Live Nation Entertainment Inc (LYV) — Q4 2025 Earnings Call Transcript

Good afternoon, and welcome to the Live Nation Full Year and Fourth Quarter 2025 Earnings Conference Call. Joining us today is our President and CEO, Michael Rapino, and our President and CFO, Joe Berchtold. We would like to remind you that this afternoon's call will contain certain forward-looking statements that 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 and 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 of Forms 10-K, 10-Q, and 8-K for a description of risks and uncertainties that could impact the actual results. Live Nation will also refer to some non-GAAP measures on this call. In accordance with the 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, and with that, we will now take your questions.

Maybe to kick it off on the outlook for Joe. I wanted to see if you'd be willing to talk a little bit more about the building blocks to the outlook for double-digit AOI growth in 2026. Just curious if you could talk a little bit more about the puts and takes investors should be keeping in mind as they think through segment contribution this year. And ultimately, just at a high level, what's giving you confidence as you sit here today looking at the business ahead for the next 12 months or so to guide for double-digit growth despite some of the headwinds. I think we're seeing Ticketmaster and then some of the preopening expense at Venue Nation on the back of some investment there, just the confidence in the double-digit guide despite some of those factors?

Sure. I'm happy to provide that guidance. Let's break it down by division. For sponsorship, we expect continued growth in double digits. Regarding AOI, we're over 70% booked this year and running ahead with double-digit growth, so we have good visibility into that pipeline. On ticketing, we don't anticipate significant contributions this year. We're seeing some mid-single-digit growth but also facing one-time challenges in the secondary market. We'll leave more detailed questions to others. Overall, we don't expect much from ticketing, despite some improvements in fundamentals. The key focus is on concerts, where we're aiming for solid double-digit growth. We have strong demand across the business globally, as highlighted in our earnings release. On the supply side, large venues and AMPs are up compared to 2024 and 2025, and approximately 80% of our shows are booked. We're optimistic about staying ahead of 2024 and 2025. In arenas, we're seeing a significant increase in show count, primarily driven by U.S. demand this year, whereas last year was more international. Stadiums are also up by double digits, driven by solid international growth, especially in the U.K. and Europe, even after strong performances last year.

That's helpful. And then maybe just as a follow-up, Michael, if you could put a finer point on the outlook for supply in 2026, and Joe mentioned up double digits across a number of different verticals there, but just as you think about the quality of that supply and maybe some of their early demand indicators you're seeing across the footprint, other than stadium, amps or arenas, domestic versus internationally? Any trends or ways to compare what you're seeing play out today looking ahead for 2026, how that might have compared to where you were 12 months ago looking ahead to '25?

Yes. I think we're continuing on our theme we've seen for multiple years now. It's a global business and continuing markets are growing. So that will be an ongoing theme for many years to come, new markets, extended markets around the world doing more shows, more demand from the consumer from all corners of the globe. You see it on all Venue segments from my club business to stadium. It's all doing more business, more tickets, more shows. So the pie is growing on the complete supply side to fill the pipe and multiple pipes, as I said, from top to bottom. So we don't see any new trend that we haven't kind of stated for the last few years that we think this is a continual growth industry on a global basis high single digits on an industry-wide, and hopefully, we'll continue to beat that because we do believe that both the supply of the artists, more bands on the road and more fans want to see those artists, those two will continue to drive all segments, all geographies over time.

Maybe switching gears to the DOJ. Yesterday, the judge partially granted your motion on the summary judgment dismissing claims that you're a monopoly in promotion and booking. I guess you're still going to proceed to trial on Venue-facing ticketing and AMPs time. But can you tell us your opinion on what the dismissal means for a potential breakup of the company and other structural or behavioral remedies?

