Core Viewpoint - TKO Group Holdings, Inc. is considered one of the best growth stocks for long-term investment despite reporting a significant earnings miss in its fourth quarter results [1] Financial Performance - TKO Group reported an EPS of -$0.08, which was significantly lower than the expected EPS of $0.26, indicating a 130.77% loss [1] - The company's revenues were slightly above forecasts, totaling $1.04 billion compared to the predicted $1.02 billion [1] Analyst Ratings and Price Targets - Bernstein SocGen Group reiterated its Outperform rating and set a price target of $250 for TKO Group [1] - MoffettNathanson raised its price objective for TKO Group from $182 to $190 while maintaining a Neutral rating [4] Future Opportunities - Bernstein anticipates that TKO Group will leverage several growth opportunities in 2026, including the launch of Zuffa Boxing and a new UFC carriage partnership [3] - TKO Group is valued using an EV/EBITDA methodology with a consistent multiple of 16.0x applied to its 2027 adjusted EBITDA forecast [4] Company Overview - TKO Group Holdings, Inc. is a New York-based premium sports and entertainment company operating through its UFC, WWE, and IMG segments [4]

Core Viewpoint - TKO Group Holdings, Inc. has declared a quarterly cash dividend of approximately $150 million, with a per share dividend of $0.78 for Class A common stockholders, to be paid on March 31, 2026 [1] Financial Summary - The dividend will be distributed to Class A common stockholders of record as of the close of business on March 16, 2026 [1] - Future dividend declarations will depend on various factors including operational results, financial condition, market conditions, and cash flow requirements [2] Credit Facility Update - The company has launched a potential upsize of its existing credit facility by up to $900 million, subject to market conditions and customary closing conditions [3] Company Overview - TKO Group Holdings, Inc. operates in the premium sports and entertainment sector, encompassing UFC, WWE, PBR, and Zuffa Boxing, reaching over 1 billion households across 210 countries and territories [5] - The company organizes more than 500 live events annually, attracting over three million fans [5] - TKO also partners with major sports rights holders through IMG and On Location, enhancing its market presence [5]

Core Insights - TKO Group reported a 12% increase in revenue to over $1 billion and achieved a net profit in a mixed quarter, with CEO Ari Emanuel noting significant momentum in both UFC and WWE [1] - UFC sales increased by 17% to $401 million, with profits rising 20% to $213 million, while WWE profits jumped 44% to $165 million on a 21% revenue increase to $360 million [2][3] - TKO is forecasting full-year revenue between $5.675 billion and $5.775 billion, with adjusted EBITDA expected to be between $2.24 billion and $2.29 billion, both higher than previous estimates [7] TKO Group Performance - The IMG segment experienced a decline in sales to $248 million, while TKO is managing premium hospitality and logistics for the FIFA World Cup 2026 [4] - Free cash flow increased to $1.16 billion, up by $691 million, although expenses also rose [4] Strategic Partnerships and Future Outlook - TKO has established long-term media rights agreements, including a significant seven-year deal with Paramount worth an average of $1.1 billion annually for UFC events starting in 2026, and a landmark rights deal with Netflix for WWE's Monday Night Raw in 2024 [6] - The company is positioned for long-term growth with operational strength and plans to initiate the next phase of its capital return program to deliver sustainable value for shareholders [5]

Financial Data and Key Metrics Changes - In 2025, the company generated revenue of $4.735 billion and Adjusted EBITDA of $1.585 billion, exceeding the upper end of the revised guidance range [18] - Adjusted EBITDA margin increased to 33.5% from just over 22% in 2024, reflecting a significant improvement in profitability [18] - For Q4 2025, revenue was $1.038 billion, a 12% increase year-over-year, while Adjusted EBITDA rose 30% to $281 million [19] Business Line Data and Key Metrics Changes - UFC revenue for Q4 2025 was $401 million, up 17% year-over-year, with an Adjusted EBITDA margin of 53% [20] - WWE generated $360 million in revenue for Q4 2025, a 21% increase, with an Adjusted EBITDA margin of 46% [22] - The IMG segment saw a revenue decrease of 9% to $248 million, with an Adjusted EBITDA loss of $4 million [25] Market Data and Key