Lamar Advertising Co’s Balanced Earnings Call Highlights

Lamar Advertising Co ((LAMR)) has held its Q3 earnings call. Read on for the main highlights of the call.

Lamar Advertising Co’s recent earnings call showcased a balanced sentiment, highlighting both positive and negative aspects of the company’s performance. While there was notable growth in digital billboards and successful mergers and acquisitions (M&A) activities, challenges such as local revenue growth, a decline in political advertising, and increased operating expenses were also discussed. This mix of outcomes reflects a company navigating through both opportunities and hurdles.

Consolidated Revenue Growth

Lamar Advertising Co reported a consolidated revenue growth of 2.9% on an acquisition-adjusted basis for the third quarter of 2025. This growth was primarily driven by national and programmatic advertising, which saw an increase of 5.5%. This indicates a strong performance in these segments, contributing positively to the overall revenue.

Digital Billboard Expansion

The company has made significant strides in expanding its digital billboard presence, with a 5% growth in digital billing. Digital billboards now account for about 31% of Lamar’s total billboard billing, with over 5,400 digital billboard faces across 155 markets. This expansion underscores Lamar’s commitment to leveraging technology to enhance its advertising reach.

Successful M&A Activity

Lamar closed 18 acquisitions in the third quarter, amounting to nearly $47 million, with a year-to-date cash spend of $134 million. The company expects total acquisition spending to reach approximately $300 million for the year, highlighting its strategic focus on growth through acquisitions.

Strong Capital Market Transactions

In a bid to strengthen its financial position, Lamar raised a total of $1.1 billion. This included refinancing a $600 million Term Loan B and issuing a $400 million senior notes offering. These actions have improved the company’s liquidity and extended its debt maturity profiles, positioning it well for future financial stability.

Adjusted EBITDA and AFFO Growth

Lamar reported an increase in adjusted EBITDA by 3.5% to $280.8 million, and adjusted funds from operations (AFFO) grew by 2.6% to $226.5 million. These figures reflect the company’s ability to generate cash flow and maintain operational efficiency despite market challenges.

Local Revenue Growth Challenges

Local revenue growth was modest at 1.6%, with a cautious sentiment prevailing at the local level. This indicates potential challenges in driving growth in local markets, which could be an area of focus for the company moving forward.

Political Advertising Decline

There was a significant decline in political advertising revenue, with Q3 2025 political revenue at $2.7 million compared to $6.1 million in the same quarter of the previous year. This drop reflects the variability and dependence on political cycles for this revenue stream.

Increased Operating Expenses

Operating expenses increased by 3.7%, attributed to onetime severance costs and technology implementation expenses. These increased costs highlight the challenges of managing operational expenses while investing in technology and workforce restructuring.

Forward-Looking Guidance

Looking ahead, Lamar provided optimistic guidance for the future. The company expects AFFO per share to be between $8.10 and $8.20 for the full year and plans to distribute a regular dividend of $6.20 per share. With expectations of political advertising serving as a tailwind in 2026, Lamar is poised to maintain strong growth momentum.

In conclusion, Lamar Advertising Co’s earnings call reflected a balanced sentiment with both positive achievements and challenges. The company’s growth in digital billboards and strategic acquisitions are promising, while local revenue growth and increased expenses present areas for improvement. Overall, Lamar remains optimistic about its future prospects, particularly with the anticipated boost from political advertising in 2026.