Lamar announced solid results for the second quarter but lowered full year revenue growth guidance from 4% to 2-2.5% due to weakening revenues. Here are the results of the 2Q 2023 Lamar earnings release and 2Q 2023 Lamar earnings conference call.
- Revenues increased 4.5% in the second quarter of 2023. Acquisitions accounted for approximately four-tenths of revenue growth. Acquisition adjusted revenues accounted for six-tenths of revenue growth. Acquisition adjusted revenues grew 2.7% during the second quarter of 2023.
- Adjusted cashflow (EBIDTA) increased by 4.3% to $254 million for the quarter.
- The company finished the quarter with a weighted average cost of debt of 5%, a weighted average debt maturity of 4.8 years and low debt/cashflow of 3.25.
Lamar CEO Sean Reilly in slowing revenue growth
as we turn the corner into Q3 we observed a slowdown in activity there is more hesitation on the part of customers to pull the trigger on renewals and new contracts as we booked fewer dollars that hurt not just the current month but also rippled through the balance of the year that softening combined with weak results from the programmatic channel mean that the top line is not shaping up as we anticipated it would for the second-half of 2023…
Reilly on what’s up and what’s down
Categories of strength in the quarter included service which was up more than 16% as well as amusement/entertainment education and financial weaker categories included gaming, real estate and insurance. The Atlantic region and to a lesser extent Gulf Coast and southwest regions saw good growth while northeast and Midwest which includes the Pacific Northwest lagged.
Lamar’s acquisitions have slowed
The first half has been relatively quiet on the M&A front…we are still pursuing deals but for now there are fewer sellers in the market..as of June 30 we had closed 16 transactions for a total of $42 million. The dollar volume is likely to pick up a bit in the second-half of 2023 as we work through deals we have under contract for the full year acquisition spend is likely to be somewhere between $100 and $150 million.
Billboard Insider’s take:
Maybe the long expected recession is arriving. Programmatic is down and revenues are slowing. Lamar closed down 4.9% on a day when Clear Channel Outdoor declined 1.8% OUTFRONT declined 1.6% and the S&P 500 declined 0.3%.
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