• Consolidated Revenue: $334 million, a 2.2% increase.
• Loss from Continuing Operations: $55 million.
• Adjusted EBITDA: $79 million, down 12.5%.
• AFFO: Negative $23 million.
• America Revenue: $254 million, up 1.8%.
• Digital Revenue (Americas): Up 6.4%.
• Local Sales (Americas): Up 2.2%.
• National Sales (Americas): Up 1% on a comparable basis.
• Segment Adjusted EBITDA (Americas): $88 million, down 8%.
• Airports Revenue: $80 million, up 4%.
• Digital Revenue (Airports): Up 15.6%.
• Segment Adjusted EBITDA (Airports): $14 million, down 25%.
• CapEx: $13 million, a 17% increase.
• Liquidity: $568 million, including $401 million of cash.
• Annualized Interest Expense Reduction: $37 million.
• Q2 2025 Revenue Guidance: $393 million to $408 million, a 4% to 8% increase.
• Full Year AFFO Guidance: $80 million to $90 million, a 36% to 54% increase over the prior year.

• Warning! GuruFocus has detected 4 Warning Signs with CCO.

Release Date: May 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Clear Channel Outdoor Holdings Inc (NYSE:CCO) reported a consolidated revenue growth of 2.2% for Q1 2025, in line with guidance.
• The company successfully reduced annual corporate expenses by approximately $35 million, with plans to further reduce costs.
• CCO has begun to meaningfully reduce interest expenses, saving $37 million annually through debt repayments and bond repurchases.
• The company is seeing increased interest from national advertisers in San Francisco, with bookings up double digits, indicating a recovery in this key market.
• AI is being leveraged to improve productivity and customer targeting, contributing to potential margin improvements and increased ad revenue.

Negative Points

• Adjusted EBITDA for Q1 2025 was down 12.5%, partly due to a decline in airport rate abatements and increased expenses from the MTA Roadside billboard contract.
• AFFO was negative $23 million for the quarter, although this was within expectations.
• The company faced challenging revenue comparisons in February due to one less selling day and the Super Bowl not being in a roadside market.
• Print revenues in both America and Airport segments were down year-on-year, raising concerns about potential cannibalization by digital revenues.
• The company is still managing transition services agreements, which require maintaining higher levels of various services, impacting cost reduction efforts.

Q & A Highlights

Q: Can you provide more details on your visibility into the second half of the year and opportunities for corporate expense reductions? A: We have good visibility into the year, with strong progress in markets like San Francisco and across various verticals such as media, entertainment, and auto insurance. Both national and local outlooks are positive. For cost reductions, we are working on transition services agreements and aim to have a zero-based budget view for the U.S. by our Investor Day in September.

Q: What are the typical cancellation terms for advertisers, and does the low end of your guidance account for a potential macro slowdown? A: Standard cancellation terms require a 60-day notice for printed ads, while digital terms vary. We have not seen any cancellations currently. The low end of our guidance is based on current observations, not accounting for all potential macroeconomic outcomes.

Q: How might your more digital asset base behave in a potential economic dislocation compared to historical periods? A: While we haven't experienced a normal dislocation with over a quarter of our revenue being digital, during COVID, digital revenue declined first but rebounded faster than printed. Automated verticals showed the closest tracking to market sentiment, and we are not seeing any negative trends currently.

Q: How should we think about site lease expenses and margin cadence throughout the year? A: For Airports, margins will be around 20%, lower than last year due to the end of COVID-related rent abatements. For America, the MTA contract will impact margins in the short term but is expected to ramp up positively over time. Margins are typically lower in Q1 due to seasonal ad sales patterns.

Q: Can you discuss the flexibility to buy back senior versus secured debt and why some debt was left outstanding? A: We focus on achieving the best yield and greatest discount when managing our capital structure. We have an 18-month reinvestment period under our debt agreements, allowing us to strategically pay down debt. We left some debt outstanding to maintain flexibility and optimize our capital structure.

Q: Is digital cannibalizing print revenue, and do you expect print revenue to grow in the future? A: The decline in print revenue is idiosyncratic and not indicative of digital cannibalization. We expect print to grow over the full year, with some campaign-specific factors affecting recent performance.

Q: How are municipalities responding to digital conversions, and how does this affect your strategy? A: Municipalities' openness to digital conversions varies, often influenced by financial pressures. We work to be good partners and strive for more conversion opportunities, though it remains a city-by-city decision. We maintain a steady state of conversion efforts, with spikes when cities broadly change their stance.

Q: How have your digital products and RADAR capabilities contributed to maintaining strong ad revenue? A: RADAR has been instrumental in meeting marketers' expectations for analytics, widely used in planning across all customer levels. Our integration with industry-specific specialists has been a differentiator, helping us secure meetings and trials, ultimately driving new advertisers to the category.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.