Clear Channel Outdoor Holdings, Inc. Class A Stock

My name is Marlane Pereiro. I'm the high-yield cable and media analyst here at Bank of America. I'm pleased to have with us from Clear Channel Outdoor, David Sailer and Jason Menzel. Thank you so much for being with us today.

Sure. Thanks for having us.

So I want to just start with advertising trends. What gives you confidence that strong ad trends can continue into '26? And are there any signals that you're seeing from renewals that you can share with us?

Sure. As we end 2025, and I think we're ending on a good note, during our earnings, we mentioned we had 90% -- this is back when we did our earnings for the third quarter, early November. We had 90% of our ad sales booked for the fourth quarter. And that's a good number going in November for the year. And I think that's kind of the start as we get into next year. And the bookings and the conversations have been strong. The upfront, which is what we call the upfront in the out-of-home industry, more on a national scale is where we have a lot of our large national advertisers doing their placements for the next year. It starts in September and that rolls through February.

And those conversations have been strong. They have been positive. On our premium assets, there are definitely rate increases. And when you think about a market or even the businesses more on the Americas segment, our premium assets, which is a smaller percentage of the overall assets, drive a much larger share of the dollars. So when you're getting that increase in price on those assets, that's a big deal, and it's good momentum as we get into the year.

And also, when I think about 2026, FIFA is going to be obviously a major sporting event in the United States and the locations of those events match up very well with our assets, both on the airport side and the Americas segment in cities like Philly, where we have a large asset base. We have the airports that will be in L.A., New York, Atlanta, Miami. So it really molds well with our asset base. And in addition to that, I think events have become a big component of sales in the U.S. and even conferences like Dreamforce in San Francisco next year, we have the Super Bowl in San Francisco.

So as I see it today and the bookings that we're looking at as we get into '26 have been strong. The conversations have been strong, both on a national and local level. So I feel good as where we're going into 2026 from a net sales standpoint.

Great. And how do current price increases compare with prior periods?

Definitely more of a position of strength this year. When I think about where we were last year at this point in time, I think the elections actually had an impact on the first half of last year. The uncertainty of the elections, I think uncertainty for advertisers, for business, just in general, is never good. And I think the RFP volume that we were seeing coming out of '24 into '25 was weaker. And I think that had an impact on the first half of 2025. The fires in L.A. obviously didn't help. But the -- and the year played out very similar in '25. As we said, when we were having these conversations last year, the year started off slow and we expected it to increase throughout the year, and it did.

And as we are here today and moving into 2026, when you're in more of a position of strength in the ad sales market, I think, is more robust than it was last year. And as I mentioned earlier, in your larger -- your more -- your premium assets are driving a larger scale of your business as you're getting rate increases on those and you're filling up the bucket, your less premium inventory as the premium inventory is filled up, advertisers go to those boards as well, and that's going to drive occupancy. And that's kind of how I see us going into the year. I think we had increases year-over-year last year, but I think it's a little bit stronger as we go into 2026.

Great. And as we think about specific categories heading into '26, which do you see as potential leaders and laggards. So for example, if we think about political, we think about pharma, if we think about auto, tech.

I'll talk political first, and it gets a lot of conversations. It's not a huge vertical for us. It actually was very strong in 2024. It was helpful. I think the presidential elections, we actually got more impact from political spend than we normally do. And I think we'll get some share of that spend, but I don't think it will be a huge driver, but it will be helpful in 2026. And overall, we've really -- we've talked about our vertical strategy.

And I'd say some of the verticals that are very strong right now that I would expect to continue into next year. The banking and financial services sector has done well, both across America and airports, technology driven by AI specifically in San Francisco has been very strong, actually stronger than we expected this year. I expect that to continue into next year. It seems like we're even booking dollars into other markets from an AI perspective.

Pharma is a vertical that our company has crafted for the out-of-home industry 5, 6 years ago, you didn't have pharma advertising. And that really came out of our direct-to-client business where we had an individual with the team that really got that skill set, and we had one client. We had one pharma client 4 or 5 years ago, and we -- from the RADAR platform, the behavioral attribution of that platform where we're able to talk about script download -- scripts that are written both in exposed and unexposed.

And we went from one client 4 or 5 years ago. Now we're having conversations with almost a dozen clients as we go into 2026. So I expect that vertical to grow. It's been a very good vertical in 2025. I expect that into 2026. Auto insurance is a vertical that was very strong for us pre-COVID, and that really went from a very big vertical and that went down as you progress through COVID and that's starting to come back. I think the auto -- I think it's a great advertiser -- you're in your car. For car insurance, I expect that to come back. It's been very strong this year. I expect that to continue.

And we talk about the vertical strategy of pharma. We're looking and we've talked about this hiring someone within our company to go after auto. That's something we're still -- it's a pretty big vertical for us. We want to drive additional growth to the Tier 3 advertising. Something that's very strong from an airport standpoint, travel has been very strong for airports, not as strong on the Americas segment. That's something that we're going to actively look at next year and think about campaigns of come to our city.

And that usually was driven through search, and that's something we want to go after within the cities that we're at and driving that type of advertising and to complement what they spend in search to kind of amplify that with our product offering for certain cities. So those are probably some of the major ones. I don't think anything else. And there are a few that haven't performed as well. at the local level, retail and restaurants kind of been up and down throughout the year. The conversation always talks about media and entertainment, still a large vertical, hasn't grown like we have liked. That's probably more of a product of L.A.

But you're starting to see media and entertainment starting to book in other cities as production facilities are moving outside of L.A. So that could be helpful, but it's still a vertical that it's not growing like we would want.

Great. And then touching on airports, how impactful will the new JFK and other terminal openings be in '26? And obviously, airports has been very strong. So how sustainable is that? And what are really the key drivers of that?

