Updates Full Year 2024 Guidance
TKO Transaction
Highlights
On September 12, 2023, Endeavor and WWE closed the transaction
to combine UFC and WWE to form a new, publicly listed company, TKO
Group Holdings, Inc. Reported results presented in this earnings
release prior to September 12, 2023 reflect only UFC activity.
Second Quarter 2024 Financial
Highlights
- Revenue of $851.2 million, a quarterly record
- Net income of $150.7 million
- Adjusted EBITDA1 of $420.9 million, a quarterly record
Full Year 2024 Guidance
- The Company increased its target for revenue to $2.670 billion
to $2.745 billion
- The Company increased its target for Adjusted EBITDA to $1.220
billion to $1.240 billion
- The Company reaffirmed its target for Free Cash Flow
Conversion2 in excess of 40%
TKO Group Holdings, Inc. (“TKO” or the “Company”) (NYSE: TKO)
today announced financial results for its second quarter ended June
30, 2024.
“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.”
Second Quarter Consolidated
Results
Revenue increased 179%, or $546.0 million, to $851.2
million. The increase reflected an increase of $89.2 million at
UFC, to $394.4 million, and the contribution of $456.8 million of
revenue at WWE.
Net Income was $150.7 million, an increase of $68.9
million from $81.8 million in the prior year period. The increase
reflected the increase in revenue partially offset by an increase
in operating expenses. The increase in operating expenses primarily
reflected an increase in direct operating costs of $177.0 million,
an increase in selling, general and administrative expenses of
$169.1 million, and an increase in depreciation and amortization of
$88.8 million.
Adjusted EBITDA1 increased 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 generated by operating activities were $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 Flow2 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, which was primarily related to WWE’s new
headquarter facility.
Cash and cash equivalents were $277.5 million as of June
30, 2024. Gross debt was $2.744 billion as of June 30,
2024.
Results by Operating
Segment3
The schedule below reflects TKO’s performance by operating
segment:
Three Months Ended
Six Months Ended
(in millions)
June 30,
June 30,
2024
2023
2024
2023
Revenue:
UFC
$
394.4
$
305.2
$
707.4
$
611.9
WWE
456.8
—
773.5
—
Total Revenue
$
851.2
$
305.2
$
1,480.9
$
611.9
Adjusted EBITDA:
UFC
$
231.9
$
188.2
$
427.0
$
374.5
WWE
251.3
—
391.5
—
Corporate
(62.3
)
(14.6
)
(115.4
)
(28.3
)
Total Adjusted EBITDA
$
420.9
$
173.6
$
703.1
$
346.2
UFC
Second Quarter 2024
Revenue increased 29%, or $89.2 million, to $394.4
million primarily driven by a $38.9 million increase in media
rights and content revenue, a $36.7 million increase in live events
revenue, and a $15.5 million increase in sponsorship revenue. The
increase in media rights and content revenue was primarily related
to holding one additional numbered event compared to the prior year
period and the contractual escalation of media rights fees. The
increase in live events revenue was primarily due to the additional
numbered event as well as higher site fee revenues. The increase in
sponsorship revenue was primarily related to new sponsors and an
increase in fees from renewals compared to the prior year
period.
Three Months Ended
Six Months Ended
(in millions)
June 30,
June 30,
2024
2023
2024
2023
UFC Revenue:
Media Rights & Content
$
250.6
$
211.7
$
465.1
$
435.8
Live Events
69.1
32.4
104.4
63.8
Sponsorship
61.7
46.2
110.3
84.2
Consumer Products
13.0
14.9
27.6
28.1
Total Revenue
$
394.4
$
305.2
$
707.4
$
611.9
Adjusted EBITDA increased 23%, or $43.7 million, to
$231.9 million, as the increase in revenue (as described above) was
partially offset by an increase in expenses. Direct expenses
increased primarily due to higher production, marketing and athlete
costs as well as an increase in direct costs of revenue due to one
additional numbered event as compared to the prior year period.
