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Madison Square Garden Entertainment Corp. (MSGE)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 revenue was $154.1M, a beat versus S&P Global consensus of ~$150.2M, while GAAP diluted EPS of -$0.57 missed; on S&P “Primary EPS” basis, actual was -$0.4448 vs -$0.3917 consensus, implying a miss; management cited fewer Garden concerts and a mix shift to rentals, plus fewer Knicks/Rangers home games *
  • Full-year FY2025 revenue declined 2% to $942.7M, but operating income rose 9% to $122.1M and AOI increased 5% to $222.5M, reflecting strong demand for live entertainment and record results for the Christmas Spectacular .
  • Management guided to solid revenue and AOI growth in FY2026 with potential modest AOI margin expansion despite higher SG&A from sponsorship insourcing; expects substantial free cash flow, ~$45M cash arena license fees in FY2026, ongoing net interest payments related to National Properties debt, and capex for venue enhancements .
  • Operational momentum: bookings pacing ahead at The Garden for Q1 FY2026 with a record quarter anticipated; majority of concerts selling out; F&B per caps up double-digit at The Garden in Q4 .
  • Capital returns remain a priority: ~$40M repurchased in FY2025; subsequent $25M buyback announced in September 2025; ~$70M authorization remaining post-FY2025 call and ~$45M remaining post-September action .

What Went Well and What Went Wrong

What Went Well

  • Record-setting Christmas Spectacular: ~1.1M tickets across 200 shows, over $170M revenue, strongest sell-through in 25 years; management: “we expect revenue growth… driven by the increased number of shows as well as higher per show revenue” .
  • Sponsorship and premium hospitality momentum: new partners (Lenovo/Motorola, Abu Dhabi DCT), renewals (Verizon, Pepsi) and suite renovations driving incremental revenue .
  • Bookings outlook improving: “we expect to increase the number of booking events including concerts in fiscal 2026… pacing ahead… 80% to our bookings goal for the year at The Garden” .

What Went Wrong

  • Q4 revenue and AOI contracted YoY: revenue down 17%; AOI turned to a loss of -$1.3M as event mix shifted and SG&A increased; GAAP diluted EPS -$0.57 vs +$1.41 prior-year Q4 .
  • Mix shift away from promoted concerts at The Garden to rentals lowered per-concert revenue and margin; fewer Knicks/Rangers home games reduced shared suite revenue .
  • SG&A increased 7% YoY in Q4 due to higher compensation and benefits and management hires, partially offset by lower rent ; management also flagged higher corporate costs from sponsorship insourcing in FY2026 .

Financial Results

Quarterly progression

MetricQ2 FY2025 (Dec)Q3 FY2025 (Mar)Q4 FY2025 (Jun)
Revenue ($USD Millions)$407.4 $242.5 $154.1
Operating Income ($USD Millions)$139.0 $27.3 -$25.8
Adjusted Operating Income (AOI) ($USD Millions)$164.0 $57.9 -$1.3
Diluted EPS ($USD)$1.56 $0.17 -$0.57

Q4 vs estimates (S&P Global)

MetricQ4 FY2025 ActualQ4 FY2025 ConsensusSurprise
Revenue ($USD)$154,138,000 $150,241,830*+$3,896,170 (+2.6% vs consensus)*
Primary EPS ($USD)-0.4448*-0.39167*-$0.0531 (miss)*

Values with asterisks (*) retrieved from S&P Global.

YoY comparison (Q4 FY2025 vs Q4 FY2024)

MetricQ4 FY2024Q4 FY2025YoY Change
Revenue ($USD Millions)$186.1 $154.1 -17%
Operating (Loss) Income ($USD Millions)-$8.9 -$25.8 NM
AOI ($USD Millions)$13.1 -$1.3 NM
Diluted EPS ($USD)$1.41 -$0.57 NM

Note: NM indicates not meaningful per company disclosure .

