Q1 2025 Clear Channel Outdoor Holdings Inc Earnings Call
[music].
Greetings and welcome to the clear channel Outdoor Holdings Q1, 'twenty 25 earnings conference call and webcast.
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Speaker Change: <unk> and answer session will follow the formal presentation.
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Speaker Change: As a reminder, this conference is being recorded.
Speaker Change: It's now my pleasure to trouble over to your host Eileen Mclaughlin Vice President Investor Relations. Please go ahead.
Good morning, and thank you for joining our call on the call today are Scott Wells, our CEO and David Taylor, Our CFO, who will provide an overview of the 2025 first quarter operating performance of clear channel Outdoor Holdings, Inc. We recommend you downloaded the 2025 first quarter earnings presentation.
Speaker Change: Located in the financial information section of our Investor website and review the presentation. During this call.
Speaker Change: After an introduction and a review of our results well open the lines for questions before we begin I'd like to remind everyone that during this call. We will make forward looking statements, including statements about the company's future financial and operational performance and the company's strategic goals the out of home industry and be it.
Speaker Change: Economy, all forward looking statements involve risks and uncertainties that may be out of the company's control, including the macroeconomic environment. There can be no assurance that management's expectations beliefs or projections will be achieved or that actual results will not differ from expectations.
Speaker Change: Please review the statements of risks contained in our earnings press release, and our filings with the SEC.
Speaker Change: During today's call. We will also refer to certain measures that do not conform 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.
Speaker Change: When reviewing our earnings presentation. It is important to note that as of December 31, 2024, we classified our Europe, North segment, and Latin American businesses as discontinued operations for all periods presented the 2025 first quarter discontinued operations include solar businesses up until their sale date.
Speaker Change: For 2025 from Mexico, Chile, and Peru, and March 31, 2025 for Europe, North. Additionally, the business in Spain was classified as discontinued operations in 2023.
Speaker Change: Consolidated results include the America and airport segment in Singapore.
Speaker Change: Also please note that the information provided on this call including guidance is based on information currently available to management and speaks only to management's views as of today may <unk> 2025, and may no longer be accurate at the time of a replay.
Speaker Change: Please see slide four in the earnings presentation, and I will now turn the call over to Scott.
Scott: Good morning, everyone and thank you for taking the time to join us today.
Scott: We're excited to speak with you about our progress as a newly U S focused business.
Scott: As such we're going to take a slightly different approach than we've typically taken on earnings calls and focus more on where we're going then on where we've been we will be happy to follow up and drill into the past, but today, we're focused on talking about the future and why we're optimistic about it.
Scott: Before we get to that we know people have a lot of questions about tariffs and the possibility of a recession, we're not macro forecasters, but I want to register several key points relevant to this question.
Scott: As for recession risk, we believe we provide cost effective accountable reach to brands in a world where that is increasingly hard to find we are also making real strides and selling direct to large advertisers partly on the back of our robust planning and attribution tools, we will provide more context on this and other initiatives.
Scott: At our Investor day in September.
Scott: We derisked our portfolio.
Scott: If you look at the Covid downturn, an extreme example in 2020 in 2021, our European businesses declined substantially more than the Americas declined largely driven by France.
Scott: Further if you look at the U S out of home market in prior non pandemic downturns you see the U S. Market's Brazilians clearly for instance, in the 1991 and 2001 downturns in the U S. You saw growth slow or modestly decline during the downturn only to return to growth shortly.
Scott: Thereafter, whatever disruption may occur, we believe our risk is greatly reduced.
Scott: We have begun to meaningfully reduce interest expense. This has been both the result of the prepayment of the CCI BV term loans and our open market repurchases of bonds.
Scott: <unk> this reduces our annualized interest by $37 million, we expect to continue to deploy proceeds from the asset sales or other available cash on hand to reduce debt in the most advantageous way contributing to a F F O and cash flow growth as permitted under our debt agreements.
Scott: As promised we have successfully eliminated approximately 35 million of annual corporate expenses and we expect we can take that further over the next couple of years.
Scott: We expect to benefit notably from the recovery of San Francisco This year, our third largest market in America.