Selling, general and administrative expenses were essentially flat
as compared to the prior year period.
Adjusted EBITDA margin decreased to 59% from
62%.
WWE
Second Quarter 2024
As a result of the timing of the consummation of the business
combination on September 12, 2023, the information below includes
WWE’s reported results for the three months ended June 30, 2024.
The presentation of WWE’s historical information provided for the
three months ended June 30, 2023 is for illustrative purposes to
facilitate an understanding of its historical operating results
prior to the consummation of the business combination. (See “Basis
of Presentation” for further details.)
Revenue was $456.8 million for the period from April 1,
2024 through June 30, 2024.
WWE revenue was $410.3 million for the period from April 1, 2023
through June 30, 2023. The increase of 11%, or $46.5 million, was
primarily due to an increase in live events revenue and an increase
in media rights and content revenue. The increase in live events
revenue was primarily related to an increase in ticket sales
revenue. The increase in media rights and content revenue was
primarily related to holding one additional premium live event
compared to the prior year period and the contractual escalation of
media rights fees. These increases were partially offset by a
decrease in third-party original programming due to the timing of
delivery. Consumer products revenue was relatively flat primarily
reflecting an increase in video game licensing revenue offset by
the previously disclosed transition of our venue merchandise
business to Fanatics in May 2023.
Three Months Ended
Six Months Ended
(in millions)
June 30,
June 30,
2024
2023
2024
2023
WWE Revenue:
Media Rights & Content
$
260.7
$
—
$
481.8
$
—
Live Events
144.1
—
194.3
—
Sponsorship
24.7
—
38.5
—
Consumer Products
27.3
—
58.9
—
Total Revenue
$
456.8
$
—
$
773.5
$
—
Adjusted EBITDA was $251.3 million for the period from
April 1, 2024 through June 30, 2024.
WWE Adjusted EBITDA was $173.1 million for the period from April
1, 2023 through June 30, 2023. The increase of 45%, or $78.2
million, was due to the increase in revenue (as described above)
and a decrease in expenses. Expenses decreased primarily due to a
decline in personnel costs and other direct costs, principally
related to planned cost reduction initiatives implemented following
the formation of TKO, as well as a decrease in production costs
primarily related to the timing of delivery of third-party original
programming.
Adjusted EBITDA margin was 55% for the period from April
1, 2024 through June 30, 2024, an increase compared to WWE’s
Adjusted EBITDA margin of 42% for the period from April 1, 2023
through June 30, 2023.
Corporate
Second Quarter 2024
Corporate Adjusted EBITDA was a loss of $62.3 million, as
compared to a loss of $14.6 million in the prior year period.
Including WWE activity for the period from April 1, 2023 through
June 30, 2023, Corporate combined Adjusted EBITDA3 was a loss of
$47.0 million for the second quarter of 2023. The decrease of $15.3
million was primarily due to an increase in personnel costs,
including TKO executive compensation, and other general and
administrative expenses, including public company expenses,
following the formation of TKO in September 2023. The decrease also
reflected an increase in service fees paid to Endeavor under the
Company’s Services Agreement. These increases were partially offset
by savings from the Company’s cost reduction program, which was
implemented to realize synergy opportunities and integrate the
combined operations of WWE and UFC following the formation of
TKO.
Other Matters
As previously disclosed, on March 20, 2024, the Company
announced that it had reached an agreement to settle all claims
asserted in both the Le and Johnson UFC antitrust lawsuits for an
aggregate amount of $335 million. The terms of the settlement were
subject to court approval. On July 30, 2024, the court issued a
ruling denying the motion for preliminary approval of the
settlement agreement and scheduled a new tentative trial date for
the Le case for October 28, 2024. The Company is evaluating all of
its options, including, without limitation, an appeal, and has also
initiated discussions with plaintiffs’ counsel, who have expressed
a willingness to engage in separate settlement discussions for the
Le and Johnson cases. A motion to dismiss the complaint in Johnson
remains pending and no trial date has been set.
