Hello, everyone. Thank you for joining us, and welcome to the OUTFRONT Media first quarter 2026 earnings call. After today's prepared remarks, we will host a question and answer session. I will now hand the call over to Stephan Bisson with OUTFRONT, p lease go ahead.
Good afternoon, and thank you for joining our 2026 first quarter earnings call. With me on the call today are Chief Executive Officer Nick Brien and Chief Financial Officer Matthew Siegel. After a discussion of our financial results, we'll 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 221 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 reconciliation. With that, let me hand the call over to Nick.
Thanks, Stephan. Thank you everyone for joining us today. We're pleased to be here reporting our first quarter results, which came in better than we had anticipated when we spoke two months ago. Given the strong demand, excellent execution from our entire organization. As you can see on slide three, which summarizes our headline numbers, consolidated revenues were up 10%, driven by 22% growth in transit and 7% growth in billboard. Consolidated OIBDA was up 56% to about $100 million, and AFFO more than doubled to $61 million. Notably, these results include $13.5 million Of condemnation billboard revenues and OIBDA that we highlighted when we provided our guidance in February. Slide four shows our more detailed revenue results. Billboard revenues were up 7.1%. Included in our compounded billboard results are two notable items this quarter.
First, approximately $13.5 million of revenue in quarter one 2026 related to billboard condemnations I just mentioned. Second, our previously announced exit of a large marginally possible billboard contract in L.A., as the revenues and expenses of this contract are still included in our reported 2025 financial statements. Excluding the billboard revenue generated by both of these items, billboard revenue growth would have been up over 4%. The strongest billboard categories in the quarter were legal and tech. Transit grew by 22%, again led by the New York MTA, which was up over 26% in quarter one. Our strongest transit categories in the quarter were tech and financial. Slide five shows our detailed billboard revenue, which as I mentioned earlier, was impacted by the outsized condemnation revenue and the large L.A. billboard contract that we exited.
On a reported basis, static and other billboard revenues were up 7.6% during the quarter, and digital billboard revenues were up 6.1%. However, excluding the revenue generated by both of these items, static and billboard revenues and other billboard revenues would have been up nearly 2%, and digital billboard revenues would have been up over 10%. Slide six shows our detailed transit revenue, which grew over 22% during the quarter. Our digital transit revenues were up over 26% to about $45 million, and static transit revenues were up almost 20%. The strength in our transit business was led by our commercial team this quarter, which grew their revenues at a clip of 35%.
We remain immensely proud of the performance turnaround in this important line of business, continuing to be driven through smarter product marketing and innovative focused sales approaches. While technically occurring in the second quarter, I'd like to highlight a recent activation with British Airways in the New York MTA that you can see on the cover of our slide presentation. As part of this innovative campaign, we wrapped the shuttle to resemble an airliner and be able their flight attendants to Grand Central and Times Square to hand out English biscuits to hungry commuters. Slide seven shows our combined digital revenue performance, which grew over 11% in the quarter and represented about a 1/3 of our total revenues. Even more impressive, excluding the aforementioned L.A. contract, digital revenues would have grown by nearly 15%.
Programmatic and digital direct automated sales increased nearly 40% during the period, now representing 20% of total digital revenue, up from 16% a year ago. On the topic of programmatic growth, I'd like to also highlight the recent addition of a very senior digital sales leader with deep expertise across programmatic advertising, data analytics, measurement, and omni-channel media activation. This strategic hire further advances our evolution into a modern media company built around digital expertise, audience intelligence, and measurable outcomes. Jeff Hackett's leadership will help us maximize the value of our unified ad tech stack, our data management platform, and trading partnerships, while strengthening our position with programmatic buyers who are increasingly extending audience-driven strategies into premium IRL Media environments.
In turn, we believe we are better positioned to capture this growing demand and demonstrate how IRL Media enhances platform-based omni-channel campaigns through greater targeting precision, breakthrough creative, and measurable performance in the real world. Moving on the breakdown of commercial and enterprise revenues can be seen on Slide eight. Commercial revenues were up 19% during the quarter, or 13% excluding the $13.5 million Condemnation revenues that we realized during quarter one. Enterprise was down about 2% during the first quarter, predominantly related to the exit of the large L.A. contract. Slide nine shows our billboard yield growth, which was up 11% year-on-year to over $2,900 per month, driven by higher rates as well as billboard condemnations.
