Lots of organization changes at OUTFRONT during the past quarter.  Here are the the results of OUTFRONT’s 2Q 25 earnings release, earnings presentation and conference call, sponsored and analyzed by SignValue.

• Consolidated revenue declined 4% to $460 million in 2Q 25 due to the exit of the low margin MTA and LA billboard contracts.  Organic revenue declined 0.2%.  Transit revenue increased 5.6%. Billboard revenue declined 2.5%.  CEO Nic Brien expects low single digit revenue growth during the third quarter of 2025.
• Operating expenses declined 3.5% to $232 million due to lost billboards, and lower lease expenses.
• SG&A expense declined 7.1% to $111 million due to lower compensation expense. The company expects SGA expenses to decline for the remainder of 2025 and the first half of 2026.
• Consolidated cash flow (OIBDA) declined 1.2% to $134 million in 2Q 25 due to decreased revenue.
• OUTFRONT’s Billboard yield increased 0.5% to $2,990 in 2Q 25
• Capital expenditures were $25.7 million in 2Q 25 consisting of $7 million maintenance expenses and $19 million growth expenses

Interim CEO Nick Brien on organizational changes

We have undergone a large organizational reorganization, rebranding our local sales teams as commercial and our national sales teams as enterprise.  Going forward we will extend these definitions to our financials…We have six heads of industry who will be responsible for automotive, entertainment, finance, CPG, retail, sports industry verticals.  This group will assist advertisers through every phase of their campaigns…We have centralized all of our operational and real estate functions…We have moved from having four sales regions to three.  We’ve done this to reduce sales expenses…

CFO Matt Siegel on layoffs

We had a $19.8 million earnings charge during the second quarter due to the reduction of 120 people from the company during the quarter…As a result of the restructuring we expect an annual expense savings of $18-20 million…we felt this action was necessary to reduce our cost base and increase our financial flexibility.

Siegel says Acquisitions are muted

We spent $3 million on acquisitions during the quarter and looking at our current acquisitions pipeline we continue to expect 2025 deal activity to be focused on opportunistic tuck-ins.

OUTFRONT has started passing on credit card fees

SGA expense declined just over $2 million or 3.3% primarily due to lower credit card usage by customers – a result of newly implemented payment policies.

SignValue’s Take:

Revenue is down because OUTFRONT exited the MTA and LA billboard contracts to improve cash flow margins. Now it’s time to get revenues going again. Lots of reorganizing and layoffs in the last quarter.  We think the sales structure changes could be a positive, while centralizing operational and real estate functions may be a negative in the long run. We’ll be watching to see how these organizational changes play out. Outfront ended the day up 1.8%. Clear channel was up 7.3%. Lamar up 1.5%. The S&P 500 declined 0.5%.

If you have questions, contact one of SignValue’s experienced analysts for a free and confidential consultation at info@signvalue.com or call 480-657-8400.

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