For the three months ended June 30, 2024, the Company’s
consolidated pre-tax results included $6.0 million of costs related
to certain litigation matters at UFC and WWE. A reconciliation of
Net Income (Loss) to Adjusted EBITDA for the three months ended
June 30, 2024 and 2023 can be found in the supplemental schedule on
page 14 of this release.
As previously disclosed, on September 12, 2023, Endeavor Group
Holdings Inc. (“Endeavor”) and World Wrestling Entertainment, LLC
(“WWE”) closed the transaction to combine the Ultimate Fighting
Championship (“UFC”) and WWE to form a new, publicly listed
company, TKO Group Holdings, Inc. (“TKO”). For the three months
ended June 30, 2024, the Company’s consolidated pre-tax results
included $2.4 million of merger and acquisition related costs. For
the three months ended June 30, 2024, the Company’s consolidated
pre-tax results also included $29.8 million (inclusive of $0.9
million of equity-based compensation expense) of restructuring,
severance and impairment costs. These costs include an impairment
charge of $24.3 million as a result of reducing the carrying value
of WWE assets held for sale to their fair value less cost to sell,
in addition to costs resulting from the Company’s cost reduction
program, which was implemented to realize synergy opportunities and
integrate the combined operations of WWE and UFC.
Full Year 2024 Guidance
In February, the Company issued revenue and Adjusted EBITDA
guidance of $2.575 billion - $2.650 billion and $1.150 billion -
$1.170 billion, respectively, for the full year 2024. In May, the
Company raised its revenue and Adjusted EBITDA guidance to $2.610
billion - $2.685 billion and $1.185 billion - $1.205 billion,
respectively, for the full year 2024. Based on outperformance
through the first six months of the year and our anticipated
performance for the remainder of the year, the Company is raising
its guidance and now expects full year 2024 revenue of $2.670
billion - $2.745 billion and Adjusted EBITDA of $1.220 billion -
$1.240 billion.
In February, the Company issued full year 2024 Free Cash Flow
Conversion guidance of in excess of 50%. In May, the Company
revised its target for full year 2024 Free Cash Flow Conversion to
in excess of 40%, primarily as a result of the expected payments in
2024 associated with the settlement of the UFC antitrust lawsuits
(see “Other Matters” for further details). The Company reaffirms
its target for Free Cash Flow Conversion of in excess of 40%.
The Company intends to provide additional detail related to its
2024 guidance on today’s earnings call.
Return of Capital to
Shareholders
As previously disclosed, in the second quarter, the Company
repurchased approximately 1.9 million shares of Class A common
stock for $165.0 million. Since the closing of the transaction to
form TKO in September 2023, the Company has repurchased
approximately 3.2 million shares of Class A common stock for an
aggregate amount of $265.0 million.
Notes
(1)
The definition of Adjusted EBITDA can be
found in the Non-GAAP Financial Measures section of the release on
page 7. A reconciliation of Net Income to Adjusted EBITDA for the
three and six months ended June 30, 2024 and 2023 can be found in
the Supplemental Information in this release on page 14.
(2)
The definition of Free Cash Flow and Free
Cash Flow Conversion can be found in the Non-GAAP Financial
Measures section of the release on page 7. A reconciliation of Net
Cash Provided by Operating Activities to Free Cash Flow for the
three and six months ended June 30, 2024 and 2023 can be found in
the Supplemental Information in this release on page 15.
(3)
An explanation of the basis of
presentation can be found in this release on page 8.
Non-GAAP Financial
Measures
The Company refers to certain financial measures that are not
recognized under United States generally accepted accounting
principles (“GAAP”). This press release includes financial measures
that are not calculated in accordance with GAAP, including Adjusted
EBITDA, Adjusted EBITDA margin, Free Cash Flow and Free Cash Flow
Conversion. Please see the definitions below and the reconciliation
tables included in this release for additional information and a
reconciliation of the Non-GAAP financial measures to the most
comparable GAAP financial measures.
