UFC’s Event Sellout Spree Powers TKO Q3 Earnings

UFC had the wind at its back in the third quarter with a string of sellout events that pushed revenue and adjusted earnings for the league’s parent company, TKO, to new heights.

UFC delivered double-digit gains in the quarter across all key measures. Revenue climbed 60% year-over-year to $519.2 million, thanks to a $132.3 million increase in media rights, production and content revenue. Live events and hospitality revenue spiked by $36 million, in addition to a $20.5 million increase in partnerships and marketing revenue and a $5.2 million boost in consumer products licensing and other revenue.

WWE, on the other hand, had a tougher quarter in part because there were three more events on the wrestling league’s main roster in the comparable year-ago quarter. Nevertheless, the full-year forecast for both UFC, WWE and IMG, which includes the On Location premium events business, which also had a strong quarter thanks to the influx of big-ticket events around the World Cup.

“Our third quarter performance reflects the secular tail winds powering live events and experiences around the world, and TKO’s assets sit front and center of that premium ecosystem,” said Mark Shapiro, president and COO of TKO. “As we close out what we’ve called our year of execution, our decision to raise full-year guidance for the second time this year is the clearest expression of our conviction across the entire portfolio. Our business is durable and our fundamentals are solid, with the vast majority of our existing revenues locked in for the next five to seven years. Macro trends are firmly in our favor, every facet of sports consumption is pointing north, and we see substantial runway ahead.”

For the quarter, TKO delivered total revenue of $1.36 billion, up 21%. Adjusted earnings before interest, taxes, depreciation and amortization, spiked 54%, to $555.7 million, powered by an increase of
$119.7 million at UFC and a gain of $9.4 million at WWE. Adjusted EBITDA margin expanded nicely to 41%, up from 32% a year ago. With these trends, TKO has increased its full-year revenue and adjusted earnings target for the full year $5.790 billion to $5.830 billion for revenue and $2.295 billion to $2.315 billion for adjusted EBITDA.

More to come