Live Nation’s Revenue Funnels Deliver a Half-Billion-Dollar Beat

Live Nation Entertainment Inc. (NYSE: LYV) shares surged 10% on its Q1 2024 earnings release despite missing EPS estimates by 53 cents and still losing money. The consumer discretionary sector giant is the world's largest producer of live music concerts and entertainment events. It also owns the largest ticketing service, Ticketmaster. Large is the theme with the company, and its revenue beat can only be described as large at $520 million in its first quarter of 2024.

Live Nation competes loosely with other live events companies like TKO Entertainment Inc. (NYSE: TKO) and Madison Square Garden Co. (NYSE: MSG) and ticketing services like StubHub, which merged with Viagogo.

The Moat Continues to Grow

Live Nation is so massive that it has been accused of anti-competitive practices. Its moat includes a controlling interest in over 335 venues worldwide, including over 150 in the United States. Some of its top artists include U2, Drake, and Bruno Mars. The company plans to open at least 12 major venues globally in 2024 and 2025, with the capacity for over 8 million additional fans expected. Arenas saw 40% attendance to almost 10 million fans worldwide.

It's year-to-date ticket sales for shows in 2024 in the first quarter were 86 million. The company projects more broken records for major concert tours and sales in 2024 as the demand for live entertainment continues to surge as consumer discretionary spending shifts to experiences from goods and products. 

Daily Descending Triangle Breakout Pattern

LYV is forming a daily descending triangle breakout pattern. The descending trendline formed at the $107.07 swing high, capping bounce attempts at lower highs. The flat-bottom trendline is at $87.61. LYV shares gapped 8% on its Q1 earnings and proceeded to break through the $96 resistance. Shares are still attempting to stay above the descending trend line. The daily relative strength index (RSI) has gone flat at the 56-band. Pullback support levels are at $94.28, $91.12, $87.61 and $85.27.

Insatiable Growth

Live Nation reported Q1 2024 GAAP losses of 53 cents per share, missing analyst estimates for a loss of 18 cents. Operating losses were $37 million. Adjusted operating income rose 15% YoY to $367 million. Revenues surged 21.5% YoY to $3.8 billion, crushing consensus estimates for $3.28 billion by $520 million. Food & Beverage spending rose 10%. Live Nation sold 77 million fee-bearing tickets. Sponsorship revenues rose 24% YoY to the highest Q1 ever. Fan growth rose 21% YoY to 23 million fans.

Fan Demand Continues Strong

Live Nation concert ticket sales for overall arena and amphitheater shows pacing was up double-digits. Confirmed shorts for large venues, including stadiums, arenas and amphitheaters, were up double-digits. Over 85% of full-year shows at large venues were booked, up from 75% last year. Arenas led attendance growth by 40% YoY with nearly 10 million fans.

International Artists' Appeal Grows

Compared to five years ago, the fan count for international artists across its top 50 global tours nearly doubled. Ticket sales for Latin shows in the United States rose double-digits YoY. The confirmed U.S. short count for Afrobeats surged 400%, and Latin was up 40% YoY. Europe had similar surges. Festival attendance grew double-digits, led by Latin American markets.

Global Ticketing Expansion and Sponsorships

Net new enterprise tickets grew to seven million YTD, with 70% coming from international markets. Over 112 million fee-bearing tickets were sold YTD, up 4%. Live Nation booked over 85% of expected sponsorship committed for the year, a double-digit jump. Adjusted operating income (AOI) for sponsorships grew 36% YoY to $130 million.

A Shift Towards Niche Music Festivals

Live Nation CEO Michael Rapino noted the company has over 100 festivals worldwide, driving up YoY ticket sales by double-digits. Festivals are starting strong in 2024. They're a huge business around sponsorships, which are up 20% YoY on festivals. The trend in three-day massive festivals with a unique headliner appeals to everyone. Even Coachella or Bonnaroo is tough to get headliners since they're making so much in stadiums and arenas. For this reason, Live Nation is seeing great success with the one and two-day festivals appealing to a niche with 35,000 attendees.

Rapino commented, “So we are seeing probably a shift to more niche one or two-day festivals with higher per heads, higher sponsorship value and less big swings across, let's go after a three day 100,000 people. There's still, though, the Coachellas, the Lollapaloozas, the Austin City Limits, they're kind of passage of right.” He concluded, “But to us, a big part of our business overall, it's a nice piece in our overall portfolio to drive our sponsorship business, and it's on a global basis, a nice piece of our overall portfolio.”

Live Nation analyst ratings and price targets are at MarketBeat.