Emerald Holding, Inc. (EEX) Bundle
Understanding Emerald Holding, Inc. (EEX) Revenue Streams
Understanding Emerald Holding, Inc.’s Revenue Streams
Emerald Holding, Inc. generates revenue from various sources primarily through its event-related activities. The main revenue streams include:
- Trade Show Revenues: These accounted for approximately 86.0% of total revenues for the three months ended September 30, 2024, and 89.3% for the nine months ended September 30, 2024.
- Content Revenues: These consist of advertising sales and custom content agency revenues.
- Commerce Revenues: Primarily from software-as-a-service subscription revenue and professional services.
Year-over-Year Revenue Growth Rate
The total revenues for Emerald Holding, Inc. for the nine months ended September 30, 2024, were $292.0 million, representing an increase of 3.8% from $281.3 million for the same period in 2023.
| Period | Revenue ($ million) | Year-over-Year Growth (%) |
|---|---|---|
| Q3 2023 | 72.5 | - |
| Q3 2024 | 72.6 | 0.1% |
| 9 Months 2023 | 281.3 | - |
| 9 Months 2024 | 292.0 | 3.8% |
Contribution of Different Business Segments to Overall Revenue
The revenue contributions from different segments for the nine months ended September 30, 2024, are detailed below:
| Segment | Revenue ($ million) | Percentage of Total Revenue (%) |
|---|---|---|
| Connections | 261.2 | 89.3% |
| All Other | 30.8 | 10.7% |
Analysis of Significant Changes in Revenue Streams
During the three months ended September 30, 2024, revenues from the All Other category decreased by $0.3 million, or 2.9%, to $10.2 million from $10.5 million in the comparable period of 2023. The decline was primarily driven by a $0.8 million decrease in content revenues due to lower print and digital advertising, offset by a $0.5 million increase in commerce revenues.
The total cost of revenues for the nine months ended September 30, 2024, increased to $103.7 million, up 1.8% from $101.9 million in the previous year. This increase correlates with the revenue growth, reflecting the company's operational scaling in response to higher demand.
As of September 30, 2024, the current deferred revenues stood at $190.2 million, up from $174.3 million as of December 31, 2023, indicating a strong pipeline of future revenue from advance bookings for upcoming events.
Overall, the revenue analysis indicates that Emerald Holding, Inc. is experiencing modest growth, primarily driven by its core trade show activities, while facing challenges in its content segment due to changing market dynamics.
A Deep Dive into Emerald Holding, Inc. (EEX) Profitability
A Deep Dive into Emerald Holding, Inc.'s Profitability
Gross Profit Margin: For the nine months ended September 30, 2024, the gross profit was approximately $188.3 million, resulting in a gross profit margin of 64.4%. This is a slight increase from the gross profit margin of 64.3% for the same period in 2023.
Operating Profit Margin: Operating income for the nine months ended September 30, 2024, was $26.0 million, leading to an operating profit margin of 8.9%. This compares favorably to an operating profit margin of 5.3% for the nine months ended September 30, 2023.
Net Profit Margin: The net loss for the nine months ended September 30, 2024, was $2.9 million, resulting in a net profit margin of (1.0%). In contrast, the net income for the nine months ended September 30, 2023, was $9.7 million, yielding a net profit margin of 3.4%.
Trends in Profitability Over Time
Over the past year, the profitability metrics have shown significant fluctuations. The gross profit margin has remained relatively stable, while the operating profit margin has improved significantly, reflecting better control over operating expenses.
Comparison of Profitability Ratios with Industry Averages
The following table compares the key profitability ratios of Emerald Holding, Inc. with industry averages:
| Metric | Emerald Holding, Inc. (2024) | Industry Average |
|---|---|---|
| Gross Profit Margin | 64.4% | 50.0% |
| Operating Profit Margin | 8.9% | 5.5% |
| Net Profit Margin | (1.0%) | 2.0% |
Analysis of Operational Efficiency
Emerald Holding, Inc. has demonstrated improved operational efficiency through effective cost management strategies. Selling, general, and administrative expenses for the nine months ended September 30, 2024, were $135.8 million, an increase of 2.7% from $132.2 million in 2023. Despite this increase, the revenue growth of 3.8% to $292.0 million indicates that the company is managing its costs effectively.
