Boston Omaha Q1 2025 Earnings: Steady Growth, Narrowing Losses
Taking a Look at Boston Omaha's (BOC) Earnings Results.
Boston Omaha (BOC) had a steady quarter of growth & improved profitability trends. The company’s diversified businesses, spanning billboards, broadband, & surety insurance, all contributed to an overall rise in revenue, while operating losses narrowed significantly. Total revenue for Q1 2025 was $27.7M, up about 8.5% YoY, a decent pace driven by balanced gains across segments. Importantly, BOC actually came close to breakeven this quarter: net losses shrank to a very modest level compared to the prior year. This shows BOC’s ability to expand its top line while controlling costs, reinforcing confidence in the company’s long-term, multi-vertical growth strategy.
Management’s execution in this Q reflects the “steady and sure” approach that long-term investors expect from BOC. There were no splashy surprises or dramatic shifts in strategy, instead, we saw incremental progress in each business unit & continued investment in future growth. Cash flow from operations remained positive (about $2.6M for the quarter), indicating that the core businesses are self-sustaining even as the company reinvests in new opportunities. Overall here, BOC delivered a decent start to the year, underlining the stability of BOC’s model & the ongoing build-out of its various segments.
Key Highlights
Moderate Revenue Growth: Total revenues reached $27.73M in Q1 2025, an increase of roughly 8.5% from $25.55M in the year-ago period. Growth was well-distributed among their operations, hinting at the benefit of its diversified revenue streams.
Narrower Losses: The company nearly achieved breakeven profitability. Net loss attributable to common shareholders was approximately $0.67M for the quarter (a loss of $0.02 per share), a pretty big improvement versus the $2.8M loss (-$0.09 per share) in Q1 2024. On a consolidated basis (including non-controlling interests), the net loss was about $2.4M, also much smaller than a year ago however down widening QoQ. The markedly reduced loss reflects both higher revenue & disciplined cost management.
Diversified Segment Gains: All three core operating segments expanded in Q1. Billboard advertising revenue was essentially flat YoY at $10.76M (holding steady after strong growth last year). Broadband services revenue grew 6.6% to $10.32M as the company continued to add subscribers/network capacity. The surety insurance segment stood out with premiums earned jumping 39% to $5.56M, alongside $0.58M in insurance commission revenue, strong growth as that business scales up. This shows that each of BOC’s business lines is contributing to growth, with insurance in particular providing a nice boost.
Positive Cash Flow & Stable Book Value: Operating cash flow came in around $2.6M for Q1, indicating that the company’s businesses collectively generate cash even while investing in expansion. Book value per share was approximately $16.95 as of March 31, 2025, essentially unchanged from $16.99 at year-end 2024. In other words, BOCs intrinsic equity value held steady during the quarter. The slight dip in book value seen last year has leveled off, aided by the improved earnings and the fact that the company’s asset values remain solid (even if some investments are carried below market value on the books).
Strong Balance Sheet: BOC closed the quarter with over $44M in unrestricted cash and marketable securities on its balance sheet. Total assets stood at $730.8M, supported by a large base of equity (over $559.8M in total equity, including minority interests). This healthy financial position gives them plenty of flexibility to fund growth initiatives and absorb short-term fluctuations. The company carries relatively modest debt & has excess liquidity, which is a key advantage as it evaluates new investments or opportunities to buy back stock under its previously authorized $20M repurchase program.
Segment Performance
BOC is a unique holding company with four primary areas of operation. Its performance in Q1 2025 reflects steady or improving trends in each operating segment:
Billboard Advertising (Link Media Outdoor): The outdoor advertising segment produced $10.8M in net billboard rental revenue in Q1, essentially flat (+0.6%) compared to the prior year period. While growth was minimal this quarter, Link Media continues to provide stable cash flows and solid operating margins. The billboard business is more mature, so its gains tend to be modest, but it remains a reliable profit center. Management has been selectively acquiring/developing new billboard locations over time (Link now operates thousands of billboard faces nationwide), which should support slow-but-steady revenue growth. In Q1, occupancy and pricing held up well even amid a mixed advertising environment, and the segment’s Adjusted EBITDA and cash generation stayed strong. Billboards remain BOC’s cash cow, not high-growth, but a steady contributor that funds investments elsewhere.
