OUTFRONT Media(OUT) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Consolidated revenues increased by 4.1%, up from 3.5% in Q3, driven by 16% growth in transit and 1% growth in billboard [10] - Consolidated OIBDA rose by 12% to $174 million, while AFFO increased by 8% to $130 million [10][22] - Billboard revenues grew by 0.5%, but would have increased by 3.7% excluding two exited contracts [11] - Transit revenues surged by 16%, with New York MTA revenues up over 20% [12][13] Business Line Data and Key Metrics Changes - Billboard revenues were impacted by the exit of two large contracts, with static billboard revenues up 1.1% and digital billboard revenues down 0.6% [12] - Digital transit revenues increased by 37% to $73 million, while static transit revenues decreased slightly [12] - Combined digital revenue performance grew about 11%, representing 39% of total revenues [13] Market Data and Key Metrics Changes - Strong demand was noted in financial, legal, and tech sectors, while government, political, retail, and auto sectors were weaker [13] - The enterprise segment grew by 1%, with mid-teens growth in transit offset by a decline in billboard revenues [14] Company Strategy and Development Direction - The company is focused on optimizing sales strategy, modernizing workflows, and generating new demand, particularly in transit [6][9] - Investments in technology include partnerships with AWS and AdQuick to enhance advertising planning and buying processes [9][28] - The company aims to redefine the value of out-of-home advertising and increase its share of U.S. ad spend [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued revenue growth into 2026, with expectations of high single-digit growth in Q1 [25] - The company anticipates a strong performance from the New York MTA, with potential for revenues to exceed the minimum annual guarantee [67] - Management highlighted the importance of upcoming events like the World Cup as a significant revenue driver [46][67] Other Important Information - The company expects to spend approximately $90 million on CapEx in 2026, primarily for digital development [20] - The board of directors maintained a cash dividend of $0.30 payable on March 31 [23] Q&A Session Summary Question: Is there a structural shift in how large advertisers engage? - Management confirmed that partnerships with AWS and AdQuick are designed to unlock new revenue streams for both enterprise and commercial segments [33][34] Question: What is the visibility on transit for the rest of the year? - Management indicated that while transit books later than billboard, they feel optimistic about the year, particularly with MTA performance [38] Question: How is national advertising trending? - Management noted strong support from enterprise brands and highlighted significant campaigns from various sectors, including entertainment and finance [45][46] Question: What revenue is expected from the New York MTA in 2026? - Management expects MTA revenues to step up by about 3% to approximately $161 million, with potential for strong double-digit growth [69][77]