EEX - Earnings call transcript Q3 2024

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Eric I. Lisman

[Audio Gap] 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. This includes remarks about future expectations, beliefs, estimates, plans and prospects. In particular, the company's statements about projected results for 2024 are forward-looking statements. Such statements are subject to a variety of risks, uncertainties and other factors that could cause actual results to differ materially from those indicated or implied by such statements.

For a discussion of these risks, uncertainties and other factors, please refer to the company's SEC filings, including its most recently filed periodic reports on Form 10-K and Form 10-Q as well as the company's earnings release, all of which can be found on the company's Investor Relations website. undertake to not statements. such does company any update duty forward-looking The

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

As be recorded, and available reminder, the the will Investors conference the call of section this a is on company's this replay being website. of

Herve Sedky

Sedky. our to position growth to the often overview David review the give implications you, CFO, aggressive you to want company which and at here And Emerald. on spoken portfolio of our taking optimization on quarter better in with XXXX had third concept I of financials. We've It's then strategy. good detail on you with we're to Thank good our is that and expected Eric, a of for discuss the today, in steps and some more be an profitability fill of near-term our the future, about results. our I'll morning, will more results. start everyone. and brief then provide our performance Herve Doft, This

to do the the expect in addition, meet half In our strong seeing we XXXX broad-based half growth although we're not expectations. of second first pacing and of XXXX, year-over-year into performance

primarily by XXXX. previously communicated X This reducing factors. we're update for expectations result, our full a year driven is As

second, and our our decisions portfolio impacts First, mix. optimize on a certain to macroeconomic And Content business. operational proactive

me each now. more of these address detail Let in

this of to the and event portfolio of growth accelerate organic An catalog. optimization activities long-term a review review outcome thorough several was earlier decision smaller we our the portfolio, trajectory events. margin entire optimize unprofitable to catalog by pruning our this year, of conducted First, -- certain and

permanently million months, events is several in of run past will $X $XX for this XX stage XXXX, discontinued in rate we totaling that and did the but but events in historic stage Over did million not aggregate, have growing stage negative for In have XXXX, revenue. $XX total that million not margin events events to at level. XXXX. XXXX EBITDA is were in stage the and decided we these in had not

we actions in impact a expect in these positively to growth margin As result, XXXX.

Florida October, our high hosted with was Additionally, we set which one million $X early to impact margins. contribution in buyer just stage Milton. cancel had The revenue of events in to was in during under Hurricane

corresponding now in the claim. submitting of insurance are process We a

fall policy that this is will expect been we insurance evacuation several have issued, times state we Given our view cancellation orders our a cancellation be the that to similar and weather-related event past emergency following were disruptions. of and under as in reimbursed

priority our forward, business. remains Moving the growing

next year we an puts expansion beyond. stronger are of and with actions our optimization, objective Our believe foundation stated us portfolio at even which for consistent

our by We the to to near-term and in these enhancement the David growth moment. Despite XXXX, business thrive. assets. expect a in of the impact touch continues solid aided these unprofitable on margin show will a return challenges, portfolio to removal existing

confident Healthcare among about MJBizCon move Week. as Meta, TikTok events, players, our others. leading Amazon, XXXX. Advertising we half into most tracks now and and for of quarter Summit excited including We're completed of including an several strength turn-out BDNY, first and the ago, prominent we few added, a the from York some with We great had weeks new Google, a Design industry feel of New of and Just the the Netflix, portfolio many Edition slate fourth upcoming Expo including of voices the Investor

In fact, revenue of by our expect should last reinforces to margin that portfolio than broad-based an expansion year our with XXXX improve business this improved growth aided point more growth pacing optimization in return is and we and year. from efforts. view solid Currently, at a stronger in XXXX into our the new mix

total our expected months we're to the in second event drive organizational significant has over half for a business, to beyond the softness X% recovery small seeing the content of continued This accounts We approximately expectations. made segment below last perform that XX Second, were continued business. our currently but in year. of changes our revenue,

expectations experiencing markets a our versus for However, growth the near-term for million low-to-mid in several called had a has modest. Even end year. small full challenging year expectations are this such the dollar XXXX, single-digit for remained growth and with which advertising environment we're exposure, shortfall

we will a result, that XXXX now basis. Content on decline As year-over-year anticipate revenue a

