LYV - Earnings call transcript Q1 2019 | Live Nation Entertainment, Inc.

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Operator

Good day, everyone. My name is Justin, and I will be your conference facilitator for today. At this time, I'd like to welcome everyone to the Live Nation Entertainment First Quarter 2019 Conference Call. Today's conference is being recorded.

Before we begin, Live Nation has asked me 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. X-K Nation's included including recent could in Forms XX-Q Live and risk filings impact to of XX-K, statements description cautionary the and the refer actual SEC uncertainties the filings, factors on risks results. Please and a that for Company's most on Nation Live measures also to refer call. will non-GAAP some this accordance SEC Regulation in a the to reconciliation GAAP with G, measures provided In most earnings their release. full Live Nation comparable has be other section The this or website financial discussed release, to in Information on can information Financial at and on found be reconciliation call statistical Nation's investors.livenationentertainment.com. the Live It Chief the conference Executive is over and Live to of President Entertainment. Nation Rapino, now my Officer pleasure to turn Michael

Michael Rapino

to a start highest and ever $XXX quarter billion. our welcome at strong AOI our first afternoon, $X.X and XX% XXXX to to up off with conference revenue million quarter with Good is first call. XXXX

first delivered and Our AOI. growth, as Concerts both segments this and quarter revenue drove record Sponsorship

tickets concerts, year. More importantly, will the AOI for we enough that growth confident to deliver have enough enough double-digit Company now sold commitments be sponsorship and booked secured

benefit to structurally for industry demand. that supply a with strong continue We tailwinds global growing both and from concerts is

arena by first in quarter, flywheel, business, up XX% ticketing the our theater further additional X led profitable almost which driving and XX our million growth shows, up had we over is performance Starting with Our our fans. attend our during concerts accelerated and sponsorship are concert onsite concert businesses. the million each by fans year-on-year,

market sold mid-April, million X% concerts pricing, business. this growing year up first At XX% for we year, to of the have our our based continued our AOI revenue XX same well we positive concerts QX the result, up shifting in time, sets As have and use was the tickets. and through platinum year-on-year. up a we This delivered

increase in demand house continue any as past from Even this amphitheaters seeing to across and amphitheaters. XX% strong arenas not pricing digits an the front in rates stadiums, year, this tickets, concerts is at for of pricing globally, two pullback sell-through our and improved at have seats seats and both we're of lawn best over seen Looking our amphitheater be years. up double front pricing, the the in the across arenas, and with amphitheaters to

to spending. As fan we we onsite add drives fans, our which continue experience, then improve

continue are growth season, I again, including concerts double-digits powers we Europe. again expect our be of Rogers Canada to the While committed year festivals X%. $X the driven expect full-year AOI the and ahead sponsors, partners, number pacing be for continues fan the was activity In we up strategic revenue, per quarter by the our revenue set these over our new lowest global deliver Communications AOI of and With in and that Diageo in beginning amphitheater U.S., grow Concerts to again XX% the to once spending are strong us adding net I Nation. growth our we what amphitheaters. just Verizon engine average this by a last typically Sponsorship, our in X% segment to large mid-April, overall of in is in year Through up reaching and Live of target for business our growth

again and ever, Sponsorship QX its quarter GTV XXXX. will highest transacted Ticketmaster first expect in I we fourth result, deliver only AOI QX quarter, this the year. a delivered In XXXX double-digit XXXX As growth in trailing and fee-bearing

clients sales, every has and trends marketplace fluctuations, time to at for million most mid-April, shows had that the the fans. GTV, than turned through digital in a impacted tickets sell the pull those Ticketmaster was sold the into onsales forward Ticketmaster served, to XXXX, quarter functionality, by mid-March by of and ticket fourth more last metric, effective of around, X leading While quarter concert year. Putting quarterly year aside including tickets same Ticketmaster ticket this demonstrates global is sales

clear and direct remains relationship digital establish ongoing fan Ticketmaster operators the ticketing focused, at for and deliver improve fans, to a scale event experience, opportunities foundation at for very the deploy with will to sponsors which live provide and value content, roadmap fan. venue Our the our greater

remain year. this be teams deliver results for seven while the are ticketing digital with via GTV digital XXX part to at and am as than venues our seeing Ticketmaster, our quarter expanding we up expect digital to growth, have of this, track of to installed entering this over another to model, XXX In year AOI And first shift to teams I million year last following year. I more from first ticketing with pure expect a the NFL, our the to As we significantly more summary, start Presence footprint. XXXX. year system on pleased successful fans with what two in we a full-year, record

