Earnings call transcript: Venu Holding’s Q1 2025 sees asset growth and expansion

Venue Holding Corporation (VENU) reported notable financial growth for the first quarter of 2025, with total assets increasing by 19% to 212.9 million dollars. According to InvestingPro analysis, the company maintains a WEAK overall financial health score of 1.54 out of 5, though it currently holds more cash than debt on its balance sheet. The company is expanding its footprint through strategic partnerships and innovative financing models, which are expected to support its ambitious plans for national expansion.

Key Takeaways

• Total assets rose 19% to 212.9 million dollars.
• Luxe Fire Suite and Aikman club sales reached 38.7 million dollars.
• New fractional ownership model generated 12.5 million dollars.
• Venu Holding anticipates operational profitability in 2026.
• Partnership with Ryan to accelerate national expansion.

Company Performance

Venu Holding has shown strong financial performance in the first quarter of 2025, driven by increased sales in its Luxe Fire Suite and Aikman club offerings. The introduction of a new fractional ownership model has also contributed significantly to its revenue stream. The company’s strategic partnerships and unique business model position it to disrupt the live music and hospitality sectors.

Financial Highlights

• Total assets: 212.9 million dollars, up 19% year-over-year.
• Property and equipment: 182.9 million dollars, a 33% increase.
• Luxe Fire Suite and Aikman club sales: 38.7 million dollars in Q1.
• Fractional ownership revenue: 12.5 million dollars since February.

Market Reaction

Following the earnings report, Venu Holding’s stock saw a positive aftermarket reaction, with shares rising 2.19% to 7.94 dollars. Despite this uptick, InvestingPro data shows the stock has declined 23.42% over the past six months. The current market sentiment appears mixed, with analysts setting price targets between $12.50 and $15.00, suggesting potential upside from current levels. This movement reflects investor optimism about the company’s growth trajectory and future profitability prospects.

Outlook & Guidance

Venu Holding is targeting 250 million dollars in fractional ownership sales for 2025 and plans to expand into new markets with its partner Ryan. The company aims to develop venues in El Paso, Texas, and Centennial, Colorado, enhancing fan experiences and improving operational efficiency.

Executive Commentary

CEO JW Roth highlighted the company’s disruptive potential, stating, "We are building literally a machine that will change and disrupt music." He also emphasized the strategic importance of the Ryan partnership, describing it as "fuel on our fire." President Will Hodgkins added, "We’re not only expanding... we’re also hard at work unlocking more value from our current operations."

Risks and Challenges

• Market Saturation: As Venu Holding expands, it may face challenges in differentiating itself in a competitive market.
• Economic Conditions: Economic downturns could impact consumer spending on entertainment.
• Operational Execution: Successfully managing rapid expansion and new partnerships will be crucial.

Venu Holding’s Q1 2025 performance underscores its potential for growth and innovation within the live music and hospitality industries. The company’s strategic initiatives and partnerships are set to drive its national expansion and enhance its market position.

Full transcript - Venu Holding (VENU) Q1 2025:

Heather Atkinson, Chief Financial Officer, Venue Holding Corporation: Good afternoon, and welcome to Venue Holding Corporation’s first quarter twenty twenty five financial results and business update. Earlier today, Venue Trading under the ticker symbol, b e n u, issued a press release summarizing the company’s first quarter twenty twenty five performance following the filing of its quarterly report on Form 10 Q for the period ending 03/31/2025. This conference call is being recorded and will be available online along with the earnings press release that venue live in accordance with the company’s retention policies. All participants on today’s call are in listen only mode. Following our prepared remarks, we will open the line for a q and a session.

At this time, I’d like to turn the call over to Heather Atkinson, chief financial officer of Venue Holding Corporation. Heather, please go ahead. Thank you all for joining Venue Holding Corporation’s first quarter twenty twenty five earnings call and business update. On the call today, we have our senior leadership team, myself, founder, chairman, and CEO, JW Roth, and president, Will Hodgkins. Following the safe harbor statement, JW will provide a review and share highlights from across the business.

