Breaking Down Madison Square Garden Entertainment Corp. (MSGE) Financial Health: Key Insights for Investors

You need to know if Madison Square Garden Entertainment Corp. (MSGE) is a solid play on the live entertainment rebound, or if its debt load and operating losses are a defintely near-term risk. The headline numbers for fiscal year 2025 (FY2025) look decent, with Adjusted Operating Income (AOI) climbing to $222.5 million, a 5% year-over-year increase, driven by strong demand for their portfolio of venues like Radio City Music Hall and The Garden. But look closer: while Q1 Fiscal 2026 revenue jumped 14% to $158.3 million on a record number of concerts, the company still posted an operating loss of $29.7 million, which you can't ignore. Plus, they're carrying a debt balance of $622 million. The market has a Moderate Buy consensus with an average 12-month price target of $49.33, so the upside is clear, but the path there requires a hard look at how they manage those operating costs and that debt.

Revenue Analysis

You need to know where Madison Square Garden Entertainment Corp. (MSGE) is making its money, and the simple truth is that its revenue base is robustly diversified, but not without near-term event-driven risks. For fiscal year 2025, MSGE reported total revenue of $942.7 million. The year-over-year (YoY) growth rate, however, showed a slight dip, declining by approximately 2% compared to the prior year.

That small decline is a critical signal, not a catastrophe. It shows the company is highly exposed to event scheduling and venue utilization, but the core business model-selling tickets and ancillary services-remains strong. You're not looking at a structural problem, but a scheduling one, which is defintely manageable.

Primary Revenue Streams and Segment Contribution

MSGE's revenue is a mix of direct event income, corporate partnerships, and facility fees. The company's strength lies in its portfolio of iconic venues-Madison Square Garden, Radio City Music Hall, and others-which allows it to capture multiple revenue streams from a single event. Here's how the $942.7 million in FY2025 revenue broke down by core segment:

• Ticketing and venue license fees: 48%
• Sponsorship, signage, and suites: 27%
• Food, beverage, and merchandise: 16%
• Arena license agreements: 8%

The biggest chunk, nearly half, comes from getting people in the door and charging for the venue itself. That's a high-margin business. The sponsorship revenue at 27% is also a powerful, relatively sticky stream, so that's a good sign of corporate demand for their prime real estate.

Analyzing Significant Revenue Shifts

The slight overall revenue decrease of 2% in FY2025 was driven by a few key changes. The most significant factor was a reduction in event-related revenue from concerts, which hit the fourth quarter particularly hard, causing a 17% YoY revenue decline in that period.

What gives? The end of Billy Joel's long-running residency at Madison Square Garden Arena was a major contributor to the lower number of shows. To be fair, you can't replace an icon overnight, but the company did see an increase in shows at its theaters, like Radio City Music Hall, which helped offset some of the loss. Still, the impact was clear, and it also led to a 24% decrease in food, beverage, and merchandise revenue in the fourth quarter.

Here's the quick math on their biggest single product: The Christmas Spectacular Starring The Radio City Rockettes was a massive success, generating $172 million in revenue for FY2025 from 1.1 million guests. This shows that their owned, recurring content is a powerful, reliable anchor, even when third-party concert bookings fluctuate. This is a crucial detail for stability.

For a deeper dive into who is betting on MSGE's portfolio of assets, you should check out Exploring Madison Square Garden Entertainment Corp. (MSGE) Investor Profile: Who's Buying and Why?

Profitability Metrics

You're looking at Madison Square Garden Entertainment Corp. (MSGE) because its assets-Madison Square Garden, Radio City Music Hall, The Beacon Theatre-are iconic, but the real question is how efficiently those assets translate into profit. The direct takeaway from fiscal year (FY) 2025 is a mixed picture: Gross Margin is strong and improving, but a sharp drop in the Net Profit Margin signals that non-core costs are eating into the bottom line.

For FY 2025, Madison Square Garden Entertainment Corp. reported total revenues of $942.7 million. The core business is performing well, with operating income climbing 9% year-over-year. But you need to look past the top-line growth and Adjusted Operating Income (AOI) to see the full financial health.

