Q2 2025 Live Nation Entertainment Inc Earnings Call
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It Off.
Good afternoon. My name is Joe and I will be your conference operator. Today at this time, I would like to welcome everyone to live nation's second quarter 2025 earnings call
I would now like to turn the call over to Miss. Amy Young. Thank you. Miss Young. You may begin.
Good afternoon and welcome to the Live Nation. Second quarter 2025 earnings conference call.
Joining us today is our president and CEO Michael rapino and our president and CFO Joe bertold.
We would like to remind you that this afternoon's call will contain certain. Forward-looking statements, there are subject to risks and uncertainties that could cause actual results to differ, including statements related to the company's anticipated financial performance business prospects. New developments in similar matters.
Please refer to live nation's SEC filings, including the risk factors, and cautionary statements included in the company's most recent filings and forms, 10K 10q and 8K, for description of risks and uncertainties that could impact the actual results.
5 Nation will also refer to some non-gaap measures on this call.
In accordance with SEC regulation G, Live Nation has provided definitions of these measures and a full reconciliation to the most comparable GAAP measures in our earnings release.
The release reconciliation can be found under the financial information section on live nation's website with that. We will now take your questions, operator.
Thank you.
Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad and a confirmation total indicate your lines in the question queue.
You may press star 2 if you would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
And our first question comes from the line of Steven Lasik with Goldman Sachs please proceed.
Hey guys, thanks for taking the questions. Maybe to kick it off. First for Michael. Uh, given the news last week. I thought it would be a good opportunity. Uh, to get your latest update on on oessa and how the evolution of the broader L am strategy. Is is playing out. I think it's clear that you've grown the business quite a bit over the last couple of years would just be curious if you can maybe touch on the incremental opportunities. You see, from here and how that strategy evolves, more broadly, uh in Latin America. Uh and then I have a follow-up for Joe on uh 32 Trends. Thank you.
Thank you. Yeah assess has been a um you know, just a home run relationship from our early days. So now our original acquisition and now our our our next piece um I think it's always a good good indication when you're working with a partner, a sophisticated as Alex and oessa, is that we came to a great terms where, you know, they wanted to stay in longer because they see the growth and want to figure out how to monetize the growth. Um, so we came here to get conclusion where we can buy a bit more now to to clean up the balance sheet and um, and then let them participate in in an ongoing, great growth track. So I think that's the best indication as you know, when you're in a 5149, anytime you're dealing with that partner. Uh when they're willing to push out their acquisition, put call to monetize, what they think is going to be a bright future of growth. It's the best indication for management. So we think Mexico under Alex has a continued great growth ahead of it. Uh we got some some venue activity festivals. Take
Getting upgrades, it's still a long way to go on TM, Mexico to get it up to speed with TM America that alone will bring um some great growth to the the business from Dynamic uh Platinum pricing to, um, be better experience for the consumer as far as the larger Latin America. You know, we're we're just start getting going, we're in the, you know, in an overall Latin America, very small market share on a, on a macro basis, but Zillow alone, we think is another Mexico, huge
Ticket Masters throughout the region. So all the basics that we can put in place, will the demand most and Supply uh grow in Latin America. We think it'll be a great great uh continued growth opportunity for us.
Great, thanks for that. And then um, 1 for Joe, just looking ahead, I'd be curious how you would encourage us to think about the concert segment as we head into the third quarter. It seems like ticket sales, deferred revenue. On-site spending all pacing up pretty nicely as we head into the back half. Uh any update, you'd be willing to provide just on how you're thinking about supply and demand, Revenue Trends margin Trends. As you look into 3 Q given maybe some mix in the the slate and then I think some mix and timing of how this year is playing out which I know you've called out uh in past periods this year. Thank you. Sure, sure, sure Stephen thanks. So first before we get to concerts just
As as the other pieces, I think, uh, Q3 looks to be very strong, both Ticketmaster and the sponsorship business, expect double digit aoi growth for the quarter, and both of those, uh, and then concerts, um, continuing, uh, the the growth Trend we've had over the course of the year, as you said, very strong, deferred revenue numbers, which gives us a high degree of confidence on where the the fan Count On Top Line is going I think it'll be a Q3 will be a very strong Stadium quarter. Probably more a third of our fans will be uh in stadiums in the in the third quarter as opposed to around a quarter of them last year. So, uh, just ever increasing.