Thanks, Brandon. Yes, we were obviously very pleasantly surprised. We never expected to get much of anything on that ruling, but pleasantly surprised that they're seeing the facts laid out on the table. As you said, the first thing that they determined was that the promotion and booking services are not a monopoly. It's not an accurate market definition, which in our minds really takes away the breakup of the company argument because the breakup of the company argument was founded on some notion of mutually reinforcing monopolies. And they just found that the promotion and booking side isn't. So we think that, that is critical element takes away that edge risk that some folks had. And then the other key thing that they decided was that the national consumer monopoly market was also dismissed. And so what that means on a practical basis is they need to demonstrate that Ticketmaster's so-called monopoly harms the venues, not that they can just say it harms fans, which would be a more emotional topic. So we think that also makes the case somewhat more difficult for them. So we're very pleased with yesterday.

Okay. And switching agencies to the FTC. It's been several months since the FTC hoopla started and you took a bunch of steps aimed at bad secondary market behavior. You reiterated in your answer to Stephen's question that it's having a real impact on Ticketmaster's secondary business. But can you tell us your view of the impact that your initiatives are having on the broader industry? And then maybe in the wake of the Senate hearing and the secondary price cap legislation that we're seeing, how you see the future of the secondary industry playing out in general?

Sure, I'll take the first part, and I'll let Michael take the back part. In terms of what we're doing, I would put it in two buckets, what we're doing. One is as it relates to allowing brokers to sell tickets on our platform, we took some immediate action shortly after the FTC lawsuit that dramatically restricts the brokers who have tickets from selling them on our platform, limiting them to one broker account per tax ID and the number of tickets being sold needing to stay within the limits. So the impact of that has been to substantially reduce, roughly cut in half, the number of tickets that are being listed by brokers for concerts on our platform. Now we think a lot of those are still being sold on the other platforms at this point, pending them taking similar steps. But we're also taking additional steps to stop the scalpers from getting the tickets in the first place. So we have ramped up our efforts starting with account creation and using identity verification more in account creation. We are increasing the use of various tools, including identity verification for artist sign-up and for queues to try to give real fans a better chance than the brokers in terms of buying the tickets; we're increasing our use of face value exchange. All of these tools, we think, have been effective in helping shrink the overall industry and keeping the artists with more control over tickets and their relationship with their fans. I don't know, Michael, if you want to comment on legislation.

I guess, legislation is, obviously, a lot of it's going on a state-by-state level. We've been very clear that we're supportive of giving more control to the artists, we're in support of price caps because we don't seem to be getting more nuanced solutions to give the artists that control, and we'll continue to support that artist agenda.

I'm Joe, and we're focused on anticipating where the market is headed. We've noticed growing momentum in the secondary market, especially on the consumer and artist fronts, which we find encouraging. We're actively developing tools for artists, and just this week, we launched an initiative with Noah Kahan that improves our capabilities, though it’s not perfect. We’ve also collaborated closely with Kid Rock on a program to assist him, and currently, we have over 100 artists utilizing our face value exchange. We feel positive about this direction, as artists are likely to seek greater control and better methods for managing secondary sales. The company that can provide the most effective tools will ultimately succeed. We expect that legislation will gradually evolve on a state-by-state basis to support artists in their efforts against the secondary market.

I guess, first for Joe, it'd be kind of helpful if you could dig in a bit more on the demand side of what you're seeing in terms of the indicators you could parse that by regions or venues or consumer segments, that would be helpful. And then for Michael, you've been quite active in arena acquisitions in Europe over the past few months. So I wanted to see if you can speak a bit more to the playbook there in terms of kind of the investments you're making into those venues and then just how it plays into your broader goals across the continent.

Sure. On the demand side, we're continuing to see very strong consistent demand. We gave you on the earnings release a number of specific points on just the volume of fans that are showing up for artists, how tremendously popular they continue to be. It also flows through to festivals. We continue to see strength of demand at the club and theater level. I think the thing that to continue to remind ourselves, to continue to remind you guys is, if you look at the U.S., 75% of the tickets are under $100. Artists are acutely aware of the need to have all of their fans be able to afford to buy a ticket, maybe not the front row, but to buy a ticket, and they're very focused on keeping it affordable. So we're not seeing any pullback, any issues whatsoever in demand for any budget-conscious fans.

