Despite Increase In Q3 Revenue, SFX Entertainment's Losses Continue

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Despite Increase In Q3 Revenue, SFX Entertainment's Losses Continue

Despite Increase In Q3 Revenue, SFX Entertainment's Losses Continue

SFX Entertainment, Inc. the events production company responsible for TomorrowWorld and Mysteryland, has reported financial results for the three and nine months that ended September 30, 2014. 

It looks like despite a slumping stock value, the Robert Sillerman lead EDM event company is starting to bring in some cash, especially during the peak festival season.

From the SFX press release regarding a November 14th conference call regarding quarterly results from the company:

Revenue for the three months ended September 30, 2014 rose 194.5% to $143.5 million while revenue for the first nine months of 2014 increased 199.9% to $258.8 million. Revenue in the 2014 third quarter included $114.7 million of revenue (79.9% of total revenue) from festivals and live events that were produced, promoted, licensed or managed by SFX during the period.

According to the press release for quarter three, SFX produced and promoted a total of 267 events, which attracted over 1,559,000 attendees, including 27 festivals that each attracted over 10,000 attendees.

SFX also reported on what it terms as "platform revenue", which includes sales of "digital music, ticketing fees and commissions, and certain marketing and digital activities, totaled $28.8 million (20.1% of total revenue) for the three months ended September 30, 2014."

It turns out producing all these events costs a pretty penny though, as their costs offset the profits as follows:

Direct costs for the three months ended September 30, 2014 totaled $110.0 million, with costs from Live representing $93.8 million, or 85.3% of total direct costs, while platform costs related to products sold was $16.2 million, or 14.7% of total direct costs. Direct costs for the nine months ended September 30, 2014 totaled $194.4 million.

Net income and diluted earnings per share for the three month period was $2.8 million and nil, respectively, while net loss and net loss per share for the nine month period was $(94.2) million and $(1.40), respectively.

Robert Sillerman issued the following statement:

“The third quarter of 2014 was one of growth and transformation for SFX and I am excited by the tremendous progress made by our entire team. During the third quarter, we extended our success in launching our most popular festivals in new geographies, rolled out highly customized programs for global flagship brands, expanded and introduced new multi-year marketing partnerships, re-launched our Beatport portal and further developed our online assets to better engage and delight our fans. With streamlined operations that are laser focused on providing the best possible experience for fans worldwide, the cash flow generated in the third quarter allowed SFX to invest an additional $11 million toward future initiatives, an investment that was expensed through our income statement. Upcoming quarters will see the benefit of these investments for all stakeholders.”

You can read the entire press release here.

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