Gross, Operating, and Net Margins: The Core Breakdown

The three key margins tell a clear story about Madison Square Garden Entertainment Corp.'s cost structure and final profitability. Gross Margin shows how well they manage the direct costs of events, Operating Margin reflects core business efficiency, and Net Margin reveals the impact of everything else-interest, taxes, and one-time charges.

Here's the quick math on the company's FY 2025 performance compared to the general Entertainment industry average, which is a defintely useful benchmark:

The 43.18% Gross Profit Margin is a clear win, sitting above the general industry average of 42.2%. This means Madison Square Garden Entertainment Corp. is doing a solid job of managing the direct costs of putting on a show (artist fees, venue staffing, etc.). That's good operational efficiency.

Trends and Operational Efficiency

The trend in Gross Margin is positive, moving from 40.70% in FY 2024 to 43.18% in FY 2025. This improvement suggests effective cost management, which has been noted in lower direct operating expenses for quarters like Q2 and Q3 FY 2025. They are squeezing more profit from each dollar of revenue before overhead.

The Operating Margin of 12.95% is solid, reflecting the core strength of their venue and event business. The 9% increase in operating income to $122.1 million is a tangible sign of this core business health.

• Gross Margin is on an upward trajectory.
• Core operations are getting more efficient.
• Lower direct operating expenses helped boost Q2 and Q3 results.

But here's the critical signal: the Net Profit Margin dropped dramatically, falling from 15.04% in FY 2024 to just 3.97% in FY 2025. What this estimate hides is the impact of non-operating expenses-things like interest on debt, taxes, or other charges-that hit after the operating income calculation. While 3.97% is still better than the general Entertainment average of 1.2%, that sharp year-over-year decline is a major red flag for investors. It means a larger portion of the operating profit is being consumed by non-core financial obligations, which you need to understand before making a decision. For a deeper look at who is invested and why, you should be Exploring Madison Square Garden Entertainment Corp. (MSGE) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

You're looking at Madison Square Garden Entertainment Corp. (MSGE)'s balance sheet to see how they fund their operations, and the first thing that jumps out is the heavy reliance on debt financing. This is not uncommon for capital-intensive entertainment companies, but MSGE's structure is particularly aggressive, showing a negative equity position.

As of the end of fiscal year 2025, Madison Square Garden Entertainment Corp.'s total debt stood at approximately $1.20 Billion. This is a significant figure, and it's important to see how that debt is structured between short-term obligations and longer-term liabilities that give the company more breathing room. The company's strategy balances this debt load with opportunistic capital returns, a classic balancing act.

• Total Debt (June 2025): Roughly $1.20 Billion.
• Short-Term Liabilities (March 2025): Approximately $537.6 Million.
• Long-Term Liabilities (March 2025): Approximately $1.19 Billion.

Here's the quick math on their leverage: The Debt-to-Equity (D/E) ratio is the most telling metric here, and for MSGE, it's highly unusual. Because the company has a negative book value per share of approximately ($0.28), the D/E ratio becomes a large negative number (e.g., -9,028.8% in one calculation). A negative equity position means total liabilities exceed total assets, which is a major red flag for financial stability, signaling a deficit in shareholder equity.

To be fair, this is a structural issue often seen in companies that have executed significant spin-offs or large share repurchase programs, but it still means the company is technically highly leveraged. For context, the average D/E ratio for the Movies & Entertainment industry is around 0.7546, so MSGE's situation is far outside the norm. This level of leverage means they are very sensitive to interest rate changes and economic slowdowns.

In terms of recent activity, the company is actively managing its capital structure. In the first quarter of fiscal 2025, they drew $55 Million on their revolving credit facility, but also made a principal repayment of $4.063 Million on long-term debt. This shows they are using their credit lines for working capital while still chipping away at the principal. On the equity side, they repurchased approximately $40 Million of Class A common stock during fiscal 2025, which is a key way they return capital to shareholders, but it also reduces equity and contributes to that negative book value.

