Hello everyone, thank you for joining us and welcome to Outfront Media 3rd Quarter 2026 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Stephan Bisson, SVP of Investor Relations. Stephan, please go ahead.

Good afternoon and thank you for joining our 2026 third quarter earnings call. With me on the call today are CEO Nick Bryan and CFO Matthew Siegel. After a discussion of our financial results, we'll open the lines for a question and answer session. Our comments today will refer to the earnings release and slide presentation that you can find on the investor relations section of our website, outfront.com. After today's call has concluded, and Audio Archive Replay will be available there as well. This conference call may include forward-looking statements. Relevant factors that could cause actual results to differ materially from these forward-looking statements are listed in our current materials and in our SEC filings, including our 2025 Form 10-K as well as our Q3 2026 Form 10-Q, which we expect to file tomorrow. We will refer to certain non-GAAP financial measures on this call. Any references to OIBDA made today will be on an adjusted basis. Reconciliations of OIBDA and other non-GAAP financial measures are in the appendix of the slide presentation, the earnings release, and on our website, which also includes presentations with prior period reconciliations. With that, let me hand the call over to Nick.

Thanks, Stephan. And thank you, everyone, for joining us today. We're excited to report our positive third quarter results. Revenue came in better than we had anticipated when we spoke in August, given continued strong demand for our premium IRL media assets, a focused and motivated sales force, and the second portion of our successful FIFA World Cup, which generated about $15 million during the third quarter, and about $15 million overall. As you can see on slide 3, which summarizes our headline numbers, consolidated revenues were up 9%, driven by 20% growth in transit and 6% growth in billboards, while consolidated EBITDA was up 6% to $145 million and AFFO grew 5% to $103 million. As I just mentioned, these results include FIFA revenues, of which we believe approximately half are incremental to our usual business. Slide four shows our more detailed revenue results. Billboard revenues were up 5.9%, driven by strong, high single digit growth in our East region. The strongest billboard categories in quarter three were tech, fueled by continued AI momentum, legal, and health medical. Transit grew 20% during the quarter, and was again led by the New York MTA, which was up 22% in quarter three. Our strongest transit categories were tech, entertainment and retail. Hopefully many of you have seen the AI company's significant presence in the New York City subways. Slide five shows our detailed billboard revenue. Digital billboard revenues were up 12.8%. and other billboard revenues were up 2.8% during the quarter. We estimate that FIFA contributed approximately $8 million of the revenue to our billboard results this quarter. Slide 6 shows our detailed transit revenue, which grew over 20% during the quarter, led by continued strength within the New York MTA. Our digital transit revenues were up nearly 17%, to about $65 million, and static transit revenues were up over 24%, given an increase in demand for station dominations. We estimate that Fever contributed approximately $6 million to our transit revenues in the third quarter. Slide 7 shows our combined digital revenue performance, which grew over 14% in the third quarter and now represents about 37% of total revenues compared to 35% last year. Programmatic and digital direct automated sales increased nearly 16% during the quarter, representing nearly 20% of total digital revenue. Moving on, the breakdown of commercial and enterprise revenues can be seen on slide eight. Commercial revenues were up 12% during the quarter, driven by strength in legal, tech, and entertainment. Enterprise was up 6% during the third quarter, with much of a strength being driven by tech, retail, and CPG. Slide 9 shows our billboard yield growth, which was up 9% year-over-year to $3,318 per month, principally driven by a focused effort to realize increased value across our premium assets, as well as the continued success of fee-for-spending. Summing up, we are quite pleased with our quarter three performance on our bookings thus far in the fourth quarter, which we believe will allow us to deliver double digit revenue growth for the full year. With that, let me now hand it over to Matt, who will review the rest of our financials.