Scott: Where it was a substantial headwind in 2023 declining double digits and dropping from our second largest market to third. It is currently setting up to be a tailwind this year with the city cleaning itself up and re emerging as a destination. We are seeing increased interest by national advertisers, there and AI is emerging as a new.
Scott: Revenue vertical that is complementary to other tech budgets, we believe that this will likely play out to a decent degree regardless of the macro environment with bookings up double digits. So far this year. Finally this management team is battle hardened on cost takeout, we've experienced dating back to the dotcom bubble as well.
Scott: The great financial crisis, and Covid, along with experience running a very leveraged company through a variety of environments. We've shown we can be agile adjusting to the environment. All of that said I'm pleased to say that at this point, we're not seeing cancellations or hearing about campaigns being scaled down our focus is on cash generation as.
Scott: Measured by F. F O and we are confirming the guidance ranges for revenue and adjusted EBITDA, We provided in February and increasing a F F O guidance to reflect debt repurchases.
Scott: So that's why we are confident in our company now we'll briefly cover Q1 and go deeper into our future vision.
For Q1, we delivered consolidated revenue growth of two 2% in line with our guidance and what is always our smallest quarter. Our consolidated revenue growth was impacted by February which had one less selling day in the Super Bowl that wasn't even one of our roadside markets for January and March only our Q1 revenue.
Scott: Growth was twice that of the entire quarter.
Scott: Also in Q1 and into April we delivered.
Scott: We signed and closed the sale of Mexico, Chile, and Peru, We signed the sale of our Europe, North segment and closed it faster than we had even anticipated note that our sales to date have amounted to approximately $745 million and purchase consideration.
Scott: We prepaid the 375 million CCI BV term loans in full we repurchased approximately $120 million in face value of bonds, resulting in a guaranteed weighted average yield of approximately 14%.
Scott: We launched the sale process for our business in Spain, which continues to perform well.
Scott: Dave will go into more detail on the results, but let me reiterate that the first quarter was in line with our expectations. We are confirming our guidance for the full year and we remain focused on positive cash generation period.
Scott: As for the future outlook, we believe that it is bright for out of home advertising in the U S. In general and clear channel in particular, here's why the simplification of our business is allowing us to reduce interest and corporate expenses as those come down we expect to be able to routinely reduce our debt which is a priority.
Scott: It is also allowing us to devote more energy to identify creative options to improve leverage using our strong operating and media assets since we announced our openness to pursue creative solutions last quarter, we've seen substantial interest from potential counterparties nothing to report here, yet, but we are actively exploring options that could validate the strategic.
Scott: <unk> importance of our hard to replicate assets and accelerate our deleveraging efforts.
Scott: As we have previously emphasized our visibility into the year is good we have the majority of our 2025 revenue guidance already booked and a strong pipeline in place for the balance of the year also over 85% of the second quarter revenue guidance is in the books.
Scott: Our direct outreach efforts to target verticals are yielding fruit. This is from a combination of radar analytics and domain savvy salespeople and makes us more confident in our ability to grow these categories.
Scott: In 'twenty 'twenty, four we successfully reduced customer churn due to the enhanced tools, we put in place to focus our sales effort on vulnerable spots and from conscious efforts to proactively grow our best customers, we'll share more on this at our Investor day, but we currently believe that this is a material opportunity on top of ordinary growth efforts.
Scott: AI is one of the capabilities fueling that effort.
Scott: And it is proving to be an asset across many parts of our business. For example, AI helped our inside sales team delivered double digit percent improvement in productivity.
Scott: We are now actively deploying large language models on activities ranging from customer targeting to creative development. We believe that as these programs are implemented they should provide tailwind to our margins and our leading productivity and out of home.
Scott: Also thinking about AI, we believe it is going to have a tendency to make many types of advertising more invasive for consumers potentially leading to backlash that likely means and will also be used to make AD blockers more powerful we believe our presence in the physical world with physical context, coupled with strong insights on aggregate audience delivery.
Scott: Should help our medium capture greater share of Ad budgets.
Scott: When you put all this together the path we've been describing a positive <unk> growth coupled with targeted investment in our business leading to reduction of leverage before we explore any creative solutions makes us very excited about the future with that I'll hand, the call over to Dave. Thanks, Scott. Please see slide five for an overview of <unk>.
