OUTFRONT Media Inc.

Good afternoon. Thank you for attending today's Outfront Media Fourth Quarter 2025 Earnings Call. My name is Micaiah and I will be the moderator during today's call. All lines will be muted during the presentation portion of the call with an opportunity for your questions and answers at the end. At this time, I'd like to pass the call over to our host, Stephan B. Sun with Outfront. You may begin today's call.

Good afternoon and thank you for joining our 2025 Fourth Quarter Earnings Call. With me on the call today are CEO Nick Bryan and CFO Matthew Siegel. After a discussion of our financial results, we'll open the lines for a question and answer session. Our comments today will refer to the earnings release and slide presentation that you can find on the investor relations section of our website, outfront.com. After today's call has concluded, an audio archive replay will be there as well. This conference call may include forward-looking statements. Relevant factors that could cause actual results to differ materially from these forward-looking statements are listed in our earnings materials and in our SEC filings, including our 2024 Form 10-K, as well as our 2025 Form 10-K, which we expect to file tomorrow. We will refer to certain non-GAAP financial measures on this call. Any references made to OIBDA today will be made on an adjusted basis. Reconciliations of OIBDA and any other non-GAAP financial measures are in the appendix of the slide presentation, the earnings release, and on our website, which also includes presentations with prior period reconciliations. With that, let me hand the call over to Nick.

Thanks, Stefan. And good afternoon to all of those listening. We're pleased to be here sharing our fourth quarter results, as well as our 2026 outlook. As has become the custom, I would like to quickly highlight some of our accomplishments in 2025. It was a busy year that was full of change, but I'm happy to report we have made significant progress on the four strategic imperatives I laid out last May. First, we've made great strides on optimizing our sales strategy, primarily through a broad reorganization of our sales force. We've created distinct enterprise and commercial go-to-market teams, and ensure there's experienced leadership throughout your entire organization. To that end, we worked diligently to make sure that the key roles were filled by the best possible leader, whether they were found internally or externally. Second, we have made important progress in modernizing our workflow and processes. We have centralized many of our back office functions, as well as invested in better sales tools, such as Salesforce, and AWS. We will continue to invest in our technology and tools to further accelerate our growth and ROI as appropriate. The latest of these efforts was our investment and exclusive commercial arrangement in Adquick, a leading independent out-of-home planning platform which we announced earlier today. We believe this is the first step towards creating an environment in which our clients can harness the full potential and value of our products to simplify planning, buying, and measurement of their advertising campaigns. Third, we generated new demand from both existing clients and new logos. Importantly, much of this new demand was created within our transit business, accelerating revenues in the segment throughout the year. Most notable of all was our growth in the New York MTA, which was up nearly 20% for the year. And lastly, our teams have responded to our demands for operational excellence by rising to the occasion as illustrated by the fourth quarter and full year results we are reporting today, as well as the strong trends we have seen thus far in 2026. Turning to those results, we're pleased to report that we had a solid fourth quarter. You can see the headline numbers on slide three. Consolidated revenues were up 4.1%. and acceleration from Q3 3.5%, driven by 16% growth in transit and 1% growth in billboard, while consolidated EBITDA was up 12% to $174 million, and AFFO was up 8% to $130 million. Slide 4 shows our more detailed revenue results. Billboard revenues were up 0.5% due to higher demand, partially offset by our previously announced exits of two large marginally profitable billboard contracts, one in New York and the other in LA. As the revenues and expenses of these contracts are still included in our reported 2024 financial statements. Excluding the revenue generated by these contracts in 2024, billboard revenues would have grown 3.7%. Transit grew an impressive 16%. led by the New York MCA, which was up over 20% during the quarter, driven by strong performances within the finance, tech, and legal verticals. Slide 5 shows our detailed billboard revenue, which, as I mentioned earlier, was impacted by the two large billboard contracts we have exited. On a reported basis, static and other billboard revenues were up 1.1%. during the quarter and digital billboard revenues were down 0.6%. However, I believe it's important to note that excluding the results of the two large billboard contracts we exited from the comparable prior year period, digital revenues would have been up 6.7%. Slide six shows our detailed transit revenue, which grew nearly 16% during the quarter our digital transit revenues were up 37% to 73 million, while static transit revenues were down a little over 2%. The overall strength in our transit business was driven equally by our commercial and enterprise teams, which both continue to operate at an extremely high level. We are proud of the momentum we have driven within our transit business in the latter half of 2025, and I'm pleased to report that this strength continues into 2026 which I will discuss later. On a consolidated revenue basis, our stronger categories during the quarter were financial, legal, and tech. The weaker categories during the quarter were government political, retail, and auto, consistent with the broader advertising industry trends. Price 7 shows our combined digital revenue performance, which grew about 11% in the quarter and represented about 39% of total revenues. Even more impressive, excluding the aforementioned New York and L.A. contracts, digital revenues would have grown by over 16%. Programmatic and digital direct automated sales were up 11.3% during the period and represented 16.9% of our total digital revenues, up slightly from the same period last year. Moving on, the breakdown of enterprise and commercial revenues can be seen on slide 8. Commercial grew by almost 7% during the fourth quarter, with transit growing mid-teens and billboard up mid-single digits. Enterprise was up 1% year-on-year during the quarter, with mid-teens growth in transit being offset by a mid-single-digit decline in billboard revenues due to the impact of the LA contract exit. Slide 9 shows our billboard yield growth. which was up about 4% year-on-year to nearly $3,300 per month, driven primarily by our in-between management efforts. Summing up, we were pleased that we ended 2025 with strong and accelerating revenues. This positive momentum continues into 2026. With that, let me now hand it over to Matt to review the rest of our financials.

