UFC Holdings had outstanding letters of credit of $11.1 million as of June 30, 2025 and none as of December 31, 2024.
The Credit Facilities restrict the ability of certain subsidiaries of the Company to make distributions and other payments to the Company. These restrictions include exceptions for, among other things, (1) amounts necessary to make tax payments, (2) a limited annual amount for employee equity repurchases, (3) distributions required to fund certain parent entities, (4) other specific allowable situations and (5) a general restricted payment basket, which generally provides for no restrictions as long as the Total Leverage Ratio (as defined in the Credit Agreement) is less than 5.0x.
The estimated fair values of the Company’s New Term Loans are based on quoted market values for the debt. As of June 30, 2025 and December 31, 2024, the face amount of the Company’s New Term Loans and Existing Term Loans approximates its fair value.
Secured Commercial Loans
As of June 30, 2025 and December 31, 2024, the Company had $29.5 million and $30.3 million, respectively, of secured loans outstanding, which were entered into in October 2018 in order to finance the purchase of a building and its adjacent land (the “Secured Commercial Loans”). The Secured Commercial Loans have identical terms except one of the Loan Agreements is secured by a deed of trust for the UFC’s headquarters building located at 6650 S. Torrey Pines Drive, Las Vegas, Nevada and underlying land and the other Loan Agreement is secured by a deed of trust for a building located at 6650 El Camino Road, Las Vegas, Nevada and its adjacent land. In May 2023, the parties amended the terms of the Secured Commercial Loans to replace the adjusted LIBOR reference rate with SOFR and bear interest at a rate of SOFR plus 1.70%. Principal amortization of 4% is payable in monthly installments with any remaining balance payable on the final maturity date of November 1, 2028.
The Secured Commercial Loans contain a financial covenant that requires the Company to maintain a minimum Debt Service Coverage Ratio of Adjusted EBITDA to Debt Service, as defined in the applicable loan agreements, of 1.15-to-1 as measured on an annual basis. As of June 30, 2025 and December 31, 2024, the Company was in compliance with its financial debt covenant under the Secured Commercial Loans.
9. STOCKHOLDERS’ EQUITY
Endeavor Share Purchases
During the six months ended June 30, 2025, Endeavor OpCo purchased 1,897,650 shares of TKO Class A common stock for an aggregate amount of $300.9 million under EGH and its subsidiaries' 10b5-1 trading plan for the Company. The trading plan was terminated on February 14, 2025. On June 3, 2025, Endeavor OpCo entered into a stock purchase agreement with Vincent K. McMahon, pursuant to which Endeavor OpCo agreed to purchase 1,579,080 shares of TKO Class A common stock held by Mr. McMahon at a per share price of $158.32 for an aggregate of $250.0 million. These shares of TKO Class A common stock purchased by Endeavor OpCo are included in the calculation of Endeavor’s total voting interest in TKO.
Endeavor Asset Acquisition — Equity Consideration
On February 28, 2025, as consideration paid in connection with the Endeavor Asset Acquisition, the Company issued approximately 26.54 million Common Units of TKO OpCo and an equivalent number of corresponding shares of TKO Class B common stock to Endeavor OpCo and certain of EGH's other subsidiaries. The equity consideration increased the nonredeemable non-controlling interest in TKO OpCo, with a corresponding increase to additional paid-in capital.
Capital Return Program
On October 24, 2024, the Company announced that its board of directors had authorized a share repurchase program of up to $2.0 billion of its Class A common stock and the approval of a quarterly cash dividend program pursuant to which holders of TKO's Class A common stock would receive their pro rata share of approximately $75 million in quarterly distributions to be made by TKO OpCo.
The Company will determine at its discretion the timing and the amount of any repurchases based on its evaluation of market conditions, share price, and other factors. Repurchases under the share repurchase program may be made in the open market, in privately negotiated transactions or otherwise, and the Company is not obligated to acquire any particular amount under the share repurchase program. The share repurchase program has no expiration, and may be modified, suspended, or discontinued at any time.
On February 13, 2025, the Company’s board of directors declared its inaugural quarterly cash dividend to holders of Class A common stock in the amount of $0.38 per share, which was paid on March 31, 2025 to stockholders of record as of March 14, 2025. On May 30, 2025, the Company's board of directors declared a quarterly cash dividend to holders of Class A common stock in the amount of $0.38 per share, which was paid on June 30, 2025 to stockholders of record as of June 13, 2025. Each quarterly
final approval by the district court on February 6, 2025. In connection with the Updated Settlement Agreement, the Company recorded charges of $375.0 million during the year ended December 31, 2024, which are included as a component of selling, general and administrative expenses in the consolidated statements of operations. The Company paid $125.0 million of the aggregate $375.0 million settlement amount into escrow in late October 2024, shortly following receipt of preliminary approval, and another $125.0 million into escrow in February 2025 shortly following receipt of final approval, in accordance with the terms of the Updated Settlement Agreement. The Company made the third and final payment covering the remaining $125.0 million in June 2025. The Company anticipates that the settlement amount will be deductible for tax purposes.
On June 24, 2021, another lawsuit, Johnson et al. v. Zuffa, LLC et al., No. 2:21-cv-1189-RFB-BNW (D. Nev.) (the “Johnson” case), was filed by a putative class of former UFC fighters and covering the period from July 1, 2017, to the present. The Johnson case alleges substantially similar claims to the Lecase and seeks injunctive relief. No trial date has been set in the Johnson action and the parties are in the midst of the discovery process.
On May 23, 2025, Cirkunovs v. Zuffa, LLC et al., No. 2:25-cv-00914-RFB-BNW (D. Nev.) (the “Cirkunovs” case), was filed by a putative class of former UFC fighters who signed contracts with arbitration clauses and class action waiver agreements during the period July 1, 2017, to the present. The complaint in Cirkunovs contains nearly identical allegations to Johnson and further alleges that the arbitration clauses and class action waivers contained in the fighters’ contracts are unenforceable. The Cirkunovs complaint seeks injunctive relief invalidating these arbitration clauses and class action waivers, as well as treble damages under the antitrust laws and attorneys’ fees and costs.
On May 29, 2025, a similar complaint was filed by a current Professional Fighters League fighter named Phil Davis. Davis v. Zuffa, LLC et al., No. 2:25-cv-00946-RFB-BNW (D. Nev.) (the “Davis” case). The Davis complaint also asserts nearly identical allegations as in Johnson and Cirkunovs, except Davis seeks to represent a class of fighters who competed in U.S.-bouts for non-UFC promotions from May 29, 2021, onward, excluding all currently contracted UFC fighters, as well as the Johnson and Cirkunovs class members. The Davis case alleges UFC’s alleged anticompetitive conduct impairs the ability of non-UFC fighters to advance their careers and artificially suppresses non-UFC fighter pay. The Davis case does not seek monetary damages and instead seeks injunctive relief. No trial date has been set in the Cirkunovs or Davis action, and discovery has not yet begun.
WWE Legal Proceedings
As announced in June 2022, a Special Committee of independent members of WWE’s board of directors (the “Special Committee”) was formed to investigate alleged misconduct by WWE’s then-Chief Executive Officer, Vincent K. McMahon (the “Special Committee investigation”). Mr. McMahon initially resigned from all positions held with WWE on July 22, 2022 but remained a stockholder with a controlling interest and served as Executive Chairman of WWE’s board of directors from January 9, 2023 through September 12, 2023, at which time Mr. McMahon became Executive Chair of the board of directors of the Company. Although the Special Committee investigation is complete and, in January 2024, Mr. McMahon resigned from his position as Executive Chair and member of the Company’s board of directors, as well as other positions, employment and otherwise, at TKO and its subsidiaries, WWE has received, and may receive in the future, regulatory, investigative and enforcement inquiries, subpoenas, demands, claims and/or complaints arising from, related to, or in connection with these matters. On July 17, 2023, federal law enforcement agents executed a search warrant and served a federal grand jury subpoena on Mr. McMahon. On January 10, 2025, the United States Securities and Exchange Commission settled charges against Mr. McMahon for failing to disclose certain settlement agreements to WWE’s board of directors, legal department, accountants, financial reporting personnel, or auditor, and in so doing, circumventing WWE’s system of internal accounting controls and causing material misstatements in WWE’s 2018 and 2021 financial statements. No charges have been brought against the Company.
On January 25, 2024, a former WWE employee filed a lawsuit against WWE, Mr. McMahon and another former WWE executive, John Laurinaitis, in the United States District Court for the District of Connecticut alleging, among other things, that she was sexually assaulted by Mr. McMahon and Mr. Lauinaitis and asserting claims under the Trafficking Victims Protection Act. On May 30, 2025, Mr. Laurinaitis was dismissed from the matter with prejudice pursuant to a stipulation of dismissal. WWE has moved to compel the matter to arbitration, and its motion is pending.