Dave: Our results.
Speaker Change: I referred to are for the first quarter of 2025 and the percent changes our first quarter 2025 compared to the first quarter of 2024, unless otherwise noted consol.
Speaker Change: Consolidated revenue for the quarter was 334, Million% to 2.2% increase which was in line with our guidance loss from continuing operations was $55 million.
Speaker Change: Adjusted EBITDA for the quarter was $79 million down 12, 5% driven in part by the expected decline in our airports rate of maintenance and the planned ramp up in the MTA roadside Billboard contract.
Speaker Change: <unk> was negative 23 million within our expectations onto slide six for the Americas segment first quarter results.
Speaker Change: America revenue was 254 million up one 8% in line with guidance. The increase was primarily driven by the MTA roadside Billboard contract with digital revenue up six 4% local sales up two 2% and national sales up 1% on a comparable basis.
Speaker Change: This is the 16th consecutive quarter local has grown year over year.
Speaker Change: Segment, adjusted EBITDA was $88 million down 8% as expected with a segment adjusted EBITDA margin of 34, 6%.
Speaker Change: Driven by the increase in site lease expense primarily related to the MTA contract in challenging revenue comps in February as Scott mentioned.
Speaker Change: Please see slide seven for a review of the first quarter results for airports.
Speaker Change: Airports revenue was $80 million up 4% also in line with guidance. The increase was driven by a 20% increase in national sales, partially offset by a 16, 4% decline in local sales on a comparable basis.
Speaker Change: Digital remains an important driver and was up 15, 6%.
Speaker Change: Airports did benefit from the Super Bowl, which was held in New Orleans this year.
Speaker Change: Yeah.
Speaker Change: Segment, adjusted EBITDA was $14 million down 25% with a segment adjusted EBITDA margin of 17, 9% as we have talked about before the decline is largely attributable to lower rent abatements.
Speaker Change: Moving on to slide eight.
Speaker Change: Capex totaled $13 million in the first quarter, a 17% increase.
Speaker Change: Now onto slide nine.
Speaker Change: We ended the quarter with strong liquidity of $568 million, which includes $401 million of cash and $166 million available under the revolvers. This includes the proceeds from the sales of our international businesses.
Speaker Change: Cash balance also reflects the prepayment of $375 million CCI BV term loans in full it does not reflect potential proceeds from Spain or Brazil.
Speaker Change: And as Scott mentioned, we repurchased approximately $120 million of bonds for approximately $100 million in cash on the open market in April and we will look to continue to capture attractive discounts going forward.
Speaker Change: We have reduced our annualized interest expense to $381 million saving $37 million.
Speaker Change: Now on slide 10 in our guidance for the second quarter and the full year of 2025.
Speaker Change: In the second quarter, we expect our consolidated revenue to be within 393 to 408 million, representing a 4% to 8% increase over the same period in the prior year and you can see this is meaningful improvement over the first quarter.
Speaker Change: We expect Americas revenue to be within $302 million to $312 million in airports revenue is expected to be within $91 million to $96 million.
Speaker Change: As Scott mentioned, we are confirming our full year guidance provided in February for revenue and adjusted EBITDA and we are increasing full year <unk> guidance to be within $80 million to $90 million, representing an increase of 36% to 54% over the prior year and reflecting lower interest expense related to the bond.
Speaker Change: Purchases, we conducted in April.
Speaker Change: Additionally, we anticipate having cash interest payment obligations of $402 million in 2025 and $381 million. In 2026. This guidance has been updated to reflect the prepayment of the CCI BV term loans and the repurchase of bonds in April and does not assume that we repay.
Speaker Change: Refinance or incur additional debt.
Scott: Now, let me turn the call back to Scott.
Scott: Thanks, Dave.
Scott: I know we've reiterated this a couple of times, but I can't emphasize enough. The Q1 came in as we expected and we have seen nothing in the marketplace to date that causes us to change our guidance for the year.
Scott: This is not to say that we're ignoring the headlines and sentiment and the macro economy. We are absolutely planning for contingencies, and we'll pivot should the facts on the ground change.
Scott: We believe this is a good environment for us to gain media share and we believe our medium coupled with the sophisticated data analytics and selling work we've been pursuing is gaining traction.
