Good morning, and welcome to the Emerald Holdings, Inc. Fourth Quarter and Full-Year 2024 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 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. Presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with US 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. I would now like to turn the call over to Mr. Herve Sedky, President and Chief Executive Officer. Please go ahead.

Thank you, Calvin, and good morning, everyone, and thank you for joining us today. I'll begin today by discussing our performance and strategic initiatives, and then David Doft, our CFO, will provide a more detailed review of our financials. 2024 and the early weeks of 2025 marked a pivotal time for Emerald. We've laid the groundwork for future successes through deliberate strategic initiatives. Importantly, and as noted in our prior call, we launched an aggressive portfolio optimization effort in 2024, this involves pruning several unprofitable events and establishing a nimbler portfolio of primes for growth. At the same time, I'm very pleased to announce two exciting acquisitions today, which further our efforts to drive scale and strengthen growth and margin over the long-term. Today, our portfolio is made up of events in increasingly high growth sectors covering seven industry verticals, including enhanced exposure to design, luxury, and technology-oriented events. We feel confident about our portfolio of strength is supported by an improved business mix from portfolio optimization and earlier strategic realignment in our content and commerce businesses. As many of you know, historically, Emerald functioned as a decentralized federation of brands rather than a unified platform. Today, we operate with scalable infrastructure that enables organic growth, improved customer efficiency, and stronger financial performance. As we accelerate organic growth, we expect significant pull-through to the bottom line and to improve customer experience while also delivering real customer value. As we move into 2025, we believe Emerald is primed for improved growth and margin enhancements supplemented by a very healthy M&A pipeline. As we shared in our press release this morning, we're thrilled to announce two strategic acquisitions that we believe will immediately enhance the value of the business. First, we signed a definitive agreement to acquire This is Beyond, a London-based…

Thank you, Herve, and good morning, everyone. As Herve said, 2024 was a constructive year for Emerald, and we're well-positioned for 2025 and beyond. Looking at our results, revenue for the fourth quarter was $106.8 million compared to $101.5 million in the prior year quarter. This was driven primarily by growth of $6.1 million in organic revenue or 6.5%, which takes into account the impact of acquisitions, scheduling adjustments, and discontinued events. The top line was also aided by $4.8 million in revenue from acquisitions. Growth in the quarter was partially offset by scheduling adjustments of $3.7 million, where events staged in the fourth quarter of last year but in the third quarter of this year and prior year discontinued event revenue of $1.9 million pruned as part of our portfolio optimization efforts. Revenue for the full-year totaled $398.8 million, an increase of 4.2% versus the prior year. The increase was driven by organic revenue growth of $21.3 million or 5.9%, as well as $13.5 million in revenue from acquisitions. This was offset by prior year discontinued revenue of $18.2 million related to portfolio optimization efforts and $0.6 million in forfeited revenue due to the cancellation of one of our hosted buyer events in October as a result of Hurricane Milton. We successfully recovered proceeds of $0.5 million from our event cancellation insurance policy, reflecting the bottom line impact of the cancellation. This is reflected in the other income line of our P&L, consistent with past practice. I'd like to highlight the impact of Event Stage in 2024, but has been discontinued going forward. These events dragged organic growth by approximately 1%, meaning that the remaining ongoing portfolio of Emerald's businesses actually grew 1% faster last year. Fourth quarter adjusted EBITDA, excluding insurance proceeds, was $32.6 million compared to $35.8…

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] One moment please for your first question. Your first question comes from the line of Allen Klee of Maxim Group. Please go ahead.

Good morning. You said that the two -- the questions related to the acquisitions where you said the initial payment is going to be combined $160 million. Just starting with that, I'll -- can you explain how that's being paid and funded interest in cash or stock or debt? And then for the -- besides the initial payment, the payments thereafter, if there's an earn out or something, anything you can touch on that? Thank you.

Sure. Thank you, Allen, and good morning. So, the acquisitions are both being funded with cash on hand. And there are deferred components based on performance through -- for both deals through 2027. So we would expect incremental payments through 2028 for that.

Through 2028. Okay, great. And then you said that they should add $40 million to $15 million of revenue and adjusted EBITDA, but they're not getting put on from day one. Can you get a sense two things related to that of how much annualized revenue if you bought them on January 1 and EBITDA they would represent? And then is there a way to because they're going to be closing like a quarter apart to think about the impact on the following quarter, I guess it's Q2 and Q3 the quarters related to that, Q2 and Q3 or maybe sorry, but the bigger question is related to that you could answer is just how should we think about seasonality through the through the four quarters, factoring these two things in? Thank you.

