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    TKO
    Earnings call· Mar 2026(Q1 FY26)

    TKO Group Holdings, Inc. TKO

    May 6, 2026 Source

    Executive summary

    TKO Group Holdings Q1 FY26 — Strong Performance and Capital Return

    TKO Group Holdings delivered a strong first quarter, validating its focus on execution across media rights, live events, and global partnerships. The company reaffirmed its full-year outlook, driven by robust growth and strategic capital returns, despite acknowledging fan feedback and specific event-related costs. Management emphasized the resilience of its live, communal, and scarce content in a transforming entertainment landscape.

    Highlights

    5

    • Revenue increased 26% to $1.597 billion in Q1 FY26.

    • Adjusted EBITDA increased 32% to $550 million in Q1 FY26, with margin expansion of 150 basis points to 34%.

    • Generated $675 million in free cash flow in Q1 FY26, with a conversion rate of 123% of adjusted EBITDA.

    • Board authorized an incremental $1 billion share repurchase, complementing the existing program, and returned approximately $1 billion of capital to equity holders in Q1.

    • UFC's CBS simulcast of UFC 326 was the most watched live UFC event since 2016, with the CBS audience alone up 270% over last year's UFC average.

    Concerns

    4

    • UFC Freedom 250 event is expected to incur a loss of approximately $30 million due to expanded costs.

    • Fan criticism regarding sponsorship and ticket pricing, as well as perceived weaker UFC cards, was acknowledged by management.

    • Q1 UFC live events and hospitality revenue decreased 17% to $49 million due to lower revenue from financial incentive packages compared to prior year.

    • Q1 WWE partnerships and marketing revenue increased only 2% to $26 million, impacted by international events and Riyadh restrictions.

    Guidance & targets

    5
    CategoryTargetConfidence
    Full-year 2026 Revenue
    $5.675 billion to $5.775 billion
    high materiality
    High
    Full-year 2026 Adjusted EBITDA
    $2.24 billion to $2.29 billion
    high materiality
    High
    Full-year 2026 Adjusted EBITDA Margin Expansion
    approximately 600 basis points
    medium materiality
    High
    Full-year 2026 Free Cash Flow Conversion Rate
    in excess of 60%
    medium materiality
    Medium
    Share Repurchase Authorization
    additional $1 billion
    high materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    UFC
    Revenue and Adjusted EBITDA increased despite two fewer Fight Nights compared to prior year. Media rights growth driven by Paramount deal, partially offset by fewer events. Live events revenue decreased due to lower FIPs, partially offset by increased ticket sales. Q1 margins were on par with prior year due to fewer Fight Nights, timing of FIPs, and higher costs for UFC 324.
    Events in Q1 FY26: 9 (3 numbered, 6 Fight Nights)Events in Q1 FY25: 11 (3 numbered, 8 Fight Nights)Media rights production and content revenue: $275 million (+23%)Partnerships and marketing revenue: $67 million (+4%)Live events and hospitality revenue: $49 million (-17%)
    		$401 million12%—$255 million Adjusted EBITDA (63% margin)
    WWE
    Revenue and Adjusted EBITDA increased significantly. Live events growth driven by FIPs from Royal Rumble in Saudi Arabia. Media rights growth from ESPN and Netflix agreements. Partnerships and marketing growth impacted by additional international events and Riyadh restrictions. Adjusted EBITDA margin improved by 4 percentage points, despite higher talent/production costs for Royal Rumble in Saudi and increased NXT non-televised events.
    Live events and hospitality revenue: $123 million (+62%)Media rights production and content revenue: $282 million (+12%)Partnerships and marketing revenue: $26 million (+2%)
    		$476 million22%—$256 million Adjusted EBITDA (54% margin)
    IMG
    Revenue increase primarily due to favorable impact of Milano Cortina Winter Olympics at On Location. IMG business revenue slightly increased, with new production agreements and boxing commissions offsetting the absence of the biannual Arabian Gulf Cup. Adjusted EBITDA reflected increased revenue, partially offset by costs related to Olympics and pre-spend for LA28.
    		$655 million38%—$97 million Adjusted EBITDA (15% margin)
    Corporate and Other
    Revenue increase driven by higher media rights and partnerships revenue at PBR, and higher management fees for boxing initiatives. Adjusted EBITDA improved due to absence of Endeavor corporate expense allocations, partially offset by costs to replicate services and increased personnel/operational expenses.
    		$74 million36%—Negative $58 million Adjusted EBITDA (improved by $19 million)

    Operational metrics

    17
    Adjusted EBITDA Margin
    34%up 150 bps YoY
    Q1 FY26

    Company-wide adjusted EBITDA margin.