Sorry, I was just jumping in on answering your Venue Nation question. You've seen some announcements we’re thrilled with the progress we're making. We outlined in our Investor Day, we have a large pipeline around the world in arenas, some amphitheaters, 5,000 seats key markets around the world where we can add into our portfolio. So we're thrilled that division is growing on a global basis, hitting all of our benchmarks, the returns we're looking for, and much more to come.

On ticketing GTV growth, I understand that there was less activity in sports and third-party events during the first half of the year. I'm interested in how that subcategory performed in the second half and any insights on how these areas of the ticketing business are developing as we look towards 2026. Additionally, Spotify recently reported over $1 billion in ticket purchase activity through its platform. What are your thoughts on whether this integration is benefiting the industry as a whole or simply shifting where people discover ticket options? Any feedback on your perspective regarding this integration and its success would be appreciated.

Yes. Just on Ticketmaster in terms of the GTV. So we ended the year with GTV growing about 6%, which was driven by concerts, really fully 9% increase in concerts with a 1% decline in sports and other third party. So as we look to this year, we expect to see that probably accelerate a bit. I think we'll see some comeback on the other pieces over the course of the year. You need to see it play out, but we feel good about the runway that Ticketmaster's on an operational basis. We didn't think the majority of it will come from concerts, but it won't be overwhelming as it was this year.

On distribution, Cameron, there's almost two businesses. There's the superstar stuff that has incredible reach, tends to sell out on its own. And we don't need much help on that. The artist has such a medium and efficiency. But a lot of the stuff that doesn't sell out around the globe, we love all of our distribution partners, Spotify, the Facebooks, Verizon. We've had lots of different partners who help us reach bands and some of those shows that the Tuesday Night Show in Indianapolis that isn't sold out, we'll take all of the reach we can to help get to those customers.

Two for Michael or Joe, please. First, I appreciate the extra disclosure on Venue Nation. Just given the preopening costs ramping up in '26, can you help us think about the overall ramp and trajectory for Venue Nation on a total portfolio AOI basis to reach that run rate in '28 and '29, that you called out? And then separately, when you think about the longer-term Venue Nation opportunity, how big of a contributor is international versus U.S. when you're thinking about that going forward?

So first, regarding the specific numbers, this is the first time we're sharing exact figures. We've been discussing this concept for some time, specifically the ramp-up costs associated with building out Venue Nation. These ramp-up costs will be significant as a percentage of the benefits during the initial years. This year, you're observing a cost of $25 million, which increased from last year's $50 million. I don't anticipate this level of increase to continue as we stabilize. We expect to start seeing the full benefits once the buildings have been operational for two to three years. I plan to provide fan count information for both the buildings we opened last year and those opening this year to illustrate the path to stabilization. We've provided profitability per fan in various formats, which you can use to model projected increases. Additionally, please consider this information in the context of our Investor Day, which detailed the long-term potential of Venue Nation. This should assist you in estimating the rate of increase.

And just like when you think about international...

Yes, in terms of long term, clearly, international is a huge focus for us, both Latin America, Europe, and Asia, all areas, really. I don't think about it in top cities, more than markets, but you are underdeveloped in the international markets on key arenas because you don't have the NBA, NHL infrastructure like you do in the U.S. So we're seeing tremendous opportunities, whether it's building a new venue. We're going into a market like Paris with lots of fans, tremendous arena, great potential there. Didn't have the full rigging to hang a modern arena show, modern arena production. So after that acquisition closes, we'll do some renovations. We expect it will help expand the marketplace to be able to draw a lot more shows to that market and help us grow the overall business.