Scott: So we're excited about our transition into a newly U S focused business and the opportunities that are emerging across our company and our industry.
Scott: Our focus is on driving the performance of our higher margin U S assets, including continuing to broaden our revenue streams, while reducing our corporate expenses.
Scott: We expect to deliver mid single digit growth in consolidated revenue and adjusted EBITDA. This year with significant compound growth in F. F O.
If you take our guidance for 2025 apply a reasonable roll forward to F. O in 2026 for interest savings from further debt reduction and growth in adjusted EBITDA and look at our current market valuation. We believe C. C. O is a big opportunity we are committed to delivering on this opportunity.
Scott: For our shareholders, we have a very bright future and I'd like to thank our companywide team for their continued contributions to our success as we move to the next stage of our plan and pursue value creation for our investors and now let me turn over the call to the operator.
Speaker Change: Thank you, we'll now be conducting a question and answer session if you'd like to be placed in the question queue. Please press star one on your telephone keypad.
Scott: Confirmation tone will indicate your line is in the question queue you.
Speaker Change: You May press star two if he'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing star one once again, that's far wanted to be placed in the question queue. Our first question today is coming from Kevin Mcveigh from Morgan Stanley. Your line is now live.
Speaker Change: Thanks, Good morning.
Speaker Change: Good morning Cameron.
Speaker Change: Good morning, guys I was curious if you could touch further on maybe just your visibility levels into the back half of the year and how that might be trending on a on a national versus local basis.
Speaker Change: And then secondly, I wanted to ask where you are seeing further opportunities for some of these corporate expense reductions.
Cameron: Thanks Cameron.
Cameron: You know I think we we aim to address the first one in our in our script, but what I'd tell you is.
Cameron: This is a business that always has pretty good visibility I mean, I think we described this most quarters.
Cameron: And we tried to dimensionalize it a little bit more given the given the environment. The things that I would call out that are giving us a lot of confidence as the year ramps. In addition to what I've said in the script, which is which was quite a lot at.
Cameron: Al mentioned, San Francisco again, because we suffered with that in 2023 and I think it is going to be a real help to us this year, but it's not just San Francisco, we're seeing.
Cameron: Good progress and a lot of markets.
Cameron: This year.
Cameron: And as we look across verticals.
Cameron: Media and entertainment is going to be solid we.
Cameron: We are seeing auto insurance coming back to our medium and that is a very welcome development, we continue to develop our pharma.
Cameron: Profile and so the way I'd characterize it is that as a proportion to guidance.
Cameron: Hmm.
Cameron: We're we're modestly ahead of where we would typically be this time of year, but not not wildly so but the pipeline is as strong across a number of those fronts and both both myself and our CRO, Bob Mcewen had been talking to our largest advertisers and while everybody is pay.
Cameron: Attention to the macro.
Cameron: We're feeling good about people's commitment to out of home as part of their media mix and I think it's because of a number of the things that I mentioned in the script. So hopefully that gives you that gives you a sense not not really going to characterize national versus local in any detail other than just to say that both are.
Cameron: Looking positive on the on the balance of the year.
Cameron: In terms of opportunity for cost reduction.
Cameron: We are going to have a transition services agreements for quite some time that are going to require us to continue to keep.
Cameron: Higher levels of a variety of.
Cameron: Services everything from you.
Cameron: You know managing the financials to taxes.
Cameron: Two you know legal and compliance so there's there's a lot of things that are going to continue as those things wind down.
Cameron: That should be something that helps us and then as we've as we've said before as we get to the end of those T. S. As we are aiming to have a zero based budget view, that's comprehensive to everything and in the U S. So this isn't just corporate expenses, we're looking at everything.
Cameron: That should that should give us some opportunity we're not really at a point that we're ready to give a target on that I think that's something you should expect when we're together in September at our Investor Day.
Speaker Change: Great that's helpful. Thanks, Scott.
Speaker Change: Thank you. Our next question today is coming from Daniel I'll say from Wells Fargo. Your line is now live.
Daniel: Thank you and good morning.
Speaker Change: Good morning.
