Live Nation Entertainment Reports Second Quarter 2023 Results

LOS ANGELES, July 27, 2023 /PRNewswire/ --

"Live music is bigger than ever, with global demand driving the industry to record levels. There's a more diverse pipeline of artists breaking from all corners of the world, and at the same time tours are going to more markets - particularly in Latin America and Asia. This was our strongest second quarter ever, with 2023 on pace to be a record year, and early indicators for 2024 giving us confidence in continued growth."  ? Michael Rapino, President and CEO, Live Nation Entertainment

2Q23 FINANCIAL OVERVIEW
(vs 2Q22, reported FX)

• Revenue Up 27% to $5.6 Billion
• Operating Income Up 21% to $386 Million
• AOI Up 23% to $590 Million
• Operating Cash Flow of $491 Million
• Free Cash Flow - Adjusted of $407 Million, Converting 69% of AOI
• EPS Up 55% to $1.02

View how these results compare to past quarters in the 2Q23 Trended Results Grid:
https://investors.livenationentertainment.com/financial-information/financial-results 

OUTLOOK: Record 2023 Ahead and Continued Growth into 2024
(based on leading indicators through mid-July)

• Record number of fans expected: Over 117 million tickets sold year-to-date for Live Nation shows this year, up 20% year-over-year
• Record Ticketmaster sales expected: 151 million reported fee-bearing tickets sold year-to-date, up 22% year-over-year; on track to manage 600 million tickets including selling 300 million fee-bearing tickets this year
• Live creates unique advertising opportunity: Sponsorship pacing to double-digit operating income and AOI growth
• Even more events ahead: $4.3 billion in event-related deferred revenue, up 37% vs 2Q22, setting up double-digit attendance growth in Q3
• Growing global artist pipeline: International acts doubled representation in top 50 tours over last five years, more acts touring globally and visiting 42% more countries
• Early 2024 pipeline up for arena/amphitheater/stadium shows confirmed and with offers in

LIVE NATION CONCERTS:

Record second quarter for Concerts (vs 2Q22):

• Revenue up 29% to $4.6 billion
• AOI up 37% to $168 million
• Full-year margin expansion expected relative to 2022

Attendance growth globally, led by international markets (vs 2Q22):

• Stadiums: up 28% to 8.0 million fans, led by Europe and Asia Pacific
• Arenas: up 19% to 10.7 million fans, largely from Canada, Asia Pacific and Latin America
• Festivals: up 14% to 4.5 million fans, driven by global demand across all our markets
• YTD overall fan growth of 25% with International markets up 46% and North America up 8%
• Number of tickets sold per show higher with on-sales and close periods both performing well
• On track to invest over $12 billion in putting on artists' shows in 2023, up 30% from 2022

VENUE NATION:

Growing Venue Nation:

• Expect double-digit fan count growth at operated venues in 2023 relative to 50 million fans in 2022
• Per-fan profitability increases double-digits, fueled by growth in sponsorship and on-site spending across our operated venues including amphitheaters, festivals, and theaters & clubs
• Ancillary per fan revenue at amphitheaters up double-digits to over $40
• With 400 venues and festivals globally, pipeline continues to grow with key developments in Asia including South Korea and Singapore, Latin America, and Europe

TICKETMASTER: 

Fan demand and client wins drive records results (vs 2Q22):

• Revenue up 23% to $709 million
• AOI up 27% to $293 million
• 14 million net new clients tickets added YTD, with half coming from International markets
• Full-year margins expected to remain in the high 30s

Sale of concert tickets leading ticketing growth (vs 2Q22):

• Total fee-bearing GTV up 25% to $8.7 billion with North America up 22% and International up 34%; over 80% of the growth driven by global concert ticket sales
• Ticket volume YTD up double-digits for both primary and secondary tickets
• Average secondary ticket price roughly 2x primary, showing the extent to which tickets remain priced below market value

LIVE NATION SPONSORSHIP:

Growing sponsorships reflect attractiveness of fan base and onsite connection (vs 2Q22):

• Revenue up 15% to $303 million, with on-site up 16% and online up 9%
• AOI up 14% to $203 million
• Full-year margins expected to remain in the low 60s

Over 90% of 2023 planned sponsorship committed:

• Top clients with multi-million dollar, multi-year commitments, made up of over 100 partners, accounted for ~85% of our revenue
• New partners include Diageo and Chateau St. Michelle; renewed multi-year deals with Salesforce and Gildan

ADDITIONAL FINANCIAL INFORMATION:

•  Capital expenditures of $158 million YTD, driven by investments in on-site venue enhancement, expansion of our venue portfolio, and continued development of ticketing products for both enterprises and fans. 2023 capital expenditures forecast remains at $450 million, two-thirds on revenue-generating projects
•  Below-the-line impact to 2023 EPS - accretion expected to be approximately 60% higher than 2022, largely driven by OCESA performance
•  Foreign exchange not expected to materially impact 2023 revenue, operating income or AOI
•  For the first six months of 2023, our fully diluted share count was 230.5m, flat compared to the same period in 2022

Balance sheet and liquidity remains strong:

• 2Q23 ended with $7.1 billion in cash and cash equivalents, including $1.4 billion in ticketing client cash and $2.3 billion in free cash
• Including $0.6 billion of available debt capacity, there is $2.9 billion of liquidity for reinvestments and future growth opportunities, including a robust global M&A pipeline
• 2Q23 net leverage is 2.6x
• Approximately 87% of debt is at a fixed rate, with an average cost of debt of 4.7%
• Projected Free Cash Flow ? Adjusted: Percentage conversion for the full-year remains in the low 60s

The company will webcast a teleconference today at 2:00 p.m. Pacific Time to discuss its financial performance, operational matters and potentially other material developments. Interested parties should visit the "News / Events" section of the company's website at investors.livenationentertainment.com to listen to the webcast. Supplemental statistical and financial information to be provided on the call, if any, will be posted to the "Financial Info" section of the website. A replay of the webcast will also be available on the Live Nation website. The link to the 2Q23 Trended Results Grid is provided above for convenience and such grid is not a part of, or incorporated into, this press release or any SEC filings that include this press release.

Notice Regarding Financial Statements
The company has provided certain financial statements at the end of this press release for reference.  These financial statements should be read in conjunction with the full financial statements, and the notes thereto, set forth in the company's Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission today and available on the SEC's website at sec.gov.

About Live Nation Entertainment:
Live Nation Entertainment, Inc. (NYSE: LYV) is the world's leading live entertainment company comprised of global market leaders: Ticketmaster, Live Nation Concerts, and Live Nation Media & Sponsorship. For additional information, visit investors.livenationentertainment.com.

Forward-Looking Statements, Non-GAAP Financial Measures and Reconciliations: 

Certain statements in this press release, including the Supplemental Information that follows, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to statements the regarding the company's anticipated prospects for a record 2023 and continued growth into 2024, with record number of fans and Ticketmaster sales expected for 2023; anticipated double-digit attendance growth for the third quarter of 2023; early indications for growth in the company's Concerts pipeline for 2024; the company's pacing to invest over $12 billion in putting on artists' shows in 2023; current expectations for fee-bearing ticket sales in 2023; the company's sponsorship and advertising segment's operating income and adjusted operating income growth pace for 2023; current full-year margin expectations for each of the company's operating segments; expectations for double-digit fan count growth at the company's operated venues in 2023; continued growth in the company's venue and festival pipeline; the company's current expectations for capital expenditures for 2023; the company's global M&A pipeline; projected free cash flow?adjusted conversion for 2023; anticipated accretion from OCESA; and the company's current expectation that there will be no material foreign exchange impacts on revenue, operating income or adjusted operating income for 2023.