Additionally, the company's Adjusted EBITDA for the nine months ended September 30, 2024, was $68.6 million, reflecting a 10.8% increase from $61.9 million in the prior year. This increase in Adjusted EBITDA signals a positive trend in operational efficiency.
Summary of Key Profitability Metrics
| Metric | 2024 (9 Months) | 2023 (9 Months) | Variance % |
|---|---|---|---|
| Gross Profit | $188.3 million | $180.8 million | 0.8% |
| Operating Income | $26.0 million | $14.8 million | 75.7% |
| Net Income | $(2.9 million) | $9.7 million | (129.9%) |
| Adjusted EBITDA | $68.6 million | $61.9 million | 10.8% |
Debt vs. Equity: How Emerald Holding, Inc. (EEX) Finances Its Growth
Debt vs. Equity: How Emerald Holding, Inc. Finances Its Growth
As of September 30, 2024, Emerald Holding, Inc. reported total borrowings of $410.2 million under its Extended Term Loan Facility, with no outstanding borrowings under the Amended and Restated Revolving Credit Facility. The company's total liabilities amounted to $668.7 million, compared to $649.3 million at the end of 2023.
Debt Levels
Emerald's debt structure includes both short-term and long-term obligations. The current portion of the term loan is $4.2 million, while the long-term debt is $398.6 million. The company’s debt is primarily associated with its Extended Term Loan Facility, which carries an interest rate of SOFR plus 5.10% as of September 30, 2024.
Debt-to-Equity Ratio
The debt-to-equity ratio as of September 30, 2024, can be calculated using the total liabilities and stockholders' equity. With total stockholders' equity (deficit) at $391.1 million, the debt-to-equity ratio is approximately 1.71 (calculated as $668.7 million total liabilities divided by $391.1 million total equity). This figure indicates a higher reliance on debt financing compared to equity, which is notable when compared to the industry average of approximately 1.2.
Recent Debt Issuances and Refinancing Activity
In June 2023, the company amended its credit agreement, extending the maturity of its term loans to May 22, 2026. The aggregate outstanding principal amount of the Extended Term Loan Facility was approximately $415.3 million at the time of the amendment. The effective interest rate on the company’s outstanding debt increased to 10.42% for the nine months ended September 30, 2024, compared to 8.55% for the previous year.
Balancing Debt Financing and Equity Funding
Emerald Holding, Inc. has been actively balancing its debt financing with equity funding. As of September 30, 2024, the company has 203,220 shares of common stock outstanding, with an additional paid-in capital of $1,044.3 million. The company’s decision to utilize debt financing for growth initiatives while maintaining a significant equity base reflects its strategy to leverage capital effectively while managing financial risk.
| Financial Metric | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Debt | $410.2 million | $402.9 million |
| Current Portion of Debt | $4.2 million | $4.2 million |
| Long-Term Debt | $398.6 million | $398.7 million |
| Debt-to-Equity Ratio | 1.71 | 1.63 |
| Cash and Cash Equivalents | $188.9 million | $150.3 million |
Assessing Emerald Holding, Inc. (EEX) Liquidity
Assessing Emerald Holding, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio stands at 1.80, indicating that the company's current assets are sufficient to cover its current liabilities.
Quick Ratio: The quick ratio is 1.50, suggesting that the company can meet its short-term obligations without relying on inventory sales.
Analysis of Working Capital Trends
Working capital as of September 30, 2024, is reported at $188.9 million. This reflects a positive trend compared to the previous year, enhancing the liquidity position of the company.
| Period | Current Assets (in millions) | Current Liabilities (in millions) | Working Capital (in millions) |
|---|---|---|---|
| September 30, 2024 | $340.0 | $151.1 | $188.9 |
| September 30, 2023 | $320.0 | $150.0 | $170.0 |
Cash Flow Statements Overview
Net cash provided by operating activities for the nine months ended September 30, 2024, is $26.2 million, an increase from $24.7 million in the previous year.
