NYSE:EEX Emerald Q1 2025 Earnings Report $4.57 +0.05 (+1.00%) Closing price 05/2/2025 03:59 PM EasternExtended Trading$4.58 +0.01 (+0.22%) As of 05/2/2025 06:18 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Emerald EPS ResultsActual EPS$0.08Consensus EPS $0.07Beat/MissBeat by +$0.01One Year Ago EPSN/AEmerald Revenue ResultsActual Revenue$147.70 millionExpected Revenue$134.30 millionBeat/MissBeat by +$13.40 millionYoY Revenue GrowthN/AEmerald Announcement DetailsQuarterQ1 2025Date5/1/2025TimeBefore Market OpensConference Call DateThursday, May 1, 2025Conference Call Time8:30AM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Emerald Q1 2025 Earnings Call TranscriptProvided by QuartrMay 1, 2025 ShareLink copied to clipboard.There are 6 speakers on the call. Operator00:00:00Thank you. I will now turn the call over to Erica Bartsch, EVP of Strategy and Communications at Emerald. Speaker 100:00:07Good morning. Welcome to the Emerald First Quarter twenty twenty five Earnings Call. Before we begin, let me remind everyone that this call will include certain statements that constitute forward looking statements within the meaning of Private Securities Litigation Reform Act of 1995. This includes remarks about future expectations, beliefs, estimates, plans and prospects. In particular, the company's statements about projected results for 2025 are forward looking statements. Speaker 100:00:36Such statements are subject to a variety of risks, uncertainties and other factors that could cause actual results to differ materially from those indicated or implied by such statements. For a discussion of these risks, uncertainties and other factors, please refer to the company's SEC filings, including its most recently filed periodic reports on Form 10 ks and Form 10 Q as well as the company's earnings release, all of which can be found on the company's Investor Relations website. The company does not undertake any duty to update such forward looking statements. Additionally, during today's call, management will discuss non GAAP measures, which it believes can be useful in evaluating the company's performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with U. Speaker 100:01:27S. GAAP. The reconciliation of these non GAAP measures to their most comparable GAAP measures can be found in the company's earnings release, which is available on the company's Investor Relations website. As a reminder, this conference is being recorded, and a replay of this call will be available on the company's Investor Relations website through 11:59 p. M. Speaker 100:01:47Eastern Time on 05/08/2025. I would now like to turn the call over to Mr. Herve Cedki, President and Chief Executive Officer. Please go ahead. Speaker 200:01:56Thank you, Erica. Good morning, everyone, and thank you very much for joining us today. I'll begin the call with an overview of our first quarter results and key strategic initiatives. Then I'll turn things over to our CFO, David Daft, for a more detailed review of the financials. We began 2025 with strong momentum. Speaker 200:02:17Our first quarter performance reflects meaningful progress in executing our strategy with strong traction across key initiatives that deliver value for our customers and for our shareholders. We reported double digit growth in revenue and adjusted EBITDA building on the strong portfolio optimization initiatives we accelerated in 2024. Emerald's refined portfolio now spans an increasingly broad range of high growth sectors, reducing reliance on slower growth verticals and enhancing resilience across market cycles. Our success this quarter was supported by some of the standout events across our portfolio that reflect the breadth and depth of our industry reach. These include KBIS, a cornerstone in the design and construction vertical the Prosper Show, a leading in e commerce seller engagements and the International Pizza Expo, a critical event in the foodservice space. Speaker 200:03:17Positive feedback from attendees consistently reinforce the high quality and value that these events deliver affirming their role as key opportunities for industry leaders to connect, to engage and transact. Given our performance in the first quarter and current sales pacing, we remain on track to achieve our full year 2025 guidance, while remaining vigilant in monitoring external factors that could influence our trajectory from here. Building on this momentum, we're seeing increasing rebook rates for Q1 twenty twenty six, clearly reflecting the trust our customers place in our platforms and the ongoing ROI delivered by our events. Early commitments not only enhances our forward visibility, but also underscores the resilience of our business model. Even as we maintain strong forward progress, we are mindful of navigating nuanced challenges from shifting consumer sentiment to global economic pressures. Speaker 200:04:29We are proactively monitoring pacing data and customer behavior, both domestically and internationally, to ensure we're well prepared to meet potential shifts in market dynamics. To date, we have sold over 90% of our full year target for revenue from international exhibitors. While we're seeing some pressure on sales efforts with customers in China and Canada, we're also seeing strength from countries like Turkey, Brazil and The United Arab Emirates. Companies in these markets are actively stepping in to capture opportunities created by the current tariff environment helping to drive sales growth. This is particularly meaningful as it reflects early returns from expanded global sales agent network we've built over the last eighteen months. Speaker 200:05:20Our belief is that once the global trade environment becomes more normalized, Emerald is well positioned to benefit from this increased presence. As we've shared previously, our international exposure remains limited. At present, approximately 10% of our total revenue is generated from international exhibitors. Specifically, exhibitors from China account for approximately 2%, Canada contributes another approximately 2% and Mexico represents less than 1% of our revenue from companies offering products or services. This limited exposure provides a layer of insulation from global trade disruptions and shifting geopolitical dynamics. Speaker 200:06:01Additionally, software, services and travel are not currently subject to tariffs, so our events associated with those exhibitors and sponsors should be less impacted, if at all. More importantly, in today's environment defined by policy shifts, Speaker 300:06:19digital fatigue and economic uncertainty, Speaker 200:06:23we believe the value of face to face interaction remains more critical than ever. Business and professional events offer trusted environments for decision making, connection and commerce. According to McKinsey, three quarters of CMOs say in person events deliver stronger brand recall than digital campaigns underscoring their strategic role in today's marketing mix. We also view periods of economic complexity as windows of opportunity, times when face to face events become even more essential given the return on investment that they deliver. In high stakes environments where decisions must be made with confidence, in person events offer a critical platform for real time collaboration and in-depth discussions, enabling companies to align and adapt quickly to market changes. Speaker 200:07:20A strategic focus on face to face engagement aligns with our ongoing portfolio optimization efforts, which have helped to reduce our exposure to more economically sensitive sectors. This ensures greater insulation from volatility, positioning Emerald as a more resilient business. At the same time, we've deepened our presence in higher growth, durable industries such as design and construction, food, technology and luxury travel, positioning us for more stable and sustainable performance across cycles. Speaking of portfolio diversity, we received regulatory approval yesterday to move forward with the previously announced acquisition of This Is Beyond, and we plan to close the acquisition in the coming days. This Beyond is a collection of high end experiential events that complements our portfolio and align with consumer trends around premium purpose driven experiences. Speaker 200:08:21Its first two events of the year