Madison Square Garden Entertainment (NYSE:MSGE) reported a 37% increase in fiscal first-quarter revenue as a record number of concerts at Madison Square Garden helped drive stronger bookings and higher spending by concertgoers.
Revenue rose to $217.1 million, while adjusted operating income increased by $27.2 million from a year earlier to $34.3 million. The company attributed the revenue growth primarily to entertainment offerings and, to a lesser extent, higher food, beverage and merchandise sales.
Executive Vice President and Chief Financial Officer David Collins said the company expects robust growth in revenue and adjusted operating income for fiscal 2027. He also forecast another record revenue year for the Christmas Spectacular, which begins its holiday run with more performances planned than last year.
Concerts Drive First-Quarter Growth
MSG Entertainment hosted more than 1.3 million guests across 160 live events during the quarter. The start of Harry Styles’ 30-night residency helped the Garden set a record for concerts in any quarter, Collins said. Sixteen of the residency’s shows took place in the fiscal first quarter, with the run ending shortly before the earnings call.
Collins said the Garden also delivered robust underlying growth in concert numbers beyond the Styles residency, although he said it was difficult to quantify the residency’s incremental financial contribution.
The significant majority of concerts across the company’s venues sold out during the quarter, and combined food, beverage and merchandise spending per concertgoer rose by a double-digit percentage year over year. Collins said concert sell-through for the next two quarters was pacing ahead of the same point last year.
Higher concert activity and revenue per concert at the Garden helped lift results, as did more events and higher revenue per event from other live entertainment and sporting events. Those gains were partially offset by fewer concerts at the company’s theaters. Higher direct operating and selling, general and administrative expenses also offset some of the revenue growth.
Bookings Outlook and Holiday Production
Collins said MSG Entertainment had slightly exceeded its fiscal-year concert booking goal for the Garden and was more than 80% of the way toward its goal across its venue portfolio. Both goals contemplate growth in concert numbers at the Garden and the theaters.
At the Garden, the company expects more concerts in the December quarter but is currently pacing below the prior year in the second half. At its theaters, it expects fewer concerts in the December quarter and is pacing ahead in the second half. Collins attributed the Garden’s second-half pacing to the timing of events and said he remained confident in full-year growth at both the arena and theaters.
The company’s financial outlook for its bookings business is stronger than it was in August, Collins said. MSG Entertainment expects more special events with improved per-event economics and more marquee sports events than previously anticipated, including the NCAA regional tournament at the Garden in March. It now expects fewer family and performing arts shows than initially contemplated.
For the Christmas Spectacular’s 93rd season, the company plans 231 performances, up from 215 last year, and expects to welcome more than 1.2 million guests. Collins said advance ticket revenue was pacing ahead of the same time last year. The production will include a new Rockettes number and onstage cameras that provide audiences with different perspectives in real time.
Capital Returns and Theater Discussions
MSG Entertainment repurchased approximately 314,000 Class A shares for $25 million during the quarter. Since its 2023 spin-off, the company has repurchased about 6.4 million shares for $230 million. Collins said the company took advantage of a significant decline in its share price to buy stock in September and would continue to explore opportunities to return capital to shareholders.
As of September 30, the company had $194 million in unrestricted cash and approximately $571 million in debt. Collins said MSG Entertainment expects significant underlying free cash flow in fiscal 2027, driven primarily by adjusted operating income and partially offset by items including interest payments, taxes, capital expenditures and working-capital timing.
The company is also working toward definitive agreements with the master developer on a potential transfer of the Infosys Theater at Madison Square Garden as part of the Penn Station redevelopment. Collins said no decisions had been made on how to use any proceeds if a transfer is completed.
Reinvesting all potential proceeds in another domestic venue would be the primary way to minimize tax leakage, he said. Although the company would not be limited to New York City, Collins said it would most likely look there first because it is MSG Entertainment’s core market.
About Madison Square Garden Entertainment (NYSE:MSGE)
Madison Square Garden Entertainment Corp. (NYSE: MSGE) is a live entertainment company that owns, operates and manages prominent entertainment venues and produces live events. Its portfolio includes Madison Square Garden, Radio City Music Hall, the Beacon Theatre and The Chicago Theatre, as well as the Hulu Theater at Madison Square Garden.
The company presents and promotes concerts, family entertainment, comedy shows, sporting events and other special events. It also produces the annual Christmas Spectacular Starring the Radio City Rockettes and supports a range of entertainment experiences through its venue operations, booking activities and event-related services.
Madison Square Garden Entertainment primarily serves audiences in the United States, with a concentration in New York City and Chicago.
