Lamar Advertising (NASDAQ:LAMR) executives said the company exited 2025 with improving sales momentum and issued 2026 guidance calling for continued growth in adjusted funds from operations (AFFO) per share, supported by pricing, digital expansion and contributions from acquisitions.
Fourth-quarter results and sales trends
CEO Sean Reilly said both local and national advertising grew in the fourth quarter despite a difficult comparison from political advertising in October. Excluding political, Lamar’s revenues grew more than 4% on an acquisition-adjusted basis in the quarter, with gains across analog and digital billboards as well as airports and logos. Reilly also highlighted a strong finish to the year, citing December pro forma growth of almost 6%.
Reilly outlined category performance, saying strength came from services, healthcare, building and construction, and financial advertising, while telecom and beer and wine were weaker. He later quantified several category moves, including services up 12% in Q4, healthcare up 13%, financial up 17%, and building and construction up 16%, while telecommunications fell 10% and beer and wine fell 20% in the quarter. He also emphasized that Lamar’s largest verticals—services (about 19% of the book) and healthcare (10.5%)—were among the strongest, while telecom (about 2%) and beverages (1.5%) were smaller portions of the business.
Digital growth and inventory
Lamar continued to add digital billboard capacity, with Reilly reporting 111 new digital units in Q4. The company ended 2025 with 5,553 digital operating units, an increase of 559 over year-end 2024. Reilly said about 320 of those additions were internally deployed, with the remainder coming from acquisitions.
On a same-store basis, digital revenue increased 3.7% in Q4, which Reilly said reflected continued advertiser demand for the flexibility of digital. Digital represented 33.7% of Lamar’s business in Q4 and 31.6% of total revenues for the full year. Reilly said the company is “still at peak average annual occupancy,” meaning growth is expected to come primarily through rate increases. He added Lamar intends to remain aggressive on digital conversions and is targeting roughly the same number of internal digital deployments in 2026 as in 2025.
Financial performance, margins, and 2026 outlook
CFO Jay Johnson said the fourth quarter exceeded internal expectations across revenue, adjusted EBITDA, and AFFO. Diluted AFFO per share rose 1.4% to $2.24 versus $2.21 in the prior-year quarter. Adjusted EBITDA increased 3.7% to $288.9 million from $278.5 million, while the adjusted EBITDA margin improved to 48.5%, up 40 basis points year-over-year. On an acquisition-adjusted basis, Johnson said adjusted EBITDA was up 2.1%.
Johnson also discussed a year-over-year change in depreciation and amortization, noting the expense “decreased $151.3 million” in Q4 2025 as the company returned to a more normal level following a Q4 2024 update to its asset retirement obligation (ARO) cost estimates. He described ARO as Lamar’s obligation to dismantle and remove over 71,000 billboard structures on leased land and restore sites, and emphasized the ARO-driven depreciation change is non-cash and does not affect adjusted EBITDA or AFFO.
For the full year, Johnson said acquisition-adjusted revenue increased 2.1% to $2.27 billion, while operating expenses rose about 2.6%. Adjusted EBITDA totaled $1.06 billion, up 1.4% on an acquisition-adjusted basis, and the adjusted EBITDA margin was 46.7%, essentially flat year-over-year. Johnson said Lamar ended the year with diluted AFFO of $8.26 per share, above the top end of the company’s revised guidance, representing 3.4% growth versus full-year 2024.
Looking ahead, management guided to 2026 AFFO of $8.50 to $8.70 per share. Reilly said the midpoint implies about 4.1% year-over-year growth in AFFO per share, about 3.5% acquisition-adjusted revenue growth, and roughly 3% acquisition-adjusted expense growth. He added expense growth is expected to taper in the back half of 2026 and that the guidance midpoint implies consolidated operating margins of over 47%, which he called the best in company history. Johnson said the guidance assumes SOFR remains flat and includes $154 million of cash interest, with maintenance capital expenditures budgeted at $64 million and cash taxes projected around $10 million.
