[10-Q] TKO Group Holdings, Inc. Quarterly Earnings Report
TKO Group Holdings (NYSE: TKO) filed its Q3 2025 report, showing lower revenue but stronger profitability. Q3 revenue was $1,119.9 million versus $1,540.7 million a year ago, while operating income rose to $172.0 million from $34.6 million. Net income was $106.8 million, and net income attributable to TKO was $41.0 million. Diluted EPS was $0.47 (basic $0.50).
Year-to-date, revenue was $3,697.2 million versus $3,956.3 million, with operating income of $777.6 million compared to a loss last year, and net income attributable to TKO of $197.8 million. Segment mix shifted, with Q3 media rights of $644.2 million and live events and hospitality of $282.8 million. WWE contributed $402.1 million, UFC $325.2 million, and IMG $336.8 million.
The balance sheet reflected higher liquidity and leverage: cash and cash equivalents were $861.4 million and restricted cash $311.9 million; long‑term debt increased to $3,701.1 million. Deferred revenue (current) was $508.0 million. Operating cash flow for nine months was $975.8 million, alongside $1,018.0 million in new borrowings, $826.1 million of share repurchases, and $124.5 million in dividends. As of October 31, 2025, Class A shares outstanding were 78,922,362 and Class B were 116,158,615.
- None.
- None.
Insights
Profitability improved despite revenue decline; leverage higher.
TKO delivered Q3 operating income of
Liquidity rose (cash and cash equivalents
Capital returns were active: nine‑month operating cash flow of
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended |
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or |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from ______ to ______ |
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Commission File Number:
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices)
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(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Accelerated Filer ☐ |
Non-Accelerated Filer ☐ |
Smaller Reporting Company |
Emerging Growth Company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
As of October 31, 2025, there were
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TABLE OF CONTENTS
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Part I – FINANCIAL INFORMATION |
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Item 1. Financial Statements (unaudited) |
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Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 |
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Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 |
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Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 2025 and 2024 |
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Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2025 and 2024 |
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Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 |
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Notes to Consolidated Financial Statements |
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. Quantitative and Qualitative Disclosures about Market Risk |
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Item 4. Controls and Procedures |
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Part II – OTHER INFORMATION |
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Item 1. Legal Proceedings |
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Item 1A. Risk Factors |
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
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Item 5. Other Information |
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Item 6. Exhibits |
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Signatures |
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FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of present and historical fact contained in this Quarterly Report, including without limitation, statements regarding the anticipated benefits of and costs associated with the TKO Transactions and the Endeavor Asset Acquisition (as defined below); our expected contractual obligations and capital expenditures; our future results of operations and financial position; our expectations regarding strategic transactions, our expectations regarding actions under our capital return program, including the amount and frequency of share repurchases and dividends; industry and business trends; the impact of market conditions and other macroeconomic factors on our business, financial condition and results of operations; the impact of legislative and regulatory developments, our future business strategy, plans, market growth and our objectives for future operations; and our competitive market position within our industry are forward-looking statements.
Without limiting the foregoing, you can generally identify forward-looking statements by the use of forward-looking terminology, including the terms “aim,” “anticipate,” “believe,” “could,” “mission,” “may,” “will,” “should,” “expect,” “intend,” “plan,” “estimate,” “project,” “predict,” “potential,” “target,” “contemplate,” or, in each case, their negative, or other variations or comparable terminology and expressions. The forward-looking statements in this Quarterly Report are only predictions and are based on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of known and unknown risks, uncertainties and assumptions, including but not limited to:
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These risks could cause our actual results to differ materially from those implied by forward-looking statements in this Quarterly Report. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. Even if our results of operations, financial condition and liquidity and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Quarterly Report, those results or developments may not be indicative of results or developments in subsequent periods.
You should read this Quarterly Report and the documents that we reference herein completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we have no obligation to update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.
Available Information and Website Disclosure
We are required to file annual, quarterly and current reports, proxy statements and other information with the SEC. Our filings with the SEC are also available to the public through the SEC’s website at www.sec.gov.
You can also find more information about us online at our investor relations website located at investor.tkogrp.com. Filings we make with the SEC and any amendments to those reports are available free of charge on our website as soon as reasonably practicable after we electronically file such material with the SEC. The information posted on or accessible through our website is not incorporated into this Quarterly Report.
Investors and others should note that we announce material financial and operational information to our investors using press releases, SEC filings and public conference calls and webcasts, and by postings on our investor relations site at investor.tkogrp.com. We may also use our website as a distribution channel for material Company information. In addition, you may automatically receive email alerts and other information about TKO when you enroll your email address by visiting the “Investor Email Alerts” option under the Resources tab on investor.tkogrp.com.
DEFINITIONS
As used in this Quarterly Report, unless we state otherwise or the context otherwise requires:
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
TKO GROUP HOLDINGS, INC.
Consolidated Balance Sheets
(In thousands, except share and per share data)
(Unaudited)
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As of September 30, |
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As of December 31, |
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2025 |
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2024 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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Restricted cash |
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Accounts receivable (net of allowance for doubtful accounts of $ |
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Deferred costs |
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Other current assets |
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Total current assets |
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Property, buildings and equipment, net |
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Intangible assets, net |
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Finance lease right-of-use assets, net |
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Operating lease right-of-use assets, net |
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Goodwill |
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Investments |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities, Non-controlling Interests and Stockholders' Equity |
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Current liabilities: |
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Accounts payable |
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Accrued liabilities |
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Current portion of long-term debt |
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Current portion of finance lease liabilities |
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Current portion of operating lease liabilities |
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Deferred revenue |
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Other current liabilities |
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Total current liabilities |
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Long-term debt |
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Long-term finance lease liabilities |
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Long-term operating lease liabilities |
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Deferred tax liabilities |
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Other long-term liabilities |
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Total liabilities |
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Commitments and contingencies (Note 16) |
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Redeemable non-controlling interests |
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Stockholders' equity: |
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Class A common stock: ($ |
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Class B common stock: ($ |
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Additional paid-in capital |
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Accumulated other comprehensive loss |
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Accumulated deficit |
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Total TKO Group Holdings, Inc. stockholders’ equity |
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Nonredeemable non-controlling interests |
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Total stockholders' equity |
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Total liabilities, redeemable non-controlling interests and stockholders' equity |
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$ |
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$ |
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See accompanying notes to consolidated financial statements.
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TKO GROUP HOLDINGS, INC.
Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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2025 |
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2024 |
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2025 |
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2024 |
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Revenue |
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$ |
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$ |
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$ |
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Operating expenses: |
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Direct operating costs |
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Selling, general and administrative expenses |
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Depreciation and amortization |
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Total operating expenses |
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Operating income (loss) |
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Other expenses: |
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Interest expense, net |
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Other (expense) income, net |
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Income (loss) before income taxes and equity earnings of affiliates |
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Provision for income taxes |
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Income (loss) before equity earnings of affiliates |
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Equity (earnings) losses of affiliates, net of tax |
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Net income (loss) |
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Less: Net income (loss) attributable to non-controlling interests |
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Net income (loss) attributable to TKO Group Holdings, Inc. |
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$ |
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$ |
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$ |
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Basic net earnings (loss) per share of Class A common stock |
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Diluted net earnings (loss) per share of Class A common stock |
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Weighted average number of common shares used in computing basic earnings (loss) per share |
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Weighted average number of common shares used in computing diluted net earnings (loss) per share |
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See accompanying notes to consolidated financial statements.
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TKO GROUP HOLDINGS, INC.
Consolidated Statements of Comprehensive Income (Loss)
(In thousands)
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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2025 |
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2024 |
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2025 |
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2024 |
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Net income (loss) |
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$ |
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$ |
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$ |
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Other comprehensive income (loss), net of tax: |
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Foreign currency translation adjustments |
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Cash flow hedges: |
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Change in net unrealized losses |
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Amortization of cash flow hedge fair value to net income |
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Total comprehensive income (loss), net of tax |
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Less: Comprehensive income (loss) attributable to non-controlling interests |
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Comprehensive income (loss) attributable to TKO Group Holdings, Inc. |
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See accompanying notes to consolidated financial statements.
8
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TKO GROUP HOLDINGS, INC.
Consolidated Statements of Stockholders’ Equity
(In thousands)
(Unaudited)
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Three Months Ended September 30, 2025 |
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Accumulated |
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Total TKO |
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Nonredeemable |
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Common Stock |
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Additional |
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Other |
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Group Holdings, |
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Non- |
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Total |
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Class A |
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Class B |
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Paid - in |
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Comprehensive |
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Accumulated |
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Inc. Stockholders' |
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Controlling |
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Stockholders' |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Loss |
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Deficit |
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Equity |
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Interests |
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Equity |
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Balance, June 30, 2025 |
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$ |
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$ |
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Comprehensive income |
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— |
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Distributions to members |
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— |
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— |
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— |
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( |
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Contributions from investors |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Contributions from parent |
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— |
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— |
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Effects of acquisition |
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— |
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Stock issuances and other, net |
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Repurchase and retirement of common stock |
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— |
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— |
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Excise taxes on repurchase of common stock |
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Equity-based compensation |
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Taxes paid related to net settlement upon vesting of equity awards |
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— |
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— |
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Cash dividends declared ($ |
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— |
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Equity impacts arising from changes in ownership |
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Equity reallocation between controlling and non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
||
Balance, September 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
|
|
Nine Months Ended September 30, 2025 |
|
|||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
Total TKO |
|
|
Nonredeemable |
|
|
|
|
||||||||||
|
|
Common Stock |
|
|
Additional |
|
|
Other |
|
|
|
|
|
Group Holdings, |
|
|
Non- |
|
|
Total |
|
|||||||||||||||||||
|
|
Class A |
|
|
Class B |
|
|
Paid - in |
|
|
Comprehensive |
|
|
Accumulated |
|
|
Inc. Stockholders' |
|
|
Controlling |
|
|
Stockholders' |
|
||||||||||||||||
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Loss |
|
|
Deficit |
|
|
Equity |
|
|
Interests |
|
|
Equity |
|
||||||||||
Balance, December 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Distributions to members |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Distributions to investors |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Net transfers from parent |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Contributions from parent |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Effects of acquisition |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
||||
Stock issuances and other, net |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||||
Repurchase and retirement of common stock |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Excise taxes on repurchase of common stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Equity-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Taxes paid related to net settlement upon vesting of equity awards |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Cash dividends declared ($ |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Equity impacts arising from changes in ownership |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Equity reallocation between controlling and non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
||
Balance, September 30, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
See accompanying notes to consolidated financial statements.
9
Table of Contents
TKO GROUP HOLDINGS, INC.
