TKO Group Q1 2025 Earnings Call Transcript

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Provided by Quartr
May 8, 2025
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Operator

Good afternoon. Thank you for attending today's TKO Q1 twenty twenty five Earnings Call. My name is Cole, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I'd now like to hand it over to Seth Zaslow, Head of Investor Relations.

Operator

Please go ahead.

Seth Zaslow
Seth Zaslow
Senior VP & Head of Investor Relations at TKO Group Holdings

Good afternoon, and welcome to TKO's first quarter twenty twenty five earnings call. A short while ago, we issued a press release, which you can view on our Investor Relations website. A recording of this call will also be available via our website for at least thirty days. After prepared remarks from Ari Emanuel, TKO's Executive Chair and Chief Executive Officer and Andrew Schweimer, TKO's Chief Financial Officer, we'll open the call for questions. Mark Shapiro, our President and Chief Operating Officer and Andrew will be handling the Q and A.

Seth Zaslow
Seth Zaslow
Senior VP & Head of Investor Relations at TKO Group Holdings

The purpose of this call is to provide you with information regarding our first quarter twenty twenty five performance. I want to remind everyone that the information discussed will include forward looking statements and or projections that involve risks, uncertainties and assumptions. Please see our filings with the Securities and Exchange Commission for further detail. If these risks or uncertainties were to materialize or any assumptions prove incorrect, our results may differ materially from those expressed or implied on this call. Forward looking statements speak only as of the date they are made, and we undertake no obligation to update them in light of new information or future events, except as legally required.

Seth Zaslow
Seth Zaslow
Senior VP & Head of Investor Relations at TKO Group Holdings

Our commentary today will also include non GAAP financial measures, which we believe provide an additional tool for investors to use in evaluating ongoing operating results and trends. These measures should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP. Reconciliations between GAAP and non GAAP metrics can be found in our press release issued today as well as the information posted on our IR website. With that, I'll now turn the call over to Ari.

Ariel Emanuel
Ariel Emanuel
Executive Chair, CEO & Director at TKO Group Holdings

Thanks, Seth. We are off to a good start in 2025, driven by continued momentum at UFC and WWE. Our first quarter revenue and profitability beat our internal expectations, and as a result, we are raising our guidance for the full year. During Q1, we also completed our acquisition of industry leading assets IMG on location and PBR. And we're now hard at work on integrating the properties into our flywheel and identifying synergies to drive top line growth and cut costs.

Ariel Emanuel
Ariel Emanuel
Executive Chair, CEO & Director at TKO Group Holdings

Andrew will share more on our updated outlook for 2025 inclusive of these businesses. Turning to the UFC. Live Events and global partnerships continue to deliver solid performance and drive meaningful growth. Live Events set new records in Q1, including our Fight Night in London, delivering the highest grossing Fight Night in company history and UFC three twelve in Sydney setting the record for Australia's highest grossing indoor arena event. Global demand for our live events further underscores our conviction in the site fee model.

Ariel Emanuel
Ariel Emanuel
Executive Chair, CEO & Director at TKO Group Holdings

Evidence of the potential here was seen in the announcement of our partnership with the Western Australian government to host five major UFC and WWE events in Perth through 2026. Our global partnerships team also secured several major innovative deals as leading brands continue to see value in UFC's worldwide and highly engaged fan base. We renewed our long standing partnership with Monster Energy in a multiyear agreement that is the largest sponsorship deal in company history. We also entered into a groundbreaking multiyear partnership with Meta designed to bring UFC content to life in immersive new ways, from AI enhanced fighter rankings to next gen in arena experiences and exclusive content across Meta's platforms. At WWE, the year started with the spectacle debut of our Netflix partnership, which will put our content in front of the streamer's 300,000,000 global subscribers each week.

Ariel Emanuel
Ariel Emanuel
Executive Chair, CEO & Director at TKO Group Holdings

Raw is now a mainstay on the global top 10, and we're seeing significant engagement and viewership increases internationally for weekly WWE programming and premium live events on Netflix, especially in Mexico, The U. K, Australia and Brazil. As global territories roll off existing rights deals, WWE's international footprint on Netflix will continue to expand. In fact, India has now joined the Netflix WWE family and brings with it one of the world's most passionate and engaged fan bases. Overall, WWE's live events similarly outperformed with 35 individual market records for ticket sales and 17 sold out events in the quarter.

Ariel Emanuel
Ariel Emanuel
Executive Chair, CEO & Director at TKO Group Holdings

Elimination Chamber in Toronto became WWE's highest grossing event in Canada. Royal Rumble set a new milestone as the highest grossing non WrestleMania event in company history, and the Road to WrestleMania tour achieved gate records at each of its 12 European events and drew over 116,000 fans collectively. That charge culminated in a record breaking WrestleMania forty one in Las Vegas last month. Allegiant Stadium welcomed 124,000 fans across two nights, and WrestleMania forty one became WWE's most successful event ever, breaking all time records in gate, premium hospitality, viewership, sponsorship, merchandise and social engagement. Turning now to some highlights from IMG, on location and PBR.

Ariel Emanuel
Ariel Emanuel
Executive Chair, CEO & Director at TKO Group Holdings

IMG announced several major renewals that underscore their unmatched capabilities, expertise and global reach in sports. We renewed our partnership with CONMEVOL, the South American Football Confederation covering sponsorship and media rights through 02/1930. We extended our strategic partnership with Euroleague Basketball through the 2,035 'thirty six season, building on a successful joint venture that has driven significant growth in media rights value and production quality since 2016. And we renewed and expanded our partnership with Major League Soccer to deliver live match and studio coverage of more than 600 games each year on Apple TV, all produced from WWE's state of the art studio facilities in Stamford, Connecticut. And at On Location, our partnership with the NFL, the leading sports and entertainment property across The U.