it operations remains leverage proprietary portfolio marketing strategy generates. to our is Content business important us Our and lead our throughout it event the enhances to due year. around an event assets the generation and the of component This personalization our in for additive data gives customers

of is much revenue, future. of As naturally means performance in variances that a which growth an limited increasingly Content overall in parts Emerald our should here impact larger overall the continues, our component becoming on other have smaller

respectively. result adjusted full least of factors, guidance million and our year million at revenue and $XXX $XXX EBITDA a these As to adjusting we're

adjusted guidance albeit year-over-year and in a both EBITDA, revenue than still growth updated Our anticipated. previously lower implies at level

portfolio understand We that positioned strong events Content well efforts by the more division of that changes leave XXXX our ROI is as in evidenced of and believe will the make-up strong within offer collection and in-person experiencing expect solid diverse growth we're us XXXX bookings. value and is and large beyond. aggressive We our strength customers our in for the and to Emerald's for proposition the the appreciate events

are shows due for survey to CMOs offer rise reporting events changes. of channels often marketing to customers. year Consulting the the diminishing are blockers traditional Boston e-mail Group, As display of returns that algorithmic I've by and before, the According ad selling a #X ads said and XX% like trade of our and recent The campaigns

experiential for a events reported events relationship necessary in-person and and XX% loyalty channels through brand to As spend and in-person a under-invest marketing strategy a increasing seen engagements. blocks any as value incredibly to knowledge a but is business. many centers, for according company's in by no In sharing, reallocating events real growing competitive valuable cost innovation disadvantage. as more part creation improve key building, in large viewed are of CMOs, a short, them in-person the building opportunity marketing. Nearly result, In-person as and long-term are investment provide C-suites toward their customer events also longer Deloitte, CMOs of like to are effective rather

As the we value of strength continue our to look we forward, believe portfolio. in and

events believe based for deep trends the Emerald We our growth. are positive brings the and in removed Ultimately, difficult volatile in value afraid on to for during to and created pandemic, data we're from prospects as to further that get mid strengthen the not the the we market. confident we immediately comps long-term decisions in-person following make

This exception. no quarter was

new are We markets of events are event level in portfolio portfolio most through acquisitions alongside a and And profitable accretive serve. industry's this on the the well-known to launches. building committed we the some they EBITDA respected of

harnessing of David live validate More that, the in-person David? importantly, the to space. the and let the over to value me I'm in events. With events of serve further recent power the transactions and things turn for path excited industry impact Doft. continue forward

David Doft

morning. you, our quarter overview allocation Thank start of with Herve, and as capital the as a recent then will I guidance. good most discuss financial and well

the in $XX.X compared that quarter, in by the $X.X event adjustments adjustments $X.X to organic offset portfolio profitability discontinued impact million the also was the million of revenue construction quarter. impacted acquisitions, of decline the optimization total as venues the strategy well up growth X.X% in $X.X primarily the period in the same million to of revenue, large organic year number revenue prior Year-to-date, events in has we for as short-term. to a takes prior were third contributing gains one $XX.X For to events, million caused as from by small reviewed, in into year. hold million and the at [Technical to million. was as declined part our compared revenue which events, These was $XX.X disruption not $XX acquisitions Difficulty] quarter. last third compared where as was of This year of driven quarter by $X scheduling quarter million scheduling of million. Organic temporarily revenue account discontinued which Herve was items and in the Besides X.X%

excluding EBITDA, an proceeds, or of million million versus adjusted insurance $X.X EBITDA Third equates to prior quarter. to approximately XX.X%. This margin XX.X% the grew adjusted quarter $XX.X

review XXX part of thorough review of our show we event portfolio. discussed, a a Herve of catalog nearly our proactive As conducted as entire

this year. events we a removed As unprofitable XX result,

which For discontinued, the expect was at be event XXXX. benefits the the means the events in seen we to should that positive and related process reducing were overhead in of some we're full those there contribution changes level,

to expenses. Turning

quarter proceeds flow, prior generated year event Third versus and consideration insurance we contingent as acquisitions. gains overhead lower year stock-based of compared lower compensation $X.X $XX.X partially remeasurement period. continued million of driven the offset in $XX.X This prior prior In from free cancellation was million to expense. costs period, in for the excluding by million million $X.X cash quarter, SG&A management of by the the was third

immediate rate boost debt. by reduced XX know, our to free interest the as our you have cash As an basis their points, we many of a recently delivers on rate Federal floating flow which interest Reserve

have loans. $XXX Specifically, million term of we

for and point for provides $X Federal approximately value-added incremental initiatives. every cash flow in equity is This added So our to leads the for million good Reserve fuel holders reduction investing from of Emerald.