The Company defines Adjusted EBITDA as net income excluding
income taxes, net interest expense, depreciation and amortization,
equity-based compensation, merger and acquisition costs, certain
legal costs, restructuring, severance and impairment charges, and
certain other items when applicable. Adjusted EBITDA margin is
defined as Adjusted EBITDA divided by revenue.
TKO management believes that Adjusted EBITDA and Adjusted EBITDA
margin are useful to investors as these measures eliminate the
significant level of non-cash depreciation and amortization expense
that results from its capital investments and intangible assets,
and improves comparability by eliminating the significant level of
interest expense associated with TKO’s debt facilities, as well as
income taxes which may not be comparable with other companies based
on TKO’s tax and corporate structure. Adjusted EBITDA and Adjusted
EBITDA margin are used as the primary bases to evaluate TKO’s
consolidated operating performance.
Adjusted EBITDA and Adjusted EBITDA margin have limitations as
analytical tools, and you should not consider them in isolation or
as a substitute for analysis of TKO’s results as reported under
GAAP. Some of these limitations are:
- they do not reflect every cash expenditure, future requirements
for capital expenditures, or contractual commitments;
- Adjusted EBITDA does not reflect the significant interest
expense or the cash requirements necessary to service interest or
principal payments on TKO’s debt;
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized will often have to be
replaced or require improvements in the future, and Adjusted EBITDA
and Adjusted EBITDA margin do not reflect any cash requirement for
such replacements or improvements; and
- they are not adjusted for all non-cash income or expense items
that are reflected in TKO’s statements of cash flows.
TKO management compensates for these limitations by using
Adjusted EBITDA and Adjusted EBITDA margin along with other
comparative tools, together with GAAP measurements, to assist in
the evaluation of TKO’s operating performance.
Adjusted EBITDA and Adjusted EBITDA margin should not be
considered substitutes for the reported results prepared in
accordance with GAAP and should not be considered in isolation or
as alternatives to net income as indicators of TKO’s financial
performance, as measures of discretionary cash available to it to
invest in the growth of its business or as measures of cash that
will be available to TKO to meet its obligations. Although TKO uses
Adjusted EBITDA and Adjusted EBITDA margin as financial measures to
assess the performance of its business, such use is limited because
it does not include certain material costs necessary to operate
TKO’s business. TKO’s presentation of Adjusted EBITDA and Adjusted
EBITDA margin should not be construed as indications that its
future results will be unaffected by unusual or nonrecurring items.
These non-GAAP financial measures, as determined and presented by
TKO, may not be comparable to related or similarly titled measures
reported by other companies. Set forth below are reconciliations of
TKO’s most directly comparable financial measures calculated in
accordance with GAAP to these non-GAAP financial measures on a
consolidated basis.
The Company defines Free Cash Flow as net cash provided by
operating activities less cash used for capital expenditures. TKO
views net cash provided by operating activities as the most
directly comparable GAAP measure. Free Cash Flow Conversion is
defined as Free Cash Flow divided by Adjusted EBITDA. Although they
are not recognized measures of liquidity under U.S. GAAP, Free Cash
Flow and Free Cash Flow Conversion provide useful information
regarding the amount of cash TKO’s continuing business generates
after capital expenditures and is available for reinvesting in the
business, debt service, share repurchases and payment of dividends.
Free Cash Flow and Free Cash Flow Conversion have certain
limitations in that they do not represent the total increase or
decrease in the cash balance for the period, nor do they represent
the residual cash flow for discretionary expenditures.
Reconciliations of the Company’s Adjusted EBITDA and Free Cash
Flow Conversion guidance to the most directly comparable GAAP
financial measures cannot be provided without unreasonable efforts
and are not provided herein because of the inherent difficulty in
forecasting and quantifying certain amounts that are necessary for
such reconciliations and certain other items reflected in our
reconciliation of historical Adjusted EBITDA and Free Cash Flow,
the amounts of which could be material.
