Emerald Holding, Inc. 8-K Analysis & Summary – 3/14/2025

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Emerald Holding, Inc.

8-K

Earnings Release (Preliminary), Guidance Update, Merger/Acquisition Announcement, Stock Buyback, Debt Offering

Filing date:

03/14/2025

TLDR:

Emerald Holding, Inc. reported its Q4 and full-year 2024 financial results, announced two strategic acquisitions, refinanced its debt, repurchased shares, declared a dividend, and provided full-year 2025 guidance.

ELI5:

Emerald Holding, a company that runs trade shows and events, made more money and became profitable in 2024. They expect to keep growing in 2025.

Accession #:

0000950170-25-039112

Published on

March 16, 2025

Analyst Summary

Revenue increased by 4.2% year-over-year to $398.8 million for 2024.
Net income shifted from a net loss of $8.2 million in 2023 to a net income of $2.2 million in 2024.
Adjusted EBITDA increased by 4.0% to $101.7 million for 2024.
Organic revenue growth was 5.9% for 2024, indicating strong underlying performance.
The company expects to generate $450 – $460 million of Revenue and $120-125 million of Adjusted EBITDA in 2025, including contributions from recent acquisitions.
Gross profit margin decreased year-over-year by 1.07% and decreased quarter-over-quarter by 5.84%.
Operating profit margin increased year-over-year by 2.67% and decreased quarter-over-quarter by 0.13%.
Net profit margin improved significantly year-over-year and quarter-over-quarter, moving from negative to positive.
EPS improved significantly year-over-year and quarter-over-quarter.
Free cash flow increased year-over-year by 28.5% and quarter-over-quarter by 36.3%.
Organic revenue increased year-over-year by 5.9% and quarter-over-quarter by 6.5%.

Opportunities and Risks

Integration Risk: Integrating the newly acquired businesses (This is Beyond and Insurtech Insights) could pose challenges.
Content Business Softness: The continued weakness in the content business could negatively impact overall revenue growth.
Economic Conditions: General economic conditions could impact the demand for B2B events.
Strategic Acquisitions: The acquisitions of This is Beyond and Insurtech Insights provide opportunities for growth and diversification.
Debt Refinancing: The debt refinancing has improved financial flexibility and reduced interest expenses.
Share Repurchase Program: The share repurchase program can enhance shareholder value.

Potential Implications

Company Performance

Continued growth and margin expansion are expected in 2025, driven by strategic acquisitions and organic revenue growth.
The company’s strong cash position provides financial flexibility for future investments and acquisitions.
Integration of acquired businesses and performance of the content business will be key factors influencing future performance.

Stock Price

Positive financial performance and optimistic 2025 guidance could lead to an increase in the company’s stock price.
Successful integration of acquisitions and stabilization of the content business could further boost investor confidence.
The share repurchase program can enhance shareholder value and potentially increase the stock price.

Emerald Holding, Inc. – Form 8-K Report

Executive Summary

This report analyzes Emerald Holding, Inc.’s (EEX) Form 8-K filed on March 14, 2025, regarding its Q4 and full-year 2024 financial results. The company reported increased revenue and a shift from net loss to net income for the year. Strategic acquisitions (This is Beyond and Insurtech Insights) and debt refinancing are key highlights. The company’s 2025 guidance indicates continued growth. Overall, the outlook appears positive, suggesting a potential “buy” or “hold” recommendation. However, careful monitoring of integration risks associated with the acquisitions and the performance of the “All Other” segment is warranted.

Company Overview

Emerald Holding, Inc. (NYSE: EEX) is a leading U.S.-based B2B event organizer. The company operates a portfolio of trade shows, conferences, and online marketplaces. Recent developments include strategic acquisitions, debt refinancing, and a share repurchase program.

Detailed Analysis

Financial Statement Analysis

Key Highlights:

Revenue: Increased by 4.2% year-over-year to $398.8 million for 2024.
Net Income: Shifted from a net loss of $8.2 million in 2023 to a net income of $2.2 million in 2024.
Adjusted EBITDA: Increased by 4.0% to $101.7 million for 2024.
Organic Revenue Growth: 5.9% for 2024, indicating strong underlying performance.
Cash Position: $194.8 million in cash and full availability of a $110.0 million revolving credit facility.