Ariel Emanuel
Ariel Emanuel
Executive Chair, CEO & Director at TKO Group Holdings

S, delivered more than 32,000 fan experiences, including at Super Bowl LVI in New Orleans, a tremendous result in the very first year of a new contract extension with the league that runs through 02/1936. I should mention that in terms of trends, WrestleMania forty one, held just a few weeks ago, was no different. On location hospitality package revenue surged 75% over WrestleMania forty. Having this experiential hospitality capability now in house at TKO bodes well for not only the growth of our owned assets, but the partnership opportunities across the 200 global sports league and team clients served by IMG. Finally, PBR's Unleash the Beast and Velocity tours stretch the live events demand we are witnessing with a strong showing in the quarter, drawing 640,000 fans to their 40 events and selling out more than 30.

Ariel Emanuel
Ariel Emanuel
Executive Chair, CEO & Director at TKO Group Holdings

Almost right out of the gate, we are capitalizing on the strengths and capabilities of these new TKO businesses to accelerate value creation across UFC and WWE. The TKO Takeover, as we call it, last month in Kansas City, marked the first time all three businesses appeared in the same arena and city over a single weekend, showcasing our unified live event strategy and seamless coordination across scheduling, ticketing and the fan experience. Our conviction in our businesses is as strong as ever. We remain focused on creating value for shareholders through integrating and driving synergies across our newly expanded sports portfolio, delivering a media rights deal for UFC that positions the brand and the business for long term audience and financial success and executing our capital return programs. With that, I'll turn the call over to Andrew.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

Good afternoon. As Ari highlighted, 2025 is off to a great start. We have delivered strong operating and financial performance at UFC and WWE and have raised our expectations for performance for the remainder of the year. I'll provide more detail on the outlook later in my remarks. Before I review our financial statements, I'll briefly touch upon basis of presentation.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

As we mentioned on our last earnings call, the acquisition of IMG on location and PBR is accounted for as a merger between entities under common control. As a result, our first quarter results include three months of activity, even though the acquisition closed on February 28 and we only owned and controlled these businesses for one month. In addition, our first quarter twenty twenty four results have been recast to include activity for these businesses. The financial results for the periods that we did not own the acquired businesses were prepared by Endeavor and include allocations of expenses to the businesses based on Endeavor's overall corporate expense profile. This presentation is consistent with the carve financial statements for the acquired businesses included in our information statement on Form 14 C filed in connection with the transaction.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

These expenses consisted of certain support functions that were provided on a centralized basis, such as finance, human resources, information technology, facilities and legal, among others. Endeavor allocated these corporate expenses on a pro rata basis of headcount and gross profit. In total, such corporate allocations in Q1 were $21,700,000 and represent the amounts solely from January 1 to February 28, the two months that we did not own the businesses. The corporate allocations were $30,700,000 for the three months ended 03/31/2024, reflecting a full three months of Endeavor ownership a year ago. To be clear, under Teekay ownership effective February twenty eight of this year, such corporate allocations will no longer occur.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

With respect to segment reporting, in connection with the acquisition, we performed a review to determine the optimal reporting structure for the company. Based on this review, we've added a third reporting segment, IMG, which consists of the operations of the IMG business and on location. To that end, we included PBR within our corporate group and have renamed it Corporate and Other. With respect to UFC and WWE, both will remain standalone reporting segments and there is no change in how we are presenting these businesses in our financial statements. UFC and WWE remain core drivers of TKO, and we will provide the exact same presentation and disclosure as we have since the inception of the company.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

In connection with our review of segmentation, we've also reviewed our various revenue verticals as well as key performance indicators and have updated our disclosure. With respect to revenue verticals, we've made some small tweaks to the nomenclature. Most notably, we've revised sponsorship revenue to partnerships and marketing revenue, which better reflects the strategic and operational functions of this area of our business. With respect to the select KPIs to be disclosed in our 10 Q, we've added KPIs for the acquired businesses that provide additional transparency for several important metrics such as number of events, clients and hospitality packages sold. When we announced the acquisition, we represented that we would work hard to assist the investment community in better understanding the drivers of the financial results for these businesses.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

We plan to periodically reference these metrics in future discussions as warranted. Before I get into more detail on our financial results, I wanted to comment on the macroeconomic environment as we know this is a topic on investors' minds. We're paying close attention to consumer behavior, but to date, we're not seeing any signs of a slowdown across our portfolio, including our premium hospitality business on location. As I'll discuss in more detail in a moment, we continue to see significant strength, particularly with respect to live events and partnerships. As for tariffs, we are largely insulated as the vast majority of our revenue is not expected to be directly impacted.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

One area of our business with a limited impact is consumer products. However, since WWE and UFC rely heavily on a license model and have minimal self manufactured goods, the impact isn't expected to be in any way significant. Now turning to our consolidated financial results for the first quarter inclusive of the acquired businesses. We generated revenue of $1,269,000,000 an increase of 4%. Adjusted EBITDA was $417,000,000 an increase of 23.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

Our adjusted EBITDA margin was 33%, an increase from 28% in the prior year period. Our UFC segment generated revenue of $360,000,000 an increase of 15%. Adjusted EBITDA was $227,000,000 an increase of 17%. UFC's adjusted EBITDA margin was 63%, an increase from 62% in the prior year period. UFC had 11 total events, including three numbered events, in both the first quarter of this year and last year.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

As we previewed on our last call, mix shifted to a higher proportion of events with live audiences, with seven in the first quarter compared to five last year, including two additional international events. Live Events and Hospitality revenue increased 66% to $59,000,000 The increase reflected higher site fee revenue, primarily related to the Fight Night held in Saudi Arabia as well as an increase in ticket sales, which reflected the two additional events with live audiences as well as strong underlying trends in pricing and attendance. Partnerships and marketing revenue increased 32% to $64,000,000 The increase was driven by new partnerships as well as partnership renewals. We continue to make significant progress in growing this area of our business, as highlighted by our recent renewal with long standing partner, Monster Energy. This agreement was the largest partnership deal in UFC history.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