stage in May with We Are Africa and LE Miami. We expect both events to exhibit strong growth year over year. We're also in early days of the integration of InsurTech Insights, which we also acquired and closed this past March. The team recently hosted its European event in London in March with strong attendee and sponsor turnout. We are pleased with the addition of both InsurTech Insights and This is Beyond and continue to actively evaluate strategic M and A opportunities that align with our focus on high growth future oriented sectors. Speaker 200:08:59Our M and A strategy is centered on expanding into high growth resilient sectors, while diversifying our portfolio to drive long term shareholder value. This strategy complements our broader goals of optimizing our event offerings and entering new markets with strong demand potential. As we look ahead, our strategy remains focused on our three pillars of value creation, customer centricity, three sixty five day engagement and portfolio optimization. We see opportunities to build upon our diverse portfolio and our confidence in our strategy. In closing, the strength and diversity of Emerald's portfolio continue to be key drivers of our success. Speaker 200:09:43With a broad range of events across high growth industries, we believe we are well positioned to capitalize on both established and emerging market opportunities. While we're confident in our strategy and the strength of our portfolio, we remain focused on staying adaptable in this dynamic environment. By balancing flexibility with precision, we are committed to delivering sustainable growth and long term success for Emerald. With that, let me turn things over to David for a review of our financials. David? Speaker 300:10:15Thank you, Herve, and good morning. Turning to our results for the first quarter, which is our seasonally largest quarter of the year, total revenue was $147,700,000 compared to $133,400,000 in the prior year quarter. Organic revenue in the first quarter increased 5.6% year over year to $139,200,000 driven by strong growth in organic revenues from our connections business, which improved 6.6 versus the prior year. First quarter adjusted EBITDA, excluding insurance proceeds, was $53,600,000 compared to $39,800,000 in the prior year period, an increase of 34.7%. The increase is attributed to continued cost management and operational efficiencies in the quarter and the benefit of the InsurTech Insights acquisition and its London event. Speaker 300:11:10This equates to an adjusted EBITDA margin of approximately 36.3% for the quarter. Turning to expenses. On a reported basis, SG and A was $54,100,000 versus $55,500,000 in the prior year quarter. The year over year decline is largely due to lower compensation and travel expenses in both our content and commerce businesses, offset by incremental expenses from acquisitions. In the first quarter, we generated $10,800,000 in free cash flow, excluding event cancellation insurance, as compared to $3,800,000 in the prior year period due to the higher adjusted EBITDA in the quarter. Speaker 300:11:51Underlying free cash flow was even stronger than reported as some onetime fees related to our January refinancing were expensed through the P and L in the quarter, reducing reported free cash flow by $5,500,000 Additionally, because of the timing of the InsurTech Incyte acquisition and its London event, cash for the event was collected prior to the close of the deal, while the associated revenue was recognized post close. The cash value was received by Emerald through a working capital adjustment in the purchase price rather than through typical deferred revenue. Had we owned the event throughout the full sales cycle, cash collections would have been $3,500,000 higher. In total, free cash flow would have been $9,000,000 higher if not for the financing fees and the timing of the Insurtech acquisition. Note that the timing of the This Is Beyond acquisition is expected to have the same impact with the majority of the cash for its upcoming events collected prior to the transaction closing and the value flowing to Emerald through the purchase price adjustment rather than through the collection receivables. Speaker 300:13:05Turning to the balance sheet. We had a healthy $276,800,000 in cash as of March 31 versus $194,800,000 as of 12/31/2024. This is after funding the InsurTech Insights acquisition, but before funding the This is Beyond deal. A $139,000,000 of this cash will be used for the anticipated closing of the Business Beyond acquisition in May, offset by working capital that comes with the business. Our total liquidity is $386,800,000 including full availability on our $110,000,000 credit facility. Speaker 300:13:42Balance sheet strength and cash flow generation support our ability to opportunistically invest in and grow our business and optimize the per share value of our stock. We expect to continue to balance capital allocation between acquisitions, investments in the business, managing debt leverage and returns of capital. During the first quarter, we bought back roughly 2,000,000 shares for $8,800,000 at an average price of $4.33 per share under our existing buyback authorization. Since the end of the quarter, we have bought a further 800,000.0 shares for $2,800,000 With that, we have successfully utilized the majority of our $25,000,000 share repurchase authorization, reflecting management and the Board's confidence in the long term value of Emerald stock. In recognition of our continued financial strength, our Board recently approved a reauthorization of our share buyback program with an additional 25,000,000 allocated. Speaker 300:14:42The Board also authorized the payment of our quarterly dividend of $0.15 per share. This decision underscores our commitment to returning value to shareholders while maintaining a balanced approach to capital allocation. As we continue to execute on our strategic initiatives, we remain disciplined in our managing our capital structure, which is key to supporting our long term objectives and navigating the current macro environment. First, it's important to highlight the strength and flexibility of our capital position. In January 2025, we executed a highly successful refinancing of our existing debt, which has significantly enhanced our financial flexibility. Speaker 300:15:21The timing of our January refinancing has set us up well. Debt maturities are well staggered with no significant maturities due until our revolving credit facility in 02/1930, providing ample runway to support our operations and growth strategies without immediate refinancing pressure. Refinancing was not only well timed but demonstrates our proactive approach to managing financial risk. We effectively extended our maturities and secured favorable terms, positioning us to navigate future opportunities with confidence. We also continue to operate well within our debt covenants, providing room to invest while maintaining a solid balance sheet. Speaker 300:15:57This proactive approach positions us for long term success and supports our strategic initiatives. Turning to our outlook. As Herve mentioned, we remain on track to deliver our full year 2025 guidance of a range of $450,000,000 to $460,000,000 in revenue and $120,000,000 to $125,000,000 in adjusted EBITDA. As a reminder, our outlook includes consideration of the potential impact of tariffs imposed and threatened by the U. S. Speaker 300:16:27Government, though we recognize there remain many unknowns and how this will fully play out. We continue to proactively manage the situation, both with aggressive sales efforts in new markets as well as by maintaining a nimble organization that can adapt based on changes in the landscape. Now let me open the call for questions. Operator? Operator00:16:54And your first question comes from the line of Barton Crockett with Rosenblatt. Please go ahead. Speaker 400:17:00Okay. Good morning. Thanks for taking the question. I was I guess a couple of things I was interested in. One, I was wanting to drill down a little bit more on the comments you made there at the end about your guidance assuming some of the kind of trade war potential impacts. Speaker 400:17:20I think as I recall, I think you guys were talking last quarter about assuming a reduction in international visitation