EEX - Earnings call transcript Q1 2022

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Operator

Good morning, and welcome to the Emerald Holding, Inc.

First Quarter 2022 Earnings Conference Call.

During today's call, all parties will be in listen-only mode.

Following the prepared remarks, the call will be opened for questions, with instructions to follow at that time.

Before we begin, let me remind everyone that this call will include certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. future estimates, about and remarks include expectations, plans, beliefs, prospects. These projected the XXXX company’s particular results statements statements. In forward-looking about for are and XXXX and from those subject of or implied cause are a statements. indicated results other such uncertainties, actual materially statements could factors differ Such to by that to risks, variety factors set in on Form-XX-Q, subsequent filings. the XX-K risks Form most recently Such and are and company's other reports forth filed periodic and statements. not does to any undertake forward-looking company The update duty such

can or in non-GAAP these measure, be The accordance during the as it call, additional company's today's will discuss reconciliation prepared the evaluating in of performance. results Additionally, be non-GAAP can company's A information substitute a considered in presentation with measures US measure which most found earnings useful for be management believes in release. GAAP. this isolation should the to not GAAP comparable of

As investors to Web Sedky, please a this on Chief is call be of and conference Eastern like p.m. XXXX. will available May to Mr. recorded over Sir, of the President replay Executive a Time XX, section go I'd being and reminder, Officer. through XX:XX this now on turn ahead. the the call Herve site company's

Hervé Sedky

more increasing excited a and journey reasons that about morning, a quarter Emerald's Vikram for ability to There share we've year, I'm us results, what back. be thrilled our one. and our is value. is which to than our with to you, our are Thank good saying deliver make been first you everyone. business speaking this morning simple shareholder clearly future three corroborate

to in sometimes revenues. returning First, exceeding pre we're pandemic

pandemic, severely coming obviously not significant in was business way. back it's our by a impacted the While

overall as likely for the a to shows our we our stage to Our business. normalize revenues, recovery returned of believe will We plan which exceed our our is strong to revenue in trade indicator that roughly pre-pandemic XX% is returning customers rapidly of events. XXXX live levels

Second, on both XX an growing including XX% shows, of basis and launched, events, content and price pre-pandemic million business will services technology, at on of additive, cash our fast conferences streams in serving represents our new QX. at substantial free XXXX, cash To guidance revenue trade we XX and return flow the our and companies. based XXX,XXX third, in as notably proceeds. generating cash in organically flow expect converted and yield of level benefit current beyond which generating exhibiting person the than expectation our X,XXX our share our flow, and before And any scale business baseline. acquired that successfully other staged products least events, insurance illustrate we a We are free and attendees of free are further of more

of $XX this Importantly, meaningful and recoveries. revenue insurance $XX.X adjusted into over translated EBITDA before of million million

in further products validates efficient that performance with sell meet live quarter events face they value and in buyers can the in our productive and person Our to customers their highly face a where the medium. fact

QX. through on levels integral improvements This QX in average participating closed growing quarter. of on towards levels relative on first pre-pandemic versus new an be the XXXX QX steadily participation and scale. XX% budgets of to return our XXXX. after to exhibiting continue part seeing of events is marketing have delivery Show the provide Our our compared pre-pandemic investment high companies We're XX% quarter attendees leads improvement to X% consistent at and business of as gap follows qualified to to XX% of events quarter and

year. improvements million, pacings than fiscal revenue our visibility revenues in sales our move to events. business point us confidence their events on $XX net through and is line revenue and a implement sales promoter that continue or rebooking. excess $XX insurance are net improving paid. of rest further continued our and which which in will first in in events, quarter-over-quarter further our levels, indicator scores $XXX also EBITDA quarter accelerating continued that that which also of provides deliver in all across This in our recovering of pipeline for we that of our proceeds, of to pleased onsite free provide rebooking results the Overall, $XX initiatives this building for and cash our significant of our Importantly, quarter pre-pandemic adjusted financial improve, flow our customer excluding we have first of delivered that out to million, expectations better of the incorporated growth as confidence gives within excess is to current we strong traction year to as the of future We're EBITDA achieving several momentum report XXXX to million highlight get continue full-year is have further excess investments business million, playing

