Madison Square Garden Entertainment (MSGE) 8 Nov 24 2025 Q1 Earnings call transcript

In the recent earnings call for Madison Square Garden Entertainment Corp., key executives provided insights into the company's operations and financial results for the first quarter of its fiscal 2025. The call, led by Michael Grau, EVP and Chief Financial Officer, highlighted a range of operational and financial highlights, revealing both challenges and opportunities for the company moving forward.

Operational Highlights

Madison Square Garden Entertainment Corp. reported a record number of concerts during the fiscal first quarter, with the Garden hosting over 120 events and welcoming nearly 800,000 guests. This underscores the company's ability to capitalize on the demand for shared experiences, as evidenced by the sellout of a majority of concerts across its venues. However, the company faced a decline in concert-related revenues year-over-year, primarily due to a mix shift towards rentals and fewer concerts at its theaters.

In terms of in-venue spending, combined food, beverage, and merchandise per caps at concerts were down modestly compared to the previous year. This decrease was mainly attributed to higher per cap spending in the prior year quarter, which included residencies from notable artists like Phish and Dave Chappelle. Despite this, per cap spending for the quarter was up compared to the fiscal '24 full year average.

Financial Highlights

For the fiscal '25 first quarter, the company reported revenues of $138.7 million, a decrease from the prior year quarter's $142.2 million. This decline was primarily due to a decrease in revenues from entertainment offerings and food, beverage, and merchandise categories. These decreases were partially offset by growth in arena license fees and other leasing categories.

Adjusted operating income for the fiscal '25 first quarter increased by $2.1 million compared to the prior year quarter, primarily due to a decrease in direct operating and SG&A expenses. The company anticipates delivering a mid- to high single-digit percentage increase in adjusted operating income for fiscal '25, despite anticipating additional expenses related to the recent decision to end its agreement with Oak View Group's Crown Properties Collection and bring sponsorship sales back in-house.

Looking Ahead

Looking ahead, Madison Square Garden Entertainment Corp. is expecting to grow its total number of bookings events this fiscal year, driven by strength in family shows, special events, and marquee sports. The company is also seeing positive momentum in its marketing partnership business, having recently announced new deals with Lenovo and Motorola, as well as the Department of Culture and Tourism, Abu Dhabi, and an expanded renewal with Verizon.

The Christmas Spectacular, a major holiday production, is also contributing to the company's positive outlook. Advanced ticket sales have outpaced the previous year, with increased individual and group sales aided by the return of tourism to New York. The production is expected to welcome over 1 million guests this holiday season and deliver another year of record revenues.

Despite the challenges faced in the first quarter, Madison Square Garden Entertainment Corp. remains optimistic about its future prospects. The company's focus on capital allocation, with a priority on opportunistically returning capital and debt paydown, positions it well for long-term growth. The strategic shift towards bringing sponsorship sales in-house and the expansion of premium hospitality offerings, including event level club spaces and suites, are expected to contribute to increased revenue and improved operational efficiency.

In conclusion, Madison Square Garden Entertainment Corp.'s fiscal '25 first quarter earnings call presented a mixed picture of the company's performance. While concert-related revenues faced challenges, the company's ability to attract guests and sellout events, as well as its successful marketing partnerships and the strong performance of the Christmas Spectacular, offer grounds for optimism. With a focus on capital allocation and operational improvements, Madison Square Garden Entertainment Corp. is well-positioned to navigate the evolving landscape of the entertainment industry and capitalize on opportunities for growth.