Live Nation wishes to caution you that there are some known and unknown factors that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements, including but not limited to operational challenges in achieving strategic objectives and executing on the company's plans, the risk that the company's markets do not evolve as anticipated, the potential impact of any economic slowdown and operational challenges associated with selling tickets and staging events.

Live Nation refers you to the documents it files from time to time with the U.S. Securities and Exchange Commission, or SEC, specifically the section titled "Item 1A. Risk Factors" of the company's most recent Annual Report filed on Form 10-K, and Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K, which contain and identify other important factors that could cause actual results to differ materially from those contained in the company's projections or forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date on which they are made. All subsequent written and oral forward-looking statements by or concerning Live Nation are expressly qualified in their entirety by the cautionary statements above. Live Nation does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.

This press release contains certain non-GAAP financial measures as defined by SEC Regulation G. A reconciliation of each such measure to its most directly comparable GAAP financial measure, together with an explanation of why management believes that these non-GAAP financial measures provide useful information to investors, is provided herein.

Adjusted Operating Income (Loss), or AOI, is a non-GAAP financial measure that we define as operating income (loss) before certain stock-based compensation expense, loss (gain) on disposal of operating assets, depreciation and amortization (including goodwill impairment), amortization of non-recoupable ticketing contract advances and acquisition expenses (including transaction costs, changes in the fair value of accrued acquisition-related contingent consideration obligations, and acquisition-related severance and compensation). We use AOI to evaluate the performance of our operating segments. We believe that information about AOI assists investors by allowing them to evaluate changes in the operating results of our portfolio of businesses separate from non-operational factors that affect net income (loss), thus providing insights into both operations and the other factors that affect reported results. AOI is not calculated or presented in accordance with GAAP. A limitation of the use of AOI as a performance measure is that it does not reflect the periodic costs of certain amortizing assets used in generating revenue in our business. Accordingly, AOI should be considered in addition to, and not as a substitute for, operating income (loss), net income (loss), and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies; thus, AOI as presented herein may not be comparable to similarly titled measures of other companies.

Constant Currency is a non-GAAP financial measure when applied to a GAAP financial measure. We calculate currency impacts as the difference between current period activity translated using the current period's currency exchange rates and the comparable prior period's currency exchange rates. We present constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations.

Free Cash Flow ? Adjusted, or FCF, is a non-GAAP financial measure that we define as net cash provided by (used in) operating activities less changes in operating assets and liabilities, less maintenance capital expenditures, less distributions to noncontrolling interest partners. We use FCF among other measures, to evaluate the ability of operations to generate cash that is available for purposes other than maintenance capital expenditures. We believe that information about FCF provides investors with an important perspective on the cash available to service debt, make acquisitions, and for revenue generating capital expenditures. FCF is not calculated or presented in accordance with GAAP. A limitation of the use of FCF as a performance measure is that it does not necessarily represent funds available for operations and is not necessarily a measure of our ability to fund our cash needs. Accordingly, FCF should be considered in addition to, and not as a substitute for, net cash provided by (used in) operating activities and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies; thus, FCF as presented herein may not be comparable to similarly titled measures of other companies.

Free Cash is a non-GAAP financial measure that we define as cash and cash equivalents less ticketing-related client funds, less event-related deferred revenue, less accrued expenses due to artists and cash collected on behalf of others, plus event-related prepaids. We use free cash as a proxy for how much cash we have available to, among other things, optionally repay debt balances, make acquisitions and fund revenue generating capital expenditures. Free cash is not calculated or presented in accordance with GAAP. A limitation of the use of free cash as a performance measure is that it does not necessarily represent funds available from operations and it is not necessarily a measure of our ability to fund our cash needs. Accordingly, free cash should be considered in addition to, and not as a substitute for, cash and cash equivalents and other measures of financial performance reported in accordance with GAAP. Furthermore, this measure may vary among other companies; thus, free cash as presented herein may not be comparable to similarly titled measures of other companies.

SOURCE Live Nation Entertainment