Clear Channel Outdoor Holdings, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to Clear Channel Outdoor Holdings Incorporated's third quarter 2021 earnings conference call. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and one on your telephone keypad. You may withdraw yourself from the queue by pressing the pound key. Please note, this call may be recorded. I'll now turn the conference over to your host, Eileen McLaughlin. Vice President, Investor Relations. Please go ahead.

Good morning, and thank you for joining Clear Channel Outdoor Holdings 2021 third quarter earnings call. On the call today are William Eccleshare, Chief Executive Officer of Clear Channel Outdoor Holdings, Inc., and Brian Coleman, Chief Financial Officer of Clear Channel Outdoor Holdings, Inc., who will provide an overview of third quarter 2021 operating performance of Clear Channel Outdoor Holdings, Inc., and Clear Channel International, BV. After an introduction and a review of our results, we'll open up the line for questions, and Scott Wells, Chief Executive Officer of Clear Channel Outdoor Americas, will participate in the Q&A portion of the call. Before we begin, I'd like to remind everyone that this conference call includes forward-looking statements. These statements include management's expectations, beliefs, and projections about performance and represent management's current beliefs. There can be no assurance that management's expectations, beliefs, or projections will be achieved or that actual results will not differ from expectations. Please review the statements of risk contained in our earnings press release and filings with the SEC. During today's call, we will provide certain performance measures that do not conform to generally accepted accounting principles. We provide schedules that reconcile these non-GAAP measures with our reported results on a GAAP basis as part of our earnings press release. and the earnings conference call presentation, which can be found in the financial section of our website, investor.clearchannel.com. Please note that our earnings release and the slide presentation are also available on our website in our integral to our earnings conference call. They provide a detailed breakdown of foreign exchange, segment revenue, adjusted EBITDA, and adjusted corporate expenses, including the impact of share-based compensation and restructuring charges, among other important information. For that reason, we ask that you review each slide as William and Brian comment on them. Also, please note that the information provided on this call speaks only to management's views as of today, November 9th, 2021, and may no longer be accurate at the time of replay. With that, please turn to page three in the presentation, and I will now turn the call over to William Escher.

