Lamar(US:LAMR)2025-05-08 14:02Financial Data and Key Metrics Changes - The company achieved its sixteenth consecutive quarter of acquisition adjusted revenue growth with an increase of 1.1% in Q1 2025 [4] - Adjusted EBITDA was $210.2 million, slightly down from $211.9 million in 2024, with an adjusted EBITDA margin of approximately 41.6% [11] - Adjusted funds from operations (AFFO) totaled $164.3 million, an increase of 3.8% from $158.2 million last year, with diluted AFFO per share growing 3.9% to $1.60 [11][17] - Acquisition adjusted consolidated expenses increased by 2.6% in Q1, slightly better than anticipated [10] Business Line Data and Key Metrics Changes - Local and regional sales accounted for approximately 82% of billboard revenue in Q1, growing for the sixteenth consecutive quarter [11] - Programmatic revenue increased by about $2 million, translating into nearly 30% growth [6] - Digital billboard revenue was up 4%, accounting for approximately 30% of total billboard revenue [6] Market Data and Key Metrics Changes - Categories of strength included services (up 11%), retail (up 6%), and construction (up 15%), while gaming (down 9%) and restaurants (down 4%) showed relative weakness [19][20] - The Central and Midwest regions showed relative strength, while the Southwest region, including Las Vegas, showed relative weakness [19] 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 [8][14] - The company plans to exceed its projected $150 million in acquisition spending for the year, with a year-to-date spend of over $70 million [8][43] - The company aims to maintain a dividend policy of distributing 100% of taxable income, with a cash dividend of $1.55 per share recommended for the second quarter [18] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the out-of-home advertising medium's resilience in uncertain economic conditions, with no cancellations reported from local or national customers [5] - The company is closely monitoring the broader economy but has not seen significant negative impacts on its business [5] - Management expressed confidence in the performance of programmatic advertising and digital billboards as they move into Q2 [19] Other Important Information - The company has repurchased $150 million of its stock at an average price of just over $108 per share, indicating confidence in its market position [8][16] - Total consolidated debt at quarter-end was approximately $3.2 billion, with a weighted average interest rate of 4.6% [13] Q&A Session Summary Question: Expectations for organic revenue growth and national softness - Management is currently 75% booked to the goal of approximately 3% organic revenue growth for the year, with national weakness attributed to changes in large customers' buying habits [25][26][27] Question: Economic slowdown and indicators of weakness - Management noted that shorter cycle sales, particularly in digital, serve as indicators, and current performance is solid, providing confidence [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 expectation [42][43] Question: Addressing national weakness and digital conversion pace - Management is pacing to meet digital conversion goals and noted that national spending can fluctuate based on customer changes [50][51] Question: AFFO per share guidance and expense growth drivers - Management affirmed that the AFFO guidance remains unchanged despite share repurchases, with elevated expenses attributed to one-time items and health insurance costs [56][59]