(Bloomberg) -- OUTFRONT Media Inc. (NYSE: OUT) reported first-quarter revenue grew 10% as its transit advertising business surged, leading the company to raise its full-year cash flow guidance.
"We are pleased with our Q1 performance, and I am happy to report we are seeing these strong top-line trends continue into the spring and summer," Chief Executive Officer Nick Brien said in the earnings call.
The out-of-home advertising company reported revenue of $429.6 million, beating the Zacks Consensus Estimate of $419.9 million. Earnings per share of 34 cents also topped estimates of 28 cents. The results were boosted by $13.5 million in non-recurring billboard combination revenue.
Looking ahead, OUTFRONT expects second-quarter revenue growth to accelerate to over 10%, driven by about 30% growth in transit and mid-single-digit growth in billboards. The company raised its full-year 2026 consolidated AFFO growth forecast to the mid-teens.
The main driver of the quarter's outperformance was the transit segment, where revenues jumped 22% to $95 million. This was led by a 26% increase in revenue from the New York Metropolitan Transportation Authority contract, the company's largest. Management attributed the turnaround to "smarter product marketing and innovative focused sales approaches."
Billboard revenues, the company's largest segment, increased 7.1% to $332.9 million. The growth came despite the company's strategic exit from a large, marginally profitable billboard contract in Los Angeles. Excluding this and the combination revenue, billboard growth would have been over 4%.
The company is also making a strategic shift, rebranding itself as a leader in "IRL (In Real Life) Media" to emphasize its impact in the physical world. "In a world of endless scrolling, muted ads, and algorithmic noise, we exist in the one place no one can opt out of, the real world," management stated during the call.
This push includes modernizing its technology. Programmatic and digital direct automated sales increased nearly 40% during the period, now representing 20% of total digital revenue. The company plans to convert approximately 125 traditional billboards to digital formats in 2026.
The strong quarterly results and improved outlook suggest OUTFRONT's strategy of focusing on high-value transit and digital assets is paying off. Investors will watch to see if the company can maintain its transit momentum and capitalize on expected advertising demand from the upcoming World Cup.
This article is for informational purposes only and does not constitute investment advice.