Excluding condemnation revenue from both periods, billboard yield would have been up about 6.5%, given our strong revenue performance and continued practice to prudently optimize our billboard portfolio. Summing up, we are pleased with our quarter one performance, and I'm happy to report we're seeing these strong top-line trends continue into the spring and summer, which I will discuss in greater detail later. With that, let me now hand it over to Matt, who's going to review the rest of our financials.
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 about $5 million, or approximately 2% year-over-year. Zooming in on lease costs, these expenses were up about $2 million, or about 2% year-over-year. This increase was driven by higher variable lease costs and contractual escalators on fixed leases, offset partially by $4 million of savings related to the large billboard contract in L.A. that we exited. Excluding the impact of the L.A. portfolio exit, billboard property lease expense would have been up about 5%. Posting, maintenance and other expenses were up over $1 million, or about 4%, due to higher maintenance and utilities, higher site-related costs, and higher compensation-related expenses.
SG&A expenses grew just over $1 million, or about 2%, due primarily to higher professional fees, including software and technology expenses, and a higher allowance for bad debt, partially offset by lower credit card usage by customers and lower compensation-related expenses. This $5 million increase in total billboard expenses, combined with the growth in billboard revenues Nick described earlier, led to billboard adjusted OIBDA increasing by about $17 million, or 18%. Excluding the impact of the billboard condemnations in the quarter, billboard OIBDA would be up around 4%. Turning to transit on slide 11. In total, transit expenses were up $4.5 million, or just under 5% year-over-year. Transit franchise expense was up 3%, due primarily to the annual inflation adjustment to the MAG for the MTA contract.
Posting maintenance and other expenses were up just over $1 million, or about 8%, due primarily to higher display production costs and higher posting and rotation costs. SG&A expenses were up $1.5 million, or about 9%, due primarily to higher compensation-related expenses, higher professional fees, including software and technology expenses, partially offset by lower credit card usage by customers. The 5% increase in total transit expenses, combined with the 22% transit revenue growth described earlier, led to transit adjusted OIBDA improving by about $13 million during the quarter to an adjusted OIBDA loss of a little over $1 million. While on the topic of transit, I would like to quickly discuss some important developments regarding the New York MTA.
Given our strong Q1 results and an improved outlook for the remainder of the year, we now believe that our 2026 New York MTA revenues will surpass the defined baseline revenue level, which we often describe as the MAG level. As a reminder, based on our prior expectations at the beginning of the year, we continued to record the MAG on a straight line basis rather than account for the contract on a revenue share basis. Due to the seasonally lower revenues in Q1, this resulted in approximately $7 million of additional expense than if we had recorded the contract on a revenue share basis. We expect to account for this benefit from the straight line MAG in Q2 and Q3 when the revenue share expense would have exceeded the MAG. By the end of Q3, we will be caught up on a year-to-date basis.
For the fourth quarter, we will book the full calculated revenue share amount, which will show a substantial increase in transit franchise expense from the prior period when we're just recording the MAG. A benefit of being above the MAG level also means that we will return to recouping the digital investments we have made in the MTA since the inception of this contract in 2018. Let me remind you how this works, as it has been a number of years since we last recouped. Any incremental transit franchise expenses due to the MTA above the MAG will not be paid in cash, but rather utilized to reduce our significant recoupable investment balance with the MTA, meaning each incremental $1 of revenue will remain extremely accretive on a cash basis.
Recoupment will positively impact our net working capital and cash balances, but will not impact adjusted OIBDA, AFFO or net income. Given the recoupment will not flow through net income, the monies recouped will not be subject to the redistribution requirements. Slide 12 shows the company's adjusted OIBDA in the first quarter. Corporate expense declined by about $6 million, due primarily to lower compensation-related expenses, including last year's severance and lower professional fees. Combined with the billboard and transit OIBDA, which includes a benefit of the condemnation discussed earlier, adjusted OIBDA totaled about $100 million, up 56% compared to last year. Before moving on, I'd like to quickly discuss some important growth investments we are making at OUTFRONT during 2026 to support our ambitious revenue targets for this year and beyond. First, we are investing in our technology.
