Emerald Holding(EEX) - 2024 Q4 - Annual Report

Acquisitions and Investments - The company acquired Hotel Interactive on January 19, 2024, enhancing its hosted buyer platform with 15 events in hospitality, food service, and healthcare sectors [27]. - On May 7, 2024, the company acquired the Blockchain Futurist Conference to expand its offerings in the blockchain sector [28]. - In 2025, Emerald completed acquisitions including JD Events LLC, This is Beyond Limited, and Insurtech Insights Limited, expanding its portfolio in the food service and insurance technology sectors [177]. - Onex committed to invest more than $300 million in Convex Group Limited, which is the lead underwriter of the Company's event cancellation insurance policies for 2022 to 2026 [134]. Financial Performance - Revenues for the year ended December 31, 2024, were$398.8 million, an increase of 4.0% compared to $382.8 million in 2023 [165]. - Net income for 2024 was$2.2 million, compared to a net loss of $8.2 million in 2023 [165]. - Operating income for 2024 was$46.8 million, compared to $34.7 million in 2023, reflecting a 34.0$101.7 million, up by $3.9 million or 4.0$97.8 million in 2023 [209]. - Free Cash Flow increased to $37.0 million in 2024, representing an increase of$8.2 million or 28.5% compared to $28.8 million in 2023 [209]. Revenue Sources and Trends - The Commerce division's revenue consists of subscription revenue, implementation fees, and professional services from its Elastic Suite and Bulletin platforms [46]. - The majority of exhibit space is sold within twelve months prior to each trade show, leading to potential lag time in revenue recognition based on economic conditions [190]. - Seasonal trends indicate that trade show revenues typically peak in the first and fourth quarters, influenced by the timing of events [190]. - Organic revenue for 2024 was$385.3 million, reflecting a growth of $21.3 million or 5.9$364.0 million in 2023 [209]. Operational Challenges - The company has faced challenges in securing desirable dates and locations for trade shows, which can significantly impact profitability and operations [80]. - Increased competition in the trade show market could adversely affect the company's business, financial condition, cash flows, and results of operations [84]. - The company has historically depended on a concentrated number of top trade shows for revenue generation, making it vulnerable to declines in performance [85]. - The company is subject to significant restrictions and covenants in its Second Amended and Restated Senior Secured Credit Facilities, including a financial covenant requiring a total first lien net secured leverage ratio of 5.50 to 1.00, tested quarterly [114]. Insurance and Risk Management - The aggregate limit for the renewed 2025 primary event cancellation insurance policy is $100 million, with additional policies for specific events covering approximately$8.3 million and $7.8 million [67]. - The company maintains various insurance policies, but coverage may not fully offset losses from business interruptions or event cancellations, particularly due to natural disasters [98]. - The company’s event cancellation insurance policies do not cover losses due to communicable disease outbreaks, which could materially affect financial results [1]. - The company faces risks associated with event cancellations, which may not be fully covered by insurance, impacting financial results [98]. Corporate Governance and Shareholder Matters - Onex beneficially owns approximately 91.6$25.0 million of common stock through December 31, 2025 [157]. - A total of 1,776,884 shares were repurchased during the fourth quarter of 2024, with an average price of $4.76 per share [158]. Environmental and Social Responsibility - The company aims to reduce greenhouse gas emissions by 50% by 2030 as part of its commitment to achieving net zero carbon emissions by 2050 [61]. - The company is committed to fostering a culture of respect and inclusion, with initiatives to support diverse backgrounds and perspectives among employees [62]. - The company has eliminated the college-degree requirement for various positions to expand the applicant pool and promote skills-based hiring [63]. Cybersecurity and Compliance - The Company has implemented an enterprise-wide information security program to manage cybersecurity risks, including third-party monitoring and incident response services [147]. - The company faces evolving cybersecurity risks that could lead to loss or theft of confidential information, resulting in reputational damage and financial losses [117]. - The company is subject to various U.S. and international privacy and consumer protection laws, and non-compliance could result in significant penalties or legal liabilities [122]. - The evolving data protection landscape, including the California Consumer Privacy Act, may require substantial operational changes and incur additional costs for compliance [123].