Sure. So we are -- we do expect to own both businesses before they stage any events in the year. And so the revenue impact is the annualized impact. And the only caveat there is the timing of the regulatory approval in Morocco. If that goes longer than we expect, it's possible that we might not close before one of the events, but from what we're told and our understanding from Council is it shouldn't be a problem. And as you know, with events and any costs related to an event are deferred to the event. And so the vast majority of the costs we're capturing this year, there is some overhead that is not being captured this year, but transparently, we built in the full-year impact of those costs in our plan as a kind of a broader overall hedge on our portfolio for the year. So the numbers we gave is what we expect the annualized impact to be. From a seasonality standpoint, these deals only moderately shift the overall seasonality of the company. They don't have any events in 1Q, so it does take down the mix of the year for the first quarter by a couple of points percentage wise of the year. So if you look at last year, and 33% of our revenue came in the first quarter. This year, it should be moderately lower than that in 1Q. And so with that, 2Q then goes up a little bit by a point or so. 3Q fairly consistent and 4Q fairly consistent. So there's just a moderate shift between 1Q and 2Q on the weighting of the year. When all is said and done, it doesn't meaningfully change the overall dynamic.

Okay. And then just following up on that, and then I'll get back in the queue for questions. The -- when you said the seasonality, does that also factor in the events that you that you're -- that you've shut down of where they're going to play out in the quarters?

Correct. As the seasonality I spoke of is the -- call it the new Emerald in its entirety.

Got it. Okay, great. I'll get back in queue. Thank you so much.

Thank you, Allen.

Thanks, Allen.

Your next question comes from the line of Barton Crockett of Rosenblatt Securities. Please go ahead.

Okay, great. Thanks for taking the question. And I guess I -- one was just a little bit more kind of understanding of the acquisition math. And I guess one of the things I was wondering is the EBITDA you're talking about, is that after synergies or before synergies or synergies kind of a meaningful part of the story? That's one. And then you touched on it before, but the performance deferrals, it sounds like that's incremental to the $160 million. Maybe you don't want to be very specific, but can you give us some bigger than a bed basket a sense of how large the deferrals might be to factor into the whole acquisition price?

Sure. Thank you, Barton, and good morning. The numbers we gave you are pre-synergies. And admittedly, because these businesses are run overseas, we don't expect synergies in 2025. Any potential synergies are likely to take a little bit longer to achieve and will likely be in 2026 and going forward. So we definitely have upside there. One of the opportunities here is, as, we have slowly in the last couple of years expanded overseas on a smaller scale, we have the advertising week business in the UK with some staff there. We have the Global Risk and Compliance GRC business, which was a smaller business we acquired last year, also based in the UK, and now with these two deals, a much more scaled of presence there. And so there is an opportunity for us to consolidate and operations over in the UK and create opportunity as well as both of these businesses have events in the US, and we always have opportunities more easily attainable in the US, but would expect it not to be in the first iteration of those shows. Typically, we like to experience show first, ourselves, well, before we really move to apply more best practices unless something meaningfully stands out, obviously upfront. So we're not building in synergies this year. We would expect 2026 those opportunities.

Yes. From a deferred payment standpoint, so our standard model which I think everyone should be familiar with at this point, is a down payment plus earn out based on performance. Earn outs are only earned if the business grows. And so -- and the way our formula has worked is that the more -- obviously, the business grows, the more we'll pay, but the lower the multiple gets. And so any deferred payment, ultimately it's because the business has grown and brings down our all-in multiple based on the current run rate of EBITDA at that time. So it's hard to forecast exactly what it will be because it's contingent on the performance. It's not an earn out where if they just hit X number, they get Y amount of dollars. It's a more complex grid of growth rates and multiples that will determine the ultimate payment. So we're still doing the accounting work of what the initial estimate will be on the balance sheet, which we'll report on the first quarter earnings. But ultimately, we do expect these to be growth businesses. We do -- I expect that we will pay more for them. And with that, we do believe strongly that the more we pay, the better position we're all going to be in because it will vastly improve overall performance for Emerald.

Okay. Thank you for that. And on -- when we think about the free cash flow conversion, I mean with your refinancing on this deal, how should we think about free cash flow conversion this year relative to what you've done for the last couple of years of EBITDA?

So we -- yes, with the EBITDA guidance we've given, we're looking at free cash flow of $50 million plus as the flow through off of that. So we are looking for a nice step forward and flow through of that EBITDA to free cash flow. And so we're beginning to get some good leverage as we would hope and expect from that going forward. Obviously, we did add $106 million to the debt, but at lower rates. So net-net, we're not in too different a position on an interest expense standpoint, but then we were in 2024, but with meaningful higher EBITDA. And as we hope we continue to grow, which is our expectation and plan, we should continue to have leverage on that because we have cash on hand to fund incremental deals, we have organic growth. We have the free cash flow expected from that organic growth to hopefully reinvest in the business and drive even more EBITDA. And so we're -- with the stabling out of interest rates, hopefully, we're in a more virtuous cycle of free cash flow generation.

And then, if I can put a question maybe to Herve. I think you were saying this was your -- this would be your first travel exposure with this deal. I just want to make sure I heard that correctly. And then, just given your background, which you spoke about, I mean, how much more opportunity do you see for not just growth of this particular trade show, but perhaps more watches or acquisitions? How much more meaningful could travel become for you guys?