We have modernized many of our systems in 2025 and early 2026, including a new CRM, training modules and our partnership with AdQuick. While each of these improvements are more costly than the systems they are replacing, we expect that each will assist us in accelerating our top line revenue growth. Second, we are investing to continue improving our workflow and processes. So far, we have started to improve how we approach inter-region revenue opportunities and our RFP response process. We have brought back the same consultant who assisted us last year, but importantly, much of their potential fee is success-based, and as such, will only be paid should we realize benefits from their efforts. Turning now to capital expenditures on slide 13. Q1 CapEx spend was about $24 million, including about $7 million of maintenance spend.
We converted 14 new billboards to digital in Q1 and expect to add a total of about 125 in the full year. For 2026, we still expect to spend approximately $90 million of CapEx, with $30 million-$35 million of this total expected for maintenance. Looking at AFFO on slide 14, you can see the bridge to our Q1 AFFO of $61 million. The improvement is principally driven by higher adjusted OIBDA. Based on the first quarter results, our expected revenue growth for the remainder of the year and our investment in our business, we now expect that our reported 2026 consolidated AFFO will grow in the mid-teens relative to our reported 2025 AFFO of $338 million.
Included in this guidance is the previously noted maintenance CapEx, interest expense of approximately $145 million and a small amount of cash taxes. Please turn to slide 15 for an update on our balance sheet. Committed liquidity is over $700 million, including $70 million of cash, around $500 million available via our revolver and $150 million available via our accounts receivable securitization facility. As of March 31st, our total net leverage dropped to 4.3x , well within our 4x-5x target range. Turning to our dividend, we announced today that our board of directors maintained a $0.30 cash dividend payable on June 30th to shareholders of record at the close of business on June 5th. We spent just over $8 million in acquisitions during the quarter.
Looking at our current acquisitions pipeline, we continue to expect our 2026 full-year deal activity to be similar to levels reached in recent years. With that, let me turn the call back to Nick.
Well, let me jump in. Nick is having some audio problems. Matt, I'll keep going. As Nick mentioned earlier, the top line strength we saw in the first quarter has continued into the spring and summer. From where we all sit today, we expect second quarter revenue growth to accelerate to over 10% year-over-year, driven by about 30% growth in transit and mid-single-digit growth in billboard.
These figures include a benefit related to the U.S. role as a World Cup host in June and July, as well as a headwind created by our strategic decision to exit a large marginally profitable billboard contract in Los Angeles, which generated about $4.4 million of billboard revenue in Q2 2025. OUTFRONT has gone through significant change over the past year based on executing the strategic imperatives I shared with you at that time. At the same time, we have reimagined out of home and our company's leading role within it. An important part of this process has been refining how we communicate our value proposition to the world. Just last week, we launched our new brand platform as a declaration.
OUTFRONT is the leader in IRL Media. 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. Our media doesn't just reach people, it moves them. IRL Media is where culture lives. It's where brands stop interrupting and start belonging in the cities and communities that shape daily life. For far too long, our industry has defaulted to talking about inventory and impressions. That's not our story. Our story is influence and impact, the breakthrough experiences we create, the cultural moments we amplify, and the real outcomes we drive for partners looking to build trusted brands in the real world. Our clients know this and are increasingly choosing IRL Media to drive the results they seek. To close, we are redefining what out-of-home means in the rapidly changing agentic advertising world.
The physical world is the last uncluttered, brand-safe, fully viewable canvas in media, offering brands the ability to show up and interact with people where their attention is the highest. Our premium inventory is immersive and experiential with national scale. In our view, the sky's the limit. With that, Operator, let's now open the lines for questions, and we'll see if we can get Nick back on the line.
We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Your first question comes from the line of Daniel Osley with Wells Fargo. Daniel, your line is open, p lease go ahead.
