TKO Group (TKO) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue rose 52% year-over-year to $681.2 million, driven by WWE's full-quarter contribution and strong UFC sponsorships, partially offset by a decline in UFC event revenue.

• Net income for Q3 2024 was $57.7 million, reversing a prior year loss, with Adjusted EBITDA at $310 million (46% margin).

• Announced $2 billion share repurchase and $75 million quarterly dividend programs, to begin in 2025.

• Announced $3.25 billion all-equity acquisition of PBR, On Location, and IMG from Endeavor, expected to close in H1 2025.

• Expecting to reach the upper end of full-year 2024 guidance for both revenue and Adjusted EBITDA.

Financial highlights

• Q3 2024 revenue: $681.2 million (+52% YoY); net income: $57.7 million; Adjusted EBITDA: $310 million (46% margin).

• WWE Q3 revenue: $326.3 million (up 14% YoY); Adjusted EBITDA: $175.3 million (up 72% YoY, 54% margin).

• UFC Q3 revenue: $354.9 million (down 11% YoY); Adjusted EBITDA: $195.6 million (down 18% YoY, 55% margin).

• Free cash flow for the quarter: $225.6 million; cash and equivalents: $457.4 million; debt: $2.736 billion.

• Adjusted EBITDA margin for Q3 2024 was 46% (down from 53% YoY); net income margin: 8%.

Outlook and guidance

• Now targeting the upper end of 2024 guidance: revenue $2.67–$2.745 billion, Adjusted EBITDA $1.22–$1.24 billion.

• Full-year free cash flow conversion expected to exceed 40% of Adjusted EBITDA.

• Q4 UFC results expected to improve with more events; WWE to see a $50 million temporary revenue/EBITDA impact from short-term Raw rights deal.

• Long-term Netflix deal for Raw begins January 2025, expected to drive further growth.

• Management expects sufficient liquidity for at least the next 12 months, with plans to refinance debt before 2026 maturities.