MADISON SQUARE GARDEN ENTERTAINMENT CORP. REPORTS FISCAL 2025 THIRD QUARTER RESULTS
FY25 Third Quarter Revenues of
FY25 Third Quarter Operating Income of
FY25 Third Quarter AOI of
The fiscal 2025 third quarter was highlighted by a diverse slate of live entertainment events held across the Company's portfolio of venues, which – in addition to concerts – included special events, family shows and marquee sports, as well as the conclusion of this year's record-setting Christmas Spectacular run in January. During the quarter, the
For the fiscal 2025 third quarter, the Company reported revenues of
Executive Chairman and CEO
Results for the Three and Nine Months Ended
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Three Months Ended |
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Nine Months Ended |
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Change |
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Change |
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$ millions |
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2025 |
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2024 |
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$ |
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% |
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2025 |
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2024 |
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$ |
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% |
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Revenues |
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$ 242.5 |
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$ 228.3 |
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$ 14.2 |
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6 % |
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$ 788.6 |
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$ 773.2 |
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$ 15.4 |
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2 % |
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Operating Income |
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$ 27.3 |
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$ 16.8 |
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$ 10.5 |
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63 % |
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$ 147.8 |
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$ 120.8 |
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$ 27.0 |
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22 % |
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Adjusted Operating Income (1) |
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$ 57.9 |
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$ 38.5 |
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$ 19.3 |
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50 % |
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$ 223.8 |
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$ 198.4 |
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$ 25.4 |
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13 % |
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Note: Amounts may not foot due to rounding. NM - Absolute percentages greater than 200% and comparisons from positive to negative values or to zero values are not considered meaningful. |
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(1) See page 4 of this earnings release for the definition of adjusted operating income (loss) included in the discussion of non-GAAP financial measures. |
Entertainment Offerings,
Fiscal 2025 third quarter revenues from entertainment offerings of
- Revenues subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements increased
$6.2 million , primarily due to higher suite license fee revenues (excluding those retained byMSG Entertainment ) as compared to the prior year quarter. - Revenues from the Christmas Spectacular production increased
$4.9 million , primarily due to higher ticket-related revenues, which reflected higher per-show revenue and, to a lesser extent, five additional performances as compared to the prior year quarter. - Revenues from venue-related sponsorship, signage and suites increased
$4.6 million , primarily due to higher suite license fee revenues (excluding those shared with MSG Sports pursuant to the Arena License Agreements) as compared to the prior year quarter. - Event-related revenues decreased
$3.6 million , primarily due to lower revenues from concerts, partially offset by higher revenues from other live entertainment and sporting events held at the Company's venues. The decrease in revenues from concerts mainly reflects lower per-concert revenues, primarily due to a shift in the mix of events at The Garden from promoted events to rentals, and a decrease in the number of concerts at the Company's venues, both as compared to the prior year quarter. The increase in revenues from other live entertainment and sporting events primarily reflects higher per-event revenues and an increase in the number of events at the Company's venues.
Fiscal 2025 third quarter arena license fees and other leasing revenues of
Fiscal 2025 third quarter direct operating expenses associated with entertainment offerings, arena license fees and other leasing of
- Event-related expenses decreased
$9.0 million , mainly due to lower per-concert expenses, primarily due to a shift in the mix of events at The Garden from promoted events to rentals and, to a lesser extent, a decrease in the number of concerts at the Company's venues. This decrease was partially offset by higher expenses for other live entertainment and sporting events, primarily due to higher per-event expenses and an increase in the number of events at the Company's venues. - Venue operating costs decreased
$2.2 million , primarily due to lower employee compensation and benefits and other cost decreases. - Expenses associated with the sharing of economics with MSG Sports pursuant to the Arena License Agreements increased
$6.6 million , primarily due to higher expenses incurred as a result of the increase in suite license fee revenues.
