Logo of jester cap with thought bubble.

Image source: The Motley Fool.

Date

Thursday, May 7, 2026 at 4:30 p.m. ET

Call participants

  • Chief Executive Officer — Nick Brien
  • Chief Financial Officer — Matthew Siegel
  • Operator

Need a quote from a Motley Fool analyst? Email [email protected]

Takeaways

  • Consolidated revenue -- Up 10% as transit grew 22% and billboard rose 7%.
  • Consolidated OIBDA -- Increased 56% to approximately $100 million, including $13.5 million of combination billboard revenues.
  • AFFO -- More than doubled to $61 million.
  • Billboard revenue -- Up 7.1%; excluding $13.5 million in combinations and the Los Angeles contract exit, growth would have been over 4%.
  • Transit revenue -- Grew 22%, led by New York MTA at over 26% growth.
  • Digital revenue -- Up over 11% and represented about one-third of total revenues; would have been nearly 15% excluding the Los Angeles contract.
  • Programmatic and digital direct automated sales -- Rose nearly 40%, now making up 20% of digital revenue versus 16% a year ago.
  • Billboard yield -- Up 11% to above $2,900 per month; adjusted increase would have been about 6.5% without combination revenue.
  • Commercial segment revenue -- Gained 19%, or 13% excluding combination revenues; enterprise segment declined about 2% due to the Los Angeles contract exit.
  • Billboard expenses -- Total increased by roughly $5 million, or 2%; lease expense up about $2 million, offset by $4 million savings from the Los Angeles exit.
  • Billboard adjusted OIBDA -- Rose by around $17 million, or 18%; would have increased roughly 4% without the impact of combinations.
  • Transit expenses -- Increased $4.5 million, or just under 5%; led to transit adjusted OIBDA improving by about $13 million though remaining slightly negative.
  • MAG recoupment -- With MTA revenue projected above the MAG for 2026, Outfront Media (OUT +3.34%) expects to recoup prior digital investments, "extremely accretive on a cash basis."
  • Corporate expense -- Declined by about $6 million, primarily through lower compensation and professional fees.
  • Capital expenditures -- $24 million spent, including $7 million maintenance; plan to add approximately 125 digital billboards this year.
  • Liquidity -- Committed liquidity exceeds $700 million, including $70 million cash, $500 million revolver access, and $150 million via receivables facility.
  • Net leverage -- Stood at 4.3 times as of March 31, within the company’s 4 times to 5 times target range.
  • Dividend -- The board maintained a $0.30 cash dividend, payable June 30 to holders of record on June 5.
  • Outlook for Q2 revenue growth -- Guidance for accelerated growth over 10%, driven by roughly 30% transit increase and mid-single-digit billboard growth, including anticipated World Cup impact.
  • Full-year 2026 AFFO guidance -- Expected to increase in the mid-teens percentage from 2025’s reported $338 million, with $90 million capital expenditures and $145 million interest built in.

Summary

Management confirmed New York MTA revenues are expected to surpass the MAG threshold in 2026, unlocking the ability to recoup past digital investment and positively impact net working capital and cash balances. Programmatic and digital direct automated sales accelerated significantly and now account for a larger share of digital revenue, reflecting a material shift in sales channel mix. Strategic technology upgrades and workflow efficiency investments were presented as means to sustain revenue growth targets. The balance sheet improvement, including lower leverage and ample available liquidity, was highlighted as positioning Outfront Media for potential acquisition opportunities if attractive assets become available. New partnerships with measurement specialists, including AWS and AdQuick, were cited as enhancing industry credibility and internal capabilities.

  • Siegel stated, "our expected revenue growth for the remainder of the year, and our investment in our business, we now expect that our reported 2026 consolidated AFFO will grow in the mid-teens relative to our reported 2025 AFFO of $338 million."
  • Outfront Media appointed a senior digital sales leader to further integrate audience analytics and expand programmatic capabilities.
  • Upcoming World Cup–related demand is anticipated to support both billboard and transit segments, with over 40% of FIFA sponsors among current clients.
  • The exit from the Los Angeles billboard contract continues to impact comparative figures across both billboards and enterprise revenues.
  • Management launched a new brand platform positioning the company as the leading "IRL media" provider and emphasized evolving value propositions beyond inventory and impressions.

