Emerald Expositions Events, Inc. Aktie

Welcome to the Emerald Holding Fourth Quarter and Full Year 2025 Earnings Conference Call. [Operator Instructions]

I will now turn the call over to Erica Bartsch, EVP of Strategy and Communications at Emerald.

Good morning, everyone, and welcome. Before we begin, let me remind everyone that this call will include certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This includes remarks about future expectations, beliefs, estimates, plans and prospects. In particular, the company's statements about projected results for 2026 are forward-looking statements. Such statements are subject to a variety of risks, uncertainties and other factors that could cause actual results to differ materially from those indicated or implied by such statements. For a discussion of these risks, uncertainties and other factors, please refer to the company's SEC filings, including its most recently filed periodic reports on Form 10-K and Form 10-Q as well as the company's earnings release, all of which can be found on the company's Investor Relations website. The company does not undertake any duty to update such forward-looking statements.

Additionally, during today's call, management will discuss non-GAAP measures, which it believes can be useful in evaluating the company's performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP. The reconciliation of these non-GAAP measures to their most comparable GAAP measures can be found in the company's earnings release, which is available on the company's Investor Relations website. As a reminder, this conference is being recorded, and a replay of this call will be available on the company's Investor Relations website through 11:59 p.m. Eastern Time on March 20, 2026.

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

Thank you, Erica, and good morning, everyone. On today's call, I'll begin with a review of our fourth quarter and full year 2025 performance, followed by an update on our strategic priorities and outlook. And then I'll turn the call over to David Doft, our CFO, to review our financial results in greater detail.

2025 marked a transformational year for Emerald. Our teams remained focused on execution, translating strategic priorities into measurable progress and positioning the business to be more resilient, better diversified and structurally stronger as we enter 2026.

Over the course of the year, we delivered solid year-on-year growth in revenue and adjusted EBITDA, excluding insurance proceeds of 16.2% and 26.8%, respectively, along with healthy organic growth. Reported organic revenue grew 1.1% in the full year. And if we assume the recently completed acquisitions of This is Beyond, Insurtech Insights and Generis, were part of the portfolio in 2024, organic revenue for full year 2025 was up a solid 4.8%. These results reflect the strength of our diversified portfolio with balanced contributions from organic growth acquisitions and sustained customer demand across our core businesses. Importantly, this performance highlights the predictability and durability of our earnings model and reinforces our confidence in our strategy.

Over the past year, that strategy has continued to focus on actively reshaping the portfolio to increase our exposure to higher growth end markets while completing the exit of several underperforming brands that didn't recover post-COVID. This was a deliberate strategy executed through a mix of organic actions and targeted acquisitions, including This is Beyond, Insurtech Insights and Generis, which expanded our presence in attractive sectors such as luxury, manufacturing and executive peer-to-peer networks. These moves were not about growth for growth's sake, but about ensuring that we own a well-diversified portfolio of only high-quality events that deliver real ROI for our customers and long-term value for shareholders. As a result, we believe we enter 2026 with the strongest and most diversified portfolio we've ever had, which we believe will drive predictable and highly cash flow generative growth in the years ahead.

The mix of our business today, the quality of customer demand and our visibility into future bookings gives us confidence in the strength of the company. That confidence reflects the fundamentals of the portfolio and our execution independent of any future strategic actions. As we look ahead, we see clear momentum entering 2026. Pacing remains healthy across the business, supported by strong rebooking activity and sustained customer engagements. These trends reflect continued confidence in the value our events deliver and the role of live in-person engagement in our customers' go-to-market strategies. Industry data consistently shows that face-to-face engagement remains one of the most effective ways to drive high-value B2B outcomes, particularly in complex or multi-stakeholder purchasing decisions.

Taken together, this momentum reinforces our view that live engagement remains a critical and efficient growth channel across industries. Against that backdrop, we're initiating full year 2026 guidance that reflects the strength of the portfolio today and our expectations for continued disciplined execution. For 2026, we expect revenue in the range of $490 million to $495 million, and adjusted EBITDA in the range of $137.5 million to $142.5 million. David will walk through our assumptions in more detail in a moment.

Building on our outlook for 2026, the demand supporting our business remains largely centered on the U.S. market, where our events serve as important marketplaces for both domestic and international participants. We continue to see solid interest from international exhibitors seeking access to U.S. buyers, which represents a meaningful opportunity to further serve global customers over time. As it relates to tariffs, we continue to monitor the situation closely and have incorporated the potential impacts into our planning for 2026. Developments in the Middle East have not had a meaningful effect on our operations to date, and we do not maintain a direct presence in the region.

Overall, our exposure remains well balanced with no material concentration risk, and we remain disciplined in how we approach international expansion. This progress along with the broader portfolio repositioning shapes our priorities for the year ahead. In 2026, our focus will be on disciplined execution and building on the strong foundation established across the business. We will continue to drive organic efficiencies through targeted investments in automation, process optimization and scalable platforms that support margin expansion over time. These efforts are designed to increase operating leverage, enhance the customer experience and generate incremental upside as the portfolio continues to scale.

M&A will also remain a key part of our growth strategy. We will deploy capital selectively, focusing on tuck-in and bolt-on acquisitions that strengthen the portfolio, expand our presence in attractive end markets and drive long-term value within a disciplined return framework. Alongside this ongoing execution, our Board continues to actively evaluate strategic options as previously announced in December. There are no updates to share at this time, and we will not be commenting further on this process until an agreement is reached or the review is otherwise completed.

In summary, 2025 was a transformational year. We strengthened the business, improved its quality and resilience and delivered a solid financial performance. As we enter 2026, we do so from a position of strength with strong demand, disciplined execution and a clear path for continued value creation.

With that, I'll turn the call over to David to walk through our financial results and outlook in more detail.

Thank you, Hervé, and good morning. Let's begin with a review of fourth quarter and full year financials. For the fourth quarter, revenue was $132.7 million compared to $106.8 million in the prior year quarter. This was driven primarily by the businesses we acquired in 2025, as well as 0.3% reported organic revenue growth, which takes into account the impact of acquisitions, scheduling adjustments and discontinued events. However, if we assume the recently completed acquisitions of This is Beyond, Insurtech, and Generis, were part of the portfolio in Q4 2024, organic revenue in Q4 2025 would be up 5.3% compared to the prior year quarter.

For the full year 2025, total revenue was $463.4 million, an increase of 16.2% versus the prior year, primarily due to revenue from acquisitions and higher organic revenues. Full year reported organic revenue increased 1.1% year-over-year. As Hervé mentioned, had the acquisitions of Generis, This is Beyond, and Insurtech been a part of our portfolio during the full year 2024, organic revenue growth would have increased 4.8% year-over-year.

Adjusted EBITDA was $36.3 million in the fourth quarter compared to $33.1 million in the prior year period, an increase of 9.7%. For the full year, adjusted EBITDA totaled $127.1 million as compared to $101.7 million in the prior year period, an increase of 25%. The improvement in both periods was driven by strong revenue growth, particularly from the acquired businesses, offset by higher bonus expense.