Then Will is going to provide an operational update on venue. I will then provide a summary of the quarterly financial results. After that, as our operator mentioned, we will open the call for questions. We’d like to remind everyone that various remarks about future expectations, plans and prospects constitute forward looking statements for purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Venue cautions that these forward looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from these indicated, including risks described in the company’s quarterly report on Form 10 Q for the quarter ended March 3125 and our other filings with the SEC, all of which can be reviewed on the company’s website at www.venu.live, spelled v e n u L I v e, or on the SEC’s website at sec.gov.

Any forward looking statements made on this conference call speak only as of today’s date, Thursday, March 05/15/2025, and that you did not intend to update any of these forward looking statements to reflect events or circumstances that would occur after today’s date, except as may be required by federal securities laws. With that, I’d like to turn the call over to our founder, chairman, and CEO, JW Rock. JW?

JW Roth, Founder, Chairman, and CEO, Venue Holding Corporation: Heather, thank you, and good afternoon, everyone. We appreciate you joining us today. Okay. I’m going to dig into some prepared remarks, and then we’ll move into our question and answer session. This first quarter was incredible.

Venue was founded on the simple idea to build world class live music and hospitality destinations that focus on the fan. And our disruptive model designed around artistic, fan focused, experience driven ambiance is absolutely working. We have witnessed fans and shareholders eager to join in on the venue movement. To better explain the impact of the next few reports, let me take a quick moment and explain how we do what we do. We work with municipalities to identify the economic impact our venues would have on their community because we have seen we are a tide that rises all boats.

We then work with the municipality to create public private partnerships that lead to one of our state of the art venues being built in their city. Now how do we finance what we do? 40% of our financing comes from the municipality partner in each market in the form of real estate, tax incentives, and cash. 40% of the financing comes from the presale of fractional ownership in each venue. Venue’s unique Ruxfire suite offers practical ownership in venue owned sunset amphitheaters.

Owning a fire suite is like owning a condo within a condo building, except in this case, the condo building is the amphitheater and the condo is the fire suite. Then 20% of the financing comes from the sale leaseback of the real estate that was contributed by the municipality. In fact, this sale leaseback typically generates a development profit. So how does Venue turn profits? Number one, we turn profits in the sale of fractional ownership in our venues.

We develop raw property contributed by municipalities into state of the art venues with fractional ownerships. Those ownerships go directly onto our balance sheet. These fractional ownerships, along with the sale leaseback, result in a development profit, of which we expect our first one to happen this year. Number two, profits from operations. These come as a result of our co promotion agreements and vendor agreements with that are associated with our amphitheaters.

Additionally, through the internal operations from our non amphitheater entities. Q1 posted our biggest quarter yet with over $38,000,000 in fractional ownership sales across our venues, well on our way toward our quarter of a billion dollar goal in 2025. These fractional ownerships are the backbone of the powerhouse that we are building. And remember, these all go directly onto our balance sheet. As for our P and L, we will not look back at our losses this first quarter and apologize.

The bulk of these costs were noncash and nonrecurring development expenses. In fact, they are driving these costs are driving the most powerful development engine in music. We will turn which will turn us profitable later this year with our first development profit and operationally profitable in 2026. As part of that engine, we launched an official partnership with Ryan to to rapidly accelerate our national expansion. This relationship and partnership is three years long and is contracted to deliver two new public private partnerships per quarter.

And remember, on average, we can expect to add between a 300,000,000 to our balance sheet with each delivered development agreement. Along the same note, a significant part of this first quarter’s staggering balance sheet increase was the property acquisition. This week, we closed on another 20 acre property for a 12,500 seat multi seasonal outdoor music venue in El Paso, Texas. The Sunset Amphitheater in in El Paso includes a $31,500,000 performance based incentive package from the city of El Paso, Texas. Earlier in the quarter, we also went under contract to acquire a property in the hydro suburb of Centennial, just outside of Denver, Colorado, where we plan to build an iconic state of the art indoor music hall, private event space, and restaurant.