Basis of Presentation
As a result of the timing of the consummation of the business
combination on September 12, 2023, TKO’s consolidated financial
information presented herein includes UFC’s results for the three
and six months ended June 30, 2024 and 2023, includes WWE’s results
for the three and six months ended June 30, 2024 and includes
results for both UFC and WWE as of December 31, 2023.
Information in this release includes results for the WWE segment
and Corporate on a combined basis to include periods prior to the
business combination. Information presented on a combined basis
does not reflect any pro forma adjustments or other adjustments for
costs related to integration activities, cost savings or synergies
that have been or may be achieved if the business combination
occurred on January 1, 2023.
Effective September 12, 2023, the Company operates its business
under two reportable segments, UFC and WWE. The UFC segment
consists entirely of the operations of the Company’s UFC business
which was the sole reportable segment prior to the acquisition of
WWE, while the WWE segment consists entirely of the operations of
the WWE business acquired on September 12, 2023. In addition, it
reports results for the “Corporate” group, which incurs expenses
that are not allocated to the business segments. The Corporate
group consists of general and administrative expenses that relate
largely to corporate activities, including information technology,
facilities, legal, human resources, finance, accounting, treasury,
investor relations, corporate communications, community relations
and compensation to TKO’s management and board of directors, which
support both reportable segments. Corporate expenses also include
service fees paid by the Company to Endeavor under the Services
Agreement. All prior period amounts related to the segment change
have been retrospectively reclassified to conform to the new
presentation. The profitability measure employed by the Company in
assessing operating performance, including that of its segments, is
Adjusted EBITDA. The Company defines Adjusted EBITDA as net income,
excluding income taxes, net interest expense, depreciation and
amortization, equity-based compensation, merger and acquisition
costs, certain legal costs, restructuring, severance and impairment
charges, and certain other items when applicable. Adjusted EBITDA
includes amortization expenses directly related to supporting the
operations of the Company’s segments, including content production
asset amortization.
Additional Information
As previously announced, TKO will host a conference call at 8:00
a.m. ET on August 8, 2024, to discuss its second quarter 2024
results. All interested parties are welcome to listen to a live
webcast that will be hosted through the Company’s website at
investor.tkogrp.com. Participants can
access the conference call by dialing 1-833-470-1428 (conference
ID: 736461). Please reserve a line 5-10 minutes prior to the start
time of the conference call.
Any accompanying materials referenced during the call will be
made available on August 8, 2024, at investor.tkogrp.com. A replay of the call will be
available approximately two hours after the conference call
concludes and can be accessed on the Company’s website.
About TKO
TKO Group Holdings, Inc. (NYSE: TKO) is a premium sports and
entertainment company. TKO includes UFC, the world’s premier mixed
martial arts organization, and WWE, the recognized global leader in
sports entertainment. Together, our organizations reach more than 1
billion households in approximately 210 countries and territories,
and we organize more than 300 live events year-round, attracting
more than two million fans. TKO is majority owned by Endeavor Group
Holdings, Inc. (NYSE: EDR), a global sports and entertainment
company.
Website Disclosure
Investors and others should note that TKO announces material
financial and operational information to its investors using press
releases, SEC filings and public conference calls and webcasts, as
well as its Investor Relations site at investor.tkogrp.com. TKO may also use its website
as a distribution channel of material information about the
Company. In addition, you may automatically receive email alerts
and other information about TKO, UFC and WWE when you enroll your
email address by visiting the “Investor Email Alerts” option under
the Resources tab on investor.tkogrp.com.
