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MS

Madison Square Garden Entertainment Corp. (MSGE)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY2025 revenue rose 6% year over year to $242.5M and AOI jumped 50% to $57.9M, driven by stronger suite license fees, record Christmas Spectacular per-show results, and lower direct operating costs .
  • Revenue beat Wall Street consensus by ~$11.3M*, while EBITDA exceeded by ~$8.4M*; S&P “Primary EPS” was a slight miss versus consensus, and GAAP diluted EPS was $0.17 .
  • Management reiterated confidence in FY25 AOI growth, with the call indicating pacing toward mid-to-high single-digit AOI growth; Q4 faces tougher comps (Billy Joel, playoff games) but theaters and special events are pacing strong .
  • Capital return remains a key catalyst: $15M repurchased in March, $40M YTD, with $70M authorization remaining .

Values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • AOI strength: Adjusted Operating Income rose 50% YoY to $57.9M, aided by higher revenues and lower direct operating and SG&A expenses .
  • Premium demand and sponsorships: Robust suite license fee growth and a Pepsi renewal; >1.5M guests across 195 events indicated strong demand .
  • Christmas Spectacular: Record-setting season delivered >$170M revenue across 200 performances; per-show attendance and ticket prices rose, and 2025 advanced ticket sales are pacing >60% YoY in gross revenue .
  • Quote: “We remain on track to deliver solid adjusted operating income growth this fiscal year and believe we are well-positioned to drive long-term value” — James L. Dolan, Executive Chairman & CEO .

What Went Wrong

  • Concert mix and volume: Event-related revenues from concerts declined, reflecting a shift at The Garden from promoted to rental events and fewer concerts overall .
  • Fewer team home games: Arena license fees decreased slightly due to two fewer Knicks/Rangers games in the quarter .
  • Non-cash impairment: $9.7M impairment on the operating lease at 2 Penn Plaza weighed on operating income and GAAP EPS .
  • Analyst concern: Q4 AOI implied to be down YoY due to concert market softness and fewer playoff games; management cited puts/takes but reiterated FY AOI growth .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$228.3 $138.7 $407.4 $242.5
Operating Income ($USD Millions)$16.8 $(18.5) $139.0 $27.3
Adjusted Operating Income (AOI) ($USD Millions)$38.5 $1.9 $164.0 $57.9
Diluted EPS ($USD)$0.06 $(0.40) $1.56 $0.17
MetricQ1 2025Q2 2025Q3 2025
EBIT Margin %-13.97%*33.90%*14.95%*
Net Income Margin %-13.93%*18.63%*3.31%*
EBITDA ($USD)$(5.60)M*$152.29M*$50.63M*

Values retrieved from S&P Global.

Segment Revenue Breakdown (Q3)

SegmentQ3 2024 ($USD Millions)Q3 2025 ($USD Millions)
Entertainment Offerings$146.2 $160.2
Food, Beverage & Merchandise$45.4 $45.8
Arena License Fees & Other Leasing$36.7 $36.4
Total Revenue$228.3 $242.5

KPIs

KPIQ3 2025
Events Hosted195
Guests>1.5 million
Christmas Spectacular Revenue (FY25 season)>$170.0M
Christmas Spectacular Performances (FY25 season)200
2025 Christmas Shows On Sale211
Advanced Ticket Sales Growth (Gross Revenue)>60% YoY

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
AOI Growth (YoY)FY2025“Solid AOI growth” (Feb) Pacing “mid to high single-digit AOI growth” (May) Refined specificity; maintained positive outlook
Capital Returns (Buyback Authorization Remaining)FY2025~$85M remaining (Feb) ~$70M remaining (May) Reduced capacity post repurchases
Quantitative Guidance (Revenue/Margins/OpEx/Tax)FY2025Not provided Not provided No formal ranges

