TKO Group Holdings, Inc. Q3 FY2025 earnings call

Management Statement and Operational Highlights

• Media Rights Deals: Secured landmark deals like UFC's $7.7 billion ７-year deal with Paramount, WWE's 5-year PLE partnership with ESPN, and Zuffa Boxing JV with Paramount media rights.
• Live Events: UFC 31９ was highest grossing at United Center; WWE live events set 35 market records; PBR extended CBS partnership with a big audience.
• Partnerships: WWE saw double-digit growth with new brands like Maybelline; PBR announced 5-year deal with Paramount+.
• Financials: Generated $399M free cash flow in Q3; doubled quarterly cash dividend; launched $1B stock buyback.

Segment Performance

• UFC Segment: Generated revenue of $325 million (a decrease of 8%), adjusted EBITDA $166 million (a decrease of 15%). Media rights production and content revenue decreased 7% to $201M; live events and hospitality revenue decreased 15% to $44M; partnerships and marketing revenue decreased 4% to $71M.
• WWE Segment: Generated revenue of $402 million (an increase of 23%), adjusted EBITDA $208 million (an increase of 19%). Live events and hospitality revenue increased 61% to $8３M; media rights production and content revenue increased 9% to $249M; partnerships and marketing revenue increased 84% to $40M.
• IMG Segment: Generated revenue of $337 million (a decrease of 59%), adjusted EBITDA $６1 million (an increase of $11６M).
• Corporate and Other: Generated revenue of $63 million (an increase of 17%), adjusted EBITDA negative $75 million (an improvement from negative $90M prior year).

Guidance

• Raised full year 2025 revenue to $４．69B－$４．72B and adjusted EBITDA to $１．57B－$１．58B. Targeting free cash flow conversion >60% in 2025.
• Q4 2025 expected strong performance: UFC to have 11 events; WWE to benefit from new rights deals but calendar timing offsets some. 2026 outlook: media rights step-up, site fees momentum, global partnerships growth, Zuffa Boxing launch.

Risks

• Uncertainties in forward-looking statements; risks of material differences from projections.
• Impact of event timing, mix, and competition on results.
• Dependence on key media rights deals and their execution.

Question and Answer

• Q: Discuss why Paramount was right for LatAm/Australian media rights, distribution model, fighter pay A: Mark Shapiro cited brand, reach, dollars; Andrew Schleimer and Lawrence Epstein discussed distribution model and fighter pay structure changes with increased fighter pay and margin accretion.
• Q: Thoughts on boxing opportunities, site fees, partnerships A: Mark Shapiro saw boxing super fights as catalyst; site fees team works on 60+ events; partnerships grow with new/existing brands, aiming for $1B+ by 2030.
• Q: Partnerships/marketing, brand numbers, pricing A: Andrew Schleimer and Mark Shapiro noted increase in brands, both volume and pricing leverage, with crossover/new brands and growth targeting.