Let me pause here and talk a little bit about the development timeline, which we include which will include all of our announced projects. Starting with this year, we will have nine open and operating entities that include three concert halls and event spaces, one amphitheater, and five restaurants and bars. In 2026, we are expected to have a total of 16 open and operating entities, including seven concert halls and event spaces, four fully functioning amphitheaters, five restaurants and bars. As we have discussed, our expansion in engine is in full gear, and we’re thrilled to officially unveil our upcoming locations in the months ahead. Circling back quickly to the fractional ownerships.

These fractional ownerships, as as previously mentioned, are also known as LUX fire fleets. Until February of this year, the only way you could participate in this offering was to pay cash upfront. Our team saw an opportunity to introduce structured financing. Now buyers can access structured payment plans and finance their purchases over time. Since launching, we have seen more than 32% of our buyers choose the financial choose to finance over traditional payments.

Further, Luxfire Suites continue to be Venue’s most sought after ownership opportunity. Because of this, we have launched a partnership. We’re one of the nation’s fastest growing net lease companies, Fans Investment Group, to offer innovative triple net real estate opportunities. Through this approach, qualified investors can now participate in Venue’s income producing long term assets under a triple net lease structure, offering a projected 11% to 12% cap rate. Finally, we have made strategic additions to our team in the first quarter, like bringing on Connect Partnership Group to serve as our official sponsorship sales partner, accelerating our corporate sales and partnership strategy across our brand portfolio.

Additionally, we have added financial leader and strategic growth adviser, mister Thomas M. Fink, to our board of directors. Mister Fink has over thirty five years of experience in financial services, including Invesco, Abstin Capital, MassMutual, and Barron. Our venue executive leadership team also grew with the executive with the announcement and addition of executive vice president of operation, Vic Sutter. Vic has spent the last twenty years in luxury hospitality brands across The United States.

The last decade was Live Nation. He is responsible for driving our operational excellence, hospitality and innovation, and premium guest experiences across all of our premium brands. With that said, I’d like to turn the conference over to President, Will Hodgson. Will, please go ahead. Thanks, JW.

Hey, all. Thanks so much for joining us. As JW mentioned, we have a lot going on at Venue. Our team is spending time focused on the core of our business across our hospitality brands, clubs and amphitheater operations. Q1 top line sales were modestly lower year over year, driven by a daypart shift at Noat’s Eatery and a slightly softer performance at Bourbon Brothers and Fill Along Event Center here in Colorado Springs.

We are in a product and service development phase, though, implementing several new strategies to enhance our programming, add additional ancillary revenue streams and improve fan and guest retention. Booking more diverse genres in our clubs, investigating robust customer engagement partnerships, implementing new seating configurations and creating new revenue streams are all meant to better monetize the guest journey, encourage longer dwell times and provide higher growth potential for artists. We are also preparing to open the Sunset Hospitality Collection here at Ford Amphitheater this fall in Colorado Springs, anchored by our very exciting new fine dining experience, Ross Seafood and Chop House. Look for new menu items and mixology offerings at our Bourbon Brothers Smokehouse and Tavern outlets as well, along with new private event packages. As we move through 2025, Venue is positioned for major, major growth.

We’re not only expanding given what you just heard from JW, we’re also hard at work unlocking more value from our current operations, smarter food and beverage strategies, refined premium offerings and targeted and enhanced analytics to help boost profitability and efficiency across the board. And most importantly, we’re keeping our focus where it belongs, delivering unforgettable experiences for both guests and artists while raising the bar at every turn. With that, I’ll turn it back over to our Chief Financial Officer, Heather Atkinson. Heather, please go ahead.

