EDGAR 10-K Filing

Company CIK: 1579214
Filing Year: 2025
Filename: 1579214_10-K_2025_0000950170-25-039386.json

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ITEM 1. BUSINESS
Item 1. Business.
BUSINESS
Our Company
Emerald is a leading business-to-business (“B2B”) event organizer principally in the United States, with expanding operations in the U.K. and international markets. Leveraging our shows as key market-driven platforms, we integrate live events, media content, industry insights, digital tools, data-focused solutions and e-commerce platforms into three complementary business lines - Connections, Content and Commerce.
Our Connections division consists of a collection of leading B2B events spanning trade shows, conferences, B2C showcases and a scaled hosted buyer platform. These events typically hold market-leading positions within their respective industry verticals, with significant brand value established over a long period of time.
Our Content division consists of B2B print publications and digital media products that complement our existing trade show properties. These print and digital media products provide industry specific business news and information across multiple sectors, facilitating year-round customer contact, new customer acquisition and content marketing vehicles.
Our Commerce division offers B2B e-commerce and digital merchandising solutions, serving the needs of manufacturers and retailers through our Elastic Suite and Bulletin platforms, which create a digital year-round transactional platform for use by Emerald’s customers, regardless of location.
We also generate a substantial amount of first-party data across our events, content, and e-commerce platforms. We continue to develop products and processes based on our first-party data assets to enhance the customer experience, by providing actionable insights and measurable results through metrics such as content impressions, lead capture rates, conversion rates and transaction value per customer. Our efforts to provide customers with a clearer picture of the return on investment they receive from Emerald’s events help incentivize customers to deploy more marketing dollars with Emerald, ultimately driving higher revenue per customer. The data we generate also creates efficiencies within Emerald’s sales efforts by enabling cross-selling of events, content, and e-commerce opportunities, contributing to lower sales costs and higher margins.
Our History
In June 2013, certain investment funds managed by an affiliate of Onex Corporation (such funds, collectively with Onex Partners V LP, “Onex”) acquired our business from an affiliate of Nielsen Holdings N.V. (the “Onex Acquisition”). We have since focused on expanding our portfolio of leading events organically, complemented by an increased focus on acquisitions.
In June 2020, we entered into an investment agreement with Onex Partners V LP (“Onex Partners V”), pursuant to which we agreed to issue to Onex Partners V, in a private placement transaction, 47,058,332 shares of our 7% Series A Convertible Participating Preferred Stock (the “redeemable convertible preferred stock”) for a purchase price of $5.60 per share (the “Series A Price per Share”), for which we received aggregate proceeds of approximately $252.0 million, net of fees and estimated expenses of $11.6 million. In conjunction with the investment agreement with Onex Partners V, we announced a rights offering to holders of our outstanding common stock of one non-transferable subscription right for each share of our common stock held, with each right entitling the holder to purchase one share of redeemable convertible preferred stock at the Series A Price per Share, backstopped by Onex Partners V (the “Onex Backstop”). The rights offering was completed in July of 2020. We received net proceeds of approximately $9.7 million from this rights offering. Pursuant to the Onex Backstop, on August 13, 2020, an additional 22,660,587 shares of redeemable convertible preferred stock were sold to Onex in exchange for proceeds of approximately $121.3 million, net of fees and expenses of $5.6 million. On April 18, 2024, the Company announced it had delivered a notice informing holders of its redeemable convertible preferred stock, including Onex-related entities, that it had exercised its right to mandate that all shares of the redeemable convertible preferred stock be converted to shares of the Company’s common stock. The notice was triggered by the fact that the closing share price of the Company’s common stock on the NYSE had exceeded 175% of the conversion price for a period of 20 consecutive trading days ending with April 17, 2024. On May 2, 2024 (the “Conversion Date”), each holder of redeemable convertible preferred stock received approximately 1.9717 shares of common stock for each share of redeemable convertible preferred stock held as of the Conversion Date, in accordance with the terms of the conversion feature as described in more detail below. As a result, 71,402,607 shares of redeemable convertible preferred stock were converted into 140,781,525 shares of common stock on the Conversion Date. Cash was paid in lieu of fractional shares of common stock. Following the Conversion Date, no redeemable convertible preferred stock was outstanding, and all rights of the former holders of the redeemable convertible preferred stock were terminated.
As of December 31, 2024, Onex beneficially owned 184,520,200 shares of our common stock, representing approximately 91.6% of our outstanding common stock.
In 2024 and 2025, we made several acquisitions in furtherance of our portfolio optimization strategy:
On January 19, 2024, we acquired all of the assets of Hotel Interactive (“HI”) to enhance our hosted buyer platform. HI produces live events with pre-scheduled appointments and connects decision-makers and suppliers in their respective markets. HI operates 15 events in the hospitality, food service and healthcare and senior living space.
On May 7, 2024, we acquired all of the assets of the Blockchain Futurist Conference (“Futurist”) and its associated experiences.
On August 5, 2024, we acquired all of the assets of Glamping Americas (“Glamping Americas”) to expand our footprint in the outdoor industry, with a particular focus on a market that combines outdoor adventure with upscale accommodations. Glamping Americas produces the only glamping industry event in the Americas.
On August 5, 2024, we acquired GRC World Forums (“GRC”) to enhance our offerings in the governance, risk management and compliance sectors and to expand our global footprint. GRC produces in-person events and livestream experiences in the governance, risk management and compliance business sectors.
On January 8, 2025, we acquired all of the assets of Plant Based World (“Plant Based World”). Plant Based World produces live events for food service professionals, retailers, distributors, buyers, wholesalers and investors within the global food system.
On March 13, 2025, we entered into an agreement to acquire This is Beyond Limited (“This is Beyond”) to expand our offerings into the luxury and travel sectors, and to continue to expand our global footprint. This is Beyond produces invitation-only trade events for the entertainment travel industry. We expect to close the transaction during the second quarter of fiscal year 2025, subject to the satisfaction of customary closing conditions.
On March 13, 2025, we acquired Insurtech Insights Limited (“Insurtech”) to enhance our offerings in the insurance sector, and to further expand our global footprint. Insurtech produces live events and webinars for the insurance technology community.
To optimize the long-term organic growth and margin trajectory of our business, we conducted a thorough review in 2024 of our entire event catalog. As a result of this review, we decided to accelerate portfolio optimization activities by pruning several smaller and unprofitable events. Specifically, in 2024, we permanently discontinued 28 events totaling $21.2 million in historic run rate revenue. $18.2 million of this historic run rate revenue related to events that did not stage in 2024 but did stage in 2023, and $3.0 million is related to events that did stage in 2024, but which Emerald decided not to stage in 2025.
Products and Services
Emerald goes to market across three distinct business lines, Connections, Content and Commerce. Each provides a distinct portfolio of products and services that are integral to Emerald’s growth and profitability.
Connections
Our Connections division consists of our collection of leading B2B events spanning trade shows, conferences, B2C showcases and a scaled hosted buyer platform. These events typically hold market-leading positions within their respective industry verticals, with significant brand value established over a long period of time. Each of our shows is typically held at least annually, with certain franchises offering multiple editions per year. Our shows are frequently the preeminent event, drawing the highest attendance in their respective industry verticals. As a result, we are able to attract high-quality attendees, including those who have the authority to make purchasing decisions on the spot or subsequent to the show. The participation of these qualified buyers makes our trade shows compelling events for our exhibitors, offering them an efficient platform for high quality lead generation. Revenue in this segment is generated from the production of trade shows and conference events, including booth space sales, registration fees and sponsorship fees.
Our attendees use our shows for a variety of reasons, most notably to fulfill procurement needs, source new suppliers and reconnect with existing suppliers, identify trends, learn about new products and network with industry peers. We believe that these factors help demonstrate that our in-person shows are paramount and difficult to replace. Our portfolio of trade shows is well-balanced and diversified across both industry sectors and customers. The scale and qualified attendance at our trade shows translates into an exceptional value proposition for participants, resulting in a self-reinforcing “network effect,” whereby the participation of high-value attendees and exhibitors drives high participant loyalty and predictable, recurring revenue streams.
We categorize our diversified portfolio of events according to seven industry verticals:
Design, Renovation & Construction
Our Design, Renovation & Construction vertical is targeted toward commercial-scale design and construction, with buyers and sellers frequently transacting in high unit counts for uses in projects such as hotels and senior living facilities. Industries served include kitchen & bath, hospitality, senior living, healthcare, education, general construction and more. Examples of our events produced in this category include:
☐ Boutique Design
☐ Hospitality Design Expo (“HD Expo”)
☐ Environments for Aging Expo & Conference (“EFA”)
☐ ICFF (previously International Contemporary Furniture Fair)
☐ Healthcare Design Expo & Conference (“HCD”)
☐ Kitchen & Bath Industry Show (“KBIS”)
☐ EDspaces
☐ Connecting Point Marketing Group hosted buyer events
Food
Our Food vertical brings together retailers, restaurateurs, and suppliers across specialty food categories, including the fast-growing pizza and plant-based food categories, with International Pizza Expo being one of the largest events serving this popular sector. Examples of our events produced in this category include:
☐ International Pizza Expo
☐ Plant Based World
☐ Pizza Expo Columbus
Home, Gift & General Merchandise
Our Home, Gift & General Merchandise vertical connects product manufacturers and retailers through premiere events and insightful content for the market’s most on-trend consumer products and merchandise. Through these invaluable connections and content, Emerald unites a vast global network of buyers and suppliers, offering unparalleled access to one of the world’s most extensive selections of merchandise. Events produced in this category include:
☐ ASD Market Week (“ASD”)
☐ NY NOW
☐ International Gift Exposition in the Smokies (“IGES”)
Technology, Advertising & Marketing
Our Technology, Advertising & Marketing vertical is a market-leading portfolio of events and resources dedicated to advertising and harnessing the power of next-generation digital media and marketing technology. The growing group of business sectors served includes advertising, automotive, intelligent traceability technology, business technology integration, communications, ecommerce, connected home technology, and more. Some examples of our events produced in this category include:
☐ Advertising Week (“AW”)
☐ Prosper
☐ Commercial Integrator
☐ RFID
☐ Total Tech Summit
☐ GRC World Forums
☐ CEDIA
☐ Blockchain Futurist
Industrial
Demonstrating leadership across established and emerging industries through collaborative B2B events and insightful forums. Perhaps the most diverse group of industry sectors served by Emerald, our expertise across the industrial category is unmatched in both content and events. The growing range of business sectors includes photography, security, hospitality, home medical, US Military, fasteners, farming & agricultural supplies largely serving the cannabis industry, and more. Examples of our events produced in this category include:
☐ Fastener
☐ MJBiz
☐ Modern Day Marine
☐ Security Sales & Integration
☐ Medtrade
☐ Wedding & Portrait Photographers International
Luxury
Our Luxury vertical provides dynamic and profitable marketplaces that emulate the highest level of artistic expression and showcase the most exceptional curation of upscale, luxury and designer products. Emerald’s luxury market of events unites an elite community of renowned heritage brands, emerging design talent, the finest retailers and award-winning media from around the globe. Examples of our events produced in this category include:
☐ Couture
☐ JA New York
☐ Las Vegas Antique Jewelry & Watch Show
☐ The Original Miami Beach Antique Show (“OMBAS”)
Sports & Outdoor
Our Sports & Outdoor vertical includes industry-leading wholesale and consumer events with globally recognizable brands, highlighting the latest products and innovations and attracting a diverse audience. Our premiere events serve the growing markets of surf, swimwear, lifestyle apparel, winter sports, outdoor recreation and overlanding, mountaineering, adventuring, and camping. Examples of our events produced in this category include:
☐ Sports Licensing and Tailgate Show
☐ Surf Expo
☐ Overland Expo
☐ Glamping Show Americas
☐ Collective Shows
Content
Our Content division consists of B2B print publications and digital media products that complement our existing trade show properties. These print and digital media products provide industry specific business news and information across multiple sectors, facilitating year-round customer contact, new customer generation and content marketing vehicles. Leveraging our industry-leading trade shows allows us to create unique and timely editorials in the sectors we serve. We plan to continue to invest in product development to ensure our advertisers have new and effective ways to engage our audiences. We are also expanding our content portfolio to support audience acquisition across a wider array of sectors and constituencies served by our trade shows, conferences, and other events. Revenue in this segment primarily consists of advertising sales for industry publications and digital products.
Commerce
Our Commerce division largely offers software-as-a-service technology that enables year-round B2B buying and selling through our Elastic Suite and Bulletin platforms for use by Emerald’s customers, regardless of location. Elastic Suite’s B2B platform bridges the gap between sellers’ order processing systems and allows brands to sell directly to their buyers using print-free digital product catalogs and merchandising technology, enabling brands to increase their efficiency, effectiveness, sustainability and profitability. We believe these platforms accelerate Emerald’s strategy to provide 365-day-per-year engagement for our customer base, by expanding our digital commerce capabilities and providing our customers with transactional functionality. Elastic Suite is integrated with leading manufacturers and retailers across numerous industries, most notably in the outdoor, home appliance and electronics, surf, cycling, footwear and sporting goods verticals. Revenue in this segment consists of subscription revenue, implementation fees and professional services.
Reportable Segments
As described in Note 1, Description of Business and Summary of Significant Accounting Policies, and Note 18, Segment Information, in the notes to our audited consolidated financial statements included in this Annual Report on Form 10-K, our business is organized into one reportable segment, consistent with the information provided to our Chief Executive Officer, who is considered the chief operating decision-maker (“CODM”). The CODM evaluates performance based on the results of our Connections, Content and Commerce business lines, which represent our three operating segments. The Connections segment is primarily comprised of Emerald’s trade shows and other live events. The remaining two operating segments do not meet the quantitative thresholds to be considered reportable operating segments and are included in the “All Other” category. In addition, we have a “Corporate-Level Activities” category consisting of finance, legal, information technology and administrative functions. Prior year disclosures below have been updated to reflect the new reportable segment structure described in Note 18, Segment Information. The following discussion provides additional detailed disclosure for the one reportable segment, the “All Other” category and the “Corporate-Level Activity” category:
Connections: This segment includes all of Emerald’s trade shows and other live events that provide exhibitors opportunities to influence their market, engage with significant buyers, generate incremental sales and expand their brand’s awareness in their industry.
All Other: This category consists of Emerald’s remaining operating segments, which provide diverse media services and e-commerce software solutions, but are not aggregated with the reportable segment. Each of operating segments in the All Other category do not meet the criteria to be a separate reportable segment.
Corporate-Level Activity: This category consists of Emerald’s finance, legal, information technology and administrative functions.
Competition
The trade show industry is highly fragmented, with approximately 13,000 B2B trade shows held per year in the United States, of which a majority are owned by industry associations, according to Advanced Market Research. Individual trade shows typically compete for attendees and exhibitors only against the other trade shows that are relevant to their industry vertical. The level of competition each of our trade shows faces therefore varies by industry vertical. In addition, the Elastic Suite platforms compete with several other well-capitalized software-as-a-service technology platforms.
Other well-established for-profit companies competing in the U.S. trade show industry include Reed Exhibitions, Informa Exhibitions and Clarion Events.
Seasonality
As is typical for the trade show industry, our business has historically been seasonal, with revenue recognized from shows typically reaching its highest level during the first and fourth quarters of each calendar year, entirely due to the timing of our live events.
Intellectual Property
Our intellectual property and proprietary rights are important to our business and we strategically and proactively develop our portfolio by registering our trademarks and rely primarily on trademark laws to protect our rights. We do not own, but have a license to use, certain trademarks belonging to industry associations in connection with our KBIS and CEDIA Expo. The KBIS license runs through 2043 and the CEDIA Expo license continues in perpetuity. See “Risk Factors-Risks Related to our Intellectual Property and Information Technology” for further discussion relating to our trademarks.
Human Capital Resources
At Emerald, our employees are the cornerstone of our growth and success. Our future depends on our ability to attract, retain, and inspire a talented workforce, ensuring we remain competitive and innovative in everything we do.
As of December 31, 2024, we had 697 full-time employees. Our management team principally works from our New York City headquarters (72 employees) and our Southern California corporate offices (51 employees), with members of our sales team located throughout the United States. As of December 31, 2024, our senior management team was 56% female and our overall employee population was 62% female.
Career development at Emerald is supported through regular employee feedback, performance reviews, and satisfaction surveys. These surveys provide valuable insights to help track workforce progress and well-being. To foster transparent and consistent communication, our CEO hosts monthly town halls, keeping employees informed and engaged.
Additionally, Emerald hosts a company-wide, in-person conference called ACE (Agility, Commitment, and Excellence), bringing team members from around the world together to reconnect face-to-face. ACE features presentations from top executives, breakout sessions focused on new business ventures and the company’s strategic roadmap, and concludes with an employee awards ceremony, where individuals are recognized by their peers as exemplary leaders.
Emerald’s corporate culture and benefits offerings are also designed to meet the wide range of needs of our workforce, including:
•Flexible work hours, a hybrid work structure allowing flexibility to work from home and paid time off to empower employees to perform at their best;
•A highly competitive benefits package that includes domestic partner coverage and a variety of medical, dental, and vision plans, with Emerald covering the majority of medical premiums to ensure affordability and access to quality care;
•Financial wellness opportunities, such as 401(k) plans with an employer match and participation in an Employee Stock Ownership Plan;
•Opportunities for community impact through the Emerald Annual Volunteer Program;
•Professional development resources, including sales training programs, on-the-job learning opportunities, and career growth support;
•A rotational associate program designed to recruit and develop entry-level talent, providing hands-on experience across different functions and building future leaders;
•A commitment to skills-based hiring, prioritizing candidates' experience, capabilities, and potential over traditional degree requirements, ensuring opportunities for qualified talent with more varied backgrounds, skills, and experiences;
•A Toastmasters program to help employees build public speaking and leadership skills;
•An Employee Resource Group (ERG) to support caregivers, providing resources and a community to help balance work and caregiving responsibilities;
•A yearlong wellness program led by a mindfulness coach to promote overall well-being; and
•A manager effectiveness program to enhance leadership capabilities across the organization.
These initiatives reflect Emerald’s dedication to supporting the physical, emotional, and financial well-being of our employees while fostering a culture of growth, collaboration, and opportunity, grounded in inclusive, skills-driven talent practices.
At Emerald, empowering employees to develop their talents, advance their careers, and achieve their goals is a top priority. We offer a variety of professional and personal development opportunities through multiple modalities, including live coaching, online learning systems, and formal sales training. Additionally, we recognize and celebrate employee achievements through initiatives like our annual Sales Club and awards programs, which highlight outstanding contributions across the organization. These efforts are designed to support growth, skill-building, and long-term success while fostering a culture of recognition and appreciation.
Emerald is not involved in any material disputes with our employees and we believe that relations with our employees are good. None of our employees are subject to collective bargaining agreements with unions. However, some facilities where we hold our trade shows require our decorators to use unionized labor.
Commitment to Corporate Sustainability and Governance
Emerald is dedicated to advancing its Environmental, Social and Governance practices across the organization. This commitment and purpose fuels our innovation, drives our collaboration, and creates lasting value for our customers, employees, shareholders, and the communities in which we live, work, and do business. To that end, we are committed to minimizing our environmental impact with the goal of reducing the environmental footprint of our events. In partnership with the global Net Zero Carbon Events initiative, Emerald has taken the Net Zero Carbon Events pledge to chart a path towards net zero carbon emissions by 2050, with an interim goal to reduce greenhouse gas emissions by 50% by 2030. As part of this pledge, we have undertaken efforts to identify and prioritize actions to reduce greenhouse gas emissions, including energy management, water conservation, materials management, food and beverage waste reduction, sustainable procurement, stakeholder management, and employee engagement initiatives. Emerald continues to gather and track key event metrics to measure the environmental impact of our events and benchmark success against our pledged goals. We also collaborate with key partners and suppliers throughout the event industry, including venues, hotels, and general service contractors in furtherance of our sustainability initiatives.
Equally important to Emerald is creating an employee experience that fosters the Company’s culture of respect and inclusion. Emerald knows its ultimate success is directly linked to its ability to identify and hire talented individuals from all backgrounds and perspectives, and we are committed to developing and fostering a culture of belonging and inclusion. By welcoming the varied perspectives and experiences of our employees, we all share in the creation of a more vibrant, unified, and engaging place to work. In support of these efforts, Emerald has a committee, made up of employees from throughout the organization, to help Emerald build upon our existing programs and maintain best practices to foster belonging and an inclusive work environment.
Emerald partners with the non-profit OneTen, which closes the opportunity gap for individuals without four-year degrees through skills-first hiring. We have also eliminated the college-degree requirement for a range of positions to expand the application process to include candidates with more varied backgrounds, skills, and experiences. Further, all personnel are required to attend training programs focused on unconscious bias training and interview skills.
In addition to company-wide initiatives, many of our trade shows sponsor environmental, social and governance-related initiatives, such as:
•Overland Expo’s fund raising partnership with the Overland Expo Foundation, a not for profit 501(c)(3) that funds organizations and individuals who help protect and advance the overland community;
•Elastic Suite and Surf Expo’s commitment to B2B print elimination programs. Elastic Suite has dedicated a number of resources related to print savings. This includes creating a B2B Print Elimination Whitepaper and partnering with the Environmental Paper Network to develop a tool that estimates the global environmental impact of eliminating printed B2B sales catalogs; and
•Several shows creating networking events for women and speaker forums for those with varied backgrounds.
Emerald is committed to sound corporate governance and effective leadership practices to ensure that the Company delivers the best results for its stakeholders. We believe that the composition and professional background of our board and our executive leadership team are well-balanced and position the Company for long term growth.
Insurance
We maintain insurance policies to cover the principal risks associated with our business, including event cancellation, business interruption, workers’ compensation, directors’ and officers’ liability, cyber security, product liability, auto, property, and umbrella and excess liability insurance. All of our insurance policies are with third-party carriers and syndicates with financial ratings of A- or better. We believe the premiums, deductibles, coverage limits and scope of coverage under such policies are reasonable and appropriate for our business. Event cancellation insurance provides coverage that allows us to refund a proportionate share, relative to the compromised enforced attendance reduction or show closure, of the deposits and booth and sponsorship fees paid to us by exhibitors in the event that we are forced to cancel a trade show or other event for reasons covered by the policies, such as natural disasters, terrorism, or venue closures. Business interruption insurance provides further coverage for our office property leases in cases where we are not able to conduct ongoing business, including sales and event planning. The continued availability of appropriate insurance policies on commercially reasonable terms is important to our ability to operate our business and to maintain our reputation.
Our event cancellation insurance policies protect against losses due to the unavoidable cancellation, postponement, relocation and enforced reduced attendance at events due to certain covered causes. However, coverage for the outbreak of communicable disease (for example, COVID-19), has not been included in our event cancellation insurance policies since policy years beginning in 2022. Coverage for each of our event cancellation insurance policies extends to include additional promotional and marketing expenses necessarily incurred by us should a covered loss occur. These policies also include a terrorism endorsement, covering an act of terrorism and/or threat of terrorism directed at the insured event or within the United States or its territories. The aggregate limit for our renewed 2025 primary event cancellation insurance policy is $100.0 million. We have also obtained a similar separate event cancellation insurance policy for the Surf Expo Winter 2025 and Surf Expo Summer 2025 shows, with a coverage limit of approximately $8.3 million and $7.8 million, respectively.
During the first quarter of fiscal year 2024, we received business interruption insurance proceeds of $1.0 million from our insurance carrier. Additionally, we received payments of $0.5 million from our insurance carrier to recover the lost revenues, net of costs saved, of a trade show cancelled due to weather during the year ended December 31, 2024, and we concluded that the receipt of $0.5 million of additional insurance proceeds was realizable as of December 31, 2024. As a result, during the year ended December 31, 2024, we reported other income, net of $1.5 million to recognize the amounts that were recovered from the insurance company.
In September 2023, we reached an agreement to settle the remaining outstanding insurance litigation relating to Surf Expo event cancellation insurance as a result of COVID-19 for proceeds for $2.8 million. During the year ended December 31, 2022, we recorded other income, net of $182.8 million related to event cancellation insurance claim and settlement proceeds deemed to be realizable by our management team. All of the other income, net for the year ended December 31, 2022 was received during the period.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources” for further discussion relating to our event cancellation insurance coverage and proceeds received under the Company’s policies.
Available Information
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Exchange Act, are filed with the SEC. We are subject to the informational requirements of the Exchange Act and file or furnish reports, proxy statements and other information with the SEC. Such reports and other information filed by us with the SEC are available free of charge on our website at investor.emeraldx.com when such reports are made available on the SEC’s website. The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. The contents of these websites are not incorporated into this filing. Further, our references to the URLs for these websites are intended to be inactive textual references only.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors.
RISK FACTORS
Investing in our common stock involves a high degree of risk. You should carefully consider the following factors, as well as other information contained in this Annual Report on Form 10-K, in evaluating our Company and business. If any of the following risks occur, our business, results of operations, and financial condition may be materially adversely affected.
Risks Relating to Our Industry and Macroeconomic Conditions
General political, economic and social conditions may have an adverse impact on the industry sectors in which our trade shows, conferences and other events operate and therefore may negatively affect demand for exhibition space and attendance at our trade shows, conferences and other events.
Our business depends upon the ability and willingness of companies to attend our shows, and such attendance is sensitive to general political, economic and social conditions and corporate spending patterns. Consequently, general domestic and global conditions could affect our business, such as, among other things, the COVID-19 pandemic or other epidemics, instability in global economic markets and geopolitical environments, increased U.S. trade tariffs and trade disputes with other countries, fluctuations in interest rates and inflation and supply chain weaknesses. In addition, certain industry-specific conditions could affect our trade shows, conferences and other events. The longer a recession or economic downturn continues, or the longer a particular industry sector is impacted by macroeconomic headwinds, the more likely it becomes that our customers reduce their marketing and advertising or procurement budgets. Any material decrease in marketing or procurement budgets could reduce the demand for exhibition space or reduce attendance at our trade shows, conferences and other events, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.
Inflationary pressures and increases in interest rates relative to historical low interest rates could negatively impact demand for exhibition space, attendance at our tradeshows, conferences and events, and profitability.
We and our customers may also be adversely affected by the impact of continued high interest rates relative to historical low interest rates, as well as changes in inflationary conditions. For example, throughout 2022 and the first half of 2023, the Federal Reserve approved almost a dozen interest increases to as high as 5.50% in July 2023. Although the Federal Reserve has since approved a series of interest rate decreases beginning in September 2024, interest rates remain high relative to historical lows. Additionally, inflation influences interest rates, which in turn impact the fair value of our investments and yields on new investments as well as increasing our financing costs. While inflation has not historically had a material effect on our business, results of operations, or financial condition, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs. Our inability or failure to do so could harm our business, results of operations and financial condition. Operating expenses, including cost of labor, are impacted to a certain degree by the inflation rate as well.
Attendance at our shows could decline as a result of disruptions in global or local travel conditions, such as congestion at airports, adverse weather, including as a result of climate change, or outbreaks or fear of communicable diseases such as COVID-19.
The number of attendees and exhibitors at our trade shows may be affected by a variety of factors that are outside our control. Because many attendees and exhibitors travel to our trade shows via airplane, factors that depress the ability or desire of attendees and exhibitors to travel to our trade shows, including, but not limited to, an increased frequency of flight delays or accidents, outbreaks of contagious disease or the potential for infection (including COVID-19 and any new variants), increased costs associated with air travel, the imposition of heightened security standards or bans on visitors from particular countries outside the United States, delays in acquiring visas for travel to the United States, or acts of nature (including those that may be related to climate change or otherwise), such as earthquakes, storms, hurricanes, wildfires and other natural disasters, could have a material adverse effect on our business, financial condition, cash flows and results of operations. Physical risks from climate change may lead to an increase in the frequency, severity, or duration of certain adverse weather conditions and natural disasters such as hurricanes, tornadoes, earthquakes, storms, wildfires, droughts, extreme temperatures, or flooding, each of which could cause more significant business interruptions, increased costs, increased liabilities, and decreased revenue than what we have experienced in the past from such events. Moreover, outbreaks of contagious disease and acts of nature may depress the ability of Emerald employees to travel to and stage our trade shows, and also may affect our ability to successfully stage our trade shows once attendees and exhibitors arrive on location. For example, the COVID-19 pandemic and its consequences forced us to cancel or postpone a substantial portion of our event calendar for 2020 and 2021. Additionally, in October 2024, we canceled the remainder of a trade show in Florida due to adverse weather caused by Hurricane Milton after the show had commenced and some attendees had arrived. If similar future disasters or public health emergencies were to occur, our business, operations, and financial results could be negatively impacted. While we are generally insured against direct losses resulting from event cancellations due to circumstances outside of our reasonable control, our event cancellation insurance policies for policy years beginning in 2022 do not include coverage for losses due to the outbreak of communicable disease, including COVID-19, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.
Increased spending on digital marketing and advertising, or other marketing channels, could reduce the amount spent on in-person trade shows.
The success of our trade shows depends on the willingness of companies to continue committing marketing budget allocations towards in-person shows and live events. Alternative channels for marketing spend such as digital, social media and telemarketing could draw marketing budgets away from in-person trade shows and live events. Moreover, digital marketing and social media have experienced meaningful growth over the last several years and, although we have not observed a material decline in demand for our trade shows as a result of the increasing use of the internet and social media for advertising and marketing, the increasing influence of online marketing and any resulting reductions or eliminations of the budgets our participants allocate to our trade shows could have a material adverse effect on our business, financial condition, cash flows and results of operations.
Risks Relating to Our Business and Operations
Our inability to secure or retain desirable dates and locations for our trade shows could have a material effect on our business, financial condition, cash flows and results of operations.
The date and location of a trade show can impact its profitability and prospects, and the demand and competition for desirable dates and locations for trade shows is high. Consistent with industry practice, we typically maintain multi-year non-binding reservations for dates at our trade show venues. Aside from a nominal deposit in some cases, we do not pay for these reservations. However, these reservations are not binding on the facility owners until we execute a definitive contract with the owners and we are not always provided notice before the venue is rented to a third party during the reservation period. We typically sign contracts that guarantee the right to specific dates at venues only one or two years in advance. Therefore, our multi-year reservations may not lead to binding contracts with facility owners. Consistency in location and all other aspects of our trade shows is important to maintaining a high retention rate from year to year, and we rely on our highly loyal customer base for the success of our shows. Moving major shows to new cities, such as the move of OR from Denver, Colorado to Salt Lake City, Utah in January 2023, can adversely affect customer behavior. Similarly, significant timing and frequency changes, such as the move of OR Winter Market originally scheduled to be held in January 2024 to an expanded event to be held in June 2025 and the shift from a three-show to one-show format for OR in 2024, can also result in unanticipated customer reactions. Our business has from time to time been negatively impacted by these moves and changes in scheduling. In addition, external factors such as legislation and government policies at the local or state level, including policy related to social, political and economic issues, may weaken the desire of exhibitors and attendees to attend our trade shows held in certain locations, or cause us to move our trade shows.
The success of each of our trade shows depends on the strong reputation of that show’s brand, and damage to the reputation or negative publicity surrounding these brands could negatively impact our business, financial condition, cash flows and results of operations.
Our exhibitors and attendees primarily know us by the names of our trade shows that operate in their specific industry sector rather than by our corporate brand name, Emerald. In addition, a single brand name is sometimes used for shows that occur more than once a year. For example, the brand name “ASD Market Week” is used at our ASD Market Week March and ASD Market Week August shows. If the image or reputation of one or more of these shows is tarnished as a result of negative publicity or otherwise, it could impact the number of exhibitors and attendees attending those shows. A decline in the success of one of our larger shows could have a material adverse effect on our business, financial condition, cash flows and results of operations.
If we fail to attract leading exhibitors or high-quality attendees to our trade shows, we may lose the benefit of the self-reinforcing “network effect” that many of our shows enjoy today.
The leading brands represented by our exhibitors attract attendees who, in many cases, have authority to make purchasing decisions, or who offer other benefits (such as publicity or press coverage) by virtue of their attendance. The presence of these exhibitors and attendees creates the self-reinforcing “network effect” that benefits our business; however, if representatives of leading brands decide for any reason not to participate in our trade shows, the number and quality of attendees could decline, which could lead to a rapid decline in the results of one or more trade shows and have an adverse effect on our business, financial condition, cash flows and results of operations.
We may fail to accurately monitor or respond to changing market trends and adapt our trade show portfolio accordingly.
Our success depends in part upon our ability to monitor changing market trends and to adapt our trade shows, acquire existing trade shows or launch new trade shows to meet the evolving needs of existing and emerging target audiences. The process of researching, developing, launching, relaunching and establishing profitability for a new trade show may lead to initial operating losses. Our strategy is to launch new trade shows from time to time in order to take advantage of these trends. Our efforts to adapt our trade shows, or to introduce new trade shows into our portfolio, in response to our perception of changing market trends, may not succeed, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.
We may face increased competition from existing trade show operators or new competitors.
Although the trade show market is highly fragmented, we currently face increased competition in certain of our industry sectors. Further, our high profit margins and low start-up costs could encourage new operators to enter the trade show business. Both existing and new competitors present an alternative to our product offerings, and if competition increases or others are successful in attracting away our exhibitors and attendees, it could have a material adverse effect on our business, financial condition, cash flows and results of operations.
A significant portion of our revenue has historically been generated by a concentrated number of our top trade shows.
We have historically depended on a concentrated number of our top trade shows to generate a significant portion of our revenues. In the years ended December 31, 2024, December 31, 2023 and December 31, 2022, our top five shows represented 30%, 28% and 29%, respectively, of our total revenue. While we continue to make efforts to diversify our business, a significant decline in the performance or prospects of any one of our top trade shows could have a material adverse effect on our business, financial condition, results of operations and cash flows.
We may not fully realize the expected results and/or operating efficiencies associated with our strategic initiatives or restructuring programs, which may have an adverse impact on our business.
We depend on our ability to evolve and grow, and as changes in our business environment occur, we may adjust our business plans by introducing new strategic initiatives or restructuring programs to meet these changes. Notable strategic initiatives include our efforts to (i) implement various sales effectiveness initiatives to improve productivity of our sales efforts, (ii) establish three dedicated divisions focused on Connections, Content and Commerce, (iii) implement event plans to standardize marketing and sales planning across our event portfolio, (iv) introduce value-based pricing in order to improve transparency and customer satisfaction while driving yield improvement, and (v) enhance our data analytics capabilities to develop new commercial insights. If we are not able to effectively execute on our strategic initiatives, if we do not adequately leverage technology to improve operating efficiencies or if we are unable to develop the data analytics capabilities needed to generate actionable commercial insights, our business performance may be impacted, which may negatively impact our financial condition and results of operations.
Our acquisition growth strategy entails risk and our future acquisitions may not be successful.
We have in the past and may continue to explore opportunities to purchase or invest in other businesses or assets that we believe will complement, enhance or expand our current business or that might otherwise offer us growth opportunities. Any transactions we identify may entail various risks, including, among others:
•the risks inherent in identifying desirable acquisition candidates, including management time spent away from running our core business and external costs associated with identifying such acquisition candidates;
•the risk that we turn out to be wrong with respect to selecting and consummating what we had believed to be accretive acquisitions;
•the risk of overpaying for a particular acquisition;
•the risks of failing to successfully integrate acquisitions and retain the key employees and/or customers of acquired businesses;
•the risks inherent in expanding into new lines of business, including our expansion into the digital commerce software-as-a-service business through the acquisition of PlumRiver, LLC (“PlumRiver”) which included the Elastic Suite product, and our acquisition of Bulletin Inc., a digital wholesale platform connecting brands and buyers;
•the risks inherent in expanding our existing business into new categories or industries, including our expansion into the highly regulated cannabis industry through the acquisition of MJBiz;
•the risks inherent in expanding into consumer events through our acquisition of the Overland Expo outdoor adventure events from Lodestone;
•the risks relating to potential unknown liabilities of acquired businesses;
•the cultural, execution, currency, tax and other risks associated with international expansion including our recent acquisitions of Advertising Week, Futurist, GRC and Plant Based World, and any future further expansion; and
•the risks associated with financing an acquisition, which may involve diluting our existing stockholders, reducing our liquidity or incurring additional debt, which in turn could result in increased debt service costs and/or a requirement to comply with certain financial or other covenants.
In furtherance of our strategy of growth through acquisitions, we routinely review and conduct investigations of potential acquisitions, some of which may be material. When we believe a favorable opportunity exists, we typically seek to enter into discussions with target shows or sellers regarding the possibility of such acquisitions. At any given time, we may be in discussions with one or more counterparties. There can be no assurances that any such negotiations will lead to definitive agreements, or if such agreements are reached, that any transactions would be consummated.
We have acquired, and intend to continue to acquire, trade shows that stage outside of the United States, which subjects us to costs and risks associated with international operations.
We stage an increasing number of our trade shows outside of the United States and we intend to continue to expand our international presence in the future. For example, in recent years we have acquired trade shows that stage in the United Kingdom, Canada, Mexico and Japan, among other countries. As a company headquartered in the United States, conducting and expanding international operations subjects us to costs and risks that we may not generally face in the United States, including but not limited to:
•exposure to foreign currency exchange rate risk;
•the effects of tariffs, trade barriers and retaliatory trade measures;
•managing and staffing international operations;
•establishing relationships with channel partners in international locations;
•increased travel, infrastructure and legal compliance costs associated with international locations;
•requirements to comply with a wide variety of foreign and domestic laws and regulations associated with international operations;
•potentially adverse tax consequences;
•complexities implementing and enforcing cross-border information technology and security controls;
•failure to recruit, onboard, build and retain a talented and engaged global workforce, and integrating personnel with diverse business backgrounds and organizational cultures;
•difficulties entering new non-U.S. markets due to, among other things, consumer acceptance and business knowledge of these new markets;
•increased financial accounting and reporting burdens and complexities; and
•political, social and economic instability abroad, terrorist attacks and security concerns in general.
If any of these risks were to materialize, our international operations and, consequently, our overall business, financial condition, cash flows and results of operations could be negatively affected.
The acquisition of MJBiz may subject us to new regulatory, business and financial risks relating to the cannabis industry.
On December 31, 2021, we completed the acquisition of MJBiz. MJBiz publishes MJBiz Daily, a leading publication addressing business, regulatory, operational, and legal issues relevant to the cannabis and hemp industries, and also sponsors the annual MJBizCon, a trade event and conference for the cannabis industry and an annual educational conference in San Diego for the scientific community focused on research, testing, and lab services in the cannabis industry. Although we do not grow, sell or distribute cannabis products, and sale and distribution of cannabis products are not permitted at MJBiz-sponsored events, our connection with businesses that serve the cannabis industry could subject us to regulatory, financial, operational and reputational risks and challenges.
Under U.S. federal law, and more specifically the Controlled Substances Act (“CSA”), the cultivation, processing, distribution, sale, advertisement, and possession of cannabis are illegal, notwithstanding the legalization of sales for medicinal or adult recreational use in many individual states. As a result, federal law enforcement authorities, or authorities in certain U.S. jurisdictions that criminalize the processing, sale or possession of cannabis products, may seek to bring criminal actions against exhibitors, attendees or subscribers to MJBiz’s events and publications. If our exhibitors or customers are found to be violating applicable state or federal law relating to cannabis, they may be subject not only to criminal charges and convictions, but also to forfeiture of property, significant fines and penalties, disgorgement of profits, administrative sanctions, cessation of business activities, or civil liabilities arising from proceedings initiated by either government entities or private citizens. Further, the perception that businesses that participate in MJBiz events or subscribe to or advertise in MJBiz publications are engaged in or promoting socially undesirable activity could have an adverse impact on our overall corporate reputation. In addition, the breadth of federal conspiracy and aiding and abetting statutes could potentially subject us to prosecution for aiding and abetting or conspiring to violate the CSA by virtue of our sponsoring events or publications that are directed to businesses that directly or indirectly service the cannabis industry. Any of these actions or consequences could have a material adverse effect on our business, operating results or financial condition, particularly if law enforcement authorities seek to treat MJBiz as participating directly in the cannabis industry.
We rely on digital media and print publications to stay in close contact with, and market to, our existing event audiences.