Thanks, Nick, and good afternoon, everyone. Please turn to slide 10 for a more detailed look at our billboard expenses. In total, billboard expenses were down about $3 million or 1.4% year over year. Zooming in on lease costs, these expenses were down $4.5 million or about 3.8% year over year. This decline includes approximately $9 million related to the large billboard contracts in New York and Los Angeles that we exited. which was partially offset by contractual escalators on fixed leases. Excluding the impact of the portfolio exits, billboard property lease expense would have been up about 4%. Posting, maintenance, and other expenses were down about $1 million, or 2.6%, due primarily to lower production expenses. SG&A expenses increased by about $2.3 million, or 3.5%, due to a higher provision for doubtful accounts higher professional fees, and higher travel and entertainment expenses. This nearly $3 million improvement in total billboard expenses, combined with the low single-digit revenue growth Nick described earlier, led to billboard-adjusted orbital increase in May over $5 million, with 3.4%. We are pleased to see billboard-adjusted orbital margin increase again, this time by 120 basis points year-over-year to 41.5%, helped by improved revenue performance, and recent portfolio management decisions. We expect billboard margins will continue to improve in 2026 relative to 2025. Now turning to transit on slide 11. In total, transit expenses are up about $6 million or a little over 6% year over year. Transit franchise expenses were up 4.7% due primarily to the annual inflation adjustment to the MAG for the MTA contract. Robert Marlayson, hosting maintenance and other expenses were up about half a million dollars. Robert Marlayson, or 2.8% be primarily the higher production expenses. Robert Marlayson, As genetic expenses are up about $2.6 million or 15% primarily due to hire professional fees. Robert Marlayson, The 6% increase in total transit expenses, combined with the nearly 16% transit revenue growth described earlier with the transit adjusted or improving by more than 56% during the quarter. to over $34 million. While on transit, I'd like to take a moment to update some of our expectations for the New York MTA in 2026. Our minimum annual payments to the MTA will step up by about 3% this year, approximately $161 million, given the New York City CPI escalator contained within the contract. Included in this $161 million is a final $11.7 million deferred minimum annual payment we will make to the MTA related to the 2020 MTA amendment during the pandemic and the associated MAG shortfall. Lastly, we will continue to account for our New York MTA franchise expense on a straight line basis throughout the year. Slide 12 shows the company's combined billboard transit and corporate adjustment order, but in the fourth quarter. Corporate expense declined by about $1 million due primarily to lower compensation related expenses Partial set by the impact of market fluctuations on an unfunded equity-linked retirement plan offered by the company to certain employees. Combined with the billboard and transit orbital I covered earlier, adjusted orbital totaled about $173 million, up 12% compared to last year. As in the third quarter, much of this increase is attributable to our improved performance within the New York MTA, as incremental revenue growth within this important franchise has extremely high margins. Turning to capital expenditures on slide 13, Q4 CapEx spend was about $25 million, including about $11 million of maintenance spent. We converted 26 new boards to digital in Q4 of 2025, bringing our total for the year to 103. For 2026, we expect to spend approximately $90 million of CapEx in line with our growing revenues and with much of this spend earmarked for digital development. We still expect 30 to $35 million of this total to be for maintenance. One quick note before turning to ASFO. Starting at the end of 2025, we modified our calculation of ASFO to include amortization of direct lease acquisition costs instead of cash paid for direct lease acquisition costs as we believe that this calculation of ASFO is a more appropriate measure of performance period over period and consistent with how we calculate funds from operations. This change has resulted in small adjustments less than $3 million on an annual basis for reported ASFO and prior periods, which have been recast to conform to this definition and can be found on slide 20 in the appendix of our earnings presentation. Now turn to slide 14. You can see the bridge to our Q4 ASFO of $130 million. The 8.3% improvement is principally driven by higher billboard and transit which was partially offset by higher maintenance CapEx. In 2026, we currently expect reported consolidated ASFO growth comfortably in the double-digit range, driven principally by improvement in Orbita. Included in this guidance is $145 million of cash interest, the aforementioned $30 to $35 million of maintenance CapEx, and $5 million of cash taxes. Please turn to slide 15 for an update on our balance sheet. The middle liquidity is nearly $750 million, including almost $100 million of cash, about $500 million available via Revolver, and $150 million available via our accounts receivable securitization facility. As of December 31st, our total net leverage was 4.7 times within our four to five times target range. We remain comfortable with our debt stack with our next maturity not until late 2027. Turning to our dividends, We announced today that our board of directors maintain the $0.30 cash dividend payable on March 31 to shareholders of record at the close of business on March 6. We spent approximately $3 million on acquisitions during the quarter, bringing our total for 2025 to just over $13 million. We remain interested in pursuing attractive tuck-in acquisitions within our footprint. Based on our current acquisition pipeline, we expect our 2026 billboard acquisition activity to remain at a similar level to those seen the last couple of years. With that, let me turn the call back to Nick. Thank you, Matt.

