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Madison Square Garden Entertainment Corp. (MSGE)·Q1 2026 Earnings Summary

Executive Summary

  • Q1 FY26 revenue rose 14% year over year to $158.3M, with adjusted operating income (AOI) of $7.1M; operating loss widened to $(29.7)M due to a $13.8M non‑cash lease impairment, higher SG&A, and higher direct operating costs .
  • Revenue and EPS modestly beat Wall Street consensus: revenue $158.3M vs $156.6M estimate (+$1.6M, +1.0%); GAAP EPS of $(0.46) vs $(0.55) estimate (+$0.09) — a beat driven by stronger concert volume and F&B, partially offset by higher SG&A; note S&P’s recorded “actual” primary EPS differs from the company’s GAAP EPS (see Estimates Context) .
  • Bookings momentum strong: record concert count at The Garden in any quarter; 215 planned Christmas Spectacular shows vs 200 last year, with advanced ticket revenues pacing up double digits and expectation to welcome over 1M guests again .
  • Capital allocation: $25M buyback (~623K shares at $40.11), $45M remaining authorization, revolver repaid post‑quarter; CFO reiterated confidence in delivering solid revenue and AOI growth and “substantial free cash flow” in FY26 .
  • Near‑term stock narrative catalysts: bookings/Christmas Spectacular strength, AOI growth trajectory, sponsorship progress (Sephora/Dove), and Sphere Immersive Sound tech deployment at Radio City; watch for impairment/SG&A drag and Garden concert timing shifts .

What Went Well and What Went Wrong

What Went Well

  • Record quarter for concerts at The Garden; majority of concerts sold out, bookings pacing up for FY26 across venues .
  • Christmas Spectacular momentum: 215 scheduled shows vs 200 last year; advanced ticket revenues pacing up double digits; expected >1M guests and record revenue again .
  • F&B strength: concert F&B per caps at The Garden were up YoY; overall F&B and merchandise revenue up 20% YoY to $22.8M .

What Went Wrong

  • Operating loss increased to $(29.7)M on higher SG&A (+24% YoY to $56.6M) and a $13.8M non‑cash impairment tied to 2 Penn Plaza lease .
  • Arena license fees and other leasing declined 12% YoY to $4.1M, reflecting lower other leasing revenues .
  • Theaters’ F&B per caps down YoY; Garden concerts expected down in December quarter (timing), with theaters pacing behind for Q3–Q4 bookings lead time (3–6 months) .

Financial Results

Consolidated P&L and Margins (Quarterly)

MetricQ3 2025Q4 2025Q1 2026
Revenue ($USD Millions)$242.5*$154.1 $158.3
Net Income ($USD Millions)$8.0*$(27.2) $(21.7)
Diluted EPS ($USD)$0.17*$(0.57) $(0.46)
EBITDA ($USD Millions)$50.6*$(7.8)*$(1.3)*
EBITDA Margin %20.9%*(5.0%)*(0.8%)*
EBIT ($USD Millions)$36.3*$(23.2)*$(15.4)*
EBIT Margin %15.0%*(15.0%)*(9.7%)*
Net Income Margin %3.3%*(17.6%)*(13.7%)*

Values with asterisk retrieved from S&P Global.

Notes:

  • Q1 FY26 AOI was $7.1M vs $1.9M in prior-year Q1; operating loss includes a $13.8M non‑cash impairment .
  • Q4 FY25 revenue decline was driven by fewer Garden concerts and lower per‑concert revenue (mix shift to rentals), partially offset by theater concert increases .

Segment Revenue Breakdown (Q1 FY26 vs Q1 FY25)

SegmentQ1 2026 ($USD Millions)Q1 2025 ($USD Millions)YoY Change ($)YoY Change (%)
Entertainment Offerings$131.3 $115.1 $16.2 14%
Food, Beverage & Merchandise$22.8 $19.0 $3.9 20%
Arena License Fees & Other Leasing$4.1 $4.7 $(0.5) (12%)
Total Revenues$158.3 $138.7 $19.5 14%

KPIs and Cash Flow

KPIQ1 2026Prior
Guests & Events>900,000 guests across 140 events N/A
Share Repurchases623,271 shares; $25.0M at $40.11 avg; $45M remaining authorization $70M remaining as of FY25-end
Cash from Operations$19.8M $(27.4)M in prior-year Q1
Capex~$6.8M cash used in investing; capex includes suite renovations, Beacon/Radio City enhancements
Debt & Liquidity$622M debt at 9/30 (TL $602M; revolver $20M); revolver repaid post‑quarter; $30M cash

