TKO Q3 2025 Earnings Call Summary

1Key Financial Results and Metrics

Revenue: $1.12 billion, a decrease of 27% year-over-year.

Adjusted EBITDA: $360 million, up 59% from the previous year, with an adjusted EBITDA margin of 32% (up from 15%).

UFC Revenue: $325 million, down 8%; adjusted EBITDA of $166 million, down 15%.

WWE Revenue: $402 million, up 23%; adjusted EBITDA of $208 million, up 19%.

IMG Revenue: $337 million, down 59%; adjusted EBITDA improved to $61 million from negative $116 million.

Free Cash Flow: $399 million, with a conversion rate of 111% of adjusted EBITDA.

Debt: $3.759 billion; cash and equivalents of $861 million.

2Strategic Updates and Business Highlights

Media Rights Deals: Secured significant agreements, including a 7-year, $7.7 billion deal for UFC with Paramount and a new 5-year partnership for WWE with ESPN.

Stock Buyback: Announced a $1 billion stock buyback program and doubled the quarterly cash dividend.

Live Events: Record performances for both UFC and WWE live events, with UFC 319 becoming the highest-grossing event at Chicago's United Center.

Zuffa Boxing: Joint venture set to launch in 2026, with a significant media rights agreement with Paramount.

Partnership Growth: Notable increases in brand partnerships, including new deals with major companies like Wingstop and JPMorgan Chase.

3Forward Guidance and Outlook

Full Year 2025 Guidance: Revenue expected to be between $4.69 billion and $4.72 billion; adjusted EBITDA targeted between $1.57 billion and $1.58 billion.

Free Cash Flow: Anticipated conversion rate of over 60% for the full year.

2026 Expectations: Significant revenue growth anticipated from new media rights deals, increased site fees from events, and ongoing expansion of global partnerships.

4Bad News, Challenges, or Points of Concern

Revenue Decline: Notable decrease in revenue primarily attributed to the 2024 Paris Olympics impacting IMG.

UFC Event Mix: Fewer numbered events in Q3 led to decreased revenue and EBITDA margins for UFC.

Potential Risks: Concerns around the timing of WWE events and the impact of shifting PLEs from Q4 2025 to Q1 2026.

Integration Challenges: Ongoing integration of IMG, On Location, and PBR may present operational complexities.

5Notable Q&A Insights

Media Rights Strategy: Discussions highlighted the importance of maximizing monetization opportunities internationally, with a focus on expanding media rights partnerships.

Sponsorship Dynamics: Increased interest from sponsors due to broader reach and distribution, particularly with the new Paramount deal.

Fighter Compensation: UFC plans to increase fighter pay, aligning with the new media rights structure, though specifics were not disclosed.

Boxing Opportunities: Management expressed a strong appetite for expanding boxing initiatives beyond the current JV structure, emphasizing the potential for high-margin revenue. Overall, TKO demonstrated strong operational momentum despite some revenue declines, with strategic initiatives aimed at enhancing long-term growth and shareholder value.