OUTFRONT Media (NYSE:OUT) reported stronger-than-expected second-quarter results, citing continued advertising demand, growth in transit and billboard revenue, and a contribution from FIFA World Cup-related campaigns.
Chief Executive Officer Nick Brien said consolidated revenue increased 14% year over year in the second quarter, driven by 32% transit revenue growth and 8% billboard revenue growth. Adjusted OIBDA rose 29% to $160 million, while adjusted funds from operations, or AFFO, increased 45% to $121 million.
Transit growth led by New York MTA
Transit revenue increased 32%, led by a 48% gain at the New York Metropolitan Transportation Authority. The strongest transit advertising categories were technology, entertainment and financial services, according to Brien.
Digital transit revenue rose nearly 36% to approximately $68 million, while static transit revenue increased more than 29%. OUTFRONT estimated FIFA contributed about $17 million in transit revenue during the second quarter.
Billboard revenue grew 8%, or 9.4% excluding the effect of a previously announced exit from a large, marginally profitable billboard contract in Los Angeles. Technology, including artificial intelligence-related advertisers, along with legal and medical categories, were the strongest billboard categories.
Digital billboard revenue increased 17.6% on a reported basis, while static and other billboard revenue rose 3.8%. Excluding the exited Los Angeles contract, digital billboard revenue would have risen more than 21% and static and other billboard revenue would have increased 4.3%, the company said. FIFA contributed an estimated $19 million to billboard revenue in the quarter.
Combined digital revenue increased more than 23% and represented about 37% of total revenue, compared with 34% in the prior-year period. Excluding the Los Angeles contract, digital revenue would have increased 26%. Programmatic and digital direct automated sales climbed nearly 50% and accounted for 20% of digital revenue, up from about 17% a year earlier.
Brien said the company sees “tremendous runway” for programmatic sales, noting that OUTFRONT remains below broader digital-media programmatic adoption levels. The company has added sales and strategy resources focused on its advertising technology relationships and programmatic business, he said.
Margins improve despite higher costs
Billboard expenses increased nearly $15 million, or about 7%, year over year. Lease costs rose $6 million, reflecting higher variable lease expenses and contractual escalators, partly offset by $4 million in savings related to the Los Angeles contract exit.
Billboard adjusted OIBDA rose more than $13 million, or 10%, as revenue growth exceeded expense growth. Billboard yield increased 12% to $3,344 per month, driven principally by efforts to establish higher rates and by FIFA-related activity.
Transit expenses increased $8 million, or just over 8%, while transit adjusted OIBDA improved by about $26 million to $33 million. Chief Financial Officer Matthew Siegel said the company will continue recording New York MTA transit franchise expense at the minimum annual guarantee of $161 million for 2026, recognized evenly each quarter.
Siegel said the accounting approach reflects the company’s assessment that it does not expect to recover the full cost of digital investments made under the MTA contract during the life of the agreement. The company had previously recognized a transit impairment in 2023.
Investment plans and updated AFFO outlook
OUTFRONT said it is accelerating investments in digital growth, programmatic sales, data analytics, training and sales technology. The company hired Chief Data Officer Huw Griffiths late in the second quarter to advance audience intelligence and measurement capabilities.
Siegel said the company expects SG&A expense growth to outpace revenue growth for the remainder of 2026 as it invests to support revenue performance in 2027 and beyond.
Second-quarter capital expenditures totaled about $17 million, including roughly $6 million of maintenance spending. The company added 51 digital boards in the quarter and expects to add approximately 125 for the full year. It maintained its full-year capital expenditure forecast of about $90 million, including $30 million to $35 million of maintenance capital expenditures.
Based on year-to-date results and its outlook, OUTFRONT now expects reported 2026 AFFO to grow in the low-20% range from reported 2025 AFFO of $338 million. The outlook includes expected maintenance capital expenditures, approximately $145 million of interest expense and a small amount of cash taxes.
Balance sheet, dividend and second-half outlook
As of June 20, OUTFRONT had nearly $600 million of committed liquidity, including about $30 million of cash, roughly $500 million available under its revolving credit facility and $50 million available through an accounts receivable securitization facility. Net total leverage was around 4 times, at the lower end of the company’s stated 4-times to 5-times target range.
During June, the company refinanced $650 million of 5% notes due in 2027 with $500 million of senior unsecured notes due in 2034 carrying a 6% coupon. The remaining balance was funded with a draw on its accounts receivable facility and cash on hand.
The board increased the quarterly cash dividend 10% to $0.33 per share, payable Sept. 30 to shareholders of record as of Sept. 4. OUTFRONT also spent just over $11 million on acquisitions during the quarter.
For the third quarter, Brien said the company expects revenue growth in the high-single-digit percentage range, including approximately 20% transit growth and mid-single-digit billboard growth. The outlook includes a $16 million World Cup benefit, with about $9 million expected in billboard revenue and $7 million in transit revenue.
About OUTFRONT Media (NYSE:OUT)
OUTFRONT Media Inc is a leading out-of-home (OOH) advertising company offering a broad range of billboard, transit and digital display solutions across major urban markets in the United States and Canada. Its portfolio encompasses traditional static billboards, high-resolution digital signage, transit media on buses, trains and taxis, as well as street furniture placements such as bus shelters, kiosks and urban panels. The company partners with brand marketers to deliver high-impact campaigns that engage consumers outside the home environment.
Through an extensive network of assets in key metropolitan areas, OUTFRONT provides advertisers with premium visibility along highways, city streets and transit corridors.
