NEW YORK--(BUSINESS WIRE)--May 05, 2026--
Sphere Entertainment Co. (NYSE: SPHR) ("Sphere Entertainment" or the "Company") today reported financial results for the first quarter ended March 31, 2026.
Recent highlights for the Company's Sphere segment include:
-- Plans to bring Sphere to Abu Dhabi and National Harbor continue to move
forward, while the Company also remains in discussions with a significant
number of markets globally regarding additional large and smaller-scale
Sphere venues;
-- The Wizard of Oz at Sphere, the Sphere Experience that opened in Las
Vegas on August 28, 2025, surpassed its 500th showing in March;
-- Metallica announced a new concert residency at Sphere, with 24 concerts
planned beginning in October 2026, while Backstreet Boys announced they
will return this summer, extending their residency run to 56 nights
total;
-- The Company continues to draw robust interest from Exosphere
advertisers and sponsors, including the announcement in April of a new
multi-year sponsorship agreement with Evian.
For the three months ended March 31, 2026, the Company reported revenues of $386.4 million, an increase of $105.8 million, or 38%, as compared to the prior year quarter. In addition, the Company reported operating income of $7.2 million, an increase of $85.8 million, and adjusted operating income of $110.0 million, an increase of $74.0 million, both as compared to the prior year quarter.(1)
Executive Chairman and CEO James L. Dolan said, "Today's results demonstrate our continued success proving out Sphere's business model. Looking ahead, we remain focused on maximizing that model's full potential in Las Vegas, while executing on our long-term vision for a global network of Sphere venues."
Segment Results for the Three Months Ended March 31, 2026 and 2025:
(In millions) Three Months Ended
March 31, Change
---------------- ----------------
2026 2025 $ %
------- ------- ------- -------
Revenues:
---------------------
Sphere $266.0 $157.5 $108.4 69%
MSG Networks 120.4 123.0 (2.6) (2)%
----- ----- ----- ---
Total Revenues $386.4 $280.6 $105.8 38%
Operating Income
(Loss):
---------------------
Sphere $(24.9) $(93.8) $ 68.9 73%
MSG Networks 32.1 15.2 16.9 112%
----- ----- ----- ---
Total Operating Income
(Loss) $ 7.2 $(78.6) $ 85.8 NM
Adjusted Operating
Income:(1)
---------------------
Sphere $ 74.3 $ 13.1 $ 61.1 NM
MSG Networks 35.7 22.8 12.9 56%
----- ----- ----- ---
Total Adjusted
Operating Income $110.0 $ 36.0 $ 74.0 NM
Note: Does not foot due to rounding. NM -- Absolute percentages greater than
200% and comparisons from positive to negative values or to zero values are
considered not meaningful.
(1) See page 3 of this earnings release for the definition of adjusted
operating income (loss) included in the discussion of non-GAAP
financial measures.
Sphere
For the first quarter 2026, the Sphere segment reported revenues of $266.0 million, an increase of $108.4 million, or 69%, as compared to the prior year quarter.
Revenues related to The Sphere Experience increased $81.7 million as compared to the prior year quarter, which primarily reflected higher per-show revenue for The Wizard of Oz at Sphere. In the current year quarter, The Sphere Experience reflected 209 performances of The Wizard of Oz at Sphere as compared to 200 performances of Postcard from Earth and V-U2 An Immersive Concert Film in the prior year quarter.
Event-related revenues increased $24.4 million as compared to the prior year quarter, primarily due to (i) higher revenues from brand events, due to one additional brand event held in the current year quarter and higher per-event revenue, and (ii) higher revenues from concerts, primarily due to six additional concert residency shows held at Sphere in Las Vegas during the current year period.
Revenues from sponsorship, Exosphere advertising and suite license fees increased $1.6 million as compared to the prior year quarter, primarily reflecting an increase in sponsorship revenues and higher suite license fee revenues.
Other revenues increased $0.7 million as compared to the prior year quarter.