We also signed a groundbreaking new 9 figure multiyear partnership agreement with Meta. Meteorite's production and content revenue increased 4% to $224,000,000 The increase was primarily driven by the contractual escalation of media rights fees. Adjusted EBITDA reflected the increase in revenue, partially offset by an increase in expenses. Direct operating expenses increased primarily due to higher production, marketing, athlete costs and direct cost of revenue due to the mix of event venues and territories. SG and A increased primarily due to higher personnel costs and travel expenses compared to the prior year period.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

Our WWE segment generated revenue of $392,000,000 an increase of 24%. Adjusted EBITDA was $194,000,000 an increase of 38%. Adjusted EBITDA margin was 50%, up from 44% in the prior year period. Live Events and Hospitality revenue increased 52% to $76,000,000 As with UFC, we continue to see strong underlying trends for WWE Live Events. The increase was primarily related to an increase in ticket sales, which more than offset a decrease in site fees that is purely timing related.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

As a reminder, we received a meaningful site fee for Elimination Chamber in Perth, Australia in the first quarter of last year. Partnerships and marketing revenue increased 86% to $26,000,000 due to new partnerships and renewals across multiple categories, including financial services, telecom, beer, wine, spirits and QSR among others. While it occurred in April, WrestleMania '40 '1 was emblematic of the momentum we're seeing in this area. The event, featured a record 28 total partners, including a partner sponsor for each of the 14 matches over the two nights, set an all time record for partnerships revenue, more than double the previous record from last year's event, as well as records for ticket sales, premium hospitality and consumer products. Media rights production and content revenue increased 14% to $252,000,000 As expected, results reflected the expansion of SmackDown to a three hour format for the first half of the year, resulting in a shift in quarterly revenue recognition, but has no impact on the full year amounts.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

The increase was also driven by the contractual escalation of media rights fees, including the January commencement of our long term agreement with Netflix to distribute Raw in The U. S. And all of WWE's content internationally. Adjusted EBITDA reflected the increase in revenue, partially offset by an increase in expenses. Direct operating expenses increased primarily due to higher talent costs.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

SG and A increased due to higher travel expenses, primarily related to the mix of venues and territories, including a three week eleven city tour across Europe leading up to WrestleMania. Our IMG segment generated revenue of $476,000,000 in the quarter, a decrease of 13%. Adjusted EBITDA was $74,000,000 a decrease of 10%. Adjusted EBITDA margin was 15% in both periods. The decline in revenue primarily related to on location activity for the Super Bowl and Collegiate Bowl games.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

The venue location in New Orleans compared to Las Vegas for the Super Bowl and the matchups, notably the third straight Super Bowl appearance for the Kansas City Chiefs, as well as a quarter final Rose Bowl in 2025 compared to a semifinal game in 2024, impacted the year over year performance. Adjusted EBITDA primarily reflected the decrease in revenue, partially offset by a decrease in expenses. The decrease in expenses primarily reflected the absence of media rights costs for the FA Cup, which was no longer part of the IMG business in Q1 twenty twenty five. Corporate and other revenue was $54,000,000 an increase of $2,000,000 The activity related to PBR and reflected growth in live events and partnerships, partially offset by a decrease in media rights related to the early termination of the Merit Street Media content distribution deal. Corporate and other adjusted EBITDA was a negative $77,000,000 essentially flat with the prior year period.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

This amount includes the 22,000,000 related to corporate allocations of Endeavor corporate expenses for the two month period prior to the close of the acquisition. For the avoidance of doubt, from February 28 forward, there will be no additional corporate allocation expenses of this nature. Also in connection with the acquisition, we've evaluated the treatment of various costs at these businesses and made certain adjustments to conform the presentation to the methodology used for UFC and WWE. In aggregate, this resulted in a reclassification of approximately $10,000,000 of costs in the quarter from the IMG segment to Corporate and Other. Now moving on to our capital structure.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

In the first three months of the year, we generated $136,000,000 of free cash flow. Our free cash flow conversion of adjusted EBITDA was 32%. Free cash flow included $27,000,000 of capital expenditures. As we discussed on our February earnings call, we expect twenty twenty five free cash flow to include the impact of approximately $300,000,000 of nonrecurring payments related to the recent UFC antitrust settlement and M and A. In Q1, we realized approximately $175,000,000 of these payments.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

The second one hundred and twenty five million dollars installment payment under the settlement agreement as well as transaction costs. As such, our free cash flow was adversely impacted. Free cash flow for the quarter was positively impacted approximately $100,000,000 of prepayments related to on location and the twenty twenty six FIFA World Cup. These amounts are included in cash flows from operations and therefore are a part of our free cash flow calculation. We expect the World Cup prepayments to be a substantial source of cash over the course of 2025, followed by a substantial use of cash in 2026 as payments are due nearer to the tournament taking place.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

As we did this quarter, we intend to separately identify this item going forward, so investors can follow the underlying cash flow generation of our business. As previously disclosed, on March 31, we made our first quarterly cash dividend payment out of Teekay OpCo of approximately $75,000,000 We ended the quarter with $2,776,000,000 in debt and $471,000,000 in cash and cash equivalents as well as $159,000,000 of restricted cash. With respect to our previously announced $2,000,000,000 share repurchase program, we continue to expect the program to commence in the second or third quarter of this year with our timing and level of activity ultimately subject to market conditions and related factors. In the meantime, we continue to accumulate cash and carefully evaluate our capital needs. We're monitoring market conditions closely and are mindful of recent volatility.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

