Updates Full Year 2024 Guidance
Announces Credit Facility Refinancing
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.
Third Quarter 2024 Financial
Highlights
- Revenue of $681.2 million
- Net income of $57.7 million
- Adjusted EBITDA1 of $310.0 million
Full Year 2024 Guidance
- The Company revised its target for revenue to the upper end of
the range of $2.670 billion to $2.745 billion
- The Company revised its target for Adjusted EBITDA to the upper
end of the range of $1.220 billion to $1.240 billion
- The Company reaffirmed its target for Free Cash Flow
Conversion2 in excess of 40%
TKO Group Holdings, Inc. (“TKO” or the “Company”) (NYSE: TKO)
today announced financial results for its third quarter ended
September 30, 2024.
Ariel Emanuel, Executive Chair and CEO of TKO, said: “TKO’s
solid third quarter results reflect continued strength across UFC
and WWE, particularly in live events and brand partnerships. In
light of this continued momentum, we now expect to deliver at the
upper end of our full-year 2024 guidance range for both revenue and
Adjusted EBITDA.
“Additionally, two weeks ago we announced the authorization of a
robust capital return program and an agreement to acquire
industry-leading sports assets that will power our profile, give us
greater scale, strengthen our position in the sports marketplace,
and accelerate returns for shareholders. Just over a year since UFC
and WWE came together to form TKO, our conviction in this business
is as strong as ever.”
Third Quarter Consolidated
Results
Revenue increased 52%, or $232.1 million, to $681.2
million. The increase reflected the increase of $274.7 million of
revenue at WWE, to $326.3 million, partially offset by a decrease
of $42.6 million at UFC, to $354.9 million.
Net Income was $57.7 million, an increase of $35.7
million from $22.0 million in the prior year period. The increase
reflected the increase in revenue partially offset by an increase
in operating expenses. The increase in operating expenses primarily
reflected an increase in direct operating costs of $76.8 million,
an increase in selling, general and administrative expenses of
$46.4 million, and an increase in depreciation and amortization of
$66.4 million.
Adjusted EBITDA1 increased 29%, or $70.3 million, to
$310.0 million, due to an increase of $153.3 million of Adjusted
EBITDA at WWE, partially offset by a decrease of $42.7 million at
UFC and an increase of $40.3 million in corporate expenses.
Cash flows generated by operating activities were $236.6
million, an increase of $169.6 million from $67.0 million,
primarily due to higher net income and the timing of working
capital.
Free Cash Flow2 was $225.6 million, an increase of $162.0
million from $63.6 million, due to the increase in cash flows
generated by operating activities partially offset by an increase
in capital expenditures.
Cash and cash equivalents were $457.4 million as of
September 30, 2024. Gross debt was $2.736 billion as of
September 30, 2024.
Results by Operating
Segment3
The schedule below reflects TKO’s performance by operating
segment:
Three Months Ended
Nine Months Ended
(in millions)
September 30,
September 30,
2024
2023
2024
2023
Revenue:
UFC
$
354.9
$
397.5
$
1,062.3
$
1,009.4
WWE
326.3
51.6
1,099.8
51.6
Total Revenue
$
681.2
$
449.1
$
2,162.1
$
1,061.0
Adjusted EBITDA:
UFC
$
195.6
$
238.3
$
622.6
$
612.8
WWE
175.3
22.0
566.8
22.0
Corporate
(60.9
)
(20.6
)
(176.3
)
(48.9
)
Total Adjusted EBITDA
$
310.0
$
239.7
$
1,013.1
$
585.9
UFC
Third Quarter 2024
Revenue decreased 11%, or $42.6 million, to $354.9
million primarily driven by a $50.4 million decrease in media
rights and content revenue partially offset by a $10.2 million
increase in sponsorship revenue. The decrease in media rights and
content revenue was primarily related to holding one less numbered
event and two fewer Fight Night events in the current year period
as compared to the prior year period. The increase in sponsorship
revenue was primarily related to new sponsors and an increase in
fees from renewals compared to the prior year period, including the
first ever title partner sale made in connection with UFC 306. Live
events revenue was essentially flat as an increase in ticket sales
related to the mix of event venues and territories was offset by
three fewer events as compared to the prior year period.