Volume, uh, you know, kind of the areas that I'd say that have really over-delivered would be stadiums and and international, um, and then probably more of the arena and theater activity, uh, a bit later in the year, more heavily weighted to Q4, than, than we've had in the past. So, um, but overall
Continued strong sell throughout the shows, uh, on sales, uh, at the closest and continued strong at uh, onsite. We're seeing no changes in the past month. In terms of level of consumer demand, we just had uh, while a palooza playoff last weekend record, Double Digit increases in on-site spending. So um, real contained strength in the consumer Force.
Great, thank you both.
The next question comes from the line of Brandon, Ross with light shed Partners, please proceed.
Thanks for taking the questions. Um, wanted to move from the focus on concerts there to Ticketmaster. And Joe you just said take a master is going to improve in the back half of the year. But even so there's been a real Divergence between performance and ticketing and concerts the past few years and even in this big Stadium year which we expected to be, uh, you know, a bigger year for Ticket Master. So, as we think about your business going forward, we're wondering if
If this is a trend that's going to continue and was hoping you could take a step back and tell us how to think about ticketing growth Beyond 2025.
Um, as you said, we're trying not to get too caught up in the weeds of of quarter to quarter. We have a year where concerts are doing very well and sports and other activity there. There's not as much of it. So that's impacting things. So, um, rather than getting overly caught up in the quarter to quarter. What's our, what's our profit formula growth formula going forward? I don't think it's changed for TM. I, I think we feel very good about the growth prospects of of Ticket Master first. Just keep reminding everybody right, we're a global business. We've got great International growth, we have new markets, Michael was just talking about, we're just getting started in Latin. America was that that, you know, close to 500 million people. So tremendous opportunity in New Markets, continuing to build share in other markets. We give you we've added 20 million tickets this this year, 70% of them are international in July and another strong month of continuing to add more clients. Um layering on top of that is just
Live Nation. Our our, our growth, uh, which is, which is feeding Ticket Master more volume. And particularly as we add more venues globally, that'll continue to grow that. Um, I think you layer on top of that over time probably have mid single digit pricing as people. Continue to get increasingly sophisticated about how they price all the different pieces of their events. Um, you've got our B2B services, our pricing and marketing, uh, which have been important components. And we expect just to continue to be uh, more and more important particularly in the international markets that are catching up to the US in terms of deploying some of those services.
as an ad platform, which we've talked about, and you don't see
All those numbers in the reported segments in The Ticket Master. But that online advertising pieces, an important part of the economics of the platform which shows up in our sponsorship business. So we don't think there is any underlying change in the ability of Ticket Master to grow on a global basis. And, and think we'll continue to see quarter to quarter es and flows. But but still a very strong underlying business.
Okay, and then just following up on the future Ticket Master. How do you guys expect AI to impact Ticket? Masters growth. Um, maybe what are the opportunities for you and do you have the right talent in place to capitalize?
Yeah, I
I,
Almost everything we do online, right? It's a
It's going to be a massive change. I think, first of all, just tactically, it drives efficiency for us, drives efficiency in customer service. Uh, we're already using AI chat Bots for a large portion of our customer service. I expect that to grow rapidly over the next few years as the chat spots. Get better and better, frankly probably get better than than humans soon. So that'll be a source of savings uh on coding absolutely using those tools. We expect that to allow us to make change faster, deploy new products and also to get
Savings. Um, I think it'll help in our effectiveness. Uh, I talked about the B2B services earlier, the pricing and the marketing. I expect that using AI tools and deploying those to our enterprise clients and to event organizers will help make the events more profitable and more successful for all the parties involved.
and then I think the last piece, which is
Emerging now. And again, I expect rapid development is in the more agentic Ai and I think this is where Ticket Masters different than some of the other ticketing businesses. I think with the agentic AI, if you're selling a commodity product, you have a problem because it'll drive to the just the lowest price. But Ticket Master has primary tickets. That's that's the main business. It's in. So it, it has a unique product, it has more leverage in terms of how it deals with the agents and the opportunity to create.
TM Zone agent, which is more focused on how do we sell the shows for our clients and not just at the whims of somebody, who's trying to scrape, your your site and come to the lowest price for a commodity product.
Doesn't sound good for a secondary. Thank you.
The next question comes from the line of David karnowski with JP Morgan, please proceed.
I guess following up on secondary um the release noted a decline in GTD due to more Market based pricing I guess first in calling this out are you seeing an acceleration in this trend and if so it's driving that? And then can you just remind us how is taking Master impacted? Um, as those sales move back to the primary Market?
Yeah, I think take a masters net or the company. Isn't that positively impacted as we move pricing back to primary. Um, take a master, it's a higher price sale. Take a master benefits from that and then on the concert side, um, the the concert folks benefit as well, uh, both from their portion of the proceeds and also just from be risking events where they've given the guarantee on the show. So I think you need to always look at secondary Sports versus concerts very different businesses, different Dynamics.