Turning to our expenses. On a reported basis, SG&A was $88.7 million in the fourth quarter versus $34.6 million in the prior year quarter. For the full year, SG&A was $241.2 million as compared to $170.4 million in the prior year period. The increase in both quarter and full year was primarily driven by contingent consideration remeasurement adjustments, reflecting strong performance and outlooks of recently acquired businesses as well as transaction and integration costs.

In the fourth quarter, free cash flow was $10.1 million versus $18.4 million in the prior year quarter. For the full year, free cash flow came in at $34.3 million versus $37.0 million in 2024. As we noted in prior quarters, underlying free cash flow for the year would have been stronger than reported given the timing of recent acquisitions. Our full year cash flow was impacted by the acquisitions of Generis, This is Beyond, and Insurtech Insights for a total of $30 million of cash flow from operations that would have been generated by the company if we had owned the businesses at the beginning of the year as a portion of event-related cash came to the company as an offset to purchase price rather than in Emerald's operating cash flow.

Free cash flow was also impacted by $6.5 million of fees related to the January and August 2025 refinancing of our debt that flows through the financials. Therefore, when taken together, this impacted our free cash flow by $36.6 million in the full year, which we believe should be taken into account to understand the cash generation of the underlying operations of the company, as those inflows are not reflected in reported free cash flow of cash flow from operations minus CapEx. This is important context when evaluating the free cash flow conversion and strength of our cash generation.

Shifting to our balance sheet. We had $100.9 million in cash as of December 31 versus $95.4 million as of September 30. Our total liquidity is $210.4 million as of December 31, including $110 million available on our revolving credit facility. As of December 31, our net debt to covenant EBITDA ratio was 2.86x, below our sub 3.0x financial policy target. Going forward, we remain focused on disciplined capital allocation across M&A, organic growth, leverage management and returns to shareholders.

In the fourth quarter, we repurchased 282,386 shares of our common stock at an average price of $4.56 per share under our share repurchase program. For the full year, we repurchased 4,058,604 shares at an average price of $4.32 per share, reflecting our confidence in the business and a disciplined approach to capital allocation. As of December 31, 2025, we had $24.6 million remaining available under the current share repurchase authorization. The Board also declared a quarterly dividend of $0.015 per share, reflecting our continued commitment to returning capital to shareholders within a disciplined and balanced capital allocation framework.

Finally, as Hervé noted, given the solid pacing and strength and diversity of our portfolio, for full year 2026, we expect to deliver $490 million to $495 million in revenue and $137.5 million to $142.5 million in adjusted EBITDA. At the midpoint, this represents approximately 6% revenue and 10% adjusted EBITDA growth year-over-year. This outlook reflects the benefits of our portfolio repositioning, continued demand for live engagement across our core markets, and the ongoing operational efficiencies, while maintaining a balanced view of the broader macro environment.

In closing, we continue to execute with financial discipline, maintain a strong balance sheet and deliver consistent performance aligned with our expectations. With the progress we've made across the portfolio and the outlook we've provided, we are confident in our ability to execute in 2026 and continue creating long-term value for shareholders.

With that, we will open the call for questions. Operator?

[Operator Instructions] Your first question comes from the line of Barton Crockett from Rosenblatt.

I guess, first thing I was just kind of curious about was the -- you mentioned some of the machinations around free cash flow this year. If we're looking at your guidance for 2026, can you give us a sense of presuming that this is a normalized period unlike last year, what the free cash flow conversion of EBITDA should be in your opinion?

Yes. We have high incremental flow-through of EBITDA to free cash flow. We would expect with that sort of EBITDA growth that free cash flow would be $85 million to $90 million. The one caveat to that is the level of acquisition and integration expense that might come with it, but as a onetime, but the underlying business, that's what we would expect.

Okay. And in terms of -- I know you're -- you can't really talk about the process that's happening right now, but was there any expense -- discrete expense attached to this process that's worth calling out as -- or was it just really immaterial to the P&L?

There's a moderate amount that's in the onetime bucket related to the transaction that, I don't think really that much of a needle-mover at the end of the day. As this progresses, obviously, it could be a bit more expensive in the first quarter of -- and first half of 2026. So we'll have to keep you updated.

Okay. And then I know your direct exposure to kind of the current war in the Middle East is really -- you don't really have direct exposure. But indirectly, is this doing anything to the environment for -- I know it's still early days and perhaps time will tell, but people's willingness to kind of travel the trade shows.

No, I don't think so, Barton. We've been obviously staying very close to the impacts. The exposure that we have is really just about international exhibitors coming from the Middle East to the U.S. events. And it's really limited. It's very, very -- it's minimal. So...

Less than 1% of our revenue comes from exhibitors from, I'd say, a very broadly defined Middle East, it's Middle East and contiguous regions.

That's right. So the impact is -- we monitor it closely, but we're not seeing anything meaningful at all.

Okay. All right. Well, that's great to hear. And then just also -- just so we kind of understand, is this process is ongoing, there's not really going to be an opportunity for you guys to kind of look at acquisitions on your side. That's really -- you guys have been opportunistic purchasers in a consolidating industry, but that has to take a back seat while you go through this process. Is that correct?

No. Our Board is continuing our strategy of diversifying, as I mentioned in our prepared remarks, and we have a good pipeline, and we're engaged in a number of conversations. So we don't expect things to change at least for the foreseeable future. We'll update you as we know more about the process.

Your next question comes from the line of Allen Klee from Maxim Group.

Can you give us any -- with your guidance, how it maybe takes into effect your visibility into revenues and how that kind of looks?

Sure. Our guidance takes into account, obviously, our -- not just our budget and plan, but our sales pacing that we track closely and our -- the year-over-year change in our sales pacing is tracking the guidance that we've given. At the same time, sitting here today, we've sold over -- sorry, over 70% of the year's revenue is already contracted. And obviously, for the first half of the year, much higher and a little bit more to sell in the back half of the year.

And any comment on the -- how the acquisitions you made last year of how they're performing and how you're feeling about integrating them and optimizing them?

We're in different phases of integration for the various acquisitions, obviously, given the timing of the acquisitions, but they're all on plan to integrate and the performance is meeting our expectations and the plan that we have for them. So we're pleased with the acquisition's performance.

Okay. Great. And then on the Las Vegas Convention Center that had some -- due to some construction had an impact on the business in '25. How what's the status update there?

Yes, it's a good question. The construction in the Las Vegas Convention Center is now completed, was completed at the end of 2025. And so our -- there were certain impact Emerald brands that were impacted by the construction last year, as you know, and as we've discussed, but we really expect to cycle past that in 2026.

When do you have your next event there?

Next week. Monday or Tuesday.

Is it your sense that it's no longer going to be having an impact or you're not sure?

Yes. I think that we need to obviously have the event. I think that we'll cycle through it in 2026. And I think some of the brands that have a couple of events in 2026 will do better in the second edition than in the first, as customers see the renovated convention center and the ease of doing business in the new venue. So we expect -- we'll keep you updated on that, but we expect to cycle through it through 2026.

Okay. Great. And then any update on your Commerce and Content businesses of what your kind of objectives are for '26? Yes, that's it.

