Sphere Entertainment Co. Reports First Quarter 2026 Results

Key Terms

adjusted operating income financial

Adjusted operating income is a company's profit from its main activities, excluding certain one-time or unusual costs and gains. It helps investors see how well the business is performing in its normal operations, without distractions from rare events or expenses. This way, they get a clearer picture of the company’s true profitability.

direct operating expenses financial

Direct operating expenses are the ongoing, out-of-pocket costs directly tied to producing a company’s goods or delivering its services — for example raw materials, production labor, utilities for the plant, and shipping tied to sales. Investors watch these expenses because they determine how much it costs to run the core business and therefore affect margins and cash flow; think of them as the ingredients and fuel needed to keep a bakery baking and selling bread.

selling, general and administrative expenses financial

Selling, general and administrative expenses are the costs a business incurs to operate daily, such as sales efforts, office management, and administrative tasks. These expenses are important to investors because they impact the company’s profitability; higher costs can reduce profits, while efficient management of these expenses can indicate better financial health.

mark-to-market financial

"Mark-to-market" is a method of valuing assets or investments based on their current market price, rather than their original cost or value. It helps investors see the most up-to-date worth of their holdings, much like checking the latest price of a stock before deciding to buy or sell. This approach ensures that financial statements reflect real-time value, providing a clearer picture of overall financial health.

share-based compensation financial

Share-based compensation is when a company pays employees, executives or directors with its own stock or rights to buy stock instead of, or in addition to, cash. Think of it like receiving store gift cards instead of extra paycheck — it can motivate staff to boost the company’s value, but it also increases the number of shares outstanding and can shrink each existing owner’s slice of profits and voting power. Investors watch it because it affects reported earnings, share count and the alignment between management and shareholders.

distribution revenue financial

Distribution revenue is the money a company earns by getting products or services to customers through its sales channels, partners or platforms—this can include margins on resold goods, licensing or royalty fees, and fees for delivery or access. Investors care because it shows how well a company’s network turns products into cash, how repeatable and scalable its sales are, and whether it relies on one-off sales or steady, channel-driven income; think of it as the cut a store or platform takes for moving goods to buyers.

rights fees expense financial

Rights fees expense are payments a company makes to secure the legal permission to use or distribute someone else’s content, brand, technology or intellectual property—think of it as paying for a ticket to legally show a movie, use a trademark, or stream a sporting event. For investors, these costs matter because they reduce profit and can be either one-time or recurring; large or rising rights fees can signal higher ongoing costs or valuable exclusive access that could boost future revenue, much like renting a prime storefront versus owning it.

NEW YORK--(BUSINESS WIRE)-- Sphere Entertainment Co. (NYSE: SPHR) (“Sphere Entertainment” or the “Company”) today reported financial results for the first quarter ended March 31, 2026.

Recent highlights for the Company’s Sphere segment include:

• Plans to bring Sphere to Abu Dhabi and National Harbor continue to move forward, while the Company also remains in discussions with a significant number of markets globally regarding additional large and smaller-scale Sphere venues;
• The Wizard of Oz at Sphere, the Sphere Experience that opened in Las Vegas on August 28, 2025, surpassed its 500^th showing in March;
• Metallica announced a new concert residency at Sphere, with 24 concerts planned beginning in October 2026, while Backstreet Boys announced they will return this summer, extending their residency run to 56 nights total;
• The Company continues to draw robust interest from Exosphere advertisers and sponsors, including the announcement in April of a new multi-year sponsorship agreement with Evian.

For the three months ended March 31, 2026, the Company reported revenues of $386.4 million, an increase of $105.8 million, or 38%, as compared to the prior year quarter. In addition, the Company reported operating income of $7.2 million, an increase of $85.8 million, and adjusted operating income of $110.0 million, an increase of $74.0 million, both as compared to the prior year quarter.⁽¹⁾

Executive Chairman and CEO James L. Dolan said, “Today’s results demonstrate our continued success proving out Sphere’s business model. Looking ahead, we remain focused on maximizing that model’s full potential in Las Vegas, while executing on our long-term vision for a global network of Sphere venues.”

Segment Results for the Three Months Ended March 31, 2026 and 2025:

(In millions)		Three Months Ended
		March 31,								Change
		2026				2025				$				%
Revenues:
Sphere		$	266.0			$	157.5			$	108.4			69	%
MSG Networks			120.4				123.0				(2.6	)		(2	)%
Total Revenues		$	386.4			$	280.6			$	105.8			38	%
Operating Income (Loss):
Sphere		$	(24.9	)		$	(93.8	)		$	68.9			73	%
MSG Networks			32.1				15.2				16.9			112	%
Total Operating Income (Loss)		$	7.2			$	(78.6	)		$	85.8			NM
Adjusted Operating Income:(1)
Sphere		$	74.3			$	13.1			$	61.1			NM
MSG Networks			35.7				22.8				12.9			56	%
Total Adjusted Operating Income		$	110.0			$	36.0			$	74.0			NM

Note: Does not foot due to rounding. NM — Absolute percentages greater than 200% and comparisons from positive to negative values or to zero values are considered not meaningful.
	(1)	See page 3 of this earnings release for the definition of adjusted operating income (loss) included in the discussion of non-GAAP financial measures.