Secondary is, is if you're dependent on.
Brokers for all your inventory. Then you have challenges there. Fortunately, we have a lot of season ticket, holder inventory, because of our team and Lead deals. And if you're dependent on search to drive your volume,
Right then the combination of those 2 can create a lot of volatility in your share. And again, on that, on that side, we have the organic traffic and um, General on-sale traffic, that we drive through Ticket Masters. So, I think the reason why we're down much less than its like, others in the market is we just have lower volatility in both our supply and our demand uh, on secondary.
Okay, and then Michael traditionally on the uh, 222 call we're far enough into the year that we can. Finally ask you how Supply Trends are filling out for the following year. That would be great to get your early view on 2026 and maybe just given the key Fields going to have a hold on. A number of North America stadiums. How does that, you know, potentially impact the shape of uh, of the Year. Even what we might see for uh, on sales in the fourth quarter?
Yeah, we're, we're definitely going to finish the year strong, you know, 6 months ago to a year ago, I would have been more worried about the World Cup of veils and that our Stadium schedule for 26, um, but team because we get ahead of this so far in advance on bookings. Um, we've been able to secure a
A really good 26, Stadium business. Um, so I'm I'm I'm very optimistic, I think the 26 on a global basis will be strong again. Um, stadiums right now look like they're, um, um, filling up well, around the world got 40, 50% of our shows booked kind of for next year already. So the pipe is
Strong. Um probably hopefully be a bigger Amphitheater Arena year next year. Um as as the as as stadiums were exceptional this year, but again to Joe's point you always got to step back on a global basis.
You know, while we may have a few less stadiums in America because the World Cup, you know, we're going to have a big, big business in Europe. Next year, we're going to Big bases in the flat, in America Mexico. So the strength of our Global portfolio. 50% of our businesses outside of America. So well 1 summer, could be strong for a amphitheaters here. It could be stronger for uh, stadiums somewhere else. So that's the great bet. You're betting on on Live Nation is our Mass diversity on a global basis, from a geographic perspective. So there's no 1 a year that's going to really matter in terms of show Camp. I've said that for many years, you're, you're not going to sit here and hear us say we didn't have, like, the movie theaters, the Blockbuster for the summer that made our year. That's not how our business is driven. We have enough scale on a global basis and enough diversity and venue types that we'll have a strong 26 next year.
Thank you.
The next question comes from the line of Cameron Manson Peron with mortise Stanley, please proceed
Thank you, good afternoon. Um, I wanted to ask about sponsorship, specifically, it seems like you guys are leaning more into Festival naming rights. I'm wondering if you could talk a little bit about how you view that as an opportunity is this something that you're kind of, testing, leaning more into or how broadly do you think about deploying that across the operated venue portfolio and then I had a follow up on an oessa?
Yeah, I don't think there's any specific new strategy festivals of of always been an important part of our overall sponsorship portfolio. I was at La La La this weekend. You know, you have a 115,000 people, a day in downtown Chicago, incredible diverse, uh, demographic. So, great, great portfolio. Our platform for Brands all weekend, um, no different than what rolling or notice and then rolling loud, which is a different demo to our festivals in Europe. So festivals are super key, sponsorship assets, but nothing new and whether it's uh, sponsors on the name or sponsors on the stage or sponsors have an access. Um, we're always just being Innovative but with different brands on how they want to capture that that moment around festivals well festivals and venues, which we talk a lot.
Got it. Uh, thanks and then on it says I just wanted to follow up and see if there was any update. You could provide on the cash savings from uh 1 fewer put to uh exercise or pay for and just in general how you're thinking about that use of cash potentially and the trade-off between you know investment versus Capital return. More broadly,
Thanks.
Yeah, I think. Broadly speaking, we're going to continue to focus on deploying the capital and the venue side is Michael just talked about which, which we're monetizing in concerts, in ticketing, in a sponsorship, is he just went through very deep pipeline of of venue investment opportunities that we still have. Um, I think it it, if, if part of your question is, what does it mean? And we picked up another quarter of oessa
Um, I think starting next year, we'll we'll see a drop in our in our NCI on both the p&l and on cash impact uh expected to drop probably around 50 million and 26 uh, from a, a p&l standpoint and then you see a bit less from a cash impact. As the business retains what it needs in terms of working capital and and ongoing maintenance capex. Um so it'll it'll free up a nice Trend. Cash, help a few points on our uh free cash flow conversion. Um and then we'll continue to reinvest that in more opportunities that we have.