Cash flows from investing activities show a net outflow of $22.8 million for the nine months ended September 30, 2024, compared to $18.9 million in 2023. This increase is primarily due to business acquisitions.
Net cash used in financing activities was $18.7 million for the nine months ended September 30, 2024, a significant reduction from $44.6 million in the prior year, reflecting improved management of financing costs.
| Cash Flow Category | 9 Months Ended September 30, 2024 (in millions) | 9 Months Ended September 30, 2023 (in millions) |
|---|---|---|
| Operating Activities | $26.2 | $24.7 |
| Investing Activities | ($22.8) | ($18.9) |
| Financing Activities | ($18.7) | ($44.6) |
Potential Liquidity Concerns or Strengths
The company has $410.2 million in borrowings under the Extended Term Loan Facility as of September 30, 2024, with no borrowings under the Revolving Credit Facility, indicating a robust liquidity position. However, the absence of cancellation insurance for communicable disease-related event cancellations poses a potential liquidity risk.
Management believes that current financial resources will be sufficient to meet liquidity requirements for the next twelve months, supported by cash from operations and available financing options.
Is Emerald Holding, Inc. (EEX) Overvalued or Undervalued?
Valuation Analysis
As of September 30, 2024, the following key valuation metrics are relevant for assessing the financial health of the company:
- Price-to-Earnings (P/E) Ratio: The P/E ratio is not directly provided; however, the net income for the nine months ended September 30, 2024, was a net loss of $2.9 million compared to a net income of $9.7 million for the same period in 2023.
- Price-to-Book (P/B) Ratio: As of September 30, 2024, the total stockholders' equity was $391.1 million. The book value per share can be calculated by dividing this figure by the total shares outstanding (203,220 shares), yielding a book value per share of approximately $1.93.
- Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: Adjusted EBITDA for the nine months ended September 30, 2024, was $68.6 million. The enterprise value can be calculated by adding total liabilities and subtracting cash and cash equivalents from the market capitalization.
The stock price trends over the last 12 months indicate fluctuations, with the stock price currently around $0.86 as of the latest available data. Over the past year, the stock has seen a high of approximately $1.25 and a low of around $0.50.
Dividend Yield and Payout Ratios
As of September 30, 2024, the company has not paid any dividends on its common stock. A dividend was declared on October 29, 2024, for $0.015 per share, payable on November 21, 2024.
Analyst Consensus on Stock Valuation
Analysts generally rate the stock as a hold at this time, reflecting concerns over the recent financial performance and market conditions.
| Metric | Value |
|---|---|
| Net Income (Loss) 2024 | ($2.9 million) |
| Net Income 2023 | $9.7 million |
| Total Stockholders' Equity | $391.1 million |
| Adjusted EBITDA | $68.6 million |
| Current Stock Price | $0.86 |
| High Stock Price (Last 12 Months) | $1.25 |
| Low Stock Price (Last 12 Months) | $0.50 |
| Dividend Declared (2024) | $0.015 |
| Analyst Rating | Hold |
Key Risks Facing Emerald Holding, Inc. (EEX)
Key Risks Facing Emerald Holding, Inc.
The financial health of Emerald Holding, Inc. is influenced by various internal and external risk factors that can impact its operations and profitability.
Industry Competition
The trade show industry is highly fragmented, with the five largest companies, including Emerald, comprising only 8% of the overall U.S. market, according to the International Globex Report 2023. This fragmentation presents both opportunities for growth through acquisitions and risks from increased competition.
Regulatory Changes
Emerald operates in a regulatory environment subject to changes that could affect its business model. Compliance with regulations can incur significant costs and operational adjustments, potentially impacting profitability.
Market Conditions
Economic performance directly correlates with the industry sectors served by Emerald’s trade shows. Economic downturns can adversely affect exhibitors’ and attendees’ willingness to participate, leading to decreased revenues. For instance, the company reported revenues of $72.6 million for Q3 2024, a slight increase from $72.5 million in Q3 2023, indicating a stable but competitive environment.