    Free Cash Flow Conversion of Adjusted EBITDA
    123%
    Q1 FY26

    Conversion rate for Q1 FY26.

    Dividend Payment
    $150 million
    Q1 FY26

    Quarterly cash dividend payment from TKO OpCo made on March 31.

    Share Repurchases Executed
    $38 million
    Q1 FY26

    Repurchased under a 10b5-1 trading plan that expired on February 26.

    Accelerated Share Repurchase (ASR) Agreement
    $800 million
    Q1 FY26

    Entered into in March, with initial delivery of shares received. Expected to complete in short order.

    10b5-1 Trading Plan for Repurchases
    $200 million
    Q1 FY26

    Entered into for repurchase of Class A common stock, to commence immediately once the ASR agreement is completed.

    Total Debt
    $4.671 billion
    Q1 FY26

    As of quarter end.

    Cash and Cash Equivalents
    $789 million
    Q1 FY26

    As of quarter end.

    Restricted Cash
    $937 million
    Q1 FY26

    As of quarter end.

    Net Leverage Ratio
    2.3x
    Q1 FY26

    Based on net debt and LTM adjusted EBITDA.

    UFC Freedom 250 Expected Loss
    $30 million
    Q2 FY26

    Expected loss for the event due to meaningfully increased costs associated with an expanded Fight Card and festivalization.

    NXT Non-Televised Events
    —
    Q1 FY26

    Strategic decision to increase the number of events to get younger talent more experienced in front of live audiences and accelerate their development.

    Fighter Bonuses Investment
    8-figuredoubled
    FY26

    Investment to double fighter bonuses at UFC, inclusive in full-year guidance, following the Paramount deal.

    PBR Team Series Expansion
    2 franchisesfrom 10 to 12 teams
    2027 season

    Approved to grow from 10 teams to 12 teams for the 2027 season, with significant increase in franchise values.

    Zuffa Boxing Fighters Signed
    more than 100
    Q1 FY26

    Number of fighters signed for Zuffa Boxing, exceeding internal growth plan.

    Zuffa Boxing Events Staged
    5
    Q1 FY26

    Events staged with solid viewership on Paramount+.

    Zuffa Boxing Media Rights Deals
    more than 15
    Q1 FY26

    Media rights deals secured across EMEA and APAC, including a multiyear deal with Sky Sports for the U.K. and Ireland.

    Industry KPIs

    2
    MetricValueDetails
    Share buyback capital returned$1 billionUSD
    Content spend title performanceMost watched live UFC event since 2016

    Product announcements

    1
    ProductTypeDetails
    Zuffa Boxing eventsexpansion

    Deals & partnerships

    5
    NetflixOfficial U.S. home of WWE's archive content

    Netflix became the official U.S. home of WWE's archive, comprising decades of WrestleMania, SummerSlam, and Royal Rumble content, in response to early success with WWE's premium content and the docuseries 'Unreal'.

    The CWExclusive home of all NXT PLEs

    The CW, already home to NXT's weekly programming, will become the exclusive home of all NXT PLEs, adding approximately 20 live broadcasts to a partnership that has made NXT the network's top-rated program among key demos.

    World RugbyLong-term strategic partnership

    IMG agreed to a long-term strategic partnership with World Rugby ahead of the 2031 and 2033 Rugby World Cups in North America.

    bet365New partnership across multiple TKO properties

    Recently announced deal with bet365, spanning multiple TKO properties, contributing to growth in partnerships and marketing revenue.

    FRE Nicotine and SupersureNew partnerships across multiple TKO properties

    Recently announced deals with FRE Nicotine and Supersure, spanning multiple TKO properties, contributing to growth in partnerships and marketing revenue.