of XX. a versus to $XXX.X had XX the as healthy of We million balance of sheet. million $XXX.X June September balance as cash Turning

As position. and preferred to upgraded I a the third structure. the stock, of in also equity a our rating eliminating of May, all highlight convertible our dividend that completed reminder, a Emerald's B+, we model quarter, from resulting reinforcing debt S&P and in early strength the preferred B liquidity should simpler the in common conversion

total million million, on our availability is facility. including full Our $XXX.X credit $XXX liquidity

leading net EBITDA XX-month the million. of a of credit had in as As of $XXX.X September in $XXX.X we ratio credit our our our to agreement agreement leverage consolidated net trailing definition of XX, defined on debt X.XXx million, based

cash strength our and our generation opportunistically ability sheet flow support and invest in grow to business. balance Our

allocation capital debt capital portfolio continue our and expect which buybacks. below priorities includes our to events, opportunistic own business, balance between forward, to X.Xx Going to EBITDA returns and bolster our of debt leverage of share shareholders, we to investments managing to acquisitions in or to net dividends

we million buyback an remaining. capacity authorization, During average which back bought of price XXX,XXX $X.X our $XX.X shares $X.XX under of per third for quarter, share million the existing for had

of repurchase $XX Directors program expansion of of stock, through extension of X% authorized XX, Board equity Emerald's for an common and million repurchase approximately current Our share the existing market December the representing capitalization. that XXXX of

on Additionally, ending a Directors million an $X.XXX imply October for dividend yesterday's XX, dividend X.X% and XXXX, which of Board share regular price. December of closing XX, on quarterly quarter of would declared $XX yield a cash Emerald's amount annualized reflecting dividend per based the of

guidance. to Turning

noted, Herve of performance As million $XXX XXXX million and expect $XXX least we of adjusted that least at be will now EBITDA. at our revenue

the the Milton. revised hosted content due events, Our discontinued Hurricane October of guidance to one cancellation and event of softness buyer the reflects the in impact aforementioned

Herve event cancellation expect this we for fall insurance cancellation our and this file to noted, As policy also an believe shortly. under claim event we should insurance

our an that, believe your that years of of continue benefits pruning for the to time. an XX%. range we portfolio. Thank and the as EBITDA we the line EBITDA margin you our much in we realize adjusted with for Our approximately in the benefits we'll our XX% reap margin investments existing adjusted coming base, implies now Note guidance cost the achieve the to open continue from can leverage And of very questions. of that

Operator

the comes Instructions] of [Operator Rosenblatt. with Your from Crockett line Barton first question

Barton Crockett

a the things. really expenses. that so on with you a me But were of about to is think And elaborate I was and kind tied understand if bit couple of you just little would is getting guess, help if this shows? kind it bit explain I much wondering you kind why EBITDA of more, unprofitable canceling could level of of event could more other reduced little One, the at I guidance? your a if for outlook

Herve Sedky

here, So there's really components Barton. X

but of cancellation one the given made a of was this here in of And year, were in SG&A already many spent decisions, year. these them of later And the sitting those October, to related we're ultimately, the events events. so lot is

fund were, modest of And we've we're SG&A not these money the contribution so events the many generating by the not and to related margin already having as as burned.

bottom-line able And ongoing next year, we XXXX. be is entering on to a to the adjust full in so be SG&A, realize benefit we'll the will prior which as and done basis

So has events that. when it's But dollars to be money we to absolute because really spent. on around ongoing beneficial of in when a been timing basis, canceled were difference expect and margin this and an surely us

