Annual Report for Fiscal Year Ending December 31, 2024 (Form 10-K)

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:

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:

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:

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:

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

Selling, General and Administrative Expenses

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,
		2024				2023				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	%

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,
		2024				2023
		(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

		Year Ended December 31,
		2024				2023
		(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

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
		2024				2023				$				%
		(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,
		2024				2023				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,
		2024				2023				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,
		2024				2023				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,
		2024				2023
		(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:

Revolving Loans under the Second Amended and Restated Senior Secured Credit Facilities bear interest at a rate equal to, at Emerald 's option, either:

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,

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			$	-

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.

		2024
		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:

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.