Live Nation Entertainment, Inc. (LYV) Earnings Call Transcript & Summary

Good afternoon. My name is Joe, and I will be your conference operator today. At this time, I would like to welcome everyone to Live Nation's Second Quarter 2026 Earnings Call. I would now like to turn the call over to Ms. Amy Yong. Thank you, Ms. Yong. You may begin.

Good afternoon, and welcome to the Live Nation Second Quarter 2026 Earnings Conference Call. Joining us today is our President and CEO, Michael Rapino; and our President and CFO, Joe Berchtold. 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 Live Nation's SEC filings, including the risk factors and cautionary statements included in the company's 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. Live Nation will also refer to some non-GAAP measures on this call. In accordance with the SEC Regulation G, Live Nation has provided definitions of these measures and a full reconciliation to the most comparable GAAP measures in our earnings release. The release reconciliation can be found under the Financial Information section on Live Nation's website. With that, we will now take your questions. Operator?

[Operator Instructions] And our first question comes from the line of Stephen Laszczyk with Goldman Sachs.

Maybe to kick us off, Michael, on the demand side, it seems like every year brings with it some reasons to be concerned about the durability of consumer demand. I was hoping if you could maybe just update us on what you're seeing on the demand front out there for live music globally as we head into the second half of the year. Maybe compare how the demand has been shaping up relative to some years in the past. And then ultimately, what you think this means for your ability to sell through the remaining concert inventory you have out there on the market? It seems like a record year on the supply side. I would love just your thoughts on how that demand meets the supply in the marketplace.

Yes. We're looking, as you can see from our numbers, we've seen no consumer issues to date in terms of purchasing. Numbers are up across the board, whether it's international, America, clubs, amphitheaters, stadiums, all genres. All venues and all geographies right now, up over 10% in terms of fan count. So we're seeing consumers buy at record levels, will be another record year after multiple record years. So the comps are always tough to beat, but we're seeing the continued global growth of the concert ticket. We're seeing it on site. Our food and beverage is up this year year-over-year across all of our owned and operated. So they're coming to the venue and they're consuming, and we're providing better menus and better options, but we're seeing no pullback there. Liquor is up year-over-year. So we're not actually seeing any of those stories about the consumer not drinking as much. They seem to look at the 2-hour night out at the concert is probably the night they're not cutting back. So we're not seeing any pullback. The whole blue dot, we have fewer cancellations this year than ever. We're running below historic lows at 1.1% cancellations versus 1.6% average. So every now and then, the media blow up about a certain tour canceling is, again, it's the 1%, not the 99%. And we're seeing deferred record levels right now in terms of going forward. So we think '26 is going to be an absolute record year. We're going to see strong Q3 and Q4 in terms of finishing off the great touring year we're going to have. So no consumer concerns, just kind of similar World Cup in sports what we're seeing on that side of the equation.

That's great. And then maybe one for Joe. I was curious if you'd be willing to unpack your expectations for the Concert segment in the back half of the year, just given the timing and mix shift to the slate and how that's expected to play out for the year. It seems like revenue and fan count expected to grow quite nicely in the back half. Would just be curious to get your latest sense as well on the timing of margins and cadence of margins in 3Q and 4Q.

Sure. So as you said, I think we always start most importantly, looking at the full year given quarters move around. And I think we've stepped up our expectation now. We expect double-digit fan growth for the full year to drive then double-digit revenue and AOI growth and then ultimately, margin expansion. So obviously, not of that for the first half. If you look at the first half, international growth has been good, but U.S. has been impacted by stadium availability for Q2 and then into the first part of Q3. So for the U.S., really all the fan growth in the U.S. will be in the second half, and we expect double-digit fan growth year-on-year in each of Q3 and Q4 for the U.S. International has had a very strong first half, and we expect that to continue again with double-digit growth in fan count for each of the third and fourth quarters internationally. So the reason for confidence in that is that we really have -- our shows have been booked and confirmed. And if you looked at our deferred revenue, it's at a level now that gives us confidence that really tickets are in the bank. It's a matter of playing off the shows. And then finally, just given the faster growth on operated venues or fan count and operated venues relative to third-party venues, that's really the foundation of what sets us up for margin expansion.