I'd answer that in two ways. One is, yes, it is our first travel acquisition and -- but I really see this acquisition just as much as being in the luxury sector than it is in the travel sector. So I would really make that distinction. It's really in luxury and it's also in travel. The -- one of the most exciting opportunities, in addition to its being an outstanding growing business, is really, as I mentioned in my prepared remarks, the entrepreneurial spirit of the founder and the team that have really been extraordinarily successful through launches. So they started with one event and then expanded from there. And in the discussions that we've had with them over the last few months, there are some very interesting and unique launch concepts that we will be exploring together. And so we will -- I expect that, as I mentioned, that this will be a good contributor to our Xcelerator strategy and that we will be launching alongside the This is Beyond team. In terms of other travel acquisitions, we -- as I mentioned, we have a rich pipeline. We don't go through the detail of our pipeline clearly and the sectors that they're in, but we do have a rich pipeline and we're not necessarily focused on the travel sector as a sector itself, but if there are some growing assets, long-term growth assets in the travel sector and there are a couple out there, then of course, those would be interesting to us.

Yes, that's great. That's it from me. Thank you guys very much.

Thank you, Barton.

Thanks, Barton.

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

Well, thanks again. I just wanted to see if you could expand on two comments you made during the call, which I think impacts your outlook. One was your confidence, given the first half pacing growth. And then second, you said you're excited about the Las Vegas construction expansion. The convention expansion, sorry. Thank you.

Yes, I'll start, and maybe David will want to add. Our guidance definitely reflects, I think, as David mentioned, what we're currently seeing in real-time in our business and also what we've already sold and given the nature and the cycles of our business. And that's why we're demonstrating confidence in the numbers and the projections that we've shared. On the Las Vegas Convention Center, it's less about excitement of the convention center, what I was mentioning is the fact that the construction is going to end at some point at the end of this year in 2025 and therefore, we expect that there will be less or no construction impact to our business in 2026 and beyond. That's the comment that I was making around the Las Vegas convention center.

Yes, just on to add to that. So the first half of the year is pacing consistent with our full-year outlook. There's the second half, there's some timing of when shows stage and when things launch that is a bit of a mismatch. And so in the next two, three weeks, it will all line up time wise. But again, we expect consistent with our full-year outlook kind of adjusted for all of that. And so we are -- we do have real-time data kind of reinforcing where we see the year and what we guided. In terms of the convention center, I just want to add one thing. So I was checked there two days ago. Our ASD event is running is one of the -- we run twice a year. It's one of the key events for us that are probably the most significant events being impacted by the construction, which I know we talked about last year a little bit. One of the halls is completed at the North Hall at the contention center. It is a meaningful upgrade. So, to your question, in the long-term, we do think this will be very good for customer experience. I'm wondering people have a good experience that helps our retention rates ultimately is good for us longer-term. So I do believe it will be, and if you've been to the convention center in looking at what they're -- and they're working on the Central hall right now. It's shut down, it's a bit of a mess. There's blockages and walls, and it's not continuous. And so our show is split between both ends of the hall, that's what makes the experience difficult during construction. But they're building a massive new entryway, foyer, all glass. I mean, it's going to be really, really nice. And so I do think there are definitely benefits. But we need it to be done. And right now, they're saying they'll be done by the end of this year. So that's a really good thing for 2026. Hopefully, it's not delayed. So far, they've been on schedule the entire time, which is great. But surely in the short-term, it causes a little bit of issues. And in the long run, those issues won't be there and hopefully it's a nice improvement.

Thanks. That's very helpful. And then my last question is, when you talked about your key strategies, one is optimization, and you did that last year on eliminating some underperforming trade shows. When you look at the fourth quarter of 2024, and can you just give some comment on -- because we just see the full numbers, but do you think that there's also some other trade shows that maybe have been underperforming that you may have to watch a little bit for 2025?

The way I'll answer that, Allen, is absolutely, we always -- and I commit that we will always look at our portfolio and the performance of every piece of our portfolio. And so this is not a one and done effort. This is a continuous effort on our part to make sure that we have the most robust growing portfolio. So we're constantly assessing this various elements of the portfolio, how the brands are performing. And I'm not going to get into any detail around projecting the future. But if, in fact, there are underperforming elements of the portfolio that are not contributing value to our shareholders and to our company, then you can expect that we will continue to take the same actions that we took in 2024.

Okay. That's great. Just personally, I actually cover a couple of insurance tech companies, so I'm excited to see that acquisition. Okay, got it. Thank you, guys.

Thank you.

[Operator Instructions] There are no further questions at this time. With that, I will turn the call back over to Herve Sedky for final closing remarks.

Well, thank you very much, everyone, for joining our call today. Today's announcements regarding the acquisitions of This is Beyond and Insurtech Insights really further demonstrate our commitment to optimizing the composition of our portfolio, as I mentioned. These developments, coupled with the ongoing efforts over the last couple of few years to enhance the business performance, to refine our go-to-market strategies and implement best practices across our organization. I believe it really position us strongly for sustained growth. And I want to close by really thanking all of our incredible employees at Emerald, whom none of this would have been possible without their hard work, efforts and commitment. And thank you all for joining the call today.

Ladies and gentlemen, that concludes your conference call. We thank you for participating and ask that you please disconnect your lines.