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

Reports
Earnings & Results·Exhibits & Filings
Filing Date
Filed August 8, 2024
Period End
August 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 August 8, 2024. Cited figures are marked; the original filing is the authoritative source.

TKO Group Holdings, Inc. reported record second-quarter 2024 results, with revenue of $851.2 milliona, a quarterly record, and Adjusted EBITDA of $420.9 million, also a quarterly record.

Net income was $150.7 millionb, compared with $81.8 million in the prior year period. The results reflect the contribution of WWE following the September 12, 2023 combination of UFC and WWE, which is why year-over-year comparisons are heavily affected by the business combination. Second-quarter revenue included $394.4 million from UFC and $456.8 million from WWE.

Operating cash flow was $230.7 millionc and Free Cash Flow was $218.6 million, with cash and cash equivalents of $277.5 million and gross debt of $2.744 billion as of June 30, 2024. TKO raised its full-year 2024 guidance for the second consecutive quarter, now expecting revenue of $2.670 billion to $2.745 billion and Adjusted EBITDA of $1.220 billion to $1.240 billion. It reaffirmed its Free Cash Flow Conversion target of in excess of 40%, which was revised down from in excess of 50% in May, primarily due to expected 2024 payments tied to the UFC antitrust settlements.

On July 30, 2024, the court denied the motion for preliminary approval of the $335 milliond settlement of the Le and Johnson UFC antitrust lawsuits, and a new tentative trial date for the Le case was set for October 28, 2024. The company is evaluating its options, including an appeal, and has begun discussions with plaintiffs' counsel about separate settlements.

The quarter also included $29.8 million of restructuring, severance and impairment costs, including a $24.3 million impairment on WWE assets held for sale, and $2.4 million of merger and acquisition costs. During the second quarter, TKO repurchased approximately 1.9 million Class A shares for $165.0 million, and since September 2023 it has repurchased approximately 3.2 million shares for $265.0 million.

02—Key points

Key Highlights

  1. Record quarterly revenue of $851.2 million and record quarterly Adjusted EBITDA of $420.9 million in Q2 2024.
  2. Net income of $150.7 million in Q2 2024, up $68.9 million from $81.8 million in the prior year period.
  3. WWE contributed $456.8 million of revenue and $251.3 million of Adjusted EBITDA in the quarter; UFC revenue rose to $394.4 million.
  4. Full-year 2024 revenue guidance raised to $2.670 billion-$2.745 billion and Adjusted EBITDA guidance raised to $1.220 billion-$1.240 billion.
  5. Free Cash Flow of $218.6 million in Q2 2024, with a reaffirmed Free Cash Flow Conversion target of in excess of 40% for 2024.
  6. UFC antitrust settlement of $335 million was denied preliminary approval on July 30, 2024; the Le case trial is tentatively set for October 28, 2024.
  7. Repurchased approximately 1.9 million Class A shares for $165.0 million in Q2 2024; approximately 3.2 million shares for $265.0 million since September 2023.

03—Questions

Frequently Asked Questions

  1. Why is year-over-year revenue growth so large in this quarter?

    Revenue rose $546.0 million to $851.2 million because WWE's results are included from the September 12, 2023 business combination, while the prior-year quarter reflected only UFC activity. UFC revenue itself increased $89.2 million to $394.4 million.

  2. Why was the full-year Free Cash Flow Conversion target revised?

    In May, the company revised its 2024 Free Cash Flow Conversion target from in excess of 50% to in excess of 40%, primarily due to expected 2024 payments associated with the settlement of the UFC antitrust lawsuits. The company reaffirmed the in excess of 40% target in this filing.

  3. What happened to the UFC antitrust settlement?

    On July 30, 2024, the court denied the motion for preliminary approval of the $335 million settlement covering the Le and Johnson UFC antitrust lawsuits and set a new tentative trial date for the Le case of October 28, 2024. The company is evaluating options including an appeal and has begun discussions with plaintiffs' counsel about separate settlement talks for the Le and Johnson cases.

  4. What one-time costs affected second-quarter 2024 results?

    The quarter included $29.8 million of restructuring, severance and impairment costs, including a $24.3 million impairment on WWE assets held for sale, $6.0 million of litigation costs at UFC and WWE, and $2.4 million of merger and acquisition costs. These are excluded from Adjusted EBITDA.

  5. How strong is TKO's balance sheet and cash position?

    As of June 30, 2024, TKO had cash and cash equivalents of $277.5 million and gross debt of $2.744 billion. Operating cash flow for the quarter was $230.7 million, up from $111.0 million a year earlier, primarily due to higher net income and the timing of working capital.

04—Continue

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