Broadband Services (Fiber/Wireless Internet): The broadband segment generated $10.3M in Q1 revenue, up about 6.6% YoY. This moderate growth reflects ongoing expansion of the company’s fiber/fixed wireless internet services. BOC’s broadband operations (which include subsidiaries like AireBeam in Arizona & InfoWest/Utah Broadband in Utah) have been integrating past acquisitions and extending their network reach. Customer subscriptions are rising as new neighborhoods are connected to fiber and as service offerings improve. It’s worth noting that the broadband unit is still in investment mode, the company continues to incur significant capital expenditures to lay fiber infrastructure (“future-proofing” these networks). As a result, current earnings are slim to none in this segment, but that’s expected at this stage. The upside is that revenue has a long runway to grow (demand for high-speed internet is strong in the communities they serve), & over time I anticipate improved operating leverage. Q1 showed that the broadband business is scaling gradually; even with heavy upfront costs, the segment’s growth & incremental efficiency gains are moving it toward profitability. This segment represents BOC’s biggest long-term growth engine, albeit one that requires patience as the fiber build-out continues.
Surety Insurance (General Indemnity Group): BOCs insurance subsidiary had an excellent quarter, highlighting the value of this often-overlooked part of the business. Premiums earned were $5.56M in Q1, a 39% surge from a year ago, thanks to increased demand for the surety bonds & related insurance products that General Indemnity Group (GIG) provides. Including commission income of about $579,000, total insurance revenue was roughly $6.14M for the quarter (+36% YoY in combined insurance revenues). This growth far outpaced the segment’s expense growth, implying improved underwriting scale. While we don’t have the exact quarterly profit for GIG, last year the insurance segment earned roughly $2.7M in net income, and Q1’s strong top-line suggests it continues to contribute positively to earnings. GIG has been expanding its geographic footprint and product reach in the surety niche, all while maintaining conservative underwriting standards (historically their loss ratios have been low). The result is a steadily scaling insurance operation that complements BOC’s portfolio with high-margin, recurring revenue. In Q1, the insurance segment demonstrated its role as a quiet but powerful contributor, delivering growth & profits that help offset the heavier investment spending in other segments.
(Note: Boston Omaha’s fourth area of business is asset management and minority investments, which doesn’t show up as a large revenue line but does impact overall results. We discuss these activities in Strategic Developments and Valuation, since they relate more to investment strategy and balance sheet value than to “segment” operating revenue.)
Strategic Developments
During Q1 2025, BOC made several strategic moves & continued to refine its investment portfolio in ways that should enhance shareholder value over time:
Partial Sale of Sky Harbour Stake: BOC owns a significant minority stake in Sky Harbour Group (SKYH), a developer of private aviation hangar campuses, which it originally helped take public via SPAC. In Q1, management opted to monetize a small portion of this investment. The company sold 220,889 shares of Sky Harbour Class A stock, realizing approximately $1.3M in gains. This sale is relatively minor given BOC’s remaining position (it still holds a 16.1% stake in Sky Harbour as of March 31, 2025, along with warrants), but it was a timely move to capture some profit after Sky Harbour’s stock price appreciated. The proceeds fortify BOC’s cash reserves and could be redeployed into other opportunities or simply strengthen the balance sheet. Importantly, despite selling a slice of Sky Harbour, BOC continues to see great value in the stake it retains, as evidenced by the fact that it also recorded an unrealized gain of about $1.2M on its Sky Harbour warrants during Q1. Management is effectively trimming the position at the margins while still participating in Sky Harbour’s upside. This approach balances risk/reward I look at it like: take some money off the table after a run-up, but hold on to the majority of the investment for longer-term gains.
Managing Investment Volatility: The flip side of the Sky Harbour story is the accounting impact on earnings. Because BOC uses the equity method for this investment (it must recognize its share of Sky Harbour’s income or losses each quarter), the significant non-cash losses from Sky Harbour’s operations flow through to BOC’s income statement. They recorded roughly $2.3M of losses from its affiliates, mainly due to Sky Harbour’s ongoing development-phase expenses. Additionally, within its Asset Management division, they saw about $2M in investment losses tied to fair value changes in its real estate funds (the 24th Street funds and the Build for Rent fund). These losses are largely mark-to-market adjustments and do not reflect core operating performance, but they did weigh on GAAP earnings. The key point for investors: management is willing to accept short-term earnings volatility from these investments in exchange for potential long-term value creation. The Sky Harbour stake, for instance, has a much higher market value (somewhere around $180M) than its carrying value on BOC’s books ($92M), a gap that represents hidden value. Similarly, the company’s real estate venture investments could pay off in the future even if they produce some accounting noise today. The strategic decision to hold such investments (& to consolidate the real estate funds on the balance sheet) reflects a long-term horizon. Management is focused on growing intrinsic value, even if quarter-to-quarter reported earnings are a bit lumpy due to these factors.
