OUTFRONT Media (OUT) Q3 2026 Earnings Call Transcript

DATE

Thursday, Nov. 5, 2026

CALL PARTICIPANTS

• Senior Vice President of Investor Relations - Stephan Bisson
• Chief Executive Officer - Nick Brien
• Chief Financial Officer - Matthew Siegel

TAKEAWAYS

• Revenue -- $511.1 million, increasing 9.3% year over year due to strong demand for premium media assets and the impact of the FIFA World Cup.
• Adjusted OIBDA -- $145.3 million, up 5.9% year over year as revenue growth was partially offset by higher expenses.
• AFFO -- $102.9 million, growing 5.0% year over year primarily driven by the increase in Adjusted OIBDA.
• Billboard Segment Revenue -- $373.7 million, up 5.9% year over year reflecting a 9% increase in yield and $8 million in revenue from the FIFA World Cup.
• Transit Segment Revenue -- $135.3 million, increasing 20.4% year over year led by a 22% revenue gain from the New York MTA and $6 million from the FIFA World Cup.
• Digital Revenue -- Up 14% year over year, representing 37% of total revenues compared to 35% in the third quarter of 2025.
• Billboard Yield -- $3,318 per month, up 9% year over year driven by efforts to realize increased value across premium assets.
• Programmatic and Digital Direct Sales -- Increased nearly 16% year over year and now account for nearly 20% of total digital revenues.
• FIFA World Cup Revenue -- $15 million in the third quarter and $50 million for the full year, with management estimating approximately half is incremental to the core business.
• Selling, General and Administrative Expenses -- $129.5 million, up 23.1% year over year due to success-based variable compensation, higher professional fees, and technology investments.
• Transit Adjusted OIBDA -- $28.9 million, growing 84.1% year over year as the 20.4% revenue increase outpaced a 6.5% rise in segment operating expenses.
• Billboard Adjusted OIBDA -- $139.5 million, increasing 0.1% year over year as revenue growth was offset by higher lease and compensation-related costs.
• New York MTA Revenue -- Up 22% year over year, while franchise expenses rose 8% due to variable costs and an annual inflation adjustment to the minimum annual guarantee.
• Full-Year Revenue Guidance -- Management expects to deliver double-digit revenue growth for the full year 2026 based on current booking momentum.
• Full-Year AFFO Guidance -- Expected to grow approximately 25% year over year compared to the reported 2025 AFFO of $338 million.
• Full-Year Capital Expenditures Guidance -- Projected at approximately $85 million, including $30 million to $35 million for maintenance-related spending.
• Interest Expense Guidance -- Management anticipates a full-year interest expense of just over $140 million.
• Net Leverage -- 3.9 times as of Sept. 30, 2026, which is below the company's target range of four to five times.
• Quarterly Dividend -- $0.33 per share, payable on Dec. 31, 2026, to stockholders of record as of Dec. 4, 2026.
• Digital Billboard Growth -- 12.8% increase in revenue during the third quarter, with management planning to add a total of 125 digital billboards in 2026.
• Digital Transit Revenue -- Nearly 17% growth to approximately $65 million, while static transit revenue grew 24% due to higher demand for station dominations.
• Commercial Segment Revenue -- Up 12% year over year, led by the legal, technology, and entertainment categories.
• Enterprise Segment Revenue -- Growing 6% year over year, driven by strength in the technology, retail, and consumer packaged goods categories.
• Capital Expenditures -- $19 million for the third quarter, including $7 million in maintenance spending and the addition of 29 new digital billboards.
• Acquisition Activity -- Just under $3 million spent on acquisitions during the quarter, with management anticipating full-year activity to be higher than in 2025.

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RISKS

• Siegel reported that the company does not expect to recover the full cost of equipment deployment for the New York MTA contract, noting that future deployment costs will be recorded as intangible assets instead of prepaid costs.
• Siegel stated that SG&A and corporate expenses are expected to grow in the high teens in the fourth quarter compared to 2025, with more than half of that increase related to success-based expenses.