Metrics Changes - The company secured over $15 billion in long-term media rights agreements across its segments, enhancing revenue visibility and predictability [6][34] - The UFC's debut on Paramount+ drew nearly 5 million streaming views, marking it as the largest exclusive live event in Paramount+ history [9] Company Strategy and Development Direction - The company is focused on execution in 2026, emphasizing operational performance over M&A opportunities [5][73] - A capital return program was launched, including a quarterly cash dividend and share repurchase initiatives totaling up to $2 billion [5][31] - The company aims to achieve $1.2 billion in total partnerships revenue by 2030, reflecting strong growth potential in this area [10][64] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's position in the content marketplace, citing strong demand for premium content and the potential for significant revenue growth [5][17] - The outlook for 2026 includes targeted revenue of $5.675 billion to $5.775 billion and Adjusted EBITDA of $2.24 billion to $2.29 billion, driven by new media rights deals and global partnerships [33][34] Other Important Information - The company plans to hold a significant event at the White House in June 2026, which is expected to cost upwards of $60 million but aims to generate substantial visibility and audience engagement [12][36] - The integration of IMG and On Location is expected to fuel growth in core IP and enhance the company's position in the sports and entertainment sector [15] Q&A Session All Questions and Answers Question: Advantages of partners bidding for WBD - Management refrained from commenting on the implications of partners bidding for WBD, emphasizing their strong relationships with both Paramount and Netflix [46][48] Question: Zuffa's strategy regarding the Conor Benn deal - Management clarified that the $15 million deal for Conor Benn is for one fight in 2026 and is financially backed by their partner Sela, not TKO directly [49][51] Question: ROI of the White House event - Management indicated that the White House event is seen as a long-term investment for visibility rather than immediate profit, with plans to offset costs through corporate partnerships [52][53] Question: 2026 guidance details - Management provided insights into expected revenue and Adjusted EBITDA growth, highlighting strong performance in UFC and WWE driven by new media rights and financial incentive packages [59][62] Question: Partnership growth opportunities - Management emphasized the growth potential in partnerships, noting that they exceeded their 2025 target and are on track to achieve their 2030 revenue goal [63][64] Question: M&A strategy and execution focus - Management reiterated that 2026 is a year of execution, focusing on operational performance rather than pursuing M&A opportunities [71][73]

Financial Data and Key Metrics Changes - In 2025, the company generated revenue of $4.735 billion and Adjusted EBITDA of $1.585 billion, exceeding the upper end of the revised guidance range [18] - Adjusted EBITDA margin increased to 33.5% from just over 22% in 2024, reflecting a significant improvement in profitability [18] - For Q4 2025, revenue was $1.038 billion, a 12% increase year-over-year, while Adjusted EBITDA rose 30% to $281 million [19] Business Line Data and Key Metrics Changes - UFC revenue for Q4 2025 was $401 million, up 17% year-over-year, with an Adjusted EBITDA margin of 53% [20] - WWE generated $360 million in revenue for Q4 2025, a 21% increase, with an Adjusted EBITDA margin of 46% [22] - The IMG segment saw a revenue decrease of 9% to $248 million, with an Adjusted EBITDA loss of $4 million [25] Market Data and Key Metrics Changes - The company secured over $15 billion in long-term media rights agreements across its segments, enhancing revenue visibility and predictability [6][35] - The UFC's debut on Paramount+ drew nearly 5 million streaming views, marking it as the largest exclusive live event in Paramount+ history [9] Company Strategy and Development Direction - The company is focused on execution in 2026, emphasizing operational performance over M&A opportunities [5][73] - A capital return program was launched, including a quarterly cash dividend and share repurchase initiatives totaling up to $2 billion [5][31] - The company aims to achieve $1.2 billion in total partnerships revenue by 2030, reflecting strong growth potential in this area [10][64] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's position in the content marketplace