Our ability to effectively engage with target audiences for our events depends in part on our ability to generate engaging and informative content for our other marketing services, including our digital media and print publication properties. The media industry is highly competitive and continues to evolve rapidly, with an increasing number of alternative methods for the production and delivery of content. If we are unable to generate timely and relevant content for our audiences, exploit new and existing technologies to distinguish our digital media and print publications from those of our competitors, or adapt to new distribution methods in order to provide enhanced user experiences, both our other marketing services and event revenues could decline, which may have a material adverse effect on our business, financial condition, cash flows and results of operations.
A loss or disruption of the services from one or more of the limited number of outside contractors who specialize in decoration, facility set-up and other services in connection with our trade shows could harm our business.
We, and to a greater extent, our exhibitors, use a limited number of outside contractors for decoration, facility set-up and other services in connection with our trade shows, and we and our exhibitors rely on the availability, capability and willingness of these contractors to provide services on a timely basis and on favorable economic and other terms. Notwithstanding our long-term contracts with many of these contractors, many factors outside our control, including but not limited to outbreaks of contagious disease and acts of nature (including those that may be related to climate change or otherwise), such as earthquakes, storms, hurricanes, wildfires and other natural disasters, could harm these relationships and the availability, capability or willingness of these contractors to provide these services on acceptable terms. The partial or complete loss of services from these contractors, or a significant adverse change in our or our exhibitors’ relationships with any of these contractors, could result in service delays, reputational damage and/or added costs that could harm our business and customer relationships to the extent we or our exhibitors are unable to replace them in a timely or cost-effective fashion, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.
In addition, some facilities where we hold our trade shows require decorators, facility set-up and other service providers to use unionized labor. Any union strikes or work stoppages could result in delays in launching or running our trade shows and other events held at such facilities, reputational damage and/or added costs, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.
The industry associations that sponsor and market certain of our trade shows could cease to do so effectively or could be replaced or supplemented by new industry associations who do not sponsor or market our trade shows.
We often enter into long-term sponsorship agreements with industry associations whereby the industry association endorses and markets our trade show to its members, typically in exchange for a percentage of the trade show’s revenue. Our success depends, in part, on our continued relationships with these industry associations and our ability to enter into similar relationships with other industry associations. Although we frequently enter into long-term agreements with these counterparties, these relationships remain subject to various risks, including, among others:
•failure of an industry trade association to renew a sponsorship agreement upon its expiration;
•termination of a sponsorship agreement by an industry trade association in specified circumstances;
•the willingness, ability and effectiveness of an industry trade association to market our trade shows to its members;
•dissolution of an industry trade association and/or the failure of a new industry trade association to support us; and
•the ability on the part of an industry trade association to organize a trade show itself.
Any disruptions or impediments in these existing relationships, or the inability to establish a new relationship, could have a material adverse effect on our business, financial condition, cash flows and results of operations.
We face risks associated with event cancellations or other interruptions to our business, which our insurance may not fully cover.
We maintain business interruption, event cancellation, casualty, general commercial and umbrella and excess liability insurance, as well as policies relating to workers’ compensation, director and officer insurance, property and product liability insurance, and cyber security insurance. Our insurance policies may not cover all risks associated with the operation of our business and may not be sufficient to offset the costs of all losses, lost sales or increased costs experienced during business interruptions or event cancellations. For example, in addition to the impact of COVID-19, we have experienced disruptions to events held in Florida due to hurricanes, most recently in October 2024, when we canceled the remainder of a trade show in Florida due to adverse weather caused by Hurricane Milton after the show had commenced and some attendees had arrived. We may be forced to cancel future trade shows in the event of other natural or man-made disasters. Additionally, our claims history due to COVID-19, combined with the increased frequency of natural disasters due to climate change or other factors, has resulted in increased event cancellation insurance premiums and higher deductibles, and we cannot guarantee that such premium increases will not continue in the future or that we will be able to renew our insurance policies or procure other desirable insurance on commercially reasonably terms, if at all. While we have been able to secure event cancellation insurance for the calendar years 2025 and 2026, this insurance policy does not include coverage for event cancellations due to the outbreak of communicable disease, including COVID-19, and due to wildfires in California. Losses and liabilities from uninsured or underinsured events and delay in the payment of insurance proceeds could have a material adverse effect on our financial condition and results of operations.
Failure to establish and maintain effective internal control over financial reporting could have a material adverse effect on our business and stock price.
We are required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which require management to certify financial and other information in our quarterly and annual reports, provide an annual management report on the effectiveness of internal control over financial reporting and include the attestation form from our independent registered public accounting firm. If we do not develop and maintain effective internal controls, our independent registered public accounting firm may issue a report that is adverse, which would be required if there are material weaknesses in our internal control over financial reporting.
In connection with becoming a public company, we undertook various actions to enable us to develop and maintain effective internal controls, such as building compliance and testing processes, and hiring additional accounting or internal audit staff or consultants. We have hired a third-party service provider to assist us with execution and management of our internal audit function. Testing and maintaining internal control over financial reporting can divert our management’s attention from other matters that are important to the operation of our business. Additionally, when evaluating our internal control over financial reporting, we may identify material weaknesses that we may not be able to remediate on a timely basis. If we identify any material weaknesses in our internal control over financial reporting and conclude that our internal control over financial reporting is not effective, or if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and we could become subject to investigations by the New York Stock Exchange, the SEC or other regulatory authorities, which could require additional financial and management resources. In addition, if we fail to remedy any material weakness, our financial statements could be inaccurate and we could face restricted access to capital markets.
We have identified in the past material weaknesses in our internal control over financial reporting. If we are unable to develop and maintain effective internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us, materially and adversely affect our business and operating results, and expose us to potential litigation.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements will not be prevented or detected and corrected on a timely basis. Specifically, we have experienced material weaknesses in the past where we did not design and maintain effective controls related to the evaluation of the impact of the arrangement’s terms and conditions on the accounting and reporting for preferred stock instruments, which resulted in the restatement of our previously filed consolidated financial statements.
We have since undertaken efforts to remediate previously existing material weaknesses. However, remediation measures can be time consuming and costly. In order to remediate those certain material weakness, we have expended resources to enhance the design of our control activities related to the evaluation of the impact of the terms and conditions on our accounting and reporting for preferred stock issuances and recognizing payment obligations payable to third parties upon recognition of insurance claim proceeds.
If we identify any new material weaknesses in the future, we may be unable to maintain compliance with the requirements of securities laws, stock exchange listing rules, or debt instrument covenants regarding timely filing of information; we could lose access to sources of capital or liquidity; and investors may lose confidence in our financial reporting and our stock price may decline as a result. As a result of any material weaknesses and any related restatements, we also may face adverse regulatory consequences, including investigations, penalties or suspensions by the SEC or the New York Stock Exchange, litigation or other disputes, which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatements and material weakness in our internal control over financial reporting and the preparation of our consolidated financial statements. Though we currently do not have any unresolved material weaknesses, we cannot assure you that the measures we may take in the future will be sufficient to avoid or remediate potential future material weaknesses.
During 2024, we recorded noncash adjustments to our recorded asset balance for certain intangible assets, and we may be required to record further such adjustment in future periods that could significantly impact our operating results.
Our balance sheet includes significant intangible assets, including trade names, goodwill and other acquired intangible assets. The determination of related estimated useful lives and whether these assets have been impaired involves significant judgment and subjective assessments, including as to our future business performance, and is subject to factors and events over which we have no control. The impact of slower growth rates, the introduction of new competition into our markets or other external or macroeconomic factors could impair the value of our intangible assets if they create market conditions that adversely affect the competitiveness of our business. Further, declines in our market capitalization may be an indicator that the carrying values of our intangible assets or goodwill exceed their fair values, which could lead to potential impairments that could impact our operating results. For the year ended December 31, 2024, we recorded intangible asset impairment charges of $7.3 million and have recorded other similar impairment charges in years affected by COVID-19 cancellations. There can be no assurance that we will not record further impairment charges in future periods.
Changes in our income tax rates or other indirect taxes may affect our future financial results.
Our future effective income tax rates may be favorably or unfavorably affected by unanticipated changes in the valuation of our deferred tax assets and liabilities, by changes in our stock price, or by changes in tax laws or their interpretation. Many of the provisions enacted under the 2017 Tax Cuts and Jobs Act (which we refer to as the “TCJA”), which introduced significant changes to U.S. income tax law, are set to expire at the end of 2025. The Administration and Congress are actively considering various policy choices which may have the impact of changing, possibly materially, how we are taxed in comparison to how we are taxed today. It is unclear whether the provisions of the TCJA will be allowed to expire in 2025, which would cause a reversion to the provisions prior to the TCJA, or whether some or all of such provisions will be extended beyond 2025 by future legislation. The Trump administration has indicated a general intent to retain the TCJA provisions but whether Congress will agree to retain such provisions beyond 2025 and what modifications might be made thereto prior to the expiration of the TCJA provisions is uncertain. Accounting for the income tax effects of the TCJA has required significant judgments and estimates as well as accumulation of information not previously provided for in U.S. tax law. In addition, we are subject to the examination of our income tax returns by the Internal Revenue Service and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. These continuous examinations may result in unforeseen tax-related liabilities, which may harm our future financial results.
On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law. The IRA establishes a 15% corporate minimum tax effective for taxable years beginning after December 31, 2022, and imposes a 1% excise tax on the repurchase after December 31, 2022 of stock by publicly traded corporations. We currently do not expect the tax-related provisions of the IRA to have a material impact on our financial results.
The loss of key management personnel or other company talent could have an adverse effect on our business.
We rely on certain key management personnel in the operation of our businesses. While we maintain long-term and emergency transition plans for key management personnel and believe we could either identify internal candidates or attract outside candidates to fill any vacancy created by the loss of any key management personnel, the loss of one or more of our key management personnel could have a negative impact on our businesses.
Risks Relating to our Indebtedness
Our significant indebtedness could adversely affect our financial condition and limit our ability to raise additional capital to fund our operations.
We have a significant amount of indebtedness. As of December 31, 2024, we had $409.2 million of term loan borrowings outstanding under our Amended and Restated Senior Secured Credit Facilities as then in effect. On January 30, 2025, we completed the 2025 Refinancing Transactions described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Recent Developments-2025 Refinancing Transactions” included elsewhere in this Annual Report. Immediately upon completion of the 2025 Refinancing Transactions, we had $515.0 million of term loan borrowings outstanding under our Second Amended and Restated Senior Secured Credit Facilities (as defined in “Item 7. - Management’s Discussion and Analysis of Financial Condition and Results of Operations.”), with $109.3 million in additional borrowing capacity under the revolving credit facility portion of the Second Amended and Restated Senior Secured Credit Facilities (after giving effect to $0.7 million of outstanding letters of credit).
Our high level of indebtedness could have important consequences to us, including: limiting our ability to obtain additional financing to fund future working capital, capital expenditures, investments or acquisitions or other general corporate requirements; requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, investments or acquisitions or other general corporate purposes; increasing our vulnerability to adverse changes in general economic, industry and competitive conditions; exposing us to the risk of increased interest rates as borrowings under our Second Amended and Restated Senior Secured Credit Facilities (to the extent not hedged) bear interest at variable rates, which could further adversely impact our cash flows; limiting our flexibility in planning for and reacting to changes in our business and the industry in which we compete; restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; impairing or restricting our ability to repay or refinance borrowings under the Second Amended and Restated Senior Secured Credit Facilities; impairing our ability to obtain additional financing in the future; and increasing our cost of borrowing.
Any one of these limitations could have a material effect on our business, financial condition, cash flows, results of operations and ability to satisfy our obligations in respect of our outstanding debt.
Despite our current debt levels, we may incur substantially more indebtedness, which could further exacerbate the risks associated with our substantial leverage.
We and our subsidiaries may be able to incur additional indebtedness in the future, which may be secured. While our Second Amended and Restated Senior Secured Credit Facilities limit our ability and the ability of our subsidiaries to incur additional indebtedness, these restrictions are subject to a number of qualifications and exceptions and thus, notwithstanding these restrictions, we may still be able to incur substantially more debt. As of December 31, 2024, we had $409.2 million of term loan borrowings outstanding under our then-existing Amended and Restated Senior Secured Credit Facilities. Immediately upon completion of the 2025 Refinancing Transactions, we had $515.0 million of term loan borrowings outstanding under our Second Amended and Restated Senior Secured Credit Facilities, with $109.3 million in additional borrowing capacity under the revolving credit facility portion of the Second Amended and Restated Senior Secured Credit Facilities (after giving effect to $0.7 million of outstanding letters of credit). To the extent that we incur additional indebtedness, the risks that we now face related to our substantial indebtedness could increase.
The covenants in our Second Amended and Restated Senior Secured Credit Facilities impose restrictions that may limit our operating and financial flexibility.
Our Second Amended and Restated Senior Secured Credit Facilities contain, and any future debt agreements may contain, significant restrictions and covenants that limit our ability to operate our business, including restrictions on our ability to incur additional indebtedness; pay dividends, repurchase or redeem our capital stock; prepay, redeem or repurchase specified indebtedness; create certain liens; sell, transfer or otherwise convey certain assets; consolidate, merger or transfer all or substantially all of our assets, make certain investments; engage in transactions with affiliates, and enter into new lines of business. In addition, the revolving credit facility portion of our Second Amended and Restated Senior Secured Credit Facilities also contains a financial covenant requiring us to comply with a 5.50 to 1.00 total first lien net secured leverage ratio test. This financial covenant is tested quarterly if the aggregate amount of revolving loans, swingline loans and letters of credit outstanding thereunder (net of up to $10.0 million of outstanding letters of credit and cash collateralized letters of credit) exceeds 35% of the total commitments under the revolving credit facility portion of our Second Amended and Restated Senior Secured Credit Facilities.
As a result of these covenants, our ability to respond to changes in business and economic conditions and engage in beneficial transactions, including to obtain additional financing as needed, may be limited. Further, our compliance with these covenants may be affected by circumstances and events beyond our control. A breach of any of these covenants could result in a default under our debt agreements, which could permit the holders to accelerate our obligation to repay the debt. If that occurs, we may not be able to make all of the required payments or borrow sufficient funds to refinance such debt. Even if new financing were available at that time, it may not be on terms that are acceptable to us or terms as favorable as our current agreements. If our debt is in default for any reason, our business, results of operations and financial condition could be materially and adversely affected.
Regulatory and Technology Risks
We face continually evolving cybersecurity and similar risks, which could result in loss, disclosure, theft, destruction or misappropriation of, or access to, our confidential information and cause disruption to our business, damage to our brands and reputation, legal exposure and financial losses.
We and third parties on our behalf rely on IT systems, networks, and services, including web-hosting platforms and internet sites, data hosting and processing facilities and tools, hardware (including laptops and mobile devices), software and technical applications and platforms, to collect and store, including by electronic means, certain personal, proprietary and other sensitive information, including payment card information that is provided to us through registration on our websites or otherwise in communication or interaction with us. These activities require the use of centralized data storage, including through third-party service providers. Data maintained by us or on our behalf in electronic form is always subject to sophisticated and evolving cybersecurity threats and security incidents, including breach, compromise, intrusion, tampering, theft, misappropriation or other malicious activity (such as ransomware, phishing attacks, social engineering and advanced persistent threats), all of which are continuing to occur in our industry, as well as the industries of our exhibitors, vendors and suppliers. We and our third party service providers have been subject to such attacks, the impact of which we do not currently believe will have a material effect on our business, financial conditions, cash flows or results of operations, and we may in the future continue to be subject to such attacks. For example, computer hackers have been and may be, in the future, able to develop and deploy viruses, worms or other malicious software programs that attack our websites or exploit security vulnerabilities in our websites and information systems. While we seek to learn from all attacks directed at us and implement remedial measures where necessary developed with cybersecurity experts, we cannot guarantee that such remedial measures will prevent material cybersecurity incidents in the future. Unauthorized access to or security breaches of our systems could result in the loss of data, loss of business, severe reputational damage adversely affecting customer or investor confidence, diversion of our management’s attention, litigation, indemnity obligations, damages for contract breach, penalties for violation of applicable laws or regulations and significant costs for remediation that may include liability for stolen or lost assets or information and repair of system damage that may have been caused and other liabilities. Further, an actual or perceived security incident, such as penetration of our or our third-party vendors’ networks, affecting personal or other sensitive information could subject us to business and litigation risk (e.g., under the California Consumer Privacy Act), or damage our reputation, including with exhibitors, sponsors and attendees. In addition, we are exposed to potentially heightened liability pursuant to the increasing and evolving SEC disclosure rules regarding material cybersecurity incidents. Despite our actions taken and programs implemented to manage our cybersecurity risk, we may fail to meet future disclosure obligations and/or may have our disclosures misinterpreted.
As our business evolves digitally, we are using data more and more in our business operations. A cyber breach or loss of sensitive or valuable data, content or intellectual property could mean a loss of reputation and trust, losses for our shareholders, fines, regulatory reprimands and business interruption. Managing these impacts could be disruptive and could cause reputational damage if handled inadequately.
Our ability to safeguard such personal information, business information, and other sensitive information is important to our business. We take these matters seriously and take significant steps to protect our stored information, including the implementation of systems and processes to thwart malicious activity and invest in protecting and securing our information. These protections are costly and require ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated, including as a result of increasingly sophisticated AI tools becoming available. There can also be no assurance that these protections, including our timely mitigation, management and remediation of vulnerabilities will be fully implemented, complied with or effective in protecting our systems and information. Notwithstanding our efforts, implementation of our supporting controls could have coverage gaps and weaknesses, as well as the potential for human error, any of which could provide threat actors a window of time to exploit such weaknesses before they are addressed. The goal of our program is to manage risks in a prioritized fashion; however, control gaps and/or effectiveness, resource constraints, and execution failure can pose cybersecurity risk to us. In addition, although we work to continuously improve our internal controls and procedures on cybersecurity incident management, prevention, detection, mitigation, response, and recovery, we may be unsuccessful in detecting, reporting or responding to breaches or incidents in a timely manner, accurately assessing the severity of such an event, or sufficiently preventing, limiting, or containing harm arising out of an event. Further, we exercise only limited control over our third-party vendors, which increases our vulnerability to problems with services they provide.
Exposure as a result of any of the above factors could have a material negative effect on our business, financial condition, and results of operations. While we maintain cyber insurance that may help provide coverage for certain data breaches or cybersecurity incidents, such insurance may not be adequate to cover the costs and liabilities related to them, which in some cases could materially and adversely impact our business, financial condition, cash flows and results of operations. In addition, our insurance policy may change as a result of such incidents or for other reasons, which may result in premium increases or the imposition of increased deductibles or co-insurance requirements.
Our information technology systems, including our Enterprise Resource Planning (“ERP”) business management system, could be disrupted.
The efficient operation of our business depends on our information technology systems. We rely on our information technology systems and certain third-party providers to effectively manage our business data, communications, vendor relationships, order entry and fulfillment and other business and financial processes. We also rely on internet service providers, mobile networks and other third-party systems to operate our business. We are currently in the process of reviewing and updating our information technology systems and processes in order to enhance our data analytics capability. This implementation process will consume time and resources and may not result in our desired outcome or improved financial performance. Our failure to properly and efficiently implement our information technology systems, or the failure of our information technology systems to perform as we anticipate, could disrupt our business and could result in transaction errors, processing inefficiencies and the loss of revenue and customers, causing our business, financial condition, cash flows and results of operations to suffer. In addition, our information technology systems may be vulnerable to damage or interruption from circumstances beyond our control, including fire, natural disasters, power outages, systems failures and viruses. While we maintain disaster recovery plans, any such damage or interruption could have a material adverse effect on our business.
We are subject to governmental regulation including a variety of U.S. and international privacy and consumer protection laws, and any failure to comply with these regulations may have a material negative effect on our business and results of our operations.
We are subject to substantial governmental regulations affecting the use of certain types of data in our business. These include, but are not limited to, data privacy and protection laws, regulations, policies, and contractual obligations that apply to the collection, transmission, storage, security, processing, retention, and use of personally identifiable information or personal data, which among other things, impose certain requirements relating to the privacy and security of such information.
The data protection landscape is rapidly evolving in the United States, the European Union and elsewhere, including the European Union’s General Data Privacy Regulation (“GDPR”). As our operations and business grow, we may become subject to or affected by new or additional data protection laws and regulations and face increased scrutiny or attention from regulatory authorities. Substantial expenses and operational changes may be required in connection with maintaining compliance with such laws, and even an unsuccessful challenge by customers or regulatory authorities of our activities could result in adverse publicity and could require a costly response from and defense by us. In addition, certain privacy laws are still subject to a high degree of uncertainty as to their interpretation, application and impact, and may require extensive system and operational changes, be difficult to implement, increase our operating costs, adversely impact the cost or attractiveness of the products or services we offer, or result in adverse publicity and harm our reputation. State-specific data privacy laws and regulations continue to evolve and each state imposes different requirements. For example, the California Consumer Privacy Act imposes certain legal obligations on our use and processing of personal information related to California residents and gives residents the right to bring certain actions against companies. Similar laws are now in effect in more than ten other states, and have been adopted or proposed throughout the United States, at both the federal and state level, that could impose new privacy and security obligations. Complying with emerging and changing requirements may cause us to incur substantial costs and make enhancements to relevant data practices. Noncompliance could result in significant penalties or legal liability having an adverse effect on our operations and financials.
We do not own certain of the trade shows and events that we operate or certain trademarks associated with some of our shows and therefore rely on ongoing license agreements with certain third parties.
The risks associated with some of our relationships with industry trade associations or other third-party sponsors of our events such as KBIS (which is owned by the National Kitchen and Bath Association), CEDIA and our Military trade shows, which are the trade shows or events in our portfolio where the trademarks are owned by an industry association or other third party and not by us. Any material disruption to our relationship with these third parties could have a material adverse impact on the revenue stream from these trade shows or events. In addition, any of these third party owners may allege that we have breached a license agreement, whether with or without merit, and accordingly seek to terminate our license. If successful, this could result in our loss of the right to use the licensed intellectual property, which could adversely affect the success of our trade shows’ and events.
The infringement or invalidation of proprietary rights could have an adverse effect on our business.
We rely on trademark, trade secret and copyright laws in the United States and abroad to protect our proprietary rights, including with respect to the names of our trade shows and publications. Failure to obtain or maintain adequate protection of our intellectual property rights for any reason could have a material adverse effect on our business. Our trademarks, trade names and brand names distinguish our trade shows from those of our competitors and we have registered and applied to register many of these trademarks to prevent others from using or capitalizing our names. There can be no assurance that our trademark applications will be approved or that our federal registrations will be upheld if challenged. Third parties may oppose our applications or otherwise challenge our use of our trademarks through administrative processes or costly litigation which if successful, could force us to rebrand our products and/or services resulting in the loss of brand recognition. Further, there can be no assurance that competitors will not infringe upon our trademarks, or that we will identify all such infringements or have adequate resources to properly enforce our trademarks.
We have begun to use certain artificial intelligence (“AI”) technologies in our business, and challenges with properly managing their use could result in reputational harm, legal liability, and financial cost.
Uncertainty around new and evolving AI use, including generative AI, may require additional investment to develop responsible use frameworks, develop or license proprietary content and data, and develop new approaches and processes for attribution, consent and/or compensation, which could be costly. We currently use AI applications embedded in third party platforms on a relatively limited basis. The legal and regulatory environment relating to AI is uncertain and rapidly evolving, both in the United States and internationally, which includes regulatory schemes targeted specifically at AI as well as provisions in intellectual property, privacy, consumer protection, employment and other laws and regulations applicable to the use of AI. The use or adoption of new and emerging technologies may increase our exposure to intellectual property claims, and the availability of copyright and other intellectual property protection for AI-generated material is uncertain. Since we rely on AI applications developed by third parties, we are dependent in part on the manner in which those third parties develop and train their models, including risks arising from the inclusion of any unauthorized material in the training data for their models and the effectiveness of the steps these third parties have taken to limit the risks associated with the output of their models, over which we are likely to have limited visibility. While we continue to develop an AI strategy for internal use, if we do not properly manage and track our AI use, this could result in reputational harm and legal liability resulting in financial cost and expense and adversely impact the public perception of our business or the effectiveness of our security or compliance measures.
Risks Relating to Ownership of Our Securities
The price of our common stock has fluctuated substantially from time to time and may continue to fluctuate substantially in the future.
Our stock price has been, and may continue to be, subject to significant fluctuations, and has decreased significantly from historical trading levels as a result of a variety of factors, some of which are beyond our control, such as volatility in the stock markets and the effects of COVID-19. We may fail to meet the expectations of our stockholders or securities analysts at some point in the future, and our stock price could decline in the future as a result. This volatility and the size of Onex’s investment in our equity securities may prevent you from being able to sell your common stock at or above the price you paid for your common stock. Additionally, further declines in our stock price could require further goodwill write-downs.
In addition, the stock markets in general have experienced extreme volatility recently that has often been unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock. Securities class action litigation has often been instituted against companies following periods of volatility in the overall market and in the market price of a company’s securities. Such litigation, if instituted against us, could result in substantial costs, divert our management’s attention and resources and harm our business, operating results and financial condition.
Because Onex controls the majority of our equity securities, it may control all major corporate decisions and its interests may conflict with the interests of other holders of our equity securities.
As of December 31, 2024, Onex beneficially owned 184,520,200 shares of our common stock, representing approximately 91.6% of our outstanding common stock.
Accordingly, for so long as Onex continues to hold the majority of our equity securities, Onex will exercise a controlling influence over our business and affairs and will have the power to determine all matters submitted to a vote of our stockholders, including the election of directors and approval of significant corporate transactions such as amendments to our certificate of incorporation, mergers and the sale of all or substantially all of our assets. Onex could cause corporate actions to be taken that conflict with the interests of our other stockholders. This concentration of ownership could have the effect of deterring or preventing a change in control transaction that might otherwise be beneficial to our stockholders. In addition, Onex may in the future own businesses that directly compete with ours.
Future stock issuances or sales could adversely affect the market price of our common stock.
The market price of our common stock could decline as a result of future issuances or sales of a large number of our common stock in the market or the sale of securities convertible into a large number of our common stock, including in connection with acquisitions by the Company. The perception that these issuances or sales could occur may also depress the market price of our common stock. We have entered into registration rights agreements with Onex that grant the Onex entities that hold shares of our common stock the right, subject to certain conditions, to require us to register the sale of their shares under the federal securities laws. By exercising their registration rights, and selling a large number of shares, these holders could cause the prevailing market price of our common stock to decline.
Additionally, any convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our common stock, and may result in dilution to owners of our common stock. Because our decision to issue or sell additional debt or equity securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future issuances or sales. Also, we cannot predict the effect, if any, of future issuances or sales of our common stock on the market price of our common stock.
Our directors who have relationships with Onex may have conflicts of interest with respect to matters involving us.
Two of our nine directors are affiliated with Onex. These persons have fiduciary duties to both us and Onex. As a result, they may have real or apparent conflicts of interest on matters affecting both us and Onex, which in some circumstances may have interests adverse to ours. Onex is in the business of making or advising on investments in companies and may hold, and may from time to time in the future acquire, interests in, or provide advice to, businesses that directly or indirectly compete with certain portions of our business or that are suppliers or customers of ours. In addition, as a result of Onex’s ownership interest, conflicts of interest could arise with respect to transactions involving business dealings between us and Onex including potential acquisitions of businesses or properties, the issuance of additional securities, the payment of dividends by us and other matters. In November 2020, Onex committed to invest more than $300 million in Convex Group Limited (“Convex”). Convex is the lead underwriter of Emerald’s 2022, 2023, 2024, 2025 and 2026 event cancellation insurance policies. In addition, in January 2018, Onex completed its acquisition of SMG Holdings Inc. (“SMG”), a leading global manager of convention centers, stadiums, arenas, theaters, performing arts centers and other venues. SMG subsequently merged with AEG Facilities, LLC to form ASM Global (“ASM”). While some of our events are staged in ASM managed venues, and two of our directors affiliated with Onex also served as directors of ASM, Onex sold their ownership position in ASM during the third quarter of 2024.
In addition, our amended and restated certificate of incorporation provides that the doctrine of “corporate opportunity” does not apply with respect to us, to Onex or certain related parties or any of our directors who are employees of Onex or its affiliates such that Onex and its affiliates are permitted to invest in competing businesses or do business with our customers. Under the amended and restated certificate of incorporation, subject to the limitations set forth therein, Onex is not required to tell us about a corporate opportunity, may pursue that opportunity for itself or it may direct that opportunity to another person without liability to our stockholders. To the extent they invest in such other businesses, Onex may have differing interests than our other stockholders.
We are a “controlled company” within the meaning of the rules of the New York Stock Exchange and, as a result, rely on exemptions from certain corporate governance requirements.
Onex owns the majority of our outstanding common stock. As a result, we are a “controlled company” within the meaning of the New York Stock Exchange corporate governance rules. As a controlled company, we have the right to elect not to comply with certain corporate governance requirements of the New York Stock Exchange, including:
•the requirement that a majority of our board consist of independent directors;
•the requirement that we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;
•the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and
•the requirement for an annual performance evaluation of the nominating and corporate governance committee and compensation committee.
Accordingly, while our board currently has a majority of independent directors, our nominating and corporate governance and compensation committees do not consist entirely of independent directors. As a result, our stockholders will not have the same protection afforded to stockholders of companies that are subject to all of the corporate governance requirements of the New York Stock Exchange.
Anti-takeover provisions in our charter documents and Delaware law could discourage a change of control of our company or a change in our management.
Our amended and restated certificate of incorporation, and our second amended and restated bylaws, and the Delaware General Corporation Law (the “DGCL”), contain provisions that might discourage, delay or prevent a merger, acquisition, or other change in control that stockholders may consider favorable, including in transactions in which stockholders might otherwise receive a premium for their shares. These provisions may also prevent or frustrate attempts by our stockholders to replace or remove our management. Among other things, our amended and restated certificate of incorporation and amended and restated bylaws:
•authorize the issuance of blank check preferred stock that our board of directors could issue in order to increase the number of outstanding shares and discourage a takeover attempt;
•divide our board of directors into three classes with staggered three-year terms;
•limit the ability of stockholders to remove directors to permit removals only “for cause” once Onex ceases to own more than 50% of all our outstanding common stock;
•prohibit our stockholders from calling a special meeting of stockholders once Onex ceases to own more than 50% of all our outstanding common stock;
•prohibit stockholder action by written consent once Onex ceases to own more than 50% of all our outstanding common stock, which will require that all stockholder actions be taken at a duly called meeting of our stockholders;
•provide that our board of directors is expressly authorized to adopt, alter, or repeal our second amended and restated bylaws;
•provide, subject to limited exceptions, that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders;
•establish advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted upon by stockholders at stockholder meetings; and
•require the approval of holders of at least two-thirds of the outstanding shares of common stock to amend our amended and restated bylaws and certain provisions of our amended and restated certificate of incorporation if Onex ceases to own more than 50% of all our outstanding common stock.
These anti-takeover defenses could discourage, delay or prevent a transaction involving a change in control of our company. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and cause us to take corporate actions other than those you desire.
We cannot assure you that we will continue to pay dividends on our common stock, and our indebtedness could limit our ability to pay dividends on our common stock.
On August 6, 2024, the Company’s board of directors approved the reintroduction of a regular quarterly dividend, and declared a dividend for the quarter ending September 30, 2024 of $0.015 per share payable to holders of record of the Company’s common stock. On October 29, 2024, the Board declared a dividend for the quarter ending December 31, 2024 of $0.015 per share payable to holders of record of the Company’s common stock. The payment of cash dividends in future quarters is subject to the discretion of our board of directors and our compliance with applicable law, and depending on, among other things, our results of operations, capital requirements, financial condition, contractual restrictions, restrictions in our debt agreements and in any preferred equity securities, business prospects and other factors that our board of directors may deem relevant. Because we are a holding company and have no direct operations, we expect to pay dividends, if any, only from funds we receive from our subsidiaries, which may further restrict our ability to pay dividends as a result of the laws of their jurisdiction of organization, agreements of our subsidiaries or covenants under any existing and future outstanding indebtedness we or our subsidiaries incur. Our Second Amended and Restated Senior Secured Credit Facilities restrict our ability to pay dividends on our common stock, and we expect that any future agreements governing indebtedness will contain similar restrictions. For more information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources-Dividend Policy” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Long-Term Debt.”
Our dividend policy entails certain risks and limitations, particularly with respect to our liquidity. By paying cash dividends rather than investing that cash in our business or repaying debt, we risk, among other things, slowing the pace of our growth and having insufficient cash to fund our operations or unanticipated capital expenditures or limiting our ability to incur additional borrowings.
Although we expect to continue to pay dividends according to our dividend policy, we may not pay dividends according to our policy, or at all, if, among other things, we do not have the cash necessary to pay our intended dividends. The declaration and payment of dividends will be determined at the discretion of our board of directors, acting in compliance with applicable law and contractual restrictions.
Because we are a holding company with no operations of our own, we rely on dividends, distributions, and transfers of funds from our subsidiaries.
We are a holding company that conducts all of our operations through subsidiaries. Consequently, we rely on dividends or advances from our subsidiaries. The ability of such subsidiaries to pay dividends to us is subject to applicable local law and may be limited due to terms of other contractual arrangements, including our indebtedness. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Long-Term Debt.” Such laws and restrictions would restrict our ability to continue operations. In addition, Delaware law may impose requirements that may restrict our ability to pay dividends to holders of our common stock.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments.
None.

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ITEM 2. PROPERTIES
Item 2. Properties.
We have two key offices located in New York, New York and San Juan Capistrano, California. We also have other smaller office locations throughout the United States, including in Rye, New Hampshire and Alpharetta, Georgia. We lease our offices from third parties on market terms and, in some cases following an acquisition, through transition services agreements with the applicable seller.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings.
From time to time, we may be involved in general legal disputes arising in the ordinary course of our business. We are not currently involved in legal proceedings that could reasonably be expected to have a material adverse effect on our business, financial condition, cash flows or results of operations. Refer to Note 16, Commitments and Contingencies, in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information regarding our legal proceedings.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures.
None.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information for Common Stock and Holders of Record
Our common stock has been listed on the New York Stock Exchange since April 28, 2017 and trades under the symbol “EEX”. The approximate number of record holders of our common stock on March 12, 2025 was 34. Because many of our shares of common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
Issuer Purchases of Equity Securities
In October 2024, our board of directors approved an extension and expansion of our previously announced share repurchase program, which allows for the repurchase of $25.0 million of our common stock from time to time through and including December 31, 2025, subject to early termination or extension by the board of directors. This approval extends and expands the previously authorized $25.0 million share repurchase program that was effective through December 31, 2024. The share repurchase program may be suspended or discontinued at any time without notice. There is no minimum number of shares that we are required to repurchase. Shares may be purchased from time to time in the open market, including pursuant to one or more Rule 10b5-1 purchase plans that we may enter into from time to time, or in privately negotiated transactions. Such purchases will be at times and in amounts as we deem appropriate, based on factors such as market conditions, legal requirements and other business considerations.
In November 2023, we announced that our board of directors had authorized an extension and expansion of our previously authorized $25.0 million share repurchase program through December 31, 2024.
The following table presents our purchases of common stock during the fourth quarter ended December 31, 2024, as part of the publicly announced share repurchase program:
(Dollars in millions, except per share data)
Total Number
of Shares
Purchased
Average Price
Paid Per Share
Total Number
of Shares
Purchased as
Part of
Publicly
Announced
Program(1)
Approximate
Dollar Value of
Shares That
May Yet Be
Purchased
Under the
Program
October 1, 2024 - October 31, 2024
276,189
$
4.45
276,189
$
24.8
November 1, 2024 - November 30, 2024
1,011,158
4.76
1,011,158
20.0
December 1, 2024 - December 31, 2024
489,537
4.81
489,537
17.6
Total
1,776,884
(1)Includes shares of common stock settled between October 1, 2024 and December 31, 2024.
Dividend Policy
On August 6, 2024, our board of directors approved the reintroduction of a regular quarterly dividend, and declared a dividend for the quarter ending September 30, 2024 of $0.015 per share payable to holders of record of our common stock. On October 29, 2024, the Company’s board of directors declared a dividend for the quarter ending December 31, 2024 of $0.015 per share payable to holders of record of our common stock. The payment of any such dividend in future quarters is subject to the discretion of our board of directors and depending upon our results of operations, cash requirements, financial condition, contractual restrictions, restrictions imposed by applicable laws and other factors that our board of directors may deem relevant, and the amount of any future dividend payment may be changed or terminated in the future at any time and for any reason without advance notice.
For more information, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources-Dividend Policy.”
Stock Performance Graph
The following performance graph and related information shall not be deemed “soliciting material” or “filed” with the SEC, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933, or the Securities Exchange Act of 1934, each as amended, except to the extent that it is specifically incorporated by reference into such filing.
The following graph compares the yearly percentage change in the cumulative total stockholder return on our common stock with corresponding changes in the cumulative total returns of the Russell 2000 Index and our peer groups for the period from December 31, 2019 through December 31, 2024. The comparison assumes an initial investment of $100 at the close of business on December 31, 2019 in our stock and in each of the indices and also assumes the reinvestment of dividends where applicable. This historical performance is not necessarily indicative of future performance.
(1)Exhibition Peers include Ascential PLC, Hyve Group Plc, Informa PLC, Relx PLC and Pursuit Attractions and Hospitality, Inc. (formerly Viad Corp).
(2)Business Services Peers include Aramark, Barrett Business Services, Inc., KForce Inc. and TrueBlue, Inc.
(3)Advertising and Entertainment Peers include Cinemark Holdings, Inc. and National CineMedia, Inc.
(4)Digital Information Services & Research Peers include Gartner, Inc., IHS Markit Ltd., John Wiley & Sons, Inc. and Nielsen Holdings plc.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. Selected Financial Data.
The following table presents selected consolidated financial data for the periods and at the dates indicated. The selected consolidated financial data as of December 31, 2024, 2023, 2022, 2021 and 2020, and for the years ended December 31, 2024, 2023, 2022, 2021 and 2020, have been derived from our audited consolidated financial statements. This financial data should be read in conjunction with the consolidated financial statements, related notes, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information appearing elsewhere in this Annual Report on Form 10-K.
