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YoY shift: Neutral
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.09pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
-0.14pp
Flat
Net-tone change vs last year's 10-K.
MD&A
-0.03pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
adversely+2
negatively+1
failure+1
loss+1
investigations+1
Positive rising
No words rose this year.
Risk Factors (Item 1A)
7,901 words
ITEM 1A. RISK FACTORS
Risks Related to Our Capital Structure
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
loss+2
restated+1
Positive rising
No words rose this year.
MD&A (Item 7)
10,949 words
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This report contains forward-looking statements. These statements are subject to risks and uncertainties including those described in Item 1A under the heading “Risk Factors,” and elsewhere in this Annual Report, that could cause actual results to differ materially from those projected in these forward-looking statements. The Company cautions investors not to place undue reliance on the forward-looking statements contained in this document. These statements speak only as of the date of this document, and the Company undertakes no obligation to update or revise the statements, except as may be required by law.
The Company’s substantial debt may adversely affect its business, financial condition and financial results.
The Company has borrowed substantially in the past and will continue to borrow in the future. At December 31, 2025, Lamar Advertising Company’s wholly owned subsidiary, Lamar Media, had approximately $3.42 billion of total debt outstanding, net of deferred financing costs, consisting of approximately $688.6 million in bank debt outstanding under Lamar Media’s senior credit facility, $2.48 billion in various series of senior notes, $249.6 million under the Accounts Receivable Securitization Program and $0.8 million in other seller notes. Despite the level of debt presently outstanding, the terms of the indentures governing Lamar Media’s notes and the terms of the senior credit facility and Accounts Receivable Securitization Program allow Lamar Media to incur substantially more debt, including approximately $742.2 million available for borrowing under the revolving credit facility as of December 31, 2025.
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The Company’s substantial debt and its use of cash flow from operations to make principal and interest payments on its debt may, among other things:
• make it more difficult for the Company to comply with the financial covenants in its senior credit facility and in its Accounts Receivable Securitization Program, which could result in a default and an acceleration of all amounts outstanding under the facility or under the Accounts Receivable Securitization Program;
• limit the cash flow available to fund the Company’s working capital, capital expenditures, acquisitions or other general corporate requirements;
• limit the Company’s ability to obtain additional financing to fund future dividend distributions, working capital, capital expenditures or other general corporate requirements;
• place the Company at a competitive disadvantage relative to those of its competitors that have less debt;
• force the Company to seek and obtain alternate or additional sources of funding, which may be unavailable, or may be on less favorable terms, or may require the Company to obtain the consent of lenders under its senior credit facility or the holders of its other debt;
• limit the Company’s flexibility in planning for, or reacting to, changes in its business and industry; and
• increase the Company’s vulnerability to general adverse economic and industry conditions.
Lamar Media has variable rate debt outstanding under the senior credit facility and its Accounts Receivable Securitization Program. Increases in the interest rates applicable to these borrowings have resulted in increased interest expense, which has impacted the Company's net income. Interest rates may continue to increase as a result of macroeconomic factors outside of our control. The Company may take actions in the future to mitigate its interest rate exposure, however, it cannot guarantee that the actions that it takes to mitigate these risks will be effective. Additionally, to the extent we refinance existing debt obligations or seek to enter into new debt financing arrangements in the current interest rate environment, we expect that such arrangements would be subject to higher interest rates than our existing debt obligations, which would further increase our interest expense.
Any of these problems could adversely affect the Company’s business, financial condition and financial results.
The Company may be unable to generate sufficient cash flow to satisfy its significant debt service obligations.
The Company’s ability to generate cash flow from operations to make principal and interest payments on its debt will depend on its future performance, which will be affected by a range of economic, competitive and business factors. The Company cannot control many of these factors, including general economic conditions, its customers’ allocation of advertising expenditures among available media and the amount spent on advertising in general, and its business would be negatively impacted if the general economy were to deteriorate in the future. If its operations do not generate sufficient cash flow from operations to satisfy its debt service obligations, the Company may need to borrow additional funds to make these payments or undertake alternative financing plans, such as refinancing or restructuring its debt, or reducing or delaying capital investments and acquisitions. The Company cannot guarantee that such additional funds or alternative financing will be available on favorable terms, if at all. The Company’s inability to generate sufficient cash flow from operations or obtain additional funds or alternative financing on acceptable terms could have a material adverse effect on our business, financial condition and results of operations.
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Restrictions in the Company’s and Lamar Media’s debt agreements reduce operating flexibility and contain covenants and restrictions that create the potential for defaults, which could adversely affect the Company’s business, financial condition and financial results.
The terms of Lamar Media’s senior credit facility and the indentures relating to Lamar Media’s outstanding notes restrict the ability of the Company and Lamar Media to, among other things:
• incur or repay debt;
• dispose of assets;
• create liens;
• make investments;
• enter into affiliate transactions; and
• pay dividends and make inter-company distributions.
At December 31, 2025, the terms of Lamar Media’s senior credit facility and of its Accounts Receivable Securitization Program also restrict the Company from exceeding a specified secured debt ratio. Lamar Media is also subject to certain other financial covenants relating to the incurrence of additional debt. Please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” for a description of the specific financial ratio requirements under the senior credit facility.
The Company’s ability to comply with the financial covenants in the senior credit facility, Accounts Receivable Securitization Program and the indentures governing Lamar Media’s outstanding notes (and to comply with similar covenants in any future agreements) depends on its operating performance, which in turn depends significantly on prevailing economic, financial and business conditions and other factors that are beyond the Company’s control. Therefore, despite its best efforts and execution of its strategic plan, the Company may be unable to comply with these financial covenants in the future.
The Company is currently in compliance with all financial covenants. However, if in the future there are economic declines the Company can give no assurance that these declines will not negatively impact the Company’s financial results and, in turn, its ability to meet these financial covenant requirements. If Lamar Media fails to comply with its financial covenants, Lamar Media could be in default under the senior credit facility and the Accounts Receivable Securitization Program (which could result in an event of default under the indentures governing its outstanding notes). In the event of such a default under the senior credit facility, the lenders under the senior credit facility could accelerate all of the debt outstanding, could elect to institute foreclosure proceedings against Lamar Media’s assets, and the Company could be forced into bankruptcy or liquidation. Any of these events could adversely affect Lamar Media’s business, financial condition and financial results. In the event of such a default under the Accounts Receivable Securitization Program, the lenders under the Accounts Receivable Securitization Program could accelerate all of the debt outstanding, could elect to institute foreclosure proceedings against the assets of the Special Purpose Subsidiaries (as defined herein), and the Special Purpose Subsidiaries could be forced into bankruptcy or liquidation. Any of these events could adversely affect the Company’s business, financial condition and financial results.
In addition, these restrictions reduce the Company’s operating flexibility and could prevent the Company from exploiting investment, acquisition, marketing, or other time-sensitive business opportunities.
The Company is controlled by significant stockholders who have the power to determine the outcome of all matters submitted to the stockholders for approval and whose interest in the Company may be different than yours.
As of December 31, 2025, members of the Reilly family, including Kevin P. Reilly, Jr., the Company’s Executive Chairman, and Sean Reilly, the Company’s President and Chief Executive Officer, and their affiliates owned in the aggregate approximately 15% of the Company’s outstanding common stock, assuming the conversion of all Class B common stock to Class A common stock. As of that date, their combined holdings represented approximately 63% of the voting power of Lamar Advertising’s outstanding capital stock, which would give the Reilly family and their affiliates the power to:
• elect the Company’s entire Board of Directors;
• control the Company’s management and policies; and
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• determine the outcome of any corporate transaction or other matter requiring stockholder approval, including charter amendments, mergers, consolidations, financings and asset sales.
The Reilly family may have interests that are different than yours in making these decisions.
Our UPREIT structure may result in potential conflicts of interest.
We are structured as an “UPREIT,” which stands for “umbrella partnership real estate investment trust.” While limited partners of Lamar Advertising Limited Partnership (“Lamar LP”) do not generally have any right to participate in or exercise management power over the business and affairs of Lamar LP, they do have the right to vote on certain amendments to the partnership agreement of Lamar LP, as well as on certain other matters. Persons holding such voting rights may exercise them in a manner that conflicts with the interests of our stockholders.
The partnership agreement of Lamar LP provides that, for so long as we own a controlling interest in Lamar LP, any conflict that cannot be resolved in a manner not adverse to either our stockholders or the limited partners shall be resolved by the general partner in favor of our stockholders. Circumstances may arise in the future when the interests of limited partners in Lamar LP may conflict with the interests of our stockholders.
Risks Related to Our Business
The Company’s growth through acquisitions may be difficult, which could adversely affect our future financial performance. In addition, if we are unable to successfully integrate any completed acquisitions, our financial performance would also be adversely affected.
The Company has historically grown through acquisitions. During the year ended December 31, 2025, we completed acquisitions for a total cash purchase price of approximately $191.1 million. Additionally, Lamar LP issued 1,187,500 Common Units to the owners of Verde Outdoor as the consideration in connection with an acquisition, whereby the assets of Verde Outdoor were contributed to Lamar LP.
The future success of our acquisition strategy could be adversely affected by many factors, including the following:
• the pool of suitable acquisition candidates is dwindling, and we may have a more difficult time negotiating acquisitions on favorable terms;
• we may face increased competition for acquisition candidates from other outdoor advertising companies and private equity funds (particularly funds that are focused on investing in media and/or infrastructure), some of which may have greater financial resources than we do, which may result in higher prices for those businesses and assets;
• we may not have access to the capital needed to finance potential acquisitions and may be unable to obtain any required consents from our current lenders to obtain alternate financing;
• compliance with REIT requirements may hinder our ability to make certain investments and may limit our acquisition opportunities;
• we may be unable to integrate acquired businesses and assets effectively with our existing operations and systems as a result of unforeseendifficulties that could divert significant time, attention and effort from management that could otherwise be directed at developing existing business;
• we may be unable to retain key personnel of acquired businesses;
• we may not realize the benefits and cost savings anticipated in our acquisitions; and
• as the industry consolidates further, larger mergers and acquisitions may face substantial scrutiny under antitrust laws.
These obstacles to our opportunistic acquisition strategy may have an adverse effect on our future financial results.
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The Company could sufferlosses due to asset impairment charges for goodwill and other intangible assets.
The Company tested goodwill for impairment on December 31, 2025. Based on the Company’s review at December 31, 2025, no impairment charge was required. The Company continues to assess whether factors or indicators become apparent that would require an interim impairment test between our annual impairment test dates. For instance, if our market capitalization is below our equity book value for a period of time without recovery, we believe there is a strong presumption that would indicate a triggering event has occurred and it is more likely than not that the fair value of one or more of our reporting units are below the carrying amount. This would require us to test the reporting units for impairment of goodwill. If this presumption cannot be overcome a reporting unit could be impaired under ASC 350 “Goodwill and Other Intangible Assets” and a non-cash charge would be required. Any such charge could have a material adverse effect on the Company’s net earnings.
The Company’s logo sign contracts are subject to state award and renewal.
In 2025, the Company generated approximately 4% of its revenues from state-awarded logo sign contracts. In bidding for these contracts, the Company competes against other national logo sign providers as well as numerous smaller local logo sign providers. As a logo sign provider, the Company incurs significant start-up costs upon being awarded a new contract. These contracts generally have a term of five to ten years, with additional renewal periods. Some states reserve the right to terminate a contract early, and most contracts require the state to pay compensation to the Company as a logo sign provider for early termination. At the end of the contract term, the Company, as a logo sign provider, transfers ownership of the logo sign structures to the state. Depending on the contract, the logo provider may or may not be entitled to compensation for the structures at the end of the contract term.
