Endeavor Releases Second Quarter 2024 Results
Highlights
-
$1.751 billion in Q2 2024 revenue -
Growth across
Owned Sports Properties driven by outperformance of marquee live events including WrestleMania 40, UFC 300 and UFC 303, as well as growth in new and existing partnerships atProfessional Bull Riders (“PBR”) -
Strength within Representation segment driven by continued recovery following WGA and
SAG-AFTRA strikes and continued consumer demand for music tours
Q2 2024 Consolidated Financial Results
-
Revenue:
$1.751 billion -
Net loss:
$253.8 million -
Adjusted EBITDA:
$380.7 million
“TKO and PBR benefited from strong consumer demand and engagement during the quarter, and we continued to drive growth in our representation segment,” said
Segment Operating Results
-
Owned Sports Properties segment revenue was$894.1 million for the quarter, up$554.0 million , or 162.9%, compared to the second quarter of 2023. The increase was primarily attributed to the acquisition of WWE inSeptember 2023 , which contributed$457 million during the second quarter, and increases at UFC in live event revenue and higher media rights fees from holding one additional numbered event compared to the prior year period, as well as higher site fees and partnerships. Segment results also benefited from growth in new and existing partnerships at PBR and increased revenue from PBR’s team series. The segment’s Adjusted EBITDA was$422.8 million , up$243.6 million , or 135.9%, year-over-year.
-
Events, Experiences & Rights segment revenue was
$472.2 million for the quarter, down$118.9 million , or 20.1%, compared to the second quarter of 2023. Segment revenue was primarily impacted by a decrease of$91 million from the sale ofIMG Academy inJune 2023 , as well as by the timing of certain events including the Miami Open. These were partially offset by increases at the Madrid Open and growth from other events including the addition of EXPO Chicago. The segment’s Adjusted EBITDA was$(68.7) million for the quarter, down$145.3 million year-over-year.
-
Representation segment revenue was
$411.4 million for the quarter, up$30.3 million , or 7.9%, compared to the second quarter of 2023. The increase in revenue is primarily attributed to growth in WME’s talent and music divisions and at 160over90, partially offset by decreases in WME’s fashion business. Adjusted EBITDA was$107.4 million for the quarter, up$0.2 million , or 0.2%, year-over-year.
Sports Data & Technology Segment Update
As part of the
Balance Sheet and Liquidity
At
For further information regarding the Company's financial results, as well as certain non-GAAP financial measures, and the reconciliations thereof, please refer to the following pages of this release or visit the Company’s Investor Relations site at investor.endeavorco.com.
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Webcast Details
Following the prior announcement of Endeavor’s definitive agreement to be acquired by
Forward-Looking Statements
This press release 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, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, the expected take-private of the Company by
Non-GAAP Financial Measures
We refer to certain financial measures that are not recognized under
About Endeavor
Endeavor (NYSE: EDR) is a global sports and entertainment company, home to many of the world’s most dynamic and engaging storytellers, brands, live events, and experiences. The Endeavor network specializes in talent representation through entertainment agency WME; sports operations and advisory, event management, media production and distribution, and brand licensing through IMG; live event experiences and hospitality through On Location; full-service marketing through global cultural marketing agency 160over90; and sports data and technology through OpenBet. Endeavor is also the majority owner of
