Release Date: May 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Emerald Holding Inc (EEX, Financial) reported a strong start to 2024 with significant early rebookings into 2025, enhancing revenue visibility.
- Record attendance at major trade shows like KBIS and Prosper, indicating robust engagement and market demand.
- Introduction of value-added tools and metrics to improve ROI transparency for customers, enhancing customer experience and loyalty.
- Expansion of the Elastic Suite into new categories, doubling its total addressable market and signing significant new customers.
- Successful conversion of all outstanding convertible preferred shares into common stock, simplifying capital structure and eliminating a $34 million annual dividend expense.
Negative Points
- First-quarter free cash flow decreased compared to the previous year, impacted by non-recurring costs related to acquisitions and restructuring.
- Increase in SG&A expenses due to acquisition integration costs and other factors, impacting profitability.
- Content business faced challenges with advertising budgets under pressure, although signs of stabilization are emerging.
- Quarter-to-quarter variability in organic growth rates due to the mix of business and timing of events.
- Ongoing challenges with international visa processing, impacting potential international exhibitor and attendee numbers.
Q & A Highlights
Q: Can you elaborate more on the variability in organic growth rate expectations for this year? Are there any quarters that look particularly stronger or weaker?
A: Hervé Sedky, President & CEO of Emerald Holding Inc, explained that the variability in organic growth rates is due to the different sectors hosting events each quarter. The first and fourth quarters are expected to show the strongest growth rates, while the middle quarters might see more muted growth. This pattern is influenced by the mix of business and timing of events throughout the year.
Q: Could you provide more details about the acquisition of Hotel Interactive and its importance?
A: Hervé Sedky noted that Hotel Interactive organizes about 15 smaller hosted buyer events, which are highly effective and offer high ROI for sponsors and attendees. These events are spread evenly throughout the year, and the acquisition allows Emerald to leverage a successful model across multiple industries.
Q: Are future acquisitions included in your guidance for this year?
A: Hervé Sedky clarified that the guidance for the year includes only the Hotel Interactive acquisition, as it was completed in January before the guidance was issued. No future acquisitions are included in the current guidance.
Q: Can you provide more insight into the key metrics like square footage and pricing trends?
A: David Doft, CFO of Emerald Holding Inc, mentioned that pricing is expected to increase by mid-single digits, building on significant improvements in recent years. Net square footage is also up, reflecting a continued recovery from the pandemic and successful implementation of new growth strategies.
Q: How is the visa processing issue affecting the industry, and what are the prospects going forward?
A: Hervé Sedky highlighted ongoing challenges with visa processing that affect the entire industry. Efforts are being made to lobby for modernized visa processing and restoration of operations to pre-pandemic levels, with some progress being made through industry-wide initiatives.
Q: Could you discuss the performance and future plans for new event launches like Cocina Sabrosa and Commercial Integrator?
A: Hervé Sedky shared that new launches such as Cocina Sabrosa and Commercial Integrator have been successful and are expected to contribute to growth in 2024. These events leverage existing infrastructure and customer bases, providing new growth avenues within their respective niche markets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.