In what would be earth-shattering news for any other company, EDM/festival giant SFX (SFXE) posted a loss of $131 million on revenue of $354.4 million for the fourth fiscal quarter of 2014. However, in intriguing news, the company appears unfazed and promises a “strong” overall 2015 with gross income expected to reach $500 million.
SFX’ fourth quarter coming at a loss is likely due to a number of factors. Q4 covers December 2014-February 2015, a time in which the only festival that was running under SFX’ banner was the light-selling Stereosonic Festival in Australia. For a company that initially will depend heavily upon festival revenue to show its best economic gains while at the same time outlying significant capital to both acquire companies and hire/re-focus existing personnel, losses–even into the $100 million range–are to be expected.
Partnerships with the likes of Mastercard and T-Mobile kick into high gear in 2015, as well as a fuller slate of festival events. These activities include Electric Zoo’s expansion to both Mexico and Japan, the second year of Mysteryland on the grounds of the Woodstock Festival, and more.
SFX’ market awareness continues to increase as attendance for SFX festival events spiked 18.7 percent to reach approximately 2.9 million, while non-festival event attendance spiked 19.5 percent to reach approximately 2.4 million.
What SFX aims to accomplish in the EDM and festival space has never been done before. As massive income totals and massive losses continue to mount, where does the tipping point lie that points to SFX’ eventual success in this endeavor? This is a story worth watching.