All consumer of first of for acceptance in market upcoming key speak our to strong quarter, for attendance and concerts, pricing, our continued growth the shows. our indicators sales demand solid

that double-digit we acceleration of quarter. The our success growth will this Joe I in AOI of growth near-term continued concert over us ticket gives you see an growth increasing AOI result, plus Nation in the turn and full high-teens the each the for with and additional details. Live through overall a With combination of double-digit the the for commitments, confidence for sales that, division take the to Ticketmaster As call deliver platform QX, will year. view more delivering sponsorship AOI year, the

Joe Berchtold

Michael. Thanks,

concerts In international growth Looking America increases promoted XX%, growth, XX%and show along and at increased Nation nearly of fan quarter, Live first for theater was activity. XX respectively. particular million Concerts. with by count segments, X,XXX both across in Fan first, worldwide, markets, North fans the arena, led business strong our and

internationally with North theaters arenas, clubs growth. leading and the expect and base America Looking full-year, in we to grow festivals fan our to and both this

resurgence growth for strong, for the growth a including combined by particularly AOI we Sheeran artists and shows our the XXXX, fan strong segment. markets overall and total, driven of which programs BTS, the for In we also pricing year are as in with Metallica. expect deliver such expect will spending mid single-digits, double-digit onsite concert initiatives stadium Ed Our international looking

to AOI only Sponsorship the and effects our excluding up in and saw Advertising Turning revenue was material and business. up where was the was up AOI quarter the up for we and X% impact Sponsorship quarter effects, was revenue is X%. X% X%. segment

and both of the America important quarters, revenue our indicated, our online fan festival markets sponsorship to And, XX% our Sponsorship, up us at revenue sponsorship. double-digits this year our within in strategic year. international consistent the up of pacing fourth gives committed broad double-digits the through North is year second will the from projected revenue and seeing year. another and as we growth confidence This AOI at growth over Michael ahead over committed with it for Given We're net be point sponsorship. that target net recognized of sponsorship both year. double-digit is And sponsors our double-digits this point advertising of last growth deliver as our per are that most both of for indicator in is XX% is

onsales both secondary GTV was driver. with similarly primary pattern consistent were with the ticketing the and sales Thereby we first in main same few secondary fourth show. down the following general where concerts with most is the the global on the activity This Ticketing. cases sales. into see to down or immediately year-on-year. concert accelerating Finally, weeks secondary, Ticketmaster's quarter up GTV $X.X we in the billion, either the quarter, have in onsale activity and is leading impact XX% Both

how to will next this and level barcodes As year with proceeding to the to give Michael as it content managed. we control indicated, ticketing is the more evolve are tickets our digital and shifting deployment sold continue encrypted well we over NFL

as the and app brand these One quarter of to a ticketing installed ticketing to sales the are enabling installs also it digital to the fans, critical of gives our is digital total directly app key us reach our to XX with implications in These our ticket sales fans. teams, artists, for real-time a in venues base mobile over channel increase partners million. our and ongoing ticket XX% shift XX% accounting mobile driving of

theaters As Concerts Michael concert accelerate particularly GTV growth activity will major ticketing fee-bearing from attendance, some growth AOI quarter. single-digits. full-year stadiums QX and from Sponsorship. which the In both with in also helps benefit the results the for second This festival our we QX, in of deliver quarter, our will will and see to In first in in a quarter. during expect shift for into a increasing QX mid noted, shaping second starts which successful the we this growth up following full in year, summary, we're

of go will financial again have over Ticketing, our over Sponsorship now the full-year, call we turn leading more our strength Kathy as across deliver AOI the range growth same we the the through at I for in Looking the several double-digit we past Concert, indicators given will grown that years are results. full-year the confident and on to to

