On August 8, 2024, TKO Group Holdings Inc (TKO, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. TKO Group Holdings Inc is a premium sports and entertainment company that comprises UFC, the world's mixed martial arts organization, and WWE, an integrated media organization and the recognized leader in sports entertainment.
Performance Overview
TKO Group Holdings Inc reported a significant increase in revenue and net income for Q2 2024. Revenue surged by 179% year-over-year to $851.2 million, surpassing the analyst estimate of $771.31 million. This growth was driven by a $89.2 million increase in UFC revenue and a $456.8 million contribution from WWE.
Net income for the quarter was $150.7 million, up from $81.8 million in the same period last year. This increase was primarily due to higher revenue, partially offset by increased operating expenses, including direct operating costs, selling, general and administrative expenses, and depreciation and amortization.
Segment Performance
UFC: Revenue for UFC increased by 29% to $394.4 million, driven by higher media rights and content revenue, live events revenue, and sponsorship revenue. Adjusted EBITDA for UFC rose by 23% to $231.9 million, although the Adjusted EBITDA margin decreased to 59% from 62% due to higher production, marketing, and athlete costs.
WWE: WWE contributed $456.8 million in revenue for the quarter. The increase was primarily due to higher live events revenue and media rights and content revenue. Adjusted EBITDA for WWE was $251.3 million, with an Adjusted EBITDA margin of 55%, up from 42% in the prior year period.
Financial Achievements
Adjusted EBITDA for the quarter increased by 142% to $420.9 million, reflecting strong contributions from both UFC and WWE. Cash flows generated by operating activities were $230.7 million, up from $111.0 million, and free cash flow was $218.6 million, an increase from $106.4 million. These metrics are crucial for TKO as they indicate the company's ability to generate cash and invest in growth opportunities.
Income Statement Highlights
| Three Months Ended | June 30, 2024 | June 30, 2023 |
|---|---|---|
| Revenue | $851.2 million | $305.2 million |
| Net Income | $150.7 million | $81.8 million |
| Adjusted EBITDA | $420.9 million | $173.6 million |
Balance Sheet and Cash Flow
As of June 30, 2024, TKO Group Holdings Inc had cash and cash equivalents of $277.5 million and gross debt of $2.744 billion. The company's strong cash position and manageable debt levels provide a solid foundation for future growth and investment.
Commentary and Analysis
“TKO generated strong financial results in the quarter, highlighted by record quarterly revenue and Adjusted EBITDA,” said Ariel Emanuel, Executive Chair and CEO of TKO. “In light of this continued momentum, we are raising our full year 2024 guidance for the second quarter in a row. The strength in our underlying business continues to give us great conviction in TKO’s ability to deliver sustainable long-term value for shareholders.”
Full Year 2024 Guidance
Based on the strong performance in the first half of the year, TKO Group Holdings Inc has raised its full-year 2024 guidance. The company now expects revenue to be in the range of $2.670 billion to $2.745 billion and Adjusted EBITDA to be between $1.220 billion and $1.240 billion.
For more detailed financial information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from TKO Group Holdings Inc for further details.