Heather Atkinson, Chief Financial Officer, Venue Holding Corporation: Thank you, Will. I appreciate everyone being on the call today. I’m gonna dive right into some performance highlights from our 10 Q and our earnings release. And a few highlights from our balance sheet. Our total assets increased 19% for the quarter for $34,464,672 to $212,882,187 as of 03/31/2025, up from a hundred and $78,417,515 as of 12/31/2024.

Along that same vein, our property and equipment increased 33% to a hundred and 80 2 thousand 9 hundred and 6 thousand 1 hundred 90 5 dollars as of 03/31/2025, up from a hundred and $37,215,936 at 12/31/2024. As JW mentioned before, our Luxe Fire Suite and Aikman club sales reached $38,700,000 for the three months ended 03/31/2025. A big push of that was since launching in late February, then used Luxe buyer suite fractional ownership model, which offers suite access at Sunset McKinney and Sunset Broken Arrow, where investors can put 25% down and offers twenty year financing, it generated 12,500,000.0 in sales through March 20 through 03/31/2025 out of that 38,700,000.0 total offering. So huge increases in our balance sheet. So that really strengthened our balance sheet for the first quarter.

So we’re super excited about what that’s gonna offer and how it’s really gonna continue to increase our balance sheet through the rest of 2025. So venue is really poised to continue to strengthen our balance sheet. And with that, I’d like to turn it over back to JW for our q and a session. JW?

JW Roth, Founder, Chairman, and CEO, Venue Holding Corporation: Heather, thank you. We couldn’t be more excited about where we’re going and and all that we’re doing here at Venue. We are building literally, we are building a machine that will change and disrupt music. So, again, I appreciate, Heather and and Will participating here. Now we’ll open it up for, for questions.

Operator?

Heather Atkinson, Chief Financial Officer, Venue Holding Corporation: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your questions, simply press star one again. We’ll pause just a moment to assemble the queue.

And we’ll take our first question from Martin Gilbert. I’m sorry. I apologize. Yes. Martin Gilbert at Morgan Stanley.

JW Roth, Founder, Chairman, and CEO, Venue Holding Corporation: Well, it’s Martin Calvert, but it is close. KW, Will, another really good quarter. Amazing news out there. I’m really interested in the Ryan and Company partnership, and I know that you guys stated you’re looking at 250,000 seats by in five years, your projection. Is that going to speed that up?

And if so, how significantly? Marty, first, thanks for joining. I appreciate your your question. I just appreciate the support that you and folks at Morgan Stanley give us. Yeah.

The the the relationship with Ryan is it’s fuel on, you know, on our fire. I mean, it is it is dramatically accelerating our expansion. Think about this. We add between a hundred and $300,000,000 to our balance sheet with every development agreement, and they’re committed to bringing us two of them a quarter. That’s eight a year.

You know, that’s they’ve just been great partners. So at the end of the day, Ryan will will add will add fuel to this fire. And at the end of the day, they’re gonna add about 200% what our original projections were in terms of adding amphitheaters and music music halls. Wow. Wow.

That’s huge. That it is. It is. It is. And I gotta tell you, Mayor Mothal has been a not only an advocate from the very beginning.

Remember, the reason that we’re in in McKinney is because of of Mayor Mothal and Ryan. The reason we’re in El Paso is because of Ryan and Mayor Mothal. So it’s not like they’re an unproven commodity. What they have done for us already sort of proves the tempo in which we’re gonna roll this out. So, again, Marty, I’m so grateful for you and thankful for your your participation today, and and buckle up.

Here we go. Thank you and your team, JW. Really appreciate it. You bet.

Heather Atkinson, Chief Financial Officer, Venue Holding Corporation: We’ll move next to John Lutz at iHit Industries.

JW Roth, Founder, Chairman, and CEO, Venue Holding Corporation: Hey, It’d good to be on the call. Sorry if I have a little wind in the background. I’m on the golf course. Alright? There you go.