Good morning, everyone, and thank you for taking the time to join today's call. We delivered very strong results during the third quarter, and we entered the fourth quarter with continuing business momentum as we capitalized on the broad-based recovery we're seeing across our markets. Advertisers are returning to launch new campaigns and rebuild brand awareness. This rebound, together with new advertisers discovering our medium for the first time, is driving growth in many of our markets ahead of 2019 revenue levels in both our digital and traditional assets. Our consolidated revenue in the third quarter increased 33.3% over the prior year. Excluding FX, consolidated revenue was $590 million, up 31.8% over the prior year. America's revenue was $319 million, up 42.6%, in line with our guidance, and at 97% of 2019 revenue. Europe's revenue was $256 million, up 18.2%, which was slightly ahead of our guidance, and 97% of 2019 revenue, both excluding FX. As we have highlighted on past calls, we have a resilient business that has consistently demonstrated its ability to bounce back from macro disruptions. We are clearly seeing this occur, and we are very pleased with how our business is performing in the current quarter. And it is with that confidence in our business and liquidity position that we repaid the $130 million outstanding balance of the revolving credit facility. Coming out of COVID, advertisers are embracing out of home as they recognize the enhanced capabilities we have built into our platform. The power of our assets is only matched by our team of talented and dedicated people and the deep relationships they have maintained across the industry throughout the pandemic. Given the expansion of our digital footprint and the related strategic investments in both data analytics and programmatic that we have made in our platform, advertisers are now utilizing an even stronger set of tools that will allow them to expand these relationships through highly creative, addressable, and measurable solutions. We're meeting our customers where they are by building on the very best features of out-of-home, and elevating what we can do for advertisers and their brands in a compelling manner. And so, this is an exciting time for our business as we execute on our vision to expand our share of total advertising spend. As we focus on delivering profitable growth, we also remain committed to reducing our overall indebtedness, strengthening our balance sheet, and elevating our ability to benefit from the operating leverage in our model. As part of this effort, and as momentum builds in our business, we will continue to evaluate disposition opportunities in line with our strategic goals and in the best interest of our shareholders. Now let me provide a brief update on each of our business segments, beginning with Americas. Based on the information we have for the fourth quarter, We expect America's revenue to be in the range of $360 and $370 million, which is above the period, reflecting the strong momentum in our business as we close out the year. In the current quarter, we're continuing to experience a notable uptick in demand with a strong volume of RFPs. National is increasing over the prior year at a slightly faster rate than local. Based on our current revenue bookings, all our small and most medium-sized markets are pacing above Q4 2019. We still haven't fully rebounded in a few markets in California, including San Francisco, although LA, which is our largest market, is now above 2019. In our larger markets, in addition to LA, New York, Miami, and Dallas are also exceeding 2019 levels, with Houston and Boston close behind. I'd also highlight a promising rebound we're seeing in airports across the country. We believe our success is attributed to our teams doing a better job of surfacing our customer needs and matching them to the best asset type. For example, our traditional sales team is now selling our airport inventory. We should note at this point, inflation and supply chain issues are not materially impacting our business. But we are, of course, keeping an eye on macro trends and how they're playing out. Our digital billboards business, which continues to lead the recovery, is central to our long-term growth strategy. We deployed 17 new digital billboards in the third quarter, giving us a total of more than 1,500 digital billboards across the United States. We are and we remain at the forefront in driving innovation in the out-of-home industry. We built a dynamic platform that delivers mass broadcast-level reach, along with the sophisticated insights, similar to the digital display platforms, with the ability to target consumers on the move. Our radar solutions continue scaling up and opening new opportunities, including with major CPG brands. Recently, we were able to match individual consumer behaviors using our radar-proof