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EG

Endeavor Group Holdings, Inc. (EDR)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 revenue was $1.850B, up 15.9% year over year, with Adjusted EBITDA of $374.1M and a 20.2% margin; GAAP net loss widened to $303.5M driven by a $335M legal settlement and impairments .
  • Owned Sports Properties surged (+94% YoY revenue) on WWE consolidation ($317M revenue contribution) and continued UFC strength; Representation and Sports Data & Technology were weaker YoY .
  • Management did not host an earnings call due to the announced take‑private by Silver Lake; the merger agreement includes a required $0.06 per‑share quarterly dividend until closing, targeted by end of Q1 2025 .
  • Consensus estimates from S&P Global were unavailable for Q1 2024; comparisons to Street expectations cannot be made at this time (will update when available).

What Went Well and What Went Wrong

What Went Well

  • Strong Owned Sports Properties: segment revenue rose to $685.4M (+94.0% YoY) with WWE contributing $317M and UFC growth in partnerships, live events, and licensing; segment Adjusted EBITDA rose to $299.0M (+61.0% YoY) .
  • Events strength: growth within On Location, the Miami Open, and Barrett‑Jackson supported Events, Experiences & Rights, despite headwinds from prior asset sales and timing effects .
  • CEO tone positive on demand: “Endeavor benefited from brisk demand for our sports and entertainment content, live events, and premium experiences” (Ariel Emanuel) .

What Went Wrong

  • GAAP net loss driven by non‑recurring items: $335M legal settlement in Owned Sports Properties and $92.7M restructuring/severance/impairment raised operating expenses; goodwill impairment in Sports Data & Technology .
  • Segment softness: Events, Experiences & Rights revenue fell 7% YoY (sale of IMG Academy, timing of biennial events), Representation revenue −1.4% YoY and Adjusted EBITDA −22.6% YoY; Sports Data & Technology revenue −10.1% YoY and Adjusted EBITDA −$9.5M on lost data rights at IMG ARENA .
  • No earnings call: management did not host a conference call due to the Silver Lake transaction, limiting real‑time guidance and Q&A disclosures .

Financial Results

Headline Results vs prior quarters (and estimates if available)

MetricQ3 2023Q4 2023Q1 2024Vs Estimates
Revenue ($USD Billions)$1.344 $1.583 $1.850 N/A (S&P Global consensus unavailable)
Net (Loss) Income ($USD Millions)$(115.984) $(29.337) $(303.471) N/A
Diluted EPS ($USD)$(0.25) $(0.03) $(0.46) N/A
Adjusted EBITDA ($USD Millions)$311.617 $292.797 $374.086 N/A

Margins

MarginQ3 2023Q4 2023Q1 2024
Net Income Margin %−8.6% −1.9% −16.4%
Adjusted EBITDA Margin %23.2% 18.5% 20.2%

Segment Breakdown

SegmentQ3 2023 Revenue ($USD Millions)Q4 2023 Revenue ($USD Millions)Q1 2024 Revenue ($USD Millions)
Owned Sports Properties$479.748 $642.755 $685.425
Events, Experiences & Rights$367.064 $414.471 $744.897
Representation$385.619 $427.433 $345.347
Sports Data & Technology$124.847 $113.575 $90.710
Eliminations$(12.883) $(15.521) $(16.095)
Total Revenue$1,344.395 $1,582.713 $1,850.284
SegmentQ3 2023 Adjusted EBITDA ($USD Millions)Q4 2023 Adjusted EBITDA ($USD Millions)Q1 2024 Adjusted EBITDA ($USD Millions)
Owned Sports Properties$237.417 $224.702 $298.972
Events, Experiences & Rights$29.846 $13.720 $95.911
Representation$96.325 $103.434 $65.197
Sports Data & Technology$23.994 $20.502 $(9.458)
Corporate$(75.965) $(69.561) $(76.536)

KPIs

KPIQ3 2023Q4 2023Q1 2024
Cash and Cash Equivalents ($USD Billions)$1.338 $1.167 $0.779
Total Debt ($USD Billions)$5.046 $5.028 $5.010

Year-over-Year (Q1 2024 vs Q1 2023)

MetricQ1 2023Q1 2024
Revenue ($USD Billions)$1.597 $1.850
Net (Loss) Income ($USD Millions)$36.255 $(303.471)
Diluted EPS ($USD)$0.03 $(0.46)
Adjusted EBITDA ($USD Millions)$306.392 $374.086
Owned Sports Properties Revenue ($USD Millions)$353.289 $685.425
Events, Experiences & Rights Revenue ($USD Millions)$800.786 $744.897
Representation Revenue ($USD Millions)$350.240 $345.347
Sports Data & Technology Revenue ($USD Millions)$100.859 $90.710

