Q1 2024 Clear Channel Outdoor Holdings Inc Earnings Call

Unknown Executive: Good morning, and thank you for joining our call. On the call today are Scott Wells, our CEO, and David Sailer, our CFO. They will provide an overview of the 2024 first quarter operating performance of Clear Channel Outdoor Holdings Inc. and Clear Channel International BV. We recommend you download the earnings presentation located in the financial section of our investor website and review the presentation during this call. After an introduction and a review of our results, we'll open the line for questions, and Justin Cochrane, CEO of Clear Channel UK and Europe, will join Scott and Dave during the Q&A portion of the call.

Good morning, and thank you for joining our call on the call today are Scott wells, our CEO and David Taylor, our CFO. They will provide an overview of the 2024 first quarter operating performance of clear channel Outdoor Holdings, Inc.

Clear channel International BV, we recommend you download the earnings presentation located in the financial section in our Investor website and review the presentation. During this call after an introduction and a review of our results well open the line for questions and Justin Cochrane CEO of clear channel U K and Europe.

Justin Cochrane: Well join Scott and Dave during the Q&A portion of the call before we begin I'd like to remind everyone that during this call we make.

Unknown Executive: Before we begin, I'd like to remind everyone that during this call, we may make forward-looking statements regarding the company, including statements about its future financial performance and its strategic goals. All forward-looking statements involve risks and uncertainties, and 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 our filings with the SEC.

Justin Cochrane: May make forward looking statements regarding the company, including statements about its future financial performance and its strategic goals.

Justin Cochrane: All forward looking statements involve risks and uncertainties and 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 risks contained in our earnings press release, and our filings with the SEC.

Justin Cochrane: During today's call. We will also refer to certain measures that do not confirm to generally accepted accounting principles. We provided schedules that reconcile these non-GAAP measures with our reported results on a GAAP basis as part of the earnings presentation.

Unknown Executive: During today's call, we will also refer to certain 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 the earnings presentation. Also, please note that the information provided on this call speaks only to management's views as of today, May 9, 2024, and may no longer be accurate at the time of a replay. Please turn to slide 4 in the earnings presentation, and I will now turn the call over to Scott.

Justin Cochrane: Also please note that the information provided on this call speaks only to management's views as of today may nine 2024 and may no longer be accurate at the time ever be play. Please turn to slide four in the earnings presentation, and I will now turn the call over to Scott.

Scott R. Wells: Good morning, everyone, and thank you for taking the time to join us today. We delivered consolidated revenue of $478 million for the first quarter, excluding movements in foreign exchange rates, reflecting a 9.3% increase as compared to the prior year. Many of the trends we saw in the fourth quarter continued into the first quarter. These results, which were in line with our guidance, reflect record first-quarter revenue for America, airports, and Europe North, excluding sold markets and movements in foreign exchange rates.

Scott R. Wells: Good morning, everyone and thank you for taking the time to join us today.

Scott R. Wells: We delivered consolidated revenue of $478 million for the first quarter.

Scott R. Wells: Excluding the movements in foreign exchange rates, reflecting a nine 3% increase as compared to the prior year.

Scott R. Wells: Any of the trends we saw in the fourth quarter continued into the first quarter.

Scott R. Wells: These results, which were in line with our guidance reflect record first quarter revenue for America airports in Europe, North excluding sold markets and movements in foreign exchange rates.

Scott R. Wells: We remain focused on delivering on our strategic plan, which is aimed at enhancing the profitability of our business, focusing on our higher-margin U.S. assets, and integrating the right technology into our platform to strengthen our ability to serve a broader range of advertisers. In our America segment during the first quarter, digital continued to grow, and print bounced back nicely, driven in large part by growth in our local sales channel, including secondary locations, which helped margins. Performance was broad-based across the majority of our market. Verticals that delivered the most growth include business services, amusements, and media entertainment.

Scott R. Wells: We remain focused on delivering on our strategic plan, which is aimed at enhancing the profitability of our business focusing on our higher margin U S assets and integrating the right technology into our platform to strengthen our ability to serve a broader range of advertisers.

Scott R. Wells: In our Americas segment during the first quarter digital continued to grow and print bounce back nicely driven in large part by growth in our local sales channel, including secondary locations, which helped margins.

Scott R. Wells: Performance was broad based across the majority of our market verticals.

Scott R. Wells: Verticals that delivered the most growth included business services Amusements and media Entertainment.

Scott R. Wells: We continue to develop ways we can proactively bring new national brands into the sector against a backdrop of mixed inbound demand. Our national sales team continues to generate incremental revenue in both PhRMA and CPG, and Programmatic is performing very well, delivering a double-digit increase in the first quarter, with very strong growth in the current quarter. Supporting our efforts, we'll continue to enhance our sales teams, including attracting sales professionals directly from the key verticals we're targeting. We believe this will have a positive impact and drive incremental revenue. Overall, we believe we're effectively playing offense in pursuing business across a number of channels.

Scott R. Wells: We continue to develop ways, we can proactively bring new national brands into the sector against the backdrop of mixed inbound demand our national sales team continues to generate incremental revenue in both pharma and CPG and programmatic is performing very well delivering a double digit increase in the first quarter.

Scott R. Wells: With very strong growth in the current quarter.

Scott R. Wells: Supporting our efforts, we're continuing to enhance our sales teams, including attracting sales professional or directly from the key verticals. We're targeting we believe this will have a positive impact and drive incremental revenue.

Scott R. Wells: Overall, we believe we're effectively playing offense and pursuing business across a number of channels.

Scott R. Wells: For example, our radar data solutions continue to bring innovation to the out-of-home marketplace, opening doors to new advertisers and verticals by providing previously unavailable insights to customers on how their out-of-home campaigns are performing. We are piloting a new approach where customers are starting to get weekly updates on campaign performance, initially around how Clear Channel's media is driving visits into restaurants. Regular delivery of campaign performance data is a critical step in moving us closer to the experience that advertisers expect from digital media.

Scott R. Wells: For example, our radar data solutions continued to bring innovation into the out of home marketplace opening doors to new advertisers and verticals by providing previously unavailable insights to customers on how their out of home campaigns are performing.

Scott R. Wells: We are piloting a new approach where customers are starting to get weekly updates on campaign performance initially around how clear channel's media is driving visits into restaurants and stores that advertising in our markets.

Scott R. Wells: Regular delivery of campaign performance data is a critical step in moving us closer to the experience that advertisers expect from digital media.

Scott R. Wells: We also continue to innovate around out-of-home impact on mobile app behaviors and how our media drives measurable performance. For example, we completed a study in Q1 for a mobile audio entertainment platform that demonstrated that younger consumers exposed to one brand's ads in our airports were more likely to try the app and were more deeply engaged with the app's content.

Scott R. Wells: We also continued to innovate around out of homes impact on mobile app behaviors and how our media drives measurable performance. For example, we completed a study in Q1 for our mobile audio entertainment platform that demonstrated that cut consumers exposed to one brands adds in our airports, we're more likely to try the app and we're more <unk>.

Scott R. Wells: Deeply engaged with the app's content.

Scott R. Wells: It's encouraging progress that reinforces the importance of leveraging data as a way of working with more digital marketers and accessing incremental budget. Turning to airports, our business remains robust, driven by continued strength across multiple verticals. We're leveraging the premium nature of our inventory to drive campaigns for major brands looking to connect with millions of travelers. We continue to invest in digital displays across our airports, including in the New York and New Jersey area.

Scott R. Wells: It's encouraging progress that reinforces the importance of leveraging data as a way of working with more digital marketers and accessing incremental budgets.

Scott R. Wells: Turning to airports our business remains robust.

Scott R. Wells: Given by continued strength across multiple verticals, we're leveraging the premium nature of our inventory to drive campaigns for major brands looking to connect with millions of travelers. We continue to invest in digital displays across our airports, including in the New York and New Jersey airports, we recently installed a mix of highly visible dynamic digital.

Scott R. Wells: We recently installed a mix of highly visible dynamic digital platforms that are providing us with additional premium inventory in these key high volume locations to sell, allowing us to take greater advantage of strong demand. Europe North is also continuing to deliver great results, with the second quarter on track to continue the strong momentum seen in the first quarter, as well as last year, with growth continuing in the largest markets, the UK, Sweden, and Belgium. The momentum in the second quarter has been buoyed by advertiser commitments around the European Football Championship.

Scott R. Wells: Forms that are providing us with additional premium inventory in these key high volume locations to sell allowing us to take greater advantage of strong demand.

Scott R. Wells: Europe North is also continuing to deliver great results with the second quarter on track to continue the strong momentum seen in the first quarter as well as last year.

Scott R. Wells: It's broke continuing in the largest markets the U K, Sweden and Belgium.

Scott R. Wells: The momentum in the second quarter Hasnt been buoyed by advertiser commitments around the European Football Championship. The continued strength in the business has been particularly impressive given the ongoing M&A efforts.

Scott R. Wells: The continued strength in the business has been particularly impressive given the ongoing M&A effort. Moving to our balance sheet, In March, we announced the refinancing of our term loan and the CCIBV notes that extended our 2025 and 2026 maturities and created flexibility supporting the M&A process in Europe. Dave will go through the details, but I do want to congratulate the team on successfully executing these transactions at what we consider favorable rates in a volatile market.

Scott R. Wells: Moving to our balance sheet.

Scott R. Wells: In March we announced the refinancing of our term loan and the CCI BB notes that extended our 'twenty 'twenty fives, and 'twenty 'twenty six maturities and create flexibility supporting the M&A process in Europe.

Scott R. Wells: Dave will go through the details, but I do want to congratulate the team on successfully executing these transactions at what we consider favorable rates in a volatile market.

Scott R. Wells: With regard to our guidance, Dave will also expand on the details later, but I want to highlight that we are confirming our full-year revenue guidance, which is expected to increase mid-single digits over last year, excluding movements and foreign exchange rates. So overall, we're pleased with our performance. In addition to benefiting from the overall growth of the economy, we're seeing positive impacts on various levels from our investments in digital, in our sales teams, in our new website, and, of course, in programmatic and data analytics.

Scott R. Wells: With regard to our guidance Dave will also expand on the details later, but I want to highlight we are confirming our full year revenue guidance, which is expected to increase mid single digits over last year, excluding movements in foreign exchange rates.

Scott R. Wells: So overall, we're pleased with our performance in addition to benefiting from the overall growth of the economy, we're seeing positive impacts on various levels from our investments in digital and our sales teams and our new website and of course in programmatic and data analytics.

Scott R. Wells: These initiatives all bode well for our longer-term growth profile. On the M&A front, we are in negotiations on the sale of our Europe North segment, and we continue to engage with potential counterparties in LATAM. We will update the market as and when we're able. With that, I'll hand the call over to Dave. As you may know, Dave was promoted to CFO on March 1st. He has made a seamless transition, and I look forward to a strong partnership with him as we move forward in executing our strategic plan.