our as as of supports forward of expectation and XXXX $XXX work back levels we bookings towards to over Additionally, a recovery our look year EBITDA to adjusted out further ahead which time. million, the historical point excess margin we in

receive dynamic as way first cash the results we quarter to free to dynamics we model $X our functional events of As business continues requires deposits clear of recover, our slate cash full our development software poised This as we expect to booking while spent staging our quarter, flows in that model advance to was flow from free in year of note to we're It's implied our a expectations. also CapEx in strong in of business customer our cycle. a business funding normal in as which important initiatives. return also the full we positive drive events, and benefit first and million little the our

invest day our optimization, to into expand and at so and for potential we combined our can as on drive which XXX on a a to business high of new quarter strategy consisting To vet accelerate XXX cash end, aspects several and opportunities, like of we we and spend morning have growth growth growth, sheet and on significant of made strong generation long-term where few outlined liquidity markets. significant and over organic call transform centricity, our Our further focused would balance discussing flexibility million provides engagementments with have earnings this moments year. been M&A progress. our short-term I we've a portfolio customer three-pronged strategy we cash

industries. The optimization to developing new accelerating into shows organic first critical in new shows is our launching first or new extension in units. sectors focus growth growth either portfolio launches the revenue key formed strong an where and we're events as of time existing trade and recently is of Launching high accelerator

XXXX already and in approved We launch three XXXX. for launch to shows shows four new expect in have new

and We organic of X,XXX SIAL we leading points the our collaboration expect hundreds new with show revenue food metrics event XX pizza our held sellers to over countries with the SIAL meetings services our a launch fulfillment year, annually. Las America. of show Vegas, achieved companies, organizer. international of launched In and exhibiting over a XXX internal we in representation buyers. March, of first one-on-one America from America between X attendees, is to SIAL over with strategy French of all expo Comexposium, event add in growth X time, new our Co-located

we SIAL edition mental in to of results, the forward Following the I'm of decentralized also second March event America next our and look announce will sectors. target XXXX. positive to health two the new of very pleased the launches finance

events, It's companies and amongst to their potential are to Web show a for trusted or and on an decentralized deciphered The technologies. engaged executives by unlocking with DX. is organizations chip solutions. X C-suite content explore Web digital business learn financial to DX peers and The executives about Web is to grow who educational technology in visionaries who branded geared want and want second person companies safely source careers X decentralization connecting through is of launch an be blue decentralized that bridges towards focused and community. curious C-suite the and platform innovation X

health people, to and and and disruptors inaugural leaders year, need resources mental sector CEOs most leaders take meant branded implement human their actions health business the partners and the person health and sector. and for mental the Mentara digital health everyone Through fosters a mental with mental health solutions is in today's for wellbeing providers focused in design find mental solution and officers, be thought pressing focus including payers, solutions community chief in improve to to is education employees. launch the Mentara. together needs ecosystem, between third and In that all. unite, especially on relationships on connecting across innovators, experiences, The brings to organizations employers, they Mentara mental optimal and Mentera its for is

launches the sustainable believe organic Now our higher growth be let our driver years the focus to the acceleration back a me as of new will step We business and rates take to value on event of we next meaningful deliver picture. over of growth. few the a improve organic big aim through

evaluate candidates Emerald's in to In we attractive optimize continue growth diversify to acquisition industries addition the portfolio. growth, organic to high further and

rapidly Emerald growing provides serve prime to Our is example. Biz, their MJ acquisition of cannabis opportunity an space recent which a

of number last the enrollments, excess platform attractive net platform. industry improving as content growth XXX a we and year sheet advertising for journalistic revenue recurring we increasing with sponsorship visible scaling improve buyers to be in favorable triple investments leverage experiencing organic Similarly, best engagement accomplishing access e-Commerce, comparison XXXX. quarter digital an With revenue generating XX/X across retention declining and to M&A to a of provides a quarter, launch and functionality specific additional and providing which and audiences accelerated our revenue by is pipeline environment have new customers active Elastic platform year, all throughout the while opportunity is component as crave. goal of technology to offerings Looking business our of robust in in customers and growth practices generate our that SaaS the new is first and revenue we critical is forward, of the the gaining to position sellers of industry This our to in revenue churn, round XX% verticals, expect supported in our transact. traction its contents an balance respect our to growing strategy, our

our this I Doft review and that over here our hand financials to Emerald we're I the of it very to am in be quarter results, can proud seen at As quarter. turnaround driving first David

industry I While the we're discussed our strategies that position believe implementation puts the recovery our to time. just an our outpace of have Emerald excellent in in over benefiting from we industry,

turned us. a awaits and journey that have the forward to corner We I'm looking

turn me David. let call to the Now over

David Doft

Thank you, Hervé and good morning.