As I mentioned earlier, the strong top line trends we saw in the fourth quarter continue into the start of 2026. And from where we sit today, we expect first quarter revenue growth to accelerate from quarter four's results. The consolidated reported revenues up in the high single digits driven by high teens growth in transit and mid single digit growth in billboard. This guidance is impacted by two non-recurring items. First, a billboard condemnation that will contribute approximately $10 million to billboard revenues, which we expect to close at the end of March. And second, the headwind credit by our strategic decision to exit a marginally profitable billboard contract in LA. which contributed approximately 4.5 million in revenue in the first quarter of 2025. Taking into account these two items, we believe quarter one consolidated revenue growth would be in the mid to high single digit range based on our existing operations. Before closing, I'd like to take a moment to reflect on three statements I made on our earnings call at this time last year. First, I described Outfront as a differentiated organization that is distinct from the pack and has significant potential to unlock. Second, I said I was focused on amplifying the power of out-of-home and expanding our share of US ad spend. And third, that we would be accelerating our digital capabilities. Looking back on these statements today, I'm pleased with the progress we have made on all counts. First, As I mentioned at the top of the call, we've begun unlocking the potential we identified a year ago by making significant headway on our strategic imperatives of optimizing our sales strategy, modernizing our workflow and processes, generating new demand, and demanding excellence from our teams. Second, we are redefining the value of out-of-home, which has been historically undervalued by increasing involvement with a variety of different advertising groups industry associations and conferences to inspire today's marketeers on the power and unique value of IRL advertising and how it can drive superior business outcomes, especially during this time of AI-driven mistrust of the online advertising world. We are increasing the visibility of Outfront and the whole industry so that we will be at the forefront of marketeers' minds as they design their future advertising campaigns Prime enough to take a larger share of their omnichannel spend. And third, we've accelerated our digital capabilities by signing two new commercial agreements. One with Amazon Web Services, which will primarily serve the enterprise marketplace by connecting our inventory more efficiently into the whole code media buying centers. And second with Adquik, an all-in-one AI-powered technology platform that makes out-of-home advertising easier to plan, purchase, and measure, enabling a significantly more efficient buying process for all of our customers. By layering proprietary data and automation, AdQuik allows marketers to launch targeted, measurable out-of-home campaigns in minutes, not weeks, thereby unlocking potential new ad spend from those who found the medium too complex to purchase in the past. While it will take some time for each of these initiatives to fully ramp, we've already signed up clients to both. Most importantly, these partnerships represent the first real steps to modernizing the out-of-home planning and buying process for brands and agencies alike. To close, I want to stress that we are far from finished. Outfront's journey of growth and innovation from a legacy out-of-home company to a cutting-edge in-real-life marketing powerhouse has just begun. While we are encouraged by our results thus far, we're even more excited by the future ahead of us. And with that, operator, let's open up the lines for questions.