Sure. I'll start and turn it over to David. On the -- on both Content and Commerce, there are smaller parts of our business, single-digit percent revenue for Content and Commerce. And -- but our strategy remains the same. Our strategy, as we've discussed in the past, for the Commerce business, it continues to -- we continue to look at expanding across different verticals and look for customers in different verticals. And for the Content business, we have launched a lead generation business from leveraging the content. And we have early signs of success and that there is customer interest and sales have begun in -- starting in October of last year. And so we're confident that the lead gen portion of the Content business will drive value to customers and that we'll recapture some of that value.

I'd say, overall, keep in mind, the events business at Emerald is over 90% of our revenue. It's the driver of our financial performance, and that includes the growth rate implied in our guidance. The Content business has had a tough couple of years post-COVID and broader disruption in digital advertising. The evolution of the offering in those different ways we're beginning to monetize it are helpful in stabilizing that business, and we expect a more stable business, but not a meaningful contributor to growth in '26 as these new revenue streams ramp up.

Great. Can you comment on what you've been doing on the AI front and what your plans are for '26?

Sure. On the AI capabilities, we announced -- I think it was last quarter that we were implementing AI agents across several of our events to improve the exhibitor experience. And so the agents essentially enable access to all of the information in real time that the exhibitors will need, and that really improves our service. It helps them get information in real time and really makes it much easier to navigate the event. So that has been going well, and we expect to scale that across many more of our events moving forward.

But beyond that, we also have some other AI pilots across the business. There are some in finance and marketing and customer service, and content, in -- I think I said marketing. So we have some early results, and the adoption is growing within the company, and we will start to measure the gains of all of these AI pilots that we've put in place.

There's real incremental scalability that we're already seeing. I think the AI agents for events on their website, it sounds like a kind of obvious thing, but I think what might not be as well understood is that down the line, it means that the number of calls into salespeople or customer success people is dropping, which makes those roles more scalable, allows our salespeople to focus more on selling, not answering questions about the goings on at an event or how does someone handle something. And so we're already seeing the benefits of that in the shows that have rolled out the agents. And again, given the cadence of our events, right, our shows roll out all year long. So you have to wait for the show to launch for the marketing of that event to kick off for the agent to then go live. So it's not like we could just flip the switch on everything because it's just not how our business operates.

I'd also add, Hervé mentioned finance, a key part of our modernization of the finance stack at Emerald is taking place in 2026. And with that newer, more modern solutions, AI might be overstating a term, but there's a whole lot more automation and again, makes us -- and will make us a lot more scalable. And a key part of our longer-term margin plans is around automation and scalability to allow us to drive more incremental flow-through of revenue to the bottom line. And we're in the middle right now of some very important projects that as we finish this year and roll into next year, will make us that much more efficient and that much more strong.

That's great. My last question is, could you comment on -- since you said earlier that you're continuing to look at M&A, how would you characterize the M&A environment?

The M&A environment remains strong. We're such a fragmented industry. There are so many smaller independent entrepreneurs that launch events in so many different sectors. So the amount of opportunity is not lacking, and we've built, as we've shared in the past, our own proprietary database of M&A opportunities in the high-growth sectors that are really attractive to us. And so we are pursuing these opportunities and are engaged in meaningful conversations with many of them. We'll update you as things progress.

And we have reached the end of our question-and-answer session. I will now turn the call back over to Hervé Sedky for closing remarks.

Very good. Well, thank you all very much for joining us today. 2025 was a transformational year, as I've said, and we made the business stronger, improved its resilience and delivered strong results. And as we head into 2026, demand remains strong. Our execution is disciplined, and we see a clear path to continued building value. So with that, I thank you for joining us and wish you a good day.

This concludes today's conference call. You may now disconnect.

Thank you for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the Emerald Holding Third Quarter 2025 Earnings Conference Call. [Operator Instructions]

I will now turn the call over to Erica Bartsch, EVP of Strategy and Communications at Emerald. Please go ahead.

Thank you. Good morning, everyone, and welcome. Before we begin, let me remind everyone that this call will include certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This includes remarks about future expectations, beliefs, estimates, plans and prospects. In particular, the company's statements about projected results for 2025 are forward-looking statements. Such statements are subject to a variety of risks, uncertainties and other factors that could cause actual results to differ materially from those indicated or implied by such statements. For a discussion of these risks, uncertainties and other factors, please refer to the company's SEC filings, including its most recently filed periodic reports on Form 10-K and Form 10-Q, as well as the company's earnings release, all of which can be found on the company's Investor Relations website. The company does not undertake any duty to update such forward-looking statements.

Additionally, during today's call, management will discuss non-GAAP measures, which it believes can be useful in evaluating the company's performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP. A reconciliation of these non-GAAP measures to their most comparable GAAP measures can be found in the company's earnings release, which is available on the company's Investor Relations site. As a reminder, this conference is being recorded, and a replay of this call will be available on the company's Investor Relations website through 11:59 p.m. Eastern Time on November 7, 2025.

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

Thank you, Erica, and good morning, everyone. I'll begin our call today with a review of our third quarter performance, followed by a discussion of our strategic initiatives. I'll then turn things over to David Doft, our CFO, to run through our financials.

Throughout the year, we've executed with discipline and consistency across the portfolio, advancing the strategic priorities we set at the start of 2025. Through the first 9 months of the year, we delivered solid growth in revenue and adjusted EBITDA, along with solid organic growth, underscoring the strength and resilience of our increasingly diversified model and the progress we're making towards our long-term objectives.

The third quarter, historically, both our smallest and softest period unfolded largely as expected. During the quarter, we strengthened our portfolio with the acquisition of Generis, a leader in peer-to-peer executive events, and advanced innovation initiatives to enhance the customer experience and drive scalable efficiencies across our operations. With Generis, Emerald's portfolio now spans an even broader mix of high-growth sectors, strengthening our resilience across market cycles and reducing exposure to slower growth verticals. Combined, these actions reflect our commitment to building dynamic, high-impact platforms that help businesses connect and grow in an increasingly complex marketplace.

Based on our progress to date, we are increasing our full year 2025 guidance to reflect the Generis acquisition and narrowing our guidance range given our increased visibility as we approach year-end. David will provide more details on this in a moment.

Stepping back from our results, what continues to define our business is focus, consistency and the power of live engagement to drive growth. Live events remain one of the most reliable ROI channels for B2B decision-makers. In fact, Harvard Business Review has found that face-to-face requests are 34x more effective than e-mail at generating action. And in a recent Center for Exhibition Industry Research, survey of more than 9,000 exhibitors and attendees, 70% agreed that in-person meetings are a highly effective way to build and maintain customer relationships.

We saw this dynamic firsthand at this October's Advertising Week in New York, one of our flagship events. The show delivered record-setting attendance and engagements this year, a strong affirmation of the appetite of high-quality in-person experiences that drive business results.

At Emerald, our customers continue to prioritize face-to-face engagement as a core part of their sales and marketing strategy, recognizing the efficiency, credibility and measurable ROI live events deliver compared to digital and other channels. We see this as a structural feature of our business, and it reinforces Emerald's position as a trusted partner helping businesses connect, meet, learn and transact more efficiently.