The next question comes from the line of Brandon Ross with LightShed Partners.

Switching gears to ticketing. It seems like things have really turned the corner there finally. How do we think about the growth algorithm from here, not just for this year, but for beyond as well? And is growth going to simply be tied to fan count? Or are there other levers? And maybe how does secondary play into that?

Sure. I'll get it started. I think we're extremely happy with the performance of Ticketmaster in the quarter and how it sets us up for the full year, increased our expectation for AOI growth for the full year to be at mid-single digits. So it certainly feels like we've turned that corner. In terms of the growth algorithm, we've talked about in the past, we do think that the first piece that is a great tailwind to have in the business is the global concert growth. So while we're not adding a lot of new venues in the U.S., we're still growing Ticketmaster's fee-bearing ticket count by high single digits so far this year, heavily off of just more activity, more utilization in those arenas and stadiums, and we think there's a lot of room for continued growth on that. And then internationally, you have a double or triple benefit because you have more shows that we're putting in, you have more markets that we're able to go into. Ticketmaster is very well positioned as we're going into Latin America and Asia markets as having the best technology out there. So it's able to build its share in those markets. That helps on the concert side to give confidence that they can go to those markets and have a platform to sell the tickets and get the grosses you need for those shows to make sense. And then together, we're adding more venues, which only further expands the marketplace that Ticketmaster can participate in. So all of those pieces continue, I think, to give a very good global growth story for Ticketmaster. On the secondary, we gave you the pieces. Secondary now on a Global GTV basis is below teens. It's low double-digit portion. The concert piece that we've been very focused on trying to shift and get more tickets into the hands of fans on the first sale is continuing to be a lower part of our business. Today, it's probably 5% of our Global GTV. So we don't see that as anything that's going to be a major impediment to growth going forward.

Okay. And then on the Spotify Reserve deal that you guys announced, I was just curious how you weighed the financial contribution from that deal versus the strategic question of potentially making them the "good guy or savior in ticketing" and potentially furthering their competitive ambitions.

I'll take that. We always look at the balance. We've done it for years. We have a much more open platform than we ever get credit for. The goal has always been, as long as we own the transaction, we'll always look for other discovery signals that can help drive ticket sales. So we've done this with Facebook for years. We've done it with Snapchat. We've done it with Groupon for years, Citi, Verizon. So we always look at opportunities on, one, can we get better data, more reach for artists to sell tickets. And then two, I think I said it a year ago the key in this one, Spotify or Amazon or super fan, a lot of that conversation that went on was making sure that we got compensated for the asset, the presale. So we looked at this just like we looked at a Verizon deal or a Citi deal. If Spotify was willing to compensate us properly for access to some presale tickets, we think it's a great win-win for both sides. It's a very small allocation on a global basis. So they're not going to be solving the onsale problems on an Ariana Grande tour at that scale. No one can solve it. But we had a great rollout with a role model tour, sold a certain allocation towards their dedicated fans. So we think it's a good win-win. We think they've been a great partner. We like working with them on the overall music business. And I think any time we can find new partners that can help us talk to super fans direct, it helps us in our ongoing quest to find better ways to battle the bots.

The next question comes from the line of David Karnovsky with JPMorgan.

On the amphitheaters, can you comment on expected attendance trends relative to prior years? And is it still your expectation to generate 70% of the fan growth there in Q3? And Michael touched upon some of the per cap demand so far this year, but if you can give any color on the key initiatives driving that, it would be great.

