TKO (US:TKO)2025-05-08 22:02Financial Data and Key Metrics Changes - The company generated revenue of $1,269 million, an increase of 4% compared to the previous year [21] - Adjusted EBITDA was $417 million, reflecting a 23% increase, with an adjusted EBITDA margin of 33%, up from 28% in the prior year [21][22] - Free cash flow for the quarter was $136 million, with a conversion rate of adjusted EBITDA at 32% [33] Business Line Data and Key Metrics Changes - UFC segment revenue increased by 15% to $360 million, with adjusted EBITDA rising 17% to $227 million, resulting in an adjusted EBITDA margin of 63% [22][26] - WWE segment revenue grew by 24% to $392 million, with adjusted EBITDA increasing by 38% to $194 million, leading to an adjusted EBITDA margin of 50% [26][28] - IMG segment revenue decreased by 13% to $476 million, with adjusted EBITDA down 10% to $74 million, maintaining an adjusted EBITDA margin of 15% [29] Market Data and Key Metrics Changes - Live Events and Hospitality revenue for UFC increased by 66% to $59 million, driven by higher site fee revenue and ticket sales [24] - WWE's Live Events and Hospitality revenue rose by 52% to $76 million, primarily due to increased ticket sales [26] - Partnerships and marketing revenue for UFC increased by 32% to $64 million, while WWE saw an 86% increase to $26 million [24][27] Company Strategy and Development Direction - The company is focused on integrating newly acquired assets IMG and PBR to drive top-line growth and cost synergies [6][13] - A partnership with the Western Australian government was secured to host five major UFC and WWE events through 2026, indicating a strategic expansion in international markets [8] - The company aims to create value for shareholders through capital return programs and organic investments, including a new boxing promotion [36][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued strength of live events and partnerships, with no signs of a slowdown in consumer behavior observed [20] - The company raised its full-year guidance, targeting revenue of $4,490 million to $4,560 million and adjusted EBITDA of $1,490 million to $1,530 million, reflecting strong performance in the first quarter [37][38] - Management remains cautious about economic uncertainties but is optimistic about the brand's growth potential [75] Other Important Information - The company completed the acquisition of IMG and PBR, which is accounted for as a merger under common control, impacting financial reporting [16][18] - Corporate allocations from Endeavor for the two months prior to the acquisition amounted to $21.7 million, which will not recur under TKO ownership [31][39] - The company plans to provide more transparency regarding the performance of acquired businesses through updated KPIs [19][85] Q&A Session Summary Question: Update on UFC rights renewal and free cash flow for 2025 - Management is in discussions with various third parties regarding UFC rights, with ESPN still included in the mix [48][49] - Free cash flow conversion rate is expected to exceed 60%, excluding nonrecurring amounts [50][51] Question: Economics of the Canelo announcement and boxing promotion - The new boxing organization will average 12 fights per year, with separate media rights deals and global partnerships [60][62] Question: Outperformance in UFC and WWE - Outperformance was driven by strong live event and global partnership performance, with confidence in continued momentum [72][73] Question: Capital return program pacing - The share repurchase program will be market-driven, with a focus on being opportunistic [76][79] Question: Growth modeling for IMG segment - The company intends to provide more transparency on IMG's growth and profitability, with expectations for increased margins over time [84][85]