Live Nation Entertainment 10-Q 2024-03-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

For the quarterly period ended March 31, 2024

or

For the transition period from to

Commission File Number 001-32601

LIVE NATION ENTERTAINMENT, INC.

(Exact name of registrant as specified in its charter)

9348 Civic Center Drive

Beverly Hills, CA 90210

(Address of principal executive offices, including zip code)

(310) 867-7000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes x No

On April 25, 2024, there were 231,442,568 outstanding shares of the registrant’s common stock, $0.01 par value per share, including 1,698,794 shares of unvested restricted stock awards and excluding 408,024 shares held in treasury.

LIVE NATION ENTERTAINMENT, INC.

INDEX TO FORM 10-Q

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PART I—FINANCIAL INFORMATION

LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

See Notes to Consolidated Financial Statements

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LIVE NATION ENTERTAINMENT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

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“Live Nation” (which may be referred to as the “Company,” “we,” “us” or “our”) means Live Nation Entertainment, Inc. and its subsidiaries, or one of our segments or subsidiaries, as the context requires. You should read the following discussion of our financial condition and results of operations together with the unaudited consolidated financial statements and notes to the financial statements included elsewhere in this quarterly report.

Special Note About Forward-Looking Statements

Certain statements contained in this quarterly report (or otherwise made by us or on our behalf from time to time in other reports, filings with the SEC, news releases, conferences, internet postings or otherwise) that are not statements of historical fact constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended, notwithstanding that such statements are not specifically identified. Forward-looking statements include, but are not limited to, statements about our financial position, business strategy, competitive position, potential growth opportunities, potential operating performance improvements, the effects of competition, the effects of future legislation or regulations and plans and objectives of our management for future operations. We have based our forward-looking statements on our beliefs and assumptions considering the information available to us at the time the statements are made. Use of the words “may,” “should,” “continue,” “plan,” “potential,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “outlook,” “could,” “target,” “project,” “seek,” “predict,” or variations of such words and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements.

Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to, those set forth below under Part II—Other Information—Item 1A.—Risk Factors, in Part I—Item IA.—Risk Factors of our 2023 Annual Report on Form 10-K as well as other factors described herein or in our annual, quarterly and other reports we file with the SEC (collectively, “cautionary statements”). Based upon changing conditions, should any risk or uncertainty that has already materialized, worsen in scope, impact or duration, or should one or more of the currently unrealized risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described in any forward-looking statements. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the applicable cautionary 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. We do not intend to update these forward-looking statements, except as required by applicable law

Executive Overview

For the third year in a row, the first quarter was a record start to the year for the Company with strong fan demand across all our markets. Our overall revenue increased by 21% to $3.8 billion on a reported basis, or 22% growth on a constant currency basis as compared to the same period of the prior year. Concerts and Sponsorship both had revenue growth in excess of 20% while Ticketing had high single-digit growth. The most significant growth came from our Concerts segment as a result of increased shows and fans. Our operating income for the quarter decreased by $179.3 million, from an operating income of $142.8 million in the first quarter of 2023 to an operating loss of $36.5 million in the first quarter of 2024 due to higher performance from all three of our major business segments offset by Astroworld estimated loss contingencies in our Concerts segment. The decrease in operating income was $166.4 million at constant currency.

Based on our strong pipeline of arena, amphitheater and theater and club shows for the remainder of the year, coupled with our current deferred revenue balance of $5.0 billion as of March 31, 2024, we are optimistic for continued success in the remainder of the year even with reduced stadium activity relative to the prior year.

All of the segment financial comments to follow are based on reported foreign currency exchange rates.