Segment breakdown (Q4 FY2025 vs Q4 FY2024)

SegmentQ4 FY2024 ($000s)Q4 FY2025 ($000s)YoY Change
Entertainment offerings142,872 118,723 -24,149 (-17%)
Food, beverage, merchandise34,713 26,402 -8,311 (-24%)
Arena license fees & other leasing8,489 9,013 +524 (+6%)
Total revenue186,074 154,138 -31,936 (-17%)

AOI reconciliation (Q4 FY2025)

Adjustment ($000s)Q4 FY2025
Operating loss-25,754
Depreciation & amortization15,432
Impairment of long-lived assets1,502
Share-based compensation5,860
Restructuring charges1,041
Merger/spin/acq-related costs113
Cloud computing amortization161
Deferred comp plan remeasurement359
Adjusted operating loss (AOI)-1,286

Selected KPIs and operational metrics

KPIQ4 FY2025Comment
Combined Knicks & Rangers home games (FY2025)97 vs 103 prior year Fewer Q4 home games at The Garden
Guests hosted (FY2025)~6 million Across ~975 events
The Garden utilization (FY2025)~65% on ~230 events Opportunity to increase utilization
Christmas Spectacular (FY2025)~1.1M tickets; ~$170M revenue Record-setting; Q4 SG&A includes staffing investments
Concert F&B per caps (Q4 FY2025)Double-digit increase at The Garden Theaters modestly down

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted Operating Income (AOI) growthFY2025“Mid- to high single-digit AOI growth this year” FY2025 on track; FY2026 “solid growth” expected Maintained for FY2025; New for FY2026
AOI marginFY2026N/A“Opportunity to modestly expand AOI margins in FY2026 even with higher SG&A” New
Arena License Fees (cash component)FY2026N/A“~$45M in FY2026; grows 3% annually through FY2055” New
Free Cash FlowFY2026N/A“Another year of substantial FCF generation” New
Net interest payments (National Properties debt)FY2026~$45M in FY2025 Ongoing net interest payments expected Maintained (run-rate)
CapexFY2026Modest near-term needs Maintenance + enhancements at Radio City & Beacon; suite renovations at The Garden Maintained with specifics
Capital returns (buybacks)Ongoing$85M authorization remaining (Feb 2025) ~$70M remaining post-FY2025; subsequent $25M repurchase in Sep 2025 leaves ~$45M Maintained; additional action executed

Earnings Call Themes & Trends

TopicQ2 FY2025Q3 FY2025Q4 FY2025Trend
Concert bookings & mixTough Garden comp; theaters down then up; FY2026 Q1 pacing up ; dynamic pricing and cancellations normalized Event-related revenues down; AOI up; Garden concerts down, theaters up FY2026 bookings pacing ahead; anticipated record Q1 at The Garden; per caps strong Improving bookings outlook into FY2026
Sponsorship strategyNew partners; renewals; in-house sales; strong value prop Continued momentum in sponsorship/signage/suites Several premium assets available; in-house positioning; outlook positive Positive momentum; investment in team raises SG&A
Premium hospitality/suitesRenovations, strong demand Higher suite license fee revenues Renovations continue; incremental revenue expected Ongoing upside
Knicks/Rangers shared economicsMore home games in Q2; timing to reverse later Shared suite revenues up; +2 fewer games YoY in Q3 Fewer Q4 home games; shared revenues down; cash arena license ~$45M FY26 Timing effects; stable long-term license
Christmas SpectacularRecord sell-through, per caps, revenue; potential to add shows Concluded record run in Jan; growth vs prior year On sale for 211 shows; revenue growth expected via show count and per-show yield Sustained strength; pricing optimization
Regulatory/Penn StationProperty tax exemption context; legislative process; Penn Station collaboration —No new update; continued collaboration Stable backdrop
ResidenciesTheaters residencies; discussions at The Garden —Late planning stages for Garden residency next calendar year; potential FY2027 impact Pipeline development

