TKO Raises Full-Year Revenue and Earnings Guidance After Acquiring PBR, On Location, and IMG

TKO has announced an increase in its full-year revenue and earnings guidance following its recent acquisitions of Professional Bull Riders, On Location, and IMG. The company saw a rise in revenue and earnings for its core properties, WWE and UFC, during the second quarter. TKO executives are optimistic about the future, citing the new five-year deal between WWE and ESPN for “WrestleMania” and other premium events as a significant driver of growth.

“We are pleased with the strong financial performance of TKO in the quarter, particularly the record-breaking results from both UFC and WWE,” said Ariel Emanuel, executive chair and CEO of TKO. “Our focus on live content and experiences has set us apart in the market, catering to the demand for high-quality sports events. With the positive momentum across our portfolio, we are raising our guidance for the full year.”

TKO has revised its full-year revenue forecast to a range of $4.630 billion to $4.690 billion, up from the previous estimate of $4.490 billion to $4.560 billion. The adjusted earnings before interest taxes, depreciation, and amortization target has also been raised to $1.560 billion, compared to the previous range of $1.490 billion to $1.530 billion.

For the second quarter, TKO reported revenue of $1.308 billion, a 10% increase from the same period last year, and a net income of $273.1 million. Adjusted EBITDA reached $526.5 million, driven by strong sponsorship and ticket sales for UFC and WWE.

During a recent analyst call, TKO executives highlighted the company’s success in leveraging the popularity of UFC and WWE to create new opportunities for growth.

“Our global partnerships division has been instrumental in securing nearly $300 million in UFC deals alone. The potential to combine these partnerships with in-arena sponsorships, broadcast integrations, and ad sales is a game-changer for us,” said Mark Shapiro, president of TKO. “With the addition of WWE events on ESPN, we now have the opportunity to sell ad inventory for UFC deals as well, which will be a significant revenue stream for us moving forward.”

UFC is currently in negotiations for a new domestic rights deal for its MMA events starting next year. While TKO is close to finalizing these discussions, Shapiro declined to speculate on the timing of an announcement. UFC currently has a partnership with ESPN.

In the second quarter, UFC reported a 5% increase in revenue year-over-year, reaching $415.9 million, with a significant boost in partnerships and marketing revenue contributing to this growth. Adjusted EBITDA also rose by 6% to $244.8 million.

For WWE, revenue climbed by 22% to $556.2 million in the second quarter, driven by increases in live events and hospitality revenue, partnerships and marketing revenue, and media rights, production, and content revenue. Adjusted EBITDA surged by 31% to $329.8 million.