Title

Presentation

Emerald Holding, Inc. beats earnings expectations. Reported EPS is $-0.01, expectations were $-0.03.

Operator: Thank you for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the Emerald Holding Second Quarter 2025 Earnings Call. [Operator Instructions] Thank you. I would now like to turn the call over to Erica Bartsch, AVP — EVP of Strategy and Communications at Emerald. Please go ahead.

Erica Bartsch: Good morning, and welcome to the Emerald Holding Second Quarter 2025 Earnings Conference Call. Before we begin, let me remind everyone that this call will include certain statements that constitute forward-looking statements within the meaning of the 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. Such 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-K 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.S. 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. Eastern Time on August 11, 2025.

I would now like to turn the call over to Mr. Herve Sedky, President and Chief Executive Officer. Please go ahead.

Herve Sedky: Thank you, Erica. Good morning, everyone, and thank you all for joining us today. I’ll begin the call with an overview of our second quarter performance and a review of our strategic initiatives. I’ll then turn things over to David Doft, our CFO, who will take us through our financials. The second quarter reflected strong disciplined execution across the portfolio with the results in line with the expectations that we laid out earlier this year. We delivered solid year-over-year growth in revenue and adjusted EBITDA, supported by the strength of our platform and the recent acquisitions. As we contemplated in our budgeting and guidance, reported organic growth was muted due to the event mix in the quarter. However, on a pro forma basis, assuming the recently completed acquisitions were part of the portfolio in the second quarter of 2024, organic growth would have been approximately 5% this quarter.

This is a more accurate reflection of the performance of our business as it’s constituted on a go-forward basis with the inclusion of these acquisitions. This offers a clearer view of the performance of the current Emerald platform and the positive underlying momentum across the portfolio. Taken together, our results year-to-date reinforce Emerald’s position as a scaled, insights-driven B2B platform and gives us confidence to reaffirm our full year outlook. The momentum we’re seeing is a direct result of the deliberate actions that we’ve taken to reshape and strengthen our portfolio. Over the past 18 months, we’ve exited underperforming assets that we’re not going to recover post- COVID, realigned our cost structure, and completed targeted acquisitions that strengthen our position in high-growth verticals.

As a result, Emerald has sharpened its focus and further strengthened its performance-driven approach with a portfolio built for durability and growth across market cycles. This transformation is not only taking hold, but it’s driving meaningful performance improvements across the business. We’re also seeing encouraging rebooking trends for the first half of 2026, a clear signal of customer confidence in the breadth and value of our portfolio. Our solid rebook rates underscore the commercial strength of our events from qualified lead generation to business outcomes that support long-term customer ROI. Exhibitors continue to reinvest because our events drive meaningful impact from enabling discovery, in-person engagement and sales pipeline acceleration.

Early rebooking activity highlights the resilience of our model and affirms that in-person engagement remains a critical go-to-market channel across sectors with strong performance in both established and high-growth segments. While we’re pleased with our execution and continued progress, we remain closely focused on the broader macroeconomic environment navigating these dynamics with operational discipline and strategic focus. Certain end markets are continuing to face macro-related pressures, tariffs in particular, but our diversified portfolio continues to perform well. This underscores the strength of our model and our intentional efforts to increase our exposure to categories that have resilient demand characteristics and relatively less exposure to economic ebbs and flows.

Our strategic focus is also contributing to measured progress internationally. As a reminder, international exhibitors account for approximately 10% of total revenue with limited exposure to any single region. While moderately dragging overall growth, we’re already — we’ve already secured 99% of our full year international revenue target signaling sustained interest from global partners seeking access to the U.S. buyers and giving us confidence to deliver on our full year targets. We’re seeing pockets of encouraging activity in markets like Italy, Germany and Brazil, which are helping to offset continued softness in regions like China and Canada. Much of this early progress reflects the foundation laid by our expanded global agent network, now nearly 100 agents across more than 50 countries, a long-term investments we expect will yield more measurable results over time.

