Madison Square Garden Entertainment (US:MSGE)2026-02-06 13:25Revenue Growth - Total revenues for the three months ended December 31, 2025, increased by 13% to $459,940,000 compared to $407,417,000 for the same period in 2024[125] - Revenues from entertainment offerings rose by 13% to $360,453,000, up from $318,276,000 year-over-year[125] - Food, beverage, and merchandise revenues increased by 8% to $64,324,000, compared to $59,321,000 in the prior year[125] - Arena license fees and other leasing revenue grew by 18% to $35,163,000 from $29,820,000[125] - Total revenues for the six months ended December 31, 2025, increased by $72,071, or 13%, compared to the prior year period, reaching $618,202[129] - Revenues from entertainment offerings for the six months ended December 31, 2025, increased by $58,406, or 13%, primarily driven by higher revenues from the Christmas Spectacular production and other live events[134] Income and Expenses - Operating income for the three months ended December 31, 2025, was $163,815,000, an increase of 18% from $139,001,000 in 2024[125] - Net income for the three months ended December 31, 2025, was $92,715,000, reflecting a 22% increase from $75,893,000 in the same period last year[125] - Direct operating expenses for entertainment offerings increased by 7% to $176,062,000, up from $164,294,000[125] - Selling, general, and administrative expenses rose by 20% to $68,359,000 compared to $57,189,000 in the prior year[125] - Net income for the six months ended December 31, 2025, was $71,061, reflecting an increase of $14,489, or 26%, compared to the prior year[129] - Direct operating expenses for the six months ended December 31, 2025, increased by $20,243, or 7%, totaling $315,026[143] - Selling, general, and administrative expenses for the six months ended December 31, 2025, rose by $22,009, or 21%, primarily due to increased employee compensation and benefits[148] Interest and Financing - Interest income surged by 123% to $813,000, compared to $365,000 in the previous year[125] - Interest expense decreased by 20% to $10,423,000 from $12,955,000 year-over-year[125] - Interest income for the six months ended December 31, 2025, increased by $596, or 81%, due to higher average balances in cash and cash equivalents[152] - Interest expense decreased by $2,532 for the three months and $5,547 for the six months ended December 31, 2025, compared to the prior year periods due to lower average borrowing rates[153] - A hypothetical 200 basis point increase in floating interest rates as of December 31, 2025 would increase the Company's interest expense on outstanding amounts under credit facilities by $11,883[185] Cash Flow and Assets - Cash flow from operating activities for the six months ended December 31, 2025, was $184,194, compared to $85,499 in the prior year[176] - The company had a net increase in cash, cash equivalents, and restricted cash of $114,039 for the six months ended December 31, 2025, compared to $21,664 in the prior year[176] - As of December 31, 2025, the company's unrestricted cash and cash equivalents were $157,056, with total debt outstanding at $594,141 and available borrowing capacity of $132,573[166] - Net cash provided by operating activities for the six months ended December 31, 2025 increased by $98,695 compared to the prior year period, driven by higher net income adjusted for non-cash items of $15,236 and an increase in cash flows from changes in working capital of $83,459[177] - Net cash used in investing activities for the six months ended December 31, 2025 decreased by $992 to $15,290 compared to the prior year period, primarily due to a reduction in capital expenditures[179] - Net cash used in financing activities for the six months ended December 31, 2025 increased by $7,312 to $54,865 compared to the prior year period, mainly due to a decrease in proceeds from the National Properties Revolving Credit Facility[180] Performance Metrics - Adjusted operating income (AOI) for the three months ended December 31, 2025, was $190,430, an increase of $26,418 or 16% compared to $164,012 in the prior year[160] - AOI for the six months ended December 31, 2025, was $197,511, reflecting an increase of $31,590 or 19% from $165,921 in the prior year[162] - The Company earns a disproportionate share of its revenues and operating income in the second and third quarters of the fiscal year, with the first and fourth quarters being disproportionately lower[181] Asset Impairment - Impairment of long-lived assets for the six months ended December 31, 2025, increased by $13,782, primarily due to losses recognized on right-of-use lease assets[149] Performance Highlights - The company had 215 Christmas Spectacular performances during the holiday season, selling over 1.2 million tickets, compared to approximately 1.1 million tickets sold in the prior year[131] - Arena license fees and other leasing revenue for the six months ended December 31, 2025, increased by $4,800, driven by higher fees from MSG Sports due to more games played[141] - Other expense, net decreased by $372 for the three months and $969 for the six months ended December 31, 2025, primarily due to lower net periodic benefit costs and an increase in unrealized gains[154] - The National Properties Credit Agreement requires a minimum debt service coverage ratio of 2.50:1 and a maximum leverage ratio of 3.50:1, with compliance as of December 31, 2025[172] - The company has $44,796 remaining under its share repurchase program as of December 31, 2025[165]