Scott R. Wells: These initiatives all bode well for our longer term growth profile.

Scott R. Wells: On the M&A front, we are in negotiations on the sale of our Europe North segment, and we continue to engage with potential counterparties in Latam, we will update the market as and when we're able.

Scott R. Wells: With that let me hand, the call over to Dave as you May know, Dave was promoted to CFO on March one he has made a seamless transition and I look forward to a strong partnership with him as we move forward in executing our strategic plan.

David Sailer: Thanks, Scott. Good morning, everyone.

Dave: Thanks, Scott Good morning, everyone I've appreciated the support all the teams have provided me as I transitioned into this new role.

David Sailer: I've appreciated the support all the teams have provided me as I transitioned into this new role. Please see slide 5 for an overview of our results. As a reminder, Eurocell is included in discontinued operations. Additionally, during our discussion of GAAP results, I'll also talk about our results excluding movements in foreign exchange rates, a non-GAAP measure. We believe this provides greater comparability when evaluating our performance.

Dave: Please see slide five for an overview of our results as a reminder, Europe South is included in discontinued operations. Additionally, during our discussion of GAAP results. I'll also talk about our results excluding movements in foreign exchange rates a non-GAAP measure. We believe this provides greater comparability when evaluating our.

Dave: Our performance.

Dave: Direct operating expenses and SG&A expenses include restructuring and other costs are excluded from adjusted EBITDA segment adjusted EBITDA.

David Sailer: Direct operating expenses and SG&A expenses include restructuring and other costs that are excluded from adjusted EBITDA and segment adjusted EBITDA. The amounts I refer to are for the first quarter of 2024, and the percent changes are for the first quarter of 2024 compared to the first quarter of 2023, unless otherwise noted. Now on to the first quarter reported results. Consolidated revenue for the quarter was $482 million, a 10.1% increase. Excluding movements and foreign exchange rates, consolidated revenue for the quarter was $478 million, up 9.3%. Loss from continuing operations was $89 million, an improvement as compared to the prior year. The consolidated net loss, which includes the loss from discontinued operations, was also $89 million.

Scott R. Wells: Mounts I referred you are for the first quarter of 'twenty 'twenty four and the percent changes our first quarter 2024 compared to the first quarter of 2023, unless otherwise noted.

Scott R. Wells: Now onto the first quarter reported results.

Scott R. Wells: Consolidated revenue for the quarter was 482 million at 10, 1% increase excluding movements in foreign exchange rates consolidated revenue for the quarter was 478 million up nine 3%.

Scott R. Wells: Loss from continuing operations was 89 million an improvement as compared to the prior year.

Scott R. Wells: Consolidated net loss, which includes the loss from discontinued operations was also $89 million.

David Sailer: Adjusted EBITDA was $97 million, up 53.6%. Excluding movements and foreign exchange rates, adjusted EBITDA was up 53%. The increase is largely driven by America and airports.

Scott R. Wells: Adjusted EBITDA was $97 million up 53, 6% excluding movements in foreign exchange rates adjusted EBITDA was up 53%.

Scott R. Wells: The increase is largely driven by America and airports.

David Sailer: AFFO was negative 16 million in the first quarter, an improvement of 62.6%. Excluding movements in foreign exchange rates, AFFO was up 61.6%. On to slide six for the Americas segment for first quarter results.

Scott R. Wells: S F O was negative $16 million in the first quarter, an improvement of 62.6% excluding movements in foreign exchange rates a F. F O was up 61, 6%.

David Sailer: American revenue was $250 million, up 5.8%, reflecting increased revenue in all regions; billboard revenue was higher driven by increased demand and digital deployments with growth both in print and digital bulletin. Digital revenue, which accounted for 33.7% of American revenue, was up 7.9% to $84 million. National sales, which accounted for 34.5% of America revenue, were up 5.5%. Local sales accounted for 65.5% of American revenue and were up 6%. Direct operating and SG&A expenses were flat for 2023 at $155 million. Higher compensation costs largely driven by increased headcount and pay increases were offset by lower credit loss expenses. Site lease expense was down slightly, driven by the renegotiation of an existing contract.

Scott R. Wells: Onto slide six for the Americas segment for first quarter results.

Scott R. Wells: America revenue was $250 million up 5.8%, reflecting increased revenue in all regions. Billboard revenue was higher driven by increased demand in digital deployments with growth both in print and digital bulletins.

Scott R. Wells: Digital revenue, which accounted for 33, 7% of America revenue was up seven 9% to $84 million.

Scott R. Wells: National sales, which accounted for 34.5% of America revenue were up 5.5% local sales accounted for 65.5% of America revenue and were up 6%.

Scott R. Wells: Direct operating and SG&A expenses were flat with 2023 at $155 million.

Scott R. Wells: Higher compensation costs, largely driven by increased head count and pay increases were offset by lower credit loss expense.

Scott R. Wells: Site lease expense was down slightly driven by the renegotiation of an existing contract.

David Sailer: Segment-adjusted EBITDA was $95 million, up 17.3%, with a segment-adjusted EBITDA margin of 38.2%, an improvement over the prior year. The improvement in segment-adjusted EBITDA margin was driven by the strong revenue performance in addition to the lower credit loss expense and favorable revenue. Please see slide 7 for a review of the first quarter results for Air Force.

Scott R. Wells: Segment, adjusted EBITDA was 95 million up 17.3% with a segment adjusted EBITDA margin of 38, 2% an improvement over the prior year the improvement in segment adjusted EBITDA margin was driven by the strong revenue performance. In addition to the lower credit loss expense.

Scott R. Wells: Favorable revenue mix. Please see slide seven for a review of the first quarter results for airports.

David Sailer: Airports revenue was $77 million, up 43%, with strong demand across the portfolio. Digital revenue, which accounted for 55.4% of airport revenue, was up 44.1% to $43 million. National sales, which accounted for 55.2% of airport revenue, were up 25.5%. Local sales accounted for 44.8% of airport revenue and were up 72.8%.

Scott R. Wells: Airports revenue was $77 million up 43% with strong demand across the portfolio.

Scott R. Wells: Digital revenue, which accounted for 55, 4% of airports, where revenue was up 44.1% to $43 million.

Scott R. Wells: National sales, which accounted for 55, 2% of airports revenue were up 25, 5% local sales accounted for 44.8% of airports revenue and were up 72, 8%.

David Sailer: Direct operating and SG&A expenses were up 21.9% to $58 million. The increase is primarily due to a 21.4% increase in site lease expense to $44 million, driven by higher revenue and an increase in compensation costs largely driven by higher sales. Segment-adjusted EBITDA was $19 million, up 204.6%, with a segment-adjusted EBITDA margin of 24.8%. The improvement in the segment-adjusted EBITDA margin is driven in large part by the increase in revenue in the quarter. Now on to slide 8.

Scott R. Wells: Direct operating and SG&A expenses were up 21, 9% to $58 million. The increase is primarily due to a 21, 4% increase in site lease expense to $44 million driven by higher revenue and an increase in compensation costs, largely driven by higher sales commissions.

Scott R. Wells: Segment, adjusted EBITDA was $19 million up 204.6% with a segment adjusted EBITDA margin of 24, 8% the.

Scott R. Wells: The improvement in the segment adjusted EBITDA margin is driven in large part by the increase in revenue in the quarter.

David Sailer: For a review of our performance in Europe North, my commentary on Europe North is based on results that have been adjusted to exclude movements in foreign exchange rates. Europe North revenue increased 5.9% to $136 million due to higher revenue in the UK, Sweden, and Belgium driven by increased demand and digital deployment, partially offset by the loss of a transit contract in Norway. Digital accounted for 52.4% of Europe North's total revenue and was up 9.1% to $71 million.

Scott R. Wells: Onto slide eight for a review of our performance in Europe, North My commentary on Europe, North is on results that had been adjusted to exclude movements in foreign exchange rates.

Scott R. Wells: Europe, North revenue increased five 9% to 136 million due to higher revenue in the U K, Sweden, and Belgium, driven by increased demand in digital deployments, partially offset by the loss of a transit contract in Norway.

Scott R. Wells: Digital accounted for 52, 4% of Europe noticed total revenue and was up nine 1% to $71 million.

David Sailer: Europe North direct operating and SG&A expenses were down slightly to $121 million due to a decrease in site lease expense, which was down 5.8% to $53 million driven by the contract loss in Norway. This was partially offset by higher compensation costs. Europe North segment-adjusted EBITDA was up 92.5% to $14 million, and the segment-adjusted EBITDA margin was 10.1%, an improvement over the prior year. The first quarter historically has the lowest segment-adjusted EBITDA, resulting in margins being more sensitive to fluctuations in revenue and contract mix.

Scott R. Wells: Europe, North direct operating and SG&A expenses were down slightly to $121 million due to a decrease in site lease expense, which was down five 8% to 53 million driven by the contract loss in Norway.

Scott R. Wells: This was partially offset by higher compensation costs.

Scott R. Wells: Europe North segment, adjusted EBITDA was up 92, 5% to $14 million and the segment adjusted EBITDA margin was 10, 1% an improvement over the prior year.

Scott R. Wells: The first quarter historically has the lowest segment adjusted EBITDA, resulting in margins being more sensitive to fluctuations in revenue and contract mix.

David Sailer: Moving on to CCI BV, or CCI BV, an indirect wholly-owned subsidiary of the company and the borrower under the CCI BV term loan facility, includes the operations of our Europe North and Europe South segments, as well as Singapore, which is included in Other.

Scott R. Wells: Moving onto CCI BV on slide nine clear channel International BV or CCI D V. An indirect wholly owned subsidiary of the company and the borrower under the CCI BV term loan facility includes the operations of our Europe, North and Europe, South segments as well as Singapore.

David Sailer: The financial results of Singapore have historically been immaterial to the results of CCI BV, and revenue and expenses for this business were further reduced in the first quarter of 2024 due to the loss of a contract. As the current and former businesses in Europe's South segment are considered discontinued operations, the results of these businesses are reported as a separate component of consolidated results in the CCI BV consolidated statement for all periods presented and are excluded from the discussion below.

Scott R. Wells: Which is included in other.

Scott R. Wells: The financial results of Singapore have historically been immaterial to the results of CCI BV and revenue and expenses for this business were further reduced in the first quarter of 2024 due to the loss of a contract.

Scott R. Wells: As the current and former businesses in Europe, South segment are considered discontinued operations. The results of these businesses are reported as a separate component of consolidated results and the CCI BV consolidated statement for all periods presented and are excluded from the discussion below.

