On Wednesday, TKO Group Holdings announced its second quarter of 2024 earnings. The company generated $851.2 million in revenue for the second quarter (April to June), an increase of 179%. UFC has contributed $394.4 million for TKO revenue, and WWE has contributed $456.8 million.
TKO suffered a net loss of $249.5 million for the first quarter of 2024 due to increased selling, general, and administrative expenses. However, the company generated a net profit of $150.7 million for the second quarter of this year. TKO stated that it increased the target for revenue from $2.670 billion to $2.745 billion in 2024.
Second Quarter 2024 Financial Highlights
- Revenue of $851.2 million, a quarterly record
- Net income of $150.7 million
- Adjusted EBITDA 1 of $420.9 million, a quarterly record
Full Year 2024 Guidance
- The Company increased its target for revenue to $2.670 billion to $2.745 billion
- The Company increased its target for Adjusted EBITDA to $1.220 billion to $1.240 billion
- The Company reaffirmed its target for Free Cash Flow Conversion 2 in excess of 40%
“TKO generated strong financial results in the quarter, highlighted by record quarterly revenue and Adjusted EBITDA,” said Ariel Emanuel, Executive Chair and CEO of TKO. “In light of this continued momentum, we are raising our full year 2024 guidance for the second quarter in a row. The strength in our underlying business continues to give us great conviction in TKO’s ability to deliver sustainable long-term value for shareholders.”
Second Quarter Consolidated Results
Revenue increased 179%, or $546.0 million, to $851.2 million. The increase reflected an increase of $89.2 million at UFC, to $394.4 million, and the contribution of $456.8 million of revenue at WWE.
Net Income was $150.7 million, an increase of $68.9 million from $81.8 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 $177.0 million, an increase in selling, general and administrative expenses of $169.1 million, and an increase in depreciation and amortization of $88.8 million.
Adjusted EBITDA1 increased 142%, or $247.3 million, to $420.9 million, due to an increase of $43.7 million at UFC and the contribution of $251.3 million of Adjusted EBITDA at WWE, partially offset by an increase of $47.7 million in corporate expenses.
Cash flows generated by operating activities were $230.7 million, an increase of $119.7 million from $111.0 million, primarily due to higher net income and the timing of working capital.
Free Cash Flow2 was $218.6 million, an increase of $112.2 million from $106.4 million, due to the increase in cash flows generated by operating activities partially offset by an increase in capital expenditures, which was primarily related to WWE’s new headquarter facility.
Cash and cash equivalents were $277.5 million as of June 30, 2024. Gross debt was $2.744 billion as of June 30, 2024.