Speaker Change: I thought the forward booking commentary was helpful and once you dig into that a little more so can you speak to the typical cancellation terms you provide to advertisers and does that differ between local and national advertisers and then as a follow up does the low end of the guide contemplate any weakness from a macro slowdown. Thank you.
Speaker Change: Okay. So first off on on terms.
Speaker Change: That of course is a very involved question and I'm going to give you a 50000 foot answer on.
Speaker Change: On it.
Speaker Change: But you know our standard terms cancellations or a 60 day notice period.
Speaker Change: That that is our standard terms and that's for printed.
Speaker Change: With digital it is.
Speaker Change: It varies and it varies depending on whose paper you're on.
Speaker Change: But generally.
Speaker Change: In our space there are cancellation terms that give us some decent visibility when things are when things are are shifting and again as I noted in the script, we're not seeing that at all in this current space.
Speaker Change: In terms of the low end of the guide we did not attempt to give a sort of full fan of outcomes of all the possible things that could happen.
Speaker Change: The low end of our guide is based on.
Speaker Change: What we're what we're seeing right now so we have not we have not you would've seen a much broader range of guidance. If we were trying to give.
Speaker Change: Give a full view of what of what might possibly happen.
Speaker Change: So hopefully that addresses that question.
Speaker Change: That's helpful. Thank you.
Avi Steiner: Thank you next question is coming from Avi Steiner from JP Morgan. Your line is now live.
Avi Steiner: Thank you good morning, I've got a few questions here.
Just maybe circling back on that last one I'm curious because you did talk about past dislocations in outdoors performance. How do you think your asset base, which I think now is more digital might behave.
Avi Steiner: So now versus those historical periods and then I've got a few more thank you.
Avi Steiner: Sure I mean, I think there's no question that being more digital.
Speaker Change: Would give us yeah. If you think of if you pull the camera way back Avi and I know you know this.
Speaker Change: Outdoor was always seen as being kind of last to go into a dislocation in first.
Speaker Change: And last to come out because the.
Speaker Change: Of the of the timeline associated with our inventory and with digital.
Speaker Change: You know that that that window is I think a little different I don't think we've had a normal dislocation since you know more than a quarter of the revenue has been digital so the the honest answer is we don't know.
Speaker Change: But I think the thing that we saw in Covid that has that is notable is we did see digital come.
Speaker Change: Come down first but it came back way faster than than the printed and.
Speaker Change: Particularly the automated.
Speaker Change: Verticals.
Speaker Change: Really showed her the automated customers the ones coming through programmatically and and other automated ways showed the closest tracking to the the sort of market sentiment and we are not at all observing anything in that space right. Now I mean, we we thought long and hard about taking his positive abuse we.
Speaker Change: Did on our call, but we're doing it from a place of very strong data and a number of factors that I've enumerated in earlier answers in the script that give us that confidence.
Speaker Change: I appreciate that very much and appreciate the Q2 acceleration of the iteration of guide I wouldn't approach it from maybe the expense side if I could.
Speaker Change: Should we think about.
Speaker Change: Site lease expenses as we roll through the year and maybe the better question is if we could.
Speaker Change: Give us a flavor or a sense of margin cadence as we move through the year. Please.
Speaker Change: They look from a site lease standpoint, I think it's everything we've been talking about in the past if I talk about it or airports I mean, we've mentioned is probably numerous times Robinson I can get the relief that we got in the last several years I mean that that is that that fund it.
Speaker Change: It definitely is complete so the margins will be different for airports I mean, we were in the Twenty's I mean, I think the <unk>.
Speaker Change: First quarter of last year for airports, we were close to 25% and that was really driven I was on a good performance of the business, which we are still seeing for airports, which is great, but youre not going to get that extra from site lease relief that we've gotten from Covid. So I think it's gonna go back to what we've been talking about from an airport standpoint, you know around 20% which is historically.
Speaker Change: Higher than it was prior to Covid. So that business has really performed the topline and that business is really.
Speaker Change: Increase the margins in that business. So that's been really solid.
Speaker Change: And then I'd also say for both segments in the first quarter. The margins are always going to be lower just it's just the media industry, there's less AD sales in the first quarter as it is second or fourth quarter. So that's going to drive your margins as well.