On October 23, 2024, five unnamed plaintiffs filed a lawsuit against Mr. McMahon, Linda McMahon, WWE, and TKO in Maryland court, alleging sexual abuse by a former World Wrestling Federation ring announcer during the 1980s. On April 28, 2025, plaintiffs filed an amended complaint adding three unnamed plaintiffs, but no new defendants. Defendants WWE and TKO, as well as Mr. McMahon and Linda McMahon, each moved to dismiss all claims on June 11, 2025.
On November 17, 2023, a purported former stockholder of WWE, Laborers’ District Council and Contractors’ Pension Fund of Ohio (“Laborers”), filed a verified class action complaint on behalf of itself and similarly situated former WWE stockholders in the Court of Chancery of the State of Delaware (“Delaware Court”), captioned Laborers District Council and Contractors’ Pension Fund of Ohio v. McMahon, C.A. No. 2023-1166-JTL (“Laborers Action”). On November 20, 2023, another purported former WWE stockholder, Dennis Palkon, filed a verified class action complaint on behalf of himself and similarly situated former WWE stockholders in the Delaware Court, captioned Palkon v. McMahon, C.A. No. 2023-1175-JTL (“Palkon Action”). The
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the information set forth in our unaudited consolidated financial statements and related notes included in this Quarterly Report and with our audited financial statements and related notes included in our 2024 Annual Report. This discussion contains forward-looking statements based upon management’s current plans, expectations and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various known and unknown factors, including those set forth under Part I, Item 1A. “Risk Factors” of our 2024 Annual Report or in other sections of the 2024 Annual Report and this Quarterly Report.
On February 28, 2025, TKO Operating Company, LLC, a Delaware limited liability company (“TKO OpCo”), and TKO Group Holdings, Inc., a Delaware corporation (together with TKO OpCo, the “TKO Parties”), completed the acquisition of the IMG business, including certain businesses operating under the IMG brand, On Location, and the Professional Bull Riders (“PBR”) (collectively, the "Acquired Businesses"), pursuant to a transaction agreement, dated as of October 23, 2024 (as amended, the “Endeavor Asset Acquisition Agreement”), by and among the TKO Parties, Endeavor OpCo, IMG Worldwide, LLC, a Delaware limited liability company (“IMG Worldwide” and, together with Endeavor OpCo, the “EGH Parties”), and Trans World International, LLC, a Delaware limited liability company and subsidiary of EGH (“TWI”) (the “Endeavor Asset Acquisition”).
The Endeavor Asset Acquisition was treated as a merger between entities under common control, due to EGH’s control of both TKO and the Acquired Businesses. As a result of the common control acquisition, the net assets of the Acquired Businesses were combined with those of TKO at their historical carrying amounts, and the financial statements have been retrospectively recast on a combined basis for all historical periods prior to February 28, 2025 because they were under common control for all periods presented.
The following is a discussion and analysis of, and a comparison between, our results of operations for the three and six months ended June 30, 2025 and 2024.
Overview
TKO is a premium sports and entertainment company which operates leading combat sports and sports entertainment brands. The Company monetizes its brands through four principal activities: (i) Media rights, production and content, (ii) Live events and hospitality, (iii) Partnerships and marketing, and (iv) Consumer products licensing.
TKO was formed through the combination of Zuffa Parent, LLC (n/k/a TKO Operating Company, LLC) which owns and operates the Ultimate Fighting Championship (“UFC”), a preeminent combat sports brand, and World Wrestling Entertainment, Inc. (n/k/a/ World Wrestling Entertainment, LLC) (“WWE”), a renowned sports entertainment business. The TKO Transactions united two complementary sports and sports entertainment properties in a single company.
Endeavor Asset Acquisition
In connection with the Endeavor Asset Acquisition Agreement, the TKO Parties acquired the Acquired Businesses for total consideration of approximately $3.25 billion plus a $50 million purchase price adjustment (based on the volume-weighted average sales price of TKO Class A common stock for the twenty five trading days ending on October 23, 2024). Endeavor Group Holdings, Inc. received approximately 26.54 million common units of TKO OpCo and subscribed for an equivalent number of corresponding shares of TKO's Class B common stock.
With respect to the historical financial data of the Acquired Businesses, the historical financial data has been derived from the combined financial statements and accounting records of Endeavor Group Holdings, Inc. and were prepared on a standalone basis in accordance with GAAP and may not be indicative of what they would have been had the Acquired Businesses been independent standalone companies, nor are they necessarily indicative of the Acquired Businesses’ future financial data.
With respect to the combined balance sheets of the Company, the combined balance sheet includes Endeavor Group Holdings, Inc.’s consolidated assets and liabilities that are specifically identifiable or otherwise attributable to the Acquired Businesses, including subsidiaries and/or joint ventures relating to the Acquired Businesses in which Endeavor Group Holdings, Inc. had a controlling financial interest. The assets, liabilities, revenue and expenses of the Acquired Businesses have been reflected in these combined financial statements on a historical cost basis, as included in the consolidated financial statements of Endeavor Group Holdings, Inc., using the historical accounting policies applied by Endeavor Group Holdings, Inc. Cash and cash equivalents held by Endeavor Group Holdings, Inc. at the corporate level were not attributable to the Acquired Businesses for any of the periods presented due to Endeavor Group Holdings Inc.’s centralized approach to cash management and the financing of its operations. Only cash amounts held by entities for which the Acquired Businesses have legal title are reflected in the combined balance sheets. Transfers of cash, both to and from Endeavor Group Holdings, Inc.’s centralized cash management system, are reflected as a component of net parent investment in the combined balance sheets and as financing activities in the combined statements of cash flows for the recast periods prior to the TKO formation on September 12, 2023. Endeavor Group Holdings, Inc.’s debt on a
consolidated basis was not attributed to the Acquired Businesses for any of the periods presented because Endeavor Group Holdings, Inc.’s borrowings are not the legal obligation of the Acquired Businesses.
With respect to the combined financial statements of the Company, the combined financial statements include all revenues and costs directly attributable to the Acquired Businesses and reflect allocations of certain of Endeavor Group Holdings, Inc.'s corporate, infrastructure and shared services expenses, including centralized research, legal, human resources, payroll, finance and accounting, employee benefits, real estate, insurance, information technology, telecommunications, treasury, and other expenses. Where possible, these charges were allocated based on direct usage, with the remainder allocated on a pro rata basis of headcount and gross profit, or other allocation methodologies that are considered to be a reasonable reflection of the utilization of services provided or the benefit received by the Acquired Businesses during the periods presented. The allocations may not, however, reflect the expense the Acquired Businesses would have incurred as standalone companies for the periods presented. These costs also may not be indicative of the expenses that the Acquired Businesses will incur in the future or would have incurred if the Acquired Businesses had obtained these services from a third party.
Accordingly, as discussed above, the historical financial data presented within this discussion and analysis of our financial condition and results of operations includes the combined historical financial data of TKO and the Acquired Businesses for all periods presented.
Segments
As of June 30, 2025, we operated our business under three reportable segments, UFC, WWE and IMG. In addition, we also report results for the “Corporate and Other” group, which incurs revenue and expenses that are not allocated to the business segments. As a result of the close of the Endeavor Asset Acquisition, the Company determined that IMG, as described below, is a third reportable segment. Refer to Note 16, Segment Information, within the unaudited consolidated financial statements included within this Quarterly Report on Form 10-Q.
UFC
The UFC segment reflects the business operations of UFC. Revenue from our UFC segment principally consists of media rights fees associated with the distribution of its programming content; ticket sales and site fees associated with the business’s global live events; partnerships and marketing; and consumer product licensing agreements of UFC-branded products.
WWE
The WWE segment reflects the business operations of WWE. Revenue from our WWE segment principally consists of media rights fees associated with the distribution of its programming content; ticket sales and site fees associated with the business’s global live events; partnerships and marketing; and consumer product licensing agreements of WWE-branded products.
IMG
The IMG segment reflects the operations of the following businesses:
•The IMG business is an independent global distributor of sports programming selling media rights on behalf of rights holders and is a producer of sports programming responsible for content on behalf of sports federations, associations and events.
•On Location is a premium experiential hospitality business, offering ticketing, curated guest experiences, live event production and travel management services.
Revenue from our IMG segment principally consists of media rights sales, commissions, production services and studio fees; ticket and premium experience sales; and partnerships and marketing.