That's helpful, thanks.
The next question comes from the line of Peter, Supino with wolf research, please proceed.
Hi. Thank you. Uh, a question that might fit for Michael and maybe 1 for Joe. Michael, I wondered if you'd talk about the development of venues a question, we frequently hear is whether building venues around the world is risky. Uh, most people find it easy to imagine that your position as a developer is advantageous, but I wonder if you could talk with us a bit about edge cases uh disappointments, how frequently they happen and and what you've learned from them, if there ever has been 1 and then, uh, Joe I wondered, if you could talk to us about, um, in your, in your trending schedule, the 2-year compound annual growth rate for the first half of 2025. So, summing the last 2 quarters, um, is about a 2 to 3% annual growth rate off of 2023. I'm just trying to strip out the year-to-year noise. I think that's below your view of normal and I wondered if you could help us bridge that growth to normal effects,
Take the easy 1, Joe. Um, on the, on, the, on the venue risk, uh, we we really don't. Um,
Don't don't feel like that's a big factor, you know, the, the risky part of our business is the concert right when you're doing a 1-off show in someone else's building. That's the risk. Uh, now with our scale and our Global competency, we've been investing in the business at that. So we've mitigated through all of our years of experience, but once we kind of, put our team together on a venue, you know, I, I, I look at venue a little bit, like art. These are, these are rare Commodities, and we spent a lot of time with our Global local teams. We don't go into markets unless we have local expertise and local boots on the ground. So we know exactly what's right for the market. We're dealt with all of the local developers. The local political, um, um scene. So when we're looking across our Global portfolio, we have you know over a hundred offices and 40 countries, great entrepreneurs on the ground um when they're in those markets, they know best.
What the market needs? Does it need a 5,000 seat venue? Does it need a new Arena are there? 2 Arenas in town and there's a third feasible. Do we buy 1 of the 2 and renovate it? Um, so we're, we're very, very diligent in looking at those businesses. But, again, our secret sauce is that we have local expertise.
Um sure. So I'll take the the question. So let me try to break up the first half of the year and I'm going to answer some of this in the context of just what's going on with the full year, which we
Said, a while ago, we expect to be double digit aoi growth in which we've continued to say and say again, today, we expect to have double digit aoi growth for the year. Um, if you look at the, the different segments, I think, concerts for the first half of the year,
Uh, versus last year is, is up almost a hundred million dollars is up 30, odd percent. So obviously representative of a great concerts year, um, driving, massive Stadium, uh, activity and doing very well on site at both our festivals and our, uh, and our other venues in terms of sponsorship, sponsorship has been relatively low growth in the first half. But as we also note here in the release, um, with 95% uh, plus committed, we we, uh, are double digits ahead of last year, so from a full year standpoint, um, we continue to expect sponsorship to grow double digits. So, uh, again, you have you have timing issues quarter to quarter. We don't spend a lot of time worrying about those issues and we try to give you guys enough information to give you confidence in what the whole year is going to be, um, take a master for the first half has had a few headwinds
Uh in terms of its specific numbers, 1 of those, I'll point to is, you know, is the is the problem of of success if you uh are deferred revenue, being up 22% to take a master. So if you just took the fact that we're doing more shows in markets uh where we're deferring recognition, what we're doing more shows in our venues. If you play out the math on that 22% growth in our average margin, I would say, you've moved roughly 25 million of aoi.
From the first half of the year to the second half of the Year. Again, it's just quarterly timing doesn't impact things over the course of the year. So it's it's just another reason why we don't obsess over the quarter. Um, first half of the Year Ticket Masters, taking the brunt of hid from our FX headwinds about 16 million dollars. Ahead wins in that segment. And then third is we've talked a lot about the international growth. Uh, and as we've talked before International activity and take a masters lower Revenue per ticket than it is in North America. So all of those things are going to have some very tactical quarter half impact. Um I talked to earlier to Brendan's question on why we continue to have confidence ticketing overall is a still a good long-term growth business, all of those things which are somewhere between 1/2 mixes and and temporal issues
Thank you.
The next question comes from the line of Peter Henderson with Bank of America, please proceed.
Great. Uh, thank you for taking the questions. So with non-english-speaking artists now representing twice as many of your top 54s compared to 2019 and ticket sales tripling. And can you just discuss how the profitability and unit economics of these tours? Compared to the traditional North American tours and then are these like emerging International artists.
And shows generating comparable, margins, on-site, spending patterns, Etc. And then finally, you know, how does this Dynamic impact your Global sponsorship opportunity?
