How does the company choose locations and ensure there isn't cannibalization between future Spheres?

Management is not concerned about cannibalization, citing the global ambition to be on all five continents and the vast untapped market. The focus is on proliferating the immersive medium, not on audience overlap between distant locations. “Well, we're not worrying about cannibalization so much because, I mean, Washington is a long way away from Vegas. We like to be a global company. So we ultimately like to be on all 5 continents. ... It's a big world, and I think there's a lot of opportunity and not many people have seen this Sphere.”

Has macro volatility impacted the pace or focus of discussions for large and small market Spheres?

Management has not seen any impact from global conflicts on expansion discussions. Many markets are reaching out, and while the process is involved due to land use and government approvals, the prospects remain good. “The -- not seeing any impact from the global, I guess, the conflicts that are going on. And I think pretty much many people think this is not a long-term thing. ... There are quite a few markets that we think that the Sphere would do well, either a full-size Vegas one or the National Harbor size one, the 6,000 seater.”

What are the current visitor trends in Vegas, and how are they affecting demand for The Wizard of Oz and residencies at the Sphere?

Vegas visitation, after being down last year and in January, returned to growth in February and March. Sphere is driving incremental visitation, with strong demand for The Wizard of Oz and residencies like Phish and Metallica, which have seen robust ticket sales. “So while we're mindful of the macro environment, we're not overly concerned at this point. And as you may know, Vegas visitation was down last year. That continued into January, but we've seen a shift and return to growth in visitation in February and March. ... we're also seeing that The Wizard of Oz playing a role in that.”

SPHR

Sphere Entertainment (SPHR) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Communication Services· May 5, 2026

Source: earnings call transcript

Executive summary

Sphere Entertainment Co. Q1 FY26 — Strong Sphere Performance Drives Revenue Growth and Global Expansion Plans

Sphere Entertainment reported a strong quarter, primarily driven by the Las Vegas Sphere's performance, which is serving as a blueprint for global expansion. The company is actively pursuing new venues in Abu Dhabi and National Harbor, while also developing new immersive content. Despite a decline in the legacy MSG Networks segment, management remains focused on maximizing the Sphere's potential and managing costs efficiently.

Highlights

Sphere segment revenue increased nearly 70% to $266 million, driven by The Wizard of Oz at Sphere and other events.
Sphere segment adjusted operating income grew significantly to $74.3 million from $13.1 million in the prior year quarter.
The Wizard of Oz at Sphere has sold nearly 3 million tickets, generating over $370 million in ticket revenue to date.
Global expansion plans are advancing with a venue site selected in Abu Dhabi and financing discussions progressing for the National Harbor Sphere.
Exosphere repeat advertisers are projected to grow by strong double-digit percentages in 2026, reflecting strong demand.

Concerns

MSG Networks segment revenue decreased to $120.4 million from $123 million in the prior year period.
MSG Networks experienced an approximately 16% decrease in subscribers.
SG&A expenses increased by $10.2 million, or 11% year-over-year, primarily due to mark-to-market adjustments on share-based compensation.

Guidance & targets

Category	Target	Timeline	Confidence
National Harbor Sphere opening timeline	4 years or less medium materiality	FY30	High
Las Vegas Sphere business growth	substantial growth high materiality	Calendar 2026 · FY26	High
Exosphere repeat advertisers growth	strong double-digit percentages medium materiality	2026 · FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Sphere Segment Revenue growth was primarily driven by the Sphere Experience, particularly The Wizard of Oz, along with increased brand events, concert residencies, and sponsorship fees. The increase in AOI was partially offset by higher direct operating and SG&A expenses. AOI prior year: $13.1 millionRevenue drivers: Higher per show revenues for The Wizard of Oz at SphereRevenue drivers: Revenue growth in brand events, concert residencies and sponsorship and suite license fees	$266 million	nearly 70%	—	$74.3 million AOI
MSG Networks Segment Revenue decreased year-over-year due to lower advertising revenues and a significant decline in subscribers. This was partially offset by the absence of a non-carriage period with Altice that impacted the prior year, and amendments to media rights agreements. Revenue prior year: $123 millionAOI prior year: $22.8 millionAdvertising revenues: DecreasedSubscribers: Approximately 16% decreaseImpact of non-carriage period with Altice: Partially offset declinesImpact of media rights agreements: Reflected amendments with MSG Sports and other teams	$120.4 million	—	—	$35.7 million AOI

Product announcements

Product	Type	Timeline	Details
From the Edge	roadmap	—

Deals & partnerships

Department of Culture and Tourism Development of a Sphere venue in Abu Dhabi

The Department of Culture and Tourism has selected the venue site for the Abu Dhabi Sphere, and early-stage procurement work with contractors and vendors is now taking place.

