Venu Holding - Earnings Call - Q4 2024
March 31, 2025
Transcript
Operator (participant)
Good afternoon and welcome to the Venu Holding Corporation's 2024 Year-End Financial Results and Business Update. Earlier today, Venu, trading under the ticker symbol VENU, issued a press release summarizing the company's 2024 year-end performance following the filing of its annual report on Form 10-K for the period ending December 31st, 2024. This conference call is being recorded and will be made available online along with further earnings press release at venue.live, in accordance with the company's retention policies. All participants on today's call are in listen-only mode. Following your prepared remarks, we will open the line for a Q&A session. At this time, I'd like to turn the call over to Heather Atkinson, Chief Financial Officer of Venu Holding Corporation. Heather, please go ahead.
Heather Atkinson (CFO)
Thank you all for joining Venu Holding Corporation's year-end 2024 earnings call and business update. On the call today, we have our senior leadership team, myself, Founder, Chairman, and CEO JW Roth, President Will Hodgson, and Chief Marketing Officer Terri Liebler. Following the safe harbor statement, JW will provide a year in review and share highlights from across the business. We will then offer an update on our current and upcoming expansion plans. Finally, I'll provide a summary of our full year financial results for 2024. After that, as our operator mentioned, we'll open the call for questions. We'd like to remind everyone that various remarks about future expectations, plans, and prospects constitute forward-looking statements for purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995.
Venu cautions that these forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from those indicated, including risks described in the company's annual report on Form 10-K for the year ended December 31, 2024, and our other filings with the SEC, all of which can be reviewed on the company's website at venu.live, spelled V-E-N-U dot L-I-V-E, or on the SEC's website at sec.gov. Any forward-looking statements made on this conference call speak only as of today's date, Monday, March 31, 2025, and Venu does not intend to update any of these forward-looking statements to reflect events or circumstances that would occur after today's date, except as may be required by federal security laws. With that said, I'd like to turn the call over to our Founder, Chairman, and CEO JW Roth.
JW Roth (Founder, Chairman, and CEO)
Thank you very much, Heather, and good afternoon, everyone. We appreciate you joining us today as I read our prepared remarks. For those just getting to know us, our company is completely reimagining what live entertainment can be. Here at Venu, we are a leading developer, owner, and operator of luxury music venues, from open-air amphitheaters to intimate music halls, all designed with one goal in mind: artist-centric, fan-focused, experience-driven ambiance. We're known for pushing the boundaries on ambiance, offering elevated amenities like our Luxe Fire Suites and custom-built Owner's Clubs, premium Aikman Clubs. Our next-level entertainment campuses include premium restaurants and event spaces, with amphitheaters ranging from 9,500 to 20,000 seats. Before we get started into what's next, let's talk about this past year.
In July of 2024, we announced a $105 million ultra-luxury amphitheater in El Paso, Texas, made possible through a landmark public-private partnership marking a major milestone in our expansion across the Southwest. Just one month later, in August of 2024, we celebrated the grand opening of the 8,000-seat Ford Amphitheater in Colorado Springs. Despite launching partway through the season, the venue welcomed more than 112,000 guests from over 5,500 zip codes nationwide and was nominated for Pollstar Magazine's 2024 Best New Concert Venue of the Year. Ford Amphitheater is booked and operated through a strategic partnership with Anschutz Entertainment Group, specifically AEG Presents Rocky Mountains. It has been an exceptional collaboration, and we are thrilled to continue this journey together through the years ahead.
Throughout 2024, we also established significant partnerships and sponsorships with Colorado Ford dealers, Anheuser-Busch, Kaiser Permanente, Boingo, NFL Hall of Fame quarterback Troy Aikman, Coca-Cola, Jack Daniel's, and EIGHT Elite Beer, further elevating our brand and fan experience. In October of 2024, we officially broke ground on our new amphitheater in Broken Arrow, Oklahoma, and began construction phases for five additional venues in Texas and Oklahoma. Pushing the momentum on our expansion plans, our established operating campuses included Colorado Springs, Colorado; Northern Atlanta in Gainesville; Tulsa Market in Broken Arrow, Oklahoma; Oklahoma City Market located in Yukon, Oklahoma; and the Dallas-Fort Worth Market located in McKinney, Texas; El Paso, Texas; and five additional markets that are currently in the pre-construction stage.
