Emerald Holding(US:EEX)2023-11-06 15:18Financial Data and Key Metrics Changes - The company's third quarter revenue was $72.5 million, an increase from $62.4 million in the prior year quarter, driven by organic revenue growth and acquisitions [24][35] - Organic revenue for the third quarter was $68.5 million, reflecting a 22.1% increase year-over-year [24] - Year-to-date organic growth stands at 16.6%, with adjusted EBITDA for the third quarter at $10.8 million, or $8.0 million excluding insurance proceeds [26][35] - Free cash flow for the third quarter was $2.7 million, compared to an outflow of $0.1 million in the prior year quarter [26] Business Line Data and Key Metrics Changes - The live events business continues to show significant year-over-year growth in revenue and profitability, driven by increases in exhibitors, attendees, and pricing [9][12] - The content business, which represents approximately 10% of revenues, is experiencing softness primarily in the technology sector due to a pullback in ad spending [17][18] - The company has launched new events such as NBA Con and Cocina Sabrosa, targeting underserved markets with high growth potential [15][20] Market Data and Key Metrics Changes - The company has seen a return of international attendees and improvements in customer supply chains, benefiting from post-COVID tailwinds [9] - The advertising environment is expected to stabilize in 2024, although near-term headwinds in ad spending are presenting risks [18] Company Strategy and Development Direction - The company focuses on three pillars of value creation: customer centricity, 365-day engagement, and portfolio optimization [19][20] - The strategy includes enhancing customer value through add-on services and data insights, as well as expanding engagement through various platforms [19][20] - The company is evaluating potential acquisitions to enhance scale and operational efficiencies in a fragmented industry [21] Management's Comments on Operating Environment and Future Outlook - Management expresses confidence in achieving double-digit growth in 2024, supported by strong visibility into event pacing and sales [5][43] - The company anticipates continued increases in exhibitor count and revenue, with a focus on optimizing pricing and yield [62] - Labor market conditions have improved, making recruitment easier and potentially easing labor cost inflation [81] Other Important Information - The company has expanded its share buyback program to $25 million and authorized cash payments for dividends on convertible preferred stock to minimize dilution [30][31] - Full-year revenue guidance is now expected to be between $385 million and $395 million, reflecting an increase of 18% to 21% over the previous year [35][36] Q&A Session Summary Question: Update on free cash flow guidance - Management revised the free cash flow expectation for 2023 to between $50 million and $60 million, down from over $60 million [41] Question: Visibility into 2024 growth expectations - Management noted strong visibility into Q1 and H1 events, with many brands having sold a majority of what they need to meet internal forecasts for 2024 [43] Question: Details on advertising exposure and revenue sources - The event that was deferred into 2024 was expected to generate low-single digit millions in revenue, with the content business facing challenges primarily in the technology sector [45] Question: Plans for improving media and content business - The company is transitioning to a lead-generating model and has made significant progress in building a subscriber base for new content products [47][59] Question: Update on software business and profitability plans - The software business is seeing strong customer retention and growth, with ongoing efforts to expand into new verticals [60] Question: Attendance and pricing strategies in trade shows - Attendance and revenue expectations remain consistent with prior guidance, with a focus on optimizing pricing based on delivered value [62]