Acquisitions, balance sheet, and capital return
Reilly said Lamar completed 13 acquisitions in Q4 for about $57 million in cash, bringing 2025 totals to 50 acquisitions for $191 million. He also referenced the completion of the Verde deal, describing it as the first UPREIT transaction in the history of out-of-home advertising, and said integration of Verde and other 2025 acquisitions was going well. He told investors Lamar expects another active M&A year in 2026 and said the company had already completed seven acquisitions since January 1 for about $40 million.
On the call’s Q&A, Reilly said he expects cash acquisition activity in 2026 to be at least as much as 2025—“close to $200 million”—and discussed valuation dynamics, saying seller multiples may appear “slightly below the mid-teenish range,” while Lamar’s synergy-adjusted multiple is “something between 10 and 11.”
Johnson described a “well-laddered” debt maturity schedule, with no maturities until an accounts receivable securitization in October 2027 and no senior notes maturity until February 2028. He said total consolidated debt was about $3.4 billion, with a weighted average interest rate of 4.5% and a weighted average maturity of 4.6 years. Under the credit facility definition, Johnson said leverage ended the quarter at 2.92x net debt to EBITDA, with secured debt leverage at 0.6x. He added Lamar had just over $800 million in total liquidity at year-end, including $64.8 million of cash and $742.2 million available under its revolver, and that the AR securitization was fully drawn with $250 million outstanding. Johnson also said the company has “investment capacity well over $1 billion” while staying at or below the high end of its target leverage range of 3.5x–4x.
On dividends, Johnson said Lamar paid a quarterly cash dividend of $1.55 per share during 2025, totaling $6.20 for the year. Management’s recommendation is for a $1.60 per share regular cash dividend for the first quarter, and the company expects to distribute $6.40 per share in regular cash dividends in 2026, subject to board approval. Johnson reiterated that the dividend is based on taxable income and that Lamar’s policy is to distribute 100% of taxable income.
Key themes: political, World Cup, expenses, and pharma
Reilly said political advertising was a headwind in Q4 and for the full year, with political down about $11 million in the quarter versus 2024, but he expects the dynamic to reverse in 2026. In Q&A, he said one way to frame the opportunity is that the difference between 2024 and 2025 political revenue was “a little less than $20 million,” while he conservatively estimated 2026 political could be roughly $12 million to $14 million higher than 2025. He added political spending typically breaks late, with most of the benefit expected in the third and fourth quarters.
Reilly also said Lamar expects incremental advertising related to the World Cup, estimating $3 million to $4 million of additional business, while noting Lamar is not as well-positioned for the event as some peers. On expense growth, Reilly and Johnson attributed part of the 2026 operating expense outlook to healthcare inflation and enterprise resource planning (ERP) initiatives. Johnson said ERP-driven expense pressure should moderate as the company moves toward going live later in 2026 with the second phase of technology initiatives, while also noting healthcare costs have been a “headwind” with high single-digit growth over the last several years.
Finally, Reilly provided detail on the company’s optimism around pharmaceutical advertising, citing changes in FDA disclosure requirements and the development of attribution studies for out-of-home through a provider he identified as Crossix, which he said has helped pharma prove campaign efficacy.
About Lamar Advertising (NASDAQ:LAMR)
Lamar Advertising Company (NASDAQ: LAMR) is one of North America’s largest outdoor advertising firms, specializing in out-of-home media solutions. Since its founding in 1902, the company has grown through a combination of organic expansion and strategic acquisitions to offer a broad portfolio of advertising products. Its core business centers on billboard advertising, encompassing traditional static billboards and a rapidly expanding network of digital displays. These assets enable advertisers to reach consumers with high-impact messaging along highways, in urban centers, and at high-traffic intersections.
In addition to highway billboards, Lamar offers a variety of supplemental out-of-home formats, including transit advertising on buses and shelters, and logo signage at travel plazas and gas stations.