Thank you. At this time, we'll now begin today's question and answer session. If you would like to ask a question, please press star followed by 1 on your telephone keypad. We'll pause here briefly while our questions are registered. The first question comes from the line of Daniel Osley with Wells Fargo. You may begin.

Thanks. Just looking at the growth that you've continued to put up at the enterprise or national segment, are you starting to see a structural shift in the way large advertisers are engaging? And how do the measurement announcements with AdQuik and AWS tie in here? Thank you.

Daniel, I think, well, first of all, thank you for the question. I mean, these are both significant strategic agreements that we've set into that are entirely designed to unlock in the new revenue streams that we see both on the enterprise and the commercial side. The orientation of our partnership with AWS is to what we're calling Agency Connect to ensure that for all the whole codes who are increasingly having consolidated AI-enabled digital planning and buying systems, that our inventory and our data sets are completely integrated into that. We see AdQuik as being much more for the SMB and mid-market, because as we talked about a year ago when we talked about setting out the strategy, to be much more focused on how we would look at SMB, mid-market, and we would look at enterprise accounts as being strategic, And those enterprise players. So we're very excited about these initiatives that we've taken. These are established both AWS, of course, and AdQuik have been established in this space and working in a very diligent format. So we're very excited about what they represent.

The next question comes from the lawn of Cameron McVey with Morgan Stanley. You may begin.

Hi, thank you. I wanted to ask about your pacings on transit so far, maybe your visibility into the rest of the year. Curious if this might be the year we see MTA results above the MAG. And then, secondly, I noticed an AI-related billboard slide on your earnings deck. I was curious how much of an impact on growth the AI vertical is driving. Thanks.

Hey, Ken. It's Matt. Thanks for the question. I'll take the patient question on transit. Transit books relatively later than billboard. So while we While we feel great about the year, Nick talked about outlook for the first quarter might be premature to give any color on the second, third, and fourth quarter, but we still feel it's in great shape, really led by the MTA and your comment of maybe the MTA gets back above the mag. As you see when we talk about our accounting, we're still accounting for it on a straight line basis, so we don't anticipate that, but we don't think it's so far out of the realm that it's certainly possible in we're hoping that we trip that line.

Cameron, if I take the second part of your question about the AI campaigns, yeah, they're significant. If I look at the visibility within the transit world, I think about AI and SaaS, let's say the B2B sector, you know, we've got some exciting brand names there. We've got a big campaign we can't announce yet. It's just come through. We've got Anthropic, Code Rabbit, Profound, Crowdview, IBM, ClickUp, we've got a lot of the independent AI brands that are striving to ensure that they get that level of visibility both to customers and clients as well as their funding. So we're very bullish on it. We've got a dedicated team led by a leadership crew in San Francisco who are having direct engagement with some of the biggest conversations there. And it seems that our medium is something that they're really understanding as virtual and digital brands, they can be building their businesses and their recognition in real life. So we continue to see 2026 as being a, this has been a strong category for us.