and staged for improvement further million where The the year did related period. in year and recovery we $XX.X first XXXX content, of revenue increase in of Hervé of that revenues in As related events quarter event quarter It XXXX. cancelled the due the Organic XXXX first definition Please compared million prior includes first increase that $XX.X quarter QX our the live several also in quarter organic were reported staged to as in in in well space, cancellations million to and e-commerce in was mode events which XXXX results revenue in our due to as last year. of The events our stage prior in not of the are primarily million to pandemic events, businesses. from that primarily the an quarter only thus, discussed, from but first $X.X year revenues note the during XXXX were $XX.X quarter staged the of $XX.X firmly subscription was of postponements. $XX.X due COVID. in XXXX, within in due to quarter led million last first growth as includes to growth which the first first software that revenues to the increase and million, excludes we

XXXX. which services additional when In $X.X the addition, of content we first to increased revenue, million have marketing seen services and and subscription and consistent compared by software growth in quarter

the note million. revenues also incremental first $X closed of quarter of which acquisitions that XXXX We after generated

increase received or the profits from million for EBITDA EBITDA adjusted staged in quarter event The was live insurance the events was is recognized XXXX. $XX.X year. of the compared of double insurance related during in the of as adjusted and cancellation result $XX.X that other in the million claim loss the proceeds which in proceeds recognition period of $X.X the million $XX.X to first income claim quarter quarter confirmed, primarily Our the of million $XX.X to the first quarter million generated of in a same last

insurance our in to weighted last of calendars QX and the first compared quarter proceeds, those to QX $XX.X year. A so to Emerald, is tend EBITDA have performance Excluding adjusted increased the financial $XX.X million loss reminder, of million million event quarters. as $XX.X for to busiest seemingly a

in scheduled previously events date, amounts event XXXX which insurance our the claims cancelled includes events. adversely we have submitted claim our in filed for unpaid or of submitted net gross received more represent payments we million costs $XX These impacted date, claims take detail, canceled of to XXXX $XXX.X collection and for are million XXXX. at $XXX.X insurance remaining place and totaling budgeted impacted to have To XXXX insurance actively revenues of pursuing in Looking and cancellation XXXX. and claims incremental in we total avoided of claims amount less million the

of flow of quarter. ago first the in which cash $XX.X million the inflow million, an in free to first $X.X year We compares an to experienced Turning quarter. inflow

the exhibitor the for pickup remainder post-COVID from benefited schedule XXXX. the continue from improving the on, are advanced insurance proceeds our that deposits we our cash in that from claims, expect working Hervé This While capital are trend in to from $XX.X quarter and including touched a a business, on experiencing million XXXX the is shows underlying we inflows for as as continues. recovery customers of

XXXX of on balance spent in quarter $XXX.X on compared XXXX. a our as We balance of to from cash also quarter sheet quarter cash million. XXXX's ended the light We model of benefit million $XXX.X $X.X CapEx first fourth as business we the of of first million the CapEx with

live $XXX have strength growth very launches the our continue achieved $XXX have the generation successful to the and early industries we recoveries, model underlying provides credit our to we're towards and of our availability with than combination million forming staging and The our with which acquisitions business. strong its and insurance durable our sheet, XXXX growth flexibility to balance we ability excited of total a Additionally, facility, which full are underlying business supports to return in through to invest the with that our events portfolio million grow and have Overall, revolving new from expected as relative to in brings in attractive business. products opportunistically combined Emerald’s liquidity with optimize cash characteristics. progress we more invest

acquisitions, will As growth we continue continue business to capital balanced believe share as in to remain drive launches, pursue buybacks, opportunistic well further product expansion investments mindful our own through to we of opportunities, among allocation as attractive. which we be organic new show and very