Importantly, as more trade deals get signed and bring certainty to more industries, our belief is that this important customer segment should bounce back and continue to grow beginning next year. In a landscape shaped by shifting trade policy, rapid technological change and rising uncertainty, the value of trusted high-impact connection channels is only growing. That’s why we remain confident in the resilience and relevance of live events. In-person experiences consistently outperform digital in brand recall and ROI, particularly in complex or high consideration environments. This advantage becomes even more pronounced during periods of uncertainty when businesses prioritize channels that drive measurable impact and builds real trust. As Mark Cuban recently noted on his, [X feed], the explosion of AI-generated content is creating a Milli Vanilli effect, a growing skepticism of what’s real versus what’s synthetic.

In his words, this will drive people back to authenticity and heightened demand for face-to-face interactions that build credibility, connection and lasting value. We couldn’t agree more. This conviction ultimately shapes how we operate and where we invest for long-term value. Our approach remain laser-focused on 3 core pillars of customer centricity, 365-day engagement, and portfolio optimization. We’ve made great progress in our portfolio optimization efforts, where we’re pursuing targeted acquisitions that diversify our offerings and expanding our presence in resilient sectors with attractive long-term growth opportunities that have a demonstrated track record of delivering impactful in-person B2B experiences. Notably, our acquisitions of This is Beyond and Insurtech Insights are already advancing our strategic priorities and contributing to growth.

In June, Insurtech Insights held its U.S. addition, drawing strong industry participation and reinforcing our position in a high-growth vertical. Similarly, This is Beyond’s flagship events, “We are Africa” and “LE Miami” delivered exceptional experiences in Q2, convening a highly curated global community of luxury travel leaders. Their focus on premium, purpose-driven experiences aligns with evolving B2B customer expectations and further strengthens Emerald’s position in the high-growth global luxury travel market. These early performance indicators underscore the strength of our portfolio, optimization strategy, and our disciplined approach to integration and value creation, leaving me energized for what’s ahead. So in closing, our second quarter performance illustrates the strength and resilience of the Emerald platform, our ability to deliver as planned, integrate value-enhancing acquisitions and navigate external challenges reflects both the commitment of our team and the trust of our customers.

We remain confident in our capacity to drive meaningful long-term value for shareholders, while continuing to deliver exceptional experiences for our customers. And with that, I’ll hand things over to David for a deeper look at our financials. David?

David B. Doft: Thank you, Herve, and good morning. Turning to our results for the second quarter. Total revenue was $105.5 million compared to $86 million in the prior year quarter. Reported organic revenue, which excludes the impact of acquisitions, scheduling adjustments and discontinued events was up 0.4% year-over-year driven by growth in our connections business, offset by event mix in the quarter and softness in content. Specifically, we have 3 events that staged in Q2 2025, but were held in a different quarter in 2024. And 2 events that occurred in Q2 2024 but are scheduled for a different quarter in 2025. As Herve noted, this does not tell the full story. We believe the most accurate view of our organic growth is on a pro forma basis, reflecting the portfolio as it actually exists today.

Assuming the recently completed acquisitions were part of the portfolio in Q2 of 2024, our second quarter organic growth would have been approximately plus 5% year-over-year. Adjusted EBITDA was $24.4 million in the second quarter compared to $15.3 million in the prior year period, an increase of 59.5%. The increase was primarily driven by higher operating income from our events and continued management of underlying costs. This also equates to an adjusted EBITDA margin of approximately 23.1% for the quarter compared to 17.8% in Q2 2024. LTM adjusted EBITDA, excluding insurance proceeds, is $123.1 million. Turning to expenses. On a reported basis, SG&A was $47.1 million versus $39.5 million in the prior year quarter. The year-over-year increase is largely due to incremental expenses from acquisitions in our connections business and higher stock-based compensation, offset by lower salary expenses in both the content and commerce businesses.