Of the Company’s 25 logo sign contracts in place at December 31, 2025, seven are subject to renewal or expiration in 2026. The Company may be unable to renew its expiring contracts. The Company may also lose the bidding on new contracts.
The Company’s transit advertising contracts are subject to the Company’s ability to obtain and renew favorable contracts with municipalities and airport authorities.
In 2025, the Company generated approximately 7% of its revenues from transit advertisements, which requires the Company to obtain, support, and renew its transit contracts. Transit contracts are generally with the local municipalities and airport authorities and allow us the exclusive right to rent advertising space to customers in airports and on buses, benches or shelters. We currently rent transit advertising displays in airport terminals and on bus shelters, benches and buses in over 80 transit markets. The terms of the contracts vary, but generally range between three to ten years, many with renewable options for contract extension. However, the Company may be unable to renew its expiring transit contracts or may lose the bidding on new contracts.
If the Company’s contingency plans relating to hurricanes and other natural disastersfail, the resulting losses could hurt the Company’s business.
The Company has determined that it is uneconomical to insure againstlosses resulting from hurricanes and other natural disasters for its outdoor or logo structure assets. Although the Company has fortified many of its advertising structures and developed contingency plans designed to mitigate the threat posed by hurricanes and other forms of inclement weather to its real estate portfolio (e.g., removing advertising faces at the onset of a storm, when possible, which better permits the structures to withstand high winds during the storm), these plans could fail and significant losses could result. To the extent that such natural disaster events become more frequent or destructive because of climate change, we may incur increased costs related to storm remediation and preparation.
The Company’s strategy involves continued investment in its digital platform, and we may fail to realize certain expected benefits of these investments and such investments may become more costly.
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The success of the Company’s strategy of investing in its digital platform, and the realization of the benefits thereof, depends upon our ability to demonstrate the increased value and capabilities of digital advertising displays. If we experience significant technological failures with respect to our digital displays or if our customers fail to realize the anticipated benefits of the digital platform, we may experience decreased demand for advertising on our digital billboards. Additionally, we may experience increased costs related to our deployment of digital billboards, if the technological components used in our digital billboards increase in cost or if there are shortages of such components. We may also face difficulties obtaining new permits for digital displays or we may be unable to renew permits for our existing digital displays due to a variety of factors, including due to potential new governmental regulations and restrictions on digital signs. Any of these factors may make it more difficult to realize the benefits of our investments in our digital platform, which may have a negative impact on our financial condition and results of operations.
Our cash distributions are not guaranteed and may fluctuate.
A REIT generally is required to distribute at least 90% of its REIT taxable income to its stockholders. The Company may have available net operating loss (“NOL”) carry forwards that could reduce or substantially eliminate its REIT taxable income, and thus it may not be required to distribute material amounts of cash to qualify for taxation as a REIT. The Company expects that it may utilize available NOL carry forwards to reduce its REIT taxable income.
The Board of Directors of the Company, in its sole discretion, will determine on a quarterly basis the amount of cash to be distributed to its stockholders based on a number of factors including, but not limited to, the Company’s results of operations, cash flow and capital requirements, economic conditions, tax considerations, borrowing capacity and other factors, including debt covenant restrictions that may impose limitations on cash payments, future acquisitions and divestitures, any stock repurchase program, and general market demand for its advertising space available for rent. Consequently, the Company’s distribution levels may fluctuate.
The Lamar Advertising charter, the Lamar Advertising bylaws and Delaware law may inhibit a takeover that stockholders consider favorable and could also limit the market price of Lamar Advertising stock.
Provisions of the Lamar Advertising charter, the Lamar Advertising bylaws and applicable provisions of Delaware law may make it more difficult for or prevent a third party from acquiring control of Lamar Advertising without the approval of the Board of Directors. These provisions:
• impose restrictions on ownership and transfer of Lamar Advertising common stock that are intended to facilitate the Company’s compliance with certain REIT rules relating to share ownership;
• limit who may call a special meeting of stockholders;
• establish advance notice and informational requirements and time limitations on any director nomination or proposal that a stockholder wishes to make at a meeting of stockholders;
• do not permit cumulative voting in the election of its directors, which would otherwise permit less than a majority of stockholders to elect directors; and
• provide the Board of Directors the ability to issue additional classes and shares of preferred stock and to set voting rights, preferences and other terms of the preferred stock without stockholder approval.
In addition, Section 203 of the Delaware General Corporation Law generally limits the Company’s ability to engage in any business combination with certain persons who own 15% or more of its outstanding voting stock or any of its associates or affiliates who at any time in the past three years have owned 15% or more of its outstanding voting stock.
These provisions may have the effect of entrenching the Company’s management team and may deprive the Company’s stockholders of the opportunity to sell their shares to potential acquirers at a premium over prevailing prices. This potential inability to obtain a control premium could reduce the price of Lamar Advertising common stock.
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Risks Related to Our Industry
The Company’s revenues are sensitive to the state of the economy and the financial markets generally and other external events beyond the Company’s control.
The Company rents advertising space on outdoor structures to generate revenues. Advertising spending is particularly sensitive to changes in economic conditions, and macroeconomic conditions such as rising interest rates and inflation may impact our industry more negatively than the economy as a whole.
Additionally, the occurrence of any of the following external events could further depress the Company’s revenues:
• a widespread reallocation of advertising expenditures to other available media by significant renters of the Company’s displays; and
• a decline in the amount spent on advertising, in general, or outdoor advertising in particular as a result of macroeconomic factors, which may occur during a recession or in periods of economic uncertainty.
The Company faces competition from larger and more diversified outdoor advertisers and other forms of advertising that could hurt its performance.
While the Company enjoys a significant market share in many of its small and medium-sized markets, the Company faces competition from other outdoor advertisers and other media in all of its markets. Although the Company is one of the largest companies focusing exclusively on outdoor advertising in a relatively fragmented industry, it competes against larger companies with diversified operations, such as television, radio and other broadcast media. These diversified competitors have the advantage of cross-selling complementary advertising products to advertisers.
The Company also competes against an increasing variety of out-of-home advertising media, such as advertising displays in shopping centers, malls, airports, stadiums, movie theaters and supermarkets, and on taxis, trains and buses. The Company also faces competition from advertising in other forms of media including online (including display, search, and social media advertising); applications used in conjunction with wireless devices; broadcast, cable and streaming television; radio; direct mail marketing; and traditional print media. The industry competes for advertising revenue along the following dimensions: exposure (the number of “impressions” an advertisement makes), advertising rates (generally measured in cost-per-thousand impressions), ability to target specific demographic groups or geographies, effectiveness, quality of related services (such as advertising copy design and layout) and customer service. The Company may be unable to compete successfully along these dimensions in the future, and the competitive pressures that the Company faces could adversely affect its profitability or financial performance.
Additional content-based restrictions on the categories of customers that can advertise on our outdoor advertising structures may be implemented by governmental authorities.
Federal, state or local authorities may seek to restrict or prohibit the use of outdoor advertising with respect to certain products and services. For instance, the use of billboards to advertise certain types of tobacco products is effectively banned in our markets, and in certain cases, state and local governments also prohibit or restrict the use of outdoor advertising for other types of products or services. If additional content-based restrictions are implemented by governmental authorities, certain segments of our customers may not be able to utilize outdoor advertising in the future, which could have a negative impact on our business and results of operations.
Federal, state and local regulation impact the Company’s operations, financial condition and financial results.
Outdoor advertising is subject to governmental regulation at the federal, state and local levels. Regulations generally restrict the size, spacing, lighting and other aspects of advertising structures and pose a significant barrier to entry and expansion in many markets. Federal law, principally the Highway Beautification Act of 1965, or the HBA, regulates outdoor advertising on Federal — Aid Primary, Interstate and National Highway Systems roads. The HBA requires states, through the adoption of individual Federal/State Agreements, to “effectively control” outdoor advertising along these roads, and mandates a state compliance program and state standards regarding size, spacing and lighting. These state standards, or their local and municipal equivalents, may be modified over time in response to legal challenges or otherwise, which may have an adverse effect on our business. The HBA requires any state or political subdivision that compels the removal of a lawful billboard along a Federal — Aid Primary or Interstate highway to pay just compensation to the billboard owner.
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All states have passed billboard control statutes and regulations at least as restrictive as the federal requirements, including laws requiring the removal of illegal signs at the owner’s expense (and without compensation from the state). Although the Company believes that the number of our billboards that may be subject to removal as illegal is immaterial, and no state in which we operate has banned billboards entirely, from time to time governments have required us to remove signs and billboards legally erected in accordance with federal, state and local permit requirements and laws. Municipal and county governments generally also have sign controls as part of their zoning laws and building codes. We contest laws and regulations that we believe unlawfully restrict our constitutional or other legal rights and may adversely impact the growth of our outdoor advertising business.
Using federal funding for transportation enhancement programs, state governments have purchased and removed billboards for beautification, and may do so again in the future. Under the power of eminent domain, state or municipal governments have laid claim to property and forced the removal of billboards. Under a concept called amortization by which a governmental body asserts that a billboard operator has earned compensation by continued operation over time, local governments have attempted to force removal of legal but nonconforming billboards (i.e., billboards that conformed to applicable zoning regulations when built but which do not conform to current zoning regulations). Although the legality of amortization is questionable, it has been upheld in some instances. Often, municipal and county governments also have sign controls as part of their zoning laws, with some local governments prohibiting construction of new billboards or allowing new construction only to replace existing structures. Although we have generally been able to obtain satisfactory compensation for those of our billboards purchased or removed as a result of governmental action, there is no assurance that this will continue to be the case in the future.
We have continued to expand the deployment of digital billboards, which display static digital advertising copy from various advertisers that changes every 6 to 8 seconds. We have encountered some existing regulations that restrict or prohibit these types of digital displays but they have not yet materially impacted our digital deployment. However, new regulations could be enacted to impose greater restrictions on digital billboards due to allegedconcerns over aesthetics or driver safety.
The findings of future studies related to the impact of digital billboards on driver safety issues, if any, may result in regulations at the federal or state level that impose greater restrictions on digital billboards. Any new restrictions on digital billboards could have a material adverse effect on both our existing inventory of digital billboards and our plans to expand our digital deployment, which could have a material adverse effect on our business, results of operations and financial condition.
Our business and operations could suffer in the event of cybersecurity breaches and we may incur significant legal and financial exposure.
The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusions, has generally increased and become more sophisticated over time. Although we have implemented physical and electronic security measures designed to protect against the loss, misuse and alteration of our websites, digital assets, proprietary business information and any personal identifiable information (“PII”) that we collect, no security measures are impenetrable and we and outside parties we interact with may be unable to anticipate or prevent unauthorized access. A security breach could occur due to the actions of outside parties, employee error, malfeasance or a combination of these or other actions. An increase in the number of our employees and outside parties with which we do business working remotely may increase the risk of a cybersecurity incident, which has required us to modify our security measures.
If an actual or perceived breach of our security were to occur, proprietary or competitive information may be misappropriated, and we could experience disruptions in our business operations, information processes and internal controls. In addition, the public perception of the effectiveness of our security measures may be harmed and adversely affect our competitive position. In the event of a security breach, we could suffer significant legal and financial exposure in connection with remediation efforts, investigations and legal proceedings, which could lead to the need for additional resources in our security and system protection measures.
We have been and expect to continue to be the target of fraudulent activities and security breaches; however, to date they have not had a material impact on our business, results of operations or financial condition.
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We could be negatively impacted by environmental, social and governance (ESG) and sustainability matters.