Speaker Change: For America.
Speaker Change: The biggest one we've talked about is really the MTA contract, which like that contract is going to be great for the business.
Speaker Change: It's just in the early stages of the contract and we've mentioned this before that contract in a ramp and that's going to help us as we get down the road, but that has a little bit of effect on our margins in the short term and especially in the first quarter.
Speaker Change: I appreciate that very much and maybe sticking with you if I can.
Speaker Change: Two questions Robert debt can you remind us.
Speaker Change: What gave you the flexibility to buy back senior versus.
Speaker Change: <unk> and.
Speaker Change: And can you speak to why you left that debt outstanding as opposed to retiring those boxes.
Speaker Change: Sure I mean look it really comes down to.
Speaker Change: Where we're going to get the best yield as we're looking at our capital structure and look at what the with the transactions you know moving forward I mean, it's great for the business to see the liquidity that we have I mean at the end of the first quarter. We had cash on the balance sheet, just 400 million liquidity is in excess of $550 million.
Speaker Change: So we're looking at our capital structure, we really looking at what is the best yield, but will give us the greatest discount.
Speaker Change: We're looking at our at our capital structure in it and for me. It's just great to see that we're bringing down our debt to pay down the BV notes with the with the proceeds from Europe at $375 million and in addition to that paying down another $120 million of the bar.
Speaker Change: And I think it's really fantastic as far as the the reason we're able to do that is really just the reinvestment provisions in our debt agreements allow us an 18 month 18 month reinvestment period.
Speaker Change: To go after the debt so that's really how that played out.
Speaker Change: Okay, one very last one if I can.
Speaker Change: But I think you teased everyone by saying.
Speaker Change: And I'm trying to quote your substantial interest from potential parties I don't know if you can or want to frame up maybe some of the creative things youre looking at and how that might help draw.
Speaker Change: Drive valuation and that helped the company to lever and thank you all for the time.
Speaker Change: Yeah.
Avi Steiner: Thanks, Avi yet I know Youre curious about this one.
Avi Steiner: We are we have been pleased with the affirmation of what we perceived to be the assets, we were bringing which is that we're a good operator with very strong assets.
Avi Steiner: We've gotten validation on that by the interest that we've seen and it is just way too early to talk about any any specific resulting opportunities, but we're encouraged.
Avi Steiner: Thank you all.
Speaker Change: Thank you. Your next question is coming from Lance Vitanza from TD Cowen. Your line is now live.
Speaker Change: Thanks, guys.
Lance Vitanza: At both America and airport it looks like the static in print revenues were actually down a little bit year on year. I'm wondering is that evidence that digital is to some extent cannibalizing the print revenue or is that the wrong conclusion, and maybe more specifically do you expect print revenue.
Lance Vitanza: Return to growth in either the second quarter or the second half of the year.
Speaker Change: Hey, Lance you know I think every quarter.
Speaker Change: Theres some variant of this question.
And it is just idiosyncratic.
I would expect print will be a grower over the course of the full year I think we had some campaign.
Speaker Change: Neat drivers in it.
Speaker Change: So I'm.
Speaker Change: I'm not at all in a place where I'm thinking print is is imperiled by digital at all they're a little bit of different use cases.
Speaker Change: Thanks.
Speaker Change: Thank you. Your next question today is coming from Aaron Watts from Deutsche Bank. Your line is that life.
Aaron Watts: Everyone. Thanks for having me on just two questions first a clarifier on your America growth curious what the impact is of the new MTA contract on the <unk> growth of one 8% and that you keep guidance, where you're calling for 48% growth just trying to get a sense of the underlying market.
Speaker Change: Strength as he moved from <unk> into <unk>.
Speaker Change: Great. So.
Speaker Change: I think we dimensionalize. The MTA is a couple of points on the full year and I think that's a reasonable thing.
Speaker Change: Overall, I wouldnt draw a lot of conclusions about market strength in Q1 looking at our numbers because of the dynamics, we called out in February.
Speaker Change: That was a pretty meaningful difference the.
Speaker Change: The extra day last year, plus the Super Bowl.
Speaker Change: So again I think the point, we were trying to make about where April at or excuse me where March in January were.