Three Months Ended
Nine Months Ended
(in millions)
September 30,
September 30,
2024
2023
2024
2023
UFC Revenue:
Media Rights & Content
$
216.3
$
266.7
$
681.4
$
702.5
Live Events
51.4
51.9
155.8
115.6
Sponsorship
74.0
63.8
184.3
148.0
Consumer Products
13.2
15.1
40.8
43.3
Total Revenue
$
354.9
$
397.5
$
1,062.3
$
1,009.4
Adjusted EBITDA decreased 18%, or $42.7 million, to
$195.6 million, primarily due to the decrease in revenue (as
described above). Expenses were essentially flat as compared to the
prior year period. Direct expenses decreased primarily due to lower
marketing, athlete costs, and direct costs of revenue due to one
less numbered event and two fewer Fight Night events as compared to
the prior year period. These decreases were partially offset by
higher production costs, primarily related to UFC 306, which was a
marquee event held at Sphere in Las Vegas. Selling, general and
administrative expenses increased primarily due to higher costs of
personnel as compared to the prior year period.
Adjusted EBITDA margin decreased to 55% from
60%.
WWE
Third Quarter 2024
The table below includes WWE’s reported results for three months
ended September 30, 2024 and, as a result of the timing of the
business combination, the period in 2023 following the acquisition
of WWE on September 12, 2023 through September 30, 2023. The
following narrative discussion of WWE’s historical information for
the three months ended September 2023 also presents WWE information
on a “combined” basis for the full quarter by including the period
from July 1, 2023 through September 11, 2023. This historical WWE
combined presentation is for illustrative purposes and to
facilitate an understanding of WWE’s historical operating results
prior to the consummation of the business combination (See “Basis
of Presentation” for further details.)
Revenue was $326.3 million for the period from July 1,
2024 through September 30, 2024.
WWE revenue was $51.6 million for the period from September 12,
2023 through September 30, 2023. Including WWE activity for the
period from July 1, 2023 through September 11, 2023, WWE combined
revenue was $287.3 million for the period from July 1, 2023 through
September 30, 2023. The increase of 14%, or $39.0 million, was
primarily driven by an increase in media rights and content, live
events, and sponsorship revenue. The increase in media rights and
content revenue was primarily related to the contractual escalation
of media rights fees as well as the timing of WWE’s weekly flagship
programming, which resulted in an additional event in the current
year period. The increase in live events revenue was primarily
related to an increase in ticket sales revenue. The increase in
sponsorship revenue was primarily related to new sponsors and an
increase in fees from renewals compared to the prior year
period.
Three Months Ended
Nine Months Ended
(in millions)
September 30,
September 30,
2024
2023
2024
2023
WWE Revenue:
Media Rights & Content
$
227.4
$
37.3
$
709.2
$
37.3
Live Events
51.1
5.4
245.4
5.4
Sponsorship
21.7
2.6
60.2
2.6
Consumer Products
26.1
6.3
85.0
6.3
Total Revenue
$
326.3
$
51.6
$
1,099.8
$
51.6
Adjusted EBITDA was $175.3 million for the period from
July 1, 2024 through September 30, 2024.
WWE Adjusted EBITDA was $22.0 million for the period from
September 12, 2023 through September 30, 2023. Including WWE
activity for the period from July 1, 2023 through September 11,
2023, WWE combined Adjusted EBITDA was $102.0 million for the
period from July 1, 2023 through September 30, 2023. The increase
of 72%, or $73.3 million, was due to the increase in revenue (as
described above) and a decrease in expenses. Expenses decreased
primarily due to a decline in personnel costs and production costs,
principally related to planned cost reduction initiatives
implemented following the formation of TKO.
Adjusted EBITDA margin was 54% for the period from July
1, 2024 through September 30, 2024, an increase compared to WWE’s
Adjusted EBITDA margin of 36% for the period from July 1, 2023
through September 30, 2023.
Corporate
Third Quarter 2024
Corporate Adjusted EBITDA was a loss of $60.9 million, as
compared to a loss of $20.6 million in the prior year period.
Including WWE activity for the period from July 1, 2023 through
September 11, 2023, Corporate combined Adjusted EBITDA3 was a loss
of $42.1 million for the third quarter of 2023. The decrease of
$18.8 million was primarily due to an increase in personnel costs,
including TKO executive compensation, and other general and
administrative expenses following the formation of TKO in September
2023. The decrease also reflected an increase in service fees paid
to Endeavor under the Company’s Services Agreement, including the
WWE portion of the fee that commenced in March 2024. These
increases were partially offset by savings from the Company’s cost
reduction program, which was implemented to realize synergy
opportunities and integrate the combined operations of WWE and UFC
following the formation of TKO.