Website Disclosure
Investors and others should note that we announce material financial and operational information to our investors using press releases,
Consolidated Statements of Operations (Unaudited) (In thousands, except share and per share data) |
|||||||||||||||||
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
Six Months Ended |
|
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
Revenue |
$ |
1,751,274 |
|
$ |
1,305,648 |
|
$ |
3,510,918 |
|
$ |
2,801,626 |
|
|||||
Operating expenses: | |||||||||||||||||
Direct operating costs |
|
741,989 |
|
|
515,902 |
|
|
1,532,804 |
|
|
1,187,487 |
|
|||||
Selling, general and administrative expenses |
|
759,244 |
|
|
585,274 |
|
|
1,805,145 |
|
|
1,213,063 |
|
|||||
Depreciation and amortization |
|
138,562 |
|
|
49,833 |
|
|
281,032 |
|
|
105,113 |
|
|||||
Total operating expenses |
|
1,639,795 |
|
|
1,151,009 |
|
|
3,618,981 |
|
|
2,505,663 |
|
|||||
Operating income (loss) from continuing operations |
|
111,479 |
|
|
154,639 |
|
|
(108,063 |
) |
|
295,963 |
|
|||||
Other (expense) income: | |||||||||||||||||
Interest expense, net |
|
(97,551 |
) |
|
(90,368 |
) |
|
(194,397 |
) |
|
(175,540 |
) |
|||||
Tax receivable agreement liability adjustment |
|
— |
|
|
10,174 |
|
|
(2,444 |
) |
|
12,518 |
|
|||||
Other income (expense), net |
|
682 |
|
|
742,066 |
|
|
(1,272 |
) |
|
766,533 |
|
|||||
Income (loss) from continuing operations before income taxes and equity losses of affiliates |
|
14,610 |
|
|
816,511 |
|
|
(306,176 |
) |
|
899,474 |
|
|||||
(Benefit from) provision for income taxes |
|
(143,377 |
) |
|
139,811 |
|
|
(206,903 |
) |
|
174,668 |
|
|||||
Income (loss) from continuing operations before equity losses of affiliates |
|
157,987 |
|
|
676,700 |
|
|
(99,273 |
) |
|
724,806 |
|
|||||
Equity losses of affiliates, net of tax |
|
(2,833 |
) |
|
(12,997 |
) |
|
(5,096 |
) |
|
(19,543 |
) |
|||||
Income (loss) from continuing operations, net of tax |
|
155,154 |
|
|
663,703 |
|
|
(104,369 |
) |
|
705,263 |
|
|||||
Discontinued operations: | |||||||||||||||||
(Loss) income from discontinued operations |
|
(176,351 |
) |
|
3,462 |
|
|
(268,607 |
) |
|
(1,230 |
) |
|||||
Provision for income taxes |
|
232,575 |
|
|
630 |
|
|
184,267 |
|
|
1,243 |
|
|||||
(Loss) income from discontinued operations, net of tax |
|
(408,926 |
) |
|
2,832 |
|
|
(452,874 |
) |
|
(2,473 |
) |
|||||
Net (loss) income |
|
(253,772 |
) |
|
666,535 |
|
|
(557,243 |
) |
|
702,790 |
|
|||||
Less: Net (loss) income attributable to non-controlling interests |
|
(39,254 |
) |
|
263,361 |
|
|
(205,385 |
) |
|
291,585 |
|
|||||
Net (loss) income attributable to |
$ |
(214,518 |
) |
$ |
403,174 |
|
$ |
(351,858 |
) |
$ |
411,205 |
|
|||||
(Loss) earnings per share of Class A common stock: | |||||||||||||||||
Basic from continuing operations |
$ |
0.20 |
|
$ |
1.33 |
|
$ |
(0.16 |
) |
$ |
1.37 |
|
|||||
Basic from discontinued operations |
|
(0.90 |
) |
|
0.01 |
|
|
(1.00 |
) |
|
- |
|
|||||
Basic |
$ |
(0.70 |
) |
$ |
1.34 |
|
$ |
(1.16 |
) |
$ |
1.37 |
|
|||||
Diluted from continuing operations |
$ |
0.19 |
|
$ |
1.28 |
|
$ |
(0.16 |
) |
$ |
1.35 |
|
|||||
Diluted from discontinued operations |
|
(0.89 |
) |
|
0.01 |
|
|
(1.00 |
) |
|
- |
|
|||||
Diluted |
$ |
(0.70 |
) |
$ |
1.29 |
|
$ |
(1.16 |
) |
$ |
1.35 |
|
|||||
Weighted average number of shares used in computing (loss) earnings per share: | |||||||||||||||||
Basic |
|
304,193,981 |
|
|
301,011,276 |
|
|
302,327,311 |
|
|
296,499,094 |
|
|||||
Diluted(1) |
|
309,319,813 |
|
|
311,046,135 |
|
|
302,327,311 |
|
|
299,810,998 |
|
(1) The diluted weighted average number of shares of 309,319,813 for the three months ended |