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Concert Mix & VolumeQ1: Record Q1 concerts but theater concerts declined; mix shifting to rentals . Q2: Lower concert revenues, mix shift to rentals .Concert revenues down; fewer concerts; mix shift persists .Persistent headwind; focusing on per-event economics
Premium Hospitality & SuitesStrong suite demand; sponsorship extensions (Lenovo/Motorola, Verizon, Abu Dhabi DCT) .Suite license fees up; sold-out event-level club; Pepsi renewal highlighted .Strengthening; key revenue driver
Christmas SpectacularQ2: 1.1M tickets across 200 shows; record revenues .Record season; per-show attendance and pricing up; 2025 advanced sales >60% .Growth momentum continuing
Capital AllocationQ2: $25M buyback; revolver repaid; $85M remaining .$15M Q3 buyback; $40M YTD; $70M remaining; net leverage ~2.5x .Ongoing returns; balance sheet delevering
Macro/Playoffs ImpactQ2 benefited from more home games .Q4 outlook softer vs prior year: fewer playoffs; NY arena concert market down .External headwinds into Q4
Real Estate/Penn StationLimited prior commentary.Engaging stakeholders; no update on theater sale; community improvement focus .Monitoring; strategic optionality
Tourism MixNot detailed previously.Int’l tourists ~10% of Christmas; low-mid single-digit of Garden concerts .Primarily domestic demand

Management Commentary

  • Prepared remarks emphasized strong demand and diversified event slate: “We continue to see strong consumer and corporate demand… pacing toward mid to high single-digit AOI growth this year” — Lee Weinberg .
  • CFO highlighted drivers and impairment: Entertainment offering revenues +10%; $9.7M non-cash impairment at 2 Penn Plaza; unrestricted cash ~$89M; debt ~$613M .
  • CEO tone: “We remain on track to deliver solid adjusted operating income growth… well-positioned to drive long-term value” — James L. Dolan .

Q&A Highlights

  • Q4 outlook: Softer NY arena concert market, tougher comps (Billy Joel, playoffs); theaters and special events solid; still on track for FY AOI growth .
  • FY2026 bookings: Pacing ahead at Garden/theaters for September quarter; likely record concerts in a single quarter at The Garden; December pacing ahead at theaters, behind at Garden but narrowing .
  • Capital returns: Net leverage ~2.5x; no material near-term capex; $70M remaining on buyback authorization; continued opportunistic repurchases .
  • Tourism mix: Int’l ~10% of Christmas tickets; low-mid single-digit for Garden concerts; Canada/UK main feeders .
  • Penn Station: Stakeholder engagement; no update on theater sale; focus on community improvements .

Estimates Context

MetricConsensus (Q3 2025)Actual (Q3 2025)# of Estimates
Revenue ($USD)$231.13M*$242.47M*8*
Primary EPS ($USD)$0.283*$0.275*6*
EBITDA ($USD)$42.22M*$50.63M*—
  • GAAP diluted EPS reported was $0.17 .
  • Revenue and EBITDA beats reflect suite fee strength, Christmas per-show gains, and lower direct operating expenses; the slight EPS miss on S&P “Primary EPS” is consistent with a non-cash impairment charge in the quarter .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Demand remains healthy across venues, with premium hospitality and sponsorships providing resilient high-margin revenue streams .
  • AOI trajectory is intact; management reiterated FY25 growth despite near-term concert market softness and playoff headwinds into Q4 .
  • Mix shift away from promoted concerts reduces per-concert revenues but also lowers risk and per-event costs; focus on per-event economics and diversified bookings .
  • Capital returns continue: $40M YTD repurchases and $70M remaining authorization; delevering profile supports continued buybacks .
  • Christmas Spectacular remains a secular growth driver; advanced ticket sales pacing >60% and more shows on sale (211 vs 200) support FY26 visibility .
  • Watch Q4 comps and playoff exposure as near-term trading catalysts; monitor early FY26 bookings where The Garden may set a quarterly concert record .
  • Non-cash lease impairment affected GAAP EPS this quarter; AOI and EBITDA trends better reflect operational performance .

Additional Relevant Press Release (Q3 window)

  • Liquid Death partnership across MSG Family of Companies enhances concession offerings and brand presence across venues, potentially supporting F&B per-cap trends .