that was somewhat at odds with kind of the early trending, which was not showing that. I was just wondering if you could give us an update in terms of are you seeing international attendance fall off? And how is that kind of consistent with or different than what's embedded in your guidance? Speaker 200:17:47Yes. To answer that question directly, Barton, and thank you for the question. As we said, we're reiterating our guidance based on what we're seeing. We're watching things very closely. As I mentioned and as you know, our platform offers a really strong ROI. Speaker 200:18:04And in these times, customers are looking for alternatives that where they can increase their sales, where they can meet their customers, they can get more leads. And so our platform, ours and the industry's platform is really efficient and effective for that. So the diversity of our portfolio, the strength of the platform and what we offer our customers allow us and what we're seeing in terms of the pacing that we're seeing for balance of year and into next year allows us to remain confident. Having said that, we have to watch things very closely because things are constantly changing and it's we have a responsibility to stay on top of what's going on from a trade war perspective and other factors that can impact our business. Speaker 300:18:59And one thing to be clear about, right, our initial budget and guidance did imply international revenues revenues from international exhibitors to be down, right? So we had that in our initial plan as a buffer against the unknowns that began to emerge as we move through January and February of this year. We had our revenue from China and Canada to be down. That's in the forecast that we had and that we continue to have. And at the same time, as we mentioned in the script, you know, there are countries that, on a relative basis, are better positioned post, the noise around tariffs, and and we are seeing increased sales from those countries. Speaker 300:19:49Now they're smaller as a percent, versus China and Canada, which are two largest country exposures, but, it helps offset some of the impact and is one of the things that allows us to continue to pace towards our plan for the year. Speaker 400:20:07Okay. But I guess what I was wondering is, are you actually seeing the declines that you expected from China and Canadian exhibitors? Yes, we are. Are seeing Speaker 200:20:20the declines we expected from Canada and from China. And that's the reality both in terms of exhibitors and visitors. We are seeing that impact. But as I mentioned in my opening remarks, the international team is hunting where tariffs are less of an issue. And so we are increasing attendance as well as sales from countries like Turkey, UAE and Brazil as three notable examples. Speaker 300:21:02Think the other thing to reinforce, while we've talked about it as a long term opportunity because of our underweight international relative to others, and it is, at times like this, it's a bit of a benefit. Right? And the reality is that the vast, vast majority of our portfolio are domestic trade shows, and the vast, vast majority of our exhibitors are domestic exhibitors, and the vast, vast majority of our attendees are domestic attendees. And so, we're talking about, what's, about 10% of exhibitors, and it's equivalent of broader attendees at our shows as a percent. And so the volatility there has smaller impact on us than it might be on other companies that have more exposure to the international markets. Speaker 400:22:01Okay. That's helpful. And then another thing I was just kind of curious about, with the EBITDA you guys just put up in the first quarter but retaining guidance, that would have the first quarter as a percentage of full year EBITDA above 40%, I believe, and that would be higher than it has been for the past couple of years as a percent of the year. Is there anything that has just seasonally made the first quarter bigger as a percent of the year in the mix of shows, maybe the acquisition of InsurTech? Or would that suggest maybe you're pacing a little better than your guidance this early part of the year? Speaker 300:22:39So the InsurTech deal surely helped. It did add a show. But between InsurTech and this is beyond, we are adding shows throughout the year. I think in this quarter, in particular, relative to last year, we also benefited from $3,000,000 of shows coming in from the second quarter, let's say, second quarter last year than in 1Q this year. You could see that in the organic growth reconciliation. Speaker 300:23:12And obviously, as you know, our overhead is consistent throughout the year. So more shows and more contribution margin from events in the quarter will flow through, basically all of that to the bottom line because our underlying SG and A is set up to manage the whole portfolio throughout the year, irrespective of the timing of revenue recognition for the quarter. So that helped as well. But we've also been managing our costs tightly through the environment through last year, as you know, which was slightly disappointing to us in the revenue outcome at the end, and we've maintained that through this year. That has allowed us to have a very strong flow through of the revenue growth, to the bottom line in the first quarter. Speaker 300:24:02But I want to be clear. The first quarter came in as we expected, and tracking to the guidance range that we talked about. Albeit to the higher end of the guidance range, but we've built in, as we've, I think, said now a couple of times, we've built in a buffer and expectation around the current environment, that captures the entire guidance range. And so, it's one of the things that allows us to say definitively that we are on track to our guidance for the year. Speaker 400:24:42Okay. All right. That's great. Thank you. Speaker 100:24:46Thanks, Barton. Operator00:24:48Your next question comes from the line of Allen Klee with Maxim Group. Please go ahead. Speaker 500:24:55Yes. Hi. Just on something you just said somewhat recently on one of the benefits of the first quarter was InsurTech. It didn't a couple of things on InsurTech. Did it show up in EBITDA in the first quarter? Speaker 500:25:11And then they they typically have three conferences, I think. And if there was one in March, there's one in June, when when is the third one? And is it reasonable to assume that the the next two are similar size to the one that just happened? So Speaker 300:25:29Insurtech won an event that took place in the quarter. In the press release, you can see in the reconciliation of organic revenue growth, we had a $5,000,000 benefit in the quarter from acquisitions. That's largely Insurtech. I think there's a couple of very small things that kind of rolled from last year, but that is the main event in M and A in the quarter. There are two other events. Speaker 300:25:55June is New York, and in the fourth quarter, there's an event in Hong Kong. The London event and the New York event are similar in size. The Hong Kong event is is a much newer event and is still in kind of the scaling mode and is meaningfully smaller than London and New York. In terms of EBITDA, yes, it was in EBITDA. What what I was so we recognized the revenue. Speaker 300:26:24We recognized the expenses, and and we we got the EBITDA benefit for the period that we own the event. But in the script and and I'll just repeat it because it's an important topic. In the script, I was trying to highlight the impact on free cash flow. And the way acquisition accounting works is for the revenue that still needs to be delivered in the future, If contracts are signed and deposits are made, that that those deposits go towards the future revenue. They come to us in a what's called a working capital adjustment. Speaker 300:27:02And so we true up the purchase price for the ongoing needs and and deferred revenue of the business so that everyone is equal. And because the deal closed so soon before the event, the vast majority of the cash collections happened before we closed the deal. So it doesn't flow through cash flow from operations for Emerald. But we still have the cash because the cash was given to us at the close of the deal as part of an adjustment to purchase price, and so it shows up in cash flow from investing. And so it throws off just in the