According to our projections, we are tracking to welcome 3.7 million guests in 2026 and to reach to more 4 million guests annually across all of our entities by early 2027. The following month, in November of 2024, we successfully completed our initial public offering, listing on the NYSE American, and raising approximately $12.3 million in net proceeds. To support this momentum, we made key additions to our leadership team late in 2024. We welcomed Will Hodgson, our President, bringing with him more than 17 years of experience at Live Nation, most recently serving as the head of House of Blues. Shortly after, Terri Liebler joined us as Chief Marketing Officer with three decades of experience in sports and entertainment, including the last 22 years at Live Nation. Terri brings unparalleled experience to our growing team.
That same month, we launched the Venu Arts and Culture Foundation, reinforcing our long-term commitment to supporting local talent and enriching community vibrancy through the arts. Closing out 2024, Fire Suite sales ended at an impressive $77.7 million. This trend has continued into the new year. We finished January at $10.4 million in sales, February at $11.2 million in sales, well on our way to our ambitious $200 million goal in Fire Suite sales this year as we open new markets. Now, looking into the new year, early in the new year, we officially closed on a 46-acre property in McKinney, Texas, the future home of our $300 million multi-seasonal Sunset Amphitheater, with a planned full capacity of 20,000. It will be the largest venue in our collection to date, located just north of Dallas.
McKinney is one of the fastest-growing cities in America, making it an ideal location for this ultra-lux development. A few weeks later, Venu took over Wall Street and rang the opening bell on the New York Stock Exchange. We introduced a groundbreaking multi-configuration model across our new amphitheaters, transforming them from seasonal venues into year-round destinations. By integrating climate-controlled environments, adaptable staging, and premium guest accommodations, this innovative design is built to maximize revenue, expand margins, and drive long-term shareholder value. As mentioned earlier, we have been breaking our own records when it comes to our Luxe Fire Suite sales, with very strong start to year, and we're on track to reach our sales goals of $200 million in 2025. As we spent time in the market, we recognized an opportunity to broaden sales pipelines through financing.
Last month, we announced our new fractional ownership financing program designed to accelerate the expansion of our popular investment opportunity, Luxe Fire Suites. It's been a massive hit. The program is already seeing results of this launch, which will be announced fully in the next coming days. We added to our portfolio of offerings and launched the Venu Income Fund, which is designed for RIAs and broker-dealers to provide the potential for consistent monthly income to its income-seeking investors through pooled ownership of Venue's Luxe Fire Suites, located both in McKinney, Texas, and Broken Arrow, Oklahoma.
Finally, in 2024 and into 2025, we were fortunate to have our story featured in a number of respected media outlets, including The Wall Street Journal, Bloomberg, CNBC Small Market Stocks, Big Money, TMZ with Troy Aikman, The Schwab Network, VenuesNow, Polestar Magazine, The New York Post, and Cheddar, just to name a few.
Now we get to what's on the horizon. As we approach the second quarter and look ahead to the rest of this year, our momentum continues to build. We're gearing up for a full season of unforgettable shows at the Ford Amphitheater here in Colorado Springs. It's shaping up to be nothing short of spectacular. This year, we will also unveil our new $41 million premium event center on the perimeter of the Ford Amphitheater.
This state-of-the-art facility will feature elevated Owner's Clubs and our year-round restaurant and bars, Roth's Seafood & Chophouse, all paired with breathtaking views of the stage and surrounding landscape, including the United States Air Force Academy. Meanwhile, we have broken ground in McKinney and continue to make major progress on our construction in Broken Arrow, Yukon, and El Paso, all an incredible season of growth across the board.
We anticipate a development profit this year as a result of the sale leased back of the Ford Amphitheater, the ground in Colorado Springs. As we know, it's taken upfront investment to get where we are. That being said, we expect to turn the corner to operational profitability in 2026, driven in part by the opening of four major venues in our portfolio: McKinney, Texas; El Paso, Texas; Broken Arrow, Oklahoma; and the Sunset Hospitality Collection at the Ford Amphitheater.