Full Year 2024 Guidance
In February, the Company issued revenue and Adjusted EBITDA
guidance of $2.575 billion - $2.650 billion and $1.150 billion -
$1.170 billion, respectively, for the full year 2024. In May, the
Company raised its revenue and Adjusted EBITDA guidance to $2.610
billion - $2.685 billion and $1.185 billion - $1.205 billion,
respectively, for the full year 2024. In August, the Company again
raised its revenue and Adjusted EBITDA guidance to $2.670 billion -
$2.745 billion and $1.220 billion - $1.240 billion, respectively,
for the full year 2024. Based on performance through the first nine
months of the year and our anticipated performance for the
remainder of the year, the Company now expects full year 2024
revenue and Adjusted EBITDA at the upper end of the range of $2.670
billion - $2.745 billion and $1.220 billion - $1.240 billion,
respectively, for the full year 2024.
The Company reaffirms its target for Free Cash Flow Conversion
of in excess of 40%.
The Company intends to provide additional detail related to its
2024 guidance on today’s earnings call.
Other Matters
Return of Capital Program
As previously disclosed, on October 24, 2024, the Company
announced its board of directors has authorized a share repurchase
program of up to $2.0 billion of its Class A common stock. The
share repurchase program is expected to commence in the first half
of 2025 and is expected to be completed within approximately three
to four years. The Company also announced that its board of
directors has authorized a quarterly cash dividend program pursuant
to which holders of the Company’s Class A common stock will receive
their pro rata share of $75.0 million expected quarterly
distributions to be made by TKO Operating Company, LLC. The Company
intends to begin making quarterly cash dividend payments on March
31, 2025.
Endeavor Asset Acquisition
As previously disclosed, on October 24, 2024, the Company
announced that it has reached a definitive agreement with Endeavor
Group Holdings, Inc. (“Endeavor”) to acquire Professional Bull
Riders, On Location, and IMG in an all-equity transaction valued at
$3.25 billion. Endeavor will receive approximately 26.14 million
common units of TKO Operating Company, LLC and will subscribe for
an equal number of shares of TKO Class B common stock in connection
with the transaction, which is subject to certain customary
purchase price adjustments to be settled at closing in equity and
cash. Subsequent to the closing of the transaction, Endeavor is
expected to own approximately 59% of TKO. The transaction is
expected to close in the first half of 2025.
Credit Facility Refinancing
On November 6, 2024, the Company announced a refinancing of its
Credit Facility seeking a new seven-year $2.75 billion term loan
and new five-year $205 million revolver. We expect the refinanced
Credit Facility to include similar covenants and terms as the
existing Credit Facility. The refinancing is expected to close
during the fourth quarter 2024.
Legal Matters
As previously disclosed, on September 26, 2024, the Company
announced that it had reached an agreement to settle all claims
asserted in the Le UFC antitrust lawsuit for an aggregate amount of
$375.0 million. On October 22, 2024, the court issued a ruling
granting the motion for preliminary approval of the settlement
agreement. The settlement, which remains subject to final court
approval, is payable in three equal installments. The Company made
one payment of $125.0 million into escrow in October 2024 and
expects to make the remaining payments of $250.0 million in
2025.
For the three months ended September 30, 2024, the Company’s
consolidated pre-tax results included $44.6 million of costs
related to certain litigation matters at UFC and WWE. A
reconciliation of Net Income (Loss) to Adjusted EBITDA for the
three months ended September 30, 2024 and 2023 can be found in the
supplemental schedule on page 14 of this release.
TKO Transaction
As previously disclosed, on September 12, 2023, Endeavor Group
Holdings Inc. (“Endeavor”) and World Wrestling Entertainment, LLC
(“WWE”) closed the transaction to combine the Ultimate Fighting
Championship (“UFC”) and WWE to form a new, publicly listed
company, TKO Group Holdings, Inc. (“TKO”).