Thanks, Nick, and good afternoon, everyone. Please turn to slide 10 for a more detailed look at our billboard expenses. In total, Billboard expenses were up nearly $21 million or approximately 10% year-over-year. Focusing in on lease costs, these expenses were up $7 million or about 7% year-over-year. This increase was driven by both higher variable lease costs and contractual escalators on fixed leases. Posting maintenance and other, or PMO, expenses decreased slightly during the quarter as lower production expenses were partially offset by higher site-related costs and higher compensation-related expenses. SG&A expenses grew approximately $13 million, primarily driven by higher professional fees, including software and technology expenses, where we reinvested a portion of the savings generated by our 2025 RIF into improving our sales enablement capabilities, and also higher compensation-related expenses and higher allowance for bad debt. the $21 million increase in total billboard expenses was offset by the strong growth in billboard revenues Nick described earlier, leading to billboard adjusted to increase slightly during the quarter. Now turning to transit on slide 11. In total, transit expenses were up nearly $10 million or about 10% year over year. Transit franchise expense was up 8% to $65 million due primarily to higher variable transit franchise expenses driven by higher transit revenues outside New York and the annual inflation adjustment to the MAG for the MTA contract. Transit PMO costs were up less than half a million dollars, or about 2%. S&A expenses were up $4.6 million due primarily to higher professional fees, including software and technology expenses, higher compensation related expenses, including commissions, a higher allowance for bad debt and higher credit card usage by customers, similar to our billboard SG&A variance. The nearly $10 million increase in total transit expenses was eclipsed by our exceptional 20% transit revenue growth described earlier, leading to transit adjusted orbital increasing by over $13 million during the quarter to $29 million. Slide 12 shows the company's adjusted orbital in the third quarter. corporate expense increased by about $5 million, primarily to higher compensation related expenses and professional fees, partially offset by the impact of market fluctuations on an unfunded equity-linked retirement plan offered by the company to certain employees. The professional fees include a top-tier management consultant focused on modernizing our business practices and improving operational speed and cost efficiency. Combined with a billboard in transit and orbital, Total consolidated adjusted EBITDA total of about $145 million, up 6% compared to last year. Before moving on, I'd like to discuss our recent expense trends and our expectations going forward. First, as we mentioned on our last earnings call, given our robust revenue performance and strong outlook for the year, we are investing proactively for continued future growth. We are strengthening all of our digital capabilities for enhanced growth our ad tech, our sales teams, our data analytics, and our inventory management. We continue to invest significantly to strengthen our sales force with additional training and advanced tools. We have also invested in our HR function to ensure that we recruit, retain, and develop the best possible talent from across the media industry. And lastly, we're also investing in AI enablement. During 2026, we developed an internally internally released Launchpad, our proprietary AI workspace across our entire organization. It gives our teams direct access to our inventory, audience, and market data, along with mapping and proposal tools, so they spend less time gathering information and more time prospecting for new business and growing our existing clients. More than half of our commercial sales team now use it every month. We also began rolling out IRL Mav, our new audience-based planning platform, and our full sales team moves on to it early next year. Also in 2027, we plan to open IRL Mav to small and local advertisers so they can enjoy the speed and simplicity of self-service media management. And second, in addition to these investments, our growth in SG&A and corporate expenses also reflect higher incentive compensation due to our exceptional financial performance this year, driven by our tremendous top-line growth. Specifically, in the third quarter, approximately half of the increase in our SG&A and corporate expenses were due to success-based variable compensation and payments, which were earned in the form of higher commissions, incentive bonuses, and professional fees, as we are significantly outperforming our budget this year. Looking forward to the fourth quarter, we expect SG&A and corporate expenses combined to grow in the high teens compared to 2025. As with the case in the third quarter, we expect that over half of the increase will be related to success-based expenses. We view these bonuses as evidence of our thriving 2026. Turning now to capital expenditures on slide 13, Q3 Camp Act spend was about $19 million including about $7 million of maintenance spent. We added 29 new digital billboards in Q3 and expect to add a total of about 125 in the full year. For 2026, we now expect to spend approximately $85 million of CapEx with 30 to $35 million of this total being maintenance related. Looking at AFFO on slide 14, you can see the bridge to our Q3 AFFO of $103 million. The improvement is principally driven by higher adjusted EBITDA, offset by slightly higher cash taxes, maintenance capex, and other items. Based on our results thus far, our expected revenue growth at Q4 and the ongoing investments in our business, we now expect that our reported 2026 AFFO will grow around 25% compared to our reported 2025 AFFO of $338 million. included in this raised guidance is the maintenance cap tax I just mentioned, interest expense with just over $140 million, and a small amount of cash taxes. Please turn to slide 15 for an update on our balance sheet. Committed liquidity is over $600 million, including about $75 million of cash, around $500 million available by our revolver, and $50 million available by our accounts receivable securitization facility. As of September 30th, our total net leverage was 3.9 times below our four to five times target range. Turning to our dividend, we announced today that our board of directors maintained the 33 cents cash dividend payable on December 31st to stockholders of record at the close of business on December 4th. We spent just under $3 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 a little higher than last year. With our leverage trending below our target range and increasing cash flows, we expect to be more active in the acquisition space going forward. With that, let me turn the call back to Nick.