Sure. I mean the airports business has been great. The team has executed wonderfully across our portfolio of assets. If you walk through an airport several years ago as to today, as we're renewing airports or extending airports and you put in -- you mentioned new terminals in JFK. As you put new assets in, really, the strategy has been going with big impactful signs as opposed to a lot of smaller signs and the advertisers have really responded to it. We've done category exclusives in a lot of our airports. If you walk through -- I was just out in Detroit, if you go in there, you'll see Michigan all over the place, the University of Michigan, you'll see it Rutgers in New Jersey.

Those category exclusives, like you're going to pay extra for owning that space. We do it with health care within the airports. And just the programs themselves, they're becoming more digital. When I think about JFK, we have the Disney Tunnel. I mean that's something you go from one terminal to another, where we've built that with having conversations with the advertising knowing that Disney was going to sponsor that. So like that's kind of the Disney tunnel.

So it's a premium buy. The demographics that are flowing through the airports is highly what the advertisers are looking for. It's a great demographic. And the airports are busy. I mean the traffic is up. As far as the growth that we've seen, we're not going to have 16%, 20% growth in the airports year-over-year into next year. That will come down to a more sustainable level. But I still think that's a mid- to high single-digit number from an airport standpoint.

Great. And then shifting to digital, what share of revenue do you expect digital represent, let's say, by '28 versus today? And which markets offer the most upside for digital penetration?

I mean the digital investment is still just a great capital project for us. When we convert a sign, you're going to get in the 4 to 5x uplift in revenue, and that's been tried and true over many years. We watch that very closely, constantly reviewing year-over-year, looking at that uplift. Organic builds are great as well, a little more -- slightly more expensive, but it gives you coverage in an area you're normally not in. As far as growth rates, look, I think there's a lot of runway to continue investing in digital across both airports and America.

In the Americas segment, we're roughly 5% or 6% of our assets are digital, but the revenue is 35%, 36%. Airports is north of that from a percentage of revenue. We have -- being at 36% in the Americas segment, we have several cities that are plus 50% in revenue, Phoenix, Atlanta. And I do think when you get to that 50% and above, and we saw this in Phoenix, and it's not just us that has boards. Obviously, there's a lot of digital boards in Phoenix. When you start getting to that 50%, it does take the market a little bit of time to absorb that inventory.

But we sort of once that market absorbs that inventory, you really can get scale now. I mean you can do campaigns across that market, really covering the entire market from a digital standpoint. I think that is something that's going to be beneficial as you put in more digital boards. But then you have markets, Houston, L.A., Philly that are below 30%. So there's room for those markets to grow. That's probably more of a regulation within those cities and you work on those to open up more digital boards. People will say, well, what do you think you can get to? When we owned our European business, there were some countries that were north of 70%.

We're at 36% in America. Overall, we're probably about 40% with airports. That will slowly tick up over time, probably a percentage point or 2 a year. But they're great investments, 30 -- actually higher than a 30% return on those boards, and we still have a lot of inventory to continue that playbook. And that's definitely when I think about the Investor Day and if folks were at Investor Day, glad you're able to attend. If not, it's definitely online to listen to. But the story that we're talking about at Investor Day is growing the top line 4% to 5%, the bottom line, 6% to 8% over that time period, reducing our leverage from where we are today at 10x levered to more 7 or 8x by 2028, that digital program is definitely a large part of that process.

Great. And what regulatory or other barriers potentially limit digital conversion?

Well, there are some areas where you can't build digitals. Tucson is a market that we have where we don't have digital signage. And everyone knows within L.A. and certain areas of L.A., where our digital boards were turned off. On top of that, we definitely have built out a very good market within L.A. Houston is a city where there isn't digital within the city. If that jurisdiction, that regulations we're able to put digital in there, we would go in and definitely over-index the amount of boards we do in a year for something like that.

But overall, across our portfolio, there is run room. And if something opened up in a specific city, we would obviously build more. That's definitely an investment for the future. We did it in Dallas several years ago. I mean, it's probably about 10 years ago, where digital was opened up in the city of Dallas, we moved in, and we probably have today over 100 digital boards in Dallas.

Great. And how does programmatic fit into your broader digital strategy?

It's another channel that we sell across our portfolio. We have our local channel, national, direct-to-client, programmatic, our inside sales channel. And look, programmatic is another way and another advertiser to go after. When we first started selling programmatic, it definitely was a different budget. It was -- you were going after a different -- at the agency, a different bucket of dollars from an advertising standpoint. And that's still the case. But there are still some clients that are direct to our business that are moving in from a programmatic standpoint.

It's a smaller channel. It's not a giant channel when you think about our $1.5 billion business, but it's growing very fast. And it gives the advertisers an opportunity to come in and out a little bit quicker. You can buy the inventory in and out a little bit quicker, a little bit easier. Where I see programmatic going for our business is our product called ClearCast Digital, which is really a way of buying impressions, which is how programmatic is sold, but buying it directly through our business as opposed to going through the DSPs and the SSPs because the margins on a programmatic buy is less for us because you are paying the SSPs and the DSPs.

But I feel like that ClearCast Digital is definitely a way where you can efficiently sell your inventory, where a lot of our assets, especially the premium assets are bought at a more of a location type buy, where through ClearCast Digital, you're buying impressions, and we can really optimize our inventory, that's where you can grow occupancy and margins and whatnot. So it's all part of the sales engine that we spoke about on Investor Day.

And then MTA, that contract has done very well, seems to outperform expectations. Can that momentum continue?