Our Concerts segment revenue for the quarter increased by $598 million, or 26%, from $2.3 billion in the first quarter of 2023 to $2.9 billion in the first quarter of 2024. The revenue growth was largely the result of more shows and fans both domestically and in our International markets. The number of events for the first quarter of 2024 was approximately 11,200 compared to approximately 9,900 in the first quarter of 2023, an increase of approximately 1,300 events or 13%. The number of fans for the quarter was 22.9 million compared to approximately 18.9 million last year, for growth of 4.0 million fans or 21%. The increase was largely in the United States, Canada and Mexico. Arena shows fueled the improvement with fan count up nearly 40% in these venues. Some of the notable acts touring in the first quarter included Coldplay, Pink, Bad Bunny and Madonna. Our festivals in Latin America included Estereo Picnic in Bogota, Lollapalooza in Sao Paulo and EDC Mexico in Mexico City. Combined, our festivals in these markets had three quarters of a million fans. Concerts AOI for the quarter was $3 million compared to $1 million in the first quarter of 2023.

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Our Ticketing segment revenue for the quarter increased by $45 million, or 7%, from $678 million in the first quarter of 2023 to $723 million in the first quarter of 2024. The improvement resulted from an increase in ticket sales, notably in Europe and Latin America. We sold approximately 77 million fee-bearing tickets in the first quarter of 2024 compared to 72 million tickets in the same period of the prior year, an increase of 6%. This was our highest first quarter ever for fee-bearing ticket sales driven by double-digit growth in Europe, Asia-Pacific and Latin America. It was our highest first quarter for GTV as well. In the first quarter, we signed 7 million net new tickets of which 70% came from our International markets – one of our best leading indicators regarding the future success of our Ticketing business. Ticketing AOI for the quarter improved by $13 million, from $271 million in the first quarter of 2023 to $284 million in the first quarter of 2024. The combination of record ticket sales, GTV and the expansion of our resale business resulted in our strongest Ticketing AOI ever for the first quarter.

Our Sponsorship & Advertising segment revenue for the quarter increased by $41 million, or 24%, from $170 million in the first quarter of 2023 to $211 million in the first quarter of 2024. The improvement was largely due to our festivals in Latin America. It was our inaugural year consolidating the Estero Picnic festival in Colombia as well as Lollapalooza in Brazil. These two events, along with a number of well attended festivals in Mexico, led to significant revenue and AOI growth for Sponsorship & Advertising. AOI for the quarter increased by $34 million, from $96 million in the first quarter of 2023 to $130 million in the first quarter of 2024.

We are optimistic about the long-term potential of our Company and are focused on the key elements of our business model: expanding our global concerts platform to connect artists and fans, bringing more shows to fans in existing and new mark

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Required information is within Part I — Financial Information—Item 2.—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Market Risk.

Evaluation of Disclosure Controls and Procedures

We have established disclosure controls and procedures to ensure that material information relating to our company, including our consolidated subsidiaries, is made known to the officers who certify our financial reports and to other members of senior management and our board of directors.

Based on their evaluation as of March 31, 2024, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) are effective to ensure that (1) the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (2) the information we are required to disclose in such reports is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or internal controls will prevent all possible errors and fraud. Our disclosure controls and procedures are, however, designed to provide reasonable assurance of achieving their objectives, and our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective at that reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings

Information regarding our legal proceedings can be found in Part I—Financial Information—Item 1. Financial Statements—Note 6 – Commitments and Contingent Liabilities.

While we attempt to identify, manage and mitigate risks and uncertainties associated with our business to the extent practical under the circumstances, some level of risk and uncertainty will always be present. Part I—Item 1A.—Risk Factors of our 2023 Annual Report on Form 10-K filed with the SEC on February 22, 2024, describes some of the risks and uncertainties associated with our business which could materially and adversely affect our business, financial condition, cash flows and results of operations, and the trading price of our common stock could decline as a result. We do not believe that there have been any material changes to the risk factors previously disclosed in our 2023 Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchase of Equity Securities

The following table provides information regarding repurchases of our common stock during the three months ended March 31, 2024:

Item 3. Defaults Upon Senior Securities

None.

No director or officer adopted or terminated any Rule 10b5-1 plan, or any other written trading arrangement that meets the requirements of a “non-Rule 10b5-1 trading arrangement” during the three months ended March 31, 2024.

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§ Management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on May 2, 2024.