Notes
(1)
The definition of Adjusted EBITDA can be found in the Non-GAAP
Financial Measures section of the release on page 7. A
reconciliation of Net Income (Loss) to Adjusted EBITDA for the
three and nine months ended September 30, 2024 and 2023 can be
found in the Supplemental Information in this release on page 14.
(2)
The definition of Free Cash Flow and Free Cash Flow Conversion can
be found in the Non-GAAP Financial Measures section of the release
on page 7. A reconciliation of Net Cash Provided by Operating
Activities to Free Cash Flow for the three and nine months ended
September 30, 2024 and 2023 can be found in the Supplemental
Information in this release on page 15.
(3)
An explanation of the basis of presentation can be found in this
release on page 8.
Non-GAAP Financial
Measures
The Company refers to certain financial measures that are not
recognized under United States generally accepted accounting
principles (“GAAP”). This press release includes financial measures
that are not calculated in accordance with GAAP, including Adjusted
EBITDA, Adjusted EBITDA margin, Free Cash Flow and Free Cash Flow
Conversion. Please see the definitions below and the reconciliation
tables included in this release for additional information and a
reconciliation of the Non-GAAP financial measures to the most
comparable GAAP financial measures.
The Company defines Adjusted EBITDA as net income excluding
income taxes, net interest expense, depreciation and amortization,
equity-based compensation, merger and acquisition costs, certain
legal costs, restructuring, severance and impairment charges, and
certain other items when applicable. Adjusted EBITDA margin is
defined as Adjusted EBITDA divided by revenue.
TKO management believes that Adjusted EBITDA and Adjusted EBITDA
margin are useful to investors as these measures eliminate the
significant level of non-cash depreciation and amortization expense
that results from its capital investments and intangible assets,
and improve comparability by eliminating the significant level of
interest expense associated with TKO’s debt facilities, as well as
income taxes which may not be comparable with other companies based
on TKO’s tax and corporate structure. Adjusted EBITDA and Adjusted
EBITDA margin are used as the primary bases to evaluate TKO’s
consolidated operating performance.
Adjusted EBITDA and Adjusted EBITDA margin have limitations as
analytical tools, and you should not consider them in isolation or
as a substitute for analysis of TKO’s results as reported under
GAAP. Some of these limitations are:
- they do not reflect every cash expenditure, future requirements
for capital expenditures, or contractual commitments;
- Adjusted EBITDA does not reflect the significant interest
expense or the cash requirements necessary to service interest or
principal payments on TKO’s debt;
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized will often have to be
replaced or require improvements in the future, and Adjusted EBITDA
and Adjusted EBITDA margin do not reflect any cash requirement for
such replacements or improvements; and
- they are not adjusted for all non-cash income or expense items
that are reflected in TKO’s statements of cash flows.
TKO management compensates for these limitations by using
Adjusted EBITDA and Adjusted EBITDA margin along with other
comparative tools, together with GAAP measurements, to assist in
the evaluation of TKO’s operating performance.
Adjusted EBITDA and Adjusted EBITDA margin should not be
considered substitutes for the reported results prepared in
accordance with GAAP and should not be considered in isolation or
as alternatives to net income as indicators of TKO’s financial
performance, as measures of discretionary cash available to it to
invest in the growth of its business or as measures of cash that
will be available to TKO to meet its obligations. Although TKO uses
Adjusted EBITDA and Adjusted EBITDA margin as financial measures to
assess the performance of its business, such use is limited because
it does not include certain material costs necessary to operate
TKO’s business. TKO’s presentation of Adjusted EBITDA and Adjusted
EBITDA margin should not be construed as indications that its
future results will be unaffected by unusual or nonrecurring items.
These non-GAAP financial measures, as determined and presented by
TKO, may not be comparable to related or similarly titled measures
reported by other companies. Set forth below are reconciliations of
TKO’s most directly comparable financial measures calculated in
accordance with GAAP to these non-GAAP financial measures on a
consolidated basis.
The Company defines Free Cash Flow as net cash provided by
operating activities less cash used for capital expenditures. TKO
views net cash provided by operating activities as the most
directly comparable GAAP measure. Free Cash Flow Conversion is
defined as Free Cash Flow divided by Adjusted EBITDA. Although they
are not recognized measures of liquidity under U.S. GAAP, Free Cash
Flow and Free Cash Flow Conversion provide useful information
regarding the amount of cash TKO’s continuing business generates
after capital expenditures and is available for reinvesting in the
business, debt service, share repurchases and payment of dividends.
