TKO Group Holdings Announces 179% Revenue Increase In 2nd Quarter 2024 Earnings

WWE and UFC have been under the same roof since Endeavor merged the two companies together. Now, we are getting a deeper look at how the publicly traded company did during the second quarter of this year.

TKO Group Holdings announced its financial results for the second quarter of 2024 on August 8th, reporting a quarterly revenue record of $851.2 million. The company also reported a net income of $150.7 million for the quarter. The UFC contributed $394.4 million to TKO’s total revenue, while WWE added $456.8 million.

Ariel Emanuel, Executive Chair and CEO of TKO, commented on the results. He highlighted their high quarterly earnings, and how their stock provides a “long-term value” to the company’s stockholders.

“TKO generated strong financial results in the quarter, highlighted by record quarterly revenue and Adjusted EBITDA. 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.”

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In addition to the revenue and net income figures, TKO Group reported an Adjusted EBITDA of $420.9 million, setting another quarterly record. The company also updated its full-year 2024 guidance, raising the revenue target to between $2.670 billion and $2.745 billion. The Adjusted EBITDA target has also been increased to a range of $1.220 billion to $1.240 billion, and the company reaffirmed its target for Free Cash Flow Conversion in excess of 40%.

Revenue for the second quarter increased by 179%, from $546.0 million to $851.2 million. This increase was driven by a rise of $89.2 million in UFC revenue to $394.4 million and the contribution of $456.8 million in WWE revenue.

Net income also rose by $68.9 million from $81.8 million in the prior year period, reflecting the revenue increase, which was partially offset by an increase in operating expenses. These expenses primarily included a $177.0 million increase in direct operating costs, a $169.1 million increase in selling, general, and administrative expenses, and an $88.8 million rise in depreciation and amortization. Adjusted EBITDA increased by 142%, or $247.3 million to $420.9 million, due to an increase of $43.7 million at UFC and the contribution of $251.3 million of Adjusted EBITDA at WWE, partially offset by an increase of $47.7 million in corporate expenses.

Cash flows were also looking very good for the company, as they generated $230.7 million, an increase of $119.7 million from $111.0 million, primarily due to higher net income and the timing of working capital. Free Cash Flow was $218.6 million, an increase of $112.2 million from $106.4 million, due to the increase in cash flows generated by operating activities, partially offset by an increase in capital expenditures primarily related to WWE’s new headquarter facility. Cash and cash equivalents were $277.5 million as of June 30, 2024, while gross debt stood at $2.744 billion as of the same date.

We will keep a close eye on this story as TKO Group Holdings continues to run both UFC and WWE under the same roof. This is a very fruitful time to be an investor in UFC and WWE, because both companies are open for business and making big deals along the way.

What’s your take on TKO Group Holdings’ 2nd quarter 2024 earnings report? Do you believe that they will continue their upswing, or is a dive in price coming eventually? Let us know what you think in the comments section!