OUTFRONT Media Beats Q4 AFFO, Guides for Double-Digit Growth in 2026

OUTFRONT Media Inc. OUT reported fourth-quarter 2025 adjusted funds from operations (AFFO) per share of 73 cents, surpassing the Zacks Consensus Estimate of 71 cents. This compares favorably with the FFO per share of 69 cents reported in the year-ago period.

The results reflect continued momentum in transit advertising and expanding margins, partially offset by modest softness in billboard revenues. OUT’s management expects double-digit AFFO growth in 2026.

Total revenues for the quarter came in at $513.3 million, up 4.1% from the prior-year period. However, the top line missed the Zacks Consensus Estimate of $514.4 million. Growth was primarily driven by strong performance in the Transit segment, while Billboard revenue remained relatively stable.

OUT’s Segment Performance in Detail

Billboard revenues totaled $376.6 million in the quarter, increasing 0.5% year over year. Growth in average revenue per display (yield), particularly from digital billboards and programmatic channels, helped offset the impact of lost displays and selective contract exits. Our estimate was pegged at $378.8 million.

Transit revenues were the clear standout, rising 15.7% year over year to $134.8 million. The increase was largely driven by improved yield per display and strong advertiser demand across key metropolitan markets, including New York. Our estimate was pegged at $133.9 million.

OUT’s Profitability & Margins

Adjusted OIBDA for the fourth quarter increased 12% year over year to $173.8 million. The adjusted OIBDA margin expanded to 33.9% from 31.5%, demonstrating operating leverage, particularly within Transit.

OUTFRONT Media’s operating income totaled $133.5 million in the fourth quarter, up 20.2% from the prior-year period. Operating income improved year over year as revenue gains outpaced cost growth. While certain expenses, including inflation-linked minimum annual guarantees tied to transit contracts such as the New York MTA, remain a structural cost factor, disciplined expense management and yield growth supported margin expansion.

Net interest expense for the fourth quarter of 2025 was $36.9 million, marginally up from $36.6 million in the prior-year quarter. The slight increase was mainly driven by higher interest rates. As of Dec. 31, 2025, the weighted average cost of debt was 5.3%, marginally lower than 5.4% a year earlier. Our estimate was $35.5 million.

OUT’s Balance Sheet & Liquidity

As of year-end 2025, OUTFRONT Media maintained solid liquidity. The company had access to nearly $750 million of committed liquidity, including availability under its revolving credit facility and accounts receivable securitization program. 

Total debt stood at approximately $2.6 billion, with net leverage around 4.7x, within its 4x to 5x target range. While leverage remains elevated relative to some REIT peers, it appears manageable, given improving AFFO and stable cash flow generation.

The company did not issue equity under its at-the-market program during the quarter, preserving shareholder value while retaining $232.5 million of capacity for potential future needs.

OUT’s 2026 Guidance

OUT’s management expressed confidence in achieving “comfortably double-digit” AFFO growth in 2026, supported by continued transit momentum, further digital yield expansion and operational efficiencies. They also flagged event-driven upside (notably FIFA’s World Cup host-city activity) and incremental benefit from digital and programmatic channels. The Zacks Consensus Estimate is currently pegged at $1.94.

Management indicated total 2026 capital expenditures of roughly $90 million, including $30 to $35 million of maintenance capex. The balance will be directed toward growth initiatives, primarily for digital conversions and new digital boards.

OUT’s Dividend Update

Concurrent with its fourth-quarter earnings release, OUTFRONT Media announced its common stock quarterly cash dividend of 30 cents per share. The dividend will be paid out on March 31 to its shareholders of record as of March 6, 2026.

OUT’s Zacks Rank

Currently, OUTFRONT Media has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

OUTFRONT Media Inc. Price, Consensus and EPS Surprise

OUTFRONT Media Inc. price-consensus-eps-surprise-chart | OUTFRONT Media Inc. Quote

Performance of Other REITs

Lamar Advertising Company LAMR reported fourth-quarter 2025 adjusted funds from operations of $2.24 per share, which outpaced the Zacks Consensus Estimate of $2.18. The figure also compared favorably with the prior-year quarter's tally of $2.21. Lamar’s results reflect year-over-year growth in the top line and an uptick in local and national sales. Lamar also issued its full-year 2026 AFFO per share guidance range. Quarterly net revenues of $595.9 million increased 2.8% on a year-over-year basis. However, the figure missed the consensus mark by just 0.24%. 

Realty Income Corporation O reported fourth-quarter 2025 adjusted funds from operations of $1.08 per share, which met the Zacks Consensus Estimate. The reported figure compared favorably with the prior-year quarter’s AFFO of $1.05. Realty Income’s results displayed year-over-year growth in the top line. O benefited from improved occupancy and higher rents. Realty Income now expects a full-year investment volume of approximately $8 billion.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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