Governments, shareholders, customers, employees and other stakeholders are increasingly focusing on corporate ESG practices and disclosures, and expectations in this area are rapidly evolving and growing. We may incur costs related to ESG initiatives, including those related to producing enhanced mandatory or voluntary disclosures about our business. Additionally, although we have policies in place with respect to the content we display in customer advertisements, if the content of the advertisements we display is controversial or if our decisions to reject certain ads based on our content policies are viewed negatively, we may face reputational damage. This could lead to public controversy, decreased customer trust, and potential loss of business. If we are unable to respond effectively to ESG matters, our reputation, business, financial condition and results of operations could be adversely impacted.
Risks Related to Our Status as a REIT
If Lamar Advertising fails to remain qualified as a REIT, both Lamar Advertising and Lamar Media would be taxed as regular C corporations and would not be able to deduct distributions to the stockholders of Lamar Advertising when computing their taxable income.
Lamar Advertising elected to qualify as a REIT for U.S. federal income tax purposes starting with its taxable year ended December 31, 2014 and for each subsequent taxable year thereafter. REIT qualification involves the application of highly technical and complex provisions of the U.S. Internal Revenue Code of 1986, as amended, (the “Code”) to Lamar Advertising’s assets and operations as well as various factual determinations concerning matters and circumstances not entirely within our control. There are limited judicial or administrative interpretations of these provisions. Although Lamar Advertising plans to operate in a manner consistent with the REIT qualification rules, the Company cannot assure you that it will so qualify or remain so qualified. Lamar Media is treated as a qualified REIT subsidiary of Lamar Advertising that is disregarded as separate from its parent REIT for U.S. federal income tax purposes.
If, in any taxable year, Lamar Advertising fails to qualify for taxation as a REIT, and is not entitled to relief under the Code:
• it will not be allowed a deduction for distributions to its stockholders in computing its taxable income;
• it and its corporate subsidiaries, including Lamar Media, will be subject to applicable federal and state income tax, including any applicable state-level alternative minimum tax, on its taxable income at regular corporate rates; and
• it would be disqualified from REIT tax treatment for the four taxable years following the year during which it was so disqualified.
Any such corporate tax liability could be substantial and would reduce the amount of cash available for distributions to Lamar Advertising’s stockholders, and may require it to borrow funds (under Lamar Media’s senior credit facility or otherwise) or liquidate some investments to pay any such additional tax liability. This adverse impact could last for five or more years because, unless it is entitled to relief under certain statutory provisions, it will be taxable as a corporation, beginning in the year in which the failure occurs, and it will not be allowed to re-elect to be taxed as a REIT for the following four years.
Even if it qualifies as a REIT, certain of Lamar Advertising’s and its subsidiaries’ business activities will be subject to U.S. and foreign taxes which will continue to reduce its cash flows, and it will have potential deferred and contingent tax liabilities.
Even if it qualifies as a REIT, Lamar Advertising may be subject to certain U.S. federal, state and local taxes and foreign taxes on its income and assets, including any applicable state-level alternative minimum taxes, taxes on any undistributed income, and state, local or foreign income, franchise, property and transfer taxes. In addition, the Company could in certain circumstances be required to pay an excise or penalty tax, which could be significant in amount, in order to utilize one or more relief provisions under the Code to maintain qualification for taxation as a REIT.
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In order to maintain its qualification as a REIT, the Company holds certain of its non-qualifying REIT assets and receives certain non-qualifying items of income through one or more TRSs. These non-qualifying REIT assets consist principally of the Company’s advertising services business and its transit advertising business. Those TRS assets and operations will continue to be subject, as applicable, to U.S. federal and state corporate income taxes. Furthermore, the Company’s assets and operations outside the United States are subject to foreign taxes in the jurisdictions in which those assets and operations are located. In addition, the Company may incur a 100% excise tax on transactions with a TRS if they are not conducted on an arm’s-length basis. Any of these taxes would decrease the Company’s earnings and its cash available for distributions to stockholders.
The Company was subject to a U.S. federal income tax at the highest regular corporate rate (currently 21%) on all or a portion of the gain recognized from a sale of assets occurring within five years after the effective date of our REIT conversion, to the extent of the built-in gain based on the fair market value of those assets held by the Company on the effective date of REIT conversion in excess of the Company’s then tax basis in those assets. Such five-year period has expired with respect to the Company but certain tax years for which this rule applied remain open such that additional taxes could be assessed with respect to sales in those tax years. The same rules apply to any assets we acquire from a “C” corporation in a carry-over basis transaction with built-in gain at the time of the acquisition by us. Gain from a sale of an asset occurring after the specified period ends will not be subject to this corporate level tax.
Dividends payable by REITs generally do not qualify for the reduced tax rates on dividend income from non-REIT corporations.
Qualified dividend income payable to U.S. stockholders that are individuals, trusts and estates are generally subject to tax at reduced rates. Dividends payable by REITs, however, generally are not eligible for the reduced qualified dividend rates. Non-corporate taxpayers may generally deduct 20% of certain pass-through business income, including “qualified REIT dividends” (generally, dividends received by a REIT shareholder that are not designated as capital gain dividends or qualified dividend income), subject to certain limitations. Although this deduction reduces the effective tax rate applicable to certain dividends paid by REITs, such tax rate may still be higher than the tax rate applicable to regular corporate qualified dividends. This may cause investors to view REIT investments as less attractive than investments in non-REIT corporations, which in turn may adversely affect the value of the stock of REITs, including our stock.
Gain on disposition of assets deemed held for sale in the ordinary course of business is subject to 100% tax.
If we sell any of our assets, the IRS may determine that the sale is a disposition of an asset held primarily for sale to customers in the ordinary course of a trade or business. Gain from this kind of sale will generally be subject to a 100% tax. Whether an asset is held "primarily for sale to customers in the ordinary course of a trade or business" depends on the particular facts and circumstances of the sale. Although we will attempt to comply with the terms of safe-harbor provisions in the Internal Revenue Code prescribing when asset sales will not be so characterized, we cannot assure you that we will be able to do so.
Failure to make sufficient distributions would jeopardize Lamar Advertising’s qualification as a REIT and/or would subject it to U.S. federal income and excise taxes.
As a REIT, Lamar Advertising is required to distribute to its stockholders with respect to each taxable year at least 90% of its REIT taxable income (excluding capital gains and net of any available NOL carry forwards) in order to qualify as a REIT, and 100% of its REIT taxable income (excluding capital gains and net of any available NOL carry forwards) in order to avoid U.S. federal income and excise taxes. For these purposes, Lamar Advertising’s subsidiaries that are not TRSs, including Lamar Media, will be treated as part of the REIT and therefore Lamar Advertising also will be required to distribute out their taxable income.
Because the REIT distribution requirements will prevent us from retaining earnings, we may be required to refinance debt at maturity with additional debt or equity, which may not be available on acceptable terms, or at all.
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Covenants specified in our existing and future debt instruments may limit Lamar Advertising’s ability to make required REIT distributions.
Lamar Media’s senior credit facility and the indentures relating to Lamar Media’s outstanding notes contain certain covenants that could limit Lamar Advertising’s distributions to its stockholders. If these limits prevent Lamar Advertising from satisfying its REIT distribution requirements, it could fail to qualify for taxation as a REIT. If these limits do not jeopardize Lamar Advertising’s qualification for taxation as a REIT but do nevertheless prevent it from distributing 100% of its REIT taxable income, it will be subject to U.S. federal corporate income tax, and potentially a nondeductible excise tax, on the retained amounts.
Lamar Advertising and its subsidiaries may be required to borrow funds, sell assets, or raise equity to satisfy its REIT distribution requirements or maintain the asset tests.
In order to meet the REIT distribution requirements and maintain its qualification and taxation as a REIT and avoid corporate income taxes, Lamar Advertising and/or its subsidiaries, including Lamar Media, may need to borrow funds, sell assets or raise equity, even if the then-prevailing market conditions are not favorable for these borrowings, sales or offerings. Any insufficiency of its cash flows to cover Lamar Advertising’s REIT distribution requirements could require it to raise short- and long-term debt, to sell assets, or to offer equity securities in order to fund distributions required to maintain its qualification and taxation as a REIT and avoid corporate income taxes. Furthermore, the REIT distribution requirements may increase the financing Lamar Advertising needs to fund capital expenditures, future growth and expansion initiatives. This would increase its total leverage.
In addition, if Lamar Advertising fails to comply with certain asset tests at the end of any calendar quarter, it must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing its REIT qualification. As a result, it may be required to liquidate otherwise attractive investments. These actions may reduce its income and amounts available for distribution to its stockholders.
Complying with REIT requirements may cause Lamar Advertising or its subsidiaries (other than TRSs) to forego otherwise attractiveopportunities.
To qualify as a REIT for U.S. federal income tax purposes, Lamar Advertising must continually satisfy tests concerning, among other things, the sources of its income, the nature and diversification of its assets, the amounts it distributes to its stockholders and the ownership of Lamar Advertising common stock. For these purposes, Lamar Advertising is treated as owning the assets of and receiving or accruing the income of its subsidiaries (other than TRSs). Thus, compliance with these tests will require Lamar Advertising and its subsidiaries to refrain from certain activities and may hinder their ability to make certain attractive investments, including investments in the businesses to be conducted by TRSs, and to that extent limit their opportunities. Furthermore, acquisition opportunities in domestic and international markets may be adversely affected if Lamar Advertising needs or requires the target company to comply with certain REIT requirements prior to closing.
Ownership limitations contained in the Lamar Advertising charter may restrict stockholders from acquiring or transferring certain amounts of shares.
In order for Lamar Advertising to remain qualified as a REIT, no more than 50% of the value of the outstanding shares of its stock may be owned, directly or indirectly or through application of certain attribution rules, by five or fewer “individuals” (as defined in the Code) at any time during the last half of a taxable year (other than the first taxable year for which an election to be a REIT has been made). To preserve its REIT qualification, the Lamar Advertising charter generally prohibits any person or entity from owning actually and by virtue of the applicable constructive ownership provisions more than 5% of the outstanding shares of Lamar Advertising common stock. These ownership limitations could restrict stockholders from acquiring or transferring certain amounts of shares of its stock. The Lamar Advertising charter also provides a separate share ownership limitation for certain members of the Reilly family and their affiliates that allows them to own actually and by virtue of the applicable constructive ownership provisions no more than 19% of the outstanding shares of Lamar Advertising common stock and, during the second half of any taxable year other than its first taxable year as a REIT, no more than 33% in value of the aggregate of the outstanding shares of all classes and series of its stock, in each case excluding any shares of its stock that are not treated as outstanding for federal income tax purposes.
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If Lamar Advertising’s operating partnership does not qualify as a partnership, its income may be subject to taxation, and Lamar Advertising would no longer qualify as a REIT.
The Internal Revenue Code classifies “publicly traded partnerships” as associations taxable as corporations (rather than as partnerships), unless substantially all of their taxable income consists of specified types of passive income. Lamar Advertising structured Lamar LP to be classified as a partnership for federal income tax purposes. However, no assurance can be given that the IRS will not challenge Lamar Advertising’s position or will not classify Lamar LP as a “publicly traded partnership” for federal income tax purposes. To minimize this risk, Lamar Advertising has placed certain restrictions on the transfer and/or redemption of partnership units in the Amended and Restated Limited Partnership Agreement of Lamar LP. If the IRS would assert successfully that Lamar LP should be treated as a “publicly traded partnership” and substantially all of Lamar LP ’s gross income did not consist of the specified types of passive income, the Internal Revenue Code would treat Lamar LP as an association taxable as a corporation. In such event, the character of our assets and items of gross income would change and would likely prevent us from satisfying the REIT asset and income tests. This, in turn, would likely prevent Lamar Advertising from qualifying as a REIT. In addition, the imposition of a corporate tax on Lamar LP would reduce the amount of distributions Lamar LP could make to Lamar Advertising and, in turn, reduce the amount of cash available to Lamar Advertising to pay dividends to our shareholders.