A clear indication of that strength is our pacing for 2026, which reflects sustained customer confidence across our portfolio. We're seeing solid rebooking momentum for the first half of 2026, reinforcing the confidence our customers have in the value and reach of our portfolio. Ongoing exhibitor renewals and strong forward bookings highlight the resilience of our model, and demonstrate that live in-person engagement remains a critical and effective growth channel across industries.

Our international business also continues to make measured progress and remains an important long-term growth opportunity for us. While international exhibitors represent roughly 10% of total revenue, our exposure is balanced across regions with no material concentration risk. We're seeing continued momentum in markets such as Italy, Germany, the United Arab Emirates and Brazil, signaling growing global interest in accessing the U.S. market. As trade conditions stabilize, we anticipate a more constructive environment heading into 2026 and are encouraged by progress in this week's trade negotiations in Asia.

Beyond financial performance, the third quarter underscores how Emerald continues to lead with customer connection and thought leadership. We're actively advancing our technology initiatives with the launch of an AI-powered event agent across selected shows. The platform automates many of the attendee interactions before, during and after the event. This marks an early step in how we're using AI to simplify the attendee experience and create more meaningful interactions on sites. This tool will help exhibitors and attendees access key event information in real time, improving service, simplifying setup and enhancing the overall customer experience. We're looking to expand this and other AI-driven platforms across our events later this year and into 2026.

At the same time, we're sharpening our go-to-market execution through more strategic selling efforts and greater centralization of our marketing functions. These initiatives are designed to strengthen brand consistency, improve lead generation and create a more scalable commercial engine across the portfolio.

For example, to demonstrate the value of live engagement, we recently brought senior marketers and business leaders together in a curated setting to showcase how in-person connections accelerate ideas, partnerships and growth. These experiences not only reinforce our customers' belief in the power of live events, but also highlights Emerald's role as a trusted partner driving innovation across the industry. Our continued focus to diversify the portfolio into higher-growth sectors that leverage Emerald's scale and best practices are strengthening the business, and positioning us for sustained performance next year and beyond.

With the completion of the Generis purchase in August, we've now executed 3 meaningful acquisitions this year, which advance our strategy to build a high-growth portfolio of live experiences that connect business people in attractive end markets and deliver measurable ROI to customers. This isn't about any single transaction. Rather, it reflects a deliberate and disciplined pattern of growth. Emerald remains a highly attractive acquirer of B2B events, executing a focused strategy to optimize our portfolio, expand into additional high-value verticals, and creating premium experiences that connect businesses operating in dynamic industries.

Through Generis, we gained a leader in peer-to-peer executive event space. Generis hosts 11 events across the U.S. and 6 in Europe annually, engaging senior decision-makers through high-impact insight-driven formats, peer-to-peer connections and curated one-to-one meetings. With this addition, Emerald will host more than 50 peer-to-peer events annually, further solidifying our position as a premier platform for high-level results-oriented networking.

At the same time, our efforts to build a centralized platform to deliver events at scale allows us to invest in new technologies and capabilities to make all of our events stronger. It also allows for a seamless sharing of best practices, scale cost benefits and improved margins over time. Moving forward, we will continue to take a strategic and selective approach to M&A, identifying opportunities that drive meaningful growth and long-term value for shareholders, while enhancing the experience and outcomes we deliver for our customers.

To sum up, our teams continue to execute with focus and consistency, advancing our strategy, deepening customer engagement and driving operational efficiency. The fundamentals of our business remains strong, and we're confident in our ability to deliver on our full year commitments and build momentum into 2026.

With that, I'll turn the call over to David to review our financial results.

Thank you, Herve, and good morning. Let's begin with a review of third quarter financials. The third quarter is by far our smallest, accounting for approximately 16% of pro forma full year 2025 revenue based on our guidance range. Total revenue in the quarter was $77.5 million, compared to $72.6 million in the prior year quarter. Reported organic revenue, which excludes the impact of acquisitions, scheduling adjustments and discontinued events, was down 6.8% year-over-year.

As our [indiscernible] quarter, the Q3 decline primarily reflects the effects of ongoing construction at the Las Vegas Convention Center and to a lesser extent, some tariff headwinds, both of which specifically affected our largest event of the quarter, and were anticipated in our guidance range. This event alone had an approximately 6% negative impact on organic revenue in the period.

It's important to note that our overall exposure to tariffs at Emerald is quite limited. However, because this was our smallest quarter, and our largest event in the quarter had some tariff exposure, the effect is more visible in the period than it would be on a full year basis. Also, if we assume the recently completed acquisition of This is Beyond and Insurtech, were part of the portfolio in Q3 2024, organic revenue in Q3 2025 would have been down 2.9% compared to the prior year quarter. Note that Generis did not post any events in the third quarter, and therefore, we did not recognize any revenue from the transaction in the quarter, while absorbing about $1 million in cost related to Generis' SG&A.

Year-to-date, total revenue was $330.7 million, an increase of 13.3% versus the prior year, primarily due to revenue from acquisitions and higher organic revenues. Year-to-date, organic revenues increased 1% year-over-year. The acquisitions of Generis, This is Beyond and Insurtech would have increased organic revenue growth to 4.3% year-over-year, had they've been part of our portfolio during the first 9 months of last year.

Adjusted EBITDA was $12.8 million in the third quarter compared to $12.5 million in the prior year period, an increase of 2.4%. The increase was primarily driven by higher operating income from our events and continued management of underlying costs. Year-to-date, adjusted EBITDA totaled $90.8 million as compared to $68.6 million in the prior year period, an increase of 32.4%. The improvement was driven by strong revenue growth, particularly from the acquired businesses and ongoing focus on optimizing margins.

Turning to our expenses. On a reported basis, SG&A was $51.3 million in the third quarter versus $40.8 million in the prior year quarter. Year-to-date SG&A was $152.5 million as compared to $135.8 million in the prior year period. The increase in both periods is largely due to incremental expenses from acquisitions, higher stock-based compensation, remeasurement of contingent consideration, and elevated legal and consulting costs related to our transactions.

Underlying cost increases remain muted. In Q3, free cash flow was slightly negative as compared to a $6.7 million inflow in the prior year quarter. I want to note that free cash flow in the quarter was impacted by the timing of payables tied to one of our large shows, where cash was paid to a vendor in early July this year versus June of last year. This timing shift resulted in a high single-digit million outflow in the third quarter but had no impact on our year-to-date underlying cash generation. Additionally, as was the case in both the first and second quarter, underlying free cash flow in the third quarter would have been stronger than reported given the timing of recent acquisitions. Specifically, the Generis acquisition closed ahead of their second half events, and most event-related cash was collected prior to the transaction, thus flowing to Emerald through a purchase price adjustment, rather than through standard collection of receivables.

