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 Third Quarter 2025 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 Third Quarter 2025 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 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.

First, going into 2025, it seemed like it was one where the sun, the moon, and the stars were all going to align with stadiums and arenas and amphitheaters all coming together. It's turned out, it seems to be a great stadium year, but there's definitely been underperformance in the other venue sizes. Can you explain what happened with amphitheaters and arenas this year? And what can give us confidence that they will rebound strongly in 2026? And I have a follow-up.

Thanks, Brandon. I'll take it. Just to be clear, we had an incredible quarter, an incredible year so far. We had revenue up 11%, operating income up 24%, AOI up 14%. These are numbers you pray for every quarter. So we've had an incredible year. One of the things we've always said about Live Nation is the great strength you have in investing in us is we are a global diversified business, both geographically and by venue type. And sometimes Europe overdelivers and America underdelivers. Sometimes the amphitheaters are having a record year, sometimes the stadiums are having a record year. And that's always been the pattern here. And what's great is at the end of the day, we're going to deliver our AOI 10% growth and had incredible growth internationally in Mexico, Latin America, and a lot of our European businesses and stadiums, which are up 60%. Now again, we would hope we have this problem every year where stadiums dominate the business. It just continues to show the strength of the consumer and the buyer. This year, we had fewer amphitheater shows. We're looking towards '26. It looks like it's going to be a great pipeline. We expect that amphitheaters, arenas, and stadiums are going to have a very strong year next year, on both an international and American basis. Probably be sitting here in a year from now telling you one of those markets overdelivered, and that's the strength of our diversified platform. So we don't think there's anything structural. We think there is a lot of content out there. A lot of artists decided not to play or not to play arenas and amphitheaters and instead go for stadiums. We support that on a global basis, and that helped deliver our global revenue growth of over 11%. We think next year, we'll have the same great combination on a global basis and deliver what we've been delivering for many years: record attendance, record revenue, and record AOI will be in the books again for next year with the combination of international amphitheaters and arenas.

Great. And then on the Ticketmaster side, following the FTC suit, it seems like you've really begun to crack down a lot on ticket scalpers. Can you remind us of the actions that you've taken so far? And what impact you expect each to have on both LYV financials and the broader ticketing industry? And it seems like most of the work that you're doing, most of the changes you're making are concerts only as opposed to both concerts and sports. Any color on why that's the case?

Sure, Brandon. I'll get going, and Michael can jump in. First, again, as always, just to set the context, secondary is a low single-digit percentage of our revenue. It's a feature to us, as we've long talked. We focused on primary and helping content get the tickets priced and sold how they want. First, just to answer sports versus concerts, it's very different. Sports, the teams and leagues use secondary as a distribution platform for disaggregation of season tickets. So the secondary I would think about is being really heavily a liquidity market in sports. In concerts, because they're all sold one-off, there is no liquidity market. It's all a price arbitrage market. So as we look at it, it's a matter of how much are the scalpers taking? How much arbitrage are they getting? And the actions that we're taking, I think, are heavily driven by the fact that when we look hard at it, it's just too much. The pieces, first, even though it gets pressed is less important, is Trade Desk. It's a tool that brokers use to manage their tickets and simultaneously place them on multiple marketplaces. It started because of sports. It's often confused that somehow it's a tool that the brokers could use to get tickets in some advantage form relative to fans. It's not this. It's never been this. But just to eliminate the noise, we're shutting it down. We don't expect it to have any financial impact on us or on the market. We expect most of these folks will either do it manually or go to one of the other multitude of platforms that offer this service. More impactful to the industry is the identity verification tools we've started to deploy. So now when our system identifies high-risk accounts based on 100 different signals, we can require validation that the account holder is a person and that their government ID matches the account. This is a key tool we've used in canceling over 1 million accounts over the past month. And on a recent high-demand sale that got some press, we used it after the fact, looking at the signals and putting fans through to determine whether they were real fans or impostors. So that's been helpful. We're optimistic in the short term that this can help rein in some of the excessive abuse that's developed. But frankly, we're also realistic that without legislative and enforcement changes, the scalpers will continue to invest in new tools to fool our systems and mask the fact that they're bots. So it's hard to fully translate into financial impacts. However, given the low percentage of revenue that secondary accounts for, what we've seen so far in terms of the activity and the volume, we don't have any reason to think it would be more than a low to mid-single-digit impact on Ticketmaster's AOI next year. More importantly, we don't see this fundamentally impacting our growth strategy given our focus on the primary side. So as we lay out our multiyear strategy tomorrow, this is not going to impact that strategy or on the numbers that we think we can get to.