Lamar Advertising may potentially be unable to deduct the full amount of its interest expense.
Interest deductions for businesses with average annual gross receipts of over $25 million are capped at 30% of the business’ “adjusted taxable income” plus business interest income pursuant to the Code. As a REIT, Lamar Advertising would generally constitute a real property trade or business, and thus would retain the ability to fully deduct interest expenses if it makes such an election. However, an entity making such an election must use a longer depreciation cost recovery period for its property. The rules for business interest expense will apply to Lamar Advertising and at the level of each entity in which or through which Lamar Advertising invests that is not a disregarded entity for U.S. federal income tax purposes. To the extent that our interest expense is not deductible, Lamar Advertising’s taxable income will be increased, as will its REIT distribution requirements and the amounts it needs to distribute to avoid incurring income and excise taxes.
Legislative changes or other actions affecting REITs could have a negative effect on Lamar Advertising and its subsidiaries.
At any time, the U.S. federal income tax laws governing REITs or the administrative and judicial interpretations of those laws may be amended or interpreted in a different manner. Federal and state tax laws are constantly under review by persons involved in the legislative process, the IRS, the U.S. Department of the Treasury, and state taxing authorities. Additional changes to the tax laws, regulations and administrative and judicial interpretations, which may have retroactive application, could adversely affect Lamar Advertising and its subsidiaries. The Company cannot predict with certainty whether, when, in what forms, or with what effective dates, the tax laws, regulations and administrative and judicial interpretations applicable to Lamar Advertising may be changed. Accordingly, the Company cannot assure you that any such change will not significantly affect Lamar Advertising’s ability to qualify for taxation as a REIT or the U.S. federal income tax consequences to it of such qualification.
The ability of the Board of Directors of Lamar Advertising to revoke its REIT election, without stockholder approval, may cause adverse consequences to its stockholders.
The Lamar Advertising charter provides that the Board of Directors may revoke or otherwise terminate the REIT election, without the approval of its stockholders, if the board determines that it is no longer in the Company’s best interest to continue to qualify as a REIT. If the Company ceases to be a REIT, it will be subject to U.S. federal income tax at regular corporate rates and applicable state and local corporate taxes, which may have adverse consequences on its total return to its stockholders.
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We are subject to risks related to our use of Artificial Intelligence.
We expect to increasingly use artificial intelligence (“AI”) technologies, including third‑party AI tools, in our operations. The design, training, and deployment of AI models involve inherent risks and uncertainties that could adversely affect our business, financial condition, and results of operations. AI systems may produce inaccurate or unreliable outputs, which could lead to flawed business decisions. Our use of AI also presents heightened risks relating to data privacy, cybersecurity, intellectual property (including inadvertent use or incorporation of third‑party proprietary content), and the protection of confidential, personal, or otherwise sensitive information. In addition, many aspects of AI are subject to rapidly evolving and, in some cases, unclear or inconsistent laws, regulations, and industry standards. Failure to comply with, or adapt to, these legal and regulatory developments could result in increased compliance costs, investigations, fines, or litigation. We also rely to a significant extent on third‑party AI providers; issues with their systems, security, compliance, or contractual performance could expose us to similar risks. Any of these events could materially and adversely affect our reputation, competitive position, and operating results.
LAMAR ADVERTISING COMPANY
The following is a discussion of the consolidated financial condition and results of operations of the Company for the years ended December 31, 2025 and 2024. This discussion should be read in conjunction with the consolidated financial statements of the Company and the related notes.
Discussion of our results of operations for the years ended December 31, 2024 and 2023 can be found in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024.
OVERVIEW
The Company’s net revenues are derived primarily from the rental of advertising space on outdoor advertising displays owned and operated by the Company. We manage our business through three operating segments – billboard, logo and transit advertising. Revenue growth is based on many factors that include the Company’s ability to increase occupancy of its existing advertising displays; raise advertising rates; and acquire new advertising displays and its operating results are therefore affected by general economic conditions, as well as trends in the advertising industry. Advertising spending is particularly sensitive to changes in general economic conditions, which affect the rates the Company is able to charge for advertising on its displays and its ability to maximize advertising sales or occupancy on its displays.
Acquisitions and capital expenditures
Historically, the Company has made strategic acquisitions of outdoor advertising assets to increase the number of outdoor advertising displays it operates in existing and new markets. The Company continues to evaluate and pursue strategic acquisition opportunities as they arise. The Company has financed its historical acquisitions and intends to finance any future acquisition activity from available cash, borrowings under the senior credit facility and the Accounts Receivable Securitization Program or through the issuance of debt or equity securities. See “Liquidity and Capital Resources- Sources of Cash,” for more information.
During the year ended December 31, 2025, the Company completed multiple acquisitions for a total cash purchase price of approximately $191.1 million. See “Uses of Cash-Acquisitions,” for more information. Additionally, Lamar Advertising Limited Partnership (“Lamar LP”), the subsidiary operating partnership of the Company and Lamar Media, acquired Verde Outdoor at a value of $147.6 million through the issuance of 1,187,500 Common Units of Lamar LP. The Common Units were issued to the owners of Verde Outdoor as the consideration in connection with the acquisition, whereby the assets of Verde Outdoor were contributed to Lamar LP. The Verde Outdoor assets include more than 1,500 billboard faces across ten states.
The Company’s business requires expenditures for maintenance and capitalized costs associated with the construction of new billboard displays, the entrance into and renewal of logo sign and transit contracts, and the purchase of real estate and operating equipment. The following table presents a breakdown of capitalized expenditures for the past two years:
(In thousands)
Billboard — Traditional
Billboard — Digital
Logos
Transit
Land and buildings
Total capital expenditures
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We expect our 2026 capital expenditures to be approximately $186 million.
NON-GAAP FINANCIAL MEASURES
Our management reviews our performance by focusing on several key performance indicators not prepared in conformity with Generally Accepted Accounting Principles in the United States (“GAAP”). We believe these non-GAAP performance indicators are meaningful supplemental measures of our operating performance and should not be considered in isolation of, or as a substitute for, their most directly comparable GAAP financial measures.
Included in our analysis of our results of operations are discussions regarding earnings before interest, taxes, depreciation and amortization (“adjusted EBITDA”), Funds From Operations (“FFO”), as defined by the National Association of Real Estate Investment Trusts, Adjusted Funds From Operations (“AFFO”) and acquisition-adjusted net revenues.
We define adjusted EBITDA as net income before income tax expense (benefit), interest expense (income), equity in (earnings) loss of investee, loss (gain) on extinguishment of debt and investments, stock-based compensation, depreciation and amortization, loss (gain) on disposition of assets and investments, transaction expenses and capitalized contract fulfillment costs, net. Our management uses this measure internally to evaluate the performance of our business as a whole and our individual business segments.
FFO is defined as net income before (gain) loss from the sale or disposal of real estate assets and investments, net of tax, and real estate related depreciation and amortization and including adjustments to eliminate unconsolidated affiliates and non-controlling interest.
We define AFFO as FFO before (i) straight-line income and expense; (ii) capitalized contract fulfillment costs, net; (iii) stock-based compensation expense; (iv) non-cash portion of tax expense (benefit); (v) non-real estate related depreciation and amortization; (vi) amortization of deferred financing costs; (vii) loss on extinguishment of debt; (viii) transaction expenses; (ix) non-recurring infrequent or unusual losses (gains); (x) less maintenance capital expenditures; and (xi) an adjustment for unconsolidated affiliates and non-controlling interest.
Acquisition-adjusted net revenues adjusts our net revenues for the prior period by adding to it the net revenues generated by the acquired assets before our acquisition of these assets for the same time frame that those assets were owned in the current period. In calculating acquisition-adjusted revenue, therefore, we include revenue generated by assets that we did not own in the period but acquired in the current period. We refer to the amount of pre-acquisition revenue generated by the acquired assets during the prior period that corresponds with the current period in which we owned the assets (to the extent within the period to which this report relates) as “acquisition net revenues”. In addition, we adjust the prior period to subtract revenue generated by the assets that have been divested since the prior period and, therefore, no revenue derived from those assets is reflected in the current period.
Adjusted EBITDA, FFO, AFFO and acquisition-adjusted net revenues are not intended to replace net income or any other performance measures determined in accordance with GAAP. Neither FFO nor AFFO represents cash flows from operating activities in accordance with GAAP and, therefore, these measures should not be considered indicative of cash flows from operating activities as a measure of liquidity or of funds available to fund our cash needs, including our ability to make cash distributions. Rather, adjusted EBITDA, FFO, AFFO and acquisition-adjusted net revenues are presented as we believe each is a useful indicator of our current operating performance. We believe that these metrics are useful to an investor in evaluating our operating performance because (1) each is a key measure used by our management team for purposes of decision-making and for evaluating our core operating results; (2) adjusted EBITDA is widely used in the industry to measure operating performance as depreciation and amortization may vary significantly among companies depending upon accounting methods and useful lives, particularly where acquisitions and non-operating factors are involved; (3) acquisition-adjusted net revenues is a supplement to net revenues to enable investors to compare period-over-period results on a more consistent basis without the effects of acquisitions and divestitures, which reflects our core performance and organic growth (if any) during the period in which the assets were owned and managed by us; (4) adjusted EBITDA, FFO and AFFO each provide investors with a meaningful measure for evaluating our period-to-period operating performance by eliminating items that are not operational in nature; and (5) each provides investors with a measure for comparing our results of operations to those of other companies.
Our measurement of adjusted EBITDA, FFO, AFFO and acquisition-adjusted net revenues may not, however, be fully comparable to similarly titled measures used by other companies. Reconciliations of adjusted EBITDA, FFO, AFFO and acquisition-adjusted net revenues to net income, the most directly comparable GAAP measure, have been included herein.
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RESULTS OF OPERATIONS
The following table presents certain items in the Consolidated Statements of Income as a percentage of net revenues for the years ended December 31, 2025 and 2024:
Year Ended December 31,
Net revenues
Operating expenses:
Direct advertising expenses
General and administrative expenses
Corporate expenses
Depreciation and amortization
Operating income
Loss on extinguishment of debt
Interest expense
Income tax expense
Net income
Year ended December 31, 2025 compared to Year ended December 31, 2024
Net revenues increased $59.1 million or 2.7% to $2.27 billion for the year ended December 31, 2025 from $2.21 billion for the same period in 2024. This increase was attributable to an increase in billboard net revenues of $57.7 million and an increase in logo net revenues of $5.2 million over the prior year, offset by a decrease in transit net revenues of $3.7 million.
Net revenues for the year ended December 31, 2025, as compared to acquisition-adjusted net revenues for the comparable period in 2024, increased $45.6 million, or 2.1%. This increase was attributable to an increase of $47.8 million in billboard net revenues and an increase of $3.9 million in logo net revenues, offset by a decrease of $2.7 million in transit net revenues. See “Reconciliations” below.
Total operating expenses, exclusive of depreciation and amortization and gain on disposition of assets and investments, increased $23.6 million, or 1.9% to $1.24 billion for the year ended December 31, 2025 from $1.22 billion in the same period in 2024. The $23.6 million increase over the prior year is primarily comprised of an increase in total direct, general and administrative and corporate expenses (excluding stock-based compensation expense) of $34.2 million primarily related to the operations of our outdoor advertising assets, offset by a decrease in stock-based compensation expense of $10.6 million.