Key Ratios and Trends:

Ratio/Metric	2023	2024	Change
Revenue (Millions)	$382.8	$398.8	4.2%
Net Income (Millions)	$(8.2)	$2.2	NM
Adjusted EBITDA (Millions)	$97.8	$101.7	4.0%
Organic Revenue Growth	N/A	5.9%	N/A

Analysis: The increase in revenue and the shift to net income are positive indicators. The organic revenue growth suggests that the company’s core business is performing well. The strong cash position provides financial flexibility for future investments and acquisitions.

Management’s Discussion and Analysis (MD&A)

Key Insights:

Management emphasizes strategic portfolio optimization through acquisitions and the discontinuation of unprofitable events.
The acquisitions of This is Beyond and Insurtech Insights are expected to contribute significantly to revenue and Adjusted EBITDA in 2025.
Debt refinancing has improved financial flexibility.
Management acknowledges continued softness in the content business.

Red Flags:

While the overall tone is positive, the continued softness in the content business warrants attention.

Uncommon Metrics

Organic Revenue: A key metric used by management to assess underlying performance, excluding the impact of acquisitions, dispositions, and discontinued events.
Adjusted EBITDA excluding event cancellation insurance proceeds: Provides a clearer picture of core operating performance.
Free Cash Flow excluding event cancellation insurance proceeds, net: A useful indicator of liquidity, showing cash generated from core operations after capital expenditures.

Risk and Opportunity Assessment

Risks:

Integration Risk: Integrating the newly acquired businesses (This is Beyond and Insurtech Insights) could pose challenges.
Content Business Softness: The continued weakness in the content business could negatively impact overall revenue growth.
Economic Conditions: General economic conditions could impact the demand for B2B events.

Opportunities:

Strategic Acquisitions: The acquisitions of This is Beyond and Insurtech Insights provide opportunities for growth and diversification.
Debt Refinancing: The debt refinancing has improved financial flexibility and reduced interest expenses.
Share Repurchase Program: The share repurchase program can enhance shareholder value.

2025 Guidance

The company expects to generate $450 – $460 million of Revenue and $120-125 million of Adjusted EBITDA in 2025, including contributions from the recent acquisitions.

Conclusion and Actionable Insights

Emerald Holding, Inc. has demonstrated positive financial performance in 2024, driven by organic revenue growth and strategic acquisitions. The company’s 2025 guidance indicates continued growth and margin expansion. The debt refinancing and share repurchase program further enhance shareholder value. However, investors should closely monitor the integration of the acquired businesses and the performance of the content business.

Overall Assessment: Positive outlook.

Recommendation: Buy/Hold. Further analysis of Q1 2025 performance is recommended to confirm the successful integration of acquisitions and the stabilization of the content business.

1. Commentary

Emerald Holding, Inc. demonstrates mixed financial performance. Revenue increased modestly for both the quarter and the year, driven by organic growth in the Connections segment. Net income improved significantly from a loss to a profit for the quarter and from a loss to a profit for the year, but remains low. Adjusted EBITDA shows a slight increase for the year, indicating improved operational efficiency, but decreased for the quarter. The company’s balance sheet shows a decrease in total assets and a significant improvement in stockholders’ equity due to the conversion of preferred stock.

2. Financial Ratio and Metric Analysis

Profitability

Gross Profit Margin

Metric: Year 2024: (398.8 – 147.5) / 398.8 = 62.99% , Quarter 2024: (106.8 – 43.8) / 106.8 = 58.99%

Trend: Year 2023: (382.8 – 137.6) / 382.8 = 64.06%, Quarter 2023: (101.5 – 35.7) / 101.5 = 64.83%. The gross profit margin decreased year-over-year by 1.07% and decreased quarter-over-quarter by 5.84%.

Industry: The industry average gross profit margin for event organizers and trade show companies typically ranges from 50% to 70%. Emerald Holding’s gross profit margin is within this range, but the decrease suggests potential cost pressures or pricing adjustments.

Operating Profit Margin

Metric: Year 2024: 46.8 / 398.8 = 11.74%, Quarter 2024: 20.8 / 106.8 = 19.48%

Trend: Year 2023: 34.7 / 382.8 = 9.07%, Quarter 2023: 19.9 / 101.5 = 19.61%. The operating profit margin increased year-over-year by 2.67% and decreased quarter-over-quarter by 0.13%.

Industry: An operating profit margin of 11.74% is generally considered healthy, indicating efficient cost management relative to revenue. The increase year over year is a positive sign.