The table below summarizes the core debt components for a clearer picture of their financing mix:

The company is balancing debt financing for operations and capital expenditures with an aggressive equity funding action-the share repurchases-which signals management's confidence in the stock's value, even as it technically deepens the shareholder deficit. For a deeper dive into the full financial picture, you can read the full post: Breaking Down Madison Square Garden Entertainment Corp. (MSGE) Financial Health: Key Insights for Investors. Your next step should be to model how a 100-basis-point interest rate hike would impact their net interest expense.

Liquidity and Solvency

You're looking at Madison Square Garden Entertainment Corp. (MSGE) and the first thing that jumps out on the balance sheet is a tight liquidity position, but honestly, the cash flow statement tells a much better story. The company's short-term obligations currently exceed its liquid assets, which is a red flag on paper, but strong operational cash generation is the defintely mitigating factor here.

Assessing MSGE's immediate ability to cover its bills reveals a classic entertainment-industry structure. For the trailing twelve months (TTM) leading up to the end of fiscal year 2025, the Current Ratio sits at a low 0.48, meaning MSGE holds only 48 cents in current assets for every dollar of current liabilities. The Quick Ratio (which strips out less-liquid assets like inventory) is even tighter at 0.26.

This translates directly into a negative working capital trend. What this estimate hides is that a venue-based business like MSGE operates differently; they collect cash (ticket sales, sponsorship fees) upfront, creating a large liability (deferred revenue) that is not a true cash drain. So, while the ratios are low, the business model itself provides a structural cushion. It's a key distinction to make before panicking about a sub-1.0 ratio.

Here's the quick math on the liquidity metrics for the latest available TTM data:

The real strength is visible in the cash flow statements. For the latest TTM period, MSGE reported an Operating Cash Flow (OCF) of $162.46 million. After accounting for Capital Expenditures (CapEx) of -$22.27 million-which covers maintenance and necessary venue upgrades-the resulting Free Cash Flow (FCF) was a robust $140.19 million. That FCF is what you use to pay down debt, fund buybacks, or invest in new growth, and it's a healthy number.

Management's actions in the financing cash flow section reflect this underlying confidence. During the fiscal 2025 second quarter, they paid down the full $55 million outstanding balance on their revolving credit facility. Plus, they repurchased approximately $40 million of Class A shares year-to-date in fiscal 2025, a clear signal they believe the stock is undervalued and they have excess capital. The ability to generate cash and then use it for capital returns and debt reduction, despite the low ratios, shows a strong operational engine.

The liquidity picture is less about the balance sheet ratios and more about the cash flow strength. MSGE is a cash-generating machine, not a capital-intensive manufacturer. For investors, the key action is to monitor the FCF-to-Debt ratio, ensuring that the $140.19 million FCF continues to provide a comfortable buffer against the approximately $618 million in total debt reported as of late 2024. You can find more detailed analysis on this topic in Breaking Down Madison Square Garden Entertainment Corp. (MSGE) Financial Health: Key Insights for Investors.

Valuation Analysis

You're looking at Madison Square Garden Entertainment Corp. (MSGE) and wondering if the recent stock momentum means you've missed the boat, or if there's still a clear runway. The quick answer is that the stock appears fairly valued to slightly undervalued based on forward earnings, but its high trailing Price-to-Earnings (P/E) ratio and negative Price-to-Book (P/B) ratio signal a complex, asset-heavy business model that requires a deeper look beyond the surface multiples.

The stock has shown strong performance, increasing nearly 29.91% over the last 12 months leading up to November 2025, trading recently around the $46.75 mark. This is a solid run, pushing the price near its 52-week high of $49.76. Madison Square Garden Entertainment Corp. is defintely a growth story right now, not a value play.

Here's the quick math on the key valuation multiples, using the most recent data from the fiscal year ended June 30, 2025:

• Price-to-Earnings (P/E): The trailing P/E ratio is high at approximately 63.90x. This is based on the reported 2025 fiscal year earnings, which were impacted by certain non-recurring items. More importantly, the forward P/E is significantly lower, around 24.71x, suggesting analysts expect a sharp rebound in net income.
• Price-to-Book (P/B): The P/B ratio is negative, sitting at about -142.63 for the end of fiscal 2025. What this estimate hides is that the company has a large accumulated deficit and significant intangible assets, leading to negative book equity. For a real estate and venue-heavy entertainment company, this ratio is often less meaningful than cash flow metrics.
• Enterprise Value-to-EBITDA (EV/EBITDA): This is the most telling metric for a capital-intensive business like this. The TTM (Trailing Twelve Months) EV/EBITDA is around 16.8x. This is a premium to many peers in the broader leisure and entertainment space, which points to the market placing a high value on the company's unique, irreplaceable assets like Madison Square Garden and Radio City Music Hall.

