Lamar Advertising Company

I'm just curious your high level thoughts on how you see it. I think there is something secular going on in terms of what's happening to our competitors out there in other local media. For example, what's going on clearly with radio, what's going on with print, and what is increasingly going on with local network affiliate television. Some of that is coming our way as they experience a drop in their audience. Some of their spend is coming our way. What we're also increasingly hearing from advertisers, and I think you're hearing this from our peers at Outfront and Clear Channel as well, Digital ad spend, while it's still the gorilla in the room, there is some disaffection with what's going on in what many people believe is the vast wasteland of what's going on with the panoply of digital products out there. And so some advertisers are coming to us in the out-of-home world because they know exactly what they're getting. There's no bot fraud. There's no chance that they're going to show up in a place that they don't want to be. And they're increasingly getting comfortable with our ability to track results when they spend with us. So it's all good out there. For out of home, you heard this from out front. Yesterday, you saw it in the Clear Channel numbers. and a rising tide is lifting all boats because we're feeling it as well. Got it.

That's great. And then just secondly, Sean and Jay, I'd be curious what the latest is on your cost savings initiatives. And is this the year we might see the 48% margin?

We're going to be close. I don't know that we're going to get all the way to 48%, but we will set a record and we should be at least a point better than last year. So we've successfully gone through phase one of our enterprise software and upgrades, mostly back office and financial and with some savings accompanying those efforts. We're somewhat hitting the pause button on phase two. We've had some wins that are going to result in some cost savings in out years. But as you're hearing from other companies, the sands are shifting around software deployment and options for functionality. So we're evaluating those things and what we're seeing out there are some More elegant and more cost-effective ways to get the functionality we're looking for. So on some of those cost savings, it's a stay tuned. Maybe not a get to 48% this year, but quite possibly in 27 or 28. I would say probably. Great. Thanks, Sean.

Thank you. Again, as a reminder, if you'd like to ask a question, please press star 1 now. Our next question will come from Stephen Cahal with Wells Fargo. Your line is open.

Thanks. I was wondering if we could go one level deeper into that acceleration you saw through the second quarter. You know, I know there was a lot of sports going on at that time, but it sounds like your pacings continue to improve. Were there particular categories of strength that you see persisting into the back half and maybe even into 27? I'm curious if AI, which has become obviously a much bigger sector, is showing up as a bigger advertiser as well. And then just on your M&A plans, I was wondering how you're thinking about valuations in the marketplace right now. It seems like, you know, one of your competitors is going to have a better balance sheet than it has historically. Sector multiples are a little higher. So just wondering how competitive that market looks for valuations. Thanks.

Sure, I'll hit the second question first. So, you know, we do basically three types of acquisitions. There are ones that are 100% fill-in in our existing footprint. We have by far and away the largest footprint nationwide of any operator. So for many of these transactions that we do that are sort of cookie-cutter fill-in transactions, We're the highest and best buyer and sometimes we're the only buyer and we just sit down and meet with a seller and we get to yes. So some of them are actually not competitive processes. As the transactions get larger, more parties come to the table and there is more of a competitive dynamic. Sometimes those transactions are in DMAs where we don't already have operations and that can attract some attention. We just remain disciplined and we have our evaluation metrics and we stick to them. Regarding the other two publics, it's interesting. Their footprints are different. Oftentimes, they're shopping in places we're not just given their geographical profile. So we run into them sometimes, and sometimes we don't. And I would describe it as we're frenemies when it comes to that. And we're going to win our fair share, as will they. You know, business, as I mentioned, services is a pretty big catch basin. And it's just growing really fast. And we saw the advent of telecom companies. and Technology Services, particularly in the AI space, augment that whole category of business. And that's been a good thing to see. And then, you know, don't forget political. We've got nice political tailwinds that we're enjoying this year. It has been somewhat unusual to have a mid-cycle outpace a presidential cycle. but that's what's going on in 2026 over 2024 and that again has certainly been one of the nice things to see this year. Thank you.

Thank you. This does conclude our Q&A session. I would now like to turn the meeting back to Sean Reilly for any closing remarks.

Well, thank you all for listening and we look forward to catching up again next quarter.

Thank you. That brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.