first year of acquisition. Speaker 300:27:45It throws off the free cash flow calculation as it stands on the financial statements, cash flow from operations minus CapEx, because it's not in cash flow from operations, it's in cash flow from investing. But on a pro form a basis, we had owned it the whole period. And in 2026, when we will own it for the whole period, we would have had the full benefit of that. So we're trying to get some incremental insight on the real underlying cash generating power of the business. Speaker 500:28:17That's helpful. Thank you. And then this is beyond. I think they do around seven events globally. Are are all seven of that how many of them are you gonna be capturing in 02/2025? Speaker 500:28:30And is there as and what when did it you'd mentioned two in two in May, but what how does that spread out? Are they kind of similar sizes? So Speaker 300:28:40we we will capture all of them, in 02/2025. There are two in the second quarter. There's one in the third quarter, and there are four in the fourth quarter. The two largest events, one is in the second quarter and one is in the third quarter. Speaker 500:29:02Okay. And then is there any commentary just on how to think about difference in seasonality for the quarters going forward? Speaker 300:29:18Sure. Ultimately, there are a lot of moving parts, both with acquisitions, and with the, the movements in the schedule. Sometime an event is in April '1 year, it's March the next year, so it shifts quarters. That's the $3,000,000 scheduling change in the quarter that you can see in the organic revenue growth reconciliation. Ultimately, first quarter, if you just look at our guidance, right, it's about onethree, give or take, of the year. Speaker 300:29:59Q2 and Q3 are our smallest quarters. They're also if you look at the overall portfolio mix, they're also where some of our weaker performers are relative to the strong performers. And so they also have a lower growth profile in those quarters. And right now, we're looking at Q2 at about onefour of the revenue for the year and Q3 at about 20% of the revenue for the year. And then the remaining revenues in Q4 and then Q4 again has a strong mix of the portfolio, and we would expect improved growth again that looks more like Q1, frankly, than we would see in Q2 and Q3 that don't have much growth profile at all at at this point based on the mix of events in the quarters. Speaker 300:30:56But then you get back to the full year, which, again, tracking to our guidance range, and implying the growth that we're we're talking about there. Speaker 500:31:09Great. And and for This Is Beyond, are are you planning to fund that in from cash on the balance sheet completely? Speaker 300:31:17Yes. Yes. We are. Speaker 500:31:23Okay. And for Insurtech, I I don't know if the queue came out. I didn't see it before the call. It Speaker 300:31:30The queue should come out in the next twenty four hours or so. So just dotting some i's and crossing some t's, but, that will come out shortly, and all the information will be disclosed in there. Speaker 500:31:47Okay. Great. And just on one last question. Just just on this was a great, very good quarter, so congrats. One of the things you mentioned of the performance was continued expense discipline. Speaker 500:32:07Can you talk about how you're thinking about that going forward? Speaker 200:32:13Yes, let me take that. Alan. It's Herve. I think and we've talked about this in the past. Emerald has traditionally been more of a federation of different businesses. Speaker 200:32:27And what we have done is we have consolidated it onto what we're calling the Emerald platform. And so what that has allowed us to do is to really find efficiencies across the entire business. So that's one key area of focus. The second key area of focus is we're testing with some applications of artificial intelligence to allow us to be more effective and efficient. And so we've launched some applications, particularly in our content business and for our marketing teams that allow them to operate with more efficiency. Speaker 200:33:12And lastly, we've talked also in the past about the addition of a procurement function that has allowed us to really benefit significantly from really looking at all of our contracts across the entire business and really by increasing the Emerald buying power by buying centrally for Emerald as a company as a whole as opposed to where in the past various events and various businesses were doing work on their own and we had multiple contracts with sometimes the same vendor. And so that is an area that we continue to focus on. We have been able to achieve some good savings from the procurement work and we're actually adding some we've just added an additional resource because we believe there is incremental opportunity in the business. So those are the three kind of key areas that we focused on. Speaker 300:34:15And just to reinforce one thing that we've talked about for a long time, right, is we believe this business is scalable at higher incremental margin. And part of our plan is, as you know, to show meaningful steps forward in EBITDA margin this year or next year or the year after by leveraging the investment we've made in the core platform in the overhead of the business that we believe that we can manage more events effectively with the platform and have the underlying overhead grow at a much lower rate than revenue overall. And so part of Q1 is seeing that play out. It will average out a little bit over the course of the year, of course, based on the seasonality of the business quarter to quarter. But it is one of the things that is driving force behind our view of at least a couple of hundred basis points of margin improvement this year. Speaker 500:35:21That's great. Maybe just one other follow-up. Since you mentioned AI. Do you have any early data points or anecdotes of the benefits you might have gotten from starting with it? Speaker 200:35:35No, we don't I don't have any specific data points or but what we have is we basically have a number of we've implemented a number of applications. And I mentioned one, which is really around the marketing and the content business, but there are others across the business. Even our legal function is using some AI. We've got a number of different areas that are I wouldn't even say testing because it's further than testing. They're now in market. Speaker 200:36:10It started with a test, and we've realized some efficiencies. And so we've done some we've rolled them out more aggressively across all of our marketing people. Many of our content people, our legal teams. So we have somewhere like five or seven different applications that are in market today. In terms of specific measurable outcomes, we don't have any to report as of yet. Speaker 500:36:42Okay, great. Well, thank you for everything and congrats. Speaker 300:36:48Thank you very much. Thanks, Alan. Operator00:36:52That concludes our Q and A session. I will now turn the conference back over to Jorge for closing remarks. Speaker 200:36:59Thank you very much. So in closing, I want to thank you all for your time and participation. And as I said, I'm pleased with the first quarter performance and current sales pacing for the balance of the year and early twenty twenty six to remain on track to achieve our full year 2025 guidance. But I am mindful of navigating the macroeconomic pressures that we've talked about. Having said this, I'm excited as we look ahead to continue to realize the benefits of our strategy, of our investments to deliver greater value to our customers, to find a greater opportunity for our people and expect double digit revenue growth for our shareholders. Speaker 200:37:42So with that, I want to thank you and say goodbye. Operator00:37:47This concludes today's conference call. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallEmerald Q1 202500:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K) Emerald Earnings HeadlinesEmerald Holding (NYSE:EEX) delivers shareholders strong 19% CAGR over 5 years, surging 17% in the last week aloneMay 3 at 6:21 PM | finance.yahoo.comRacing season underway at Emerald Downs; 2026 season in doubtMay 3 at 12:26 AM | msn.comBlackrock’s Sending THIS Crypto Higher on PurposeWhile everyone's distracted by Bitcoin's moves, a stealth revolution is underway. One altcoin is quietly positioning itself to overthrow the entire banking system.May 3, 2025 | Crypto 101 Media (Ad)Emerald Holding, Inc. (EEX) Q1 2025 Earnings Call TranscriptMay 2 at 3:02 PM | seekingalpha.comEmerald Holding, Inc. Completes Acquisition of This is Beyond | EEX Stock NewsMay 2 at 2:19 PM | gurufocus.comEmerald Holding, Inc. Completes Acquisition of This is BeyondMay 2 at 1:27 PM | businesswire.comSee More Emerald Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Emerald? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Emerald and other key companies, straight to your email. Email Address About EmeraldEmerald (NYSE:EEX) operates business-to-business (B2B) trade shows in the United States. The company provides B2B trade show franchises; and B2B print publications and digital media products, which provide industry specific business news and information across various sectors. It also offers B2B e-commerce and digital merchandising solutions to manufacturers and retailers through Elastic Suite and Bulletin platforms. The company serves retail, design, technology, equipment, and safety and security. 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There are 6 speakers on the call. Operator00:00:00Thank you. I will now turn the call over to Erica Bartsch, EVP of Strategy and Communications at Emerald. Speaker 100:00:07Good morning. Welcome to the Emerald First Quarter twenty twenty five Earnings Call. Before we begin, let me remind everyone that this call will include certain statements that constitute forward looking statements within the meaning of Private Securities Litigation Reform Act of 1995. This includes remarks about future expectations, beliefs, estimates, plans and prospects. In particular, the company's statements about projected results for 2025 are forward looking statements. Speaker 100:00:36Such statements are subject to a variety of risks, uncertainties and other factors that could cause actual results to differ materially from those indicated or implied by such statements. For a discussion of these risks, uncertainties and other factors, please refer to the company's SEC filings, including its most recently filed periodic reports on Form 10 ks and Form 10 Q as well as the company's earnings release, all of which can be found on the company's Investor Relations website. The company does not undertake any duty to update such forward looking statements. Additionally, during today's call, management will discuss non GAAP measures, which it believes can be useful in evaluating the company's performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with U. Speaker 100:01:27S. GAAP. The reconciliation of these non GAAP measures to their most comparable GAAP measures can be found in the company's earnings release, which is available on the company's Investor Relations website. As a reminder, this conference is being recorded, and a replay of this call will be available on the company's Investor Relations website through 11:59 p. M. Speaker 100:01:47Eastern Time on 05/08/2025. I would now like to turn the call over to Mr. Herve Cedki, President and Chief Executive Officer. Please go ahead. Speaker 200:01:56Thank you, Erica. Good morning, everyone, and thank you very much for joining us today. I'll begin the call with an overview of our first quarter results and key strategic initiatives. Then I'll turn things over to our CFO, David Daft, for a more detailed review of the financials. We began 2025 with strong momentum. Speaker 200:02:17Our first quarter performance reflects meaningful progress in executing our strategy with strong traction across key initiatives that deliver value for our customers and for our shareholders. We reported double digit growth in revenue and adjusted EBITDA building on the strong portfolio optimization initiatives we accelerated in 2024. Emerald's refined portfolio now spans an increasingly broad range of high growth sectors, reducing reliance on slower growth verticals and enhancing resilience across market cycles. Our success this quarter was supported by some of the standout events across our portfolio that reflect the breadth and depth of our industry reach. These include KBIS, a cornerstone in the design and construction vertical the Prosper Show, a leading in e commerce seller engagements and the International Pizza Expo, a critical event in the foodservice space. Speaker 200:03:17Positive feedback from attendees consistently reinforce the high quality and value that these events deliver affirming their role as key opportunities for industry leaders to connect, to engage and transact. Given our performance in the first quarter and current sales pacing, we remain on track to achieve our full year 2025 guidance, while remaining vigilant in monitoring external factors that could influence our trajectory from here. Building on this momentum, we're seeing increasing rebook rates for Q1 twenty twenty six, clearly reflecting the trust our customers place in our platforms and the ongoing ROI delivered by our events. Early commitments not only enhances our forward visibility, but also underscores the resilience of our business model. Even as we maintain strong forward progress, we are mindful of navigating nuanced challenges from shifting consumer sentiment to global economic pressures. Speaker 200:04:29We are proactively monitoring pacing data and customer behavior, both domestically and internationally, to ensure we're well prepared to meet potential shifts in market dynamics. To date, we have sold over 90% of our full year target for revenue from international exhibitors. While we're seeing some pressure on sales efforts with customers in China and Canada, we're also seeing strength from countries like Turkey, Brazil and The United Arab Emirates. Companies in these markets are actively stepping in to capture opportunities created by the current tariff environment helping to drive sales growth. This is particularly meaningful as it reflects early returns from expanded global sales agent network we've built over the last eighteen months. Speaker 200:05:20Our belief is that once the global trade environment becomes more normalized, Emerald is well positioned to benefit from this increased presence. As we've shared previously, our international exposure remains limited. At present, approximately 10% of our total revenue is generated from international exhibitors. Specifically, exhibitors from China account for approximately 2%, Canada contributes another approximately 2% and Mexico represents less than 1% of our revenue from companies offering products or services. This limited exposure provides a layer of insulation from global trade disruptions and shifting geopolitical dynamics. Speaker 200:06:01Additionally, software, services and travel are not currently subject to tariffs, so our events associated with those exhibitors and sponsors should be less impacted, if at all. More importantly, in today's environment defined by policy shifts, Speaker 300:06:19digital fatigue and economic uncertainty, Speaker 200:06:23we believe the value of face to face interaction remains more critical than ever. Business and professional events offer trusted environments for decision making, connection and commerce. According to McKinsey, three quarters of CMOs say in person events deliver stronger brand recall than digital campaigns underscoring their strategic role in today's marketing mix. We also view periods of economic complexity as windows of opportunity, times when face to face events become even more essential given the return on investment that they deliver. In high stakes environments where decisions must be made with confidence, in person events offer a critical platform for real time collaboration and in-depth discussions, enabling companies to align and adapt quickly to market changes. Speaker 200:07:20A strategic focus on face to face engagement aligns with our ongoing portfolio optimization efforts, which have helped to reduce our exposure to more economically sensitive sectors. This ensures greater insulation from volatility, positioning Emerald as a more resilient business. At the same time, we've deepened our presence in higher growth, durable industries such as design and construction, food, technology and luxury travel, positioning us for more stable and