Corporate and Other
Corporate and Other reflects operations not allocated to the UFC, WWE or IMG segments and primarily consists of general and administrative expenses as well as operations of PBR and boxing. PBR owns the Professional Bull Riding brand, which organizes bull riding competitions, promotes the sport and its athletes through live events and broadcasts. Boxing includes the joint venture with Sela Company for the Zuffa Boxing brand as well as promotional services TKO provides for boxing events.
Revenue from our Corporate and Other group principally consists of media rights fees associated with the distribution of PBR's programming content; ticket sales and site fees associated with live events; partnerships and marketing; and consumer product licensing agreements of PBR-branded products. Revenue also consists of management fees for services provided to certain equity method investments primarily related to boxing.
General and administrative expenses relate largely to corporate activities, including information technology, facilities, legal, human resources, finance, accounting, treasury, investor relations, corporate communications, community relations and compensation to TKO’s management and board of directors, which support all reportable segments. Corporate and Other expenses also include service fees paid by the Company to Endeavor Group Holdings, Inc. under the Services Agreement, inclusive of fees paid for revenue producing services related to the segments. On the closing date of the Endeavor Asset Acquisition, the Services Agreement between EGH and TKO OpCo was terminated and the Transition Services Agreement was entered into between the EGH Parties, TWI and the TKO Parties.
Components of Our Operating Results
Revenue
TKO primarily generates revenue via domestic and international media rights fees, production services and studio fees, ticket sales at live events, hospitality sales and site fees, partnerships and marketing, and consumer products licensing.
Direct Operating Costs
TKO’s direct operating costs primarily include costs associated with our athletes and talent, marketing, venue costs related to live events, expenses associated with the production of events and experiences, event ticket sales and fees for media rights. These costs include required payments related to media sales agency contracts when minimum sales guarantees are not met, materials and related costs associated with consumer product merchandise sales, commissions and direct costs with distributors, as well as certain service fees paid to Endeavor Group Holdings, Inc. under the Services Agreement and Transition Services Agreement.
Selling, General and Administrative
TKO’s selling, general and administrative expenses primarily include personnel costs as well as rent, travel, professional service costs, overhead required to support operations, and certain service fees paid to Endeavor Group Holdings, Inc. under the Services Agreement and Transition Services Agreement.
Provision for Income Taxes
TKO Group Holdings, Inc. was incorporated as a Delaware corporation in March 2023. As the sole managing member of TKO OpCo, TKO Group Holdings, Inc. ultimately controls the business affairs of TKO OpCo. TKO Group Holdings, Inc. is subject to corporate income taxes on its share of taxable income of TKO OpCo. TKO OpCo is treated as a partnership for U.S. federal income tax purposes and is therefore generally not subject to U.S. corporate income tax. TKO OpCo’s foreign subsidiaries are subject to entity-level taxes. TKO OpCo’s U.S. subsidiaries are subject to withholding taxes on sales in certain foreign jurisdictions which are included as a component of foreign current taxes. TKO OpCo is subject to entity-level income taxes in certain U.S. state and local jurisdictions. For the periods prior to the Endeavor Asset Acquisition, the Acquired Businesses primarily consisted of U.S. flow through entities not subject to tax as well as some foreign subsidiaries and U.S. regarded corporations subject to entity level taxes. Income taxes related to the Acquired Businesses reflected in the combined tax provision are attributable to U.S. regarded entities and foreign entities subject to tax in their respective jurisdictions.
RESULTS OF OPERATIONS
(dollars in millions, except where noted)
The following is a discussion of our consolidated results of operations for the three and six months ended June 30, 2025 and 2024. This information is derived from our accompanying consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
Revenue |
|
$ |
1,308.4 |
|
|
$ |
1,193.2 |
|
|
$ |
2,577.2 |
|
|
$ |
2,415.6 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating costs |
|
|
476.4 |
|
|
|
591.2 |
|
|
|
1,044.0 |
|
|
|
1,196.8 |
|
Selling, general and administrative expenses |
|
|
364.3 |
|
|
|
368.2 |
|
|
|
727.6 |
|
|
|
1,036.5 |
|
Depreciation and amortization |
|
|
99.4 |
|
|
|
118.9 |
|
|
|
199.9 |
|
|
|
241.0 |
|
Total operating expenses |
|
|
940.1 |
|
|
|
1,078.3 |
|
|
|
1,971.5 |
|
|
|
2,474.3 |
|
Operating income (loss) |
|
|
368.3 |
|
|
|
114.9 |
|
|
|
605.7 |
|
|
|
(58.7 |
) |
Other expenses: |
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|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(48.2 |
) |
|
|
(63.0 |
) |
|
|
(93.0 |
) |
|
|
(124.2 |
) |
Other expense, net |
|
|
(7.8 |
) |
|
|
(0.2 |
) |
|
|
(16.2 |
) |
|
|
(8.4 |
) |
Income (loss) before income taxes and equity earnings of affiliates |
|
|
312.3 |
|
|
|
51.7 |
|
|
|
496.5 |
|
|
|
(191.3 |
) |
Provision for income taxes |
|
|
46.5 |
|
|
|
6.6 |
|
|
|
67.7 |
|
|
|
0.9 |
|
Income (loss) before equity earnings of affiliates |
|
|
265.8 |
|
|
|
45.1 |
|
|
|
428.8 |
|
|
|
(192.2 |
) |
Equity earnings of affiliates, net of tax |
|
|
(7.3 |
) |
|
|
(1.1 |
) |
|
|
(9.8 |
) |
|
|
(3.9 |
) |
Net income (loss) |
|
|
273.1 |
|
|
|
46.2 |
|
|
|
438.6 |
|
|
|
(188.3 |
) |
Less: Net income (loss) attributable to non-controlling interests |
|
|
174.8 |
|
|
|
(12.9 |
) |
|
|
281.9 |
|
|
|
(143.5 |
) |
Net income (loss) attributable to TKO Group Holdings, Inc. |
|
$ |
98.3 |
|
|
$ |
59.1 |
|
|
$ |
156.7 |
|
|
$ |
(44.8 |
) |
Revenue
Revenue increased by $115.2 million, or 10%, to $1,308.4 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.
•UFC revenue increased by $21.5 million, or 5%. This increase was primarily due to $24.1 million of greater partnerships revenue from new sponsors and increases in fees from renewals, as well as $9.9 million of increased media rights, production and content revenue from higher domestic and international rights fees resulting from increases in contractual revenues, compared to the prior year. These increases were partially offset by $10.6 million of lower live event revenue driven by lower site fees revenue associated with the timing of certain international events and a decrease of $1.9 million in consumer products licensing revenue from lower royalties on UFC-branded products.
•WWE revenue increased by $99.4 million, or 22%. This increase was primarily due to $41.6 million of increased live event revenue, which was the result of higher ticket sales revenue, driven by WrestleMania 41 in Las Vegas, combined with increased site fee revenue associated with WWE’s premium live events, most notably Night of Champions held in Riyadh, Saudi Arabia. This increase was also driven by $33.6 million of higher partnerships revenue from new sponsors and increases in fees from renewals. Additionally, WWE generated $18.2 million of higher media rights, production and content revenue associated with domestic and international rights fees for WWE’s flagship programs, Raw, SmackDown and NXT, which was attributable to the new global content distribution agreement with Netflix that became effective in January 2025 and the format expansion of WWE’s SmackDown programming, as well as $6.0 million of increased consumer products licensing revenue related to the sale of WWE-branded products, including merchandise and video game sales, compared to the prior year.
•IMG revenue decreased by $13.0 million, or 4%. This decrease was primarily driven by lower revenues of $13.5 million from the IMG business due to a reduction in media rights revenue primarily from no longer having rights to the FA Cup which did not transfer to the Company pursuant to the Endeavor Asset Acquisition Agreement. This reduction was partially offset by higher revenue associated with new production agreements, most notably Saudi Pro League.
•Corporate and Other revenue increased by $3.7 million, or 9%, compared to the prior year, primarily driven by higher management fees for services provided to certain equity method investments primarily related to boxing.
Revenue increased by $161.6 million, or 7%, to $2,577.2 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
•UFC revenue increased by $68.2 million, or 10%. This increase was primarily due to $39.8 million of higher partnerships revenue from new sponsors and increases in fees from renewals, as well as $19.5 million of increased media rights, production and content revenue from higher domestic and international rights fees resulting from increases in contractual revenues, compared to the prior year. Additionally, UFC generated $12.7 million of greater live event revenue driven by higher site fee revenue associated with the timing of certain international events, including a Fight Night event held in Baku, Azerbaijan and higher average ticket sales revenue per event. These increases were partially offset by a decrease of $3.8 million in consumer product licensing revenue from lower royalties on UFC-branded products compared to the prior year.