The following information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Business” and our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Year Ended December 31,
2024(1)
2023(1)
2022(1)
2021(1)
2020(1)
(dollars in millions, share data in thousands except earnings per share)
Statement of income and
comprehensive income data:
Revenues
$
398.8
$
382.8
$
325.9
$
145.5
$
127.4
Other income, net
1.5
2.8
182.8
77.4
107.0
Cost of revenues
147.5
137.6
116.5
57.1
57.6
Selling, general and administrative
expenses(2)
170.4
168.3
145.0
143.0
118.6
Depreciation and amortization expense
28.3
45.0
59.5
47.6
48.6
Goodwill impairment charge(3)
-
-
6.3
7.2
603.4
Intangible asset impairment charge(4)
7.3
-
1.6
32.7
76.8
Operating income (loss)
46.8
34.7
179.8
(64.7
)
(670.6
)
Interest expense
47.8
43.3
24.5
15.9
20.6
Interest income
8.5
8.2
2.7
0.1
0.1
Loss on extinguishment of debt(5)
-
2.3
-
-
-
Other expense
-
-
-
0.1
0.1
Loss on disposal of fixed assets
-
0.2
-
0.4
-
Income (loss) before income taxes
7.5
(2.9
)
158.0
(81.0
)
(691.2
)
Provision for (benefit from) income taxes
5.3
5.3
27.2
(1.3
)
(57.6
)
Net income (loss) and comprehensive
income (loss)
2.2
(8.2
)
130.8
(79.7
)
(633.6
)
Accretion to redemption value
of redeemable convertible
preferred stock(6)
(12.7
)
(42.0
)
(38.8
)
(35.6
)
(15.6
)
Participation rights on if-converted basis
-
-
(60.2
)
-
-
Net (loss) income and comprehensive
(loss) income attributable to
Emerald Holding, Inc. common
stockholders
$
(10.5
)
$
(50.2
)
$
31.8
$
(115.3
)
$
(649.2
)
Net (loss) income per share attributable
to common stockholders
Basic
$
(0.07
)
$
(0.78
)
$
0.46
$
(1.62
)
$
(9.09
)
Diluted
$
(0.07
)
$
(0.78
)
$
0.46
$
(1.62
)
$
(9.09
)
Weighted average common shares
outstanding
Basic
156,592
63,959
69,002
71,309
71,431
Diluted
156,592
63,959
69,148
71,309
71,431
Dividends declared per common share
$
0.0300
$
-
$
-
$
-
$
0.0750
Statement of cash flows data:
Net cash provided by (used in)
operating activities
$
46.8
$
40.3
$
175.1
$
90.0
$
(37.1
)
Net cash used in investing activities
$
(25.0
)
$
(21.0
)
$
(47.9
)
$
(131.9
)
$
(37.3
)
Net cash (used in) provided by
financing activities
$
(31.2
)
$
(54.2
)
$
(119.3
)
$
(22.2
)
$
360.1
As of December 31,
(dollars in millions)
Balance sheet data:
Cash and cash equivalents
$
194.8
$
204.2
$
239.1
$
231.2
$
295.3
Total assets(7)
$
1,048.7
$
1,053.9
$
1,098.4
$
1,062.4
$
1,054.4
Total debt(8)
$
409.2
$
413.3
$
415.3
$
519.7
$
525.2
Total liabilities
$
662.8
$
649.3
$
659.1
$
749.5
$
659.9
(1)Financial data for the year ended December 31, 2024 includes the results of GRC and Glamping Americas since their acquisition on August 5, 2024, The Futurist since its acquisition on May 7, 2024 and Hotel Interactive since its acquisition on January 19, 2024. Financial data for the year ended December 31, 2023 includes the results of Lodestone since its acquisition on January 9, 2023. Financial data for the year ended December 31, 2022 includes the results of Bulletin since its acquisition on July 11, 2022 and Advertising Week since its acquisition on June 21, 2022. Financial data for the year ended December 31, 2021 includes the results of MJBiz since its acquisition on December 31, 2021 and Sue Bryce Education and the Portrait Masters since its acquisition on April 1, 2021. Financial data for the year ended December 31, 2020 includes the results of PlumRiver since its acquisition on December 31, 2020 and EDspaces since its acquisition on December 21, 2020.
(2)Selling, general and administrative expenses for the years ended December 31, 2024, 2023, 2022, 2021 and 2020 included expenses of $13.5 million, $10.5 million, a gain of $14.0 million, and expenses of $9.4 million and $7.0 million, respectively, in non-cash contingent consideration remeasurements, and acquisition-related transaction, transition and integration costs, including one-time severance, legal and advisory fees. Also included in selling, general and administrative expenses for the years ended December 31, 2024, 2023, 2022, 2021 and 2020, were stock-based compensation expenses of $5.8 million, $7.8 million, $5.8 million, $10.4 million and $6.7 million, respectively.
(3)The goodwill impairments for the year ended December 31, 2022 represent a non-cash impairment charge of $6.3 million in connection with the interim January 31, 2022 testing of goodwill for impairment. The goodwill impairments for the year ended December 31, 2021, represent a non-cash impairment charge of $7.2 million in connection with our annual October 31 testing of goodwill for impairment. The goodwill impairments for the year ended December 31, 2020, represent a non-cash impairment charge of $588.2 million in connection with the interim March 31, 2020 testing of goodwill for impairment and a non-cash impairment charge of $15.2 million for goodwill in connection with our annual October 31 testing of goodwill for impairment. No goodwill impairments were recorded for the years ended December 31, 2024 and 2023.
(4)The intangible asset impairments for the years ended December 31, 2024, 2022, 2021 and 2020, were recorded to align the carrying value of certain trade name and customer relationship intangible assets with their fair value. No intangible asset impairments were recorded for the year ended December 31, 2023.
(5)Loss on extinguishment of debt for the year ended December 31, 2023 of $2.3 million was comprised of $2.1 million of original issuance discount (“OID”) related to the term loan borrowings under the Amended and Restated Senior Secured Credit Facilities as then in effect and $0.2 million of previously capitalized OID and debt issuance costs, allocated to lenders in the syndicate whose balances were extinguished in conjunction with the Term Loan Amendment as defined in Note 7, Debt, to the audited financial statements included elsewhere in this Annual Report on Form 10-K.
(6)During the year ended December 31, 2020, we received proceeds of $373.3 million, net of fees and expenses of $17.2 million, from the sale of redeemable convertible preferred stock to Onex in the Initial Private Placement (as defined below) and net proceeds of approximately $9.7 million pursuant to the Rights Offering. We used $50.0 million of the net proceeds from the sale of redeemable convertible preferred stock to repay outstanding debt under the Amended and Restated Revolving Credit Facility and used the remaining proceeds for general corporate purposes, including organic and acquisition growth initiatives. During the years ended December 31, 2024, 2023, 2022, 2021 and 2020, we recorded accretion of $12.7 million, $42.0 million, $38.8 million, $35.6 million and $15.6 million, respectively, with respect to the redeemable convertible preferred stock, bringing the aggregate accreted carrying value to zero, $497.1 million, $472.4 million, $433.9 million and $398.3 million as of December 31, 2024, 2023, 2022, 2021 and 2020, respectively. The accretion is reflected in the calculation of net (loss) income and comprehensive (loss) income attributable to Emerald Holding, Inc. common stockholders.
(7)As of December 31, 2024, total assets included goodwill of $573.8 million and intangible assets, net, of $155.9 million. As of December 31, 2023, total assets included goodwill of $553.9 million and intangible assets, net, of $175.1 million. As of December 31, 2022, total assets included goodwill of $545.5 million and intangible assets, net, of $204.8 million. As of December 31, 2021, total assets included goodwill of $514.2 million and intangible assets, net, of $236.7 million. As of December 31, 2020, total assets included goodwill of $404.3 million and intangible assets, net, of $275.0 million.
(8)As of December 31, 2024, total debt of $409.2 million consisted of $402.7 million of term loan borrowings, net of unamortized deferred financing fees of $0.9 million and unamortized original issue discount of $5.6 million, and no revolving borrowings outstanding under the Amended and Restated Senior Secured Credit Facilities as then in effect. As of December 31, 2023, total debt of $413.3 million consisted of $402.9 million of term loan borrowings, net of unamortized deferred financing fees of $1.5 million and unamortized original issue discount of $8.9 million, and no revolving borrowings outstanding under the Amended and Restated Senior Secured Credit Facilities as then in effect. As of December 31, 2022, total debt of $415.3 million consisted of $413.9 million of term loan borrowings, net of unamortized deferred financing fees of $0.8 million and unamortized original issue discount of $0.6 million, and no revolving borrowings outstanding under the Amended and Restated Senior Secured Credit Facilities as then in effect. As of December 31, 2021, total debt of $519.7 million consisted of $516.6 million of term loan borrowings, net of unamortized deferred financing fees of $1.7 million and unamortized original issue discount of $1.4 million, and no revolving borrowings outstanding under the Amended and Restated Senior Secured Credit Facilities as then in effect. As of December 31, 2020, total debt of $525.4 million consisted of $521.0 million of term loan borrowings, net of unamortized deferred financing fees of $2.4 million and unamortized original issue discount of $2.0 million, and no revolving borrowings outstanding under the Amended and Restated Senior Secured Credit Facilities as then in effect.
Quarterly Results of Operations (Unaudited)
The following table sets forth our unaudited quarterly consolidated statements of (loss) income and comprehensive (loss) income data for each of the eight quarterly periods ended December 31, 2024 and 2023. The information for each of these quarters has been prepared on the same basis as the audited annual consolidated financial statements included elsewhere in this Annual Report on Form 10-K and, in our opinion, includes all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the results of operations for these periods. This information should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. These quarterly results are not necessarily indicative of our operating results for a full year or any future period.
Quarter Ended
Dec. 31,
Sept. 30,
Jun. 30,
Mar. 31,
Dec. 31,
Sept. 30,
Jun. 30,
Mar. 31,
(unaudited)
(dollars in millions, share data in thousands except earnings per share)
Statement of income and
comprehensive income data:
Revenues
$
106.8
$
72.6
$
86.0
$
133.4
$
101.5
$
72.5
$
86.5
$
122.3
Other income, net
0.5
-
-
1.0
-
2.8
-
-
Cost of revenues
43.8
23.1
33.1
47.5
35.7
25.9
32.8
43.2
Selling, general and administrative
expense
34.6
40.8
39.5
55.5
36.1
41.6
41.8
48.8
Depreciation and amortization expense
7.1
7.1
7.0
7.1
9.8
8.8
12.9
13.5
Intangible asset impairment charges
1.0
6.3
-
-
-
-
-
-
Operating income (loss)
20.8
(4.7
)
6.4
24.3
19.9
(1.0
)
(1.0
)
16.8
Interest expense
11.4
12.3
12.0
12.1
11.8
12.1
11.4
8.0
Interest income
1.9
2.2
2.1
2.3
3.2
1.6
2.3
1.1
Loss on extinguishment of debt
-
-
-
-
-
-
2.3
-
Other (income) expense
-
-
-
-
(0.1
)
0.1
0.1
(0.1
)
Loss on disposal of fixed assets
-
-
-
-
-
-
-
0.2
Income (loss) before income taxes
11.3
(14.8
)
(3.5
)
14.5
11.4
(11.6
)
(12.5
)
9.8
Provision for (benefit from) income taxes
6.2
(3.7
)
(0.7
)
3.5
29.3
(22.3
)
(4.4
)
2.7
Net income (loss) and comprehensive
income (loss)
5.1
(11.1
)
(2.8
)
11.0
(17.9
)
10.7
(8.1
)
7.1
Accretion to redemption value
of redeemable convertible
preferred stock
-
-
(2.0
)
(10.7
)
(10.8
)
(10.7
)
(10.4
)
(10.1
)
Participation rights on if-converted basis
-
-
-
(0.2
)
-
-
-
-
Net income (loss) and comprehensive
income (loss) attributable to
Emerald Holding, Inc. common
stockholders
$
5.1
$
(11.1
)
$
(4.8
)
$
0.1
$
(28.7
)
$
0.0
$
(18.5
)
$
(3.0
)
Basic income (loss) per share
$
0.03
$
(0.05
)
$
(0.03
)
$
0.00
$
(0.45
)
$
0.00
$
(0.29
)
$
(0.04
)
Diluted income (loss) per share
$
0.03
$
(0.05
)
$
(0.03
)
$
0.00
$
(0.45
)
$
0.00
$
(0.29
)
$
(0.04
)
Basic weighted average common
shares outstanding
202,495
203,893
155,915
63,039
63,601
63,586
62,868
67,280
Diluted weighted average common
shares outstanding
202,825
203,893
155,915
65,205
63,601
63,586
62,868
67,280
Dividend declared per common share
$
0.0150
$
0.0150
$
-
$
-
$
-
$
-
$
-
$
-

---

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion and analysis of the financial condition and results of our operations should be read in conjunction with “Item 6. Selected Financial and Operating Data” and our consolidated financial statements and related notes of Emerald Holding, Inc. included in Item 15 of this Annual Report on Form 10-K. You should review the “Item 1A. Risk Factors” section of this filing for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by any forward-looking statements contained in the following discussion and analysis.
This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023. Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Recent Events
Dividend
On February 25, 2025, Emerald’s board of directors declared a dividend for the quarter ending March 31, 2025 of $0.015 per share payable on March 20, 2025 to holders of record of Emerald’s common stock on March 10, 2025.
2025 Refinancing Transactions
On January 30, 2025, Emerald X, Inc. (“Emerald X”), a wholly-owned subsidiary of the Company, entered into new senior secured credit facilities (the “Second Amended and Restated Senior Secured Credit Facilities”) with a syndicate of lenders and Bank of America, N.A., as administrative agent, providing for (i) a seven-year $515.0 million senior secured term loan facility (the “Second Amended and Restated Term Loan Facility”), scheduled to mature on January 30, 2032 and (ii) a $110.0 million senior secured revolving credit facility (the “Second Amended and Restated Revolving Credit Facility”), scheduled to mature on January 30, 2030. A portion of the proceeds of the Second Amended and Restated Term Loan Facility were used to refinance all existing loans outstanding under Emerald X’s previous Amended and Restated Senior Secured Credit Facilities (the “Amended and Restated Senior Secured Credit Facilities”), and to pay costs and expenses in connection with the refinancing. The balance of the proceeds of the Second Amended and Restated Term Loan Facility remained on the balance sheet of Emerald X and may be used from time to time for general business purposes, including the financing of acquisitions. The Second Amended and Restated Revolving Credit Facility was not drawn and may be used from time to time for general business purposes, including the financing of acquisitions.
For more information regarding these refinancing transactions (the “2025 Refinancing Transactions”) and the senior secured credit facilities in effect during the periods covered by this Management’s Discussion and Analysis, see “- Liquidity and Capital Resources - Long-Term Debt” and Note 7, Debt, to the audited financial statements included elsewhere in this Annual Report on Form 10-K.
Acquisitions
We completed the following acquisitions in 2025:
•JD Events LLC (“Plant Based World”) - On January 8, 2025, we acquired all of the assets of Plant Based World. Plant Based World produces live events for food service professionals, retailers, distributors, buyers, wholesalers and investors within the global food system.
•This is Beyond Limited (“This is Beyond”) - On March 13, 2025, we signed an agreement to acquire This is Beyond. This is Beyond produces invitation-only trade events for the entertainment travel industry. We expect to close the transaction during the second quarter of fiscal year 2025, subject to the satisfaction of customary closing conditions.
•Insurtech Insights Limited (“Insurtech”) - On March 13, 2025, we acquired Insurtech. Insurtech produces live events and webinars for the insurance technology community.
Overview and Background
Emerald is a leading operator of business-to-business trade shows principally in the United States, with expanding operations in the U.K. and international markets. Leveraging our shows as key market-driven platforms, we combine our events with effective industry insights, digital tools, and data-focused solutions to create uniquely rich experiences. Emerald strives to build its customers’ businesses by creating opportunities that deliver tangible results.
All of our trade show franchises typically hold market-leading positions within their respective industry verticals, with significant brand value established over a long period of time. Each of our shows is scheduled to stage at least annually, with certain franchises offering multiple editions per year. As our shows are frequently the largest and most well attended in their respective industry, we are able to attract high-quality attendees, including those who have the authority to make purchasing decisions on the spot or subsequent to the show. The participation of these attendees makes our trade shows “must-attend” events for our exhibitors, further reinforcing the leading positions of our trade shows within their respective industry verticals. Our attendees use our shows to fulfill procurement needs, source new suppliers, reconnect with existing suppliers, identify trends, learn about new products and network with industry peers, which we believe are factors that make our shows difficult to replace with non-face-to-face events. Our portfolio of trade shows is well-balanced and diversified across both industry sectors and customers.
In addition to organizing our trade shows, conferences and other events, we also operate content and content-marketing websites, related digital products, and produce publications, each of which is aligned with a specific sector for which we organize an event. We also offer business-to-business commerce and digital merchandising solutions, serving the needs of manufacturers and retailers, through our Elastic Suite platform. In addition to their respective revenues, these products complement our live events and provide us year-round channels of customer acquisition and development.
Organic Growth Drivers
We are primarily focused on generating organic growth by understanding and leveraging the drivers for increased exhibitor and attendee participation at trade shows and providing year-round services that provide incremental value to those customers. Creating new opportunities for exhibitors to influence their market, engage with significant buyers, generate incremental sales and expand their brand’s awareness in their industry builds further demand for exhibit space and strengthens the value proposition of a trade show, which generally allows us to modestly increase booth space pricing annually across our portfolio. At the same time, our trade shows provide attendees with the opportunity to enhance their industry connectivity, develop relationships with targeted suppliers and distributors, discover new products, learn about new industry developments, celebrate their industry’s achievements and, in certain cases, obtain continuing professional education credits, which we believe increases their propensity to return and, consequently, drives high recurring participation among our exhibitors. By investing in and promoting these tangible and return-on-investment linked outcomes, we believe we will be able to continue to enhance the value proposition for our exhibitors and attendees alike, thereby driving strong demand and premium pricing for exhibit space, sponsorship opportunities and attendee registration.
Acquisitions
We are also focused on growing our national footprint through the acquisition of high-quality events that are leaders in their specific industry verticals. Historically, we have completed acquisitions at earnings before interest, taxes, depreciation, and amortization (“EBITDA”) purchase multiples that are typically in the mid-to-high single digits. Our acquisitions have historically been structured as asset deals that have resulted in the generation of long-lived tax assets, which in turn have reduced our purchase multiples when incorporating the value of the created tax assets. In the future, we intend to look for acquisitions with similarly attractive valuation multiples.
Transactions Affecting Recent Periods
Acquisitions
We completed the following acquisitions during the periods presented in this Management’s Discussion and Analysis of Financial Condition and Results of Operations:
•Lodestone Events (“Lodestone”) - On January 10, 2023, we acquired substantially all of the assets of Lodestone. Lodestone is a producer of the Overland Expo series of vehicle-based, adventure travel consumer shows.
•Hotel Interactive (“HI”) - On January 19, 2024, we acquired all of the assets of HI. HI produces live events with pre-scheduled appointments and connects decision-makers and suppliers in their respective markets. HI operates 15 events in the hospitality, food service and healthcare and senior living space.
•Futurist - On May 7, 2024, we acquired all of the assets of the Blockchain Futurist Conference and its associated experiences.
•Over the Pond Media (“Glamping Americas”) - On August 5, 2024, we acquired all of the assets of Glamping Americas. Glamping Americas produces the only glamping industry event in the Americas.
•GRC World Forums Limited (“GRC”) - On August 5, 2024, we acquired GRC. GRC produces in-person events and livestream experiences in the governance, risk management and compliance business sectors.
Redeemable Preferred Stock
Mandatory Conversion of Preferred Stock
On April 18, 2024, the Company announced it had delivered a notice informing holders of its redeemable convertible preferred stock, including Onex-related entities, that it had exercised its right to mandate that all shares of the redeemable convertible preferred stock be converted to shares of the Company’s common stock. On May 2, 2024 (the “Conversion Date”), each holder of redeemable convertible preferred stock received approximately 1.9717 shares of common stock for each share of redeemable convertible preferred stock held as of the Conversion Date, in accordance with the terms of the conversion feature as described in more detail below. Following the Conversion Date, no redeemable convertible preferred stock was outstanding, and all rights of the former holders of the redeemable convertible preferred stock were terminated.
Prior to its conversion, each share of redeemable convertible preferred stock accumulated dividends at a rate per annum equal to 7% of the accreted liquidation preference, compounding quarterly by adding to the accreted liquidation preference until July 1, 2023, and thereafter, at the Company’s option, paid either in cash or by adding to the accreted liquidation preference. The Company’s board of directors approved the payment in cash of a dividend on the Company’s redeemable convertible preferred stock (such dividend, the “Preferred Stock Cash Dividend”) for each of the periods ending March 31, 2024, December 31, 2023 and September 30, 2023, and the Company paid Preferred Stock Cash Dividends for a total of $8.6 million, or $0.12 per share, respectively, in such periods. As a result of the mandatory conversion on the Conversion Date, the dividends that accrued in the period since the March 31, 2024 Preferred Stock Cash Dividend were settled in stock as a result of the mandatory conversion on May 2, 2024.
During the year ended December 31, 2024, the Company recorded no accretion with respect to the redeemable convertible preferred stock due to the payment of the Preferred Cash Dividend. During the year ended December 31, 2023, the Company recorded accretion of $16.7 million with respect to the redeemable convertible preferred stock, bringing the aggregate liquidation preference to $492.6 million as of December 31, 2023.
Trends and Other Factors Affecting Our Business
There are a number of existing and developing factors and trends which impact the performance of our business, and the comparability of our results from year to year and from quarter to quarter, including:
•Market Fragmentation - The trade show industry is highly fragmented, with the four largest companies, including Emerald, comprising only 8% of the wider U.S. market according to the International Globex Report 2023. This has afforded us the opportunity to acquire other trade show businesses, a growth opportunity we expect to continue pursuing. These acquisitions may affect our growth trends, impacting the comparability of our financial results on a year-over-year basis.
•Overall Economic Environment and Industry Sector Cyclicality - Our results of operations are correlated, in part, with the economic performance of the industry sectors that our trade shows serve, as well as the state of the overall economy, which may be affected by factors such as inflation and supply chain interruption. Overall economic conditions and inflationary pressure may also affect exhibitors’ or attendees’ willingness or ability to travel to attend our in-person events.
•Increases in Inflation and Interest Rates - Heightened levels of inflation present risk for us in terms of increased labor costs, venue costs and other expenses that may not be able to be passed on to customers through increased pricing. In addition, due to inflationary pressures, continued high interest rates relative to historical low rates may increase our financing and borrowing costs on new and existing debt.
•Lag Time - As the majority of our exhibit space is sold during the twelve months prior to each trade show, there is often a timing difference between changes in the economic conditions of an industry sector vertical and their effect on our results of operations. This lag time can result in a counter-cyclical impact on our results of operations.
•Variability in Quarterly Results - Our business is seasonal, with trade show revenues typically reaching their highest levels during the first and fourth quarters of each calendar year, entirely due to the timing of our trade shows. This seasonality is typical within the trade show industry. However, as a result of outside circumstances such as cancellations or interruptions resulting from natural or manmade disasters, including severe weather events or outbreaks of communicable diseases (e.g., COVID-19), future results may not align with this historical trend. Since event revenue is recognized when a particular event is held, we may also experience fluctuations in quarterly revenue and cash flows based on the movement of annual trade show dates from one quarter to another. Our presentation of Adjusted EBITDA and Organic revenue accounts for these quarterly movements and the timing of shows, where applicable and material.
How We Assess the Performance of Our Business
In assessing the performance of our business, we consider a variety of performance and financial measures. The key indicators of the financial condition and operating performance of our business are revenues, Organic revenue, cost of revenues, selling, general and administrative expenses, interest expense, depreciation and amortization, income taxes, Adjusted EBITDA and Free Cash Flow.
Basis of Presentation
As described in Note 1, Description of Business and Summary of Significant Accounting Policies, and Note 18, Segment Information, in the notes to our audited consolidated financial statements included in this Annual Report on Form 10-K, our business is organized into a single reportable segment, consistent with the information provided to our Chief Executive Officer, who is considered the chief operating decision-maker (“CODM”). The CODM evaluates performance based on the results of our Connections, Content and Commerce business lines, which represent our three operating segments. The Connections segment is primarily comprised of Emerald’s trade shows and other live events. Neither of the remaining two operating segments meets the quantitative thresholds to be considered a reportable segment and are included in the “All Other” category. In addition, we have a “Corporate-Level Activities” category consisting of finance, legal, information technology and administrative functions. Prior year disclosures below have been updated to reflect the new reportable segment structure described in Note 18, Segment Information.
The following discussion provides additional detailed disclosure for the one reportable segment, the “All Other” category and the “Corporate-Level Activity” category:
•Connections: This segment includes all of Emerald’s trade shows and other live events that provide exhibitors opportunities to influence their market, engage with significant buyers, generate incremental sales and expand their brand’s awareness in their industry.
•All Other: This category consists of Emerald’s remaining operating segments, which provide diverse media platforms and services and e-commerce software solutions, but are not aggregated with the reportable segments. Each of the operating segments in the All Other category do not meet the criteria to be a separate reportable segment.
•Corporate-Level Activity: This category consists of Emerald’s finance, legal, information technology and administrative functions.
Revenues
We generate revenues primarily from selling trade show exhibit space to exhibitors on a per square foot basis. Other trade show revenue streams include conferences, sponsorships, ancillary exhibition fees and attendee registration fees. Exhibitors contract for their booth space and sponsorships up to a year in advance of the trade show. Fees are typically invoiced and collected in full prior to the trade show or event. Additionally, we generate revenue through digital media and print publications that complement our trade shows. We also engage third-party sales agents to support our marketing efforts. Other marketing service revenue contracts are invoiced and recognized in the period the advertising services are delivered. Typically, the fees we charge are collected after the publications are issued.
We define “Organic revenue growth” and “Organic revenue decline” as the growth or decline, respectively, in our revenue from one period to the next, adjusted for the revenue impact of: (i) acquisitions and dispositions, (ii) discontinued events and (iii) material show scheduling adjustments. We disclose changes in Organic revenue because we believe it assists investors and analysts in comparing Emerald’s operating performance across reporting periods on a consistent basis by excluding items that we do not believe reflect a true comparison of the trends of the existing event calendar given changes in timing or strategy. Management and our board of directors evaluate changes in Organic revenue to understand underlying revenue trends of its events. Organic revenue is not defined under GAAP, and has limitations as an analytical tool, and you should not consider such measure either in isolation or as a substitute for analyzing our results as reported under GAAP. Some of these limitations include that Organic revenue reflects certain adjustments that we consider not to be indicative of our ongoing operating performance. Because not all companies use identical calculations, our presentation of Organic revenue may not be comparable to other similarly titled measures used by other companies.
Organic Revenue
Organic revenue is a supplemental non-GAAP financial measure of performance and is not based on any standardized methodology prescribed by GAAP. Organic revenue should not be considered in isolation or as an alternative to revenues or other measures determined in accordance with GAAP. Also, Organic revenue is not necessarily comparable to similarly titled measures used by other companies.
The most directly comparable GAAP measure to Organic revenue is revenues. For a reconciliation of Organic revenues to revenues as reported, see Footnote 5 to the table under the heading “Results of Operations-Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023.”
Other Income
We maintain event cancellation insurance to protect against losses due the unavoidable cancellation, postponement, relocation and enforced reduced attendance at events due to certain covered causes, including losses caused by natural disasters, such as hurricanes. For example, in October 2024, we canceled the remainder of a trade show in Florida due to adverse weather caused by Hurricane Milton after the show had commenced and some attendees had arrived. While these causes previously included event cancellation caused by the outbreak of communicable diseases, including COVID-19, Emerald’s renewed event cancellation insurance policies beginning with policy year 2022 do not cover losses due to event cancellations caused by the outbreak of communicable diseases. Our Other Income is primarily comprised of received or confirmed event cancellation insurance claim and insurance litigation settlement proceeds. See “Risk Factors-Risks Relating to our Business and Operations-We face risks associated with event cancellations or other interruptions to our business, which our insurance may not fully cover.”
Cost of Revenues
•Decorating Expenses. We work with general service contractors to both set up communal areas of our trade shows and provide services to our exhibitors, who primarily contract directly with the general service contractors. We will usually select a single general service contractor for an entire show, although it is possible to bid out packages of work within a single show on a piecemeal basis to different task-specific specialists. Decorating expenses represented 16%, 19%, and 17% of our total cost of revenues for the years ended December 31, 2024, 2023 and 2022, respectively, and 6%, 7%, and 6% of our total revenues for each of the years ended December 31, 2024, 2023 and 2022, respectively.
•Sponsorship Costs. We often enter into long-term sponsorship agreements with industry trade associations whereby the industry trade association endorses and markets the show to its members in exchange for a percentage of the show’s revenue. Sponsorship costs represented 13% of our total cost of revenues for each of the years ended December 31, 2024, 2023 and 2022, and 5% of our total revenues for each of the years ended December 31, 2024, 2023 and 2022.
•Venue Costs. Venue costs represent rental costs for the venues, usually convention centers or hotels, where we host our trade shows. Given that convention centers are typically owned by local governments who have a vested interest in stimulating business activity in and attracting tourism to their cities, venue costs typically represent a small percentage of our total cost of revenues. Venue costs represented 10%, 12%, and 11% of our total cost of revenues for the years ended December 31, 2024, 2023 and 2022, respectively, and 4% of our total revenues for each of the years ended December 31, 2024, 2023 and 2022.
•Costs of Other Marketing Services. Costs of other marketing services represent paper, printing, postage, contributor and other costs related to digital media and print publications. Costs of other marketing services represented 6%, 5%, and 6% of our total cost of revenues for each of the years ended December 31, 2024, 2023 and 2022, respectively, and 2% of our total revenues for each of the years ended December 31, 2024, 2023 and 2022.
•Other Event-Related Expenses. Other event-related costs include temporary labor for services such as security, shuttle buses, speaker fees, food and beverage expenses and event cancellation insurance. Other event-related expenses represented 33%, 35%, and 27% of our total cost of revenues for the years ended December 31, 2024, 2023 and 2022, respectively, and 12%, 13%, and 10% of our total revenues for the year ended December 31, 2024, 2023 and 2022, respectively.
Selling, General and Administrative Expenses
•Labor Costs. Labor costs represent the cost of employees who are involved in sales, marketing, planning and administrative activities. The actual on-site set-up of the events is contracted out to third-party vendors and is included in cost of revenues. Labor costs represented 64%, 64%, and 72% of our total selling, general and administrative expenses for the years ended December 31, 2024, 2023 and 2022, respectively, and 27%, 28%, and 32% of our total revenues for each of the years ended December 31, 2024, 2023 and 2022, respectively.
•Miscellaneous Expenses. Miscellaneous expenses are comprised of a variety of other expenses, including advertising and marketing costs, promotion costs, credit card fees, travel expenses, printing costs, office supplies and office rental expense. Direct trade show costs are recorded in cost of revenues. All other costs are recorded in selling, general and administrative expenses. Miscellaneous expenses represented 36%, 36%, and 28% of our total selling, general and administrative expenses, for the years ended December 31, 2024, 2023 and 2022, respectively, and 15%, 16%, and 13% of our total revenues for the years ended December 31, 2024, 2023 and 2022, respectively.
Interest Expense
Interest expense principally represents interest payments and certain other fees paid to lenders under our Amended and Restated Senior Secured Credit Facilities (as amended, for the portion of the year ended December 31, 2023 after the Term Loan Amendment Effective Date, by the Term Loan Amendment). Interest expense for the year ended December 31, 2022, and for the portion of 2023 prior to the Term Loan Amendment Effective Date (as defined in Note 7, Debt, to the audited financial statements included elsewhere in this Annual Report on Form 10-K), principally represented interest paid in respect of our Amended and Restated Senior Secured Credit Facilities (as amended and in effect during the applicable period).
Depreciation and Amortization
We have historically grown our business through acquisitions and, in doing so, have acquired significant intangible assets, the value of some of which is amortized over time. These acquired intangible assets, unless determined to be indefinite-lived, are amortized over extended periods of three to thirty years from the date of each acquisition for reporting under accounting principles generally accepted in the United States of America (“GAAP”) purposes, or fifteen years for tax purposes. This amortization expense reduces our taxable income. Depreciation expense relates to property and equipment and represented less than 1% of our total revenues for each of the years ended December 31, 2024 and 2023, and approximately 1% of our total revenues for the year ended December 31, 2022.
Income Taxes
Income tax expense consists of U.S. federal, state, local and foreign taxes based on income in the jurisdictions in which we operate.
We record deferred tax charges or benefits primarily associated with our utilization or generation of net operating loss carryforwards and book-to-tax differences related to amortization of goodwill, amortization of intangible assets, depreciation, stock-based compensation charges, 163(j) interest expense limitation and deferred financing costs.
Cash Flow Model
We typically have favorable cash flow characteristics, as described below (see “Liquidity and Capital Resources-Cash Flows”), as a result of our high profit margins, low capital expenditures and consistent negative working capital, excluding cash on hand. Our working capital, excluding cash on hand, is negative due to the fact that our current assets are generally lower than our current liabilities. Current assets primarily include accounts receivable and prepaid expenses, while current liabilities primarily include accounts payable and deferred revenues. Cash received prior to an event is recorded as deferred revenue on our balance sheet and recognized as revenue upon completion of each trade show. The implication of having negative working capital, excluding cash on hand, is that changes in working capital represent a source of cash as our business grows. Accounts receivable and deferred revenue balances related to cancelled events have been reclassified to Cancelled event liabilities in the consolidated balance sheets, as the net amount represents balances which we expect will be refunded to our customers.
The primary driver for our negative working capital, excluding cash on hand, is the sales cycle for a trade show, which typically begins during the twelve months prior to a show. In the interim period between the current show and the following show, we continue to sell to new and past exhibitors and collect payments on contracted exhibit space. Our exhibitors pay in full in advance of each trade show, whereas the bulk of direct expenses are paid close to or after the show. Cash deposits start to be received as early as twelve months prior to a show taking place and the balance of booth space fees are typically received in cash one month prior to a show taking place. This highly efficient cash flow model, where cash is received in advance of expenses to be paid, creates a working capital benefit.
Free Cash Flow
In addition to net cash provided by operating activities presented in accordance with GAAP, we present Free Cash Flow because we believe it is a useful indicator of liquidity that provides information to our management and investors about the amount of cash generated from our core operations that, after capital expenditures, can be used for the repayment of indebtedness, paying of dividends, repurchasing of shares of our common stock and strategic initiatives, including investing in our business and making strategic acquisitions.
Free Cash Flow is a supplemental non-GAAP financial measure of liquidity and is not based on any standardized methodology prescribed by GAAP. Free Cash Flow should not be considered in isolation or as an alternative to net cash provided by operating activities or other measures determined in accordance with GAAP. Also, Free Cash Flow is not necessarily comparable to similarly titled measures used by other companies.
The most directly comparable GAAP measure to Free Cash Flow is net cash provided by operating activities. For a reconciliation of Free Cash Flow to net cash provided by operating activities, see Footnote 4 to the table under the heading “Results of Operations-Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023.”
Adjusted EBITDA
Adjusted EBITDA is a key measure of our performance. We define Adjusted EBITDA as net income (loss) before (i) interest expense, (ii) provision for (benefit from) income taxes, (iii) goodwill impairments, (iv) intangible asset impairments, (v) depreciation and amortization, (vi) stock-based compensation, (vii) deferred revenue adjustment and (viii) other items that we believe are not part of our core operations. We present Adjusted EBITDA because we believe it assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance.
Management and our board of directors use Adjusted EBITDA to assess our financial performance and believe it is helpful in highlighting trends because it excludes the results of decisions that are outside the control of management, while other performance metrics can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. We reference Adjusted EBITDA frequently in our decision-making because it provides supplemental information that facilitates internal comparisons to the historical operating performance of prior periods.
Adjusted EBITDA is not defined under GAAP and has limitations as an analytical tool, and you should not consider such measure either in isolation or as a substitute for analyzing our results as reported under GAAP. Some of these limitations include that Adjusted EBITDA excludes certain normal recurring expenses and one-time cash adjustments that we consider not to be indicative of our ongoing operating performance. Because not all companies use identical calculations, our presentation of Adjusted EBITDA may not be comparable to other similarly titled measures used by other companies.
The most directly comparable GAAP measure to Adjusted EBITDA is net income (loss). For a reconciliation of Adjusted EBITDA to net income (loss), see Footnote 3 to the table under the heading “Results of Operations-Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023.”
Results of Operations
Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023
The tables in this section summarize key components of our results of operations for the periods indicated.
Year Ended December 31,
Variance $
Variance %
(dollars in millions)
Statement of income and comprehensive
income data:
Revenues
$
398.8
$
382.8
$
16.0
4.2
%
Other income, net
1.5
2.8
(1.3
)
(46.4
)%
Cost of revenues
147.5
137.6
9.9
7.2
%
Selling, general and administrative expenses(1)
170.4
168.3
2.1
1.2
%
Depreciation and amortization expense
28.3
45.0
(16.7
)
(37.1
)%
Intangible asset impairments(2)
7.3
-
7.3
100.0
%
Operating income
46.8
34.7
12.1
34.9
%
Interest expense
47.8
43.3
4.5
10.4
%
Interest income
8.5
8.2
0.3
3.7
%
Loss on extinguishment of debt
-
2.3
(2.3
)
(100.0
)%
Loss on disposal of fixed assets
-
0.2
(0.2
)
(100.0
)%
Income (loss) before income taxes
7.5
(2.9
)
10.4
NM
Provision for income taxes
5.3
5.3
-
0.0
%
Net income (loss) and comprehensive income (loss)
$
2.2
$
(8.2
)
$
10.4
NM
Other financial data (unaudited):
Adjusted EBITDA(3)
$
101.7
$
97.8
$
3.9
4.0
%
Free Cash Flow(4)
$
37.0
$
28.8
$
8.2
28.5
%
Organic revenue(5)
$
385.3
$
364.0
$
21.3
5.9
%
(1)Selling, general and administrative expenses for the years ended December 31, 2024 and 2023 included expenses of $13.5 million and $10.5 million, respectively, in contingent consideration remeasurement adjustments, acquisition-related transaction, transition and integration costs, including legal, audit and advisory fees. Also included in selling, general and administrative expenses for each of the years ended December 31, 2024 and 2023 were stock-based compensation expenses of $5.8 million and $7.8 million, respectively.
(2)Intangible asset impairments for the year ended December 31, 2024 included non-cash impairments of $7.3 million for certain definite-lived and indefinite-lived trade name intangible assets in connection with our interim and annual impairment assessments. See Note 6, Intangible Assets and Goodwill, in the notes to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information with respect to our non-cash intangible asset impairments.
(3)In addition to net income (loss) presented in accordance with GAAP, we use Adjusted EBITDA to measure our financial performance. Adjusted EBITDA is a supplemental non-GAAP financial measure of operating performance and is not based on any standardized methodology prescribed by GAAP. Adjusted EBITDA should not be considered in isolation or as alternatives to net income, cash flows from operating activities or other measures determined in accordance with GAAP. Also, Adjusted EBITDA is not necessarily comparable to similarly titled measures presented by other companies.
We define Adjusted EBITDA as net income (loss) before (i) interest expense, net, (ii) provision for income taxes, (iii) goodwill impairments, (iv) intangible asset impairments, (v) depreciation and amortization, (vi) stock-based compensation, (vii) loss on extinguishment of debt and (viii) other items that we believe are not part of our core operations. We present Adjusted EBITDA because we believe it assists investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management and our board of directors use Adjusted EBITDA to assess our financial performance and believe it is helpful in highlighting trends because it excludes the results of decisions that are outside the control of our management, while other performance metrics can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. We reference Adjusted EBITDA frequently in our decision-making because it provides supplemental information that facilitates internal comparisons to the historical operating performance of prior periods. Adjusted EBITDA is not defined under GAAP and has limitations as an analytical tool, and you should not consider such measure either in isolation or as a substitute for analyzing our results as reported under GAAP. Some of these limitations include that Adjusted EBITDA excludes certain normal recurring expenses and one-time cash adjustments that we consider not to be indicative of our ongoing operative performance. Because not all companies use identical calculations, our presentation of Adjusted EBITDA may not be comparable to other similarly titled measures used by other companies.
Year Ended December 31,
(unaudited)
(dollars in millions)
Net income (loss)
$
2.2
$
(8.2
)
Add (deduct):
Interest expense, net
39.3
35.1
Loss on extinguishment of debt
-
2.3
Provision for income taxes
5.3
5.3
Intangible asset impairments(a)
7.3
-
Depreciation and amortization expense
28.3
45.0
Stock-based compensation expense(b)
5.8
7.8
Other items(c)
13.5
10.5
Adjusted EBITDA
$
101.7
$
97.8
Deduct:
Event cancellation insurance proceeds
1.5
2.8
Adjusted EBITDA excluding event cancellation insurance proceeds
$
100.2
$
95.0
(a)Represents the non-cash intangible asset impairments described in Footnote 2 above.
(b)Represents costs related to stock-based compensation associated with certain employees’ participation in the 2013 Stock Option Plan (“2013 Plan”), the 2017 Omnibus Equity Plan (the “2017 Plan”) and the 2019 Employee Stock Purchase Plan (the “ESPP”).
(c)Other items for the year ended December 31, 2024 included: (i) $1.2 million in gains related to the remeasurement of contingent consideration; (ii) $8.3 million in acquisition-related integration and restructuring-related transition costs, including a one-time severance expense of $3.7 million; (iii) $3.4 million in acquisition-related transaction costs and (iv) $3.0 million in non-recurring legal, audit and consulting fees. Other items for the year ended December 31, 2023 included: (i) $2.3 million in gains related to the remeasurement of contingent consideration; (ii) $6.1 million in acquisition-related integration and restructuring-related transition costs, including a one-time severance expense of $1.5 million; (iii) $2.6 million in acquisition-related transaction costs and (iv) $4.1 million in non-recurring legal, audit and consulting fees.