Consolidated Statements of Stockholders’ Equity
(In thousands)
(Unaudited)
|
|
Three Months Ended September 30, 2024 |
|
|||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
Total TKO |
|
|
Nonredeemable |
|
|
|
|
||||||||||
|
|
Common Stock |
|
|
Additional |
|
|
Other |
|
|
|
|
|
Group Holdings, |
|
|
Non- |
|
|
Total |
|
|||||||||||||||||||
|
|
Class A |
|
|
Class B |
|
|
Paid - in |
|
|
Comprehensive |
|
|
Accumulated |
|
|
Inc. Stockholders' |
|
|
Controlling |
|
|
Stockholders' |
|
||||||||||||||||
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Income (Loss) |
|
|
Deficit |
|
|
Equity |
|
|
Interests |
|
|
Equity |
|
||||||||||
Balance, June 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Comprehensive (loss) income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Distributions to investors |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Net transfers from parent |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Stock issuances and other, net |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Excise taxes on repurchase of common stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|||
Taxes paid related to net settlement upon vesting of equity awards |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Equity-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Principal stockholder contributions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Equity reallocation between controlling and non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
||
Balance, September 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
|
|
Nine Months Ended September 30, 2024 |
|
|||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
Total TKO |
|
|
Nonredeemable |
|
|
|
|
||||||||||
|
|
Common Stock |
|
|
Additional |
|
|
Other |
|
|
|
|
|
Group Holdings, |
|
|
Non- |
|
|
Total |
|
|||||||||||||||||||
|
|
Class A |
|
|
Class B |
|
|
Paid - in |
|
|
Comprehensive |
|
|
Accumulated |
|
|
Inc. Stockholders' |
|
|
Controlling |
|
|
Stockholders' |
|
||||||||||||||||
|
|
Shares |
|
|
Amount |
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Income |
|
|
Deficit |
|
|
Equity |
|
|
Interests |
|
|
Equity |
|
||||||||||
Balance, December 31, 2023 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
Comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Distributions to investors |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Net transfers from parent |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Stock issuances and other, net |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Repurchase and retirement of common stock |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Excise taxes on repurchase of common stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Taxes paid related to net settlement upon vesting of equity awards |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Equity-based compensation |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Principal stockholder contributions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Equity reallocation between controlling and non-controlling interests |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
||
Balance, September 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||||||
See accompanying notes to consolidated financial statements.
10
Table of Contents
TKO GROUP HOLDINGS, INC.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
|
|
Nine Months Ended |
|
|||||
|
|
September 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
|
|
$ |
( |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Amortization and impairments of content costs |
|
|
|
|
|
|
||
Impairment charges |
|
|
|
|
|
|
||
Amortization and write-off of original issue discount and deferred financing cost |
|
|
|
|
|
|
||
Loss on sale of assets |
|
|
|
|
|
— |
|
|
Equity-based compensation |
|
|
|
|
|
|
||
Income taxes |
|
|
|
|
|
( |
) |
|
Equity earnings of affiliates, net of dividends received |
|
|
( |
) |
|
|
|
|
Loss on disposal of assets |
|
|
— |
|
|
|
|
|
Net loss (gain) on foreign currency transactions |
|
|
|
|
|
( |
) |
|
Other, net |
|
|
( |
) |
|
|
( |
) |
Changes in operating assets and liabilities, net of acquisition: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
( |
) |
|
|
( |
) |
Other current assets |
|
|
( |
) |
|
|
|
|
Other noncurrent assets |
|
|
( |
) |
|
|
( |
) |
Accounts payable and accrued liabilities |
|
|
( |
) |
|
|
|
|
Deferred revenue |
|
|
|
|
|
( |
) |
|
Other liabilities |
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
|
|
|
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
||
Purchases of property, buildings and equipment and other assets |
|
|
( |
) |
|
|
( |
) |
Investments in affiliates, net |
|
|
( |
) |
|
|
( |
) |
Acquisitions, net of cash acquired |
|
|
( |
) |
|
|
— |
|
Due from parent |
|
|
— |
|
|
|
( |
) |
Proceeds from sales of property and equipment |
|
|
|
|
|
|
||
Proceeds from infrastructure improvement incentives |
|
|
|
|
|
|
||
Proceeds from sales of investments and other |
|
|
|
|
|
|
||
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
||
Repayment of long-term debt |
|
|
( |
) |
|
|
( |
) |
Proceeds from borrowings |
|
|
|
|
|
|
||
Repurchase of Class A common stock |
|
|
( |
) |
|
|
( |
) |
Payments of contingent consideration related to acquisitions |
|
|
— |
|
|
|
( |
) |
Net transfers to parent |
|
|
( |
) |
|
|
|
|
Contributions from parent |
|
|
|
|
|
|
||
Distributions to members |
|
|
( |
) |
|
|
— |
|
Dividends paid |
|
|
( |
) |
|
|
— |
|
Payments for financing costs |
|
|
( |
) |
|
|
— |
|
Taxes paid related to net settlement upon vesting of equity awards |
|
|
( |
) |
|
|
( |
) |
Distributions of non-controlling interests |
|
|
( |
) |
|
|
( |
) |
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
Effects of exchange rate movements on cash |
|
|
|
|
|
( |
) |
|
NET INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH |
|
|
|
|
|
|
||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD |
|
|
|
|
|
|
||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD |
|
$ |
|
|
$ |
|
||
SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
|
|
$ |
|
||
Cash payments for income taxes |
|
$ |
|
|
$ |
|
||
NON-CASH INVESTING AND FINANCING TRANSACTIONS: |
|
|
|
|
|
|
||
Capital expenditures included in current liabilities |
|
$ |
|
|
$ |
|
||
Capital contribution from parent |
|
$ |
|
|
$ |
|
||
Accretion of redeemable non-controlling interests |
|
$ |
( |
) |
|
$ |
— |
|
Principal stockholder contributions |
|
$ |
— |
|
|
$ |
|
|
Excise taxes on repurchases of common stock |
|
$ |
|
|
$ |
|
||
See accompanying notes to consolidated financial statements.
11
Table of Contents
TKO GROUP HOLDINGS, INC.
Notes to Consolidated Financial Statements
(Unaudited)
1. DESCRIPTION OF BUSINESS
TKO Group Holdings, Inc. (the "Company" or "TKO") is a premium sports and entertainment company that operates leading combat sports and sports entertainment brands. The Company monetizes its media and content properties 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 Formation
TKO was incorporated as a Delaware corporation in March 2023, under the name New Whale Inc., and was formed for the purpose of facilitating the business combination of the Ultimate Fighting Championship (“UFC”) and World Wrestling Entertainment, LLC (f/k/a World Wrestling Entertainment, Inc.) (“WWE”) businesses under TKO Operating Company, LLC (f/k/a Zuffa Parent, LLC) (“Zuffa” or “TKO OpCo”), which owns and operates the UFC and WWE businesses (the “Transactions”), as contemplated within the Transaction Agreement, dated as of April 2, 2023, by and among Endeavor Group Holdings, Inc. (“EGH”), Endeavor Operating Company, LLC (“Endeavor OpCo”), TKO OpCo, WWE, TKO, and Whale Merger Sub Inc. (the “Transaction Agreement”). On September 12, 2023, the TKO Transactions were completed with the newly-formed TKO combining the UFC and WWE businesses. TKO OpCo is the accounting acquirer and predecessor to TKO. Under the terms of the Transaction Agreement, at the time of the transaction, (A) EGH and/or its subsidiaries received (1) a
Endeavor Asset Acquisition
On February 28, 2025, TKO OpCo and TKO Group Holdings, Inc., (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”). In connection with the Endeavor Asset Acquisition Agreement, the TKO Parties acquired the Acquired Businesses for total consideration of approximately $
On February 28, 2025, prior to the close of the Endeavor Asset Acquisition, EGH, through its subsidiaries, had controlled approximately
Endeavor Take-Private Transaction
On March 24, 2025, Silver Lake and its affiliates completed the previously announced acquisition (the “Endeavor Acquisition” or “Endeavor Take-Private Transaction”) of EGH, as described in a Current Report on Form 8-K filed by EGH on March 24, 2025. As a result of the consummation of the Endeavor Take-Private Transaction, Silver Lake, through its ownership of Endeavor Group Holdings, Inc. and its subsidiaries, controls TKO. As of the effective time thereof, Silver Lake and its affiliates beneficially own approximately
12
Table of Contents
Financial results and information included in the accompanying interim consolidated financial statements include the financial results and information of TKO Group Holdings, Inc., and its consolidated subsidiaries. See Note 2, Summary of Significant Accounting Policies - Basis of Presentation, for further details on the presentation of the accompanying financial statements as a result of the Endeavor Asset Acquisition.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC for interim financial reporting. These financial statements should be read in conjunction with the audited recast combined financial statements and accompanying notes with respect to the fiscal years ended December 31, 2024, 2023 and 2022 (included in Form 8-K filings on May 8, 2025 and March 19, 2025), giving effect to the Endeavor Asset Acquisition as if such transaction had been consummated on January 1, 2022, the beginning of the earliest period presented. Certain information and note disclosures normally included in the annual financial statements have been condensed or omitted from these interim financial statements. The interim consolidated financial statements as of September 30, 2025 and for the three and nine months ended September 30, 2025 and 2024 are unaudited; however, in the opinion of management, such interim consolidated financial statements reflect all adjustments, consisting solely of normal and recurring adjustments (including required common control recast adjustments discussed below), necessary for a fair statement of its financial position, results of operations and cash flows for the interim periods presented. The results of operations of any interim period are not necessarily indicative of the results of operations for the full year. All intercompany balances are eliminated in consolidation.
Combined Financial Statements for Historical Recast Periods:
The historical periods included in the accompanying interim financial statements have been retrospectively recast to reflect the Company's February 28, 2025 common control acquisition of the Acquired Businesses from Endeavor Group Holdings, Inc. and its subsidiaries. As such, the financial statements for periods prior to the acquisition reflect the combined results of the Company and the Acquired Businesses as if they had been part of the Company during the historical periods under common control.
The historical financial data of the Acquired Businesses included in the historical recast periods has been derived from the historical 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.
The Acquired Businesses include 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 the recast 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 recast periods presented due to EGH'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 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.
The combined financial statements of the Acquired Businesses 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, events 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.
13
Table of Contents
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and the accompanying disclosures.
Significant accounting policies that contain subjective management estimates and assumptions include those related to revenue recognition, the allowance for doubtful accounts, recoverability of deferred costs, content cost amortization and impairment, the fair value of acquired assets and liabilities associated with acquisitions, the fair value of the Company’s reporting units and the assessment of goodwill, other intangible assets and long-lived assets for impairment, determination of useful lives of intangible assets and long-lived assets acquired, the fair value of equity-based compensation, leases, income taxes and contingencies.
Management evaluates these estimates using historical experience and other factors, including the general economic environment and actions it may take in the future. The Company adjusts such estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management's best judgment at a point in time and as such, these estimates may ultimately differ from actual results. Changes in estimates resulting from weakness in the economic environment or other factors beyond the Company's control could be material and would be reflected in the Company's consolidated financial statements in future periods.
3. RECENT ACCOUNTING PRONOUNCEMENTS
Recently Adopted Accounting Pronouncements
In August 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-05, Business Combinations – Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement. This ASU requires that a joint venture apply a new basis of accounting upon formation. The amendments in this update were effective prospectively for all joint venture formations with a formation date on or after January 1, 2025, with an option to apply the amendments retrospectively. Early adoption was permitted in any interim or annual period in which financial statements had not yet been issued. The Company adopted this guidance on January 1, 2025, with no material effect on the Company’s financial position or results of operations.
In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures. This ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The Company adopted this guidance for the year ended December 31, 2024 on a retrospective basis. See Note 17, Segment Information, for further detail.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU requires that an entity annually disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income or loss by the applicable statutory income tax rate) as well as income taxes paid disaggregated by jurisdiction. The amendments in this Update were effective for all entities for fiscal years beginning after December 15, 2024. The Company adopted this guidance on January 1, 2025 with no effect on the Company's financial position or results of operations, and expects to include the disclosures required by this ASU in its Annual Report on Form 10-K for the year ending December 31, 2025.
In March 2024, the FASB issued ASU 2024-02, Codification Improvements – Amendments to Remove References to the Concepts Statements. This ASU amends the Accounting Standards Codification (“ASC”) to remove references to various FASB Concepts Statements to simplify the ASC and draw a distinction between authoritative and nonauthoritative literature. The amendments in this update apply to all reporting entities within the scope of the affected accounting guidance, and were effective for public entities for fiscal years beginning after December 15, 2024. Early adoption was permitted in any interim or annual period in which financial statements had not yet been issued. The Company adopted this guidance on January 1, 2025, with no material effect on the Company's financial position or results of operations.
