Madison Square Garden Entertainment Corp. Q2 FY2025 earnings call

• Strong demand for in-person experiences with nearly 2.7 million guests at over 440 events. - Christmas Spectacular had record results in its 91st holiday season, with 200 performances (up from 193), strong ticket demand, and record per cap spending. - Knicks and Rangers returned to the Garden, with positive momentum in economic arrangements. - Bookings continue to fill calendars despite tough year-over-year comparisons at The Garden, expecting growth in fiscal 2025. - Resumed stock buyback with $25 million repurchase of Class A common stock. - Marketing partnerships and premium hospitality saw new deals and strong suite sales.

For the fiscal 2025 second quarter, revenues were $407.4 million. Adjusted operating income was $103.9 million. Revenues from entertainment offerings were affected by lower concert revenues due to a shift in events and fewer concerts at the Garden, but were offset by the Christmas Spectacular's success. Food, beverage, and merchandise revenues increased, as did arena license fees and other leasing revenues. Adjusted operating income increased 2% compared to the prior year quarter, with lower direct operating expenses partially offset by higher SG&A costs.

• Expect mid to high single-digit AOI growth for fiscal 2025. - Bookings at venues expected to grow in fiscal 2025. - Resumed stock buyback program with $25 million repurchased, $85 million remaining under authorization. - Fiscal 2026 bookings at Garden pacing up vs record first quarter fiscal 2025, theaters pacing ahead for first quarter fiscal 2026.

• Forward-looking statements involve risks and uncertainties that could materially affect results. - Tough year-over-year comparisons at The Garden due to prior year's record concerts. - Potential impact of changes in tourism levels, artist cancellations, or venue tax exemptions.

Q: Can you provide an update on how concert bookings are pacing for the rest of fiscal 2025 and first half of fiscal 2026?

A: This year, Garden has tough comp but still expects solid concerts; fiscal 2026 Garden pacing up vs fiscal 2025 first quarter, theaters pacing ahead for fiscal 2026 first quarter.

Q: Talk about Christmas Spectacular's pricing demand, audience demo trends, and growth opportunity?

A: Strong demand from tourism, high teens percentage increase in tourists, added performances, opportunity to increase shows next year due to projected tourism growth; managed pricing to increase average ticket yield, potential for further pricing upside.

Q: Update on stock buyback approach considering leverage and cash flow?

A: Company in strong position, net debt leverage ~3x, core priorities are strong balance sheet, investing in core business, and returning capital; $85 million remaining under authorization for buybacks.

Q: Thoughts on Penn Station renovation and property tax exemption?

A: Penn Station improvements seen, close collaboration with stakeholders; property tax exemption important for job creation, Garden's tax abatement lower than other sports venues, repeal would need state legislature action.

Q: Update on cancellations and Christmas Spectacular's dynamic pricing?

A: Cancellations returned to normal; strategically manage pricing inventory, use dynamic pricing and other levers, continue to analyze sales for revenue optimization.

Q: Residencies at venues and consumer health?

A: In discussions for residencies, examples like Hugh Jackman at Radio City, Mike Birbiglia at Beacon, Taylor Tomlinson at Chicago Theatre; no slowdown in consumer demand, strong sell-through for concerts, high per cap spending at Christmas Spectacular.