The X Content to by a the ad with second shorter years is, business. has there difficult to real That that advertisers in over market has term was become for business it little a softness that X the difficult a decision-making last volatile in made us admittedly. more forecast is

prior is on impact mentioned versus impact $X million percent we call, fairly as in business. down there bottom-line expectations a We a that, for our And low-to-mid from some so our basis the that single-digit meaningfully expectations. took

that in Admittedly, hurricane lot the insurance, that past -- learned Florida event this in to nothing in Ultimately, recoveries. seen make is to didn't smaller much hitting a we the did is as going unclear point come cause us money And a cause it's believe. it we'll to did insurance be won't. It's we've discussion, recover $X there's emphasize it about when and million. third, a But the believe in small we've canceled. financial we at around one. us but The we

we've expectation our stripped so entirely. just out of And that

Barton Crockett

Content, those revenue largely millions? out Okay. terms of the And EBITDA, that is low-to-mid of in come single-digit

Herve Sedky

point. year. contribution Again, a the does It business. margin timing, Digital this at is media late high in it's the given

this hard in year. to to basis adjusted the time And cost benefit so it's bit a get

is flow-through high And short-term in so we the shortfall what thought. versus that of a there

Barton Crockett

Okay.

for is forward about know the you XXXX? later. know good nature of or what now just the anything pacings Is now us level starting is by XXXX. fact months still or mean, there So commentary in better, you were the should can second terms is you good wondering any few this look that when confidence but what to are in different I that anything change the see offered pacings said relative I'm you of question can you've a -- that that different for the give driven you there see you saw XXXX things it cancellations event that and but it of some reservations, I look beast? is that

Herve Sedky

time. So they pacings -- over are build

because half, and half first some market when looking comment the in into have where our market been around that's visibility, all in have that is we where a little we're half and now. have events so -- less time high And visibility in the the first we of 'XX back for and have right

today. As update the few give months results, back when we'll more year and our we the the half have visibility of we move the on through next than year-end next do we on

poorer that the are our performers So past is have And back we're about and not we quarter. comment the a making on year. And half in our the it third of the a second true business. of concentrated our extensively mix as in reminder, quarter-to-quarter talked more

have we time make can year. the next before do in back a we some call half so And

sectors, for number and of for next about this eliminating we when really right, number are events sign. And year, However, broad-based. pacing were only the this a as year. that their because last in we that's the portfolio day. percent a underperformers. what's more talk of half in there first different at There more optimization not we outperforming It's higher pacing growth this point year, of point us, events sat good run are year a next at track right, we last also strength, and also last the And where than every on versus this across portfolio year, day we you're is it's mix

growth believe performance. were and allow We that brands that are the Emerald resources have the don't part a our profitable path long of to eliminating events we be financial better be will drive of to focus strong us assets, assets on to better tail

Barton Crockett

that's what's little sure just bit. a switching some Blockchain there's understand, been was to where around an then wanting Futurist clear suggesting happened. I'm And releases acquisition, that just Okay. exactly gears not press I which I make

if to event, in doing there? talk I obviously So wondering what is Canada? which I bit was think Miami, is what popular a about you're that expanding engagement your with little you And could

David Doft

portfolio, way if to a then in a where of turn launch quite burn invested can kind slight also thinking emerging about think as start that the important couple of about of couple we've investing accelerate a much we optimization I'll in that that we assets in There's because acquihire lot nuance I I'll bottom-line losses can and our we've type bring it is, and a and is as EBITDA launches been it last identify unit. an There's Herve. activity new in the think into portfolio talked Xcelerator we do shift we are in in more doesn't the years on them launches. of years a where bit recognize in a

can by do accelerate if right market finding would we so to minimize brands, and the launches we path And emerging that.

so already more the trajectory. of the eliminate what favorable supplements be in a launch doing accelerates and we with we a and contributor a had growth launch And blockchain faster that we This have area. to it it way burn where were expect in a

Herve Sedky

invest launch your point, is Xcelerator only And Miami launch has in by investing a And launch. that which be again, our pushing is thing team and team, continued the managed team, will grow. the I'll and that Xcelerator team add the there announced. to to And the and been is push we to

part is This our and to fuels just launch strategy. So our our David's it launches. of point, accelerates --

Operator

Derek of with line the Maxim next Your comes Greenberg question from Group.