We generated $13.8 million in free cash flow in the second quarter as compared to $7.1 million in the prior year period due to higher adjusted EBITDA in the quarter. As was the case in the first quarter, underlying free cash flow in Q2 was stronger than reported, primarily due to the timing of recent acquisitions, specifically, with This is Beyond acquisition closing shortly before its major events, most event-related cash was collected prior to the transaction and flowed to Emerald through a purchase price adjustment rather than through standard receivables. As a result, those inflows are not reflected in reported free cash flow and cash from operations minus CapEx. This mirrors the dynamic we noted last quarter within Insurtech Insights and it’s important context when evaluating the free cash flow conversion and strength of our cash generation.

Adjusting for these acquisition-related timing effects, total free cash flow would have been $17 million higher. Also, our year-to-date free cash flow is similarly impacted by the acquisition of Insurtech Insights in the first quarter of this year to the tune of $3.5 million and from $5.5 million of fees related to our January 2025 refinancing of our debt that flows through the financials. In total, these items impacted reported year-to-date free cash flow by $26 million. Turning to the balance sheet. We had $156.4 million in cash as of June 30 versus $276.8 million as of March 31. This is after funding the, This is Beyond transaction, which closed in the quarter. Our total liquidity of $266.4 million, including full availability on our $110 million credit facility.

As of June 30, our net debt to covenant EBITDA ratio was 2.56x, well within our sub-3x financial policy target. Our strong balance sheet and cash flow give us flexibility to invest in strategic growth and deliver long-term value. As a business, we remain focused on disciplined capital deployment across M&A, organic growth, debt reduction and shareholder return. In the second quarter, we repurchased approximately 1.6 million shares for $6.9 million at an average price of $4.24 per share under our buyback program, underscoring management and the board’s conviction in Emerald’s long-term value. At quarter end, we had $20.8 million remaining available under the existing repurchase authorization. In addition, the Board declared a quarterly dividend of $0.015 per share, demonstrating our continued commitment to shareholder returns alongside prudent, balanced capital deployment.

Finally, we remain on track for and are reaffirming our full year 2025 guidance of a range of $450 million to $460 million in revenue, and $120 million to $125 million in adjusted EBITDA. In line with expectations at the start of the year, the second and third quarters are both our smallest and we expect Q3 reported organic growth to be our weakest this year, followed by stronger reported organic growth in the fourth quarter. Given the added dynamic of the continued construction at the Las Vegas Convention Center impacting our largest Q3 event, organic growth in that quarter are expected to fall below what we reported in the second quarter. Consistent with our original expectations this year. Q1 and Q4 remain our largest and strongest growth quarters.

This seasonality is fully in line with our expectations and supports the full year targets we set at the beginning of the year and targets that we are reiterating today. Our outlook also factors in potential tariff impacts, while the precise effect remains uncertain due to evolving U.S. trade policy, our overall exposure is relatively limited. We remain proactive targeting growth in underpenetrated markets while preserving the agility to adapt the changing macro conditions. With that, we’ll now open the call up for questions. Operator?

Operator: [Operator Instructions] Your first question comes from Barton Crockett with Rosenblatt.

Barton Evans Crockett: So yes. So I guess one of the things I was wondering about is the commentary you just gave on the third quarter kind of trajectory. You say that organic growth will be below what you had in the second quarter, but there wasn’t much growth in the second quarter. Are you actually saying that the third quarter looks like it will be down year-over-year? And any way to kind of size that in terms of just bigger than a bread basket type of thing?

David B. Doft: Sure. Thank you, Barton. That’s exactly what we’re saying. The reality is, is every quarter, we have different events around different industries at stage, and they have different characteristics. That’s why we target the year in terms of overall portfolio performance, and that continues to track. The third quarter is by far our smallest quarter of the year, and we are impacted, as we’ve talked about for a long time now, by construction at the Las Vegas Convention Center that is impacting the largest show that’s in our third quarter. And so we do expect that, that will pull organic growth down into the negative region. But that’s in line with how we’ve seen the year progress. And we do expect the fourth quarter based on the mix of events in the quarter to be a nicely positive organic growth quarter more consistent with overall first half performance.

And that should lead to the full year performance that we’re guiding to and that we’ve guided to from the beginning of the year.

