Sphere Entertainment (SPHR) investor relations material

Executive summary

• Revenues for Q1 2026 increased 38% year-over-year to $386.4 million, driven by strong performance at Sphere Las Vegas and growth in immersive productions and event-related revenues.

• Adjusted operating income reached $110.0 million, up significantly year-over-year, with both Sphere and MSG Networks segments contributing.

• Net income was $4.5 million, a turnaround from a net loss of $82.0 million in Q1 2025, reflecting improved operating results and lower interest expense.

• Sphere Experience in Las Vegas surpassed 500 showings, with new residencies and sponsorships announced.

• Expansion projects in Abu Dhabi and National Harbor are progressing, with global market interest and franchise models under consideration.

Financial highlights

• Total company revenues reached $386.4 million for the March quarter, with Sphere segment revenues up 69% year-over-year to $266.0 million.

• MSG Networks segment reported $120.4 million in revenues and $35.7 million in AOI, with a 2% revenue decline and ongoing subscriber losses.

• Operating income was $7.2 million, compared to a loss of $78.6 million in the prior year period.

• Cash and cash equivalents increased to $630.2 million as of March 31, 2026.

• Adjusted operating income margin and gross margin improved significantly year-over-year.

Outlook and guidance

• Management expects substantial annual revenue and AOI growth for Sphere Las Vegas, with The Wizard of Oz and new content as key drivers.

• Expansion plans for Sphere venues in Abu Dhabi and National Harbor are advancing, with additional global markets under discussion.

• Exosphere advertising business is positioned for strong double-digit growth in repeat advertisers in 2026.

• MSG Networks is expected to face continued subscriber declines, impacting future revenue and AOI.

• SG&A expenses expected to fluctuate quarter-over-quarter due to share-based compensation adjustments.