David Sailer: CCI BV's results from continuing operations for the first quarter of 2024 as compared to the same period of 2023 are as follows. CCI BV revenue increased 3.8% to $140 million from $134 million. Excluding the $3 million impact of movements in FX, CCI BV revenue increased 1.4% as higher revenue from our Europe North segment, as I just mentioned, was partially offset by the loss of a contract in Singapore. CCI BV's operating loss was $7 million compared to an operating loss of $18 million in the same period of 2023.

Scott R. Wells: C C. I B V results from continuing operations for the first quarter of 2024 as compared to the same period of 2023 are as follows.

Scott R. Wells: CCI BV revenue increased three 8% to $140 million from $134 million <unk>.

Scott R. Wells: Excluding the 3 million impact of movements in FX CCI D V revenue increased 1.4% as higher revenue from our Europe North segment as I, just mentioned was partially offset by the loss of a contract in Singapore.

Scott R. Wells: C C I b, the operating loss was $7 million compared to the operating loss of $18 million in the same period of 2023.

David Sailer: Now moving to slide 10, End Hour Review of Capital Expenditures. CapEx totaled $24 million in the first quarter, a decrease of $9 million over the prior year due to the timing of CapEx spend in both America and airports. Now on to slide 11.

Scott R. Wells: Now moving to slide 10, and our review of capital expenditures Capex totaled 24 million in the first quarter, a decrease of $9 million over the prior year due to timing of Capex spend in both America and airports.

Scott R. Wells: Now onto slide 11.

David Sailer: During the first quarter, cash and cash equivalents decreased by $58 million to $193 million, primarily as a result of $127 million in cash interest payments, which included an additional $48 million in payments due to timing. Specifically, the cash paid for interest during the first quarter increased $55 million compared to the same period in the prior year. Approximately $48 million of this increase is related to the timing of interest paid early as a result of the debt refinancing transactions in March 2024 and the payment of the first semi-annual interest payment on the CCOH 9% senior secured notes issued in August 2023. The remaining increase is due to higher interest rates on the term loan facility.

Scott R. Wells: During the first quarter cash and cash equivalents decreased by 58 million to $193 million, primarily as a result of a $127 million in cash interest payments, which included an additional $48 million in payments due to timing.

Scott R. Wells: Specifically the cash paid for interest during the first quarter increased 55 million compared to the same period in the prior year approximately 48 million of this increase is related to the timing of interest paid early as a result of the debt refinancing transactions in March 2024, and the payment of the first semi annual.

Scott R. Wells: Interest payment on the C. C O H, 9% senior secured notes issued in August 2023.

Scott R. Wells: The remaining increase is due to higher interest rates on the term loan facility.

David Sailer: Our liquidity was $389 million as of March 31, 2024, down $97 million compared to liquidity at the end of the fourth quarter due to a decline in cash and cash equivalents, as well as a decrease in the availability under the receivable-based credit facility due to lower net receivables at the end of the quarter. Our debt was $5.7 billion as of March 31st, 2024, a slight increase compared to December 31st, 2023 due to the refinancing in March.

Scott R. Wells: Our liquidity was $389 million as of March 31, 2024 down 97 million compared to liquidity at the end of the fourth quarter due to the decline in cash and cash equivalents as well as the decrease in the availability under the receivable base credit facility due to lower net.

Scott R. Wells: <unk> at the end of the quarter.

Scott R. Wells: Our debt was $5 7 billion as of March 31, 2024, a slight increase compared to December 31, 2023 due to the refinancing in March.

David Sailer: As Scott mentioned, we successfully executed debt transactions with favorable terms during the quarter that improved our balance sheet by deferring our near-term maturities and reducing our anticipated cash interest payments in 2024 by approximately $18 million as a result of the refinancing. On March 18, 2024, we issued $865 million aggregate principal amount of 7.875% senior secured notes due 2030 and used a portion of the proceeds therefrom to prepay $835 million of borrowings outstanding under our term loan facility.

Scott R. Wells: As Scott mentioned, we successfully executed that transactions with favorable terms during the quarter that improved our balance sheet by deferring, our near term maturities and reducing our anticipated cash interest payments in 2024 by approximately $18 million as a result of the refinancings.

Scott R. Wells: On March 18, 2024, we issued 865 million aggregate principal amount of 7.8, 75% senior secured notes due 2030 and used a portion of the proceeds therefrom to prepay $835 million of borrowings outstanding under our term loan facility.

Scott R. Wells: At the same time, we amended our senior secured credit agreement to among other things refinance the $425 million remaining principal balance on the term loan facility and to extend its maturity date from 2026 2028.

David Sailer: At the same time, we amended our senior secured credit agreement to, among other things, refinance the $425 million remaining principal balance on the term loan facility and extend its maturity date from 2026 to 2028. On March 22nd, 2024, CCI BV entered into a credit agreement comprising two tranches of term loans totaling an aggregate principal amount of $375 million, which mature in 2027, and used the proceeds therefrom to redeem all of the outstanding CCI BV 6.625% senior security notes due 2025.

Scott R. Wells: On March 22nd 2020 for CCI BV entered into a credit agreement comprising two tranches of term loan totaling an aggregate principal amount of $375 million, which mature in 2027 and used the proceeds therefrom to redeem all of the outstanding CCI BV.

Scott R. Wells: <unk>, 6.625% senior secured notes due 2025.

Scott R. Wells: Our weighted average cost of debt was seven 4% a slight improvement over year end.

David Sailer: Our weighted average cost of debt was 7.4%, a slight improvement over year-end. As of March 31st, 2024, our first lien leverage ratio was 5.38 times, an improvement over year-end. The credit agreement covenant threshold is 7.1 times.

Scott R. Wells: As of March 31, 2024, our first lien leverage ratio was 5.38 times, an improvement over a year and the credit agreement Covenant threshold is seven one times.

David Sailer: Now on to slide 12 and our guidance for the second quarter and the full year 2024. All consolidated guidance and Europe-North guidance excludes movements in foreign exchange rates, with the exception of capital expenditures and cash interest. For the second quarter, we believe our consolidated revenue will be between $547 million and $572 million, representing a 3% to 8% increase over the second quarter of 2023. We expect America revenue to be between $290 and $300 million, and airport revenue is expected to be between $82 and $87 million.

Scott R. Wells: Now onto slide 12, and our guidance for the second quarter and the full year 2024.

Scott R. Wells: <unk> consolidated guidance in Europe, North guidance excludes movements in foreign exchange rates with the exception of capital expenditures and cash interest payments for.

Scott R. Wells: For the second quarter, we believe our consolidated revenue will be between 547, and 572 million, representing a 3% to 8% increase over the second quarter of 2023.

Scott R. Wells: We expect America revenue to be between 290 and $300 million in airports revenue is expected to be between 82 and $87 million.

David Sailer: Your North revenue is expected to be between $155 and $165 million. Moving on to our full year guidance, we are confirming the full year guidance for revenue, adjusted EBITDA, and CapEx provided in February. Cash interest payments, loss from continuing operations, and AFFO have been revised to reflect the recent refinancings and other updated information.

Scott R. Wells: Europe, North revenue is expected to be between 155 and $165 million.

Scott R. Wells: We expect consolidated revenue to be between $2.2 and $2.26 billion, representing a 3% to 6% increase over 2023. America revenue is expected to be between $1.135 and $1.165 billion. Airport revenue is expected to be between $345 and $360 million. Your north revenue is expected to be between $635 and $655 million. On a consolidated basis, we expect adjusted EBITDA to be between $550 and $585 million. AFFO guidance is $80 to $105 million.

Scott R. Wells: Moving onto our full year guidance.

Scott R. Wells: Yes.

Scott R. Wells: We are confirming the full year guidance for revenue adjusted EBITDA and Capex provided in February.

Scott R. Wells: Cash interest payments loss from continuing operations and a F. F O have been revised to reflect the recent refinancings and other updated information.

Scott R. Wells: We expect consolidated revenue to be between 2.2, and $2, two 6 billion, representing a 3% to 6% increase over 2023.

Scott R. Wells: America revenue is expected to be between 1.135 and 1.165 billion.

Scott R. Wells: Airports revenue is expected to be between 345 and $360 million.

Scott R. Wells: Europe, North revenue is expected to be between 635 and $655 million.

Scott R. Wells: On a consolidated basis, we expect adjusted EBITDA to be between 550 and $585 million.

Scott R. Wells: F O guidance is $80 million to $105 million.

Scott R. Wells: Capital expenditures are expected to be in the range of $130 and $150 million with a continued focus on investing in our digital footprint in the U.S. Additionally, we anticipate having cash interest payment obligations of $436 million in 2024 and $425 million in 2025. The expected increase in cash interest payments in 2024 compared to the prior year is largely due to differences in the timing of interest payments. We expect $93 million of cash interest to be paid in the second quarter. This guidance assumes that we do not refinance or incur additional debt. And now, let me turn the call back to Scott.

Scott R. Wells: Capital expenditures are expected to be in the range of 130 and $150 million with a continued focus on investing in our digital footprint in the U S.

Scott R. Wells: Additionally, we anticipate having cash interest payment obligations of $436 million in 2024 and $425 million in 2025 the expected.

Scott R. Wells: The increase in cash interest payments in 2024 compared to the prior year is largely due to differences in the timing of interest payments, we expect $93 million of cash interest to be paid in the second quarter.

Scott R. Wells: This guidance assumes that we do not inked refinance or incur additional debt.

Scott R. Wells: And now let me turn the call back to Scott.

Scott R. Wells: Thanks, Dave.

Scott R. Wells: To recap, we're positive about the trends we're seeing in our business and our team's disciplined focus on executing our plan. Our performance is broad-based across the portfolio, and our outlook remains positive. In the U.S., we're making good progress in leveraging the investments we're making to modernize our platform and expand the range of advertisers we can serve. At the same time, we remain committed to streamlining our organization with a focus on our Americas and airports segments.

Scott R. Wells: To recap we're positive about the trends, we're seeing in our business and our teams disciplined focus on executing our plan.

Scott R. Wells: Our performance is broad based across the portfolio and our outlook remains positive.

Scott R. Wells: In the U S. We're making good progress in leveraging the investments, we're making to modernize our platform and expand the range of advertisers we can serve at.

Scott R. Wells: At the same time, we remain committed to streamlining our organization with a focus on our America and airports segments.

Scott R. Wells: Summing up, with our operating progress and the refinancings, we've reduced exposure to rate hikes, retained optionality to hedge down or refinance as rates move down, and created room for adjusted EBITDA growth by moving our maturities out. And if you take our full-year AFFO guidance and include our discretionary CAPEX, we expect to be close to positive cash flow in 2024. It looks like pretty good progress from our point of view.

Scott R. Wells: Summing up with our operating progress and the refinancings, we've reduced exposure to rate hikes retained optionality to hedge down or refinance as rates move down and created room for adjusted EBITDA growth by moving our maturities out.

Scott R. Wells: And if you take our full year <unk> guidance and include our discretionary Capex, we expect to be close to positive cash flow in 2024, it looks like pretty good progress from our point of view.