Joe, maybe on the concert segment for the quarter. I was wondering if you could help us break down some of the puts and takes to concert segment AOI growth in 3Q. I think there's a number of factors that investors are trying to better understand. You have growth in Venue Nation attendance and the profitability that might be coming as you layer on some new capacity there. You have more stadium activity as you called out earlier and then some pressure on amp and arena attendance. I think any color to help us better understand the sizing of some of these drivers would be helpful as we look into next year. I would appreciate any of that. And then I have a follow-up.

Sure. I'll give you the detail on the quarter. Overall, for the concert segment, we grew AOI by about 40 million dollars with roughly 1 million or just over 1 million fans. So pretty good per fan incremental profitability. It's 120 more stadium shows that really drove the growth, which was pretty well balanced between the U.S. and international. It was also heavily driven by stadiums that we operate. So the reopening of GMP and building back up the Rogers Stadium in Toronto. So it was a lot of fans that we operated at, which is what drove some of the high profitability per fan. We had about 250 fewer amphitheater shows, as Michael alluded to, just from a cyclical standpoint, fewer shows. Arenas are about flat, but we did grow our activity in our operated arenas with the new Portugal arena coming online and some of our other European arenas. So there was a big shift to stadiums, and overall, in some of the large venues outside of the amphitheaters, we had more activity in our operated venues that helped in the context of the few amphitheater shows.

Great. And then maybe secondly, just as a follow-up on regulatory and some of the commitments you made on the FTC side. Just would love any other color you could provide about where we stand in your dialogue with the FTC? And then maybe related to that, where we stand in the DOJ's process? And to what extent you feel like maybe some of the more recent dialogue you've had, perhaps with both agencies, has created a framework or common ground with these agencies or lawmakers.

Sure. I'll start with the FTC. I think the government shut down pretty much immediately after that came out. So no real action there. What I would say, and we've said this before, when this happened, we feel very good about our case with the FTC. We think it's an extremely expansive view of the BOTS Act. The fact that they would file the suit when we do more to stop bots and to counter a lot of this activity than the rest of the industry combined, we find this very far afield. From a legal standpoint, we don't believe that they have a strong case. A lot of the changes that we just talked about are friendly things that have been in motion for a while. Obviously, you don't roll out identity verification in two weeks. That's a tool we've been building, and we were just ready to deploy it. On the DOJ, that case is advanced procedurally. Generally speaking, discovery is complete. Everybody has exchanged expert reports, and we're in the middle of some of the expert depositions. All that's left is a few straggler depositions. So that process continues. The judge reaffirmed the March 6 date for the trial. So we'll continue on that process for now. But the other development that I think is of real note is that we think the remedies decision in the Google search case has very much validated our view that the claims in our case can't lead to a breakup of Live Nation and Ticketmaster, even if the DOJ prevails on one claim or another. We expected that, but certainly welcome news on that side.

First, on the ticketing side of the business. You've talked about the competitiveness in the ticketing industry in the past, particularly in the U.S. I was wondering if you could describe how that landscape has been evolving and how you've been responding to that level of competitiveness, particularly whether it raises your appetite or the attractiveness of capturing international growth within that segment of your business?

Yes. Cameron, I don't think we think of it as an either/or. We look at it as a global business. We're a global platform. We're global in concerts. We're global in ticketing. We are underdeveloped in international markets in Ticketmaster, particularly if you look at Latin America, Asia, and even parts of Europe. So there's a heavy focus on building out our presence in those markets. We think we have the best ticketing platform and enterprise tools out there. And that's clearly been helping us win a lot of business as we've given you those numbers over the past several years in international markets. North America is competitive, but that's fine. Most businesses in life are competitive. And I think we continue to win a lot because we can compete effectively on all dimensions, and we've continued to add clients and tickets in North America as well. We'll continue to fight that fight. But we see international over the next several years as a great growth opportunity.

Got it. And then on the numbers in the release around deferred revenue, some pretty healthy growth both in event-related deferred revenues and ticketing revenues. Any color you can provide in terms of how we should think about that as indicative of fourth-quarter activity relative to indicative of 2026 activity?

Yes. I think most of that will be getting into next year at this point, given the size of those numbers and the fact that Q4 is cyclically one of the smaller quarters. It goes hand-in-hand with the other things we've given you on the strength of the pipeline for '26 in terms of large venues and the fact that our ticket sales for shows next year are up double digits. Ticketmaster, you'll continue to see some growth in the deferred revenue also as we're adding more venues and the tickets for those venues get deferred.

I wanted to see if you could refresh us on the venue pipeline that will impact in 2026 in terms of the buildings opening in the second half of this year and those planned for the coming year. When we look at your fan count growth at Venue Nation, I think you had previously guided this to around 7 million fans. Any reason to think you wouldn't be able to sustain a pace comparable to that next year?