Those entities in 2026, along with our other campuses, will drive our first year of overall operational profitability. Here's the deal: we're all in this building together, and we're building a game changer. Our team is laser-focused on three things: developing the most premium live entertainment venues on Earth, building a profitable, scalable business, and enhancing shareholder value at every turn.
We achieve this by staying true to our vision and continually optimizing our strategy. Every step forward is about pushing boundaries, bringing fans closer to the music, creating unforgettable moments for artists, and delivering unmatched value for our shareholders. The best is truly yet to come. With that said, I'd like to turn it over to our CFO, Heather Atkinson.
Heather Atkinson (CFO)
Thank you, JW. As JW mentioned earlier, the fractional ownership of our Fire Suite sales reached $77.7 million in 2024, representing a 250% increase over 2023's total of $22.2 million. Also, our total assets increased 114% to $178.4 million as of December 31, 2024, up from $83.2 million at December 31, 2023. Also, our property and equipment increased 138% to $137.2 million as of December 31, 2024, up from $57.7 million at December 31, 2023. Our total annual revenue rose 42% to $17.8 million in fiscal 2024, compared to $12.6 million in fiscal 2023. Our restaurant operations continued steady growth of $1.3 million and 14% in fiscal 2024, compared to fiscal 2023. Event center operations grew $2.2 million and 74%, respectively, in fiscal 2024, compared to fiscal 2023.
Both operations were successful due to growth at the Colorado Springs campus, along with the Georgia campus being fully operational during the full year of 2024, compared to opening mid-year 2023. Amphitheater operations generated net profit to Venu due to the opening and initial success of Ford Amphitheater, defined as profit after Venu's split with AEG Presents Rocky Mountains, the operator of the amphitheater, with receipts from our naming right agreements, which are outside of Venu AEG's partnership agreement, combined for $1,659,291, or 9% of our total revenue for fiscal 2024.
Over the limited 2024 season of 20 shows at the Ford Amphitheater, this location generated gross receipts of $15.2 million. Those gross receipts, which are inclusive of ticket sales, concessions, ticketing fees, premium upgrades, as well as other receipts, are subject to the split with AEG. The Ford Amphitheater, booked and operated in partnership with AEG Presents Rocky Mountains, sold over 97,000 tickets at an average of $156 per ticket in its 20 shows of 2024. Thank you, JW, and thank you all for joining the call today. With that, I'd like to now turn the call back over to JW.
JW Roth (Founder, Chairman, and CEO)
Heather, thank you. With that, we're going to open up the line to Q&A.
Operator (participant)
Thank you. The floor is now open for questions. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you're called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Just a moment while we compile the roster. Your first question comes from the line of Martin Calvert of Morgan Stanley. Your line is open.
Martin Calvert (SVP and Financial Advisor)
Thank you. JW and team, amazing first quarter. Wow, that's really, really impressive. The numbers just jumped off the page. I saw recently you entered into an agreement with Connect Partnership Group. How is the process going with sponsorships and strategic partners in this competitive landscape?
JW Roth (Founder, Chairman, and CEO)
First, Martin.
Heather Atkinson (CFO)
Hi, Marty.
JW Roth (Founder, Chairman, and CEO)
It's great.
Heather Atkinson (CFO)
Sorry, go ahead.
JW Roth (Founder, Chairman, and CEO)
Terri is going to jump in and answer that question, but I just wanted to thank you for joining the call.
Martin Calvert (SVP and Financial Advisor)
Oh, absolutely, JW.
Terri Liebler (CMO)
Thanks, JW. Thanks, Marty, for the question. This is Terri Liebler, Chief Marketing Officer. We've had.
Martin Calvert (SVP and Financial Advisor)
Hey, Terri.
Terri Liebler (CMO)
Significant interest in venue sponsorship offerings for a lot of reasons, actually one of the primary reasons being this premium, elevated, and guest fan experience that we're introducing into the music industry. The sports industry has had tremendous success introducing premium and elevated experiences that brands can own and draw from, but in live music, especially in an outdoor seating, that's really trailed behind. As a result, brands are expressing increased enthusiasm about the new value proposition that we are introducing, and it's a very exciting time to join Venu in what we're doing if you are a brand.
