– WWE parent company TKO Group Holdings announced the company’s Quarter 1 2024 earnings today. As previously noted, Endeavor and WWE closed a transaction to combine UFC and WWE to form the publicly listed company TKO Group Holdings. The full report is available at the above link.
Of note, the report lists certain legal costs related to litigation matters including the antitrust matters for WWE and UFC. The report notes, “Includes costs related to certain litigation matters including antitrust matters for UFC and WWE, matters where Vincent K. McMahon has agreed to make future payments to certain counter-parties personally and, for the three months ended March 31, 2024, the settlement of both UFC antitrust lawsuits for $335.0 million.” Here are the main quarterly results:
TKO Reports First Quarter 2024 Results
05/08/2024
Updates Full Year 2024 Guidance
TKO Transaction Highlights
On September 12, 2023, Endeavor and WWE closed the transaction to combine UFC and WWE to form a new, publicly listed company, TKO Group Holdings, Inc. Reported results presented in this earnings release prior to September 12, 2023 reflect only UFC activity.
First Quarter 2024 Financial Highlights
* Revenue of $629.7 million
* Net loss of $249.5 million
* Adjusted EBITDA1 of $282.2 millionFirst Quarter 2024 Operational Highlights and Recent Developments
* UFC held 11 events, including five with live audiences, that consistently delivered strong viewership and attendance and set several all-time records for gross revenue at the respective arenas
* In April, UFC 300 was one of the most successful and highest-grossing events in UFC history with a gate of $16.5 million and attendance of 20,067 at T-Mobile Arena in Las Vegas
* WWE held 47 events, including two premium live events. Each WWE premium live event (Royal Rumble and Elimination Chamber) delivered all-time records for gross revenue and viewership for the respective event
* WWE entered into a long-term media rights agreement with Netflix for Raw beginning in January 2025; subsequently, WWE entered into a $25 million domestic media rights agreement with NBCUniversal for Raw to remain on USA Network for the fourth quarter of 2024
* In April, WrestleMania XL was held at Lincoln Financial Field in Philadelphia over two consecutive nights in front of a combined 145,298 fans. WrestleMania XL was the highest-grossing event in WWE history, increasing 78% as compared to the previous record set at WrestleMania 39. Prime Hydration, the exclusive “Official Hydration Drink Partner” of WWE, became the first partner to ever appear on the center of the WWE ring
* TKO reached an agreement to settle all claims asserted in both UFC antitrust lawsuits for an aggregate amount of $335 million. The settlement is payable in installments and is anticipated to be deductible for tax purposesFull Year 2024 Guidance
The Company increased its target for revenue to $2.610 billion to $2.685 billion
The Company increased its target for Adjusted EBITDA to $1.185 billion to $1.205 billion
The Company revised its target for Free Cash Flow Conversion2 to in excess of 40%NEW YORK–(BUSINESS WIRE)– TKO Group Holdings, Inc. (“TKO” or the “Company”) (NYSE: TKO) today announced financial results for its first quarter ended March 31, 2024.
“TKO is off to a strong start in 2024 with multiple record-setting live events, new brand partnerships, and media rights deals for WWE Raw,” said Ariel Emanuel, Executive Chair and CEO of TKO. “With our momentum in the first quarter and solid financial results, we have raised our full year 2024 guidance. We also reached an agreement to settle all claims asserted in both UFC antitrust lawsuits. These positive developments, along with the strength in our underlying businesses, give us more conviction than ever in the combination of UFC and WWE, and in TKO’s ability to deliver sustainable long-term value for shareholders.”
First-Quarter Consolidated Results
Revenue increased 105%, or $323.0 million, to $629.7 million. The increase reflected an increase of $6.3 million at UFC, to $313.0 million, and the contribution of $316.7 million of revenue at WWE.
Net Loss was $249.5 million, a decrease of $337.4 million from net income of $87.9 million in the prior year period. The decrease reflected an increase in operating expenses partially offset by the increase in revenue. The increase in operating expenses primarily reflected an increase in selling, general and administrative expenses of $475.6 million, an increase in direct operating costs of $111.8 million, and an increase in depreciation and amortization of $91.9 million. The increase in selling, general and administrative expenses included a legal settlement of $335.0 million related to a UFC antitrust matter.
Adjusted EBITDA1 increased 63%, or $109.6 million, to $282.2 million, due to an increase of $8.8 million at UFC and the contribution of $140.2 million of Adjusted EBITDA at WWE, partially offset by an increase of $39.4 million in corporate expenses.
Cash flows generated by operating activities were $59.3 million, a decrease of $10.4 million from $69.7 million, primarily due to lower net income and the timing of working capital.
Free Cash Flow2 was $27.8 million, a decrease of $37.3 million from $65.1 million, due to the decrease in cash flows generated by operating activities and an increase in capital expenditures, which was primarily related to WWE’s new headquarter facility.
Cash and cash equivalents were $245.8 million as of March 31, 2024. Gross debt was $2.752 billion as of March 31, 2024.
