Sports Group Raises Outlook as Margins Expand
Full-year revenue guidance rose to a range of $5.775 billion to $5.825 billion.
TKO Group Holdings (TKO), the sports-and-entertainment company, lifted second-quarter adjusted EBITDA 23% to $649.9 million as its margin expanded to 42% from 40% a year earlier.
The profit gain came despite a sequential revenue decline, reflecting stronger contributions from UFC and WWE after an Olympics-supported first quarter. Adjusted EBITDA rose 18.2% from the prior quarter, while the margin jumped from 34%.
Revenue increased 18% from a year earlier to $1.547 billion, slowing from 26% growth in the first quarter and slipping 3.1% sequentially. Net income rose 11.3% to $303.9 million and increased 21.7% from the first quarter.
UFC revenue climbed 29% to $535.7 million, accelerating from 12% growth in the prior quarter, as media-rights revenue increased $64.7 million and partnerships and marketing revenue rose $59.0 million. Live-events and hospitality revenue declined because Freedom 250 had no ticket sales and the quarter included one fewer Numbered Event. UFC adjusted EBITDA increased 15% to $280.4 million, while the event's financial profile reduced the segment margin to 52% from 59%.
WWE revenue rose 12% to $620.9 million, led by an $80.8 million increase in media-rights revenue tied notably to the ESPN agreement. Lower WrestleMania 42 ticket sales weighed on live-events and hospitality revenue. WWE adjusted EBITDA increased 12% to $368.3 million, and its margin held at 59%.
IMG revenue increased 16% to $354.7 million as World Cup sales lifted live-events and hospitality revenue, though revenue fell 45.9% sequentially after the first quarter benefited from the Olympics. Adjusted EBITDA rose 171% to $78.6 million, expanding the segment margin to 22% from 9%. The loss of IMG's contract for Italy's leading professional cycling event weighed on media-rights revenue.
TKO now expects full-year adjusted EBITDA of $2.275 billion to $2.305 billion, raising both ends of its previous range. The company also planned additional stock repurchases after completing $1 billion of buybacks, with slightly more than $1 billion remaining under its authorization as of Aug. 3.