Kathy Willard

Thanks, Joe; and everyone. good afternoon,

increased AOI revenue billion, artists financial in revenue future accelerated theater strongly XX% a And the ticket Michael our grew by globally, Overall, months to as first what by increase of to total in The a primarily up in March billion, Our result payments had of increase had of and as we expected and, Concerts, also delivered stronger to compared AOI of XX% items. QX which in noted. quarter. which globally, XXXX, activity in our starting for our shift some up ago shows Ticketing, deferred the quarter than the $XXX theaters QX. arenas also saw our sales $X.X and quarter AOI few shows for into X% a large that was was first from a of million slightly revenue $X.X mid-March, last to year. number due key for In a was Concerts, we driven performed highlights related we then finished increased as performance the few XX, to

by $XX prior first with driven result quarter, million amortization costs. quarter as for acquisition-related operating year, Our $XX loss loss. was compared the of a our $XX higher in was and And the along million operating loss depreciation the the to higher net million in

interest For the $XX quarter, of non-controlling redeemable accretion million. was

this be the with accretion estimate year, full for across consistent will currently that approximately the fairly quarters. remainder million $XX the the For year we

now, revenue AOI second few be of years For X%. contract based impact had a of QX, FX the in approximately we rates and negatively in expected be Amortization in ticketing And on line quarter. negative expense. by of last non-recoupable on the to the is XXXX advances X% to we both expect about with impacted

balance Turning sheet. to our

into billion sales year. million, ticket $X.X million As for expect net billion, including currently balance of in to flow the year, a and cash fourth free $X.X million full of March that non-controlling activities million. to shift driven leaving be provided will of related client of AOI XX, we $XXX cash in as cash XXXX. last quarter $X as We compared the operating impacted $XXX in had timing of by percentage the free by XXXX, was Net total flow, was concert event $XXX line cash of with $XXX Free of by cash million prior interest. distributions adjusted year cash the cash,

generating more The capital venues expand and globally will satisfactions, quarter is as our revenue the on ancillary addition. were we Concerts spend our venue sponsorship to improve $XX $XXX compared to capital with spent XX% as drive We full-year than and that increase million on continue by Our existing currently footprint the be million, year to fan driven for generating expect revenue approximately for our last expenditures opportunities. total in half with capital expenditures items. expenditures

balance the in of billion a lease $X.X billion Our quarter will average X.X%. statement of value will for $X.X new than greater March This of We terms first Thank of the going operating not that amounts for a forward. open minimum have our XXXX. and of March on These operating see liabilities lease to total impact XXst, are payments leases have material with XXXX, of today, guidance globally based now as lease you sheet, we and total lease guidance implemented remaining joining our of present debt, the assets of income the weighted questions. was Operator? on various lease our us call cost the billion so XX, will $X.X you as new operating accounting one-year.

Operator

And [Operator take question. we'll ahead and go Thank you. the Instructions] first

Unidentified Analyst

Hi. David. This is

How back in think at As or quarter driven much you posting realizing now with first other the business Ticketmaster of positive just that there in quarter. your that noted, losses factors I scale result least going are the this have Concerts in positive this modest shifted you're by merger. higher to after the AOI a first a attendance on is

Michael Rapino

fundamentally David. by That's Yes. driven all the attendance, higher

we then continue was in we and for theaters which to quarter, As business. that strong very which so flow higher said, the as have and that the performance, has pricing the higher arenas to just we through drove record supported scale we're attendance through the by

Unidentified Analyst

other the in there a theaters And how clubs active at you've local month areas? you California the and you Okay. opportunities repeat division, extension getting of fairly the level adding relationships, to strategic sort in that just been new Southern this room in past booking then in such talk about venues, over is see much can scale strategy and

Michael Rapino

geographically, diversity continue countries, XX are many festival we goal to our business more our about talking we're and keep where or been cities global so both in be building, we've of David, to our business. a business our business. of There our business, to concert it's venue is whether lots Yes. want the concert

releases venue, pick venue. up when just from Los or Angeles we our in continual financials where great promoter, the you those a head are Diego see London see margin opportunity manage or increases. per know So a or an markets pick San like our to we Paris you up And as bolt-ons

that the So markets festival come. bolt-on you'll pieces to looking or we're for or continue to in for the always promoter world opportunities and years of see around business venue

Unidentified Analyst

ticketing say margin all if expenses out Thanks. you data result, breach the at any are there your Okay. Is can rolling there quarter? just ongoing on then any impact And in to Presence? from

Joe Berchtold

Yes.

as breach year. data course we think this millions I we about to the expected call, in see high-single over last costs talked the of in the

of primarily in you So in quarter. so said, this do we that and QX, to as some that be also we expected QX have

at to continuing the standpoint side. operational some of It's cost As nothing will be Presence, material deploying but which new this different or on it relates the out at to roll the systems nothing on side, control Presence there's a from really point. access venues, capital

Unidentified Analyst

you. Thank

Operator

the And we'll next take question.