attribution tool with household purchase data from an ID resolution partner, LiveRamp. In the CPG world, this advancement matters as households rather than individuals, often are the decision makers in this product category. So we can now measure the household impact of exposure to our out-of-home advertising. For example, in separate campaigns for a snack brand, a sports beverage, and a new packaged food brand, we delivered household sales insights about the consumer buying these products and how out-of-home attracts new customers to these brands. RadarProof also demonstrated the ability of out-of-home exposure to increase the lifetime value of repeat brand purchases, a key metric for consumer packaged goods brands. Further, through our strategic expansion into the programmatic space, we continue to see a notable uptick in brands experimenting with programmatic, and we are positioned to participate in this opportunity. For instance, these innovations are evident in our recent campaign for Twitch and MediaHub Global, to promote their second annual streamable gaming event. The campaign won Best Use of Programmatic, the digital out-of-home this year, as part of Adweek's annual Media Plan of the Year awards. Our commitment to technology in improving the buying process and enhancing our ability to demonstrate attribution are key drivers of performance in our America's business. And I believe Scott and his exceptional leadership team should be proud of their work in delivering such a strong performance as the business emerges from the pandemic. Turning to our business in Europe, based on the information we have today, we expect fourth quarter segment revenue to be between $335 and $350 million, which is in line with Europe's top line performance in the fourth quarter of 2019 of $349 million. All amounts exclude movements in FX. Similar to the US, in Europe we are demonstrating the resilience of our platform and its ability to rapidly return to growth. As we've noted in the past, about two-thirds of our European revenue comes from roadside assets. This has benefited our performance in the current environment, given that we have limited exposure to the transit sector, which has, of course, seen a greater impact from COVID. This is most evident in the UK, where we have continued to deliver revenue ahead of 2019, For the last six months, UK revenue has been ahead of 2019, led by the strength of our street furniture footprint and from the benefits of both new contracts and further development and investment in digital roadside inventory. Overall, we are continuing to benefit from pent-up demand across Europe, although orders are still coming in later than pre-COVID. Based on current trends, our pipeline across CPG and retail, our largest verticals, is looking strong. with fashion and beauty also looking healthy. Our digital expansion is also a central part of our growth strategy in Europe. We added 314 digital screens in the third quarter for a total of over 16,900 screens now live, including digital screens in the UK, Italy and Ireland. And we are further elevating the value proposition of our digital footprint through the rollout of our radar suite of solutions, which is now gaining traction in all of our major European markets. For example, in Spain, we are now able to target campaigns based on online behavior in addition to physical store visits, and we are having significant success using the tool in the auto category where brands are able to efficiently target likely car buyers. In addition, we recently completed the launch of our programmatic offering, Launchpad, in Italy, and we are now executing on our programmatic strategy across Europe, allowing brands to connect at the right time with consumers through multiple touchpoints, plan real-time digital out-of-home campaigns, and control exactly when, where, and at what times their ads are deployed. We are also continuing to selectively pursue contract tenders that meet our strategic objectives in multiple markets. In Sweden, we won a seven-year contract to operate the advertising related to a public bike program in the center of Stockholm, consisting of 350 static and digital panels in prime locations, further strengthening our footprint across the city. So in summary, we are executing at a high level across every facet of our strategic plan. The recovery continues to gain momentum, and we are seeing good progress in our business in the current quarter. Coming out of the pandemic, we are well positioned to maximize our performance as we leverage our digital expansion and the investments we are making in our data analytics and programmatic resources, which is broadening the universe of advertisers we can pursue and strengthening our growth profile. And with that, let me now turn it over to Brian to discuss our third quarter 2021 financial results. Thank you, William.