Great. Thanks, Matt. Thanks, Nick.

The next question comes from the line of Jonathan Navarrete with TD Catwin. You may begin.

Hey, guys. Nice job on the quarter. My question is, with two months already into the year, can you maybe talk about how national is trending perhaps in the first quarter and then what you guys are seeing in the second half? And lastly, can you help us quantify the benefit that the World Cup, that you guys will have from the World Cup this year? Thank you.

Okay, I think, well, thank you, Jonathan. Thank you for the question. I think national, when we're talking about national You know, as I said, we tend to now focus on our categorization between enterprise and commercial. So these enterprise brands and national advertisers, they continue to be, you know, a very important part of our business. And we've really looked at some very strong brand names that are continuing to support us. You know, I think as we just talked about earlier on the AI and the SaaS side, I mean, some of the big enterprise players on the enterprise side of entertainment, when we think about all the big entertainment brands have been active. In beauty, we've had L'Oreal, that's a significant advertiser. Cat One in finance, DoorDash, eBay, even Duolingo, who did a very significant campaign with us that was going to surround Super Bowl and Bad Bunny's performance. So again, the enterprise team is combined of those who focus on the enterprise clients that abide through agencies, as well as business direct and brand direct conversations with our brand solutions team. And those are going extremely well. And then when we think about FIFA, yeah, we think of the World Cup, we're excited. It is, you know, this has been identified before. It's a tailwind. We're not yet giving out detailed numbers, but we have direct agreements. We've made with six of the host committee partnerships of six cities. LA, San Francisco, Atlanta, Dallas, Kansas City, Miami. And our level of enterprise revenue that's coming across from some of the significant brands is something we're tracking on a weekly basis. I mean, we've identified every one of the FIFA Priority Access sponsors to the obvious ones we think about, Coca-Cola, AB InBev, Unilever, Verizon, Telemundo, Lenovo, Lays. I mean, McDonald's, some of the biggest brands we know, and we're having conversations with every single one on a very frequent basis. And whether that's specials, whether that's going to be more standard inventory that we have, as well as some of the specific city agreements that we have to create unique advertising opportunities during the course of the festival. So we are going to be giving more detail on that on our second notice, on our next earnings call. But at this stage, we're feeling very, you know, we're excited about what FIFA and the World Cup represents.

Great. Thank you.

Thank you. The next question comes from the line of Patrick Shaw with Barrington Research. You may begin.

Hi, thanks for taking the question. I just have maybe a follow-up on CapEx, you know, beyond the maintenance CapEx guidance, the digital . Is there any, like, is that primarily digital boards, or are there other digital investments that would be included in that?

Thanks, Pat. It's Matt. So the CapEx, we try to keep it around 5% of our revenue, a little lower. T. With revenue growing we felt we can take it from 85 to $90 million this year maintenance capex will be about the same as as last year. T. So you have the the the increase will be all in growth and the men's primarily for digital conversions and new digital boards is an occasional replacement of a board that drives revenue growth, and then we have some spend. in some transit areas. We have residual contractual obligations. But most of the growth is really driving digital billboards.

Okay. And then maybe just to follow up on the AI and other tech ad spending commentary, on advertisers like Anthropic and other prediction markets, Is that group within tech, or is that kind of viewed similar to, I think, gambling a few years ago when that was ramping up in certain states? And I guess do you kind of see that as – is that not really meaningful, or do you see that as kind of different and potentially more sustainable?

Pat, I think we group all those within tech, but you point out a good point. A lot of interesting categories within tech – Uber, for example, is obviously a tech company, but it's also travel and transportation. But AI right now, I think we cover it in tech.

Okay. And then lastly, MTA, is there any sort of comp issue from the transition from MetroCorp with government advertising around that, or is that pretty much all informational board stuff?

Can you repeat that? I don't think we have any comp issues at all. The MTA is doing great. It had a strong second half of the year. It grew all through 2025, as Nick pointed out, rolling into the first quarter. If transit has growth for us, it's mostly coming from the MTA. I'm not sure if I answered the question entirely.