Absolutely. Look, the MTA, it played out. I mean we actually beat the plan that we had in place, which was aggressive the first year. It's going to be cash flow positive in the first year and it has a sizable Mag in year 1. It's very good inventory. It's premium inventory. We talked about the U.S. Open during our earnings call where we're able to utilize our inventory, MTA and New York inventory along with our airports inventory in New York, where you would get folks coming in for that event, you're getting them going to the airports, driving into the city around the city, around the venue. that's a huge selling point to customers.

Do I see the MTA continuing to grow? Absolutely. We got that contract where we were awarded that contract on November 1, 2025. We signed the contract in October. So the ramp-up on that -- on those boards was a little bit slower in the sense that we started selling in October and you inherited it in November. So that was really why the margins had a margin impact on our business because the site lease on day 1 is the same as the site lease 10 months later. But now as I talked about the strength going into 2026, and the MTA is a part of that. Now that's part of the process as we're selling our upfronts for the next year. That wasn't there last year.

I expect the MTA to continue to have the progress that it's having. This year, as we get into 2026, we'll start to see the margins improve on the Americas business because we have absorbed the MAG and the site lease of the MTA, but that will continue to grow from a revenue standpoint. And it's a great buy. It's done very well. It's helped the national sales team in 2025 into '26, but it's also a very good local buy. So it's been very productive for the business. And it's also the type of product before we had the MTA, we had an okay inventory in the New York market. We were probably a little scaled more in New Jersey.

But having that MTA, when we have large national RFPs coming through that include New York, it just makes us that much stronger. And if it's a multi-market deal, that helps the business overall. And we spoke about that when we were signing that MTA contract, and that has come played out in reality, which has been great.

Great. And how will Americas margins expand as those MTA costs normalize?

They'll expand year-over-year. Like we were down probably 0.5 percentage point from a margin standpoint, maybe a little bit more. You'll start to see that grow back. In the fourth quarter, we'll see margin expansion on our Americas business, and that will continue as you get into the first, second and third quarter, which definitely would be nice to talk about as opposed to the margins going the other way. We knew that was going to happen. We told everyone, but there was a reason for it. But at the end of the day, it's also driving margin dollars in addition to the percentages next year.

So overall, from a strategic standpoint, the MTA has been a good property for us.

Great. And you mentioned earlier, David, some of the targets you laid out at your Investor Day. So 4% to 5% revenue CAGR, 6% to 8% EBITDA growth through '28, also reaching $200 million AFFO, 7 to 8x leverage. on the flip side, what are some risks that could potentially derail that plan? And how might you mitigate them?

Sure. I mean, look, overall, I think the plan we laid out on Investor Day is an aggressive plan. I think it's reasonable. We're growing the business 4% to 5% on the top line for the next 3 years is absolutely attainable. And I think there's a potential to actually overdeliver that plan if certain things fall into place in the right way, and we went through that in detail during Investor Day. But as far as the risk that happens, we are an ad sales business, any kind of macro could have an impact on the business. I think we do have sticky assets in the sense that we talk about us being a location buy.

And what we saw even during certain parts of COVID is folks that have perms, our business is sold in the sense that on the Americas business, probably a little less than half of our business are perms. And what that means is advertisers are buying the full year. It's really a calendar year, but throughout the year, they're re-upping for 12 months, and it's pretty steady throughout the year. It's probably in the high 40s. Our airports business, their perm business is probably closer to 60%. So when you do have a downturn, there are assets that folks don't want to -- they don't want to abandon that space because they look at it as they own that location.

And that helps us during a downturn. And even when that happens, if someone does drop that board, usually, you'll get a pretty good price increase because someone wants to go after it. But obviously, an economic impact would hurt the business. But where we are today, if we were having this conversation 2 years ago, I have a much different answer. When we owned our international businesses, a downturn was I want to say scary, but it was quite impactful. The businesses over there, especially France, like during COVID, burned a lot of cash.

Those businesses are much higher Mags more from a rev share standpoint, where today, we're more of a simplified derisked business where we can absolutely weather a downturn from a cash standpoint much easier than we could prior. So I think as a business, we're set up in a much better way. And we would utilize the normal triggers as far as you would look at your capital spend, you would look at your expenses and whatnot. But we can definitely weather a downturn better today than we could a year ago or 2 years ago.

Great. And shifting to the balance sheet and your capital structure in particular. How do you think about addressing the '28 and '29 unsecured maturities and kind of what creative options could accelerate that delevering?

Sure. I'll bring Jason into the fold, and I can always come on top, but if you want to start.

Yes, I think, our view of the 28 maturities are they're in focus, right? We were able to go to the markets and push out all the maturities that stood in front of them. So now those are out in 2031 and 2033. So we are solely focused on the unsecured notes. And we're addressing those as we laid out in the Investor Day through asset sale proceeds and free cash flow generation. And I think the trading levels of those bonds, while we can't capture discount anymore because I think they're near par at this point.

There's been kind of a sentiment change to where we feel, at least, and we feel internally for sure, that those are more addressable in kind of the normal way capital markets, especially if we continue to delever and take those balances down by the time we have to deal with them, which would be sometime likely in 2027 at the latest point, right? But we do get a lot of creative ideas coming through. I mean everybody has a way to handle those. And I think if we determine that they are beneficial kind of to the long-term cost of our capital, we take a look at them.

But today, as we sit here, I think turning through those with our free cash flow generation and paying them down and monitoring the capital markets from here until that point and taking something -- looking at things that are opportunistic has suited us pretty well, but we're not closing our eyes to any creative ideas that are out there.

Great. And can you remind us what your current secured capacity is? And also, is there an appetite for any ABS financing?