$XX.X beginning quarter XXXX, repurchase XXXX, Since shares repurchased price in million of X.X share. X.X have our of share shares of $XXX.X terms a the of per authorization. the times During buyback total leverage the first an of of for $X.XX agreement. we credit million the net first $XXX.X X.X remaining of the million a We of TTM with with ratio net finished million quarter average our consolidated EBITDA debt representing for million, we

springing under our thought a structure reminder, of kicks million. I and the borrowings to capacity the new story this revolver, value X.X our XXXX, no agreement had revolver so business. our in our liquidity covenant of a to on credit credit At given review XX% strong do it time, no can we position. XX, At under draw those facility net in total As sense our our more make near-term, not to than of expect March our revolver easily capital exceed if our would leverage that which times, more $XXX borrowings has

have common stock XX, over a million March little XX.X of XXXX, shares we outstanding. of As

convertible the of issued million preferred of business bolstered during shares world XX.X which early we pandemic of We which much days outstanding, stock down. the had also was the successfully and have our while shut

shares conversion by liquidation convertible stock shares our free XX a converted At had of insurance flow least preferred it accreting of total X% per outstanding convertible approximately stock. before it shares an liquidation Friday's that being XXX.X When March of Add considering the closing million stock stock of per shares to million any million of the expectation price, cap stock equates XXXX, that you has of outstanding, number this This compares preferred equates to and When of the currently $X.XX convertible XX, $XXX million common to on in as preference receipts. while outstanding as this each divide initial equity million. total market convertible into cash available converted of to at XX.X Our a XXX.X common multiplied $X.XX to preferred share, basis. preference equates Emerald share at common X.XX shares of stock to year, by share as a of already an of basis. annually. price of common on

we have million three estimated our to consideration the sheet contingent balance acquired for We businesses. future last also totals and have tied the growth on acquisitions is for forecasts years, over which $XX.X made

common consecutive trading after our of date with a build driven company. years to pleased growing momentum are or we conclude, the for recovery by treatment that and three issuance initiatives starting of business $XX to exceeds net outstanding. our present have tax stock acquisitions has many to leads an common the right estimate force $XXX a we Additionally, deferred to tax of preferred value This our the To Emerald share the stock convertible to conversion enterprise strategic the core given stock given June value. $X.XX and per Emerald days. worth approximately of debt continued of profitable discounted XXXX, the of XX, million million at around price the if asset our we XX

mediums industries high investing our are enter we business return in high further while and prudently diversifying digital growth as new We opportunities.

fiscal in million pipeline revenues XXXX track to leave of and of on achieve excess results quarter EBITDA in excess million. sales Emerald year adjusted and first Our $XXX $XX

is adjusted on product SaaS of verticals. in this new Importantly, initiatives guidance $XX and show investment Elastic EBITDA projected of growth in new net million launches

reiterate our $XX to fiscal of million. expectation also excess year cash XXXX free in We achieve flow of

future adjusted exclude I any $XX.X EBITDA expect received flow from Importantly, the as recently these earlier. free discussed which such recoveries and million figures cash insurance, secure, we to

historical to fiscal back we over return to now full-year time. build Looking $XXX excess of events we back expect million EBITDA improved XXXX, a to call Hervé. meaningfully turn of towards as adjusted levels of deliver ahead on to margins that, With and the in margin I'll our work

Hervé Sedky

that higher events Emerald more the that organic customers, streams, guidance new through firmly we you We David. and goals. our growth we we valuable of believe deliver demonstrate streamlining I and scales value content, to a aspects financial Thank into value events a is diversified business qualifies we to of our coming for first cash with new earn new and Difficulty] Thank business need on value that our the through conclude, key we and path across our built we on To creation of out Elastic a you, number believe as very demonstrate high by will results stronger and with pandemic This add continue to their of ultimately more flow. leads much number but of business, quality we our not only realized in of stage business the to they and the also itself can and the attendance; advertisers will BXB time manifests platform; investors our show [Technical demonstrate the achieving eCommerce our the BXB and have much believe to execute successful efforts. catalyst of demonstrate quarter demonstrate engaging value again to leads year, the right constituencies; will a the sponsors markets. a customers way revenues margin all to makes to manufacturers our in sectors our value which our live accelerating we of higher high revenue value demonstrate scalability growth new today. and our leveraging XXXX are your public sales for provide, that multiple our business generate to which

meeting Now the Vikram, for please questions. open

Operator

We first Paribas. Annick Instructions] [Operator line with from the have BNP question of a Maas