14
Table of Contents
Recently Issued Accounting Pronouncements
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. This ASU amends the ASC to incorporate certain disclosure requirements from SEC Release No. 33-10532, Disclosure Update and Simplification, which was issued in 2018. The effective date for each amendment will be the date on which the SEC's removal of that related disclosure from Regulation S-X or Regulation S-K becomes effective, with early adoption prohibited. If, by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the ASC and will not become effective. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. Additionally, in January 2025, the FASB issued ASU 2025-01, Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, to clarify the effective date of ASU 2024-03. This ASU improves expense disclosures by requiring disclosure of additional information about specific expense categories in the notes to the financial statements at interim and annual reporting periods. The amendments in this update, as clarified, are effective for public business entities for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements.
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity ("VIE"). This ASU clarifies the guidance in determining the accounting acquirer in a business combination effected primarily by exchanging equity interests when the acquiree is a VIE that meets the definition of a business. The ASU is effective for annual reporting periods beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted, and the ASU is to be applied prospectively to acquisitions after the adoption date. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements.
In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The ASU amends ASC 326-20 to provide a practical expedient (for all entities) related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606, Revenue from Contracts with Customers. The ASU is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. Early adoption is permitted, and the amendments should be applied prospectively. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements.
In September 2025, the FASB issued ASU 2025‑06, Targeted Improvements to the Accounting for Internal‑Use Software (ASC 350‑40). The update eliminates references to development stages throughout ASC 350-40 and introduces a new capitalization threshold requiring (1) management authorization with funding commitment and (2) a determination that it is probable the project will be completed and used as intended. Additionally, the ASU aligns disclosures with ASC 360‑10 - Property, Plant, and Equipment for all capitalized software. The ASU is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Early adoption permitted, and entities may adopt using a retrospective, prospective, or modified transition approach. The Company is in the process of assessing the impact of this ASU on its consolidated financial statements.
15
Table of Contents
4. REVENUE
The Company derives its revenue principally from the following sources: (i) media rights and content fees associated with the production and distribution of content, (ii) ticket sales at live events, hospitality sales and site fees, (iii) partnerships and marketing, and (iv) consumer product licensing and other.
Disaggregated Revenue
The following table presents the Company’s revenue disaggregated by primary revenue sources (in thousands):
|
|
For the Three Months Ended September 30, 2025 |
|
|||||||||||||||||
|
|
UFC |
|
|
WWE |
|
|
IMG |
|
|
Corp & Other |
|
|
Total |
|
|||||
Media rights, production and content |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Live events and hospitality |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Partnerships and marketing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Consumer products licensing and other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Eliminations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
For the Nine Months Ended September 30, 2025 |
|
|||||||||||||||||
|
|
UFC |
|
|
WWE |
|
|
IMG |
|
|
Corp & Other |
|
|
Total |
|
|||||
Media rights, production and content |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Live events and hospitality |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Partnerships and marketing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Consumer products licensing and other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Eliminations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
For the Three Months Ended September 30, 2024 |
|
|||||||||||||||||
|
|
UFC |
|
|
WWE |
|
|
IMG |
|
|
Corp & Other |
|
|
Total |
|
|||||
Media rights, production and content |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Live events and hospitality |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Partnerships and marketing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Consumer products licensing and other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Eliminations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
For the Nine Months Ended September 30, 2024 |
|
|||||||||||||||||
|
|
UFC |
|
|
WWE |
|
|
IMG |
|
|
Corp & Other |
|
|
Total |
|
|||||
Media rights, production and content |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Live events and hospitality |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Partnerships and marketing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Consumer products licensing and other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Eliminations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
||||
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Remaining Performance Obligations
The transaction price related to the Company’s future performance obligations does not include any variable consideration related to sales or usage-based royalties. The variability related to these sales or usage-based royalties will be resolved in the periods when the licensee generates sales related to the intellectual property license.
The following table presents the aggregate amount of the transaction price allocated to remaining performance obligations for contracts greater than one year for their initial term prior to opt-out provisions with unsatisfied or partially satisfied performance obligations as of September 30, 2025 (in thousands):
16
Table of Contents
Remainder of 2025 |
|
$ |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
Thereafter |
|
|
|
|
Total remaining performance obligations |
|
$ |
|
Revenue from Prior Period Performance Obligations
The Company did
Contract Liabilities (Deferred Revenues)
The Company records deferred revenue when cash payments are received or due in advance of the Company’s performance. The Company’s deferred revenue balance primarily relates to advance payments received related to its content distribution rights agreements, live event and hospitality arrangements, consumer product licensing agreements and partnerships and marketing arrangements, as well as memberships for the Company’s subscription services. Deferred revenue is included within current liabilities and in other long-term liabilities in the consolidated balance sheets. Total deferred revenue as of September 30, 2025 was $
5. SUPPLEMENTARY DATA
Property, Buildings and Equipment, net
As of September 30, 2025, property, buildings and equipment totaled $
During the three and nine months ended September 30, 2025, the Company recognized impairment charges of $
Allowance for Doubtful Accounts
The changes in the allowance for doubtful accounts are as follows (in thousands):
|
|
As of |
|
|
Charged to |
|
|
|
|
|
|
|
|
As of |
|
|||||
|
|
December 31, |
|
|
Costs and |
|
|
|
|
|
Foreign Exchange |
|
|
September 30, |
|
|||||
|
|
2024 |
|
|
Expenses |
|
|
Deductions |
|
|
and Other |
|
|
2025 |
|
|||||
Nine Months Ended September 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||
17
Table of Contents
Other Current Assets
The following is a summary of other current assets (in thousands):
|
|
As of |
|
|||||
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
Prepaid taxes |
|
$ |
|
|
$ |
|
||
Ticket inventory |
|
|
|
|
|
|
||
Prepaid event and production-related costs |
|
|
|
|
|
|
||
Other current receivables |
|
|
|
|
|
|
||
Amounts due from the Group (Note 18) |
|
|
|
|
|
|
||
Prepaid expenses |
|
|
|
|
|
|
||
Prepaid insurance |
|
|
|
|
|
|
||
Assets held for sale |
|
|
— |
|
|
|
|
|
Other |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Accrued Liabilities
The following is a summary of accrued liabilities (in thousands):
|
|
As of |
|
|||||
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
Payroll-related costs |
|
$ |
|
|
$ |
|
||
Accrued operating expenses |
|
|
|
|
|
|
||
Event and production-related costs |
|
|
|
|
|
|
||
Legal and professional fees |
|
|
|
|
|
|
||
Interest |
|
|
|
|
|
|
||
Accrued capital expenditures |
|
|
|
|
|
|
||
Legal settlements (Note 16) |
|
|
— |
|
|
|
|
|
Other |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
Other Current Liabilities
The following is a summary of other current liabilities (in thousands):
|
|
As of |
|
|||||
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
Collections due to third parties (1) |
|
$ |
|
|
$ |
— |
|
|
Amounts due to the Group (Note 18) |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
6. GOODWILL AND INTANGIBLE ASSETS
Goodwill
There were
18
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Intangible Assets, net
Amortization of finite-lived intangible assets was $
7. INVESTMENTS
The following is a summary of the Company’s investments (in thousands):
|
|
As of |
|
|||||
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
Equity method investments |
|
$ |
|
|
$ |
|
||
Nonmarketable equity investments without readily determinable fair values |
|
|
|
|
|
|
||
Nonmarketable equity investments with readily determinable fair values |
|
|
|
|
|
|
||
Total investment securities |
|
$ |
|
|
$ |
|
||
Equity Method Investments
As of September 30, 2025 and December 31, 2024, the Company held various investments in non-marketable equity instruments of private companies. As of September 30, 2025, the Company’s equity method investments are primarily comprised of Sports News Television Limited and EverPass, LLC. The Company’s ownership of its equity method investments ranges from
In March 2025, the Company entered into a joint venture with Sela Company to launch a global boxing promotion business. Sela Company holds a majority of the common equity units, while TKO was granted in-substance common stock in the form of profit interests, subject to vesting upon the achievement of certain future milestones. TKO will also provide executive and operational services to the joint venture under a services agreement with an annual fee over an initial five-year term. During the three months ended September 30, 2025,
The Company recognized equity earnings (losses) of $
Nonmarketable Equity Investments Without Readily Determinable Fair Values
As of September 30, 2025 and December 31, 2024, the Company held various investments in nonmarketable equity instruments of private companies.
The Company did
The fair value measurements of the Company’s nonmarketable equity investments without readily determinable fair values are classified within Level 3 as significant unobservable inputs are used as part of the determination of fair value. Significant unobservable inputs may include variables such as near-term prospects of the investees, recent financing activities of the investees, and the investees' capital structure, as well as other economic variables, which reflect assumptions market participants would use in pricing these assets. For equity investments without readily determinable fair values, the Company has elected to use the measurement alternative to fair value that will allow these investments to be recorded at cost, less impairment, and adjusted for subsequent observable price changes.
19
Table of Contents
8. DEBT
The following is a summary of the Company’s outstanding debt (in thousands):
|
|
As of |
|
|||||
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2025 |
|
|
2024 |
|
||
First Lien Term Loan (due |
|
$ |
|
|
$ |
|
||
Secured Commercial Loans |
|
|
|
|
|
|
||
Notes payable |
|
|
|
|
|
|
||
Total principal |
|
|
|
|
|
|
||
Unamortized discount |
|
|
( |
) |
|
|
( |
) |
Unamortized debt issuance cost |
|
|
( |
) |
|
|
( |
) |
Total debt |
|
|
|
|
|
|
||
Less: Current portion of long-term debt |
|
|
( |
) |
|
|
( |
) |
Total long-term debt |
|
$ |
|
|
$ |
|
||
First Lien Term Loan (due November 2031)
As of September 30, 2025 and December 31, 2024, the Company had $
On September 15, 2025 (the “Credit Agreement Closing Date”), TKO Worldwide Holdings entered into the Sixth Refinancing Amendment (the “Credit Agreement Amendment”). The Credit Agreement Amendment, among other things: (i) refinanced and replaced the outstanding first lien term loans (the "Existing Term Loans") with a new class of first lien secured term loans, (ii) provided for an additional $
The New Term Loans accrue interest, at the option of the borrower, at either (a) Term SOFR plus
The Company incurred $
Borrowings under the Revolving Credit Facility now accrue interest at either (a) Term SOFR plus
As of September 30, 2025 and December 31, 2024, there was
The First Lien Credit Agreement contains a financial covenant that requires the Company to maintain, commencing with the fiscal quarter ended June 30, 2025, a First Lien Leverage Ratio of Consolidated First Lien Debt to Consolidated EBITDA of
20
Table of Contents
TKO Worldwide Holdings had outstanding letters of credit of $
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 First Lien Credit Agreement) is less than
The estimated fair values of the Company’s outstanding term loans are based on quoted market values for the debt. As of September 30, 2025 and December 31, 2024, the face amount of the Company’s term loans approximated their fair value.
Secured Commercial Loans
As of September 30, 2025 and December 31, 2024, the Company had $
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 September 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 nine months ended September 30, 2025, Endeavor OpCo purchased
Endeavor Asset Acquisition — Equity Consideration
On February 28, 2025, as consideration paid in connection with the Endeavor Asset Acquisition, the Company issued approximately
Capital Return Program
In October 2024, the Company announced that its board of directors had authorized a share repurchase program of up to $
On September 3, 2025, the Company’s board of directors authorized an increase to its quarterly cash dividend program and
21
Table of Contents
in connection with the September 2025 dividend payment, TKO’s Class A common stockholders were entitled to their pro rata share of an aggregate distribution of approximately $
On September 4, 2025, the Company repurchased
On September 15, 2025, the Company announced that it had entered into an accelerated share repurchase agreement (the “ASR Agreement”) with Morgan Stanley & Co. LLC to repurchase $
In addition, on September 15, 2025, the Company also entered into a Rule 10b5-1 trading plan providing for up to $
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.
