TKO (US:TKO)2025-08-06 22:00Financial Data and Key Metrics Changes - The company generated revenue of $1,308 million, an increase of 10% compared to the previous year [16] - Adjusted EBITDA was $526 million, reflecting a significant increase of 75%, with an adjusted EBITDA margin of 40%, up from 25% in the prior year [16] - The UFC segment reported revenue of $416 million, a 5% increase, while adjusted EBITDA was $245 million, a 6% increase [16][17] - The WWE segment generated revenue of $556 million, a 22% increase, with adjusted EBITDA of $330 million, a 31% increase [20] - The IMG segment saw a revenue decrease of 4% to $307 million, but adjusted EBITDA improved significantly to $29 million from a negative margin in the prior year [23] Business Line Data and Key Metrics Changes - UFC's partnerships and marketing revenue increased by 39% to $86 million, driven by new partnerships and renewals [17] - WWE's live events and hospitality revenue increased by 29% to $186 million, attributed to higher ticket sales and site fee revenue [20] - IMG's revenue decline was primarily due to the loss of FA Cup rights, partially offset by new production agreements [23] Market Data and Key Metrics Changes - The company set 36 individual market records for ticket sales in WWE, selling out 16 events during the quarter [9] - WWE's partnership with Netflix has shown robust growth, with over 280 million view hours since its launch [10] - The company anticipates strong performance in upcoming events, including the Canelo versus Crawford fight and the FIFA World Cup [14][30] Company Strategy and Development Direction - The company is focused on capitalizing on sustained demand for premium content and live events, raising its full-year guidance for revenue and adjusted EBITDA [5][29] - The strategy includes leveraging partnerships across multiple TKO properties, enhancing brand partnerships, and integrating IMG On Location and PBR [18][30] - The recent ESPN deal for WWE's premium live events is expected to create a high-margin revenue stream with attractive visibility and stability [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued momentum across UFC and WWE, highlighting strong operating performance and the potential for further growth [15][29] - The company is optimistic about the impact of the new ESPN deal and the integration of IMG, expecting to achieve significant savings and revenue growth [30] - Management noted that while there are challenges in the upcoming quarters, the overall outlook remains positive with strong demand for premium content [34] Other Important Information - The company generated $375 million in free cash flow, with a conversion rate of 71% [27] - The company ended the quarter with $2.769 billion in debt and $535 million in cash [27] - A share repurchase program of $2 billion is expected to commence in 2025, subject to market conditions [27] Q&A Session Summary Question: What are the implications of the new WWE deal with ESPN? - Management emphasized the importance of not putting all rights on one platform, highlighting the benefits of having multiple partners to maximize monetization and reach [42][44] Question: Why was the WWE PLE deal announced before the UFC deal? - Management clarified that the timing was due to simultaneous negotiations for multiple properties and confirmed that the UFC deal is progressing well [60][62] Question: What are the growth opportunities beyond the UFC media rights renewal? - Management highlighted the potential for increased profitability through partnerships, sponsorships, and the expansion of live events, indicating a strong growth trajectory [96][100]