For the first quarter 2026, the Sphere segment had direct operating expenses of $99.2 million, an increase of $28.7 million, or 41%, as compared to the prior year quarter. Expenses associated with The Sphere Experience increased $18.1 million as compared to the prior year quarter, primarily due to higher per-show expenses for The Wizard of Oz at Sphere. Event-related expenses increased $10.8 million as compared to the prior year quarter, primarily due to (i) higher expenses from brand events, due to higher per-event expenses and an increase in the number of brand events held in the current year quarter, and (ii) higher expenses from concerts, due to an increase in the number of concert residency shows held at Sphere in Las Vegas, partially offset by lower per-concert expenses.
For the first quarter 2026, selling, general and administrative expenses of $106.6 million increased $10.2 million, or 11%, as compared to the prior year quarter, primarily due to the impact of mark-to-market adjustments on certain share-based compensation awards as a result of the appreciation in the Company's stock price during the current year quarter.
For the first quarter 2026, operating loss of $24.9 million improved by $68.9 million, or 73%, and adjusted operating income of $74.3 million increased $61.1 million, both as compared to the prior year quarter, primarily due to the increase in revenues, partially offset by higher direct operating expenses and higher selling, general and administrative expenses.
MSG Networks
For the first quarter 2026, the MSG Networks segment reported total revenues of $120.4 million, a decrease of $2.6 million, or 2%, as compared to the prior year quarter.
Advertising revenue decreased $4.9 million as compared to the prior year quarter, primarily due to a lower number of live regular season professional sports telecasts. This decrease was partially offset by an increase in distribution revenue of $1.8 million, primarily reflecting the absence of revenues from Altice during MSG Networks' non-carriage period from January 1, 2025 through February 21, 2025 in the prior year quarter, partially offset by a decrease in total subscribers of approximately 16.0% (excluding the impact of the Altice non-carriage period in the prior year quarter).
For the first quarter 2026, direct operating expenses of $70.4 million decreased $17.4 million, or 20%, as compared to the prior year quarter. Rights fees expense decreased $16.5 million as compared to the prior year quarter, primarily reflecting reductions in media rights fees as a result of the amendments to MSG Networks' media rights agreements with certain professional sports teams.
For the first quarter 2026, selling, general and administrative expenses of $15.1 million decreased $2.8 million, or 15%, as compared to the prior year quarter. This decrease was primarily due to (i) lower professional fees of $3.6 million, mainly due to the absence of costs associated with pursuing a work-out of MSG Networks' credit facilities recorded in the prior year quarter, and (ii) lower employee compensation and related benefits of $2.3 million, partially offset by (iii) higher advertising and marketing costs of $3.0 million.
For the first quarter 2026, operating income of $32.1 million increased $16.9 million as compared to the prior year quarter, primarily due to lower direct operating expenses and, to a lesser extent, lower selling, general and administrative expenses (including merger, debt work-out and acquisition related costs), partially offset by the decrease in revenues. Adjusted operating income of $35.7 million increased $12.9 million, or 56%, as compared to the prior year quarter, primarily due to lower direct operating expenses, partially offset by the decrease in revenues and higher selling, general and administrative expenses (excluding merger, debt work-out and acquisition related costs).
About Sphere Entertainment Co.
Sphere Entertainment Co. is a leader in immersive experiences, technology and media. The Company includes Sphere, an experiential medium powered by advanced technologies. The first Sphere opened in Las Vegas, with plans also announced for Sphere venues in Abu Dhabi and National Harbor. In addition, the Company includes MSG Networks, which operates two regional sports and entertainment networks, MSG Network and MSG Sportsnet, as well as a direct-to-consumer and authenticated streaming product, MSG+, delivering a wide range of live sports content and other programming. More information is available at www.sphereentertainmentco.com.
