“Trends continue to be encouraging as we near year end,” was how Lamar CEO Sean Reilly lead off the company’s 3Q 2024 earnings call.  Here are the results of the Lamar Advertising 3Q 2024 earnings release and conference call, analyzed and sponsored by SignValue.

• Revenues increased by 4% to $564 million.  Local revenue as up 4.9%.  National revenue was down 2.9%.  Programmatic revenue increased 70%.
• Operating expense increased by 5% due to increased medical costs, contract labor and no covid relief grants.  Lamar CEO Sean Reilly said “we see expense trends correcting in Q4.”
• Adjusted EBIDTA increased 2.1% to $266. million.
• Capexp totaled $30 million for the third quarter of 2024.  The company added 50 new digital billboards.  In addition, Lamar closed 17 acquisitions accounting for 90 new faces for a total acquisition price of $31 million.
• Total debt was $3.2 billion at September 30, 2024.  The company’s debt/EBIDTA is a low 2.91.  The weighted average cost of debt was 5%.

Lamar CEO Sean Reilly says political has been good.

Political…was quite a bright spot both Q3 and year to date at almost $15 million year to date through Q3.  We’re setting records for political…it it meant in Q3 political growth of a little less than 1% for our overall growth.

Reilly on programmatic’s lower margins

It is a fact that today the cost of a programmatic sale runs about 10% and our overall cost of sales what we pay our account executives and what we pay our national account managers runs about 6%… so you got about a 4% delta there. Now where do we see that going. #1 we get a slightly higher CPM through the programmatic channel and our customers are willing to pay that higher CPM because they get a a richer data set that helps prove out the effectiveness of their campaign so that little bit of extra expense is offset by a higher CPM…

Reilly says Lamar will be back in the M&A market next year

Our leverage as measured by our our bank covenants is going to be less than three for the first time in the company’s history so we’re really happy about the work we did there and and part of that was slowing down the M&A activity this year…that said, going into next year we see it picking up…we’re going to be very active next year…as interest rates start falling then activity picks up…

SignValue’s Take:  Revenue growth of 4% was OK but not great.  Expenses grew faster than revenues – a rarity for Lamar.  Lamar has extremely low debt and is signalling it will be back in the acquisition market next year.  SignValue can be reached at (480) 657-8400 or info@signvalue.com for a confidential consultation.