As a result, those inflows are not reflected in reported free cash flow, and cash from operations [ minus ] CapEx. We believe this is an important context when evaluating the free cash flow conversion and strength of our cash generation. Our year-to-date free cash flow is similarly impacted by the acquisition of Generis in Q3, and This is Beyond an Insurtech Insights in the first half of the year, for a total of $30 million. And from $5.5 million of fees related to our January 2025 refinancing of our debt that flows through the financials. Year-to-date, this impacted our free cash flow by $35.5 million, which we believe should be taken into account to understand the cash generation of the underlying operations of the company.

Shifting to our balance sheet. We had $95.4 million in cash as of September 30 versus $156.4 million as of June 30. This is after funding the Generis acquisition, which closed in the third quarter. Our total liquidity is $205.4 million as of September 30, including the full availability on our $110 million credit facility. As of September 30, our net debt to covenant EBITDA ratio was 2.96x, slightly below our sub 3.0x financial policy target following the acquisition of Generis. As we move forward, we continue to be committed to disciplined capital deployment across M&A, organic growth, managing our leverage and shareholder returns.

In the third quarter, we repurchased approximately 116,000 shares of our common stock at an average price of $4.87 per share under our share repurchase program. Since the beginning of the program in 2021, we have repurchased a total of 17 million shares of our common stock for $70 million. In recognition of our continued financial strength, Emerald's Board of Directors recently approved an extension and expansion of Emerald's share repurchase authorization, allowing for the repurchase of up to $25 million of our common stock through December 31, 2026. At the end of the third quarter, we had $20.3 million remaining available under the prior share repurchase authorization. The Board also declared a quarterly dividend of [ $0.015 ] per share. This decision underscores our commitment to returning value to shareholders while maintaining a balanced approach to capital allocation.

Finally, as Herve noted, we have adjusted higher and narrowed our full year guidance range to $460 million to $465 million in revenue, and $122.5 million to $127.5 million in adjusted EBITDA to reflect the Generis acquisition, aligned with our year-to-date performance and provide a more focused outlook for the remainder of the year. As we have shared before, this outlook factors in the potential impact of tariffs.

In summary, we're executing with financial discipline, maintaining a strong balance sheet and driving consistent performance in line with our expectations. All while progressing well in our efforts to strategically improve our portfolio for sustained profitable growth in the future. We remain confident in our ability to deliver on our full year guidance and create long-term value for our shareholders.

With that, we'll open the call for questions. Operator?

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

Congratulations on the growth in Advertising Week. The -- one of the things that -- just listening to you kind of walk through what's happening that I was wanting to explore was some of the commentary around tariffs and international. David, I think you mentioned something about a $6 million impact that I think you attributed to tariffs, but you were also talking about the construction in Las Vegas. And I just want to clarify, was that inclusive of both of those things? Or was that just a tariff impact?

No. That's inclusive of both of those items. The tariff impact is actually the lesser of the items of that impact. We've been talking all year, maybe even longer about the issues around the construction of the convention center, basically related to larger shows that are in multiple halls that used to be side-by-side, but now are split on opposite side the convention center, and it created a really difficult customer experience. And so following the [ first ] of those events, which really was last year, there was some pretty negative pushback that impacted our bookings for this year, both earlier this year as well as in this quarter.

Thankfully, the construction is on track to be completed by the end of this year, which is great. Which means that next year our events will be able to go back to their normal structure and having the halls next to each other, which will meaningfully improve customer experience again. So we're enthusiastic about cycling this impact next year. But unfortunately, it's something we've had to manage for the last few quarters. I think we've talked about it probably on every earnings call. And in this quarter, again, because it's such a small quarter, and I know we're emphasizing that a lot, but it's true. And we had a large event that was impacted, it abnormally impact our overall reported our growth rate.

But the bulk of the issue was related to the customer experience issues and kind of compounding over a couple of shows. And then the tariff issue was a bit more minor, but it was real for this particular event and a couple of others at Emerald, but not broad-based across the portfolio.

Okay. All right. So you were spending some time talking about your international attendance, around 10% of your total. And there was -- [indiscernible] factor to some degree into the discussion. So I'm just wondering, overall, this year, this kind of unusual trade environment, how much of an impact has that had, would you say in -- does it feel like now that the world has kind of gotten accustomed to this whole tariff -- I mean, this whole kind of approach of trade policy in the U.S. that there might be a bit of a tailwind as we go into next year, are you getting that sense?

Yes. So this is Herve, Barton. So in terms of the impact of tariffs, we factored that into our plans for 2025. We had -- as we provided guidance we had expected that tariffs would have some impact. And the reality is that in some markets, we have been impacted. So countries like China and Canada, we've definitely seen an impact.

But as I mentioned in my prepared remarks, we've seen a -- and our international sales team has done a really good job of driving business from other markets that are looking to expand in the U.S. and to take advantage, quite honestly, of entering the U.S. market. And so the net effects of tariffs is a very manageable impact for our business overall. But we're definitely seeing in a handful of markets.

I think you're right, Barton. As we cycle this year, we're hopeful that next year is a bit more normal. I think it's too early to say that it's a tailwind, but I think the year-over-year change shouldn't be as meaningful. And I think for two reasons, right?

One is the cycling of it and the uncertainty. And obviously, you take the hit up front, not necessarily incremental hits, especially if things start to incrementally better, and we're hopeful it will based on surely a little bit of movement this week with some of the Asian countries, though they're admittedly not fully wherever want it to be. But also as Herve [indiscernible], the effort by our international sales team to reach into other markets to fill the gap will actually be a really nice benefit for us in the long term. And we've been talking about investment into our international reach for sales into our U.S. based shows for a couple of years before the tariff issue was really an issue. So we already had been expanding meaningfully our international agent network which are commission-based agents not on our payroll, but who are actively selling our events into dozens of markets around the country. I think we're up to about 100 of these agents.

Two years ago, I think we had 40. So that's more than double the number of people that are out there. And we haven't seen as much of the impact because of the tariffs, of the benefit of that. But we see it in the underlying data in the region to these other countries. So if some of the more impacted countries from tariffs begin to normalize, then we should have that sort of tailwind. It's just -- it's a little difficult to know exactly when that's going to happen, but we are hopeful that at least the incremental hit won't be there next year, which by nature, is a benefit to our growth rate in 2026.

Okay. And then David, one other question I had was in -- so I see, obviously, your updated guidance range for 2025 to include the Generis acquisition. If that acquisition hadn't happened, would you be in a place where you would be reiterating the former guidance that you had? Or -- if you can update on that, that would be interesting.

So we are absolutely within the guidance range, excluding Generis. It is the lower half of the range, to be clear, and there is some of the guidance impact on revenue, and it's more the mid part of the range on EBITDA. So we're tracking well on profitability. There's been a little bit more of the revenue volatility as we fear could happen, which is why we created the range we created. So it's all still within that range. But it is the lower half of revenue and kind of more mid-ish on [indiscernible] on EBITDA.

Okay. And then in terms of the Generis impact, is this just like 6 months of Generis, so maybe the full year impact of Generis would be larger next year?

Correct. So Generis, their events are largely split between first half and second half. We closed the deal in the middle of August. So we have 4.5 months of Generis, but they have no events from June through September. So their third quarter this year, no revenue. So it's all expensed. So we didn't miss out anything in the second half on revenue, and there'll be some events in the fourth quarter that we'll benefit from. But ultimately, the first half of the year is about that $10 million of revenue that we didn't get from Generis that we'll get next year.