I would like to underscore that in this environment, Ari, Mark and the Board believe we should remain prudent and conservative for the time being. That said, we remain committed to a robust and sustainable capital return program that balances return of capital to shareholders with organic investment, such as our entry into boxing, and maintaining our strong balance sheet. As per boxing, in early March, we announced that we entered into a multiyear partnership to establish a new boxing promotion. We will serve as the managing partner, providing day to day operational management and oversight of the promotion. We've commenced operationalizing the JV and will provide updates as and when appropriate.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

Now turning to our outlook. As we've discussed in the past, we manage the business with a focus on full year performance. Therefore, we believe results are best evaluated on a full year basis given the quarterly fluctuations that are inherent in our operations. As noted in our press release, based on strong performance at UFC and WWE through the first three months of the year and our anticipated performance for the balance of the year, we are increasing our expectations for TKO, excluding the impact of the acquired businesses. We are now targeting revenue of 3,005,000,000.000 to $3,075,000,000 and adjusted EBITDA of 1,390,000,000 to $1,430,000,000 an increase of $75,000,000 and $40,000,000 respectively, as compared to the guidance we issued in February.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

The increase was driven by continued strength across each vertical of our businesses. We are also updating our guidance to include the acquired businesses and the associated transaction impacts. For full year 2025, we are targeting revenue of 4,490,000,000.00 to $4,560,000,000 and adjusted EBITDA of $1,490,000,000 to $1,530,000,000 When we announced the deal last October, we presented an expected full year 2025 revenue and adjusted EBITDA contribution from these acquired businesses, inclusive of expected run rate cost savings of approximately $1,555,000,000 and $165,000,000 respectively. The amounts included in our guidance represent an expected full year 2025 revenue and adjusted EBITDA contribution of approximately $1,485,000,000 and $100,000,000 respectively. The updated contribution is a result of the following: number one, the previously mentioned twenty one point seven million dollars of corporate allocations from Endeavor for January and February.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

Given the fact that our carve out financial statements were not yet prepared, the quantum was unknown at the time. The $21,700,000 is a nonrecurring accounting adjustment and does not reflect the ongoing cost base of the acquired businesses. Number two, our prior cost savings and transaction impacts target of $30,000,000 plus. We've been hard at work identifying and actioning upon these synergies. I'm pleased to report that we have identified $40,000,000 plus of estimated run rate cost savings, of which approximately $15,000,000 are expected to be realized in 2025, with the vast majority expected by year end 2026.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

The $15,000,000 in year twenty twenty five contribution comps to the prior $30,000,000 plus run rate. Number three. At PBR, the previously disclosed loss of our domestic media rights agreement with Merit Street Media. While we remain in active discussions with various parties, our 2025 outlook excludes any revenue or adjusted EBITDA related to a new rights agreement. With respect to the IMG and nonlocation businesses, the expected contribution is essentially consistent with the amounts we disclosed when we announced the transaction.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

In terms of free cash flow, as we discussed on our last call, while we have not given formal guidance, excluding the impact of approximately $300,000,000 of non recurring amounts, our targeted full year 2025 free cash flow conversion rate would be in excess of 60%. This is exclusive of the benefit of any restricted cash. Including the impact of the acquired businesses, our view remains unchanged. Consistent with our prior calls, while we are not providing quarterly guidance, we want to highlight a few notable items as we look to the second quarter. At UFC, results will reflect the mix of events in the quarter.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

UFC is currently scheduled to have 11 total events, including four numbered events, which is comparable to the second quarter of last year. We also expect one additional Fight Night with a live audience and one less Apex event compared to the prior year. With respect to live events revenue, the Fight Night scheduled to take place in Baku, Azerbaijan carries a meaningful site fee, but as a reminder, the second quarter of twenty twenty four included a site fee related to UFC's first ever event in Saudi Arabia. At WWE, given the timing of our event calendar, including WrestleMania as well as a premium live event in Saudi Arabia, we expect the second quarter to be the highest revenue and adjusted EBITDA quarter of the year in terms of absolute dollars. At the IMG segment, the first quarter of the year is historically the most profitable due to the timing of events, most notably the Super Bowl.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

As a result, we expect a quarter over quarter decline in adjusted EBITDA in terms of absolute dollars. In conclusion, we generated strong first quarter results that reflect continued momentum across our businesses, in particular UFC and WWE. While we still have a lot of work ahead of us, the integration of IMG on location and PBR is well underway and yielding meaningful early benefits. We are extremely excited about the road ahead and our prospects for the remainder of the year and beyond. With that, I'll turn it back to Seth.

Seth Zaslow
Seth Zaslow
Senior VP & Head of Investor Relations at TKO Group Holdings

Thanks, Andrew. Operator, we're ready to open the call for questions.

Operator

Our first question is from Ben Swinburne with Morgan Stanley. Your line is now open.

Benjamin Swinburne
Benjamin Swinburne
Head of U.S Media Research at Morgan Stanley

Hey, good afternoon guys. I should ask Mark about the UFC rights renewal now that you guys are, I believe, out of the exclusive window. Can you give us any update on that process? How you're thinking about the pros and cons of splitting those rights or keeping them all with one partner? And sort of any update on ESPN as a go forward partner?

Benjamin Swinburne
Benjamin Swinburne
Head of U.S Media Research at Morgan Stanley

And then, Andrew, I don't know if you can be any more specific. You gave us a lot there at the end on the acquired assets. But just trying to get to free cash flow for '25 now that you've closed the Endeavor acquisitions. Is there anything else you can tell us to sort of help us think about free cash flow conversion including acquired businesses now that that deal is all done? Thank you very much.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

Thanks, Ben. You know, I'll keep my commentary light and then we can get into the free cash flow just because of the nature and sensitivity of all the conversations we're having. We're we're in discussions at this time, various third parties regarding the UFC rights. I would term the conversations as thoughtful and strategic. Nothing to announce at this time.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

And ESPN is still heavily included in the mix. I think we've been pretty vocal about how great of a partner they've been and how instrumental they've been to our growth and success. And I still believe they're one of the best marketing machines in the business, let alone the brand and, of course, all the excitement around ESPN flagship and whatever it's going to be called come next week. Jimmy Vittaro and and and Bob Iger, both fans of the UFC and personally showed up to events and, you know, would be thrilled to continue with them. And they're definitely part of the equation.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

But as I said at the time or for the time being, various conversations, various parties and no real update beyond that. Andrew, the free cash flow?