Net Parent Investment and Accumulated Other Comprehensive Loss
In connection with the Endeavor Asset Acquisition of the Acquired Businesses on February 28, 2025, and the retrospective combination of their results with TKO beginning on September 12, 2023 (the date of TKO’s formation), the portion of net parent investment related to the Acquired Businesses as of September 12, 2023, totaling $
TKO Ownership Interests
As of September 30, 2025, EGH and its subsidiaries collectively controlled
As of September 30, 2025, the Company owned
22
Table of Contents
10. NON-CONTROLLING INTERESTS
Nonredeemable Non-Controlling Interest in the Acquired Businesses
For periods prior to the business acquisition of WWE on September 12, 2023, nonredeemable non-controlling interest represents the component of equity in the Acquired Businesses’ subsidiaries held by third parties.
Nonredeemable Non-Controlling Interest in TKO OpCo
In connection with the business acquisition of WWE on September 12, 2023, the Company became the sole managing member of TKO OpCo and, as a result, consolidates the financial results of TKO OpCo. The Company reports a non-controlling interest representing the economic interest in TKO OpCo held by the other members of TKO OpCo. Beginning on September 12, 2023, in connection with the Endeavor Asset Acquisition, the nonredeemable non-controlling interest balance also includes the carrying amount of the Acquired Businesses’ net parent investment and accumulated other comprehensive loss. TKO OpCo’s operating agreement provides that holders of membership interests in TKO OpCo (“Common Units”) may, from time to time, require
Redeemable Non-Controlling Interest in the UFC
In July 2018, the Company received an investment of $
The changes in carrying value of the redeemable non-controlling interest were as follows (in thousands):
Balance — December 31, 2023 |
|
$ |
|
|
Net income attributable to non-controlling interest holders |
|
|
|
|
Accretion |
|
|
|
|
Balance — September 30, 2024 |
|
$ |
|
|
|
|
|
|
|
Balance — December 31, 2024 |
|
$ |
|
|
Net income attributable to non-controlling interest holders |
|
|
|
|
Accretion |
|
|
( |
) |
Balance — September 30, 2025 |
|
$ |
|
|
11. EQUITY-BASED COMPENSATION
Equity-based compensation expense, which is included within direct operating costs and selling, general and administrative expenses on the Company’s consolidated statements of operations, consisted of the following (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
EGH 2021 Plan |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Replacement Awards under WWE 2016 Plan (1) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
TKO 2023 Plan |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other awards (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity-based compensation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
23
Table of Contents
In connection with the Endeavor Asset Acquisition, the Company converted each equity award of restricted stock units (“RSUs”) held by employees of the Acquired Businesses into TKO RSUs of equal value and vesting conditions. The value of these was determined using the closing price of TKO Class A common stock on the day of the closing of the Endeavor Asset Acquisition. Effective March 1, 2025, equity-based compensation expense associated with these awards is included as part of the TKO 2023 Plan in the table above.
Upon the close of the Endeavor Asset Acquisition, the Company issued
In January 2024, WWE entered into an Independent Services Contractor and Merchandising Agreement (the “DJ Services Agreement”) with Dwayne Johnson, a member of the Company’s board of directors, pursuant to which Mr. Johnson agreed to provide to WWE certain promotional and other services. See Note 18, Related Party Transactions, for further discussion. As consideration for Mr. Johnson’s services provided under the DJ Services Agreement, the Company granted Mr. Johnson RSUs for an aggregate value of $
12. EARNINGS PER SHARE ("EPS")
Basic earnings per share is calculated utilizing net income (loss) available to common stockholders of the Company during the three and nine months ended September 30, 2025 and 2024, divided by the weighted average number of shares of TKO Class A common stock outstanding during the same period. Diluted earnings per share is calculated by dividing the net income (loss) available to common stockholders by the diluted weighted average shares outstanding during the same period. The Company’s outstanding equity-based compensation awards under its equity-based compensation arrangements (refer to Note 11, Equity-based Compensation) as well as outstanding shares of TKO Class B common stock were anti-dilutive during the nine months ended September 30, 2024.
The historical earnings per share amounts for periods prior to the close of the Endeavor Asset Acquisition on February 28, 2025 have not been retrospectively adjusted. This is because TKO’s Class A common stockholders did not have a claim on the results of the Acquired Businesses prior to that date. The consideration issued in the transaction consisted solely of TKO OpCo common units and an equivalent number of corresponding shares of TKO Class B common stock, which do not share in the earnings of TKO Group Holdings, Inc. and are therefore excluded from basic EPS. However, shares of TKO Class B common stock are exchangeable, on a one-for-one basis, into shares of TKO Class A common stock at the option of the holder. As a result, shares of TKO Class B common stock are considered potentially dilutive and are included in the calculation of diluted EPS under the if-converted method, but only to the extent they are dilutive to Class A common shareholders. For periods after the Endeavor Asset Acquisition close date, the impact of shares of TKO Class B common stock on diluted EPS will be evaluated based on their dilutive effect, if any, in the respective reporting period.
On September 15, 2025, the Company entered into an ASR Agreement with Morgan Stanley & Co. LLC to repurchase $
24
Table of Contents
Based on the Company’s volume weighted average price of TKO Class A common stock for the period from September 16, 2025 to September 30, 2025, the ASR was in a gain position, and the Company would have received approximately
The following table presents the computation of basic and diluted net earnings (loss) per share and weighted average number of shares of the Company’s common stock outstanding for the periods presented (dollars in thousands, except share and per share data):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Numerator |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) attributable to TKO Group Holdings, Inc. |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|||
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustment to net income attributable to TKO Group Holdings, Inc. from the assumed conversion of Class B shares |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Net income (loss) attributable to TKO Group Holdings, Inc. used in computing diluted earnings (loss) per share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average Class A Common Shares outstanding - Basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Effect of dilutive securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Additional shares from RSUs and PSUs, as calculated using the treasury stock method |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Additional shares from the assumed conversion of Class B shares |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Weighted average number of shares used in computing diluted earnings (loss) per share |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic earnings (loss) per share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|||
Diluted earnings (loss) per share |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Securities that are anti-dilutive this period |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unvested RSUs |
|
|
|
|
|
— |
|
|
|
|
|
|
|
|||
Unvested PSUs |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
TKO Class B Common Shares |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
ASR Agreement |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
13. 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, other than entity-level income taxes in certain U.S. state and local jurisdictions. TKO OpCo’s foreign subsidiaries are subject to entity-level taxes, and TKO OpCo’s U.S. subsidiaries are subject to foreign withholding taxes on sales in certain foreign jurisdictions which are included as a component of foreign current taxes. 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.
In accordance with ASC 740, each interim period is considered integral to the annual period and tax expense is generally determined using an estimate of the annual effective income tax rate ("AETR"). The Company records income tax expense each quarter using the estimated AETR to provide for income taxes on a current year-to-date basis, adjusted for discrete items that are
25
Table of Contents
noted in the relevant period. During the three and nine months ended September 30, 2024, the Company treated the legal settlement related to UFC antitrust lawsuit of $
The provision for income taxes for the three months ended September 30, 2025 and 2024 was $
The Company’s effective tax rate differs from the U.S. federal statutory rate primarily due to state and local income taxes, non-controlling interest, withholding taxes in foreign jurisdictions that are not based on net income, and increased income subject to tax in foreign jurisdictions which differ from the U.S. federal statutory income tax rate.
As of September 30, 2025 and December 31, 2024, the Company had unrecognized tax benefits of $
The Company records valuation allowances against its net deferred tax assets when it is more likely than not that all, or a portion, of a deferred tax asset will not be realized. The Company evaluates the realizability of its deferred tax assets by assessing the likelihood that its deferred tax assets will be recovered based on all available positive and negative evidence, including historical results, reversals of deferred tax liabilities, estimates of future taxable income, tax planning strategies and results of operations.
Other Matters
On July 4, 2025, President Trump signed the “One Big Beautiful Bill Act” (“OBBBA”) into law. This legislation introduces several changes to U.S. federal income tax law, such as an expansion of the rules related to deductibility of executive compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), and reinstating the bonus depreciation deduction for qualified property. The OBBBA also restores the EBITDA-based business interest expense limitation under Section 163(j) of the Code, and modifies the computation of certain taxes related to international operations. The legislation has multiple effective dates, with certain provisions effective in 2025 and others to be implemented through 2027. The provisions of the OBBBA are not expected to have a material effect on the Company's consolidated financial statements.
In December 2022, the Organization for Economic Co-operation and Development ("OECD") proposed Global Anti-Base Erosion Rules, which provides for changes to numerous long-standing tax principles including the adoption of a global minimum tax rate of 15% for multinational enterprises ("GloBE rules"). Various jurisdictions have adopted or are in the process of enacting legislation to adopt GloBE rules and other countries are expected to adopt GloBE rules in the future. While changes in tax laws in the various countries in which the Company operates can negatively impact the Company’s results of operations and financial position in future periods, the Company’s impact related to the adoption of the GloBE rules was not material to the Company’s consolidated financial position. In June 2025, the G7 and the U.S. Department of the Treasury issued a statement that outlined a shared understanding to exclude U.S. parented groups from certain aspects of the Pillar 2 global minimum tax rules (the "G7 Statement"). We will continue to monitor developments related to the G7 Statement, which has not yet been incorporated into the OECD framework. As countries continue to enact and refine the Pillar 2 rules, we will evaluate the impact on our financial position.
26
Table of Contents
14. RESTRUCTURING CHARGES
During 2023 and 2024, the Company initiated a cost reduction program, primarily related to realizing synergy opportunities and integrating the combined operations of WWE and UFC following the formation of TKO. During the first quarter of 2025, the Company implemented an ongoing cost reduction program, primarily related to realizing synergy opportunities and integrating the combined operations of the Acquired Businesses. The Company recorded restructuring charges of $
Changes in the Company’s restructuring liability through September 30, 2025 were as follows (in thousands):
Balance — December 31, 2024 |
|
$ |
|
|
Restructuring charges |
|
|
|
|
Payments |
|
|
( |
) |
Balance — September 30, 2025 |
|
$ |
|
15. CONTENT PRODUCTION INCENTIVES
The Company has access to various governmental programs that are designed to promote content production within the United States of America and certain international jurisdictions. These programs primarily consist of nonrefundable tax credits issued by a jurisdiction on an annual basis for qualifying expenses incurred during the year in the production of certain entertainment content created in whole or in part within the jurisdiction. The Company recognizes these benefits when we have reasonable assurance regarding the realizable amount of the tax credits.
During the three and nine months ended September 30, 2025 and 2024, the Company recorded content production incentives of $
During the nine months ended September 30, 2025 and 2024, the Company recorded infrastructure improvement incentives of $
16. COMMITMENTS AND CONTINGENCIES
Legal Proceedings
The Company is involved in legal proceedings, claims and governmental investigations arising in the normal course of business. The types of allegations that arise in connection with such legal proceedings vary in nature, but can include, among others, contract, employment, tax and intellectual property matters. The Company evaluates all cases and records liabilities for losses from legal proceedings when the Company determines that it is probable that the outcome will be unfavorable and the amount, or potential range, of loss can be reasonably estimated. While any outcome related to litigation or such governmental proceedings cannot be predicted with certainty, management believes that the outcome of these matters, except as otherwise may be discussed below, individually or in the aggregate, will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.
