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TKO Group Holdings 8-K Report, Financial Results (May 8, 2024)

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed May 8, 2024
Period End
May 8, 2024
Security
TKO
In the record · 2023–202610-K310-Q98-K42

TKO filed 3 annual reports (10-K), 9 quarterly reports (10-Q) and 42 current reports (8-K) between 2023 and 2026.

  1. Leadership change8-K · Jan ’24Jan ’24
  2. Change in control8-K · Mar ’25Mar ’25
  3. Material agreement8-K · Mar ’26Mar ’26

01—Abstract

Summary

Summary of the 8-K filed May 8, 2024. Cited figures are marked; the original filing is the authoritative source.

TKO Group Holdings, Inc. reported first-quarter 2024 results for the period ended March 31, 2024, with revenue of $629.7 milliona and a net loss of $249.5 million, compared with net income of $87.9 million in the prior-year period.

The net loss reflected higher operating expenses, including a $335.0 millionb legal settlement related to a UFC antitrust matter, along with increases in selling, general and administrative expenses of $475.6 million, direct operating costs of $111.8 million, and depreciation and amortization of $91.9 million. Adjusted EBITDA was $282.2 million, up 63% from the prior year, driven by the contribution of $140.2 million from WWE. Cash and cash equivalents were $245.8 million and gross debt was $2.752 billion as of March 31, 2024.

Operating cash flow was $59.3 millionc and Free Cash Flow was $27.8 million. TKO raised its full-year 2024 guidance, now targeting revenue of $2.610 billion to $2.685 billion and Adjusted EBITDA of $1.185 billion to $1.205 billion. The company revised its Free Cash Flow Conversion target to in excess of 40%, down from in excess of 50% previously, citing expected 2024 payments under the UFC antitrust settlement.

The settlement, which remains subject to court approval, is payable in three installments: two payments totaling $200 milliond in 2024 and one payment of $135 million in 2025. The filing also discloses that TKO repurchased approximately 1.9 million Class A shares for $165.0 million in April 2024, and approximately 3.2 million shares for an aggregate $265.0 million since the September 2023 formation of TKO. The quarter's results include WWE on a full-quarter basis, while the prior-year comparison reflects only UFC, so year-over-year comparisons are affected by the business combination.

02—Key points

Key Highlights

  1. Revenue of $629.7 million versus $306.7 million a year earlier, with WWE contributing $316.7 million and UFC revenue rising to $313.0 million.
  2. Net loss of $249.5 million, compared with net income of $87.9 million in Q1 2023, largely due to a $335.0 million UFC antitrust settlement charge.
  3. Adjusted EBITDA of $282.2 million, up 63%, with WWE contributing $140.2 million and UFC $195.1 million, offset by Corporate loss of $53.1 million.
  4. Full-year 2024 guidance raised: revenue of $2.610 billion to $2.685 billion and Adjusted EBITDA of $1.185 billion to $1.205 billion.
  5. Free Cash Flow Conversion target revised down to in excess of 40% from in excess of 50%, reflecting expected 2024 antitrust settlement payments.
  6. Free Cash Flow of $27.8 million, down from $65.1 million, reflecting lower operating cash flow and higher capital expenditures, including about $19.6 million related to WWE's new headquarters facility.
  7. Share repurchases of approximately 1.9 million Class A shares for $165.0 million in April 2024, and approximately 3.2 million shares for $265.0 million since September 2023.

03—Questions

Frequently Asked Questions

  1. What drove the swing from net income to a net loss in the first quarter of 2024?

    The net loss of $249.5 million reflected a $335.0 million legal settlement related to a UFC antitrust matter, included in selling, general and administrative expenses, along with higher depreciation and amortization and direct operating costs following the WWE combination. Total operating expenses rose to $840.0 million from $160.7 million.

  2. What is the status and payment schedule of the UFC antitrust settlement?

    The settlement of both UFC antitrust lawsuits totals $335.0 million and remains subject to court approval. It is payable in three installments: two payments totaling $200 million in 2024 and one payment of $135 million in 2025.

  3. Why did TKO lower its Free Cash Flow Conversion target?

    TKO revised its full-year 2024 Free Cash Flow Conversion target to in excess of 40%, from in excess of 50% previously, primarily because of expected 2024 payments associated with the settlement of the UFC antitrust lawsuits.

  4. How did TKO's full-year 2024 outlook change?

    TKO raised its full-year 2024 revenue target to $2.610 billion to $2.685 billion, from $2.575 billion to $2.650 billion, and its Adjusted EBITDA target to $1.185 billion to $1.205 billion, from $1.150 billion to $1.170 billion. The increase reflects outperformance in the first three months and a $25 million domestic media rights agreement for Raw in the fourth quarter of 2024.

  5. How much cash and debt does TKO report and how has it returned capital to shareholders?

    As of March 31, 2024, TKO had cash and cash equivalents of $245.8 million and gross debt of $2.752 billion. The company repurchased approximately 1.9 million Class A shares for $165.0 million in April 2024 and approximately 3.2 million shares for an aggregate $265.0 million since the September 2023 formation of TKO.

04—Continue

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