sustainable performance across cycles. Speaking of portfolio diversity, we received regulatory approval yesterday to move forward with the previously announced acquisition of This Is Beyond, and we plan to close the acquisition in the coming days. This Beyond is a collection of high end experiential events that complements our portfolio and align with consumer trends around premium purpose driven experiences. Speaker 200:08:21Its first two events of the year stage in May with We Are Africa and LE Miami. We expect both events to exhibit strong growth year over year. We're also in early days of the integration of InsurTech Insights, which we also acquired and closed this past March. The team recently hosted its European event in London in March with strong attendee and sponsor turnout. We are pleased with the addition of both InsurTech Insights and This is Beyond and continue to actively evaluate strategic M and A opportunities that align with our focus on high growth future oriented sectors. Speaker 200:08:59Our M and A strategy is centered on expanding into high growth resilient sectors, while diversifying our portfolio to drive long term shareholder value. This strategy complements our broader goals of optimizing our event offerings and entering new markets with strong demand potential. As we look ahead, our strategy remains focused on our three pillars of value creation, customer centricity, three sixty five day engagement and portfolio optimization. We see opportunities to build upon our diverse portfolio and our confidence in our strategy. In closing, the strength and diversity of Emerald's portfolio continue to be key drivers of our success. Speaker 200:09:43With a broad range of events across high growth industries, we believe we are well positioned to capitalize on both established and emerging market opportunities. While we're confident in our strategy and the strength of our portfolio, we remain focused on staying adaptable in this dynamic environment. By balancing flexibility with precision, we are committed to delivering sustainable growth and long term success for Emerald. With that, let me turn things over to David for a review of our financials. David? Speaker 300:10:15Thank you, Herve, and good morning. Turning to our results for the first quarter, which is our seasonally largest quarter of the year, total revenue was $147,700,000 compared to $133,400,000 in the prior year quarter. Organic revenue in the first quarter increased 5.6% year over year to $139,200,000 driven by strong growth in organic revenues from our connections business, which improved 6.6 versus the prior year. First quarter adjusted EBITDA, excluding insurance proceeds, was $53,600,000 compared to $39,800,000 in the prior year period, an increase of 34.7%. The increase is attributed to continued cost management and operational efficiencies in the quarter and the benefit of the InsurTech Insights acquisition and its London event. Speaker 300:11:10This equates to an adjusted EBITDA margin of approximately 36.3% for the quarter. Turning to expenses. On a reported basis, SG and A was $54,100,000 versus $55,500,000 in the prior year quarter. The year over year decline is largely due to lower compensation and travel expenses in both our content and commerce businesses, offset by incremental expenses from acquisitions. In the first quarter, we generated $10,800,000 in free cash flow, excluding event cancellation insurance, as compared to $3,800,000 in the prior year period due to the higher adjusted EBITDA in the quarter. Speaker 300:11:51Underlying free cash flow was even stronger than reported as some onetime fees related to our January refinancing were expensed through the P and L in the quarter, reducing reported free cash flow by $5,500,000 Additionally, because of the timing of the InsurTech Incyte acquisition and its London event, cash for the event was collected prior to the close of the deal, while the associated revenue was recognized post close. The cash value was received by Emerald through a working capital adjustment in the purchase price rather than through typical deferred revenue. Had we owned the event throughout the full sales cycle, cash collections would have been $3,500,000 higher. In total, free cash flow would have been $9,000,000 higher if not for the financing fees and the timing of the Insurtech acquisition. Note that the timing of the This Is Beyond acquisition is expected to have the same impact with the majority of the cash for its upcoming events collected prior to the transaction closing and the value flowing to Emerald through the purchase price adjustment rather than through the collection receivables. Speaker 300:13:05Turning to the balance sheet. We had a healthy $276,800,000 in cash as of March 31 versus $194,800,000 as of 12/31/2024. This is after funding the InsurTech Insights acquisition, but before funding the This is Beyond deal. A $139,000,000 of this cash will be used for the anticipated closing of the Business Beyond acquisition in May, offset by working capital that comes with the business. Our total liquidity is $386,800,000 including full availability on our $110,000,000 credit facility. Speaker 300:13:42Balance sheet strength and cash flow generation support our ability to opportunistically invest in and grow our business and optimize the per share value of our stock. We expect to continue to balance capital allocation between acquisitions, investments in the business, managing debt leverage and returns of capital. During the first quarter, we bought back roughly 2,000,000 shares for $8,800,000 at an average price of $4.33 per share under our existing buyback authorization. Since the end of the quarter, we have bought a further 800,000.0 shares for $2,800,000 With that, we have successfully utilized the majority of our $25,000,000 share repurchase authorization, reflecting management and the Board's confidence in the long term value of Emerald stock. In recognition of our continued financial strength, our Board recently approved a reauthorization of our share buyback program with an additional 25,000,000 allocated. Speaker 300:14:42The Board also authorized the payment of our quarterly dividend of $0.15 per share. This decision underscores our commitment to returning value to shareholders while maintaining a balanced approach to capital allocation. As we continue to execute on our strategic initiatives, we remain disciplined in our managing our capital structure, which is key to supporting our long term objectives and navigating the current macro environment. First, it's important to highlight the strength and flexibility of our capital position. In January 2025, we executed a highly successful refinancing of our existing debt, which has significantly enhanced our financial flexibility. Speaker 300:15:21The timing of our January refinancing has set us up well. Debt maturities are well staggered with no significant maturities due until our revolving credit facility in 02/1930, providing ample runway to support our operations and growth strategies without immediate refinancing pressure. Refinancing was not only well timed but demonstrates our proactive approach to managing financial risk. We effectively extended our maturities and secured favorable terms, positioning us to navigate future opportunities with confidence. We also continue to operate well within our debt covenants, providing room to invest while maintaining a solid balance sheet. Speaker 300:15:57This proactive approach positions us for long term success and supports our strategic initiatives. Turning to our outlook. As Herve mentioned, we remain on track to deliver our full year 2025 guidance of a range of $450,000,000 to $460,000,000 in revenue and $120,000,000 to $125,000,000 in adjusted EBITDA. As a reminder, our outlook includes consideration of the potential impact of tariffs imposed and threatened by the U. S. Speaker 300:16:27Government, though we recognize there remain many unknowns and how this will fully play out. We continue to proactively manage the situation, both with aggressive sales efforts in new markets as well as by maintaining a nimble organization that can adapt based on changes in the landscape. Now let me open the call for questions. Operator? Operator00:16:54And your first question comes from the line of Barton Crockett