UFC Legal Proceedings
27
Table of Contents
Le case abandoned their claim for injunctive relief, so the only relief the fighter plaintiffs would have sought at trial was damages. On September 26, 2024, following the court’s denial of an earlier proposed settlement agreement, the Company reached an agreement with the plaintiffs to settle all claims asserted in the Le case for an aggregate amount of $
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 Le case 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. Zuffa filed a motion to compel arbitration, and the Court has allowed Plaintiffs to seek discovery regarding the arbitration clause before ruling on Zuffa’s motion. No trial date has been set in the Cirkunovs action.
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 Davis action, and discovery has not yet begun. Zuffa has filed a motion to dismiss which argues, among other things, that Davis’ claims are released because of his prior affiliation with UFC and his membership in a class of fighters who have settled and released the same claims against Zuffa as those raised in Davis.
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 Company's board of directors. 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. Laurinaitis 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,
28
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plaintiffs filed an amended complaint adding
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 Laborers and Palkon Actions allege breach of fiduciary duty claims against former WWE directors Mr. McMahon, Nick Khan, Paul Levesque, George A. Barrios, Steve Koonin, Michelle D. Wilson, and Frank A. Riddick III (collectively, the “Individual Defendants”), arising out of the TKO Transactions. On April 24, 2024, the City of Pontiac Reestablished General Employees’ Retirement System (“Pontiac”), a purported former stockholder of WWE, filed another verified class action complaint on behalf of itself and similarly situated former WWE stockholders in the Delaware Court captioned City of Pontiac Reestablished General Employees’ Retirement System v. McMahon, C.A. No. 2024-0432 (“Pontiac Action”). The Pontiac Action similarly alleges breach of fiduciary duty claims against the Individual Defendants and added claims against WWE and TKO for denying stockholders their appraisal rights under DGCL § 262, as well as claims against EGH for aiding and abetting the alleged breaches of fiduciary duties and for civil conspiracy to violate DGCL § 262. On May 2, 2024, the Court entered an order consolidating the Laborers, Palkon and Pontiac Actions under the caption In re World Wrestling Entertainment, Inc. Merger Litigation, C.A. No. 2023-1166-JTL (“Consolidated Action”). On August 8, 2024, the Delaware Court appointed the Laborers and Palkon plaintiffs as co-lead plaintiffs, and the co-lead plaintiffs subsequently designated the Palkon complaint as operative. As a result, WWE, TKO and EGH are no longer defendants. On October 24, 2024, the Delaware Court entered a stipulation dismissing all claims against Messrs. Koonin and Riddick, who, therefore, are no longer defendants. The remaining Individual Defendants filed answers to the complaint on October 28, 2024 and discovery is currently underway.
IMG Legal Proceedings
As set forth in the Endeavor Asset Acquisition Agreement and pursuant to other agreements between the Company and Endeavor Group Holdings, Inc., Endeavor Group Holdings, Inc. is obligated to indemnify the Company for, and pay directly, any judgment entered against IMG or settlement entered into with respect to IMG, including with respect to claims or actions brought by other parties, in each case, to the extent related to the proceedings described below.
In July 2017, the Italian Competition Authority (“ICA”) issued a decision opening an investigation into alleged breaches of competition law in Italy, involving inter alia IMG, and relating to bidding for certain media rights of the Serie A and Serie B football leagues. In April 2018, the European Commission conducted on-site inspections at a number of companies that are involved with sports media rights, including IMG. The inspections were part of an ongoing investigation into the sector and into potential violations of certain antitrust laws that may have taken place within it. IMG investigated these ICA matters, as well as other regulatory compliance matters. In May 2019, the ICA completed its investigation and fined IMG approximately EUR
29
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taken over an existing claim. IMG has defended in its submissions to date, and intends to continue to defend, against all of the damages claims, Interventions and any related claims, and management believes that IMG has meritorious defenses to these claims, including the absence of actual damage. IMG may also be subject to regulatory and other claims and actions with respect to these ICA and other regulatory matters.
17. SEGMENT INFORMATION
Prior to the Endeavor Asset Acquisition, the Company identified
The Company also reports the results for the “Corporate and Other” group. The Corporate and Other group 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. 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 and promotional fees for services 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 EGH and its subsidiaries 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.
As disclosed within Note 2, Summary of Significant Accounting Policies, the historical financial data includes the recast combined results of TKO and the Acquired Businesses for all periods prior to February 28, 2025. All prior period amounts related to the segment change have been retrospectively reclassified to conform to the new presentation.
The Company does not disclose assets by segment information. The Company does not provide assets by segment information to the Company’s CODM, as that information is not typically used in the determination of resource allocation and assessing business performance of each reportable segment. A significant portion of the Company’s assets following the TKO Transactions are comprised of goodwill and intangible assets arising from the TKO Transactions.
30
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The following tables present summarized financial information for each of the Company’s reportable segments (in thousands):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
UFC: |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Direct operating costs (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expenses (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
WWE: |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Direct operating costs (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expenses (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
IMG: |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Direct operating costs (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expenses (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjusted EBITDA |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Revenue
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
UFC |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
WWE |
|
|
|
|
|
|
|
|
|
|
|
|
||||
IMG |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue from reportable segments |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Corporate and Other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Eliminations |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
31
Table of Contents
Reconciliation of segment profitability
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
UFC |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
WWE |
|
|
|
|
|
|
|
|
|
|
|
|
||||
IMG |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Total Adjusted EBITDA from reportable segments |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate and Other |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reconciling items: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity earnings of affiliates |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Interest expense, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Depreciation and amortization |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Equity-based compensation expense (1) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Merger, acquisition and earn out costs (2) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Certain legal costs (3) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Restructuring, severance and impairment (4) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Debt transaction costs (5) |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
Other adjustments (6) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Income (loss) before income taxes and equity earnings of affiliates |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|||
32
Table of Contents
18. RELATED PARTY TRANSACTIONS
EGH and its subsidiaries
EGH and its subsidiaries (collectively, the “Group”), which collectively own approximately
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Event and other licensing revenues earned from the Group |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Expenses incurred with the Group included in direct operating costs (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expenses incurred with the Group included in selling, general and administrative expenses (2) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense (income) with the Group (3) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Net expense resulting from Group transactions included within net income (loss) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Outstanding amounts due to and from the Group were as follows (in thousands):
|
|
|
|
As of |
|
|||||
|
|
|
|
September 30, |
|
|
December 31, |
|
||
|
|
Classification |
|
2025 |
|
|
2024 |
|
||
Amounts due from the Group |
|
Other current assets |
|
$ |
|
|
$ |
|
||
Amounts due from the Group |
|
Other assets |
|
$ |
|
|
$ |
— |
|
|
Amounts due to the Group |
|
Other current liabilities |
|
$ |
( |
) |
|
$ |
( |
) |
Prior to February 28, 2025, the Company reimbursed the Group for third-party costs incurred on the Company’s behalf under the Services Agreement, which was terminated effective that date. During the nine months ended September 30, 2025 and 2024, the Company reimbursed $
Corporate Allocations in Recast Historical Combined Periods
In connection with the Company’s common control acquisition of the Acquired Businesses from Endeavor Group Holdings, Inc. and its subsidiaries on February 28, 2025, the historical financial statements have been retrospectively recast to include the combined results of TKO and the Acquired Businesses. During these historical combined periods, certain general corporate expenses incurred by EGH and its subsidiaries were allocated to the Acquired Businesses. These expenses related to centralized support functions provided by EGH and its subsidiaries, such as finance, human resources, information technology, facilities, and legal services (collectively, “General Corporate Expenses”). The General Corporate Expenses were allocated to the Acquired Businesses using reasonable methodologies, including pro rata measures based on headcount, gross profit, or other relevant drivers. These costs are included in the historical combined statements of operations within selling, general and administrative expense, and other (expense) income, net.
While management believes the allocation methodologies used for the historical combined periods are reasonable, the amounts may not reflect the actual costs that would have been incurred had the Acquired Businesses operated as standalone companies.
33
Table of Contents
The allocations of General Corporate Expenses, applicable for periods prior to the Endeavor Asset Acquisition on February 28, 2025, are reflected in the combined statements of operations as follows (in thousands)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Selling, general and administrative expenses |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other expense, net |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Total General Corporate Expenses |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Non-Controlling Interests
All significant related party transactions between the Acquired Businesses and Endeavor Group Holdings, Inc. and its subsidiaries have been included in the combined financial statements and are considered to be effectively settled for cash at the time the transaction is recorded. The total net effect of the settlement of these related party transactions is reflected in the combined statements of cash flows as a financing activity and in the combined balance sheets as a component of nonredeemable non-controlling interest.
Nonredeemable non-controlling interests as of September 30, 2024 in the combined balance sheets and net transfers from parent in the combined statement of stockholders’ equity represent Endeavor Group Holdings, Inc.’s historical investment in the Acquired Businesses and include net earnings (loss) after taxes (Endeavor Group Holdings, Inc.’s basis) and the net effect of transactions with and cost allocations from EGH and its subsidiaries. Also included in these line items are the contributions made by the Company during this period. Such balances are reflected in the combined statements of cash flows based on the cash flows made by Endeavor Group Holdings, Inc. These cash flows are included within net transfers to parent within cash flows from financing activities.
The following table summarizes the components of the net transfers to parent in nonredeemable non-controlling interests for the three and nine months ended September 30, 2025 and 2024 (applicable for periods prior to the Endeavor Asset Acquisition on February 28, 2025):
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Cash pooling and general financing activities (1) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Corporate allocations |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contributions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net transfers from/(to) parent per the Combined Statements of Equity |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
||
Equity based compensation expense (2) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Currency translation adjustments on intercompany transactions |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Taxes deemed settled with Parent |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss on foreign currency transactions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Distributions not settled in cash |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Contract balances retained by Parent and other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net transfers from/(to) parent per the Combined Statements of Cash Flows |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
Dwayne Johnson
Dwayne Johnson (also known by his stage name “The Rock”) is an actor, film producer, entrepreneur and professional wrestler who has provided talent related services to WWE for decades. Mr. Johnson is represented by talent agency William Morris Endeavor, an affiliate of TKO. On January 23, 2024, the Company’s board of directors appointed Mr. Johnson as a WWE director designee on the TKO Board.
On January 22, 2024, WWE and Mr. Johnson entered into the DJ Services Agreement, pursuant to which Mr. Johnson agreed to provide to WWE certain promotional and other services. WWE also entered into an IP Assignment Agreement with certain
34
Table of Contents
affiliates of Mr. Johnson, pursuant to which WWE assigned to Mr. Johnson (via one of his affiliates) “The Rock” trademark and certain related trademarks, service marks, ring names, taglines and other intellectual property assets (the “Assigned IP”).
Under the terms of the DJ Services Agreement, Mr. Johnson further agreed to license the Assigned IP and Mr. Johnson’s name, likeness and certain other intellectual property rights to WWE for use in connection with certain categories of licensed products related to professional wrestling for up to
As consideration for Mr. Johnson’s services pursuant to the DJ Services Agreement, and in respect of the intellectual property grants and licenses made by Mr. Johnson and his affiliates in connection therewith, Mr. Johnson received an RSU award for an aggregate value of $
Mr. Johnson also receives annual royalties from WWE and will be entitled to receive royalties in connection with the sale of licensed products that utilize the Assigned IP and his name, likeness and other intellectual property rights in accordance with the DJ Services Agreement. For the three months ended September 30, 2025 and 2024, the Company paid royalties earned by Mr. Johnson of $
Other Related Parties
During the three months ended September 30, 2025, the Company divested its equity-method investment in Euroleague Ventures S.A. (“Euroleague”). Accordingly, related-party transactions connected with Euroleague are presented through the date of divestiture. For the three months ended September 30, 2025 and 2024, the Company recognized revenue of $
35
Table of Contents
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 nine months ended September 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
36
Table of Contents
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 September 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 17, 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:
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 Riders 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 and promotional fees for services primarily related to boxing.
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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.
