MSG Entertainment Q3 Earnings: Revenue, Full-Year Forecasts Up

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MSG Entertainment boosted the lower ends of its forecast ranges for revenue, operating income and adjusted operating income (AOI), the company announced in its fiscal third quarter earnings release on Thursday. 

The full-year revenue forecast was raised to $940-$950 million from $930-$950 million. Operating income ticked up to $100-$110 million from $95-$105 million. AOI improved to $200-$210 million from $195-$205 million. 

The New York City-based live entertainment company posted mixed results for the period ended March 31, 2024. While revenue grew 13% to $228.3 million, operating income fell 32% $16.8 million and adjusted operating income dropped 23% to $38.5 million. 

Net income was $2.8 million, or $0.06 per share. Analysts expected earnings per share of $0.17, according to figures compiled by Thomson Reuters. 

Shares of MSG Entertainment fell as much as 12.7% to $34.83 in early trading Thursday. They recaptured some losses, improving to $37.47, down 6%, by midday.

During Thursday’s earnings call, Mike Grau, executive vp and CFO, attributed the company’s performance in the quarter to “record-setting revenues” from the 90th season of the Christmas Spectacular Starring the Radio City Rockettes and its booking business, which will achieve a “low, double-digit percentage increase in events for fiscal ’24.” The majority of concerts sold out in the quarter, he added, and per-head spending on food, beverage and merchandise increased from the prior-year quarter. 

AOI was impacted by higher sales, general and administrative (SG&A) expenses, said Grau, adding that the expenses are “not fully comparable on a year-to-year basis” because MSG Entertainment was spun off from Sphere Entertainment Co. in April of 2023. “Results for the prior year quarter are based on carve-out accounting and do not reflect all of the SG&A expenses we would have incurred,” he noted.

Enjoying continued strength in both supply and demand for live events, MSG Entertainment hosted more than 1.5 million guests at over 200 live events in the quarter. “A strong, multi-night comedy schedule” helped the number of concerts increase by a double-digit percentage from the prior-year quarter, said Grau. MSG Entertainment owns and operates such high-profile venues as Madison Square Garden, the Theater at Madison Square Garden, Radio City Music Hall, the Beacon Theatre and the Chicago Theatre. 

Since the spin-off in 2023, MSG Entertainment has repurchased about 1.6 million shares — roughly 10% of its Class A shares — and has an additional $110 million remaining in its share repurchase plan. In addition, in the first four months of calendar 2024, the company sold 1.6 million shares in radio broadcaster Townsquare Media for approximately $15.6 million.