The company does not pay a regular dividend, so the dividend yield and payout ratios are both 0.00%. This is typical for a company focused on reinvesting cash flow back into its core assets and growth initiatives, especially following the major capital expenditure cycles associated with venue operations.

Analyst consensus is generally bullish. The current consensus rating is a Moderate Buy, with an average 12-month price target of approximately $51.50. This target suggests a potential upside of about 11.96% from the recent trading price. Goldman Sachs, for example, recently lifted its target to $52 with a Buy rating. This confidence is grounded in the company's strong fiscal 2025 revenue of $942.7 million and operating income of $122.1 million, which beat expectations. You should definitely check out Exploring Madison Square Garden Entertainment Corp. (MSGE) Investor Profile: Who's Buying and Why? for a deeper dive into who is driving this institutional buying.

The table below summarizes the core valuation metrics you should be tracking:

Your action item is to focus on the forward-looking metrics, especially the forward P/E and the EV/EBITDA multiple, which better reflect the company's operating cash flow and future earnings power, rather than getting hung up on the negative book value.

Risk Factors

You're looking for a clear-eyed view of Madison Square Garden Entertainment Corp. (MSGE), and the truth is, while the brand is iconic, its financial health carries some immediate, tangible risks you need to weigh. The biggest takeaway: despite a strong full-year revenue, the company is still battling operational headwinds and significant debt.

For the full Fiscal Year 2025, which ended June 30, 2025, Madison Square Garden Entertainment Corp. reported total revenues of $942.7 million and an Adjusted Operating Income (AOI) of $222.5 million, a solid 5% year-over-year increase in AOI. Still, the fourth quarter saw a revenue drop of 17% to $154.1 million, resulting in a quarterly adjusted operating loss of $1.3 million. This volatility is a flashing light.

Here's the quick math: Revenue growth is not a straight line, and operational risks are hitting the core business.

Operational and Market Headwinds

The core operational risk is a dip in high-margin concert revenue at the flagship venue, The Garden. The end of Billy Joel's long-running residency, for example, directly contributed to a year-over-year decrease in concerts and lower per-concert revenues. This shift means the company is relying more on rentals and other live entertainment, which can dilute profitability.

Externally, Madison Square Garden Entertainment Corp. faces two major macro factors that could quickly erode those revenue gains:

• Economic Sensitivity: The live entertainment industry is a discretionary spend. Any economic downturn or prolonged inflation will immediately impact consumer willingness to buy tickets, especially for high-priced events.
• Competition: The market is highly competitive, not just from other venues but also from new forms of entertainment, which puts constant pressure on event booking and ticket pricing.

Financial and Strategic Risks

The company's substantial indebtedness is a structural risk that can't be ignored. Madison Square Garden Entertainment Corp. is highly leveraged, and while the debt balance was reported at $69 million in Q4 2025, the overall debt profile remains a concern, especially with rising interest rates increasing debt service obligations. This leverage limits financial flexibility for capital expenditures or responding to unexpected market shifts.

Plus, the company has historically incurred substantial operating losses and negative cash flow, and there is no guarantee of sustained positive operating income in the future. You need to watch the balance sheet closely. For a deeper look at who is buying into this risk profile, you can check out Exploring Madison Square Garden Entertainment Corp. (MSGE) Investor Profile: Who's Buying and Why?

Mitigation and Forward Strategy

The good news is management is defintely aware of these pressures and has clear mitigation strategies. They are focusing on diversifying event mix and expanding their most reliable cash cow. The Christmas Spectacular production, for instance, is a major pillar, having sold 1.1 million tickets and generated over $170 million in revenue in FY2025. They plan to expand this to 211 performances in Fiscal Year 2026.