Industry glossary

  • OIBDA: Operating income before depreciation and amortization; a non-GAAP performance metric for operational profitability, excluding certain non-cash expenses.
  • AFFO: Adjusted funds from operations; a commonly used REIT metric that adjusts FFO for recurring capital expenditures to better reflect cash flow available to shareholders.
  • MTA: Metropolitan Transportation Authority; New York’s primary mass transit agency and a major Outfront Media contract partner.
  • MAG: Minimum annual guarantee; the contractual revenue baseline Outfront Media must pay in its MTA contract before revenue sharing applies.
  • IRL media: "In real life" media; refers to physical, out-of-home advertising channels as opposed to exclusively digital or online inventory.

Full Conference Call Transcript

Nick Brien: We are pleased to be here reporting our first quarter results, which came in better than we had anticipated when we spoke two months ago. The strong demand and the excellent execution from our entire organization drove the performance. As you can see on Slide 3, it summarizes our headline numbers. Consolidated revenues were up 10% driven by 22% growth in transit and 7% growth in billboard, while consolidated OIBDA was up 56% to about $100 million and AFFO more than doubled to $61 million. Notably, these results include $13.5 million of combination billboard revenues and OIBDA that we highlighted when we provided our guidance in February. Slide 4 shows our more detailed revenue results. Billboard revenues were up 7.1%.

Included in our comparative billboard results are two notable items this quarter. First, approximately $13.5 million of revenue in Q1 2026 related to the billboard combinations I just mentioned. Second, our previously announced exit of a large marginally profitable billboard contract in Los Angeles, as the revenues and expenses of this contract are still included in our reported 2025 financial statements. Excluding the billboard revenue generated by both of these items, billboard revenue growth would have been up over 4%. The strongest billboard categories in the quarter were legal and tech. Transit grew by 22%, again led by the New York MTA, which was up over 26% in Q1. Our strongest transit categories in the quarter were tech and financial.

Slide 5 shows our detailed billboard revenue, which, as I mentioned earlier, was impacted by the outsized combination revenue and the large Los Angeles billboard contract that we exited. On a reported basis, static and other billboard revenues were up 7.6% during the quarter, and digital billboard revenues were up 6.1%. However, excluding the revenue generated by both of these items, static and other billboard revenues would have been up nearly 2%, and digital billboard revenues would have been up over 10%. Slide 6 shows our detailed transit revenue, which grew over 22% during the quarter. Our digital transit revenues were up over 26% to about $45 million, and static transit revenues were up almost [inaudible].

The strength in our transit business was led by our commercial team this quarter, which grew their revenues at a clip of 35%. We remain immensely proud of the performance turnaround in this important line of business, continuing to be driven through smarter product marketing and innovative focused sales approaches. While technically occurring in the second quarter, I would like to highlight a recent activation with British Airways in the New York MTA that you can see on the cover of our slide presentation. As part of this innovative campaign, we wrapped the shuttle to resemble an airliner and enabled their flight attendants to visit Grand Central and Times Square to hand out English biscuits to hungry commuters.

Slide 7 shows our combined digital revenue performance, which grew over 11% in the quarter and represented about one-third of our total revenues. Even more impressive, excluding the aforementioned Los Angeles contract, digital revenues would have grown by nearly 15%. Programmatic and digital direct automated sales increased nearly 40% during the period, now representing 20% of total digital revenue, up from 16% a year ago. On the topic of programmatic growth, I would like to also highlight the recent addition of a very senior digital sales leader from the [inaudible] with deep expertise across programmatic advertising, data analytics, measurement, and omnichannel media activation.

This strategic hire further advances our evolution into a modern media company built around digital expertise, audience intelligence, and measurable outcomes. Jeff Hackett’s leadership will help us maximize the value of our unified ad tech stack, update the management platform and trading partnerships, while strengthening our position with programmatic buyers who are increasingly extending audience-driven strategies into premium IRL media environments. In turn, we believe we are better positioned to capture this growing demand and demonstrate how IRL media enhances platform-based omnichannel campaigns through greater targeting precision, breakthrough creative, and measurable performance in the real world. Moving on, the breakdown of commercial and enterprise revenues can be seen on Slide 8.