Yeah, no, just the transition from the Metro card to the one Metro New York.

No issues for us. Ridership continues to slowly melt higher. However, people are getting on the subway. Personally, I use credit cards. Some people use their phone. Metro cards are dead, but I think ridership is around 80, low 80% of where it was in 2019, slightly higher, and I don't think the Metro card change is impacting that at all.

Okay. Okay. Okay.

Yeah.

They did.

Somebody wasn't significant. They use their own medium for that. But, you know, we look at the ridership, you know, up 30% in 2022. I mean, the range is, as Matt said, between 80 and 85%. But, you know, we increased the stash in 25. We had over $1.3 billion trips in total. So, yeah. know we we continue to be excited and and as importantly you know that dedicated trans you know transit velocity team have been excellent on focusing uh not just on the advertising but on the relationship with the mta about the opportunities that they see to encourage uh more creativity and more innovation on their platform and on on their rolling stock uh it gives us the opportunity to continue to push the envelope with the advertisers who really want to stand out beyond doing a classic ad. So we continue to be very excited about MTA.

Okay. Thank you.

Thank you. The next question comes from the line of Alexi Filippov with JP Morgan. You may begin.

Yes, good evening. Thank you very much. Can you talk about your contract again? What revenue do you expect for 2026? So your 20% full-year growth that you disclosed, I think, implies around mid-20s growth for fourth quarter. Can you talk what is driving this strong momentum again? And the second question will be on A44 outlook for this year. Obviously, World Cup and strong momentum in New York MTA are two big tailwinds. Perhaps you could help understand between these two factors, what is more important for you to execute in order to achieve the double digit growth in ASFO4?

Thank you. I'll take the ASFO question first. Obviously, we feel very comfortable with the phrase we use with There's a few one-time things in 2026. As someone mentioned earlier, World Cup is going to benefit us. There is an election year, which we're not a big political player, but it's going to be helpful. As Nick mentioned, we have a sizable condemnation that's going to hit end of the first quarter. And then just continued strong growth in our regular way business transit continues to Rally and highlight and, you know, a lot of new initiatives, a lot of things are panning out. We really felt very bullish about our year. So I think the way we give guidance for ASFO, we think that's helpful. We give the details between ASFO and then EBITDA and I think that's, you can back into the EBITDA number and then make some assumptions around margin to fund a revenue number. We typically don't give full year revenue guidance. You know, at this time, that's not something we want to put out there in POET. We're happy to help you with your assumptions at a different time.

Yeah, and then, Alan, you had the question about the New York, the MTA contract. I think, as Matt shared in our comments, that we will see the MTA step up 3% to approximately 161 million this year. I'm not sure I understood what the rest of the question was.

Just a more broad layer about what is driving revenue growth. For the revenue growth...

yeah revenue growth again we haven't given that guidance but we feel uh very confident you can see the acceleration from the first quarter of 25 uh through as nick described into into 2026 um as uh ken pointed out before there is a chance um TAB, Mark McIntyre, Not not in our guns, but there's a chance that we clear the mag breakeven which is around $285 million that would imply. TAB, Mark McIntyre, Very strong double digit revenue growth for the mta but that's again not not what we're cutting you're just saying there's a chance of that.

TAB, Mark McIntyre, Thank you very much. Thank you. At this time, there are no registered questions waiting, so if you would like to re-queue and ask a question, please press star 1. We'll pause here briefly if any questions are registered. There are no registered questions waiting at this time. I'll now pass the call back over to Nicholas for any further closing remarks.

Well, thank you. We appreciate everyone dialing in today and to listen to our prepared remarks and also to our questions. We're certainly very excited and we know that we're going to see and meet many of you at various conferences and events over the coming weeks and months. But, you know, for those that we don't, we wish you well and we look forward to presenting our quarter one results to you in May. So thank you so much for joining us, and, yeah, best wishes.

Thank you all. At this time, this will now conclude today's conference call. We hope you have an amazing rest of your day, and you may now disconnect your lines.