Unknown Executive: Many thanks to our company-wide team for their ongoing contributions as we pursue growth this year. Now, let me turn over the call to the operator, and Justin Cochrane will join us on the call. Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question today, please press star 1 on your telephone keypad, and a confirmation tone will indicate your line is in the question queue.

Speaker Change: Many thanks to our companywide team for their ongoing contributions as we pursue growth this year and now let me turn over the call to the operator, and Justin Cochran will join us on the call.

Unknown Executive: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question today, please press star 1 on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to withdraw your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the start key.

Justin Cochrane: Thank you.

Unknown Executive: Thank you, and one moment for our first question. The first question today comes from the line of Cameron McVeigh with Morgan Stanley. I'm pleased to see you with your questions.

Speaker Change: At this time, we'll be conducting a question and answer session if.

Operator: If you'd like to ask a question today. Please press star one from your telephone keypad, a confirmation tone will indicate your line is in the question queue.

Speaker Change: Press Star two if he like to withdraw your question from the queue.

Justin Cochrane: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Scott R. Wells: Thanks, Cameron. Yeah, I mean, I think there's a lot of things going on. And it's always hard to bridge with a competitor where, you know, we don't know exactly how they calculate the numbers and how they choose to report them. I think, as we've said, and I do think this is pretty consistent, what we call national is tied to the biggest agencies and the business placed by the biggest agencies.

Scott R. Wells: One moment for our first question.

Scott R. Wells: The first question today comes from the line of Cameron Mcknight with Morgan Stanley. Please proceed with your questions.

Cameron Alan McVeigh: Hey, guys. Thank you.

Cameron Alan McVeigh: Scott I thought it was interesting your Americas performance and.

Cameron Alan McVeigh: National and local versus some of your peers.

Cameron Alan McVeigh: I was hoping you could discuss maybe in your view why there is a divergence and any other color on your view of the current state of the AD market.

Speaker Change: And then secondly.

Speaker Change: How would you suggest we think about <unk> growth beyond 2024. Thank you.

Speaker Change: Thanks Cameron.

Scott R. Wells: That's how we got at the metric. And as we look at it, I mean, I think you can see a couple things just in our numbers. If you look at America versus airports, you know, national grew five times as much in airports as it did in America in the roadside business. And I think that speaks to the challenge of thinking of national as like a as a singular thing.

Scott R. Wells: So it's a it's a hard number to compare. I do think we have some things flowing through there that are probably different, particularly related to the pharma vertical. I think we are having success in that and are blazing the trail in that, and that we probably don't have our competitors probably don't have as much of that flowing through. I don't I don't have. I think probably the only other thing I'd call out that's tangible is, you may recall from Q1 last year, we had a pretty rough Q1 last year. And that was at least partly because of challenges in California, particularly in northern California.

Speaker Change: <unk> that are probably differential particularly related to the pharma vertical I think we are having success in that and are blazing the trail in that and that.

Speaker Change: We probably don't have our competitors, probably don't have as much of that flowing through.

Speaker Change: I don't I don't have I think probably the only other thing I'd call out that's tangible.

Speaker Change: Is.

Speaker Change: You may recall from Q1 last year, we had a pretty rough Q1 last year and that was at least partly because of challenges in California, particularly in northern California, and that has stabilized and started to move in the other direction I wont say that its fully where it needs to be.

Scott R. Wells: And that has stabilized and started to move in the other direction. I won't say that it's fully where it needs to be, but it's in a significantly better place than last year.

Scott R. Wells: And I think that that probably colors those numbers as well. Those would be the things that I would pick off. I don't know, Dave, if there's anything that that jumps to your mind? No, no, I think that covers it. And then do you want to take the AFO? Yeah, when

Speaker Change: But it's at a significantly better place than last year, and I think that that probably colors those numbers as well those would be the things that I would pick off I don't know, Dave if there's anything that jumps to your mind no I think that covers it and then do you want to take the ortho yeah, when you're thinking about <unk> as we're moving forward.

David Sailer: Yeah, when you're thinking about AFFO, you know, as we're moving forward, the components of AFFO, when you think about our interest and what we did in the month of March, which I was very pleased with, with the, you know, pushing out of our maturities for our notes that we're doing 25 and 26, and they were pushed out to 2027, 2028, and some of the term loan was pushed out to 2030 But from an AFFO standpoint, I feel like a lot of components of interest maintenance capital will, you know, should be pretty similar to where we are this year. I think the growth in our EBITDA is really going to drive our EFFO higher as we get into next year. Yeah, Cameron, you had asked about that.

Dave: The components of <unk>, when you think about our interest and what we did.

Dave: The month of March, which I was very pleased with with the the pushing out of our maturities for our notes that were due in 'twenty five and 26 and they were pushed out to 2027 2028 and in some of the term loan was pushed out to 2030 with the notes that we issued but from an <unk> standpoint, I feel like a lot of the components interest.

Dave: <unk>.

Dave: Maintenance capital will it should be pretty similar to where we are this year I think the growth in our EBITDA is really going to drive our <unk> higher as we as we get into next year.

Scott R. Wells: Yeah, Cameron, you asked about the general ad market. I'm sorry, I left that one out in my opening, trying to bridge to numbers that I don't know what I'm bridging from.

Speaker Change: Yes, Cameron you had asked about the general AD market I'm, sorry, I left that one off in my in my opening trying to bridge to numbers that I don't know what a bridging from.

Scott R. Wells: So just in terms of the ad market, I think I'd characterize it as the local market remains strong and pretty broad-based: business services, amusement. You know, really a number of retail, a number of verticals doing really well in that space, you know, in national entertainment, you know, media is picking up. I think tech is picking up. So I think there are a number of things moving in the right direction.

Speaker Change: So just in terms of the AD market.

Speaker Change: I think I'd characterize it as the local market remained strong and and pretty broad based.

Speaker Change: Business services amusements.

Speaker Change: Really a number of.

Speaker Change: Retail a number of verticals doing doing really well in that space.

Speaker Change: In National Entertainment.

Speaker Change: It is picking up.

Speaker Change: Media media is picking up.

Speaker Change: Thank teck is picking up.

Speaker Change: So I think there are a number there are a number of things.

Speaker Change: Moving in the right direction, we had hoped to see more activity in auto insurance. This year and that has not come together. So far there have been a lot of conversations but no.

Scott R. Wells: You know, we had hoped to see more activity in auto insurance this year, and that has not come together so far. There have been a lot of conversations, but no significant orders. You know, I think the broader health care, set aside pharma, the broader health care space, which is partly local, partly national, but a lot of cross-market, a lot of kind of regional health care, that hasn't been great. So, you know, it's a mixed market.

Speaker Change: Significant no significant orders.

Speaker Change: I think the broader health care set aside pharma the broader health care space.

Speaker Change: Which is partly local partly national.

Speaker Change: But a lot of cross market a lot of kind of regional health care.

Speaker Change: It hasnt been great.

Scott R. Wells: I mean, we're trying to characterize it down the middle of the fairway here and not get too excited about the relative Q1 performance and trying to focus on bringing in incremental business as the year goes on. So I think that's kind of the best snapshot I can give you at this point. Hopefully, that helps. Definitely. Thank you both. Thanks, Cameron. Our next question is from the line of Daniel Osley with Wells Fargo.

Speaker Change: So you know it's a it's a mixed market I mean, we're trying to characterize it.

Speaker Change: Down the middle of the fairway here and not not get over.

Speaker Change: Excited about the relative to Q1 performance.

Speaker Change: And trying to focus on bringing in incremental business as the year goes on so.

Speaker Change: I think that's that's kind of the best snapshot I can give you at this point hopefully that helps.

Speaker Change: Definitely thank you both.

Speaker Change: Thanks Kim.

Unknown Executive: Our next question is from the line of Daniel Osley with Wells Fargo. Please proceed with your question.

Speaker Change: Our next question is from the line of Daniel Osley with Wells Fargo, Let's see with your question.

Daniel Osley: Thank you.

Daniel Osley: So we are impressed with margins across segments in the quarter. We were also surprised that shrink didn't flow through to full year EBITDA range were there any timing related factors that impacted the quarter and can you help us to generally impacts of the margin puts and takes between sales build outside of Houston location the contract losses.

Speaker Change: Hi.

Scott R. Wells: So why don't I hit on part of this, and then I'll have Dave add in some of the detail on margins. You know, when we do our annual guidance, we have pretty good visibility into where Q1 is going to come in. And so, um, I mean, I'm intrigued.

Speaker Change: So why don't I hit on part of this and then I'll have Dave.

Dave: Add in some of the detail on on margins.

Speaker Change: When we when we do our annual guidance.

Dave: We have pretty good visibility to where Q1 is going to it's going to come in and so I mean, I'm intrigued I'm intrigued with I think I think the core issue here is just that particularly in Europe and to a degree in airports Q1 is always such a small part.

Scott R. Wells: I'm intrigued with, uh, I think the core issue here is just that, particularly in Europe and, and to a degree in airports, Q1 is always such a small part of the annual number that the percentages can get pretty gaudy pretty quickly. Last year, in airports, in particular, that worked against us. This year it worked in favor of us and, you know, international business also worked in favor of us.

Dave: The annual number that the percentages can get pretty gaudy pretty quickly last year and airports in particular that worked against US. This year. It worked in favor of US and international also worked in favor of us.

Scott R. Wells: So, I guess what I'd tell you is we had pretty good visibility into where Q1 was going to be when we guided, and so there wasn't a sense on our side of needing to up the guide at this point. This was not particularly surprising from where we sat as we looked at the full year. I don't know, Dave, if you want to talk about the puts and takes part of the question.

Dave: I.

Dave: I guess, what I would tell you is we had pretty good visibility to where Q1 was going to be when we guided and so there wasn't a sense on our side.

Dave: Of needing to up the guide.

Dave: At this point that this was not particularly surprising from where we sat.

Speaker Change: As we looked at the full year I don't know, Dave If you want to talk about the puts and takes part of the question, yes, absolutely and when I think about the guidance from a revenue standpoint, we were within our guide in Q1, but Q1 as Scott mentioned is it's a smaller EBITDA amount in each of our segments. So if you get a couple of ones.

David Sailer: Yeah, absolutely, and when I think about the guidance from a revenue standpoint, we were within our guide in Q1, but Q1, as Scott mentioned, is a smaller EBITDA amount in each of our segments. So, if you get a couple one-timers going each way or a little bit of favorability, it is going to have a bigger impact on your margins in the first quarter as opposed to Q2 through Q4. If I kind of unpack it by segment, for America, we were up 6%. The first quarter of 2023 wasn't the strongest, and I'd probably say the biggest impact is when we have growth of 6% and expenses are rising, roughly flat because of a credit loss. We had savings money there.