Barton Evans Crockett: Okay. Now the Vegas stuff, is that done after this year? Do you expect it to be not a factor next year?

Herve Sedky: That’s correct. The Las Vegas Convention Center is scheduled to be completed, and we believe they’re on schedule by the end of this year. And so we expect that as we get into 2026, that we will come back to a more normal pattern.

Barton Evans Crockett: Okay. Now the performance, the contributions from the acquisitions were pretty meaningful this quarter. It looks like — it sounds like they’re growing like gangbusters. But even with the disruption of acquisitions. But do we see much more contribution from these guys over the balance of this calendar year? Or was the second quarter really the bulk of what we’re going to see from — This is Beyond and Insurtech?

David B. Doft: Both businesses have events in the second half of the year. This is Beyond has 4 more events this year. 1 in September and then 3 in the fourth quarter. And Insurtech has 1 smaller event in the fourth quarter. So the most — the bulk of Insurtech’s year is done from a revenue standpoint outside of their Hong Kong event. But This is Beyond, still quite a bit to go.

Barton Evans Crockett: Okay. All right. And then in terms of some of the back and forth about impacts of the macro, I was wondering if you could just give us the sense kind of in aggregate is, how much of a headwind do you feel right now from just a macro environment? Is it a small kind of headwind? Is it a big headwind that you’re just overcoming or just kind of qualitatively, how do you feel about how big the macro kind of impacts are at this point for you guys?

Herve Sedky: Well, I think the most important thing to say is that we went into this year expecting an impact. And therefore, we were prudent in our budgeting process. And as I said in the script, we’ve already secured 99% of our full year international revenue. So we are tracking very, very well to the assumptions that we made. I would characterize the impact as small overall, given that international is a small part is a smaller part of the total revenue. And as I mentioned, while we’re seeing headwinds in China for sure and in Canada, we’re very pleased that there are some other countries that I named where we’re seeing the opposite effect. They’re really taking advantage of entering the U.S. market. And therefore, they’re exceeding our expectations. So when you pull it together, the impact is relatively small.

David B. Doft: I think the only thing I’d add to that is, while small, there is an impact. And as we cycle it and as we said in the script, as we cycle it and as we — as there’s more clarity in the specific country by country, we do think it becomes more of a contributor again in 2026. And so what is a moderate drag on organic growth this year, we think, could be a contributor next year, especially given our aggressive investment in rolling out our agent network around the world, which gives us more reach into more countries than Emerald has ever had before.

Operator: Your next question comes from Allen Klee with Maxim Group.

Allen Robert Klee: When you — in the press release, you talked about 3 acquisitions impact on the quarter. One, I wasn’t familiar with GRC World, I assume it’s smaller. Could you just comment on what that is?

David B. Doft: GRC is Global Risk and Compliance, we actually acquired that last summer, in the summer of ’24, but it was not in the first half 2024 numbers. So in order to run the appropriate pro forma, we had to include it in both.

Herve Sedky: And it is small.

Allen Robert Klee: Got it. Okay. And then if I read — I think I read that it’s in your numbers saying that acquisitions added $24 million in 2Q. And I think last quarter, you said you expected, This is Beyond and Insurtech to add $40 million in revenue for the full year. So is it correct saying the difference between those 2 is what you expect in the second half?

David B. Doft: That would be the math.

Allen Robert Klee: I’m sorry, what?

Herve Sedky: Yes, that’s correct. That’s right.

Allen Robert Klee: We’re confirming your assumption. I need to confirm my assumptions usually. Okay. And then you said that you’re seeing positive first half ’26 rebooking rates. Is there any commentary from say, in terms of just the overall of how much of revenue you feel you have booked for ’25 and ’26? Or any commentary just in general?

David B. Doft: I think it’s premature to give a ’26 number. But needless to say, we are willing to express confidence because it’s surely up nice enough to allow us to give a comment that it’s trending well. And so give it that our events are about returning on investment to our customers, the fact that they’re be booking at higher rates is a really good sign, and that’s what we’re indicating. In terms of 2025, at this point, we’re 90%-ish booked on the year of where we’re tracking. And so there’s still a little bit more to go. And obviously, largely fourth quarter weighted on what still needs to be booked, but we’re feeling pretty good about the trajectory to the range that we’ve given.