Commercial revenues were up 19% during the quarter, or 13% excluding the $13.5 million combination revenues that we realized during Q1. Enterprise was down about 2% during the first quarter, predominantly related to the exit of the large Los Angeles contract. Slide 9 shows our billboard yield growth, which was up 11% year-over-year to over $2.9 thousand per month, driven by higher rates as well as billboard combinations. Excluding combination revenue from both periods, billboard yield would have been up about 6.5% given our strong revenue performance and continued practice to prudently optimize our billboard portfolio.

Summing up, we are pleased with our Q1 performance, and I am happy to report we are seeing these strong top-line trends continue into the spring and summer. I will discuss in greater detail later. With that, let me now hand it over to Matt, who is going to review the rest of our financials. Thanks, Nick. Good afternoon, everyone.

Matthew Siegel: Please turn to Slide 10 for a more detailed look at our billboard expenses. In total, billboard expenses were up about $5 million, or approximately 2% year-over-year. Zooming in on lease costs, these expenses were up about $2 million, or about 2% year-over-year. The increase was driven by higher variable lease costs and contractual escalators on fixed leases, offset partially by $4 million of savings related to the large billboard contract in Los Angeles that we exited. Excluding the impact of the Los Angeles portfolio exit, billboard property lease expense would have been up about 5%.

Posting, maintenance, and other expenses were up over $1 million, or about 4%, due to higher maintenance and utilities, higher site-related costs, and higher compensation-related expenses. SG&A expenses grew just over $1 million, or about 2%, due primarily to higher professional fees, including software and technology expenses, and a higher allowance for bad debt, partially offset by lower credit card usage by customers and lower compensation-related expenses. This $5 million increase in total billboard expenses, combined with the growth in billboard revenues Nick described earlier, led to billboard adjusted OIBDA increasing by about $17 million, or 18%. Excluding the impact of the billboard combinations in the quarter, billboard OIBDA would be up around 4%.

Now turning to transit on Slide 11. In total, transit expenses were up $4.5 million, or just under 5% year-over-year. Transit franchise expense was up 3% due primarily to the annual inflation adjustment to the MAG for the MTA contract. Posting, maintenance, and other expenses were up just over $1 million, or about 8%, due primarily to higher display production costs and higher posting and rotation costs. SG&A expenses were up $1.5 million, or about 9%, due primarily to higher compensation-related expenses and higher professional fees, including software and technology expenses, partially offset by lower credit card usage by customers.

The 5% increase in total transit expenses, combined with the 22% transit revenue growth described earlier, led to transit adjusted OIBDA improving by about $13 million during the quarter to an adjusted OIBDA loss of a little over $1 million. While on the topic of transit, I would like to quickly discuss some important developments regarding the New York MTA. Given our strong Q1 results and an improved outlook for the remainder of the year, we now believe that our 2026 New York MTA revenues will surpass the defined baseline revenue level, which we often describe as the MAG level.

As a reminder, based on our prior expectations at the beginning of the year, we continued to record the MAG on a straight-line basis rather than account for the contract on a revenue share basis. Due to the seasonally lower revenues in Q1, this resulted in approximately $7 million of additional expense than if we had recorded the contract on a revenue share basis. We expect to account for this benefit from the straight-line MAG in Q2 and Q3 when the revenue share expense would have exceeded the MAG. By the end of Q3, we will be caught up on a year-to-date basis.

Then for the fourth quarter, we will book the full calculated revenue share amount, which will show a substantial increase in transit franchise expense from the prior period when we were just recording the MAG. A benefit of being above the MAG level means that we will return to recouping the digital investments we have made in the MTA since the inception of this contract in 2018. Let me remind you how this works, as it has been a number of years since we last recouped.