Yes I think secured capacity, I think we've stated this before, we're around $500 million to $600 million of total secured capacity. We do like to reserve some of that capacity for draws on revolvers, and we don't anticipate a need for those with our liquidity position today. But that is -- it's not enough to say we get questions, do you have enough secured capacity to take care of the unsecured. And the answer to that question is no today. And then as we think through the ABS, that is a type of secured financing, and we obviously take a look at it. But again, using secured capacity, especially on contracts that we have that have really nice cash flows, we just want to make sure that it makes sense over the long term, right?

So the cost of that financing, which we've seen historically has been at the same rates as we would likely see a high-yield offering. So we definitely monitor it and are taking a look at it. But we would want to make sure that it's efficient to the capital structure in the long term, and it doesn't throw anything into the mix that we wouldn't otherwise be able to do in kind of the high-yield markets, which have been very efficient for us.

The REIT topic comes up often. So what conditions need to be met for a REIT conversion? And realistically, when could something like that occur?

Look from a REIT standpoint, that for our vantage point, that's really a tax play. And as of today, like we're not a material federal taxpaying entity. That will change over time. It's not happening in the immediate future. But for a REIT really to make sense and if you look at some of our counterparts, you probably need your leverage in that 5x area for it to make sense. In the short term, from a tax planning standpoint, that's not something that we're looking to do. But over the long term, as you get past our -- at the end of the Investor Day period, that is a viable option.

But to get down to that 5% leverage ratio, I think through our Investor Day. I think the 7 to 8x is absolutely attainable. If we overdeliver that plan, you could probably get into the 6s. But if you do that, I think the value you're going to create over that time period, paying down debt, as Jason mentioned earlier, it's probably another $400 million of debt, which obviously you could get that transfer of value from equity -- I mean, from debt to equity as you grow the business over that time frame, and we've talked about this over that LRF period is probably $100 million, $115 million of EBITDA.

And if you don't even think about it from a multiple expansion, if you look about where we are today and where we trade, that's probably $1.5 billion, $1.6 billion of value from an equity standpoint. And then your stock price is different than where it is today, and maybe you can utilize that currency to further delever the balance sheet. So the tools and the options that we have available to the business today are so different than where it was 2 years ago when we were trying to sell our European business. So I feel good when you bring up the REIT conversation, yes, that is something we could do down the road.

You asked me that question a couple of years ago, it would have been harder to imagine, but now that we sold that business, the value that we can create, it kind of opens the doors. And that could be helpful also from -- when Jason talks about our leverage and our senior notes coming due in '27. So there's definitely more options on the table for us.

And I would just add, I mean, the 2 roadblocks to REIT conversion were the international assets, which are non-REITable and leverage, and we've addressed one of them. So we're hoping to address the next.

When we think about M&A, industry consolidation, also asset sales is the other side of that, how are you more holistically thinking about that from an industry perspective, where you could fit into that? And also, what are some of the limitations we should be mindful of, specifically from a tax perspective that could hinder some larger transactions that people might speculate would be beneficial.

Sure. I mean, from an M&A standpoint, we're very realistic of our capital structure. So we're not out there going after a large acquisition where we are from a leverage standpoint. But on the flip side, we have talked about creative solutions, maybe that's a JV structure, we bring in a partner. That's something that we're absolutely exploring where we would contribute assets, they contribute cash and then you can go out and purchase something. And obviously, that grows your EBITDA, that helps you from a leverage standpoint.

Look, the industry as a whole, we expected 2025 probably to be a little more robust from an M&A standpoint, and it wasn't with the new administration coming in, folks expected more. You're still seeing the 10 boards being picked off here and there by certain companies. But I think over the next several years, you'll probably see some larger type transactions. Do I know what they are today? No. But the out-of-home space, the top 3 are probably 65% of the industry. So there's another 35% of some pretty large out-of-home companies down to small ones and twosies. And it's kind of been an out-of-home strategy of doing acquisitions over the time. We did it years ago. Obviously, Lamar does that as well. So we'll see how that plays out.

We'll look at smaller acquisitions where it makes sense. But from a more larger scale, that's probably something we would do from a partner standpoint. But again, that's another tool for us. But when I think about just what we went through on Investor Day and the road map that we laid out, like that strategy of just operating the business, growing EBITDA, we'll be able to reduce our leverage to that 7 to 8x range, which I think is a big deal from where we are today at 10x, but that will happen over the next couple of years.

Great. Well, we're out of time. So thank you. Helpful and informative as always.

Thank you.

Thanks for joining us.

Appreciate it.

Hello, and welcome to Clear Channel Outdoor Holdings, Inc. Third Quarter 2025 Earnings Conference Call and Webcast. [Operator Instructions] Also, as a reminder, this conference call is being recorded today. If you have any objections, please disconnect at this time. It's now my pleasure to turn the call over to Laura Kiernan, VP of Investor Relations. Laura, please go ahead.

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 third quarter 2025 operating performance of Clear Channel Outdoor Holdings, Inc.

We recommend that you download the third quarter 2025 earnings presentation located in the Financial Information section of our Investor Relations website and review the presentation during this call. After an introduction and review of our results, we will open the line for questions. Before we begin, I would like to remind everyone that during this call, we will 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 on our filings with the SEC.

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. When reviewing the earnings presentation, it is important to reiterate that all European and Latin American operations are reported as discontinued operations for all periods presented.

This includes our current business in Spain, our former business in Brazil, which was sold on October 1, our former businesses in Mexico, Chile and Peru, which were sold on February 5; and our former Europe North segment, which was sold on March 31. Our reported consolidated results include the America and Airport segments and Singapore.

Also, please note that the information provided on this call speaks only to management's views as of today, November 6, 2025, and may no longer be accurate at the time of replay. Please see Slide 4 in the earnings presentation, and I will now turn the call over to Scott.