Depreciation and amortization expense decreased $136.6 million to $326.3 million for the year ended December 31, 2025 as compared to $463.0 million for the same period in 2024. The decrease is primarily due to the revision in the cost estimate included in the calculation of asset retirement obligations during 2024.
For the year ended December 31, 2025, the Company recognized a gain on disposition of assets and investments of $75.9 million as compared to a gain on disposition of assets and investments of $6.1 million for the same period in 2024. The gain on disposition of assets and investments for the year ended December 31, 2025 primarily resulted from the sale of the Company’s equity interest in Vistar Media, Inc., as well as transactions related to the sale of billboard locations and displays.
Due to the above factors, operating income increased $242.0 million to $774.1 million for the year ended December 31, 2025 compared to $532.0 million for the same period in 2024.
Interest expense decreased $11.3 million for the year ended December 31, 2025 to $160.4 million as compared to $171.7 million for the year ended December 31, 2024. The decrease in interest expense is related to a decrease in interest rates on the senior credit facility and Accounts Receivable Securitization Program.
Equity in earnings of investee was $0.2 million and $5.1 million for the years ended December 31, 2025 and 2024, respectively. The decrease of $4.9 million was primarily due to the sale of the Company’s equity interest in Vistar Media, Inc. in February 2025.
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The increase in operating income as well as the decrease in interest expense, partially offset by the decrease in equity in earnings of investee, over the comparable period in 2024, resulted in a $246.9 million increase in net income before income taxes.
The Company recorded income tax expense of $21.3 million for the year ended December 31, 2025 as compared to income tax expense of $4.5 million for the same period in 2024. The $21.3 million equates to an effective tax rate for the year ended December 31, 2025 of approximately 3.5%, which differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.
As a result of the above factors, the Company recognized net income for the year ended December 31, 2025 of $593.1 million, as compared to net income of $362.9 million for the same period in 2024.
Reconciliations:
Because acquisitions occurring after December 31, 2023 have contributed to our net revenues results for the periods presented, we provide 2024 acquisition-adjusted net revenues, which adjusts our 2024 net revenues for the year ended December 31, 2024 by adding to or subtracting from it the net revenues generated by the acquired or divested assets prior to our acquisition or divestiture of these assets for the same time frame that those assets were owned in the year ended December 31, 2025.
Reconciliations of 2024 reported net revenues to 2024 acquisition-adjusted net revenues for the year ended December 31, 2024 as well as a comparison of 2024 acquisition-adjusted net revenues to 2025 reported net revenues for the year ended December 31, 2025, are provided below:
Reconciliation and Comparison of Reported Net Revenues to Acquisition-Adjusted Net Revenues
Year ended December 31,
(In thousands)
Reported net revenues
Acquisition net revenues
Adjusted totals
Key Performance Indicators
Net Income/Adjusted EBITDA
Year Ended December 31,
Amount of Increase (Decrease)
Percent Increase (Decrease)
(In thousands)
Net income
Income tax expense
Loss on extinguishment of debt
Interest expense, net
Equity in earnings of investee
Gain on disposition of assets
Depreciation and amortization
Capitalized contract fulfillment costs, net
Stock-based compensation expense
Adjusted EBITDA
Adjusted EBITDA for the year ended December 31, 2025 increased 2.4% to $1.06 billion. The increase in adjusted EBITDA was primarily attributable to the increase in our gross margin (net revenues less direct advertising expenses, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $40.0 million, partially offset by an increase in general and administrative and corporate expenses of $15.2 million, excluding the impact of stock-based compensation expense.
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Segmented Adjusted EBITDA
Year Ended December 31,
Amount of Increase (Decrease)
Percent Increase (Decrease)
(In thousands)
Billboard adjusted EBITDA
Other adjusted EBITDA (1)
Corporate expenses (2)
Adjusted EBITDA
(1) Logo and transit advertising do not meet the criteria to be reportable segments, and accordingly, are included in Other.
(2) Corporate operations are not an operating segment. Corporate expenses include expenses related to infrastructure and support, including information technology, human resources, legal, finance and administrative functions of the Company, as well as overall executive, administrative and support functions.
Adjusted EBITDA for the year ended December 31, 2025 increased 2.4% to $1.06 billion. The increase in adjusted EBITDA was primarily attributable to the increase in our billboard advertising adjusted EBITDA of $31.2 million, offset by a decrease in other adjusted EBITDA of $1.7 million and an increase in corporate expenses of $4.4 million, excluding the impact of stock-based compensation expense.
Net Income/FFO/AFFO
Year Ended December 31,
Amount of Increase (Decrease)
Percent Increase (Decrease)
(In thousands)
Net income
Depreciation and amortization related to real estate
Gain from sale or disposal of real estate, net of tax
Adjustments for unconsolidated affiliates and non-controlling interest
FFO
Straight-line expense
Capitalized contract fulfillment costs, net
Stock-based compensation expense
Non-cash portion of tax provision
Non-real estate related depreciation and amortization
Amortization of deferred financing costs
Loss on extinguishment of debt
Capital expenditures – maintenance
Adjustments for unconsolidated affiliates and non-controlling interest
AFFO
FFO for the year ended December 31, 2025 was $827.3 million as compared to FFO of $798.4 million for the same period in 2024. AFFO for the year ended December 31, 2025 increased 3.4% to $846.7 million as compared to $819.0 million for the same period in 2024. The increase in AFFO was primarily attributable to the increase in our gross margin (net revenues less direct advertising expenses, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $40.3 million, partially offset by an increase in total general and administrative and corporate expenses (excluding the effect of stock-based compensation expense) of $15.2 million.
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LIQUIDITY AND CAPITAL RESOURCES
Overview
The Company has historically satisfied its working capital requirements with cash from operations and borrowings under its senior credit facility and Accounts Receivable Securitization Program. The Company’s wholly owned subsidiary, Lamar Media Corp., is the principal borrower under the senior credit facility and maintains all corporate operating cash balances. Certain subsidiaries of Lamar Media are the principal borrowers under the Accounts Receivable Securitization Program. Any cash requirements of the Company, therefore, must be funded by distributions from Lamar Media.
Sources of Cash
Total Liquidity. As of December 31, 2025 we had $807.0 million of total liquidity, which is comprised of $64.8 million in cash and cash equivalents and $742.2 million of availability under the revolving portion of the senior credit facility. We expect our total liquidity to be adequate for the Company to meet its operational requirements for the next twelve months. We are currently in compliance with the maintenance covenant included in the senior credit facility and we would remain in compliance after giving effect to borrowing the full amount available to us under the revolving portion of the senior credit facility.
As of December 31, 2025 and 2024, the Company had a working capital deficit of $334.3 million and $353.2 million, respectively. The working capital deficit for the year ended December 31, 2025 is primarily related to the $249.6 million outstanding under the Accounts Receivable Securitization Program as well as $232.5 million in current operating lease liabilities which has a corresponding right of use asset recorded in long term assets.
Cash Generated by Operations. For the years ended December 31, 2025 and 2024 our cash provided by operating activities was $864.0 million and $873.6 million, respectively. We expect to generate cash flows from operations during 2026 in excess of our cash needs for operations, capital expenditures and dividends, as described herein. We expect to have sufficient liquidity available under our revolving credit facility to meet our operating needs for the next twelve months.
Accounts Receivable Securitization Program. On June 24, 2022, Lamar Media and the Special Purpose Subsidiaries entered into the Sixth Amendment (the "Sixth Amendment") to the Receivables Financing Agreement. The Sixth Amendment increased the Accounts Receivable Securitization Program from $175.0 million to $250.0 million. Additionally, the Sixth Amendment provides for the replacement of LIBOR-based interest rate mechanics with Term Secured Overnight Financing Rate ("Term SOFR") based interest rate mechanics for the Accounts Receivable Securitization Program.
The Accounts Receivable Securitization Program was set to mature on July 21, 2025, but was subsequently extended to October 15, 2027 by the Seventh Amendment to the Receivables Financing Agreement dated October 15, 2024. Lamar Media may amend the facility to further extend the maturity date, enter into a new securitization facility with a different maturity date, or refinance the indebtedness outstanding under the Accounts Receivable Securitization Program using borrowings under its senior credit facility or from other financing sources.
Borrowing capacity under the Accounts Receivable Securitization Program is limited to the availability of eligible accounts receivable collateralizing the borrowings under the agreements governing the Accounts Receivable Securitization Program. In connection with the Accounts Receivable Securitization Program, Lamar Media and certain of its subsidiaries (such subsidiaries, the “Subsidiary Originators”) sell and/or contribute their existing and future accounts receivable and certain related assets to one of two special purpose subsidiaries, Lamar QRS Receivables, LLC (the “QRS SPV”) and Lamar TRS Receivables, LLC (the “TRS SPV” and together with the QRS SPV the “Special Purpose Subsidiaries”), each of which is a wholly-owned subsidiary of Lamar Media. Existing and future accounts receivable relating to Lamar Media and its qualified REIT subsidiaries will be sold and/or contributed to the QRS SPV and existing and future accounts receivable relating to Lamar Media’s TRSs will be sold and/or contributed to the TRS SPV. Each of the Special Purpose Subsidiaries has granted the lenders party to the Accounts Receivable Securitization Program a security interest in all of its assets, which consist of the accounts receivable and related assets sold or contributed to them, as described above, in order to secure the obligations of the Special Purpose Subsidiaries under the agreements governing the Accounts Receivable Securitization Program. Pursuant to the Accounts Receivable Securitization Program, Lamar Media has agreed to service the accounts receivable on behalf of the two Special Purpose Subsidiaries for a fee. Lamar Media has also agreed to guarantee its performance in its capacity as servicer and originator, as well as the performance of the Subsidiary Originators, of their obligations under the agreements governing the Accounts Receivable Securitization Program. None of Lamar Media, the Subsidiary Originators or the Special Purpose Subsidiaries guarantees the collectability of the receivables under the Accounts Receivable Securitization Program. In addition, each of the Special Purpose Subsidiaries is a separate legal entity with its own separate creditors who will be entitled to access
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the assets of such Special Purpose Subsidiary before the assets become available to Lamar Media. Accordingly, the assets of the Special Purpose Subsidiaries are not available to pay creditors of Lamar Media or any of its subsidiaries, although collections from receivables in excess of the amounts required to repay the lenders and the other creditors of the Special Purpose Subsidiaries may be remitted to Lamar Media.
As of December 31, 2025, there was $250.0 million of outstanding aggregate borrowings under the Accounts Receivable Securitization Program at a borrowing rate of approximately 4.7%. Lamar Media had noadditional availability under the Accounts Receivable Securitization Program as of December 31, 2025.
“ At-the-Marke t” Offering Program. On July 24, 2024, the Company entered into an equity distribution agreement, or At-the-Market Offering agreement (the "2024 Sales Agreement"), with J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, Truist Securities, Inc., SMBC Nikko Securities America, Inc. and Scotia Capital (USA) Inc. as our sales agents (each a "Sales Agent", and collectively, the "Sales Agents"), which replaced the prior Sales Agreement with substantially similar terms (the "2021 Sales Agreement"). Under the terms of the 2024 Sales Agreement, the Company may, from time to time, issue and sell shares of its Class A common stock, having an aggregate offering price of up to $400.0 million through the Sales Agents as either agents or principals. Sales of the Class A common stock, if any, may be conducted in negotiated transactions or transactions that are deemed to be "at-the-market offerings" as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on or through the Nasdaq Global Select Market and any other existing trading market for the Class A common stock, or sales made to or through a market maker other than on an exchange. The Company has no obligation to sell any of the Class A common stock under the 2024 Sales Agreement and may at any time suspend solicitations and offers under the 2024 Sales Agreement. The Company intends to use the net proceeds, if any, from the sale of the Class A common stock pursuant to the 2024 Sales Agreement for general corporate purposes, which may include the repayment, refinancing, redemption or repurchase of existing indebtedness, working capital, capital expenditures, acquisition of outdoor advertising assets and businesses and other related investments. The Company did not issue any shares under the 2024 Sales Agreement during the years ended December 31, 2025 and 2024. The Company did not issue any shares under the 2021 Sales Agreement from inception through expiration.