Thank you, Matt. Our revenue momentum is strong and it's accelerating into quarter four. We expect quarter four revenue growth to reach double digits driven by our over 20% growth in transit and mid-single-digit growth in billboards. This is no accident. It's a result of disciplined execution against our 2026 strategic imperatives, sharper focus on our priority growth opportunities, and a stronger AI-enabled sales engine. On the last call, I told you we'd commissioned Kantar to study consumer trust across media in the US. The research is now published and the findings validate our strong belief that IRL media has a much bigger role to play in the future of brand advertising and that Outfront is well positioned to lead it. Four key findings stand out. First, trust online is breaking down. 93% of consumers surveyed now question whether the content they see online was created by a person or generated by AI. Social media ads were rated the most likely of any format to be fake, misleading, or AI generated. Gen Z and millennials are the most skeptical of any group. Second, reality is becoming more valuable. 78% of consumers are seeking out real world experiences more than they did last year. And Gen Z and millennials, the consumers our clients most want to reach, are leading the shift. The generation raised by algorithms values connection, surprise, discovery, and real-world experiences. The future of media isn't less technology, it's more reality. Third, the physical layer creates the trust foundation. Out of home is consistently perceived as the most trusted real-life advertising channel and the least likely to be fake or misleading by every generation surveyed. When consumers saw the identical ad on social media and on a billboard, they rated the billboard version at least twice as credible, believable, and trustworthy. Fourth, the role of media in the AI era is changing quickly. Reach and targeting still matter, but the media environment a brand chooses now either strengthens or weakens its trust and credibility. As AI continues to flood the internet, The physical layer becomes more essential to brands. It makes every campaign more credible and carries that credibility across the entire media brand. Our assets live in that layer and what we offer advertisers has never been more valuable. As Matt described earlier, that's why we're continuing to invest in the talent, technology, measurement and AI tools across every function. to unlock this growth opportunity and accelerate profitability. Thank you, operator, and we'll now open the line for questions.

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. 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 Cameron McVey with Morgan Stanley. Your line is open.

Hey, thank you. I just had a couple. So maybe any more color on the SG&A expenses, you know, up 23% of the quarter, which you had communicated would be a step up. But just curious how you're framing the potential ROI on this and how you might expect it to translate into revenue growth into 27. And then, Nick, curious how you think about sustaining transit momentum in particular into next year, which is likely related to my first question. But obviously, you'll be copying very impressive growth over the course of this year. So any more color on your transit growth strategy would be helpful. Thank you.

OK. Cam, I'll take the first part. It's Matt. Of course, of the SG&A spend, as I mentioned, about half of it is success-based payments, so commissions, sales bonuses, management incentive comp, and then a success-based formula for our consultant that we've mentioned in the past. As you know, we're having a very good year, comfortably outperforming our budget and our expectations. and that leads to a fair increase in that. Obviously, we don't expect that to go forward, but if it did go forward next year, we'd be pleased with the results. On the investments, Nick, you want to talk about the specific investments or the ROI?

Well, the ROI, we're tracking every one of the investments we're making. I mean, I talked about earlier, Cameron, and thank you for your question, that we were We were very focused on our strategic imperatives. So we have the six that guide all of the investment and the initiatives we take. Tech acceleration, our product strength, how we're driving our brand expansion, the growth velocity, people and culture, and then the operational excellence. So we're looking, we're very exacting about the investment. Again, we're making it very clear to the culture of the organization. These aren't expenses. These are investments. So for every dollar spent, We need to see a payback and each one is quantifiable and trackable and we do that on a very frequent basis. On the second part of your question, yeah, transit, I mean, it is going to be against stronger comps. We know that, but it continues to get stronger. I mean, the New York MTA, all of our transit, but especially the New York MTA, when we think about the extended IRL media network that's fully connected across 5,000 miles New York, Long Island, Hudson Valley, Connecticut. This is a remarkable jewel in our crown that we've always talked about, but never truly talked about in the context of a value proposition, taken it to market, and made it an integral part of our mix. The MTA specifically, as well as our transit product overall, it is not opt-in, it's opt-out. and we offer a portfolio mix. It's the same when we're looking at static versus digital versus billboard versus transit. And we continue to believe that the brands that want to create more IRL media experiences, to demonstrate more innovation and creativity, they're going to be more and more drawn to the transit product we have. We showcase it, we evidence it and we demonstrate the kind of remarkable results around it. So we see no sign of that slowing down.