Forward-Looking
Statements:
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. We intend such forward-looking statements to be covered by
the safe harbor provisions for forward-looking statements contained
in Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All
statements in this press release that do not relate to matters of
historical fact should be considered forward-looking statements,
including statements regarding TKO’s business strategy and plans,
financial condition, and anticipated financial or operational
performance. The words “believe,” “may,” “will,” “estimate,”
“potential,” “continue,” “anticipate,” “intend,” “expect,” “could,”
“would,” “project,” “plan,” “target,” and similar expressions are
intended to identify forward-looking statements, though not all
forward-looking statements use these words or expressions. These
forward-looking statements are based on management’s current
expectations. These statements are neither promises nor guarantees
and involve known and unknown risks, uncertainties and other
important factors that may cause actual results, performance or
achievements to be materially different from what is expressed or
implied by the forward-looking statements, including, but not
limited to: TKO’s ability to generate revenue from discretionary
and corporate spending on events; TKO’s dependence on key
relationships with television and cable networks, satellite
providers, digital streaming partners and other distribution
partners; TKO’s ability to adapt to or manage new content
distribution platforms or changes in consumer behavior; adverse
publicity concerning the Company or its key personnel; the highly
competitive, rapidly changing and increasingly fragmented nature of
the markets in which TKO operates; financial risks with owning and
managing events for which TKO sells media and sponsorship rights,
ticketing and hospitality; risks related to the integration and
realization of the expected benefits of the business combination of
UFC and WWE; the Company’s substantial indebtedness; and other
important factors discussed in the section entitled “Risk Factors”
in TKO’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2023 filed by TKO, as any such factors may be updated
from time to time in TKO’s other filings with the SEC, accessible
on the SEC’s website at www.sec.gov and TKO’s investor relations
site at investor.tkogrp.com. Forward-looking statements speak only
as of the date they are made and, except as may be required under
applicable law, TKO undertakes no obligation to update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise.
TKO Group Holdings,
Inc.
Consolidated Income
Statements
(In millions, except per share
data)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Revenue
$
851.2
$
305.2
$
1,480.9
$
611.9
Operating expenses:
Direct operating costs
259.8
82.8
460.8
171.9
Selling, general and administrative
expenses
232.6
63.5
764.5
119.8
Depreciation and amortization
103.9
15.0
211.0
30.2
Total operating expenses
596.3
161.3
1,436.3
321.9
Operating income
254.9
143.9
44.6
290.0
Other expenses:
Interest expense, net
(65.7
)
(57.9
)
(130.2
)
(111.8
)
Other income (expense), net
0.8
(0.6
)
0.5
(0.9
)
Income (loss) before income taxes and
equity (earnings) losses of affiliates
190.0
85.4
(85.1
)
177.3
Provision for income taxes
39.6
2.9
14.1
6.5
Income (loss) before equity (earnings)
losses of affiliates
150.4
82.5
(99.2
)
170.8
Equity (earnings) losses of affiliates,
net of tax
(0.3
)
0.7
(0.4
)
1.0
Net income (loss)
150.7
81.8
(98.8
)
169.8
Less: Net income (loss) attributable to
non-controlling interests
91.6
0.4
(54.1
)
0.8
Less: Net income attributable to TKO
Operating Company, LLC prior to the Transactions
—
81.4
—
169.0
Net income (loss) attributable to TKO
Group Holdings, Inc.
$
59.1
$
—
$
(44.7
)
$
—
Basic net earnings (loss) per share of
Class A common stock
$
0.73
N/A
$
(0.55
)
N/A
Diluted net earnings (loss) per share of
Class A common stock
$
0.72
N/A
$
(0.55
)
N/A
Weighted average number of common shares
used in computing basic net earnings (loss) per share
80,884,513
N/A
81,618,084
N/A
Weighted average number of common shares
used in computing diluted net earnings (loss) per share
81,851,388
N/A
81,618,084
N/A
TKO Group Holdings,
Inc.