Good morning, everyone. Thank you for joining our call. As William mentioned, we continue to see a strong rebound in our business as reflected in our third quarter results and outlook for the fourth quarter. And we continue to manage our cost base, including negotiating rent abatements in some of the markets most affected by COVID-19, as well as strengthening our capital structure. Moving on to the results on slide four. In the third quarter, consolidated revenue increased 33.3% to $596 million. Excluding FX, revenue was up 31.8%. Consolidated net loss in the third quarter was $41 million compared to a consolidated net loss of $136 million in the prior year. Adjusted EBITDA was $136 million in the third quarter, representing a substantial improvement over the prior year, which was $31 million. Excluding FX, adjusted EBITDA was $135 million in the third quarter. Please turn to slide five for a review of the Americas third quarter results. The Americas segment revenue was 319 million in the third quarter, up 42.6% compared to the prior year and in line with guidance we previously provided in July. Revenue was up across all of our products, most notably print billboards, digital billboards, and airport displays. Digital revenue rebounded strongly and was up 68.4% to $115 million. National and local continued to improve with both up 43%. Direct operating and SG&A expenses were up 15.8%. The increase is due in part to a 15.3% increase in site lease expense driven by higher revenue combined with higher compensation costs driven by improvements in our operating performance. This was partially offset by lower credit loss expense related to our recovery from COVID-19. Segment adjusted EBITDA was $139 million in the third quarter, up 96.7% compared to the prior year, with segment adjusted EBITDA margin of 43.6% above our guidance in Q3 2019 results due to temporary savings including site lease savings primarily related to airports, as well as lower spending and a reduction in the credit loss expense. Please turn to slide six. This slide breaks out our America's revenue into billboard and other and transit. Billboard and other, which primarily includes revenue from billboards, street furniture, spectaculars, and wall scapes, was up 37.6%. Transit was up 82.7%. with airport display revenue up 88.7% to $43 million in the third quarter. Airport revenue was helped by the return of airline passenger traffic and the new Port Authority of New York and New Jersey advertising and sponsorship contract. Please turn to slide seven for a bit more detail on America's Q3 billboard and other. Digital revenue rebounded strongly in Q3 and was up 59.5% to $91 million and now accounts for 33.4% of total billboard and other revenue. Non-digital revenue was up 28.7%. Next, please turn to slide 8 and a review of our performance in Europe. Please note that as I comment on the percentage change from the prior year, all percentages are excluding movements in foreign exchange. Europe revenue was $263 million in the third quarter. Excluding movements in foreign exchange revenue was $256 million, up 18.2% compared to the prior year, ahead of the guidance we provided in our second quarter earnings call. As you may remember, in Q3 2020, restrictions were lifted, and the business bounced back quickly, which created tougher comps than in the second quarter. Revenue in the third quarter was up across most of our products, primarily street furniture and retail displays, and in most countries. Digital revenue was up 39.3% to $89 million, excluding FX, a strong performance driven in large part by the rebound in the UK. Direct operating and SG&A expenses were up 6.4% compared to the third quarter of last year. The increase is largely driven by a $13 million increase in cost related to our restructuring plan to reduce headcount. As a reminder, Costs related to our restructuring plan are not included in adjusted EBITDA. Site lease expense declined 3.7% to $99 million, excluding FX, driven by negotiated rent abatements. Segment adjusted EBITDA was $30 million, excluding movements in foreign exchange in the third quarter, as compared to negative $8 million in the prior year. Moving on to CCIBV. Our Europe segment consists of the businesses operated by CCIVV and its consolidated subsidiaries. Accordingly, the revenue for our Europe segment is the same as the revenue for CCIVV. Europe segment adjusted EBITDA. The segment profitability metric reported in our financial statements does not include an allocation of CCIVV's corporate expense that are deducted from CCIVV's operating income and adjusted EBITDA. CCIBV revenue increased $46 million during the third quarter of 2021 compared to the same period of 2020 to $263 million. After adjusting for a $6 million impact from movements in foreign exchange rates, CCIBV revenue increased $39 million. CCIBV operating loss was $26 million in the third quarter of 2021 compared to $38 million in the same period of 2020. Let's move to slide nine and a quick review of other, which includes Latin America. Note, this is the first quarter that the prior year results do not include our China business. Latin America revenue was $15 million. Excluding movements in foreign exchange rates, it was $14 million in the third quarter, up $7 million compared to the same period last year. Direct operating expense and SG&A from our Latin American business were $14 million, up $1 million compared to the third quarter in the prior year. Latin America adjusted EBITDA rounded to zero in the third quarter. Now moving to slide 10 and a review of capital expenditures. Capital expenditures totaled $33 million in the third quarter, an increase of approximately $6 million compared to the prior year period as we ramped up our investment in our Americas business. Now on to slide 11. Clear Channel Outdoors consolidated cash and cash equivalents totaled $600 million as of September 30th, 2021. Our debt was $5.7 billion, up $166 million due in large part to the refinancing of the CCWH senior notes in February and in June. Cash paid for interest on debt was $52 million during the third quarter and $264 million year to date. Our weighted average cost of debt was 5.5% as of September 30th, 2021, 60 basis points lower than the prior year. Additionally, as William mentioned, given our improved outlook for both our business and liquidity position, we repaid the $130 million outstanding balance under the company's revolving credit facility with cash on hand on October 26, resulting in a corresponding increase in excess availability under such revolving credit facilities. Finishing with our guidance on slide 12. Again, as William noted, for the fourth quarter of 2021, America's segment revenue is expected to be in the range of between $360 and $370 million, which is above the $345 million reported in Q4 2019. Segment-adjusted EBITDA margin is expected to return to close to Q4 2019 levels of 42.3%. Q4's adjusted EBITDA margin is expected to benefit from the top-line improvement, but also from one-time items, including site lease savings and temporary cost savings. Our Europe segment revenue is expected to be in the range of between $335 and $350 million, which is in line with Europe's revenue in Q4 2019 of $349 million. Both the guidance and Q4 2019 consolidated revenue are based on 2020 exchange rates and exclude China. Our consolidated Q4 revenue guidance is $715 to $740 million, which is in line with or better than our Q4 2019 consolidated revenue of $717 million. As noted above, guidance and Q4 2019 consolidated revenue are based on 2020 exchange rates and exclude China. We expect cash interest payments of $123 million in the fourth quarter of 2021 and $319 million in 2022. We expect consolidated capital expenditures to be in the $150 to $160 million range in 2021. Lastly, we are once again increasing our guidance for liquidity as of December 31, 2021, including unrestricted cash and availability under the company's credit facilities. We expect liquidity of approximately $525 to $575 million, a $50 million increase from the guidance provided in July. This is reflective of our improved performance in our businesses. The guidance also includes a near-term acquisition pipeline of approximately $20 to $25 million that we could potentially close by year-end that represents small, selective, tuck-in billboard acquisitions in the Americas. Please keep in mind that liquidity could vary based on timing, of cash receipts and or payments at year-end. That concludes my formal remarks. Now, let me turn the call back over to William.