Yeah, thank you Peter. Um,
You know, you're there there is no real uh, the real difference. So you know, this is been a artists have been Global forever. Um, and whether you're a K-pop artist playing in La um, or whether you're a um, Gracie Abrams in a, in a young pop star appealing to a young demo, um, for heads the margin what you pay the artists, all of the same economics,
Our segment strategy that if it's a country act and you go to an Amphitheater, those digital bars are going to have a very different menus than if you show up 2 days later. And it's a Backstreet Boys playing or 3 days later. If it's a, if it's a Young Band appealing to a young demo. So we've always been adjusting and we're doing a better job now, adjusting our food and beverage on-site, spend to meet the segment. Um, but no difference because the artist is from Colombia uh, Mexico or Boston.
The next question comes from the line of cut gun morale with evercore, isi, please proceed.
Great, thanks for taking the question. I, I just wanted to follow up on venue Nation. Um, you provide a lot of great color and detail, but it still seems like somewhat of a hidden gold mine in the business. Um, you know, you talk a lot about the strong fan Camp growth the pipeline. Overall Trends seem to be very robust and certain seems like it's becoming a primary driver of the business. So is there just any more color, you could provide to help us better dissect? Its specific contributions to the segment to the concert segment. Thank you.
Well, it's hard to answer that question and give you specific numbers without breaking out on an exact building basis, which which we're not going to do, which is, that's why we give you what we're spending, we give you, uh, the fact that it's a 20% plus return that return obviously Cascades across different pieces of the business. It, it comes as Michael said with sponsorship that really, uh, doing have as a priority monetizing the venue, it comes through in your on-site activity, uh, the selling the beer, the selling the VIP clubs it comes through and the promotion side. Um, and it comes from the ticketing side from having more events, the ticket more venues that they're working with. Um, you know, I think, I think you can certainly see that it's happening. Also, um, in the concert side, by the margin, the fact that this year, a very heavy Stadium year, uh, margins are consistent with last year speaks to the continued benefit. We're getting out of our
Our venue portfolio and the fact that that's keeping, uh, uh, that the margin is keeping up. Even though you have so many more events outside of our venues,
Thank you, I appreciate it.
And the last question will come from the line of Benjamin soft with Deutsche Bank, please proceed.
Good afternoon. Thanks for the question. It'd be great to hear your latest thoughts on the APAC region and the opportunity. You see their following the recent acquisition, you did in Japan and then to follow up on venue Nation. You call that a really nice increase in fans this year is that about the timing of new venues coming online? Is it better to utilization at your existing venues? Or is it something else? Thank you.
You also have to take the first part.
You know, as we've said in our annual investor day, we look at the whole globe as a great opportunity. Still, we're looking at Latin America; we're looking in the Middle East.
We've had great success recently in India. It's called play and others and all of the Asia and APAC region. Um, so equally, we think there's opportunity all around the globe of this new Young consumer with the Jukebox, and their phone in their, in their hand, called that phone. That want to see. Um, um, Travis Scott. So, that that's the great opportunity on a global basis. It doesn't matter, uh, pretty much every country in the world, maybe less China. But other than that, every country in the world from India, onward. Um, that consumer is been let loose with the the man now, and wants to see the the live show sees it on Tik Tok season.
And Longevity that you can add your power to and and and, and build off of there. So, yes, we think build it out of a new business is great on its own Japan. 1 of the biggest markets in the world so that alone like like we've talked about in Brazil or Mexico will be a great great growth opportunity. We're very underdeveloped there. Um, but then it also opens up the rest of the markets um to operate out of our kind of our regional Hub out of Japan.
And then in terms of our operative venues, um, mostly the activity or most of the growth this year is coming out of a combination, UK Europe, and and Latin America. Those are really the 2 primary drivers of our, um, operated fan count growth and and and you got the 2 pieces. It's a mix of existing venues and uh, of new venues that are coming online. So Latin America, you have both a tremendous increase in show, count that estadio G&P coming out of the refurbishment last year. Big growth in fan count there. And then we've also we're opening new, you know, new new stadium in Columbia and that contributes. And then similarly, in Europe, as we've been building out our venue, portfolio, adding adding altise and Lisbon and, and, and others is piece of it. But so is driving increased utilization at our existing venues. So it it's really a combination of those 2. I'd expect the new venue.
piece of that, uh, to be picking up over the next few years as we bring more of them online, uh, into next year and the 27.
Thank you, this concludes the question and answer session, I would like to say, please join the call back to Michael Lino for closing remarks.
Thank you, everybody, for your support, have a great rest of the summer and we will talk to you in the fall. Thank you.
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