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

Yes, Ben. As I stated in my prepared remarks and I kind of tacked back to our last call, while we haven't given formal guidance, we do have $300,000,000 or so of nonrecurring amounts that will impact the entirety of 2025. And absent those amounts, free cash flow conversion rate would be in excess of 60%. I did make the statement that including the impact of the acquired business, our view remains unchanged. So therefore, that's the read through.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

The one thing I would note is I also articulated that this is exclusive of the benefit of any restricted cash. Restricted cash is largely associated with the presales for our FIFA arrangement, and we anticipate that to grow over the course of the year. So there will be a benefit from that which we have not sort of forecast or model. So consistent with our prior thoughts, absent the 300,000,000

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

And just a good story for us. I mean obviously our adjusted EBITDA margin will change once we're talking about just the newly formed company, if you will. But to Andrew's point, not changing our free cash flow conversion is something we're pretty excited about.

Benjamin Swinburne
Benjamin Swinburne
Head of U.S Media Research at Morgan Stanley

Yes. That's helpful. Thank you guys.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

Thank you.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

Thank you Ben.

Operator

Our next question is from Brandon Ross with LightShed Partners. Your line is now open.

Brandon Ross
Partner, Media & Technology Analyst at LightShed Partners

Hi, thanks. A couple of topics. First, we all saw the Canelo announcement assume that Canelo falls under the bucket of one offs in your commentary about boxing last quarter. Can you just tell us how the economics work on that versus the main promotion that you're building? And where will these fights get distributed?

Brandon Ross
Partner, Media & Technology Analyst at LightShed Partners

And will you get paid? And is there a strategic tie in to what you're doing with other media rights? And then just to follow-up on Ben's first question, if if you'll be helpful Here we go.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

Brandon. Brandon. Save some for the fish.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

I'm giving you a few follow ups. Alright.

Brandon Ross
Partner, Media & Technology Analyst at LightShed Partners

Give me two follow ups and ask for follow

Brandon Ross
Partner, Media & Technology Analyst at LightShed Partners

ups.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

Exactly. Okay. I was just telling you that, look, we're, you know, we're expecting with the new boxing organization that we're launching to put on an average of, call it, 12 fights a year, 12 cards a year for the next each of the next five years. We're still putting that plan together and obviously working, hand in hand with our friends from Saudi.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

Irrespective of those, we will look to do anywhere from one to four sorta super fights per year. We'll see how that plays out. But, obviously, we would term the Canelo Crawford September matchup as as one of those. And then on that undercard, we would have a a number of those undercard fights that would likely air on the the television partner, the media partner we would have for our newly formed boxing organization. And I should mention, it's not going to be called TKO Boxing.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

We'll you know, that seems like the soup of the day here. We'll be unveiling our name for our business fairly soon here. So but it will not be TKO Boxing. And as you look at those, those are two separate businesses. Right?

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

The Saudis are funding what would be these, you know, super fight cards. We'll work with them on media rights deals and and take a commission. We'll work with them, obviously, on global partnerships. We'll work with them on ticketing. We'll handle the production.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

We'll look to potentially promote all of them with Dana White and Nick Khan, you know, driving much of that. But then separately, we'll have our boxing organization, JV with them, where we're going out and doing, as I mentioned, 12 cards a year on average and getting a separate media rights fee, selling global partnerships through those cards and, of course, promoting and producing those cards with our and on whatever media platform we ultimately, choose to to tie with. So that's kind of the the the state of boxing if that makes sense. Any follow-up on that before we go to your other one?

Brandon Ross
Partner, Media & Technology Analyst at LightShed Partners

No. I think I think I'm good there. And then just on the UFC media rights, can you can you comment maybe on how the market and your approach to the number of fights and the fight nights might differ in this negotiation? Are you looking to have the same balance of reach and dollars for each? Do you have the same objectives for each?

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

Nothing's really changed from our previous commentary. I mean, we remained highly flexible. I mean, that's the beauty of owning your own league. That's the beauty of having an executive management team that's as nimble and as tight as we are. You know, we're as we like to say, I mean, we're we're the owners, you know, and we're the commissioner at the same time.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

So we'll make decisions that are best for the long term future of of the sport and the brand. We have to continue to balance monetizing this rights deal while at the same time doing what's best for our reach, our engagement, and the growth of the brand. We the market, I believe, remains quite strong. Our, you know, our our content is year round. It's it's young men, unbelievable numbers 18.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

And believe it or not, our high school numbers are off the charts, and we're we're tied with the NBA for, the biggest draw when it comes to 18 from the major sports. And, you know, we're still an antidote to churn and and I believe a a serum a proven formula that works for subscriber acquisition. So we're, you know, cautiously optimistic. We're in no rush. This is a a volatile economy.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

Right now, a lot of uncertainty out there. We also understand there aren't a lot of major sports rights hitting the market anytime soon. So we will we will be opportunistic, but at the same time, responsible when it comes to the right home for the growth of our brand.

Brandon Ross
Partner, Media & Technology Analyst at LightShed Partners

Great. Thank you very much.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

Thanks Brandon.

Operator

We have a question from Steven Laschuk with Goldman Sachs. Your line is now open.

