TKO Raises Guidance and Beats the Street in Q3 After Flurry of Dealmaking
TKO Group Holdings, the company that owns UFC, WWE and IMG, among other businesses, once again raised its outlook for the year and saw net income and adjusted EBITDA rise thanks to a particularly strong quarter from WWE. The company beat Wall Street estimates in the process. The company reported Q3 earnings Wednesday after cutting…
TKO Group Holdings, the company that owns UFC, WWE and IMG, among other businesses, once again raised its outlook for the year and saw net income and adjusted EBITDA rise thanks to a particularly strong quarter from WWE. The company beat Wall Street estimates in the process.
The company reported Q3 earnings Wednesday after cutting a flurry of deals in the last few months, including a $7.7 billion UFC deal with Paramount, a WWE deal with ESPN valued at $325 million per year, and new rights deals for Professional Bull Riders and Zuffa boxing (also with Paramount) among others.
“The table is set for long-term sustainable growth,” Ariel Emanuel, executive chair and CEO of TKO, told Wall Street analysts.
“TKO delivered solid third quarter financial results, and with UFC and WWE’s sustained momentum, we are once again raising our full-year guidance,” Emanuel added in a statement. “Having secured landmark multiyear media rights deals for UFC, WWE, and Zuffa Boxing, our conviction in TKO has never been stronger. We remain focused on operational execution, including preparing for UFC’s launch with Paramount, further integrating and unlocking synergies with IMG, On Location, and PBR, and maximizing shareholder value.”
Boxing was a big focus of the earnings call, with president and COO Mark Shapiro touting the ways the company will be compensated through Zuffa, and targeting between two and four mega fights per year.
The company raised its 2025 target revenue to between $4.690 billion to $4.720 billion, and raised its target for Adjusted EBITDA to $1.570 billion to $1.580 billion, a sign of its bullishness after raising guidance multiple times already this year. The company is also continuing its capital return program, raising its dividend (the last dividend in September was $0.76 per share) and continued share repurchases.
Revenue did decline in both the UFC and IMG segments, owing to one less numbered UFC event in the quarter compared to a year ago, and the 2024 Paris Olympics boosting IMG’s quarter a year ago.
Revenue at UFC was $325.2 million in Q3, with adjusted EBITDA of $165.6 million; revenue at WWE was $402.1 million, with adjusted EBITDA of $207.8 million; revenue at IMG as $336.7 million, with adjusted EBITDA of $61.4 million.
UFC was down slightly in media rights, live events and hospitality and partnerships and marketing, mostly owing to having less event, as well as an unfair comparison to the Sphere event last year, which was the highest-grossing event in UFC history.
WWE meanwhile saw healthy growth across media rights, live events and hospitality and partnerships and marketing compared to last year thanks to higher sales, site fees, and the first event with ESPN, Wrestlepalooza.
IMG’s media rights were comparable to last year, but live event and hospitality and partnerships and marketing were down significantly, owing mostly to On Location’s presence at last year’s Paris Olympics.
As for what’s next, Shapiro emphasized that the company is focusing on execution, particularly around its new Paramount UFC deal, which begins next year. And he added that the company is “on the hunt” for more acquisitions, though the bar is high. In the meantime, TKO views boxing as a growth engine.