•WWE revenue increased by $174.2 million, or 23%. This increase was primarily due to $67.8 million of increased live event revenue, which was the result of higher ticket sales revenue, driven by WrestleMania 41 in Las Vegas, coupled with increased site fee revenue associated with WWE’s premium live events, most notably Night of Champions held in Riyadh, Saudi Arabia. This increase was also driven by $48.7 million of higher media rights, production and content revenue associated with domestic and international rights fees for WWE’s flagship programs, Raw, SmackDown and NXT, which was attributable to the new global content distribution agreement with Netflix that became effective in January 2025 and the format expansion of WWE’s SmackDown programming, as well as $45.4 million of higher partnerships revenue from new sponsors and increases in fees from renewals. Additionally, WWE generated $12.3 million of increased consumer products licensing related to the sale of WWE-branded products, including video games, merchandise and collectibles sales, compared to the prior year.
•IMG revenue decreased by $86.4 million, or 10%. This decrease was driven by lower revenues of $57.6 million from On Location, due to lower hospitality sales primarily driven by less favorable locations related to the Super Bowl and collegiate Bowl Games compared to the prior year. Additionally, lower revenues of $28.8 million from the IMG business were driven by a reduction in media rights revenue primarily from no longer having rights to the FA Cup, as these rights did not transfer to the Company pursuant to the Endeavor Asset Acquisition Agreement. This reduction was partially offset by higher revenue associated with new production agreements, most notably Saudi Pro League.
•Corporate and Other revenue increased by $5.9 million, or 6%, primarily driven by higher management fees for services provided to certain equity method investments primarily related to boxing, coupled with higher ticket sales and partnerships revenue from PBR compared to the prior year.
Direct Operating Costs
Direct operating costs decreased by $114.8 million, or 19%, to $476.4 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.
•UFC direct operating costs decreased by $3.3 million, or 3%. This decrease was primarily due to $6.1 million of a decrease in production, marketing, athlete and other event-related costs driven by changes in event cards, as well as the location mix of events compared to the prior year.
•WWE direct operating costs increased by $9.1 million, or 7%. This increase was primarily driven by $15.2 million of higher production and talent-related costs associated with WWE's weekly television programming and premium live events, including WrestleMania 41 in Las Vegas, partially offset by $3.2 million of lower event-related costs driven by the reduction in non-televised events compared to the prior year.
•IMG direct operating costs decreased by $110.7 million, or 35%. This decrease was driven by costs of $85.7 million from On Location in the prior year largely relating to the write down of unsold tickets for the 2024 Paris Olympics. Additionally, lower costs of $25.0 million from the IMG business were primarily due to lower media rights fees associated with no longer having rights to the FA Cup.
•Corporate and Other direct operating costs decreased by $9.1 million, or 24%. This decrease was primarily driven by service fees paid to Endeavor Group Holdings, Inc. in the prior year for various operational functions that support revenue generating activities pursuant to the Services Agreement. The Services Agreement was terminated during the first quarter of 2025 in connection with the Endeavor Asset Acquisition. Additionally, lower costs of $3.2 million from PBR was primarily driven by lower production- and event-related costs compared to the prior year.
Direct operating costs decreased by $152.8 million, or 13%, to $1,044.0 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
•UFC direct operating costs increased by $4.0 million, or 2%. This increase was primarily due to $4.3 million of higher production, marketing, athlete and other event-related costs primarily associated with the location mix of events and changes in event cards compared to the prior year.
•WWE direct operating costs increased by $16.7 million, or 7%. This increase was primarily driven by $22.8 million of higher production and talent-related costs associated with WWE's weekly television programming and premium live events, including WrestleMania 41 in Las Vegas, partially offset by lower event-related costs driven by the reduction in non-televised events compared to the prior year.
•IMG direct operating costs decreased by $162.4 million, or 23%. This decrease was driven by lower costs of $100.5 million from On Location due to higher costs in the prior year largely relating to the write down of unsold tickets for the 2024 Paris Olympics, coupled with decreased event-related costs in the prior year primarily from fewer hospitality sales associated with less favorable locations related to the Super Bowl and collegiate Bowl Games compared to the prior year. Additionally, lower costs of $61.8 million from the IMG business, was primarily due to lower media rights fees associated with no longer having rights to the FA Cup.
•Corporate and Other direct operating costs decreased by $6.9 million, or 9%. This decrease was primarily driven by service fees paid to Endeavor Group Holdings, Inc. in the prior year for various operational functions that support revenue generating activities pursuant to the Services Agreement. The Services Agreement was terminated during the first quarter of 2025.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased by $3.9 million, or 1%, to $364.3 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.
•UFC selling, general and administrative expenses increased by $16.5 million, or 36%. This increase was primarily driven by $17.7 million of higher personnel and travel costs compared to the prior year.
•WWE selling, general and administrative expenses decreased by $14.5 million, or 13%. The prior year included an impairment charge of $24.3 million as a result of reducing the carrying value of WWE assets held for sale to their fair value less cost to sell, as described in Note 5, Supplementary Data, to our unaudited consolidated financial statements included in this Quarterly Report. The current year included $11.5 million of higher personnel and travel costs compared to the prior year.
•IMG selling, general, and administrative expenses decreased by $16.9 million, or 16%. This decrease was primarily driven by a reduction in third-party and personnel costs from On Location due to the timing of the Olympics as well as the impact of cost reduction initiatives in connection with the Endeavor Asset Acquisition.
•Corporate and Other selling, general and administrative expenses increased by $6.6 million, or 6%. This increase was primarily driven by $26.7 million of higher cost of personnel and other operating expenses compared to the prior year. These increases were partially offset by $20.1 million of lower corporate allocated costs from Endeavor Group Holdings, Inc. to the Acquired Businesses. The decrease in service fees paid to Endeavor Group Holdings, Inc. under the Services Agreement were mostly offset by fees paid under the Transition Services Agreement.
Selling, general and administrative expenses decreased by $308.9 million, or 30%, to $727.6 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.
•UFC selling, general and administrative expenses increased by $28.8 million, or 34%. This increase was primarily driven by $30.0 million of higher personnel and travel costs compared to the prior year.
•WWE selling, general and administrative expenses decreased by $19.5 million, or 10%. The prior year included an impairment charge of $24.3 million as a result of reducing the carrying value of WWE assets held for sale to their fair value less cost to sell, as described in Note 5, Supplementary Data, to our unaudited consolidated financial statements included in this Quarterly Report. The current year included $12.6 million of higher personnel and travel costs compared to the prior year, which were offset by the continuation of planned cost reduction initiatives implemented following the formation of TKO.
•IMG selling, general, and administrative expenses decreased by $30.3 million, or 15%. This decrease was primarily driven by a reduction in third-party and personnel costs from On Location due to the timing of the Olympics as well as the impact of cost reduction initiatives in connection with the Endeavor Asset Acquisition.
•Corporate and Other selling, general and administrative expenses decreased by $292.1 million, or 52%. This decrease was primarily driven by lower legal costs of $340.6 million, of which $335.0 million was due to charges recorded in the prior year associated with the preliminary legal settlement of the UFC antitrust lawsuit, as well as the impact of $29.1 million of lower corporate allocated costs from Endeavor Group Holdings, Inc. to the Acquired Businesses. The decrease in service fees paid to Endeavor Group Holdings, Inc. under the Services Agreement were mostly offset by fees paid under the Transition Services Agreement. These declines were partially offset by $41.1 million of higher professional fees associated with strategic transactions, primarily the Endeavor Asset Acquisition, and $36.5 million of higher cost of personnel and other operating expenses compared to the prior year.
Depreciation and Amortization
Depreciation and amortization decreased by $19.5 million, or 16%, to $99.4 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This decrease was primarily due to a decline of $18.0 million of expenses associated with certain WWE intangible assets that became fully amortized during the third quarter of 2024.
Depreciation and amortization decreased $41.1 million, or 17%, to $199.9 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This decrease was primarily due to a decline of $36.1 million of expenses associated with certain WWE intangible assets that became fully amortized during the third quarter of 2024.
Interest Expense, Net
Interest expense, net decreased by $14.8 million, or 23%, to $48.2 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This decrease was primarily driven by the refinancing of the Credit Facilities in November 2024 that resulted in New Term Loans with a lower interest rate.
Interest expense, net decreased by $31.2 million, or 25%, to $93.0 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This decrease was primarily driven by the refinancing of the Credit Facilities in November 2024 that resulted in New Term Loans with a lower interest rate.