Free Cash Flow and Free Cash Flow Conversion have certain
limitations in that they do not represent the total increase or
decrease in the cash balance for the period, nor do they represent
the residual cash flow for discretionary expenditures.
Reconciliations of the Company’s Adjusted EBITDA and Free Cash
Flow Conversion guidance to the most directly comparable GAAP
financial measures cannot be provided without unreasonable efforts
and are not provided herein because of the inherent difficulty in
forecasting and quantifying certain amounts that are necessary for
such reconciliations and certain other items reflected in our
reconciliation of historical Adjusted EBITDA and Free Cash Flow,
the amounts of which could be material.
Basis of Presentation
As a result of the timing of the consummation of the business
combination on September 12, 2023, TKO’s consolidated financial
information presented herein includes UFC’s results for the three
and nine months ended September 30, 2024 and 2023, includes WWE’s
results for the three and nine months ended September 30, 2024 and
includes results for both UFC and WWE as of December 31, 2023.
Information in this release includes results for the WWE segment
and Corporate on a combined basis to include periods prior to the
business combination. Information presented on a combined basis
does not reflect any pro forma adjustments or other adjustments for
costs related to integration activities, cost savings or synergies
that have been or may be achieved if the business combination
occurred on January 1, 2023.
Effective September 12, 2023, the Company operates its business
under two reportable segments, UFC and WWE. The UFC segment
consists entirely of the operations of the Company’s UFC business
which was the sole reportable segment prior to the acquisition of
WWE, while the WWE segment consists entirely of the operations of
the WWE business acquired on September 12, 2023. In addition, it
reports results for the “Corporate” group, which incurs expenses
that are not allocated to the business segments. The Corporate
group consists of general and administrative expenses that relate
largely to corporate activities, including information technology,
facilities, legal, human resources, finance, accounting, treasury,
investor relations, corporate communications, community relations
and compensation to TKO’s management and board of directors, which
support both reportable segments. Corporate expenses also include
service fees paid by the Company to Endeavor under the Services
Agreement. All prior period amounts related to the segment change
have been retrospectively reclassified to conform to the new
presentation. The profitability measure employed by the Company in
assessing operating performance, including that of its segments, is
Adjusted EBITDA. The Company defines Adjusted EBITDA as net income,
excluding income taxes, net interest expense, depreciation and
amortization, equity-based compensation, merger and acquisition
costs, certain legal costs, restructuring, severance and impairment
charges, and certain other items when applicable. Adjusted EBITDA
includes amortization expenses directly related to supporting the
operations of the Company’s segments, including content production
asset amortization.
Additional Information
As previously announced, TKO will host a conference call at 5:00
p.m. ET on November 6, 2024, to discuss its third quarter 2024
results. All interested parties are welcome to listen to a live
webcast that will be hosted through the Company’s website at
investor.tkogrp.com. Participants can
access the conference call by dialing 1-833-470-1428 (conference
ID: 243176). Please reserve a line 5-10 minutes prior to the start
time of the conference call.
Any accompanying materials referenced during the call will be
made available on November 6, 2024, at investor.tkogrp.com. A replay of the call will be
available approximately two hours after the conference call
concludes and can be accessed on the Company’s website.
About TKO
TKO Group Holdings, Inc. (NYSE: TKO) is a premium sports and
sports entertainment company. TKO includes UFC, the world’s premier
mixed martial arts organization, and WWE, the recognized global
leader in sports entertainment. Together, our organizations reach
more than 1 billion households in approximately 210 countries and
territories, and we organize more than 300 live events year-round,
attracting more than two million fans. TKO is majority owned by
Endeavor Group Holdings, Inc. (NYSE: EDR), a global sports and
entertainment company.
Website Disclosure
Investors and others should note that TKO announces material
financial and operational information to its investors using press
releases, SEC filings and public conference calls and webcasts, as
well as its Investor Relations site at investor.tkogrp.com. TKO may also use its website
as a distribution channel of material information about the
Company. In addition, you may automatically receive email alerts
and other information about TKO, UFC and WWE when you enroll your
email address by visiting the “Investor Email Alerts” option under
the Resources tab on investor.tkogrp.com.