Makes sense. Thanks, guys.

Our next question comes from the line of Alexey Filipov with JP Morgan. Your line is open.

Yes, thank you. Good evening. How far do you expect the out-of-home market to grow in 2020? Specifically for fourth quarter, if we adjust for World Cup, it looks like fourth quarter revenue is accelerating despite tougher comps from last year. Could you comment on what's driving that? Is there political benefit to bring more political revenue this year compared to 2024 presidential cycle? Thank you.

Okay, so Alexis, thank you for your question. I heard three questions in there. One was overall out-of-home market growth. The line got a bit scrambled at that point. You were talking about, I think, FIFA and how well we did there. And certainly the third area, you were talking about the political. When I think about the out-of-home growth, we're looking this year, I think what I'm looking at as a sector in the U.S. is between... Thank you very much. in a market that accounts for 40% of media spend. FIFA was good for us. We prepared well for it. I believe our teams executed extremely well in the key markets where we had the host cities. And we estimated, as we said in our earlier call, that it was going to be a total for the year of 50 million, of which half was basically considered to be incremental. The third area you talked about was political advertising. And I'm very pleased with the result, although it's a very nascent category for us at Outfront. It is favored. Certainly, Lamar, I think, is a more established player within the political advertising sector. But we're on track to outpace the midterms of four years ago. So I'm very pleased with what that represents. and it's certainly, you know, almost an industry vertical that we're thinking about adding and developing in anticipation of obviously the 2028 general elections. But I didn't, Alex, the first question you asked was very garbled on the phone. So did I capture that correctly?

Yeah, I was asking about 2027 potential for the market growth. as a whole. After the 6-7% growth that you see for 2026, any number you expect for 2027 for the market to grow?

Well, I believe that obviously this year overall media inflation was pretty strong for the overall paid media industry across all verticals. We're getting the early estimates for 2027 are probably going to be a bit more modest than that. But I think for our media sector, I believe we're more organized and we're more focused on a number of very important areas as an industry. And certainly I'm going to have greater oversight of how the industry is focused on executing those. There's now been appointed the chairman of the OAAA, the Industry Trade Association. The three are measurement, and the advanced measurement pilot that is going on right now in partnership with Ipsos is getting good momentum, continued rigor. So we're very hopeful about how we get that evolution of industry measurement. The second is programmatic and how we as a medium are doing a better job with our digital inventory of making sure it's seamless and painless to be able to integrate, whether it be the key leading DFPs, SSPs, we need to be available and I know the industry is doing a better job in that regard. And when it comes to marketing and our storytelling and redefining our value proposition in the context of the research, the Kantar research I shared with you at the end of my prepared comments, our value proposition, the value proposition of the out-of-home medium in the context of in real life and that growth I'm not going to be able to give you figures on what each one of those represents for 2027, but they are very important drivers of engagement with both agencies and brands. So I'm very bullish about the medium and our role as leading the medium in 2027.

It's premature for us to give you 2027 guidance. We look forward to February and taking you through our excitement and some numbers for the full year for the first quarter. I can tell you, you know, first quarter pacing is looking pretty good. We're very focused on very strong through the fourth quarter and talking about it in February.

That's very helpful. Thank you so much.

Next question comes from the line of Ali Yassin with Wolf Research. Your line is open.

Thanks for taking my question. Just one quick one from me. So you mentioned tech and AI was strong as a category. I was kind of wondering how big AI is as an industry vertical for you. When did it start really coming into your portfolio? And is there a point where it's kind of a tough comp against the AI advertiser spending?

Ali, thank you for that question. Certainly, we're very excited about it because within our and many more. Thank you very much. So from all the conversations we're having, we're having renewal conversations with all those significant advertisers. And as yet, we've only had one direct-to-consumer product offering that's really hit the market, which is Muse by Facebook, by obviously Meta. And the MetaMuse campaign was significant for us and Facebook. We believe in all the conversations we're having with Meta that they're going to continue to support it because it's been such a success. So when we look at 2027, we remain pretty bullish about the AI industry vertical.

Great, thanks. And again, if you would like to ask a question, please press star one to raise your hand. Our next question comes from the line of Patrick Scholl with Barrington Research. Your line is open.

