40% of Billboard Insider readers say that a strength of out of home is that it is a simple business with high cashflow margins. The best proxy for cashflow is EBITDA or earnings before interest, depreciation, amortization and taxes. It’s what cash you have left in the business after paying your vendors. Your EBITDA margin is EBITDA divided by revenue. A rule of thumb is that you can run your out of home company on a 40-60% EBITDA margin. 10-20% of your revenues goes for leases, 10-20% of your revenues goes for sales commissions and 10-20% of your revenues goes for everything else, including you.
The numbers bear this out. Lamar Advertising had an EBITDA margin of 49% in the second quarter of 2026 which is twice as high as the 24% average EBITDA margin for the S&P 500 companies. OUTFRONT and Clear Channel Outdoor had cashflow margins of 32% and 30% in the second quarter of 2026. OUTFRONT and Clear Channel Outdoor had lower cashflow margins because of high cost urban/airport/transit leases but their cashflow margin was still almost a third higher than a typical S&P 500 company.
A simple business lends itself to scale. When you buy another out of home company you add leases and steel structures and ad contracts and not much else. This allows you to increase margins.
A simple business is easier to manage. You need to keep track of sales and you need to keep track of leases and site development. Compare this to a tech company which needs to worry about product research, production, sales, support, and a huge workforce.
A simple business is easier to fix. There are no one of a kind business models in the roadside out of home business. One roadside out of home company tends to look like another. This is what makes the IBOUSA conference so valuable. Everyone else who is there has the same business and if something works for them it will probably also work for your.
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