Forward-Looking
Statements:
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. We intend such forward-looking statements to be covered by
the safe harbor provisions for forward-looking statements contained
in Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All
statements in this press release that do not relate to matters of
historical fact should be considered forward-looking statements,
including, without limitation, statements regarding TKO’s business
strategy and plans, its expected strategic transactions, TKO’s
announced capital return program, financial condition, and
anticipated financial or operational performance. The words
“believe,” “may,” “will,” “estimate,” “potential,” “continue,”
“anticipate,” “intend,” “expect,” “could,” “would,” “project,”
“plan,” “target,” and similar expressions are intended to identify
forward-looking statements, though not all forward-looking
statements use these words or expressions. These forward-looking
statements are based on management’s current expectations. These
statements are neither promises nor guarantees and involve known
and unknown risks, uncertainties and other important factors that
may cause actual results, performance or achievements to be
materially different from what is expressed or implied by the
forward-looking statements, including, but not limited to: TKO’s
ability to generate revenue from discretionary and corporate
spending on events; TKO’s dependence on key relationships with
television and cable networks, satellite providers, digital
streaming partners and other distribution partners; TKO’s ability
to adapt to or manage new content distribution platforms or changes
in consumer behavior; adverse publicity concerning the Company or
its key personnel; the highly competitive, rapidly changing and
increasingly fragmented nature of the markets in which TKO
operates; financial risks with owning and managing events for which
TKO sells media and sponsorship rights, ticketing and hospitality;
risks related to the integration and realization of the expected
benefits of the business combination of UFC and WWE; the Company’s
substantial indebtedness; and other important factors discussed in
the section entitled “Risk Factors” in TKO’s Annual Report on Form
10-K for the fiscal year ended December 31, 2023 filed by TKO, as
any such factors may be updated from time to time in TKO’s other
filings with the SEC, including, without limitation, its Quarterly
Report on Form 10-Q for the quarterly period ended September 30,
2024, accessible on the SEC’s website at www.sec.gov and TKO’s
investor relations site at investor.tkogrp.com. Forward-looking
statements speak only as of the date they are made and, except as
may be required under applicable law, TKO undertakes no obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
TKO Group Holdings,
Inc.
Consolidated Income
Statements
(In millions, except share and
per share data)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Revenue
$
681.2
$
449.1
$
2,162.1
$
1,061.0
Operating expenses:
Direct operating costs
207.1
130.3
667.9
302.3
Selling, general and administrative
expenses
239.6
193.2
1,004.1
313.0
Depreciation and amortization
98.1
31.7
309.1
61.9
Total operating expenses
544.8
355.2
1,981.1
677.2
Operating income
136.4
93.9
181.0
383.8
Other expenses:
Interest expense, net
(62.7
)
(60.6
)
(192.9
)
(172.4
)
Other income (expense), net
1.4
(0.7
)
1.9
(1.6
)
Income (loss) before income taxes and
equity (earnings) losses of affiliates
75.1
32.6
(10.0
)
209.8
Provision for income taxes
17.8
11.2
31.8
17.7
Income (loss) before equity (earnings)
losses of affiliates
57.3
21.4
(41.8
)
192.1
Equity (earnings) losses of affiliates,
net of tax
(0.4
)
(0.6
)
(0.7
)
0.3
Net income (loss)
57.7
22.0
(41.1
)
191.8
Less: Net income (loss) attributable to
non-controlling interests
34.6
(22.5
)
(19.5
)
(21.7
)
Less: Net income attributable to TKO
Operating Company, LLC prior to the Transactions
—
66.4
—
235.4
Net income (loss) attributable to TKO
Group Holdings, Inc.
$
23.1
$
(21.9
)
$
(21.6
)
$
(21.9
)
Basic net earnings (loss) per share of
Class A common stock
$
0.29
$
(0.26
)
$
(0.27
)
$
(0.26
)
Diluted net earnings (loss) per share of
Class A common stock
$
0.28
$
(0.26
)
$
(0.27
)
$
(0.26
)
Weighted average number of common shares
used in computing basic net earnings (loss) per share
80,966,252
83,161,406
81,399,221
83,161,406
Weighted average number of common shares
used in computing diluted net earnings (loss) per share
171,601,095
83,161,406
81,399,221
83,161,406
TKO Group Holdings,
Inc.