Dave: <unk> going each way or a little bit of favorability. If it is going to have a bigger impact on your margins in the first quarter as opposed to the Q2 through Q4, and I kind of unpack it by segment from.

Speaker Change: From an American for America, we were up 6%.

Speaker Change: First quarter of 2023 wasn't the strongest and I'd, probably say the biggest impact is when we had we have growth of 6% and expenses are.

David Sailer: We had some bad debt in the first quarter of last year that obviously didn't repeat in the first quarter of this year for America, and collections were actually very strong. That's probably driving that increase. Airports are different.

Speaker Change: Our roughly flat because of a credit loss and we had savings there. We had we had some bad debt in the first quarter of last year that obviously didn't repeat in the first quarter of this year for America and collections were actually very strong that's probably driving that increase airports is different we had a tough first quarter in 2002.

David Sailer: We had our tough first quarter in 2023, and for 2024, we were up 43%, and we continue to get COVID site lease relief, very similar to what we got last year in the first quarter. When you have that incremental revenue growth, that's really going to have a big impact on your margins. When you think about airports going forward, because I know this question will come up, the margins will be elevated in 2024, similar to 2023 because COVID relief is still going to trickle in. We're not 100% sure what quarters will fall in, but we do expect to get some. We always talk about our airport business as if it's a high-teens business.

Speaker Change: 23, <unk> for 2024, we were up 43% and were continually to get.

Speaker Change: Covid site lease relief very similar to what we got last year in the first quarter. So when you have that incremental revenue growth, that's really going to have a big impact on your margins and when you think about airports going forward because I know this question will come out the margins will be elevated in 2024 similar to 2023 because slightly.

Speaker Change: <unk> is still going to trickle in.

Speaker Change: We're not 100% sure what quarters will fall in but we do expect to get some so we always talk about our airports business that it is a high teens business as revenue grows youre going to get to the higher teens, maybe many up to about 20%, but this year, you'll be higher just because of the relief you're getting and for Europe, nor their E.

David Sailer: As revenue grows, you're going to get to the higher teens, maybe up to about 20%, but this year, you'll be higher just because of the relief you're getting. For Europe North, their EBITDA is smaller in the first quarter, you know, but they obviously grow throughout the year, and each quarter gets stronger. But with 7 million at EBITDA in the first quarter of 2023, they had very good, you know, top-line growth

Speaker Change: EBITDA.

Speaker Change: It's smaller than the first quarter, you know that <unk> growth throughout the year and each quarter gets stronger.

Speaker Change: <unk> 7 million of EBITDA in the first quarter of 2023, they had very good top line growth.

Speaker Change: We spoke about earlier last contract in Norway. So when Youre site lease goes down and their expenses are roughly flat and they have topline growth, that's really what's driving that margin impact, especially because the numbers are small it is going to be definitely a little bit higher.

David Sailer: We spoke about earlier, you know, lost contracts in Norway. So when your site lease goes down, and their expenses, you know, are roughly flat, and they have, you know, top line growth, that's really what's driving that margin impact, especially because the numbers are small. It's going to be, you know, definitely a little bit higher.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Thank you.

Unknown Executive: Our next question is from the line of Avi Steiner with J.P. Morgan. I'm pleased to see you with your question.

Speaker Change: Our next question is from the line of Avi Steiner with Jpmorgan. Please proceed with your questions.

Unknown Executive: Thank you very much. I've got a couple here. One, just given the markets you're in, and I think, Scott, you may have touched on this, but I'm curious how you think about the media and entertainment category, particularly as we kind of move to the second half of the year and we kind of lose some of the impact of strikes and some other issues, and then I've got a couple more.

Avraham Steiner: Thank you very much I've got a couple here one.

Avraham Steiner: Just given the markets you're in and I think Scott you may have touched on this but I'm curious how you think about that.

Avraham Steiner: Media and entertainment category.

Avraham Steiner: Particularly as we kind of move to the second half of the year and we kind of lap some impact of strikes and some other issues.

Speaker Change: And then I've got a couple more thank you.

Scott R. Wells: Yeah, I mean, media and entertainment obviously slowed us down in Q4. It was doing kind of okay in Q1, and that was off of, you know, not great comps in Q1 of 23. That was before the strikes, but it just, you know, that had not been a particularly strong quarter. And I think as it builds, we're going to see it, you know, continue to continue to perform. There's nothing that we're hearing that suggests, um, a lot of softness there, but or a lot of what's the right word?

Scott R. Wells: Yeah, I mean, I think media and entertainment obviously.

Avraham Steiner: Slowed us down in in Q4.

Avraham Steiner: It was.

Avraham Steiner: Doing kind of okay in Q1 and that was off of.

Avraham Steiner: Not great comps in Q1 of 'twenty three that was before the strikes, but it just you know that that had not been a particularly.

Avraham Steiner: Strong quarter.

Avraham Steiner: And I think as it as it builds I think we're going to see it.

Avraham Steiner: Continue to continue to perform.

Avraham Steiner: There's nothing that we're hearing that suggests.

Avraham Steiner: A lot of softness there but.

Avraham Steiner: Or a lot of.

Avraham Steiner: What's the what's the right word it is.

Scott R. Wells: It is, So you don't you don't have the streaming wars going on right now. You know, that was a high point in media and entertainment time. So it's not going to be as vibrant as in that era, but without the strikes going in with a pretty good release schedule, the movie part of media and entertainment looks like it should be solid through the year. I think the streaming content and television parts of it are a little more idiosyncratic, and you kind of have to go company by company and look at the book of product that each of those companies has. And so you're gonna have puts and takes within that, but I think it'll be a growth category for us this year. That would be top line, how I'd characterize it.

Avraham Steiner: So you don't you don't have the streaming wars going on right now that was a high point in media and entertainment.

Avraham Steiner: <unk>, so it's not going to be as vibrant as as that era.

Avraham Steiner: But without the strikes going in with a pretty good release schedule.

Avraham Steiner: You know the the.

Avraham Steiner: The movie part of media and entertainment looks like it should be solid through the through the year I think the streaming content and TV parts of it are a little more idiosyncratic and you kind of have to get company by company and.

Avraham Steiner: <unk>.

Avraham Steiner: The book.

Avraham Steiner: A product that each of those companies have.

Avraham Steiner: And so youre going to have you're going to have puts and takes within that but I think it'll be a growth category for us this year Avi.

Avraham Steiner: B topline how I'd characterize it.

Scott R. Wells: And then, just on Europe North, even with some puts and takes, it seems to be performing quite well. I think you made some comments in the opening about some buoyancy there, and I'm just curious how that backdrop might be impacting the process you're going through there, if at all, and how you think about those assets.

Avraham Steiner: I appreciate that and then just on Europe, north even with some puts and takes it seems to be performing quite well.

Avraham Steiner: I think you made some comments in the opening.

Avraham Steiner: About some buoyancy, there and I'm just curious how that backdrop might be impacting the process you're going through there if at all.

Speaker Change: And how you think about those assets and then I have one more and thank you.

Scott R. Wells: Yeah, I mean, I think I would not look at near-term or short-term performance as a direct factor in how things sort out. If anything, it supports the dialogue. It makes the perceived value of the assets to us go up every time that the performance goes up. And so that's a factor that comes into play.

Avraham Steiner: Yeah.

Avraham Steiner: I would not look at near term or short term performance.

Avraham Steiner: Being a direct factor in in how things sort out if anything it supports the it supports the dialogue.

Avraham Steiner: It makes the perceived value of the assets to US go up every time that the performance goes up and so that's a.

Scott R. Wells: But we've been real clear that our intention is to become a U.S.-focused business. So the fact that it's performing well, and I'm extrapolating from your question a little bit, Avi, the things you've asked me in times past, it hasn't at all in any way changed our intention on that. And as I said in the opening script comments, we are in negotiations with a buyer at this point, and I'm not going to go into any more detail on that in case anyone else wants to ask about that one.

Avraham Steiner: The factor that the that that comes into play, but we've been real clear that our intention is to become a U S focused business. So the fact that it's performing well I'm extrapolating from your question a little bit Avi the things you've asked me in times past it hasnt at all in any way changed our intention on that.

Scott R. Wells: That's what you're getting, but the process is progressing. I think strong performance supports that as we work through it, but it's not going to change the answer or the viewpoint on what our portfolio should look like downstream. You know what? That's a great point.

Avraham Steiner: And as I said in the in the opening script comments, we are in negotiations with with a buyer.

Avraham Steiner: At the point and I am not going to go into any more detail on that in case anyone else wants to ask on that one that that's what you're getting.

Avraham Steiner: But the.

Avraham Steiner: The process is progressing I think you know <unk>.

Avraham Steiner: <unk> performance supports that.

Avraham Steiner: As we work through it but it's not it's not going to change the the answer or the viewpoint on what our portfolio should look like downstream.

Unknown Executive: You know what? That's a great place for me to leave it. I'll turn it over. Thank you very much for your time, everybody.

Speaker Change: You know what that's a great place for me to leave and I'll turn it over thank you very much for the time everyone.

Speaker Change: Thanks Avi.

Unknown Executive: Our next questions are from the line of Lance Vitanza with TD Cowan. Please proceed with your question.

Speaker Change: Our next questions are from the line of Lance Vitanza with TD Cowen. Please proceed with your question.

Unknown Executive: Hi, thanks for taking the questions, and a great quarter. The Norway contract loss that you called out in the prepared remarks, could you give us just a little bit more detail? I mean, I know that this asset is ultimately going away, but I'm just curious about what this contract was for. You know, who did you lose it to? Had the contract been profitable? Did you let the contract go, or was this a disappointing loss for you? And, maybe most importantly, does it impact your ability to sell Norway one way or the other?

Lance William Vitanza: Hi, Thanks for taking my questions and great quarter.

Unknown Executive: Thanks.

Lance William Vitanza: The Norway contract loss that you called out in the prepared.

Lance William Vitanza: Paired remarks could you give us just a little bit more detail I mean, I know that this asset is ultimately going away, but I'm. Just curious what was this contract you know who do you lose it too had the contract been profitable did you did you let the contract go or was this a disappointing loss for you and then maybe most importantly does it impact your ability to sell.

Speaker Change: Norway, one way or the other thanks.

Unknown Executive: So I'm going to ask Justin to comment on Norway and on that particular contract.

Speaker Change: So I'm going to ask Justin to.

Justin: To opine on on Norway on that particular contract.

Justin: Yeah sure. Thanks, Scott. So this was a this is a transit contracts are centered around the Oslo Metro.

Justin Cochrane: So it was a relatively big contract for us, with a relatively low margin. But we lost it in a public tender. It's always the case with a contract; you're only willing to bid the level to which you're willing to bid to make it worthwhile doing it. We bid at a level that we were very happy with. We didn't win the contract. It was won by JCDecaux. And we then move on to our plan B and continue to grow the business. So, like I said, it was a lower-margin contract. We have plans to replace it with smaller, higher-margin contracts, and those plans are going well.