Martin Calvert (SVP and Financial Advisor)
Oh, that's great. It looks like you've already got a lot of brands on board, but obviously with the new opportunities at the new venues, I'm sure that you're looking to take advantage of that.
Terri Liebler (CMO)
100%. We are fielding lots of interest. Thanks again, Marty.
Martin Calvert (SVP and Financial Advisor)
Thanks, Terri.
Operator (participant)
Your next question comes from the line of Greg Gibas of Northland Securities. Your line is open.
Greg Gibas (SVP and Senior Research Analyst)
Hey, good afternoon, JW and Heather. Congrats on the strong results and momentum that you're seeing. Apologies for my voice here, a little under the weather, but wanted to just ask about your funding. You mentioned approximately 40% coming from new markets with fractional ownerships that you're preselling now. You also recently mentioned that you can now finance fractional ownership. How does that work exactly?
JW Roth (Founder, Chairman, and CEO)
First, Greg, thanks for joining the call. At the end of the day, fractional ownership is changing. It's a game changer for our industry. 40% or so of our financing comes from municipal relationships and public-private partnerships that we put together. These amphitheaters are extremely expensive to build. In order to make them pencil, fractional ownership becomes a big part of what we do. 40% of our financing comes from fractional ownerships. Up until a few months ago, the millions and millions of dollars flown in to our projects have come from fully cash-paid investors and fractional buyers. A couple of months ago, we were able to add financing. As a result of that, we have seen a doubling in our sales.
Banks have now stepped up, and are financing fractional ownership, much like a bank would finance a mortgage on a condominium. It's been a complete game changer for it. The other piece of that too, Greg, that's interesting is we've expanded the pool of potential buyers. Buyers of our fire pit suites used to be just your typical guy like me that just loves going to shows, buys a fire pit suite for him and his family and his friends, or corporations that buy them to use with their customers and whatever. Now that pool with financing has completely changed, and it's expanded into triple-net buyers. Now we're seeing a good percentage of our buyers on a weekly basis being triple-net investors that are buying these for purely investment purposes.
Greg Gibas (SVP and Senior Research Analyst)
Got it. Thanks for the call, JW. I'll pass it on.
Operator (participant)
Your next question comes from the line of Ray Oliver of Bear Creek Capital. Your line is open.
Ray Oliver (CEO)
Hey, JW. Great job with you and the team. Really love seeing these numbers. You mentioned earlier that some of your construction plans and certain new projects to include multi-season configurations allowing for year-end revenue streams. Could you expand on what that looks like in practice and how it's shaping your overall business model? Yeah. When we first, Ray, thanks for joining the call, and I appreciate you as a shareholder. You know when we first sat down and started the process of developing what state-of-the-art amps look like, you start with all of the things that are sort of driving the fan experience, right? At the end of the day, you're trying to figure out what can we do to expand the season.
JW Roth (Founder, Chairman, and CEO)
We started to look at and work with our architects to build a multi-seasonal configuration, which now is part of all of our new amphitheaters. What that has done is it's just created a game-changing model for us in which we now have a 5,000 and 6,000 configuration that's year-round built into our 12,000 and 20,000 seat amps. This is something that you will—I can't even explain what the ambiance will be like. I say this all the time to our team.
Can you imagine going to an outdoor concert in the dead of winter when it's 40 degrees Fahrenheit outside, and you're going to an outdoor amphitheater, and you're going to watch that show, and you're going to enjoy that show at 65 to 70 degrees Fahrenheit? That's an ambiance like you just won't experience anyplace else.I can't tell you how excited I am to open this first one in Broken Arrow with this multi-seasonal approach. It is an industry-changing venue.
Ray Oliver (CEO)
Thanks, JW.
Operator (participant)
If you have a question, please press star one on your telephone keypad. Your next question comes from the line of Stephen Hemedes. Oh, my apologies. Your next question comes from the line of Jon Lutz of iHit Industries LLC. Your line is open.
