Madison Square Garden Entertainment Corp. Q4 FY2025 earnings call

• Fiscal 2025 benefited from strong demand across entertainment assets, resulting in full year revenues of $942.7 million and adjusted operating income up 5% year-over-year. • The company repurchased approximately $40 million of its Class A common stock during fiscal '25. • For fiscal 2026, growth avenues include increasing event numbers at venues, driving per event profitability, building on the success of the Christmas Spectacular, and growing sponsorship in premium hospitality. • Fiscal 2025 highlights: nearly 6 million guests at over 975 live events; growth in special events, family shows, and sports booking; Christmas Spectacular sold ~1.1 million tickets for 200 performances, generating over $170 million; agreements with MSG Sports saw per-game revenue growth in suites, etc.; marketing partnerships welcomed new partners and renewed with existing ones; premium hospitality had strong demand and renovation initiatives.

During fiscal 2025, the company achieved full year revenues of $942.7 million and adjusted operating income of $222.5 million, a 5% year-over-year increase. For the fiscal 2025 fourth quarter, revenues were $154.1 million, a 17% decrease compared to the prior year period. Adjusted operating income for the fourth quarter was a loss of $1.3 million, a $14.4 million decrease from the prior year quarter. The majority of revenues stemmed from the company's entertainment assets, with concert revenues being a significant component, and adjustments in food, beverage, and merchandise revenues also playing a role.

• The company believes it is well positioned to drive solid growth in revenue and adjusted operating income in fiscal '26. • Expect to increase the number of events at venues, drive growth in per event profitability, and see growth in the Christmas Spectacular with more shows and higher per show revenue. • Cash component of arena license fees in fiscal '26 is approximately $45 million and will grow 3% annually through 2055. • Fiscal '26 is expected to be another year of AOI growth and significant free cash flow generation.

• Today's discussion may contain forward-looking statements which are not guarantees of future performance. Actual results may differ materially due to risks and uncertainties. Refer to the company's SEC filings for a discussion of risks and uncertainties.

Q: Can you provide an update on how ticket sales are pacing for the Christmas Spectacular and growth opportunities?

A: Initial sales started earlier this year compared to last year, and advanced ticket revenue is pacing well ahead of last year. This season has 211 shows vs 200 last year, representing a mid-single-digit percent increase in show count. The company will strategically manage and price ticketing inventory to maximize revenue.

Q: What's the outlook for forward bookings and non-concert events in fiscal '26?

A: The company expects to increase the number of booking events, including concerts, in fiscal '26. Currently pacing ahead in concerts vs fiscal '25. For special events, there will be a modest increase in the number of events but a tough comparison financially due to the absence of the SNL 50th anniversary special. Growth is expected to be driven by concerts, family shows, and sports properties.

Q: Update on Garden utilization and new residencies?

A: The Garden had an effective utilization of a little over 65% in fiscal '25. The company is targeting event growth in fiscal '26. There is late planning stages for a residency next calendar year, which could create concert growth at the Garden in fiscal '27.

Q: Approach to capital returns in fiscal '26?

A: The company's capital allocation priorities include maintaining a strong balance sheet, investing in the core business, and opportunistically returning capital. There is $70 million remaining under the current share repurchase authorization.

Q: Outlook for sponsorship and consumer demand?

A: Sponsorship momentum is expected to continue with new and renewed partnerships. Strong consumer demand is seen, with strong ticket sales for the Christmas Spectacular 2025 holiday run, sold-out concerts, and double-digit F&B per cap growth at Garden concerts in the fiscal fourth quarter.