• Total Revenue (2024): $2.804 billion
• Adjusted EBITDA (2024): $1.251 billion
• Adjusted EBITDA Margin (2024): 45%
• Fourth Quarter Revenue: $642 million
• Fourth Quarter Adjusted EBITDA: $238 million
• Fourth Quarter Adjusted EBITDA Margin: 37%
• UFC Fourth Quarter Revenue: $344 million
• UFC Fourth Quarter Adjusted EBITDA: $178 million
• UFC Fourth Quarter Adjusted EBITDA Margin: 52%
• WWE Fourth Quarter Revenue: $298 million
• WWE Fourth Quarter Adjusted EBITDA: $114 million
• WWE Fourth Quarter Adjusted EBITDA Margin: 38%
• Free Cash Flow (2024): $509 million
• Free Cash Flow Conversion (2024): 41%
• Debt (End of 2024): $2.78 billion
• Cash and Cash Equivalents (End of 2024): $526 million
• 2025 Revenue Guidance: $2.93 billion to $3.0 billion
• 2025 Adjusted EBITDA Guidance: $1.35 billion to $1.39 billion

• Warning! GuruFocus has detected 3 Warning Sign with ASX:AEF.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• TKO Group Holdings Inc (NYSE:TKO) delivered record financial performance in 2024, with revenue of $2.804 billion and adjusted EBITDA of $1.251 billion, exceeding revised guidance.
• The integration of UFC and WWE resulted in greater efficiency and exceeded the guided net savings of $100 million.
• TKO strengthened its media rights portfolio by securing transformative partnerships, such as moving WWE Raw to Netflix, significantly expanding reach and engagement.
• Both UFC and WWE achieved record-breaking years in live events, setting multiple all-time highs for ticket sales, attendance, and gate revenues worldwide.
• Sponsorship revenue for UFC grew 28% and WWE sponsorship revenue increased 20% year-over-year, marking record highs for both.

Negative Points

• WWE segment revenue decreased by 10% in the fourth quarter, primarily due to a short-term domestic rights deal for Raw, impacting revenue and adjusted EBITDA.
• Free cash flow for 2024 was negatively impacted by the first installment payment under the UFC antitrust case settlement and debt transaction costs.
• The 2025 outlook includes a timing-related unfavorable impact of approximately $55 million due to a shift in WWE's premium live events in Saudi Arabia.
• UFC's international events, while increasing revenue, have a lower margin profile compared to Apex events, affecting overall profitability.
• The acquisition of IMG, On Location, and PBR is not yet reflected in the 2025 financial outlook, leaving some uncertainty about future integration impacts.

Q & A Highlights

Q: Do you expect the UFC domestic deals with Disney to be finalized within the exclusive negotiation window? A: Mark Shapiro, President and COO, stated that they are currently in an exclusive negotiation window with Disney and ESPN, which opened on January 15 and will last 90 days. The market for premium content is strong, and they are focused on balancing reach, engagement, and monetization, whether through one or multiple partners.

Q: What are your thoughts on the potential repeal of the Ali Act and its impact on your boxing plans? A: Mark Shapiro mentioned that while the Ali Act has flaws, they are not actively lobbying for its repeal. Regardless of the Act's status, they see significant opportunities in boxing and are pursuing them, including potential partnerships with Saudi Arabia to create a boxing league.

Q: Can you discuss the outlook for live event revenue growth for UFC and WWE in 2025? A: Andrew Schleimer, CFO, indicated that despite a shift in Saudi PLEs affecting revenue, they expect meaningful growth in live event revenue driven by site fee growth and yield maximization. Mark Shapiro added that demand for premium live events remains strong, and they are not seeing signs of a slowdown.

Q: How is the Netflix deal impacting WWE's international distribution and engagement? A: Mark Shapiro noted that while it's early, they are focused on expanding international events to build audiences. Andrew Schleimer added that they retain income from international distributors until they transition to Netflix, with the first year of the Netflix deal expected to be economically smooth.

Q: What is the potential for sponsorship growth, and how does the Kansas City TKO Takeover fit into this strategy? A: Mark Shapiro stated they are on track to hit their $375 million sponsorship target, with significant opportunities in WWE and PBR. The Kansas City TKO Takeover is an example of their strategy to monetize non-premium events, with plans to expand similar opportunities across their portfolio.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.