On Wednesday, WWE held its 2022 3rd Quarter earning call due to Saturday’s Crown Jewel premium live event. The company generated $304.6 million in revenue for the 3rd quarter which was an increase of 19% in the same quarter of last year. However, the net income was $41.7 million, a decrease from $43.5 million in the 3rd quarter of 2021.
WWE Co-CEOs Stephanie McMahon and Nick Khan said the following during the press conference.
“We generated strong financial results in the quarter, highlighted by record revenue and Adjusted OIBDA for a third quarter, and remain firmly on track to deliver record revenue and Adjusted OIBDA for the full year”
“We continue to effectively execute our strategy, including staging a record-setting international stadium event, Clash at the Castle, in early September. Clash at the Castle, as well as our other premium live events (“PLEs”) including SummerSlam and Extreme Rules all continue our streak of delivering record viewership for each respective event. These PLEs, along with strong ratings for our flagship programs, Raw and SmackDown, continue to expand the reach of our brands and enhance the value of our content across various platforms, both domestically and abroad.”
Third Quarter 2022 Highlights
- Revenue was $304.6 million, an increase of 19%; Operating Income was $58.9 million, a decrease of 8%; and Adjusted OIBDA 1 was $91.2 million, an increase of 17%
- Returned $9.1 million of capital to shareholders through dividends paid
- Clash at the Castle, the first major WWE stadium event in the UK in over 30 years, was held at Principality Stadium in Cardiff, Wales. Clash at the Castle was the most viewed international event in WWE’s history
- Each WWE domestic premium live event (Money in the Bank, SummerSlam and Extreme Rules) was the most viewed event in its history with year-over-year increases of 17%, 20% and 36%, respectively, in domestic unique viewership on Peacock
- WWE announced a multi-year agreement with its long-standing partner, the Foxtel Group, to expand the distribution of the Company’s content in Australia
- WWE announced the creation of NXT Europe, which is planned to launch in 2023, to expand the NXT brand internationally
- In October, WWE announced its “Campus Rush” recruitment tour to further enhance the Company’s talent development program
Third-Quarter Consolidated Results
Revenue increased 19% to $304.6 million, primarily due to an increase in core content rights fees for the Company’s flagship programs, Raw and SmackDown, and the monetization of third-party original programming. To a lesser extent, higher consumer product licensing revenue and international ticket sales also contributed to the increase in revenue.
Operating Income decreased 8%, or $5.1 million, to $58.9 million, as the increase in revenue was offset by an increase in operating expenses. The increase in operating expenses was primarily driven by higher costs to support the creation of content as well as the impact of certain costs related to the Special Committee investigation. (See the “Special Committee Investigation” discussion for further details.) The Company’s operating income margin decreased to 19% from 25%.
Adjusted OIBDA (which excludes stock-based compensation and other items included in operating income) increased 17%, or $13.3 million, to $91.2 million. The Company’s Adjusted OIBDA margin remained flat at 30%.
Net Income was $41.7 million, or $0.49 per diluted share, a slight decline from $43.5 million, or $0.52 per diluted share in the third quarter of 2021, primarily reflecting the decrease in operating performance.
Cash flows generated by operating activities were $54.5 million, a slight decline from $56.9 million, primarily due to lower net income and higher working capital requirements.
Free Cash Flow was $3.5 million, a decrease from $44.8 million, primarily due to an increase in capital expenditures. For the three months ended September 30, 2022, the Company incurred $42.3 million of capital expenditures related to its new headquarter facility. Excluding the capital expenditures related to the new headquarter facility, Free Cash Flow for the three months ended September 30, 2022 was $45.8 million.
Return of Capital to Shareholders
The Company returned $9.1 million of capital to shareholders in dividends in the third quarter. There were no share repurchases under the Company’s existing share repurchase program. As of September 30, 2022, the Company had $210.9 million available under its existing $500 million stock repurchase authorization.
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