Sphere

For the first quarter 2026, the Sphere segment reported revenues of $266.0 million, an increase of $108.4 million, or 69%, as compared to the prior year quarter.

Revenues related to The Sphere Experience increased $81.7 million as compared to the prior year quarter, which primarily reflected higher per-show revenue for The Wizard of Oz at Sphere. In the current year quarter, The Sphere Experience reflected 209 performances of The Wizard of Oz at Sphere as compared to 200 performances of Postcard from Earth and V-U2 An Immersive Concert Film in the prior year quarter.

Event-related revenues increased $24.4 million as compared to the prior year quarter, primarily due to (i) higher revenues from brand events, due to one additional brand event held in the current year quarter and higher per-event revenue, and (ii) higher revenues from concerts, primarily due to six additional concert residency shows held at Sphere in Las Vegas during the current year period.

Revenues from sponsorship, Exosphere advertising and suite license fees increased $1.6 million as compared to the prior year quarter, primarily reflecting an increase in sponsorship revenues and higher suite license fee revenues.

Other revenues increased $0.7 million as compared to the prior year quarter.

For the first quarter 2026, the Sphere segment had direct operating expenses of $99.2 million, an increase of $28.7 million, or 41%, as compared to the prior year quarter. Expenses associated with The Sphere Experience increased $18.1 million as compared to the prior year quarter, primarily due to higher per-show expenses for The Wizard of Oz at Sphere. Event-related expenses increased $10.8 million as compared to the prior year quarter, primarily due to (i) higher expenses from brand events, due to higher per-event expenses and an increase in the number of brand events held in the current year quarter, and (ii) higher expenses from concerts, due to an increase in the number of concert residency shows held at Sphere in Las Vegas, partially offset by lower per-concert expenses.

For the first quarter 2026, selling, general and administrative expenses of $106.6 million increased $10.2 million, or 11%, as compared to the prior year quarter, primarily due to the impact of mark-to-market adjustments on certain share-based compensation awards as a result of the appreciation in the Company’s stock price during the current year quarter.

For the first quarter 2026, operating loss of $24.9 million improved by $68.9 million, or 73%, and adjusted operating income of $74.3 million increased $61.1 million, both as compared to the prior year quarter, primarily due to the increase in revenues, partially offset by higher direct operating expenses and higher selling, general and administrative expenses.

MSG Networks

For the first quarter 2026, the MSG Networks segment reported total revenues of $120.4 million, a decrease of $2.6 million, or 2%, as compared to the prior year quarter.

Advertising revenue decreased $4.9 million as compared to the prior year quarter, primarily due to a lower number of live regular season professional sports telecasts. This decrease was partially offset by an increase in distribution revenue of $1.8 million, primarily reflecting the absence of revenues from Altice during MSG Networks’ non-carriage period from January 1, 2025 through February 21, 2025 in the prior year quarter, partially offset by a decrease in total subscribers of approximately 16.0% (excluding the impact of the Altice non-carriage period in the prior year quarter).

For the first quarter 2026, direct operating expenses of $70.4 million decreased $17.4 million, or 20%, as compared to the prior year quarter. Rights fees expense decreased $16.5 million as compared to the prior year quarter, primarily reflecting reductions in media rights fees as a result of the amendments to MSG Networks’ media rights agreements with certain professional sports teams.

For the first quarter 2026, selling, general and administrative expenses of $15.1 million decreased $2.8 million, or 15%, as compared to the prior year quarter. This decrease was primarily due to (i) lower professional fees of $3.6 million, mainly due to the absence of costs associated with pursuing a work-out of MSG Networks’ credit facilities recorded in the prior year quarter, and (ii) lower employee compensation and related benefits of $2.3 million, partially offset by (iii) higher advertising and marketing costs of $3.0 million.

For the first quarter 2026, operating income of $32.1 million increased $16.9 million as compared to the prior year quarter, primarily due to lower direct operating expenses and, to a lesser extent, lower selling, general and administrative expenses (including merger, debt work-out and acquisition related costs), partially offset by the decrease in revenues. Adjusted operating income of $35.7 million increased $12.9 million, or 56%, as compared to the prior year quarter, primarily due to lower direct operating expenses, partially offset by the decrease in revenues and higher selling, general and administrative expenses (excluding merger, debt work-out and acquisition related costs).

About Sphere Entertainment Co.

