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Sep 30, 2023
Sphere Entertainment Co Q1 2024 Earnings Report
Sphere Entertainment Co reported Q1 results with $118.0M revenue, net income of $66.4M, and an operating loss of $69.8M.
Key Takeaways
Q1 revenue declined 4% year over year to $118.0M, reflecting lower MSG Networks revenue partially offset by Sphere’s opening in Las Vegas. The company posted GAAP net income of $66.4M due to a large income tax benefit, despite an operating loss of $69.8M. Adjusted operating loss was $57.9M, primarily from pre-opening costs and elevated expenses at Sphere.
Total Q1 revenue was $118.0M, down from $123.1M in the prior year quarter.
GAAP diluted EPS was $1.89, boosted by a significant income tax benefit.
Adjusted operating loss was $57.9M, compared to a $30.8M loss last year.
Sphere segment revenue reached $7.8M, including $4.1M in event-related revenues and $2.6M from sponsorship and related fees.
Sphere Entertainment Co
Sphere Entertainment Co
Sphere Entertainment Co Revenue by Segment
Revenue by Segment
MSG Networks Revenue
CapyFin.com Forward Guidance
Management expects Sphere’s momentum to continue with strong U2 ticket sales, launch of The Sphere Experience, and high-profile events, while MSG Networks faces subscriber declines.
Positive Outlook
- Sphere opened successfully with all U2 shows sold out to date.
- Additional 11 U2 shows added in January and February 2024 due to strong demand.
- Launch of The Sphere Experience in October to critical acclaim.
- First-ever brand campaigns on the Exosphere attracted major global brands.
- Upcoming Formula 1 Las Vegas Grand Prix multi-day takeover of Sphere.
Challenges Ahead
- No formal quantitative guidance provided.
- MSG Networks revenue declined 10% year over year due to subscriber losses.
- Sphere segment incurred significant adjusted operating loss due to pre-opening and early operating costs.
- High SG&A expenses partly tied to transition services agreement with MSG Entertainment.
- Depreciation and amortization costs increased significantly year over year.