Good morning, everyone, and thank you for taking the time to join us today. Many thanks to those of you who were able to participate in our Investor Day in September. We hope you came away with a clear understanding of our vision, strategy and financial goals as we center all our efforts on accelerating our revenue growth in the U.S., increasing our cash generation and reducing debt.

Turning to our results. On a consolidated basis, we generated revenue of $405.6 million, representing a year-over-year increase of 8.1%. This was driven by record third quarter revenue levels in both segments. Our Americas segment grew 5.9% with our 18th consecutive quarter of year-over-year local revenue growth, and Airports delivered another great quarter with 16.1% year-over-year revenue growth.

We saw growth in key markets, including New York and San Francisco, in national and local sales channels and in digital and programmatic sales. Categories that continue to perform well across the company include banking, legal services and technology, including AI.

We remain on track to achieve our financial guidance for the year as we benefit from our focus on customer centricity, accelerating technology capabilities and sales execution and further strengthening our balance sheet. Our transition into a U.S.-focused company has improved our risk profile while allowing us to focus our management team on a range of initiatives to drive more business across our platform while pursuing operating efficiencies through our zero-based budgeting effort.

In addition to our financial results, we announced some important milestones during and shortly after the third quarter as we continue simplifying and derisking our company. On September 7, we entered into an agreement to sell our business in Spain to Atres Media for approximately $135 million. On October 1, we closed the sale of our business in Brazil for $15 million. Once the Spanish sale closes, we will have completed international divestitures worth nearly $900 million.

We also continue to derisk our capital structure and extend our debt maturity profile with the August debt refinancing. We continue to strategically reinvest in our business and our digital conversion plan remains key as we leverage our reach, data analytics capabilities and verticalized sales teams to expand our presence in the broader advertising market and gain share.

Last quarter, I spoke about the success we were having with pharma driven by our advances in technology, analytics and our go-to-market strategy. This quarter, I would like to share another example of how we are leveraging the power of our out-of-home scale to serve brands in major cities like New York with global events like the recent U.S. Open tennis tournament. For this year's tournament, we executed multiple campaigns for national advertisers looking to connect with the massive and highly attractive audience attending the U.S. Open. We delivered an unmatched advertising platform covering thousands of tennis fans throughout their journey from our inventory in the New York airports as they arrived to our newly expanded New York roadside inventory as they travel to and from the city and finally, through our high-profile inventory in and around city field, adjacent to the U.S. open venue.

Our business is increasingly surrounding live events with powerful advertising displays in dynamic and integrated ways. This is also a great example of how we're performing on our expanded New York inventory, and I'm pleased to announce that we're ahead of our internal projections for these assets. They are on track to be cash flow positive in year 1. We've lapped the fixed cost site lease headwind and expect to see accelerating growth as we've now fully incorporated them into our network.

Diving deeper into our airports platform to show the power of our inventory, a recent study by Nielsen Scarborough found that airports media is the perfect canvas on which to tell a brand story. According to the study, among frequent flyers who noticed airport advertising, 82% read the ads, 61% recalled seeing them and 57% took action after viewing an ad, a clear demonstration of the impact of this medium.

Additionally, the study shows that experiential marketing works well in airport settings and in-person brand experiences are highly appealing with 89% of frequent flyers wanting to sample food or beverages and 62% interested in trying new products they had seen advertised in airports. As we execute on our revenue-driving initiatives, we are also on track to deliver a further reduction in our corporate costs. This is enabled by a combination of direct savings related to the sale of our international businesses as well as the additional efficiency opportunities stemming from our zero-based budgeting efforts, as I previously noted. We are on track to deliver the $50 million in corporate cost savings announced during our Investor Day.

To sum it up, our business remains healthy in the fourth quarter, and we are on track to deliver on our financial guidance for the year. We now have 90% of our Q4 revenue guidance under contract and our business pipeline remains strong. In addition, we remain on track in pursuing the multiyear goals we discussed at Investor Day of 6% to 8% adjusted EBITDA growth, $200 million in AFFO and net leverage of 7 to 8x by the end of 2028. So the future looks bright for our company as we actively pursue what we believe is a substantial opportunity to unlock shareholder value as a U.S. focused organization and leader in our space. And with that, I will turn the call over to Dave for the financial review.

Thanks, Scott. On to Slide 5 for an overview of our results. The amounts I refer to are for the third quarter of 2025 and the percent changes are the third quarter 2025 compared to the third quarter of 2024, unless otherwise noted. Our results this quarter continued the steady trend we've seen all year with solid revenue growth and strong liquidity, positioning us well to achieve our year-end guidance. Consolidated revenue for the quarter was $405.6 million, an 8.1% increase, in line with our guidance. The increase was driven in part by strong digital revenue and growth across all sales channels. Adjusted EBITDA for the quarter was $132.5 million, up 9.5% and AFFO was $30.5 million, up 62.5%, both within our expectations.

On to Slide 6 for the Americas segment third quarter results. America revenue was $310 million, up 5.9%, in line with guidance. The increase reflected growth across both print and digital revenue with continued benefit from the MTA Roadside billboard contract and improvements in the San Francisco Bay Area. Mobile sales were up 5.7% and national sales were up 6.1% on a comparable basis. Segment adjusted EBITDA was $133.4 million, up 3.9% with a segment adjusted EBITDA margin of 43.1%.

Please see Slide 7 for a review of the third quarter results for Airports. Airports delivered another great quarter with revenue of $95.6 million, up 16.1%, in line with guidance. The increase was driven by digital revenue up 37.4% and strong performance in national sales, which grew 25.2%. Mobile sales were up 3% on a comparable basis. Segment adjusted EBITDA was $21.9 million, up 29.2% with a segment adjusted EBITDA margin of 22.9%.