Shelf Registration Statement. On July 24, 2024, the Company filed a new automatically effective shelf registration statement that allows the Company to offer and sell an indeterminate amount of additional shares of its Class A common stock, which replaced a previous shelf registration statement. During the years ended December 31, 2025 and 2024, the Company did not issue any shares under the shelf registration statement.
Credit Facilities. On February 6, 2020, Lamar Media entered into a Fourth Amended and Restated Credit Agreement (the “Fourth Amended and Restated Credit Agreement”) with certain of Lamar Media’s subsidiaries as guarantors, JPMorgan Chase Bank, N.A. as administrative agent and the lenders party thereto, under which the parties agreed to amend and restate Lamar Media’s existing senior credit facility. The Fourth Amended and Restated Credit Agreement amended and restated the Third Amended and Restated Credit Agreement dated as of May 15, 2017, as amended (the "Third Amended and Restated Credit Agreement").
The senior credit facility, as established by the Fourth Amended and Restated Credit Agreement (as amended by the Amendments, as defined below) (the “senior credit facility”), consists of (i) a $750.0 million senior secured revolving credit facility which will mature on July 31, 2028, subject to certain conditions (see description of Amendment No. 4 below) (the “revolving credit facility”), (ii) a $700.0 million senior secured Term B loan facility (the “Term B loans”) which will mature on September 23, 2032, and (iii) an incremental facility (the “Incremental Facility”) pursuant to which Lamar Media may incur additional term loan tranches or additional incremental revolving facilities or increase its existing revolving credit facility subject to a pro forma secured debt ratio calculated as described under “Restrictions under Senior Credit Facility” of 4.50 to 1.00, as well as certain other conditions, including lender approval.
On July 2, 2021, Lamar Media entered into Amendment No. 1 (the "Amendment No. 1"), to the Fourth Amended and Restated Credit Agreement. The Amendment No. 1 amends the definition of "Subsidiary" to exclude each of Lamar Partnering Sponsor LLC and Lamar Partnering Corporation and any of their subsidiaries (collectively, the "Lamar Partnering Entities") such that, after giving effect to the Amendment, none of the Lamar Partnering Entities are subject to the Fourth Amended and Restated Credit Agreement covenants and reporting requirements, but any investment by Lamar Media in any of the Lamar Partnering Entities would be subject to the Fourth Amended and Restated Credit Agreement covenants. The Amendment No. 1 also amends the definition of "EBITDA" to replace the existing calculation with a net income-based calculation, which excludes the income of non-Subsidiary entities such as the Lamar Partnering Entities, except to the extent that income of such entities is received by Lamar Media in the form of dividends or distributions.
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On July 29, 2022, Lamar Media entered into Amendment No. 2 ("Amendment No. 2") to the Fourth Amended and Restated Credit Agreement with certain of Lamar Media's subsidiaries as guarantors, JPMorgan Chase Bank, N.A. as administrative agent and the lenders party thereto. Amendment No. 2 established the Term A loans as a new class of incremental term loans. The Term A loans were set to mature on February 6, 2025. Lamar Media borrowed all $350.0 million in Term A loans on July 29, 2022 and proceeds from the Term A loans were used to repay outstanding balances on the revolving credit facility and a portion of the outstanding balance on our Accounts Receivable Securitization Program. The Term A loans were subsequently repaid in full on July 31, 2024.
On April 26, 2023, Lamar Media entered into Amendment No. 3 ("Amendment No. 3") to the Fourth Amended and Restated Credit Agreement with certain of Lamar Media's subsidiaries as guarantors, JPMorgan Chase Bank N.A. as administrative agent and the lenders party thereto. Amendment No. 3 replaced the London Interbank Offered Rate as administered by the ICE Benchmark Administration with Term SOFR as the successor rate, as set in the Fourth Amended and Restated Credit Agreement. All other material terms and conditions of the Fourth Amended and Restated Credit Agreement remain unchanged by Amendment No. 3.
On July 31, 2023, Lamar Media entered into Amendment No. 4 (the "Amendment No. 4") to the Fourth Amended and Restated Credit Agreement with certain of Lamar Media's subsidiaries as guarantors, JPMorgan Chase Bank, N.A. as administrative agent and the lenders party thereto. Amendment No. 4 extends the maturity date of Lamar Media's $750.0 million revolving credit facility such that the revolving credit facility matures July 31, 2028; provided, that, if on the date (a "Springing Maturity Test Date") that is 91 days prior to the February 15, 2028 maturity date of Lamar Media's 3 3/4% Notes, the Company and its restricted subsidiaries do not have sufficient liquidity (defined as unrestricted cash and cash equivalents of the Company and its restricted subsidiaries plus unused commitments under the revolving credit facility) to repay in full the aggregate outstanding amount (including all accrued and unpaid interest, premiums and make-whole amounts (if any)) of the 3 3/4% Notes (as applicable), the revolving credit facility will mature on such Springing Maturity Test Date. On the maturity date of the revolving credit facility, the entire principal amount of revolving loans outstanding under the revolving credit facility, together with all accrued and unpaid interest on such revolving loans, will be due and payable.
Amendment No. 4 also establishes a $75.0 million swingline as a sublimit of the revolving credit facility, which allows Lamar Media to borrow revolving loans on a same-day basis, in an aggregate outstanding principal amount of up to $75.0 million. In addition, Amendment No. 4 amends the provisions of the Fourth Amended and Restated Credit Agreement related to incremental facilities to allow Lamar Media to establish, from time to time, one or more new incremental revolving facilities on the terms, and subject to the conditions, set forth therein.
On September 23, 2025, Lamar Media entered into Amendment No. 5 (the “Amendment No. 5”, and together with the Amendment, the Amendment No. 2, the Amendment No. 3 and the Amendment No. 4, the “Amendments”) to the Fourth Amended and Restated Credit Agreement with certain of Lamar Media’s subsidiaries as guarantors, JPMorgan Chase Bank, N.A., as administrative agent and the lenders party thereto. Amendment No. 5 established the Term B loans as a new class of incremental term loans. Lamar Media borrowed all $700.0 million in Term B loans on September 23, 2025. Proceeds from the Term B loans were used to repay $600.0 million in Term B loans previously outstanding, with the remainder used to repay a portion of the outstanding balance on the revolving credit facility. The Term B loans will mature on September 23, 2032 (or if such day is not a Business Day, the next Business Day) and the entire principal amount of the Term B loans then outstanding, together with all accrued and unpaid interest on the Term B loans, will be due and payable on such date. The Term B loans bear interest at rates based on the Adjusted Term SOFR Rate (“Term Benchmark Term B Loans”) or the Adjusted Base Rate (“Base Rate Term B Loans”) at Lamar Media’s option. For purposes of the Term B Loans, the “Adjusted Term SOFR Rate” is a rate per annum equal to the Term SOFR Rate for the applicable interest period, plus 0.00%. Term Benchmark Term B Loans bear interest at a rate per annum equal to the Adjusted Term SOFR Rate plus 1.50% and Base Rate Term B Loans bear interest at a rate per annum equal to the Adjusted Base Rate plus 0.50%. The covenants, events of default and other terms of the senior credit facility (all of which are unchanged by Amendment No. 5) apply to the Term B loans.
As of December 31, 2025, the aggregate balance outstanding under the senior credit facility was $700.0 million, consisting of $700.0 million in Term B loans aggregate principal balance and nooutstanding borrowings under our revolving credit facility. Lamar Media had approximately $742.2 million of unused capacity under the revolving credit facility.
Note Offering. On September 25, 2025, Lamar Media completed an institutional private placement of $400.0 million aggregate principal amount of 5 3/8% Senior Notes due 2033 (the “5 3/8% Notes”). The institutional private placement on September 25, 2025 resulted in net proceeds to Lamar Media of approximately $393.5 million. Lamar Media used the proceeds from this offering, together with borrowings on the Term B loans, to pay off the balance outstanding on the revolving credit facility as well as pay down a portion of the balance on the Accounts Receivable Securitization Program.
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Factors Affecting Sources of Liquidity
Internally Generated Funds. The key factors affecting internally generated cash flow are general economic conditions, specific economic conditions in the markets where the Company conducts its business and overall spending on advertising by advertisers. We expect to generate cash flows from operations during 2026 in excess of our cash needs for operations, capital expenditures and dividends, as described herein, and we believe we have sufficient liquidity with cash on hand and availability under our revolving credit facility to meet our operating cash needs for the next twelve months.
Credit Facilities and Other Debt Securities. The Company and Lamar Media must comply with certain covenants and restrictions related to the senior credit facility, its outstanding debt securities and its Accounts Receivable Securitization Program.
Restrictions under Debt Securities. The Company and Lamar Media must comply with certain covenants and restrictions related to its outstanding debt securities. Currently, Lamar Media has outstanding the $600.0 million 3 3/4% Senior Notes issued February 2020, the $550.0 million 4% Senior Notes issued February 2020 and August 2020, the $400.0 million 4 7/8% Senior Notes issued in May 2020, the $550.0 million 3 5/8% Senior Notes issued in January 2021 and the $400.0 million 5 3/8% Senior Notes issued September 2025.
The indentures relating to Lamar Media’s outstanding notes restrict its ability to incur additional indebtedness, but permit the incurrence of indebtedness (including indebtedness under the senior credit facility), (i) if no default or event of default would result from such incurrence and (ii) if after giving effect to any such incurrence, the leverage ratio (defined as the sum of (x) total consolidated debt plus (y) the aggregate liquidation preference of any preferred stock of Lamar Media’s restricted subsidiaries (and in the case of the 5 3/8% Notes, minus (z) unrestricted cash of Lamar Media and its restricted subsidiaries) to trailing four fiscal quarter EBITDA (as defined in the indentures)) would be less than 7.0 to 1.0. Currently, Lamar Media is not in default under the indentures of any of its outstanding notes and, therefore, would be permitted to incur additional indebtedness subject to the foregoing provision.
In addition to debt incurred under the provisions described in the preceding paragraph, the indentures relating to Lamar Media’s outstanding notes permit Lamar Media to incur indebtedness pursuant to the following baskets:
• up to $2.0 billion of indebtedness under the senior credit facility;
• indebtedness outstanding on the date of the indentures or debt incurred to refinance outstanding debt;
• inter-company debt between Lamar Media and its restricted subsidiaries or between restricted subsidiaries;
• certain purchase money indebtedness and capitalized lease obligations to acquire or lease property in the ordinary course of business that cannot exceed the greater of $50.0 million or 5% of Lamar Media’s net tangible assets;
• additional debt not to exceed $75.0 million; and
• up to $500.0 million of permitted securitization financings.
Restrictions Under Senior Credit Facility. Lamar Media is required to comply with certain covenants and restrictions under the senior credit facility. If the Company or Lamar Media fails to comply with these tests, the lenders under the senior credit facility will be entitled to exercise certain remedies, including the termination of the lending commitments and the acceleration of the debt payments under the senior credit facility. As of December 31, 2025 we were, and currently we are, in compliance with all such tests under the senior credit facility.
