On Wednesday, TKO Group Holdings announced 2024 third quarter earnings. The company generated $681.2 million in revenue for the third quarter (July to September), an increase of 52% compared to last year’s third quarter. UFC has contributed $354.9 million to TKO’s revenue, while WWE has contributed $326.3 million. The company generated a net profit of $57.7 million for the third quarter of this year.
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 EBITDA 1 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 Conversion 2 in excess of 40%
NEW YORK–(BUSINESS WIRE)– 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.