with Rosenblatt. Please go ahead. Speaker 400:17:00Okay. Good morning. Thanks for taking the question. I was I guess a couple of things I was interested in. One, I was wanting to drill down a little bit more on the comments you made there at the end about your guidance assuming some of the kind of trade war potential impacts. Speaker 400:17:20I think as I recall, I think you guys were talking last quarter about assuming a reduction in international visitation that was somewhat at odds with kind of the early trending, which was not showing that. I was just wondering if you could give us an update in terms of are you seeing international attendance fall off? And how is that kind of consistent with or different than what's embedded in your guidance? Speaker 200:17:47Yes. To answer that question directly, Barton, and thank you for the question. As we said, we're reiterating our guidance based on what we're seeing. We're watching things very closely. As I mentioned and as you know, our platform offers a really strong ROI. Speaker 200:18:04And in these times, customers are looking for alternatives that where they can increase their sales, where they can meet their customers, they can get more leads. And so our platform, ours and the industry's platform is really efficient and effective for that. So the diversity of our portfolio, the strength of the platform and what we offer our customers allow us and what we're seeing in terms of the pacing that we're seeing for balance of year and into next year allows us to remain confident. Having said that, we have to watch things very closely because things are constantly changing and it's we have a responsibility to stay on top of what's going on from a trade war perspective and other factors that can impact our business. Speaker 300:18:59And one thing to be clear about, right, our initial budget and guidance did imply international revenues revenues from international exhibitors to be down, right? So we had that in our initial plan as a buffer against the unknowns that began to emerge as we move through January and February of this year. We had our revenue from China and Canada to be down. That's in the forecast that we had and that we continue to have. And at the same time, as we mentioned in the script, you know, there are countries that, on a relative basis, are better positioned post, the noise around tariffs, and and we are seeing increased sales from those countries. Speaker 300:19:49Now they're smaller as a percent, versus China and Canada, which are two largest country exposures, but, it helps offset some of the impact and is one of the things that allows us to continue to pace towards our plan for the year. Speaker 400:20:07Okay. But I guess what I was wondering is, are you actually seeing the declines that you expected from China and Canadian exhibitors? Yes, we are. Are seeing Speaker 200:20:20the declines we expected from Canada and from China. And that's the reality both in terms of exhibitors and visitors. We are seeing that impact. But as I mentioned in my opening remarks, the international team is hunting where tariffs are less of an issue. And so we are increasing attendance as well as sales from countries like Turkey, UAE and Brazil as three notable examples. Speaker 300:21:02Think the other thing to reinforce, while we've talked about it as a long term opportunity because of our underweight international relative to others, and it is, at times like this, it's a bit of a benefit. Right? And the reality is that the vast, vast majority of our portfolio are domestic trade shows, and the vast, vast majority of our exhibitors are domestic exhibitors, and the vast, vast majority of our attendees are domestic attendees. And so, we're talking about, what's, about 10% of exhibitors, and it's equivalent of broader attendees at our shows as a percent. And so the volatility there has smaller impact on us than it might be on other companies that have more exposure to the international markets. Speaker 400:22:01Okay. That's helpful. And then another thing I was just kind of curious about, with the EBITDA you guys just put up in the first quarter but retaining guidance, that would have the first quarter as a percentage of full year EBITDA above 40%, I believe, and that would be higher than it has been for the past couple of years as a percent of the year. Is there anything that has just seasonally made the first quarter bigger as a percent of the year in the mix of shows, maybe the acquisition of InsurTech? Or would that suggest maybe you're pacing a little better than your guidance this early part of the year? Speaker 300:22:39So the InsurTech deal surely helped. It did add a show. But between InsurTech and this is beyond, we are adding shows throughout the year. I think in this quarter, in particular, relative to last year, we also benefited from $3,000,000 of shows coming in from the second quarter, let's say, second quarter last year than in 1Q this year. You could see that in the organic growth reconciliation. Speaker 300:23:12And obviously, as you know, our overhead is consistent throughout the year. So more shows and more contribution margin from events in the quarter will flow through, basically all of that to the bottom line because our underlying SG and A is set up to manage the whole portfolio throughout the year, irrespective of the timing of revenue recognition for the quarter. So that helped as well. But we've also been managing our costs tightly through the environment through last year, as you know, which was slightly disappointing to us in the revenue outcome at the end, and we've maintained that through this year. That has allowed us to have a very strong flow through of the revenue growth, to the bottom line in the first quarter. Speaker 300:24:02But I want to be clear. The first quarter came in as we expected, and tracking to the guidance range that we talked about. Albeit to the higher end of the guidance range, but we've built in, as we've, I think, said now a couple of times, we've built in a buffer and expectation around the current environment, that captures the entire guidance range. And so, it's one of the things that allows us to say definitively that we are on track to our guidance for the year. Speaker 400:24:42Okay. All right. That's great. Thank you. Speaker 100:24:46Thanks, Barton. Operator00:24:48Your next question comes from the line of Allen Klee with Maxim Group. Please go ahead. Speaker 500:24:55Yes. Hi. Just on something you just said somewhat recently on one of the benefits of the first quarter was InsurTech. It didn't a couple of things on InsurTech. Did it show up in EBITDA in the first quarter? Speaker 500:25:11And then they they typically have three conferences, I think. And if there was one in March, there's one in June, when when is the third one? And is it reasonable to assume that the the next two are similar size to the one that just happened? So Speaker 300:25:29Insurtech won an event that took place in the quarter. In the press release, you can see in the reconciliation of organic revenue growth, we had a $5,000,000 benefit in the quarter from acquisitions. That's largely Insurtech. I think there's a couple of very small things that kind of rolled from last year, but that is the main event in M and A in the quarter. There are two other events. Speaker 300:25:55June is New York, and in the fourth quarter, there's an event in Hong Kong. The London event and the New York event are similar in size. The Hong Kong event is is a much newer event and is still in kind of the scaling mode and is meaningfully smaller than London and New York. In terms of EBITDA, yes, it was in EBITDA. What what I was so we recognized the revenue. Speaker 300:26:24We recognized the expenses, and and we we got the EBITDA benefit for the period that we own the event. But in the script and and I'll just repeat it because it's an important topic. In the script, I was trying to highlight the impact on free cash flow. And the way acquisition accounting works is for the revenue that still needs to be delivered in the future, If contracts are signed and deposits are made, that that those deposits go towards the future revenue. They come to us in a what's called a working capital adjustment. Speaker 300:27:02And so we true up the purchase price for the ongoing needs and and deferred