Madison Square Garden Entertainment Corp. (MSGE) reported its fiscal third-quarter results Thursday, and it's a classic tale of two stories. On one hand, revenue came in ahead of expectations. On the other, rising costs ate into profits, causing an earnings miss.

The company posted earnings of 11 cents per share, falling short of the analyst consensus of 16 cents. That's also down from the 17 cents per share it earned in the same quarter last year. Operating income dropped to $16.1 million from $27.3 million a year ago.

But the top line told a different story. Revenue hit $246.3 million, beating the $242.953 million Wall Street was looking for and edging past the $242.5 million from the prior-year quarter.

So what's squeezing the bottom line? Costs. Direct operating expenses rose 10% to $118.3 million, driven by higher employee compensation and increased repairs that pushed venue operating costs up by $2.4 million. Selling, general, and administrative expenses jumped 17% to $61 million. That's a lot of extra spending.

Despite the earnings miss, management isn't hitting the panic button. Executive Chairman and CEO James L. Dolan struck an optimistic tone: "We continue to bring an array of live events to our venues, and demand for those entertainment offerings remains strong. As we approach the end of the fiscal year, we remain on track to deliver robust growth in revenue and adjusted operating income in fiscal 2026."

As of March 31, the company had $323.653 million in cash and restricted cash on hand. Shares were unchanged at $66.95 in premarket trading Thursday.