Yes. Amps are doing great this year. We've said they're up double digits in terms of the attendance through the first half. We continue to expect it, yes, to be mainly back half, 70% focused in terms of the growth for the year. The per caps, as Michael said earlier, per caps on-site spending is up. It's up across the board. We're seeing continued uptake in liquor categories, high-performing on ready-to-drink, the shaker cups. So it's continuing to be the big night out. We've also introduced a number of new products, some things that we've kind of built up our own brand on. Those are getting very high marks from fans in terms of the quality. We've introduced more sort of economy, lower cost offerings on both food and beverage. Those are doing well. So we're seeing across the board performance, ticket buying. Premium is doing very well. Premium is up this year. As we noted in the release, a couple of the new amphitheaters are performing very well, showing if we build quality premium product, the audience is out there. So overall, I think this is a great year for the amphitheaters, best year we've had.

Okay. And then with some of the recent arena acquisitions you've announced, can you just update on what's completed versus what's pending? And then how we should think about when these start to fully contribute relative to any interim investment period?

Sure. So we've completed the acquisition of 3 arenas so far this year, the Impact Arena in Bangkok, ForumNet in Milan and Movistar in Buenos Aires. We expect a few more before the end of 2027, probably 4 or 5 in that period, which is on track for adding capacity for about 15 million fans between what we're building and buying between '26 and '27. In terms of the cadence, generally speaking, we'll get pretty quickly up to speed on things that we buy. So if we buy something this year, next year, it should be pretty up to speed in terms of the bookings and the fan count. Sponsorship may take a bit longer, depending on what deals they have in place and how long it takes for them to roll off. For the venues that we're building, I generally think of it taking a couple of years from the year that you completed in to get fully ramped up and those performing with the full fan count and sponsorship levels.

The next question comes from the line of Cameron Mansson-Perrone with Morgan Stanley.

Two follow-ups on Ticketmaster. First, a growing proportion of the ticket wins seem to be coming from international. You touched on it earlier, but I'm curious, is that growth being driven by just the growth in touring globally? Or is it more of an intentional focus kind of operationally at Ticketmaster, reflecting maybe what you see as more attractive market dynamics internationally? And then I have one other one.

Yes. As I said, I think it's a couple of things going on. First, as we enter new markets, we are finding that our platform is extremely attractive and quickly gets established as best-in-class. So as we've -- we're now in 6 Latin America markets, 6 Asia Pacific markets, and we're finding it to be an attractive area to be able to go and get new customers. Second is that the venues are being added in those markets. So that's naturally a place for us to be adding new customers. And then across globally, international is benefiting along with the U.S. in terms of just more concert activity going on globally. So yes, but we see international -- and we've talked about international. I think we're truly delivering international now. You can see that in the numbers on every segment through the first half. And we think, again, the runway is tremendous for many years on all of these pieces.

Yes, that's coming through. And then on Spotify Reserve, I wanted to follow up. Just any color on how you expect that partnership to grow over time or potential for it to scale from kind of the starting point? And Michael, you touched on kind of the desire to be good stewards of tickets and how this facilitates that. What other avenues exist for you to help kind of drive towards that aim?

Listen, our goal is we've got an incredible global platform of TM. Time and time again, we can show clients and artists that we're the best probably placed as a first stop for someone to look for a concert ticket or a sports ticket. But everyone has partners, and we always want to make sure that we're reaching as many avenues as we can for new distribution. So we don't look at Spotify as a ticketing competitor just as we don't look at Verizon as a ticketing competitor. Not saying they can't enter that space. But in this kind of deal, this is a traditional deal where someone has paid us for some of our inventory, and we've weighed those pros and cons of is a presale and monetizing the presale a good strategic move for our business and when we can get a partner that we think has good reach like a Verizon, a Citi or a Spotify and get monetized for it, it's a win-win. That's the way we look at it. So the scale on their side is no different than we look at will Verizon scale their presale program. The answer is yes, if they want to pay us a lot more. So that's the way we look at it. We have this incredible asset we buy called the ticket. Our job is to sell every one of them. And we look at sponsors as a great distribution partner to accomplish that goal, maybe not on the ones that sell out in 3 seconds. But as we know, 90% of shows don't sell out. So we're always looking for help in distribution and new consumers to help us on those 90% of shows that don't sell.