Lamar Stock Falls Despite Q2 AFFO Beat, Revenues Increase Y/Y

Core Insights - Lamar Advertising Company (LAMR) reported second-quarter 2025 adjusted funds from operations (AFFO) per share of $2.22, exceeding the Zacks Consensus Estimate of $2.15 and up from $2.08 in the prior-year quarter [1][9] - Quarterly net revenues reached $579.3 million, reflecting a year-over-year increase of 2.5%, but fell short of the consensus estimate of $581.9 million [2][9] Financial Performance - Operating income for the quarter was $197.7 million, a 7.3% increase from $184.2 million in the same period last year [3] - Adjusted EBITDA rose 2.5% to $278.4 million, while acquisition-adjusted net revenues climbed 1.9% year over year [3] - Direct advertising expenses increased by 2% to $187.2 million, and general and administrative expenses rose by 2.8% to $86.7 million [4] Cash Flow and Liquidity - Free cash flow decreased by 2.2% year over year to $199.1 million [4] - Cash flow from operating activities for the three months ended June 30, 2025, was $229.5 million, compared to $127.7 million in the previous quarter [5] - As of June 30, 2025, total liquidity was $363 million, including $307.3 million available for borrowing and $55.7 million in cash [6] 2025 Outlook - LAMR revised its 2025 AFFO per share guidance to a range of $8.10 to $8.20, compared to the previous range of $8.13 to $8.28, with the Zacks Consensus Estimate currently at $8.19 [7] Market Sentiment - Despite the positive earnings report, shares of LAMR fell by 4% during the initial hours of trading, likely due to higher expenses impacting investor sentiment [2][9]