Forensic Analysis · Live Entertainment & Events · as of Nov 9, 2026
Sphere Entertainment Co. (SPHR)
A forensic read on Sphere Entertainment Co. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
D · Weak — demands caution
Forensic grade
Distress
Financial health
0.8
Distress distance
Clean
Earnings quality
5
Forensic signals
1.5%
ROE
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (auditor quality, say on pay, board independence, going concern). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
Sphere Entertainment Co. earns a D (Weak — demands caution) forensic quality grade, and its balance-sheet distress test reads 0.8, placing it in the Distress zone. 5 forensic signals were flagged in its latest SEC filings, led by return on invested capital.
What the filings flag
-4.6%
FY2025
Return on invested capital.Return on invested capital is -4.6% in the latest fiscal year, against -4.2% in FY2023, having run between -7.0% and -4.2% across FY2023–FY2025 with no direction held. After-tax operating profit was ($177M) in FY2023 and ($149M) in FY2025, with operating income at -47.6% of revenue in FY2023, -33.2% in FY2024 and -18.8% in FY2025. The capital base behind it came down -23% across FY2023–FY2025, from $4.2B to $3.2B, so this return is struck on a smaller base than it started on. FY2025's operating profit carried a $65M goodwill write-off and a $12M restructuring charge that alone took about 1.5 points off that year's return, so more than the whole 0.4-point fall across FY2023–FY2025 is that charge landing in the latest year rather than the capital earning less. A non-cash write-down lowers the reported return in the year it lands.
+13.9%/yr
FY2023–FY2025
Share-count dilution.Diluted share count changed +30% over the last 2 years to FY2025 (+13.9%/yr). The count is growing — 34.9M shares in FY2023, 45.3M in FY2025: more stock was issued than repurchased over this window, so aggregate results grew faster than their per-share equivalents. That's ~13.9% shaved off per-share growth every year — total profit has to grow that much just to keep earnings-per-share flat, and a stake held since FY2023 has been diluted ~23%.
5% of rev
FY2025
Stock-based comp load.Stock-based compensation ran 5% of revenue in FY2025 — about $1.30 per diluted share. No cash left the business to pay it, which is why operating cash flow adds it back. Net of repurchases the diluted count still rose about 13.9% a year across FY2023–FY2025 and that rate is not falling, so total profit has to grow by that much annually before any of it reaches a share. Stock compensation is one source of that issuance; acquisition consideration, equity raises, convertibles and other employee plans also net into the count, and these figures do not separate them.
$65M
FY2025
Goodwill impairments.Took $65M of goodwill writedowns across 1 year (FY2025 ($65M)) — about 196% of net income over the span. A large writedown means an acquisition turned out worth far less than was paid — a real mark against M&A discipline.
0.94×
FY2023–FY2025
Cash conversion.Over FY2023–FY2025, cumulative operating cash flow was 0.94× cumulative net income before $65.4M of non-cash goodwill impairment. Cash is lagging reported profit. The shortfall is profit tied up in working capital rather than collected — the accrual and receivables lines below show where.Cash conversion: operating cash flow divided by net income, the share of profit that arrived as cash.
Key fundamentals
Latest Revenue$1.22B
Revenue CAGR (2yr)+35.1%
Net Margin2.7%
Return on Equity1.5%
Debt / Equity0.37x
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from Sphere Entertainment Co.'s actual 10-K/10-Q/8-K filings?