Jon Lutz (President)
Thank you, JW. I just want to let you know I've went to a couple of concerts at the Ford Amphitheater this last summer, and I got to tell you, it's quite the experience. You've done a really spectacular job on that theater, and I'm thinking that's going to transform into all your projects. So well done there.
JW Roth (Founder, Chairman, and CEO)
I appreciate that.
Jon Lutz (President)
My question is, you bet. My question is, what kind of fan experience innovations are you going to be implementing to drive repeat attendance? What's going to bring people back again and again, just aside from the spectacular nature of the venue? Yeah. That's a good question. I mean, right now, we are focused on building world-class venues, and sort of the core to our offering are the Fire Suites, right? Building that and then building around that is multi-seasonal configurations. What we talk about here at Venu on a daily basis is, how do we increase dwell time? How do we increase the amount of time that somebody experiences Venu in one of our amps?
Really, what we're trying to do now is increase dwell time by opening our clubs, the Aikman Club, our Owners Club in Colorado Springs, the Seafood and Chophouse, Brohan's Rooftop Bars. All of those ads that are coming this season will be focused on driving dwell time and ultimately driving ambiance and experience for the concertgoer. There's not another place on planet Earth where you can go and see a concert like you do at the Ford Amphitheater, and there's not another place on Earth where you can come to an outdoor amphitheater like the Ford Amphitheater and enjoy dwell time that's an hour and a half to an hour and a half after the show and before the show, and enjoy that kind of ambiance.
Excellent. Thank you. You're welcome. And thanks again for your participation. You're a great shareholder.
Operator (participant)
Your next question comes from the line of Stephen Hemedes of T.R. Winston & Company. Your line is open.
Stephen Hemedes (Analyst)
Hi everyone. Congratulations on your 2024 achievements. Thanks for taking my questions. To start expanding on questions and answers from earlier, I was wondering if you could help us think about your expected revenue mix. Do you have a long-term vision for diversifying your recurring top line beyond mainly ticketing sales and concessions? Perhaps as a follow-up to that, are there opportunities visible to expand non-music event utilization of your various campuses? Thanks.
JW Roth (Founder, Chairman, and CEO)
Yeah. Steven, thanks for joining. I'll take the first one. I'm going to pass the second one on to Will. Again, I'm going to reiterate the importance of building multi-seasonal and multi-configuration amps. When we're looking at trying to diversify the revenue, I'm actually more interested in concentrating on what we're really good at and extracting more revenue out of key metrics. Dwell time is important, and multi-seasonal configurations are important because what we're doing there is we're adding content. We're also adding time for existing content.
Those are all sort of where our focus is. Not to get too far out in the weeds and too far out in the future, we've got a really interesting tech team here at Venu, and we're working diligently on what will ultimately be a subscription model to a soft ticket.That's just a little hint of what is coming over the next year or so. That is what's coming in terms of diversifying revenue. Thanks a million for joining us today, and thanks for your question. Will, I'm going to have you jump in and answer the second part.
Will Hodgson (President)
Yeah. Hi, Will Hodgson here, President of Venu. Thanks, Steven, for the question. As JW said, right, diversifying what we do extends beyond what happens just at the venue. There's certainly a market for non-touring entertainment on our stages that can be in the form of a rental with a third-party promoter, day-long festivals that engage the community. The way these amphitheaters were designed and constructed lends ourselves to producing really great private events for larger companies, as well as, like I said, community activations like a food market, movie nights, certainly graduations with local schools.
All those things can help us contribute more content on available days. I will say too that there's a focus for us definitely to, as JW said, increase dwell time, and that can happen with pre-event activations with local bands, same with post-show activations in our various VIP clubs.Certainly a primary focus for us as we continue to expand our content providers and what we can put on in a successful way at these unbelievable amphitheaters.
Stephen Hemedes (Analyst)
I appreciate that color from both of you. Thank you. It was very helpful.
Operator (participant)
Your next question comes from the line of Michael Bixby of Choice One RX. Your line is open.
Michael Bixby (Director)
Ladies and gentlemen, fantastic presentation. Enjoyed seeing where this is going. We've been following it for some time. While I see that you're currently deep in the development stage and laser-focused on growth, can you provide some clarity on your path to profitability and when you anticipate reaching a break-even or at least generating some consistent positive operating income?