Continued Expansion/Vertical Integration: The core businesses continued to invest in growth during the quarter. In broadband, the company pushed forward with fiber network construction projects in its Arizona /Utah markets, aiming to extend service to new customers. In billboards, Link Media remains on the lookout for tuck-in acquisitions of billboard assets and land under its signs to strengthen its footing in key regions. On the insurance front, GIG is entering new states and broadening its agent network to sustain its rapid growth. A strategic theme is BOC’s effort to bring more capabilities in-house to support these expansions. In fact, the company has indicated interest in vertical integration moves, like for example, exploring the acquisition of a construction/services company to assist with broadband network build-outs & possibly real estate development. While no specific deal was completed in Q1, this intent shows management’s proactive approach to controlling costs and ensuring quality in its projects. By owning expertise (rather than outsourcing everything), BOC could improve efficiency as it scales its infrastructure-heavy businesses. This is a long-term strategic consideration that aligns with the company’s hands-on, value-driven philosophy.
Asset Management Initiatives: Boston Omaha’s Asset Management arm (Boston Omaha Asset Management — BOAM) continues to evolve. In recent years, the company raised and managed investment funds in areas like real estate development (the 24th Street Real Estate partnerships) and residential homebuilding for rent (the BFR Fund). During Q1, there were no new funds launched, but management did update investors on the status of existing ones. The Build for Rent (BFR) Fund is being wound down after completing its development cycle, and BOC has been gradually monetizing those real estate assets and returning capital. Meanwhile, the 24th Street funds (which invest in commercial properties) are now fully consolidated on BOC’s balance sheet after the company acquired the remaining interest in its asset management subsidiary last year. While BOAM’s contributions to revenue are currently small (&, as noted, some funds saw valuation markdowns this quarter), this business gives them a platform to earn fee income and performance gains on external capital. It’s a strategic complement to their own balance sheet investing, allowing them to pursue larger opportunities than they could alone, and to potentially earn asset management economics over time. So, they are steadily building an investment management capability that could become a more meaningful part of the company in the future. For now, the focus is on successfully managing &exiting the projects in these funds and establishing a track record that could attract more third-party capital down the road.
BOC is staying active on multiple fronts: pruning and optimizing its investment portfolio (Sky Harbour), laying groundwork for future operational efficiency (vertical integration, internal capabilities), and advancing its role as an asset manager. Each of these moves is aimed at increasing the long-term value of the enterprise, even if the immediate impacts are subtle. Management has communicated a patient, opportunistic strategy, and the first quarter’s actions were very much in line with that.
Valuation
From a valuation standpoint, Boston Omaha’s stock continues to trade at a noticeable discount to the company’s intrinsic value, in my view. The current share price in the mid-teens does not fully reflect the sum-of-the-parts value of BOC’s diverse assets and businesses. A quick breakdown using Q1 updates and recent figures illustrates this value gap:
Book Value vs. Market Price: Book value per share is around $16.95 as of the end of Q1. The stock has been trading below that level for much of the year, implying investors can buy into Boston Omaha at or even under the value of its net assets on the balance sheet. And recall, that book value is calculated using conservative GAAP accounting, for instance, it carries the Sky Harbour equity stake at cost minus losses, which significantly understates the true market value of that stake. Adjusting for such hidden value, the economic book value of BOC is higher than $16.95. The fact that the market price has been roughly $14–$16 (as recently as early 2025) suggests a classic “conglomerate discount” is at play. In other words, because BOC is a holding company with several parts, and some of those parts are early-stage or not fully understood by the market, investors are pricing the whole at less than the sum of the parts.
Sum-of-the-Parts (SOTP) Assessment: If we value each of their main components separately, we arrive at an intrinsic value comfortably above the current market cap. For example, the Link Media billboard segment produces strong cash flows; applying a reasonable EBITDA multiple (in line with other outdoor advertising companies) to its earnings would yield a valuation well over $150M for that segment alone. The Broadband segment is growing fast, similar fiber broadband businesses have been valued at around 2x revenue in M&A transactions, which would imply perhaps $80–$90M for BOC’s communications segment (given its $40M annual revenue run-rate). The Insurance segment, which earned a few million dollars last year, could be worth on the order of $30M–$40M (or more) applying a typical 10x–15x earnings multiple that small insurance companies command, especially considering its growth rate. Adding to these the value of BOC’s investments: the Sky Harbour stake (currently worth roughly $180M+ at market prices), plus other holdings (like a minority stake in Crescent Bank, valued around $19M, and the various real estate ventures we can roughly peg at $40M–$50M combined), and finally net cash of around $27M, the sum-of-parts quickly approaches and even exceeds $550M in total value. On a per-share basis, that equates to an intrinsic value in the high teens (upper $17–$18+ per share by my estimate). This aligns with my prior valuations and is higher than where the stock is currently trading.