Thank you, Brian. As I make the transition into the new role of Executive Vice Chairman at the close of the year, and Scott moves to take over as CEO, I'm confident that we will continue to build on the momentum we're seeing in our business. We're leading the digital transformation of our industry, innovating our platform, and strengthening our ability to serve a large universe of advertisers. We're coming out of COVID with a stronger and more dynamic platform, supported by an energized worldwide team focused on growth and execution. As we continue to invest in our technology, while carefully managing our costs, we remain focused on driving profitable growth and evaluating all avenues to delever our balance sheet, including dispositions. As this will be my last quarterly conference call, I'd like to thank all of our investors for their support over the last few years. It's been a pleasure to have met so many of you and to have engaged in conversations with you regarding our industry, our company, and the direction of the global advertising market. I'd also like to record my thanks to my exceptional leadership team who've maintained their focus during an extraordinary period of change, both in our business and the world in which we operate. You remain, of course, in very good hands with Scott and the management team as they continue to execute on our plan to fully surface the growth potential and intrinsic value of our assets. So a very heartfelt thanks to all of you. And now let me turn over the call to the operator for the Q&A session.

At this time, if you would like to ask a question, please press star 1 on your telephone keypad. Again, that is star 1 on your telephone keypad. you may withdraw yourself from the queue by pressing the pound key. We'll take a question from Stephen Cahill of Wells Fargo.

Thanks. Maybe first, Scott, you mentioned national is growing, I think, a little bit better than local. Do you anticipate national becoming a bigger proportion of revenue over time, particularly as you use radar and maybe have more agency buys? And if that does happen, does that give you any benefits to your EBITDA margins?

Thanks, Steve. So right now we're right around 37% on national, and historically we've been closer to 40, so I think there's definitely short-term room to improve. I also think that there's room beyond that for the reasons that you mentioned, and our programmatic business skews a little bit national as well, and so that's an opportunity to drive it. National does tend to buy our very best assets. They tend to go for a lot of the premium locations and premium products, so having national increase will generally help our margins, but it's not like a big light switch. It's a modest improvement as the mix moves in that direction. Hopefully that helps.

Yeah, and then just sticking with America, just wondering if you perceive any real benefit in the quarter from rent abatement activity. And as we think about maybe some of those costs catching up next year, any commentary you could provide on how we should think about America's margins or operating leverage?

I think I'm going to have Brian speak to that, but, yeah, we definitely have an opinion here.

Yeah, and I would answer that for the entire company because I'm not sure the story is that much different in the Americas than it is internationally, and that is our operating teams continue to work with our municipal partners and our various landlords on seeking appropriate renovations. And we're going to see some of that in the fourth quarter. I mean, we saw some of that in the third quarter. about $22 million of the $79 million here today. We would expect that to continue for the next few quarters into Q4 and on, albeit likely at a decreasing rate as the business starts to improve. I think that the team is doing a good job. There is a bit of a lag, so it may continue for a while. It is impacting our margins. I think you can see both in the results and in the guidance that our margins are back to levels at or around 2019. But that does reflect some of these renovations and temporary cost savings. So I think that that's the right way to think about renovations both in the Americas and internationally.