and the potential for growth driven by new media rights deals [5][17] - The company anticipates revenue growth of 21% and Adjusted EBITDA growth of 43% for 2026, primarily due to new media rights agreements [33][62] Other Important Information - The company plans to hold a significant event at the White House, expected to cost upwards of $60 million, aimed at increasing brand visibility [12][52] - Financial incentive packages are expected to generate over $300 million in value in 2026, doubling previous amounts [14] Q&A Session Summary Question: Advantages of partners bidding for WBD - Management refrained from commenting on the implications of partners bidding for WBD, emphasizing their strong relationships with both Paramount and Netflix [46][48] Question: Zuffa's strategy regarding the Conor Benn deal - Management clarified that the $15 million deal for Conor Benn is for one fight and is financially backed by their partner Sela, not TKO [49][51] Question: ROI on the White House event - Management confirmed the event is an investment for visibility and audience expansion, expecting to offset half of the costs through partnerships [52][53] Question: 2026 guidance details - Management provided insights on expected revenue and Adjusted EBITDA growth, highlighting contributions from media rights and financial incentive packages [59][62] Question: Growth opportunities in partnerships - Management noted the potential for continued growth in partnerships, emphasizing the appeal of their audience to marketers [63][64] Question: Execution focus for 2026 - Management reiterated that 2026 is a year of execution, focusing on operational performance rather than pursuing M&A opportunities [73]

Financial Data and Key Metrics Changes - In 2025, the company generated revenue of $4.735 billion and Adjusted EBITDA of $1.585 billion, exceeding the upper end of the revised guidance range [19] - Adjusted EBITDA margin increased to 33.5% from just over 22% in 2024, reflecting a significant improvement in profitability [19] - For Q4 2025, revenue was $1.038 billion, a 12% increase year-over-year, while Adjusted EBITDA rose 30% to $281 million [20] Business Line Data and Key Metrics Changes - UFC revenue for Q4 2025 was $401 million, up 17% year-over-year, with an Adjusted EBITDA margin of 53% [21] - WWE generated $360 million in revenue for Q4 2025, a 21% increase, with an Adjusted EBITDA margin of 46% [24] - The IMG segment saw a revenue decrease of 9% to $248 million, with an Adjusted EBITDA loss of $4 million [27] Market Data and Key Metrics Changes - The company secured over $15 billion in long-term media rights agreements across its properties, enhancing revenue visibility and predictability [7] - WWE's partnership with Netflix resulted in 525 million hours of content streamed in its first year, indicating strong audience engagement [8] - UFC's debut on Paramount+ drew nearly 5 million streaming views, marking it as the largest exclusive live event in the platform's history [10] Company Strategy and Development Direction - The company aims to focus on execution in 2026, emphasizing operational efficiency and capital return programs [5][74] - Plans to leverage financial incentive packages (FIPs) to enhance live event economics and drive growth [36] - The company is optimistic about expanding its global partnerships and achieving a target of $1.2 billion in partnerships revenue by 2030 [11][35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position within the sports and entertainment ecosystem, anticipating continued growth driven by media rights deals and partnerships [4][18] - The company expects revenue growth of 21% and Adjusted EBITDA growth of 43% for 2026, with a targeted Adjusted EBITDA margin of approximately 39.6% [34] - Management highlighted the importance of upcoming events, including a significant UFC event at the White House, as a strategic investment for long-term visibility [36][52] Other Important Information - The company initiated a capital return program, doubling its quarterly cash dividend and planning to repurchase up to an additional $1 billion of shares [5][33] - Free cash flow for 2025 was $1.159 billion, with a conversion rate of 73% [29] - The company ended 2025 with $3.783 billion in debt and $831 million in cash, resulting in a net leverage ratio of 1.9 times [30] Q&A Session Summary Question: Advantages of partners bidding for WBD - Management refrained from commenting on the implications of partners bidding for WBD, emphasizing their strong business relationships