Amy Yong

Young activity the and about? on specific that Macquarie. understand drove on us a understand international there you This is mid-March What the that think following making Maybe turnaround option to afternoon. Good front? in Amy that of update on Rock is I can the And Was puts Thank just remainder lastly, And talk Can takes ticketing. there's the progress anything ticketing an up lot for help April? can of you from Rio. in buy specific in you. that and us deal? you us what the are then

Michael Rapino

Sure.

end of was having was spoke. February, last We the Amy, going its just just of anything and its In was uncertainty more that we turnaround, April. the I the of terms QX course in catching than March, that it of up to know end think, of whether was pull forward when else QX. end in run that what course run didn't There

playing point, business where That a less as quarter of well build in that international, out globally this particularly ticketing us. strong Presence flywheel it of work we then don't And use middle but theater as with the March, our to the up on from we very it's a historical but the Concerts when remains for play, to are business Ticketmaster shorter as certainly have we as activity. strong to announce concerts have then tended speaking quarter that we out, ourselves a and have when thought, was continues was basically also particularly a ended lead to on strong we it combined think which for saw the grow announced anything to a structural at to the augmented strategy the of of the – markets and course and Presence. was So follow business, this concerts a have onsale to It international. the I time that the system. shows benefit

at Rock I said, what not point. got make final a do or think as been comment we to of nothing position to this we we're a done we're terms don't you certain do in has going In Rio, on have yes, determination. until options in

Amy Yong

Got congrats it. quarter. And the on

Joe Berchtold

say, record we're Rock year will acquisition. we a the Rio to year is attendance with thrilled Amy, sales this But have profitability. in going ticket

been it's So we've One, that's the it's known got it we're and jewels business, part a always one American global in huge entry. the festival of to prized fabulous, so of it. festival our South think we using expansion

part. It we regardless invest day So see what more do more, general strategy the is what do in it. of you'll us

Operator

Instructions] caller. we'll the next go [Operator And and take

Brandon Ross

Hi, your similar And timing we your assumption XXXX? gave onsale the have growth in AOI a single-digit us QX for you year? then mid guidance, another Do in BTIG. it's expect one. On tickets like you forward QX Brandon that pull Ross from this for what's I of saw of

Michael Rapino

the We've Yes. more couple you'll go be trend I seems earlier, activity see and in so the earlier more following sales the years. year QX seen for and of think to last in

Brandon Ross

maybe types With then investing your talk venue in little more follow-up footprint. exactly venues on accelerating And expanding about a your growth of David's. where you're mentioned this CapEx that? year, Can and you're a in investing you're Okay. what you've you

Michael Rapino

that Does Brandon. help venues, Music model? your

Brandon Ross

Theaters. Amphitheaters,

Michael Rapino

Music venues, right. Yes.

data of the In we footprint, XXX X,XXX-seat something world. keep From the there's continues ticketing, piece and portfolio, drives to We Canada. sweet have two to that Fillmore those see sponsorships, be drives us of Blues We our our real XX around shows to spot Huge show amphitheaters, higher-end think arenas over see we'll range, six and drives we we so you'll around five, the and culture, now. our sponsorship, customers love segment, as those go if business. expanding food so the House XXX-seat go opportunities, a to have a it youth global both It a great venues beverage, at that do versus that to upcoming those model, high-margin have to here talent. of drives – times of Europe, I times. tend strong Australia, we you a

So for young seats. seem kind real get audience when be movie of XXX in a new to to you're theater you developer. X,XXX the active every the the They

pie of of great have in development. we more revenue, right for leverage more to opportunities kind the the our So equity, content more

part think a I to theater real the their the neighborhood, venue a attraction all centers. So is of a want live of centers developers, that lot estate, urban spot we're that sweet where in really city be they in part

So we of bill, continually on we whether we manage, and whether whether to, are they continue good options have we a a acquire lease, businesses accretive globally. expansion overall where book list will big or the think opportunity long whether we we we

Brandon Ross

you. Thank

Operator

[Operator the Instructions] next We'll go and question. take

Douglas Arthur

festivals It's concert Is from a it's shifting is more about made Doug that seasonality you margin the of that the to Arthur. Joe, to in on terms going something the of terms in of sector? of modeling, that of QX the timing – skew comment is Or how QX. sort material?