(4)In addition to net cash provided by operating activities presented in accordance with GAAP, we present Free Cash Flow because we believe it is a useful indicator of liquidity that provides information to our management and investors about the amount of cash generated from our core operations that, after capital expenditures, can be used for the repayment of indebtedness, payment of dividends, repurchases of shares of our common stock and strategic initiatives, including investing in our business and making strategic acquisitions. Free Cash Flow is a supplemental non-GAAP financial measure of liquidity and is not based on any standardized methodology prescribed by GAAP. Free Cash Flow should not be considered in isolation or as an alternative to cash flows from operating activities or other measures determined in accordance with GAAP. Also, Free Cash Flow is not necessarily comparable to similarly titled measures used by other companies.
Year Ended December 31,
(unaudited)
(dollars in millions)
Net Cash Provided by Operating Activities
$
46.8
$
40.3
Less:
Capital expenditures
9.8
11.5
Free Cash Flow
$
37.0
$
28.8
(5)In addition to revenues presented in accordance with GAAP, we present Organic revenue because we believe it assists investors and analysts in comparing Emerald’s operating performance across reporting periods on a consistent basis by excluding items that we do not believe reflect a true comparison of the trends of the existing event calendar given changes in timing or strategy. Our management and board of directors evaluate changes in Organic revenue to understand underlying revenue trends of its events. Our presentation of Organic revenue adjusts revenue for (i) acquisition revenue and (ii) scheduling adjustments.
Organic revenue is a supplemental non-GAAP financial measure of performance and is not based on any standardized methodology prescribed by GAAP. Organic revenue should not be considered in isolation or as an alternative to revenues or other measures determined in accordance with GAAP. Also, Organic revenue is not necessarily comparable to similarly titled measures used by other companies.
Year
Ended December 31,
Change
$
%
(unaudited)
(dollars in millions)
Revenues
$
398.8
$
382.8
$
16.0
4.2
%
Add (deduct):
Acquisition revenues
(13.5
)
-
Hurricane related event cancellation
-
(0.6
)
Discontinued events
-
(18.2
)
Organic revenue
$
385.3
$
364.0
$
21.3
5.9
%
Revenues
Total revenues of $398.8 million for the year ended December 31, 2024 increased $16.0 million, or 4.2%, from $382.8 million for the year ended December 31, 2023. See “Connections Segment-Revenues,” and “All Other Category-Revenues” below for a discussion of the factors contributing to the changes in total revenues.
Other Income, net
Total other income, net of $1.5 million for the year ended December 31, 2024 decreased $1.3 million, from $2.8 million for the year ended December 31, 2023. See “Connections Segment-Other Income, net” below for a discussion of the factors contributing to the changes in total other income, net.
Cost of Revenues
Total cost of revenues of $147.5 million for fiscal 2024 increased by $9.9 million, or 7.2%, from $137.6 million for fiscal 2023. See “Connections Segment-Cost of Revenues,” and “All Other Category-Cost of Revenues” below for a discussion of the factors contributing to the changes in total cost of revenues.
Selling, General and Administrative Expenses
Total selling, general and administrative expenses consist primarily of compensation and employee-related costs, sales commissions and incentive plans, stock-based compensation expense, marketing expenses, information technology expenses, travel expenses, facilities costs, consulting fees and public reporting costs. Total selling, general and administrative expenses of $170.4 million for the year ended December 31, 2024 increased $2.1 million, or 1.2%, from $168.3 million for the year ended December 31, 2023. See “Connections Segment-Selling, General and Administrative Expenses”, “All Other Category-Selling, General and Administrative Expenses” and “Corporate-Selling, General and Administrative Expenses” below for a discussion of the factors contributing to the changes in total selling, general and administrative expenses.
Depreciation and Amortization Expense
Total depreciation and amortization expense of $28.3 million for the year ended December 31, 2024 decreased $16.7 million, or 37.1%, from $45.0 million for the year ended December 31, 2023. See “Connections Segment-Depreciation and Amortization Expense,” “All Other Category-Depreciation and Amortization Expense” and “Corporate-Depreciation and Amortization Expense” below for a discussion of the factors contributing to the changes in total depreciation and amortization expense.
Intangible Asset Impairments
As a result of the identification of an interim impairment trigger for two of our indefinite-lived intangible assets during the third quarter of 2024, we performed an interim impairment assessment and recorded non-cash impairment charges of $6.3 million for certain of our indefinite-lived trade name intangible assets.
As a result of our annual impairment assessment as of October 31, 2024, we recorded a non-cash impairment charge of $1.0 million, which included non-cash impairment charges of $0.4 million and $0.6 million for certain definite-lived and indefinite-lived trade name intangible assets, respectively. There were no intangible asset impairment charges recorded during the year ended December 31, 2023. See “Connections Segment-Intangible Asset Impairments,” below for further discussion of total intangible asset impairments.
Interest Expense
Total interest expense of $47.8 million for the year ended December 31, 2024 increased $4.5 million, or 10.4%, from $43.3 million for the year ended December 31, 2023. See “Corporate-Interest Expense” below for a discussion of the factors contributing to the changes in total interest expense.
Interest Income
Total interest income of $8.5 million for the year ended December 31, 2024 increased $0.3 million, or 3.7%, from $8.2 million for the year ended December 31, 2023. See “Corporate-Interest Income” below for a discussion of the factors contributing to the changes in total interest income.
Adjusted EBITDA
Total Adjusted EBITDA of $101.7 million for the year ended December 31, 2024 increased $3.9 million, or 4.0%, from $97.8 million for the year ended December 31, 2023. The increase in Adjusted EBITDA was primarily attributable to cost management and the discontinuation of several small, non-core and unprofitable events.
Adjusted EBITDA is a financial measure that is not calculated in accordance with GAAP. For a discussion of our presentation of Adjusted EBITDA, see Footnote 3 to the table under the heading “Results of Operations-Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023.”
Connections Segment
Year Ended December 31,
Variance $
Variance %
(dollars in millions)
Revenues
$
355.1
$
340.2
$
14.9
4.4
%
Other income, net
1.5
2.8
(1.3
)
(46.4
)%
Cost of revenues
136.6
128.0
8.6
6.7
%
Selling, general and administrative expenses
78.0
79.4
(1.4
)
(1.8
)%
Depreciation and amortization expense
17.0
34.8
(17.8
)
(51.1
)%
Intangible asset impairments
7.3
-
7.3
NM
Operating income
$
117.7
$
100.8
$
16.9
16.8
%
Revenues
During the year ended December 31, 2024, revenues for the Connections reportable segment of $355.1 million increased by $14.9 million, or 4.4% from $340.2 million for the year ended December 31, 2023. The primary driver of the increase was organic revenue growth of $20.2 million, or 6.3%, from $321.4 million in fiscal year 2023 to $341.6 million in the current year. This growth was primarily comprised of a recurring revenues increase of $17.3 million, or 5.4%, to $338.8 million in the current year from $321.5 million in fiscal year 2023 and $2.8 million from new event launches in the current year. Acquisitions generated incremental revenues of $13.5 million during fiscal year 2024. These increases were partially offset by $18.2 million in prior year revenues from discontinued events and $0.6 million from an event cancelled in the current year due to a hurricane.
Other Income, net
Other income, net of $1.5 million and $2.8 million was recorded for the Connections reportable segment related to business interruption insurance proceeds during the years ended December 31, 2024 and 2023, respectively. Of the $1.5 million of other income, net, for the Connections reportable segment for the year ended December 31, 2024, $1.0 million was received during the year and $0.5 million was in the first quarter of fiscal year 2025. All of the $2.8 million of other income, net, for the Connections reportable segment was received during the year ended December 31, 2023.
Cost of Revenues
During the year ended December 31, 2024, cost of revenues for the Connections reportable segment increased $8.6 million, or 6.7%, to $136.6 million from $128.0 million for the year ended December 31, 2023. This growth was comprised of an increase in cost of recurring revenues of $13.5 million, or 11.9%, to $127.2 million in the current year from $113.7 million in fiscal year 2023, and an increase of $1.8 million in cost of revenues from new event launches in the current year. Acquisitions generated incremental cost of revenues of $7.0 million during fiscal year 2024. These increases were partially offset by a decrease of $13.2 million from prior year cost of revenues relating to discontinued events and $0.5 million from an event cancelled in the current year due to a hurricane.
Selling, General and Administrative Expenses
During the year ended December 31, 2024 selling, general and administrative expenses for the Connections reportable segment decreased $1.4 million, or 1.8%, to $78.0 million from $79.4 million for the comparable period in 2023. The decrease was primarily attributable to lower salary and benefits expense offset by incremental expense from the acquisitions of HI, The Futurist, Glamping Americas and GRC World Forums.
Depreciation and Amortization Expense
Depreciation and amortization expense attributable to the Connections reportable segment of $17.0 million for the year ended December 31, 2024 decreased $17.8 million, or 51.1%, from $34.8 million for the year ended December 31, 2023. The decrease was due to the full amortization of intangible assets acquired in the formation of Emerald in June 2013 and in the acquisition of GLM in January 2024. Lower amortization on the definite-lived trade name and customer relationship intangible assets associated with the MJBiz acquisition also contributed to the decline.
Intangible Asset Impairments
In connection with the identification of an interim impairment trigger during the third quarter of 2024 as described above, we recorded non-cash impairment charges of $6.3 million for certain indefinite-lived trade name intangible assets under the Connections reportable segment. As a result of the annual impairment assessment as of October 31, 2024 as described above, we recorded non-cash impairment charges of $1.0 million, comprised of $0.6 million for certain indefinite-lived trade name intangible assets and $0.4 million for certain definite-lived trade name intangible assets under the Connections reportable segment. Refer to the consolidated intangible assets impairment discussion under the heading, Intangible Asset Impairments, above in this Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion on intangible asset impairments.
All Other Category
Year Ended December 31,
Variance $
Variance %
(dollars in millions)
Revenues
$
43.7
$
42.6
$
1.1
2.6
%
Cost of revenues
10.9
9.6
1.3
13.5
%
Selling, general and administrative expenses
26.7
29.4
(2.7
)
(9.2
)%
Depreciation and amortization expense
8.1
7.2
0.9
12.5
%
Operating loss
$
(2.0
)
$
(3.6
)
$
1.6
(44.4
)%
Revenues
During the year ended December 31, 2024, revenue attributable to the All Other category of $43.7 million increased by $1.1 million, or 2.6%, from $42.6 million for the year ended December 31, 2023. The increase in revenues was comprised of a $1.8 million, or 9.4%, increase in commerce revenues to $20.9 million in the current year from $19.1 million in fiscal year 2023, primarily related to the continued growth of the Elastic Suite e-commerce business, partially offset by a $0.7 million, or 3.0%, decrease in content revenues to $22.8 million in the current year from $23.5 million in fiscal year 2023. The decrease in content revenues was attributable to lower print and digital advertising revenues.
Cost of Revenues
During the year ended December 31, 2024, cost of revenues attributable to the All Other category increased $1.3 million, or 13.5%, to $10.9 million from $9.6 million for the year ended December 31, 2023. Content cost of revenues increased $0.9 million, or 19.1%, to $5.6 million primarily due to higher barter cost of revenues. Commerce cost of revenues increased $0.4 million, or 8.2%, to $5.3 million primarily due to higher software maintenance expense.
Selling, General and Administrative Expenses
During the year ended December 31, 2024, selling, general and administrative expenses for the All Other category of $26.7 million decreased by $2.7 million, or 9.2%, from $29.4 million for the year ended December 31, 2023. The decrease in selling, general and administrative expense was primarily driven by lower salary and benefits and promotional expenses.
Depreciation and Amortization Expense
Depreciation and amortization expense for the All Other category of $8.1 million for the year ended December 31, 2024 increased $0.9 million, or 12.5%, from $7.2 million for the year ended December 31, 2023. The increase was due to higher amortization of software development costs related to our commerce business.
Corporate
Year Ended December 31,
Variance $
Variance %
(dollars in millions)
Selling, general and administrative expenses
$
65.7
$
59.5
$
6.2
10.4
%
Depreciation and amortization expense
3.2
3.0
0.2
6.7
%
Total operating expenses
$
(68.9
)
$
(62.5
)
$
(6.4
)
10.2
%
Selling, General and Administrative Expenses
During the year ended December 31, 2024, selling, general and administrative expenses of $65.7 million for the Corporate category increased by $6.2 million, or 10.4%, from $59.5 million for the year ended December 31, 2023. The increase in selling, general and administrative expense was primarily driven by a $4.5 million increase in other compensation expense as well as higher transition and acquisition related expenses and lower non-cash gains related to the remeasurement of contingent consideration liabilities. The decreases were offset by lower general business insurance expenses.
Depreciation and Amortization Expense
Depreciation and amortization expense relating to the Corporate category of $3.2 million for the year ended December 31, 2024 increased $0.2 million, or 6.7%, from $3.0 million for the year ended December 31, 2023. The increase was related to higher corporate software amortization in the current year.
Interest Expense; Interest Income; Provision for Income Taxes; Net Income / (Loss) and Comprehensive Income / ( Loss)
Interest Expense
Interest expense of $47.8 million for the year ended December 31, 2024 increased $4.5 million, or 10.4%, from $43.3 million for the year ended December 31, 2023. The increase was primarily attributable to an increase in the variable interest rate on the term loan portion of our Amended and Restated Senior Secured Credit Facilities as in effect during the periods presented, for which the average rate during 2024 was 10.27%, compared to 8.98% during 2023.
Interest Income
Interest income of $8.5 million for the year ended December 31, 2024 increased $0.3 million, or 3.7% from $8.2 million for the year ended December 31, 2023. The increase was primarily attributable to rising interest rates in fiscal 2023 and 2024.
Provision for Income Taxes
For each of the years ended December 31, 2024 and 2023, we recorded a provision for income taxes of $5.3 million. The tax provision position in 2024 was primarily attributable to a higher unrecognized tax benefit and operating income position while the tax provision position in 2023 was primarily attributable to Section 163(j) interest expense limitation in the prior year.
Net Income (Loss) and Comprehensive Income (Loss)
Net income and comprehensive income of $2.2 million for the year ended December 31, 2024 increased $10.4 million from net loss and comprehensive loss of $8.2 million for the year ended December 31, 2023. The key drivers of the increase were higher revenues and lower depreciation and amortization expenses offset in part by higher cost of revenues, intangible asset impairments and higher interest expense, net during fiscal 2024.
Liquidity and Capital Resources
Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, debt service, acquisitions, other commitments and contractual obligations. We consider liquidity in terms of cash flows from operations and their sufficiency to fund our operating and investing activities.
As of December 31, 2024, we had $402.7 million of term loan borrowings outstanding under the Amended and Restated Senior Secured Credit Facilities as then in effect, which was recorded net of unamortized discount of $5.6 million, and net of unamortized deferred financing fees of $0.9 million. Borrowings under the Second Amended and Restated Senior Secured Credit Facilities, which Emerald X entered into in connection with the 2025 Refinancing Transactions, are subject to mandatory prepayments under specified circumstances, including 50% of Excess Cash Flow, subject to step-downs to 25% and 0% of excess cash flow at certain leverage based thresholds, and with 100% of the net cash proceeds of asset sales and casualty events in excess of certain thresholds (subject to certain reinvestment rights), subject to step-downs to 50% and 0% at certain leverage-based thresholds. If these thresholds are triggered, we would be required to make these mandatory prepayments. See “-Long-Term Debt” below for more detail regarding the terms of our Second Amended and Restated Senior Secured Credit Facilities.
Based on our return to positive operating cash flows and current cash position, as well as revolving commitments available to us under the Second Amended and Restated Senior Secured Credit Facilities, we believe that our current financial resources will be sufficient to fund the Company's liquidity requirements for the next twelve months.
Dividend Policy
On August 6, 2024, our board of directors approved the reintroduction of a regular quarterly dividend, and declared a dividend for the quarter ending September 30, 2024 of $0.015 per share payable to holders of record of our common stock. On October 29, 2024, the Company’s board of directors declared a dividend for the quarter ending December 31, 2024 of $0.015 per share payable to holders of record of our common stock. The payment of any such dividend in future quarters is subject to the discretion of our board of directors and depending upon our results of operations, cash requirements, financial condition, contractual restrictions, restrictions imposed by applicable laws and other factors that our board of directors may deem relevant, and the amount of any future dividend payment may be changed or terminated in the future at any time and for any reason without advance notice.
Our business is conducted through our subsidiaries. Dividends, distributions and other payments from, and cash generated by, our subsidiaries will be our principal sources of cash to repay indebtedness, fund operations and pay dividends. Accordingly, our ability to pay dividends to our stockholders is dependent on the earnings and distributions of funds from our subsidiaries. In addition, the covenants in the agreements governing our existing indebtedness, including the Second Amended and Restated Senior Secured Credit Facilities, significantly restrict the ability of our subsidiaries to pay dividends or otherwise transfer assets to us. See “-Long-Term Debt”, “Risk Factors-Risks Relating to Ownership of Our Common Stock-Because we are a holding company with no operations of our own, we rely on dividends, distributions, and transfers of funds from our subsidiaries” and “Risk Factors-Risks Relating to Ownership of Our Common Stock-We cannot assure you that we will continue to pay dividends on our common stock, and our indebtedness could limit our ability to pay dividends on our common stock.”
Prior to its mandatory conversion on May 2, 2024, each share of our outstanding redeemable convertible preferred stock accumulated dividends at a rate per annum equal to 7% of the accreted liquidation preference, which compounded quarterly by adding to the accreted liquidation preference until July 1, 2023 and thereafter, at our option, was to be paid either in cash or by adding to the accreted liquidation preference. For each of the quarterly periods ended September 30, 2023, December 31, 2023 and March 31, 2024, we elected to pay dividends on the redeemable convertible preferred stock in cash. The aggregate amount of such dividends was $8.6 million in each of the quarterly periods ended September 30, 2023, December 31, 2023 and March 31, 2024. On April 18, 2024, the Company announced it had delivered a notice informing holders of its redeemable convertible preferred stock, including Onex-related entities, that it had exercised its right to mandate that all shares of the redeemable convertible preferred stock be converted to shares of the Company’s common stock. On May 2, 2024 (the Conversion Date), each holder of redeemable convertible preferred stock received approximately 1.9717 shares of common stock for each share of redeemable convertible preferred stock held as of the Conversion Date, in accordance with the terms of the conversion feature as described in more detail below. As a result, 71,402,607 shares of redeemable convertible preferred stock were converted into 140,781,525 shares of common stock on the Conversion Date. Cash was paid in lieu of fractional shares of common stock. Following the Conversion Date, no redeemable convertible preferred stock was outstanding, and all rights of the former holders of the redeemable convertible preferred stock were terminated.
Share Repurchases
On November 3, 2023, our Board approved a further extension and expansion of our previously authorized $20 million share repurchase program, which allows for the repurchase of $25.0 million of our common stock through December 31, 2024, subject to early termination or extension by the Board. During the year ended December 31, 2023, we repurchased an aggregate of 5,064,140 shares of common stock for $16.9 million under the repurchase program as then in effect.
On October 29, 2024, our Board approved the extension and expansion of the share repurchase program, which allows for the repurchase of $25.0 million of our Common Stock through December 31, 2025, subject to early termination or extension by the Board. The share repurchase program may be suspended or discontinued at any time without notice. There is no minimum number of shares that we are required to repurchase. Shares may be purchased from time to time in the open market, including pursuant to one or more Rule 10b5-1 purchase plans that we may enter into from time to time, or in privately negotiated transactions. Such purchases will be at times and in amounts as we deem appropriate, based on factors such as market conditions, legal requirements and other business considerations.
We repurchased an aggregate of 2,815,473 shares of common stock for $13.8 million under the share repurchase program during the year ended December 31, 2024. There was $17.6 million remaining available for share repurchases under the share repurchase program as of December 31, 2024.
During the year ended December 31, 2023, we repurchased an aggregate of 5,064,140 shares of common stock for $16.9 million under the repurchase program as then in effect.
Insurance Settlements
Emerald maintains event cancellation insurance to protect against losses due to the unavoidable cancellation, postponement, relocation and enforced reduced attendance at events due to certain covered events. Emerald was previously insured for losses due to event cancellations caused by the outbreak of communicable diseases, including COVID-19. However, Emerald’s renewed event cancellation insurance policies for the policy years beginning in 2022 do not cover losses due to event cancellations caused by the outbreak of communicable diseases, including COVID-19. In addition, coverage for each of our event cancellation insurance policies extends to include additional promotional and marketing expenses necessarily incurred by us should a covered loss occur. These policies also include a terrorism endorsement covering an act of terrorism and/or threat of terrorism directed at the insured event or within the United States or its territories. The aggregate limit for our renewed 2024 primary event cancellation insurance policy is $100.0 million. We have also obtained a similar separate event cancellation insurance policy for the Surf Expo Winter 2024 and Surf Expo Summer 2024 shows, with a coverage limit of approximately $7.6 million and $7.8 million, respectively.
During the first quarter of fiscal year 2024, we received business interruption insurance proceeds of $1.0 million from our insurance carrier. Additionally, we received payments of $0.5 million from our insurance carrier to recover the lost revenues, net of costs saved, of a trade show cancelled due to weather during the year ended December 31, 2024, and we concluded that the receipt of $0.5 million of additional insurance proceeds was realizable as of December 31, 2024. As a result, during the year ended December 31, 2024, we reported other income, net of $1.5 million to recognize the amounts that were recovered from the insurance company.
On August 3, 2022, we reached an agreement to settle outstanding insurance litigation relating to event cancellation insurance for proceeds of $148.6 million. During the years ended December 31, 2024, 2023 and 2022, we recorded other income, net of $1.5 million, $2.8 million and $182.8 million, respectively, related to event cancellation insurance claim and settlement proceeds deemed to be realizable by our management. For the year ended December 31, 2024, $1.0 million was received during the year and $0.5 million was received in the first quarter of fiscal year 2025. For the years ended December 31, 2023 and 2022, all such amounts were received during the respective periods in which they were recorded.
Cash Flows
The following table summarizes the changes to our cash flows for the periods presented:
Year Ended December 31,
(unaudited)
(dollars in millions)
Statement of Cash Flows Data
Net cash provided by operating activities
$
46.8
$
40.3
Net cash used in investing activities
$
(25.0
)
$
(21.0
)
Net cash used in financing activities
$
(31.2
)
$
(54.2
)
Operating Activities
Operating activities consist primarily of net income (loss) adjusted for non-cash items that include goodwill and intangible asset impairments, depreciation and amortization, deferred income taxes, amortization of deferred financing fees and debt discount, share-based compensation, plus the effect of changes during the period in our working capital.
Net cash provided by operating activities for the year ended December 31, 2024 increased $6.5 million to $46.8 million, from $40.3 million during the year ended December 31, 2023. The increase was primarily due to a $10.4 million increase in net income (loss) to net income of $2.2 million in fiscal year 2024 from net loss of $8.2 million in fiscal year 2023 as well as lower cash used for working capital of $7.9 million during 2024. The decrease in cash used for working capital was primarily due to an increase in cash inflows from accounts receivable and a decrease in outflows from accounts payable and other current liabilities, income taxes payable and operating lease liabilities, offset by lower cash inflows from deferred revenues. These increases to cash provided by operating activities were partly offset by a $11.8 million decrease in non-cash adjustments to net income in 2024. The decrease in non-cash adjustments to net income was primarily attributable to a $16.7 million decrease in depreciation and amortization expense and a $2.3 million decrease in loss on extinguishment of debt offset by a $7.3 million increase in intangible asset impairment.
Investing Activities
Investing activities generally consist of business acquisitions and purchases of other productive assets, investments in information technology and capital expenditures to furnish or upgrade our offices.
Net cash used in investing activities for the year ended December 31, 2024 increased $4.0 million to $25.0 million from $21.0 million during the year ended December 31, 2023. The increase was primarily due to an increase in aggregate cash used for business acquisitions during the year ended December 31, 2024 of $16.2 million compared to $9.5 million in the prior year. The Company completed four and one business acquisitions in the years ended December 31, 2024 and 2023, respectively. In addition, the Company’s purchases of property, plant and equipment increased by $0.7 million during the year ended December 31, 2024. These increases in cashed used for investing activities were offset by a $2.4 million decrease in purchases of intangible assets, from $10.9 million in the year ended December 31, 2023 to $8.5 million in the year ended December 31, 2024.
Financing Activities
Financing activities primarily consist of payment of the preferred and common stock dividends, borrowing and repayments on our debt, common stock repurchases and proceeds from the issuance of common stock associated with stock option exercises.
Net cash used in financing activities for the year ended December 31, 2024 was $31.2 million, comprised of $13.8 million in share repurchases associated with our share repurchase programs, payment of an aggregate of $8.6 million of cash dividends on our outstanding redeemable convertible preferred stock, payment of $6.1 million of cash dividends on our common stock and $4.2 million in repayments of principal on the term loan portion of our Amended and Restated Senior Secured Credit Facilities as then in effect. We also received $1.5 million in proceeds from issuance of common stock under our equity plans.
Foreign Currency Risk
The Company has recently expanded its trade show footprint to encompass several international shows. The Company may be exposed to foreign currency risk to the extent that it enters into transactions or collects revenue related to these international shows denominated in currencies other than the U.S. dollar, the reporting currency of the Company, as a result of exposure from fluctuating currency exchange rates. As the majority of the Company’s trade shows are currently held in the United States and denominated in the U.S. dollar, management does not expect significant exposure in the near term to foreign currency risk.
Free Cash Flow
Free Cash Flow of $37.0 million for the year ended December 31, 2024 increased $8.2 million, from $28.8 million for the year ended December 31, 2023.
Free Cash Flow is a financial measure that is not calculated in accordance with GAAP. For a discussion of our presentation of Free Cash Flow, see Footnote 5 to the table under the heading “Results of Operations-Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023.”
Off-Balance Sheet Commitments
We are not party to, and do not typically enter into any, off-balance sheet arrangements.
Long-Term Debt
Second Amended and Restated Senior Secured Credit Facilities
On January 30, 2025, our wholly owned subsidiary, Emerald X, Inc. (“ Emerald X”) entered into the Second Amended and Restated Senior Secured Credit Facilities with a syndicate of lenders and Bank of America, N.A., as administrative agent, providing for (i) a seven-year $515.0 million Second Amended and Restated Term Loan Facility, scheduled to mature on January 30, 2032 and (ii) a $110.0 million Second Amended and Restated Revolving Credit Facility, scheduled to mature on January 30, 2030. A portion of the proceeds of the Second Amended and Restated Term Loan Facility were used to refinance all existing loans outstanding under Emerald X’s previously existing Amended and Restated Senior Secured Credit Facilities, and to pay costs and expenses in connection with the refinancing. The balance of the proceeds of the Second Amended and Restated Term Loan Facility remained on the balance sheet of Emerald X and may be used from time to time for general business purposes, including the financing of acquisitions. The Second Amended and Restated Revolving Credit Facility was not drawn at the closing of the refinancing and may be used from time to time for general business purposes, including the financing of acquisitions.
Rates and Fees
Term Loans under the Second Amended and Restated Senior Secured Credit Facilities bear interest at a rate equal to, at Emerald X’s option, either:
•a base rate equal to the greatest of: (i) the administrative agent’s prime rate; (ii) the federal funds effective rate plus 50 basis points and (iii) one month Term SOFR plus 1.00%; in each case plus 2.75%, or
•Term SOFR plus 3.75%.
Revolving Loans under the Second Amended and Restated Senior Secured Credit Facilities bear interest at a rate equal to, at Emerald ’s option, either:
•a base rate equal to the greatest of: (i) the administrative agent’s prime rate; (ii) the federal funds effective rate plus 50 basis points and (iii) one month Term SOFR plus 1.00%; in each case plus 1.25%, or
•Term SOFR plus 2.25%;
in each case of any Revolving Loans, subject to one step-up of 0.25% if the Total First Lien Net Leverage Ratio (as defined in the Second Amended and Restated Senior Secured Credit Facilities) exceeds 2.50 to 1.00 and one additional step-up of 0.25% if the Total First Lien Net Leverage Ratio exceeds 2.75 to 1.00.
The Second Amended and Restated Revolving Credit Facility is subject to payment of a commitment fee of 0.25% per annum, calculated on the unused portion of the facility, which may be increased to 0.375% if the Total First Lien Net Leverage Ratio exceeds 3.00 to 1.00 and to 0.50% if the Total First Lien Net Leverage Ratio exceeds 3.50 to 1.00. Upon the issuance of letters of credit under the Second Amended and Restated Senior Secured Credit Facilities, Emerald X is required to pay fronting fees, customary issuance and administration fees and a letter of credit fee equal to the then-applicable margin (as determined by reference to Term SOFR) for the Second Amended and Restated Revolving Credit Facility.
Payments and Commitment Reductions
The Second Amended and Restated Term Loan Facility requires scheduled quarterly payments, each equal to 0.25% of the original principal amount of the loans made under the Second Amended and Restated Term Loan Facility on January 30, 2025.
The Second Amended and Restated Senior Secured Credit Facilities require certain mandatory prepayments of outstanding loans under the Second Amended and Restated Term Loan Facility, subject to certain exceptions and step-downs, based on (i) a percentage of net cash proceeds of certain asset sales and casualty and condemnation events in excess of certain thresholds (subject to certain reinvestment rights), (ii) net cash proceeds of any issuance of debt, excluding permitted debt issuances and (iii) a percentage of Excess Cash Flow (as defined in the Second Amended and Restated Senior Secured Credit Facilities) in excess of certain thresholds during a fiscal year.
Guarantees, Collateral, Covenants and Events of Default
All obligations under the Second Amended and Restated Senior Secured Credit Facilities are guaranteed by Emerald X’s direct parent company and, subject to certain exceptions, substantially all of Emerald X’s direct and indirect wholly-owned domestic subsidiaries, and such obligations and the related guarantees are secured by a perfected first priority security interest in substantially all tangible and intangible assets owned by Emerald X or by any guarantor.
The Second Amended and Restated Senior Secured Credit Facilities contain customary incurrence-based negative covenants, including limitations on indebtedness; limitations on liens; limitations on certain fundamental changes (including, without limitation, mergers, consolidations, liquidations and dissolutions); limitations on asset sales; limitations on dividends and other restricted payments; limitations on investments, loans and advances; limitations on payments, repayments and modifications of subordinated indebtedness; limitations on changes in fiscal periods; limitations on agreements restricting liens and/or dividends; and limitations on changes in lines of business.
In addition, the Second Amended and Restated Revolving Credit Facility contains a financial covenant requiring Emerald X to comply with a 5.50 to 1.00 Total First Lien Net Leverage Ratio. This financial covenant is tested quarterly only if the aggregate amount of revolving loans, swingline loans and letters of credit outstanding under the Second Amended and Restated Revolving Credit Facility (net of up to $10.0 million of outstanding letters of credit and collateralized letters of credit) exceeds 35% of the total commitments thereunder.
Events of default under the Second Amended and Restated Senior Secured Credit Facilities include, among others and subject to certain customary exceptions and limitations, nonpayment of principal when due; nonpayment of interest, fees or other amounts; cross-defaults; covenant defaults; material inaccuracy of representations and warranties; certain bankruptcy and insolvency events; material unsatisfied or unstayed judgments; certain ERISA events; change of control; or actual or asserted invalidity of any guarantee or security document.
Previous Amended and Restated Senior Secured Credit Facilities
Prior to the completion of the 2025 Refinancing Transactions described above, Emerald X was a party to a senior secured credit facility (the “Amended and Restated Senior Secured Credit Facilities”) entered into with a syndicate of lenders and Bank of America, N.A., as administrative agent. The Amended and Restated Senior Secured Credit Facilities provided for a term loan facility (the “Extended Term Loan Facility”) in the amount of approximately $415.3 million, maturing on May 22, 2026, and a $110.0 million revolving credit facility. The terms of the Amended and Restated Senior Secured Credit Facilities were similar to the terms of the Second Amended and Restated Senior Secured Credit Facilities described above, except that the interest rate applicable to the term loans under the Amended and Restated Senior Secured Credit Facilities was equal to, at the option of Emerald X,
•the Term Secured Overnight Financing Rate (“Term SOFR”) plus 5.00% per annum plus a credit spread adjustment of 0.10% per annum or
•an alternate base rate (“ABR”) plus 4.00% per annum.
As of December 31, 2024, we were in compliance with the terms of the Amended and Restated Senior Secured Credit Facilities. For more information regarding the Amended and Restated Senior Secured Credit Facilities as in effect for the periods covered by this Management’s Discussion and Analysis, see Note 7, Debt, to the audited financial statements included elsewhere in this Annual Report on Form 10-K.
Modifications to our Debt Agreements
We may, from time to time, repurchase or otherwise retire or extend our debt and/or take other steps to reduce our debt, lower our interest payments or otherwise improve our financial position. These actions may include open market debt repurchases, negotiated repurchases, other retirements of outstanding debt and/or opportunistic refinancing, amendment or repricing of debt. The amount of debt that may be repurchased or otherwise retired or refinanced, if any, will depend on market conditions, trading levels of our debt, our cash position, compliance with debt covenants and other considerations. Our affiliates may also purchase our debt from time to time, through open market purchases or other transactions. In such cases, our debt may not be retired, in which case we would continue to pay interest in accordance with the terms of the debt, and we would continue to reflect the debt as outstanding in our consolidated balance sheets.
Contractual Obligations and Commercial Commitments
The table below summarizes our contractual obligations as of December 31, 2024.
Payments Due By Period
Total
Less Than
1 Year
1-3 Years
3-5 Years
More Than
5 Years
(dollars in millions)
Contractual obligations(1)
$
69.9
$
38.2
$
29.0
$
2.7
$
-
Long-term debt obligations(2)
409.2
4.2
405.0
-
-
Short-term debt obligations(3)
-
-
-
-
-
Operating lease obligations(4)
10.3
4.0
6.2
0.1
-
Interest on long-term debt obligations(5)
54.2
39.1
15.1
-
-
Totals:
$
543.6
$
85.5
$
455.3
$
2.8
$
-
(1)We have entered into certain contractual obligations to secure trade show venues. These agreements are not unilaterally cancellable by us, are legally enforceable and specify fixed or minimum amounts or quantities of goods or services at fixed or minimum prices.
(2)Represents principal obligations with respect to term loan borrowings under the Amended and Restated Senior Secured Credit Facilities as in effect on December 31, 2024.
(3)Represents principal obligations with respect to revolving loan borrowings under the Amended and Restated Senior Secured Credit Facilities as in effect on December 31, 2024.
(4)We have entered into certain operating leases for real estate facilities. These agreements are not unilaterally cancellable by us, are legally enforceable and specify fixed or minimum amounts of rents payable at fixed or minimum prices.
(5)Represents interest expense on term loan borrowings under the Amended and Restated Senior Secured Credit Facilities using the interest rates in effect at December 31, 2024. Actual cash flows may differ significantly due to changes in underlying estimates.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires the appropriate application of certain accounting policies, some of which require us to make estimates and assumptions about future events and their impact on amounts reported in our consolidated financial statements. Since future events and their impact cannot be determined with absolute certainty, the actual results will inevitably differ from our estimates.
We believe the application of our accounting policies, and the estimates inherently required therein, are reasonable. Our accounting policies and estimates are reevaluated on an ongoing basis and adjustments are made when facts and circumstances dictate a change.
The policies and estimates discussed below involve the selection or application of alternative accounting policies that are material to our consolidated financial statements. With respect to critical accounting policies, even a relatively minor variance between actual and expected experience can potentially have a materially favorable or unfavorable impact on subsequent results of operations.
Our accounting policies are more fully described in Note 1, Description of Business and Summary of Significant Accounting Policies, in the notes to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. Our management has discussed the selection of these critical accounting policies and estimates with members of our board of directors.
We have certain accounting policies that require more significant management judgment and estimates than others. These include our accounting policies with respect to revenue recognition, goodwill and indefinite-lived intangibles, definite-lived intangibles, share-based compensation and accounting for income taxes, which are more fully described below.
Revenue Recognition and Allowance for Credit Losses
Connections
A significant portion of the Company’s annual revenue is generated from the Connections segment through the production of trade shows and conference events, including booth space sales, registration fees and sponsorship fees. Revenue from the Company’s trade shows and other events is recognized in the period the trade show or other event stages as the Company’s performance obligations have been satisfied. Exhibitors contract for their booth space and sponsorships up to a year in advance of the trade show. Trade show and other events generated approximately 89%, 89% and 87% of revenues for the years ended December 31, 2024, 2023 and 2022, respectively.
Content
Revenues from the Company’s Content category primarily consist of advertising sales for digital products and industry publications that complement the event properties in each industry sector as well as custom content agency revenues. These revenues are recognized in the period in which the digital products are provided or publications are issued or when the custom content is delivered to the customer. Typically, the fees charged are collected after the digital products are provided, the publications are issued or the custom content is delivered. Content category revenues generated approximately 6%, 6% and 8% of revenues for the years ended December 31, 2024, 2023 and 2022, respectively.
Commerce
Revenues from the Commerce category primarily consist of sales from the Company’s software-as-a-service Elastic Suite platform. Revenue consists of subscription revenue, implementation fees and professional services. Fees associated with implementation are deferred and recognized over the expected customer life, which is four years. Subscription revenue is generally recognized over the term of the contract. The Company’s contracts associated with the subscription software and services are generally three-year terms with one-year renewals. Subscription software and services revenues generated approximately 5%, 5% and 5% of revenues for the years ended December 31, 2024, 2023 and 2022, respectively.
Because we collect our booth space, sponsorship and attendee registration revenue prior to the trade show staging, we do not incur substantial bad debt expense, or have exposure to credit losses with relation to these revenue streams. Bad debt expense is recognized in the consolidated statements of (loss) income and comprehensive (loss) income as selling, general and administrative expense. Accounts receivable are presented on the face of the consolidated balance sheet, net of an allowance for credit losses in 2024 and 2023.
Barter Transactions
The Company has barter transactions in which the Company provides booth space, sponsorship or advertising in exchange for promotional, advertising, marketing or other services in the ordinary course of business. The transaction price for these contracts is measured on the standalone selling price of the booth space, sponsorship or advertising promised to the customer, unless there is no standalone selling price, in which case the non-cash consideration received is based on management’s estimated fair value. Revenues from barter transactions are recognized during the period in which the advertisements are run or when an event stages and are included in consolidated revenues in the consolidated statements of (loss) income and comprehensive (loss) income. Barter transaction costs are recorded upon receipt and usage of the advertising and services, as applicable, and are reflected as cost of revenues in the consolidated statements of (loss) income and comprehensive (loss) income. For the years ended December 31, 2024, 2023 and 2022, the Company recognized barter revenues of $18.8 million, $7.0 million and $1.2 million, respectively. Barter transaction costs totaled $18.8 million, $7.0 million and $1.2 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Business Combinations
Upon acquisition of a new business, management prepares a purchase price allocation to record the acquired entity’s tangible and intangible assets and liabilities. The goodwill recorded reflects the future cash flow expectations for the acquired businesses’ market positions in their respective industries, synergies and assembled workforce. The fair values of acquired customer-relationship intangibles are estimated using a discounted cash flow analysis. The significant assumptions used in the discounted cash flow analysis include future cash flows, growth rates, discount rates, and tax rates. These assumptions are used in developing the present value of future cash flow projections which are the basis of the fair value calculation.
Goodwill and Indefinite-Lived Intangible Assets
Goodwill
Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the assets acquired and liabilities assumed resulting from acquisitions. Goodwill is not amortized but instead tested for impairment at least annually or more frequently should an event or circumstances indicate that a reduction in the fair value of a reporting unit may have occurred. We test for impairment on October 31 of each year, or more frequently if events and circumstances warrant. Such events and circumstances may be a significant change in our business climate, economic and industry trends, legal factors, negative operating performance indicators, significant competition or changes in strategy. We perform our goodwill impairment test at the reporting unit level, using a fair value method based on management’s judgments and assumptions or third party valuations. The fair value of a reporting unit refers to the price that would be expected to be received to sell the reporting unit in an orderly transaction between market participants at the measurement date.