Consolidated Balance
Sheets
(In millions)
(Unaudited)
As of
September 30,
December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
457.4
$
235.8
Accounts receivable, net
250.6
135.4
Other current assets
185.8
121.2
Total current assets
893.8
492.4
Property, buildings and equipment, net
528.2
608.4
Intangible assets, net
3,325.2
3,563.7
Finance lease right-of-use assets, net
233.0
255.7
Operating lease right-of-use assets,
net
33.5
35.5
Goodwill
7,664.0
7,666.5
Investments
33.2
16.4
Other assets
59.5
52.1
Total assets
$
12,770.4
$
12,690.7
Liabilities, Non-controlling Interests
and Stockholders' Equity
Current liabilities:
Accounts payable
$
31.7
$
42.0
Accrued liabilities
613.4
267.4
Current portion of long-term debt
22.2
22.4
Current portion of finance lease
liabilities
9.6
8.1
Current portion of operating lease
liabilities
4.7
4.2
Deferred revenue
67.7
119.0
Other current liabilities
14.1
9.0
Total current liabilities
763.4
472.1
Long-term debt
2,697.3
2,713.9
Long-term finance lease liabilities
224.6
245.3
Long-term operating lease liabilities
30.3
32.9
Deferred tax liabilities
373.0
372.9
Other non-current liabilities
5.9
3.0
Total liabilities
4,094.5
3,840.1
Commitments and contingencies
Redeemable non-controlling interests
13.8
11.6
Stockholders' equity:
Class A common stock
—
—
Class B common stock
—
—
Additional paid-in capital
4,370.4
4,244.5
Accumulated other comprehensive loss
(3.0
)
(0.3
)
Accumulated deficit
(322.8
)
(135.2
)
Total TKO Group Holdings, Inc.
stockholders’ equity
4,044.6
4,109.0
Nonredeemable non-controlling
interests
4,617.5
4,730.0
Total stockholders' equity
8,662.1
8,839.0
Total liabilities, nonredeemable
non-controlling interests and stockholders' equity
$
12,770.4
$
12,690.7
TKO Group Holdings,
Inc.
Consolidated Statements of
Cash Flows
(In millions)
(Unaudited)
Nine Months Ended
September 30,
2024
2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income
$
(41.1
)
$
191.8
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Depreciation and amortization
309.1
61.9
Amortization and impairments of content
costs
20.2
13.2
Amortization of original issue discount
and deferred financing cost
8.2
7.9
Loss on impairment of assets
25.8
—
Equity-based compensation
74.6
36.1
Income taxes
0.7
6.0
Other, net
0.4
3.1
Changes in operating assets and
liabilities, net of acquisition:
Accounts receivable
(116.5
)
(46.2
)
Other current assets
(41.7
)
19.4
Other noncurrent assets
(24.5
)
(11.4
)
Accounts payable and accrued
liabilities
357.4
13.0
Deferred revenue
(49.3
)
(39.8
)
Other liabilities
3.3
(7.3
)
Net cash provided by operating
activities
526.6
247.7
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, buildings and
equipment and other assets
(54.6
)
(12.6
)
Investment in affiliates, net
(21.5
)
—
Cash acquired from WWE
—
381.2
Payment of deferred consideration in the
form of a dividend to former WWE shareholders
—
(321.0
)
Proceeds from sale of property, buildings
and equipment
11.0
—
Net cash (used in) provided by investing
activities
(65.1
)
47.6
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings
150.0
—
Repayment of long-term debt
(183.5
)
(24.5
)
Taxes paid related to net settlement upon
vesting of equity awards
(5.7
)
—
Payments for financing costs
—
(0.3
)
Distributions to members
(41.8
)
(260.5
)
Repurchase and retirement of common
stock
(165.0
)
—
Proceeds from principal shareholder
contributions
6.4
—
Net cash used in financing activities
(239.6
)
(285.3
)
Effects of exchange rate movements on
cash
(0.3
)
(2.0
)
NET INCREASE IN CASH AND CASH
EQUIVALENTS
221.6
8.0
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
235.8
180.6
CASH AND CASH EQUIVALENTS, END OF
PERIOD
$
457.4
$
188.6
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest
$
190.1
$
159.9
Cash payments for income taxes
$
46.1
$
11.9
NON-CASH INVESTING AND FINANCING
TRANSACTIONS:
Capital expenditures included in current
liabilities
$
10.3
$
4.9
Acquisition of WWE, net of deferred
considerations
$
-
$
8,111.1
Capital contribution from parent for
equity-based compensation
$
5.8
$
15.8
Principal stockholder contributions
$
1.5
$
-
Excise taxes on repurchases of common
stock
$
1.0
$
-
TKO Group Holdings,
Inc.
