Lamar Advertising's Q1 2025: Conflicting Insights on Ad Spend Recovery, AFFO Growth, and M&A Prospects

National ad spend recovery and growth expectations, 2025 AFFO growth guidance and factors impacting growth, programmatic advertising growth and importance, M&A activity and expectations, M&A environment and timing are the key contradictions discussed in Lamar Advertising's latest 2025Q1 earnings call.



Revenue Growth and Steady Out-of-Home Market:
- Lamar Advertising Company reported acquisition-adjusted revenue growth of 1.1% in Q1, despite an extra day of revenue in Q1 2024 due to a leap year and the impact of the 2024 Super Bowl.
- Growth was supported by resilience in local and regional sales, with programmatic revenue up nearly 30%, and digital billboard revenue rising 4%.

Digital and Programmatic Expansion:
- Digital billboard revenue accounted for approximately 30% of Lamar's total billboard revenue, reflecting a continued shift towards digital and programmatic platforms.
- Growth in digital and programmatic revenue was driven by strong demand for data-driven and targeted advertising campaigns.

M&A Activity and Stock Repurchase:
- Lamar closed 10 deals worth $22 million in Q1 and repurchased $150 million of its stock at an average price over $108.
- The company's active M&A strategy is focused on expanding its digital footprint, while stock repurchases reflect confidence in the out-of-home advertising market.

Cost Control and Financial Health:
- Consolidated expenses increased by 2.6%, in line with expectations, and adjusted EBITDA was $210.2 million with a margin of approximately 41.6%.
- The company maintained strong financial health with total leverage of 2.85 times net debt to EBITDA and a weighted average interest rate of 4.6%.