revenue of the business so that everyone is equal. And because the deal closed so soon before the event, the vast majority of the cash collections happened before we closed the deal. So it doesn't flow through cash flow from operations for Emerald. But we still have the cash because the cash was given to us at the close of the deal as part of an adjustment to purchase price, and so it shows up in cash flow from investing. And so it throws off just in the first year of acquisition. Speaker 300:27:45It throws off the free cash flow calculation as it stands on the financial statements, cash flow from operations minus CapEx, because it's not in cash flow from operations, it's in cash flow from investing. But on a pro form a basis, we had owned it the whole period. And in 2026, when we will own it for the whole period, we would have had the full benefit of that. So we're trying to get some incremental insight on the real underlying cash generating power of the business. Speaker 500:28:17That's helpful. Thank you. And then this is beyond. I think they do around seven events globally. Are are all seven of that how many of them are you gonna be capturing in 02/2025? Speaker 500:28:30And is there as and what when did it you'd mentioned two in two in May, but what how does that spread out? Are they kind of similar sizes? So Speaker 300:28:40we we will capture all of them, in 02/2025. There are two in the second quarter. There's one in the third quarter, and there are four in the fourth quarter. The two largest events, one is in the second quarter and one is in the third quarter. Speaker 500:29:02Okay. And then is there any commentary just on how to think about difference in seasonality for the quarters going forward? Speaker 300:29:18Sure. Ultimately, there are a lot of moving parts, both with acquisitions, and with the, the movements in the schedule. Sometime an event is in April '1 year, it's March the next year, so it shifts quarters. That's the $3,000,000 scheduling change in the quarter that you can see in the organic revenue growth reconciliation. Ultimately, first quarter, if you just look at our guidance, right, it's about onethree, give or take, of the year. Speaker 300:29:59Q2 and Q3 are our smallest quarters. They're also if you look at the overall portfolio mix, they're also where some of our weaker performers are relative to the strong performers. And so they also have a lower growth profile in those quarters. And right now, we're looking at Q2 at about onefour of the revenue for the year and Q3 at about 20% of the revenue for the year. And then the remaining revenues in Q4 and then Q4 again has a strong mix of the portfolio, and we would expect improved growth again that looks more like Q1, frankly, than we would see in Q2 and Q3 that don't have much growth profile at all at at this point based on the mix of events in the quarters. Speaker 300:30:56But then you get back to the full year, which, again, tracking to our guidance range, and implying the growth that we're we're talking about there. Speaker 500:31:09Great. And and for This Is Beyond, are are you planning to fund that in from cash on the balance sheet completely? Speaker 300:31:17Yes. Yes. We are. Speaker 500:31:23Okay. And for Insurtech, I I don't know if the queue came out. I didn't see it before the call. It Speaker 300:31:30The queue should come out in the next twenty four hours or so. So just dotting some i's and crossing some t's, but, that will come out shortly, and all the information will be disclosed in there. Speaker 500:31:47Okay. Great. And just on one last question. Just just on this was a great, very good quarter, so congrats. One of the things you mentioned of the performance was continued expense discipline. Speaker 500:32:07Can you talk about how you're thinking about that going forward? Speaker 200:32:13Yes, let me take that. Alan. It's Herve. I think and we've talked about this in the past. Emerald has traditionally been more of a federation of different businesses. Speaker 200:32:27And what we have done is we have consolidated it onto what we're calling the Emerald platform. And so what that has allowed us to do is to really find efficiencies across the entire business. So that's one key area of focus. The second key area of focus is we're testing with some applications of artificial intelligence to allow us to be more effective and efficient. And so we've launched some applications, particularly in our content business and for our marketing teams that allow them to operate with more efficiency. Speaker 200:33:12And lastly, we've talked also in the past about the addition of a procurement function that has allowed us to really benefit significantly from really looking at all of our contracts across the entire business and really by increasing the Emerald buying power by buying centrally for Emerald as a company as a whole as opposed to where in the past various events and various businesses were doing work on their own and we had multiple contracts with sometimes the same vendor. And so that is an area that we continue to focus on. We have been able to achieve some good savings from the procurement work and we're actually adding some we've just added an additional resource because we believe there is incremental opportunity in the business. So those are the three kind of key areas that we focused on. Speaker 300:34:15And just to reinforce one thing that we've talked about for a long time, right, is we believe this business is scalable at higher incremental margin. And part of our plan is, as you know, to show meaningful steps forward in EBITDA margin this year or next year or the year after by leveraging the investment we've made in the core platform in the overhead of the business that we believe that we can manage more events effectively with the platform and have the underlying overhead grow at a much lower rate than revenue overall. And so part of Q1 is seeing that play out. It will average out a little bit over the course of the year, of course, based on the seasonality of the business quarter to quarter. But it is one of the things that is driving force behind our view of at least a couple of hundred basis points of margin improvement this year. Speaker 500:35:21That's great. Maybe just one other follow-up. Since you mentioned AI. Do you have any early data points or anecdotes of the benefits you might have gotten from starting with it? Speaker 200:35:35No, we don't I don't have any specific data points or but what we have is we basically have a number of we've implemented a number of applications. And I mentioned one, which is really around the marketing and the content business, but there are others across the business. Even our legal function is using some AI. We've got a number of different areas that are I wouldn't even say testing because it's further than testing. They're now in market. Speaker 200:36:10It started with a test, and we've realized some efficiencies. And so we've done some we've rolled them out more aggressively across all of our marketing people. Many of our content people, our legal teams. So we have somewhere like five or seven different applications that are in market today. In terms of specific measurable outcomes, we don't have any to report as of yet. Speaker 500:36:42Okay, great. Well, thank you for everything and congrats. Speaker 300:36:48Thank you very much. Thanks, Alan. Operator00:36:52That concludes our Q and A session. I will now turn the conference back over to Jorge for closing remarks. Speaker 200:36:59Thank you very much. So in closing, I want to thank you all for your time and participation. And as I said, I'm pleased with the first quarter performance and current sales pacing for the balance of the year and early twenty twenty six to remain on track to achieve our full year 2025 guidance. But I am mindful of navigating the macroeconomic pressures that we've talked about. Having said this, I'm excited as we look ahead to continue to realize the benefits of our strategy, of our investments to deliver greater value to our customers, to find a greater opportunity for our people and expect double digit revenue growth for our shareholders. Speaker 200:37:42So with that, I want to thank you and say goodbye. Operator00:37:47This concludes today's conference call. You may now disconnect.Read morePowered by