with both companies [46][49] Question: Zuffa's $15 million Conor Benn deal - Management clarified that the deal is for one fight and is financially backed by their partner Sela, not TKO's direct expenditure [50][51] Question: ROI on the White House event - Management indicated that the event is expected to cost upwards of $60 million, with plans to offset half of the cost through corporate partnerships, viewing it as a long-term investment for visibility [52][53] Question: 2026 guidance details - Management provided insights into expected revenue and Adjusted EBITDA growth, highlighting contributions from media rights and financial incentive packages [58][62] Question: Partnership growth opportunities - Management expressed confidence in the growth potential of partnerships, noting the successful exceedance of previous revenue targets and the ongoing expansion into new categories [63][66] Question: M&A strategy for 2026 - Management emphasized that 2026 is a year of execution, focusing on operational performance rather than pursuing acquisitions [74]

Core Insights - Paramount's CEO David Ellison emphasized that the addition of UFC bouts to Paramount+ at no extra charge justifies upcoming price hikes for the service in early 2026 [1][3] Group 1: Value Proposition - The company believes it is offering significant value to Paramount+ subscribers, as for the price of approximately one pay-per-view event, subscribers can access all UFC content [2] - The UFC rights deal, costing $7.7 billion for seven years, positions Paramount+ as the home for combat sports, enhancing its competitive edge [2][4] Group 2: Pricing Strategy - Price hikes for Paramount+ are planned for Canada and Australia, with the U.S. set to follow in early 2026, although specific details on timing and amounts were not disclosed [3] - Higher prices are intended to support continued investment in the service, improving user experience and programming quality [4] Group 3: Market Positioning - Ellison described UFC as a "unicorn sports property" due to its exclusive presence on Paramount+, unlike other major leagues that are spread across multiple platforms [4] - The company is also making significant talent commitments to popular creators, indicating a broader strategy to enhance content offerings [5]

Financial Data and Key Metrics Changes - The company generated revenue of $1.12 billion in Q3 2025, with adjusted EBITDA of $360 million and an adjusted EBITDA margin of 32% [13][14] - Year-over-year revenue decreased by 27%, while adjusted EBITDA increased by 59%, and adjusted EBITDA margin improved from 15% in the prior year period [14] - Free cash flow for the quarter was $399 million, with a conversion rate of adjusted EBITDA at 111% [23][24] Business Line Data and Key Metrics Changes - UFC segment revenue was $325 million, a decrease of 8%, with adjusted EBITDA of $166 million, down 15% [15][16] - WWE segment revenue increased by 23% to $402 million, with adjusted EBITDA rising by 19% to $208 million [17][18] - IMG segment revenue decreased by 59% to $337 million, but adjusted EBITDA improved significantly from -$7 million to $61 million [20][21] Market Data and Key Metrics Changes - UFC's media rights production and content revenue decreased by 7% to $201 million, while WWE's media rights production and content revenue increased by 9% to $249 million [15][18] - WWE's live events revenue increased by 61% to $83 million, driven by higher ticket sales and site fee revenue [17] - The company secured significant media rights agreements, including a seven-year, $7.7 billion deal with Paramount for UFC and a five-year partnership with ESPN for WWE [5][7] Company Strategy and Development Direction - The company is focused on maximizing shareholder value, preparing for UFC's Paramount debut, and launching Zuffa Boxing in 2026 [11][30] - Strategic priorities include sustaining strong performance across all businesses, capitalizing on new growth opportunities, and enhancing global partnerships [11][30] - The company aims to achieve $450 million in high-margin partnership revenue by 2025 and targets $1 billion in total company partnership revenue by around 2030 [31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's momentum, citing strong demand for premium sports content and experiences [5][11] - The company raised its full-year 2025 guidance for revenue to $4.69 billion-$4.72 billion and adjusted EBITDA to $1.57 billion-$1.58 billion [26] - Management highlighted the importance of site fees and global partnerships as