Reconciliation of Adjusted
EBITDA and Adjusted EBITDA Margin
(In millions, except
percentages)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Net income (loss)
$
57.7
$
22.0
$
(41.1
)
$
191.8
Provision for income taxes
17.8
11.2
31.8
17.7
Interest expense, net
62.7
60.6
192.9
172.4
Depreciation and amortization
98.1
31.7
309.1
61.9
Equity-based compensation expense (1)
20.0
24.6
74.6
36.1
Merger and acquisition costs (2)
8.9
67.5
11.8
82.5
Certain legal costs (3)
44.6
6.3
395.8
6.8
Restructuring, severance and impairment
(4)
1.6
15.1
39.7
15.1
Other adjustments
(1.4
)
0.7
(1.5
)
1.6
Total Adjusted EBITDA
$
310.0
$
239.7
$
1,013.1
$
585.9
Net income (loss) margin
8
%
5
%
(2
)%
18
%
Adjusted EBITDA margin
46
%
53
%
47
%
55
%
(1)
Equity-based compensation represents primarily non-cash
compensation expense for awards issued under Endeavor’s 2021 Plan
subsequent to its April 28, 2021 IPO, for the Replacement Awards
and for awards issued under the 2023 Incentive Award Plan. For the
three and nine months ended September 30, 2024, equity-based
compensation includes $1.0 million and $16.7 million of expense,
respectively, associated with certain services provided by an
independent contractor in the WWE segment. Equity-based
compensation also includes $3.3 million of expense during the nine
months ended September 30, 2024 and $16.5 million of expense during
the three and nine months ended September 30, 2023 associated with
accelerated vesting of the Replacement Awards related to the
workforce reduction of certain employees in the WWE segment and
Corporate.
(2)
Includes (i) certain costs of professional fees and bonuses related
to the TKO transaction and payable contingent on the closing of the
TKO transaction and (ii) certain costs of professional advisors
related to other strategic transactions, primarily the Endeavor
asset acquisition announced on October 24, 2024.
(3)
Includes costs related to certain litigation matters including
antitrust matters for UFC and WWE and matters where Vincent K.
McMahon has agreed to make future payments to certain
counterparties personally. For the three and nine months ended
September 30, 2024, these costs include settlement charges of $40.0
million and $375.0 million, respectively, regarding the UFC
antitrust lawsuits. For more information, please refer to the
Company’s various filings with the SEC, including, but not limited
to, Note 18, Commitments and Contingencies, of its Form 10-Q for
the quarterly period ended September 30, 2024.
(4)
Includes impairment charges of $1.5 million and $25.8 million,
respectively, as a result of reducing the carrying value of WWE
assets held for sale to their fair value less cost to sell as well
as costs resulting from the Company’s cost reduction program during
the three and nine months ended September 30, 2024. For more
information, please refer to the Company’s various filings with the
SEC, including, but not limited to, Note 6, Supplementary
Information, and Note 16, Restructuring Charges, of its Form 10-Q
for the quarterly period ended September 30, 2024.
TKO Group Holdings,
Inc.
Reconciliation of Free Cash
Flow
(In millions)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Net cash provided by operating
activities
$
236.6
$
67.0
$
526.6
$
247.7
Less cash used for capital
expenditures:
Purchases of property, buildings and
equipment and other assets (1)
(11.0
)
(3.4
)
(54.6
)
(12.6
)
Free Cash Flow
$
225.6
$
63.6
$
472.0
$
235.1
(1)
Purchases of property, buildings and equipment and other assets for
the three and nine months ended September 30, 2024 includes
approximately $2.8 million and $29.7 million, respectively, of
capital expenditures related to WWE’s new headquarter facility.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241106832322/en/
Investors: Seth Zaslow
szaslow@tkogrp.com Media:
press@tkogrp.com
Grafico Azioni Endeavor (NYSE:EDR)
Storico
Da Nov 2024 a Dic 2024
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Da Dic 2023 a Dic 2024