Justin: So it was a relatively big contract for us relatively low margin, we lost it in a in a public tender.

Justin: It's always the case for the contract you'll you'll be only willing to bid the level to which you are willing to pay to make it worthwhile doing it we bid to the level that we were very happy with we didn't win the contract. The contract was won by JC Decaux.

Justin: And we then move on to a plan B and continue to grow the business. So like I said it was a low margin contract we have plans to replace it with with a smaller higher margin contracts and those plans are going well.

Unknown Executive: Great, thanks. And then, Scott, you talked quite a bit about Hollywood, but the Bay Area and Silicon Valley, I think, have also been a particular soft spot for advertisers as of late, but likely recovering or, you know, how far back is your business in that region? Is it 80% back? Or is it 90% back? And if you could distinguish between what you saw in the first quarter and then what you're seeing today as we sit here in May, if there's been any additional change. Thanks. Yeah, I mean,

Speaker Change: Great. Thanks, and then Scott you talked quite a bit about Hollywood, but the bay area and Silicon Valley I think it also then a particular.

Speaker Change: Soft spot for for advertisers as of late but but likely recovering or.

Scott R. Wells: How far back is your business in that region is it is it 80% back is it 90% back end and if you could distinguish between what you saw in the first quarter and then what Youre seeing today as we sit here in May if theres been any additional change thanks.

Scott R. Wells: Yeah, I mean, we have a really enormous footprint in the Bay Area, you know, all the way from Silicon Valley up through San Francisco into Oakland, and then into the surrounding areas. And I tell you that.

Speaker Change: Yeah I mean.

Scott R. Wells: We have we have a really enormous footprint over the bay area all the way from Silke.

Scott R. Wells: Silicon Valley up through San Francisco into Oakland.

Scott R. Wells: And then into the into the surrounds.

Scott R. Wells: And I would tell you that.

Scott R. Wells: When you talk about percent back, it's been, it's been a little bit. I mean, throughout its history, San Francisco has been a boom and bust city. And it busted hard during COVID, but it actually came back, and it really boomed when it came back. And it came back very strong in 21 and 22, until the latter part of 22.

Scott R. Wells: When you talk about percent back.

Scott R. Wells: It's been it's been a little bit I mean throughout its history, San Francisco has been a boom and bust city and it busted hard and Covid, but it actually came back and it really boomed when it came back and it came back very strong in 'twenty, one and 'twenty two.

Scott R. Wells: Until the latter part of 'twenty, two and then you started having the whole narrative about downtown San Francisco, and homelessness, and lawlessness and shoplifting in retailers, leaving and all those kinds of things.

Scott R. Wells: And then you started having the whole narrative about downtown San Francisco and homelessness and lawlessness and shoplifting and retailers leaving and all those kind of things that kind of came out in late 22 into early 23. And, you know, the city has done a number of things since then, including a number of ballot initiatives, passing, increasing policing and working to, you know, get streets cleaned up. I think that to characterize it as like a percentage back is hard for me to do because it is not anywhere near its full potential right now.

Scott R. Wells: Came out in late 'twenty two into early 'twenty three.

Scott R. Wells: And.

Scott R. Wells: The city has done a number of things since then including a number of ballot initiatives passing.

Scott R. Wells: Increasing policing and working to.

Scott R. Wells: Get get streets cleaned up.

Scott R. Wells: I think that to characterize it as like a percentage back its hard for me to do because it is not anywhere near its full potential right now, but it is it's.

Scott R. Wells: It's back to growing and it's moving in the it's moving in the right direction.

Scott R. Wells: But it is, you know, growing, and it's moving in the right direction. And I would tell you that tech, in particular, that vertical in the city is coming back very nicely, and that we're definitely seeing positivity from out of that market, but I think it's going to be a little while still before national advertisers decide that they want to weigh in.

Scott R. Wells: And I would tell you that tech.

Scott R. Wells: In particular that vertical in the city is coming back.

Scott R. Wells: Very nicely and that we're definitely seeing positivity for.

Scott R. Wells: From out of that market, but I think it's going to be a little while still till national advertisers decide that they that they want to weigh in and national advertisers have always been an important part of the media mix there.

Scott R. Wells: And national advertisers have always been an important part of the media mix there. I mean, it's a really interesting dynamic, because if you think about where a lot of our street furniture assets are in the city, which are some of the assets that have been hit hardest, the neighborhoods in San Francisco are actually doing incredibly well. The like main streets in Noe Valley or in the marina or you know, Cow's Hollow, the various neighborhoods.

Scott R. Wells: I mean, it's really it's a really interesting dynamic because if you think about where a lot of art like street furniture assets are in the city, which are some of the assets that have been hit hardest.

Scott R. Wells: The neighborhoods in San Francisco are actually doing incredibly well.

Scott R. Wells: Like main streets in Noe valley or in the Marina or.

Scott R. Wells: Cal hollow the various the various neighborhoods neighborhoods are doing really really well, where there's a perceived softness in there. There's some actual softness although I'd go to San Francisco a couple of times every year and I would tell you. It is considerably better now than it was two years ago. So I feel good about the trend line that the cities on I feel.

Scott R. Wells: Neighborhoods are doing really, really well where there's a perceived softness and there's some actual softness. I go to San Francisco a couple of times every year, and I'd tell you it is considerably better now than it was two years ago. So I feel good about the trend line that the city's on. I feel good that our team, you know, our local team in particular, has really stepped up and is taking on the challenge of covering for those national advertisers not being as vibrant there. And, you know, I think we see good things ahead for San Francisco.

Scott R. Wells: I feel good that our team our local team in particular has really stepped up.

Scott R. Wells: And is taking on the challenge of <unk>.

Scott R. Wells: <unk>.

Scott R. Wells: For those national advertisers not being as vibrant there and.

Scott R. Wells: I think I think we see we see good things ahead for San Francisco.

Speaker Change: Great. Thanks, so much.

Speaker Change: Thanks Lance.

Unknown Executive: Our next questions are from the line of Aaron Watts with Deutsche Bank. Please proceed with your question.

Speaker Change: Our next questions are from the line of Aaron Watts with Deutsche Bank. Please proceed with your question.

Unknown Executive: Everyone, thanks for having me on. One follow-up on the national ad performance, which obviously was quite good in the quarter. I'm curious, Scott, your view on the recent introduction of several ad-supported streaming offerings providing more targeted video inventory. Do you see that as a potential headwind at all for your business here in the U.S.?

Aaron Lee Watts: Everyone. Thanks for having me on one follow up on the National AD performance, which obviously was quite good in the quarter I'm curious Scott your view on the recent introduction of several AD supported streaming offerings, providing more targeted video inventory do you see that as a potential had waned at all for your business here.

Aaron Lee Watts: U S.

Scott R. Wells: You know, I don't think so. And part of why I don't think so is because I think they're, you know, an enormous threat to linear TV, and linear TV is struggling. I think what they might do is they might prevent us participating in, you know, the transition of advertisers out of linear TV as much as we might otherwise. So I guess in that regard, it is, is a bit of a challenge.

Scott R. Wells: You know I don't I don't think so and part of why I don't think so is because I think there an enormous threat to linear TV and linear TV is struggling.

Scott R. Wells: I think what they might do as they might prevent us participating in.

Aaron Lee Watts: The transition of advertisers out of linear TV as much as we might have otherwise.

Aaron Lee Watts: So I guess in that in that regard.

Scott R. Wells: But overall, I don't think that they are a particular threat to us. I think they just speak to, and it's one of the real frustrations in the US because, that linear TV transition in the rest of the world, it's true in LATAM, it's true in Europe, we are seeing money coming out of linear TV and going on to our assets in international markets to a degree that we are not seeing it as much here.

Aaron Lee Watts: It is it is a bit of a challenge but overall.

Aaron Lee Watts: I don't think that there.

Aaron Lee Watts: A particular threat aimed us I think they just speak to and it's one of the real frustration in the U S. Because.

Aaron Lee Watts: That linear TV transition and the rest of the world. It's true in Latam, It's true in Europe.

Aaron Lee Watts: We are seeing money coming out of linear TV and going on to our assets and in international markets.

Scott R. Wells: We're seeing some here, but the magnitude of it in international markets is much higher, and it's a lot of the same brands. And so it's just interesting that brands gravitate toward out-of-home more in other markets than in the US. Some of it is that they do like the street furniture asset that's a little closer to the point of sale. But when we look at it analytically, the impact of the roadside is similar to what the impact of street furniture is for many use cases.

Aaron Lee Watts: To a degree that we are not seeing it as much here, we're seeing some here, but the magnitude of it.

Aaron Lee Watts: In international markets is much higher and it's a lot of the same brands and so it's just interesting that the brand's gravitate to out of home.

Aaron Lee Watts: More in in other other markets than the U S. Some of it is they do like the street furniture assets, that's a little closer to point of sale.

Aaron Lee Watts: But when we look at at it analytically the impact of the roadside is similar to what the impact of street furniture is for many use cases so.

Aaron Lee Watts: It's a little bit of a head scratcher to us that more of that linear TV money doesn't come.

Scott R. Wells: So it's a little bit of a head-scratcher to us that more of that linear TV money doesn't come here in the US, but that's the dynamic. So I don't think it's a huge threat, and it is, in some ways, an opportunity because they are promoting these ad-served businesses on our signs. So there's an opportunity in that too.

Aaron Lee Watts: Here in the U S but.

Aaron Lee Watts: That's the dynamic so I don't think it's a huge threat.

Aaron Lee Watts: And it is in some ways an opportunity because they are promoting these add add served businesses on our signs so.

Aaron Lee Watts: There.

Aaron Lee Watts: There's opportunity in there too.

Unknown Executive: That's a helpful perspective. If I could ask one last question, just on the capital structure. You've highlighted all the work you've done to extend maturities. You've got a clear runway for the next couple years. Given the current rate environment, do you take a pause on that front now? And then, relatedly, any other levers aside from growth in the business that we should be thinking about over the near-term horizon to accelerate the deleveraging process?

Speaker Change: That's a that's helpful perspective, if I could ask one last question just around the capital structure, you've highlighted all the work you've done to extend out maturities you've got a clear runway for the next couple of years.

Aaron Lee Watts: Given the current rate environment do you take a pause on that front now and then relatedly any other lever aside from growth in the business that we should be thinking about over the near term horizon to accelerate the deleveraging process.

David Sailer: From what you're saying, as we pushed out the maturities there, we're obviously extremely pleased with what went on in the month of March, pushing out BB Notes to 2027, which would obviously be tied to the process that we're running overseas in Europe that Scott mentioned earlier. But look, we're always going to monitor the market, and we saw that opportunity in March, and we went for it, and I think it was very successful from our standpoint. Whatever rates have honestly gone since that point in time, the opportunity is not there.