I’ve been to several concerts at the Ford Amphitheater and loved it last summer. I’m just wondering what kind of new exciting things you might have in the office for Ford and maybe some of the other venues. Well, John, first, I I hope you’re hitting them straight today. But to answer your question, we are we are we’re excited about a lot of things. I’m gonna start with the expansion plan.

Our expansion plan, as it rolls out, is allowing us to add, again, two or so new development agreements per quarter. That’s the first thing that we’re excited about. The second piece of our excitement focuses on the sale of our fire pit suites. As you can see, we have accelerated that. We believe we can cross a quarter of $1,000,000,000 this year in sales.

The new financing metrics and the new financing programs that are falling into place with both banks and ultimately the SBA will will be will be fuel to that to that fire. And then, you know, at the at the when we when we cap it all off, it it all comes down to the fan experience in our in our venues, adding adding Vic to the mix here and and adding to the ambiance and experience that we have at our at our at our venues and our shows. Those are all things that you can expect to watch us watch us grow. Thanks so much, Steve, I mean. Keep up the good work.

Thank you.

Heather Atkinson, Chief Financial Officer, Venue Holding Corporation: We’ll move next to Wes Gottsman at Raymond James.

JW Roth, Founder, Chairman, and CEO, Venue Holding Corporation: Hey, JW. How’s it going? Wes Gottiston here. Wes, it’s good to have you on. Absolutely.

Good to be here. Thank you. My question for you. So a significant differentiator for Venue is, of course, the fire pit suites, which you’ve been talking about, which have also had strong momentum over the past few months. And on the last call, we heard about the launch of the fire suite financing.

Can you talk more about that, how it works, and how it’s been performing so far? Yeah. Good question. So, you know, fire pit suites drive drive the development of our business. Right?

I mean, it’s what it’s what pushes forward the financing as we as we move into these new markets. And so we have been working diligently to expand not only how how investors and how fans can purchase Firepit Suites, but how they’re marketed. So the person the first piece of your question sort of is answered with the financing model that we have in place has increased sales about 32% across the board. We expect that to increase over the next quarter or so. Additionally, we’re expanding beyond the markets where we’re building and into markets where investors can participate in owning private fleets.

So in other words, a triple net investor that typically buys, like, let’s say, a Walgreens. He lives in Green Bay, Wisconsin. Can now buy a triple net product of ours in the form of a fire pit suite in one of our markets and never attend the show. Kick that fire pit suite back to us. Let us manage that fire pit suite and produce a triple net return for him that averages in that 11 to 12% cap rate.

Fantastic. Thank you. You bet. And

Heather Atkinson, Chief Financial Officer, Venue Holding Corporation: we’ll go next to Pete Derruda at Broadcasting Experts.

JW Roth, Founder, Chairman, and CEO, Venue Holding Corporation: Hey, JW. I saw you recently announced a partnership with Sands Investment Group to launch the NNN real estate opportunities at Venue. How does this fit into the broader development strategy at Venue? And I appreciate your time. Please, thanks for thanks for calling in.

Again, I appreciate your support of all that we do here. I I look at it as a way to expand the market of of condo or, let’s say, fire pit suite owners. Right now, when we started this when we started this business, the bulk of fire pit suite owners were owners in the market. And as we continue to grow and build our our venues, we realized that there were investors across The US that wanted to own these fire pit suites like they would own a triple net real estate investment outside of of of the markets where they live. And so we we we we did a bunch of research, and at the end of the day, Sands Bubble to the Top is one of the best triple net platforms in the country.

And so we started up we started a conversation with them. And at the end of the day, it resulted in us signing a deal with Sands to promote our fire pit suites on their platform. So over the next couple of weeks, you’ll see them start to launch these on their platforms. And I believe with all my heart that this will this will become a major way we sell fire pit suites across The US, and it’ll be a big accelerator, as we expand our markets. That’s awesome.

Appreciate it. You bet.

Heather Atkinson, Chief Financial Officer, Venue Holding Corporation: With no further questions in the queue, that concludes our conference call for today. Thank you so much for your participation. You may now disconnect.

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