|
Securities that are anti-dilutive for the three months ended |
|
Segment Results (Unaudited) (In thousands) |
|||||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||||
Revenue: | |||||||||||||||||
|
$ |
894,061 |
|
$ |
340,088 |
|
$ |
1,579,486 |
|
$ |
693,377 |
|
|||||
Events, Experiences & Rights |
|
472,221 |
|
|
591,078 |
|
|
1,217,118 |
|
|
1,391,864 |
|
|||||
Representation |
|
411,410 |
|
|
381,149 |
|
|
756,757 |
|
|
731,389 |
|
|||||
Eliminations |
|
(26,418 |
) |
|
(6,667 |
) |
|
(42,443 |
) |
|
(15,004 |
) |
|||||
Total Revenue |
$ |
1,751,274 |
|
$ |
1,305,648 |
|
$ |
3,510,918 |
|
$ |
2,801,626 |
|
|||||
Adjusted EBITDA: | |||||||||||||||||
|
$ |
422,827 |
|
$ |
179,234 |
|
$ |
721,799 |
|
$ |
364,905 |
|
|||||
Events, Experiences & Rights |
|
(68,745 |
) |
|
76,583 |
|
|
27,166 |
|
|
184,574 |
|
|||||
Representation |
|
107,388 |
|
|
107,149 |
|
|
172,585 |
|
|
191,355 |
|
|||||
Corporate and other |
|
(80,728 |
) |
|
(74,722 |
) |
|
(160,231 |
) |
|
(152,747 |
) |
|||||
Consolidated Balance Sheets (Unaudited) (In thousands, except share data) |
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|
2024 |
|
|
|
2023 |
|
ASSETS | |||||||||
Current Assets: | |||||||||
Cash and cash equivalents |
$ |
697,656 |
|
$ |
1,166,526 |
|
|||
Restricted cash |
|
403,309 |
|
|
278,456 |
|
|||
Accounts receivable (net of allowance for doubtful accounts of |
|
1,008,782 |
|
|
810,857 |
|
|||
Deferred costs |
|
646,465 |
|
|
606,207 |
|
|||
Other current assets |
|
438,999 |
|
|
432,042 |
|
|||
Current assets of discontinued operations |
|
209,531 |
|
|
170,459 |
|
|||
Total current assets |
|
3,404,742 |
|
|
3,464,547 |
|
|||
Property and equipment, net |
|
861,464 |
|
|
914,645 |
|
|||
Operating lease right-of-use assets |
|
416,645 |
|
|
309,704 |
|
|||
Intangible assets, net |
|
4,615,399 |
|
|
4,812,284 |
|
|||
|
|
9,516,086 |
|
|
9,517,143 |
|
|||
Investments |
|
397,084 |
|
|
394,179 |
|
|||
Deferred income taxes |
|
446,484 |
|
|
429,729 |
|
|||
Other assets |
|
630,541 |
|
|
599,394 |
|
|||
Long-term assets of discontinued operations |
|
872,655 |
|
|
1,103,148 |
|
|||
Total assets |
$ |
21,161,100 |
|
$ |
21,544,773 |
|
|||
LIABILITIES, REDEEMABLE INTERESTS AND SHAREHOLDERS' EQUITY | |||||||||
Current Liabilities: | |||||||||
Accounts payable |
$ |
531,300 |
|
$ |
462,361 |
|
|||
Accrued liabilities |
|
977,928 |
|
|
684,390 |
|
|||
Current portion of long-term debt |
|
2,329,585 |
|
|
58,894 |
|
|||
Current portion of operating lease liabilities |
|
65,618 |
|
|
73,899 |
|
|||
Deferred revenue |
|
860,165 |
|
|
802,344 |
|
|||
Deposits received on behalf of clients |
|
391,135 |
|
|
262,436 |
|
|||
Current portion of tax receivable agreement liability |
|
122,189 |
|
|
156,155 |
|
|||
Other current liabilities |
|
64,603 |
|
|
97,191 |
|
|||
Current liabilities of discontinued operations |
|
166,857 |
|
|
199,276 |
|
|||
Total current liabilities |
|
5,509,380 |
|
|
2,796,946 |
|
|||
Long-term debt |
|
2,743,045 |
|
|
4,969,417 |
|
|||
Long-term operating lease liabilities |
|
391,979 |
|
|
279,042 |
|
|||
Long-term tax receivable agreement liability |
|
743,332 |
|
|
834,298 |
|
|||
Deferred tax liabilities |
|
445,375 |
|
|
446,250 |
|
|||
Other long-term liabilities |
|
394,178 |
|
|
392,951 |
|
|||
Long-term liabilities of discontinued operations |
|
101,043 |
|
|
103,358 |
|
|||
Total liabilities |
|
10,328,332 |
|
|
9,822,262 |
|
|||
Commitments and contingencies | |||||||||
Redeemable non-controlling interests |
|
229,736 |
|
|
215,458 |
|
|||
Shareholders' Equity: | |||||||||
Class A common stock, 306,602,233 and 298,698,490 shares issued and outstanding as of and |
|
3 |
|
|
3 |
|
|||