Allen Robert Klee: That’s great. And I missed when you were talking about free cash flow and you said, if it would have been adjusted for some of the money collected for acquisitions, how much did you say would have added to the quarter? I think I heard a number that’s probably too high.

David B. Doft: So in the quarter, the — I’m just going to quote for the exact — so I don’t misstate it myself. $17 million.

Allen Robert Klee: 17?

Herve Sedky: Correct.

David B. Doft: Correct.

Allen Robert Klee: So you did like $13 million of EBITDA, but — I’m sorry, free cash flow, really would have been more like $30 million.

David B. Doft: Correct. So just to be clear, right, so next year, when we own these businesses for the full year, we will have the benefit of the collections for the events we stage ahead of that event. This year, those collections happened prior to the acquisition, right? So we acquired those collections. They came to us as an offset to purchase price. So we still got the money, but it doesn’t show up in cash flow from operations in 2025. But in 2026, you should see a much higher conversion of adjusted EBITDA to free cash flow because we will own the entire period of marketing those events and the collection of the cash for those events.

Allen Robert Klee: That’s helpful. That’s great. I mean it was in one of your smaller quarters to have that much free cash flow generation is great pro forma. So then just one other thing on the Las Vegas construction. Do you have events in the fourth quarter that are also going to be at the Las Vegas centers that will be affected in the fourth quarter, but maybe that will show better for fourth quarter ’26?

Herve Sedky: Yes. We do. We have one event in the fourth quarter that has the same — will have the same impact or similar impact.

David B. Doft: The fourth quarter overall, though, is a larger quarter. We run more events with more revenue. So on a percent basis, it doesn’t swing the numbers as much.

Allen Robert Klee: That makes sense. Okay. And then last quarter, you mentioned how you were trying to use AI internally for certain things. Any update, comment on that?

Herve Sedky: Yes, we’re — absolutely. We’re leveraging AI to enhance our employee productivity to — we have a number of initiatives around cost reduction, some customer engagement initiatives. And we also have our revenue components where we have a dedicated efforts towards unlocking revenue from AI across our portfolio, and we’ll talk about that more as that strategy is developed. But right now, we have early pilots in finance, in marketing, in customer service and in content production that are already starting to yield some measurable efficiency gains, and they’re streamlining some of our workflows, and we’re confident that over time, we’ll continue to both find ways to save money, be more efficient, allow our teams to do more with less. And that’s before the revenue initiative that I mentioned.

Allen Robert Klee: That’s great. My last question, I have written in my notes from the first quarter earnings call that you said something like, I forget why, but for some reason, you thought you might be tracked and tell me if I’m wrong, you were tracking maybe towards the higher end of your ’25 guidance. If you did say that then, is that something that you would repeat now?

David B. Doft: I think what we said is that our guidance range was based on a range of possibilities, one of which is the range of tariff impact on the year. And there’s still some uncertainty there. So our range is our range. Our quarter was a strong quarter and as we expected. So we’re tracking well. That’s for sure. And hopefully, we continue on this and deliver to the high end. But we give a range because that’s our guidance.

Allen Robert Klee: Got it. You guys are really well positioned in this environment, just in general. So congratulations.

Herve Sedky: Thank you very much, Allen.

Operator: There are no further questions at this time. I will now turn the call back over to Emerald’s CEO, Herve Sedky, for closing remarks.

Herve Sedky: Well, thank you very much. So to wrap things up, our second quarter showed just how strong and resilient the Emerald platform really is. We stuck to our plan. We made smart acquisitions that added value and handled outside challenges with confidence. It all comes down to the dedication of our team and the trust of our customers. So we’re feeling good about where we’re headed and confident we can keep creating long-term value for shareholders, while giving our team and customers great experiences. And so with that, I thank you for joining us today. Have a great day, and goodbye.

Operator: This concludes today’s conference. You may now disconnect.