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2026Expect solid revenue growth Increasingly confident in solid revenue growth Maintained (confidence reiterated)
Adjusted Operating Income (AOI)FY 2026Expect growth; opportunity for modest margin expansion Increasingly confident in AOI growth Maintained
Arena License Fees (Cash Component)FY 2026~$45M; grows 3% annually through FY2055 $45M; grows 3% annually through FY2055 Maintained
Net Interest PaymentsFY 2026~$45M in FY25; ongoing in FY26 Ongoing; similar framework referenced Maintained
CapexFY 2026Suite renovations; Radio City/Beacon enhancements Suite renovations; Beacon & Radio City (Sphere Immersive Sound installed) Maintained/Expanded (tech deployment)
Share Repurchase AuthorizationAs of quarter-end~$70M remaining (FY25-end) ~$45M remaining (post $25M repurchase) Lowered (utilized $25M)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 FY25 and Q4 FY25)Current Period (Q1 FY26)Trend
Bookings & Concert VolumePlan to grow events; return to Garden concert growth; 80%–85% to bookings goals Record Garden concerts in quarter; FY26 concerts pacing up; timing dip in December quarter at Garden; theaters pacing behind for Q3–Q4 but lead times 3–6 months Improving; timing variance
Christmas SpectacularOn sale earlier; advanced ticket revenue pacing up; 211 planned shows 215 shows; advanced ticket revenue pacing up double digits; expect >1M guests; deploying Sphere Immersive Sound Strengthening
Consumer Demand & Per CapsConcert sell-through strong; Garden F&B per caps up double digits in Q4 Majority of concerts sold out; Garden F&B per caps up; theaters per caps down (mix) Resilient
Sponsorship (Back In‑House)Team build-out; new partners (Lenovo, Motorola, Abu Dhabi; renewals: Verizon, Pepsi) Internal sales team largely in place; new categories (Sephora, Dove) Positive momentum
Technology InitiativesN/ASphere Immersive Sound deployed at Radio City (Christmas Spectacular debut; Jan roll-out for events) Expanding
Regulatory/TaxesN/ANew mayoral admin risks: property tax/income tax changes require state action; no speculation Watchful
Penn Station RedevelopmentN/AUSDOT/Amtrak timeline: select master developer by May 2026; construction by end of 2027; MSG committed to collaborate External progress
Residency PlanningLate-stage planning for Garden residency in next calendar year (FY27 impact) Progress continues; expect more info in coming months Advancing
Sports & Arena EconomicsKnicks/Rangers shared revenue streams improved per game; 97 home games in FY25 Knicks/Rangers seasons underway; early positive momentum in shared F&B/merch; arena license fees cash $45M Steady to modest growth

Management Commentary

  • “We are seeing strong momentum across our business… increasingly confident in our ability to drive solid growth in both revenue and adjusted operating income in fiscal 2026.” — James L. Dolan, Executive Chairman & CEO .
  • “Our venues welcomed over 900,000 guests across 140 events… a new record for the number of concerts in any quarter at The Garden… majority of concerts… were sold out.” — David Collins, CFO .
  • “We anticipate once again welcoming over 1 million guests to the Christmas Spectacular… on track to deliver another year of record revenues for the production.” — David Collins .
  • “As of September 30th, we had $30 million of unrestricted cash… $622 million debt… repaid the full $20 million revolver balance since quarter-end… expect to generate substantial free cash flow as we progress through the year.” — David Collins .
  • “We repurchased approximately 623,000 shares… for $25 million… $45 million remaining under our current buyback authorization.” — David Collins .

Q&A Highlights

  • Christmas Spectacular demand and pricing: advanced ticket revenues pacing up double digits; 215 shows with potential to add more; still priced below comparable entertainment options .
  • Bookings cadence: Garden down in December quarter (timing), pacing up in fiscal Q3–Q4; theaters up in December quarter but pacing behind for Q3–Q4 with typical 3–6 month lead times .
  • Residency update: making progress to finalize a major residency for next year (substantial arena dates), potential to drive FY27 concert growth .
  • Sponsorship in‑house: internal team in place; premium assets available; new categories and partners (Sephora, Dove); renewals pipeline .
  • Taxes/Regulatory: any changes to city income taxes/property tax exemption require NY State legislative and gubernatorial action; company not speculating .
  • Penn Station redevelopment: USDOT/Amtrak timeline (master developer by May 2026; construction by end of 2027); MSG committed to collaborate .

