Outfront Media (NYSE:OUT) 2025 Conference Summary Company Overview - **Company**: Outfront Media - **Industry**: Out-of-home advertising Key Points Advertising Environment - Confidence in advertising strength carrying into 2026 due to a strong third quarter, particularly in the transit business [3] - Fourth quarter growth rate expected to be higher than the third quarter [3] - Improved visibility into 2026 compared to the previous year [3] - Price growth in the perm business is up from last year, indicating improved sales metrics [3] Local Market Performance - Outfront Media has a significant local business that is less volatile compared to national ads [4] - Local business is expected to benefit from increased marketing efforts [4] - Key categories driving local momentum include the legal profession and retail resurgence [5] Impact of Major Events - Major events like the World Cup and Olympics are seen as tailwinds for revenue growth [7] - Opportunities for short-term permitting and innovative advertising experiences during these events [7][8] Digital Revenue Growth - Digital revenue currently accounts for 35% of total revenue, with a target to reach 50% [9] - Digital penetration is growing at approximately 1% per quarter, expected to reach around 40% by the end of next year [9] - Programmatic revenue is growing faster than regular digital revenue [9] Transit Business Performance - Transit revenue increased by 24% in Q3, with New York MTA up 37% [15] - MTA performance is attributed to focus, execution, and portfolio management [15][16] - Expectations for continued growth in the high teens for MTA in Q4 [16] Margin Optimization - Billboard margins improved to 39.5%, with expectations for further increases [28] - Focus on managing the portfolio and negotiating tougher lease agreements to optimize margins [28][29] Capital Structure and Debt Management - Current leverage is 4.7 times, with a goal to reduce it closer to four times [32] - Next debt maturity is in summer 2027, with plans to maintain financial flexibility [32] - Strong liquidity position allows for potential M&A opportunities [35] M&A Strategy - Focus on acquiring footprint rather than just digital capabilities [36] - Potential for strategic changes in the industry, with Outfront Media positioned to participate [35] Future Outlook - AFFO growth expected to be in the high single digits for 2025, with similar trends anticipated for 2026 [39] - Continued emphasis on digital and programmatic advertising to drive revenue growth [47][48] Capital Expenditures - Expected CapEx to remain similar to the current year, around $90 million [45] - Increased maintenance CapEx to proactively replace aging digital screens [45] Conclusion - Outfront Media is optimistic about its growth trajectory, particularly in digital and local markets, while managing its capital structure and focusing on margin optimization. The company is well-positioned to leverage upcoming major events and continue its strategic initiatives in the out-of-home advertising space.

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]