Speaker Change: In the script is the more relevant you know what's the what's the underlying market point.
Speaker Change: Okay perfect. Thanks, Scott and then secondly, just maybe Dave.
Speaker Change: You spoke to the healthy liquidity position remind us what the minimum amount of cash you would like to keep on hand is I understand you have a revolver at your disposal as well and then relatedly what the capital structure. How are you thinking about addressing your twenty-seven debt maturity I imagine you'd like to start to attack that.
Speaker Change: Over the course of the next year any different approach.
Speaker Change: This time versus how you've dealt with the capital structure in the past.
Speaker Change: Sure I'll start with the capital structure question first I mean look that's some or most attractive debt with a really good interest rate on it.
Speaker Change: Just to remind the group I mean thats due in the second half of 2027. So we do have a little bit of time there.
Speaker Change: And look we'll be watching the markets looking at Windows open and close but I think that's something that we're going to address you know as we get into 2026, why not something we're going to address in 2025, and you know us unless something interesting comes out out there, but I think we're in good shape from that standpoint, and as far as the cash on hand, obviously, we would we kept more.
Speaker Change: Cash when we were in international business and what I'd want to point out here is really by selling the international businesses in Europe, and Latin America, we really have derisked. The business you know when I think about.
Speaker Change: Past recessions or when we went through Covid really the burn.
Speaker Change: From those businesses was a lot was much greater I'd sort of burn came from those business as opposed to the U S business, So definitely a lot less risk in the business.
Speaker Change: Forward.
Speaker Change: Managing from a cash standpoint, it's great to see.
Speaker Change: Liquidity that we have on the balance sheet as I mentioned before the $400 million of cash, which we utilize some of that for debt pay down, but we'll manage that over the year and we'll come out with the right number but right now we're not there yet.
Speaker Change: Alright, Thanks again.
Speaker Change: Thank you. Our next question is coming from David Karnofsky from J P. Morgan Your line is now live.
David Karnofsky: Thank you.
David Karnofsky: You alluded in your prepared remarks to our near term future, where AI is going to create some.
David Karnofsky: Privacy issues on the digital side with outdoor maybe a beneficiary.
Speaker Change: I don't know if you could dig into that dynamic a bit more and then for David is it possible to quantify at all the ultimate headwind from the L. A fire side on a quarter and full year outlook.
David Karnofsky: Thanks, David.
David Karnofsky: Yeah, I mean, I don't want to dig into other media issues in in too much detail other than to say I think whatever degree of intrusiveness people perceive now and I know an awful lot of pre rolls get skipped and an awful lot of blockers gets deployed.
David Karnofsky: As as the AI gets more specific in how it is addressing you as a consumer I think there is an excellent chance that that's going to make people uncomfortable and thats going to cause people to deploy blockers, who maybe haven't deployed them to date and that's really the point that I was trying to get to.
This is a constant arms race in our in our industry and.
David Karnofsky: I think that we're at a moment in time, where our positioning in the public square is is going to be an increasing advantage.
David Karnofsky: Now look as far as the L. A fires, which honestly it was just a horrific event.
David Karnofsky: Which I was happened in January I mean, I don't have a specific number obviously didn't help during that time period, I mean, both businesses our team our sellers our entire team obviously they.
David Karnofsky: They were worried about their families and their friends and what was going on so obviously not a lot of bookings were happening during that time period.
David Karnofsky: Some of that probably had an impact on February <unk> and whats I was talking about earlier, but theres not a specific number but obviously it didn't help in the first quarter.
David Karnofsky: Thanks.
Speaker Change: Thank you. Our next question today is coming from Patrick <unk> from Barrington Research. Your line is now live.
Speaker Change: Hi, good morning.
Speaker Change: Just curious in terms of like the conversations you have around digital conversion if those have.
Speaker Change: It's sort of like the.
Speaker Change: The trading out of static versus digital has maybe changed over time.
Speaker Change: I'm sorry, Patrick could you could you unpack that one a little bit more I'm not sure I'm following the question.
Speaker Change: I guess.
Speaker Change: I'm curious like do you extend that.
Speaker Change: Municipalities, there may be more open to digital conversion to with.
Speaker Change: The potential revenue benefits and local tax gains from from that.
