EEX

Emerald is a B2B trade-show roll-up whose top-line growth masks deteriorating economics. FY2025 revenue rose 16.2% to $463M, but operating income fell 51.9% to $22.5M (a 4.9% operating margin) and the company swung to a $30.7M net loss versus a $2.2M profit in FY2024. The MD&A's own description of the strategy — acquiring events 'at mid-to-high single digit EBITDA multiples' and pushing 'modest' annual booth-price increases — explains the shape of the P&L: revenue is being bought rather than compounded, and the incremental shows are not flowing through to earnings. D&A of $31M now exceeds operating income, consistent with a heavily amortizing acquired-intangibles base.

The balance sheet is the bigger concern. Total liabilities grew 31.9% to $874M while equity shrank 12.2% to $339M, taking liabilities/equity to 2.58x. Cash fell 48% to $101M, current assets dropped 23% to $235M against current liabilities of $289M (a working-capital deficit), and retained earnings sit at -$681M — the company has never produced cumulative GAAP profits. Operating cash flow of $42.6M is real but thin against that debt load, and management still chose to spend $17.5M on buybacks and $11.9M on dividends in a loss year, with the board declaring another $0.015 quarterly dividend on March 12, 2026. That is capital being returned to shareholders that arguably belongs to the lenders.