38
Table of Contents
RESULTS OF OPERATIONS
(dollars in millions, except where noted)
The following is a discussion of our consolidated results of operations for the three and nine months ended September 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 |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Revenue |
|
$ |
1,119.9 |
|
|
$ |
1,540.7 |
|
|
$ |
3,697.1 |
|
|
$ |
3,956.3 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Direct operating costs |
|
|
439.7 |
|
|
|
1,011.7 |
|
|
|
1,483.7 |
|
|
|
2,208.5 |
|
Selling, general and administrative expenses |
|
|
379.2 |
|
|
|
379.6 |
|
|
|
1,106.8 |
|
|
|
1,416.1 |
|
Depreciation and amortization |
|
|
129.1 |
|
|
|
114.9 |
|
|
|
329.0 |
|
|
|
355.9 |
|
Total operating expenses |
|
|
948.0 |
|
|
|
1,506.2 |
|
|
|
2,919.5 |
|
|
|
3,980.5 |
|
Operating income (loss) |
|
|
171.9 |
|
|
|
34.5 |
|
|
|
777.6 |
|
|
|
(24.2 |
) |
Other expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net |
|
|
(50.8 |
) |
|
|
(59.4 |
) |
|
|
(143.8 |
) |
|
|
(183.6 |
) |
Other (expense) income, net |
|
|
(3.2 |
) |
|
|
32.4 |
|
|
|
(19.4 |
) |
|
|
24.0 |
|
Income (loss) before income taxes and equity earnings of affiliates |
|
|
117.9 |
|
|
|
7.5 |
|
|
|
614.4 |
|
|
|
(183.8 |
) |
Provision for income taxes |
|
|
12.7 |
|
|
|
2.8 |
|
|
|
80.4 |
|
|
|
3.7 |
|
Income (loss) before equity earnings of affiliates |
|
|
105.2 |
|
|
|
4.7 |
|
|
|
534.0 |
|
|
|
(187.5 |
) |
Equity (earnings) losses of affiliates, net of tax |
|
|
(1.6 |
) |
|
|
1.3 |
|
|
|
(11.4 |
) |
|
|
(2.6 |
) |
Net income (loss) |
|
|
106.8 |
|
|
|
3.4 |
|
|
|
545.4 |
|
|
|
(184.9 |
) |
Less: Net income (loss) attributable to non-controlling interests |
|
|
65.8 |
|
|
|
(19.7 |
) |
|
|
347.7 |
|
|
|
(163.2 |
) |
Net income (loss) attributable to TKO Group Holdings, Inc. |
|
$ |
41.0 |
|
|
$ |
23.1 |
|
|
$ |
197.7 |
|
|
$ |
(21.7 |
) |
Revenue
Revenue decreased by $420.8 million, or 27%, to $1,119.9 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.
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Revenue decreased by $259.2 million, or 7%, to $3,697.1 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.
Direct Operating Costs
Direct operating costs decreased by $572.0 million, or 57%, to $439.7 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.
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Table of Contents
Direct operating costs decreased by $724.8 million, or 33%, to $1,483.7 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased by $0.4 million, or 0.1%, to $379.2 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.
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Table of Contents
Selling, general and administrative expenses decreased by $309.3 million, or 22%, to $1,106.8 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.
Depreciation and Amortization
Depreciation and amortization increased by $14.2 million, or 12%, to $129.1 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was driven by a $25.3 million acceleration of WWE customer relationship assets following the modification of a related media revenue arrangement. This increase was partially offset by a decline of $14.3 million of expense associated with certain WWE intangible assets that became fully amortized during the third quarter of 2024.
Depreciation and amortization decreased $26.9 million, or 8%, to $329.0 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. This decrease was primarily due to a decline of $50.4 million of expenses associated with certain WWE intangible assets that became fully amortized during the third quarter of 2024. This decrease was partially offset by a $25.3 million acceleration of WWE customer relationship assets following the modification of a related media revenue arrangement.
Interest Expense, Net
Interest expense, net decreased by $8.6 million, or 14%, to $50.8 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. This decrease was primarily driven by the Credit Facilities refinancing transactions in November 2024 and September 2025 that resulted in term loans with a lower interest rate, partially offset by a $1.0 billion increase in the principal balance of our term loan resulting from the September 2025 refinancing transaction.
Interest expense, net decreased by $39.8 million, or 22%, to $143.8 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. This decrease was primarily driven by the Credit Facilities refinancing transactions in November 2024 and September 2025 that resulted in term loans with a lower interest rate, partially offset by a $1.0 billion increase in the principal balance of our term loan resulting from the September 2025 refinancing transaction.
Other Expense, Net
Other expense, net for the three months ended September 30, 2025 and 2024 includes net gains on foreign currency transactions. Other expense, net for the three months ended September 30, 2025 also includes a net loss of $7.1 million from the sale of certain equity method investments.
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Other expense, net for the nine months ended September 30, 2025 and 2024 includes net losses on foreign exchange transactions. Other expense, net for the nine months ended September 30, 2025 also includes a net loss of $9.6 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 September 30, 2025, TKO recorded a provision for income taxes of $12.8 million compared to $2.9 million for the three months ended September 30, 2024. This change was primarily related to increased pretax income for the three months ended September 30, 2025.
For the nine months ended September 30, 2025, TKO recorded a provision for income taxes of $80.4 million compared to $3.7 million for the nine months ended September 30, 2024. This change was primarily related to increased pretax income for the nine months ended September 30, 2025 as well as the legal settlement for the UFC antitrust lawsuit of $375.0 million that resulted in a $44.0 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 $65.8 million and loss of $19.7 million for the three months ended September 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 September 30, 2025 as compared to the reported net loss for the three months ended September 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 $347.7 million and loss of $163.2 million for the nine months ended September 30, 2025 and 2024, respectively. The change was primarily due to the change in the amount of reported net income for the nine months ended September 30, 2025 as compared to the reported net loss for the nine months ended September 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 September 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 nine months ended September 30, 2025 and 2024:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
UFC |
|
$ |
325.2 |
|
|
$ |
354.9 |
|
|
$ |
1,100.8 |
|
|
$ |
1,062.3 |
|
WWE |
|
|
402.1 |
|
|
|
326.3 |
|
|
|
1,349.8 |
|
|
|
1,099.8 |
|
IMG |
|
|
336.7 |
|
|
|
829.1 |
|
|
|
1,119.6 |
|
|
|
1,698.4 |
|
Total revenue from reportable segments |
|
|
1,064.0 |
|
|
|
1,510.3 |
|
|
|
3,570.2 |
|
|
|
3,860.5 |
|
Corporate and Other |
|
|
63.3 |
|
|
|
54.1 |
|
|
|
162.3 |
|
|
|
147.2 |
|
Eliminations |
|
|
(7.4 |
) |
|
|
(23.7 |
) |
|
|
(35.4 |
) |
|
|
(51.4 |
) |
Total Revenue |
|
$ |
1,119.9 |
|
|
$ |
1,540.7 |
|
|
$ |
3,697.1 |
|
|
$ |
3,956.3 |
|
43
Table of Contents
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
UFC |
|
$ |
165.6 |
|
|
$ |
195.6 |
|
|
$ |
637.8 |
|
|
$ |
622.6 |
|
WWE |
|
|
207.8 |
|
|
|
175.3 |
|
|
|
731.5 |
|
|
|
566.8 |
|
IMG |
|
|
61.4 |
|
|
|
(54.2 |
) |
|
|
163.9 |
|
|
|
(64.1 |
) |
Total Adjusted EBITDA from reportable segments |
|
|
434.8 |
|
|
|
316.7 |
|
|
|
1,533.2 |
|
|
|
1,125.3 |
|
Corporate and Other |
|
|
(74.6 |
) |
|
|
(90.5 |
) |
|
|
(229.1 |
) |
|
|
(259.4 |
) |
Total Adjusted EBITDA |
|
$ |
360.2 |
|
|
$ |
226.2 |
|
|
$ |
1,304.1 |
|
|
$ |
865.9 |
|
UFC
The following table sets forth our UFC segment results for the three and nine months ended September 30, 2025 and 2024:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Media rights, production and content |
|
$ |
200.5 |
|
|
$ |
216.3 |
|
|
$ |
685.1 |
|
|
$ |
681.4 |
|
Live events and hospitality |
|
|
43.6 |
|
|
|
51.4 |
|
|
|
160.7 |
|
|
|
155.8 |
|
Partnerships and marketing |
|
|
70.8 |
|
|
|
74.0 |
|
|
|
220.9 |
|
|
|
184.3 |
|
Consumer products licensing and other |
|
|
10.3 |
|
|
|
13.2 |
|
|
|
34.1 |
|
|
|
40.8 |
|
Total Revenue |
|
$ |
325.2 |
|
|
$ |
354.9 |
|
|
$ |
1,100.8 |
|
|
$ |
1,062.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Direct operating costs |
|
$ |
104.0 |
|
|
$ |
114.8 |
|
|
$ |
310.0 |
|
|
$ |
316.7 |
|
Selling, general and administrative expenses |
|
$ |
55.6 |
|
|
$ |
44.5 |
|
|
$ |
153.0 |
|
|
$ |
123.0 |
|
Adjusted EBITDA |
|
$ |
165.6 |
|
|
$ |
195.6 |
|
|
$ |
637.8 |
|
|
$ |
622.6 |
|
Adjusted EBITDA margin |
|
|
51 |
% |
|
|
55 |
% |
|
|
58 |
% |
|
|
59 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
UFC Operating Metrics: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Number of events |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Numbered events |
|
|
2 |
|
|
|
3 |
|
|
|
9 |
|
|
|
10 |
|
Fight Nights |
|
|
8 |
|
|
|
7 |
|
|
|
23 |
|
|
|
22 |
|
Total events |
|
|
10 |
|
|
|
10 |
|
|
|
32 |
|
|
|
32 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Location of events |
|
|
|
|
|
|
|
|
|
|
|
|
||||
United States |
|
|
6 |
|
|
|
6 |
|
|
|
22 |
|
|
|
24 |
|
International |
|
|
4 |
|
|
|
4 |
|
|
|
10 |
|
|
|
8 |
|
Total events |
|
|
10 |
|
|
|
10 |
|
|
|
32 |
|
|
|
32 |
|
44
Table of Contents
WWE
The following table sets forth our WWE segment results for the three and nine months ended September 30, 2025 and 2024:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Media rights, production and content |
|
$ |
248.9 |
|
|
$ |
227.4 |
|
|
$ |
779.4 |
|
|
$ |
709.2 |
|
Live events and hospitality |
|
|
82.5 |
|
|
|
51.1 |
|
|
|
344.5 |
|
|
|
245.4 |
|
Partnerships and marketing |
|
|
39.9 |
|
|
|
21.7 |
|
|
|
123.8 |
|
|
|
60.2 |
|
Consumer products licensing and other |
|
|
30.8 |
|
|
|
26.1 |
|
|
|
102.1 |
|
|
|
85.0 |
|
Total Revenue |
|
$ |
402.1 |
|
|
$ |
326.3 |
|
|
$ |
1,349.8 |
|
|
$ |
1,099.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Direct operating costs |