Joe Berchtold

June, and I it's festivals As meaningful that a of couple over weekend those QX of mentioned goes the or sit and have the you how through. end can on either of beginning falls, think in assume weekends it into QX. could July. just based to more probably traditionally We

do you that point and the your get QX. so between balance to guys as you sure making just we're So modeling, out, QX

Douglas Arthur

Advertising of quarter, it cautious call. were quarter. what Ticketing you of mean kind guys And do, the thought first onsales the the these timing pretty in later. this on bit kind in obviously Okay. Sponsorship We the on would swell seems the little like was buildup about of segment I of a terms you is It talked did quite and then,

you which in surprise have expected? So do the not big it I'm you do big very revenue that out visibility surprised ergo, terms was in when how of see fourth at the your segment what surprise, quite strong the I or time was on quarter, versus guess that such the you've a originally you playing did Concerts growth.

Joe Berchtold

as we going fully was how was Ticketmaster to QX the didn't of earlier I know and part, on that much of pull how the the call, think, incremental on was when part timing. said I and it through it work Well, forward of much

we So saw play that know what didn't until we that was. out,

we as sold seen now it the point play it more Now X mid-July, positive million we this for. for it of concert end at we've Ticketmaster said, hoped And had tickets has shows on year the year. out, was as spectrum this last of sold what of than

February. So that unknown for us we in was when definitely call did an the

Another on think lead to tends times strong rates. I've the business sell-through few been then the the Concert that said theater side of happy with thing is particular shorter the And side, overall I that in is has time. be a been and we've very third

As strong. Michael mentioned, very they've been

you You've us that other something concerns better that think I again and and having across than and venue at type months few a lot an economic across maybe last been cycle calls listened that's are ticket has a did given year's to the to about that companies' ago. unknown still types we above – hear was us today or sell-through rates

Michael Rapino

We not bumps Doug business. to that – our I make jump that sure that that want that, going were no going environmentally we last globally, And point fundamental. was speed there think were is a just affect into year, to the on to

do up QX. Our really, sell-through through week. our annual picked concert halfway really We

what think now. have we X maybe year it's days sold or our would I last yesterday, would year. We than been fourth third three sold have million more which in tickets

strong. the shows example very So is that strong. club European is very to of business our festivals, From another market is

now that very we consumer is are there perspective. global a no on down demand So at slow optimistic all

Our is business strong.

Douglas Arthur

All right.

sponsorships? a that and to the improve of more data, you you extent of that question, and mobile via sell tickets sort finally, your the does the drive via guess, data, your I then nerdy And helpful. very That's Okay. help granularity but app,

Joe Berchtold

Great question.

Michael Rapino

Best question so far.

Joe Berchtold

had we've we selling terms model, So on tickets difference historical the data a in the once have. of material the app, under

get individuals we data. of digital identity, we better data, of us, gives all, and all much we on have it ticketing the identified those first As to shift when

Second us of more to with sponsor, via numbers marketing effective a phone, whether team, of by it all, so marketing installs, that's connect it platform. provides having app enables Ticketmaster real-time directly cellphone an and much combination a artist, a them a

Douglas Arthur

Great, okay. Thank you.