Aaron Lee Watts: Okay.

Aaron Lee Watts: From what Youre, saying as we pushed out the maturities that were obviously extremely pleased with what went on in the month of March pushing out.

Aaron Lee Watts: BB notes 2027, which obviously would be tied to the process that were running overseas in Europe that Scott mentioned earlier.

Aaron Lee Watts: Look we're always going to monitor the market and we saw that opportunity.

Aaron Lee Watts: In March and we went for it and I think it was very successful from our standpoint.

Aaron Lee Watts: Where rates have honestly have gone since that point in time.

Aaron Lee Watts: The opportunity is not there, but look we will monitor the market. If there is an opportunity to lower our cost of debt well, obviously, we'll look at it.

David Sailer: But look, we will monitor the market. If there's an opportunity to lower our cost of debt, well, obviously, we'll look at it, but the economics have to be compelling. When you're thinking about deleveraging, yeah, obviously pushing out our maturities, 2027 into 2028, that really gives us that runway from an EBITDA standpoint to really grow the business. And as we go through the process in Europe, and as those proceeds come out, some of those proceeds will obviously go to the BB Notes or the BB Term Loan as it is today.

Aaron Lee Watts: And Omics happy compelling when youre thinking about deleveraging, yeah, obviously pushing out our maturities.

Aaron Lee Watts: 2027 into 2028 that really gives us that runway for them from an EBITDA standpoint to really grow the business.

Aaron Lee Watts: And as we go through the process in Europe and as.

Aaron Lee Watts: Those proceeds come out some of those proceeds will obviously go to the BBB notes term loan as it is today.

David Sailer: And then the remaining proceeds can be used, we have 18 months to reinvest in the business, either through CapEx or acquisitions. So I think there'll be options at that point in time to take a look at it. Yeah. And I think to the other part of your question, I think that's a really good point.

Aaron Lee Watts: And then the remaining proceeds can be we have 18 months to kind of reinvest in the business either through capex or acquisitions. So I think there'll be options at that point in time to kind of take a look at it yeah and I think to the to the other part of your question of what to look for.

Scott R. Wells: Yeah, and I think to the other part of your question of what to look for, you know, I think we've been pretty clear that we've had a lot of our kind of structuring and deal creativity focused on Europe and on international divestitures for the last couple of years. As we successfully work our way through those processes, that capacity will become available to us in the U.S., and there's a lot of interest in this sector and a lot of different ideas that come our way.

Aaron Lee Watts: I think we've been pretty clear that we've had.

Aaron Lee Watts: A lot of our kind of structuring and deal creativity focused on on Europe and on the international divestitures.

Aaron Lee Watts: For the last couple of years as we successfully work our way through those processes.

Aaron Lee Watts: That that capacity will become available to us in the U S and.

Aaron Lee Watts: There's a lot of interest in this sector and a lot of a lot of different ideas that are that come our way and I think as we simplify and clarify the business our ability to do something creative is good but I'm not going to direct you as to what that creative thing might be because.

Scott R. Wells: And I think as we simplify and clarify the business, our ability to do something creative is good. But I'm not going to direct you as to what that creative thing might be, because, as you are very well aware, the variety of things that we could do is broad. And you should just expect that the creative energy that we've been expending to position ourselves for the divestitures we've been working on is energy that we'll be able to deploy to work on structuring things here in the U.S. downstream.

Aaron Lee Watts: As you are very well aware that a variety of things that we could do is broad and.

Aaron Lee Watts: You should just expect that the creative energy that we have been expanding to position ourselves for the.

Aaron Lee Watts: The divestitures, we've been working on is energy that will be able to deploy on working on structuring things here in the U S downstream.

Speaker Change: Alright, Thanks, Scott Thanks, Dave.

Unknown Executive: Our next question comes from David Kamofsky with J.P. Morgan. Please proceed with your questions.

Speaker Change: Our next question comes from the line of David <unk> with Jpmorgan. Please proceed with your questions.

Unknown Executive: All right, thank you. This is Ted on behalf of David.

Speaker Change: Alright. Thank you this is Ted on for David.

Speaker Change: I have two questions. The first is on the 2024.

Unknown Executive: I have two questions. The first is on the 2024 AFFO guide. Just wanted to ask about the source of the upside there relative to keeping revenue and EBITDA the same. Is that primarily from Q1 flowing through to the full

Speaker Change: <unk> guide.

Ted: Just wanted to ask about the source of the.

Ted: Upside there.

Speaker Change: Relative to keeping <unk>.

Speaker Change: Revenue and EBITDA.

Speaker Change: Jim.

Jim: Is that primarily from Q1 flowing through to the full year.

Jim: Or is there.

Speaker Change: Anything.

David Sailer: No, there's really nothing like that. No, there's really nothing major there.

Jim: No there's really nothing.

Jim: No there's really nothing major there, it's just us refining our estimates there was really an adjustment in our deferred tax asset, which kind of flows through to that calculation from overall Pac standpoint.

David Sailer: It's just us refining our estimates. There was really an adjustment in our deferred tax asset, which kind of flows through to that calculation. You know, from an overall tax standpoint, our cash taxes, which are minimal for the year, mostly focused around some international and US local and state. I don't see any major differences from where we are with what we paid last year from a cash standpoint and our projections for 2024. Got it. Thank you. Then

Jim: Our cash taxes, which are minimal for the year, you're mostly focused around.

Jim: In international and in the U S local and state I don't see any major differences from where we what we paid last year from a cash standpoint, and our projections for 2024.

Unknown Executive: Got it. Thank you. Then I wanted to ask about programmatic. I just wanted to ask about the source of strength for the quarter and expectations moving forward.

Speaker Change: Got it thank you.

Speaker Change: And then I.

Speaker Change: I wanted to ask on.

Jim: Programmatic.

Jim: Okay.

Jim: Okay.

Jim: I wanted to ask about the source of strength for.

Jim: For the quarter and.

Jim: Expectations moving forward.

Unknown Executive: Ladies and gentlemen, please stand by. We're experiencing technical difficulties.

Jim: Ladies and gentlemen, please standby we're experiencing technical difficulties our conference will resume momentarily. Let's go please remain online at our conference will resume momentarily.

Jim: Yeah.

Speaker Change: But they can't talk to you for joining us.

Speaker Change: Our conference will resume momentarily.

Speaker Change: Please standby.

Speaker Change: Okay.

Jim: Please standby, we're experiencing technical difficulties our conference will resume momentarily.

Unknown Executive: Our conference will resume momentarily. Once again, please remain on the line. Our conference will resume momentarily. Thank you.

Speaker Change: Please continue with your questions Hey, Ted Sorry, we lost you as you are starting your second question I'm not sure we had a little power surge or something knocked us out off are off our line, but we're back.

Unknown Executive: Hey Ted, sorry we lost you as you were starting your second question. I'm not sure; we had a little power surge or something knocked us off our line, but we're back.

Unknown Executive: Once again, thank you for joining us. Our conference will resume momentarily. Deb, please stand by. Please stand by. You are experiencing technical difficulties. Our conference will resume momentarily. Please continue with your questions. Hey, Ted.

Unknown Executive: Okay, great. Yeah, the question was basically about Q1 programmatic strength and the source of that, and what your expectations are for programmatic for the rest of the So, um,

Ted: Okay, Great. Yeah. The question was basically about.

Ted: Q1 programmatic strength.

Jim: And the source of that and.

Jim: What your expectations are for.

Jim: Programmatic for the rest of the year.

Scott R. Wells: So programmatic has been ramping pretty well since kind of September, October last year, and there's a variety of drivers behind it. At least one of the growth programmatic accounts right now is actually coming off of direct business, and so that's something we haven't seen broadly. And so there's a little bit of it coming out of the left pocket into the right pocket.

Jim: So programmatic has been ramping pretty well sense kind of September October last year.

Jim: And there is there's a variety of theres a variety of drivers behind it.

Jim: At least one of the one of the growth programmatic accounts right now is actually coming off of direct business and so that's something we haven't seen broadly and so theres a little bit of you know, it's it's coming out of the left pocket into the right pocket and that that is that.

Scott R. Wells: And that is part of what's going on. But I think the broader thing is that you've had the trade desk mainstream out of home, and DB360 is in the process of mainstreaming out of home. And what that means is that your two biggest omni-channel DSPs are offering out of home, and digital out of home, in their base trading platform.

Jim: It is part of what's going on but I think the broader thing is that you've had the trade desk mainstream out of home and DB $3 60 is in the process of mainstreaming out of home.

Jim: And what that means is that your your two biggest omnichannel D. S peas are offering out of home.

Jim: Digital out of home in there you know base trading platform and so we get consideration that way and I think that's at least part of what's going on in addition to outreach to clients. There are a number of.

Scott R. Wells: And so we get consideration that way. And I think that's at least part of what's going on. In addition to outreach to clients, there are a number of partners that we've had some really good success bringing new advertisers to the category.

Jim: Partners that we've had some really good success, bringing new advertisers to the category.

Scott R. Wells: So there are a variety of factors behind it. I don't think that the growth rate will stay as high as it has been in the last couple quarters for the whole year. But I do think, you know, we expect it'll be a double-digit growth rate. It just won't be as high as it was, you know, in Q4 and Q1.

Jim: So it's a it's a it's a variety of factors behind it I don't think that the growth rate will stay as high as it's been the last couple of quarters for the for the whole year.

Jim: But I do think.

Jim: We expect it'll be a double digit growth rate it just won't be as as high as it's been you know in Q4 and Q1.

Jim: Yeah.

Speaker Change: Thank you.

Scott R. Wells: Our final question is from the line of Jim Goss with Barrington Research. Please answer your questions.

Speaker Change: And our final question is from the line of Jim Goss with Barrington Research. Please proceed with your questions.

James Charles Goss: Alright, thank you.

James Charles Goss: The movie advertising is going to be a very immediate obviously.

Unknown Executive: out of CinemaCon. There's a lot of enthusiasm for 25 and 26 with the return of film flow, but a very current, tough environment over the next couple of quarters. I'm wondering how big a drag you think that can be and what your optimism is for next year, and also the mix of small screen versus big screen in terms of importance. I think it's mostly a big screen, but...

James Charles Goss: Just coming out of cinema com.

James Charles Goss: There's a lot of enthusiasm for 25 and 26 with return of film flow better.

James Charles Goss: But a very current tough environment.

James Charles Goss: Over the next couple of quarters.

Speaker Change: I'm wondering how big a drag you think that can be and what's your optimism for next year and also the mix of small screen versus big screen in terms of importance to your markets.

James Charles Goss: And it's mostly big screen, but.

Speaker Change: Tell me otherwise.