|
$ |
113.4 |
|
|
$ |
86.4 |
|
|
$ |
378.1 |
|
|
$ |
314.2 |
|
Selling, general and administrative expenses |
|
$ |
80.9 |
|
|
$ |
64.6 |
|
|
$ |
240.2 |
|
|
$ |
218.8 |
|
Adjusted EBITDA |
|
$ |
207.8 |
|
|
$ |
175.3 |
|
|
$ |
731.5 |
|
|
$ |
566.8 |
|
Adjusted EBITDA margin |
|
|
52 |
% |
|
|
54 |
% |
|
|
54 |
% |
|
|
52 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
WWE Operating Metrics: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Number of events |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Premium live events |
|
|
8 |
|
|
|
5 |
|
|
|
18 |
|
|
|
15 |
|
Televised events |
|
|
44 |
|
|
|
39 |
|
|
|
125 |
|
|
|
116 |
|
Non-televised events |
|
|
23 |
|
|
|
21 |
|
|
|
53 |
|
|
|
83 |
|
Total events |
|
|
75 |
|
|
|
65 |
|
|
|
196 |
|
|
|
214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Location of events |
|
|
|
|
|
|
|
|
|
|
|
|
||||
United States |
|
|
58 |
|
|
|
47 |
|
|
|
163 |
|
|
|
180 |
|
International |
|
|
17 |
|
|
|
18 |
|
|
|
33 |
|
|
|
34 |
|
Total events |
|
|
75 |
|
|
|
65 |
|
|
|
196 |
|
|
|
214 |
|
45
Table of Contents
IMG
The following table sets forth our IMG segment results for the three and nine months ended September 30, 2025 and 2024:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Media rights, production and content |
|
$ |
185.1 |
|
|
$ |
185.3 |
|
|
$ |
509.8 |
|
|
$ |
535.3 |
|
Live events and hospitality |
|
|
138.3 |
|
|
|
610.2 |
|
|
|
558.9 |
|
|
|
1,091.5 |
|
Partnerships and marketing |
|
|
10.3 |
|
|
|
29.8 |
|
|
|
40.5 |
|
|
|
57.3 |
|
Consumer products licensing and other |
|
|
3.0 |
|
|
|
3.8 |
|
|
|
10.4 |
|
|
|
14.3 |
|
Total Revenue |
|
$ |
336.7 |
|
|
$ |
829.1 |
|
|
$ |
1,119.6 |
|
|
$ |
1,698.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Direct operating costs |
|
$ |
198.0 |
|
|
$ |
783.1 |
|
|
$ |
725.8 |
|
|
$ |
1,475.2 |
|
Selling, general and administrative expenses |
|
$ |
77.3 |
|
|
$ |
100.2 |
|
|
$ |
229.9 |
|
|
$ |
287.3 |
|
Adjusted EBITDA |
|
$ |
61.4 |
|
|
$ |
(54.2 |
) |
|
$ |
163.9 |
|
|
$ |
(64.1 |
) |
Adjusted EBITDA margin |
|
|
18 |
% |
|
|
(7 |
)% |
|
|
15 |
% |
|
|
(4 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
IMG Business Operating Metrics: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Number of clients with events (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Rights |
|
|
73 |
|
|
|
87 |
|
|
|
117 |
|
|
|
118 |
|
Studios |
|
|
95 |
|
|
|
91 |
|
|
|
130 |
|
|
|
123 |
|
Event management |
|
|
25 |
|
|
|
24 |
|
|
|
35 |
|
|
|
35 |
|
Total |
|
|
193 |
|
|
|
202 |
|
|
|
282 |
|
|
|
276 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(1) Represents unique clients generating revenue in the period; quarterly counts may include repeats. |
|
|||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||||||||||||||
On Location Operating Metrics |
|
September 30, 2025 |
|
|
September 30, 2024 |
|
|
September 30, 2025 |
|
|
September 30, 2024 |
|
||||||||||||||||||||
|
|
Number of Events |
|
|
Packages Sold |
|
|
Number of Events |
|
|
Packages Sold |
|
|
Number of Events |
|
|
Packages Sold |
|
|
Number of Events |
|
|
Packages Sold |
|
||||||||
NFL |
|
|
90 |
|
|
|
35,987 |
|
|
|
88 |
|
|
|
42,834 |
|
|
|
117 |
|
|
|
69,523 |
|
|
|
112 |
|
|
|
79,740 |
|
Collegiate Sports |
|
|
18 |
|
|
|
1,191 |
|
|
|
24 |
|
|
|
1,603 |
|
|
|
46 |
|
|
|
118,573 |
|
|
|
51 |
|
|
|
135,037 |
|
Combat Sports |
|
|
18 |
|
|
|
6,622 |
|
|
|
15 |
|
|
|
4,315 |
|
|
|
53 |
|
|
|
20,710 |
|
|
|
52 |
|
|
|
17,143 |
|
Other Sports |
|
|
11 |
|
|
|
30,434 |
|
|
|
13 |
|
|
|
7,436 |
|
|
|
28 |
|
|
|
47,540 |
|
|
|
31 |
|
|
|
25,617 |
|
46
Table of Contents
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 and promotional fees for services 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 nine months ended September 30, 2025 and 2024:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Revenue |
|
$ |
63.3 |
|
|
$ |
54.1 |
|
|
$ |
162.3 |
|
|
$ |
147.2 |
|
Adjusted EBITDA |
|
$ |
(74.6 |
) |
|
$ |
(90.5 |
) |
|
$ |
(229.1 |
) |
|
$ |
(259.4 |
) |
The following table sets forth our operating metrics for PBR for the three and nine months ended September 30, 2025 and 2024:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
PBR Operating Metrics: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Number of events: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unleash The Beast ("UTB") |
|
|
— |
|
|
|
— |
|
|
|
18 |
|
|
|
19 |
|
Teams |
|
|
10 |
|
|
|
11 |
|
|
|
10 |
|
|
|
11 |
|
Velocity |
|
|
4 |
|
|
|
5 |
|
|
|
37 |
|
|
|
38 |
|
Other |
|
|
9 |
|
|
|
5 |
|
|
|
27 |
|
|
|
21 |
|
Total events |
|
|
23 |
|
|
|
21 |
|
|
|
92 |
|
|
|
89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Location of events: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
United States |
|
|
17 |
|
|
|
18 |
|
|
|
80 |
|
|
|
79 |
|
International |
|
|
6 |
|
|
|
3 |
|
|
|
12 |
|
|
|
10 |
|
Total events |
|
|
23 |
|
|
|
21 |
|
|
|
92 |
|
|
|
89 |
|
Adjusted EBITDA for the three months ended September 30, 2025 increased by $15.9 million, or 18%, compared to the three months ended September 30, 2024. This increase was primarily driven by the impact of $32.7 million of lower corporate allocated costs from Endeavor Group Holdings, Inc. to the Acquired Businesses and incremental revenue from higher management and promotional fees for services primarily related to boxing. These increases were partially offset by $26.1 million of higher cost of personnel and other operating expenses, as well as a decline in revenue related to PBR driven by lower media rights, compared to the prior year.
Adjusted EBITDA for the nine months ended September 30, 2025 increased by $30.3 million, or 12%, compared to the nine months ended September 30, 2024. This increase was primarily driven by the impact of $65.4 million of lower corporate allocated costs from Endeavor Group Holdings, Inc. to the Acquired Businesses and incremental revenue from higher management and promotional fees for services primarily related to boxing. These increases were partially offset by $50.3 million of higher cost of personnel and other operating expenses, as well as a decline in revenue related to PBR driven by lower media rights, compared to the prior year.
47
Table of Contents
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:
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 |
|
|
Nine Months Ended |
|
||||||||||
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) |
|
$ |
106.8 |
|
|
$ |
3.4 |
|
|
$ |
545.4 |
|
|
$ |
(184.9 |
) |
Provision for income taxes |
|
|
12.7 |
|
|
|
2.8 |
|
|
|
80.4 |
|
|
|
3.7 |
|
Interest expense, net |
|
|
50.8 |
|
|
|
59.4 |
|
|
|
143.8 |
|
|
|
183.6 |
|
Depreciation and amortization |
|
|
129.1 |
|
|
|
114.9 |
|
|
|
329.0 |
|
|
|
355.9 |
|
Equity-based compensation expense (1) |
|
|
19.9 |
|
|
|
22.2 |
|
|
|
83.2 |
|
|
|
81.2 |
|
Merger, acquisition and earnout costs (2) |
|
|
4.6 |
|
|
|
6.9 |
|
|
|
48.6 |
|
|
|
9.8 |
|
Certain legal costs (3) |
|
|
19.2 |
|
|
|
44.6 |
|
|
|
35.4 |
|
|
|
395.8 |
|
Restructuring, severance and impairment (4) |
|
|
5.0 |
|
|
|
3.1 |
|
|
|
10.8 |
|
|
|
43.0 |
|
Debt transaction costs (5) |
|
|
8.7 |
|
|
|
— |
|
|
|
8.7 |
|
|
|
— |
|
Other adjustments (6) |
|
|
3.4 |
|
|
|
(31.1 |
) |
|
|
18.8 |
|
|
|
(22.2 |
) |
Total Adjusted EBITDA |
|
$ |
360.2 |
|
|
$ |
226.2 |
|
|
$ |
1,304.1 |
|
|
$ |
865.9 |
|
Net income (loss) margin |
|
|
10 |
% |
|
|
0 |
% |
|
|
15 |
% |
|
|
(5 |
)% |
Adjusted EBITDA margin |
|
|
32 |
% |
|
|
15 |
% |
|
|
35 |
% |
|
|
22 |
% |
48
Table of Contents
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 September 30, 2025 and December 31, 2024, the Company had $3.7 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 (now known as "TKO Guarantor, LLC" or "TKO Guarantor"), UFC Holdings, LLC (now known as "TKO Worldwide Holdings, LLC" or "TKO Worldwide Holdings"), as borrower, the lenders party thereto 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 September 15, 2025 (the “Credit Agreement Closing Date”), TKO Worldwide Holdings entered into the Sixth Refinancing Amendment (the “Credit Agreement Amendment”) to the First Lien Credit Agreement. The Credit Agreement Amendment, among other things: (i) refinanced and replaced the outstanding first lien term loans (the "Existing Term Loans") with a new class of first lien secured term loans, (ii) provided for an additional $1.0 billion incremental first lien secured term loan as a fungible increase to the Existing Term Loans of $2.8 billion (the "New Term Loans"), (iii) extended the maturity of the existing $205.0 million revolving credit facility from November 21, 2029 to September 15, 2030 (the "Revolving Credit Facility" and together with the New Term Loans, the "Credit Facilities"), and (iv) made certain other changes to the First Lien Credit Agreement. The Credit Facilities are secured by liens on substantially all of the assets of TKO Guarantor and TKO Worldwide Holdings and certain subsidiaries thereof.
The New Term Loans accrue interest, at the option of the borrower, at either (a) Term SOFR plus 2.00% (with a SOFR floor of 0.00%) or (b) the Alternate Base Rate (“ABR”) plus 1.00% (with an ABR floor of 1.00%). The New Term Loans' interest rate totaled 6.04% as of September 30, 2025. The New Term Loans have the same amortization schedule as the Existing Term Loans and collectively amortizes in equal quarterly installments and matures on November 21, 2031.
49
Table of Contents
Borrowings under the Revolving Credit Facility now accrue interest at either (a) Term SOFR plus 1.75% to 2.00% (depending on the First Lien Leverage Ratio) with a SOFR floor of 0.00% or (b) ABR plus 0.75% to 1.00% (with an ABR floor of 1.00%).
The Company incurred $9.0 million in transaction costs related to the Credit Agreement Amendment. Of this amount, $8.7 million related to modification arrangements which are included within selling, general and administrative expenses on the Company’s consolidated statements of operations, while the remaining $0.3 million associated with new lenders entering the syndication were capitalized as a component of long-term debt on the Company's consolidated balance sheets.
As of September 30, 2025 and December 31, 2024, there was no outstanding balance under the Revolving Credit Facility.
