FWONK — Formula One Group

Summary of Liberty Media Corporation's Q1 2026 Earnings Call for FWONK

1. Key Financial Results and Metrics

• Formula One (F1):

  • Revenue increased by 53% year-over-year, driven by an additional race and growth across all revenue streams.
  • Adjusted OIBDA grew 102%.
  • Team payments as a percentage of pre-team share adjusted OIBDA were 51.7%.

• MotoGP:

  • Revenue increased due to race mix and sponsorship growth, with adjusted OIBDA also showing improvement.

• Corporate and Other:

  • Revenue was $6 million, with an adjusted OIBDA loss of $7 million.

• Cash and Debt:

  • Cash and liquid investments totaled $1.3 billion.
  • Total debt was approximately $5 billion, with net leverage at three times.

2. Strategic Updates and Business Highlights

• Formula One:

  • Continued strong fan engagement and commercial interest, particularly in the U.S. with Apple as the new media rights partner.
  • Successful marketing activations around the Miami race, contributing to increased viewership and engagement.
  • Sold-out races and expanded Paddock Club capacity in response to high demand.

• MotoGP:

  • Positive early season performance with a focus on expanding the global footprint, including a return to Brazil.
  • Initiatives to enhance fan engagement and hospitality offerings are underway.

• Capital Allocation:

  • Focus on de-leveraging while exploring strategic investments and potential capital returns to shareholders.

3. Forward Guidance and Outlook

• Anticipate a modest increase in trailing twelve-month leverage due to the cancellation of two races in the Middle East.
• Continued confidence in the long-term trajectory of both F1 and MotoGP, with expectations for sustained growth and engagement.
• Potential for rescheduling races later in the season, which could positively impact revenue.

4. Bad News, Challenges, or Points of Concern

• Race Cancellations: The decision to cancel the Bahrain and Saudi Arabian Grands Prix will have a near-term financial impact, primarily affecting race promotion and hospitality revenues.
• Expense Increases: Rising operating expenses, including higher team payments and costs related to hospitality and travel.
• Currency Fluctuations: Negative impacts on SG&A expenses due to unfavorable currency exchange rates.
• Market Risks: Ongoing geopolitical tensions in the Middle East pose risks for future events and scheduling.

5. Notable Q&A Insights

• Sponsorship Dynamics: A balance between new and existing partnerships is being maintained, with potential growth in high-tech sectors identified as an opportunity.
• Capital Deployment: Management is evaluating various avenues for capital allocation, including investments in core businesses and potential M&A.
• Sky Agreement: The recent extension with Sky is viewed as a long-term strategic move to secure financial and technical contributions, rather than immediate economic impacts.
• Fuel Price Impact: Rising fuel prices may affect MotoGP's cost structure, while F1 can pass some costs through to teams.
• Expansion Opportunities: Discussions are ongoing regarding adding more races in the U.S. and optimizing race locations for MotoGP to enhance fan engagement.

Overall, Liberty Media's Q1 2026 results reflect strong growth in both F1 and MotoGP, despite challenges posed by race cancellations and external market conditions. The company remains optimistic about future opportunities while navigating potential risks.