Any incremental transit franchise expense due to the MTA above the MAG will not be paid in cash, but rather utilized to reduce our significant recoupable investment balance with the MTA, meaning each incremental dollar of revenue will remain extremely accretive on a cash basis. Recoupment will positively impact our net working capital and cash balances but will not impact adjusted OIBDA, AFFO, or net income. Given the recoupment will not flow through net income, the monies recouped will not be subject to the redistribution requirements.

On Slide 12, the company's adjusted OIBDA in the first quarter benefited from lower corporate expense, which declined by about $6 million due primarily to lower compensation-related expenses, including last year's severance, and lower professional fees. Combined with the billboard and transit OIBDA, which includes a benefit of the condemnation discussed earlier, adjusted OIBDA totaled about $100 million, up 56% compared to last year. Before moving on, I would like to quickly discuss some important growth investments we are making at Outfront Media Inc. during 2026 to support our ambitious revenue targets for this year and beyond. First, we are investing in our technology.

We have modernized many of our systems in 2025 and early 2026, including a new CRM, training modules, and our partnership with AdQuick. While each of these improvements is more costly than the systems they are replacing, we expect that each will assist us in accelerating our top-line revenue growth. Second, we are investing to continue improving our workflow and processes. So far, we have started to improve how we approach inter-region revenue opportunities and our RFP response process. We have brought back the same consultant who assisted us last year, but importantly, much of their potential fee is success-based and, as such, will only be paid should we realize benefits from their efforts.

Turning now to capital expenditures on Slide 13. Q1 CapEx spend was about $24 million, including about $7 million of maintenance spend. We converted 14 new billboards to digital in Q1 and expect to add a total of about 125 in the full year. For 2026, we still expect to spend approximately $90 million of CapEx, with $30 million to $35 million of this total expected for maintenance. Looking at AFFO on Slide 14, you can see the bridge to our Q1 AFFO of $61 million. The improvement is principally driven by higher adjusted OIBDA.

Based on the first quarter results, our expected revenue growth for the remainder of the year, and our investment in our business, we now expect that our reported 2026 consolidated AFFO will grow in the mid-teens relative to our reported 2025 AFFO of $338 million. Included in this guidance is previously noted maintenance CapEx, interest expense of approximately $145 million, and a small amount of cash taxes. Please turn to Slide 15 for an update on our balance sheet. Committed liquidity is over $700 million, including $70 million of cash, around $500 million available via our revolver, and $150 million available via our accounts receivable securitization facility.

As of March 31, our total net leverage dropped to 4.3 times, well within our four to five times target range. Turning to our dividend, we announced today that our board of directors maintained a $0.30 cash dividend payable on June 30 to shareholders of record at the close of business on June 5. We spent just over $8 million on acquisitions during the quarter, and looking at our current acquisition pipeline, we continue to expect our 2026 full-year deal activity to be similar to levels reached in recent years. With that, let me turn the call back to Nick. Let me jump in. Nick is having some audio problems. I will keep going.

As Nick mentioned earlier, the top-line strength we saw in the first quarter has continued into the spring and summer, and from where we sit today, we expect second quarter revenue growth to accelerate to over 10% year-on-year, driven by about 30% growth in transit and mid-single-digit growth in billboard. These figures include a benefit related to the U.S. role as a World Cup host in June and July, as well as a headwind created by our strategic decision to exit a large marginally profitable billboard contract in Los Angeles, which generated about $4.4 million of billboard revenue in Q2 2025.

Outfront Media Inc. has gone through significant change over the past year, executing the strategic imperatives we shared with you at that time. At the same time, we have reimagined out-of-home and our company's leading role within it. An important part of this process has been refining how we communicate our value proposition to the world, and just last week, we launched our new brand platform as a declaration: Outfront is the leader in IRL media. In a world of endless scrolling, muted ads, and algorithmic noise, we exist in the one place no one can opt out of, the real world. Our media does not just reach people. It moves them. IRL media is where culture lives.

It is where brands stop interrupting and start belonging in the cities and communities that shape daily life. For far too long, our industry has defaulted to talking about inventory and impressions. That is not our story. Our story is influence and impact: the breakthrough experiences we create, the cultural moments we amplify, and the real outcomes we drive for partners looking to build trusted brands in the real world. Our clients know this and are increasingly choosing IRL media to drive the results they seek. To close, we are redefining what out-of-home means in a rapidly changing, agentic advertising world.