I was just going to jump in. The good news, David, is we're going to take this through our Investor Day tomorrow and get into more detail on the venue stuff. So that's probably the best place for it. But no, we continue to see the same pipeline of growth as we've outlined previously, and we've made great progress this year in getting these buildings either started or opened up. Tomorrow, we'll take you through kind of the longer-term vision of it.

Okay. And then just on the stadium outlook, just wanted to see if you could check in on the pipeline for next year. I know there had been some hope expressed in September that you could get to a comparable year in the U.S. with the growth internationally, despite the FIFA factor. I just want to get an update there.

Yes. I would say the World Cup FIFA, some of those fears that everyone had earlier haven't seemed to come to life. We are looking right now at this time of the year, which is early still, but good for stadiums to have a very strong year next year. International, which already had a spectacular year, looks very strong on a global basis. So we look at next year being a very strong stadium year again. Going to Brandon's concern, add a few extra shows in amphitheaters and arenas, and you're back to your annual higher double-digit fan growth that we've been able to do for the last 15 years or so. We see that consistency continuing for the next few years.

I have two for either Michael or Joe. Maybe just following up on where you just went. The earnings release calls out the international fan count is on track to surpass the U.S. for the first time. I'm just wondering if you can shed some additional light on where you see that mixed shift going with international fan growth over time? And how much of that factors into your confidence of delivering another year of double-digit AOI growth in '26? I'll start there.

I'm not sure I got the question right, but I think if you're asking about international, we believe this will continue to be a global international business. Most of our growth, both in Ticketmaster sponsorship, venues, and concerts will continue to be on a global basis, given there are so many markets that we are not very high in market share or haven't entered yet. So that mix will continue to grow and continue to be an international story for many years to come.

Got it. Can you discuss your recent hire of a new Global President for Ticketmaster and how you expect that to assist in the AI transformation of your overall business or at least Ticketmaster?

Yes. I think we thought it was time. Mark has done an incredible job growing the business dramatically. Our focus under Mark, based out of London originally was to really focus Ticketmaster to become a much more international business, away from being just solely U.S. focused and think about it as a global platform. We had many different technologies at the time. Carlos and Mark have done a fabulous job standardizing our global business, launching in many markets. Mark will continue as Chairman, and that will be his focus to keep running hard on international. We absolutely wanted to find somebody that had a very strong technical background, engineering AI-based capabilities that could look at the platform overall and not just considering how do we make the enterprise marketplace better. But of course, how do we ensure that we are leading the charge on AI from an agent perspective at the front door to all the places that we're adding on the enterprise level.

Just a quick question for me. Your release reiterates your expectations for long-term AOI compounding, but doesn't discuss 2026 specifically. I'm curious given all the strong leading indicators that you've called out, is it fair to assume that you can continue to grow AOI double digits next year? Or are there mitigating factors that we should keep in mind?

This is Joe. I want to emphasize that there are no mitigating factors. We have never made that call in November before the year has begun. Typically, we discuss this in February. What we can share now are the leading indicators related to our show pipeline, ticket sales, sponsorship commitments, deferred revenue, and numerous factors that are showing very positive signs. However, we prefer to wait until February when we have all the data to make that call, and there are no negative concerns at this point.

But your point is what we've been saying for year after year, the last few. We think this business on a global basis has incredible growth ahead of it that would mirror the history we've been able to deliver.

Just wondering if you could talk about corporate appetite for sponsorships now in terms of what they're willing to do and sort of how much they're willing to spend?

Yes. Again, our sponsorship numbers, you saw the 14%. They've been growing by double digits for years. As we grow our business, we provide more inventory. The more arenas, the more international, the more cities we add, the more inventory our team has to sell. We think that the live show continuously serves as a really good return on investment. They may not have all the other media channels solved while they're figuring out where to put their dollars. But if you want to absolutely touch consumers in a live location like sports or music, these two places are where marketers tend to be spending more money today. So we're matching that with them. We have the best inventory in the world, and we see continued growth for a long time in sponsorship and brands that want to be part of that exciting two hours of magic.

I just wanted to zoom in a little bit, hone in on food and beverage spend. I was just wondering if you could stratify the growth that you're seeing a little bit across different venue types and then front of the house, back of the house, VIP, if possible.

Yes. We've had a strong year again in food and beverage in our amphitheaters, our festivals, owned and operated clubs. We delivered on our growth targets this year again. We continue to be better at diversifying our portfolio, increasing our hospitality, and enhancing our offerings across all platforms. So we've had a strong year. We continue to see year-over-year growth on-site, food and beverage, VIP, hospitality, and premium, as well as all of the ancillary revenues. When they come to that show, they still want to find that place to have fun and spend some dollars to enjoy it.

There are no further questions at this time. I'd like to hand the call back to Michael Rapino for closing remarks.

Thank you, everyone, for your participation, and we'll talk to you tomorrow afternoon at our Investor Day. Look forward to it. Thank you.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.