Madison Square Garden Entertainment (MSGE) - 2025 Q4 - Annual Results

Fiscal 2025 Fourth Quarter and Full Year Results Overall Performance Summary Fiscal 2025 revenue decreased 2% to $942.7 million, while operating income rose 9% to $122.1 million, despite a Q4 revenue decline and operating loss Overall Financial Performance | Metric | Q4 FY2025 | Q4 FY2024 | Change | FY 2025 | FY 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | $154.1M | $186.1M | -17% | $942.7M | $959.3M | -2% | | Operating (Loss) Income | $(25.8)M | $(8.9)M | -191% | $122.1M | $111.9M | +9% | | Adjusted Operating (Loss) Income | $(1.3)M | $13.1M | NM | $222.5M | $211.5M | +5% | - Hosted nearly 6 million guests at more than 975 events during fiscal 2025, including concerts, special events, and sports[2] - The Christmas Spectacular production sold approximately 1.1 million tickets across 200 shows, achieving another year of record-setting revenues[2] - The company repurchased approximately $40 million of its Class A common stock during fiscal 2025[2] - Executive Chairman and CEO James L. Dolan stated, "We see this momentum continuing in fiscal 2026, and believe we are well positioned to drive solid revenue and adjusted operating income growth in the year ahead"[3] Segment Performance Analysis (Q4 FY2025) Entertainment Offerings, Arena License Fees and Other Leasing Q4 FY2025 entertainment offerings revenue decreased 17% to $118.7 million due to lower event-related revenues, partially offset by a 6% increase in arena license fees, with direct operating expenses falling 14% - Entertainment offerings revenues decreased by $24.1 million (17%) compared to the prior year quarter, driven by lower event-related revenues and decreased revenue sharing with MSG Sports[6] - Event-related revenues fell by $21.6 million, mainly from a decrease in the number of concerts at Madison Square Garden Arena and a shift in event mix from promoted events to rentals[13] - Arena license fees and other leasing revenues increased by $0.5 million (6%), primarily due to higher other leasing revenues[7] - Direct operating expenses for this segment decreased by $14.2 million (14%), mainly due to lower event-related expenses[8] Food, Beverage and Merchandise Q4 FY2025 food, beverage, and merchandise revenues declined 24% to $26.4 million due to fewer events, with direct operating expenses decreasing 27% to $16.5 million Food, Beverage and Merchandise Performance | Metric | Q4 FY2025 | Change vs Q4 FY2024 | Reason | | :--- | :--- | :--- | :--- | | Revenues | $26.4M | -$8.3M (-24%) | Fewer games and concerts at The Garden | | Direct Operating Expenses | $16.5M | -$6.2M (-27%) | Lower costs in line with reduced sales volume | Selling, General and Administrative Expenses Q4 FY2025 selling, general and administrative expenses increased 7% to $59.9 million, primarily driven by higher employee compensation and benefits - Q4 SG&A expenses increased by $4.1 million, or 7%, to $59.9 million[11] - The primary driver for the increase was higher employee compensation and related benefits, which was partially offset by lower rent expense[11] Operating Loss and Adjusted Operating (Loss) Income Q4 FY2025 operating loss widened by $16.9 million to $25.8 million, and adjusted operating income swung to a $1.3 million loss, driven by lower revenues and higher SG&A expenses Operating and Adjusted Operating Income | Metric | Q4 FY2025 | Q4 FY2024 | Change | | :--- | :--- | :--- | :--- | | Operating Loss | $(25.8)M | $(8.9)M | +$16.9M | | Adjusted Operating (Loss)/Income | $(1.3)M | $13.1M | -$14.4M | - The decline in operating results was primarily due to lower revenues and, to a lesser extent, higher selling, general and administrative expenses, partially offset by lower direct operating expenses[12] Financial Statements Consolidated Statements of Operations Fiscal year 2025 consolidated operations show total revenues of $942.7 million and operating income of $122.1 million, but net income significantly dropped to $37.4 million due to tax changes Fiscal Year Ended June 30 | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Total revenues | $942,734 | $959,265 | | Operating income | $122,092 | $111,941 | | Net income | $37,431 | $144,300 | | Diluted EPS | $0.77 | $2.97 | Three Months Ended June 30 | Metric (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Total revenues | $154,138 | $186,074 | | Operating loss | $(25,754) | $(8,860) | | Net (loss) income | $(27,177) | $66,927 | | Diluted (Loss) EPS | $(0.57) | $1.41 | Consolidated Balance Sheets As of June 30, 2025, total assets increased to $1.67 billion and total liabilities to $1.68 billion, with cash rising to $43.5 million and the total deficit narrowing Consolidated Balance Sheets Summary | Metric (in thousands) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total current assets | $237,132 | $219,084 | | Total assets | $1,669,842 | $1,552,707 | | Total current liabilities | $502,401 | $505,823 | | Total liabilities | $1,683,142 | $1,575,872 | | Total deficit | $(13,300) | $(23,165) | - Cash, cash equivalents and restricted cash increased to $43.5 million from $33.6 million in the prior year[28] - Long-term debt, net of deferred financing costs, decreased to $568.8 million from $599.2 million[28] Selected Cash Flow Information For FY2025, net cash from operating activities increased to $115.3 million, while investing activities used $23.7 million and financing activities used $81.6 million, resulting in a $10.0 million net cash increase Selected Cash Flow Summary | Metric (in thousands) | FY 2025 | FY 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $115,297 | $111,266 | | Net cash used in investing activities | $(23,693) | $(62,371) | | Net cash used in financing activities | $(81,621) | $(99,695) | | Net increase (decrease) in cash | $9,983 | $(50,800) | Appendix Non-GAAP Financial Measures Reconciliation This section reconciles GAAP operating income to adjusted operating income, showing how $122.1 million operating income was adjusted to $222.5 million for FY2025, a key internal performance indicator - Adjusted operating income is defined as operating income excluding items such as depreciation, amortization, share-based compensation, restructuring charges, and merger/spin-off costs[16] Reconciliation to Adjusted Operating Income (FY 2025) | Description | Amount (in thousands) | | :--- | :--- | | Operating income | $122,092 | | Depreciation and amortization | $57,768 | | Impairment of long-lived assets | $11,202 | | Share-based compensation | $27,694 | | Restructuring charges | $1,055 | | Other adjustments | $2,695 | | Adjusted operating income | $222,506 | - The company uses revenues and adjusted operating income as its most important internal indicators of business performance and management effectiveness[17] Company Overview and Other Information Madison Square Garden Entertainment Corp. is a prominent live entertainment company operating renowned venues and producing the Christmas Spectacular, with the report including standard forward-looking statement disclaimers - The company's portfolio includes world-renowned venues in New York and Chicago, such as Madison Square Garden and The Chicago Theatre[15] - Features the original production, the Christmas Spectacular Starring the Radio City Rockettes, a holiday tradition for over 90 years[15] - The press release includes a forward-looking statements disclaimer, cautioning investors about risks and uncertainties that could affect future performance[18]