Moving on to Slide 8. CapEx totaled $13.2 million in the third quarter, down 25.9%, driven by lower digital spend and reduced contractual spend on shelters. Now on to Slide 9. We ended the quarter with liquidity of $366 million, which includes $155 million of cash and $211 million available under the revolvers. Following the amendments of our revolving credit facilities in the second quarter, which extended maturities through June 2030, we completed a $2.05 billion senior secured note offering in August, refinancing $2 billion of existing notes and increasing our weighted average time to maturity to 4.8 years at the time of the refinancing.

Through this refinancing and our second quarter debt buybacks, we have maintained essentially flat annualized cash interest, and this does not include interest savings of approximately $28 million from the prepayment of the CCIBV term loans. Now on to Slide 10 and our guidance for the fourth quarter and full year of 2025.

For the fourth quarter, we expect consolidated revenue to be within $441 million to $456 million, representing a 3% to 7% increase over the same period in the prior year. We expect America revenue to be within $322 million to $332 million, representing a 4% to 7% increase over the same period in the prior year and Airports revenue to be within $119 million to $124 million, representing a 3% to 7% increase over the same period in the prior year.

Given our year-to-date performance and our outlook for the fourth quarter, we've tightened our consolidated full year revenue guidance range. We now expect consolidated revenue to be within $1.584 billion to $1.599 billion for the year, representing a 5% to 6% increase over the prior year. We continue to expect full year adjusted EBITDA to be within $490 million to $505 million, up 3% to 6% from last year, and we now expect full year AFFO to be within $85 million to $95 million, up 45% to 62% from last year. And we continue to expect full year CapEx to be within $60 million to $70 million. And following our recent capital markets transactions, we continue to anticipate future annualized cash interest of approximately $390 million, assuming no additional activity.

As we discussed during Investor Day, we are powering our cash flow flywheel, including growing revenue, expanding margins, increasing AFFO and reducing debt. Through this meaningful debt reduction, we are actively converting enterprise value from debt to equity. And now let me turn the call back to Scott before we take your questions.

Thanks, Dave. To summarize, we believe we are at a pivotal moment with industry trends in our favor, irreplaceable premium inventory and strong digital capabilities that together create real growth opportunities. The disruption in search and linear TV ad markets makes this the most exciting ad market in which we've operated. As the last mass visual medium with increasing analytic firepower, our industry is poised to gain share if we do the things we need to do. I believe we are doing those things and excited about the opportunities that lie ahead. To that end, I want to thank our company-wide team for their continued dedication and hard work as we pursue this great opportunity.

We are confident in our ability to achieve our near-term guidance and long-term goals, including sustainable top line growth, expanded margins and meaningful deleveraging in line with what we discussed on our Investor Day. For those of you who don't recall, we described adjusted EBITDA growth of approximately $115 million by year-end 2028 and applied our then current multiple, yielding value creation of roughly $1.3 billion. We added to that further debt paydown of about $400 million in the same time frame. Taken together, we see this as an opportunity for value creation of approximately $1.7 billion for shareholders based on the plan we laid out with further upside if we realize some of the discontinuities we discussed or see improvement in our valuation multiple.

With a streamlined business and a growing digital portfolio, we expect to enter 2026 from a position of strength. And now we welcome your questions. Operator?

[Operator Instructions] Our first question is from Aaron Watts from Deutsche Bank.

A couple of questions for me. I wanted to start with one on the ad environment for both the billboard and airports unit. Can you provide a bit more detail around how advertiser behavior to close out the year is setting the stage for early '26? And I know we've all been waiting for some stronger tailwinds from the ad market. Curious if you feel that momentum building.

Thanks, Aaron. This is always a tough question to answer from our little quarter of the world. But we really like what we're seeing in the marketplace right now. The year has built how we expected it would. And if you go back to our earlier earnings calls, we sort of described how we thought it would build, and it very much has had momentum build. And has had good strength. We've seen it both in local and in national and probably relative to kind of prior quarters in our book, national has probably been better than what it has been in the last couple of years, and we see that continuing into 2026.

I don't know how much I generalize that to the total ad market because I don't have visibility. And I do think the things we called out on Investor Day around disruption in search and disruption in linear TV are providing us some tailwinds. We certainly are hearing from advertisers that we're picking up some share as a result of those disruptions.

Okay. That's helpful. And then if I could ask one more. There was a report about interest in the company from a third party. We've also seen public comments from your shareholders encouraging consideration of strategic alternatives. Can you provide us with an update on where all that stands? And has any of this changed how you and the Board are thinking about the strategic future of the company?

Aaron, we're a public company. You know the rules on this as well as I do. So I'm not going to be able to comment on market speculation.

Okay. Fair enough. If I could squeeze one last one in, maybe for Dave. You ended third quarter with around $150 million of cash held in the U.S., assuming Spain closes as expected, you'll have further liquidity coming in. Remind us what minimum amount of cash you would like to keep on hand day-to-day and how you're thinking about priorities for allocation of that excess cash above the minimum over the near-term horizon.

Sure. Thanks for the question. Look, now that we're a U.S. focused business, I've mentioned this in the past. We're probably targeting between $50 million and $75 million of a minimum amount of cash. I think, allows us to weather the seasonality of our business. We have stronger cash generation in the second half of the year. But we're looking to deploy cash in a disciplined way, prioritizing our near-term debt as we look forward. But prioritizing the paydown of debt, as we mentioned before, is a priority for the business, in addition to obviously investing in the business as well.

Our next question is from David Karnovsky from JPMorgan.

Scott, you noted in the release strength in the Northern California market for billboard and airport. I was hoping to just drill in more. Maybe you could speak to what's improved, where you're seeing that incremental demand? And then just as a follow-up, just with the government shutdown, any impact here either due to government as a category or maybe looking ahead, just the potential for air traffic reductions and what that could mean to the airports business?