Reasons for the Discount: So why is the stock cheaper than that intrinsic value? Part of it is the conglomerate structure, multi-industry holding companies often trade at a discount until one or more of their parts becomes big enough to attract focused attention. Another factor is the early-stage nature of some segments: the broadband business, for instance, is still ramping up and not yet throwing off significant profits; the asset management ventures are nascent. The market may be taking a “wait and see” approach, assigning low multiples until these units prove themselves. Additionally, BOC is relatively small (market cap in the mid hundreds of millions) and not widely covered by analysts, which can lead to mispricing. Lastly, the company’s accounting earnings have been minimal or negative due to heavy investment and some one-time charges, investors who screen just on EPS might overlook BOC’s value. That said, these are temporary or perception-related issues in our view. As their underlying earnings power becomes clearer (for example, if broadband swings to profit, or insurance profits continue to grow), and as the company potentially monetizes or highlights the value of its investments, the stock’s discount could narrow.
To sum up this valuation picture: BOC trades below what we believe it’s worth, and the company’s financial results and asset values support that belief. The stock is around or under book value, and my analysis suggests a fair value per share that is materially higher than the market price. This gap may require patience to close, but it provides a favorable risk/reward opportunity, the downside is cushioned by hard assets & stable businesses, while the upside could be substantial if the company’s growth plans bear fruit. BOC’s co-CEOs, being significant shareholders themselves, have a clear incentive to narrow this valuation gap over time, whether through continued execution, share repurchases, or other strategic actions.
My Take
This was not a flashy quarter by BOC, it was about steady execution and laying more groundwork for the future. In my view, the Q1 results reinforce the investment thesis for BOC as a long-term value compounder. The company delivered a bit of growth where it counts, tightened up its losses to nearly breakeven, and demonstrated that each of its business segments is pulling its weight. For a conglomerate of this size and age, that’s exactly what I want to see: consistent progress without taking undue risks. There were no signs of distress or strategy drift; instead, BOC is sticking to its playbook of gradual expansion, careful capital allocation, and opportunistic investment moves (very boring, but working). As a long-term investor, my conviction in BOCs trajectory remains strong after this quarter.
It’s important to set reasonable expectations for a company like this. This isn’t a get-rich-quick story, it’s more of a “get rich slowly” story (although I hate using this terminology but best lens to look at it thru). The management is building brick by brick, and sometimes that means certain parts (like broadband or new ventures) won’t show big profits right away. Q1 is a good reminder of this: the numbers were solid but not mind-blowing, which is fine. In fact, the quarter’s stability is a positive indicator that the underlying businesses are healthy. We saw the insurance arm shooting ahead with impressive growth, the fiber broadband unit steadily adding revenue even as it invests, and the billboard division reliably churning out cash. Those are fundamental positives that can get overlooked by investors who might have been hoping for, say, a surprise profit or a huge jump in revenues. In my opinion, patience will be rewarded here. The value here tends to reveal itself over a multi-year timeframe, for example, as fiber build-outs translate into subscriber revenue or as investment stakes like Sky Harbour mature and potentially get monetized.
I also like how management is navigating the current environment. Being pragmatic capital allocators. Trimming a small piece of the Sky Harbour position for a gain shows they’re willing to realize value when the market offers it, yet holding the bulk of it shows they still believe in the long-term upside. That balance is thoughtful. At the same time, they’re not shying away from investing in their own businesses: spending on fiber networks, growing the insurance portfolio, and exploring ways to vertically integrate are moves that may hurt short-term earnings a bit but should increase long-term value. This is unique thinking, focus on the long run, even if reported earnings are bumpy. I am more confident Mr. Peterson will continue to allocate capital in shareholders’ best interests, whether that means investing in new opportunities or buying back stock if it remains undervalued.
Ultimately, the Q showed that the company is doing the right things: growing at a steady pace, keeping expenses in check, investing for the future, and taking actions to enhance long-term value. There were no red flags in the results, if anything, there were green shoots (like the insurance surge and the near-breakeven earnings). Yes, external factors like economic conditions or execution challenges in broadband could pose risks, but those are manageable in my opinion. BOC remains a company that requires patience and a long-term outlook from its investors. I continue to view BOC as a compelling long-term holding, a smaller-scale compounder that is gradually turning its diversified ventures into tangible shareholder value. My strategy is to stay the course with BOC until I see a dead end, and even consider adding on dips, because I believe the company’s best days are ahead as its investments mature and its earnings power comes to the forefront.