Estimates Context

  • Wall Street consensus (S&P Global) for Q1 FY26: revenue $156.6M (6 estimates) vs actual $158.3M; Primary EPS $(0.55) (5 estimates) vs company GAAP $(0.46); EBITDA $(2.3)M vs actual $(1.3)M. Values retrieved from S&P Global.
  • Note: S&P’s “Primary EPS actual” displays $(0.29), while company-reported diluted GAAP EPS is $(0.46); differences likely reflect S&P methodology (primary EPS or normalization). For investor comparison, use company GAAP EPS with S&P consensus for beat/miss framing .

Q1 FY26: Estimates vs Actuals

MetricEstimateActualSurprise ($)Surprise (%)
Revenue ($USD Millions)156.6158.3 +1.6+1.0%
Primary EPS ($USD)(0.55)(0.46) +0.09N/A
EBITDA ($USD Millions)(2.3)(1.3)+1.0N/A

Values retrieved from S&P Global.

Implications:

  • Modest top-line beat and EPS beat driven by stronger concert volume and F&B; expect analysts to raise AOI and revenue forecasts for FY26 modestly, while monitoring SG&A trajectory and event mix (promoted vs rental) discussed on prior calls .

Key Takeaways for Investors

  • Demand remains robust: record Garden concerts and double‑digit advanced Christmas ticket revenue support near‑term AOI growth .
  • Mix/timing matter: Garden concerts dip in December quarter reflects timing; theaters behind for Q3–Q4 with shorter booking lead times — watch booking progression updates .
  • Non‑cash impairment obscures optics: $(13.8)M lease impairment widened operating loss; AOI improved to $7.1M — focus on AOI and cash generation .
  • FCF and buybacks: revolver repaid; CFO expects “substantial” FY26 FCF with $45M buyback capacity remaining — opportunistic capital returns likely .
  • Sponsorship runway: in‑house sales and new categories (Sephora/Dove) expand monetization across Rockettes/venues; watch renewals and naming rights progress .
  • Tech differentiation: Sphere Immersive Sound at Radio City elevates guest experience and artist appeal; potential pricing/premium benefits in concerts .
  • Medium‑term upside: prospective Garden residency in next calendar year sets up FY27 concert growth; monitor announcements and calendar utilization .

Appendices

Additional Operating Detail from Q1 FY26 Release

  • Entertainment offerings revenue +$16.2M YoY; concerts revenue +$8.3M (more concerts, higher per‑concert revenue); other live events/sporting +$6.8M (more events at The Garden) .
  • F&B revenue +$3.9M YoY: +$2.5M from concerts (higher per‑concert revenue, more concerts), +$1.4M from other live/sporting at The Garden .
  • Direct operating expenses +$2.1M (other live/sporting +$4.8M; venue operating costs down $1.3M; concert expenses down $1.2M due to mix shift to rentals) .
  • SG&A +$10.8M YoY to $56.6M (primarily employee comp/benefits) .
  • Selected cash flow info: CFO $19.8M, investing $(6.8)M, financing $(26.1)M in Q1 FY26 .

Prior Quarter Context (Q4 FY25)

  • Q4 FY25 revenue down 17% YoY to $154.1M; AOI loss $(1.3)M; Garden concerts down and per‑concert revenue lower due to shift to rentals; theater concerts up .
  • F&B down 24% YoY to $26.4M (fewer Knicks/Rangers games; fewer Garden concerts) .
  • SG&A up 7% to $59.9M .
  • FY25 highlights: ~6M guests at >975 events; ~1.1M Christmas tickets sold across 200 shows; AOI $222.5M (+5% YoY) .

Relevant Press Releases (Q1 FY26 Seasonality and Sponsorship)

  • Sphere Immersive Sound launched at Radio City; debuts with 2025 Christmas Spectacular; January roll‑out for concerts/events .
  • Dove named official partner of the Rockettes and Christmas Spectacular with in‑venue activations .
  • Rockettes 100th anniversary citywide activations; “Rockettes Way” street renaming; partnerships with Empire State Building, Museum of Broadway, Kith, etc. .

Non‑GAAP AOI Definition and Reconciliation

  • AOI excludes D&A and impairments, share‑based comp, restructuring, M&A/spin‑off costs, cloud computing amortization, deferred comp remeasurement .
  • Q1 FY26 AOI reconciliation: operating loss $(29.7)M + D&A $14.1M + impairment $13.8M + SBC $7.3M + restructuring $1.2M + other $0.7M = AOI $7.1M .

Values with asterisk retrieved from S&P Global.