Stephen Laszczyk
Stephen Laszczyk
Analyst at Goldman Sachs

Hey guys, thanks for taking the questions. Maybe first for Andrew on the guide for the core business, UFC and WWB. It sounds like both outperformed your internal expectations heading into the year. I would just be curious if you could talk a little bit more about what specific areas of outperformance, were captured in the first quarter within those two businesses? And to what degree the increase in the guidance the year factors any continuation of that outperformance into the back half of the year or if you're still maintaining perhaps some degree of conservatism there?

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

Yes. I think I

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

would say that each revenue vertical in our business is strong right now. The outperformance in Q1 for corelegacy TKO, which is USC and WWE, leading to the $75,000,000 revenue increase and $40,000,000 adjusted EBITDA increase was largely driven by two things. Number one, outperformance to our own internal expectations on Live Event and Global Partnerships in the first quarter, much of which we flowed through to the balance of the year And then continued tailwinds in both those areas anchored by a strong WrestleMania in April gives us confidence into the visibility for now through December. So we feel real good top to bottom, and that's reflected in our guide.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

Yeah. I just add, Steven. I mean, there's there's definitely not there's no conservative play from us in our numbers or any kind of sandbagging. I mean, there's just a lot of uncertainty out there. I mean, you know, there isn't a a morning we're waking up and reading about Toyota or GE all of a sudden raining in their marketing budget.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

Now it's a good thing because we haven't closed an an auto partner yet. That's still an open category for us. But it's just that the market's definitely tightening up. Marketing is always one of the first things to get throttled. Premium experiences, by the way, is high up on that list as well.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

You know? So while we feel good and historically the WWE and UFC business models and particularly the sports rights business at IMG have proven resilient in times of economic uncertainty, and we're encouraged by the strength of our portfolio, we're keeping an eye on all the trends and sectors, taking nothing for granted. We expect at some point something comes home to roost. We're not trying to be paranoid, but we're just trying to be responsible for our shareholders and our numbers reflect that.

Stephen Laszczyk
Stephen Laszczyk
Analyst at Goldman Sachs

Thanks

Stephen Laszczyk
Stephen Laszczyk
Analyst at Goldman Sachs

for that. And maybe just a quick follow-up question on capital returns. It sounds like share repurchases should kick in the second or maybe third quarters here. Anything more you can say on how you're thinking about the pacing of that $2,000,000,000 share repurchase program? Should we expect you to be consistent on execution or more opportunistic, more price sensitive the marketplace?

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

We're sticking to that that our plan on capital return, and and Andrew can underscore that again for everybody on the, on the phone with regard to dividend and share repurchase and timing. But having said that, we're well aware that we are accumulating cash at a feverish pace. That's going to continue, but we're going to keep our powder dry. We think that's the prudent thing to do at this time. So we're not we're not in the market yet buying back any stock.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

Andrew, why don't you underscore our plan?

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

Yes.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

I think that's that really sums it up. The only other color I would add, Stephen, in terms of sort of the nature of the buyback, it's really going to be market driven and the form of which that buyback can take. When we initially announced the $2,000,000,000 share repurchase, think we articulated it would be fairly linear over the three to four year period. I don't think we're coming off that commentary, but again, we can be opportunistic to the extent these opportunities present themselves. So we're watching it closely.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

We're in the enviable position to be able to, as Mark said, accumulate cash and then carefully evaluate our capital needs. Good place to be.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

Thanks, Stephen.

Stephen Laszczyk
Stephen Laszczyk
Analyst at Goldman Sachs

Thank you, both.

Operator

We have a question from Peter Supino with Wolfe Research. Your line is now open.

Peter Supino
MD & Senior Analyst - Media & Entertainment, Cable & Telecom at Wolfe Research, LLC

Hi. Thank you. And first, Mark, I just want to come, to Brandon's defense. That was nothing compared to some of the compound questions we hear on media conference calls. Wanted to ask you a question about the IMG segment.

Peter Supino
MD & Senior Analyst - Media & Entertainment, Cable & Telecom at Wolfe Research, LLC

How should we think about modeling that segment's growth across the subcomponents of media, live events, sponsorships, products? And then how might we think about incremental EBITDA margins?

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

So we you know, the

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

first thing that we wanna double down on here, Peter, is the fact that we intend to be more transparent, and provide information and KPIs as we did. I'm not sure if you've had the opportunity to thumb through our 10 q yet, but we did add some tables on the IMG segment. We also added a table on PBR analogous to our historical KPI tables for UFC and WWE on location of events, type of event, numbers of events, etcetera. And then on the IMG business, particularly on location, we have put some information in the financial statements on number of hospitality packages sold, numbers of number of events, etcetera. So we we anticipate over time that that information would be a guide to how best to think about the growth and profitability profile of these businesses.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

At 15% margins and effective cost savings plan, we anticipate growth over the course of the year, both top line and a margin perspective. That being said, Q1 is generally the largest adjusted EBITDA contribution quarter for the IMG segment and for PBR, which is in the corporate group. The IMG segment obviously has the on location business and the Super Bowl is the anchor of the year. And we see that positively impacting revenue and adjusted EBITDA in the quarter. And for PBR, the most profitable tour is in the first quarter as well.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

The balance of this year will be impacted by the pre spend for our Milan Olympics program and that will have a negative impact to EBITDA and EBITDA margin. Hence when we announced the acquisition in October, we presented numbers on a normalized basis, which would have added $100,000,000 roughly of adjusted EBITDA to this year and had a positive impact on margin. So what we can expect from us over the course of this year is A, an update on the growth and profitability profile of the IMG segment, growth and profitability of PBR and some more commentary on the expenses related to the Olympics.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

I think too, Peter, just

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

to underscore, I think, Andrew's comments on the prerecord, you know, just the idea that we're we're now out in the marketplace, fingers crossed, but obviously a lot of work and gut and grit and strategy underneath it. But we're out in the marketplace on Milan and FIFA World Cup. And so far, the activity is in line with our expectations. So another good sign for the business, another reason why we're bullish about our forecast and raising guidance. But as I mentioned, keeping a close eye, close watch on all of it with these changing times.