Your next question comes from Allen Klee with Maxim Group.

Yes. Just following up on -- you're mentioning that there was -- there'll be $10 million incremental revenue from Generis next year. If I -- if we looked at all the acquisitions, you made in 2025 and you didn't make them all in January -- none of them on January 1.

How much revenue did they have in 2025 that you were not able to recognize because of the timing of when you acquire them?

For the other acquisitions in [indiscernible], all of their events happened post close. There might have been a couple of dollars of online digital revenue, but not even $0.5 million. So it's basically [ 0 ] preclose. So there's not going to be a pro forma benefit of incremental revenue in '26 for Beyond and Insurtech. Only Generis has that [indiscernible].

Okay. And then following up on the Las Vegas construction comments. Is there a general sense of like over the whole year? How much of an impact that's had on your financial results so that we could think about maybe that recovers next year?

It's a little difficult to be precise on that admittedly, but we get a lot of customer feedback that's qualitative about why they may not come back, or skip a version or 2 of the show. And this was the dominant factor in the declines at this show that -- and so we're -- it makes sense to talk about it, like we know it's real. There are a lot of complaints and people say [indiscernible] the construction is done to come back because it really did impact the experience in [indiscernible] and with that, the ROI. And these shows are about ROI.

But we know, based on the prior years that the event was healthy and delivering. And so this is really the key change that took place that led to the change in dynamics and performance of the event. The -- so it's hard to give a precise number. It's a few million dollars as you back into the math.

Okay. And then you talked about your AI power tool. Could you maybe give an example so we can kind of understand what it's projected to do?

Sure. So the AI-powered tool that we just launched and that we will be scaling across our events over the next few months is really an agent. And an agent that allows our customers to interrogate and basically get answers to both exhibitors and visitors to anything that they need around the entire customer journey. So instead of going to the website and reading all the material, or reading exhibitor manuals and going through a lot of data, we basically simplified that experience through this agent, and that's essentially what we've just rolled out.

And I think it's hard to comprehend the magnitude of the complexity sometimes of managing a trade show experience. The manual, Herve, is often a 50-page document with specifications and rules that are required by the venue, required by insurance, and required by -- obviously by us. So if we can make that simpler for people to interact, it's actually a huge timesaver and satisfaction driver when you can eliminate like frustration and how to deal with that.

Okay. Just -- I know you've been on a journey of, what's the right word, to have -- do things across everything that you have for one process to get scale and savings. Any update on those efforts?

I think we're progressing well. We call that internally our platform strategy, and we're progressing really well. And we're seeing the evidence of that as we acquire businesses and are able to incorporate them into the broader Emerald. So there are a couple of things that we see immediately.

One is the best practice sharing. We were able to learn from businesses that we buy. One of the benefits of buying businesses of course, is the great sectors that they're in, their growth profile. But another one is that there are some really good learnings that we can take and then deploy across Emerald. And vice versa, there are some things that we have at Emerald that have been extraordinarily successful that we're able to quickly implement within the acquired companies. So that's a massive benefit of the platform.

And the other one is really cost and efficiency. As you'll see through a very disciplined management of our SG&A that as we acquire companies, that is something that we have very well under control.

Yes. I think the acquisitions have kind of muddied the water update on -- in the reported financials. But if you peel out the business we've [ borne ] in the last couple of years, our underlying SG&A at Emerald is kind of flattish for 3 years now. So we're getting a lot of leverage out of the organization. And as we continue to scale, we expect that leverage to continue and drive incremental dollar to the bottom line and thus higher margins.

It will take us some time with these new acquisitions because they're overseas, and we didn't have previous scale presence overseas to integrate that and drive the incremental savings out of those dollars. But when we buy things in the United States and we operate in our core market, which is the vast majority of our business, we're already seeing meaningful leverage and expect that to be more and more apparent in the coming couple of years as the growth of the business translates more into [ bottom line ] growth.

What -- you're talking about acquisitions. I'm just curious on the M&A environment, any comments on just how much is potentially out there now relative to -- in the past? And how you think -- do you think valuations are -- where valuations are relative to where they've been?

Yes. I haven't seen a major change in valuations. And the opportunities are there. Our -- I mean, I obviously won't go through much detail, but the pipeline is strong. And we are actively exploring a handful of opportunities. So we'll continue to keep you updated as we make progress. But I feel very confident in our ability to continue to grow through M&A. It's one of the important growth levers that we have, not the only one but an important one, and one that we'll continue to use.

Yes. As you know, Allen, a very key component of our strategy that we've articulated over the last few years has been around portfolio optimization which is, at its core, the reshaping of our portfolio, to continue to enhance our exposures to more growth areas. And probably the best evidence of the progress we've made, particularly in the last year, is the pro forma organic growth versus the reported organic growth at Emerald.

And you can see, despite the -- obviously, those issues, the convention center and tariffs this year, and all of that, that's impacting some of the legacy brands at [ Emerald's ]. But at the end of the day, we feel great about investing into exciting, fast-growing industries. When we can find the #1 show that gives us a very high visibility to accelerated growth longer term. And you can see what that could do for the overall Emerald performance. And that strategy continues to be at the core of what we do here. And we're very active, as Herve said, we have a deep pipeline, and we continue to look for exciting opportunities to [indiscernible].

Yes. I saw in your slide deck. Now I don't see it, but -- here it is. 90% of trade shows hold market-leading positions within their verticals, which is quite impressive just your positioning. I was curious -- I think they're not a large part of your business, but any update on commerce and content segments?

Yes. I think on -- both on content and commerce, it's an evolution of both businesses. So on the content side, as you know, it's been an area that has been an anchor to our growth. And so we have been investing in continuously shifting that business from relying on advertising to being more of a lead gen model, and we're making some very good progress, especially in the last -- in the last few months, which I'm very, very happy about. We'll report about that in the coming quarters.

And then on the Commerce side, we've really shifted our focus to one of profitability, and we've made some material progress in terms of really driving a profitable commerce business, whereas it went from unprofitable to breakeven to now a contributor to EBITDA, which we're very, very happy with the team's progress on that front.

There are no further questions at this time. I would now like to turn the call over to Herve Sedky for any closing remarks.

Well, thank you. And to wrap up, thank you all for your time and participation. As I mentioned, I'm really pleased with how we performed to date this year, with how sales are trending for the rest of the year and into early 2026. Importantly, we're on track to meet the 2025 goals that we set at the beginning of the year, even as we manage the volatility at some small number of events and stay mindful of the broader economic pressures that we discussed.

That's the benefit of our increasingly diversified portfolio. That said, I'm generally excited about what's ahead, continuing to see our strategy and investments pay off with more value to our customers, with new opportunities for our teams and strong EBITDA growth for our shareholders. And so with that, I thank you for joining, and wish you a great day.

Ladies and gentlemen, this concludes today's call. Thank you for participating. You may now disconnect.

Thank you for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the Emerald Holding Second Quarter 2025 Earnings Call. [Operator Instructions] Thank you.

