Lamar Advertising's Q2 2025: Navigating Contradictions in Revenue, M&A Strategy, and Digital Transformation

National revenue challenges and performance, M&A pipeline and revenue contribution, M&A strategy and impact on revenue growth, digital conversion and CapEx trends, programmatic ad spending and margins are the key contradictions discussed in Lamar Advertising Company's latest 2025Q2 earnings call.



Revenue and Growth Trends:
- Lamar Advertising reported acquisition-adjusted revenue growth of 1.9% on a consolidated basis for Q2 2025, marking its 17th consecutive quarter of acquisition-adjusted revenue growth.
- Growth was driven by increased activity in the form of national RFPs and local proposals, although some advertisers maintained a cautious approach due to economic uncertainty.

M&A Activity and Strategic Partnerships:
- Lamar completed a milestone deal with the first ever UPREIT transaction in the billboard space, acquiring billboards from Verde Outdoor in the Southeast, Northeast, and Midwest.
- This transaction provided a tax-efficient mechanism for sellers to diversify their asset base while continuing to enjoy income from distributions, which is expected to accelerate M&A activity in the sector.

Operational Efficiency and Expense Management:
- Acquisition-adjusted consolidated expenses increased by 1.9% in Q2, better than internal expectations, and operating expense growth for the full year is now expected to come in around 2.5%.
- Jay Johnson attributed this to Lamar's focus on operational efficiency and cost control measures.

Impact of Vancouver Transit Contract Termination:
- The termination of the contract with TransLink in Vancouver resulted in an estimated $0.06 per share impact on AFFO, primarily due to severance costs associated with Canadian employees.
- Although the contract was high-revenue, its actual EBITDA contribution was less than 10%, and it had been negative to the bottom line since COVID.