Live Nation Entertainment, Inc. (NYSE:LYV) Q2 2023 Earnings Call Transcript

Live Nation Entertainment, Inc. (NYSE:LYV) Q2 2023 Earnings Call Transcript July 27, 2023

Live Nation Entertainment, Inc. beats earnings expectations. Reported EPS is $0.66, expectations were $0.63.

Operator: Good afternoon. My name is John, and I will be your conference operator today. At this time, I would like to welcome everyone to Live Nation’s Second Quarter 2023 Earnings Call. Joining us today from Live Nation, our President and CEO; Michael Rapino, President and CFO, Joe Berchtold, and Head of Investor Relations, Amy Yong. And I would now like to turn the call over to Mr. Berchtold. Thank you. Mr. Berchtold, you may begin your conference.

Joe Berchtold: Thanks, everyone, for joining us. As I think you noticed from our earnings release this time based on some feedback that we’ve gotten on our release and the materials in general. We’ve switched it up this time to get a little more comprehensive and data-driven in terms of numbers and the facts. So you see an earnings release that we reduced the narrative and increase, if I give you on a more structured basis all the key numbers and then also put a trending schedule that I think there was a link to you can get as a PDF or an Excel file, so you can track this quarter’s numbers relative to history to make some of it easier. So I’ll turn it over to Amy to give you a quick reminders, and then Michael and I will go straight into taking questions that folks have. Amy?

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Amy Yong: Thanks, Joe. 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 our SEC filings, including the risk factors and cautionary statements included in our most recent filings on Forms 10-K, 10-Q and 8-K for a description of risks and uncertainties that could impact the actual results. We will also refer to some non-GAAP measures on this call. In accordance with the SEC Regulation G, we have provided definitions of these measures and a full reconciliation to the most comparable GAAP measures in our earnings release issued earlier today.

The release reconciliation can be found under the Financial Information section on our website. And with that, we are now ready to take questions. Operator?

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Q&A Session

Operator: [Operator Instructions]. And the first question comes from the line of Brandon Ross with LightShed Partners. Please proceed with your questions.

Brandon Ross: I think investor concern now, if you were to pull the buy side is that with the past few years coming out of COVID being so strong, you’re going to have trouble growing next year. And I think the Street is only at mid- to high single-digit growth. I guess, this is a good problem to have, but you said there are positive indications for ’24, and wanted to see if you can kind of break that down into domestic and international. So on the domestic side, what are the positive indications that you’re seeing besides this very early pipeline? Will supply match what we’ve seen in the past couple of years. And then on international, obviously, LatAm has been a huge tailwind post-acquisition. You’ve seen some other green shoots in Asia and parts of Europe. Should we expect continued growth in those markets or just more M&A on top?

Joe Berchtold: So Brandon, thanks. This is Joe. For starters, as I think you probably noticed we put in the release that at this point, our confirmed shows and shows that we have offers in on our arenas, amphitheaters, stadium shows is up relative to where we are at this point last year coming into ’23. So we’re seeing continued growth in the show count, which should lead to continued growth in attendance. As you know, our formula is to drive that growth in attendance and from there, accelerate the AOI levels even higher with increasing per fan profitability on-site, increasing sponsorship, increasing our ticketing business. So I think we’re set up for a very strong continued growth into 2024 across the board. And a lot of that activity, these are going to be the shows that have the longest lead time on.

So a lot of these are going to be global in nature, cutting across both North America and international. As you noted and as I think much of the release lays out, this has been a tremendous quarter for growth in international markets up, I think it was 46% fan growth so far this year, which given that we were closed part of last year, we expected to see very strong growth. But we still think we’re in the early innings. If you take Latin America, we’re up about 35% this year so far year-to-date with roughly 10 million fans. But we think we’re still in the early innings in South America. We launched the Town festival already sold 400,000 tickets on our way to probably 500,000 tickets, which is unheard of for a festival in its first year. So as we continue to layer on our promoting business bringing in our sponsorship business, bringing in our ticketing business throughout Latin America.

That just continues to drive it forward. In North America, again, a very good year this year, and we’re seeing the sort of growth that we think is possible ongoing year-to-date, up 8% in North America with the fan count expect that to be double-digit fan growth in Q3, probably verging on double-digit fan growth for the full year in North America as we’re seeing top to bottom. We’re seeing strong growth in theaters and clubs. Our amphitheaters are doing great, substantially up in number of fans attending per show and the high-end stadiums are doing very well. I’ve seen some things talking about is the middle, how is the low end demand across all of those continues to be very strong.