Sure. Thanks, David. On NORCAL, there are a few things that have been going San Francisco's way of late. And I think number one is that the city reputation has bounced back, and that has caused broader advertiser interest in the market. A couple of years ago, we suffered as the kind of reputation of where San Francisco was degraded. We're now benefiting from a lot of changes that the city has made cleaning itself up and making progress, and that has helped. I think the second thing and from a dollar level, this might actually be bigger, but it's just kind of one vertical, but it's the tech vertical and specifically AI has been absolutely focused on out-of-home as a vehicle to promote the companies that are emerging in that space, both the big ones and smaller ones. So whenever you have a geographic area with finite inventory where there's a lot of competition to get the word out, that is good. We are a supply and demand business, and this is something that we're benefiting from both in the road side and in airports. So we're very happy about the direction San Francisco is moving in right now.

On your second point about government shutdowns, we have not seen anything disrupting things to date. Obviously, we are watching it very closely, but we really have not seen a drop in air traffic. The delays have been episodic and around the system, but have not, at this point, driven any dialogue. So, really nothing to report on that. Probably for us, the government shutdown impacts us more in our Washington, Baltimore market, where just that is not an area that advertisers are necessarily prioritizing much because commercial activity is somewhat diminished in that area. But honestly, it's not enough for us to see in the numbers at this point. Anyway, I'm just saying that, that would be more where I would look at our portfolio for an impact of it.

Our next question is from Lance Vitanza from TD Cowen.

Nice job on the quarter. On the Americas, you mentioned strength in San Francisco and New York, but not in L.A. And I'm wondering if you could give an update on the prospects for, I guess, entertainment as a national category, but also L.A. as a local market. And then actually, I'll just throw in auto insurance as a national category, too. I'd be curious to know how those 3 are shaping up.

Great. Okay. Lance, that's a broad field. Let me deal with L.A. first. We'll come back to insurance. This has been a tough year in L.A. starting with the fires in January and all of the movement in the entertainment space. Entertainment is being cultivated by lots of different cities around the country and around the world, frankly, for production. And I think we've all seen the articles exploring how entertainment is "moving out of L.Aâ€. I think L.A. would still very much assert itself as the entertainment capital of the world. But that obviously is something that is coveted and that other people are impacting. And we have not seen the entertainment vertical. It's been kind of a laggard all year for us. I don't think that makes us think that that's a permanent condition, but L.A. is going through a phase like many cities go through. I mean we just talked about San Francisco with David a minute ago. The outlook in 2023 was very bleak. And here we are 2 years later, and it's a shining star. And I think I'm a big believer in L.A. I'm a big believer in L.A. bouncing itself back. And as the entertainment industry evolves and as the rebuilding starts to take hold, which has taken longer, I think, than any of us would have hoped, I think you're going to see L.A. reassert itself and get itself moving in the right direction again. I do have a lot of faith that Los Angelinos are going to burnish their city and get it moving in the right direction. But it has been a laggard for us this year. We're looking forward to talking about its renaissance though soon.

In auto insurance, that's a brighter picture. That market, and you and I have talked about this a lot in the last couple of years. They were a really big category for us pre-COVID. Post-COVID, they had shrunk quite a lot. And we're seeing auto insurance come back and the activity that I'm seeing heading into 2026 makes me feel like this is going to have some durability. So I'm hopeful that we'll be talking about auto insurance as a success story for us here over the next couple of years. It's moved in the right direction. It will be a grower for us this year, but I think there's still plenty of upside to that vertical for us.

If I could pivot to New York, and you've talked a bit about that in the prepared remarks, but I'm concerned about New York City going forward and perhaps falling into a sort of a San Francisco style slide. And so I'm just wondering if you could just clarify relative to, I guess, OUTFRONT is really the big competitor. Are you more or less exposed to the New York City marketplace in terms of like revenue contribution relative to other areas?

So I don't know their numbers off the top of my head, but I would guess that they are more exposed than we because MTA Subway is a bigger contract than the Port Authority and airports, and they probably have, of the other assets sprinkling around probably somewhat more. But you need to talk to them about what percentage of their revenue it is. For us, it's an increased percentage as a result of the roadside contract MTA that we picked up a year ago. But we very much believe that New Yorkers have grit and that they're going to navigate the uncertainty that the most recent election lays out just fine. So we feel good about New York. We feel good about New York as a cultural and commercial center for the country and for, frankly, the world. So I appreciate your concern, but we feel good about New York's prospects.

One last one, if I could, regarding the Spain sale. If I recall, this is your second attempt at selling the asset. And so I'm wondering if there's anything in particular that makes you more comfortable that this transaction ultimately gets approved, whereas the last one, if I recall, got blown up by the regulators.

Your recollection is correct. The first attempted sale was to a direct competitor in the marketplace. This sale is to someone who does not participate in the out-of-home space. They are a media company, but they don't participate in out-of-home. It's in the regulators' hands, Lance, but I can assure you, we did a lot of diligence on that as we were evaluating the process, and we're hopeful that this will be something that is acceptable to the regulator.

Our next question is from [ Avi ] Steiner from JPMorgan.

A fair bit has already been asked. Maybe 1 or 2 things here. Political was a minor bump in the past from a revenue perspective, but I couldn't help notice more political advertising on billboards, at least on my commute than in recent memory, both from candidates and also new prediction market betting sites. And I was wondering if, a, that was helpful at all into the November election. I'm not looking for specific guidance. And is that potential upside as you kind of think into next year?

Thanks, Avi. And I appreciate that you're noting billboards and other outdoor advertising on your commute. You're like many of the commuters out there. We -- political is down this year as a result of a presidential year. So to your specific question, it was not a contributor, particularly to our Q3 results. I do think we have been working as have our competitors for years to get political campaigns to use out-of-home more. The U.S. is probably uniquely for our -- particularly state and federal elections, a smaller user of out-of-home than other geographies around the world, which it should not be. That doesn't make a lot of sense.

