TKO Q1 investors call notes

[Chris]

WWE News: WWE releases Q1 financials & revenue

The following are news and notes from Thursday’s release of TKO financials, taking a look back at Q1 for WWE, UFC and their other companies. Overall TKO revenue increased to $1.269 billion, a 4%

www.f4wonline.com

The following are news and notes from Thursday’s release of TKO financials, taking a look back at Q1 for WWE, UFC and their other companies.

Overall TKO revenue increased to $1.269 billion, a 4% year-over-year increase of $46.4 million.


Especially of note during the Q&A portion was how excited TKO leadership is about the AAA acquisition and that they are going to increase revenue, consumer products, and media rights for the group. More notes on that below.

WWE Q1 2025 Detailed Financial Notes & Breakdown​

• WWE finished the first quarter at $391.5 million, up $74.8 million from Q1 of 2024 ($316.7 million).
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) finished at $193.9 million, up from Q1’s $140.2 million.
• The revenue breakdown was as follows:
  • $251.6 million in media rights, production and content, up from Q1’s $221.1 million. This was powered by the “timing of the previously disclosed format expansion” of SmackDown which is assumed to be their increase to three hours in addition to the first quarter of their Netflix deal.
  • $76.3 million in live events & hospitality, up from Q1’s $50.2 million, attributed to higher ticket revenue (price increase and attendance increases) despite less events. Site fees were down and there was no international premium live event as there had been the previous year (Elimination Chamber in Perth, Australia).
  • Partnerships and marketing finished at $25.6 million, up from the previous year’s $13.8 in Q1, attributed to higher renewal fees and new partners.
  • Consumer product licensing and the other category was up slightly to $38 million, up from last year’s $31.6 million, attributed to increases in video game and collectibles revenue.

Other WWE Notes​

• Buried in the report in the Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin section was a note in the Equity-based compensation expense ($30.3 million total) that “For the three months ended March 31, 2025 and March 31, 2024, equity-based compensation includes $1.0 million and $9.0 million, respectively, of expense associated with certain services provided by an independent contractor in the WWE segment.”
• In that same section under Certain legal costs of $3.5 million, a note reads, “Includes costs related to certain litigation matters including antitrust lawsuits for UFC and WWE and matters where Mr. McMahon has agreed to make future payments to certain counterparties personally.”
• In the EBITDA section, it noted “Direct expenses increased primarily due to higher talent-related costs compared to the prior year period. Selling, general and administrative expenses were essentially flat as the continued benefit of planned cost reduction initiatives implemented following the formation of TKO were offset by higher travel expenses primarily related to the mix of event venues and territories, including an increase in international events primarily related to a tour across Europe leading up to WrestleMania 41 compared to the prior year period.”

TKO Q&A Notes​

• It was stated before the Q&A portion that Q2 is expected to be the highest revenue/EBITDA of the year dollars-wise for WWE due to both WrestleMania and a show held in Saudi Arabia.
• There’s no news on the UFC media rights front other than they are in discussions with various third parties that Mark Shapiro called “thoughtful” and “strategic.” He noted ESPN is still heavily in the mix.
• Shapiro said they will announce the new name of their boxing league/association with Saudi Arabia soon, but it will not be TKO Boxing.
• Asking about how they determine site fees, Shapiro said a lot of research and negotiation goes into it, and there’s more deals you don’t hear of vs. the ones you do. They have some “big hires” coming up on the government regulation side that will help. They look for cash and “in kind” deals which he said it just as good. When asked about disclosing more about what they are looking for in site fees financially, TKO CFO Andrew Schleimer declined to answer directly. Shapiro added the recent Kansas City takeover for WWE and UFC was huge for them and to look for more of that based on their dedicated team.
• Asked about the impending acquisition, Shapiro said it was a huge property in Mexico with a big fan base and the leadoff hit that will “catch a lot of fire.” He said leadership is in line to help them hit all their KPs. Nick Khan then said put over the spike in Latino viewership with Penta, citing social media stats. The influx of new wrestlers and powering the demographic which is already strong. He said both Worlds Collide and Money in the Bank will produced from one truck. Schleimer said they think they can leverage, institutionalize, increase media rights, live event revenue, and consumer product licensing. Shapiro mentioned how strong merch was for Penta in his first week.
• No other mergers or acquisitions are on the horizon, according to Shapiro.

 

[O-Blaze]

I guess my 0.005698 shares doesn't get me invited to this.