Earnings: Emerald Reports Mixed Q3 Results Amid Strategic Changes
November 1, 2024
Emerald Holding Inc., a U.S.-based trade show producer that is publicly traded on the New York Stock Exchange, released its third-quarter (Q3) 2024 financial results on Oct. 30, reporting revenue growth but also a shift toward streamlining its portfolio to improve profitability. The quarter closed with a slight revenue increase of 0.1%, totaling $72.6 million, attributed mainly to recent acquisitions and schedule shifts, despite an organic revenue dip driven by event discontinuations and challenges in its content segment.
Emerald's decision to discontinue 20 smaller, less profitable events, contributing $20 million in annual run-rate revenue, is expected to bolster future growth and profitability. The move aims to realign Emerald's portfolio with a focus on profitable and core events. Emerald CEO Hervé Sedky noted that while the portfolio optimization negatively impacted Q3 results, the strategy positions the company for a healthier trajectory into 2025.
Related: Glamping Shows Americas Joins Emerald’s Expanding Sports and Outdoor Portfolio
Big picture: Operationally, Emerald posted a net loss of $11.1 million, a reversal from the $10.7 million profit in Q3 2023, influenced by non-cash impairment charges and tax benefits recorded in the prior period. Adjusted EBITDA improved 15.7% year-over-year, reaching $12.5 million, reflecting efficient cost management and the removal of underperforming events.
Deeper dive: Emerald CFO David Doft expressed confidence in the company's adjusted portfolio and enhanced focus on its connections segment, anticipating stronger 2025 bookings and sustained demand for trade show marketing.
Related: Earnings: Emerald Narrows Losses, Resumes Dividend Payments
By the numbers: Emerald ended Q3 with $188.9 million in cash reserves and an expanded share buyback program of up to $25 million through December 2025 while also declaring a quarterly dividend of $0.015 per share, payable in November.
What they are saying: “We pruned 20 select, non-core events which, in aggregate, were a drag on organic growth and weren’t contributing to profitability,” Sedky said. “While this process is expected to enhance our overall growth rate, margin and profitability in 2025, it will have a negative impact on our 2024 performance.”
We reached out to Emerald to get a list of the 20 events that were discontinued, and here was the response: “As part of our commitment to delivering best-in-class, impactful events that drive results for our customers, we continually evaluate and refine Emerald’s Connections business portfolio of trade events and conferences,” Sedky said. “This optimization process assesses each event’s performance, growth potential, and alignment with our core business objectives, focusing on the evolving needs of our customers.”
He continued, “Portfolio optimization is a cornerstone of Emerald's value creation strategy, guiding us in making informed, strategic choices. By sharpening our focus on maximizing business value, we ensure resources are allocated to the most impactful events. Recently, we decided to discontinue certain underperforming events that no longer align with our objectives, allowing us to concentrate on our most promising opportunities. This refinement enables us to emphasize our strongest performers while remaining responsive to emerging market opportunities.”
Sedky said: “Through these efforts, we enhance our growth profile and reinforce our commitment to a customer-centric approach, ensuring that Emerald stays agile and well-equipped to meet market demands while delivering lasting value to our attendees, exhibitors, and stakeholders.”
Context: Each year, Emerald connects more than 1.9 million customers across 142 events and 16 media properties, according to its website. During Q3 2024, Emerald hosted several key events. Some of the notable events included:
NY NOW Summer Market – The biannual trade show celebrated its 100th anniversary in 2024. In July, NY NOW Online, an integrated wholesale platform powered by Bulletin, launched a new Shopify app, allowing exhibitors (and all brands selling on the online marketplace) to seamlessly sync products, inventory, and orders between Shopify and Bulletin, according to a press release.
CEDIA Expo 2024 -- The 2024 event drew a total combined registration of more than 15,200 residential technology integration, designers and construction professionals and featured nearly 400 exhibitors with 31% of attendees visiting for the first time and 90 first-time exhibitors, according to a press release.
Surf Expo – The biannual trade show draws exhibitors and buyers from water sports, beach, and coastal lifestyle sectors. The September 2024 edition drew more than 650 exhibiting companies, and attendance was up 7% year-over-year, according to its website.
View the Q3 2024 presentation by Sedky and Doft here.
Partner Voices
MGM Resorts is committed to fostering an inclusive and diverse culture, not just among employees and guests but also within its supply chain. The company prioritizes procuring goods and services from businesses owned by minorities, women, veterans, people with disabilities, LGBTQ individuals and those facing economic disadvantages. This commitment is integral to MGM Resorts' global procurement strategy.
Through its voluntary supplier diversity program, MGM Resorts actively identifies and connects certified diverse-owned suppliers to opportunities within its supply chain. The company is on track to spend at least 15% of its biddable procurement with diverse-owned businesses by 2025, demonstrating that supplier diversity is not only a social responsibility but also a strategic business imperative.
Supplier diversity isn’t just the right thing to do – it’s good for business. A diverse supply chain allows access to a broader range of perspectives and experience, helping to drive innovation, entrepreneurship and resilience, while strengthening communities. At MGM Resorts, engaging diverse suppliers ensures best-in-class experiences for guests and clients. Supplier diversity ensures a more resilient supply chain while supporting economic development in the communities in which it operates.
The impact of MGM Resorts' supplier diversity initiatives is significant. In 2023, these efforts supported over 3,500 jobs across more than 30 states, contributed over $214 million in income for diverse-owned businesses and generated more than $62 million in tax revenue. The story extends beyond the numbers – it reflects the tangible benefits brought to small and diverse-owned businesses, fostering economic empowerment in their communities.
MGM Resorts also supports the development and business skills of diverse-owned businesses through investment, mentorship and education. Through the MGM Resorts Supplier Diversity Mentorship Program, the company identifies, mentors and develops diverse-owned businesses to fill its future pipeline, while providing businesses with tools and resources to empower and uplift. Since 2017, the program has successfully graduated 105 diverse-owned businesses and is on track to achieve its goal of 150 graduates by 2025.
MGM Resorts’ commitment to supplier diversity not only enhances its business operations but also plays a crucial role in uplifting communities and fostering economic development. This approach reinforces the idea that diversity is a powerful driver of innovation and resilience, benefiting both the company and the wider community.
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