LAMAR ADVERTISING CO/NEW

RESULTS OF OPERATIONS

The following table presents certain items in the Consolidated Statements of Income as a percentage of net revenues for the years ended December 31, 2025 and 2024:

Year ended December 31, 2025 compared to Year ended December 31, 2024

Net revenues increased $59.1 million or 2.7% to $2.27 billion for the year ended December 31, 2025 from $2.21 billion for the same period in 2024. This increase was attributable to an increase in billboard net revenues of $57.7 million and an increase in logo net revenues of $5.2 million over the prior year, offset by a decrease in transit net revenues of $3.7 million.

Net revenues for the year ended December 31, 2025, as compared to acquisition-adjusted net revenues for the comparable period in 2024, increased $45.6 million, or 2.1%. This increase was attributable to an increase of $47.8 million in billboard net revenues and an increase of $3.9 million in logo net revenues, offset by a decrease of $2.7 million in transit net revenues. See“Reconciliations” below.

Total operating expenses, exclusive of depreciation and amortization and gain on disposition of assets and investments, increased $23.6 million, or 1.9% to $1.24 billion for the year ended December 31, 2025 from $1.22 billion in the same period in 2024. The $23.6 million increase over the prior year is primarily comprised of an increase in total direct, general and administrative and corporate expenses (excluding stock-based compensation expense) of $34.2 million primarily related to the operations of our outdoor advertising assets, offset by a decrease in stock-based compensation expense of $10.6 million.

Depreciation and amortization expense decreased $136.6 million to $326.3 million for the year ended December 31, 2025 as compared to $463.0 million for the same period in 2024. The decrease is primarily due to the revision in the cost estimate included in the calculation of asset retirement obligations during 2024.

For the year ended December 31, 2025, the Company recognized a gain on disposition of assets and investments of $75.9 million as compared to a gain on disposition of assets and investments of $6.1 million for the same period in 2024. The gain on disposition of assets and investments for the year ended December 31, 2025 primarily resulted from the sale of the Company’s equity interest in Vistar Media, Inc., as well as transactions related to the sale of billboard locations and displays.

Due to the above factors, operating income increased $242.0 million to $774.1 million for the year ended December 31, 2025 compared to $532.0 million for the same period in 2024.

Interest expense decreased $11.3 million for the year ended December 31, 2025 to $160.4 million as compared to $171.7 million for the year ended December 31, 2024. The decrease in interest expense is related to a decrease in interest rates on the senior credit facility and Accounts Receivable Securitization Program.

Equity in earnings of investee was $0.2 million and $5.1 million for the years ended December 31, 2025 and 2024, respectively. The decrease of $4.9 million was primarily due to the sale of the Company’s equity interest in Vistar Media, Inc. in February 2025.

The increase in operating income as well as the decrease in interest expense, partially offset by the decrease in equity in earnings of investee, over the comparable period in 2024, resulted in a $246.9 million increase in net income before income taxes.

The Company recorded income tax expense of $21.3 million for the year ended December 31, 2025 as compared to income tax expense of $4.5 million for the same period in 2024. The $21.3 million equates to an effective tax rate for the year ended December 31, 2025 of approximately 3.5%, which differs from the federal statutory rate primarily due to our qualification for taxation as a REIT and adjustments for foreign items.

As a result of the above factors, the Company recognized net income for the year ended December 31, 2025 of $593.1 million, as compared to net income of $362.9 million for the same period in 2024.

Reconciliations:

Because acquisitions occurring after December 31, 2023 have contributed to our net revenues results for the periods presented, we provide 2024 acquisition-adjusted net revenues, which adjusts our 2024 net revenues for the year ended December 31, 2024 by adding to or subtracting from it the net revenues generated by the acquired or divested assets prior to our acquisition or divestiture of these assets for the same time frame that those assets were owned in the year ended December 31, 2025.

Reconciliations of 2024 reported net revenues to 2024 acquisition-adjusted net revenues for the year ended December 31, 2024 as well as a comparison of 2024 acquisition-adjusted net revenues to 2025 reported net revenues for the year ended December 31, 2025, are provided below:

Reconciliation and Comparison of Reported Net Revenues to Acquisition-Adjusted Net Revenues

Key Performance Indicators

Net Income/Adjusted EBITDA

Adjusted EBITDA for the year ended December 31, 2025 increased 2.4% to $1.06 billion. The increase in adjusted EBITDA was primarily attributable to the increase in our gross margin (net revenues less direct advertising expenses, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $40.0 million, partially offset by an increase in general and administrative and corporate expenses of $15.2 million, excluding the impact of stock-based compensation expense.

Segmented Adjusted EBITDA

(1)Logo and transit advertising do not meet the criteria to be reportable segments, and accordingly, are included in Other.

(2)Corporate operations are not an operating segment. Corporate expenses include expenses related to infrastructure and support, including information technology, human resources, legal, finance and administrative functions of the Company, as well as overall executive, administrative and support functions.

Adjusted EBITDA for the year ended December 31, 2025 increased 2.4% to $1.06 billion. The increase in adjusted EBITDA was primarily attributable to the increase in our billboard advertising adjusted EBITDA of $31.2 million, offset by a decrease in other adjusted EBITDA of $1.7 million and an increase in corporate expenses of $4.4 million, excluding the impact of stock-based compensation expense.

Net Income/FFO/AFFO

FFO for the year ended December 31, 2025 was $827.3 million as compared to FFO of $798.4 million for the same period in 2024. AFFO for the year ended December 31, 2025 increased 3.4% to $846.7 million as compared to $819.0 million for the same period in 2024. The increase in AFFO was primarily attributable to the increase in our gross margin (net revenues less direct advertising expenses, exclusive of depreciation and amortization and capitalized contract fulfillment costs, net) of $40.3 million, partially offset by an increase in total general and administrative and corporate expenses (excluding the effect of stock-based compensation expense) of $15.2 million.