Consolidated Balance
Sheets
(In millions)
(Unaudited)
As of
June 30,
December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
277.5
$
235.8
Accounts receivable, net
294.7
135.4
Other current assets
176.9
121.2
Total current assets
749.1
492.4
Property, buildings and equipment, net
548.1
608.4
Intangible assets, net
3,401.9
3,563.7
Finance lease right-of-use assets, net
236.3
255.7
Operating lease right-of-use assets,
net
34.5
35.5
Goodwill
7,665.3
7,666.5
Investments
16.0
16.4
Other assets
68.6
52.1
Total assets
$
12,719.8
$
12,690.7
Liabilities, Non-controlling Interests
and Stockholders' Equity
Current liabilities:
Accounts payable
$
31.9
$
42.0
Accrued liabilities
571.1
267.4
Current portion of long-term debt
22.2
22.4
Current portion of finance lease
liabilities
10.3
8.1
Current portion of operating lease
liabilities
4.6
4.2
Deferred revenue
99.5
119.0
Other current liabilities
13.5
9.0
Total current liabilities
753.1
472.1
Long-term debt
2,702.8
2,713.9
Long-term finance lease liabilities
225.6
245.3
Long-term operating lease liabilities
31.3
32.9
Deferred tax liabilities
373.0
372.9
Other non-current liabilities
5.9
3.0
Total liabilities
4,091.7
3,840.1
Commitments and contingencies
Redeemable non-controlling interests
13.1
11.6
Stockholders' equity:
Class A common stock
—
—
Class B common stock
—
—
Additional paid-in capital
4,339.2
4,244.5
Accumulated other comprehensive loss
(1.2
)
(0.3
)
Accumulated deficit
(346.4
)
(135.2
)
Total TKO Group Holdings, Inc.
stockholders’ equity
3,991.6
4,109.0
Nonredeemable non-controlling
interests
4,623.4
4,730.0
Total stockholders' equity
8,615.0
8,839.0
Total liabilities, nonredeemable
non-controlling interests and stockholders' equity
$
12,719.8
$
12,690.7
TKO Group Holdings,
Inc.
Consolidated Statements of
Cash Flows
(In millions)
(Unaudited)
Six Months Ended
June 30,
2024
2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income
$
(98.8
)
$
169.8
Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
Depreciation and amortization
211.0
30.2
Amortization and impairments of content
costs
14.5
8.0
Amortization of original issue discount
and deferred financing cost
5.4
5.2
Loss on impairment of assets
24.3
—
Equity-based compensation
54.6
11.6
Income taxes
(7.2
)
1.1
Equity (earnings) losses of affiliates
(0.3
)
1.0
Net provision for allowance for doubtful
accounts
1.4
0.1
Other, net
(1.1
)
(0.2
)
Changes in operating assets and
liabilities, net of acquisition:
Accounts receivable
(162.6
)
(3.7
)
Other current assets
(22.0
)
(26.4
)
Other noncurrent assets
(26.5
)
(7.5
)
Accounts payable and accrued
liabilities
310.8
(20.5
)
Deferred revenue
(17.6
)
1.4
Other liabilities
4.1
10.6
Net cash provided by operating
activities
290.0
180.7
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, buildings and
equipment and other assets
(43.6
)
(9.2
)
Investment in affiliates, net
(4.8
)
—
Proceeds from sale of property, buildings
and equipment
0.1
—
Net cash used in investing activities
(48.3
)
(9.2
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings
150.0
—
Repayment of long-term debt
(172.0
)
(16.3
)
Payments for financing costs
—
(0.3
)
Distributions to members
(12.3
)
(161.5
)
Repurchase and retirement of common
stock
(165.0
)
—
Net cash used in financing activities
(199.3
)
(178.1
)
Effects of exchange rate movements on
cash
(0.7
)
(1.2
)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
41.7
(7.8
)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD
235.8
180.6
CASH AND CASH EQUIVALENTS, END OF
PERIOD
$
277.5
$
172.8
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest
$
130.1
$
103.5
Cash payments for income taxes
$
16.6
$
7.1
NON-CASH INVESTING AND FINANCING
TRANSACTIONS:
Capital expenditures included in current
liabilities
$
14.2
$
0.3
Capital contribution from parent for
equity-based compensation
$
4.6
$
11.6
Principal stockholder contributions
$
1.5
$
—
Excise taxes on repurchases of common
stock
$
1.5
$
—
TKO Group Holdings,
Inc.
