Outfront Media (OUT) Citi's 2024 Global TMT Conference summary

Business performance and market trends

• Revenue and order growth have shown a positive flow-through, with operating leverage expected to continue through 2025.

• Local business has grown over 30% since 2019, while national business is up around 20%, though national has lagged.

• National ad market weakness is attributed more to specific verticals and comps than to secular decline, but competition from social media is acknowledged.

• Out-of-home advertising globally is at record highs, with a broad advertiser base and local categories like legal services leading in Q2.

• Macro uncertainty persists, but current business conditions are stable, with national business improving and local business solid.

Transit contracts and strategy

• Major non-NY transit contracts include Boston, DC, LA Buses, Miami, and BART, with few renewals expected in the next few years.

• Recent DC contract renewal reduced revenue share and de-risked guarantees, with a focus on avoiding new capital commitments.

• Targeting a return to a 20% OIBDA margin in transit, similar to pre-MTA rebid levels, though this will take time.

• Growth in transit revenue is supported by improved digital products and programmatic integration, even if ridership remains at 70%.

Digital and programmatic advertising

• Digital revenues now comprise about a third of total business, with 16% of digital (5% of total) coming from automated/programmatic channels.

• Programmatic is expected to be a multi-year growth driver, with no margin disadvantage compared to traditional sales.

• Automated buying allows for more efficient inventory utilization and access to a broader advertiser base, including small spenders.

• U.S. digital share is about a third, but could approach 50% in three to five years, though structural differences with other markets exist.