I would now like to turn the call over to Erica Bartsch, AVP -- EVP of Strategy and Communications at Emerald.

Please go ahead.

Good morning, and welcome to the Emerald Holding Second Quarter 2021 Earnings Conference Call. Before we begin, let me remind everyone that this call will include certain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. This includes remarks about future expectations, beliefs, estimates, plans and prospects.

In particular, the company's statements about projected results for 2025 are forward-looking statements. Such statements are subject to a variety of risks, uncertainties and other factors that could cause actual results to differ materially from those indicated or implied by such statements. For a discussion of these risks, uncertainties and other factors, please refer to the company's SEC filings, including its most recently filed periodic reports on Form 10-K and Form 10-Q as well as the company's earnings release, all of which can be found on the company's Investor Relations website. The company does not undertake any duty to update such forward-looking statements.

Additionally, during today's call, management will discuss non-GAAP measures, which it believes can be useful in evaluating the company's performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with U.S. GAAP. The reconciliation of these non-GAAP measures to their most comparable GAAP measures can be found in the company's earnings release, which is available on the company's Investor Relations website.

As a reminder, this conference is being recorded, and a replay of this call will be available on the company's Investor Relations website through 11:59 p.m. Eastern Time on August 11, 2025.

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

Thank you, Erica. Good morning, everyone, and thank you all for joining us today. I'll begin the call with an overview of our second quarter performance and a review of our strategic initiatives. I'll then turn things over to David Doft, our CFO, who will take us through our financials.

The second quarter reflected strong disciplined execution across the portfolio with the results in line with the expectations that we laid out earlier this year. We delivered solid year-over-year growth in revenue and adjusted EBITDA, supported by the strength of our platform and the recent acquisitions. As we contemplated in our budgeting and guidance, reported organic growth was muted due to the event mix in the quarter.

However, on a pro forma basis, assuming the recently completed acquisitions were part of the portfolio in the second quarter of 2024, organic growth would have been approximately 5% this quarter. This is a more accurate reflection of the performance of our business as it's constituted on a go-forward basis with the inclusion of these acquisitions. This offers a clearer view of the performance of the current Emerald platform and the positive underlying momentum across the portfolio.

Taken together, our results year-to-date reinforce Emerald's position as a scaled, insights-driven B2B platform and gives us confidence to reaffirm our full year outlook. The momentum we're seeing is a direct result of the deliberate actions that we've taken to reshape and strengthen our portfolio. Over the past 18 months, we've exited underperforming assets that we're not going to recover post-COVID, realigned our cost structure, and completed targeted acquisitions that strengthen our position in high-growth verticals.

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

Exhibitors continue to reinvest because our events drive meaningful impact from enabling discovery, in-person engagement and sales pipeline acceleration. Early rebooking activity highlights the resilience of our model and affirms that in-person engagement remains a critical go-to-market channel across sectors with strong performance in both established and high-growth segments.

While we're pleased with our execution and continued progress, we remain closely focused on the broader macroeconomic environment navigating these dynamics with operational discipline and strategic focus. Certain end markets are continuing to face macro-related pressures, tariffs in particular, but our diversified portfolio continues to perform well. This underscores the strength of our model and our intentional efforts to increase our exposure to categories that have resilient demand characteristics and relatively less exposure to economic ebbs and flows.

Our strategic focus is also contributing to measured progress internationally. As a reminder, international exhibitors account for approximately 10% of total revenue with limited exposure to any single region. While moderately dragging overall growth, we're already -- we've already secured 99% of our full year international revenue target signaling sustained interest from global partners seeking access to the U.S. buyers and giving us confidence to deliver on our full year targets.

We're seeing pockets of encouraging activity in markets like Italy, Germany and Brazil, which are helping to offset continued softness in regions like China and Canada. Much of this early progress reflects the foundation laid by our expanded global agent network, now nearly 100 agents across more than 50 countries, a long-term investments we expect will yield more measurable results over time.

Importantly, as more trade deals get signed and bring certainty to more industries, our belief is that this important customer segment should bounce back and continue to grow beginning next year.

In a landscape shaped by shifting trade policy, rapid technological change and rising uncertainty, the value of trusted high-impact connection channels is only growing. That's why we remain confident in the resilience and relevance of live events. In-person experiences consistently outperform digital in brand recall and ROI, particularly in complex or high consideration environments. This advantage becomes even more pronounced during periods of uncertainty when businesses prioritize channels that drive measurable impact and builds real trust.

As Mark Cuban recently noted on his, [X feed], the explosion of AI-generated content is creating a Milli Vanilli effect, a growing skepticism of what's real versus what's synthetic. In his words, this will drive people back to authenticity and heightened demand for face-to-face interactions that build credibility, connection and lasting value. We couldn't agree more. This conviction ultimately shapes how we operate and where we invest for long-term value. Our approach remain laser-focused on 3 core pillars of customer centricity, 365-day engagement, and portfolio optimization.

We've made great progress in our portfolio optimization efforts, where we're pursuing targeted acquisitions that diversify our offerings and expanding our presence in resilient sectors with attractive long-term growth opportunities that have a demonstrated track record of delivering impactful in-person B2B experiences.

Notably, our acquisitions of This is Beyond and Insurtech Insights are already advancing our strategic priorities and contributing to growth. In June, Insurtech Insights held its U.S. addition, drawing strong industry participation and reinforcing our position in a high-growth vertical. Similarly, This is Beyond's flagship events, "We are Africa" and "LE Miami" delivered exceptional experiences in Q2, convening a highly curated global community of luxury travel leaders. Their focus on premium, purpose-driven experiences aligns with evolving B2B customer expectations and further strengthens Emerald's position in the high-growth global luxury travel market. These early performance indicators underscore the strength of our portfolio, optimization strategy, and our disciplined approach to integration and value creation, leaving me energized for what's ahead.

So in closing, our second quarter performance illustrates the strength and resilience of the Emerald platform, our ability to deliver as planned, integrate value-enhancing acquisitions and navigate external challenges reflects both the commitment of our team and the trust of our customers. We remain confident in our capacity to drive meaningful long-term value for shareholders, while continuing to deliver exceptional experiences for our customers.

And with that, I'll hand things over to David for a deeper look at our financials. David?

Thank you, Herve, and good morning. Turning to our results for the second quarter. Total revenue was $105.5 million compared to $86 million in the prior year quarter. Reported organic revenue, which excludes the impact of acquisitions, scheduling adjustments and discontinued events was up 0.4% year-over-year driven by growth in our connections business, offset by event mix in the quarter and softness in content. Specifically, we have 3 events that staged in Q2 2025, but were held in a different quarter in 2024. And 2 events that occurred in Q2 2024 but are scheduled for a different quarter in 2025.

As Herve noted, this does not tell the full story. We believe the most accurate view of our organic growth is on a pro forma basis, reflecting the portfolio as it actually exists today. Assuming the recently completed acquisitions were part of the portfolio in Q2 of 2024, our second quarter organic growth would have been approximately plus 5% year-over-year.

