Lamar(US:LAMR)2025-05-08 14:00Financial Data and Key Metrics Changes - The company reported a 1.1% increase in acquisition adjusted revenue for Q1 2025, marking the sixteenth consecutive quarter of growth [4][10] - Adjusted EBITDA was $210.2 million, a slight decline of 0.8% from $211.9 million in Q1 2024, with an adjusted EBITDA margin of approximately 41.6% [10][12] - Adjusted funds from operations (AFFO) totaled $164.3 million, up 3.8% from $158.2 million in the previous year, with diluted AFFO per share growing 3.9% to $1.60 [10][15] Business Line Data and Key Metrics Changes - Local and regional sales accounted for approximately 82% of billboard revenue, continuing to grow for the sixteenth consecutive quarter [10] - Programmatic revenue increased by about $2 million, translating to nearly 30% growth year over year [6][18] - Digital billboard revenue rose by 4%, representing around 30% of total billboard revenue [6] Market Data and Key Metrics Changes - The Central and Midwest regions showed relative strength, while the Southwest region, including Las Vegas, exhibited weakness [18] - Categories of strength included services (up 11%), retail (up 6%), and construction (up 15%), while gaming and restaurants showed declines of 9% and 4% respectively [18] Company Strategy and Development Direction - The company is focused on maintaining its leadership status in the out-of-home advertising industry, with a strong balance sheet and a commitment to acquisitions [7][12] - The company plans to exceed its projected $150 million in acquisition spending for the year, having already closed 10 deals worth approximately $22 million in Q1 [7][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the out-of-home advertising medium, noting no cancellations or significant concerns from customers [5][17] - The company affirmed its full-year AFFO guidance of $8.13 to $8.28 per share, indicating a stable outlook despite broader economic uncertainties [15][17] Other Important Information - The company repurchased $150 million of its stock at an average price of just over $108 per share, reflecting confidence in its market position [7][14] - Total consolidated debt stood at approximately $3.2 billion, with a weighted average interest rate of 4.6% and total leverage of 2.85 times net debt to EBITDA [12][13] Q&A Session Summary Question: Expectations for organic revenue growth and national softness - Management indicated they are 75% booked to their goal of approximately 3% organic revenue growth, with national weakness attributed to changes in large customers' buying habits [23][25] Question: Economic slowdown and indicators of weakness - Management noted that shorter cycle sales, particularly digital, serve as indicators, and current performance is solid, providing confidence [31][32] Question: M&A landscape and expense growth expectations - Management expects to exceed $200 million in acquisition activity for the year and maintains a 3% expense growth outlook [41][42] Question: Addressing national weakness and digital conversion pace - Management acknowledged national weakness but noted that programmatic growth helps offset it, with digital conversion goals still on track [47][48] Question: AFFO per share guidance and expense growth drivers - Management clarified that the AFFO guidance remains unchanged despite share repurchases, and elevated expenses were due to one-time items and health insurance costs [53][56]