In testing goodwill for impairment, we first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, we determine it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then additional impairment testing is not required. If the carrying amount of goodwill exceeds the fair value, an impairment loss is recognized in an amount equal to the excess of the carrying amount over the fair value of the reporting unit. We would also be required to reduce the carrying amounts of the related assets on our balance sheet.
Determining the fair value of a reporting unit requires the application of judgment and involves the use of significant estimates and assumptions including, projections of future cash flows, including forecasted revenues, EBITDA margins, discount rates, debt free net working capital, capital expenditures and other factors which can be affected by changes in business climate, economic conditions, the competitive environment and other factors. We base these fair value estimates on assumptions our management believes to be reasonable but which are unpredictable and inherently uncertain. A change in underlying assumptions would cause a change in the results of the tests and, as such, could cause fair value to be less than the carrying amounts and result in an impairment of goodwill in the future. Additionally, if actual results are not consistent with the estimates and assumptions or if there are significant changes to our planned strategy, it may cause fair value to be less than the carrying amounts and result in additional impairments of goodwill in the future. We corroborate the reasonableness of the total fair value of the reporting unit by assessing the implied control premium based on our market capitalization. Our market capitalization is calculated using the number of shares outstanding and stock price of our publicly traded shares. In the event of a goodwill impairment, we would be required to record an impairment, which would impact earnings and reduce the carrying amounts of goodwill on the consolidated balance sheet.
We also consider the amount of headroom for our reporting units when determining whether an impairment existed. Headroom is the difference between the fair value of a reporting unit and its carrying value. In performing our annual impairment analysis as of October 31, 2024, the fair values of the reporting units which were not impaired exceeded their carrying values by amounts ranging from 41.0% to 234.9%. Reporting units in which the fair value exceeded carrying value by less than 50% included $25.6 million of goodwill. Of the $573.8 million of goodwill, the carrying value equals the fair value for no reporting units as of October 31, 2024. The fair values of the respective reporting units were determined primarily by discounting estimated future cash flows, which were determined based on revenue and expense long-term growth assumptions ranging from 1.5% growth to 3.0% growth, at a discount rate ranging from 10.6% to 11.8%.
The discount rate and long-term growth rate used to determine the fair value of the reporting unit, which exceeded carrying value by less than 50%, were 11.3% and 3.0%, respectively. Changes in these assumptions would have a significant impact on the valuation model. Holding all other assumptions constant, a hypothetical 100 basis point increase in the discount rate assumption would decrease the fair value of the reporting unit by approximately 12.8%, which would not result in a hypothetical impairment charge. Holding all other assumptions constant, a hypothetical 100 basis point decrease in the long-term growth rate assumption would decrease the fair value of the reporting unit by approximately 7.3%, which would not result in a hypothetical impairment charge.
Accordingly, a relatively small change in the underlying assumptions, including if the financial performance of the reporting unit does not meet expectations in future years or a decline occurs in the market price of our publicly traded stock, may cause a change in the results of the impairment assessment in future periods and, as such, could result in an impairment of goodwill, for which the carrying amount is $573.8 million as of December 31, 2024.
Indefinite-Lived Intangible Assets
The annual evaluation for impairment of indefinite-lived intangible assets is a two-step process. The first step is to perform a qualitative impairment assessment. If this qualitative assessment indicates that, more likely than not, the indefinite lived intangible assets are not impaired, then no further testing is performed. If the qualitative assessment indicates that, more likely than not, the indefinite lived intangible assets are impaired, then the fair value of the indefinite lived intangible assets must be calculated. If the carrying value exceeds the fair value, an impairment loss is recorded for that excess.
Indefinite-lived intangible assets are not amortized but instead tested for impairment at least annually or more frequently should an event or circumstances indicate that a reduction in fair value may have occurred. We test for impairment on October 31 of each year, or more frequently if events and circumstances warrant. Such events and circumstances may be a significant change in our business climate, economic and industry trends, legal factors, negative operating performance indicators, significant competition or changes in strategy. We perform testing of indefinite-lived intangible assets, other than goodwill, at the asset group level using the relief from royalty method. If the carrying value exceeds the fair value, an impairment loss is recorded for that excess. We would also be required to reduce the carrying amounts of the related assets on our balance sheet.
See Note 6, Intangible Assets and Goodwill, in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information with respect to goodwill and indefinite-lived intangible assets.
Definite-Lived Intangible Assets
Definite-lived intangible assets consist of certain trade names, acquired technology, customer relationships and other amortized intangible assets. Definite-lived intangible assets are amortized over their estimated useful lives based on the pattern of expected economic benefit. Intangible assets with finite lives are stated at cost, less accumulated amortization and impairment losses, if any.
Estimated
Useful Life
Weighted
Average
Customer relationship intangibles
2-10 years
7 years
Definite-lived trade names
3-30 years
21 years
Acquired technology
3-7 years
6 years
Acquired content
5.5-7 years
6 years
Computer software
3-5 years
4 years
With respect to business acquisitions, the fair values of acquired definite-lived intangibles are estimated using the income approach. Input assumptions including future cash flows, growth rates, attrition rates, royalty rates, discount rates, tax rates and tax amortization benefits are used in developing the present value of future cash flow projections are the basis of the fair value calculations.
Impairment of Long-Lived Assets
We review long-lived assets, including tangible assets and other intangible assets with definitive lives, for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. We conduct our long-lived asset impairment analysis by grouping assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluate the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset group is recoverable, an impairment is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on the discounted cash flow analysis. If the carrying amount of an intangible asset exceeds its fair value, we recognize an impairment loss in an amount equal to that excess. We would also be required to reduce the carrying amounts of the related assets on our balance sheet.
See Note 6, Intangible Assets and Goodwill, in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information with respect to impairments of long-lived assets.
Stock-Based Compensation
We use share-based compensation, including stock options and restricted stock units, to provide long-term performance incentives for our employees and non-employee directors. We calculate stock-based compensation expense for each vesting tranche of stock options using the Black-Scholes option pricing model and recognize such costs, net of forfeitures, within the consolidated statements of (loss) income and comprehensive (loss) income; however, no expense is recognized for awards that do not ultimately vest. The determination of the grant date fair value of stock options using an option-pricing model is affected by a number of assumptions, such as the fair value of the underlying stock, our expected stock price volatility over the expected term of the options, stock option forfeiture behaviors, risk-free interest rates and expected dividends, which we estimated as follows:
•Fair Value of our Common Stock - The fair value per share of common stock for purposes of determining share-based compensation is the closing price of our common stock as reported on the New York Stock Exchange on the applicable grant date.
•Expected Term - The expected option term represents the period of time the option is expected to be outstanding.
•Volatility - The expected volatility is based on our publicly traded stock price and historical average volatilities.
•Risk-Free Rate - The risk-free rate is based on the yields of United States Treasury securities with maturities similar to the expected term of stock option for each stock option grant.
•Forfeiture Rate - Estimates of pre-vesting forfeitures, or forfeiture rates, are based on an internal analysis, which primarily considers the award recipients’ position within the Company.
•Dividend Yield - During 2024, we adopted a policy of paying quarterly cash dividends on common stock, and resumed paying cash dividends in August 2024. Stock option grants include an expected dividend yield which is commensurate with the Company’s quarterly dividend policy.
See Note 12, Stock-Based Compensation, in the notes to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information with respect to stock-based compensation.
Income Taxes
We provide for income taxes utilizing the asset and liability method of accounting. Under this method, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each balance sheet date, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. If it is determined that it is more likely than not that future tax benefits associated with a deferred tax asset will not be realized, a valuation allowance is provided. Given our current earnings and anticipated future earnings, we believe that there is a realistic possibility that within the next twelve months, sufficient positive evidence may become available to allow us to reach a conclusion that a significant portion of the our valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease in the provision for income taxes for the period the release is recorded. The effect on deferred tax assets and liabilities of a change in the tax rates is recognized in the consolidated statements of (loss) income and comprehensive (loss) income as an adjustment to income tax expense in the period that includes the enactment date.
We record a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. We recognize interest and penalties, if any, related to unrecognized tax benefits in income tax expense. See Note 15, Income Taxes, in the notes to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

---

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Market risk is the potential loss arising from adverse changes in market rates and prices. Our primary exposure to market risk is interest rate risk associated with our senior secured credit facilities as in effect from time to time. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Long-Term Debt” for further description of these credit facilities. As of December 31, 2024, we had $409.2 million of variable rate term loan borrowings outstanding and no variable rate revolving borrowings outstanding under our Amended and Restated Senior Secured Credit Facilities as then in effect. Holding other variables constant and assuming no interest rate hedging, a 0.25% increase in the average interest rate on our variable rate indebtedness would have resulted in a $1.0 million increase in annual interest expense based on the amount of borrowings outstanding as of December 31, 2024.
Historically, inflation has not had a material effect on our business, results of operations, cash flows or financial condition. However, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs. While we have strategies to manage and offset these pressures, our inability or failure to do so could harm our business, results of operations and financial condition. For example, changes in inflation rates influence interest rates, which in turn impact the fair value of our investments and yields on new investments. Changes in inflation rates may also impact our financial statements and operating results in several areas. Operating expenses, including payrolls, are impacted to a certain degree by the inflation rate. We do not believe that inflation rates have had a material effect on our results of operations for the periods presented. However, recent economic trends have resulted in inflationary conditions, including pressure on wages, and sustained inflationary conditions in future periods that could affect our business.

---

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID: 238)
Consolidated Balance Sheets as of December 31, 2024 and 2023
Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income for the Years Ended December 31, 2024, 2023 and 2022
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit) for the Years Ended December 31, 2024, 2023 and 2022
Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022
Notes to Consolidated Financial Statements
Schedule I - Condensed Financial Information of Registrant for the Years Ended December 31, 2024, 2023 and 2022
Schedule II - Valuation and Qualifying Accounts for the Years Ended December 31, 2024, 2023 and 2022
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of Emerald Holding, Inc.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Emerald Holding, Inc. and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of (loss) income and comprehensive (loss) income, of redeemable convertible preferred stock and stockholders’ equity (deficit) and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes and financial statement schedules listed in the accompanying index (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Annual Goodwill Impairment Assessment - A Certain Reporting Unit
As described in Notes 1 and 6 to the consolidated financial statements, the Company’s consolidated goodwill balance was $573.8 million as of December 31, 2024, of which a portion relates to a certain reporting unit. Management tests goodwill for impairment on October 31 of each year, or more frequently should an event or a change in circumstances occur that would indicate the carrying value may be impaired. If the carrying amount of a reporting unit exceeds its fair value, an impairment is recorded equal to the amount by which the carrying value exceeds the fair value, up to the amount of goodwill associated with the reporting unit. During the fourth quarter of 2024, in connection with the Company’s annual impairment assessment, management performed a quantitative assessment of the Company’s fair value of goodwill using an income approach. Determining the fair value of a reporting unit requires the application of judgment and involves the use of significant estimates and assumptions including, projections of future cash flows, which include forecasted revenue, earnings before interest, taxes, depreciation, and amortization (EBITDA) margin, discount rate, debt free net working capital, capital expenditures and other factors which can be affected by changes in business climate, economic conditions, the competitive environment and other factors.
The principal considerations for our determination that performing procedures relating to the annual goodwill impairment assessment of a certain reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of a certain reporting unit; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to forecasted revenues, EBITDA margins, the discount rate, and capital expenditures; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of a certain reporting unit. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of a certain reporting unit; (ii) evaluating the appropriateness of the income approach used by management; (iii) testing the completeness and accuracy of underlying data used in the income approach; and (iv) evaluating the reasonableness of the significant assumptions used by management related to forecasted revenues, EBITDA margins, the discount rate, and capital expenditures. Evaluating management’s assumptions related to forecasted revenues, EBITDA margins, and capital expenditures involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of a certain reporting unit; (ii) the consistency with industry data; and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the income approach and (ii) the reasonableness of the discount rate assumption.
Annual Indefinite-Lived Intangible Asset Impairment Assessment - A Certain Indefinite-Lived Trade Name
As described in Notes 1 and 6 to the consolidated financial statements, the Company’s indefinite-lived intangible assets consist of trade names. The Company’s consolidated indefinite-lived trade names balance was $45.7 million as of December 31, 2024, of which a portion relates to a certain indefinite-lived trade name. Indefinite-lived intangible assets are tested annually for impairment at October 31, or between annual tests if the Company becomes aware of an event or a change in circumstances that would indicate the carrying value of an asset group may be impaired. The fair value of the trade name is compared to the carrying value of each trade name. If the carrying amount of the trade name exceeds its fair value, an impairment loss would be reported. The fair values of the Company’s indefinite-lived trade name asset groups are calculated by management using a form of the income approach referred to as the “relief from royalty payments” method. Determining the fair value of an indefinite-lived intangible asset group requires the application of judgment and involves the use of significant estimates and assumptions, including projections of future cash flows, which include forecasted revenue, EBITDA margin, discount rate, tax rate, and royalty rate.
The principal considerations for our determination that performing procedures relating to the annual indefinite-lived intangible asset impairment assessment of a certain indefinite-lived trade name is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of a certain indefinite-lived trade name; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to forecasted revenues, EBITDA margins, the discount rate, and the royalty rate; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s indefinite-lived intangible asset impairment assessment, including controls over the valuation of a certain indefinite-lived trade name. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of a certain indefinite-lived trade name; (ii) evaluating the appropriateness of the relief from royalty payments method used by management; (iii) testing the completeness and accuracy of underlying data used in the relief from royalty payments method; and (iv) evaluating the reasonableness of the significant assumptions used by management related to forecasted revenues, EBITDA margins, the discount rate, and the royalty rate. Evaluating management’s assumptions related to forecasted revenues and EBITDA margins involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the brand associated with a certain indefinite-lived trade name; (ii) the consistency with industry data; and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the relief from royalty payments method and (ii) the reasonableness of the discount rate and royalty rate assumptions.
/s/ PricewaterhouseCoopers LLP
Irvine, California
March 14, 2025
We have served as the Company’s auditor since 2015.
Emerald Holding, Inc.
Consolidated Balance Sheets
December 31, 2024 and 2023
(dollars in millions, share data in thousands, except par value)
Assets
Current assets
Cash and cash equivalents
$
194.8
$
204.2
Trade and other receivables, net of allowances of $1.6 million
and $1.4 million, as of December 31, 2024 and 2023, respectively
82.5
85.2
Prepaid expenses and other current assets
29.6
21.5
Total current assets
306.9
310.9
Noncurrent assets
Property and equipment, net
1.8
1.5
Intangible assets, net
155.9
175.1
Goodwill, net
573.8
553.9
Right-of-use lease assets
6.4
8.8
Other noncurrent assets
3.9
3.7
Total assets
$
1,048.7
$
1,053.9
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Current liabilities
Accounts payable and other current liabilities
$
40.7
$
46.6
Income tax payable
-
0.2
Cancelled event liabilities
1.2
0.6
Deferred revenues
190.5
174.3
Contingent consideration
0.7
0.2
Right-of-use lease liabilities, current portion
4.0
4.0
Term loan, current portion
4.2
4.2
Total current liabilities
241.3
230.1
Noncurrent liabilities
Term loan, net of discount and deferred financing fees
398.5
398.7
Deferred tax liabilities, net
4.9
3.1
Right-of-use lease liabilities, noncurrent portion
5.5
8.9
Other noncurrent liabilities
12.6
8.5
Total liabilities
662.8
649.3
Commitments and contingencies (Note 16)
Redeemable convertible preferred stock
7% Series A Convertible Participating Preferred Stock,
$0.01 par value; authorized shares at December 31, 2024 and 2023:
80,000; zero and 71,403 shares issued and outstanding; aggregate
liquidation preference of zero and $492.6 million at
December 31, 2024 and 2023, respectively
-
497.1
Stockholders’ equity (deficit)
Common stock, $0.01 par value; authorized shares at December 31, 2024
and 2023: 800,000; 201,447 and 62,915 shares issued and outstanding at
December 31, 2024 and 2023, respectively
2.0
0.6
Additional paid-in capital
1,034.0
559.2
Accumulated deficit
(650.1
)
(652.3
)
Total stockholders’ equity (deficit)
385.9
(92.5
)
Total liabilities, redeemable convertible preferred stock and
stockholders’ equity (deficit)
$
1,048.7
$
1,053.9
The accompanying notes are an integral part of these consolidated financial statements.
Emerald Holding, Inc.
Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income
Years Ended December 31, 2024, 2023 and 2022
(dollars in millions, share data in thousands except loss per share)
Revenues
$
398.8
$
382.8
$
325.9
Other income, net
1.5
2.8
182.8
Cost of revenues
147.5
137.6
116.5
Selling, general and administrative expense
170.4
168.3
145.0
Depreciation and amortization expense
28.3
45.0
59.5
Goodwill impairment charge
-
-
6.3
Intangible asset impairment charge
7.3
-
1.6
Operating income
46.8
34.7
179.8
Interest expense
47.8
43.3
24.5
Interest income
8.5
8.2
2.7
Loss on extinguishment of debt
-
2.3
-
Loss on disposal of fixed assets
-
0.2
-
Income (loss) before income taxes
7.5
(2.9
)
158.0
Provision for income taxes
5.3
5.3
27.2
Net income (loss) and comprehensive
income (loss) attributable to Emerald Holding, Inc.
$
2.2
$
(8.2
)
$
130.8
Accretion to redemption value of redeemable convertible preferred stock
(12.7
)
(42.0
)
(38.8
)
Participation rights on if-converted basis
-
-
(60.2
)
Net (loss) income and comprehensive (loss) income
attributable to Emerald Holding, Inc.
common stockholders
$
(10.5
)
$
(50.2
)
$
31.8
Basic (loss) income per share
$
(0.07
)
$
(0.78
)
$
0.46
Diluted (loss) income per share
$
(0.07
)
$
(0.78
)
$
0.46
Basic weighted average common shares outstanding
156,592
63,959
69,002
Diluted weighted average common shares outstanding
156,592
63,959
69,148
The accompanying notes are an integral part of these consolidated financial statements.
Emerald Holding, Inc.
Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Years Ended December 31, 2024, 2023 and 2022
Total Emerald Holding, Inc. Stockholders’ Equity (Deficit)
Redeemable Convertible
Preferred Stock
Common Stock
Additional
Paid-in
Accumulated
Total
Stockholders’
(shares in thousands; dollars in millions)
Shares
Amount
Shares
Amount
Capital
Deficit
Equity (Deficit)
Balances at December 31, 2021
71,442
$
433.9
70,026
$
0.7
$
653.2
$
(774.9
)
$
(121.0
)
Stock-based compensation
-
-
-
5.9
-
5.9
Issuance of common stock under equity plans
-
-
-
0.1
-
0.1
Accretion to redemption value of redeemable convertible preferred stock
-
38.8
-
-
(38.8
)
-
(38.8
)
Redeemable convertible preferred stock conversion
(25
)
(0.3
)
-
0.3
-
0.3
Repurchase of common stock
-
-
(2,883
)
-
(10.4
)
-
(10.4
)
Net income and comprehensive
income
-
-
-
-
-
130.8
130.8
Balances at December 31, 2022
71,417
$
472.4
67,588
$
0.7
$
610.3
$
(644.1
)
$
(33.1
)
Stock-based compensation
-
-
-
7.4
-
7.4
Issuance of common stock under equity plans
-
-
-
0.2
-
0.2
Accretion to redemption value of redeemable convertible preferred stock
-
42.0
-
-
(42.0
)
-
(42.0
)
Redeemable convertible preferred stock conversion
(14
)
(0.1
)
-
0.1
-
0.1
Repurchase of common stock
-
-
(5,064
)
(0.1
)
(16.8
)
-
(16.9
)
Preferred stock cash dividend
-
(17.2
)
-
-
-
-
-
Net loss and comprehensive
loss
-
-
-
-
-
(8.2
)
(8.2
)
Balances at December 31, 2023
71,403
$
497.1
62,915
$
0.6
$
559.2
$
(652.3
)
$
(92.5
)
Stock-based compensation
-
-
-
-
6.1
-
6.1
Issuance of common stock under equity plans
-
-
-
1.5
-
1.5
Accretion to redemption value of redeemable convertible preferred stock
-
12.7
-
-
(12.7
)
-
(12.7
)
Redeemable convertible preferred stock conversion
(71,403
)
(501.2
)
140,782
1.4
499.8
-
501.2
Repurchase of common stock
-
-
(2,816
)
-
(13.8
)
-
(13.8
)
Preferred stock cash dividend
-
(8.6
)
-
-
-
-
-
Dividends on common stock
-
-
-
-
(6.1
)
-
(6.1
)
Net income and comprehensive
income
-
-
-
-
-
2.2
2.2
Balances at December 31, 2024
-
$
-
201,447
$
2.0
$
1,034.0
$
(650.1
)
$
385.9
The accompanying notes are an integral part of these consolidated financial statements.
Emerald Holding, Inc.
Consolidated Statements of Cash Flows
Years Ended December 31, 2024, 2023 and 2022
(in millions)
Operating activities
Net income (loss)
$
2.2
$
(8.2
)
$
130.8
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Stock-based compensation
5.8
7.8
5.8
Allowance for credit losses
0.5
0.3
0.4
Depreciation and amortization
28.3
45.0
59.5
Goodwill impairments
-
-
6.3
Intangible asset impairments
7.3
-
1.6
Loss on disposal of fixed assets
-
0.2
-
Non-cash operating lease expense
2.4
2.6
3.4
Amortization of deferred financing fees and debt discount
4.3
3.0
1.7
Loss on lease abandonment
0.1
0.9
3.0
Loss on extinguishment of debt
-
2.3
-
Deferred income taxes
1.8
1.3
0.3
Remeasurement of contingent consideration
(1.2
)
(2.3
)
(33.3
)
Changes in operating assets and liabilities, net of effect of
businesses acquired:
Trade and other receivables
4.5
(8.6
)
(24.9
)
Insurance receivables
(0.5
)
-
-
Prepaid expenses and other current assets
(4.2
)
(1.9
)
(4.8
)
Other noncurrent assets
(0.6
)
(0.4
)
(0.1
)
Accounts payable and other current liabilities
(7.9
)
(11.0
)
6.2
Cancelled event liabilities
0.6
(2.7
)
(6.5
)
Contingent consideration
(0.2
)
-
(2.1
)
Income tax payable
(2.5
)
(2.7
)
1.4
Deferred revenues
8.7
19.5
29.9
Operating lease liabilities
(3.3
)
(4.1
)
(4.7
)
Other noncurrent liabilities
0.7
(0.7
)
1.2
Net cash provided by operating activities
46.8
40.3
175.1
Investing activities
Acquisition of businesses, net of cash acquired
(16.2
)
(9.5
)
(37.6
)
Working capital adjustment receivable from seller
1.0
-
-
Purchase of marketable securities
-
-
(50.0
)
Proceeds from maturity of marketable securities
-
-
50.0
Purchases of property and equipment
(1.3
)
(0.6
)
(1.8
)
Purchases of intangible assets
(8.5
)
(10.9
)
(8.5
)
Net cash used in investing activities
(25.0
)
(21.0
)
(47.9
)
Financing activities
Payment of contingent consideration for acquisition of businesses
-
(3.7
)
(4.4
)
Repayment of principal on Amended and Restated Term Loan Facility
-
(239.4
)
(104.2
)
Proceeds from Extended Term Loan Facility
-
239.4
-
Repayment of principal on Extended Term Loan Facility
(4.2
)
(2.1
)
-
Original issuance discount
-
(12.5
)
-
Fees paid for debt issuance
-
(2.0
)
(0.4
)
Repurchase of common stock
(13.8
)
(16.9
)
(10.4
)
Dividends on common stock
(6.1
)
-
-
Preferred stock cash dividend
(8.6
)
(17.2
)
-
Proceeds from issuance of common stock under equity plans
1.5
0.2
0.1
Net cash used in financing activities
(31.2
)
(54.2
)
(119.3
)
Net (decrease) increase in cash and cash equivalents
(9.4
)
(34.9
)
7.9
Cash and cash equivalents
Beginning of year
204.2
239.1
231.2
End of year
$
194.8
$
204.2
$
239.1
The accompanying notes are an integral part of these consolidated financial statements.
Emerald Holding, Inc.
Consolidated Statements of Cash Flows (Continued)
Years Ended December 31, 2024, 2023 and 2022
(in millions)
Supplemental disclosures of cash flow information
Cash paid for income taxes
$
4.6
$
6.9
$
25.6
Cash paid for interest
$
43.8
$
38.1
$
22.5
Supplemental schedule of non-cash investing and financing activities
Contingent consideration related to 2024 acquisitions
$
5.2
$
-
$
-
Contingent consideration related to 2023 acquisition
$
-
$
0.7
$
-
Contingent consideration related to 2022 acquisitions
$
-
$
-
$
6.9
Unpaid capital expenditures
$
0.3
$
-
$
-
Conversion of redeemable convertible preferred stock to common stock
$
501.2
$
-
$
-
Amended and Restated Term Loan Facility
$
-
$
(175.9
)
$
-
Extended Term Loan Facility
$
-
$
175.9
$
-
The accompanying notes are an integral part of these consolidated financial statements.
Emerald Holding, Inc.
Notes to Consolidated Financial Statements
Note 1. Description of Business and Summary of Significant Accounting Policies
Emerald Holding, Inc. (“Emerald” or “the Company”) is a corporation formed on April 26, 2013, under the laws of the State of Delaware. Emerald is majority owned by investment funds managed by an affiliate of Onex Partners Manager LP (“Onex Partners”).
The Company is a leading operator of large business-to-business (“B2B”) trade shows principally in the United States (“U.S.”), with operations in the United Kingdom (“U.K.”), France and other international markets. The Company leverages its trade shows as market-driven platforms, to integrate live events, media content, industry insights, digital tools, data-focused solutions and e-commerce platforms in three complementary business lines - Connections, Content and Commerce.
Basis of Presentation
The consolidated financial statements include the operations of the Company and its wholly-owned subsidiaries. These consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany transactions, accounts and profits, if any, have been eliminated in the consolidated financial statements.
The Company had no items of other comprehensive (loss) income; as such, its comprehensive (loss) income is the same as net (loss) income for all periods presented.
Results of our reportable segments for the years ended December 31, 2024, 2023 and 2022 reflect the updated segment presentation discussed below in Note 18, Segment Information.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and judgments that affect the amounts reported and disclosed in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, the Company evaluates its estimates and judgments compared to historical experience and expected trends. Actual results and outcomes may differ from management's estimates and assumptions.
Cash and Cash Equivalents
The Company maintains its cash in bank deposit accounts and in money market mutual funds, which at times may exceed federally insured limits. As of December 31, 2024 and 2023, the Company held $163.7 million and $177.0 million of money market mutual funds, respectively, which are highly liquid and quoted in active markets. The Company considers cash deposits in banks and money market mutual funds with original maturities at purchase of three months or less to be cash equivalents. As of December 31, 2024 and 2023, amounts receivable from credit card processors, totaling $0.5 million and $0.4 million, respectively, are considered cash equivalents because they are short-term, highly liquid in nature and they are typically converted to cash within three days of the sales transaction.
Marketable Securities
The Company purchased $50.0 million in marketable securities during the year ended December 31, 2022. These matured during the same year and therefore the Company no longer held any marketable securities as of December 31, 2022. The Company did not purchase any marketable securities during the years ended December 31, 2024 and 2023. Therefore, there were no unrealized holding gains or losses at December 31, 2024 or December 31, 2023. The Company has in the past held, and may from time to time, hold marketable securities that consist of certificates of deposit with financial institutions with maturities over three months and up to one year. These have historically been classified as marketable debt securities as their underlying investments primarily consist of corporate debt securities. These certificates of deposits have readily ascertainable values as they can be readily purchased or sold using established markets. These investments are generally classified as available-for-sale and reported at fair value. Fair value is generally based on available market information including quoted broker or dealer quotations, or other observable inputs.
The Company may invest its marketable securities in high-quality commercial financial instruments.
Fair Value Measurements
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP provides an established hierarchy and framework for inputs used to measure fair value. The fair value hierarchy gives the highest priority to inputs using quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Inputs are broadly defined as assumptions market participants would use in pricing an asset or liability. There are three levels of inputs that may be used to measure fair value:
•Level 1 - includes financial instruments for which there are quoted market prices in active markets for identical assets or liabilities.
•Level 2 - includes financial instruments for which there are observable market-based inputs for similar assets or liabilities that are corroborated by market data.
•Level 3 - includes financial instruments for which unobservable inputs that are not corroborated by market data which fair value is derived from valuation techniques in which one or more significant inputs are unobservable, including the Company’s own assumptions.
Assets and liabilities measured at fair value are classified based on the lowest level of input that is significant to the fair value measurement. The inputs to the determination of fair value are based upon the best information in the circumstances and may require significant management judgment or estimation. A significant adjustment to a Level 2 input could result in the Level 2 measurement becoming a Level 3 measurement.
The Company’s contingent consideration liabilities related to acquisitions made in 2024, 2023 and 2022 are classified as Level 3 liabilities, which are measured at fair value based on significant unobservable inputs and re-measured to an updated fair value at each reporting period. Refer to Note 9, Fair Value Measurements, for further information related to the Company’s contingent consideration.
The Company’s market-based share award liabilities are classified as Level 3 liabilities, which are measured at fair value, and are re-measured to an updated fair value at each reporting period. Refer to Note 12, Stock-Based Compensation, for further information related to the Company’s market-based share awards.
The Company’s money market mutual funds are quoted in an active market and classified as Level 1 assets, which are measured at fair value based on the closing price of these assets as of the reporting date. Refer to Note 9, Fair Value Measurements, for further information related to the Company’s money market mutual funds.
Financial Instruments
The Company’s financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable and certain accrued liabilities. Accounts receivable, accounts payable and certain accrued liabilities are carried at cost, which management believes approximates fair value because of the short-term maturity of these instruments. Cash and cash equivalents are recorded at fair value. Financial instruments also include the Company’s revolving credit facility and senior term loan with third party financial institutions.
Cash and cash equivalents, accounts receivable, and the revolving credit facility and term loan potentially subject the Company to concentrations of credit risk. To minimize the risk of credit loss for cash and cash equivalents, these financial instruments are primarily held with large, reputable financial institutions in the United States. As of December 31, 2024 and 2023, the Company’s uninsured cash and cash equivalents balances totaled $194.8 million and $204.2 million, respectively. As of December 31, 2024 and 2023, the Company’s trade receivables balances totaled $82.5 million and $85.2 million, respectively. No single customer accounts for more than 10% of gross accounts receivable as of December 31, 2024 or 2023. As of December 31, 2024 and 2023, an allowance for credit losses was recorded to account for potential credit losses. Credit risk with respect to trade receivables is low due to the Company’s large customer base dispersed across different industries.
As of December 31, 2024 and 2023, the fair value and carrying value of the Company’s debt is summarized in the following table:
December 31, 2024
(in millions)
Fair
Value
Carrying
Value
Extended Term Loan Facility, with
interest at SOFR plus 5.10% (equal to 9.46%)
at period end, including short-term portion
$
411.0
$
409.2
Total
$
411.0
$
409.2
December 31, 2023
(in millions)
Fair
Value
Carrying
Value
Extended Term Loan Facility, with
interest at SOFR plus 5.10% (equal to 10.46%)
at period end, including short-term portion
$
415.0
$
413.3
Total
$
415.0
$
413.3
The difference between the carrying value and fair value of the Company’s variable-rate term loan is due to the difference between the period-end market interest rates and the projected market interest rates over the term of the loan, as well as the financial performance of the Company since the issuance of the debt. In addition, the carrying value is net of discounts. The Company estimated the fair value of its variable-rate debt using observable market-based inputs that are corroborated by market data (Level 2 inputs).
Trade and Other Receivables
The Company extends non-interest bearing trade credit to its customers in the ordinary course of business which is not collateralized. Accounts receivable are presented on the face of the consolidated balance sheets, net of allowance for credit losses. The Company monitors collections and payments from its customers and maintains an allowance based upon applying an expected credit loss rate to receivables based on the historical loss rate from similar higher risk customers adjusted for current conditions, including any specific customer collection issues identified, and forecasts of economic conditions.
Prepaid Expenses
Prepaid expenses are primarily comprised of prepaid event costs. The Company pays certain direct event costs, such as facility rental deposits and insurance costs, in advance of the event. Such costs are deferred in prepaid expenses on the consolidated balance sheets when paid and reported on the consolidated statements of (loss) income and comprehensive (loss) income as cost of revenues upon the staging of the event.
Property and Equipment
Property and equipment is carried at cost less accumulated depreciation and impairment losses, if any. Property and equipment is depreciated on a straight-line basis over the estimated useful lives of 1 to 10 years (shorter of economic useful life or lease term) for leasehold improvements and 1 to 10 years for equipment, which includes computer hardware, event equipment and office furniture.
Definite-lived Intangible Assets
Definite-lived intangible assets consist of certain trade names, acquired technology, customer relationships and other amortized intangible assets. Definite-lived intangible assets are amortized over their estimated useful lives based on the pattern of expected economic benefit. Intangible assets with finite lives are stated at cost, less accumulated amortization and impairment losses, if any.
Estimated
Useful Life
Weighted
Average
Customer relationship intangibles
2-10 years
7 years
Definite-lived trade names
3-30 years
21 years
Acquired technology
3-7 years
6 years
Acquired content
5.5-7 years
6 years
Computer software
3-5 years
4 years
Impairment of Long-Lived Assets Other than Goodwill and Indefinite-Lived Intangible Assets
Long-lived assets other than goodwill and indefinite-lived intangible assets, held and used by the Company, including property and equipment and long-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. The Company conducts the long-lived asset impairment analysis at the asset group level. The Company evaluates recoverability of assets to be held and used by comparing the carrying amount of an asset to the future net undiscounted cash flows expected to be generated by the asset to determine if the carrying value is not recoverable. If the carrying value is not recoverable, the Company fair values the asset and compares the resulting amount to the carrying value. If the asset is considered to be impaired, the impairment loss is measured as the amount by which the carrying amount of the asset exceeds its fair value.
Indefinite-Lived Intangible Assets
The Company’s indefinite-lived intangible assets consist of trade names. Indefinite-lived intangible assets are tested annually for impairment at October 31, or between annual tests if the Company becomes aware of an event or a change in circumstances that would indicate the carrying value of an asset group may be impaired. The Company conducts its impairment analysis by grouping assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and has determined it has multiple asset groups that are typically at the trade show brand level. The Company has the option to first assess qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible asset group is impaired. To perform a qualitative assessment, the Company must identify and evaluate changes in economic, industry and entity-specific events and circumstances that could affect the significant inputs used to determine the fair value of an indefinite-lived intangible asset group. If the result of the qualitative analysis indicates it is more likely than not that an indefinite-lived intangible asset group is impaired, a fair value calculation will be performed to measure the amount of impairment losses to be recognized, if any.
The fair values of the Company’s indefinite-lived trade name asset groups are calculated using a form of the income approach referred to as the “relief from royalty payments” method. The royalty rates are estimated using evidence of identifiable transactions in the marketplace involving the licensing of trade names similar to those owned by the Company. The fair value of the trade name is then compared to the carrying value of each trade name. If the carrying amount of the trade name exceeds its fair value, an impairment loss would be reported. Determining the fair value of an indefinite-lived intangible asset group requires the application of judgment and involves the use of significant estimates and assumptions, including projections of future cash flows, which include forecasted revenue, EBITDA margin, discount rate, tax rate, and royalty rate. The Company bases its fair value estimates on assumptions it believes to be reasonable, but which are unpredictable and inherently uncertain. Actual future results may differ from the estimates. Refer to Note 6, Intangible Assets and Goodwill, for the indefinite-lived intangible asset impairments recorded during the years ended December 31, 2024 and 2022.
Goodwill
Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the assets acquired and liabilities assumed. Goodwill is not amortized, but instead is tested for impairment. The Company tests for impairment on October 31 of each year, or more frequently should an event or a change in circumstances occur that would indicate the carrying value may be impaired. Such events and circumstances may be a significant change in business climate, economic and industry trends, legal factors, negative operating performance indicators, significant competition or changes in strategy. The Company performs its goodwill impairment test at the reporting unit level.
The Company’s goodwill impairment analysis is performed, and related impairment charges recorded, after the impairment analysis and recognition of impairment charges for long-lived assets other than goodwill and indefinite-lived intangible assets. In testing goodwill for impairment, the Company first assesses qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then additional impairment testing is not required. When the Company determines a fair value test is necessary, it estimates the fair value of a reporting unit and compares the result with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment is recorded equal to the amount by which the carrying value exceeds the fair value, up to the amount of goodwill associated with the reporting unit.
Determining the fair value of a reporting unit requires the application of judgment and involves the use of significant estimates and assumptions including, projections of future cash flows, which include forecasted revenue, EBITDA margin, discount rate, debt free net working capital, capital expenditures and other factors which can be affected by changes in business climate, economic conditions, the competitive environment and other factors. The Company bases these fair value estimates on assumptions management believes to be reasonable but which are unpredictable and inherently uncertain. A change in underlying assumptions would cause a change in the results of the tests and, as such, could cause fair value to be less than the carrying amounts and result in an impairment of goodwill in the future. Additionally, if actual results are not consistent with the estimates and assumptions or if there are significant changes to the Company’s planned strategy, it may cause the fair value of the reporting unit to be less than its carrying amount and result in additional impairments of goodwill in the future. The Company corroborates the reasonableness of the total fair value of the reporting units by assessing the implied control premium based on the Company’s market capitalization. The Company’s market capitalization is calculated using the relevant shares outstanding and stock price of the Company’s publicly traded shares. In the event of a goodwill impairment, the Company would be required to record an impairment, which would impact earnings and reduce the carrying amounts of goodwill on the consolidated balance sheet. Refer to Note 6, Intangible Assets and Goodwill, for the goodwill impairment recorded during the year ended December 31, 2022.
Contingent Consideration
Some of the Company’s acquisition agreements include contingent consideration arrangements, which are generally based on the achievement of future performance thresholds. For each transaction, the Company estimates the fair value of contingent consideration payments as part of the initial purchase price and records the estimated fair value of contingent consideration as a liability.
The Company considers several factors when determining that contingent consideration liabilities are part of the purchase price, including the following: (1) the valuation of its acquisitions is not supported solely by the initial consideration paid, (2) the former shareholders of acquired companies that remain as key employees receive compensation other than contingent consideration payments at a reasonable level compared with the compensation of the Company’s other key employees and (3) contingent consideration payments are not affected by employment termination.
The Company reviews and assesses the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could differ materially from the initial estimates. Adjustments to the estimated fair value of contingent consideration are reported in selling, general and administrative expense in the consolidated statements of (loss) income and comprehensive (loss) income. As of December 31, 2024 and 2023, the Company’s contingent consideration balances totaled $10.7 million and $6.9 million, respectively. Contingent consideration of $0.7 million and $0.2 million as of December 31, 2024 and 2023, respectively, are included within contingent consideration in the consolidated balance sheets and contingent consideration of $10.0 million and $6.7 million, respectively, are included within other noncurrent liabilities in the consolidated balance sheets. Refer to Note 9, Fair Value Measurements, for further information related to the Company’s contingent consideration.
Revenue Recognition and Deferred Revenue
Revenue is recognized as the customer receives the benefit of the promised services and performance obligations are satisfied. Revenue is recognized at an amount that reflects the consideration the Company expects to receive in exchange for those services. Refer to Note 3, Revenues, for further information related to the Company’s revenues.
Connections
A significant portion of the Company’s annual revenue is generated from the Connections segment through the production of trade shows and conference events, including booth space sales, registration fees and sponsorship fees. Revenue from the Company’s trade shows and other events is recognized in the period the trade show or other event stages as the Company’s performance obligations have been satisfied. Exhibitors contract for their booth space and sponsorships up to a year in advance of the trade show. Trade show and other events generated approximately 89%, 89% and 87% of revenues for the years ended December 31, 2024, 2023 and 2022, respectively.