Scott R. Wells: Thanks, Jim. Yeah, no, you're absolutely right. We are we are more big screen oriented; we get some small screen, but not, that's not the prevalent part of our mix. Um, you know, I think your characterization of the release schedule is maybe a little darker than what I hear, but I'm not disputing that 24 will not be as good as 25. So I do think that this is something that can be a, you know, multi-quarter positive thing, and there will be upside for us in 24 if we actually crack that one.

Speaker Change: Thanks, Jim Yeah, no you're absolutely right. We are we are more big screen oriented we we get some.

Speaker Change: Small screen, but but not that's not the prevalent part of our of our mix.

Speaker Change: You know I think we.

James Charles Goss: Your your characterization of the release schedule is is maybe a little darker than than what what I hear but that I'm not I'm not disputing that 24 will not be as good as twenty-five. So I do think that this is something that can be a multi quarter positive.

Speaker Change: Category for us.

Speaker Change: It's not an enormous part of our book. So you know I don't think I would characterize it as it's going to make or break how 'twenty forgoes her or what twenty-five can be but you know with a political year, where we don't get a ton of direct political although we are working very hard on that but we don't have a lot of dirt.

Speaker Change: Correct political built into our our guide so that would be upside for us in 'twenty four we actually cracked that one.

Speaker Change: But with the with a year that has political we're going to see.

Scott R. Wells: But with a year that has politics, we're going to see, you know, an overflow coming to us of people that are getting crowded out in the TV space or that want to find other ways to reach audiences that are fatigued with the, you know, 17th political ad in a row on the breaks in their sports that they're watching. So movies can be a welcome growth driver in 2025. And I think, you know, we share your optimism for how that release schedule is going to look, and that should help offset some of the, you know, political comp that we build this year into next year. But again, it's not going to make or break our business.

Speaker Change: Overflow coming to us.

Speaker Change: Of people that are getting crowded out in the TV space or that want to find other ways to reach audiences that are fatigued with the 17th.

Speaker Change: Political AD in a in a row on the brakes and their sports that they are watching.

Speaker Change: So movies can.

Speaker Change: It can be a welcome.

Speaker Change: A welcome growth driver in 2025, and I think you know we share your optimism for how that release schedule is going to look and that should help offset some of the political.

Speaker Change: Political comp that we build this year in.

Speaker Change: In the next year, but I again, it's not going to make or break our business.

Scott R. Wells: Okay, thanks. The other area I'd like to touch on briefly, if I get it straight, you said airport margins should probably be high teens in general but can vary quite a bit. I wonder if you might talk a little about the drivers you think are important in terms of either travel trends, the volume of the travelers, business versus personal, and how that's going to affect the revenue side and what you think might be impactful in terms of the expense.

Speaker Change: Okay, Thanks, and the other.

Speaker Change: The area I would like to touch on briefly.

Speaker Change: If I get it straight you said airport margin should probably be high teens business in general that can vary quite a bit and I wonder if you might talk a little about the draw.

Scott R. Wells: The drivers you think are important in terms of either travel trends the volume of the travelers business versus personal.

Scott R. Wells: And how are how that's going to affect.

Speaker Change: The revenue side, and what you think might be.

Scott R. Wells: They are impactful in terms of the <unk>.

Speaker Change: Brent said.

Scott R. Wells: So let me start on the revenue side, and then I'll let Dave dig in on the expense side. You know, we really have changed how we sell airports over the last few years. We have become more focused on creating experiences that are particularly compelling for advertisers, whether that's doing sampling or other onsite experiences, experiences taking over different assets like tunnels between terminals. We've done that in a number of airports.

Brent: So let me let me start on the revenue side, and then I'll, let Dave dig in on the expense side.

Dave: You know, we we really have changed how we sell airports over the last few years.

Speaker Change: We have become more focused on.

Dave: Creating experiences that are particularly compelling for advertisers whether that's.

Speaker Change: Doing sampling or other on site.

Speaker Change: Experiences take.

Speaker Change: Taking over different assets like tunnels between terminals we've.

Speaker Change: We've done that in a number and a number of airports and so what what you've seen in the last kind of 18 months.

Scott R. Wells: And so, what you've seen in the last kind of 18 months has been the progression of us just getting better at monetizing those assets. And that's something that I'm challenging the team to apply some of that same kind of thinking to our roadside assets. And we're starting to see some experiments along those lines playing out. But I think that the driver, so building out New York fully was a big part of the driver. New York is largely built, although there will be meaningful projects as LaGuardia, some of the LaGuardia terminals finish, and some of the JFK terminals finish because there's still renovation going on there.

Scott R. Wells: Has been the progression of us.

Speaker Change: Just getting better at monetizing those assets and that's something that I'm challenging the team to apply some of that same kind of thinking to our roadside assets.

Speaker Change: And we're starting to we're starting to see some experiments.

Speaker Change: Along those lines playing out.

Scott R. Wells: But I think that the driver so.

Speaker Change: Building out New York's only was a was a big part of the driver.

Speaker Change: New York is largely built although there will be meaningful project says laguardia of some of the Laguardia terminals finish some of the JFK terminals finish because they're still they're still renovation going on there. So you know there there should be some more.

Scott R. Wells: So there should be some more juice in just the expansion of that footprint. We've gotten much more strategic about where we deploy assets in different airports. And that's been a tailwind of what's gone on. And you're going to have that pretty consistently.

Speaker Change: Jus in in just the expansion of that footprint.

Speaker Change: We've gotten much more strategic about where we deploy assets.

Speaker Change: In in different airports and that's that's been a tailwind of what's gone on and Youre going to have that pretty consistently and until we get to where we have you know the next the next big step back in airports will be when we lose a big contract, which inevitably at some point we will there is nothing that we can.

Scott R. Wells: And until we get to where we have, the next big step back in airports will be when we lose a big contract, which inevitably at some point we will, there's nothing that we can see in front of us right now that we think is headed that way. And we've had, you know, good fortune doing direct extensions. But that's the nature of that business. At some point, we will, you know, take a step back at one of the big airports that we're in. And that'll be, you know, a headwind.

Speaker Change: See in front of US right now that we think is headed that way.

Scott R. Wells: And we've had good fortune doing direct extensions, but that's the nature of that business at some point, we will take.

Unknown Executive: Take a step back in and one of the big airports that were in and and that'll that'll be a headwind I think in terms of the actual travelers in and who the advertisers are trying to reach we had done a really nice job of getting people bought into the idea that even if people were pleasure.

David Sailer: I think in terms of the actual travelers and who the advertisers are trying to reach, we did a really nice job of getting people to buy into the idea that even if people were pleasure travelers, they still represented very attractive demographics within business decision-making. And as business travel has come back, and business travel is, you know, getting back close to where it was pre-pandemic, that has been, that has been like a cherry on top for us because it, for certain airports, gives you really nice uplifts as the business traveler comes back.

David Sailer: Travelers they still represent a very attractive demographics within business decision, making and as business travel has come back in business travel is.

David Sailer: You know getting back close to where it was pre pandemic.

David Sailer: That has been a that has been like a cherry on top for us because it it for certain airports gives you really nice uplifts.

David Sailer: As the as the business traveler it comes back and so that's been that's been part of the revenue story too, but those are the those are the big drivers sort of different selling our ongoing expansion of our digital assets.

David Sailer: And so that's been part of the revenue story too. But those are the big drivers, sort of different selling, ongoing expansion of our digital assets, and the traveler continuing to come back and continuing to be a super attractive premium target. Dave, do you want to talk about expenses? Sure.

Dave: And the traveler continuing to come back and continue to be a super attractive premium.

David Sailer: For expenses, I would say it's definitely simpler than from a revenue standpoint. Obviously, there are a lot of drivers going into the fantastic revenue growth we've been seeing over the last several quarters. But from an expense standpoint, the airport business's biggest expense is site lease, what we pay to the airport authorities for the assets that we have in the airports. And when you think about that site lease, most of our contracts are a percent rent. The larger airports have a higher percent rent; the smaller airports, it's slightly lower.

David Sailer: Target, Dave you want talk to expenses yours expenses I would say is it's definitely simpler than from a revenue standpoint, obviously, there's a lot of drivers going into.

David Sailer: The fantastic revenue growth, we've been seeing of it over the last several quarters. Both on an expense standpoint, when you. The airports visit their biggest expenses site lease what we pay to the airport authorities for the assets that we have in the airports and when you think about that site lead you know some of our most of our contracts are a percent rent the larger.

David Sailer: Airports are a higher percent rent in a lower smaller airports you know it is slightly lower so your revenue mix actually has a big component of.

David Sailer: So your revenue mix actually has a big component of what your margins are going to be. And right now, we're performing really well across all those factors, which is really helping from a margin standpoint. And we also have a few airports that are, it's a fixed magazine.

David Sailer: What your margins are going to be in right now I mean, we're performing really well across all those factors, which is really helping from a margin standpoint, and we also have a few airports that are you know its a fixed Mag zone. If you drive revenue above that that's going to drop right down to the bottom line, we definitely experienced that in the first quarter and then I'll I'll go back to.

David Sailer: So if you drive revenue above that, that's going to drop right down to the bottom line. We definitely experienced that in the first quarter. And then I'll go back to the relief that we're continually getting, and we're going to get that throughout 2024 to a lesser extent than we did in 23. But those are two of the main factors that are really driving it from an expense standpoint. But as that revenue grows, you are going to have margin expansion. And that's what we've been seeing.

David Sailer: Do you know the relief that we continue we get any we're going to get that you know throughout 2024 to a lesser extent than we than we had in 'twenty three but those are two of the main factors that are really driving it from an expense standpoint, but as that revenue grows.

David Sailer: You are going to have margin expansion and that's what they've been saying.

Unknown Executive: All right. Thank you very much. I appreciate it.

Speaker Change: Alright, Thank you very much I appreciate it.

Speaker Change: Thank you Jim.

Unknown Executive: Yeah.

Scott R. Wells: Thank you. At this time, I'd like to turn the floor back to Scott for closing comments.

Unknown Executive: Thank you at this time I'd like to turn the floor back to Scott for closing comments.

Scott R. Wells: Great, thank you, Rob. And thank you to all of our questioners and for putting up with our little technical glitch there. Sorry for that, that brief window of silence. We appreciate your attention. We feel good about the year and look forward to seeing you all or many of you at upcoming events in the coming weeks.

Scott: Great. Thank you, Rob and thank you to all of our questioners and for putting up with our little technical glitch, there I'm sorry for that that brief window of silence.

Scott R. Wells: We appreciate your attention we feel good about the year and look forward to seeing you all or many of you in an upcoming events in the in the coming weeks take care.

Unknown Executive: Thank you. This will conclude today's conference. You may disconnect your lines at this time. We thank you for your participation and have a wonderful day.

Speaker Change: Thank you. This will conclude today's conference you may disconnect. Your lines at this time and we thank you for your participation and have a wonderful day.