Reconciliation of Adjusted
EBITDA and Adjusted EBITDA Margin
(In millions, except
percentages)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Net income (loss)
$
150.7
$
81.8
$
(98.8
)
$
169.8
Provision for income taxes
39.6
2.9
14.1
6.5
Interest expense, net
65.7
57.9
130.2
111.8
Depreciation and amortization
103.9
15.0
211.0
30.2
Equity-based compensation expense (1)
24.4
5.8
54.6
11.6
Merger and acquisition costs (2)
2.4
9.5
2.9
14.9
Certain legal costs (3)
6.0
0.1
351.2
0.5
Restructuring, severance and impairment
(4)
28.9
—
38.1
—
Other adjustments
(0.7
)
0.6
(0.2
)
0.9
Total Adjusted EBITDA
$
420.9
$
173.6
$
703.1
$
346.2
Net income (loss) margin
18
%
27
%
(7
)%
28
%
Adjusted EBITDA margin
49
%
57
%
47
%
57
%
(1)
Equity-based compensation represents
primarily non-cash compensation expense for awards issued under
Endeavor’s 2021 Plan subsequent to its April 28, 2021 IPO, for the
Replacement Awards and for awards issued under the 2023 Incentive
Award Plan. For the three and six months ended June 30, 2024,
equity-based compensation includes $6.7 million and $15.7 million
of expense, respectively, associated with certain services provided
by an independent contractor in the WWE segment and $0.9 million
and $3.3 million of expense, respectively, associated with
accelerated vesting of the Replacement Awards related to the
workforce reduction of certain employees in the WWE segment and
Corporate.
(2)
Includes (i) certain costs of professional
fees and bonuses related to the TKO transaction and payable
contingent on the closing of the TKO transaction and (ii) certain
costs of professional advisors related to mergers and
acquisitions.
(3)
Includes costs related to certain
litigation matters including antitrust matters for UFC and WWE and
matters where Vincent K. McMahon has agreed to make future payments
to certain counterparties personally. For the six months ended June
30, 2024, these costs include the settlement amount of $335.0
million regarding the UFC antitrust lawsuits. For more information,
please refer to the Company’s various filings with the SEC,
including, but not limited to, Note 17, Commitments and
Contingencies, of its Form 10-Q for the quarterly period ended June
30, 2024.
(4)
For the three and six months ended June
30, 2024 includes costs resulting from the Company’s cost reduction
program as well as an impairment charge of $24.3 million as a
result of reducing the carrying value of WWE assets held for sale
to their fair value less cost to sell. For more information, please
refer to the Company’s various filings with the SEC, including, but
not limited to, Note 6, Supplementary Information, and Note 16,
Restructuring Charges, of its Form 10-Q for the quarterly period
ended June 30, 2024.
TKO Group Holdings,
Inc.
Reconciliation of Free Cash
Flow
(In millions)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2024
2023
2024
2023
Net cash provided by operating
activities
$
230.7
$
111.0
$
290.0
$
180.7
Less cash used for capital
expenditures:
Purchases of property, buildings and
equipment and other assets (1)
(12.1
)
(4.6
)
(43.6
)
(9.2
)
Free Cash Flow
$
218.6
$
106.4
$
246.4
$
171.5
(1)
Purchases of property, buildings and
equipment and other assets for the three and six months ended June
30, 2024 includes approximately $7.3 million and $26.9 million,
respectively, of capital expenditures related to WWE’s new
headquarter facility.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240808674463/en/
Investors: Seth Zaslow
szaslow@tkogrp.com Media:
press@tkogrp.com
Endeavor (NYSE:EDR)
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から 7 2024 まで 8 2024
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から 8 2023 まで 8 2024