Other Expense, Net
Other expense, net for the three months ended June 30, 2025 and 2024 was primarily driven by foreign currency transaction losses. Other expense, net for the three months ended June 30, 2025 includes a net gain of $2.2 million from the sale of certain equity method investments.
Other expense, net for the six months ended June 30, 2025 and 2024 primarily reflect losses on foreign exchange transactions. Other expense, net for the six months ended June 30, 2025 also includes a net loss of $2.5 million from the sale of certain equity method investments, partially offset by a gain of $1.3 million on the sale of PBR's former headquarters building.
Provision for Income Taxes
For the three months ended June 30, 2025, TKO recorded a provision for income taxes of $46.5 million compared to a provision of $6.6 million for the three months ended June 30, 2024. This change was primarily related to increased pretax income for the three months ended June 30, 2025.
For the six months ended June 30, 2025, TKO recorded a provision for income taxes of $67.7 million compared to a provision of $0.9 million for the six months ended June 30, 2024. This change was primarily related to the preliminary legal settlement for the UFC antitrust lawsuit of $335.0 million that resulted in a $39.6 million discrete tax benefit that was recognized in the prior year.
Net Income (Loss) Attributable to Non-Controlling Interests
Net income (loss) attributable to non-controlling interests was income of $174.8 million and loss of $12.9 million for the three months ended June 30, 2025 and 2024, respectively. The change was primarily due to the change in the amount of reported net income for the three months ended June 30, 2025 as compared to the reported net loss for the three months ended June 30, 2024, as well as the impact of the Endeavor Asset Acquisition. See Note 10, Non-Controlling Interests, to our unaudited consolidated
financial statements included in this Quarterly Report for further details on the effect of the Endeavor Asset Acquisition to this line item.
Net income (loss) attributable to non-controlling interests was income of $281.9 million and loss of $143.5 million for the six months ended June 30, 2025 and 2024, respectively. The change was primarily due to the change in the amount of reported net income for the six months ended June 30, 2025 as compared to the reported net loss for the six months ended June 30, 2024, as well as the impact of the Endeavor Asset Acquisition. See Note 10, Non-Controlling Interests, to our unaudited consolidated financial statements included in this Quarterly Report for further details on the effect of the Endeavor Asset Acquisition to this line item.
Segment Results of Operations
As described above, the following discussion and analysis of our financial condition and results of operations presents three reportable segments as of June 30, 2025: UFC, WWE and IMG, which were determined to be our reportable segments following the close of the Endeavor Asset Acquisition. Our chief operating decision maker evaluates the performance of our segments based on segment Revenue and segment Adjusted EBITDA. Management believes segment Adjusted EBITDA is indicative of operational performance and ongoing profitability, and Adjusted EBITDA is used to evaluate the operating performance of our segments and for planning and forecasting purposes, including the allocation of resources and capital. Segment operating results reflect earnings before corporate expenses. These segment results of operations should be read in conjunction with our discussion of the Company’s consolidated results of operations included above.
The following tables set forth Revenue and Adjusted EBITDA for each of our segments for the three and six months ended June 30, 2025 and 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
UFC |
|
$ |
415.9 |
|
|
$ |
394.4 |
|
|
$ |
775.6 |
|
|
$ |
707.4 |
|
WWE |
|
|
556.2 |
|
|
|
456.8 |
|
|
|
947.7 |
|
|
|
773.5 |
|
IMG |
|
|
306.6 |
|
|
|
319.6 |
|
|
|
782.9 |
|
|
|
869.3 |
|
Total revenue from reportable segments |
|
|
1,278.7 |
|
|
|
1,170.8 |
|
|
|
2,506.2 |
|
|
|
2,350.2 |
|
Corporate and Other |
|
|
44.6 |
|
|
|
40.9 |
|
|
|
99.0 |
|
|
|
93.1 |
|
Eliminations |
|
|
(14.9 |
) |
|
|
(18.5 |
) |
|
|
(28.0 |
) |
|
|
(27.7 |
) |
Total Revenue |
|
$ |
1,308.4 |
|
|
$ |
1,193.2 |
|
|
$ |
2,577.2 |
|
|
$ |
2,415.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
UFC |
|
$ |
244.8 |
|
|
$ |
231.9 |
|
|
$ |
472.2 |
|
|
$ |
427.0 |
|
WWE |
|
|
329.8 |
|
|
|
251.3 |
|
|
|
523.7 |
|
|
|
391.5 |
|
IMG |
|
|
29.0 |
|
|
|
(91.2 |
) |
|
|
102.5 |
|
|
|
(9.9 |
) |
Total Adjusted EBITDA from reportable segments |
|
|
603.6 |
|
|
|
392.0 |
|
|
|
1,098.4 |
|
|
|
808.6 |
|
Corporate and Other |
|
|
(77.1 |
) |
|
|
(91.2 |
) |
|
|
(154.5 |
) |
|
|
(168.9 |
) |
Total Adjusted EBITDA |
|
$ |
526.5 |
|
|
$ |
300.8 |
|
|
$ |
943.9 |
|
|
$ |
639.7 |
|
UFC
The following table sets forth our UFC segment results for the three and six months ended June 30, 2025 and 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Media rights, production and content |
|
$ |
260.5 |
|
|
$ |
250.6 |
|
|
$ |
484.6 |
|
|
$ |
465.1 |
|
Live events and hospitality |
|
|
58.5 |
|
|
|
69.1 |
|
|
|
117.1 |
|
|
|
104.4 |
|
Partnerships and marketing |
|
|
85.8 |
|
|
|
61.7 |
|
|
|
150.1 |
|
|
|
110.3 |
|
Consumer products licensing and other |
|
|
11.1 |
|
|
|
13.0 |
|
|
|
23.8 |
|
|
|
27.6 |
|
Total Revenue |
|
$ |
415.9 |
|
|
$ |
394.4 |
|
|
$ |
775.6 |
|
|
$ |
707.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating costs |
|
$ |
116.3 |
|
|
$ |
119.6 |
|
|
$ |
206.0 |
|
|
$ |
201.9 |
|
Selling, general and administrative expenses |
|
$ |
54.8 |
|
|
$ |
42.9 |
|
|
$ |
97.4 |
|
|
$ |
78.5 |
|
Adjusted EBITDA |
|
$ |
244.8 |
|
|
$ |
231.9 |
|
|
$ |
472.2 |
|
|
$ |
427.0 |
|
Adjusted EBITDA margin |
|
|
59 |
% |
|
|
59 |
% |
|
|
61 |
% |
|
|
60 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
UFC Operating Metrics: |
|
|
|
|
|
|
|
|
|
|
|
|
Number of events |
|
|
|
|
|
|
|
|
|
|
|
|
Numbered events |
|
|
4 |
|
|
|
4 |
|
|
|
7 |
|
|
|
7 |
|
Fight Nights |
|
|
7 |
|
|
|
7 |
|
|
|
15 |
|
|
|
15 |
|
Total events |
|
|
11 |
|
|
|
11 |
|
|
|
22 |
|
|
|
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location of events |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
9 |
|
|
|
9 |
|
|
|
16 |
|
|
|
18 |
|
International |
|
|
2 |
|
|
|
2 |
|
|
|
6 |
|
|
|
4 |
|
Total events |
|
|
11 |
|
|
|
11 |
|
|
|
22 |
|
|
|
22 |
|
WWE
The following table sets forth our WWE segment results for the three and six months ended June 30, 2025 and 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Media rights, production and content |
|
$ |
278.9 |
|
|
$ |
260.7 |
|
|
$ |
530.5 |
|
|
$ |
481.8 |
|
Live events and hospitality |
|
|
185.7 |
|
|
|
144.1 |
|
|
|
262.0 |
|
|
|
194.3 |
|
Partnerships and marketing |
|
|
58.3 |
|
|
|
24.7 |
|
|
|
83.9 |
|
|
|
38.5 |
|
Consumer products licensing and other |
|
|
33.3 |
|
|
|
27.3 |
|
|
|
71.3 |
|
|
|
58.9 |
|
Total Revenue |
|
$ |
556.2 |
|
|
$ |
456.8 |
|
|
$ |
947.7 |
|
|
$ |
773.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating costs |
|
$ |
142.6 |
|
|
$ |
127.1 |
|
|
$ |
264.7 |
|
|
$ |
227.8 |
|
Selling, general and administrative expenses |
|
$ |
83.8 |
|
|
$ |
78.4 |
|
|
$ |
159.3 |
|
|