SUMMARY

OUTFRONT Media Inc. (NYSE:OUT) reported a 9.3% increase in total revenues to $511.1 million for the third quarter, driven by double-digit growth in the transit segment and contributions from the FIFA World Cup. Management indicated that the company is reinvesting savings from its 2025 restructuring into digital capabilities, AI tools, and sales enablement to capture a larger share of programmatic advertising spend. The company raised its full-year AFFO growth guidance to approximately 25% based on current revenue momentum and disciplined execution against strategic imperatives. Management stated that the physical advertising layer remains a critical trust foundation for brands as consumer skepticism toward online, AI-generated content continues to rise.

• The company deployed Launchpad, a proprietary AI workspace that more than half of the commercial sales team now uses monthly to access inventory, audience data, and proposal tools.
• CFO Siegel stated, "During 2026, we developed and internally released Launchpad, our proprietary AI workspace, across our entire organization," to improve prospecting and client growth efficiency.
• Management expects to roll out IRL NAV, a new audience-based planning platform, to the full sales team early next year and to small and local advertisers for self-service media management in 2027.
• CEO Brien stated, "the media environment a brand chooses now either strengthens or weakens its trust and credibility," highlighting that billboards are perceived as more credible than social media ads.
• Approximately 50% of the increase in SG&A and corporate expenses during the third quarter was driven by success-based variable compensation including commissions and incentive bonuses.
• Management indicated that leverage trending below the target range, combined with increasing cash flows, will allow the company to be more active in the acquisition space.

INDUSTRY GLOSSARY

• AFFO: Adjusted Funds From Operations, a non-GAAP financial measure used by REITs to evaluate performance after accounting for maintenance capital expenditures and other non-cash items.
• Adjusted OIBDA: Operating Income Before Depreciation and Amortization, adjusted for restructuring charges, stock-based compensation, and gains or losses on dispositions.
• DSP: Demand-Side Platform, a system that allows buyers of digital advertising inventory to manage multiple ad exchange and data source accounts through one interface.
• IRL: In Real Life, referring to physical-world advertising and consumer experiences.
• MAG: Minimum Annual Guarantee, a fixed payment threshold often required in transit and municipal advertising contracts.
• MTA: Metropolitan Transportation Authority, specifically referring to the New York City public transportation system.
• OAAA: Out of Home Advertising Association of America, the lead trade association for the out-of-home advertising industry.
• Programmatic: The automated buying and selling of advertising inventory in real time using data and algorithms.
• SSP: Supply-Side Platform, a technology platform that enables publishers to manage their advertising space supply and fill it with ads.
• Yield: The average revenue generated per monthly display or billboard asset.

Full Conference Call Transcript

Operator: I will now hand the conference over to Stephan Bisson, SVP of Investor Relations. Stephan, please go ahead.

Stephan Bisson: Good afternoon, and thank you for joining our 2026 third quarter earnings call. With me on the call today are CEO Nick Brien and CFO Matthew Siegel. After a discussion of our financial results, we will 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, an 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 earnings 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.

Nick Brien: Thanks, Stephan, and thank you everyone for joining us today. We are 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 $50 million overall. As you can see on slide three, which summarizes our headline numbers, consolidated revenues were up 9%, driven by 20% growth in transit and 6% growth in billboard, while consolidated OIBDA 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 Q3 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 Q3. 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 static 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 six 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 FIFA contributed approximately $6 million to our transit revenues in the third quarter.

Slide seven 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 revenues. 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 the strength being driven by tech, retail, and CPG.

Slide nine 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 FIFA spending. Summing up, we are quite pleased with our Q3 performance and 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.

Matthew Siegel: 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 OIBDA 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%. SG&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 OIBDA increasing by over $13 million during the quarter to $29 million. Slide 12 shows the company's Adjusted OIBDA in the third quarter. Corporate expense increased by about $5 million, due 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 included a top-tier management consultant focused on modernizing our business practices and improving operational speed and cost efficiency.