Lamar Media must maintain a secured debt ratio, defined as total consolidated secured debt of Lamar Advertising, Lamar Media and its restricted subsidiaries (including capital lease obligations), minus the lesser of (x) $150.0 million and (y) the aggregate amount of unrestricted cash and cash equivalents of Lamar Advertising, Lamar Media and its restricted subsidiaries (other than the Special Purpose Subsidiaries (as defined above under S ources of Cash – Accounts Receivable Securitization Program)) to EBITDA, as defined below, for the period of four consecutive fiscal quarters then ended, of less than or equal to 4.5 to 1.0.
Lamar Media is restricted from incurring additional indebtedness subject to exceptions, one of which is that it may incur additional indebtedness not exceeding the greater of $250.0 million or 6% of its total assets.
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Lamar Media is also restricted from incurring additional unsecured senior indebtedness under certain circumstances unless, after giving effect to the incurrence of such indebtedness, Lamar Media would have a total debt ratio, defined as (x) total consolidated debt (including subordinated debt) of Lamar Advertising, Lamar Media and its restricted subsidiaries as of any date minus the lesser of (i) $150.0 million and (ii) the aggregate amount of unrestricted cash and cash equivalents of Lamar Advertising, Lamar Media and its restricted subsidiaries (other than the Special Purpose Subsidiaries) to (y) EBITDA, as defined below, for the most recent four fiscal quarters then ended, of less than 7.0 to 1.0.
Lamar Media is also restricted from incurring additional subordinated indebtedness under certain circumstances unless, after giving effect to the incurrence of such indebtedness, it is in compliance with the secured debt ratio covenant and its total debt ratio is less than 7.0 to 1.0.
Under the senior credit facility, as amended, “EBITDA” means, for any period, net income, plus (a) to the extent deducted in determining net income for such period, the sum determined without duplication and in accordance with GAAP, of (i) taxes, (ii) interest expense, (iii) depreciation, (iv) amortization, (v) any other non-cash income or charges accrued for such period, (vi) charges and expenses in connection with the senior credit facility, any actual or proposed acquisition, disposition or investment (excluding, in each case, purchases and sales of advertising space and operating assets in the ordinary course of business) and any actual or proposed offering of securities, incurrence or repayment of indebtedness (or amendment to any agreement relating to indebtedness), including any refinancing thereof, or recapitalization, (vii) any loss or gain relating to amounts paid or earned in cash prior to the stated settlement date of any swap agreement that has been reflected in operating income for such period, and (viii) any loss on sales of receivables and related assets to a securitization entity in connection with a permitted securitization financing, plus (b) the amount of cost savings, operating expense reductions and other operating improvements or synergies projected by Lamar Media in good faith to be realized as a result of any acquisition, investment, merger, amalgamation or disposition within 18 months of any such acquisition, investment, merger, amalgamation or disposition, net of the amount of actual benefits realized during such period from such action; provided, (A) the aggregate amount for all such cost savings, operating expense reductions and other operating improvements or synergies will not exceed an amount equal to 15% of EBITDA for the applicable four quarter period and (B) any such adjustment to EBITDA pursuant to this clause (b) may only take into account cost savings, operating expense reductions and other operating improvements or synergies that are (I) directly attributable to such acquisition, investment, merger, amalgamation or disposition, (II) expected to have a continuing impact on Lamar Media and its restricted subsidiaries and (III) factually supportable, in each case all as certified by the Chief Financial Officer of Lamar Media on behalf of Lamar Media, minus (c) to the extent included in net income for such period (determined without duplication and in accordance with GAAP) (i) any extraordinary and unusual gains or losses during such period, and (ii) the proceeds of any casualty events and dispositions. For purposes of this EBITDA definition, the effect thereon of any adjustments required under Statement of Financial Accounting Standards No. 141R shall be excluded. If during any period for which EBITDA is being determined, Lamar Media has consummated any acquisition or disposition, EBITDA will be determined on a pro forma basis as if such acquisition or disposition had been made or consummated on the first day of such period.
Under the senior credit facility, "net income" means for any period, the consolidated net income (or loss) of Lamar Advertising, Lamar Media, and its restricted subsidiaries, determined on a consolidated basis in accordance with GAAP; provided that the following is excluded from net income: (a) the income (or deficit) of any person accrued prior to the date it becomes a restricted subsidiary or is merged into or consolidated with Lamar Advertising, Lamar Media or any of its restricted subsidiaries, and (b) the income (or deficit) of any person (other than any of our restricted subsidiaries) in which Lamar Advertising, Lamar Media or any of its subsidiaries has an ownership interest, except to the extent that any such income is received by Lamar Advertising, Lamar Media or any of its restricted subsidiaries in the form of dividends or similar distributions.
The Company believes that its current level of cash on hand, availability under the senior credit facility and future cash flows from operations are sufficient to meet its operating needs for the next twelve months. All debt obligations are reflected on the Company’s balance sheet.
Restrictions under Accounts Receivable Securitization Program. The agreements governing the Accounts Receivable Securitization Program contain customary representations and warranties, affirmative and negative covenants, and termination event provisions, including but not limited to those providing for the acceleration of amounts owed under the Accounts Receivable Securitization Program if, among other things, the Special Purpose Subsidiaries fail to make payments when due, Lamar Media, the Subsidiary Originators or the Special Purpose Subsidiaries become insolvent or subject to bankruptcy proceedings or certain judicial judgments, breach certain representations and warranties or covenants or default under other material indebtedness, a change of control occurs, or if Lamar Media fails to maintain the maximum secured debt ratio of 4.5 to 1.0 required under the senior credit facility.
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Uses of Cash
Capital Expenditures. Capital expenditures, excluding acquisitions, were approximately $180.8 million for the year ended December 31, 2025. Our capital expenditures are categorized as growth or maintenance as described below.
• Growth capital expenditures include discretionary capital expenditures incurred primarily for the expansion or development of new advertising markets and construction of new advertising sites. Growth capital expenditures also include certain technology-related investments necessary to support and scale for future customer demand of our outdoor advertising services, and other capital projects. Growth capital expenditures were $111.8 million for the year ended December 31, 2025.
• Maintenance capital expenditures include recurring capital expenditures not otherwise categorized as growth or other non-recurring capital expenditures, including costs incurred to enhance existing advertising sites, general asset improvements, and ordinary corporate capital expenditures. Maintenance capital expenditures were $57.3 million for the year ended December 31, 2025.
• Other non-recurring capital expenditures include capital expenditures to develop new non-revenue generating assets, such as office space in our local markets and the costs to re-develop advertising sites impacted by hurricanes. Other non-recurring capital expenditures were $11.6 million for the year ended December 31, 2025.
• We anticipate our 2026 total capital expenditures will be approximately $186 million.
Acquisitions. During the year ended December 31, 2025, the Company completed over 50 acquisitions for a total cash purchase price of approximately $191.1 million. The acquisitions occurring during the year ended December 31, 2025 were financed using available cash on hand, borrowings under the revolving credit facility and borrowings under the Accounts Receivable Securitization Program.
Dividends. During the year ended December 31, 2025, the Company declared and paid distributions of $655.9 million, or $6.45 per share of common stock. During the year ended December 31, 2024, the Company declared and paid distributions of $578.8 million, or $5.65 per share of common stock. Subject to the approval of the Company’s Board of Directors, the Company expects aggregate quarterly distributions to stockholders in 2026 will be at least $6.40 per common share.
As a REIT, the Company must annually distribute to its stockholders an amount equal to at least 90% of its REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). The amount, timing and frequency of future distributions will be at the sole discretion of the Board of Directors and will be declared based upon various factors, a number of which may be beyond the Company’s control, including financial condition and operating cash flows, the amount required to maintain REIT status and reduce any income and excise taxes that the Company otherwise would be required to pay, limitations on distributions in our existing and future debt instruments, the Company’s ability to utilize net operating losses to offset, in whole or in part, the Company’s distribution requirements, limitations on its ability to fund distributions using cash generated through its TRSs, the impact of general economic conditions on the Company’s operations and other factors that the Board of Directors may deem relevant. The foregoing factors may also impact management’s recommendations to the Board of Directors as to the timing, amount and frequency of future distributions.
Stock and Debt Repurchasing Program. Prior to May 15, 2025, the Company’s Board of Directors had authorized the repurchase of up to $250.0 million of the Company’s Class A common stock. Additionally, the Board of Directors has authorized Lamar Media to repurchase up to $250.0 million in outstanding senior or senior subordinated notes and other indebtedness outstanding from time to time under its senior credit agreement. The repurchase programs are currently authorized through March 31, 2026. On May 15, 2025, the Company's Board of Directors approved the increase of the amount authorized under the Stock Repurchase Program by $150.0 million, bringing the total amount authorized under the Program to $400.0 million. The Company’s management may opt not to make any repurchases under the program, or may make aggregate purchases less than the total amount authorized. During the year ended December 31, 2025, the Company repurchased 1,388,091 shares of the Company's Class A common stock outstanding for a total purchase price of $150.0 million.
Material Cash Requirements
Our expected material cash requirements for the twelve months ended December 31, 2026 and thereafter are comprised of contractual obligations, required annual distributions and other opportunistic expenditures.
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Debt and Contractual Obligations. The following table summarizes our future debt maturities, interest payment obligations, and contractual obligations including required payments under operating and financing leases as of December 31, 2025:
(In millions)
Thereafter
Debt maturities (1)
Interest obligations on long-term debt (2)
Contractual obligations, including operating and financing leases
Total payments due
(1) Debt maturities assume there is no refinancing prior to the existing maturity date.
(2) Interest rates on our variable rate instruments assume rates at the December 31, 2025 levels. See Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" for further discussion on interest rate risk.
Required Annual Distributions. As a REIT, the Company must annually distribute to its stockholders an amount equal to at least 90% of its REIT taxable income (determined before the deduction for distributed earnings and excluding any net capital gain). Our Board of Directors will continue to evaluate future dividends in order to continue to satisfy the requirements needed to maintain our REIT status.
Opportunistic Expenditures. As part of our capital allocation strategy, we plan to continue to allocate our available capital among investment alternatives that meet our return on investment criteria. We will continue to reinvest in our existing assets and expand our outdoor advertising display portfolio through new construction. We will also continue to pursue strategic acquisitions of outdoor advertising businesses and assets. This includes acquisitions in our existing markets and in new markets where we can meet our return on investment criteria.
Cash Flows
The Company’s cash flows provided by operating activities decreased $9.6 million from $873.6 million in 2024 to $864.0 million for the year ended December 31, 2025, primarily resulting from a decrease in the change in operating assets and liabilities in 2025 as compared to 2024.
Cash flows used in investing activities increased $79.7 million from $164.9 million in 2024 to $244.6 million in 2025 primarily due to a net increase in the amount of assets acquired through acquisitions and capital expenditures of $79.7 million, as compared to the same period in 2024.
The Company’s cash flows used in financing activities were $604.3 million for the year ended December 31, 2025 as compared to $703.4 million in 2024. This decrease in cash used in financing activities of $99.1 million for the year ended December 31, 2025 is primarily due to the proceeds received in the issuance of the 5 3/8% Senior Notes and net borrowings on the Term B loan, offset by an increase in cash paid for dividends and distributions, cash used for stock repurchases, and payments on the revolving credit facility.