$ |
154.2 |
|
Adjusted EBITDA |
|
$ |
329.8 |
|
|
$ |
251.3 |
|
|
$ |
523.7 |
|
|
$ |
391.5 |
|
Adjusted EBITDA margin |
|
|
59 |
% |
|
|
55 |
% |
|
|
55 |
% |
|
|
51 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
WWE Operating Metrics: |
|
|
|
|
|
|
|
|
|
|
|
|
Number of events |
|
|
|
|
|
|
|
|
|
|
|
|
Premium live events |
|
|
8 |
|
|
|
7 |
|
|
|
11 |
|
|
|
10 |
|
Televised events |
|
|
40 |
|
|
|
39 |
|
|
|
80 |
|
|
|
77 |
|
Non-televised events |
|
|
12 |
|
|
|
28 |
|
|
|
30 |
|
|
|
62 |
|
Total events |
|
|
60 |
|
|
|
74 |
|
|
|
121 |
|
|
|
149 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location of events |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
58 |
|
|
|
60 |
|
|
|
105 |
|
|
|
133 |
|
International |
|
|
2 |
|
|
|
14 |
|
|
|
16 |
|
|
|
16 |
|
Total events |
|
|
60 |
|
|
|
74 |
|
|
|
121 |
|
|
|
149 |
|
IMG
The following table sets forth our IMG segment results for the three and six months ended June 30, 2025 and 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
Media rights, production and content |
|
$ |
163.4 |
|
|
$ |
172.5 |
|
|
$ |
324.7 |
|
|
$ |
350.0 |
|
Live events and hospitality |
|
|
132.1 |
|
|
|
128.2 |
|
|
|
420.6 |
|
|
|
481.3 |
|
Partnerships and marketing |
|
|
7.9 |
|
|
|
14.5 |
|
|
|
30.2 |
|
|
|
27.5 |
|
Consumer products licensing and other |
|
|
3.2 |
|
|
|
4.4 |
|
|
|
7.4 |
|
|
|
10.5 |
|
Total Revenue |
|
$ |
306.6 |
|
|
$ |
319.6 |
|
|
$ |
782.9 |
|
|
$ |
869.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating costs |
|
$ |
202.8 |
|
|
$ |
313.5 |
|
|
$ |
527.8 |
|
|
$ |
692.1 |
|
Selling, general and administrative expenses |
|
$ |
74.8 |
|
|
$ |
97.3 |
|
|
$ |
152.6 |
|
|
$ |
187.1 |
|
Adjusted EBITDA |
|
$ |
29.0 |
|
|
$ |
(91.2 |
) |
|
$ |
102.5 |
|
|
$ |
(9.9 |
) |
Adjusted EBITDA margin |
|
|
9 |
% |
|
|
(29 |
)% |
|
|
13 |
% |
|
|
(1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
IMG Business Operating Metrics: |
|
|
|
|
|
|
|
|
|
|
|
|
Number of clients with events (1) |
|
|
|
|
|
|
|
|
|
|
|
|
Rights |
|
|
77 |
|
|
|
94 |
|
|
|
97 |
|
|
|
105 |
|
Studios |
|
|
91 |
|
|
|
85 |
|
|
|
118 |
|
|
|
101 |
|
Event management |
|
|
18 |
|
|
|
19 |
|
|
|
27 |
|
|
|
25 |
|
Total |
|
|
186 |
|
|
|
198 |
|
|
|
242 |
|
|
|
231 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents unique clients generating revenue in the period; quarterly counts may include repeats. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
On Location Operating Metrics |
|
June 30, 2025 |
|
|
June 30, 2024 |
|
|
June 30, 2025 |
|
|
June 30, 2024 |
|
|
|
Number of Events |
|
|
Packages Sold |
|
|
Number of Events |
|
|
Packages Sold |
|
|
Number of Events |
|
|
Packages Sold |
|
|
Number of Events |
|
|
Packages Sold |
|
NFL |
|
|
1 |
|
|
|
1,211 |
|
|
|
1 |
|
|
|
1,166 |
|
|
|
27 |
|
|
|
33,536 |
|
|
|
24 |
|
|
|
36,906 |
|
Collegiate Sports |
|
|
5 |
|
|
|
45,381 |
|
|
|
5 |
|
|
|
55,577 |
|
|
|
28 |
|
|
|
117,382 |
|
|
|
27 |
|
|
|
133,434 |
|
Combat Sports |
|
|
20 |
|
|
|
9,449 |
|
|
|
21 |
|
|
|
8,047 |
|
|
|
35 |
|
|
|
14,088 |
|
|
|
37 |
|
|
|
12,828 |
|
Other Sports |
|
|
9 |
|
|
|
7,864 |
|
|
|
10 |
|
|
|
8,033 |
|
|
|
17 |
|
|
|
17,888 |
|
|
|
18 |
|
|
|
18,181 |
|
Corporate and Other
Corporate and Other revenue primarily relates to media rights fees associated with the distribution of PBR's programming content; ticket sales and site fees associated with live events; partnerships and marketing; and consumer product licensing agreements of PBR-branded products. Revenue also consists of management fees for services provided to certain equity method investments primarily related to boxing. Corporate and Other expenses relate to direct operating costs and general and administrative expenses attributable to PBR as well as general and administrative expenses largely related to corporate activities, including information technology, facilities, legal, human resources, finance, accounting, treasury, investor relations, corporate communications, community relations and compensation to TKO’s management and board of directors, which support each of the reportable segments. Corporate and Other expenses also include service fees paid by the Company to Endeavor related to corporate activities as well as revenue generating activities under the Services Agreement, prior to its termination on February 28, 2025. As discussed above, on the closing date of the Endeavor Asset Acquisition, the Services Agreement between TKO OpCo and Endeavor was terminated and a Transition Services Agreement has been entered into between the EGH Parties, TWI and the TKO Parties.
The following table sets forth results for Corporate and Other for the three and six months ended June 30, 2025 and 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
Revenue |
|
$ |
44.6 |
|
|
$ |
40.9 |
|
|
$ |
99.0 |
|
|
$ |
93.1 |
|
Adjusted EBITDA |
|
$ |
(77.1 |
) |
|
$ |
(91.2 |
) |
|
$ |
(154.5 |
) |
|
$ |
(168.9 |
) |
The following table sets forth our operating metrics for PBR for the three and six months ended June 30, 2025 and 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
PBR Operating Metrics: |
|
|
|
|
|
|
|
|
|
|
|
|
Number of events: |
|
|
|
|
|
|
|
|
|
|
|
|
UTB |
|
|
5 |
|
|
|
6 |
|
|
|
18 |
|
|
|
19 |
|
Teams |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Velocity |
|
|
4 |
|
|
|
6 |
|
|
|
31 |
|
|
|
31 |
|
Other |
|
|
13 |
|
|
|
13 |
|
|
|
20 |
|
|
|
18 |
|
Total events |
|
|
22 |
|
|
|
25 |
|
|
|
69 |
|
|
|
68 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location of events: |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
|
18 |
|
|
|
20 |
|
|
|
63 |
|
|
|
61 |
|
International |
|
|
4 |
|
|
|
5 |
|
|
|
6 |
|
|
|
7 |
|
Total events |
|
|
22 |
|
|
|
25 |
|
|
|
69 |
|
|
|
68 |
|
Adjusted EBITDA for the three months ended June 30, 2025 increased by $14.1 million, or 15%, compared to the three months ended June 30, 2024. This increase was primarily driven by the impact of $23.7 million of lower corporate allocated costs from Endeavor Group Holdings, Inc. to the Acquired Businesses and incremental revenue from higher management fees for services provided to certain equity method investments primarily related to boxing. These increases were partially offset by $13.8 million of higher cost of personnel and other operating expenses compared to the prior year.
Adjusted EBITDA for the six months ended June 30, 2025 increased by $14.4 million, or 9%, compared to the six months ended June 30, 2024. This increase was primarily driven by the impact of $32.8 million of lower corporate allocated costs from Endeavor Group Holdings, Inc. to the Acquired Businesses and incremental revenue from higher management fees for services provided to certain equity method investments primarily related to boxing. These increases were partially offset by $22.6 million of higher cost of personnel and other operating expenses compared to the prior year.
NON-GAAP FINANCIAL MEASURES
Adjusted EBITDA is a non-GAAP financial measure and is defined as net income, excluding income taxes, net interest expense, depreciation and amortization, equity-based compensation, merger and acquisition costs, certain legal costs, restructuring, severance and impairment charges, and certain other items when applicable. Adjusted EBITDA margin is a non-GAAP financial measure defined as Adjusted EBITDA divided by Revenue.
