Executive Summary

Q3 delivered solid consolidated performance led by WWE; revenue was $681.2M, net income $57.7M, Adjusted EBITDA $310.0M (46% margin). On a like-for-like “combined” basis versus Q3 2023, revenue was down ~1% while Adjusted EBITDA rose ~4% as mix and cost actions offset UFC calendar headwinds .
WWE strength (live events, sponsorships, cost reductions) outweighed UFC’s fewer events and higher one-time production costs for UFC 306 at Sphere; management expects FY24 revenue and Adjusted EBITDA at the upper end of prior ranges ($2.670–$2.745B; $1.220–$1.240B) .
Strategic moves and capital returns are in focus: authorization of a $2.0B share repurchase and a $75M quarterly dividend (first payment targeted for Mar 31, 2025); definitive agreement to acquire PBR, On Location, and IMG in an all‑equity deal valued at $3.25B; announced credit facility refinancing (7‑yr $2.75B TLB, 5‑yr $205M revolver) .
Legal overhang progressing: UFC antitrust settlement increased to $375M with preliminary court approval and first $125M escrow funded; two remaining $125M payments expected in 2025; Q3 included $44.6M legal costs .

What Went Well and What Went Wrong

What Went Well
- WWE momentum: Revenue +14% vs combined Q3’23 to $326.3M; Adjusted EBITDA +72% to $175.3M; margin expanded to 54% on ticket yield strategy, sponsorship growth (+54% YoY to $21.7M), and cost reductions .
- Sponsorship and live events outperformance: UFC sponsorship +16% YoY to $74.0M; WWE set 42 market ticket records; SummerSlam became WWE’s highest-grossing non‑WrestleMania event; UFC 306 was UFC’s highest-grossing event ever and drove record merchandise and sponsorship .
- Guidance bias higher: “Now expecting to come in at the upper end” of FY24 revenue and Adjusted EBITDA guidance; reaffirmed FCF conversion “in excess of 40%” .
What Went Wrong
- UFC revenue −11% YoY to $354.9M driven by one fewer numbered event and two fewer Fight Nights; Adjusted EBITDA −18% to $195.6M with margin down to 55% due to event timing and elevated one‑time production costs for UFC 306 at Sphere .
- Higher corporate costs: Corporate Adjusted EBITDA loss widened to $(60.9)M vs $(42.1)M (combined) in Q3’23 on personnel, executive comp, Endeavor services fee, and G&A .
- Legal costs and near-term Q4 headwind: Q3 included $44.6M of litigation costs; Q4 WWE Raw short-term USA deal expected to be ~$(50)M to revenue and ~$(50)M to Adjusted EBITDA versus Q4’23 before Netflix begins in Jan 2025 .

Financial Results

Consolidated results by quarter (oldest to newest):

Metric	Q1 2024	Q2 2024	Q3 2024
Revenue ($M)	$629.7	$851.2	$681.2
Net Income ($M)	$(249.5)	$150.7	$57.7
Diluted EPS (Class A)	$(1.26)	$0.72	$0.28
Adjusted EBITDA ($M)	$282.2	$420.9	$310.0
Adjusted EBITDA Margin %	45%	49%	46%
Free Cash Flow ($M)	$27.8	$218.6	$225.6

Q3 year-over-year context (company “combined” basis for comparability):

Metric	Q3 2023 (Combined)	Q3 2024	YoY
Revenue ($M)	~$685	$681.2	(1%)
Adjusted EBITDA ($M)	~$298	$310.0	+4%
Adjusted EBITDA Margin %	~44%	46%	+2 ppt
Diluted EPS (Class A)	$(0.26)	$0.28	n/m

Segment breakdown (Q3 2024 vs Q3 2023 combined):

Segment	Revenue Q3’23 ($M)	Revenue Q3’24 ($M)	Adj. EBITDA Q3’23 ($M)	Adj. EBITDA Q3’24 ($M)
UFC	$397.5	$354.9	$238.3	$195.6
WWE	$287.3	$326.3	$102.0	$175.3
Corporate	n/a	n/a	$(42.1)	$(60.9)

Key KPIs and operating drivers (Q3 2024):

UFC events: 10 total (vs 13 prior year) impacted media and live events revenue mix .
UFC Sponsorship revenue: $74.0M (+16% YoY) .
WWE live events: 42 market ticket records; 18 shows outside U.S. (vs 11 prior year) .
WWE sponsorship: $21.7M (+54% YoY) .
FCF: $225.6M; CFO/Operating Cash Flow $236.6M; capex $11.0M .
Cash & cash equivalents: $457.4M; Gross debt: $2.736B .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2024	$2.670–$2.745B (raised in Aug)	Track to upper end of range	Bias raised (upper end)
Adjusted EBITDA	FY 2024	$1.220–$1.240B (raised in Aug)	Track to upper end of range	Bias raised (upper end)
Free Cash Flow Conversion	FY 2024	>40% (revised in May)	>40% reaffirmed	Maintained
WWE Raw interim deal impact	Q4 2024	n/a	~$(50)M revenue and ~$(50)M Adj. EBITDA vs Q4’23 (timing only; Netflix starts Jan’25)	New color

Return of capital and balance sheet actions:

Share repurchase authorization up to $2.0B; $75M quarterly dividend starting target March 31, 2025 .
Refinancing announced: new 7‑yr $2.75B term loan and 5‑yr $205M revolver; expect similar covenants; intended to close in Q4 2024 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1, Q2)	Current Period (Q3)	Trend
Guidance and profitability	Raised FY24 guidance in Q1 and Q2; emphasized full‑year view and cost actions	Now expect upper end of ranges; Q3 Adj. EBITDA margin 46% (vs ~44% combined Q3’23)	Improving execution; margin discipline
Legal matters	Reached antitrust settlements; court initially denied preliminary approval in July; exploring options	Settlement revised to $375M; preliminary approval granted; first $125M escrow funded; $250M due in 2025	Progressing; cash timing clarified
Media rights & distribution	WWE: Raw to Netflix Jan 2025; interim Q4’24 USA deal	UFC domestic rights strategy focused on maximizing value; flexible models; strong ESPN relationship; Fight Pass to remain proprietary	Active renewal phase; optionality
Sponsorship growth	WWE/ UFC sponsorship growth; unified partnerships ramp	WWE +54% YoY; UFC +16% YoY; title sponsorship at UFC 306; Netflix tie‑in for WWE sponsorships	Accelerating; higher‑margin mix
Live event innovation	Record WrestleMania/PLEs (Q1); Q2 live events strength	UFC 306 at Sphere: record gross, one‑off cost; “one and done” in Vegas; spectacle playbook continues (e.g., Intuit Dome)	Showpiece events as brand/$$ drivers
Capital returns & M&A	Buybacks in H1; evaluating options	$2.0B buyback and $75M quarterly dividend; definitive deal to acquire PBR, On Location, IMG; On Location’s NFL deal extended to 2036	Sharper capital allocation; portfolio scale

Management Commentary

Ari Emanuel (CEO): “We’re now expecting to come in at the upper end of our full year guidance range for both revenue and adjusted EBITDA… [and announced] a $2 billion share repurchase program and a quarterly cash dividend program of $75 million” .
Mark Shapiro (President/COO): On synergies and margins: “You can just expect more margin accretion as we flow through… we’re… in mid‑innings on the integration… we’ll sell triple‑header sponsorships… margins are only going to be better” .
Andrew Schleimer (CFO): On UFC 306 costs: “We incurred production costs… meaningfully higher than our historical norm… which resulted in reduced adjusted EBITDA… However… [it] was a once‑in‑a‑lifetime experience and a highly successful event” .
On 2024 outlook: “We are revising our full year ’24 guidance… targeting the upper end… related primarily to strong operating performance… particularly in live events and sponsorship” .

Q&A Highlights

UFC domestic rights strategy: TKO aims to “maximize value” with flexibility across models; strong ESPN relationship but exploring broader options; Fight Pass remains proprietary with more live content potential .
WWE profitability: Margin expansion driven by cost actions, production efficiency, and higher‑margin sponsorship mix; Q3 WWE Adj. EBITDA margin reached 54% .
Boxing exploration: No M&A checks; if launched, would prefer partner‑funded, organically operated approach; early exploratory stage .
Spectacle events: UFC 306 at Sphere was “one and done” in Las Vegas due to cost/complexity, but spectacle playbook will continue globally; potential future opportunities at technologically advanced venues (e.g., Intuit Dome) .
On Location/NFL: NFL hospitality partnership extended to 2036; expect greater transparency on revenue/profitability profiles post-close; integration to support portfolio cross‑sell .

Estimates Context

We attempted to retrieve S&P Global (Capital IQ) consensus for Q3 2024 revenue, EPS, and EBITDA, but the data was unavailable due to access limits at this time. As a result, we cannot present a definitive “vs. estimates” comparison in this recap. If you’d like, we can refresh this section when S&P Global data becomes accessible again.

Key Takeaways for Investors

Mix shift and cost actions are working: WWE’s strength in live events and sponsorships plus synergy capture offset UFC’s event‑timing headwinds, lifting combined margins YoY in Q3 .
FY24 tracking to upper end on both revenue and Adjusted EBITDA; Q4 Raw interim headwind (~$50M/ ~$50M) is purely timing ahead of Netflix in Jan 2025, a structural positive for reach and sponsorship .
Capital returns are material: $2.0B buyback authorization plus $75M quarterly dividend starting 2025, supported by strong FCF (Q3 FCF $225.6M; FY FCF conversion >40%) and planned refinancing .
Strategic portfolio scale: Pending acquisition of PBR, On Location, and IMG deepens rights, experiences, and hospitality; NFL hospitality extended to 2036 provides durable marquee exposure .
UFC rights renewal is a 2025 catalyst: management signaling flexibility across models and confidence in demand; Fight Pass retained for proprietary growth .
Legal overhang de‑risking: UFC antitrust settlement at $375M with preliminary approval and payment schedule clarity helps reduce uncertainty into 2025 .
Near‑term trading lens: Expect focus on (i) UFC event cadence in Q4, (ii) WWE’s Netflix transition setup, (iii) capital return timing post‑asset acquisition close, and (iv) updates on UFC rights negotiations—each a potential stock narrative driver .

Appendix: Additional Context and References

UFC 306 technical/production complexity and vendor partnerships (e.g., WEKA supporting Sphere broadcast workflow) underscore one‑time cost intensity and innovation scale .
Reported GAAP EPS improved to $0.28 in Q3 from $(0.26) in Q3’23 as reported; note comparability limits due to post‑combination structure—use “combined” disclosures for operating trend analysis .

TKO Group Holdings, Inc. (TKO)·Q3 2024 Earnings Summary