Content
Revenues from the Company’s Content category primarily consist of advertising sales for digital products and industry publications that complement the event properties in each industry sector as well as custom content agency revenues. These revenues are recognized in the period in which the digital products are provided or publications are issued or when the custom content is delivered to the customer. Typically, the fees charged are collected after the digital products are provided, the publications are issued or the custom content is delivered. Content category revenues generated approximately 6%, 6% and 8% of revenues for the years ended December 31, 2024, 2023 and 2022, respectively.
Commerce
Revenues from the Commerce category primarily consist of sales from the Company’s software-as-a-service Elastic Suite platform. Revenue consists of subscription revenue, implementation fees and professional services. Fees associated with implementation are deferred and recognized over the expected customer life, which is four years. Subscription revenue is generally recognized over the term of the contract. The Company’s contracts associated with the subscription software and services are generally three-year terms with one-year renewals. Subscription software and services revenues generated approximately 5%, 5% and 5% of revenues for the years ended December 31, 2024, 2023 and 2022, respectively.
Deferred Revenue
The Company typically invoices and collects payment in-full from customers prior to the staging of a trade show or other event and records deferred revenues in the consolidated balance sheets until the staging of the trade show or other event. As of December 31, 2024 and 2023, the Company had current deferred revenues of $190.5 million and $174.3 million, respectively, of which, $57.5 million and $54.7 million, are included in accounts receivable on the consolidated balance sheets as of December 31, 2024 and 2023, respectively.
Other Income
The Company maintains event cancellation insurance to protect against losses due to the unavoidable cancellation, postponement, relocation and enforced reduced attendance at events due to certain covered events. Emerald’s event cancellation insurance policies beginning with policy year 2022 do not cover losses due to event cancellations caused by the outbreak of communicable diseases, including COVID-19. During the years ended December 31, 2024 and 2023, the Company reported other income, net of $1.5 million and $2.8 million, respectively, related to event cancellation insurance claim proceeds deemed to be realizable by management during the years ended 2024 and 2023, respectively, in the consolidated statements of (loss) income and comprehensive (loss) income. On August 3, 2022, the Company reached an agreement to settle outstanding insurance litigation relating to event cancellation insurance for proceeds of $148.6 million. In total, the Company received payments of $182.8 million from its insurance carrier to recover the lost revenues, net of costs saved, of the affected 2021 and 2020 trade shows during the year ended December 31, 2022. As a result, during the year ended December 31, 2022, the Company reported other income, net of $182.8 million to recognize the amount that was recovered from the insurance company in the consolidated statements of (loss) income and comprehensive (loss) income.
Barter Transactions
The Company has barter transactions in which the Company provides booth space, sponsorship or advertising in exchange for promotional, advertising, marketing or other services in the ordinary course of business. The transaction price for these contracts is measured on the standalone selling price of the booth space, sponsorship or advertising promised to the customer, unless there is no standalone selling price, in which case the non-cash consideration received is based on management’s estimated fair value. Revenues from barter transactions are recognized during the period in which the advertisements are run or when an event stages and are included in consolidated revenues in the consolidated statements of (loss) income and comprehensive (loss) income. Barter transaction costs are recorded upon receipt and usage of the advertising and services, as applicable, and are reflected as cost of revenues in the consolidated statements of (loss) income and comprehensive (loss) income. For the years ended December 31, 2024, 2023 and 2022, the Company recognized barter revenues of $18.8 million, $7.0 million and $1.2 million, respectively. Barter transaction costs totaled $18.8 million, $7.0 million and $1.2 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Deferred Financing Fees and Debt Discount
Costs relating to debt issuance have been deferred and are amortized over the terms of the underlying debt instruments using the effective interest method for the Extended Term Loan Facility and Amended and Restated Term Loan Facility and the straight-line method for the Amended and Restated Revolving Credit Facility. Debt discount is recorded as a contra-liability and is amortized over the term of the underlying debt instrument, using the effective interest method.
Segment Reporting
Operating segments are components of an enterprise for which discrete financial reporting information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Emerald’s Chief Executive Officer (“CEO”) is considered the CODM. Effective October 31, 2023, Emerald’s management structure was reorganized and the discrete financial reporting information regularly provided to the CODM to facilitate his allocation of resources and assessment of performance was updated to reflect the new structure. As a result, there was a change in reporting segments. The CODM evaluates performance and allocates resources based on the results of three operating segments. The Connections segment is the only operating segment which meets the criteria to be classified as a reportable segment. The Connections reportable segment includes all of Emerald’s trade shows and other live events. The other two operating segments, which provide diverse media services and e-commerce software solutions, do not meet the quantitative thresholds of a reportable segment and did not meet the aggregation criteria set forth in Accounting Standards Codification 280 (“ASC 280”), Segment Reporting, and as such are referred to as “All Other.” Refer to Note 18, Segment Information, for information regarding the Company’s reportable segments.
Advertising and Marketing Costs
Advertising and marketing costs are expensed as incurred and are reflected as selling, general and administrative expenses in the consolidated statements of (loss) income and comprehensive (loss) income. These costs include brand advertising, telemarketing, direct mail and other sales promotion expenses associated with the Company’s trade shows, conference events, digital media, Elastic Suite platform and publications. Advertising and marketing costs totaled $8.6 million, $9.6 million and $10.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Stock-Based Compensation
The Company uses share-based compensation, including stock options and restricted stock units, to provide long-term performance incentives for its employees and non-employee directors. Stock-based compensation expense is calculated for each vesting tranche of stock options using the Black-Scholes option pricing model. The expense is recognized, net of forfeitures, within the consolidated statements of (loss) income and comprehensive (loss) income; however, no expense is recognized for awards that do not ultimately vest. The determination of the grant date fair value of stock options using an option-pricing model is affected by a number of assumptions, such as the fair value of the underlying stock, Emerald’s expected stock price volatility over the expected term of the options, stock option forfeiture behaviors, risk-free interest rates and expected dividends, which are estimated as follows:
•Fair Value of Common Stock -The fair value per share of common stock for purposes of determining share-based compensation is the closing price of the Company’s common stock as reported on the New York Stock Exchange on the applicable grant date.
•Expected Term -The expected option term represents the period of time the option is expected to be outstanding.
•Volatility -The expected volatility is based on the Company’s publicly traded stock price and historical average volatilities.
•Risk-Free Rate -The risk-free rate is based on the yields of United States Treasury securities with maturities similar to the expected term of stock option for each stock option grant.
•Forfeiture Rate -Estimates of pre-vesting forfeitures, or forfeiture rates, are based on an internal analysis, which primarily considers the award recipients’ position within the Company.
•Dividend Yield -During 2024, the Company adopted a policy of paying quarterly cash dividends on common stock, and resumed paying cash dividends in August 2024. Stock option grants include an expected dividend yield which is commensurate with the Company’s quarterly dividend policy.
The Company granted Restricted Stock Units (“RSUs”), that contain service and, in certain instances, performance conditions to certain executives and employees, which are equity-classified awards. The Company recognizes cumulative stock-based compensation expense for the portion of the awards for which the service period and performance conditions, as applicable, are probable of being satisfied. The grant date fair value of stock-based awards is recognized as expense over the requisite service period on the graded-vesting method.
Market-based Share Awards
The Company granted performance-based market condition share awards to one senior executive in 2020 under the 2017 Omnibus Equity Plan. These awards are classified as liabilities, which are measured at fair value, and are re-measured to an updated fair value at each reporting period. The fair value of performance-based market condition share awards is estimated using a risk-neutral Monte Carlo simulation model. The Company recognizes expense for performance-based market condition share awards over the derived service period for each tranche. The Company recognizes stock-based compensation expense for awards subject to market-based vesting conditions regardless of whether it becomes probable that these conditions will be achieved or not, and stock-based compensation expense for any such awards may be reversed if vesting does not occur and the employee terminates employment before the ten year term expires, except that upon a termination of employment other than for cause, or upon a termination for good reason within three months prior to the earlier of the execution of an agreement resulting in a change in control or the date of a change in control, any unvested shares subject to the performance-based market condition share award shall remain eligible to vest in accordance with the performance-based market condition share award agreement’s vesting conditions. Refer to Note 12, Stock-Based Compensation, for further information regarding the Company’s performance-based market condition share awards.
Redeemable Convertible Preferred Stock
The Company records redeemable convertible preferred stock at fair value on the dates of issuance, net of issuance costs. The Company classifies its redeemable convertible preferred stock as mezzanine equity outside of stockholders’ equity (deficit) when the stock contains contingent redemption features that are not solely within the Company’s control. Each share of redeemable convertible preferred stock accumulated dividends at a rate per annum equal to 7% of the accreted liquidation preference, compounding quarterly by adding to the accreted liquidation preference until July 1, 2023 and thereafter, at the Company’s option, paid either in cash or by adding to the accreted liquidation preference. For each of the quarterly periods ended March 31, 2024, December 31, 2023 and September 30, 2023, the Company elected to pay dividends on the redeemable convertible preferred stock in cash.
The Company had the right to redeem all, but not less than all, of the redeemable convertible preferred stock on or after June 29, 2026 for a cash purchase price equal to (a) on or after the six-year anniversary thereof, 105% of the accreted liquidation preference, (b) on or after the seven-year anniversary thereof, 103% of the accreted liquidation preference or (c) on or after the eight-year anniversary thereof, the accreted liquidation preference. In addition, if there was a change of control transaction involving the Company prior to the six-year anniversary of the First Closing Date, the Company had the right to redeem all, but not less than all, of the redeemable convertible preferred stock for a cash purchase price equal to the accreted liquidation preference plus the net present value of the additional amount by which the accreted liquidation preference would have otherwise increased from the date of such redemption through the sixth anniversary of the closing. The Company also had the right to require the conversion of all shares of redeemable convertible preferred stock into shares of the Company’s common stock if the closing price of its common stock on the NYSE exceeded 175% of the conversion price for a period of 20 consecutive trading days. Refer to Note 11, Stockholders’ Equity (Deficit) and Redeemable Convertible Preferred Stock, for further information regarding the conversion of the Company’s redeemable convertible preferred stock during the year ended December 31, 2024.
Income Taxes
The Company provides for income taxes utilizing the asset and liability method of accounting. Under this method, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each balance sheet date, based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. If it is determined that it is more likely than not that future tax benefits associated with a deferred tax asset will not be realized, a valuation allowance is provided. The effect on deferred tax assets and liabilities of a change in the tax rates is recognized in the consolidated statements of (loss) income and comprehensive (loss) income as an adjustment to income tax expense in the period that includes the enactment date.
The Company records a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax return. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense. Refer to Note 15, Income Taxes, for further information related to the Company’s income taxes.
Net (Loss) Income Attributable to Common Stockholders
Basic and diluted net (loss) income per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. The Company considers all redeemable convertible preferred stock to be a participating security. Under the two-class method, the net loss attributable to common stockholders is not allocated to the redeemable convertible preferred stock as the holders of the Company’s redeemable convertible preferred stock do not have a contractual obligation to share in the losses.
Under the two-class method, basic net (loss) income per share attributable to common stockholders is computed by dividing the net (loss) income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period.
Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of stock options, restricted stock units (“RSUs”) and redeemable convertible preferred stock. In periods where the Company has reported a loss, all potentially dilutive securities are antidilutive, and accordingly, basic net loss per share equals diluted net loss per share.
Note 2. Adoption of New Accounting Pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within the segment measure of profit or loss. The standard is required to be applied retrospectively to prior periods presented, based on the significant segment expense categories identified and disclosed in the period of adoption. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company adopted ASU 2023-07 in December 2024 and the adoption did not have a material impact on the Company’s consolidated financial statements.
Recently Issued Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (“ASU 2024-03”). ASU 2024-03 requires disclosure of disaggregated information about certain income statement expense line items in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods with fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact the adoption will have on the disclosures within the Company’s consolidated financial statements.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires disclosure of disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions and applies to all entities subject to income taxes. The standard should be applied on a prospective basis although retrospective application is permitted. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company is currently evaluating the impact the adoption will have on the disclosures within the Company’s consolidated financial statements.
There have been no other new accounting pronouncements that are expected to have a significant impact on the Company’s consolidated financial statements.
Note 3. Revenues
Revenue Recognition and Deferred Revenue
Revenue is recognized as the customer receives the benefit of the promised services and performance obligations are satisfied. Revenue is recognized at an amount that reflects the consideration the Company expects to receive in exchange for those services. Customers generally receive the benefit of the Company’s services upon the staging of each trade show or conference event and over the subscription period for access to the Company’s subscription software and services. Fees are typically invoiced and collected in-full prior to the trade show or event.
A significant portion of the Company’s annual revenue is generated from the Connections segment primarily related to the production of trade shows and conference events (collectively, “trade shows”), including booth space sales, registration fees and sponsorship fees. The Company recognizes revenue in the period the trade show occurs.
Content revenues primarily consist of advertising sales for digital products and industry publications that complement the event properties, custom content agency revenues and subscription fees for educational and e-learning services. Advertising sales and custom content revenues are recognized in the period in which the custom content and digital products are provided or publications are issued. Subscription fees for educational and e-learning services are billed and collected at the subscription date. Typically, the fees charged are collected after the custom content and digital products are delivered or publications are issued.
Commerce revenues primarily consist of software-as-a-service subscription revenue, implementation fees and professional services. Fees associated with implementation are deferred and recognized over the expected customer life, which is four years. Subscription revenue is generally recognized over the term of the contract. Payment terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days.
Deferred revenues generally consist of booth space sales, registration fees and sponsorship fees that are invoiced prior to a trade show, as well as upfront payments for software subscription fees, professional services and implementation fees for the Company’s subscription software and services. Current deferred revenues are reported as deferred revenues on the consolidated balance sheets and were $190.5 million and $174.3 million as of December 31, 2024 and 2023, respectively. Long-term deferred revenues as of December 31, 2024 and 2023 were $0.2 million and $0.9 million, respectively, and are reported as other noncurrent liabilities on the consolidated balance sheets. Total deferred revenues, including the current and noncurrent portions, were $190.7 million and $175.2 million, as of December 31, 2024 and 2023, respectively.
The accounts receivable and deferred revenue balances related to cancelled events have been reclassified to cancelled event liabilities in the consolidated balance sheets as the total amount represents balances which are expected to be refunded to customers. As of December 31, 2024, cancelled event liabilities of $1.2 million represents $0.1 million of deferred revenues for cancelled trade shows and $1.1 million of related accounts receivable credits reclassified to cancelled event liabilities in the consolidated balance sheets. As of December 31, 2023, cancelled event liabilities of $0.6 million represents $0.5 million of deferred revenues for cancelled trade shows and $0.1 million of related accounts receivable credits reclassified to cancelled event liabilities in the consolidated balance sheets.
The following table represents the deferred revenue activity for the years ended December 31, 2024 and 2023, respectively:
(in millions)
Balance at beginning of period
$
175.2
$
152.6
Invoiced during the period
179.1
167.2
Consideration earned during the period
(170.7
)
(148.2
)
Additions related to business combinations
7.1
3.6
Balance at end of period
$
190.7
$
175.2
Performance Obligations
For the Company’s trade shows and other events, sales are deferred and recognized when performance obligations under the terms of a contract with the Company’s customers are satisfied, which is typically at the completion of a show or event. Revenue is measured as the amount of consideration the Company earns upon completion of its performance obligations.
For the Company’s subscription software and services, the Company may enter into contracts with customers that include multiple performance obligations, which are generally capable of being distinct. Fees associated with implementation and related professional services are deferred and recognized over the expected customer life, which is four years. Subscription revenue is recognized over the term of the contract. The Company’s contracts associated with the subscription software and services are generally three-year terms with one-year renewals following the initial three-year term.
For the Company’s other marketing services, revenues are deferred and recognized when performance obligations under the terms of a contract with the Company’s customers are satisfied. This generally occurs in the period in which the publications are issued. Revenue is measured as the amount of consideration the Company earns upon completion of its performance obligations.
The Company applies a practical expedient which allows the exclusion of disclosure information regarding remaining performance obligations if the performance obligation is part of a contract that has an expected duration of one year or less. The Company’s performance obligations greater than one year were $0.2 million as of December 31, 2024.
Disaggregation of Revenue
The following table represents revenues disaggregated by type:
Year Ended December 31,
Revenues
(in millions)
Connections
$
355.1
$
340.2
$
282.6
Content
22.8
23.5
27.9
Commerce
20.9
19.1
15.4
Total revenues
$
398.8
$
382.8
$
325.9
Contract Balances
The Company’s contract assets are primarily sales commissions incurred in connection with the Company’s subscription software and services, which are expensed over the expected customer relationship period. As of December 31, 2024 and 2023, the Company does not have material contract assets.
Contract liabilities generally consist of booth space sales, registration fees, sponsorship fees that are collected prior to the trade show or other event and subscription revenue, implementation fees and professional services associated with the Company’s subscription software and services. Contract liabilities less than one year from the date of the performance obligation are reported on the consolidated balance sheets as deferred revenues. Contract liabilities greater than one year from the date of the performance obligation are reported on the consolidated balance sheets in other noncurrent liabilities.
The Company’s sales commission costs incurred in connection with sales of booth space, registration fees and sponsorship fees at the Company’s trade shows and other events and with sales of advertising for industry publications are generally short term, as sales typically begin up to one year prior to the date of the trade shows and other events. The Company expects the period benefited by each commission to be less than one year, and as a result, the Company expenses sales commissions associated with trade shows, other events and other marketing services as incurred. Sales commissions are reported on the consolidated statements of (loss) income and comprehensive (loss) income as selling, general and administrative expense.
Accounts Receivable
The Company monitors collections and payments from its customers and maintains an allowance based upon applying an expected credit loss rate to receivables based on the historical loss rate from similar higher risk customers adjusted for current conditions, including any specific customer collection issues identified, and forecasts of economic conditions. Delinquent account balances are written off after management has determined that the likelihood of collection is remote. The activities in this account, including write-offs and the current-period provision for expected credit losses for the year ended December 31, 2024 were $0.3 million and $0.5 million, respectively, and for the year ended December 31, 2023 were $0.4 million and $0.3 million, respectively. The activities in this account for the year ended December 31, 2022 were not material.
Contract Estimates and Judgments
The Company’s trade show, other event and other marketing sales revenue contracts do not require significant estimates or judgments based on the nature of the Company’s contracts. The sales price in the Company’s contracts are fixed and stated on the face of the contract. All consideration from contracts is included in the transaction price. The Company’s contracts with multiple performance obligations are considered to be fulfilled upon the completion of each trade show, publication issuance or as advertising services are provided, as applicable. The Company’s contracts consist of subscription revenue, implementation fees and professional services. Fees associated with implementation and professional services are deferred and recognized over the expected customer life, which is four years. Subscription revenue is recognized over the term of the contract. The Company’s contracts associated with the subscription software and services are generally three-year terms with one-year renewals. The Company’s contracts do not include material variable consideration.
Note 4. Business Acquisitions
The Company acquired certain assets and assumed certain liabilities of four companies in 2024 (the “2024 Acquisitions”), one company in 2023 (the “2023 Acquisition”) and two companies in 2022 (the “2022 Acquisitions”) as described below. Each transaction qualified as an acquisition of a business and was accounted for as a business combination.
The Company recorded goodwill of $19.9 million and $8.4 million for the business acquisitions in the years ended December 31, 2024 and 2023, respectively. In the view of management, the goodwill recorded reflects the future cash flow expectations for the acquired businesses’ market positions in their respective industries, synergies and assembled workforce. The fair values of acquired customer-relationship intangibles are estimated using a discounted cash flow analysis. The significant assumptions used in the discounted cash flow analysis include future cash flows, growth rates, discount rates, and tax rates. These assumptions are used in developing the present value of future cash flow projections which are the basis of the fair value calculation.
2024 Acquisitions
GRC World Forums (“GRC”)
In furtherance of the Company’s portfolio optimization strategy to enhance its offerings in the governance, risk management and compliance sectors and also to expand its global footprint, the Company executed a share purchase agreement on August 5, 2024 to acquire all the assets and assume certain liabilities of the UK-based business known as GRC World Forums (collectively known as “GRC”). GRC produces in-person events and livestream experiences in the governance, risk management and compliance business sectors. The total estimated purchase price of $2.9 million included an initial cash payment of $1.2 million and contingent consideration with an estimated fair value of $1.2 million. As of December 31, 2024, the estimated fair value of the contingent consideration was $0.8 million. This amount was measured based on significant unobservable inputs and probability weightings using a Monte Carlo simulation. The acquisition was financed with cash from operations.
The contingent consideration liability related to the acquisition of GRC consists of a potential payment based on a range of multiples, which are dependent upon the acquisition’s compounded average EBITDA growth rate between 2024 and 2027, being applied to their EBITDA growth from 2024 EBITDA. The payment is expected to be settled in the first quarter of 2028.
External acquisition costs of $0.4 million were expensed as incurred and included in selling, general and administrative expenses in the consolidated statements of (loss) income and comprehensive (loss) income. There was $2.0 million of revenue and $0.3 million of net income generated from the acquisition of GRC during the year ended December 31, 2024. Goodwill was calculated as the excess of the purchase price over the estimated fair values of acquired assets and intangible assets offset by liabilities acquired, and is primarily attributable to the future economic benefits from synergies expected to arise due to certain cost savings, operating efficiencies and other strategic benefits. Substantially all of the goodwill recorded is expected to be deductible for income tax purposes.
Identified intangible assets associated with GRC included trade name and customer relationship intangible assets of $0.4 million and $1.0 million, respectively. The weighted-average amortization period of the trade name intangible assets acquired was 3.0 years. The weighted-average amortization period of the customer relationship intangible assets acquired was 3.0 years. There is no assumed residual value for the acquired trade name and customer relationship intangible assets.
The following table summarizes the fair value of the acquired assets and liabilities on the acquisition date:
(in millions)
August 5,
Trade and other receivables
$
0.2
Goodwill
3.7
Intangible assets
1.4
Deferred revenues
(1.2
)
Accounts payable and other current liabilities
(1.2
)
Purchase price, including working capital adjustment
$
2.9
Over the Pond Media (“Glamping Americas”)
In furtherance of the Company’s portfolio optimization strategy to expand its footprint in the outdoor industry, particularly focused on a market that combines outdoor adventure with upscale accommodations, the Company executed an asset purchase agreement on August 5, 2024 to acquire all the assets and assume certain liabilities of the business known as Over the Pond Media (collectively known as “Glamping Americas”). Glamping Americas produces the only glamping industry event in the Americas. The total estimated purchase price of $3.0 million included an initial cash payment of $2.3 million and contingent consideration with an estimated fair value of $0.4 million. The contingent consideration liability related to the acquisition of Glamping Americas consists of a potential payment based on Glamping America’s 2024 EBITDA. The payment is expected to be settled in the first quarter of 2025. As of December 31, 2024, the estimated fair value of the contingent consideration was $0.4 million. The acquisition was financed with cash from operations.
External acquisition costs of $0.2 million were expensed as incurred and included in selling, general and administrative expenses in the consolidated statements of (loss) income and comprehensive (loss) income. There was $1.2 million of revenue and $0.4 million of net income generated from the acquisition of Glamping Americas during the year ended December 31, 2024. Goodwill was calculated as the excess of the purchase price over the estimated fair values of acquired assets and intangible assets offset by liabilities acquired, and is primarily attributable to the future economic benefits from synergies expected to arise due to certain cost savings, operating efficiencies and other strategic benefits. Substantially all of the goodwill recorded is expected to be deductible for income tax purposes.
Identified intangible assets associated with Glamping Americas included trade name and customer relationship intangible assets of $0.2 million and $0.6 million, respectively. The weighted-average amortization period of the trade name intangible assets acquired was 4.0 years. The weighted-average amortization period of the customer relationship intangible assets acquired was 4.0 years. There is no assumed residual value for the acquired trade name and customer relationship intangible assets.
The following table summarizes the fair value of the acquired assets and liabilities on the acquisition date:
(in millions)
August 5,
Trade and other receivables
$
0.1
Prepaid expenses and other current assets
0.2
Goodwill
2.6
Intangible assets
0.8
Deferred Revenues
(0.7
)
Purchase price, including working capital adjustment
$
3.0
The Futurist
On May 7, 2024, the Company executed an asset purchase agreement to acquire the assets and assume certain liabilities of the Blockchain Futurist Conference and its associated experiences (collectively known as the “Futurist”). The total estimated purchase price of $1.9 million included an initial cash payment of $1.1 million and contingent consideration with an estimated fair value of $0.9 million. As of December 31, 2024, the estimated fair value of the contingent consideration was $0.3 million. The Company recorded goodwill of $1.8 million in connection with the Futurist acquisition. The acquisition was financed with cash from operations. There was $1.6 million of revenue and $0.2 million of net income generated from the acquisition of Futurist during the year ended December 31, 2024.
Hotel Interactive
In furtherance of the Company’s portfolio optimization strategy to enhance its best-in-class hosted buyer platform, the Company executed an asset purchase agreement on January 19, 2024 to acquire all the assets and assume certain liabilities of the business known as Hotel Interactive. Hotel Interactive produces hosted buyer events in the hotel, hospitality, food service and healthcare and senior living space sectors. The total estimated purchase price of $13.5 million included an initial cash payment of $11.6 million and contingent consideration with an estimated fair value of $2.7 million, as well as a $0.8 million post close working capital adjustment receivable from the seller. As of December 31, 2024, the estimated fair value of the contingent consideration was $2.0 million. This amount was measured based on significant unobservable inputs and probability weightings using a Monte Carlo simulation. During the year ended December 31, 2024, the Company received $1.0 million from the seller for certain working capital adjustments, which is recorded in investing activities in the Company’s consolidated statement of cash flow. The acquisition was financed with cash from operations.
The contingent consideration liability related to the acquisition of Hotel Interactive consists of two potential payments, the interim payment and the final payment. The interim payment is based on a range of multiples, which are dependent upon the acquisition’s compounded annual EBITDA growth rate from 2023 to 2024, being applied to the 2024 EBITDA growth from a specified EBITDA target. The interim payment will be settled in the second quarter of 2025. The final payment is based on a range of multiples, which are dependent upon the acquisition’s 3-year compounded annual EBITDA growth rate from 2023 to 2026, being applied to the average annual EBITDA growth in calendar years 2025 and 2026, from a specified EBITDA target, less the interim payment. The final payment will be settled in the second quarter of 2027.
External acquisition costs of $0.2 million were expensed as incurred and included in selling, general and administrative expenses in the consolidated statements of (loss) income and comprehensive (loss) income. There was $8.6 million of revenue and $0.5 million of net income generated from the acquisition of Hotel Interactive during the year ended December 31, 2024. Goodwill was calculated as the excess of the purchase price over the estimated fair values of acquired assets and intangible assets offset by liabilities acquired, and is primarily attributable to the future economic benefits from synergies expected to arise due to certain cost savings, operating efficiencies and other strategic benefits. Substantially all of the goodwill recorded is expected to be deductible for income tax purposes.
Identified intangible assets associated with Hotel Interactive included trade name and customer relationship intangible assets of $1.6 million and $2.5 million, respectively. The weighted-average amortization period of the trade name intangible assets acquired was 10.0 years. The weighted-average amortization period of the customer relationship intangible assets acquired was 4.0 years. There is no assumed residual value for the acquired trade name and customer relationship intangible assets. The measurement period for the acquisition closed in the third quarter of 2024.
The following table summarizes the fair value of the acquired assets and liabilities on the acquisition date:
(in millions)
January 19,
Trade and other receivables
$
1.2
Prepaid expenses and other current assets
1.1
Goodwill
11.8
Intangible assets
4.1
Deferred Revenues
(4.7
)
Purchase price, including working capital adjustment
$
13.5
2023 Acquisition
Lodestone Events (“Lodestone”)
In furtherance of the Company’s strategy to expand into the growing business-to-consumer event space, the Company executed an asset purchase agreement on January 9, 2023 to acquire certain assets and assume certain liabilities of the business known as Lodestone for a total estimated purchase price of $10.2 million, which included an initial cash payment of $9.5 million and contingent consideration with an estimated fair value of $0.7 million. The contingent consideration liability related to the acquisition of Lodestone consists of a potential payment based on Lodestone’s average annual EBITDA during the period from January 1, 2025 through December 31, 2026. The payment is expected to be settled in the second quarter of 2027. As of December 31, 2024, the estimated fair value of the contingent consideration was $4.6 million. This amount was measured based on significant unobservable inputs and probability weightings using a Monte Carlo simulation. Lodestone produces the Overland Expo series of vehicle-based, adventure travel consumer shows. The acquisition was financed with cash from operations.
External acquisition costs of $0.4 million were expensed as incurred and included in selling, general and administrative expenses in the consolidated statements of (loss) income and comprehensive (loss) income. There was $9.0 million of revenue and $4.4 million of net income generated from the acquisition of Lodestone during the year ended December 31, 2023. Goodwill was calculated as the excess of the purchase price over the estimated fair values of acquired assets and intangible assets offset by liabilities acquired, and is primarily attributable to the future economic benefits from synergies expected to arise due to certain cost savings, operating efficiencies and other strategic benefits. Substantially all of the goodwill recorded is expected to be deductible for income tax purposes.
Identified intangible assets associated with Lodestone included trade name and customer relationship intangible assets of $1.1 million and $2.3 million, respectively. The weighted-average amortization period of the trade name intangible assets acquired was 5.0 years. The weighted-average amortization period of the customer relationship intangible assets acquired was 6.0 years. There is no assumed residual value for the acquired trade name and customer relationship intangible assets. The measurement period for the acquisition closed in the second quarter of 2023.
The following table summarizes the fair value of the acquired assets and liabilities on the acquisition date:
(in millions)
January 9,
Trade and other receivables
$
1.8
Prepaid expenses and other current assets
0.2
Goodwill
8.4
Intangible assets
3.4
Deferred revenues
(3.6
)
Purchase price, including working capital adjustment
$
10.2
2022 Acquisitions
Bulletin, Inc. (“Bulletin”)
In furtherance of the Company’s strategy to combine both in-person and e-commerce offerings, the Company executed an asset purchase agreement on July 11, 2022 to acquire certain assets and assume certain liabilities of the business known as Bulletin for a total estimated purchase price of $9.9 million, which included an initial cash payment of $8.9 million and contingent consideration with an estimated fair value of $1.0 million. The contingent consideration liability related to the acquisition of Bulletin of $1.0 million, consists of a potential payment based on the 2026 Bulletin EBITDA. The 2026 payment is expected to be settled in the second quarter of 2027. As of December 31, 2024, the estimated fair value of the contingent consideration was not material. Bulletin is an online wholesale market for retail where brands, buyers and designers gather to connect and discover new products. The acquisition was financed with cash from operations.
External acquisition costs of $1.1 million were expensed as incurred and included in selling, general and administrative expenses in the consolidated statements of (loss) income and comprehensive (loss) income. The Bulletin acquisition generated a net loss of $1.8 million during the year ended December 31, 2022. The revenue generated by Bulletin during the year ended December 31, 2022, was not material. Goodwill was calculated as the excess of the purchase price over the estimated fair values of acquired assets and intangible assets acquired offset by liabilities acquired and is primarily attributable to the future economic benefits expected to arise from synergies expected to arise due to certain cost savings, operating efficiencies and other strategic benefits. Substantially all of the goodwill recorded is expected to be deductible for income tax purposes.
Identified intangible assets associated with Bulletin included acquired technology and trade name intangible assets of $2.0 million and $0.1 million, respectively. The weighted-average amortization period of the acquired technology was 3.0 years. The weighted-average amortization period of the trade name intangible assets acquired was 3.0 years. There is no assumed residual value for the acquired technology and trade name intangible assets.
The following table summarizes the fair value of the acquired assets and liabilities on the acquisition date:
(in millions)
July 11,
Trade receivables and prepaid expenses
$
0.4
Goodwill
7.9
Intangible assets
2.1
Accounts payable and other current liabilities
(0.5
)
Purchase price
$
9.9
Advertising Week
In furtherance of the Company’s strategy to provide year-round engagement and optimize its portfolio within strategic growth industries, the Company executed an asset purchase agreement on June 21, 2022 to acquire all the assets and assume certain liabilities of the business known as Advertising Week from Stillwell Partners for a total estimated purchase price of $34.3 million, which included an initial cash payment of $28.4 million and contingent consideration with an estimated fair value of $5.9 million. As of December 31, 2024, the estimated fair value of the contingent consideration was $2.3 million. This amount was measured based on significant unobservable inputs and probability weightings using a Monte Carlo simulation. Advertising Week is a global event and thought leadership platform focused on marketing, media, technology, and culture. The acquisition was financed with cash from operations.
Identified intangible assets associated with Advertising Week included trade name, customer relationship and content intangible assets of $5.4 million, $5.9 million and $1.1 million, respectively. The weighted-average amortization period of the trade names acquired was 15.0 years. The weighted-average amortization period of the customer relationship intangible assets acquired was 10.0 years, based on the expected pattern of economic benefit used to calculate their fair value. The weighted-average amortization period of the content intangible assets acquired was 7.0 years. There is no assumed residual value for the acquired content, trade names, or customer relationships.
The contingent consideration liability related to the acquisition of Advertising Week in the amount of $5.9 million as of the acquisition date, consists of two potential payments: the 2023 payment and the 2026 payment. The 2023 payment was based on a multiple of 2023 EBITDA growth from a specified EBITDA target. The Advertising Week business did not achieve growth from the specified EBITDA target in fiscal year 2023 and therefore did not receive the 2023 payment. The 2026 payment is based on a range of multiples, which are dependent upon the acquisition’s 5-year compounded annual EBITDA growth rate from 2021 through 2026, being applied to the average annual EBITDA growth in calendar years 2024, 2025 and 2026, from a specified EBITDA target, less the 2023 payment. The 2026 payment will be settled in the second quarter of 2027. The 2023 and 2026 payments are not capped as they are based on increases in EBITDA. Therefore, there is no pre-determined upper limit to the undiscounted range.
External acquisition costs of $0.6 million were expensed as incurred and included in selling, general and administrative expenses in the consolidated statements of (loss) income and comprehensive (loss) income. There was $14.6 million of revenue and $2.2 million of net income generated from the acquisition of Advertising Week during the year ended December 31, 2022. Goodwill was calculated as the excess of the purchase price over the estimated fair values of acquired assets and intangible assets acquired offset by liabilities acquired and is primarily attributable to the future economic benefits expected to arise from synergies expected to arise due to certain cost savings, operating efficiencies and other strategic benefits. Substantially all of the goodwill recorded is expected to be deductible for income tax purposes.
The following table summarizes the fair value of the acquired assets and liabilities on the acquisition date:
(in millions)
June 21,
Trade and other receivables
$
3.8
Prepaid expenses and other current assets
0.3
Goodwill
23.6
Intangible assets
12.4
Right-of-use lease asset
1.2
Accounts payable and other current liabilities
(2.7
)
Deferred revenues
(3.1
)
Right-of-use lease liability
(1.2
)
Purchase price
$
34.3
Supplemental Pro-Forma Financial Information
Supplemental information on an unaudited pro-forma basis, is reflected as if each of the 2024, 2023 and 2022 acquisitions had occurred at the beginning of the year prior to the year in which each acquisition closed, after giving effect to certain pro-forma adjustments primarily related to the amortization of acquired intangible assets and interest expense. The unaudited pro-forma supplemental information is based on estimates and assumptions that the Company believes are reasonable. The supplemental unaudited pro-forma financial information is presented for comparative purposes and is not necessarily indicative of what the Company’s financial position or results of operations actually would have been had the Company completed the acquisitions at the dates indicated, nor is it intended to project the future financial position or operating results of the combined companies. Further, the supplemental unaudited pro-forma information has not been adjusted for show timing differences or discontinued events.
Year Ended December 31,
(in millions)
(Unaudited)
Pro-forma revenues(1)
Hotel Interactive
$
-
$
7.9
$
-
Other 2024 acquisitions(2)
0.9
4.9
-
Lodestone
-
-
6.4
Advertising Week
-
-
5.5
Emerald revenue
398.8
382.8
325.9
Total pro-forma revenues
$
399.7
$
395.6
$
337.8
Pro-forma net income (loss)
Hotel Interactive
$
-
$
0.8
$
-
Other 2024 acquisitions(2)
(0.8
)
0.8
-
Lodestone
-
-
0.5
Bulletin
-
-
(2.1
)
Advertising Week
-
-
(0.7
)
Emerald net income (loss)
2.2
(8.2
)
130.8
Total pro-forma net income (loss)
$
1.4
$
(6.6
)
$
128.5
(1)Pro-forma revenues from the Bulletin acquisition were not material to the year ended December 31, 2022.
(2)Includes the Company’s acquisitions of Futurist, Glamping Americas and GRC in the year ended December 31, 2024.
Note 5. Property and Equipment
Property and equipment, net, consisted of the following:
December 31,
(in millions)
Furniture, equipment and other
$
5.8
$
5.2
Leasehold improvements
1.4
1.0
$
7.2
$
6.2
Less: Accumulated depreciation
(5.4
)
(4.7
)
Property and equipment, net
$
1.8
$
1.5
Depreciation expense related to property and equipment for the years ended December 31, 2024, 2023 and 2022 was $1.0 million, $1.0 million and $1.6 million, respectively.
Note 6. Intangible Assets and Goodwill
Intangible Assets, Net
Intangible assets, net consist of the following:
(in millions)
Indefinite-
lived trade
names
Customer
relationship
intangibles
Definite-
lived trade
names
Acquired
Technology
Acquired
Content
Computer
software
Capitalized
software in
progress
Total
Intangible
Assets
Gross carrying
amount at
December 31, 2024
$
45.7
$
363.6
$
92.3
$
8.4
$
2.6
$
45.1
$
2.3
$
560.0
Accumulated amortization
-
(343.5
)
(27.6
)
(5.7
)
(1.4
)
(25.9
)
-
(404.1
)
Net carrying
amount at
December 31, 2024
$
45.7
$
20.1
$
64.7
$
2.7
$
1.2
$
19.2
$
2.3
$
155.9
Gross carrying
amount at
December 31, 2023
$
52.6
$
365.4
$
91.1
$
8.4
$
2.6
$
36.9
$
1.6
$
558.6
Accumulated amortization
-
(336.7
)
(22.6
)
(4.7
)
(1.0
)
(18.5
)
-
(383.5
)
Net carrying
amount at
December 31, 2023
$
52.6
$
28.7
$
68.5
$
3.7
$
1.6
$
18.4
$
1.6
$
175.1
Amortization expense for the years ended December 31, 2024, 2023 and 2022 was $27.3 million, $44.0 million and $56.1 million, respectively.
Future amortization expense is estimated to be as follows for each of the five following years and thereafter ending December 31:
(in millions)
23.6
18.7
13.3
7.3
5.0
Thereafter
40.0
$
107.9
Intangible asset impairments for the year ended December 31, 2024, included non-cash impairments of $7.3 million for indefinite-lived and definite-lived trade name intangible assets. There were no intangible asset impairments for the year ended December 31, 2023. Intangible asset impairments for the year ended December 31, 2022, included non-cash impairments of $1.6 million for indefinite-lived trade name intangible assets. All intangible asset impairments are presented in the consolidated statements of (loss) income and comprehensive (loss) income as intangible asset impairments.
Impairment of Long-Lived Assets Other than Goodwill and Indefinite-Lived Intangible Assets
2024 Impairments
During the fourth quarter of 2024, the Company identified an impairment trigger for one of its definite-lived intangible assets due to the cancellation of a certain event that was not contributing to profitability. As a result, during the fourth quarter of 2024, the Company recorded an impairment of $0.4 million to write-off the carrying value related to the definite-lived trade name intangible asset in the Connections reportable segment. The impairment is reported in intangible asset impairments in the consolidated statements of (loss) income and comprehensive (loss) income. The long-lived asset impaired during the fourth quarter of 2024 had a remaining fair value of zero due to the cancellation of the event related to the trade name intangible asset.
2023 Impairments
During the year ended December 31, 2023, there were no triggering events or changes in circumstances that would indicate the carrying value of the Company’s long-lived assets other than goodwill are not recoverable. As such, no quantitative assessment for impairment was required during the year.