Great. And then lastly, how are you thinking about CapEx for next year, just as the business continues to improve and get back to prior levels? You know, you were confident enough to pay down some debt in the quarter, and I think CapEx came up. So signals like we're sort of getting back to normal. And maybe relatedly, any more color on some of these additional potential tuck-in America's acquisitions that you highlighted? Thanks.

Yeah, Steve, I think you hit it. As our business normalizes and we do have visibility and it looks like it is recovering, you should expect our 2022 CapEx to also go back to kind of pre-COVID levels. I think that's a good estimate, and that number is probably 200, 225 million. It would exclude China because we no longer have that operation. I think in addition to that, you are seeing enough of these tuck-in acquisitions that we chose to kind of break it out in our commentary. That number is about 20, 25 million. We do expect that could close in the fourth quarter. It could go on a little longer. Each one of those acquisitions takes a little bit of time, and it's difficult to predict. But it was material enough that we wanted to break it out. And I think the other thing is this. It's reflective of the current environment. The recovery has brought potential sellers into the market for various reasons. The valuation gap has narrowed. These are unique opportunities that we want to take advantage of. We are in a position where we can. I think you've heard others talk about it. So as long as it's a material number, we'll continue to talk about it, and it would be on top of our CapEx expectations. really leading into these opportunities if they're available. And I think it's a positive reflection of where we see the business.

Great. Thank you.

Thanks, Steve.

Our next question is from Cameron McVeigh of Morgan Stanley.

Hey, guys. This is Cameron for Ben. We'd be interested in which verticals in the U.S. have not fully recovered. And then as a follow-on, how early are 2022 bookings looking versus pre-COVID growth rates? Thanks.

Sure. I think both of those are U.S., so I'll take them. Thanks for the questions, Cameron. You know, on the verticals, we have seen good recovery, you know, pretty broadly, but lagging relative to historical norms would be areas like amusements, theatrical, and restaurants. But they're not lagging a ton, and particularly theatrical has really been bouncing back nicely and has a really strong pipeline of releases that bode well, and they're using the medium very effectively. Those would be the ones that I'd call out on kind of not fully recovered. As far as early 2022, you know, it's too early for us to give a full read on 2022. But what we're seeing right now in the early buying and the early bookings is that we're running nicely ahead of pre-pandemic times. So it looks like we are positioned for a strong 2022.

Great. Thanks.

Our next question is from Lance Vitanza of Cowen.

Hi. Thanks, guys, for taking the questions. I have one on U.S. and one on Europe. In the U.S., the digital at 33% of the billboard revenues is Could you remind me, what's the all-time high in that number, and when do you expect to get back to that, or if that is the all-time high, where do you think that this percentage goes in, say, three to five years? Is there a point in the future where half the business is digital, or how are you thinking about that?

Yeah, so Lance, I don't have at my fingertips the all-time high, but we'll follow up with you and get you that information. You were asking specifically about billboards. I think a third of revenue was about the all-time high in the U.S. for all digital across everything. I'm not 100% sure. It's in the ballpark of what our all-time high on billboards would have been, but I'm not sure if that's exactly the highest. So on the first part of your question, we'll follow up. The second part of the question in terms of where it could go, you know, this is, and I'm sure you get tired of hearing us talk about regulation and the regulatory constraints, but there are markets in the U.S. that are north of 50%. I think, you know, we've talked about the U.K. being north of 60% in terms of digital revenue. And I think the potential for the business is quite a bit higher than a third. But the path to get to it is going to require more cities embracing digital signage and us getting the ability to convert more universally. Because within our portfolio, I think this is, again, something I've mentioned before, we have markets that are at 0% digital, and we have markets that are in the mid-50s. So the range is – and then, of course, internationally it's even higher in the U.K. So, you know, I think it is going to be a long-term trend for us. I think we're going to see that number creep up over time, but it probably won't be a sudden move. It'll probably just be a steady move over the years to come.