significant revenue drivers for 2026 and beyond [30][66] Other Important Information - The company announced a 100% increase in its quarterly cash dividend program, with a payment of approximately $150 million made under the new program [24] - A $1 billion stock buyback program was launched, with an ASR agreement to repurchase $800 million of Class A Common Stock [24][25] Q&A Session Summary Question: Discussion on UFC media rights and international opportunities - Management emphasized the importance of execution and operational expansion, focusing on maximizing media rights opportunities internationally [37][39] Question: WWE live events revenue growth - Management noted that both premium live events and weekly events contributed to revenue growth, with high capacity and appropriate pricing strategies [40][41] Question: Distribution model with Paramount and pay-per-view model - Management clarified that while some markets still utilize pay-per-view, the focus is on expanding distribution through subscription models [46] Question: Incremental flow-through margin percentage and fighter pay structure - Management indicated that the new media rights deal would be margin accretive, with plans for increased fighter pay in line with historical margins [48][49] Question: Opportunities in boxing and potential for larger investments - Management expressed a strong appetite for boxing, focusing on super fights and the Zuffa Boxing league, while remaining cautious about distractions from core operations [52][56] Question: Site fees as a revenue driver - Management highlighted the potential for significant revenue from site fees, particularly with upcoming events in Saudi Arabia and ongoing discussions with various municipalities [64][66]

Financial Data and Key Metrics Changes - The company generated revenue of $1.12 billion in Q3 2025, with adjusted EBITDA of $360 million, reflecting a 59% increase year-over-year [13][14] - Adjusted EBITDA margin improved to 32%, up from 15% in the prior year period [14] - Reported revenue decreased by 27% year-over-year, primarily due to the impact of the 2024 Paris Olympics [14] Business Line Data and Key Metrics Changes - UFC segment revenue was $325 million, down 8%, with adjusted EBITDA of $166 million, a decrease of 15% [15][16] - WWE segment revenue increased by 23% to $402 million, with adjusted EBITDA rising 19% to $208 million [16][17] - IMG segment revenue decreased by 59% to $337 million, but adjusted EBITDA increased significantly to $61 million from a negative $55 million [20][21] Market Data and Key Metrics Changes - UFC's media rights production and content revenue decreased by 7% to $201 million, while WWE's media rights production and content revenue increased by 9% to $249 million [15][18] - Live events and hospitality revenue for UFC decreased by 15% to $44 million, while WWE's live events revenue surged by 61% to $83 million [16][17] Company Strategy and Development Direction - The company is focused on maximizing shareholder value, preparing for UFC's Paramount debut, and expanding WWE's presence on ESPN [11][12] - Significant media rights agreements have been secured, providing a high-margin, contractual revenue stream with annual escalators [12][30] - The company aims to achieve $450 million in high-margin partnership revenue by 2025 and targets $1 billion in total company partnership revenue by around 2030 [31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's momentum and the strong demand for premium sports content [5][11] - The outlook for Q4 2025 is positive, with expectations of strong financial performance driven by increased events and new media rights agreements [26][29] - The company is preparing for a significant step-up in financials in 2026 due to new media rights deals and increased site fees [30][31] Other Important Information - The company announced a 100% increase in its quarterly cash dividend program, with the first payment of approximately $150 million made on September 30 [24] - A $1 billion stock buyback program was launched, with an ASR agreement to repurchase $800 million of Class A Common Stock [24][25] Q&A Session Summary Question: Why was Paramount chosen as the partner for LATAM and Australia? - Management highlighted the strong brand alignment and marketing plan offered by Paramount, which provided the best rights fee and overall value for the company [36][39] Question: What is the outlook for WWE live events revenue? - Management indicated that both premium live events and weekly events are contributing