Peter Supino
MD & Senior Analyst - Media & Entertainment, Cable & Telecom at Wolfe Research, LLC

Thank you, both.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

Thank you.

Operator

Our next question is from Eric Handler with ROTH Capital. Your line is now open.

Eric Handler
MD & Senior Research Analyst at Roth Capital Partners, LLC

Wonder if you could talk a little bit about some of the directional activity you're seeing with site fee deals. It seems like there's been more this year. Can you maybe talk about directionally the volume of deals that you're doing?

Eric Handler
MD & Senior Research Analyst at Roth Capital Partners, LLC

Maybe, you know, the percentage increase that you're seeing? And sort of like, how do you determine location by location, like, what the value is of that type fee deal?

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

Look. We do a lot of, you know, economic impact studies. And, Eric, frankly, it's a it's a lot of negotiations, a lot of conversations. I mean, more deals you don't hear of than deals that are being done. We're out there surveying the market.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

We're aggressive in the space. It helps to have offices in as many countries as we do, and IMG has obviously enhanced our position there. We're we're making a couple of hires coming up, some big hires in the government relations side that will help us both with relationships, c suite activity, and track record to capitalize, in the space. But it's no different. Every office we walk into, it's no different than f one was either there the day before or coming in the next day.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

So we're we're constantly on the lookout for cash. And, of course, in kind We announced at the February our new deal with Tourism Western Australia, which will see us bring multiple UFC and w d b w d WWE events to Perth over the next two years, and we're very excited about our event coming up in June of twenty five in Baku. And that's just for a fight night. So we often talk about we need to capitalize on-site fees for all of our numbered events and capitalize on-site fees for all the PLEs.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

But when we're done with that, we still have Raw's, SmackDown's, NXT's, Fight Nights. And this will be a, you know, a year multiple year strategy where we see benefits to the bottom line. And Baku is an example of that. We will get a meaningful multimillion dollar site fee for taking a Fight Night to Azerbaijan.

Eric Handler
MD & Senior Research Analyst at Roth Capital Partners, LLC

Great. That's helpful. I guess just to follow-up to that, can you maybe what percentage of, you know, your events would you say actually have site fees? Just trying to get a sense of, like, what inning you're in here.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

Yeah. Eric, I don't think we're gonna disclose that publicly. We're relatively new at this effort, and I think our success outside The Middle East is really starting to pick up. The SiteView model is anchored in our historic relationships with our partners at DCT in Abu Dhabi and obviously our partners in Saudi Arabia. So international markets, we've seen meaningful success over the last six to twelve months in Australia.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

We have historical relationships in Singapore and the list goes on. But this effort is relatively new. So I'm not gonna quote a percentage penetration, at this point in time, but a lot of work that's going to pay, pay off in the coming years.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

And a lot of inventory. That Kansas City takeover we did, in April was, you know, just a big win for us. I mean, put aside the the the fee and the and the in kind, the amount of earned media we received for that promotion, would say. PBR, Raw, UFC, I mean, just just extraordinary. And and frankly, helps us on our marketing expense.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

Money we we don't have to spend because we're able to make so much hay and so much noise with that promotion. So I look for more of that and and just realize that internally, we've got a team solely dedicated to just surveying the market, identifying the opportunities, and negotiating using the leverage we have with the economic impact we've historically brought.

Eric Handler
MD & Senior Research Analyst at Roth Capital Partners, LLC

Very helpful. Thank you.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

Got it. Thanks, Eric.

Operator

We have a question from Ryan Gravett with UBS. Your line is now open.

Ryan Gravett
Ryan Gravett
Equity Research at UBS Group

Great. Thanks. Just on the announced acquisition of AAA Wrestling in Mexico, Mark, curious what you see as the biggest opportunity here in terms of improving monetization and integration with the WWE.

Ryan Gravett
Ryan Gravett
Equity Research at UBS Group

And are there similar tuck in opportunities, like this one around the world?

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

Yeah. Thanks, Ryan. I would just say I'm I'm I'm gonna let Nick Connors at the table, Lawrence Epstein for the UFC is at the table. I'm gonna let Andrew and Nick, dig into some detail here. But I'll tell you, I am really excited about this.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

This is an opportunity that, frankly, that Nick and Paul Levesque unearthed. This is a major property in Mexico, enormous following, avid fan base, extremely young, with a a bunch of events, you know, starting with the, in Los Angeles, starting with an event that we're gonna do there at the Clipper Stadium, that is just just really gonna be, you know, the touch, the lead off hit, if you will. This is something that's gonna catch a lot of fire, and our partnership is is well structured to see us capitalize in all those different business KPIs we talk about already across UFC and WWE and PBR. So this is this is a fastball, you know, right down the middle for us. Nick?

Nick Khan
Nick Khan
Director at TKO Group Holdings

Yes. So a couple of things to add to that. The triple a acquisition for us. If you look at some of the recent, wrestlers who came into WWE, Penta and his real life brother Phoenix, in particular, Both social media impressions, Penta on his debut, almost a hundred million social media impressions. We see a spike in Latino viewership when he comes out.

Nick Khan
Nick Khan
Director at TKO Group Holdings

It's something we noticed a few years ago when Bad Bunny came in on his run with WWE was that the Latino audience would be there if there was someone like their them who was there. So we think, number one, it's a new influx of wrestlers. It's added to a demographic where we're already strong. And as Mark said, the June 7 event at the Forum, which will be at noon Pacific followed up by a WWE Premium Live event, four p. M.

