions) | % Change | | :------------------------------------------------ | :----------------- | :----------------- | :---------------- | :------- | | Net Cash Provided by Operating Activities | $15.9 | $9.8 | $6.1 | 62.2% | | Capital Expenditures | $2.1 | $2.7 | $(0.6) | (22.2%) | | Free Cash Flow (excluding event cancellation) | $13.8 | $7.1 | $6.7 | 94.4% | - Net cash provided by operating activities increased by 62.2% to $15.9 million[5][17] - Free Cash Flow, excluding event cancellation insurance proceeds, nearly doubled to $13.8 million[5][17] - The reported Free Cash Flow was impacted by approximately $17.0 million of event-related cash from the This is Beyond acquisition being reflected in the purchase price rather than operating cash flow[17] Capital Allocation and Shareholder Returns Emerald demonstrated commitment to shareholder value through a declared quarterly dividend and continued share repurchases in Q2 2025 Dividend Declaration Emerald's Board of Directors declared a quarterly dividend for Q3 2025, demonstrating a commitment to returning value to shareholders - On July 29, 2025, Emerald's Board of Directors declared a dividend of $0.015 per share for the quarter ending September 30, 2025[4][10] - The dividend is payable on August 25, 2025, to shareholders of record as of August 14, 2025[10] Share Repurchase Program Emerald continued its share repurchase program, buying back a significant amount of common stock in Q2 2025 and year-to-date, with a substantial amount remaining under the current authorization Share Repurchase Activity | Period | Shares Repurchased | Amount (Millions) | Average Price Per Share | | :---------------- | :----------------- | :---------------- | :---------------------- | | Q2 2025 | 1,630,679 | $6.9 | $4.24 | | Year-to-Date 2025 | 3,660,124 | $15.7 | $4.29 | | Since 2021 Restart | 16.9 million | $69.4 | N/A | - The Board of Directors approved an expansion of the share repurchase program on April 30, 2025, allowing for $25.0 million in repurchases through December 31, 2025[11] - At the end of Q2 2025, $20.8 million remained available under the existing repurchase authorization[11] Company Information This section provides an overview of Emerald's business as a leading B2B event organizer, along with details for its Q2 2025 earnings call and investor contacts About Emerald Emerald Holding, Inc. is the largest U.S.-based B2B event organizer, providing year-round solutions through trade shows, conferences, B2C showcases, and a hosted buyer platform. The company focuses on expanding connections, developing content, and delivering commerce-driven solutions across various industries - Emerald is America's largest producer of trade shows and associated conferences, content, and commerce[1][16] - The company owns and operates a curated portfolio of B2B events and delivers dynamic solutions through robust content and an e-commerce marketplace[16] - Emerald serves thousands of customers, predominantly small and medium-sized businesses, by driving commerce through streamlined buying, selling, and networking opportunities 365 days a year[16] Conference Call Webcast Details Emerald provided details for its Q2 2025 earnings conference call and webcast, including access information for live participation and replays - A conference call to discuss Q2 2025 results was scheduled for 8:30 am EDT on Monday, August 4, 2025[13] - Access to the live call is available via domestic (1-800-715-9871) or international (1-646-307-1963) dial-in numbers[14] - A telephonic replay is available until August 11, 2025, using passcode 1558503, and an online replay is accessible on Emerald's investor website[14][15] Contact Information Investor relations contact details for Emerald Holding, Inc. are provided for inquiries - Investor Relations can be reached via email at investor.relations@emeraldx.com or by phone at 1-866-339-4688 (866EEXINVT)[26] Non-GAAP Financial Information This section defines and explains the non-GAAP financial measures of Organic Revenue, Adjusted EBITDA, and Free Cash Flow, used by management to assess core operating performance and liquidity Organic Revenue Organic revenue is a non-GAAP measure used to assess Emerald's operating performance by adjusting for the impact of acquisitions, dispositions, discontinued events, and material show scheduling adjustments, providing a consistent comparison across reporting periods - Organic revenue growth/decline adjusts for the revenue impact of acquisitions, dispositions, discontinued events, and material show scheduling adjustments[19] - This measure helps investors and analysts compare operating performance consistently by excluding items not indicative of underlying event portfolio trends due to timing or strategy