OUTFRONT Media Beats Q2 Estimates as FIFA World Cup Ads and Digital Growth Lift Results
OUTFRONT Media (NYSE:OUT) beat second-quarter expectations, powered by steady advertiser demand, strong growth in transit and billboard revenue, and a major contribution from FIFA World Cup-related campaigns. The results, discussed on the company's earnings call, showed how out-of-home media is benefiting from both event-driven spending and the industry's shift toward digital screens.
Chief Executive Officer Nick Brien said consolidated revenue rose 14% year over year in the second quarter, reflecting 32% growth in transit advertising and an 8% gain in billboards. Adjusted OIBDA climbed 29% to $160 million, while adjusted funds from operations, a key cash-flow metric for the company, jumped 45% to $121 million.
The FIFA World Cup gave the quarter a visible lift. Brien said the company generated more than $35 million in World Cup-related revenue in the second quarter and more than $50 million for the year to date, with about half of that amount incremental to its normal business. The timing makes sense: the tournament began in June across North America, and OUTFRONT has a large presence in transit systems and urban corridors. The company expects the event to contribute another $16 million in the third quarter, including $9 million in billboard and $7 million in transit.
Transit was the standout segment. Revenue rose 32%, helped by a 48% increase at the New York Metropolitan Transportation Authority. Digital transit revenue grew nearly 36% to roughly $68 million, and static transit revenue rose more than 29%. Technology, entertainment and financial services were the strongest ad categories. OUTFRONT estimated that FIFA-related campaigns contributed about $17 million to transit revenue during the quarter.
Billboard revenue increased 8%, or 9.4% when excluding the effect of the company's earlier exit from a large, marginally profitable Los Angeles contract. Digital billboard revenue rose 17.6% as reported and would have climbed more than 21% without the LA contract; static and other billboard revenue was up 3.8%, or 4.3% excluding that exit. FIFA accounted for roughly $19 million of billboard revenue in the quarter. Advertisers in technology, including AI-related brands, along with legal and medical categories, were the strongest contributors.
Digital now accounts for a bigger share of the mix. Combined digital revenue grew more than 23% and represented about 37% of total revenue, compared with 34% a year earlier. Excluding the LA contract, digital revenue would have increased 26%. Programmatic and direct automated sales climbed nearly 50% and made up 20% of digital revenue, up from about 17%.
Brien said the company sees a 'tremendous runway' for programmatic sales, noting that out-of-home has trailed other digital media in automated buying. OUTFRONT has hired additional sales and strategy staff focused on advertising technology and programmatic partnerships.
The growth plan is showing up in costs. Billboard expenses increased about $15 million, or 7%, as lease costs rose $6 million on higher variable lease expenses and contractual escalators. Those increases were partly offset by $4 million in savings from the Los Angeles contract exit. Billboard adjusted OIBDA still rose more than $13 million, or 10%, and average monthly billboard yield improved 12% to $3,344 on stronger pricing and World Cup activity.
Transit expenses rose $8 million, just over 8%, but transit adjusted OIBDA improved by about $26 million to $33 million. Chief Financial Officer Matthew Siegel said the company will keep recognizing the New York MTA transit franchise expense at the minimum annual guarantee of $161 million for 2026, spread evenly across quarters. He said the accounting reflects management's view that OUTFRONT is unlikely to recover the full cost of its digital investments under the MTA contract over the agreement's remaining life. The company recorded a transit impairment in 2023.
OUTFRONT is also pouring more money into digital growth, programmatic sales, data analytics, training and sales technology. The company hired Huw Griffiths as chief data officer late in the second quarter to lead audience intelligence and measurement work. Siegel said SG&A expense growth is likely to outpace revenue growth for the rest of 2026 as the company invests for 2027 and beyond.
Second-quarter capital expenditures came in at about $17 million, including $6 million for maintenance. The company added 51 digital boards during the quarter and still expects to add about 125 for the full year. Management maintained its full-year capex forecast of roughly $90 million, with $30 million to $35 million earmarked for maintenance.
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 planned maintenance capital expenditures, approximately $145 million of interest expense and a small amount of cash taxes.
The company's balance sheet remains stable. As of June 20, committed liquidity was nearly $600 million, including roughly $30 million of cash, $500 million available under its revolving credit facility and $50 million through an accounts receivable securitization facility. Net total leverage was about 4 times, at the bottom of the company's 4-to-5 target range.
In June, OUTFRONT refinanced $650 million of 5% notes due in 2027 with $500 million of senior unsecured notes due in 2034 at a 6% coupon, extending its maturities while taking on a modestly higher rate. The remainder was funded with cash and a draw on its receivables facility. The board also raised the quarterly dividend by 10% to $0.33 per share, payable Sept. 30 to shareholders of record Sept. 4, and the company spent just over $11 million on acquisitions in the quarter.
For the third quarter, Brien said revenue growth is expected in the high-single-digit range, including roughly 20% transit growth and mid-single-digit billboard growth, with a $16 million World Cup benefit included.
The earnings report reinforces a broader trend in out-of-home advertising: live events and digital place-based media are creating fresh demand, but the durability of those gains depends on how well companies like OUTFRONT can automate sales and measure audiences. The company's push into programmatic and data analytics is designed to address that, while the dividend increase and debt refinancing suggest management is comfortable with its cash flow position even as it invests through 2026.
OUTFRONT Media is one of the largest out-of-home advertising companies in North America, offering billboard, transit and digital display solutions across major urban markets in the United States and Canada. Its portfolio includes static billboards, high-resolution digital signage, transit media on buses, trains and taxis, and street furniture such as bus shelters, kiosks and urban panels. The company uses that footprint to help brand marketers reach consumers throughout the day, outside the home and along commuter routes.