Class B common stock, none issued and outstanding as of |
|
— |
|
|
— |
|
|||
Class C common stock, none issued and outstanding as of |
|
— |
|
|
— |
|
|||
Class X common stock, 161,433,926 and 166,569,908 shares issued and outstanding as of and |
|
1 |
|
|
1 |
|
|||
Class Y common stock, 216,298,160 and 225,960,405 shares issued and outstanding as of and |
|
2 |
|
|
2 |
|
|||
Additional paid-in capital |
|
4,956,534 |
|
|
4,901,922 |
|
|||
Accumulated deficit |
|
(505,359 |
) |
|
(117,065 |
) |
|||
Accumulated other comprehensive loss |
|
(25,502 |
) |
|
(157 |
) |
|||
|
|
4,425,679 |
|
|
4,784,706 |
|
|||
Nonredeemable non-controlling interests |
|
6,177,353 |
|
|
6,722,347 |
|
|||
Total shareholders' equity |
|
10,603,032 |
|
|
11,507,053 |
|
|||
Total liabilities, redeemable interests and shareholders' equity |
$ |
21,161,100 |
|
$ |
21,544,773 |
|
Note Regarding Non-GAAP Financial Measures
This press release includes financial measures that are not calculated in accordance with
Adjusted EBITDA is a non-GAAP financial measure and is defined as net income (loss), excluding the results of discontinued operations, income taxes, net interest expense, depreciation and amortization, equity-based compensation, merger, acquisition and earn-out costs, certain legal costs and settlements, restructuring, severance and impairment charges, certain non-cash fair value adjustments, certain equity earnings (losses), net gains on sales of businesses, tax receivable agreement (“TRA”) liability adjustment, and certain other items, when applicable. Adjusted EBITDA margin is a non-GAAP financial measure defined as Adjusted EBITDA divided by Revenue.
Management believes that Adjusted EBITDA is useful to investors as it eliminates the significant level of non-cash depreciation and amortization expense that results from our capital investments and intangible assets recognized in business combinations, and improves comparability by eliminating the significant level of interest expense associated with our debt facilities, as well as income taxes and the TRA, which may not be comparable with other companies based on our tax and corporate structure.
Adjusted EBITDA and Adjusted EBITDA margin are used as the primary bases to evaluate our 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 our results as reported under GAAP. Some of these limitations are:
- they do not reflect every cash expenditure, future requirements for capital expenditures, or contractual commitments;
- Adjusted EBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt;
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and Adjusted EBITDA and Adjusted EBITDA margin do not reflect any cash requirement for such replacements or improvements; and
- they are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows.
We compensate 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 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 (loss) as indicators of our financial performance, as measures of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations. Although we use Adjusted EBITDA and Adjusted EBITDA margin as financial measures to assess the performance of our business, such use is limited because it does not include certain material costs necessary to operate our business. Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed as indications that our future results will be unaffected by unusual or nonrecurring items. These non-GAAP financial measures, as determined and presented by us, may not be comparable to related or similarly titled measures reported by other companies. Set forth below are reconciliations of our most directly comparable financial measures calculated in accordance with GAAP to these non-GAAP financial measures on a consolidated basis.
