TKO released the following press release along with their Q1 2025 results:
TKO Reports First Quarter 2025 Results
05/08/2025
Raises Full Year 2025 Guidance Reflecting Strength at UFC and WWE
Updates Full Year 2025 Guidance to Include the Acquisition of the IMG Business, On Location, PBR, and Associated Transaction Impacts
Acquired Businesses
On February 28, 2025, TKO Group Holdings, Inc. (“TKO”) completed the acquisition of certain businesses operating under the IMG brand (the “IMG Business”), On Location, and Professional Bull Riders (“PBR”) (collectively referred to as the “Acquired Businesses”). As a common control acquisition, reported results presented in this earnings release reflect the Acquired Businesses as if they had been part of TKO during the historical periods presented. (See “Basis of Presentation” for further details.)
First Quarter 2025 Financial Highlights1
- Revenue of $1,268.8 million
- Net income of $165.5 million
- Adjusted EBITDA2 of $417.4 million
Full Year 2025 Guidance3
- Excluding the impact of the Acquired Businesses, the Company increased its targets for revenue to $3.005 billion to $3.075 billion, from $2.930 billion to $3.000 billion, and Adjusted EBITDA to $1.390 billion to $1.430 billion, from $1.350 billion to $1.390 billion
- Including the impact of the Acquired Businesses, the Company is targeting revenue of $4.490 billion to $4.560 billion and Adjusted EBITDA of $1.490 billion to $1.530 billion
NEW YORK--(BUSINESS WIRE)-- TKO Group Holdings, Inc. (“TKO” or the “Company”) (NYSE: TKO) today announced financial results for its first quarter ended March 31, 2025.
“TKO is off to a good start in 2025 with both UFC and WWE delivering solid financial results,” said Ariel Emanuel, Executive Chair and CEO of TKO. “Given the strength and momentum of these businesses and no material change to our overall business outlook, we are raising our guidance. At the same time, we are updating guidance to reflect the addition of IMG, On Location, and PBR. Our conviction in our portfolio of assets is strong and we are now focused on integration, driving synergies, the domestic media rights deal for UFC, and our capital return programs.”
Consolidated Results
First Quarter 2025
Revenue increased 4%, or $46.4 million, to $1.269 billion. The increase primarily reflected an increase of $74.8 million at WWE, to $391.5 million, and an increase of $46.7 million at UFC, to $359.7 million, partially offset by a decrease of $73.4 million at IMG, to $476.3 million.
Net Income was $165.5 million, an increase of $400.0 million from a net loss of $234.5 million in the prior year period. The increase primarily reflected the increase in revenue and a decrease in operating expenses. The decrease in operating expenses reflected a decrease in selling, general and administrative expenses of $305.0 million, a decrease in direct operating costs of $38.0 million, and a decrease in depreciation and amortization of $21.6 million. The decrease in selling, general and administrative expenses was primarily related to the absence of a preliminary legal settlement charge of $335.0 million related to a UFC antitrust matter that was recorded in the prior year period.
Adjusted EBITDA2 increased 23%, or $78.5 million, to $417.4 million, primarily due to an increase of $53.7 million at WWE, to $193.9 million, and an increase of $32.3 million at UFC, to $227.4 million, partially offset by a decrease of $7.8 million at IMG, to $73.5 million. Corporate and Other was essentially flat as compared to the prior year period.
Cash flows generated by operating activities were $162.8 million, an increase of $117.9 million from $44.9 million, primarily due to higher net income and the timing of working capital, including approximately $100.3 million of pre-payments held in escrow related to the 2026 FIFA World Cup. These increases were partially offset by a payment of $125.0 million related to the UFC antitrust lawsuit as well as payments related to transaction costs in connection with the Acquired Businesses and the timing of bonuses. (See “Other Matters” for further details.)
Free Cash Flow4 was $135.5 million, an increase of $128.0 million from $7.5 million, due to the increase in cash flows generated by operating activities and a decrease in capital expenditures.
Cash and cash equivalents were $470.9 million as of March 31, 2025. Gross debt was $2.776 billion as of March 31, 2025.
First Quarter 2025
Revenue increased 24%, or $74.8 million, to $391.5 million primarily related to a $30.5 million increase in media rights, production and content revenue, a $26.1 million increase in live events and hospitality revenue, a $11.8 million increase in partnerships and marketing revenue, and a $6.4 million increase in consumer products licensing and other revenue. The increase in media rights, production and content revenue was primarily related to the timing of the previously disclosed format expansion of WWE’s weekly program, SmackDown, as well as the contractual escalation of media rights fees, notably the impact of WWE’s global content distribution agreement with Netflix, compared to the prior year period. The increase in live events and hospitality revenue was due to higher ticket sales revenue, related to an increase in both price and attendance despite fewer total events, which more than offset a decrease in site fees, primarily due to revenue recorded in the prior year period related to an international premium live event. The increase in partnerships and marketing revenue was primarily related to new partners and an increase in fees from renewals compared to the prior year period. The increase in consumer products licensing and other revenue was primarily related to higher video gaming and collectibles revenue compared to the prior year period.
Adjusted EBITDA increased 38%, or $53.7 million, to $193.9 million, primarily due to the increase in revenue (as described above) partially offset by an increase in expenses. Direct expenses increased primarily due to higher talent-related costs compared to the prior year period. Selling, general and administrative expenses were essentially flat as the continued benefit of planned cost reduction initiatives implemented following the formation of TKO were offset by higher travel expenses primarily related to the mix of event venues and territories, including an increase in international events primarily related to a tour across Europe leading up to WrestleMania 41 compared to the prior year period.
Adjusted EBITDA margin increased to 50% from 44%.
