MSGS Stock Down on Q2 Earnings Miss, Revenue Beat Estimates

Core Insights - Madison Square Garden Sports Corp. (MSGS) experienced a 3.6% decline in shares following mixed second-quarter fiscal 2025 results, with earnings per share missing estimates while revenues exceeded expectations [1][3] Earnings & Revenue Discussion - MSGS reported quarterly earnings of 5 cents per share, missing the Zacks Consensus Estimate of 25 cents by 80%, and reflecting a 91.5% decline from the previous year's earnings of 59 cents per share [3] - Revenues for the quarter reached $357.8 million, surpassing the consensus mark of $350.6 million by 2.1%, and increased by 9% year-over-year, driven by higher ticket sales, suite revenues, sponsorship, signage revenues, and growth in food, beverage, and merchandise sales [4] Operating Highlights - Adjusted operating income was $20.2 million, down 45% from $64.4 million in the year-ago quarter, with adjusted operating margin contracting by 570 basis points to 5.6% year-over-year [5] - Direct operating expenses rose by 19% to $275.8 million compared to the previous year, attributed to higher team personnel compensation and increased provisions for league revenue sharing [6] Balance Sheet - As of December 31, 2024, MSGS had cash, cash equivalents, and restricted cash totaling $115.9 million, an increase from $94.9 million at the end of fiscal 2024 [7] - Long-term debt remained stable at $275 million, consistent with the previous fiscal year-end [7] - In the first half of fiscal 2025, net cash provided by operating activities was $35.6 million, compared to net cash used of $20.3 million in the same period last year [7]