Fiscal 2025 third quarter food, beverage and merchandise revenues of
Fiscal 2025 third quarter food, beverage and merchandise direct operating expenses of
Selling, General and Administrative Expenses
Fiscal 2025 third quarter selling, general and administrative expenses of
Operating Income and Adjusted Operating Income
Fiscal 2025 third quarter operating income of
Other Matters
During the fiscal 2025 third quarter, the Company repurchased 436,008 shares of MSGE Class A common stock at an average price of
For fiscal 2025 year-to-date, the Company has repurchased 1,117,601 shares of MSGE Class A common stock at an average price of
About
Non-GAAP Financial Measures
We define adjusted operating income (loss), which is a non-GAAP financial measure, as operating income (loss) excluding (i) depreciation, amortization and impairments of property and equipment, goodwill and other long-lived assets, including right of use assets and related lease costs, (ii) share-based compensation expense or benefit, (iii) restructuring charges or credits, (iv) merger, spin-off, and acquisition-related costs, including merger-related litigation expenses, (v) gains or losses on sales or dispositions of businesses and associated settlements, (vi) the impact of purchase accounting adjustments related to business acquisitions, (vii) amortization for capitalized cloud computing arrangement costs and (viii) gains and losses related to the remeasurement of liabilities under the executive deferred compensation plan. We believe that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of the various operating units of our business without regard to the settlement of an obligation that is not expected to be made in cash. We eliminate merger, spin-off, and acquisition-related transaction costs, when applicable, because the Company does not consider such costs to be indicative of the ongoing operating performance of the Company as they result from an event that is of a non-recurring nature, thereby enhancing comparability. In addition, management believes that the exclusion of gains and losses related to the remeasurement of liabilities under the executive deferred compensation plan, provides investors with a clearer picture of the Company's operating performance given that, in accordance with
We exclude impairments of long-lived assets, including right-of-use assets and related lease costs, as these expenses do not represent core business operating results of the Company. We believe adjusted operating income (loss) is an appropriate measure for evaluating the operating performance of the Company on a consolidated and combined basis. Adjusted operating income (loss) and similar measures with similar titles are common performance measures used by investors and analysts to analyze our performance. Internally, we use revenues and adjusted operating income (loss) as the most important indicators of our business performance, and evaluate management's effectiveness with specific reference to these indicators. Adjusted operating income (loss) should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with GAAP. Since adjusted operating income (loss) is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies. For a reconciliation of operating income (loss) to adjusted operating income (loss), please see page 6 of this release.
Forward-Looking Statements
This press release may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results, developments or events may differ materially from those in the forward-looking statements as a result of various factors, including financial community perceptions of the Company and its business, operations, financial condition and the industries in which it operates and the factors described in the Company's filings with the
Contacts:
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Senior Vice President, Investor Relations,
(212) 465-6072 |
Vice President,
(212) 465-6109 |
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Vice President, Investor Relations &
(212) 631-5076 |
Senior Director, Investor Relations &
(212) 631-5345 |
Conference Call Information:
The conference call will be Webcast live today at
Conference call dial-in number is 888-660-6386 / Conference ID Number 8020251
Conference call replay number is 800-770-2030 / Conference ID Number 8020251 until
Investor presentation available at investor.msgentertainment.com/events-and-presentations
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Three Months Ended |
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Nine Months Ended |
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2025 |
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2024 |
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2025 |
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2024 |
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Revenues |
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Revenues from entertainment offerings |
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$ 160,214 |
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$ 146,221 |
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$ 593,571 |
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$ 581,025 |
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Food, beverage, and merchandise revenues |
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45,808 |
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45,380 |
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124,104 |
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127,379 |
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Arena license fees and other leasing revenue |
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36,443 |
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36,712 |
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70,921 |
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64,787 |
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Total revenues |
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242,465 |
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228,313 |
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788,596 |
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773,191 |
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Direct operating expenses |
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Entertainment offerings, arena license fees, and other leasing direct |
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(107,995) |
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(112,997) |
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(358,755) |
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(375,786) |
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Food, beverage, and merchandise direct operating expenses |
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(30,875) |
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(29,024) |
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(74,898) |
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(70,673) |
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Total direct operating expenses |
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(138,870) |
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(142,021) |
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(433,653) |
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(446,459) |
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Selling, general, and administrative expenses |
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(52,112) |
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(53,945) |
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(155,047) |
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(151,156) |
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Depreciation and amortization |
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(14,372) |
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(13,182) |
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(42,336) |
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(39,972) |
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Impairment of long-lived assets |
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(9,700) |
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— |
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(9,700) |
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— |
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Restructuring charges |
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(84) |
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(2,362) |
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(14) |
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(14,803) |
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Operating income |
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27,327 |
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16,803 |
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147,846 |
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120,801 |
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Interest income |
|
710 |
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341 |
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1,447 |
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2,275 |
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Interest expense |
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(11,800) |
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(14,425) |
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(38,798) |
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(43,761) |
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Other (expense) income, net |
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(949) |
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78 |
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(2,763) |
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(1,545) |
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Income from operations before income taxes |
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15,288 |
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2,797 |
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107,732 |
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77,770 |
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Income tax expense |
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(7,252) |
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(2) |
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(43,124) |
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(397) |
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Net income |
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$ 8,036 |
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$ 2,795 |
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$ 64,608 |
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$ 77,373 |
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Earnings per share attributable to |
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Basic |
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$ 0.17 |
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$ 0.06 |
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$ 1.34 |
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$ 1.59 |
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Diluted |
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$ 0.17 |
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$ 0.06 |
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$ 1.33 |
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$ 1.58 |
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Weighted-average number of shares of common stock: |
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Basic |
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47,955 |
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48,109 |
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48,171 |
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48,675 |
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Diluted |
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48,271 |
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48,447 |
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48,445 |
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48,883 |
ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS) TO
ADJUSTED OPERATING INCOME (LOSS)
(in thousands)
(Unaudited)
The following is a description of the adjustments to operating income in arriving at adjusted operating income as described in this earnings release:
- Depreciation and amortization. This adjustment eliminates depreciation and amortization of property and equipment and intangible assets.