Thanks. Maybe a bigger picture question. I wanted to get your industry outlook on measurement monetization. We saw the OAAA recently announced a new pilot program. What's your view on the timing of all this and the potential benefits the industry could see on the other side? As a follow-up, how does the measurement partnerships that OUTFRONT has recently announced tie in here? Thank you.
Dan, sorry, Nick's still having some audio problems. Obviously, measurement's a key factor for the industry overall. It's been something the industry's been shy and behind on. Nick and the other leaders of the industry are working with OAAA and Geopath, bringing consultants, and really trying to move the measurement dialogue and capabilities forward. Some of the partnerships we've signed up, like AWS and AdQuick in particular, we think will help us. AdQuick has some great measurement capabilities, demonstrating really a viable currency and hopefully, over time, maybe a proof of concept for greater industry adoption. Well, we'll see how it works for us first.
Thanks, Matt.
Your next question comes from the line of Cameron McVeigh with Morgan Stanley. Cameron, your line is open, p lease go ahead.
Great. Thank you. First, I was curious of your view on one of your peers potentially being taken private and maybe implications on asset sales in your acquisition pipeline as you think through the remainder of the year. Is this a potential opportunity for you going forward? Secondly, I know you'd mentioned this in the prepared remarks, but I was curious if you could help size the potential impact of the World Cup over the next couple of quarters and the midterm elections in the back half of the year, just as we think through the cadence of growth. Thank you.
First, peers, obviously, we love all our peers. They're fine people. With one of the large peers or competitors going private, interesting. I think a capital infusion will likely make them healthier, which I think is great for the industry. They can be more nimble and invest in the business and invest in the industry overall. We have not heard that there's any asset sales coming out of that. To the extent there are asset sales from them or really from anyone else material kind of in our footprint or something that would make strategic sense, we think our balance sheet's in a much better place than it's been in the last few years.
Our, you know, capabilities are strong, and we would expect to participate in something that's interesting. As far as size impact for the World Cup, we're not prepared to share numbers there. As far as, you know, names, we have about 70 customers overall. You know, and I think the numbers that we've heard in media, you know, seem to be in the right neighborhood. But we're still calculating. We still think we still have business to book in the second quarter and certainly in the third quarter. We will give you a much, much greater in-depth explanation in August.
Matt, is this working now? Can you hear me or not?
Yes, you're back on, Nick. Nick, you want to add something?
Yeah. No, I just wanted to add on the World Cup thing. I mean, I think as Matt said, you know, we've got over 40% of the FIFA sponsors. We've got road there ahead. As Matt said, what's exciting is that a lot of those significant brands and the big sponsors. They actively use our medium, they don't use it as much as we'd like. We see FIFA and the World Cup as a way of really attracting some of the biggest brands to really demonstrate how they're building their brands in real life. It's an exciting time for us.
Great. Thank you both.
Thanks, Cam. Operator, next question.
Your next question comes from the line of Alexey Philippov with JP Morgan, y our line is open, p lease go ahead.
Yes, thank you very much. Transit grew 22% in the quarter, well above your high teens guide that you gave in February. Can you help us understand what drove that upside relative to your preliminary expectations in February? You mentioned 26% for New York MTA specifically. It looks like other transit contracts are also doing rather well. Is there an unexpected turnaround there, too? If I may follow up related to transit, thinking about FIFA benefit, is it primarily around billboards, or do you expect this to be a meaningful thing for New York MTA? I wonder how your clients think about that. Transit officials in New York already announced to work from home because of the traffic inflow. Just qualitatively, how to think about benefit for New York MTA. Thank you.
Sure, Alexey. Thanks for the question. I'll start and Nick, you can jump in. Transit's going well. It's because of the MTA, and frankly, for the last few years, when transit wasn't, it's the MTA. MTA is more than half of our transit revenue. It's about seven or eight times the next largest transit franchise. We have a great focus there. The 26% growth in the MTA is obviously what's leading to transit. Other transit franchises like BART in San Francisco, doing pretty well is also You know, San Francisco is one of our best-performing markets in the first quarter. I think one of our peers probably also had a very strong San Francisco growth led by, you know, certainly by tech and the repopulation of the city. As far as FIFA, we're taking business in both billboard and transit.