Speaker Change: Helping their balance sheets.
Speaker Change: That's very more digital uptake.
Speaker Change: Yeah, I think it's a it's a really I understand where I understand where you're going.
Speaker Change: You know as as municipalities feel more pinched, the odds of them being open to a dialogue on it due.
Speaker Change: Do tend to go up.
Speaker Change: Very very hard thing to generalize on broadly.
Speaker Change: We have a number of markets where we're.
Speaker Change: And the 50% plus digital revenue range.
Speaker Change: And largely those are in municipalities that have embraced it and have seen it as a.
Speaker Change: Positive oftentimes they've gotten a reduction of printed assets in return for embracing digital.
Speaker Change: But it's been a net net positive for the industry and.
Speaker Change: The municipalities can speak for themselves.
Speaker Change:
Speaker Change: <unk>.
Speaker Change: The degree to which this is an emotional issue in cities remains.
Speaker Change: And.
Speaker Change: I, just I would not I would not paint a picture that that everything's moving in our direction I would paint the picture of we are working on it and we're working to be good partners to cities and.
Speaker Change: Striving to get more opportunities for conversion.
Speaker Change: But I think I think the and I've talked about this on other other calls in the past we have kind of a steady state of conversion that we do and what we what we forecast that tends to be based on.
Speaker Change: What work products or group of real estate professionals can generate in any given year.
Speaker Change: In terms of getting the ordinances adjusted getting permits et cetera.
Speaker Change: Where we tend to spike when were doing conversions is when we actually have a city do what you're describing which is a broad based change of heart and we're working on a number of those at any given time, but they're incredibly difficult.
Speaker Change: To forecast so I.
Speaker Change: I think that you know in general a lot of the objections to digital.
Speaker Change: Have been either addressed by technology, we have ways to diminish.
Speaker Change: Diminish the light pollution, we have ways to address a lot of the arguments that people have against it.
Speaker Change: But it remains something that is.
Speaker Change: That is that as you know a city by city decision process hopefully that helps.
Speaker Change: Yes. Thanks, Yeah I was just curious if you could maybe talk about like.
Speaker Change: So the digital products.
Speaker Change: Products like your radar capabilities and how that's helped in terms of keeping.
Speaker Change: AD revenue.
Speaker Change: Strong in the in the in.
Speaker Change: In your guidance and then the second quarter.
Speaker Change: Yeah, I mean I. Appreciate the question radar has been a real positive for us meet.
Speaker Change: Meeting marketers, where they are in terms of their expectation of of analytic insights.
Speaker Change: It has become a very heavily used tool in the planning part of the business across all of our customer base. So.
National regional local kind of every level.
Speaker Change: The radar view planning tool and the different market segments that we have that let people see audience details.
Speaker Change: Something that is very widely embraced and very widely used.
Speaker Change: Attribution is a little a little narrower than it tends to go to the marketers that are most focused on.
Speaker Change: Their performance dashboards.
Speaker Change: But what what I think has been the most powerful thing for US is the work that we've done in terms of integrating our data with.
Speaker Change: Various industry specific specialists. So there are industry specific CPG specialists that are industry specific pharma specialists automotive etcetera and that has been a real differentiator for us.
Speaker Change: In terms of being able to get meetings get trial and then ultimately get on the.
Speaker Change: Routine planning and I think if you if you look at the progress we've made over the last four or five years.
Speaker Change: Our direct client outreach.
You really cant sell.
Speaker Change: Separate radar from the the industry vertical savvy salespeople that we have to work hand in hand and are a big part of what is driving our ability to bring new advertisers to the category.
Speaker Change: Hopefully that helps.
Speaker Change: Yes. Thank you.
Speaker Change: Thank you we've reached end of our question and answer session I'd like to turn the floor back over for any further or closing comments.
Speaker Change: Great. Thank you Kevin and thank you everyone for joining us today hopefully it came across but we are very confident of the opportunity that lies ahead and we believe very much that C. C. O is a great opportunity for our investors. So thank you all and have a great day.
Speaker Change: Thank you that does conclude today's teleconference and webcast you may disconnect. Your line at this time and have a wonderful day, we thank you for your participation today.
Speaker Change: Yeah.