Derek Greenberg

think terms of the that events a were more underperforming? you discontinued could you just give color of start, profile in and why were bit they little the To

Herve Sedky

cover I'll that.

the discontinued of launches to into detail the brands. existing they -- going not get that the because are We adjacency largely are were to

will they -- they driving give brands. were initially just So And the the have existing the and it largely other or that were doesn't were either such, out customers more brands brands little for. didn't discontinued through one that go from the that largest Hopefully, we cities were meet you or were fit other it's weren't that in one extended they NBA the of just I way a were all, group to the to of that just the I the Con. they to large as in didn't profile color geo -- color, the going serve largely -- really One, that than that doesn't the to not thought meet gives returns were or call the just that brands that The we that so customers expecting. the but brands the us this brands extended of didn't looking you're uptake that, that But not -- profile -- is we've that in the were. And extensions, detail you that described. discontinued. bit not we're added list it's brands

Derek Greenberg

then definitely you that make to that's back comment of it full business could the is to performance some And how on can pre-pandemic just there? steps helpful. Yes, and the relative tracking get

Herve Sedky

looks long at is, time business point, pre-pandemic our a this So and very very different. ago,

the we our is that of that continue own after we pandemic, -- has stronger a hasn't executing events clearly dynamics discontinued of industry underperformers. And and some and that many still on. the that many, the the back to we're growth brands of of levels, it's events the are frankly, they're gotten their portfolio many underperformers were to its that out issue. comments, what work brands group our So assets. industry mix across going as own really drive of still more pre-pandemic Each before still while have not exceeding events bounced for Per growth pandemic. back And shift have of what's many, have the they of those and There on were group our and have parts small big each number our been. part this portfolio, there's relevant are especially we not a

Derek Greenberg

of terms there? just Got it. how side that getting And the then to and was return of business, driving I you're progressing international wondering, in

Herve Sedky

we're we've How progressing shared we've terms an the past, team. in sales as invested in of international So in international?

terms said of So in network because time the underweight of international we were That terms building Emerald's but that really a we've invested international built. takes network, that is bit in we penetration. of the in

sales around We now brands the representing it's have around the around some that but world. take agents more diverse from impact activity number, see world. see XX years. over agents sales to And world. exact are XX of But full for forget we countries some -- but I to the north it starting the time investment, expect are the that coming of see and that from us activity we to Emerald will the few over

we we do a some headwinds see team have just -- we back expect do and from that came Now China China. from

I election will watching think next it the a Emerald it's of of are watching part of -- international total a small China the it's we hearing that they're depend from revenues, revenue. that we're large while it's but that outcome week, the And closely. part some of closely. But on

active are revenues so as And China we taking to speak. diversify our from steps international we

Derek Greenberg

impacted that it to then canceled something the you year host that And plan it. in is hosted or by was of buyer event is hurricane, next this Got still until the trying just Okay. year? terms on

Herve Sedky

No.

are we've this event We the for it. canceled canceled altogether -- We've year.

Derek Greenberg

progressing with integrating and using Okay. would Got question the across be it. And just you're how AI my business? then last

Herve Sedky

tests is a in -- progress. of it's use. the AI good number and They're around largely that's company. us a So have topic internal around question. hot That's work we a for

of and from landing efficiently efforts AI we in headlines But some more of improve see team. some copy scale our and those that and effectively marketing and marketing e-mail are it marketing and page For personalization things. can really using our of for copy help instance, quickly types conversion teams help and for the our rates

continue marketing internal side we on test these of of and we're and a use the we'll think scale initiatives and number use, plan we to outcome AI from internally So an testing it monitor as will we to that help of the really that, tests.

Operator

Herve turn back I Sedky will closing to for the over remarks. now call

Herve Sedky

Thank to call. you I for all joining Well, very much. you thank wanted the

last pillars centricity engagement. Over talked portfolio and is, about day we've we've sustained to years, mix discontinuing few the of we've years' portfolio largely more portfolio our in course a discussion portfolio more made position of we've And these the which centered our the the well optimization. really And XXX growth, last M&A. Today, events. around the lot the are for optimization this decisions. reality customer to has But difficult few talked really optimization, about really focused foreseeable important difficult us growth on And decisions optimize were for X of quarter, future.

while updating we make growth to the were were continue forward as difficult we in you And on our upcoming they decisions, they important. to quarters. strategy So look progress

call, thank to forward speaking you you So again quarter. for joining next and to the I look

Operator

you today's all joining. Ladies and concludes Thank call. for that gentlemen,

may now disconnect. You

Emerald Holding (EEX) 30 Oct 242024 Q3 Earnings call transcript