Operator

another And question. we'll take

Ryan Sundby

can for Ryan my press maybe in Hi. talk if front done you about house, you what as Sundby, pricing something has maybe kind Blair. you've of the and looked over like like then Michael, Yes. kind and at question. on taking inventory the And called release, years. a today – thanks of William how driving last arenas in your I just going for what the and of wondering tickets tie you was a unsold Congrats rest of were job of of quarter, looks XX% out, the amphitheater house. really ago the with couple great in few versus shared unsold? years that

Michael Rapino

the that. Yes. again. can annual you Day remember on do number, up in has of I precise year-over-year. the we On kind can't go at our I but Investor look slide The back mean those November. numbers there progress I and have been

secondary years. factors, over last few continue the just one, market and on the So at demand the few look we

the As much also been secondary PX, business as we've has the been growing. increasing

still we demand $XX perspective. billion from house to the consumer of billion of priced outside there's So a $X opportunities know

the his that you be these fan tickets sense be what he that a forward what's between this his the but what charge – bear. slower to So a we’ve right artist as appetite kind the progress. years we moved makes selling market left allows slowly exceed know is and call what The on for find a artists the larger brand it's price to sunlight will a some and now we in balance the we'll has are great more That and or is sitting that and much telling we've for. of process, increased efficiency, and will us got because on artist lot

we a upfront. opportunity So to great have pricing keep

final pricing the talked upfront great reduce never we've drive the been I you also to in concert get the they XX before. some about XX they and when advantage in you The extra back. that and then a your rows, of buy pot A and sell growth problem the can to in business it's sponsorship the those the and get think first is sell house customer is pricing beer your in data. rows

one So of revenue strategy able better ticket our think this sales back, price lower what revenue we've reasons the artist can, do needed net still been continually yet us whole the gross, higher overall do we house multiyear to the it's in for our a is, and price promote, when house. higher to a the the for again will you and you the see have grow promotions, be some is

the So a the different the price seat the a front price come than aisle the price pricing more of different has into Friday, sophisticated effect, house better, Tuesday than seat. middle

talked and overall those our implemented. And show. the know of and them. well then all strategies throughput monetize have you get about on introduced the our driving revenue show, It's as they been of All all of been of pricing classic the airlines in we will slowly dynamic we how those tell once models as things

driving So more we've been tickets.

closing gap. Again, the a sell-through the of have about talking at because the sell of day the run multiyear majority ahead, rate of shows still we've don't think I opportunity been we end out. our

So person we – zero. and turnstile always whether at is have a another worth inventory ticket that lot the to X:XX through of putting it's keep

and as out to long that as to customer announcement him get the how monetize business continues move. through between X:XX, the the So door price at any to figured we

over years. few that the number up been moving we've last So

points I or one two year. think a

I by house years in pricing people the more as that few we think to November, said opportunity the through house put plus look over to we we the be a million $XXX next better.

Ryan Sundby

And driver I you growth. in got called QIC, tuning as Okay, a then the of out it. guess Asia helpful. concert higher Very activity in

big then more next on over could, of wondering, And are drive as look to of from? materially color that and mean, in today? back Just five the Asia maybe in the us years, if where remind take just opportunities just growth? maybe kind step you a you a little you provide came are I kind countries what what

Michael Rapino

the where the comment a as where building been in years, we're It sure We've where for show. is bundle XX Nation not business office, know. global Live promoting local came business. you from. I'm we have We're our Asia a global of markets,

to have ground boots actually have to the execute. You on

that at business been perspective, Eastern Western those – global the years, look a believe seen have when knows one that whether been as or historically markets. single the artist in infrastructure drops European, it is you of America, whether that if in We And as European, of slowly building our in the it's our now Australia Town you've Detroit. traditional global Singapore, well Canada, it's and that business. Colombia the the on and tomorrow, a a about U.S. in last Drake Asia Cape global markets in five South Europe, XX-year-old out terms So we've

a world perform is being it in city major the The global Drake So infrastructure to an there. wants fast expanding and have be entertainment Every capital business. is built.

are India Europe, year So and more aggressive markets as legitimate. Eastern Asia, every you're see America, South those in continue becoming going to be us and

Kong time. Overall, Asia continually businesses Hong in. looking our We've we those for been be part years. of great have Asia been driven success be China, and our growing I very story, is and where tour. we're and think came been will business. that Asia BTS in by global tour grow comment a that Singapore business proud comment to might might to It's the over a We've

Ryan Sundby

Thanks. Perfect.

Operator

And the conclude now to for the turn question-and-answer over remarks. you additional any that does back conference I'll session.

Michael Rapino

you, right. All Thank everybody.

Operator

thank does you your That today's conclude you. thank participation. We for wonderful Have Well, a do day. conference.

Live Nation Entertainment (LYV) 2 May 192019 Q1 Earnings call transcript