Combined with the billboard and transit OIBDA, total consolidated Adjusted OIBDA totaled 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. Lastly, we are also investing in AI enablement. During 2026, we developed and 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 NAV, our new audience-based planning platform, and our full sales team moves onto it early next year. Also in 2027, we plan to open IRL NAV to small and local advertisers so they can enjoy the speed and simplicity of self-service media management. 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 CapEx spend was about $19 million, including about $7 million on maintenance spend. 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 million-$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 OIBDA, offset by slightly higher cash taxes, maintenance CapEx, and other items.

Based on our results thus far, our expected revenue growth for 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 CapEx I just mentioned, interest expense of 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 via our revolver, and $50 million available via 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 $0.33 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.

Nick Brien: Thank you, Matt. Our revenue momentum is strong, and it's accelerating into Q4. We expect Q4 revenue growth to reach double digits, driven by our over 20% growth in transit and mid-single-digit growth in billboard. 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 U.S. 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. 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 plan. 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 lines for questions.

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

Cameron McVeigh: Hey, thank you. I just had a couple. Maybe any more color on the SG&A expenses, up 23% in the quarter, which you had communicated would be a step-up. Just curious how you're framing the potential ROI on this and how you might expect it to translate into revenue growth into 2027. Then, Nick, curious how you think about sustaining transit momentum, in particular, into next year, which is likely related to my first question. Obviously, you'll be comping very impressive growth over the course of this year, so any more color on your transit growth strategy would be helpful. Thank you. Okay.

Matthew Siegel: 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?

Nick Brien: 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 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, when we think about New York, Long Island, the Hudson Valley, Connecticut, I mean, 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.

We continue to believe that the brands that want to create more IRL media experiences, to demonstrate more innovation and creativity, they are 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. We see no sign of that slowing down.

Cameron McVeigh: Makes sense. Thanks, guys.

Operator: Our next question comes from the line of Alexey Philippov with JPMorgan. Your line is open.

Alexey Philippov: Yes, thank you. Good evening. How far do you expect the out-of-home market to grow in 2026? 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 is driving that? Is there political benefit? Did you bring more political revenue this year compared to 2024 presidential cycle? Thank you.

Nick Brien: Okay, Alexey, thank you for your question. I think 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 when I'm looking at it as a sector in the U.S., is probably between 6% and 7%.

We're getting the final numbers in now, but the opportunity that I keep communicating to my peers in the industry overall is that the market share of the industry, we are the lowest share of media spend in the largest ad market of the world. When I look at the fact that the average across the top 10 advertising markets is well over 5%, the U.S. still only commands 2% of media spending 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.

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. I'm very pleased with what that represents. It's certainly almost an industry vertical that we're thinking about adding and developing in anticipation of, obviously, the 2028 general elections.

Alex, the first question you asked was very garbled on the phone, so did I capture that correctly?

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

Nick Brien: Well, I believe that obviously this year, overall media inflation was pretty strong for the overall paid media industry across all verticals. We are getting the early estimates for 2027. They are probably going to be a bit more modest than that. But I think for our media sector, I believe we are more organized and we are more focused on a number of very important areas as an industry. I am going to have greater oversight of how the industry is focused on executing those, as now been appointed the Chairman of the OAAA, the industry trade association.

But 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. We are 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 is seamless and painless to be able to integrate, whether it be the key leading DSPs, SSPs, we need to be available. I know the industry is doing a better job in that regard.

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 bodes well. I am 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. I am very bullish about the medium and our role as leading the medium in 2027.

Matthew Siegel: Alex, let me jump in. Obviously, it is 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, first quarter pacing is looking pretty good.

Nick Brien: Thank you.

Matthew Siegel: We're very focused on finishing very strong through the fourth quarter and talking about it in February.

Alexey Philippov: That's very helpful. Thank you so much.

Operator: Next question comes from the line of Ally Yaseen with Wolfe Research. Your line is open.