Net Profit Margin

Metric: Year 2024: 2.2 / 398.8 = 0.55%, Quarter 2024: 5.1 / 106.8 = 4.78%

Trend: Year 2023: -8.2 / 382.8 = -2.14%, Quarter 2023: -17.9 / 101.5 = -17.64%. The net profit margin improved significantly year-over-year and quarter-over-quarter, moving from negative to positive.

Industry: A net profit margin of 0.55% is relatively low, suggesting that the company has significant interest expenses. The improvement from a loss is a positive trend.

Return on Assets (ROA)

Metric: Year 2024: 2.2 / 1048.7 = 0.21%

Trend: To determine the trend, we would need the ROA from the previous comparable period, which is not provided in the filing.

Industry: An ROA of 0.21% is quite low, indicating that the company is not generating significant profit from its assets. The industry average ROA typically ranges from 5% to 10%.

Return on Equity (ROE)

Metric: Year 2024: 2.2 / 385.9 = 0.57%

Trend: To determine the trend, we would need the ROE from the previous comparable period, which is not provided in the filing.

Industry: An ROE of 0.57% is very low, suggesting that the company is not effectively using equity to generate profits. The industry average ROE typically ranges from 10% to 15%.

Earnings Per Share (EPS) – Basic and Diluted

Metric: Year 2024: Basic: -0.07, Diluted: -0.07, Quarter 2024: Basic: 0.03, Diluted: 0.03

Trend: Year 2023: Basic: -0.78, Diluted: -0.78, Quarter 2023: Basic: -0.46, Diluted: -0.46. EPS improved significantly year-over-year and quarter-over-quarter.

Industry: The EPS values reflect the company’s low profitability. The improvement is a positive sign, but the values are still low compared to industry averages.

Liquidity

Current Ratio

Metric: 306.9 / 241.3 = 1.27

Trend: 2023: 310.9 / 230.1 = 1.35. The current ratio decreased slightly.

Industry: A current ratio of 1.27 indicates that the company has enough current assets to cover its current liabilities. A ratio between 1.5 and 2.0 is generally considered ideal, so Emerald Holding is slightly below this range.

Quick Ratio (Acid-Test Ratio)

Metric: (306.9 – 29.6) / 241.3 = 1.15

Trend: (310.9 – 21.5) / 230.1 = 1.26. The quick ratio decreased slightly.

Industry: A quick ratio of 1.15 suggests that the company has adequate liquid assets to cover its current liabilities without relying on inventory. A ratio of 1.0 or higher is generally considered healthy.

Cash Ratio

Metric: 194.8 / 241.3 = 0.81

Trend: 204.2 / 230.1 = 0.89. The cash ratio decreased slightly.

Industry: A cash ratio of 0.81 indicates that the company has a significant portion of its current liabilities covered by cash and cash equivalents. This is a relatively strong liquidity position.

Solvency/Leverage

Debt-to-Equity Ratio

Metric: 662.8 / 385.9 = 1.72

Trend: 2023: 649.3 / -92.5 = NM (negative equity). The debt-to-equity ratio decreased significantly due to the increase in stockholders’ equity.

Industry: A debt-to-equity ratio of 1.72 indicates that the company is financed more by debt than equity. The industry average typically ranges from 0.5 to 1.5.

Debt-to-Assets Ratio

Metric: 662.8 / 1048.7 = 0.63

Trend: 649.3 / 1053.9 = 0.62. The debt-to-assets ratio increased slightly.

Industry: A debt-to-assets ratio of 0.63 indicates that 63% of the company’s assets are financed by debt. This is a moderate level of leverage.

Interest Coverage Ratio (Times Interest Earned)

Metric: Year 2024: 7.5 + 39.3 / 39.3 = 1.19, Quarter 2024: 11.3 + 9.5 / 9.5 = 2.29

Trend: Year 2023: -2.9 + 35.1 / 35.1 = 0.92, Quarter 2023: 11.4 + 8.6 / 8.6 = 2.33. The interest coverage ratio increased year-over-year and decreased quarter-over-quarter.

Industry: An interest coverage ratio of 1.19 indicates that the company’s earnings before interest and taxes are just enough to cover its interest expenses. A ratio of 1.5 or higher is generally preferred.

Activity/Efficiency

Asset Turnover

Metric: 398.8 / 1048.7 = 0.38

Trend: 382.8 / 1053.9 = 0.36. The asset turnover ratio increased slightly.

Industry: An asset turnover ratio of 0.38 indicates that the company is not generating a significant amount of revenue from its assets. The industry average typically ranges from 0.5 to 1.0.