Politicians, the world overuse out-of-home with a lot of success and U.S. politicians take a page out of that playbook. So that's my advertisement. But look, I think that 2026 it won't be like a presidential year, but I do think that there's some prospect of some uplift from it, not something that I think is going to make or break our year, but this is a category we'd like to see spend more with us.

Great. And one last one for me. This was a slower tuck-in acquisition year for, I would say, most of the industry. And as you look into '26, do you think there might be more opportunities to kind of, at the margin, bolster the portfolio? And if so, I'm curious where you think seller expectations might be among maybe the smaller operators.

Thanks, Avi. Yes, look, expectations are always high among the smaller operators on what payment is due and things like that. It's always hard to call what the macro M&A market is going to be like. Obviously, our participation in that market is always pretty limited just given our balance sheet. We are very targeted. Obviously, one of the things we have talked about in our creative commercial solutions is partnering with the people to be able to do some of that, and that may be something that changes our participation in it. But I think with M&A in this space, it's a question of the operators being comfortable that they're selling into a good environment. And I think the environment is solid. So it was a quiet year in 2025, but I would not be surprised if we saw a little bit more activity I don't think that we've had an environment that people's expectations should be wildly out of the realm, but that's probably a positive in terms of being likely to get activity done, but don't really have a deeply informed view of that.

Our next question is from Daniel Osley from Wells Fargo.

So you recently launched your new in-campaign measurement solution and some of your peers have also released new measurement tools as well. So taking a step back, can you speak to the progress you're seeing in addressing out-of-home's historical measurement challenges? Any early feedback you've gotten from advertisers? And are there any updates on GeoPath?

Great. Thanks, Daniel, and thanks for noticing all of the activity and measurement in our space. I think it's exciting and it's a positive for the industry. On the in-flight insights to which you refer, feedback from advertisers has been positive. We've sold a number of campaigns with it, and it's definitely driving a lot of dialogue right now. So I'm optimistic that, that's going to be something that's a good tool in our toolbox.

To your broader question about GeoPath, there is an industry effort going on where the Boards of the [ OAAA ] and Geopath have brought in an industry expert to help us develop a viewpoint on what next-generation outdoor measurement should be. And that effort is ongoing. It's going smoothly. It's in the stage now where vendors are being solicited and an architecture is being framed out. And I would expect that's something that Q1 of next year, we're going to get to a point where we have a sense of what investment is required and we can have the industry conversation about how we actually make that happen.

It's not at a point that we can say it's going to happen in exactly one form or another, but I'm encouraged by the enthusiasm every part of the out-of-home community has, the buy side and the sell side for taking a hard look at this. I think everybody recognizes that a better quality currency that everybody can be very, very confident in would be a positive development.

That's helpful. And as a quick follow-up, to the extent that you've started conversations with advertisers on term renewals, can you speak to how those conversations are going and how any price increases are coming in compared to prior years?

Great. Yes. No, thanks, Daniel. You remember our calendar well. For other folks, we always talk about our upfront, our version of an upfront happening kind of between October and February. So we're kind of a quarter of a way in-ish to the time frame on that. And we're encouraged. The early dialogue has been positive. We're seeing solid increases as we do the renewals and there are definitely some very positive developments in terms of people looking to expand their footprint. So touch wood, it's off to a good start, Daniel.

Our final question is from Pat Sholl from Barrington Research.

With the CapEx guidance that you provided, to the extent that we get, I guess, a favorable resolution of the tariff issue, would you look to accelerate that in the coming years?

Look, from a tariff standpoint, there's been a little bit of an effect from a company standpoint. We're seeing an increase in steel. But overall, that really has not had really any impact from a CapEx standpoint and what we're going to invest in the business. You probably noticed our CapEx was down in the third quarter, and that's really more on timing of when we're putting digital in the ground. So not really a huge impact. We also had some shelter that we had to do last year, which we did not this year, which is really driving CapEx being down year-over-year. Airports is pretty consistent year-over-year third quarter last year to this year. But overall, going back from a tariff standpoint, I think the team, we've managed that pretty well. We'll see where that goes into next year, but that really hasn't been part of the decision-making process from a CapEx standpoint.

Okay. And then I guess with the sales process in Brazil largely, all the international markets largely complete, do you have like an update on just like the expense reduction expectations for on the corporate side or like any additional cost takeouts on that? Or is that largely complete?

No. It's very similar to what we talked about during Investor Day when we were a global company with all our business units in Europe and Latin America and the U.S., we had corporate expenses roughly in the $135 million range. We mentioned on Investor Day, we went through the process that we're going to take $50 million of cost out, which would leave you in the mid-80s range from a corporate expense standpoint. During that call, we had line of sight to roughly $40 million of that $50 million. We're working on that, and we'll get to that run rate sometime in 2026. So I think that's all on track from that standpoint. very similar to what we talked about during Investor Day.

There are no more questions. So I'll now turn the call back over to Scott Wells for any closing remarks.

Thank you. And I'd like to thank all of our listeners again for taking the time to listen to our call. Like we said before, this is an exciting time in our industry and for our company. I wanted to end by reiterating what we've tried to make clear in each of our investor updates.

Our Board, consistent with its fiduciary duties, is open to all avenues to create long-term shareholder value. The Board and company are actively working with advisers to evaluate a range of available pathways to do so. We can't guarantee that any particular outcome will be achieved, and we plan to make an update only if and when there's something concrete to report. But make no mistake, this is an effort about which the Board is very serious. Thanks again for joining our call.