TKO management believes that Adjusted EBITDA and Adjusted EBITDA margin are useful to investors as these measures eliminate the significant level of non-cash depreciation and amortization expense that results from its capital investments and intangible assets, and improve comparability by eliminating the significant level of interest expense associated with TKO’s debt facilities, as well as income taxes which may not be comparable with other companies based on TKO’s tax and corporate structure.
Adjusted EBITDA and Adjusted EBITDA margin are used as the primary bases to evaluate TKO’s consolidated operating performance.
Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of TKO’s results as reported under GAAP. Some of these limitations are:
•they do not reflect every cash expenditure, future requirements for capital expenditures, or contractual commitments;
•Adjusted EBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on TKO’s debt;
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and Adjusted EBITDA and Adjusted EBITDA margin do not reflect any cash requirement for such replacements or improvements; and
•they are not adjusted for all non-cash income or expense items that are reflected in TKO’s statements of cash flows.
TKO management compensates for these limitations by using Adjusted EBITDA and Adjusted EBITDA margin along with other comparative tools, together with GAAP measurements, to assist in the evaluation of TKO’s operating performance.
Adjusted EBITDA and Adjusted EBITDA margin should not be considered substitutes for the reported results prepared in accordance with GAAP and should not be considered in isolation or as alternatives to net income as indicators of TKO’s financial performance, as measures of discretionary cash available to it to invest in the growth of its business or as measures of cash that will be available to TKO to meet its obligations. Although TKO uses Adjusted EBITDA and Adjusted EBITDA margin as financial measures to assess the performance of its business, such use is limited because it does not include certain material costs necessary to operate TKO’s business. TKO’s presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed as indications that its future results will be unaffected by unusual or nonrecurring items. These non-GAAP financial measures, as determined and presented by TKO, may not be comparable to related or similarly titled measures reported by other companies. Set forth below are reconciliations of TKO’s most directly comparable financial measures calculated in accordance with GAAP to these non-GAAP financial measures on a consolidated basis.
Adjusted EBITDA and Adjusted EBITDA Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
Reconciliation of Net Income (Loss) to Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
273.1 |
|
|
$ |
46.2 |
|
|
$ |
438.6 |
|
|
$ |
(188.3 |
) |
Provision for income taxes |
|
|
46.5 |
|
|
|
6.6 |
|
|
|
67.7 |
|
|
|
0.9 |
|
Interest expense, net |
|
|
48.2 |
|
|
|
63.0 |
|
|
|
93.0 |
|
|
|
124.2 |
|
Depreciation and amortization |
|
|
99.4 |
|
|
|
118.9 |
|
|
|
199.9 |
|
|
|
241.0 |
|
Equity-based compensation expense (1) |
|
|
33.0 |
|
|
|
26.8 |
|
|
|
63.3 |
|
|
|
59.0 |
|
Merger and acquisition costs (2) |
|
|
4.2 |
|
|
|
2.4 |
|
|
|
44.0 |
|
|
|
2.9 |
|
Certain legal costs (3) |
|
|
9.7 |
|
|
|
6.0 |
|
|
|
16.2 |
|
|
|
351.2 |
|
Restructuring, severance and impairment (4) |
|
|
4.3 |
|
|
|
30.4 |
|
|
|
5.8 |
|
|
|
39.9 |
|
Other adjustments (5) |
|
|
8.1 |
|
|
|
0.5 |
|
|
|
15.4 |
|
|
|
8.9 |
|
Total Adjusted EBITDA |
|
$ |
526.5 |
|
|
$ |
300.8 |
|
|
$ |
943.9 |
|
|
$ |
639.7 |
|
Net income (loss) margin |
|
|
21 |
% |
|
|
4 |
% |
|
|
17 |
% |
|
|
(8 |
)% |
Adjusted EBITDA margin |
|
|
40 |
% |
|
|
25 |
% |
|
|
37 |
% |
|
|
26 |
% |
(1)Equity-based compensation represents non-cash compensation expense for various awards issued under the TKO 2023 Incentive Award Plan, awards assumed in connection with the acquisition of WWE in September 2023, and awards issued under Endeavor Group Holdings, Inc.’s 2021 Plan. For the three and six months ended June 30, 2025 and 2024, equity-based compensation includes $1.0 million and $6.7 million, and $2.0 million and $15.7 million, respectively, of expense associated with certain services provided by an independent contractor in the WWE segment. For the three and six months ended June 30, 2024, equity-based compensation includes $0.9 million and $3.3 million, respectively, of expense associated with accelerated vesting of the Replacement Awards related to the workforce reduction of certain employees in the WWE segment and Corporate and Other.
(2)Includes certain costs of professional advisors related to strategic transactions, primarily the Endeavor Asset Acquisition.
(3)Includes costs related to certain litigation matters including antitrust lawsuits for UFC and WWE and matters where Mr. McMahon has agreed to make future payments to certain counterparties personally. For the six months ended June 30, 2024, these costs include the preliminary legal settlement of the UFC antitrust lawsuit for $335.0 million, as described in Note 15, Commitments and Contingencies, to our unaudited consolidated financial statements in this Quarterly Report.
(4)Includes costs resulting from the Company’s cost reduction program as described in Note 14, Restructuring Charges, to our unaudited consolidated financial statements in this Quarterly Report. For the three and six months ended June 30, 2024, the Company recorded an impairment charge of $24.3 million as a result of reducing the carrying value of WWE assets held for sale to their fair value less cost to sell, as described in Note 5, Supplementary Data, to our unaudited consolidated financial statements in this Quarterly Report.
(5)For the three months ended June 30, 2025, other adjustments primarily reflect losses on foreign exchange transactions, partially offset by a net gain of $2.2 million related to the sale of certain equity method investments. For the six months ended June 30, 2025, other adjustments primarily reflect losses on foreign exchange transactions and also includes a net loss of $2.5 million from the sale of certain equity method investments, partially offset by a gain of $1.3 million on the sale of PBR's former headquarters building. Other adjustments for three and six months ended June 30, 2024 primarily reflects losses on foreign exchange transactions.
Liquidity and Capital Resources
Sources and Uses of Cash
Cash flows from operations are used to fund TKO’s day-to-day operations, revenue-generating activities, and routine capital expenditures, as well as service its long-term debt, and are expected to be used to fund our capital return programs.
Credit Facilities
As of June 30, 2025 and December 31, 2024, the Company had $2.7 billion and $2.8 billion, respectively, outstanding under a credit agreement dated August 18, 2016 (as amended and/or restated, the “First Lien Credit Agreement”), by and among Zuffa Guarantor, LLC ("Zuffa Guarantor"), UFC Holdings, LLC ("UFC Holdings"), as borrower, the lenders party hereto and Goldman Sachs Bank USA, as Administrative Agent, which was entered into in connection with the acquisition of Zuffa by EGH in 2016. TKO Operating Company, LLC and TKO Group Holdings, Inc. are holding companies with limited business operations, cash flows, assets and liabilities other than the equity interests in the borrower entities Zuffa Guarantor and UFC Holdings. On November 21, 2024 (the “Closing Date”), UFC Holdings entered into the Fifth Refinancing Amendment (the “Credit Agreement Amendment”) to the First Lien Credit Agreement (as previously amended and/or restated, the “Existing Credit Agreement” and, as further amended by the Credit Agreement Amendment, the “Credit Agreement”).
The Credit Agreement Amendment amended the Existing Credit Agreement to, among other things, (i) refinance and replace the outstanding first lien secured term loans (the “Existing Term Loans”) with a new class of first lien secured term loans in an aggregate principal amount of $2,750.0 million (the “New Term Loans”), which now mature on November 21, 2031, (ii) refinance the existing secured revolving credit facility (the “Existing Revolving Credit Facility”) in an aggregate principal amount of $205.0 million, which now matures on November 21, 2029 (the “New Revolving Credit Facility,” and, together with the New Term Loans, the “Credit Facilities”), and (iii) make certain other changes to the Existing Credit Agreement including as summarized below. The Credit Facilities are secured by liens on substantially all of the assets of Zuffa Guarantor and UFC Holdings and certain subsidiaries thereof.
The New Term Loans accrue interest at an annual interest rate equal to Term Secured Overnight Financing Rate ("SOFR") plus 2.25%, with a SOFR floor of 0.00%, which totaled 6.57% as of June 30, 2025. The Existing Term Loans accrued interest at an annual interest rate equal to SOFR plus a credit spread adjustment plus 2.75%. The New Term Loans include 1% principal amortization payable in equal quarterly installments, with any remaining balance payable on the final maturity date of November 21, 2031.