That's helpful. Thanks. And then with respect to Europe, could you discuss in a little bit more detail the situation in France in particular? And I apologize, you probably called this out in the prepared remarks, but where did you come out versus 2019 in France? And is that business profitable today?

We don't break out the individual performances of the European markets. So I can't be specific on the the exact numbers, all I would say is that France is showing strong recovery along with most of our other major European markets. So we're certainly seeing a strong snapback in the French business and recovering very, very well. But we don't give individual performances for the individual European markets.

We're also going through the restructuring plan in Europe. Some of that would be in France as well. You should expect to see results from the restructuring plan starting now, 2022, but largely finished in 2023.

Thanks very much. Appreciate it. Thanks.

We'll take our next question from David Joyce of Barclays.

Thank you. First, I wanted to clarify something. It seems like the CapEx guidance for the year is a little bit below what you had previously discussed. Is that because of the tuck-ins that you just mentioned of the $20-25 million being a replacement use of cash? And then secondly, is there any way you can point to your digital revenue growth as taking a share from other media or share of ad budgets? Thank you.

David, I'll take the first one and then I'll flip it to Scott for the second piece of that. You're spot on. It does look like our CapEx guidance came down a little bit. And the way to think about that is when acquisitions are immaterial, which they have been largely over the past few quarters, it's easier just to kind of look at CapEx and you can kind of include that number in the CapEx guidance. We don't want to not talk about cash needs. But I think when you get to the level that we are at today, it's more appropriate to break it out. So in aggregate, I think we're still within or actually have increased the range for CapEx and acquisitions if you combine the two numbers. But since we broke out acquisitions, CapEx looked like it retracted a little bit. So you're thinking about it the right way. I think going forward, we're just going to break the two out. They are different. So that's probably the best way to handle it. And then, Scott, over to you for the digital question.

Yeah, I'm happy to take a crack at it for the U.S., and then William can weigh in if there are other aspects of it internationally. You know, it is always difficult to pin down in the aggregate ad budget flows. You get buried under anecdotes very quickly when you look at what goes on, but the couple things that I'd anchor on, and it's really specific to the programmatic space, the vast majority of our programmatic ad revenue is coming in via non-traditional agency partners. It's not predominantly coming from the agency partners and the agency divisions that buy out of home. As we grow programmatic, I do believe that that is a tangible way to think about us capturing more of the digital ad budget space. It's still small to a degree that you're not going to see percentage points moved in that, but I think it gives us a lot of headroom as we think about capturing those budgets. As I think about the conversations we're having with advertisers, The two primary things that we're having related to other media in terms of the role that we're playing is helping people diversify away from digital where they feel like they were overexposed pre-COVID and during COVID they got even more overexposed to digital display and search and so forth. And then the other place that I see us having dialogue about other media is around television. and, you know, us playing a role that linear TV used to play that, you know, of being able to have a broad reach. I don't know, William, if there are other aspects you'd call out from your perspective.

No, I mean, I think the direction of travel is exactly as Scott described it. Europe is a little bit behind the U.S. in terms of the development of programmatic platforms for out-of-home, but that is the That is the direction of travel, and that will enable us to, I think, be able to take more share from other digital platforms.

Great. Thank you very much. And once again, please press star 1 on your phone. We'll go next to Jim Goss of Barrington Research.

Thank you, and good luck, William. You've had a challenging period to manage through, so congratulations on that. Thank you. One question I have is I'm interested in the new advertisers that you've been able to secure. It's sort of a best-kept secret that's right in front of us. I'm wondering what is driving the new awareness and adoption, and maybe you could comment on that a little bit.