Frankly, the influx in all the big cities of tourists, it's not just near the stadiums, but the influx of tourists, attractive demographic tourists, and the ability for them to move around cities and move underground, above ground are hitting our inventory, again, above and below ground, and we're very happy to have it. Nick, do you want to add something on FIFA transit?
I think on the Alexey, thank you for your question. I think the, as I mentioned earlier on the New York MTA, this has been significantly strengthened by a dedicated focus on the product marketing and the unique attributes of our, you know, the transit within the context of the cities that they serve, as well as the innovation and the opportunity for creating the brand experiences. As opposed, we've got, you know, and we're demonstrating that, as I said, you see on the front cover, the BA wrap. This is becoming more exciting because they're now starting to understand transit is a really exciting platform for IRL Media activation. The experiences can be created, and we're celebrating those and pricing them accordingly. That's made a big contribution.
Great. Thank you.
Your next question comes from the line of Patrick Sholl with Barrington Research. Patrick, your line is open, p lease go ahead.
Hi. Thank you. Congratulations on the milestone on the MTA. Could you remind us how the revenue share on the MTA works when, you know, revenue generation is above the MAG?
It's, it's been a while, so it's good to refresh everybody. The MTA is a 70% revenue share contract. The gap between 70% and 55% was intended not to be a cash payment, but to allow OUTFRONT to recoup the investment that we made in the screens upfront. We would qualify for that recoupment if we got above that baseline revenue line, which is we commonly refer to as the MAG line. While we will be expensing 70% revenue share cost to the MTA, we won't be sending the MTA a check for the gap between the MAG and the revenue share. We'll be using that to, you know, pay down some of our debt and offset some working capital. Obviously, there's a big number there.
It's not gonna pay it all down, this year, but it's good to get back to that recoupment plan and start to, you know, get paid back for some of the screens we invested in.
Okay. Thank you. You had mentioned San Francisco doing a little bit better, and so did one of your peers. I was curious, like post-event, if that has been sustained and, you know, the extent that, you know, if there's a benefit from the World Cup on some of the, I think you said depopulated cities, to the extent that that could, you know, benefit those markets as well. Thank you.
Yeah, Patrick, I'll grab that. I think we've definitely seen the, that early start success as well as having a very strong team and also obviously the strength in San Francisco, the AI developments. When I look at the kind of the size of the, not just the big, the OpenAI and the Anthropic, but also the pure play native AI companies. We've got Genspark, CodeRabbit, Nebius, Arize AI, Dot Ai, and they really are shifting towards a physical reality. These are pure play technology companies that have a huge interest in the, in the, in the trust and the physical nature of our medium. Those campaigns are extending now outside of San Francisco. That, that is providing a very solid revenue stream for us in that important market.
Okay. Thank you. There are no further questions at this time. I will now turn the call over to Nick Brien. Nick?
Well, thank you. I don't think I could have actually articulated my closing, you know, my summary for the earnings better than Matt did, so thank you for jumping in on that. I apologize again for the technology mishap here. I think the one thing that I wanna close with is the fact that, you know, we've got various conferences, events across the spring and the summer, and I'm gonna continue to be with the team articulating just how I see and feel this remarkable shift that we're experiencing now that in the agentic advertising world, the power of this medium that I've always believed has been undervalued through when we think about its tremendous scale, its tremendous value, and really proven trust and therefore the influence it has for consumers and people.
As I said at the close that Matt shared, you know, the sky's the limit. I'm just excited that the organization has really stepped up to follow all those initiatives. We set out for transformation velocity in March of 2025, and here we are, you know, not far a year after that and seeing the fruits start to appear. It's really testament to the remarkable focus and hard work of the entire organization. I look forward to sharing more of that on the road, and look forward to presenting our quarter two results to you in August. Thank you so much for your time.
This concludes today's call. Thank you for attending, y ou may now disconnect.