TKO Group (TKO) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue rose 52% year-over-year to $681.2 million, driven by WWE's full-quarter contribution and strong UFC sponsorships, partially offset by a decline at UFC.

• Net income for Q3 2024 was $57.7 million, reversing a prior year loss, with Adjusted EBITDA at $310 million and a 46% margin.

• Announced a $2 billion share repurchase program and a $75 million quarterly cash dividend, with repurchases to begin after asset acquisitions close.

• Announced $3.25 billion acquisition of PBR, On Location, and IMG from Endeavor, expected to close in H1 2025, expanding the global sports portfolio.

• Live events for both UFC and WWE set multiple records for attendance, ticket sales, and revenue, with significant international growth.

Financial highlights

• Q3 2024 revenue: $681.2 million (+52% YoY); net income: $57.7 million; Adjusted EBITDA: $310 million (46% margin); free cash flow: $225.6 million.

• WWE Q3 2024 revenue: $326.3 million (up 14%); Adjusted EBITDA: $175.3 million (up 72%, margin 54%).

• UFC Q3 2024 revenue: $354.9 million (down 11%); Adjusted EBITDA: $195.6 million (down 18%, margin 55%).

• Cash and equivalents: $457.4 million; total debt: $2.736 billion as of September 30, 2024.

• Free cash flow conversion for the quarter was 73%.

Outlook and guidance

• Full-year 2024 revenue expected at the upper end of $2.67–$2.745 billion; Adjusted EBITDA at the upper end of $1.22–$1.24 billion.

• Free cash flow conversion target reaffirmed at over 40% of Adjusted EBITDA.

• Q4 2024 expected to improve for UFC with more events; WWE to see a $50 million short-term impact from a domestic rights deal.

• Management expects sufficient liquidity for at least the next 12 months, with plans to refinance debt before 2026 maturities.