- Impairment of long-lived assets. This adjustment eliminates the impairment of long-lived assets, including right of use assets and related lease costs.
- Share-based compensation. This adjustment eliminates the compensation expense relating to restricted stock units and stock options granted under the Company's Employee Stock Plan and the Company's Non-Employee Director Plan.
- Restructuring charges. This adjustment eliminates costs related to termination benefits provided to certain corporate executives and employees.
- Merger, spin-off, and acquisition-related costs. This adjustment eliminates costs related to mergers, spin-offs and acquisitions, including merger-related litigation expenses.
- Amortization for capitalized cloud computing arrangement costs. This adjustment eliminates amortization of capitalized cloud computing arrangement costs.
- Remeasurement of deferred compensation plan liabilities. This adjustment eliminates the impact of gains and losses related to the remeasurement of liabilities under the executive deferred compensation plan.
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Three Months Ended |
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Nine Months Ended |
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$ thousands |
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2025 |
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2024 |
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2025 |
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2024 |
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Operating income |
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$ 27,327 |
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$ 16,803 |
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$ 147,846 |
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$ 120,801 |
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Depreciation and amortization |
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14,372 |
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13,182 |
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42,336 |
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39,972 |
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Impairment of long-lived assets |
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9,700 |
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— |
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9,700 |
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— |
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Share-based compensation (excluding share-based compensation |
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6,250 |
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5,611 |
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21,834 |
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19,561 |
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Restructuring charges |
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84 |
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2,362 |
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14 |
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14,803 |
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Merger, spin-off, and acquisition-related costs |
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— |
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— |
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1,361 |
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2,035 |
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Amortization for capitalized cloud computing arrangement costs |
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183 |
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388 |
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552 |
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836 |
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Remeasurement of deferred compensation plan liabilities |
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(45) |
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191 |
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149 |
|
389 |
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Adjusted operating income |
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$ 57,871 |
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$ 38,537 |
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$ 223,792 |
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$ 198,397 |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(in thousands, except per share data) |
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(Unaudited) |
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ASSETS |
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Current Assets: |
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Cash, cash equivalents, and restricted cash |
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$ 89,474 |
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$ 33,555 |
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Accounts receivable, net |
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84,507 |
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77,259 |
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Related party receivables, current |
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31,857 |
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17,469 |
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Prepaid expenses and other current assets |
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101,756 |
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90,801 |
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Total current assets |
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307,594 |
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219,084 |
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Non-Current Assets: |
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Property and equipment, net |
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626,982 |
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633,533 |
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Right-of-use lease assets |
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489,757 |
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388,658 |
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|
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69,041 |
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69,041 |
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Indefinite-lived intangible assets |
|
63,801 |
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63,801 |
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Deferred tax assets, net |
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41,327 |
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68,307 |
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Other non-current assets |
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140,910 |
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110,283 |
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Total assets |
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$ 1,739,412 |
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$ 1,552,707 |
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LIABILITIES AND EQUITY |
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Current Liabilities: |
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Accounts payable, accrued and other current liabilities |
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$ 175,470 |
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$ 203,750 |
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Related party payables, current |
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73,810 |
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42,506 |
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Long-term debt, current |
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28,438 |
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16,250 |
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Operating lease liabilities, current |
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28,979 |
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27,736 |
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Deferred revenue |
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230,873 |
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215,581 |
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Total current liabilities |
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537,570 |
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505,823 |
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Non-Current Liabilities: |
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Long-term debt, net of deferred financing costs |
|
577,409 |
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599,248 |
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Operating lease liabilities, non-current |
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569,763 |
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427,014 |
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Other non-current liabilities |
|
45,144 |
|
43,787 |
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Total liabilities |
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1,729,886 |
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1,575,872 |
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Commitments and contingencies |
|
|
|
|
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Equity (Deficit): |
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|
|
|
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Class A Common Stock (a) |
|
460 |
|
456 |
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Class B Common Stock (b) |
|
69 |
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69 |
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Additional paid-in-capital |
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40,184 |
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33,481 |
|
|
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(180,204) |
|
(140,512) |
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Retained earnings |
|
180,211 |
|
115,603 |
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Accumulated other comprehensive loss |
|
(31,194) |
|
(32,262) |
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Total equity (deficit) |
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9,526 |
|
(23,165) |
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Total liabilities and equity |
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$ 1,739,412 |
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$ 1,552,707 |
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_________________ |
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(a) Class A Common Stock, |
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(b) Class B Common Stock, |
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Nine Months Ended |
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|
|
2025 |
|
2024 |
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Net cash provided by operating activities |
|
$ 142,308 |
|
$ 111,054 |
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Net cash used in investing activities |
|
(19,379) |
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(72,625) |
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Net cash used in financing activities |
|
(67,010) |
|
(94,476) |
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Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
55,919 |
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(56,047) |
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Cash, cash equivalents, and restricted cash, beginning of period |
|
33,555 |
|
84,355 |
|
Cash, cash equivalents, and restricted cash, end of period |
|
$ 89,474 |
|
$ 28,308 |
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