TKO Group Holdings, Inc. (TKO) Earnings

Management highlights

2026 is off to a strong start. Key growth drivers like media rights, live events and experiences, global partnerships, and financial incentive packages delivered as planned. UFC's Paramount Plus debut and CBS simulcast showed strong viewership. WWE's ESPN partnership is gaining traction. Zufa Boxing is on accelerated growth. IMG is powering Apple's Formula One debut and has strategic partnership with World Rugby. PBR had record performance and team series expansion. Live events demand remains strong with sellouts.

Guidance

Reaffirm full year outlook. For full year 2026, target revenue of $5.675 billion to $5.775 billion and adjusted EBITDA of $2.24 billion to $2.29 billion. Second quarter UFC to have media rights revenue from Paramount deal, WWE second quarter expected to be highest revenue quarter, IMG impacted by World Cup and LA28 sales efforts. Free cash flow conversion rate target in excess of 60%.

Segment performance

UFC generated revenue of $401 million in the quarter, an increase of 12% or $41 million. Adjusted EBITDA was $255 million, an increase of 12% or $27 million. UFC's adjusted EBITDA margin was 63%. WWE segment generated revenue of $476 million in the quarter, an increase of 22% or $84 million. Adjusted EBITDA was $256 million, an increase of 32% or $62 million. Adjusted EBITDA margin was 54%. IMG segment generated revenue of $655 million, an increase of 38% or $179 million. Adjusted EBITDA was $97 million, an increase of 32% or $24 million. Adjusted EBITDA margin was 15%. Corporate and other generated revenue of $74 million, an increase of 36%. Adjusted EBITDA was negative $58 million. Zufa Boxing's progress is exceeding internal growth plan, with over 100 fighters signed, events staged on Paramount+ and media rights deals in over 15 territories.

Risks & headwinds

Potential impact of Middle East situation on business. Fan criticism on sponsorship and ticket pricing. Competitive retention of top fighters.

Analyst Q&A

• Q: You guys have unlocked a ton of monetization at both UFC and WWE over the last several years. But as you noted in your prepared, there's been some vocal fan criticism calling out things like sponsorship and ticket pricing is being excessive. How do you think about balancing fan facing monetization and the fan experience going forward? And do you think that those vocal critics are reflective of the larger overall fan base?

  A: First off, we take any and all feedback, especially from our core fan base, extremely serious. High priority. We listen, we learn. At the same time, balancing the fan experience, with the business of sports is never easy. You know, whether you're talking ticket prices or commercial integration, it's as old as time. And frankly, it crosses genres...

• Q: Mark, I think you mentioned financial incentive packages, pipeline growing, and you guys referenced Azerbaijan as a good example. I was curious if you could elaborate on some color and texture and what new deals are looking like and conversations are looking like. Is there any impact from the Middle East there on a go-forward basis? And then curious as, Peace Guy and WBD potentially combine what that could mean for UFC and Zufa in terms of, you know, HBO Plus, Paramount Plus, and a combat sports super app.

  A: First off, Sean, let me just say it sounded like we cut off Brandon. So, Brandon, if you're listening or still on or maybe you got disconnected, just hit back and we'll come back around to you. Sean, you had a bunch of questions there, and we'll, of course, cover the board. Look, we're excited about this Paramount WBD combination...

• Q: You guys have unlocked a ton of monetization at both UFC and WWE over the last several years. But as you noted in your prepared, there's been some vocal fan criticism calling out things like sponsorship and ticket pricing is being excessive. How do you think about balancing fan facing monetization and the fan experience going forward? And do you think that those vocal critics are reflective of the larger overall fan base?

  A: Well, that's the journalist in you there. I get it now. Look, Brandon, let me leave no stone unturned with the – with the direct questions. Look, bottom line is we don't buy it. Let's just start with this premise, right? The product is great at the UFC. The brand has never been stronger. Our reach has never been greater...

• Q: Mark, you called out the strong engagement momentum you're seeing with your new distribution deals at ESPN and Paramount. I was curious if you could expand on that a little bit and maybe update us on perhaps to what extent you're seeing increases in engagement translate to other parts of the business, like live events or sponsorship revenue, how some of those conversations progress and to what extent those benefits you think could flow through the P&L this year and what we've seen so far play out and what's still to come.

  A: Yeah, look, Steven, just across the board, we're just you know, as evidenced by our report today, I mean, we're hitting and firing on all cylinders, right? We just, we have demand and fans, consumers, you know, frankly, they're in dire need or thirst for live experiences. And we're, you know, we're right at the top...

• Q: Hey, guys. Thanks for taking the questions. Mark, you called out the strong engagement momentum you're seeing with your new distribution deals at ESPN and Paramount. I was curious if you could expand on that a little bit and maybe update us on perhaps to what extent you're seeing increases in engagement translate to other parts of the business, like live events or sponsorship revenue, how some of those conversations progress and to what extent those benefits you think could flow through the P&L this year and what we've seen so far play out and what's still to come.

  A: Yeah, so on UFC, partnership and marketing revenue for the quarter increased 4%, and that's largely attributable to timing, if not exclusively attributable to timing. We're bullish. Partnerships and marketing is core to our thesis, and we really see no slowdown at UFC or WWE for that matter...

• Q: Hi. Good afternoon. I wanted to ask about the segmentation of demand. If you guys could share any color on how you see consumers at various price points acting across WWE and UFC and how that informs your strategy going forward in terms of trying to maximize your revenue at a given night. And then she also would talk about the success of UFC on Paramount+. Obviously, that bigger stage is great for the brand, and I wondered how you expect that to show up across the business over the next few years.

  A: Yeah, I mean, it's a little more of the same, Peter, in terms of how it's going to show up across the business. Look, they'll use all the bells and whistles and platforms they have at their disposal and what's to come with Warner Brothers Discovery to ultimately get our content to a larger audience. And as that audience converts, and it will do that, I mean, that's MMA, right? Think of where it was 20 years ago versus where it is today...

• Q: Hey, guys. Thank you. Two questions for me. I guess first on the PBR. I guess coming off the new right fields you signed last year and the expansion of the team series plan for next year, how should we think about the opportunity for growth at that property and the level of EBITDA contribution that it could drive for the company? And then, Andrew, I think it was about a year or two ago when you first talked about your comfort in operating the business at up to three times leverage. I'm just wondering if your thoughts around leverage have changed at all now that you have, you know, all those media rights locked in through the end of the decade.

  A: Yeah, so I'll hit the PBR and actually I'll take the entire question, Ryan, on, you know, as I reported, our corporate and other segment where PBR sits generated revenue of $74 million. in the quarter, which is up 36% over the prior year period. A couple of factors that drove that very impressive growth. Boxing, obviously, is in there as well, but PBR and PBR media rights and just traction in that business is something that we're very, very excited about driving year-over-year increases...

• Q: Good afternoon. Thanks for squeezing me in. So just one for me on, there've been several instances of high profile one-off fighting events that are just really validating the fan interest in combat sports. But I guess the flip side is this demand could also make the demand for some of your fighters even stronger. So are you finding that it's becoming more competitive to retain top fighters and You know, anything you could share on how fighter comp is tracking this year relative to priors?

  A: Yeah, look, we are, you know, data point that I can share. Brent is, you know, the one that we said previously where we out of the gate when we did the Paramount deal, we doubled fighter bonuses at UFC, which is an eight-figure investment now is inclusive in our full-year guidance. Fighter compensation, you know, continues to grow. at a meaningful clip, and we know what our core assets are, and we would never turn a blind eye to our most meaningful investments...