CRITICAL ACCOUNTING ESTIMATES
Our discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate our estimates and judgments, including those related to intangible assets, goodwill impairment and asset retirement obligations. We base our estimates on historical and anticipated results and trends and on various other assumptions that we believe are reasonable under the circumstances, including assumptions as to future events and, where applicable, established valuation techniques. These estimates form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. By their nature, estimates are subject to an inherent degree of uncertainty. Actual results may differ from our estimates. We believe that the following significant accounting policies and assumptions may involve a higher degree of judgment and complexity than others.
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Asset Retirement Obligations. The Company had an asset retirement obligation of $624.9 million as of December 31, 2025. This liability relates to the Company’s obligation upon the termination or non-renewal of a lease to dismantle and remove its billboard structures from the leased land and to restore the site to its original condition. The Company records the present value of obligations associated with the retirement of tangible long-lived assets in the period in which they are incurred. The liability is capitalized as part of the related long-lived asset’s carrying amount. Over time, accretion of the liability is recognized as an operating expense and the capitalized cost is depreciated over the expected useful life of the related asset. In calculating the liability, the Company calculates the present value of the estimated cost to dismantle using an average cost to dismantle, adjusted for inflation and market risk.
This calculation includes 100% of the Company’s billboard structures on leased land (which currently consist of approximately 71,500 structures). The Company uses a 15-year retirement period based on historical operating experience in its core markets, including the actual time that billboard structures have been located on leased land in such markets and the actual length of the leases in the core markets, which includes the initial term of the lease, plus consideration of any renewal period. Historical third-party cost information is used to estimate the cost of dismantling of the structures and the reclamation of the site. The interest rate used to calculate the present value of such costs over the retirement period is based on the Company’s historical credit-adjusted risk free rate.
Acquisitions. The Company accounts for transactions that meet the definition of a business combination and asset group purchases as acquisitions. For transactions that meet the definition of a business combination, the Company allocates the purchase price, including any contingent consideration, to the assets acquired and the liabilities assumed at their estimated fair values as of the date of the acquisition with any excess of the purchase price paid over the estimated fair value of net assets acquired recorded as goodwill. For transactions that meet the definition of a business, the determination of the final purchase price and the acquisition-date fair value of identifiable assets acquired and liabilities assumed may extend over more than one period and result in adjustments to the preliminary estimate recognized in the prior period financial statements. For transactions that meet the definition of asset group purchases, the Company allocates the purchase price to the assets acquired and the liabilities assumed at their estimated relative fair values as of the date of the acquisition. If a transaction is determined to be a group of assets, any direct acquisition costs are capitalized. Transaction costs for transactions determined to be a business combination are expensed as incurred.
The fair value of the assets acquired and liabilities assumed is typically determined by using either estimates of replacement costs or discounted cash flow valuation methods. When determining the fair value of tangible assets acquired, the Company must estimate the cost to replace the asset with a new asset, adjusted for an estimated reduction in fair value due to age of the asset, and the economic useful life. When determining the fair value of intangible assets acquired, the Company must estimate the applicable discount rate and the timing and amount of future cash flows.
Lease Liabilities and Right of Use Assets. On January 1, 2019, the Company adopted ASU No. 2016-02, “Leases (Codified as ASC 842),” which resulted in recording operating lease liabilities and right of use assets on our consolidated balance sheet. Our operating lease liabilities (including short-term liabilities) and right of use asset balances were $1.49 billion and $1.50 billion as of December 31, 2025, respectively. The balances are recorded based on the present value of the remaining minimum rental payments under the leasing standard for our existing operating leases. The key estimates for our leases include (1) the discount rate used to discount the unpaid lease payments to present value and (2) lease term. Our leases generally do not include a readily determinable implicit rate, therefore, using a portfolio approach, we determine our collateralized incremental borrowing rate to discount the lease payments based on the information available at lease commencement. Our lease terms include the noncancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend the lease controlled by the lessor. The Company has determined we are not reasonably certain to exercise renewals or termination options, and as a result we use the lease’s initial stated term as the lease term for our lease population.
ACCOUNTING STANDARDS AND REGULATORY UPDATE
See Note 22, "New Accounting Pronouncements" to our consolidated financial statements included in Part II, Item 8 of this report for a discussion of our Accounting Standards and Regulatory Update.
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LAMAR MEDIA CORP.
The following is a discussion of the consolidated financial condition and results of operations of Lamar Media for the years ended December 31, 2025 and 2024. This discussion should be read in conjunction with the consolidated financial statements of Lamar Media and the related notes.
RESULTS OF OPERATIONS
The following table presents certain items in the Consolidated Statements of Income as a percentage of net revenues for the years ended December 31, 2025 and 2024:
Year Ended December 31,
Net revenues
Operating expenses:
Direct advertising expenses
General and administrative expenses
Corporate expenses
Depreciation and amortization
Operating income
Loss on extinguishment of debt
Interest expense
Income tax expense
Net income
Year ended December 31, 2025 compared to Year ended December 31, 2024
Net revenues increased $59.1 million or 2.7% to $2.27 billion for the year ended December 31, 2025 from $2.21 billion for the same period in 2024. This increase was attributable to an increase in billboard net revenues of $57.7 million and an increase in logo net revenues of $5.2 million over the prior year, offset by a decrease in transit net revenues of $3.7 million.
Net revenues for the year ended December 31, 2025, as compared to acquisition-adjusted net revenues for the comparable period in 2024, increased $45.6 million, or 2.1%. The $45.6 million increase in net revenues is due to a $47.8 million increase in billboard net revenues and an increase of $3.9 million in logo net revenues, offset by a $2.7 million decrease in transit net revenues. See “Reconciliations” below.
Total operating expenses, exclusive of depreciation and amortization and gain on disposition of assets, increased $23.6 million, or 1.9% to $1.24 billion for the year ended December 31, 2025 from $1.22 billion in the same period in 2024. The $23.6 million increase over the prior year is primarily comprised of an increase in total direct, general and administrative and corporate expenses (excluding non-cash compensation expense) of $34.2 million primarily related to the operations of our outdoor advertising assets, offset by a decrease in non-cash compensation expense of $10.6 million.
Depreciation and amortization expense decreased $136.6 million to $326.3 million for the year ended December 31, 2025 as compared to $463.0 million for the same period in 2024. The decrease is primarily due to the revision in the cost estimate included in the calculation of asset retirement obligations during 2024.
For the year ended December 31, 2025, Lamar Media recognized a gain on disposition of assets of $75.9 million as compared to a gain on disposition of assets of $6.1 million for the same period in 2024. The gain on disposition of assets for the year ended December 31, 2025 primarily resulted from the sale of its equity interest in Vistar Media, Inc., as well as transactions related to the sale billboard locations and displays.
Due to the above factors, operating income increased $242.0 million to $774.6 million for the year ended December 31, 2025 compared to $532.6 million for the same period in 2024.
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Interest expense decreased $11.3 million for the year ended December 31, 2025 to $160.4 million as compared to $171.7 million for the year ended December 31, 2024. The decrease in interest expense is related to the repayment of the Term A loans outstanding under the senior credit facility during the year ended December 31, 2024 as well as a decrease in the interest rate on the senior credit facility and Accounts Receivable Securitization Program.
Equity in earnings of investee was $0.2 million and $5.1 million for the years ended December 31, 2025 and 2024, respectively. The decrease of $4.9 million was primarily due to the sale of its equity interest in Vistar Media, Inc. in February 2025.
The increase in operating income as well as the decrease in interest expense, partially offset by the decrease in equity in earnings of investee, over the comparable period in 2024, resulted in a $246.9 million increase in net income before income taxes.
Lamar Media recorded income tax expense of $21.3 million for the year ended December 31, 2025 as compared to income tax expense of $4.5 million for the same period in 2024. The $21.3 million equates to an effective tax rate for the year ended December 31, 2025 of approximately 3.5%, which differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.
As a result of the above factors, Lamar Media recognized net income for the year ended December 31, 2025 of $593.6 million, as compared to net income of $363.5 million for the same period in 2024.
Reconciliations:
Because acquisitions occurring after December 31, 2023 have contributed to our net revenues results for the periods presented, we provide 2024 acquisition-adjusted net revenues, which adjusts our 2024 net revenues for the year ended December 31, 2024 by adding to or subtracting from it the net revenues generated by the acquired or divested assets prior to our acquisition or divestiture of these assets for the same time frame that those assets were owned in the year ended December 31, 2025.
Reconciliations of 2024 reported net revenues to 2024 acquisition-adjusted net revenues for the year ended December 31, 2024 as well as a comparison of 2024 acquisition-adjusted net revenues to 2025 reported net revenues for the year ended December 31, 2025, are provided below:
Reconciliation and Comparison of Reported Net Revenues to Acquisition-Adjusted Net Revenues
Year ended December 31,
(In thousands)
Reported net revenues
Acquisition net revenues
Adjusted totals
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Key Performance Indicators
Net Income/Adjusted EBITDA
Year Ended December 31,
Amount of Increase (Decrease)
Percent Increase (Decrease)
(In thousands)
Net income
Income tax expense
Loss on extinguishment of debt
Interest expense, net
Equity in earnings of investee
Gain on disposition of assets
Depreciation and amortization
Capitalized contract fulfillment costs, net
Non-cash compensation expense
Adjusted EBITDA
Adjusted EBITDA for the year ended December 31, 2025 increased 2.4% to $1.06 billion. The increase in adjusted EBITDA was primarily attributable to the increase in our gross margin (net revenues less direct advertising expenses, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $40.0 million, and was partially offset by an increase in general and administrative and corporate expenses of $15.2 million, excluding the impact of non-cash compensation expense.
Segmented Adjusted EBITDA
Year Ended December 31,
Amount of Increase (Decrease)
Percent Increase (Decrease)
(In thousands)
Billboard adjusted EBITDA
Other adjusted EBITDA (1)
Corporate expenses (2)
Adjusted EBITDA
(1) Logo and transit advertising do not meet the criteria to be reportable segments, and accordingly, are included in Other.
(2) Corporate operations are not an operating segment. Corporate expenses include expenses related to infrastructure and support, including information technology, human resources, legal, finance and administrative functions of the Company, as well as overall executive, administrative and support functions.
Adjusted EBITDA for the year ended December 31, 2025 increased 2.4% to $1.06 billion. The increase in adjusted EBITDA was primarily attributable to the increase in our billboard advertising adjusted EBITDA of $31.2 million, offset by a decrease in other adjusted EBITDA of $1.7 million and an increase in corporate expenses of $4.4 million, excluding the impact of non-cash compensation expense.
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Net Income/FFO/AFFO
Year Ended December 31,
Amount of Increase (Decrease)
Percent Increase (Decrease)
(In thousands)
Net income
Depreciation and amortization related to real estate
Gain from sale or disposal of real estate, net of tax
Adjustments for unconsolidated affiliates and non-controlling interest
FFO
Straight-line expense
Capitalized contract fulfillment costs, net
Non-cash compensation expense
Non-cash portion of tax provision
Non-real estate related depreciation and amortization
Amortization of deferred financing costs
Loss on extinguishment of debt
Capital expenditures – maintenance
Adjustments for unconsolidated affiliates and non-controlling interest
AFFO
FFO for the year ended December 31, 2025 was $827.9 million as compared to FFO of $799.0 million for the same period in 2024. AFFO for the year ended December 31, 2025 increased 3.4% to $847.2 million as compared to $819.6 million for the same period in 2024. The increase in AFFO was primarily attributable to the increase in our gross margin (net revenues less direct advertising expenses, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $40.0 million, partially offset by an increase in total general and administrative and corporate expenses (excluding the effect of non-cash compensation expense) of $15.2 million.
