Transcript: Lamar Advertising Q2 2026 Earnings Conference Call

Lamar Advertising (NASDAQ:LAMR) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below.

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The full earnings call is available at https://join.eventcastplus.com/eventcastplus/lamar-advertising-q2-2026-earnings-call

Summary

Lamar Advertising is benefiting from a shift in advertising spend from traditional local media to out-of-home, driven by dissatisfaction with digital ad platforms.

The company is optimistic about cost savings initiatives but does not expect to reach a 48% margin this year, though improvements are anticipated in future years.

Strong performance was noted in the second quarter with contributions from sports and AI sectors, alongside continued political advertising tailwinds.

Regarding M&A, Lamar remains strategic and disciplined, focusing on fill-in acquisitions and maintaining competitive valuation metrics.

Management highlighted positive trends in technology services, particularly AI, and noted unusual political advertising trends favoring 2026 over 2024.

Full Transcript

UNKNOWN Analyst

Political. I'm just curious your high-level thoughts on how you see it.

Sean Riley

So, you know, I think there is something secular going on in terms of what's happening to our competitors out there in other local media. For example, what's going on clearly with radio, what's going on with print, and what is increasingly going on with local network affiliate television. Some of that is coming our way. As they experience a drop in their audience, some of their spend is coming our way. What we're also increasingly hearing from advertisers—and I think you're hearing this from our peers at Outfront and Clear Channel as well—digital ad spend, while it's still the gorilla in the room, there is some disaffection with what many people believe is the vast wasteland of the panoply of digital products out there. And so some advertisers are coming to us in the out-of-home world because they know exactly what they're getting. There's no bot fraud, there's no chance that they're going to show up in a place that they don't want to be, and they're increasingly getting comfortable with our ability to track results when they spend with us. So it's all good out there for out-of-home.

You heard this from Outfront yesterday. You saw it in the Clear Channel numbers. And a rising tide is lifting all boats because we're feeling it as well.

UNKNOWN Analyst

Got it. That's great. And then just secondly, Sean and Jay, I'd be curious what the latest is on your cost savings initiatives. And is this the year we might see the 48% margins?

Sean Riley

We're going to be close. I don't know that we're going to get all the way to 48%, but we will set a record and we should be at least a point better than last year. So we've successfully gone through phase one of our enterprise software and upgrades, mostly back office and financial, and with some savings accompanying those efforts. We're somewhat hitting the pause button on phase two. We've had some wins that are going to result in some cost savings in out years, but as you're hearing from other companies, the sands are shifting around software deployment and options for functionality.

So we're evaluating those things, and what we're seeing out there are some more elegant and more cost-effective ways to get the functionality we're looking for. So on some of those cost savings, it's a stay tuned. Maybe not a get to 48% this year, but quite possibly in 27 or 28, I would say probably.

UNKNOWN Analyst

Great. Thanks, Sean.

OPERATOR

Thank you again. As a reminder, if you'd like to ask a question, please press star one now. Our next question will come from Steven Cahal with Wells Fargo. Your line is open.

Steven Cahal, Analyst at Wells Fargo

Thanks. I was wondering if we could go one level deeper into that acceleration you saw through the second quarter. I know there was a lot of sports going on in that time, but it sounds like your pacings continued to improve. Were there particular categories of strength that you see persisting into the back half and maybe even into 27? I'm curious if AI, which has become obviously a much bigger sector, is showing up as a bigger advertiser as well.

And then just on your M&A plans, I was wondering how you're thinking about valuations in the marketplace right now. It seems like one of your competitors is going to have a better balance sheet than it has historically. Sector multiples are a little higher. So just wondering how competitive that market looks for valuations. Thanks.

Sean Riley

Sure. I'll hit the second question first. So, you know, we do basically three types of acquisitions. There are ones that are 100% fill-in in our existing footprint. We have by far and away the largest footprint nationwide of any operator, so for many of these transactions that we do that are sort of cookie-cutter fill-in transactions, we're the highest and best buyer, and sometimes we're the only buyer, and we just sit down and meet with a seller and we get to yes.

So some of them are actually not competitive processes. As the transactions get larger, more parties come to the table and there is more of a competitive dynamic. Sometimes those transactions are in DMAs where we don't already have operations, and that can attract some attention. We just remain disciplined, and we have our valuation metrics and we stick to them. Regarding the other two publics, you know, it's interesting, their footprints are different.

Oftentimes they're shopping in places we're not, just given their geographical profile. So we run into them sometimes and sometimes we don't, and I would describe it as we're frenemies when it comes to that, and we're going to win our fair share, as will they. As I mentioned, services is a pretty big catch basin, and it's just growing really fast. And we saw the advent of telecom and technology services, particularly around the AI space, augment that whole category of business, and that's been a good thing to see.

And then, you know, don't forget political. We've got nice political tailwinds that we're enjoying this year. It has been somewhat unusual to have a mid-cycle outpace a presidential cycle, but that's what's going on in 2026 over 2024. And that again has certainly been one of the nice things to see this year.

Steven Cahal, Analyst at Wells Fargo

Thank you.

OPERATOR

Thank you. This does conclude our Q&A session. I would now like to turn the meeting back to Sean Riley for any closing remarks.

Sean Riley

Well, thank you all for listening, and we look forward to catching up again next quarter.

OPERATOR

Thank you. That brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

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