Adjusted EBITDA was $24.4 million in the second quarter compared to $15.3 million in the prior year period, an increase of 59.5%. The increase was primarily driven by higher operating income from our events and continued management of underlying costs. This also equates to an adjusted EBITDA margin of approximately 23.1% for the quarter compared to 17.8% in Q2 2024. LTM adjusted EBITDA, excluding insurance proceeds, is $123.1 million.

Turning to expenses. On a reported basis, SG&A was $47.1 million versus $39.5 million in the prior year quarter. The year-over-year increase is largely due to incremental expenses from acquisitions in our connections business and higher stock-based compensation, offset by lower salary expenses in both the content and commerce businesses.

We generated $13.8 million in free cash flow in the second quarter as compared to $7.1 million in the prior year period due to higher adjusted EBITDA in the quarter. As was the case in the first quarter, underlying free cash flow in Q2 was stronger than reported, primarily due to the timing of recent acquisitions, specifically, with This is Beyond acquisition closing shortly before its major events, most event-related cash was collected prior to the transaction and flowed to Emerald through a purchase price adjustment rather than through standard receivables.

As a result, those inflows are not reflected in reported free cash flow and cash from operations minus CapEx. This mirrors the dynamic we noted last quarter within Insurtech Insights and it's important context when evaluating the free cash flow conversion and strength of our cash generation. Adjusting for these acquisition-related timing effects, total free cash flow would have been $17 million higher. Also, our year-to-date free cash flow is similarly impacted by the acquisition of Insurtech Insights in the first quarter of this year to the tune of $3.5 million and from $5.5 million of fees related to our January 2025 refinancing of our debt that flows through the financials.

In total, these items impacted reported year-to-date free cash flow by $26 million.

Turning to the balance sheet. We had $156.4 million in cash as of June 30 versus $276.8 million as of March 31. This is after funding the, This is Beyond transaction, which closed in the quarter. Our total liquidity of $266.4 million, including full availability on our $110 million credit facility. As of June 30, our net debt to covenant EBITDA ratio was 2.56x, well within our sub-3x financial policy target.

Our strong balance sheet and cash flow give us flexibility to invest in strategic growth and deliver long-term value. As a business, we remain focused on disciplined capital deployment across M&A, organic growth, debt reduction and shareholder return. In the second quarter, we repurchased approximately 1.6 million shares for $6.9 million at an average price of $4.24 per share under our buyback program, underscoring management and the board's conviction in Emerald's long-term value. At quarter end, we had $20.8 million remaining available under the existing repurchase authorization.

In addition, the Board declared a quarterly dividend of $0.015 per share, demonstrating our continued commitment to shareholder returns alongside prudent, balanced capital deployment.

Finally, we remain on track for and are reaffirming our full year 2025 guidance of a range of $450 million to $460 million in revenue, and $120 million to $125 million in adjusted EBITDA. In line with expectations at the start of the year, the second and third quarters are both our smallest and we expect Q3 reported organic growth to be our weakest this year, followed by stronger reported organic growth in the fourth quarter.

Given the added dynamic of the continued construction at the Las Vegas Convention Center impacting our largest Q3 event, organic growth in that quarter are expected to fall below what we reported in the second quarter. Consistent with our original expectations this year. Q1 and Q4 remain our largest and strongest growth quarters. This seasonality is fully in line with our expectations and supports the full year targets we set at the beginning of the year and targets that we are reiterating today.

Our outlook also factors in potential tariff impacts, while the precise effect remains uncertain due to evolving U.S. trade policy, our overall exposure is relatively limited. We remain proactive targeting growth in underpenetrated markets while preserving the agility to adapt the changing macro conditions.

With that, we'll now open the call up for questions. Operator?

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

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

Sure. Thank you, Barton. That's exactly what we're saying. The reality is, is every quarter, we have different events around different industries at stage, and they have different characteristics. That's why we target the year in terms of overall portfolio performance, and that continues to track. The third quarter is by far our smallest quarter of the year, and we are impacted, as we've talked about for a long time now, by construction at the Las Vegas Convention Center that is impacting the largest show that's in our third quarter.

And so we do expect that, that will pull organic growth down into the negative region. But that's in line with how we've seen the year progress. And we do expect the fourth quarter based on the mix of events in the quarter to be a nicely positive organic growth quarter more consistent with overall first half performance. And that should lead to the full year performance that we're guiding to and that we've guided to from the beginning of the year.

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

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

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

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

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

Well, I think the most important thing to say is that we went into this year expecting an impact. And therefore, we were prudent in our budgeting process. And as I said in the script, we've already secured 99% of our full year international revenue. So we are tracking very, very well to the assumptions that we made.

I would characterize the impact as small overall, given that international is a small part is a smaller part of the total revenue. And as I mentioned, while we're seeing headwinds in China for sure and in Canada, we're very pleased that there are some other countries that I named where we're seeing the opposite effect. They're really taking advantage of entering the U.S. market. And therefore, they're exceeding our expectations. So when you pull it together, the impact is relatively small.

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

Your next question comes from Allen Klee with Maxim Group.

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

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

And it is small.

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

That would be the math.

I'm sorry, what?

Yes, that's correct. That's right.

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

I think it's premature to give a '26 number. But needless to say, we are willing to express confidence because it's surely up nice enough to allow us to give a comment that it's trending well. And so give it that our events are about returning on investment to our customers, the fact that they're be booking at higher rates is a really good sign, and that's what we're indicating.

In terms of 2025, at this point, we're 90%-ish booked on the year of where we're tracking. And so there's still a little bit more to go. And obviously, largely fourth quarter weighted on what still needs to be booked, but we're feeling pretty good about the trajectory to the range that we've given.

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

So in the quarter, the -- I'm just going to quote for the exact -- so I don't misstate it myself. $17 million.

17?

Correct.

Correct.

So you did like $13 million of EBITDA, but -- I'm sorry, free cash flow, really would have been more like $30 million.

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

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

Yes. We do. We have one event in the fourth quarter that has the same -- will have the same impact or similar impact.

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

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

Yes, we're -- absolutely. We're leveraging AI to enhance our employee productivity to -- we have a number of initiatives around cost reduction, some customer engagement initiatives. And we also have our revenue components where we have a dedicated efforts towards unlocking revenue from AI across our portfolio, and we'll talk about that more as that strategy is developed.

But right now, we have early pilots in finance, in marketing, in customer service and in content production that are already starting to yield some measurable efficiency gains, and they're streamlining some of our workflows, and we're confident that over time, we'll continue to both find ways to save money, be more efficient, allow our teams to do more with less. And that's before the revenue initiative that I mentioned.

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

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

But we give a range because that's our guidance.

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

Thank you very much, Allen.

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

Well, thank you very much. So to wrap things up, our second quarter showed just how strong and resilient the Emerald platform really is. We stuck to our plan. We made smart acquisitions that added value and handled outside challenges with confidence.

It all comes down to the dedication of our team and the trust of our customers. So we're feeling good about where we're headed and confident we can keep creating long-term value for shareholders, while giving our team and customers great experiences.

And so with that, I thank you for joining us today. Have a great day, and goodbye.

This concludes today's conference. You may now disconnect.