The physical world is the last uncluttered, brand-safe, fully viewable canvas in media, offering brands the ability to show up and interact with people where their attention is the highest. Our premium inventory is immersive and experiential with national scale. In our view, the sky is the limit. Operator, let us now open the lines for questions. We will see if we can get Nick back on the line. We will now open the call for questions.

Operator: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press 1 on your telephone keypad. To withdraw your question, press 1 again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Daniel Osley with Wells Fargo. Daniel, your line is open. Please go ahead.

Analyst: Thanks. Maybe a bigger-picture question: I wanted to get your industry outlook on measurement modernization. I saw the OAAA recently announced a new pilot program. What is your view on the timing of all this and the potential benefits the industry could see on the other side? And then as a follow-up, how do the measurement partnerships that Outfront Media Inc. has recently announced tie in here?

Matthew Siegel: Dan, sorry. Nick is still having some audio problems. Obviously, measurement is a key factor for the industry overall. It is been something the industry has been lagging behind on. Nick and the other leaders of the industry are working with OAAA and Geopath, bringing in consultants, and really trying to move the measurement dialogue and capabilities forward. Some of the partnerships we have signed up, like AWS and AdQuick in particular, we think will help us. AdQuick has some great measurement capabilities, demonstrating a viable currency, and hopefully, over time, maybe a proof of concept for greater industry adoption. We will see how it works for us first. Thanks, Dan.

Operator: Your next question comes from the line of Cameron McVeigh with Morgan Stanley. Cameron, your line is open. Please go ahead.

Analyst: Great, thank you. First, I was curious about your view on one of your peers potentially being taken private and the implications on asset sales in your acquisition pipeline as you think through the remainder of the year. Is this a potential opportunity for you going forward? And then secondly, you mentioned this in the prepared remarks, but could you help size the potential impact of the World Cup over the next couple of quarters and the midterm elections in the back half of the year, just as we think through the cadence of growth?

Matthew Siegel: Sure. First, peers. Obviously, we level our peers. They are fine people. With one of the large peers or competitors going private, it is interesting. A capital infusion will likely make them healthier, which I think is great for the industry. They can be more nimble and invest in the business and invest in the industry overall. We have not heard that there are any asset sales coming out of that, but to the extent there are asset sales from them or really from anyone else that are material in our footprint or would make strategic sense, we think our balance sheet is in a much better place than it has been in the last few years.

Our capabilities are strong, and we would expect to participate in something that is interesting. As far as sizing the impact for the World Cup, we are not prepared to share numbers there. We have about 70 customers overall. The numbers that we have heard in media seem to be in the right neighborhood, but we are still calculating. We still think we have business to book in the second quarter and certainly in the third quarter, and we will give you a much greater in-depth explanation in August.

Nick Brien: I just wanted to add on the World Cup. As Matt said, we have got over 40% of the FIFA sponsors. What is exciting is that a lot of those significant brands and the big sponsors actively use our medium, but they do not use it as much as we would like. We see FIFA and the World Cup as a way of really attracting some of the biggest brands to demonstrate how they are building their brands in real life. It is an exciting time for us.

Matthew Siegel: Thanks, Cameron. Operator, next question.

Operator: Your next question comes from the line of Kaleksi Filipov with JPMorgan. Your line is open. Please go ahead.

Analyst: Yes, thank you very much. Transit grew 22% in the quarter, well above your high-teens guide that you gave in February. Can you help us understand what drove that upside relative to your preliminary expectations in February? And you mentioned 26% for New York MTA specifically. It looks like other transit contracts are also doing rather well. Is there an unexpected turnaround there too? And if I may follow up related to transit: thinking about FIFA benefit, is it primarily around billboards, or do you expect this to be a meaningful thing for New York MTA? Wonder how your clients think about that.

Transit officials in New York already note the work-from-home impact on traffic inflow, so just qualitatively, how to think about benefits for New York? Thank you.