Annick Maas

my pandemic price first that rebooking question you you My question already held push can on Can far sector where shows XX% visibility sorts year will levels has give of available. suggested maybe be? you've on the start is of the is will second the you is indication of what think a year? indication Can pre can these levels. us that give through? an us exceed changed you I the exhibitions more And since upgrades comment the or of finally, so price shares And bit you which this just maybe from how around

David Doft

one to allowed event terms ramping that back price calendar I drive business quite for for levels increases, price there to demand think is of of power. real inflation of enabled In of suite maintain new ability deliver successes us our we pricing against to our us the and up that's the The continue has out effectively. customers our them manage to frankly has that

we're least mid so least more digits to increases we're event circumstances, depending have cases the match some general getting able depending increases underlying exceed been and seeing. cost in at or and seemly the on that at And and in the on single price

that. about pleased very we're So

little a industries, growth impacted international faster bit more little are don't issues, are than exposed other parts been exhibitors United world the growth of general, you that pandemic, this has Those and other of specifics slower I across still where next little of events if around a we portfolio, pre to terms that into going see our has easy it's as industries those path supply attendees to industries a and expect exceeding are definitely year we it we Also though to beyond. high year pandemic recovery what further. think not like that are than look back as But into that. the that as into shows I and event-by-event. I ones better a as as year bouncing In we positioned and been things industries more think go in move In back are States. the such more go ramp are to high want events there's see are next coming bit others, in chain surely industries are by to

Annick Maas

the on Can maybe of quite us of or just versus of for of the what year. seen visibility similar the at now you start little give the And the improved year? to a the the significantly has company bit you've indication visibility start

David Doft

we Visibility our rolling next has improved year's on And those was of very for benefited the event, events. Emerald out site only that much which from only this I XX% doing portfolio. rebooking and selling site unfamiliar, on just event on rebooking was site of doing what rebookings, is across all at pre-pandemic comparison on for year's is. site as

the now minds it building the much whole added while visibility. portfolio. fresh we're our events doing momentum of to it's so on has And for successful And in people's very

pre-pandemic from absolute in we sit ahead of now. right so we’re where pacing dollars, And

based in some that. of on but just over keep that definitely a out of lot we're getting of evening Now the time, mind catch benefit will that up over cycle sales

we on I later. seeing item is still signing other point The up bit attendees a attendee to the little side, are

been pleased. longer because a still And accelerate strong the little able been rebooking waiting successfully so we've numbers coming closer we've the event, attendees bit little onsite get we But exhibitors the in are as earlier so to bit effort, but to visibility.

Hervé Sedky

out are Promoter stronger maybe participate I'll contributing made future. and to improved exhibitors also by the is thing now the is bookings forward Score about some add wanting comment the I fear past participate in our didn't who to the only in the of Annick, Net missing

Operator

line question Saeed have of the Berenberg. with We Saim from next

Saim Saeed

quite simple. first My is one

on of again My the industries any indication are trended the So version? particular seeing with also rates against of of Could helpful [Technical might costs, And it's sellers price are side, pre-pandemic shows they terms? supply how notable, just cost and there other could state, an focusing terms What by for where pandemic. recovery impacted? they in in would the or of is on terms second end it’d QX, give finally had just over how terms that help And exactly the you you be venue shows us are I'm mean understand inflation. respect is average would you whether since measuring which you’re [inflation] a your impacting that Difficulty] guessing are question shows us XXXX I of sort is within very using? the sell the most be M&A metrics and multiples in these say numbers, chain shows the revenue have

David Doft

Again, I'll after. out I'll jump let Hervé in start and

and revenue between In of the of recovery basis, on a we're rate, on at terms looking off XX% XX% pre-pandemic average.