The loans made pursuant to the New Revolving Credit Facility accrue interest at a variable interest rate equal to Term SOFR plus 2.00%-2.25%, depending on the First Lien Leverage Ratio (as defined in the Credit Agreement), with a SOFR floor of 0.00%.
On the Closing Date, UFC Holdings borrowed $2,750.0 million of New Term Loans under the Credit Agreement to (i) repay the entire amount outstanding under the Existing Term Loans and (ii) pay fees and expenses incurred in connection with entering into the Credit Agreement Amendment.
As of June 30, 2025 and December 31, 2024, there was no outstanding balance under the New Revolving Credit Facility.
The New Revolving Credit Facility contains a financial covenant that requires the Company to maintain, commencing with the fiscal quarter ending June 30, 2025, a First Lien Leverage Ratio of Consolidated First Lien Debt to Consolidated EBITDA of 8.25-to-1. Prior to the Closing Date, Zuffa Guarantor was required to maintain a First Lien Leverage Ratio of no more than 6.5-to-1. Pursuant to the terms of the Credit Agreement Amendment, following the Closing Date, the Company is only required to comply with the foregoing financial covenant if the sum of outstanding borrowings under the New Revolving Credit Facility (excluding any letters of credit, whether drawn or undrawn) is greater than the greater of (i) $85.0 million and (ii) forty percent of the borrowing capacity of the New Revolving Credit Facility. Prior to the Closing Date, this applicable testing condition was thirty-five percent of the borrowing capacity of the Existing Revolving Credit Facility. This covenant did not apply as of June 30, 2025 and December 31, 2024 as UFC Holdings had no borrowings outstanding under either of the revolving credit facilities.
UFC Holdings had $11.1 million of outstanding letters of credit as of June 30, 2025 and none as of December 31, 2024.
Restrictions on Dividends
The Credit Agreement contains restrictions on TKO’s ability to make distributions and other payments from the respective credit groups. These restrictions on dividends include exceptions for, among other things, (1) amounts necessary to make tax payments, (2) a limited annual amount for employee equity repurchases, (3) distributions required to fund certain parent entities, (4) other specific allowable situations and (5) a general restricted payment basket, which generally provides for no restrictions as long as the Total Leverage Ratio (as defined in the Credit Agreement) is less than 5.0x.
Other Debt
In October 2018, UFC entered into a $28.0 million Loan Agreement and a $12.0 million Loan Agreement in order to finance the purchase of a building and its adjacent land (the “Secured Commercial Loans”). The Secured Commercial Loans have identical terms except the $28.0 million Loan Agreement is secured by a deed of trust for UFC’s headquarters building and underlying land in Las Vegas and the $12.0 million Loan Agreement is secured by a deed of trust for the acquired building and its adjacent land, also located in Las Vegas. The Secured Commercial Loans bore interest at a rate of LIBOR + 1.62% (with a LIBOR floor of 0.88%). In May 2023, the parties amended the terms of the Secured Commercial Loans to replace the adjusted LIBOR reference rate with SOFR, and bear interest at a rate of SOFR plus 1.70%. Principal amortization of 4% is payable in monthly installments with any remaining balance payable on the final maturity date of November 1, 2028.
The applicable loan agreements each contain a financial covenant that requires UFC to maintain a Debt Service Coverage Ratio as defined in the applicable loan agreements of no more than 1.15-to-1 as measured on an annual basis (the “Secured Commercial Loan Covenant”). As of June 30, 2025 and December 31, 2024, UFC was in compliance with the Secured Commercial Loan Covenant.
Capital Return Programs
In October 2024, the Company announced that its board of directors has authorized a share repurchase program of up to $2.0 billion of its Class A common stock and the approval of a quarterly cash dividend program pursuant to which holders of TKO’s Class A common stock will receive their pro rata share of approximately $75.0 million expected quarterly distributions to be made by TKO OpCo. TKO OpCo made distributions of $75.2 million on each of March 31, 2025 and June 30, 2025 under the cash dividend program. We will determine at our discretion the timing and the amount of any repurchases based on our evaluation of market conditions, share price, and other factors. Repurchases under the share repurchase program may be made in the open market, in privately negotiated transactions or otherwise, and we are not obligated to acquire any particular amount under the share repurchase program. The share repurchase program has no expiration, is expected to be completed within approximately three to four years and may be modified, suspended, or discontinued at any time.
Future declarations of quarterly dividends are subject to our determination and discretion based on our consideration of various factors, such as our results of operations, financial condition, market conditions, earnings, cash flow requirements, restrictions in its debt agreements and legal requirements and other factors that we deem relevant.
Cash Flows Overview
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
June 30, |
|
|
|
2025 |
|
|
2024 |
|
Net cash provided by operating activities |
|
$ |
559.0 |
|
|
$ |
352.0 |
|
Net cash used in investing activities |
|
$ |
(49.7 |
) |
|
$ |
(83.3 |
) |
Net cash used in financing activities |
|
$ |
(346.0 |
) |
|
$ |
(258.3 |
) |
Operating activities increased from $352.0 million of cash provided in the six months ended June 30, 2024 to $559.0 million of cash provided in the six months ended June 30, 2025. Cash provided in the six months ended June 30, 2025 was primarily due to net income for the period of $438.6 million, which included certain non-cash items, including depreciation and amortization of $199.9 million and equity-based compensation of $63.3 million, as well as an increase in restricted cash of $265.1 million related to On Location for the FIFA World Cup 2026. This increase was partially offset by a decline in accounts payable and accrued liabilities primarily driven by the $250.0 million payments under the settlement agreement in the UFC antitrust lawsuits and the timing of bonus payments.
Investing activities increased from $83.3 million of cash used in the six months ended June 30, 2024 to $49.7 million of cash used in the six months ended June 30, 2025. Cash used in the six months ended June 30, 2025 primarily reflects payments for property, buildings and equipment of $48.6 million and investments in affiliates of $13.8 million, partially offset by proceeds from the sale of assets of $5.8 million and infrastructure improvement incentives received of $5.4 million. Cash used in the six months ended June 30, 2024 primarily reflects payments for property, buildings and equipment of $64.2 million and investments in affiliates of $16.4 million.
Financing activities decreased from $258.3 million of cash used in the six months ended June 30, 2024 to $346.0 million of cash used in the six months ended June 30, 2025. Cash used in the six months ended June 30, 2025 primarily reflects distributions to EGH and its subsidiaries of $166.7 million, net transfers to Endeavor Group Holdings, Inc. of $122.5 million, dividends paid to holders of TKO Class A common stock of $62.1 million and net payments on debt of $20.8 million. These decreases were partially offset by contributions of $26.5 million from Endeavor Group Holdings, Inc. in connection with the Endeavor Asset Acquisition. Cash used in the six months ended June 30, 2024 primarily reflects share repurchases of $165.0 million, net transfers to Endeavor Group Holdings, Inc. of $70.2 million, and net payments on debt of $22.1 million.
Future Sources and Uses of Liquidity
TKO’s sources of liquidity are (1) cash on hand, (2) cash flows from operations and (3) available borrowings under the Credit Facilities (which borrowings would be subject to certain restrictive covenants contained therein). Based on our current expectations, we believe that these sources of liquidity will be sufficient to fund our working capital requirements and to meet our commitments, including long-term debt service, for at least the next 12 months.
TKO expects that its primary liquidity needs will be cash to (1) provide capital to facilitate organic growth of its business, (2) pay operating expenses, including cash compensation to its employees, athletes and talent, (3) fund capital expenditures and investments, (4) pay interest and principal when due on the Credit Facilities, (5) pay income taxes, (6) reduce its outstanding indebtedness under the Credit Facilities, (7) fund share repurchases as authorized by the Board and (8) make distributions to members and, in accordance with the Company’s cash management policy, to TKO stockholders, including the planned quarterly dividend when declared by the Board.
Recent Accounting Pronouncements
See Note 3, Recent Accounting Pronouncements, to our unaudited consolidated financial statements included in this Quarterly Report for further information on certain accounting standards that have been recently adopted or that have not yet been required to be implemented and may be applicable to our future operations.
Critical Accounting Estimates
For a description of our policies regarding our critical accounting estimates, see “Critical Accounting Estimates” in our audited recast combined financial statements and accompanying notes with respect to the fiscal years ended December 31, 2024, 2023 and 2022 (included in a Form 8-K filing on May 8, 2025), giving effect to the Endeavor Asset Acquisition as if such transaction had been consummated at the beginning of the earliest period presented. During the six months ended June 30, 2025, there were no significant changes in our critical accounting policies and estimates or the application or the results of the application of those policies to our unaudited consolidated financial statements from those previously disclosed in the Form 8-K filing on May 8, 2025.