Sphere 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 plans also announced for Sphere venues in Abu Dhabi and National Harbor. 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.

Non-GAAP Financial Measures

We 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’s 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’s Executive Deferred Compensation Plan, provides investors with a clearer picture of the Company’s operating performance given that, in accordance with U.S. generally accepted accounting principles (“GAAP”), gains and losses related to the remeasurement of liabilities under the Company’s Executive Deferred Compensation Plan are recognized in operating income (loss) whereas gains and losses related to the remeasurement of the assets under the Company’s 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).

We 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’s 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 release.

Forward-Looking Statements

This 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’s filings with the Securities and Exchange Commission, including the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained therein. The Company disclaims any obligation to update any forward-looking statements contained herein.

Conference Call Information:
The conference call will be Webcast live today at 10:00 a.m. ET at investor.sphereentertainmentco.com
Conference call dial-in number is 888-800-3155 / Conference ID Number 8089430
Conference call replay number is 800-770-2030 / Conference ID Number 8089430 until May 12, 2026

SPHERE ENTERTAINMENT CO.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
		Three Months Ended
		March 31,
		2026				2025
Revenues		$	386,412			$	280,574
Operating expenses:
Direct operating expenses			169,647				158,323
Selling, general, and administrative expenses			121,703				114,269
Depreciation and amortization			84,367				84,229
Impairment and other losses, net			79				521
Restructuring charges			3,414				1,841
Operating income (loss)			7,202				(78,609	)
Other income (expense):
Loss on extinguishment of debt			(2,071	)			—
Interest income			3,951				3,878
Interest expense			(8,039	)			(26,206	)
Other expense, net			(1,424	)			(1,340	)
Loss from continuing operations before income taxes			(381	)			(102,277	)
Income tax benefit			4,841				20,323
Net income (loss)		$	4,460			$	(81,954	)
Less: Net income attributable to participating securities			6,053				—
Net loss attributable to Sphere Entertainment Co.’s stockholders		$	(1,593	)		$	(81,954	)
Basic loss per common share attributable to Sphere Entertainment Co.’s stockholders		$	(0.04	)		$	(2.27	)
Diluted loss per common share attributable to Sphere Entertainment Co.’s stockholders		$	(0.04	)		$	(2.27	)
Weighted-average number of common shares outstanding:
Basic			35,878				36,110
Diluted			35,878				36,110

SPHERE ENTERTAINMENT CO.
ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS) TO
ADJUSTED OPERATING INCOME (LOSS)
(In thousands)
(Unaudited)

The following is a description of the adjustments to operating income (loss) in arriving at adjusted operating income as described in this earnings release:

• Share-based compensation. This adjustment eliminates the compensation expense relating to restricted stock units, performance stock units and stock options granted under the Sphere Entertainment Employee Stock Plan, MSG Sports Employee Stock Plan, MSG Networks Employee Stock Plan, as amended and assumed by Sphere Entertainment, and Sphere Entertainment Non-Employee Director Plan.
• Depreciation and amortization. This adjustment eliminates depreciation and amortization of property and equipment and intangible assets.
• Restructuring charges. This adjustment eliminates costs related to termination benefits provided to certain executives and employees.
• Impairment and other losses (gains), net. This adjustment eliminates non-cash impairment charges and the impact of gains or losses from the disposition of assets or businesses.
• Merger, debt work-out, and acquisition-related costs, including merger-related litigation expenses, net of insurance recoveries. This adjustment eliminates costs related to mergers, debt work-outs and acquisitions, including litigation expenses.
• Amortization for capitalized cloud computing arrangement costs. This adjustment eliminates amortization of capitalized cloud computing arrangement costs.
• Remeasurement of deferred compensation plan liabilities. This adjustment eliminates the impact of gains and losses related to the remeasurement of liabilities under the Company's executive deferred compensation plan.

		Three Months Ended
		March 31,
		2026			2025
Operating income (loss)		$	7,202		$	(78,609	)
Share-based compensation			13,910			21,595
Depreciation and amortization			84,367			84,229
Restructuring charges			3,414			1,841
Impairment and other losses, net			79			521
Merger, debt work-out, and acquisition related costs, net of insurance recoveries			87			4,791
Amortization for capitalized cloud computing arrangement costs			917			1,579
Remeasurement of deferred compensation plan liabilities			—			21
Adjusted operating income		$	109,976		$	35,968

