Clear Channel Outdoor Holdings, Inc. Q3 2024 Earnings Update

Date: October 31, 2024
Ticker: NYSE: CCO

Clear Channel Outdoor Holdings, Inc. reported a revenue increase of 6.1% year-over-year to $559 million during its Q3 2024 Earnings Conference Call. Despite facing a net loss of $32 million, adjusted EBITDA rose by 2.6% to $143 million. Key developments include a significant 15-year contract with the New York MTA, ongoing strategic exits from European operations, and projections for Q4 2024 revenue to range between $628 million and $653 million.

Key Takeaways

• Consolidated revenue for Q3 2024 was $559 million, representing a 6.1% increase year-over-year.
• Net loss reported was $32 million. Adjusted EBITDA increased to $143 million.
• Secured a 15-year contract with the New York MTA for roadside advertising.
• Plans for exiting European operations are in progress, factoring in negotiations for the sale of Europe-North and re-marketing of Spanish assets.
• AFFO improved by 9.1% to $27 million, aiding potential debt reduction.
• Q4 2024 revenue is projected between $628 million and $653 million while full-year guidance stands at $2.222 billion to $2.247 billion.
• Capital expenditures for the full year are anticipated at $130 million to $140 million, focusing on digital expansion in the U.S.

Company Outlook

• Consolidated revenue for Q4 2024 expected between $628 million and $653 million (considering a 1% decline to 3% increase year-over-year).
• Full-year revenue guidance stands at $2.222 billion to $2.247 billion, signifying a 4% to 6% increase.
• Expected adjusted EBITDA for the full year: $560 million to $580 million. AFFO guidance is between $90 million and $105 million.
• Focused digital investments within planned $130 million to $140 million capital expenditures.

Bearish Highlights

• Net loss of $32 million recorded for Q3 2024.
• Adjusted EBITDA in Europe-North declined by 4.5% to $27 million.
• Liquidity decreased to $376 million due to a reduction in borrowing limits.
• Sale of the Spain operation encountered regulatory delays.
• Q4 EBITDA guidance suggests slight declines due to increased costs.

Bullish Highlights

• Revenue growth noted across all business segments.
• Americas segment revenue grew by 5% mainly due to digital and printed billboards.
• Airport revenue rose by 9% to $82 million.
• Europe-North revenue increased by 8.6% to $162 million.
• New contract with New York MTA to boost future revenue growth.

Misses

• CCIBV's operating income fell to $5 million from $9 million year-over-year.
• Rising costs in Europe-North due to new contracts and property tax increases.

Q&A Highlights

Management addressed the positive impacts of significant contracts on operating leverage, challenges in local and political advertising, and anticipated stabilization in airport growth.

Conclusion: Clear Channel Outdoor Holdings is demonstrating resilience with revenue growth and strategic business optimization despite facing challenges in the European market. Continued investment in digital expansion is set to enhance future performance.