Emerald Holding, Inc. slightly reduced its outlook from steps taken to discontinue some of its smaller events. The operator of Outdoor Retailer, Surf Expo, Sports Licensing & Tailgate Show, and other venues also reported improved underlying earnings in the third quarter on flat sales.

In the third quarter ended September 30, revenues totaled $72.6 million, an increase of $0.1 million, or 0.1 percent, over Q3 2023. This was primarily due to revenues from acquisitions and scheduling differences, offset by organic decline, sustained softness in its Content business, and several small, discontinued events that were not contributing to profitability.

Organic revenues, a non-GAAP measure that takes into account the impact of acquisitions, scheduling adjustments and discontinued events, totaled $58.7 million, a decrease of $3.3 million, or 5.3 percent, from $62.0 million for the third quarter of 2023.

Emerald showed a net loss of $11.1 million in the quarter, compared to a net income of $10.7 million for the third quarter of 2023, principally due to lower benefit from income taxes and recognition of intangible asset impairment charges offset by lower stock-based compensation expense and other items primarily relating to acquisition costs.

Adjusted EBITDA was $12.5 million, compared to $10.8 million for the third quarter of 2023. Adjusted EBITDA, excluding event cancellation insurance for the third quarter of 2023, was $8.0 million. The year-over-year increase resulted from cost management and the discontinuation of several small, non-core and unprofitable events.

Operational and Capital Structure Updates

  • For full year 2024, the company updated its FY 2024 guidance and now expects to generate at least $400 million in revenue and at least $100 million in Adjusted EBITDA. Previously, for the full year 2024, the company expected to generate $415 million to $425 million in revenue and between $110 million and $115 million in Adjusted EBITDA.
  • Emerald also said it accelerated portfolio optimization initiatives by discontinuing 20 smaller, unprofitable events, totaling $20 million of historical run-rate revenue.
  • The company repurchased $3.6 million of its common stock in the third quarter at an average price of $4.85 per share.
  • Emerald’s Board of Directors authorized an extension and expansion of the existing share repurchase program through December 31, 2025, for the repurchase of $25.0 million of Emerald’s common stock.

Hervé Sedky, Emerald’s president and chief executive officer, said, “We managed through several operational initiatives in our Connections business this quarter, including accelerating our portfolio optimization efforts. This, combined with sustained softness in our Content business, impacted our performance and resulted in our outlook for the year to be below prior expectations. Despite these near-term effects, our overall Connections pacing into H1 2025 is showing accelerated growth, driving expectations for improved results in the new year.

“We pruned twenty select, non-core events which, in aggregate, were a drag on organic growth and weren’t contributing to profitability. While this process is expected to enhance our overall growth rate, margin and profitability in 2025, it will have a negative impact on our 2024 performance. We are also working to address softness in our Content business, which accounts for just 5 percent of revenue, where a challenging advertising environment in several of our end markets continues to weigh on our performance. We have a profitable portfolio of well-known and respected events and are committed to building this portfolio through new event launches as well as accretive acquisitions in the coming year.”

David Doft, Emerald’s chief financial officer, added, “We feel confident that the changes to the makeup of our portfolio and more aggressive efforts in our Content business leave us well positioned for strength in 2025 and beyond. Our forward visibility into trade show booking, including into the first half of 2025, as well as the critical place of trade shows in companies’ marketing budgets, gives us confidence in our ability to deliver year-over-year growth as we cycle past these near-term effects.”

Image courtesy Sports Licensing & Tailgate Show