JW Roth (Founder, Chairman, and CEO)
MG, I thank you for joining. That's a really good question. Profitability is going to come in two different forms at two different times. This year, in 2025, we are going to realize a significant development profit as a result of the sale of our ground underneath the Ford Amphitheater and the lease back here in Colorado Springs. That will provide a significant profit this year. In 2026, we expect our first operational profit as we open all three new amps that will then operate in conjunction with the Ford Amphitheater here in Colorado Springs, as well as the Sunset Hospitality Collection and Event Centers here in Colorado Springs that will be opening here in the next 60-90 days. You know, I've been hellbent; you know this.
Over the next 48-60 months, we're going to build $3 billion-$3.5 billion worth of new venues, and we're going to build those with zero occupancy costs. At the end of the day, we are building a machine here that is building what will be an unbelievable business in terms of generating profitability. Again, 2025 for a development profit, 2026 for a sizable operational profit, and then over the course of the next 48-60 months, we'll open $3 billion-$3.5 billion worth of these that will be game-changing in every sense.
Michael Bixby (Director)
Outstanding.
Operator (participant)
Your next question comes from the line of Stephen Laszczyk of Goldman Sachs. Your line is open.
Stephen Laszczyk (VP)
Hey, guys. Thanks for taking the questions. Maybe two, if I could. JW, curious if you could talk a little bit more just about your latest thinking on the potential opportunity for venue footprint expansion beyond the next maybe three to five venues that you have in the pipeline. Curious East Coast, West Coast, where you see the most opportunity. Then maybe for Will on just touring supply in 2025, if you could talk a little bit about your outlook for amphitheater tours this year. 2024 is a record amp year in North America. Curious if you're expected to see that momentum continue or if there could be a bit of a makeshift just back to stadiums as they come back online this year in 2025. Thank you.
JW Roth (Founder, Chairman, and CEO)
Steven, thanks for joining the call. I appreciate the question. As we think about expansion, we have a very robust and aggressive forward-looking team, both internally and through Ryan Companies in Dallas, out meeting with and talking with municipalities. Currently, we are in talks, as we've reported, with seven different municipalities that we will be announcing later this next quarter and early into the fourth quarter about the expansion plans for 2026 with builds coming in 2027. There are really three key pieces to expansion, right? First, we're always looking for and developing municipalities along the routes that we feel would be best for us and for our content partners. There is that first piece. The second is those municipalities have to be sort of geared toward and have an appetite toward a public-private partnership.
Ninety-nine percent of the time, that is driven by their focus on economic impact in their community. That is the second piece. The third piece is those municipalities have to have a demographic that would be most likely to embrace fire suite ownership, fractional ownership, and ticket buying, right? You are looking for those three specific things as you expand. Right now, we have seven more coming that will be added to our five. In early, early stage for 2027, 2028, and opening in 2029, we have 12 more. Expansion is aggressive around here. With our sort of ability to finance these the way we are, we are very optimistic that we are going to hit our goal of 20 units in the next 60 months or so.
Will Hodgson (President)
Steven, I'll attack that second question, and thanks again for the question. Thanks for hopping on. As you know, and as JW mentions often, the supply of new artists couldn't be greater. Obviously, each of those artists carries a different level of ticket demand. It is really important, I think, that we understand the multi-configuration setup that we've got with these amphitheaters as well as the multi-seasonal. When I say that, they're designed with the intent that we can scale these buildings down to a 5,000, 6,000 cap and still operate efficiently with strong profitability in mind.
That just opens us up to a larger supply of artists that can play our buildings. Not all of them need to sell 13,000 tickets. We have built a model that will allow us to promote and contract those artist performances at various levels and still be extremely profitable. We've, again, increased our ability to attract a larger supply of artists that should help, will help navigate any shift in supply at various capacity levels, ticket demand levels.
Stephen Laszczyk (VP)
That's great. Thank you both.
JW Roth (Founder, Chairman, and CEO)
Thank you, Steven.
Operator (participant)
With no further questions in the queue, that does conclude our conference call for today. Thank you so much for your participation. You may now disconnect.