Hi, thanks for taking the question. With the SG&A investments that you're making, I'm just curious, like when you get to, I guess, more of a steady state of that level of investment, how should we think about like incremental revenue growth that you're able to drive on that with that increased digital investment?

I'll talk about it. It's Matt. Thanks for the question. We think, you know, next year we're in steady state growth. We have, you know, in the last 18 months, we fired a head of digital, a head of data. We have a new, you heard about IRL Nav, which is based on our investment in AdQuik. We signed up, you know, high end CRM beginning of this year. So we're having full year impact, you know, into next year. But we fully expect all of these things to drive outsized revenue growth. That's why we did it. So we think, you know, it's great if you asked some of our sales leaders what they anticipate for their budget targets in 2027. They're certainly stretched. As Nick was talking about AI just a minute ago. Shout out to Cynthia in San Francisco. She had a great year and she's got a big hurdle next year. So all the investments we expect to drive outsized revenue growth and help to improve our EBITDA margin in the year next year in 2027.

Patrick, I'd like to just jump on that. Patrick, just another point to make is when we're talking about the SG&A investments, It's because we've been so determined to get ourselves match fit for the real game, because it's about the best people, the processes and the technology to enable them to ensure that this medium, and specifically our company, engages where the real money is being spent. 75% of all dollars in paid media are spent digitally. Of that 75%, 70% is taken by three companies, maybe four. 80% of it is traded programmatically and to date less than 20% of our revenue comes programmatically. These are separate pools of money where these programmatic buyers, they're buying by audiences, they're not going to be so deliberate on the channels. We need to ensure that we have the experts who understand how to engage with the big DSPs, make sure our inventory and our data sets are clearly integrated into the leading SSPs as well as the industry SSPs that we had like Vistar and the Place Exchange. I mean, we either retool ourselves and invest accordingly to unlock those spends or we won't get them. So as Matt said, we're going through 2027 budget setting now and it is A challenging time for our organization to appreciate that these resources in research, in measurement, in data analytics, in programmatic, in the ad tech stack, in the tools they have, these are all significant investments to unlock revenue growth and drive profitability. So we are very bullish about 2027 because we've hired some of the best players in the media industry and the digital industry. No one from out of home. everyone coming from the outside industry because they also see the massive unlock of opportunity with our media that is being enabled by AI. Everything enabled to make us more intelligent, more viable, more measurable, but our absolute media impact isn't destroyed in any way. So yeah, these SG&A investments, you can see them and they're running higher because they're there and they're being strategically considered discussed in conjunction with the growth velocity we've shared with the board and signed off as part of our longer-term three-year strategic plan. So we're very, very bullish about 2027.

Okay, thank you. And just another question on World Cup. And I'm sorry if I missed this, but with some of the incremental spending and additional advertisers coming in for that event, Have you seen anything with being able to retain some of the newer buyers from that event and how they're allocating more spending to out-of-home? Thank you. Well, yes, we have.

And that's because we've got the traditional significant buyers who have been with the medium, like Coca-Cola, who are also significant World Cup sponsors. And we've used every opportunity to engage with them post-FIFA about the impact that their increased advertising achieved. And a lot of them were about spectaculars, real remarkable creative innovation, high-end creative development work. And we have had a SWOT team through exactly what you've said to not allow them to simply be associated with the World Cup and then disappear to spending, as usual, opportunities to say, hey, you ramped it up for the World Cup, you ramped it up, you enjoyed the benefits, now stay with it. That's our ultimate mission, is that we need to be convincing these enterprise marketeers, these significant big brands, across the sectors that we've targeted. We have six industry verticals between tech, telco, auto, pharma, wellness, CPG, entertainment and financial services. And so many of those big brands were significant fee for sponsors who used our medium. Now the conversations are ongoing about how we integrate within their brand campaigns into 2027. And those conversations are going well.

Okay, thank you.

We have reached the end of the Q&A session. I will now turn the call back to Nick Bryan, our CEO, for closing remarks.

Well, thank you all for participating in today's call and thank you all for the questions you've asked. We continue to be extremely excited about the potential of our medium and outfront role within the industry to change the conversation and to accelerate the value proposition and the importance of this physical layer has within brand building campaigns. So we look forward to talking with you, if not before, at the various industry investor conferences or any individual conversations. We'll look forward to talking with you at the next earnings call. So thank you all so much for your time.

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