Management Commentary

  • “During fiscal 2025, we saw strong demand for our portfolio of entertainment assets. We see this momentum continuing in fiscal 2026, and believe we are well positioned to drive solid revenue and adjusted operating income growth in the year ahead.” — James L. Dolan, Executive Chairman & CEO .
  • “We reported revenues of $154.1M… AOI decreased $14.4M to a loss of $1.3M… mainly due to a decrease in event-related revenues from concerts at The Garden and lower per-concert revenues primarily due to a mix shift from promoted events to rentals.” — David Collins, CFO .
  • “We expect another year of substantial free cash flow generation… solid growth in AOI… capital expenditures will include enhancements at Radio City Music Hall and the Beacon Theatre and certain suite renovations at The Garden.” — David Collins .
  • “We expect to grow the number of events… pacing ahead in concerts versus fiscal 2025… record number of concerts in a quarter at The Garden.” — David Collins .

Q&A Highlights

  • Christmas Spectacular pricing and pacing: Advanced ticket revenue pacing well ahead of last year; show count increased to 211 with potential to add more; focus on dynamic pricing to maximize per-show revenue .
  • Bookings visibility: FY2026 pacing ahead with 80% to bookings goal at The Garden; record Q1 anticipated; special events up modestly, tough comp due to SNL50; family shows to improve financially (Cirque du Soleil return) .
  • Garden utilization and residency: FY2025 utilization a little over 65%; late planning stages for a new Garden residency next calendar year with potential FY2027 impact .
  • Capital returns: Net leverage ~2.5x; ~$70M authorization remaining post-FY2025, approach remains opportunistic; continued focus on balance sheet strength .
  • Margins and costs: Opportunity to modestly expand AOI margins in FY2026 despite higher SG&A from sponsorship insourcing and executive hires; pursuing efficiency offsets .
  • Sponsorship outlook and consumer health: Multiple premium assets available; renewals pipeline healthy; consumer demand strong, double-digit F&B per caps at The Garden in Q4; combined July per caps up double-digit .

Estimates Context

  • Revenue beat: $154.138M actual vs ~$150.242M consensus (+2.6%); Primary EPS miss: -$0.4448 actual vs -$0.3917 consensus (miss of ~$0.053). Company GAAP diluted EPS was -$0.57. Values retrieved from S&P Global; estimate comparisons anchored to S&P Global; GAAP figures per 8-K *.
  • Implications: Sell-side likely to trim near-term EPS given mix and SG&A, but raise FY2026 revenue/AOI on bookings momentum, Christmas Spectacular yield, and sponsorship trajectory *.

Key Takeaways for Investors

  • Q4 delivered a classic “top-line beat, bottom-line miss” driven by event mix (rentals vs promoted) and fewer Garden concerts/home games; watch AOI margin trajectory into FY2026 as bookings normalize and sponsorship revenues ramp .
  • FY2026 setup is constructive: record Q1 concert cadence at The Garden, theaters pacing up, and potential modest AOI margin expansion despite higher SG&A .
  • Durable Christmas Spectacular growth lever: added shows and dynamic pricing support per-show yield; Sphere Immersive Sound installation at Radio City adds differentiation ahead of the 2025 season .
  • Capital allocation remains shareholder-friendly: ongoing deleveraging, substantial FCF, and opportunistic buybacks; post-September buyback, ~$45M authorization remains for further action .
  • Long-term visibility underpinned by arena license economics (~$45M cash in FY2026, 3% annual growth through 2055) and suite renovations supporting premium hospitality monetization .
  • Near-term risks: mix shift to rentals at The Garden compresses per-concert economics; SG&A inflation from sponsorship insourcing; timing variability in Knicks/Rangers schedules impacts shared revenue .
  • Watch catalysts: FY2026 concert calendar execution (multi-night runs/residencies), sponsorship wins and naming rights, Christmas Spectacular ticket pacing and per caps, and incremental venue tech upgrades (Sphere Immersive Sound) enhancing pricing power .