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NEW YORK–(BUSINESS WIRE<\/a>)–<\/span>Sphere Entertainment Co. (NYSE: SPHR<\/a>) (\u201cSphere Entertainment\u201d or the \u201cCompany\u201d) today reported financial results for the fourth quarter and full-year ended December 31, 2025.<\/p>\n \nRecent highlights for the Company\u2019s Sphere segment include:<\/p>\n \nFor the three months ended December 31, 2025, the Company reported revenues of $394.3 million, an increase of $86.0 million, or 28%, as compared to the prior year quarter. In addition, the Company reported operating income of $28.9 million, an increase of $171.9 million, and adjusted operating income of $128.0 million, an increase of $95.2 million, both as compared to the prior year quarter.(1)<\/sup><\/p>\n \nFor the twelve months ended December 31, 2025, the Company reported revenues of $1,220.0 million, an increase of $89.1 million, or 8%, as compared to the prior year period. <\/sup>In addition, the Company reported an operating loss of $229.6 million, an improvement of $142.8 million, or 38%, and adjusted operating income of $261.8 million, an increase of $152.0 million, or 138%, both as compared to the prior year period.(1)<\/sup><\/p>\n \nExecutive Chairman and CEO James L. Dolan said, \u201cToday\u2019s results serve as continued validation of the business model behind Sphere. As we begin 2026, we remain focused on expanding Sphere\u2019s global footprint, including advancing our plans to bring Sphere to Abu Dhabi and National Harbor, and believe the Company is well-positioned for long-term growth.\u201d<\/p>\n \nSegment Results for the Three and Twelve Months Ended December 31, 2025 and 2024:<\/b><\/p>\n \nSphere<\/span><\/b><\/p>\n \nFor the three months ended December 31, 2025, the Sphere segment reported revenues of $274.2 million, an increase of $105.2 million, or 62%, as compared to the prior year quarter.<\/p>\n \nRevenues related to The Sphere Experience increased $108.5 million as compared to the prior year quarter, which reflected higher per-show revenue due to the impact of The Wizard of Oz at Sphere<\/i> and, to a lesser extent, an increase in the number of overall performances. In the current year quarter, The Sphere Experience included 245 performances of The Wizard of Oz at Sphere <\/i>as compared to 190 performances of Postcard from Earth<\/i> and V-U2 An Immersive Concert Film<\/i> in the prior year quarter.<\/p>\n \nRevenues from sponsorship, Exosphere advertising and suite license fees increased $4.2 million as compared to the prior year quarter, reflecting an increase in Exosphere advertising and sponsorship revenues, as well as higher suite license fee revenues.<\/p>\n \nOther revenues decreased $4.4 million as compared to the prior year quarter.<\/p>\n \nEvent-related revenues decreased $3.1 million as compared to the prior year quarter, primarily due to the absence of one brand event (formerly referred to as corporate events) held in the prior year quarter. This decrease was partially offset by two additional concert residency shows held at Sphere as compared to the prior year quarter and, to a lesser extent, higher per-concert revenue as compared to the prior year quarter.<\/p>\n \nFor the three months ended December 31, 2025, the Sphere segment had direct operating expenses of $92.6 million, an increase of $20.0 million, or 27%, as compared to the prior year quarter. Expenses associated with The Sphere Experience increased $21.9 million as compared to the prior year quarter due to higher per-show expenses for The Wizard of Oz at Sphere<\/i> and an increase in the number of overall performances. This was partially offset by other cost decreases.<\/p>\n \nFor the three months ended December 31, 2025, selling, general and administrative expenses of $104.1 million decreased $14.9 million, or 13%, as compared to the prior year quarter, primarily due to lower employee compensation and related benefits of $14.4 million, including the impact of executive management transition costs of $4.2 million recorded in the current year quarter as compared to executive management transition costs of $8.3 million recorded in the prior year quarter.<\/p>\n \nFor the three months ended December 31, 2025, operating loss of $6.5 million improved by $101.4 million and adjusted operating income of $89.4 million increased by $90.2 million, both as compared to the prior year quarter, primarily due to the increase in revenues and, to a lesser extent, lower selling, general and administrative expenses, partially offset by higher direct operating expenses.<\/p>\n \nMSG Networks<\/span><\/b><\/p>\n \nFor the three months ended December 31, 2025, the MSG Networks segment reported total revenues of $120.1 million, a decrease of $19.2 million, or 14%, as compared to the prior year quarter.<\/p>\n \nDistribution revenue decreased $19.7 million, primarily due to a decrease in total subscribers of approximately 14.5% and the impact of lower affiliation rates in the current year quarter.<\/p>\n \nFor the three months ended December 31, 2025, direct operating expenses of $70.7 million decreased $23.8 million, or 25%, as compared to the prior year quarter. Rights fees expense decreased $19.5 million as compared to the prior year quarter, primarily reflecting reductions in media rights fees as a result of the amendments to MSG Networks\u2019 media rights agreements with certain professional sports teams and other rights fees decreases. Other programming and production costs decreased $4.3 million as compared to the prior year quarter, primarily due to lower costs related to MSG+ as well as other cost decreases.<\/p>\n \nFor the three months ended December 31, 2025, selling, general and administrative expenses of $10.8 million decreased $5.5 million, or 33%, as compared to the prior year quarter. This decrease was primarily due to (i) lower employee compensation and related benefits of $3.2 million and (ii) lower professional fees of $3.2 million, mainly due to the absence of costs associated with pursuing a work-out of MSG Networks\u2019 credit facilities with its syndicate of lenders recorded in the prior year quarter, partially offset by higher advertising and marketing costs of $1.0 million.<\/p>\n \nIn addition, results for the three months ended December 31, 2025 had no impairment and other losses, net, as compared to a non-cash goodwill impairment charge of $61.2 million in the prior year quarter.<\/p>\n \nFor the three months ended December 31, 2025, operating income of $35.4 million increased by $70.5 million from an operating loss of $35.0 million in the prior year quarter, primarily due to the absence of impairment and other losses, net, recorded in the prior year quarter, lower direct operating expenses and, to a lesser extent, lower selling, general and administrative expenses, partially offset by the decrease in revenues. Adjusted operating income of $38.6 million increased $5.0 million, or 15%, as compared to the prior year quarter, primarily due to lower direct operating expenses, partially offset by the decrease in revenues.<\/p>\n \nAbout Sphere Entertainment Co.<\/b><\/p>\n \nSphere 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 a second venue planned for Abu Dhabi. 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<\/a>.<\/p>\n \nNon-GAAP Financial Measures<\/b><\/p>\n \nWe 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\u2019s 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\u2019s Executive Deferred Compensation Plan, provides investors with a clearer picture of the Company\u2019s operating performance given that, in accordance with U.S. generally accepted accounting principles (\u201cGAAP\u201d), gains and losses related to the remeasurement of liabilities under the Company\u2019s Executive Deferred Compensation Plan are recognized in operating income (loss) whereas gains and losses related to the remeasurement of the assets under the Company\u2019s 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).<\/i><\/p>\n \nWe 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\u2019s 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 earnings release.<\/i><\/p>\n \nForward-Looking Statements<\/b><\/p>\n \nThis 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\u2019s filings with the Securities and Exchange Commission, including the sections titled \u201cRisk Factors\u201d and \u201cManagement\u2019s Discussion and Analysis of Financial Condition and Results of Operations\u201d contained therein. The Company disclaims any obligation to update any forward-looking statements contained herein.<\/i><\/p>\n\n
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