Non-GAAP Financial Measures
We define adjusted operating income (loss), which is a non-GAAP financial measure, as operating income (loss) before (i) depreciation, amortization and impairments of property and equipment, goodwill and intangible assets, (ii) amortization for capitalized cloud computing arrangement costs, (iii) share-based compensation expense, (iv) restructuring charges or credits, (v) merger, debt work-out and acquisition-related costs, including merger-related litigation expenses, net of insurance recoveries, (vi) gains or losses on sales or dispositions of businesses and associated settlements, (vii) the impact of purchase accounting adjustments related to business acquisitions, and (viii) gains and losses related to the remeasurement of liabilities under the Company's Executive Deferred Compensation Plan. We believe that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of our business without regard to the settlement of an obligation that is not expected to be made in cash. We eliminate merger, debt work-out and acquisition-related costs, including merger related litigation expenses, net of insurance recoveries, when applicable, because the Company does not consider such costs to be indicative of the ongoing operating performance of the Company as they result from an event that is of a non-recurring nature, thereby enhancing comparability. In addition, management believes that the exclusion of gains and losses related to the remeasurement of liabilities under the Company's Executive Deferred Compensation Plan, provides investors with a clearer picture of the Company's operating performance given that, in accordance with U.S. generally accepted accounting principles ("GAAP"), gains and losses related to the remeasurement of liabilities under the Company's Executive Deferred Compensation Plan are recognized in operating income (loss) whereas gains and losses related to the remeasurement of the assets under the Company's Executive Deferred Compensation Plan, which are equal to and therefore fully offset the gains and losses related to the remeasurement of liabilities, are recognized in other income (expense), net, which is not reflected in operating income (loss).
We believe adjusted operating income (loss) is an appropriate measure for evaluating the operating performance of our business segments and the Company on a consolidated basis. Adjusted operating income (loss) and similar measures with similar titles are common performance measures used by investors and analysts to analyze our performance. Internally, we use revenues and adjusted operating income (loss) as the most important indicators of our business performance, and evaluate management's effectiveness with specific reference to these indicators. Adjusted operating income (loss) should be viewed as a supplement to and not a substitute for operating income (loss), net income (loss), cash flows from operating activities, and other measures of performance and/or liquidity presented in accordance with GAAP. Since adjusted operating income (loss) is not a measure of performance calculated in accordance with GAAP, this measure may not be comparable to similar measures with similar titles used by other companies. For a reconciliation of operating income (loss) to adjusted operating income (loss), please see page 5 of this release.
Forward-Looking Statements
This press release may contain statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results, developments or events may differ materially from those in the forward-looking statements as a result of various factors, including financial community perceptions of the Company and its business, operations, financial condition and the industries in which it operates and the factors described in the Company's filings with the Securities and Exchange Commission, including the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained therein. The Company disclaims any obligation to update any forward-looking statements contained herein.
Conference Call Information:
The conference call will be Webcast live today at 10:00 a.m. ET at investor.sphereentertainmentco.com
Conference call dial-in number is 888-800-3155 / Conference ID Number 8089430
Conference call replay number is 800-770-2030 / Conference ID Number 8089430 until May 12, 2026
SPHERE ENTERTAINMENT CO.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
March 31,
-----------------------
2026 2025
--------- ------------
Revenues $386,412 $ 280,574
Operating expenses:
Direct operating expenses 169,647 158,323
Selling, general, and
administrative expenses 121,703 114,269
Depreciation and amortization 84,367 84,229
Impairment and other losses, net 79 521
Restructuring charges 3,414 1,841
------- --------
Operating income (loss) 7,202 (78,609)
Other income (expense):
Loss on extinguishment of debt (2,071) --
Interest income 3,951 3,878
Interest expense (8,039) (26,206)
Other expense, net (1,424) (1,340)
------- --------
Loss from continuing operations before
income taxes (381) (102,277)
Income tax benefit 4,841 20,323
------- --------
Net income (loss) $ 4,460 $ (81,954)
Less: Net income attributable to
participating securities 6,053 --
------- --------
Net loss attributable to Sphere
Entertainment Co.'s stockholders $ (1,593) $ (81,954)
======= ========
Basic loss per common share
attributable to Sphere Entertainment
Co.'s stockholders $ (0.04) $ (2.27)
Diluted loss per common share
attributable to Sphere Entertainment
Co.'s stockholders $ (0.04) $ (2.27)
Weighted-average number of common shares
outstanding:
Basic 35,878 36,110
Diluted 35,878 36,110
SPHERE ENTERTAINMENT CO.
ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS) TO
ADJUSTED OPERATING INCOME (LOSS)
(In thousands)
(Unaudited)
The following is a description of the adjustments to operating income (loss) in arriving at adjusted operating income as described in this earnings release:
-- Share-based compensation. This adjustment eliminates the compensation
expense relating to restricted stock units, performance stock units and
stock options granted under the Sphere Entertainment Employee Stock Plan,
MSG Sports Employee Stock Plan, MSG Networks Employee Stock Plan, as
amended and assumed by Sphere Entertainment, and Sphere Entertainment
Non-Employee Director Plan.
-- Depreciation and amortization. This adjustment eliminates depreciation
and amortization of property and equipment and intangible assets.
-- Restructuring charges. This adjustment eliminates costs related to
termination benefits provided to certain executives and employees.
-- Impairment and other losses (gains), net. This adjustment eliminates
non-cash impairment charges and the impact of gains or losses from the
disposition of assets or businesses.
-- Merger, debt work-out, and acquisition-related costs, including
merger-related litigation expenses, net of insurance recoveries. This
adjustment eliminates costs related to mergers, debt work-outs and
acquisitions, including litigation expenses.
-- Amortization for capitalized cloud computing arrangement costs. This
adjustment eliminates amortization of capitalized cloud computing
arrangement costs.
-- Remeasurement of deferred compensation plan liabilities. This
adjustment eliminates the impact of gains and losses related to the
remeasurement of liabilities under the Company's executive deferred
compensation plan.
Three Months Ended
March 31,
------------------------
2026 2025
----------- -----------
Operating income (loss) $ 7,202 $(78,609)
Share-based compensation 13,910 21,595
Depreciation and amortization 84,367 84,229
Restructuring charges 3,414 1,841
Impairment and other losses, net 79 521
Merger, debt work-out, and acquisition related
costs, net of insurance recoveries 87 4,791
Amortization for capitalized cloud computing
arrangement costs 917 1,579
Remeasurement of deferred compensation plan
liabilities -- 21
------- -------
Adjusted operating income $ 109,976 $ 35,968
======= =======
SPHERE ENTERTAINMENT CO.
SEGMENT RESULTS
(In thousands)
(Unaudited)
BUSINESS SEGMENT RESULTS
Three Months Ended March 31, 2026
--------------------------------------------
Sphere MSG Networks Total
--------------- ------------- ------------
Revenues $ 265,965 $ 120,447 $ 386,412
Operating
expenses:
Direct operating
expenses 99,226 70,421 169,647
Selling, general
and
administrative
expenses 106,596 15,107 121,703
Depreciation and
amortization 82,274 2,093 84,367
Impairment and
other losses,
net 79 -- 79
Restructuring
charges 2,673 741 3,414
------- --- -------- --------
Operating (loss) income $ (24,883) $ 32,085 $ 7,202
Reconciliation to
adjusted operating
income:
Share-based
compensation 13,143 767 13,910
Depreciation and
amortization 82,274 2,093 84,367
Restructuring
charges 2,673 741 3,414
Impairment and
other losses,
net 79 -- 79
Merger, debt
work-out, and
acquisition
related costs,
net of
insurance
recoveries 87 -- 87
Amortization for
capitalized
cloud computing
arrangement
costs 917 -- 917
------- --- -------- --------
Adjusted operating
income $ 74,290 $ 35,686 $ 109,976
======= === ======== ========
Three Months Ended March 31, 2025
--------------------------------------------
Sphere MSG Networks Total
--------------- ------------- ------------
Revenues $ 157,545 $ 123,029 $ 280,574
Operating expenses:
Direct operating
expenses 70,536 87,787 158,323