Nick Khan
Nick Khan
Director at TKO Group Holdings

That same day right across the street at the Intuit Dome, a doubleheader wrestling event for us produced from one truck. There's efficiencies there. There's good dollars there, and we're excited about the overall opportunity.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

Look, the only thing I would add, Ryan,

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

is that strategically, we view this as a significant opportunity to hold down on what Mark and Nick said. The short term financial impact is not meaningful to the overall picture. But just as we've done with the UFC and WWE, this was a family operated promotion that we think we can leverage, institutionalize, low lowering our expertise to create value. We will increase media rights. We will increase live events revenue.

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

We will increase partnership revenue, and we'll increase consumer products and licensing opportunities. So this fits squarely in our warehouse on top of just the rich cultural heritage and the strategic importance to WWE.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

First week we came out of the gate with Penta. When he first debuted, you know, he let all merchandise sales that week. Just just new to the party, and he was number one. So we're, you know, we're we're looking to mine these opportunities everywhere. Obviously, this is an established league.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

But to the latter part of your question, nothing else on the horizon from an m and a standpoint, if you will, very similar to the capital repurchase program. Now we're we're holding our powder. Let's accumulate cash, and let's see what happens with this economy.

Ryan Gravett
Ryan Gravett
Equity Research at UBS Group

That's great. And just to confirm, this would be incremental to the current guidance?

Andrew Schleimer
Andrew Schleimer
Chief Financial Officer at TKO Group Holdings

Yes. We don't answer this. There's no real short term financial impact, but any impact would be incremental.

Ryan Gravett
Ryan Gravett
Equity Research at UBS Group

Yes.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

Very marginal.

Ryan Gravett
Ryan Gravett
Equity Research at UBS Group

Great. Thanks, guys.

Seth Zaslow
Seth Zaslow
Senior VP & Head of Investor Relations at TKO Group Holdings

Operator, let's take one last question, please.

Operator

Our last question will be from Jason Bazinet with Citi. Your line is now open.

Jason Bazinet
Jason Bazinet
Analyst at Citigroup

I just had a very simple question. You know, the market really likes the assets that you guys are managing, and they love the way you're managing them. The one, I guess, slight concern that I have, and I I don't know if it's valid, is that once we get through the UFC renewal and the WWPLEs, my my fear is that your equity turns into, a bond, meaning it's well run. It generates a lot of cash, but there's not as much enthusiasm for the equity just because there aren't as many needle moving things that you can do. Do you think that that's a valid concern?

Jason Bazinet
Jason Bazinet
Analyst at Citigroup

Or do you think there's enough with boxing and sponsorship and site fees to sort of keep the growth as exciting as it has been? Thanks.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

Thanks, Jason. Interesting perspective. What I would just say is if you know our management team, we don't sit still. There will always be a lot of gas in this car, Call it rocket fuel. So, yes, significant upside on the on the global partnerships front, still a ways to go on the live ticket revenue, especially on the WWE front.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

New properties we're going to launch, new franchises, new promotions, new leagues we will unearth like the JV with with triple a, wrestling, digging into the Hispanic market. You know, IMG is now working with 200 different partners across the world. Some massive events on the horizon, Euroleague gaining some steam and conversations with, hopefully, the NBA at some point here. Combo ball and CAF and the World Cup, women's sports, and where that's going. On location, adding new partners every day, setting a all time record with WrestleMania in in Las Vegas and what's what's to come there.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

And PBR, while certainly niche and it's just western lifestyle, a lot more we can do there. And and it's another situation where we're the owner and the commissioner all in one. So kinda put that aside, you know, we're Ari Emmanuel is our partner here and our fearless leader. I can promise you that, you know, we're not gonna be sitting still and whatever new media deals we get, they will have annual increases baked into them and opportunities for new programming and more ancillary programming, which not only drives our storytelling and our stars, but opens up new programming vehicles for us to monetize.

Jason Bazinet
Jason Bazinet
Analyst at Citigroup

That's super helpful. Thank you for that context.

Mark Shapiro
Mark Shapiro
COO, President & Director at TKO Group Holdings

That that point, we'll have a lot a lot more cash going and hopefully do more on the dividend front and more on the share repurchase program. We're going to be active. We're, We want to see the story play out in the way that I think our shareholders expected to over the next five to seven years. Thanks, Jason.

Jason Bazinet
Jason Bazinet
Analyst at Citigroup

Thank you very much.

Seth Zaslow
Seth Zaslow
Senior VP & Head of Investor Relations at TKO Group Holdings

All right. Well,

Seth Zaslow
Seth Zaslow
Senior VP & Head of Investor Relations at TKO Group Holdings

thank you everyone for joining us on today's call and for your interest in TKO. Operator, you can conclude the call.

Operator

That concludes today's call.

Operator

Thank you all for your participation. You may now disconnect your line.

Executives
Analysts
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Key Takeaways

  • TKO reported Q1 revenue of $1.269 billion (up 4%) and adjusted EBITDA of $417 million (up 23%), with UFC and WWE both beating internal expectations and prompting a raise in full-year guidance.
  • UFC live events set new records in London and Sydney, validating the site fee model, and the segment secured its largest sponsorship deal ever with Monster Energy plus a multiyear partnership with Meta.
  • WWE’s debut on Netflix reached the global top 10, drove strong viewership gains internationally, and its live events—led by a record-breaking WrestleMania 41—set multiple market and revenue records.
  • The acquisition of IMG, On Location, and PBR closed in Q1, and early integrations have yielded cost‐saving synergies while renewing key media and sponsorship deals with CONMEBOL, Euroleague Basketball, MLS on Apple TV and the NFL hospitality program.
  • TKO generated $136 million of free cash flow, expects to exceed 60% conversion in 2025 (excluding nonrecurring items), and plans to launch a $2 billion share repurchase program alongside continued dividends and a new boxing promotion JV.
AI Generated. May Contain Errors.
Earnings Conference Call
TKO Group Q1 2025
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