Formula One Group Q1 FY2025 earnings call

Dorna Acquisition

• Progressing with Phase II regulatory process, working constructively with European Commission, hope for approval by June 30, 2025. MotoGP 2025 season launched in Bangkok, 22 races, strong attendance at early races, and secured commercial agreements like Pirelli as tire supplier from 2027 and GP extensions.

Structural Simplification

• Progressing with planned split off of Liberty Live.

Formula One Momentum

• Sponsorship and licensing momentum, e.g., LEGO partnership in Miami. LVGP ticket sales trending ahead of last year. U.S. media rights discussions ongoing. Strong engagement metrics (e.g., viewership growth, social media followers, fan base growth). Media rights growth with F1 TV subscriber growth, and commercial successes like race renewals (Mexico through 2028, Miami through 2041) and additional series providing value to broadcasters.

Formula One:

• Revenue impacted by calendar variance; race promotion revenue decreased due to race mix, media rights and sponsorship declined but offset by new/renewed deals. Adjusted OIBDA declined with revenue. Other costs increased due to freight, commissions, and Grand Prix Plaza activity. Grand Prix Plaza new year-round activations started May 2, with modest impact in 2025.
• As of March 31, Formula One had $14.2 billion of future revenue secured under contract.

Corporate and Other:

• Revenue was $53 million, including Quint results and ~$6 million rental income from Las Vegas Grand Prix Plaza. Corporate and other adjusted OIBDA loss was $12 million.

Liberty Live Group:

• Attributed cash of $314 million and $400 million undrawn margin loan capacity relating to Live Nation margin loan. Value of Live Nation stock held was $9.3 billion, with $1.15 billion principal debt against holdings.

Forward-Looking

• Adjusted OIBDA impacted by calendar variance in Q1 but tracking well against internal plan. Full-year other costs of F1 revenue expected consistent with prior years as percentage of total revenue. Team payments expected to come down as Concorde agreement term ends. U.S. media rights renewal discussions ongoing with positive momentum, and F1 TV Premium tier outperforming expectations.

Risks

• Regulatory risks related to the Dorna acquisition. Macro-economic uncertainties impacting consumer sentiment, though Formula One's business model has shown resilience historically.

Q: Stefan Laszczyk of Goldman Sachs on team payments and budget A: Brian Wendling on team payment upside and sponsorship focus, noting opportunities for upside but conservatism due to variables like Las Vegas GP and sponsorship, with ticket sales trending well Q: Ben Swinburne of Morgan Stanley on U.S. media rights and Concorde agreement A: Stefano Domenicali on positive media rights discussions in U.S. and expectation of team payment leverage in '26 to '30 time frame Q: Kutgun Maral of Evercore ISI on MotoGP A: Derek Chang on progressing Dorna acquisition, seeing upside in MotoGP and plan to execute on premium sports asset plan once deal closes Q: Peter Supino of Wolfe Research on sponsorship and media rights A: Stefano Domenicali on media rights strategy to engage different fan typologies and sponsorship strength with quality partners, Brian Wendling on complexity of sponsorship revenue recognition Q: Steven Cahall of Wells Fargo on other costs of revenue and Concorde agreement A: Brian Wendling on other costs including partner servicing, GPP, and growth initiatives; Stefano Domenicali on Concorde agreement focusing on sporting, financial, and awareness pillars for competitive balance Q: Ryan Gravett of UBS on non-U.S. media rights renewals A: Stefano Domenicali on dynamic non-U.S. media rights situation with competition in streaming and positive developments in markets like Japan and Brazil Q: Joseph Stauff of Susquehanna International Group on sponsorship and team competition A: Brian Wendling on sponsorship revenue complexity and Stefano Domenicali on team competition due to regulation, budget cap, and sustainable fuel efforts Q: Spencer Amer of Deutsche Bank on Miami Grand Prix renewal A: Stefano Domenicali on Miami Grand Prix as important U.S. strategy pillar, extending early for partner investment certainty Q: Jason Bazinet of Citibank on sponsorship defensiveness in economic slowdown A: Stefano Domenicali and Derek Chang on strong partner relationships, long-term contracts, and no seen slowdown in discussions despite market fluctuations Q: Matthew Harrigan of Benchmark on engagement metrics monetization A: Stefano Domenicali and Derek Chang on building an ecosystem where various points of contact (social, retail, events) contribute to monetization indirectly through fan engagement and behavior