Adjusted EBITDA (Unaudited) (In thousands) |
|||||||||||||||||
Three Months Ended |
Six Months Ended |
||||||||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||||
Net (loss) income |
$ |
(253,772 |
) |
$ |
666,535 |
|
$ |
(557,243 |
) |
$ |
702,790 |
|
|||||
Loss (income) from discontinued operations, net of tax |
|
408,926 |
|
|
(2,832 |
) |
|
452,874 |
|
|
2,473 |
|
|||||
(Benefit from) provision for income taxes |
|
(143,377 |
) |
|
139,811 |
|
|
(206,903 |
) |
|
174,668 |
|
|||||
Interest expense, net |
|
97,551 |
|
|
90,368 |
|
|
194,397 |
|
|
175,540 |
|
|||||
Depreciation and amortization |
|
138,562 |
|
|
49,833 |
|
|
281,032 |
|
|
105,113 |
|
|||||
Equity-based compensation expense (1) |
|
53,002 |
|
|
61,100 |
|
|
111,728 |
|
|
139,543 |
|
|||||
Merger, acquisition and earn-out costs (2) |
|
32,903 |
|
|
15,831 |
|
|
57,182 |
|
|
29,738 |
|
|||||
Certain legal costs (3) |
|
8,530 |
|
|
1,489 |
|
|
19,832 |
|
|
3,911 |
|
|||||
Legal settlement (4) |
|
— |
|
|
— |
|
|
335,000 |
|
|
— |
|
|||||
Restructuring, severance and impairment (5) |
|
34,884 |
|
|
13,736 |
|
|
60,414 |
|
|
21,936 |
|
|||||
Fair value adjustment - equity investments (6) |
|
20 |
|
|
(68 |
) |
|
(100 |
) |
|
(781 |
) |
|||||
Equity method losses - Fifth Season (7) |
|
3,594 |
|
|
6,580 |
|
|
7,328 |
|
|
15,103 |
|
|||||
Net gain on sale of the Academy business (8) |
|
— |
|
|
(736,978 |
) |
|
— |
|
|
(736,978 |
) |
|||||
Tax receivable agreement liability adjustment (9) |
|
— |
|
|
(10,174 |
) |
|
2,444 |
|
|
(12,518 |
) |
|||||
Other (10) |
|
(81 |
) |
|
(6,987 |
) |
|
3,334 |
|
|
(32,451 |
) |
|||||
Adjusted EBITDA |
$ |
380,742 |
|
$ |
288,244 |
|
$ |
761,319 |
|
$ |
588,087 |
|
|||||
Net (loss) income margin |
|
(14.5 |
%) |
|
51.1 |
% |
|
(15.9 |
%) |
|
25.1 |
% |
|||||
Adjusted EBITDA margin |
|
21.7 |
% |
|
22.1 |
% |
|
21.7 |
% |
|
21.0 |
% |
______________
(1) |
Equity-based compensation represents primarily non-cash compensation expense associated with our equity-based compensation plans. |
|
|
|
The decrease for the three and six months ended |
|
|
(2) |
Includes (i) certain costs of professional advisors related to mergers, acquisitions, dispositions or joint ventures and (ii) fair value adjustments for contingent consideration liabilities related to acquired businesses and compensation expense for deferred consideration associated with selling shareholders that are required to retain our employees. |
|
|
|
Such costs for the three months ended |
|
|
|
Such costs for the three months ended |
|
|
|
Such costs for the six months ended |
|
|
|
Such costs for the six months ended |
|
|
(3) |
Includes costs related to certain litigation or regulatory matters in our |
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(4) |
Relates to a legal settlement in our |
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(5) |
Includes certain costs related to our restructuring activities and non-cash impairment charges. |
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Such costs for the three months ended |
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Such costs for the six months ended |
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Such costs for the three and six months ended |
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(6) |
Includes the net change in fair value for certain equity investments with and without readily determinable fair values, based on observable price changes. |
(7) |
Relates to our share of losses for our investment in Fifth Season. |
(8) |
Relates to the gain recorded for the sale of the Academy business, net of transactions costs of |
(9) |
For the six months ended |
(10) |
For the three months ended |
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For the three months ended |
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For the six months ended |
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For the six months ended |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240807868154/en/
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