The Peterson Company Development of a Sphere venue in National Harbor, U.S.

Partnership to bring the second Sphere in the U.S. to National Harbor. Financing discussions are progressing, venue design is being finalized, and the company is working with state and county on legislative approvals and incentives. The venue is expected to be open in 4 years or less.

Risks & headwinds

Macroeconomic environment impact on Vegas visitation Near-term

Vegas visitation was down last year and in January, but shifted to growth in February and March.

Mitigation:Sphere is observed to be driving incremental visitation to the market, and demand for experiences remains strong and resilient despite market softness.

Fluctuations in SG&A expenses due to share-based compensation Remainder of 2026

SG&A expenses increased by $10.2 million or 11% year-over-year, primarily due to mark-to-market adjustments on share-based awards.

Mitigation:Management is focused on managing infrastructure and SG&A costs efficiently, identifying cost savings opportunities, and balancing this with supporting the global vision for Spheres.

Legacy MSG Networks segment decline Ongoing

MSG Networks revenue decreased to $120.4 million from $123 million, with approximately 16% decrease in subscribers.

Mitigation:Partially offset by the impact of MSG Networks non-carriage period with Altice in the prior year and amendments to media rights agreements. The company's primary focus is on the Sphere business model.

What to watch in Q2 FY26

National Harbor Sphere Development

Next quarter / within 4 years

Current Financing discussions progressing as planned; finalizing venue design; working on legislative approvals.

Target Groundbreaking or significant advancement in approvals/financing.

Why it matters

Key to global expansion strategy and demonstrating replicability of the Sphere model.

Financing discussions for this 6,000 feet Sphere are progressing as planned. We're also finalizing the venue design, which we coordinate with the Peterson Company on the site management plan and the preconstruction planning. In addition, we're working together with the state and the county on the various legislative approvals and incentives for the project.

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Q&A highlights

Given the profitability of the Vegas Sphere, would the company consider owning or operating future venues instead of a franchise model?

Management stated that the strong performance of the Vegas Sphere provides more options, including potentially owning or operating future venues. While a capital-light model helps speed up expansion, the company can now pursue either approach.

“For us, we'd like to move as quickly as we can to building multiple Spheres. So the capital-light tactic is one of the ways to help speed it up. But with the strength of the operating model in Vegas, it does give us more options. So we can go probably either way.”

asked by Brandon Ross · answered by James Dolan

2 min read 5 chapters

Detailed narrative

Sphere Business Model Validation and Global Vision

The company's Q1 FY26 financial results demonstrate continued success in proving out Sphere's business model in Las Vegas. This success is now serving as a blueprint for a long-term vision to establish a global network of Sphere venues. Management emphasized the goal of proliferating the immersive medium globally, aiming for presence on all five continents, and is confident about the path towards global expansion.

Global Expansion Progress

Significant progress is being made on global expansion. In Abu Dhabi, the Department of Culture and Tourism has selected the venue site, with early-stage procurement work underway. For the second U.S. Sphere in National Harbor, financing discussions are progressing, venue design is being finalized, and the company is working with state and county authorities on legislative approvals and incentives, with an expected opening in four years or less.

Discussions are ongoing with numerous markets worldwide for both large and smaller-scale Spheres.

Content Strategy and Performance

The Wizard of Oz at Sphere continues to perform well, reinforcing confidence in its long-term viability as a strong performer in 2026 and beyond, having sold nearly 3 million tickets for over $370 million in revenue. The company is also developing its next Sphere Experience, 'From the Edge,' which is designed to be extremely experiential and focused on extreme sports.

Additionally, Sphere is working with IP holders to build out a diverse slate of new content, responding to increasing demand from artists and brands for the new medium.

Exosphere Monetization and Utilization

The Exosphere continues to gain momentum, operating with a strategy of 50% advertising time and 50% art and promotion. This approach drives social engagement and brand differentiation. Brands are utilizing the Exosphere for cultural moments, and the company is seeing strong demand, with sellout periods during peak times like CES.

Repeat advertisers, including Adobe, Google, and Amazon, are growing, with projections for strong double-digit percentage growth in 2026.

Operational Efficiency and Cost Management

A key learning from the Las Vegas operation is the ability to run multiple shows, including concerts and Sphere Experiences, in the same day with minimal changeover, sometimes under an hour. This operational flexibility allows for increased revenue generation and efficiency.

While SG&A expenses saw an 11% year-over-year increase due to mark-to-market adjustments on share-based compensation, management remains focused on identifying cost savings opportunities while supporting the global expansion vision.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.