Valuation

Price-to-Earnings Ratio (P/E)

Metric: 4.09 / (-0.07) = NM (negative earnings)

Trend: Not Meaningful due to negative earnings in both periods.

Industry: The P/E ratio is not meaningful due to negative earnings. Generally, a P/E ratio between 15 and 25 is considered healthy.

Price-to-Book Ratio (P/B)

Metric: Market Cap = 4.09 * 201.447 million shares = $823.93 million. Book Value = 385.9 million. P/B = 823.93 / 385.9 = 2.14

Trend: To determine the trend, we would need the P/B from the previous comparable period, which is not provided in the filing.

Industry: A P/B ratio of 2.14 suggests that the market values the company at more than twice its book value. A P/B ratio between 1 and 3 is generally considered reasonable.

Price-to-Sales Ratio (P/S)

Metric: Market Cap = 4.09 * 201.447 million shares = $823.93 million. P/S = 823.93 / 398.8 = 2.07

Trend: To determine the trend, we would need the P/S from the previous comparable period, which is not provided in the filing.

Industry: A P/S ratio of 2.07 suggests that the market values the company at just over twice its annual sales. A P/S ratio below 1 is generally considered undervalued.

Enterprise Value to EBITDA (EV/EBITDA)

Metric: Market Cap = 4.09 * 201.447 million shares = $823.93 million. Debt = 398.5 million. Cash = 194.8 million. EV = 823.93 + 398.5 – 194.8 = 1027.63 million. EBITDA = 101.7 million. EV/EBITDA = 1027.63 / 101.7 = 10.10

Trend: To determine the trend, we would need the EV/EBITDA from the previous comparable period, which is not provided in the filing.

Industry: An EV/EBITDA of 10.10 is within the typical range for the industry, suggesting that the company is reasonably valued relative to its earnings before interest, taxes, depreciation, and amortization.

Growth Rates

Revenue Growth

Metric: Year 2024: 398.8, Year 2023: 382.8. (398.8 – 382.8) / 382.8 = 4.18%

Trend: Revenue grew by 4.18% year-over-year.

Industry: The revenue growth rate is modest, indicating steady but not rapid expansion.

Net Income Growth

Metric: Year 2024: 2.2, Year 2023: -8.2. (2.2 – (-8.2)) / -8.2 = NM

Trend: Not Meaningful due to negative earnings in the previous period.

Industry: The net income growth is not meaningful due to the negative earnings in the previous period. However, the shift from a loss to a profit is a significant improvement.

EPS Growth

Metric: Year 2024: -0.07, Year 2023: -0.78. (-0.07 – (-0.78)) / -0.78 = NM

Trend: Not Meaningful due to negative earnings in the previous period.

Industry: The EPS growth is not meaningful due to the negative earnings in the previous period. However, the shift from a loss to a profit is a significant improvement.

Other Relevant Metrics

Adjusted EBITDA

Metric: Year 2024: $101.7 million, Quarter 2024: $33.1 million

Trend: Year 2023: $97.8 million, Quarter 2023: $35.8 million. Adjusted EBITDA increased year-over-year by 4.0% and decreased quarter-over-quarter by 7.5%.

Significance: Adjusted EBITDA is a non-GAAP measure that excludes certain items such as interest, taxes, depreciation, amortization, and other non-recurring items. It provides a clearer picture of the company’s core operational profitability. The adjustments seem reasonable as they remove items that are not indicative of ongoing operational performance.

Free Cash Flow

Metric: Year 2024: $37.0 million, Quarter 2024: $18.4 million

Trend: Year 2023: $28.8 million, Quarter 2023: $13.5 million. Free cash flow increased year-over-year by 28.5% and quarter-over-quarter by 36.3%.

Significance: Free cash flow represents the cash a company generates after accounting for cash outflows to support operations and maintain its capital assets. The increase in free cash flow indicates improved financial health and the ability to invest in future growth.

Organic Revenue Growth

Metric: Year 2024: $385.3 million, Quarter 2024: $99.9 million

Trend: Year 2023: $364.0 million, Quarter 2023: $93.8 million. Organic revenue increased year-over-year by 5.9% and quarter-over-quarter by 6.5%.

Significance: Organic revenue growth excludes the impact of acquisitions and divestitures, providing a clearer picture of the company’s underlying business performance. The increase in organic revenue indicates that the company’s core business is growing.