2022 Impairments
During the first quarter of 2022, the Company identified an interim impairment trigger for two of its definite-lived intangible assets. As a result, the Company performed a recoverability analysis on the definite-lived intangible assets and determined that the carrying value was recoverable. No additional triggering events or changes in circumstances that would indicate the carrying value of the Company’s long-lived assets other than goodwill are not recoverable occurred for the remainder of the year ended December 31, 2022. As such, no quantitative assessment for impairment was required during the year.
Impairment of Indefinite-Lived Intangible Assets
2024 Impairments
During the third quarter of 2024, the Company identified an interim impairment trigger for two of its indefinite-lived intangible assets due to the cancellation of certain events that were not contributing to profitability. As a result, the Company performed a quantitative analysis utilizing the “relief from royalty payments” method with assumptions that are considered level 3 inputs. As a result of the interim impairment assessment, the Company recorded an impairment of $6.3 million to certain indefinite-lived trade name intangible assets. The impairment is reported in intangible asset impairments in the consolidated statements of (loss) income and comprehensive (loss) income.
The Company performed a quantitative analysis for its annual impairment assessment for indefinite-lived intangible assets on October 31, 2024. The quantitative analysis utilized the “relief from royalty payments” method with assumptions that are considered level 3 inputs and concluded one of the indefinite-lived trade name assets had a carrying value in excess of its fair value as of October 31, 2024. As a result, during the fourth quarter of 2024, the Company recorded an impairment of $0.6 million related to a certain indefinite-live trade name intangible asset. The impairment is reported in intangible asset impairments in the consolidated statements of (loss) income and comprehensive (loss) income. The indefinite-lived trade name intangible asset impaired during the fourth quarter of 2024 had a remaining fair value of $1.1 million as of October 31, 2024.
The Company recorded total impairments of $6.9 million to certain indefinite-lived trade name intangible assets related to the Connections reportable segment for the year ended December 31, 2024.
2023 Impairments
The Company performed a quantitative analysis for its annual impairment assessment for indefinite-lived intangible assets on October 31, 2023. The quantitative analysis utilized the “relief from royalty payments” method with assumptions that are considered level 3 inputs and concluded that each of the indefinite-lived trade name asset groups had fair values in excess of their carrying values as of October 31, 2023, and therefore no impairments were identified.
2022 Impairments
During the first quarter of 2022, the Company identified an interim impairment trigger for three of its indefinite-lived intangible assets. As a result, the Company performed a quantitative analysis utilizing the “relief from royalty payments” method with assumptions that are considered level 3 inputs. As a result of the January 31, 2022 impairment assessment, the Company recorded an impairment of $1.6 million for one indefinite-lived trade name intangible asset. The impairment is reported in intangible asset impairments in the consolidated statements of (loss) income and comprehensive (loss) income.
The Company performed a quantitative analysis for its annual impairment assessment for indefinite-lived intangible assets on October 31, 2022. The quantitative analysis utilized the “relief from royalty payments” method with assumptions that are considered level 3 inputs and concluded that each of the indefinite-lived trade name asset groups had fair values in excess of their carrying values as of October 31, 2022, and therefore no impairments were identified.
The Company recorded total impairments of $1.6 million to a certain indefinite-lived trade name intangible asset for the year ended December 31, 2022. These impairments all related to certain indefinite-lived trade name intangible assets in the Connections reportable segment.
Goodwill
The table below summarizes the changes in the carrying amount of goodwill for each reportable segment:
Reportable Segment
(in millions)
Commerce
(Legacy)
Design,
Creative &
Technology
(Legacy)
Connections
All Other
All Other
(Legacy)
Total
Balance at December 31, 2022
$
356.1
$
160.8
$
-
$
-
$
28.6
$
545.5
Acquired goodwill
-
-
8.4
-
-
8.4
Transfers
(356.1
)
(160.8
)
509.9
35.6
(28.6
)
-
Balance at December 31, 2023
$
-
$
-
$
518.3
$
35.6
$
-
$
553.9
Acquired goodwill
-
-
19.9
-
-
19.9
Balance at December 31, 2024
$
-
$
-
$
538.2
$
35.6
$
-
$
573.8
Impairment of Goodwill
2024 Impairment
During the fourth quarter of 2024, in connection with the Company’s annual impairment assessment, the Company performed a quantitative assessment of the Company’s fair value of goodwill using an income approach with assumptions that are considered level 3 inputs and concluded that the fair value of all reporting units exceeded their respective carrying values. The fair values of the reporting units were determined by discounting estimated future cash flows, which were determined based on forecasted revenues, EBITDA margins, debt free net working capital, capital expenditures and other factors, at a discount rate ranging from 10.6% to 11.8%. As of the date of the Company’s assessment, there were no reporting units where the fair value of the reporting unit was equal to its carrying value.
No goodwill impairment was recorded in connection with the Company’s annual impairment assessment as of October 31, 2024.
The Company also considers the amount of headroom for a reporting unit when determining whether an impairment exists. Headroom is the difference between the fair value of a reporting unit and its carrying value. In performing the annual impairment analysis as of October 31, 2024, the Company determined that the carrying amount of certain reporting units did not exceed their respective fair values. Based on the results of the impairment test performed as of October 31, 2024, the fair values of the reporting units exceeded their carrying value between 41.0% and 234.9%.
2023 Impairment
During the fourth quarter of 2023, the Company changed its operating segments which resulted in a change in reporting units. Under accounting standards, the Company is required to perform an impairment assessment of its prior reporting units immediately prior to the change in reporting units and immediately after the change on its new reporting units. To the extent that a prior reporting unit was separated into more than one reporting unit, the allocation of goodwill between the components of the old reporting units was determined based on their relative fair value. Due to the change in reporting units, the Company performed a quantitative assessment of the fair value of its prior and new reporting units as of October 31, 2023 using an income approach with assumptions that are considered level 3 inputs and concluded that the fair value of all prior and new reporting unit exceeded their respective carrying values. The fair values of the prior and new reporting units were determined by discounting estimated future cash flows, which were determined based on forecasted revenues, EBITDA margins, debt free net working capital, capital expenditures and other factors, at a discount rate ranging from 13.0% to 15.5%. As of the date of the Company’s assessment, there were no reporting units where the fair value of the reporting unit was equal to its carrying value. Reporting units where fair value exceeded carrying value by less than 10% included $25.6 million of goodwill.
No goodwill impairment was recorded in connection with the Company’s annual impairment assessment as of October 31, 2023.
The Company also considers the amount of headroom for a reporting unit when determining whether an impairment exists. Headroom is the difference between the fair value of a reporting unit and its carrying value. In performing the annual impairment analysis as of October 31, 2023, the Company determined that the carrying amount of certain reporting units did not exceed their respective fair values. Based on the results of the impairment test performed as of October 31, 2023, the fair values of the reporting units exceeded their carrying value between 4.2% and 241.5%.
2022 Impairments
During the first quarter of 2022, the Company changed its operating segments which resulted in a change in reporting units. Under accounting standards, the Company is required to perform an impairment assessment of its prior reporting units immediately prior to the change in reporting units and immediately after the change on its new reporting units. To the extent that a prior reporting unit was separated into more than one reporting unit, the allocation of goodwill between the components of the old reporting units was determined based on their relative fair value. The Company had recently completed its annual impairment assessment on October 31, 2021 for its old reporting units. As of this interim impairment assessment, reporting units where fair value exceeded carrying value by less than 5% included $214.6 million of goodwill. Due to the change in reporting units, the Company performed a quantitative assessment of the fair value of its prior and new reporting units as of January 31, 2022 using an income approach with assumptions that are considered level 3 inputs and concluded that the carrying value of one reporting unit exceeded its respective fair value, resulting in goodwill impairments of $6.0 million and $0.3 million related to the Connections reportable segment and All Other category, respectively. The fair values of the respective reporting units were determined by discounting estimated future cash flows, which were determined based on revenue, long-term growth assumptions ranging from zero to 3.0%, at a discount rate ranging from 12.8% to 15.5%. As of the date of the Company’s assessment, reporting units where the fair value of the reporting unit was equal to its carrying value contained $3.1 million of goodwill.
No goodwill impairment was recorded in connection with the Company’s annual impairment assessment as of October 31, 2022.
The Company also considers the amount of headroom for a reporting unit when determining whether an impairment exists. Headroom is the difference between the fair value of a reporting unit and its carrying value. In performing the annual impairment analysis as of October 31, 2022, the Company determined that the carrying amount of certain reporting units did not exceed their respective fair values. Based on the results of the impairment test performed as of October 31, 2022, the fair values of the reporting units exceeded their carrying value between 53.2% and 1,809.5%.
Total accumulated goodwill impairments are $686.0 million through December 31, 2024.
Note 7. Debt
Debt is comprised of the following indebtedness to various lenders:
(in millions)
December 31,
December 31,
Extended Term Loan Facility, with
interest at SOFR plus 5.10% as of
December 31, 2024 and 2023, respectively,
(equal to 9.46% and 10.46% at December 31,
2024 and 2023, respectively) due 2026, net(a)
$
402.7
$
402.9
Less: Current maturities
4.2
4.2
Long-term debt, net of current maturities, debt
discount and deferred financing fees
$
398.5
$
398.7
(a)The Extended Term Loan Facility (as defined below), scheduled to mature on May 22, 2026, was recorded net of unamortized discount of $5.6 million and net of unamortized deferred financing fees of $0.9 million as of December 31, 2024. The Extended Term Loan Facility as of December 31, 2023 was recorded net of unamortized discount of $8.9 million and net of unamortized deferred financing fees of $1.5 million. The fair market value of the Company’s debt under the Extended Term Loan Facility was $411.0 million as of December 31, 2024.
Term Loan Facility
On June 12, 2023, (the “Term Loan Amendment Effective Date”) Emerald X, Inc. (“Emerald X”), a wholly-owned subsidiary of the Company, entered into a Sixth Amendment (the “Term Loan Amendment”) to its Amended and Restated Credit Agreement by and among Emerald X, as Borrower, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent, which amends that certain Amended and Restated Credit Agreement, dated as of May 22, 2017 (as amended from time to time, the “Amended and Restated Credit Agreement”). The Term Loan Amendment extended the maturity of the term loans outstanding under the Amended and Restated Credit Agreement (such term loan facility, as effect prior to the Term Loan Amendment Effective Date, the “Amended and Restated Term Loan Facility”, and as extended by the Term Loan Amendment, the “Extended Term Loan Facility”) from May 22, 2024 to May 22, 2026. The aggregate outstanding principal amount of the Extended Term Loan Facility was approximately $415.3 million as of the Term Loan Amendment Effective Date. Of the $415.3 million, $175.9 million was funded through a non-cash rollover from existing lenders and $239.4 million was funded through cash transactions.
The Term Loan Amendment replaced the interest rate applicable to the term loans with a rate equal to, at the option of Emerald X, (i) the Term Secured Overnight Financing Rate (“Term SOFR”) plus 5.00% per annum plus a credit spread adjustment of 0.10% per annum or (ii) an alternate base rate (“ABR”) plus 4.00% per annum. Prior to the Term Loan Amendment, the interest rate applicable to the term loans was a rate equal to, at the option of Emerald X, (i) LIBOR plus 2.75% or 2.50% per annum, depending on Emerald X’s first lien net leverage ratio or (ii) ABR plus 1.75% or 1.50% per annum, depending on Emerald X’s first lien net leverage ratio. The effective interest rate at December 31, 2024 and December 31, 2023 was 10.68% and 11.66%, respectively.
The Extended Term Loan Facility proceeds of $415.3 million, net of $12.5 million of original issuance discount (“OID”), were used to repay the previously outstanding principal and interest under the Amended and Restated Term Loan Facility and third party fees of $3.5 million. Of the $12.5 million of OID paid, $2.1 million was recognized as loss on extinguishment of debt and $10.4 million will be amortized over the life of the Extended Term Loan Facility using the effective interest method. Of the $3.5 million in third party fees, $2.1 million was recognized as interest expense and $1.4 million will be amortized over the life of the Extended Term Loan Facility using the effective interest method. As of December 31, 2023, there were no unpaid debt issuance costs. The loss on extinguishment of debt of $2.3 million for the year ended December 31, 2023, included $2.1 million of OID related to the Extended Term Loan Facility and $0.2 million of previously capitalized OID and debt issuance costs which were allocated to lenders whose balances were extinguished.
The Term Loan Amendment also reset scheduled quarterly payments, each equal to 0.25% of the original principal amount of the Extended Term Loan Facility. Further, the Term Loan Amendment modified the prepayment provisions so that, upon the occurrence of a repricing transaction, subject to certain specified exceptions, Emerald X would have been required to pay a prepayment fee of 2%, in the event of a repricing transaction occurring within the first twelve months after the Term Loan Amendment Effective Date, or 1%, in the event of a repricing transaction occurring on a date that is between twelve months after the Term Loan Amendment Effective Date and eighteen months after the Term Loan Amendment Effective Date. No prepayment premium is payable for prepayments made after the eighteen month anniversary of the Term Loan Amendment Effective Date. Emerald X made no voluntary prepayments on the Extended Term Loan Facility during the years ended December 31, 2024 and 2023.
Revolving Credit Facility
On February 2, 2023, Emerald X entered into a Fifth Amendment (the “RCF Amendment”) to its Amended and Restated Credit Agreement. The RCF Amendment increased the aggregate amount of all revolving commitments under the Amended and Restated Credit Agreement from $100.4 million to $110.0 million (such facility, as amended by the RCF Amendment, the “Extended Revolving Credit Facility”). The increased revolving commitments have the same terms as the previously existing revolving commitments. The RCF Amendment did not change any other material terms of the Amended and Restated Credit Agreement. The Company paid $0.6 million in financing fees related to the RCF Amendment during the first quarter of 2023.
Emerald X was required to pay a quarterly commitment fee in respect of the unutilized revolving commitments under the Amended and Restated Credit Agreement in an amount equal to 0.50% per annum, calculated on the unused portion of the facility, which is reduced to 0.375% upon achievement of a Total First Lien Ratio of 3.50 to 1.00. Upon the issuance of letters of credit under the Amended and Restated Credit Agreement, Emerald X was required to pay fronting fees, customary issuance and administration fees and a letter of credit fee equal to the then-applicable margin (as determined by reference to Term SOFR) for the Amended and Restated Credit Agreement.
Emerald X had no outstanding borrowings under the revolving portion of its Amended and Restated Credit Agreement as of December 31, 2024 and 2023. Emerald X had $0.7 million and $1.0 million, respectively, in stand-by letters of credit outstanding under the revolving portion of its Amended and Restated Credit Agreement as of December 31, 2024 and 2023. During the years ended December 31, 2024 and 2023, revolving borrowings under the Amended and Restated Credit Agreement were subject to an interest rate equal to Term SOFR plus 2.25% or ABR plus 1.25%. As of December 31, 2024, Emerald X had $109.3 million in additional revolving borrowing capacity under the Amended and Restated Credit Agreement (after giving effect to $0.7 million of outstanding letters of credit).
Guarantees; Collateral; Covenants; Events of Default
All obligations under the Amended and Restated Senior Secured Credit Facilities were guaranteed by Emerald X’s direct parent company and, subject to certain exceptions, by all of Emerald X’s direct and indirect wholly owned domestic subsidiaries. As of December 31, 2024, all of Emerald X’s domestic subsidiaries and Emerald X’s direct parent have provided guarantees.
Subject to certain limitations, the obligations under the Amended and Restated Senior Secured Credit Facilities were secured by a perfected first priority security interest in substantially all tangible and intangible assets owned by Emerald X or by any guarantor.
The Amended and Restated Senior Secured Credit Facilities contained customary incurrence-based negative covenants, including limitations on indebtedness; limitations on liens; limitations on certain fundamental changes (including, without limitation, mergers, consolidations, liquidations and dissolutions); limitations on asset sales; limitations on dividends and other restricted payments; limitations on investments, loans and advances; limitations on repayments of subordinated indebtedness; limitations on transactions with affiliates; limitations on changes in fiscal periods; limitations on agreements restricting liens and/or dividends; and limitations on changes in lines of business. In addition, the Extended Revolving Credit Facility contained a financial covenant requiring Emerald X to comply with a 5.50 to 1.00 total first lien net secured leverage ratio test. This financial covenant was required to be tested quarterly only if the aggregate amount of revolving loans, swingline loans and letters of credit outstanding under the Extended Revolving Credit Facility (net of up to $10.0 million of outstanding letters of credit and cash collateralized letters of credit) exceeded 35% of the total commitments thereunder. As of December 31, 2024, this financial covenant had not been triggered and Emerald X was in compliance with all covenants under the Amended and Restated Senior Secured Credit Facilities.
Events of default under the Amended and Restated Senior Secured Credit Facilities include, among others, nonpayment of principal when due; nonpayment of interest, fees or other amounts; cross-defaults; covenant defaults; material inaccuracy of representations and warranties; certain bankruptcy and insolvency events; material unsatisfied or unstated judgments; certain ERISA events; change of control; or actual or asserted invalidity of any guarantee or security document. There were no events of default under the Amended and Restated Senior Secured Credit Facilities through December 31, 2024.
During the years ended December 31, 2024, 2023 and 2022, Emerald X made no revolving loan borrowings or revolving loan repayments under the Amended and Restated Credit Agreement.
Interest Expense
Interest expense reported in the consolidated statements of (loss) income and comprehensive (loss) income consists of the following:
Year Ended December 31,
(in millions)
Extended Term Loan Facility
$
43.0
$
23.8
$
-
Amended and Restated Term Loan Facility
-
13.9
22.3
Term Loan Amendment third party fees
-
2.1
-
Non-cash interest for amortization of debt discount
and debt issuance costs
4.3
3.0
1.7
Revolving credit facility interest and commitment fees
0.5
0.5
0.5
Total interest expense
$
47.8
$
43.3
$
24.5
Note 8. Leases
The Company accounts for leases in accordance with ASC 842: Leases. The Company determines if an arrangement is or contains a lease at contract inception. The Company’s leases consist of operating leases for office space and certain equipment. The Company does not have any financing leases. For arrangements where the Company is the lessee, a right-of-use lease asset, representing the underlying asset during the lease term, and a right-of-use lease liability, representing the payment obligation arising from the lease, are reported on the balance sheet at lease commencement based on the present value of the payment obligation. Right-of-use lease assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less lease incentives received. The Company’s leases have a remaining contractual term of 1 years to 5 years, some of which include options to extend the lease term for up to five years and options to terminate. The options to extend certain lease terms or terminate certain leases are at the sole discretion of the Company. As the Company is not reasonably certain that it will exercise these options, none of the options to modify the lease terms are included in the Company’s right-of-use lease assets and right-of-use lease liabilities as of December 31, 2024. The Company’s weighted-average remaining lease term was 2.6 years and 3.5 years as of December 31, 2024 and 2023, respectively.
Short-term operating leases with a contractual term of 12 months or less are not reported on the balance sheet, but instead are expensed as incurred and included as selling, general and administrative expense on the consolidated statements of (loss) income and comprehensive (loss) income and are considered rent expense. Short-term operating lease costs were not material for the years ended December 31, 2024, 2023 and 2022, respectively. Leases with a duration of less than one month are not included in rent expense. Operating lease cost is recognized on a straight-line basis over the related lease term. Rent expense was $3.3 million, $4.2 million and $7.5 million for the years ended December 31, 2024, 2023 and 2022, respectively. The Company reported $1.2 million in rent expense on the consolidated statements of (loss) income and comprehensive (loss) income as cost of revenues for the years ended December 31, 2024, 2023 and 2022, and $2.1 million, $3.0 million and $6.3 million in rent expense on the consolidated statements of (loss) income and comprehensive (loss) income as selling, general and administrative expense for the years ended December 31, 2024, 2023 and 2022, respectively. During the years ended December 31, 2024, 2023 and 2022, the Company recorded $0.1 million, $0.9 million and $3.0 million, respectively, of loss on lease abandonment for operating lease ROU assets related to offices closed in 2024, 2023 and 2022, respectively, which are reported on the consolidated statements of (loss) income and comprehensive (loss) income as selling, general and administrative expense.
Certain of the Company’s lease agreements include variable lease payments. Variable lease costs were $0.1 million, $0.2 million and $0.2 million for the each of the years ended December 31, 2024, 2023 and 2022, respectively.
Maturities of right-of-use lease liabilities for the remaining five years and thereafter as of December 31, 2024 were as follows:
(in millions)
December 31,
$
4.0
4.0
1.7
0.5
0.1
Thereafter
-
Minimum lease payments
$
10.3
Less: Imputed interest
(0.8
)
Present value of minimum lease payments
$
9.5
Supplemental cash flow and other information related to leases were as follows:
December 31,
(in millions)
Cash paid for amounts included in the measurement of
right-of-use lease liabilities:
Cash paid reported as operating activities on the
consolidated statements of cash flows
$
3.9
$
4.6
$
5.4
Right-of-use lease assets obtained in exchange for new
right-of-use lease liabilities
$
0.2
$
1.9
$
1.9
The discount rate implicit within the Company’s leases is generally not determinable; therefore, the Company determined the discount rate based on its incremental collateralized borrowing rate using the portfolio approach. The Company’s weighted-average discount rate used to measure right-of-use lease liabilities was 5.2% and 5.1% as of December 31, 2024 and 2023, respectively.
Note 9. Fair Value Measurements
As of December 31, 2024, the Company’s assets and liabilities measured at fair value on a recurring basis are categorized in the table below:
December 31, 2024
(in millions)
Total
Level 1
Level 2
Level 3
Assets
Cash and cash equivalents
$
31.1
$
31.1
$
-
$
-
Money market mutual funds(a)
163.7
163.7
-
-
Total assets at fair value
$
194.8
$
194.8
$
-
$
-
Liabilities
Market-based share awards liability(b)
$
0.5
$
-
$
-
$
0.5
Contingent consideration(b)
10.7
-
-
10.7
Total liabilities at fair value
$
11.2
$
-
$
-
$
11.2
(a)The Company’s money market mutual funds of $163.7 million as of December 31, 2024 are included within cash and cash equivalents in the consolidated balance sheets. The money market mutual funds are traded in active markets and quoted in broker or dealer quotations and are classified as Level 1 assets. The fair value of the Company’s money market mutual funds are based on unadjusted quoted prices on the reporting date.
(b)The market-based share awards liability of $0.5 million as of December 31, 2024 is included within other noncurrent liabilities in the consolidated balance sheet. The fair value of the Company’s market-based share awards and contingent consideration are derived from valuation techniques in which one or more significant inputs are unobservable, including the Company’s own assumptions. Contingent consideration of $0.7 million as of December 31, 2024 is included within contingent consideration in the consolidated balance sheets and contingent consideration of $10.0 million is included within other noncurrent liabilities in the consolidated balance sheets.
As of December 31, 2023, the Company’s assets and liabilities measured at fair value on a recurring basis are categorized in the table below:
December 31, 2023
(in millions)
Total
Level 1
Level 2
Level 3
Assets
Cash and cash equivalents
$
27.2
$
27.2
$
-
$
-
Money market mutual funds(a)
177.0
177.0
-
-
Total assets at fair value
$
204.2
$
204.2
$
-
$
-
Liabilities
Market-based share awards liability(b)
$
0.8
$
-
$
-
$
0.8
Contingent consideration(b)
6.9
-
-
6.9
Total liabilities at fair value
$
7.7
$
-
$
-
$
7.7
(a)The Company’s money market mutual funds are based on the closing price of these assets as of the reporting date. The fair value of the Company’s money market mutual funds are based on unadjusted quoted prices on the reporting date. The Company’s money market mutual funds are quoted in an active market and classified as Level 1 assets.
(b)Included within other noncurrent liabilities in the consolidated balance sheet. The fair value of the Company’s market-based share awards and contingent consideration are derived from valuation techniques in which one or more significant inputs are unobservable, including the Company’s own assumptions.
The contingent consideration liability of $10.7 million as of December 31, 2024 consists of liabilities of $0.7 million, $9.2 million and $0.8 million, which are expected to be paid in 2025, 2027 and 2028, respectively.
As of December 31, 2024 and 2023, the contingent consideration liability related to the acquisition of Advertising Week was $2.3 million and $4.9 million, respectively, which consisted of two potential payments, the 2023 payment and the 2026 payment. During 2023, the specified EBITDA target for the 2023 payment was not met and therefore this amount as of December 31, 2024 represents the estimated 2026 payment. The 2026 payment is based on a range of multiples, which are dependent upon the acquisition’s 5-year compounded annual EBITDA growth rate from 2021 through 2026, being applied to the average annual EBITDA growth in calendar years 2024, 2025 and 2026, from a specified EBITDA target, less the 2023 payment. The 2026 payment is expected to be settled in the second quarter of 2027. The 2026 payment is not capped as it is based on increases in EBITDA. Therefore, there is no pre-determined upper limit to the undiscounted range.
Contingent consideration related to the Company’s other acquisitions amounted to $8.4 million and $2.0 million as of December 31, 2024 and 2023, respectively. These contingent payments are based on the achievement of various revenue or EBITDA growth metrics. The Company expects to pay $0.7 million, $6.9 million and $0.8 million, in 2025, 2027 and 2028, respectively, related to these contingent consideration liabilities as of December 31, 2024. The Company paid $0.2 million in contingent consideration during the first quarter of 2024 in relation to the Company’s acquisition of AV-iQ. The Company paid $3.7 million in contingent consideration during the second quarter of 2023 in relation to the Company’s acquisition of PlumRiver. The contingent consideration paid during the first quarter of 2023 in relation to the Company’s acquisition of EDspaces was not material.
The Company’s contingent consideration liabilities are remeasured based on the methodologies described above at the end of each reporting period. As a result of these remeasurements, during 2024, 2023 and 2022, the Company recorded a $1.2 million, $2.4 million and $33.6 million decrease in the fair value of its contingent consideration liabilities, respectively, which is included in selling, general and administrative expense in the consolidated statements of (loss) income and comprehensive (loss) income. The determination of the fair value of the contingent consideration liabilities could change in future periods. Any such changes in fair value will be reported in selling, general and administrative expense in the consolidated statements of (loss) income and comprehensive (loss) income.
The table below summarizes the changes in fair value of the Company’s contingent consideration liabilities during the years ended December 31, 2024, 2023 and 2022:
(in millions)
Balance at beginning of period
$
6.9
$
12.3
$
36.2
Payment of contingent consideration
(0.2
)
(3.7
)
(6.5
)
Fair value remeasurement adjustments
(1.2
)
(2.4
)
(33.6
)
Business acquisition
5.2
0.7
6.9
Measurement period adjustment
-
-
8.9
Contingent compensation
-
-
0.4
Balance at end of period
$
10.7
$
6.9
$
12.3
The market-based share award liability was $0.5 million and $0.8 million as of December 31, 2024 and 2023, respectively. Changes in the fair value of the market-based share award liability is included in selling, general and administrative expense in the consolidated statements of (loss) income and comprehensive (loss) income. The determination of the fair value of the market-based share award liability could change in future periods. See Note 12, Stock-Based Compensation, for additional information with respect to the market-based share awards.
Note 10. Related-Party Transactions
Investment funds affiliated with Onex Corporation (“Onex”) owned approximately 91.6% of the Company’s outstanding common stock at December 31, 2024. Affiliates of Onex Corporation held a 96.0% ownership position in Convex Group Ltd. (“Convex”), which is one of the insurers in the syndicate that provides the Company’s insurance coverage. The Company made payments of $0.5 million, $0.8 million and $0.3 million to Convex during the years ended December 31, 2024, 2023 and 2022, respectively. The Company had $0.2 million and $0.3 million due to Convex as of December 31, 2024 and 2023, respectively. Additionally, certain of the Company’s tradeshows and other events are held at facilities managed by ASM Global (“ASM”). During the third quarter of 2024, affiliates of Onex Corporation sold their ownership position in ASM. The Company paid to ASM aggregate fees, inclusive of certain concessions, equal to $1.0 million, $1.3 million and $1.4 million during the years ended December 31, 2024, 2023 and 2022, respectively. These payments are included in cost of revenues in the consolidated statements of (loss) income and comprehensive (loss) income.
Note 11. Stockholders’ Equity (Deficit) and Redeemable Convertible Preferred Stock
Common Stock Issuances
On May 3, 2017, the Company completed the initial public offering of its common stock and the Company’s stock began trading on the New York Stock Exchange under the symbol “EEX”.
Redeemable Convertible Preferred Stock
On June 10, 2020, the Company entered into an investment agreement (the “Investment Agreement”) with Onex Partners V LP (“Onex”), pursuant to which the Company agreed to (i) issue to an affiliate of Onex, in a private placement transaction (the “Initial Private Placement”), 47,058,332 shares of redeemable convertible preferred stock for a purchase price of $5.60 per share and (ii) effect a rights offering (“Rights Offering”) to holders of its outstanding common stock of one non-transferable subscription right for each share of the Company’s common stock held, with each right entitling the holder to purchase one share of redeemable convertible preferred stock at the Series A Price per share. Onex agreed to purchase (the “Onex Backstop”) any and all redeemable convertible preferred stock not subscribed for in the Rights Offering by stockholders other than affiliates of Onex at the Series A Price per share. As a result of the Initial Private Placement and the Onex Backstop, the Company sold 69,718,919 shares of redeemable convertible preferred stock to Onex in exchange for $373.3 million, net of fees and expenses of $17.2 million. As a result of the Rights Offering, the Company issued 1,727,427 shares of redeemable convertible preferred stock in exchange for $9.7 million.
Mandatory Conversion of Preferred Stock
On April 18, 2024, the Company announced it had delivered a notice informing holders of its redeemable convertible preferred stock that it had exercised its right to mandate that all shares of the redeemable convertible preferred stock be converted to shares of the Company’s common stock. The notice was triggered by the fact that the closing share price of the Company’s common stock on the NYSE had exceeded 175% of the conversion price for a period of 20 consecutive trading days ending with April 17, 2024. On May 2, 2024 (the “Conversion Date”), each holder of redeemable convertible preferred stock received approximately 1.9717 shares of common stock for each share of redeemable convertible preferred stock held as of the Conversion Date, in accordance with the terms of the conversion feature as described in more detail below. As a result, 71,402,607 shares of redeemable convertible preferred stock were converted into 140,781,525 shares of common stock on the Conversion Date. Cash was paid in lieu of fractional shares of common stock. Following the Conversion Date, no redeemable convertible preferred stock was outstanding, and all rights of the former holders of the redeemable convertible preferred stock were terminated.
Liquidation Preference
Upon liquidation or dissolution of the Company, the holders of redeemable convertible preferred stock were entitled to receive the greater of (a) the accreted liquidation preference, and (b) the amount the holders of redeemable convertible preferred stock would have received if they had converted their redeemable convertible preferred stock into common stock immediately prior to such liquidation or dissolution.
Dividends
Each share of redeemable convertible preferred stock accumulated dividends at a rate per annum equal to 7% of the accreted liquidation preference, compounding quarterly, by adding to the accreted liquidation preference until July 1, 2023, and thereafter, at the Company’s option, paid either in cash or by adding to the accreted liquidation preference.
During the year ended December 31, 2023, the Company recorded accretion of $16.7 million with respect to the redeemable convertible preferred stock, bringing the aggregate liquidation preference to $492.6 million as of December 31, 2023. Holders of redeemable convertible preferred stock were also entitled to participate in and receive any dividends declared or paid on the Company’s common stock on an as-converted basis, and no dividends could have been paid to holders of common stock unless the aggregate accreted liquidation preference on the redeemable convertible preferred stock had been paid or holders of a majority of the outstanding redeemable convertible preferred stock had consented to such dividends.
The Company’s Board of Directors (the “Board of Directors” or the “Board”) approved the payment in cash of a dividend on the Company’s redeemable convertible preferred stock (the “Preferred Stock” and such dividend, the “Preferred Cash Dividend”) for each of the periods ending March 31, 2024, December 31, 2023 and September 30, 2023, respectively, and the Company paid Preferred Stock Cash Dividends for a total of $8.6 million, or $0.12 per share, in each such period. Of this amount, approximately $8.4 million in the aggregate was paid to Onex-related entities in each such period. As a result of the mandatory conversion on May 2, 2024, the dividends that accrued in the period since the March 31, 2024 Preferred Stock Cash Dividend were settled in stock as a result of the mandatory conversion on May 2, 2024.
There were no cash dividends on preferred stock declared or paid for the year ended December 31, 2022. The following is a summary of the preferred stock dividends paid for the years ended December 31, 2024 and 2023:
Q1
Q2
Q3
Q4
(dollars in millions, except per share values)
Dividend declared on
March 12, 2024
-
-
-
Stockholders of record on
March 26, 2024
-
-
-
Dividend paid on
March 28, 2024
-
-
-
Dividend per share
$
0.1200
$
-
$
-
$
-
Cash dividend paid
$
8.6
$
-
$
-
$
-
Q1
Q2
Q3
Q4
(dollars in millions, except per share values)
Dividend declared on
-
-
August 1, 2023
November 3, 2023
Stockholders of record on
-
-
August 1, 2023
November 3, 2023
Dividend paid on
-
-
September 29, 2023
December 28, 2023
Dividend per share
$
-
$
-
$
0.1200
$
0.1200
Cash dividend paid
$
-
$
-
$
8.6
$
8.6
Conversion Features
Shares of the redeemable convertible preferred stock were subject to conversion at the option of the holder into a number of shares of common stock equal to (a) the amount of the accreted liquidation preference, divided by (b) the applicable conversion price. Each share of redeemable convertible preferred stock had an initial liquidation preference of $5.60 and were initially convertible into approximately 1.59 shares of common stock, which is equivalent to the initial liquidation preference per share of $5.60 divided by the initial conversion price of $3.52 per share. The conversion price was subject to customary anti-dilution adjustments upon the occurrence of certain events, including downward adjustment in the event the Company issued securities, subject to exceptions, at a price that was lower than the fair market value of such securities.
Redemption Features
The Company had the right to redeem all, but not less than all, of the redeemable convertible preferred stock on or after June 29, 2026 for a cash purchase price equal to (a) on or after the six-year anniversary of the First Closing Date, 105% of the accreted liquidation preference, (b) on or after the seven-year anniversary of the First Closing Date, 103% of the accreted liquidation preference or (c) on or after the eight-year anniversary of the First Closing Date, the accreted liquidation preference. In addition, if there was a change of control transaction involving the Company prior to the six-year anniversary of the First Closing Date, the Company had the right to redeem all, but not less than all, of the redeemable convertible preferred stock for a cash purchase price equal to the accreted liquidation preference plus the net present value of the additional amount by which the accreted liquidation preference would have otherwise increased from the date of such redemption through the sixth anniversary of the First Closing Date. If, after the Company ceased to have a controlling stockholder group, there was a change of control transaction involving the Company, holders of redeemable convertible preferred stock could elect to (x) convert their redeemable convertible preferred stock into shares of common stock at the then-current conversion price or (y) require the Company to redeem the redeemable convertible preferred stock for cash, at a price per share equal to the then-unpaid accreted liquidation preference. Although only Unaffiliated Directors (as defined below) could have been involved in any decisions with respect to the Company’s rights to exercise the redemption features, the holders of the redeemable convertible preferred stock controlled the majority of the votes through representation on the board of directors. Therefore, the redeemable convertible preferred stock was required to be accreted to its redemption price on the date the redemption option first became exercisable. For the fiscal years ending December 31, 2024 and 2023, the Company recorded $12.7 million and $42.0 million, respectively, in deemed dividends, representing the accretion of the redeemable convertible preferred stock to the redemption value.
Voting Rights
Certain matters would have required the approval of holders of a majority of the redeemable convertible preferred stock, including (i) amendments to the Company’s organizational documents in a manner adverse to the redeemable convertible preferred stock, (ii) the creation or issuance of senior or parity equity securities or (iii) the issuance of any convertible indebtedness, other class of redeemable convertible preferred stock or other equity securities in each case with rights to payments or distributions in which the redeemable convertible preferred stock would not participate on a pro-rata, as-converted basis.
In addition, for so long as the redeemable convertible preferred stock represented more than 30% of the outstanding common stock on an as-converted basis, without the approval of a majority of the directors elected by the holders of the redeemable convertible preferred stock, the Company could not (i) incur new indebtedness to the extent certain financial metrics are not satisfied, (ii) redeem or repurchase any equity securities junior to the redeemable convertible preferred stock, (iii) enter into any agreement for the acquisition or disposition of assets or businesses involving a purchase price in excess of $100 million, (iv) hire or terminate the chief executive officer of the Company or (v) make a voluntary filing for bankruptcy or commence a dissolution of the Company.
For so long as the redeemable convertible preferred stock represented a minimum percentage of the outstanding shares of common stock on an as-converted basis as set forth in the Certificate of Designations relating to the redeemable convertible preferred stock, the holders of the redeemable convertible preferred stock had the right to appoint up to five members of the Company’s Board of Directors.
All decisions of the Company’s Board with respect to the exercise or waiver of the Company’s rights relating to the redeemable convertible preferred stock were determined by a majority of the Company’s directors that are not employees of the Company or affiliated with Onex (“Unaffiliated Directors”), or a committee of Unaffiliated Directors.
As part of the transactions contemplated by the Investment Agreement, the Company and Onex entered into a Registration Rights Agreement whereby Onex is entitled to certain demand and piggyback registration rights in respect of the redeemable convertible preferred stock and the shares of common stock issuable upon conversion thereof.
Dividends
There were no dividends paid or declared with respect to the Company’s common stock for the years ended December 31, 2023 and 2022. The following is a summary of the common stock dividends paid for the year ended December 31, 2024:
Q1
Q2
Q3
Q4
(dollars in millions, except per share values)
Dividend declared on
-
-
August 6, 2024
October 29, 2024
Stockholders of record on
-
-
August 19, 2024
November 11, 2024
Dividend paid on
-
-
August 28, 2024
November 19, 2024
Dividend per share
$
-
$
-
$
0.0150
$
0.0150
Cash dividend paid
$
-
$
-
$
3.1
$
3.0
Share Repurchases
October 2024 Share Repurchase Program Extension and Expansion (“October 2024 Share Repurchase Program”)
On October 29, 2024, the Company’s Board approved an extension and expansion of its share repurchase program, which allows for the repurchase of $25.0 million of the Company’s common stock through December 31, 2025, subject to early termination or extension by the Board. The Company repurchased 1,536,769 shares for $7.3 million during the year ended December 31, 2024 under this extension and expansion. There was $17.6 million remaining available for share repurchases under the October 2024 Share Repurchase Program as of December 31, 2024. The share repurchase program may be suspended or discontinued at any time without notice.
November 2023 Share Repurchase Program Extension and Expansion (“November 2023 Share Repurchase Program”)
In November 2023, the Company’s Board approved an extension and expansion of its share repurchase program, which allows for the repurchase of $25.0 million of the Company’s common stock through December 31, 2024, subject to early termination or extension by the Board. The Company repurchased 1,278,704 shares for $6.5 million during the year ended December 31, 2024 under this repurchase program. The Company did not repurchase any shares during the year ended December 31, 2023 under this extension and expansion; however, the Company repurchased 5,064,140 shares for $16.9 million during the year ended December 31, 2023 under the October 2022 Share Repurchase Program described below.
October 2022 Share Repurchase Program Extension and Expansion (“October 2022 Share Repurchase Program”)
On October 26, 2022, the Company’s Board approved an extension and expansion of its share repurchase program, which allows for the repurchase of $20.0 million of the Company’s common stock through December 31, 2023, subject to early termination or extension by the Board. As described above, the Company repurchased 5,064,140 shares for $16.9 million during the year ended December 31, 2023 under this repurchase program. The Company settled the repurchase of 21,393 shares for $0.1 million during the year ended December 31, 2022 under this repurchase program, and a further 2,861,448 shares for $10.3 million pursuant to the October 2020 Share Repurchase Program, during the year ended December 31, 2022.
October 2020 Share Repurchase Program
In October 2020, the Company’s Board authorized and approved a $20.0 million share repurchase program. In October 2021, the Company’s Board approved the extension and expansion of the October 2020 Share Repurchase Program, which allowed for the repurchase of an additional $20.0 million of the Company’s common stock through December 31, 2022. The Company repurchased 2,861,448 shares for $10.3 million during the year ended December 31, 2022 under this repurchase program, as described above.