The Revolving Credit Facility contains a financial covenant that requires the Company to maintain, commencing with the fiscal quarter ended June 30, 2025, a First Lien Leverage Ratio of Consolidated First Lien Debt to Consolidated EBITDA of 8.25-to-1. The Company is only required to comply with the foregoing financial covenant if the sum of outstanding borrowings under the Revolving Credit Facility is (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 Revolving Credit Facility. This covenant did not apply as of September 30, 2025 and December 31, 2024, as the Company had no borrowings outstanding under the Revolving Credit Facility.
TKO Worldwide Holdings had outstanding letters of credit of $11.1 million as of September 30, 2025 and none as of December 31, 2024.
Restrictions on Dividends
The First Lien 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 First Lien 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 September 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.
In September 2025, the Company's board of directors authorized an increase to the quarterly cash dividend from $0.38 per share to $0.76 per share starting with third quarter 2025 dividend payment. Under the upsized quarterly cash dividend program, TKO's Class A common stockholders will receive their pro rata share of approximately $150.0 million to be made by TKO OpCo. TKO OpCo made distributions of $150.7 million on September 30, 2025 under the cash dividend program.
In September 2025, the Company repurchased approximately $26.1 million of its outstanding Class A common stock under a privately negotiated transaction. Additionally, the Company entered into an accelerated share repurchase agreement ("ASR Agreement") to repurchase $800.0 million of its outstanding Class A common stock. The Company also entered into a 10b5-1 trading plan for the repurchase of up to $174.0 million of its outstanding Class A common stock (the "10b5-1 Plan"), which will commence immediately following the completion of the ASR Agreement. These share repurchase transactions are being completed under the
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Company's previously announced $2.0 billion share repurchase authorization. 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, through accelerated share repurchase agreements, 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 the next three 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
|
|
Nine Months Ended |
|
|||||
|
|
September 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Net cash provided by operating activities |
|
$ |
975.8 |
|
|
$ |
530.0 |
|
Net cash used in investing activities |
|
$ |
(73.7 |
) |
|
$ |
(116.2 |
) |
Net cash used in financing activities |
|
$ |
(409.9 |
) |
|
$ |
(198.0 |
) |
Operating activities increased from $530.0 million of cash provided in the nine months ended September 30, 2024 to $975.8 million of cash provided in the nine months ended September 30, 2025. Cash provided in the nine months ended September 30, 2025 was primarily due to net income for the period of $545.4 million, which included certain non-cash items, including depreciation and amortization of $329.0 million and equity-based compensation of $83.2 million, as well as an increase in restricted cash of $253.6 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 as well as other unfavorable changes in working capital primarily driven by the timing of collections.
Investing activities decreased from $116.2 million of cash used in the nine months ended September 30, 2024 to $73.7 million of cash used in the nine months ended September 30, 2025. Cash used in the nine months ended September 30, 2025 primarily reflects payments for property, buildings and equipment of $66.5 million, investments in affiliates of $16.2 million and acquisitions of $8.7 million, partially offset by infrastructure improvement incentives received of $10.4 million and proceeds from the sale of assets of $5.8 million. Cash used in the nine months ended September 30, 2024 primarily reflects payments for property, buildings and equipment of $91.2 million and investments in affiliates of $33.2 million, partially offset by infrastructure improvement incentives received of $11.0 million.
Financing activities increased from $198.0 million of cash used in the nine months ended September 30, 2024 to $409.9 million of cash used in the nine months ended September 30, 2025. Cash used in the nine months ended September 30, 2025 primarily reflects payments for share repurchases of $826.1 million, distributions to EGH and its subsidiaries of $313.8 million, dividends paid to holders of TKO Class A common stock of $124.5 million, net transfers to EGH of $122.5 million and net payments on debt of $53.3 million. These payments were partially offset by net proceeds of $1.0 billion received from the upsizing of the Company's existing first lien term loan in September 2025 and contributions of $26.5 million from EGH in connection with the Endeavor Asset Acquisition.
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 strategic 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.
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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 nine months ended September 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.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
TKO is exposed to market risks in the ordinary course of its business. Market risk represents the risk of loss that may impact TKO’s financial position due to adverse changes in financial market prices and rates.
Interest Rate Risk
Our exposure to changes in interest rates relates primarily to the floating interest component on our long-term debt. The Credit Facilities bear interest at floating rates and we regularly monitor and manage interest rate risks. Holding debt levels constant as of September 30, 2025, a 1% increase in the effective interest rates would have increased our annual interest expense by approximately $37 million.
Foreign Currency Risk
We have operations in several countries outside of the United States, and certain of our operations are conducted in foreign currencies, principally the British Pound and the Brazilian Real. The value of these currencies fluctuates relative to the U.S. dollar. These changes could adversely affect the U.S. dollar equivalent of TKO’s non-U.S. dollar revenue and operating costs and expenses and reduce international demand for its content and services, all of which could negatively affect TKO’s business, financial condition and results of operations in a given period or in specific territories.
Holding other variables constant (such as interest rates and debt levels), if the U.S. dollar appreciated by 10% against the foreign currencies used by TKO’s operations in the nine months ended September 30, 2025, revenues would have decreased by approximately $50.7 million and operating income would have decreased by approximately $3.0 million.
We regularly review our foreign exchange exposures that may have a material impact on our business and from time to time use foreign currency forward exchange contracts or other derivative financial instruments to hedge the effects of potential adverse fluctuations in foreign currency exchange rates arising from these exposures. TKO does not enter into foreign exchange contracts or other derivatives for speculative purposes.
Credit Risk
TKO maintains its cash and cash equivalents with various major banks and other high quality financial institutions, and its deposits at these institutions exceed insured limits. Market conditions can impact the viability of these institutions and the failure of any of the financial institutions where we maintain our cash and cash equivalents or any inability to access or delays in our ability to access our funds could adversely affect our business and financial position.
Item 4. Controls and Procedures
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
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Evaluation of Disclosure Controls and Procedures
The Company’s management has evaluated, with the participation of the Chief Executive Officer and the Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2025.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
During the first quarter of 2025, the Company consummated the Endeavor Asset Acquisition. Under guidelines established by the SEC, companies are permitted to exclude acquisitions from their assessment of internal control over financial reporting during the first year of an acquisition while integrating the acquired company. The Company is in the process of integrating the Acquired Businesses and as a result of these integration activities, certain controls will be evaluated and may be changed.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may be involved in claims and proceedings arising in the course of our business. The outcome of any such claims or proceedings, regardless of the merits, is inherently uncertain. For a description of our legal proceedings, refer to Note 16, Commitments and Contingencies, to our unaudited consolidated financial statements included in this Quarterly Report, which is incorporated herein by reference.
Item 1A. Risk Factors
Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described as risk factors, any one or more of which could, directly or indirectly, cause our actual operating results and financial condition to vary materially from past, or anticipated future, operating results and financial condition. For a discussion of these potential risks and uncertainties, see Part I, Item 1A. "Risk Factors" in our 2024 Annual Report. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results and the price of our common stock. There have been no material changes in our risk factors to those included in our 2024 Annual Report.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Report of Offering of Securities and Use of Proceeds Therefrom
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
The following table presents information with respect to purchases of the Company's Class A common stock by the Company and its affiliated purchasers made during the three months ended September 30, 2025:
Period |
|
Total Number |
|
|
Average Price |
|
|
Total Number |
|
|
Approximate |
|
||||
July 1, 2025 to July 31, 2025 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
2,000,000 |
|
August 1, 2025 to August 31, 2025 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
2,000,000 |
|
September 1, 2025 to September 30, 2025 |
|
|
3,303,352 |
|
|
$ |
250.09 |
|
|
|
3,303,352 |
|
|
$ |
1,173,851 |
|
Total |
|
|
3,303,352 |
|
|
|
|
|
|
3,303,352 |
|
|
|
|
||
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Unregistered Sales of Equity Securities
None.
Item 5. Other Information
(a) Disclosure in lieu of reporting on a Current Report on Form 8-K.
None.
(b) Material changes to the procedures by which security holders may recommend nominees to the Board.
None.
(c)
Other than the below, during the three months ended September 30, 2025, no director or "officer" (as defined under 16a-1(f) of the Exchange Act) of the Company
On
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Item 6. Exhibits
|
|
|
|
|
|
|
Exhibit Number |
Description |
Form |
File No. |
Exhibit |
Filing Date |
Filed/Furnished Herewith |
2.1# |
Transaction Agreement, dated April 2, 2023, by and among Endeavor Group Holdings, Inc., Endeavor Operating Company, LLC, Zuffa Parent, LLC, World Wrestling Entertainment, Inc., New Whale Inc., and Whale Merger Sub Inc. |
424(b)(3) |
333-271893 |
Annex A |
08/22/2023 |
|
3.1 |
Amended and Restated Certificate of Incorporation of TKO Group Holdings, Inc. |
S-8 |
333-274480 |
4.1 |
09/12/2023 |
|
3.2 |
Amended and Restated Bylaws of TKO Group Holdings, Inc. |
S-8 |
333-274480 |
4.2 |
09/12/2023 |
|
4.1 |
Registration Rights Agreement, dated as of September 12, 2023, by and among TKO Group Holdings, Inc., Endeavor Group Holdings, Inc. and Vincent K. McMahon. |
8-K |
001-41797 |
4.1 |
09/12/2023 |
|
4.2 |
Indenture between World Wrestling Entertainment, Inc. and U.S. Bank National Association, as trustee, dated December 16, 2016. |
8-K |
001-16131 |
4.1 |
12/16/2016 |
|
4.3 |
Form of 3.375% Convertible Senior Note due 2023. |
8-K |
001-16131 |
4.1 |
12/16/2016 |
|
4.4 |
First Supplemental Indenture, among World Wrestling Entertainment, Inc., New Whale Inc. and U.S. Bank Trust Company, National Association, as trustee. |
8-K |
001-16131 |
4.2 |
09/12/2023 |
|
10.1 |
Sixth Refinancing Amendment, dated as of September 15 2025, to the First Lien Credit Agreement, dated as of August 18, 2016, among TKO Guarantor, LLC, as holdings, TKO Worldwide Holdings, LLC, as borrower, the lenders party thereto and Goldman Sachs Bank USA, as administrative agent. |
8-K |
001-41797 |
10.1 |
09/15/2025 |
|
10.2+ |
Amendment No. 1, dated as of August 1, 2025, to Term Employment Agreement dated as of November 5, 2023, by and between TKO Group Holdings, Inc. and Andrew Schleimer |
10-Q |
001-41797 |
10.1 |
08/06/2025 |
|
10.3 |
Amendment No. 3 to the Fourth Amended and Restated Operating Agreement of TKO Operating Company, LLC. |
|
|
|
|
* |
31.1 |
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
* |
31.2 |
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
* |
32.1 |
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
** |
32.2 |
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
|
** |
101.INS |
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
|
|
|
|
* |
101.SCH |
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents. |
|
|
|
|
* |
104 |
Cover Page Interactive Data File – formatted as Inline XBRL and contained in Exhibit 101. |
|
|
|
|
* |
* Filed herewith.
** Furnished herewith.
# Annexes, schedules and/or exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant undertakes to furnish supplemental copies of any of the omitted schedules or similar attachments upon request by the SEC.
+ Indicates a management contract or compensatory plan, contract or arrangement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
|
|
|
|
TKO GROUP HOLDINGS, INC.
|
||
|
|
|
|
|
Date: |
November 5, 2025 |
By: |
/s/ ANDREW SCHLEIMER |
|
|
|
|
Andrew Schleimer |
|
|
|
|
Chief Financial Officer |
|
|
|
|
(principal financial officer and authorized |
|
|
|
|
signatory) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date: |
November 5, 2025 |
By: |
/s/ SHANE KAPRAL |
|
|
|
|
Shane Kapral |
|
|
|
|
Deputy Chief Financial Officer |
|
|
|
|
(principal accounting officer and authorized |
|
|
|
|
signatory) |
|
|
|
|
|
|
56