Other actions include a strategic focus on growing the high-margin sponsorship and premium hospitality businesses, plus capital expenditures to enhance venues like Radio City Music Hall and the Beacon Theatre to boost the guest experience. These moves aim to increase per-event profitability and reduce reliance on a single type of event or performer.

The immediate action for you: Track the Q2 2026 earnings release closely to see if the expanded Christmas Spectacular run successfully offsets the Q4 2025 concert revenue dip. That will be the first real test of their mitigation plan.

Growth Opportunities

You're looking for the next leg of growth in Madison Square Garden Entertainment Corp. (MSGE), and the story is clear: it's a focused play on premium, irreplaceable live event real estate and a classic holiday franchise. The company's growth isn't about new construction; it's about maximizing the yield from its iconic, high-demand assets, which is a much lower-risk proposition.

For the fiscal year 2025, Madison Square Garden Entertainment Corp. reported revenues of $942.7 million, a slight dip of 2% year-over-year, but its Adjusted Operating Income (AOI) actually grew by 5% to $222.5 million. That tells you the core business is getting more efficient, even with a small revenue contraction. The path forward relies on three key drivers: premiumization, franchise expansion, and operational leverage.

Key Growth Drivers and Strategic Initiatives

The core of Madison Square Garden Entertainment Corp.'s strategy is simple: own the best venues in the best market and charge more for the experience. The company's venues, like The Garden, Radio City Music Hall, and the Beacon Theatre, are cultural landmarks that command a premium. That's a strong moat.

The most immediate and predictable growth driver is the enduring popularity of the Christmas Spectacular Starring the Radio City Rockettes. This is essentially a high-margin, repeatable product innovation that keeps delivering. Here's the quick math on that:

• Franchise Expansion: The Christmas Spectacular sold 1.1 million tickets in FY2025.
• Near-Term Upside: The company is planning to expand the number of shows to 211 in the 2025 season, and advanced ticket sales for the production were already up 60% in gross revenue.

Also, management is focused on increasing venue utilization and enhancing per-event profitability through ongoing investments in premium hospitality and suite renovations. This is a smart move, as high-margin ancillary revenue streams-like food, beverage, and luxury suites-are what truly improve overall profitability. You can read more about the institutional interest in this strategy here: Exploring Madison Square Garden Entertainment Corp. (MSGE) Investor Profile: Who's Buying and Why?

Revenue and Earnings Projections

Analysts are projecting a significant jump in profitability for the next fiscal year, which is where the operational leverage really kicks in. The forecast annual revenue growth rate is a modest but steady 5.1% per year, which is slightly better than the US Leisure industry average of 5.09%.

The real story is the earnings per share (EPS) forecast. Madison Square Garden Entertainment Corp.'s earnings are expected to grow from $1.04 per share to $1.78 per share in the next year, representing a massive 71.15% increase. This kind of jump suggests the market is pricing in the full realization of the premiumization strategy and the strong performance of the Christmas Spectacular franchise.

Here is a snapshot of the forward-looking financial picture:

What this estimate hides, to be fair, is that the stock is still trading at a high price-to-earnings ratio (P/E) of around 64.63x, suggesting the market is defintely pricing in this massive earnings growth.

Competitive Advantages

Madison Square Garden Entertainment Corp. holds a powerful, almost unassailable competitive advantage (economic moat) in its venue portfolio. It's not just that they own the venues; it's that they own the right venues.

The prestige of the brand is a huge barrier to entry for competitors. The company's ownership of The Garden, Radio City Music Hall, and The Chicago Theatre gives it a unique edge in attracting top-tier talent and events. This is especially true in the New York City metro area, which is the number one concert market in the U.S. and provides access to over 23 million people and more than 64 million annual tourists. No one can replicate that kind of market position overnight.

Plus, the long-term arena license agreements with the New York Knicks and New York Rangers provide a stable, recurring revenue base that anchors the entire business. That stability is a financial analyst's best friend.

Next Step: Finance: Model a sensitivity analysis on the FY2026 EPS target, factoring in a 10% miss on the Christmas Spectacular advanced ticket sales to stress-test the $1.78 EPS forecast by the end of the week.