changes[19] Adjusted EBITDA Adjusted EBITDA is a non-GAAP measure utilized by Emerald to evaluate core operating performance by excluding specific non-operating or non-cash items, offering a clearer view of financial trends independent of capital structure or tax decisions - Adjusted EBITDA is defined as net income (loss) before interest expense (net), provision for income taxes, depreciation and amortization, stock-based compensation, goodwill and other intangible asset impairment charges, and other non-core operational items[21] - It is used to compare operating performance consistently across periods by excluding items outside management's control, such as long-term strategic decisions on capital structure, tax jurisdictions, and capital investments[20] - Adjusted EBITDA excluding event cancellation insurance proceeds is also presented to illustrate the amount from continuing operations[21] Free Cash Flow Free Cash Flow is a non-GAAP liquidity indicator that provides insight into cash generated from core operations available for business maintenance, growth, debt repayment, dividends, and strategic opportunities, after accounting for capital expenditures - Free Cash Flow is defined as net cash provided by operating activities less capital expenditures[17][34] - It is a useful indicator of liquidity, showing cash available for maintaining and growing the business, repaying debt, paying dividends, and funding strategic opportunities[23] - Free Cash Flow excluding event cancellation insurance proceeds, net, is also presented to illustrate the amount from continuing operations[24] Cautionary Statement Concerning Forward-Looking Statements This section outlines the inherent uncertainties and risks associated with forward-looking statements made in the press release and earnings call. These statements are based on management's current expectations and assumptions but are not guaranteed and are subject to various economic, competitive, governmental, and technological factors that could cause actual results to differ materially - Forward-looking statements, including those regarding business return to pre-COVID levels, market growth, organic growth, interest rates, guidance, insurance coverage, dividends, acquisitions, and international operations, are inherently uncertain and not guaranteed[25] - These statements are based on management's current expectations, estimates, and assumptions but involve risks and uncertainties from economic, competitive, governmental, and technological factors outside the company's control[25] - The company undertakes no obligation to update or revise any forward-looking statements[25] Condensed Consolidated Financial Statements This section presents Emerald's financial position and performance through condensed consolidated statements of income (loss) and balance sheets for the reported periods Condensed Consolidated Statements of Income (Loss) The condensed consolidated statements of income (loss) provide a detailed breakdown of Emerald's revenues, expenses, and net income (loss) for the three and six months ended June 30, 2025, and 2024 Condensed Consolidated Statements of Income (Loss) | Metric (Millions) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------------ | :------ | :------ | :------- | :------- | | Revenues | $105.5 | $86.0 | $253.2 | $219.4 | | Cost of revenues | $40.6 | $33.1 | $92.0 | $80.6 | | Selling, general and administrative expense | $47.1 | $39.5 | $101.2 | $95.0 | | Operating income | $10.2 | $6.4 | $46.0 | $30.7 | | Interest expense, net | $9.6 | $9.9 | $24.7 | $19.7 | | Income (loss) before income taxes | $0.6 | $(3.5) | $21.3 | $11.0 | | Net (loss) income attributable to Emerald Holding, Inc. | $(1.4) | $(2.8) | $13.9 | $8.2 | | Diluted (loss) income per share | $(0.01) | $(0.03) | $0.07 | $(0.04) | Condensed Consolidated Balance Sheets The condensed consolidated balance sheets present Emerald's financial position as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets | Metric (Millions) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Cash and cash equivalents | $156.4 | $194.8 | | Total current assets | $279.0 | $306.9 | | Total assets | $1,202.1 | $1,048.7 | | Total current liabilities | $264.7 | $241.3 | | Term loan, net of discount and deferred financing fees | $501.6 | $398.5 | | Total liabilities | $812.7 | $662.8 | | Total stockholders' equity | $389.4 | $385.9 | - Total assets increased to $1,202.1 million as of June 30, 2025, from $1,048.7 million at December 31, 2024, largely due to increases in intangible assets and goodwill from acquisitions[29] - Total liabilities also increased to $812.7 million, primarily driven by an increase in the term loan, net of discount and deferred financing fees[29] Non-GAAP