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Welcome to the Emerald Holding Fourth Quarter and Full Year 2025 Earnings Conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. I will now turn the call over to Erica Bartsch, EVP of Strategy and Communications at Emerald.

Morning, everyone, and welcome. Before we begin, I'd like to 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.

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 Insights, 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 revenue. Full year reported organic revenue increased 1.1% year-over-year. As Hervé mentioned, had the acquisitions of Generis, This is Beyond, and Insurtech Insights 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 refinancings 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 31st versus $95.4 million as of September 30th. Our total liquidity is $210.4 million as of December 31st, including $110 million available on our revolving credit facility.

As of December 31st, 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 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'll open the call for questions. Operator?

Thank you. If you would like to ask a question, please press star one in your telephone keypad. If you would like to withdraw your question, simply press star one again. Your first question comes from the line of Barton Crockett from Rosenblatt. Your line is open.

Okay. Thanks for taking the question. Good morning. First thing I was just kind of curious about was you mentioned some of the machinations around free cash flow this yearIf 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?

We have a 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.

Okay.

The one caveat to that is the level of acquisition and integration expense that might come with it, but as a one-time. The underlying business, that's what we would expect.

In terms of, I know 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 one-time bucket related to the transaction that I don't think is 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 and first half of 2026. We'll have to keep you updated.

Thank you, Barton.

Your next question comes from a line of Allen Klee from Maxim Group. Your line is open.

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. 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 and 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 2026, as the new revenue streams ramp up.

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. We're already seeing the benefits of that in the shows that have rolled out the agents. Again, given the cadence of our events is our show's rollout all year long.

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. It's not like we can just flip the switch on everything 'cause 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. With that newer, more modern solution, 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.

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. 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.