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

Nick Brien: Al, thank you for that question. We are very excited about it because within our tech category, AI leads the way. We are getting equal measure between, let us call them the existing tech incumbents who have integrated AI within their systems and their services that they want to advertise, as well as, let us say, the insurgents and the established players, whether it be ChatGPT or Anthropic, or the individual brands like Blacksmith.ai, Arise.ai. We are getting tremendous momentum and commitment to the physical media and their real appreciation of it. We have had that within transit as well.

We are not seeing, even though our comps will be tougher next year, because obviously we have done very well in quarter three and quarter two, three, and now we see in quarter four, we do not see any slowdown of the spending and the commitment to our individual media sector. From all the conversations we are having, we are having renewal conversations with all those significant advertisers, and as yet, we have only had one direct-to-consumer product offering that has really hit the market, which is Muse by Facebook, by obviously Meta.

The Meta Muse campaign was significant for us, and we believe in all the conversations we are having with Meta that they are going to continue to support it because it has been such a success. When we look at 2027, we remain pretty bullish about the AI industry vertical.

Ally Yaseen: Great. Thanks.

Operator: 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 Sholl with Barrington Research. Your line is open.

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

Matthew Siegel: So-

Patrick Sholl: How that flows through to EBITDA margins?

Matthew Siegel: I will try. It is Matt. Thanks for the question. We think mid-next year, we are at steady state growth. In the last 18 months, we hired a head of digital, a head of data. We have a new, you heard about IRL NAV, which is based on our investment in AdQuick. We signed up high-end CRM beginning of this year, so we are adding full-year impact into next year. We fully expect all of these things to drive outsized revenue growth. That is why we did it. We think it is great if you asked some of our sales leaders what they anticipate for their budget targets in 2027.

They are certainly stretched, as Nick was talking about AI just a minute ago. Shout out to Cynthia in San Francisco. Said she had a great year, and she has got a big hurdle next year. All the investments, we expect to drive outsized revenue growth and help to improve our EBITDA margin in the year, next year, in 2027.

Nick Brien: Yeah. Patrick, I would like to just jump on that as Patrick, just another point to make is when we are talking about the SG&A investments, it is because we have been so determined to get ourselves match fit for the real game, because it is 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. To date, less than 20% of our revenue comes programmatically.

These are separate pools of money, where these programmatic buyers, they are buying by audiences. They are 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 have, like Vistar and Place Exchange. I mean, we either retool ourselves and invest accordingly to unlock those spends, or we will not get them.

As Matt said, we are 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. We are very bullish about 2027 because we have 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 is not destroyed in any way. Yeah, it is that these SG&A investments, you can see them, and they are running higher because they are there, and they are being strategically considered, discussed in conjunction with the growth velocity we have shared with the board and signed off as part of our longer-term three-year strategic plan. We are very, very bullish about 2027.

Patrick Sholl: Okay, thank you. Just another question on World Cup. I am 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 are allocating more spending to out-of-home? Thank you.

Nick Brien: Well, yes, we have. That is because we have got the sort of the traditional significant buyers who have been with the medium, like Coca-Cola, who are also significant World Cup sponsors. We have used every opportunity to engage with them post-FIFA about the impact that their increased advertising achieved. A lot of them were about spectaculars, real remarkable creative innovation, high-end creative development work. We have had a SWAT team to do exactly what you have said, Patrick, which is to not allow them to simply be associated with the World Cup and then disappear to spending as usual. Our opportunity is to say, "Hey, you ramped it up for the World Cup. You ramped it up.

You enjoyed the benefits. Now stay with it." That is our ultimate mission, is that we need to be convincing these enterprise marketeers, these significant big brands across the sectors that we have targeted. We have six industry verticals between tech, telco, auto, pharma, wellness, CPG, entertainment, and financial services. So many of those big brands were significant FIFA sponsors who used our medium. Now the conversations are ongoing about how we integrate within their brand campaigns into 2027. Those conversations are going well.

Patrick Sholl: Okay. Thank you.

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

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

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

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