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Earnings Call / Guidance Policy2024Management hosted calls; annual guidance to be determinedNo Q1 2024 earnings call; “will not be initiating annual guidance estimates for 2024” (Q4 call) Lowered disclosure cadence
Dividend per ShareEach quarter prior to transaction closeNot specified in prior 8‑K press (dividend program referenced) $0.06 per share required each calendar quarter until Silver Lake closing Maintained/Specified amount
Transaction Close TimingSilver Lake take‑privateUnder review of strategic alternatives Expected to close by end of Q1 2025 (customary approvals) New timing disclosure

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2023)Previous Mentions (Q4 2023)Current Period (Q1 2024)Trend
Strategic alternatives / Take‑privateInitiated formal review to evaluate strategic alternatives No annual guidance while review ongoing Definitive agreement to be acquired by Silver Lake; no earnings call Escalating to execution
TKO media rights & partnershipsWWE NXT to CW; SmackDown renewal; AB InBev partnership; site fees WWE Raw deal with Netflix; >1.4x AAV increase; integration momentum WWE contributed $317M revenue to Q1; ongoing UFC strength Strong, sustaining
Consumer demand for live experiencesRobust demand across events; On Location record cycles On Location hosted 15,000 at Super Bowl; optimism for 2024 “Brisk demand” for content, live events, and premium experiences Robust
Sports Data & Technology strategyOpenBet expansion (Brazil); IMG Arena partnerships (Wimbledon, Roland‑Garros) OpenBet long‑term Veikkaus (Finland); global market focus Revenue down; loss of certain IMG ARENA data rights; goodwill impairment Mixed; data rights competition pressure
Legal / regulatoryVarious settlements (antitrust $20M) in prior year Integration progress highlighted, ratings upgrade noted $335M legal settlement in Owned Sports Properties One‑off impact in Q1

Management Commentary

  • “Endeavor benefited from brisk demand for our sports and entertainment content, live events, and premium experiences… while working toward the close of our take‑private transaction with Silver Lake.” — Ariel Emanuel, CEO .
  • TKO rights momentum: “WWE’s deal with Netflix… 52 weeks a year, beginning in 2025… Together, these deals delivered an increase of more than 1.4x in AAV.” — Ariel Emanuel (Q4 call) .
  • 2024 update: focus on integrating TKO, expanding live events/site fees, and optimizing Sports Data & Technology offerings amid competitive markets — Jason Lublin (Q4 call) .

Q&A Highlights

  • No Q1 2024 earnings call or Q&A was held due to the Silver Lake transaction .
  • Prior context (Q3 2023 Q&A):
    • Strikes impact and recovery: ramp into early 2024; pent‑up demand expected to persist into 2025 (Ariel Emanuel; Mark Shapiro) .
    • PGA minority investment discussion clarified as contingent on extending commercial services at a premium; ultimately not pursued (Ariel Emanuel; Mark Shapiro) .
    • Sports Data & Technology: OpenBet’s white‑label B2B expansion tied to regulatory openings; IMG Arena disciplined on Tier 2/3 rights for margin sustainability (Mark Shapiro) .

Estimates Context

  • Wall Street consensus via S&P Global for Q1 2024 EPS, revenue, and EBITDA was unavailable due to a mapping issue; comparisons to estimates cannot be provided at this time. We will update when S&P Global fields are accessible.

Key Takeaways for Investors

  • Q1 revenue strength and improved Adjusted EBITDA vs prior year reflect consolidation benefits (WWE) and resilient demand; however, GAAP results were heavily affected by a $335M legal settlement and impairments, widening net loss and depressing net margin .
  • Owned Sports Properties continues to be the growth engine (UFC/WWE/PBR) with robust attendance/partnerships; expect ongoing tailwinds from TKO rights renewals and site‑fee strategy .
  • Events, Experiences & Rights faced YoY headwinds from asset sale (IMG Academy) and event timing; On Location and marquee events partially offset, suggesting seasonality and mix will matter in 2024 .
  • Sports Data & Technology requires monitoring: revenue decline and negative Adjusted EBITDA driven by lost data rights highlights the competitive pressure in betting data; look for stabilization via OpenBet growth and product optimization .
  • Disclosure cadence is lower near‑term (no call; no 2024 annual guidance), but dividend visibility is high: $0.06 per share each quarter until close; transaction expected by end of Q1 2025, anchoring short‑term trading around deal spread and regulatory timing .
  • Cash declined sequentially (from $1.167B to $0.779B) while total debt remained stable (~$5.0B); balance sheet remains levered, with net debt sensitive to cash generation and working capital through 2024 .
  • Without current Street estimates, focus on segment trends and non‑recurring items to recalibrate internal models; expect future updates post‑close milestones or when S&P Global consensus becomes available.