Note 12. Stock-Based Compensation
Employee Benefit Plans
2013 Stock Option Plan (the “2013 Plan”) and 2017 Omnibus Equity Plan (the “2017 Plan”)
Effective June 17, 2013, the Board approved the adoption of the 2013 Plan. Following the Company’s IPO, the 2013 Plan is no longer used for granting new awards. Vesting of all option grants begins at the first anniversary of the date of grant. Options granted under the 2013 Plan vest 20% per year over five years.
In April 2017, the Board approved the 2017 Plan. The Company’s stockholders approved the 2017 Plan and it became effective in connection with the Company’s initial public offering. Under the 2017 Plan, the Company may grant incentive stock options, non-statutory stock options, restricted stock, restricted stock units (“RSUs”) and stock appreciation rights, dividend equivalent rights, share awards and performance-based awards to employees, directors or consultants. The Company initially reserved 5,000,000 shares of its common stock for issuance under the 2017 Plan. During 2021, the 2017 Plan was amended and restated principally to provide for an increase in the number of shares of the Company’s common stock reserved for issuance under the 2017 Plan by 13,000,000 shares. During 2023, the 2017 Plan was further amended and restated principally to provide for an increase in the number of shares of the Company’s common stock reserved for issuance under the 2017 Plan by 4,900,000 shares. A total of 3,673,109 shares were available for future grant under the 2017 Plan as of December 31, 2024.
The Board determines eligibility, vesting schedules and exercise prices for award grants. Option grants have a contractual term of 10 years from the date of grant. Under the 2017 Plan, options are granted with the exercise price being equal to or greater than the fair market value of the Company’s common stock at the date of grant.
Vesting of all option grants begins at the first anniversary of the grant date. Options granted under the 2017 Plan vest pro rata over a term of either three, four or five years.
2019 Employee Stock Purchase Plan (the “ESPP”)
In January 2019, the Board approved the ESPP, which was approved by the Company’s stockholders in May 2019. The ESPP requires that participating employees must be employed for at least 20 hours per week, have completed at least 6 months of service, and have compensation (as defined in the ESPP) not greater than $150,000 in the 12-month period before the enrollment date to be eligible to participate in the ESPP. Under the ESPP, eligible employees will receive a 10% discount from the lesser of the closing price on the first day of the offering period and the closing price on the purchase date. The Company reserved 500,000 shares of its common stock for issuance under the ESPP.
ESPP expense recognized by the Company was not material for the years ended December 31, 2024, 2023 and 2022. As of December 31, 2024, the Company has issued 170,958 shares to employees under the ESPP.
Stock Options
The fair value of stock options is estimated on the grant date using the Black-Scholes option pricing model using the following assumptions:
Year Ended December 31, 2024
Range
Weighted-Average
Expected volatility
61.4% to 67.0%
Dividend yield
-
Risk-free interest rate
3.6% to 4.5%
Expected term (in years)
5.5 to 7.5
Weighted-average fair value at grant date
$
3.68
Year Ended December 31, 2023
Range
Weighted-Average
Expected volatility
34.7% to 38.6%
Dividend yield
-
Risk-free interest rate
3.5% to 4.5%
Expected term (in years)
5.5 to 7.5
Weighted-average fair value at grant date
$
1.49
Year Ended December 31, 2022
Range
Weighted-Average
Expected volatility
31.5% to 34.5%
Dividend yield
-
Risk-free interest rate
1.4% to 3.7%
Expected term (in years)
5.5 to 9.1
Weighted-average fair value at grant date
$
1.09
There were 371,000 stock options granted during the year ended December 31, 2024. There were 8,794,112 stock options vested and exercisable at December 31, 2024.
There were 7,195,786 and 990,000 stock options granted during the years ended December 31, 2023 and 2022, respectively. There were 6,231,142 and 4,959,488 stock options vested and exercisable at December 31, 2023 and 2022, respectively.
Stock option activity for the year ended December 31, 2024 was as follows:
Weighted-Average
Number of
Options
Exercise
Price
per Option
Remaining
Contractual
Term
Aggregate
Intrinsic
Value
(thousands)
(years)
(millions)
Outstanding at December 31, 2023
19,791
$
6.25
7.4
$
15.7
Granted
5.77
Exercised
(277
)
4.99
Forfeited/Expired
(2,261
)
8.74
Outstanding at December 31, 2024
17,624
$
5.94
6.1
$
6.9
Exercisable at December 31, 2024
8,794
$
7.09
4.7
$
1.4
Information regarding fully vested and expected to vest stock options as of December 31, 2024 was as follows:
Exercise Price
Number of
Options
Weighted
Average
Remaining
Contractual
Life
(share data in thousands)
(years)
$2.87 - $4.66
6,865
7.96
$5.02 - $7.53
6,740
4.25
$8.00 - $12.00
3,132
4.15
$12.47 - $18.71
3.66
$22.08 - $33.12
2.96
17,624
The aggregate intrinsic value is the amount by which the fair value of the common stock exceeded the exercise price of the options at December 31, 2024, for those options for which the market price was in excess of the exercise price.
The Company recognizes cumulative stock-based compensation expense for the portion of the awards for which the service period is probable of being satisfied. During the years ended December 31, 2024, 2023 and 2022, the Company recorded stock-based compensation expense related to stock options of $5.1 million, $6.2 million and $3.8 million, respectively, which is included in selling, general and administrative expenses in the consolidated statements of (loss) income and comprehensive (loss) income. The related deferred tax benefit for stock-based compensation recognized was $1.4 million, $1.9 million and $1.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.
The aggregate weighted average grant date fair value of stock options vested during the years ended December 31, 2024, 2023 and 2022, was $6.3 million, $3.7 million and $4.9 million, respectively. There was a total of $7.6 million unrecognized stock-based compensation expense at December 31, 2024 related to unvested stock options expected to be recognized over a weighted-average period of 1.89 years.
Restricted Stock Units
The Company grants RSUs that contain service conditions to certain executives and employees. The Company recognizes cumulative stock-based compensation expense for the portion of the awards for which the service period is probable of being satisfied. Stock-based compensation expense related to RSUs recognized in the years ended December 31, 2024, 2023 and 2022, was $1.0 million, $1.2 million and $1.9 million, respectively.
RSU activity for the year ended December 31, 2024 was as follows:
(share data in thousands, except per share data)
Number of
RSUs
(share data in
thousands)
Weighted Average
Grant Date
Fair Value
per Share
Unvested balance, December 31, 2023
$
5.95
Granted
6.59
Forfeited
(18
)
5.49
Vested
(346
)
6.35
Unvested balance, December 31, 2024
$
5.71
There was a total of $0.3 million unrecognized stock-based compensation expense at December 31, 2024 related to unvested RSUs expected to be recognized over a weighted-average period of 0.7 years.
Market-based Share Awards
In January 2020, the Company granted performance-based market condition share awards to one senior executive under the 2017 Omnibus Equity Plan, which entitle this employee the right to receive shares of common stock equal to a maximum value of $4.9 million in the aggregate, upon achievement of specified targeted share prices measured over sixty days within a ninety-day trading period. The performance-based market condition share awards granted in January 2020 remain unvested with an estimated weighted average conversion threshold of $21.09 per share, which would result in an estimated 45,718 shares of common stock to be issued upon vesting. Each of the estimated 45,718 shares of common stock has a weighted-average grant date fair value of $24.53 per share.
In June 2019, the Company granted performance-based market condition share awards to two senior executives under the 2017 Omnibus Equity Plan, which entitle these employees the right to receive shares of common stock equal to a maximum value of $16.9 million, in the aggregate, upon achievement of specified targeted share prices measured over sixty days within a ninety-day trading period. During the year ended December 31, 2020, performance-based market condition share awards with maximum value of $14.0 million, with an estimated 157,677 shares of common stock that would have been issued were forfeited. During the year ended December 31, 2024, performance-based market condition share awards that had been granted to one senior executive in June 2019, with maximum cash value of $4.9 million and an estimated 32,323 shares of common stock that would have been issued, were forfeited.
As of December 31, 2024, all outstanding performance-based market condition share awards remain unvested with an estimated weighted average conversion threshold of $21.09 per share. The Company recorded a credit of $0.3 million in stock-based compensation expense related to performance-based market condition share awards for the year ended December 31, 2024 and expense of $0.4 million and zero, respectively, for the years ended December 31, 2023 and 2022.
The performance-based market condition awards are classified as liability awards, which are measured at fair value, and are remeasured to an updated fair value at each reporting period. As of December 31, 2024 and 2023, the liability for these awards was $0.5 million and $0.8 million, respectively, and is reported on the consolidated balance sheets in other noncurrent liabilities. The fair value of performance-based market condition share awards is estimated on the grant date using a risk-neutral Monte Carlo simulation model. The aggregate fair value of the awards at the grant date was $1.9 million. The aggregate fair value of the awards as of December 31, 2024 and 2023 was $0.4 million and $1.3 million, respectively. The Company recognizes expense for performance-based market condition share awards over the derived service period for each tranche. As of December 31, 2024, the weighted average remaining service period is 5.0 years in aggregate. The Company recognizes stock-based compensation expense for awards subject to market-based vesting conditions regardless of whether it becomes probable that these conditions will be achieved or not, and stock-based compensation expense for any such awards may be reversed if vesting does not occur and the employee terminates employment before the ten year term expires, except that upon a termination of employment other than for cause, or upon a termination for good reason within three months prior to the earlier of the execution of an agreement resulting in a change in control or the date of a change in control, any unvested shares subject to the performance-based market condition share award shall remain eligible to vest in accordance with the performance-based market condition share award agreement’s vesting conditions, including in the event of a change in control.
The weighted average assumptions used in determining the fair value for the performance-based market condition share awards granted in 2020 and 2019 and remeasured at December 31, 2024 were as follows:
Grant Date
December 31,
Expected volatility
41.7
%
69.8
%
Dividend yield
1.1
%
1.2
%
Risk-free interest rate
1.3
%
3.6
%
The weighted-average expected term of the Company’s performance-based market condition share awards was 3.7 years at grant date, which represents the weighted-average of the derived service periods for the share awards.
Note 13. Earnings Per Share
Basic earnings per share is computed using the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted-average number of common shares outstanding during the period, plus the dilutive effect of outstanding options, using the treasury stock method and the average market price of the Company’s common stock during the applicable period. Certain shares related to some of the Company’s outstanding employee share awards were excluded from the computation of diluted earnings per share because they were antidilutive in the periods presented but could be dilutive in the future. Performance-based market condition share awards are considered contingently issuable shares, which would be included in the denominator for earnings per share if the applicable market conditions have been achieved, and the inclusion of any performance-based market condition share awards is dilutive for the respective reporting periods.
Diluted earnings per share is computed using the weighted-average number of common shares outstanding during the period, plus the dilutive effect of outstanding options, using the treasury stock method and the average market price of the Company's common stock during the applicable period. Certain shares related to some of the Company's outstanding employee share awards were excluded from the computation of diluted earnings per share because they were antidilutive in the periods presented but could be dilutive in the future. Performance-based market condition share awards are considered contingently issuable shares, which would be included in the denominator for earnings per share if the applicable market conditions have been achieved, and the inclusion of any performance based market condition share awards is dilutive for the respective reporting periods. For the years ended December 31, 2024, 2023 and 2022, unvested performance-based market condition share awards were excluded from the calculation of diluted earnings per share because the market conditions had not been met. There were no 7% Series A Redeemable Convertible Participating Preferred Stock shares outstanding at December 31, 2024. These preferred stock shares were anti-dilutive for the years ended December 31, 2024, 2023 and 2022 and are therefore excluded from the diluted (loss) income per common share calculation.
The details of the computation of basic and diluted (loss) income per common share are as follows:
Year Ended December 31,
(dollars in millions, share data in thousands except earnings per share)
Net income (loss) and comprehensive
income (loss) attributable to Emerald Holding, Inc.
$
2.2
$
(8.2
)
$
130.8
Accretion to redemption value of redeemable
convertible preferred stock
(12.7
)
(42.0
)
(38.8
)
Participation rights on if-converted basis
-
-
(60.2
)
Net (loss) income and comprehensive (loss) income
attributable to Emerald Holding, Inc.
common stockholders
$
(10.5
)
$
(50.2
)
$
31.8
Weighted average common shares outstanding
156,592
63,959
69,002
Basic (loss) income per share
$
(0.07
)
$
(0.78
)
$
0.46
Net (loss) income and comprehensive (loss) income
attributable to Emerald Holding, Inc.
common stockholders
$
(10.5
)
$
(50.2
)
$
31.8
Diluted effect of stock options
-
-
Diluted weighted average common shares
outstanding
156,592
63,959
69,148
Diluted (loss) income per share
$
(0.07
)
$
(0.78
)
$
0.46
Anti-dilutive employee share awards excluded
from diluted earnings per share calculation
10,082
19,704
14,858
Note 14. Defined Contribution Plans
The Company has a 401(k) savings plan, the Emerald Expositions, LLC 401(k) Savings Plan (the “Emerald Plan”), that was formed on January 1, 2014. The Company matches 50% of up to 6% of an eligible plan participant’s compensation for the contribution period. In March 2020, the Company suspended the Company’s 401(k) match for all participants. The Company’s 401(k) match was reinstated in August 2021. For each of the years ended December 31, 2024, 2023 and 2022, the Company recorded compensation expense of $1.5 million, $1.8 million and $1.6 million, respectively, for the employer matching contribution.
Note 15. Income Taxes
The Company’s (loss) income before income taxes expense (benefit) from its United States and foreign operations are as follows:
Year Ended December 31,
(in millions)
United States
$
9.2
$
(3.0
)
$
158.2
Foreign
(1.7
)
0.1
(0.2
)
Total
$
7.5
$
(2.9
)
$
158.0
The Company’s current and deferred income tax provision (benefit) were as follows:
Year Ended December 31,
(in millions)
Current
Federal
$
3.3
$
2.4
$
20.8
State and local
0.1
1.6
6.1
Foreign
0.1
-
-
3.5
4.0
26.9
Deferred
Federal
0.8
1.8
0.2
State and local
0.9
(0.5
)
0.2
Foreign
0.1
-
(0.1
)
1.8
1.3
0.3
Total provision for income taxes
$
5.3
$
5.3
$
27.2
The differences between income taxes expected at U.S. statutory income tax rates and the income tax provision (benefit) are set forth below:
Year Ended December 31,
(in millions)
Income (loss) before income taxes
$
7.5
$
(2.9
)
$
158.0
U.S. statutory tax rate
21.0
%
21.0
%
21.0
%
Taxes at the U.S. statutory rate
1.6
(0.6
)
33.2
Tax effected differences
State and local taxes, net of federal benefit
0.5
0.8
7.3
Share-based payments
4.6
0.3
0.6
Nondeductible goodwill impairment
-
-
1.1
Change in valuation allowance
(2.4
)
3.7
(16.5
)
Return to provision adjustments
0.9
0.3
0.1
Change in tax rates
(0.6
)
0.5
0.3
Nondeductible expenses
0.7
0.4
1.1
Other, net
-
(0.1
)
-
Total provision for income taxes
$
5.3
$
5.3
$
27.2
The fluctuations of the Company’s income tax benefits and effective tax rates between the years ended December 31, 2024, 2023 and 2022, are primarily attributable to certain nondeductible expenses recorded by the Company (e.g., portion of the goodwill impairment charges that is nondeductible for tax purposes recorded during the year ended December 31, 2022). Additionally, changes in the relative mix of the Company’s operations in and among various U.S. state and local jurisdictions impact the Company’s state and local income tax benefit. Due to a lack of available sources of future taxable income, the Company recorded a full valuation allowance against its net balance of deferred tax assets.
The income tax effects of temporary differences between the book value and tax basis of assets and liabilities are as follows:
December 31,
(in millions)
Deferred tax assets
Net operating loss carryforwards
$
0.6
$
1.0
Deferred compensation
0.3
0.6
Stock-based compensation
5.7
9.6
Fixed asset depreciation
1.5
0.2
Lease liabilities
2.4
3.2
Accrued expenses
0.2
0.2
Goodwill and intangible assets
-
8.6
Section 163(j) interest carryover
14.9
6.7
Other assets
0.9
0.6
Total deferred tax assets
26.5
30.7
Deferred tax liabilities
Right-of-use lease assets
(1.6
)
(2.1
)
Goodwill and intangible assets
(0.5
)
-
Total deferred tax liabilities
(2.1
)
(2.1
)
Valuation allowance
(29.3
)
(31.7
)
Deferred tax liabilities, net
$
(4.9
)
$
(3.1
)
In assessing the realization of the deferred tax assets, the Company considers whether it is more likely than not that some portion of the deferred tax assets will not be realized. Given the Company’s current earnings and anticipated future earnings, management believes that there is a realistic possibility that within the next twelve months, sufficient positive evidence may become available to allow management to reach a conclusion that a significant portion of the Company’s valuation allowance will no longer be needed. However, the Company’s judgment regarding anticipated future earnings and the exact timing and amount of any valuation allowance release are subject to change due to many factors, including future market conditions and the ability to successfully execute its business plans. Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease in the provision for income taxes for the period the release is recorded. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Due to lack of available sources of taxable income, the Company recorded a full valuation allowance against its net deferred tax assets as sufficient uncertainty exists regarding the future realization of these assets. As of December 31, 2024 and 2023, the Company recorded a valuation allowance of $29.3 million and $31.7 million, respectively. The decrease in the valuation allowance was due to book-to-tax differences related to goodwill and intangible assets and stock-based compensation, which were offset by Section 163(j) interest carryover.
As of December 31, 2024 and 2023, the Company had zero U.S. federal net operating loss carryforwards. As of December 31, 2024 and 2023, the Company had U.S. state net operating loss carryforwards of $6.3 million and $16.0 million, respectively. The U.S. state net operating loss carryforward begins to expire in 2026. The Company does not have any income tax credit carryforwards.
The following table summarizes the changes to the gross unrecognized tax benefits for the years ended December 31, 2024, 2023 and 2022:
December 31,
(in millions)
Gross unrecognized tax benefits, beginning of period
$
-
$
-
$
-
Decreases related to prior year tax positions
-
-
-
Increases related to current year tax positions
1.5
-
-
Gross unrecognized tax benefits, end of period
$
1.5
$
-
$
-
For the years ended December 31, 2024, 2023 and 2022, interest and penalties were not significant. The Company records interest and penalties on unrecognized tax benefits within the provision for income taxes in the consolidated statements of (loss) income and comprehensive (loss) income.
As of December 31, 2024, the Company has $1.5 million of unrecognized tax benefits, which is included within other noncurrent liabilities in the consolidated balance sheets. The $1.5 million of unrecognized tax benefits as of December 31, 2024 would impact the effective income tax rate if recognized. The Company does not expect unrecognized tax benefits to change significantly over the next 12 months.
The Company is subject to U.S. federal income tax and various state and local taxes in numerous jurisdictions. The Company’s federal tax returns for 2021 through 2024 years remain open for examination by the IRS. In most cases, the Company’s state tax returns for 2021 through 2024 remain open and are subject to income tax examinations by state taxing authorities.
Note 16. Commitments and Contingencies
Operating Leases and Other Contractual Obligations
The Company has entered into operating leases for office space and office equipment and other contractual obligations primarily to secure venues for the Company’s trade shows and events. These agreements are not unilaterally cancelable by the Company, are legally enforceable and specify fixed or minimum amounts or quantities of goods or services at fixed or minimum prices.
The amounts presented below represent the future minimum annual payments under the Company’s operating leases and other contractual obligations that have initial or remaining non-cancelable terms in excess of one year as of December 31, 2024:
Years Ending December 31,
(in millions)
Thereafter
Total
Operating leases
$
4.0
$
4.0
$
1.7
$
0.5
$
0.1
$
-
$
10.3
Other contractual obligations
38.2
18.3
7.9
2.8
2.2
0.5
69.9
$
42.2
$
22.3
$
9.6
$
3.3
$
2.3
$
0.5
$
80.2
Rent expense incurred under operating leases was $3.3 million, $4.2 million and $7.5 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Litigation
The Company is subject to litigation and other claims in the ordinary course of business. The Company records an accrual for loss contingencies for legal proceedings when it believes that an unfavorable outcome is both probable and the amount or range of any possible loss is reasonably estimable. The Company did not record an accrual for loss contingencies associated with legal proceedings as of December 31, 2024 and 2023. In the opinion of management, the Company is not presently a party to any material litigation and management is not aware of any pending or threatened litigation against the Company that would have a material adverse impact on the Company’s business, consolidated balance sheets, results of operations or cash flows.
Other Commitments and Contingencies
Refer to Note 9, Fair Value Measurements, for further discussion on the contingent considerations related to the Company’s acquisition of GRC, Glamping Americas, Futurist, Hotel Interactive, Lodestone, Bulletin and Advertising Week.
Note 17. Accounts payable and other current liabilities
Accounts payable and other current liabilities consisted of the following:
December 31,
(in millions)
Trade payables
$
17.3
$
24.1
Other current liabilities
11.3
9.3
Accrued event costs
7.4
6.7
Accrued personnel costs
4.7
6.5
Total accounts payable and other current liabilities
$
40.7
$
46.6
Note 18. Segment Information
The Company routinely evaluates whether its operating and reportable segments continue to reflect the way the CODM evaluates the business. The determination is based on: (1) how the Company’s CODM evaluates the performance of the business, including resource allocation decisions, and (2) whether discrete financial information for each operating segment is available. The Company considers its Chief Executive Officer to be its CODM.
The Connections segment is the only operating segment which meets the criteria to be classified as a reportable segment. The Connections reportable segment includes all of Emerald’s trade shows and other live events. The other two operating segments, which provide diverse media services and e-commerce software solutions, do not meet the quantitative thresholds of a reportable segment and did not meet the aggregation criteria set forth in Accounting Standards Codification 280 (“ASC 280”), Segment Reporting, and as such are referred to as “All Other.”
Operating segment performance is evaluated by the Company’s CODM based on Adjusted EBITDA, defined as EBITDA exclusive of general corporate expenses, stock-based compensation expense, impairments and other items. These adjustments are primarily related to items that are managed on a consolidated basis at the corporate level. The exclusion of such charges from each segment is consistent with how the CODM evaluates segment performance. The CODM considers budget-to-actual variances and year-over-year growth on a monthly basis when assessing segment performance and making decisions about allocating resources to the segments.
The following table presents a reconciliation of reportable segment revenues, other income, and Adjusted EBITDA to net income (loss) before income taxes:
Years Ended December 31,
(in millions)
Revenues
Connections Segment
$
355.1
$
340.2
$
282.6
All Other Category
43.7
42.6
43.3
Total revenues
$
398.8
$
382.8
$
325.9
Other income, net
Connections Segment
$
1.5
$
2.8
$
34.2
Non-segment related(1)
-
-
148.6
Total other income, net
$
1.5
$
2.8
$
182.8
Connections Segment expenses
Cost of Revenues
$
136.0
$
127.4
$
106.9
Selling, general and administrative
78.3
78.8
76.9
Total expenses
$
214.3
$
206.2
$
183.8
Adjusted EBITDA
Connections Segment
$
142.3
$
136.8
$
133.0
Segment Adjusted EBITDA
$
142.3
$
136.8
$
133.0
All Other Category Adjusted EBITDA
$
6.2
$
3.6
$
0.2
Other Income, net(1)
-
-
148.6
General corporate and other expenses(2)
(46.8
)
(42.6
)
(42.2
)
Interest expense, net
(39.3
)
(35.1
)
(21.8
)
Loss on extinguishment of debt
-
(2.3
)
-
Goodwill impairment charge
-
-
(6.3
)
Intangible asset impairment charge
(7.3
)
-
(1.6
)
Depreciation and amortization expense
(28.3
)
(45.0
)
(59.5
)
Stock-based compensation expense
(5.8
)
(7.8
)
(5.8
)
Deferred revenue adjustment
-
-
(0.6
)
Other items(3)
(13.5
)
(10.5
)
14.0
Income (loss) before income taxes
$
7.5
$
(2.9
)
$
158.0
(1)On August 3, 2022, the Company reached an agreement for a one-time settlement of outstanding insurance litigation relating to event cancellation insurance for proceeds of $148.6 million. The one-time settlement payment was not specifically attributable to any of the Company’s outstanding event cancellation insurance claims and therefore was not recorded at the segment level. The other income, net related to this one-time settlement is not indicative of any one segment’s performance and is not included in the measure of segment profit and loss analyzed by the CODM on a regular basis.
(2)General corporate and other expenses are primarily related to corporate level expenditures.
(3)Other items for the year ended December 31, 2024 included: (i) $1.2 million in gains related to the remeasurement of contingent consideration; (ii) $8.3 million in acquisition-related integration and restructuring-related transition costs, including a one-time severance expense of $3.7 million; (iii) $3.4 million in acquisition-related transaction costs and (iv) $3.0 million in non-recurring legal, audit and consulting fees. Other items for the year ended December 31, 2023 included: (i) $2.3 million in gains related to the remeasurement of contingent consideration; (ii) $6.1 million in acquisition-related integration and restructuring-related transition costs, including a one-time severance expense of $1.5 million; (iii) $2.6 million in acquisition-related transaction costs and (iv) $4.1 million in non-recurring legal, audit and consulting fees. Other items for the year ended December 31, 2022 included: (i) $33.3 million in gains related to the remeasurement of contingent consideration; (ii) $6.1 million in restructuring-related transition costs, including $3.0 million in non-cash lease abandonment charges; (iii) $3.6 million in transaction costs in connection with certain acquisition transactions; (iv) $1.7 million in non-recurring legal, audit and consulting fees and (v) $7.9 million in insurance settlement related expenses.
The following table presents reportable and non-reportable segment cost of revenues and selling, general and administrative expenses:
Years Ended December 31,
(dollars in millions)
Cost of revenues
Connections Segment
$
136.0
$
127.4
$
106.9
All Other Category
10.8
9.6
9.5
Other items(1)
0.7
0.6
0.1
Total cost of revenues
$
147.5
$
137.6
$
116.5
Selling, general and administrative expenses
Connections Segment
$
78.3
$
78.8
$
76.9
All Other Category
26.7
29.4
33.6
Corporate
46.8
42.6
42.2
Other items(1)
18.6
17.5
(7.7
)
Total selling, general and administrative expenses
$
170.4
$
168.3
$
145.0
(1)Other items included in cost of revenues and selling, general and administrative expenses relate to one-time adjustments that are considered to not be indicative of ongoing segment operative performance.
The Company’s CODM does not receive information with a measure of total assets or capital expenditures for each operating segment as this information is not used for the evaluation of operating segment performance as the Company’s operations are not capital intensive. Capital expenditure information is provided to the CODM on a consolidated basis. Therefore, the Company has not provided asset and capital expenditure information by reportable segment. For the years ended December 31, 2024, 2023 and 2022, substantially all revenues were derived from transactions in the United States.
Note 19. Subsequent Events
Second Amended and Restated Senior Secured Credit Facilities
On January 30, 2025, the Company’s wholly owned subsidiary, Emerald X, Inc. (“Emerald X”) entered into the Second Amended and Restated Senior Secured Credit Facilities with a syndicate of lenders and Bank of America, N.A., as administrative agent, providing for (i) a seven-year $515.0 million senior secured term loan facility (the “Term Loan Facility”), scheduled to mature on January 30, 2032 and (ii) a $110.0 million senior secured revolving credit facility (the “Revolving Credit Facility”), scheduled to mature on January 30, 2030. A portion of the proceeds of the Term Loan Facility were used to refinance all existing loans outstanding under Emerald X’s previously existing Amended and Restated Senior Secured Credit Facilities, and to pay costs and expenses in connection with the refinancing. The balance of the proceeds of the Term Loan Facility remained on the balance sheet of Emerald X and may be used from time to time for general business purposes, including the financing of acquisitions. The Revolving Credit Facility was not drawn at the closing of the refinancing and may be used from time to time for general business purposes, including the financing of acquisitions.
Dividends Declared
On February 25, 2025, the Company’s Board of Directors declared a dividend for the quarter ending March 31, 2025 of $0.015 per share payable on March 20, 2025 to holders of the Company’s common stock as of March 10, 2025.
Acquisitions
On March 13, 2025, the Company signed an agreement to acquire the stock of This is Beyond Ltd., a London-based organizer of B2B trade shows serving the global luxury travel industry, for an aggregate purchase price of approximately $134.0 million. The Company expects to close the transaction during the second quarter of fiscal year 2025, subject to the satisfaction of customary closing conditions.
On March 13, 2025, the Company executed a share purchase agreement to acquire the associated assets and liabilities of Insurtech Insights, a premier operator of large-scale insurance conferences across the US, Europe, and Asia. The purchase price consideration of the transaction was approximately $26.0 million plus future contingent payments based on business performance. The Company funded this transaction with cash from operations. The initial accounting and fair value measurements of assets acquired and liabilities assumed necessary to develop the purchase price allocation has not been completed.
Emerald Holding, Inc. (parent company only)
Schedule I - Condensed Financial Information of Registrant
Condensed Balance Sheets
December 31, 2024 and 2023
(dollars in millions, share data in thousands except par value)
Assets
Current assets
Receivable from related parties
$
-
$
-
Total current assets
-
-
Noncurrent assets
Long term receivable from related parties
-
-
Investment in subsidiaries
385.9
404.6
Total assets
$
385.9
$
404.6
Liabilities, Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)
Current liabilities
Payable to subsidiary
$
-
$
-
Total current liabilities
-
-
Noncurrent liabilities
Long term payable to subsidiary
-
-
Total liabilities
$
-
$
-
Redeemable convertible preferred stock
7% Series A Convertible Participating Preferred Stock,
$0.01 par value; authorized shares at December 31, 2024 and 2023:
80,000; zero and 71,403 shares issued and outstanding; aggregate
liquidation preference of zero and $492.6 million at
December 31, 2024 and 2023, respectively
-
497.1
Stockholders’ equity (deficit)
Common stock, $0.01 par value; authorized shares at December 31, 2024
and 2023: 800,000; 201,447 and 62,915 shares issued and
outstanding at December 31, 2024 and 2023, respectively
2.0
0.6
Additional paid-in capital
1,034.0
559.2
Accumulated deficit
(650.1
)
(652.3
)
Total stockholders’ equity (deficit)
385.9
(92.5
)
Total liabilities, redeemable convertible preferred stock
and stockholders’ equity (deficit)
$
385.9
$
404.6
Emerald Holding, Inc. (parent company only)
Schedule I - Condensed Financial Information of Registrant
Condensed Statements of (Loss) Income and Comprehensive (Loss) Income
December 31, 2024, 2023 and 2022
(dollars in millions)
Revenues
$
-
$
-
$
-
Other income, net
-
-
-
Cost of revenues
-
-
-
Selling, general and administrative expense
-
-
-
Depreciation and amortization expense
-
-
-
Goodwill impairment charge
-
-
-
Intangible asset impairment charge
-
-
-
Operating income (loss)
-
-
-
Interest expense
-
-
-
Interest income
-
-
-
Loss on extinguishment of debt
-
-
-
Other expense
-
-
-
Loss on disposal of fixed assets
-
-
-
(Loss) income before income taxes
-
-
-
Provision for (benefit from) income taxes
-
-
-
Earnings before equity in net (loss) income and
comprehensive (loss) income of subsidiaries
-
-
-
Equity in net income (losses) and comprehensive income
(losses) of subsidiaries
2.2
(8.2
)
130.8
Accretion to redemption value of redeemable
convertible preferred stock
(12.7
)
(42.0
)
(38.8
)
Participation rights on if-converted basis
-
-
(60.2
)
Net (loss) income and comprehensive (loss) income
$
(10.5
)
$
(50.2
)
$
31.8
Emerald Holding, Inc. (parent company only)
Schedule I - Condensed Financial Information of Registrant
Notes to Condensed Financial Statements
December 31, 2024, 2023 and 2022
1. Basis of Presentation
In the parent-company-only financial statements, Emerald Holding, Inc.’s investment in subsidiaries is stated at cost plus equity in undistributed earnings of subsidiaries since the date of acquisition. The parent-company-only financial statements should be read in conjunction with the Company’s consolidated financial statements. A condensed statement of cash flows was not presented because Emerald Holding, Inc.’s net operating activities have no cash impact and there were no investing or financing cash flow activities during the fiscal years ended December 31, 2024, 2023 and 2022.
Income taxes and non-cash stock-based compensation have been allocated to the Company’s subsidiaries for the fiscal years ended December 31, 2024, 2023 and 2022.
Redeemable Convertible Preferred Stock
The Company records redeemable convertible preferred stock at fair value on the dates of issuance, net of issuance costs. The Company classifies its redeemable convertible preferred stock as mezzanine equity outside of stockholders’ equity (deficit) when the stock contains contingent redemption features that are not solely within the Company’s control. Each share of redeemable convertible preferred stock accumulated dividends at a rate per annum equal to 7% of the accreted liquidation preference, compounding quarterly by adding to the accreted liquidation preference until July 1, 2023 and thereafter, at the Company’s option, paid either in cash or by adding to the accreted liquidation preference. For each of the quarterly periods ending March 31, 2024, December 31, 2023 and September 30, 2023, the Company elected to pay dividends on the redeemable convertible preferred stock in cash, in an aggregate amount of $8.6 million for each such quarterly period.
On April 18, 2024, the Company announced it had delivered a notice informing holders of its redeemable convertible preferred stock, including Onex-related entities, that it had exercised its right to mandate that all shares of the redeemable convertible preferred stock be converted to shares of the Company’s common stock. On May 2, 2024 (the “Conversion Date”), each holder of redeemable convertible preferred stock received approximately 1.9717 shares of common stock for each share of redeemable convertible preferred stock held as of the Conversion Date, in accordance with the terms of the conversion feature as described in more detail above. Following the Conversion Date, no redeemable convertible preferred stock was outstanding, and all rights of the former holders of the redeemable convertible preferred stock were terminated.
Prior to its conversion, the Company had the right to redeem all, but not less than all, of the redeemable convertible preferred stock on or after June 29, 2026 for a cash purchase price equal to (a) on or after the six-year anniversary thereof, 105% of the accreted liquidation preference, (b) on or after the seven-year anniversary thereof, 103% of the accreted liquidation preference or (c) on or after the eight-year anniversary thereof, the accreted liquidation preference. In addition, if there was a change of control transaction involving the Company prior to the six-year anniversary of the First Closing Date, the Company had the right to redeem all, but not less than all, of the redeemable convertible preferred stock for a cash purchase price equal to the accreted liquidation preference plus the net present value of the additional amount by which the accreted liquidation preference would have otherwise increased from the date of such redemption through the sixth anniversary of the closing.
2. Guarantees and Restrictions
As of the balance sheet dates presented herein, the Company’s wholly owned subsidiary, Emerald X, Inc. (“Emerald X”), is the borrower under the Amended and Restated Senior Secured Credit Facilities, by and among Expo Event Midco, Inc. (“EEM”), Emerald X and Emerald X’s subsidiaries as guarantors, various lenders from time to time party thereto and Bank of America, N.A., as administrative agent, as amended from time to time. The Amended and Restated Senior Secured Credit Facilities include restrictions on the ability of Emerald X and its restricted subsidiaries to incur additional liens and indebtedness, make investments and dispositions, pay dividends and make intercompany loans and advances or enter into other transactions, among other restrictions, in each case subject to certain exceptions. Under the Amended and Restated Senior Secured Credit Facilities, Emerald X would be permitted to pay dividends so long as immediately after giving effect thereto, no default or event of default had occurred and was continuing, (a) up to an amount equal to, (i) a basket that builds based on 50% of Emerald X’s Consolidated Net Income (as defined in the Amended and Restated Senior Secured Credit Facilities) and certain other amounts, subject to various conditions including compliance with a fixed charge coverage ratio of 2.0 to 1.0 and (b) in certain additional limited amounts, subject to certain exceptions set forth in the Amended and Restated Senior Secured Credit Facilities.
Since the restricted net assets of Emerald X and its subsidiaries exceed 25% of the consolidated net assets of the Company and its subsidiaries as of the dates presented above, the condensed parent company financial statements have been prepared in accordance with Rule 12-04, Schedule 1 of Regulation S-X. This information should be read in conjunction with the consolidated financial statements.
Emerald Holding, Inc.
Schedule II - Valuation and Qualifying Accounts
Additions
Balance at
Beginning of
Period
Reclassification
Charged to
Costs &
Expenses
Charged to
Other
Accounts
Deductions
Balance at
End of
Period
Description
(in millions)
Year Ended December 31, 2024:
Allowance for credit losses
$
1.4
-
0.5
-
(0.3
)
$
1.6
Deferred tax asset valuation allowance
$
31.7
-
-
(2.4
)
-
$
29.3
Year Ended December 31, 2023:
Allowance for credit losses
$
1.5
-
0.3
-
(0.4
)
$
1.4
Deferred tax asset valuation allowance
$
28.0
-
-
3.7
-
$
31.7
Year Ended December 31, 2022:
Allowance for credit losses
$
1.2
-
0.4
-
(0.1
)
$
1.5
Deferred tax asset valuation allowance
$
44.5
-
-
(16.5
)
-
$
28.0

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) that are designed to provide reasonable assurance that information required to be disclosed in the Company's reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company will be detected.
As of the end of the period covered by this report, management, under the supervision of the Company's Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of December 31, 2024 the disclosure controls and procedures were effective at the reasonable assurance level.
Management’s Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Internal control over financial reporting is a process designed by, or under the supervision of, the Company's Chief Executive Officer and Chief Financial Officer and effected by the Company's board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
▪pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company;
▪provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
▪provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
The Company’s management assessed the effectiveness of its internal control over financial reporting as of December 31, 2024. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013).
Based on the evaluation, our management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2024.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2024 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report appearing under “Item 8. Financial Statements and Supplementary Data”.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the Company’s fourth fiscal quarter of 2024 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information.
(a) Form 8-K Disclosures
None.
(b) Rule 10b5-1 Trading Plans
During the three months ended December 31, 2024, none of the Company’s directors or executive officers have informed us that they have adopted, modified, or terminated a contract, instruction or written plan for the purchase or sale of Company securities intended to satisfy the affirmative defense conditions Rule 10b5-1(c) or a non-Rule 10b5-1 trading arrangement.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate Governance.
The information required by this item will be included in our definitive proxy statement for the 2025 Annual Meeting of Stockholders and is incorporated herein by reference. We will file such definitive proxy statement with the SEC pursuant to Regulation 14A within 120 days after our fiscal year ended December 31, 2024.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation.
The information required by this item will be included in our definitive proxy statement for the 2025 Annual Meeting of Stockholders and is incorporated herein by reference. We will file such definitive proxy statement with the SEC pursuant to Regulation 14A within 120 days after our fiscal year ended December 31, 2024.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this item will be included in our definitive proxy statement for the 2025 Annual Meeting of Stockholders and is incorporated herein by reference. We will file such definitive proxy statement with the SEC pursuant to Regulation 14A within 120 days after our fiscal year ended December 31, 2024.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information required by this item will be included in our definitive proxy statement for the 2025 Annual Meeting of Stockholders and is incorporated herein by reference. We will file such definitive proxy statement with the SEC pursuant to Regulation 14A within 120 days after our fiscal year ended December 31, 2024.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accountant Fees and Services
The information required by this item will be included in our definitive proxy statement for the 2025 Annual Meeting of Stockholders and is incorporated herein by reference. We will file such definitive proxy statement with the SEC pursuant to Regulation 14A within 120 days after our fiscal year ended December 31, 2024.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits, Financial Statement Schedules.
The following documents are filed as part of this Annual Report on Form 10-K:
(a)(1) and (a)(2) The financial statements set forth in the Index to Consolidated Financial Statements and the Consolidated Financial Statement Schedules are filed as part of this Annual Report on Form 10-K included in Item 8.
(a)(3) and (b)	The exhibits listed in the accompanying Exhibit Index are filed as part of this Annual Report on Form 10-K and either filed herewith or incorporated by reference herein, as applicable.