SPHERE ENTERTAINMENT CO.
SEGMENT RESULTS
(In thousands)
(Unaudited)
BUSINESS SEGMENT RESULTS
		Three Months Ended March 31, 2026
		Sphere				MSG Networks			Total
Revenues		$	265,965			$	120,447		$	386,412
Operating expenses:
Direct operating expenses			99,226				70,421			169,647
Selling, general and administrative expenses			106,596				15,107			121,703
Depreciation and amortization			82,274				2,093			84,367
Impairment and other losses, net			79				—			79
Restructuring charges			2,673				741			3,414
Operating (loss) income		$	(24,883	)		$	32,085		$	7,202
Reconciliation to adjusted operating income:
Share-based compensation			13,143				767			13,910
Depreciation and amortization			82,274				2,093			84,367
Restructuring charges			2,673				741			3,414
Impairment and other losses, net			79				—			79
Merger, debt work-out, and acquisition related costs, net of insurance recoveries			87				—			87
Amortization for capitalized cloud computing arrangement costs			917				—			917
Adjusted operating income		$	74,290			$	35,686		$	109,976
		Three Months Ended March 31, 2025
		Sphere				MSG Networks			Total
Revenues		$	157,545			$	123,029		$	280,574
Operating expenses:
Direct operating expenses			70,536				87,787			158,323
Selling, general and administrative expenses			96,404				17,865			114,269
Depreciation and amortization			82,005				2,224			84,229
Impairment and other losses, net			521				—			521
Restructuring charges			1,841				—			1,841
Operating (loss) income		$	(93,762	)		$	15,153		$	(78,609	)
Reconciliation to adjusted operating income:
Share-based compensation			19,954				1,641			21,595
Depreciation and amortization			82,005				2,224			84,229
Restructuring charges			1,841				—			1,841
Impairment and other losses, net			521				—			521
Merger, debt work-out, and acquisition related costs, net of insurance recoveries			988				3,803			4,791
Amortization for capitalized cloud computing arrangement costs			1,579				—			1,579
Remeasurement of deferred compensation plan liabilities			21				—			21
Adjusted operating income		$	13,147			$	22,821		$	35,968

SPHERE ENTERTAINMENT CO.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
		As of
		March 31,				December 31,
		2026				2025
ASSETS
Current Assets:
Cash, cash equivalents, and restricted cash		$	630,151			$	521,264
Accounts receivable, net			181,549				171,630
Related party receivables, current			20,215				24,457
Prepaid expenses and other current assets			71,655				92,824
Total current assets			903,570				810,175
Non-Current Assets:
Investments			37,650				38,725
Property and equipment, net			2,629,439				2,710,643
Right-of-use lease assets			88,851				91,372
Goodwill			344,772				344,772
Intangible assets, net			20,161				21,817
Other non-current assets			198,243				192,404
Total assets		$	4,222,686			$	4,209,908
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable		$	36,484			$	24,593
Accrued expenses and other current liabilities			427,060				431,477
Related party payables, current			11,404				14,301
Current portion of long-term debt, net			57,690				63,009
Operating lease liabilities, current			16,515				17,186
Deferred revenue			193,510				192,808
Total current liabilities			742,663				743,374
Non-Current Liabilities:
Long-term debt, net			752,700				767,439
Operating lease liabilities, non-current			111,463				113,824
Deferred tax liabilities, net			166,661				172,111
Other non-current liabilities			201,272				179,921
Total liabilities			1,974,759				1,976,669
Commitments and contingencies
Equity:
Class A Common Stock (a)			299				297
Class B Common Stock (b)			69				69
Additional paid-in capital			2,480,705				2,470,120
Treasury stock, at cost, 1,054 shares as of March 31, 2026 and December 31, 2025, respectively			(50,024	)			(50,024	)
Accumulated deficit			(181,981	)			(186,441	)
Accumulated other comprehensive loss			(1,141	)			(782	)
Total stockholders’ equity			2,247,927				2,233,239
Total liabilities and equity		$	4,222,686			$	4,209,908

_______________
(a)	Class A Common Stock, $0.01 par value per share, 120,000 shares authorized; 29,921 and 28,629 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively.
(b)	Class B Common Stock, $0.01 par value per share, 30,000 shares authorized; 6,867 shares issued and outstanding as of March 31, 2026 and December 31, 2025.

SPHERE ENTERTAINMENT CO.
SELECTED CASH FLOW INFORMATION
(In thousands)
(Unaudited)
		Three Months Ended
		March 31,
		2026				2025
Net cash provided by operating activities		$	136,241			$	6,348
Net cash used in investing activities			(5,005	)			(17,570	)
Net cash used in financing activities			(22,263	)			(26,307	)
Effect of exchange rates on cash, cash equivalents, and restricted cash			(86	)			98
Net increase (decrease) in cash, cash equivalents, and restricted cash			108,887				(37,431	)
Cash, cash equivalents, and restricted cash at beginning of period			521,264				515,633
Cash, cash equivalents, and restricted cash at end of period		$	630,151			$	478,202

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20260505518866/en/

Ari Danes, CFA
Investor Relations
(212) 465-6072

Grace Kaminer
Investor Relations
(212) 631-5076

Source: Sphere Entertainment Co.