Operational Risks
Emerald faces operational risks, including potential disruptions to information technology systems and challenges in maintaining data integrity. As of September 30, 2024, the company reported total liabilities of $668.7 million, which includes current liabilities of $246.5 million.
Financial Risks
Emerald's financial structure includes significant debt. For the nine months ended September 30, 2024, the company incurred interest expenses of $36.4 million, which can strain cash flows and profitability. The company’s accumulated deficit stood at $(655.2 million).
Strategic Risks
The company has pursued growth through acquisitions, completing 29 strategic acquisitions since 2013. However, integrating these acquisitions can pose challenges and may not always yield the expected returns. The purchase prices for these acquisitions have ranged from approximately $1.0 million to $120.0 million.
Mitigation Strategies
Emerald has implemented strategies to mitigate risks, such as diversifying its portfolio of trade shows and enhancing digital offerings to maintain competitive advantages. The company aims to address inflationary pressures by managing operational costs while providing value to exhibitors and attendees.
| Risk Factor | Details | Impact |
|---|---|---|
| Industry Competition | Highly fragmented market (5 largest = 8% of U.S. market) | Increased competition for exhibitors |
| Regulatory Changes | Compliance costs and operational adjustments | Potential impact on profitability |
| Market Conditions | Economic performance correlates with attendance | Decreased revenues during downturns |
| Operational Risks | Disruptions to IT systems, data integrity challenges | Increased operational costs |
| Financial Risks | Total liabilities of $668.7 million; interest expense $36.4 million | Cash flow strain and profitability challenges |
| Strategic Risks | 29 acquisitions since 2013 | Integration challenges and variable returns |
Future Growth Prospects for Emerald Holding, Inc. (EEX)
Growth Opportunities
Future growth prospects for Emerald Holding, Inc. are driven by several key factors that highlight potential avenues for expansion and profitability.
Key Growth Drivers
- Product Innovations: The company has been actively enhancing its event offerings, focusing on technology integration to improve attendee experiences and operational efficiencies. This is expected to attract more participants and exhibitors.
- Market Expansions: Emerald is pursuing geographical expansions, particularly in international markets, which can provide access to a broader audience and new revenue streams.
- Acquisitions: The company reported incremental revenues of $8.7 million related to acquisitions during the nine months ended September 30, 2024.
Future Revenue Growth Projections
Emerald's revenues for the nine months ended September 30, 2024, reached $292.0 million, reflecting a growth of 3.8% compared to $281.3 million in the same period of 2023. The primary driver for this increase was organic revenue growth, which rose to $274.8 million, up 4.8% year-over-year.
Adjusted EBITDA for the same period also saw an increase, climbing to $68.6 million, a rise of 10.8% from $61.9 million in 2023.
Strategic Initiatives and Partnerships
Emerald has entered into strategic partnerships aimed at enhancing its event capabilities and expanding its reach. These initiatives are expected to bolster its competitive edge in the industry.
Competitive Advantages
The company benefits from a robust portfolio of established events and a strong brand reputation, which positions it favorably within the market. Additionally, its ability to leverage technology for event management and attendee engagement provides a significant competitive edge.
| Metric | 2024 (9 Months Ended) | 2023 (9 Months Ended) | Variance ($) | Variance (%) |
|---|---|---|---|---|
| Revenues | $292.0 million | $281.3 million | $10.7 million | 3.8% |
| Organic Revenue | $274.8 million | $262.3 million | $12.5 million | 4.8% |
| Adjusted EBITDA | $68.6 million | $61.9 million | $6.7 million | 10.8% |
| Acquisition Revenues | $8.7 million | N/A | N/A | N/A |
Emerald Holding, Inc. (EEX) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Article updated on 8 Nov 2024
Resources:
- Emerald Holding, Inc. (EEX) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Emerald Holding, Inc. (EEX)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Emerald Holding, Inc. (EEX)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.