Reconciliations and Segment Results This section provides detailed reconciliations of GAAP to non-GAAP financial measures and disaggregated segment results, offering transparency into Emerald's financial adjustments and operational performance Reconciliation of Revenues to Organic Revenues This schedule provides a reconciliation of GAAP revenues to non-GAAP organic revenues, detailing adjustments for acquisition revenues, discontinued events, and scheduling adjustments for both consolidated and segment-level results Reconciliation of Revenues to Organic Revenues | Metric (Millions) | Q2 2025 | Q2 2024 | Change ($) | Change (%) | | :---------------------- | :------ | :------ | :--------- | :--------- | | Revenues | $105.5 | $86.0 | $19.5 | 22.7% | | Deduct: Acquisition revenues | $(23.6) | $0.0 | N/A | N/A | | Deduct: Discontinued events | $0.0 | $(2.8) | N/A | N/A | | Deduct: Scheduling adjustments | $(1.7) | $(3.3) | N/A | N/A | | Organic revenues | $80.2 | $79.9 | $0.3 | 0.4% | - Acquisition revenues for Q2 2025 totaled $23.6 million, primarily from This is Beyond, Insurtech, and GRC World Forums[30] - Assuming prior year foreign currency rates, these acquisitions would have resulted in a 4.6% year-over-year increase in Organic Revenues for Q2 2025[30] Reconciliation of Revenues to Disaggregated Revenues This schedule disaggregates total revenues into key segments: Connections, Content, and Commerce, providing a clearer view of revenue contributions from different business lines Reconciliation of Revenues to Disaggregated Revenues | Segment (Millions) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 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 | - The Connections segment remains the largest revenue contributor, showing significant growth in both Q2 and year-to-date periods[32] Reconciliation of Net Income (Loss) to Adjusted EBITDA This schedule reconciles GAAP net income (loss) to non-GAAP Adjusted EBITDA, detailing the adjustments for interest, taxes, depreciation, amortization, stock-based compensation, and other non-core items Reconciliation of Net Income (Loss) to Adjusted EBITDA | Metric (Millions) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------ | :------ | :------ | :------- | :------- | | Net (loss) income | $(1.4) | $(2.8) | $13.9 | $8.2 | | Add: Interest expense, net | $9.6 | $9.9 | $24.7 | $19.7 | | Add: Provision for (benefit from) income taxes | $2.0 | $(0.7) | $7.4 | $2.8 | | Add: Depreciation and amortization | $7.6 | $7.0 | $14.0 | $14.1 | | Add: Stock-based compensation | $3.0 | $1.5 | $5.6 | $4.0 | | Add: Other items | $3.6 | $0.4 | $12.4 | $7.3 | | Adjusted EBITDA | $24.4 | $15.3 | $78.0 | $56.1 | - Other items for Q2 2025 included $1.1 million in acquisition-related transaction costs, $1.9 million in acquisition integration and restructuring costs, and $0.6 million in contingent consideration remeasurement expense[33] Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow This schedule reconciles GAAP net cash provided by operating activities to non-GAAP Free Cash Flow, highlighting the impact of capital expenditures and event cancellation insurance proceeds Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow | Metric (Millions) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------------------ | :------ | :------ | :------- | :------- | | Net Cash Provided by Operating Activities | $15.9 | $9.8 | $28.5 | $17.1 | | Less: Capital expenditures | $2.1 | $2.7 | $3.9 | $5.2 | | Free Cash Flow | $13.8 | $7.1 | $24.6 | $11.9 | | Event cancellation insurance proceeds | $0.0 | $0.0 | $0.0 | $(1.0) | | Free cash flow excluding event cancellation insurance proceeds, net | $13.8 | $7.1 | $24.6 | $10.9 | Reconciliation of Reportable Segments Results to Income (Loss) Before Taxes This schedule provides a breakdown of revenues and Adjusted EBITDA by reportable segments (Connections and All Other), and then reconciles these segment results to the consolidated income (loss) before income taxes by accounting for general corporate expenses and other adjustments Reconciliation of Reportable Segments Results to Income (Loss) Before Taxes | Metric (Millions) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :------------------------------------ | :------ | :------ | :------- | :------- | | Revenues - Connections | $95.4 | $75.0 | $233.7 | $198.4 | | Revenues - All Other | $10.1 | $11.0 | $19.5 | $21.0 | | Adjusted EBITDA - Connections | $35.2 | $26.4 | $101.3 | $82.6 | | Adjusted EBITDA - All Other | $1.8 | $1.8 | $2.5 | $2.1 | | Adjusted EBITDA (excluding General corporate expenses) | $37.0 | $28.2 | $103.8 | $84.7 | | General corporate expenses | $(12.6) | $(12.9) | $(25.8) | $(28.6) | | Income (loss) before income taxes | $0.6 | $(3.5) | $21.3 | $11.0 |