I had a few additional questions regarding Venue Nation. First, Joe, to follow up on your previous comments, when we analyze the detailed information you shared at the Investor Day and assess the growth rate of the Venue Nation AOI, it appears that 2026 could be a pivotal year. Additionally, when you examine the AOI, the growth in fan count, and the revenue and AOI, it looks like the acceleration could continue into 2027 and 2028. While I understand you don't provide specific guidance, is this a reasonable framework to consider the underlying developments not just for Venue Nation and concerts, but perhaps on a broader scale as well? Secondly, the acquisition of ForumNet Group in Italy caught my attention. I recognize that the main aspect of the deal was focused on their arena, but they have two other venues in their portfolio too. Could this mean that acquiring companies with multiple venues might play a significant role in scaling Venue Nation in the future, or was this acquisition more of an isolated case?

Yes. And just in terms of the ramp, I think you will see an acceleration that you would naturally have if every set of venues that you get, if you build one, there's probably a 3-ish year run rate when you buy them, maybe a 2-year run rate. So as we build that base, you're going to naturally get the benefit of all the pieces. I mean, just to give you a little bit of context. So if you look at how we envision building our owner-operated fan count this year, I'd say it's kind of 20% from venues we opened in '25, about 1/3 from venues we opened in '26, and about half organic. So if you think about that playing out as you add new venues, yes, you're going to accelerate your rate of increase because you just have more pieces that you're adding into that funnel. So I would absolutely expect each year to help grow that base of fans in our operated venues.

Venue Nation, it's just a one-off. We're not looking to buy venue management companies. We don't love the return on those businesses as much as we like owning the venue and fully taking over the P&L. So in this case, they were added bonuses, but not a regular strategy.

Great. Just a follow-up on the demand side. Can you provide a bit more color on the recent down sale activity and sell-through rates, how they stack up advanced last year into the summer pipeline? And maybe a bit more color on consumers' willingness to pay up against higher ticket prices for the World Cup that we're seeing now?

Yes, we are experiencing consistent performance with overall demand and sell-through levels similar to last year. Each tour has its unique characteristics, but we noted a few at the very high end, such as Harry Styles, BTS, and Bruno Mars, which are showing demand levels higher than ever before. Generally, ticket sales are strong across various venue sizes. However, we are not involved with FIFA and cannot comment on their ticket sales. What we do observe is that artists are very aware of their fanbase and manage that relationship effectively, including ticket pricing to ensure their fans can access the venues. If tickets end up being sold on the secondary market, brokers might profit significantly from that arbitrage. Overall, this larger trend continues to unfold.

Yes, it appears you are experiencing strong international momentum across all regions. I'm interested in knowing where you are seeing the best growth—is it in Europe, Latin America, or Asia Pacific? What are the implications for margins and capital needs based on this mix shift? Additionally, what is currently the biggest constraint internationally—venues, local partnerships, regulation, or talent acquisition? I also have a follow-up question.

Yes. We're seeing all the countries equally have the appetite for that live show. So whether it's Sao Paulo or Milan, the major cities around the world all want to have superstar.

Great. When a venue chooses Ticketmaster, what are the top two or three factors that consistently lead to that decision? Is it because you have the best technology or that you're heavily investing in fraud tools or bot prevention? I'm curious about your insights on why venues select you so often.

Yes. I think the #1 reason why they choose us is because we just sell more tickets. Empirically, a promoter or a manager would tell you they look at the shows on the tour. The Ticketmaster ones are most effective at helping them sell the most tickets. Getting the highest grosses from their show. So what they can do in terms of using our distribution, using our marketing capabilities in terms of using our pricing tools to make sure they understand what's the right level to get to all the fans. So that's the #1 reason. And then depending on the marketplace in the U.S., where it's more mature, it's going to be more economics driven. In other markets that are less mature, some of the other software tools on the venue level are going to matter more. But selling tickets is the overriding #1 factor.

My apologies, the line had dropped, but it looks like you took over, Joe. Thanks.