to revenue growth, with increased ticket prices and capacity [40][42] Question: What is the distribution model with Paramount? - The company plans to sell a significant amount of content to distributors, focusing on maximizing monetization opportunities internationally [45][46] Question: What are the expectations for fighter pay in the UFC? - Management confirmed that there will be an increase in fighter pay, aligning with the margins maintained over the years [49][50] Question: Are there plans for more boxing events beyond the current joint venture? - Management expressed a strong appetite for boxing, with plans for multiple super fights and leveraging Zuffa Boxing to enhance revenue opportunities [53][56] Question: How significant will site fees be in 2026? - Management indicated that site fees will be a major revenue driver, with ongoing discussions for multiple events globally [65][68]

Financial Data and Key Metrics Changes - TKO generated revenue of $1.12 billion in Q3 2025, with adjusted EBITDA of $360 million, resulting in an adjusted EBITDA margin of 32% [11][12] - Year-over-year revenue decreased by 27%, while adjusted EBITDA increased by 59%, and adjusted EBITDA margin improved from 15% in the prior year [12] - Free cash flow for the quarter was $399 million, with a conversion rate of 111% [22][23] Business Line Data and Key Metrics Changes - UFC segment revenue was $325 million, down 8%, with adjusted EBITDA of $166 million, a decrease of 15% [13][15] - WWE segment revenue increased by 23% to $402 million, with adjusted EBITDA rising by 19% to $208 million [15][16] - IMG segment revenue decreased by 59% to $337 million, but adjusted EBITDA improved significantly from negative $7 million to $61 million [18][19] Market Data and Key Metrics Changes - UFC's media rights production and content revenue decreased by 7% to $201 million, while WWE's media rights production and content revenue increased by 9% to $249 million [13][17] - WWE's live events revenue surged by 61% to $83 million, driven by higher ticket sales and site fees [16][17] - PBR's broadcast drew an average of 2.7 million viewers, the largest audience since joining CBS in 2012 [9] Company Strategy and Development Direction - TKO is focused on maximizing shareholder value through strong performance across all business segments and capitalizing on new growth opportunities [10][25] - The company aims to enhance its competitive position in boxing with the launch of Zuffa Boxing and significant media rights agreements [5][31] - TKO plans to leverage its media rights deals to secure high-margin revenue streams and expand its global partnerships [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's momentum, citing strong demand for premium sports content and experiences [4][10] - The company raised its full-year 2025 guidance for revenue and adjusted EBITDA for the third consecutive quarter, targeting revenue of $4.69 billion to $4.72 billion [25][26] - Management highlighted the importance of international market expansion and monetization opportunities as key growth drivers [36][37] Other Important Information - TKO announced a $1 billion stock buyback program and doubled its quarterly cash dividend [4][23] - The company ended the quarter with $3.759 billion in debt and $861 million in cash and cash equivalents [24] Q&A Session Summary Question: Why was Paramount chosen as the partner for LATAM and Australia? - Management emphasized the execution story and the importance of maximizing media rights opportunities, noting that Paramount offered the best overall deal [33][34][37] Question: What is the outlook for WWE live events revenue? - Management indicated that both premium live events and weekly events are contributing to revenue growth, with high capacity and appropriate pricing strategies [38][39] Question: How will the distribution model with Paramount affect international markets? - Management clarified that while some markets will retain pay-per-view models, the focus will be on maximizing reach through subscription-based offerings [40][41] Question: What are the plans for boxing beyond the Zuffa Boxing initiative? - Management expressed a strong appetite for super fights and emphasized the potential for high-margin revenue through promotional and management fees [45][46] Question: How significant will site fees be for revenue in 2026? - Management highlighted the strategic focus on securing site fees and the potential for significant revenue growth from upcoming events, particularly in Saudi Arabia [52][54]