Sure. So I'll, again, take a first pass at it, and then, William, if I miss anything, you should definitely, definitely weigh in. You know, we're working on a number of fronts to bring in new advertisers. We have evolved our sales model to have people devoted to calling on large brands as well as calling on the strategy and planning parts of agencies in a way that we historically have not been arrayed. And so part of what's going on is that we're just covering the market better, and I think that continues to have upside for us, not just at the large advertiser end, but also at the small advertiser end of the spectrum. William talked about it as meeting advertisers where they are, and that has been a really important theme for us as we array our sales forces. So that's sort of the first part of it. The second part of it is that We are bringing to bear new capabilities that many people don't associate with out-of-home, particularly data and analytics, but also the ability to trade programmatically. And you put those two things together, you're having a very contemporary conversation with advertisers relative to what out-of-home was having five or six years ago. And so that is really what's making it possible. for us to bring in new advertisers in the category. We're able to do things like associate with app downloads, look at the impact of an out-of-home campaign on people downloading apps. We're able to look at prescription uptake as a result of out-of-home campaigns. The types of things we're able to measure and that we're able to do attribution are are much richer than they were just a couple years ago. and the advertisers are very focused on data and very focused on seeing ROI, and we're making it easier for them to do that. So those are the kind of things that are leading to us bringing new advertisers to the category.

Yeah, and the only thing I would add within Europe is we have been putting quite an effort into working with startups and encouraging startups, incentivizing startup companies to come into the medium and explore the the way in which, with a relatively low cost of entry into advertising, they can build brand awareness and drive activity through the use of our medium.

Okay. And you had just been mentioning data analytics and links to other media. Are these likely to remain sort of informal ties, or are there going to be formal relationships you're establishing to create those bonds?

When you say formal relationships, you mean with other media, or what do you mean?

Yes, with other media sellers.

No, you know, where this is happening, Jim, is it's happening in the data management platforms of the advertisers a lot of the time. Many of the advertisers have spent extraordinary amounts to build first-party data on their customers, and what we're enabling is the ability to associate out-of-home assets in analyses that they're doing with other media. So it is often the agency or the advertiser themselves that are doing those analytics. We're just enabling it by offering the feed of data on audiences that are exposed to Idaho.

Okay. And one last one, if I could. Could you comment on the impact on your airport business with the U.S. borders reopening? shape or scope of any recovery that you can draw attention to?

I mean, yeah, we were seeing, you know, that just happened yesterday. William was actually on the first BA flight that was generally open with the BA CEO on it. It was quite a celebration coming into JFK. But that has been something we've been aware of for six or eight weeks, You can see in our results that airports was having a good trajectory on their recovery already in Q3, and I'd just say that that trajectory has continued into Q4, and we're definitely seeing advertisers get excited about the fact that international travel is happening. It's probably a little early to declare that we're back on the international part of it, given that the first flight was just yesterday. The first flights, I should say, were just yesterday, but I would say it's a very encouraging development for sure.

All right. Thanks very much.

I'd be happy to return the call to management for concluding comments.

Great. Thank you very much, and thanks, everybody, for engaging with us this morning and for some excellent questions as ever. This has been the first time that got Brian and I being in a room together for earnings for 21 months. Scott just referenced the skies are opening, so it's been really good to be in the room together, and I hope you've noticed a seamless Q&A as we've been working together on this. And my final remarks, again, just to thank everybody for their support. You are in truly excellent hands with Scott leading the business and Brian continuing as CFO, it's a great leadership team that we have here. I am pleased to be able to announce as a kind of parting gesture that we will be issuing our first ESG report in the next few weeks, which pulls together all of the really excellent work that we do around environmental and social issues all around our global business. And that report will be available on our investor website within the next few weeks. And I commend it to you. It's quite an impressive record of all that we do. So with that said, I will say thank you very much indeed. Wish everybody all the very best. And we look forward to talking to you over the coming weeks and months.

Thanks. This does conclude today's conference. You may now disconnect your lines.

And everyone, have a great day.