in get chain though, and And to good so chain strong international bit feeling where their Hervé exposure a supply are, back pretty score, impacted promoter cetera, others and exceed some fortunate we about attendees -- net with strong to ramp longer trends shows period more mentioned, as pre-pandemic, we by while have as we're performance as exhibitors, and we of a seen that up said have to have that. supply et so issues, not are

really much mind been dollars tourism of venues that in inflation venue be not that have to of in tend an Keep issue. to owned terms general, municipalities costs coming In want their impacts, cities. by

our more always as be staff. the it majority the or their more that of that have, The rest the registration, security, has costs general change, costs, the issue for own based haven't or so anxious it vast has one And are been our our is come within to we been of contractors more labor which own service cities around or anything, just And visitors we of part the as if reasonable structure. recoveries. cost of costs seen

the the business. our some And then as able really back that cases and I inflation successfully we've to to that's we some we're as most in build we that, so against. And cost and price that said, managing offset been see

going of pay the terms they I'd want forward. the -- in be valued want we pre-pandemic and sellers off to make in of M&A, process say and of tension what In M&A it's now off the of to course, is,

order to We what we've increased of outcome. happy pay ensure earnout that so in we're number with And get. is the everyone's seen for what want deals an to to going

we deals and too we're the we've we them structuring worked the ensure times out. so in not that it And given a pre-pandemic that those the to EBITDA distressed done, say And different structure price, And that they're to at EBITDA. X what growth, deals industry, paid not dynamic, similarly, them are to terms get that probably comfortable of multiples, of forward allows comfort bit with seems to from between selling a depending we've have X size, for look paid deals. and sellers, but a a in the different on for. I'd

Operator

Instructions] We Keller] with the from next have question [Indiscernible]. [Operator of [Christopher line

Unidentified Analyst

governance about? My ESG social material identified around have factors? provide objectives, any Have you report? Is question Are in you're issues, risk an annual to environmental, you sustainability any Do ESG. strategic corporate objectives you ESG? thinking revolves that something and able

Hervé Sedky

every from. for no We of risks and terms understanding our very retained carbon map to instance, outline. us a that, one party have to we're consultant help emission, in have live single Having our comes actually where it third events, seriously said taking ESG of

the goals We ourselves has the from there pledge put for reduce industry we've the signed will to that start to forth. carbon set emission

-- increased of that And us we'll attention coming area more an so about in talking about the quarters. and lot it's for start a

David Doft

annual efforts. sustainability on working an our on report We also developing are

later year. this eye And that out so for keep likely an

Hervé it's company an on documenting at said, initiative it. working on appropriately reporting and become As we're and the important

Unidentified Analyst

final question, I if then And one may.

renew you I if year, correctly and commercial Your it of to been viable it the end terms? recall expired business interruption and at -- last you've have at insurance, able

David Doft

pandemic coverage event insurance the included end expire of policy at of did XXXX. cancellation that the the So

XXXX. renewed have policy XXXX, event as well We as for insurance the now for cancellation

pandemic as no does reasonable However, has but we're little it minimal paying cost longer other work. to X a that grand The maybe the cost can companies the things. that covers of a cover cost would of in Previously, benefit but before, events adversely X.X the gone fairly the the The impact you it out gone has it given up control cancellation insurance the in up fairly way or times we've lead imagine versus events. was otherwise over the scheme times, our received. still cost company's what

Hervé Sedky

insurance being communicable or what the a So not communicable but is considered forward? cover covered under previously, insurance was disease going pandemic, exactly that covered now that the not will diseases, and was

David Doft

That's correct.

policy they prior us will had for actually a we that the provide rider that and specific no in rider, extra paid Our case of that diseases, communicable us. covered longer

Operator

CEO, for reached Thank turn remarks. end you. to sir. I'd to answer question we the and you, Over And Sedky, Ladies back the President like have call closing and the Hervé Mr. of and session. gentlemen, to

Hervé Sedky

you, today goodbye. just journey, to for Thank and you thank wanted look and following all for time next speaking quarter. to I your and forward you to the Emerald

Operator

Thank concludes and gentlemen, this you. Ladies conference. today's

may You for time. you this your disconnect Thank lines participation. your at

Emerald Holding (EEX) 9 May 222022 Q1 Earnings call transcript