Matthew Siegel: Sure, thanks for the question. I will start, and Nick, you can jump in. First, transit is going well. It is led by the MTA and, frankly, for the last few years, when transit was not, it was the MTA. The MTA is more than half of our transit revenue. It is about seven or eight times the next largest transit franchise. We have a great focus there. So the 26% growth in the MTA is obviously what is leading transit. Other transit franchises like BART in San Francisco are doing pretty well. San Francisco is one of our best performing markets in the first quarter.

I think one of our peers also had very strong San Francisco growth, led certainly by tech and the repopulation of the city. As far as FIFA, we are taking business in both billboard and transit. Frankly, the influx in all the big cities of tourists—it is not just near the stadiums—but the influx of attractive demographic tourists and the ability for them to move around cities and move underground and above ground are hitting our inventory, again above and below ground, and we are very happy to have it. Nick, you want to add something on FIFA and transit?

Nick Brien: Thank you for your question. As I mentioned earlier on the New York MTA, this has been significantly strengthened by dedicated focus on the product market and the unique attributes of our transit within the context of the cities that they serve, as well as the innovation and the opportunity for creating brand experiences. As you saw on the front cover, the British Airways wrap demonstrates that this is becoming more exciting because transit is a really compelling platform for IRL media activation. The experiences can be created, and we are celebrating those and pricing them accordingly. That has made a big contribution.

Operator: Your next question comes from the line of Patrick Scholl with Barrington Research. Patrick, your line is open. Please go ahead.

Analyst: Hi, thank you. Congratulations on the milestone on the MTA. Could you remind us how the revenue share on the MTA works when revenue generation is above the MAG?

Matthew Siegel: Sure. It has been a while, so it is good to refresh everybody. The MTA is a 70% revenue share contract. The gap between 70% and the MAG level—which historically was around a 55% equivalent—was intended not to be a cash payment, but to allow Outfront Media Inc. to recoup the investment that we made in the screens upfront. We would qualify for that recoupment if we got above that baseline revenue line, which is what we commonly refer to as the MAG line. So while we will be expensing a 70% revenue share cost to the MTA, we will not be sending the MTA a check for the gap between the MAG and the revenue share.

We will be using that to pay down some of our recoupable balance and offset some working capital. Obviously, it is a big number. It is not going to be paid down all this year, but it is good to get back to that recoupment plan and start to get paid back for some of the screens we invested in.

Analyst: Okay, thank you. You had mentioned San Francisco doing a little bit better, and so has one of your peers. I was just curious, post-events, if that has been sustained and to what extent, and if there is a benefit from the World Cup on some of the depopulated cities to the extent that could benefit those markets as well. Thank you.

Nick Brien: Yes, Patrick. We have definitely seen the early success, as well as having a very strong team. Also, obviously, the strength in San Francisco with AI developments. When I look at the size of not just the big players like OpenAI and Anthropic, but also the pure-play native AI companies, we have Genspark, CodeRabbit, Nebius, Arise.ai, and they are shifting towards a physical reality. These are pure-play technology companies that have a huge interest in the trust and the physical nature of our medium. Those campaigns are extending now outside of San Francisco, but that is providing a very solid revenue stream for us in that important market.

Operator: There are no further questions at this time. I will now turn the call over to Nick Brien. Nick?

Nick Brien: Thank you. I do not think I could have articulated my closing summary for the earnings better than that. I apologize again for the technology mishap here. The one thing that I want to close with is the fact that we have various conferences and events across the spring and summer, and I will continue to be with the team articulating how I see and feel this remarkable shift that we are experiencing now in the agentic advertising world: the power of this medium that I have always believed has been undervalued when we think about its tremendous scale, tremendous value, and proven trust, and therefore, the influence it has for consumers and people.

As I said at the close, and Matt shared, the sky is the limit. I am excited that the organization has really stepped up to follow all those initiatives we set out for transformation velocity in March 2025, and here we are not far—about a year—after that and seeing the fruits start to appear. It is really a testament to the remarkable focus and hard work of the entire organization. I look forward to sharing more of that on the road and look forward to presenting our Q2 results to you in August. Thank you so much for your time.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.