WWE’s Strong 3rd Quarter 2022 Earnings Report Boosted By Multiple Factors

WWE moved their earnings call a day due to their Saudi Arabia event. As of this writing, the call has yet to take place, but we will give you all the updates here at Ringside News. We now have the final results for its third quarter earnings that ended September 30th, 2022, because the company dropped their earnings report.

WWE’s company president and chief financial officer, Frank Riddick, said that they exceeded their guidance. OIBDA adjusted rose 17%, reflecting a 19% increase in revenue from the previous year. Growth in their Media business as well as a change in the timing of revenue tied to specific license agreements were the main factors that contributed to their financial success.

An increase in some expenditures associated with supporting content creation was more than offset by these factors. According to PW Insider., WWE now projects Adjusted OIBDA for 2022 to be at the higher end of the $370 to $385 million range. WWE co-Chief Executive Officers, Stephanie McMahon and Nick Khan, addressed the Q3 earnings.

We generated strong financial results in the quarter, highlighted by record revenue and Adjusted OIBDA for a third quarter, and remain firmly on track to deliver record revenue and Adjusted OIBDA for the full year. We continue to effectively execute our strategy, including staging a record-setting international stadium event, Clash at the Castle, in early September. Clash at the Castle, as well as our other premium live events (“PLEs”) including SummerSlam and Extreme Rules all continue our streak of delivering record viewership for each respective event. These PLEs, along with strong ratings for our flagship programs, Raw and SmackDown, continue to expand the reach of our brands and enhance the value of our content across various platforms, both domestically and abroad.

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WWE provided adjusted OIBDA guidance of $360 to $375 million for the entire year 2022 in February. The company increased its forecast in August to $370 to $385 million. The Company currently anticipates that Adjusted OIBDA for the entire year 2022 will be at the higher end of the range of $370 – $385 million, based on performance through the first nine months of the year as well as management’s current estimates for the fourth quarter. Check out the third quarter highlights below.

Third Quarter 2022 Highlights

• Revenue was $304.6 million, an increase of 19%; Operating Income was $58.9 million, a decrease of 8%; and Adjusted OIBDA1 was $91.2 million, an increase of 17%
• Returned $9.1 million of capital to shareholders through dividends paid
• Clash at the Castle, the first major WWE stadium event in the UK in over 30 years, was held at Principality Stadium in Cardiff, Wales. Clash at the Castle was the most viewed international event in WWE’s history
• Each WWE domestic premium live event (Money in the Bank, SummerSlam and Extreme Rules) was the most viewed event in its history with year-over-year increases of 17%, 20% and 36%, respectively, in domestic unique viewership on Peacock
• WWE announced a multi-year agreement with its long-standing partner, the Foxtel Group, to expand the distribution of the Company’s content in Australia
• WWE announced the creation of NXT Europe, which is planned to launch in 2023, to expand the NXT brand internationally
• In October, WWE announced its “Campus Rush” recruitment tour to further enhance the Company’s talent development program

Third-Quarter Consolidated Results

Revenue increased 19% to $304.6 million, primarily due to an increase in core content rights fees for the Company’s flagship programs, Raw and SmackDown, and the monetization of third-party original programming. To a lesser extent, higher consumer product licensing revenue and international ticket sales also contributed to the increase in revenue.

Operating Income decreased 8%, or $5.1 million, to $58.9 million, as the increase in revenue was offset by an increase in operating expenses. The increase in operating expenses was primarily driven by higher costs to support the creation of content as well as the impact of certain costs related to the Special Committee investigation. (See the “Special Committee Investigation” discussion for further details.) The Company’s operating income margin decreased to 19% from 25%.

Adjusted OIBDA (which excludes stock-based compensation and other items included in operating income) increased 17%, or $13.3 million, to $91.2 million. The Company’s Adjusted OIBDA margin remained flat at 30%.

Net Income was $41.7 million, or $0.49 per diluted share, a slight decline from $43.5 million, or $0.52 per diluted share in the third quarter of 2021, primarily reflecting the decrease in operating performance.

Cash flows generated by operating activities were $54.5 million, a slight decline from $56.9 million, primarily due to lower net income and higher working capital requirements.

Free Cash Flow3 was $3.5 million, a decrease from $44.8 million, primarily due to an increase in capital expenditures. For the three months ended September 30, 2022, the Company incurred $42.3 million of capital expenditures related to its new headquarter facility. Excluding the capital expenditures related to the new headquarter facility, Free Cash Flow for the three months ended September 30, 2022 was $45.8 million.

We will have full coverage of the 3rd quarter 2022 earnings report here at Ringside News. Keep checking back for all the latest updates as Vince McMahon’s former company carries on without him.

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