Selling, general
and
administrative
expenses 96,404 17,865 114,269
Depreciation and
amortization 82,005 2,224 84,229
Impairment and
other losses,
net 521 -- 521
Restructuring
charges 1,841 -- 1,841
------- --- -------- --------
Operating (loss) income $ (93,762) $ 15,153 $ (78,609)
Reconciliation to
adjusted operating
income:
Share-based
compensation 19,954 1,641 21,595
Depreciation and
amortization 82,005 2,224 84,229
Restructuring
charges 1,841 -- 1,841
Impairment and
other losses,
net 521 -- 521
Merger, debt
work-out, and
acquisition
related costs,
net of
insurance
recoveries 988 3,803 4,791
Amortization for
capitalized
cloud computing
arrangement
costs 1,579 -- 1,579
Remeasurement of
deferred
compensation
plan
liabilities 21 -- 21
------- --- -------- --------
Adjusted operating
income $ 13,147 $ 22,821 $ 35,968
======= === ======== ========
SPHERE ENTERTAINMENT CO.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
As of
March 31, December 31,
----------- ----------------
2026 2025
----------- ----------------
ASSETS
Current Assets:
Cash, cash equivalents, and
restricted cash $ 630,151 $ 521,264
Accounts receivable, net 181,549 171,630
Related party receivables, current 20,215 24,457
Prepaid expenses and other current
assets 71,655 92,824
--------- ---------
Total current assets 903,570 810,175
Non-Current Assets:
Investments 37,650 38,725
Property and equipment, net 2,629,439 2,710,643
Right-of-use lease assets 88,851 91,372
Goodwill 344,772 344,772
Intangible assets, net 20,161 21,817
Other non-current assets 198,243 192,404
--------- ---------
Total assets $4,222,686 $ 4,209,908
========= =========
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable $ 36,484 $ 24,593
Accrued expenses and other current
liabilities 427,060 431,477
Related party payables, current 11,404 14,301
Current portion of long-term debt,
net 57,690 63,009
Operating lease liabilities,
current 16,515 17,186
Deferred revenue 193,510 192,808
--------- ---------
Total current liabilities 742,663 743,374
Non-Current Liabilities:
Long-term debt, net 752,700 767,439
Operating lease liabilities,
non-current 111,463 113,824
Deferred tax liabilities, net 166,661 172,111
Other non-current liabilities 201,272 179,921
--------- ---------
Total liabilities 1,974,759 1,976,669
Commitments and contingencies
Equity:
Class A Common Stock (a) 299 297
Class B Common Stock (b) 69 69
Additional paid-in capital 2,480,705 2,470,120
Treasury stock, at cost, 1,054
shares as of March 31, 2026 and
December 31, 2025, respectively (50,024) (50,024)
Accumulated deficit (181,981) (186,441)
Accumulated other comprehensive
loss (1,141) (782)
--------- ---------
Total stockholders' equity 2,247,927 2,233,239
--------- ---------
Total liabilities and equity $4,222,686 $ 4,209,908
========= =========
_______________
(a) Class A Common Stock, $0.01 par value per share, 120,000 shares
authorized; 29,921 and 28,629 shares issued and outstanding as of March
31, 2026 and December 31, 2025, respectively.
(b) Class B Common Stock, $0.01 par value per share, 30,000 shares
authorized; 6,867 shares issued and outstanding as of March 31, 2026 and
December 31, 2025.
SPHERE ENTERTAINMENT CO.
SELECTED CASH FLOW INFORMATION
(In thousands)
(Unaudited)
Three Months Ended
March 31,
----------------------
2026 2025
--------- -----------
Net cash provided by operating activities $136,241 $ 6,348
Net cash used in investing activities (5,005) (17,570)
Net cash used in financing activities (22,263) (26,307)
Effect of exchange rates on cash, cash
equivalents, and restricted cash (86) 98
------- -------
Net increase (decrease) in cash, cash
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