    Risks & headwinds

    4
    Geopolitical developments in the Middle EastRemainder of 2026

    Potential implications on business, specifically scheduled events.

    Mitigation: Closely monitoring developments, in contact with partners, tracking government advisories and security assessments. Planning to move forward with all scheduled events, with partners confirming unwavering commitment.

    Fan criticism regarding monetization and creative executionOngoing

    Vocal fan criticism on sponsorship, ticket pricing, commercial load, celebrity usage, and perceived weaker UFC cards.

    Mitigation: Taking feedback seriously, balancing fan experience with business needs. Emphasizing product quality first, continuous talent building, and strong matchmaking. Acknowledging that commercial integration is new for WWE and that sports have natural ebbs and flows.

    High costs associated with unique eventsQ2 FY26

    UFC Freedom 250 expected to lose approximately $30 million.

    Mitigation: Acknowledged as a once-in-a-lifetime event to highlight the brand, despite expenses meaningfully exceeding limited partnership inventory.

    Impact of international events on margin profilesQ1 FY26 (12 WWE international events)

    International shows tend to have lower margin profiles due to increased travel and logistical costs.

    Mitigation: Strategic decision to increase international events to increase fan engagement and overall monetization, despite lower margins.

    What to watch in Q2 FY26

    5

    Share Repurchase Completion

    short order
    Current$800M ASR underway, $38M repurchased in Q1
    TargetASR completed, $200M 10b5-1 plan commenced

    Why it matters

    Indicates progress on capital return program and management's view on stock valuation.

    We received an initial delivery of approximately 3.1 million shares and expect to complete the ASR in short order. We also entered into a 10b5-1 trading plan for the repurchase of up to $200 million of Class A common stock. Repurchases contemplated under this 10b5-1 plan are to commence immediately once the ASR agreement is completed.

    Q&A highlights

    7

    How does TKO balance fan-facing monetization (sponsorship, ticket pricing) with fan experience, given vocal criticism, and are these critics representative of the broader fanbase?

    Management takes fan feedback seriously but notes that balancing monetization with fan experience is a common challenge across industries. They highlighted that commercial integration is new for WWE, leading to some initial backlash, but emphasized that product quality is paramount. They believe the audience is resilient, with current record attendance, viewership, and engagement.

    “Look, change takes getting used to. Back at ESPN, when -- I recall when we took our national ad windows in SportsCenter from 1 minute to 2 minutes, there was significant backlash that went on for months.”

    asked by Brandon Ross · answered by Mark Shapiro

    2 min read6 chapters

    Detailed Narrative

    01

    Middle East Strategy and Commitment

    TKO is firmly moving ahead with scheduled events in the Middle East and neighboring markets despite a challenging environment. Partners in Saudi Arabia have confirmed unwavering commitment to TKO properties, unlike the situation with LIV Golf. The company expects six more events, including UFC, WWE, and Zuffa Boxing, to take place as planned in 2026, mostly in Q4. Management noted no consumer pullback globally for live events.

    02

    Media Rights Monetization and Audience Growth

    New media rights deals are activating successfully. UFC's Paramount+ debut reached more homes in nearly a decade, and UFC 326 on CBS was the most watched live UFC event since 2016, with the CBS audience up 270%. WWE's ESPN partnership is gaining traction, with Elimination Chamber and WrestleMania 42 showing strong viewership. Netflix became the official U.S. home of WWE's archive, and CW will be the exclusive home of all NXT PLEs, adding 20 live broadcasts.

    03

    Live Events Demand and Profitability

    Demand for live events across TKO's portfolio continues to build, with UFC events selling out globally and WWE Royal Rumble in Saudi Arabia being the highest grossing gate for the event. WrestleMania 42 saw over 106,000 fans over two nights and financial incentive package economics meaningfully ahead of last year. The company is expanding its footprint into new markets with financial incentive package-backed events in Philadelphia and Serbia.

    04

    Portfolio Growth and Strategic Initiatives

    On Location successfully delivered the Milano Cortina Olympic program and is ahead of schedule for FIFA World Cup 2026 sales. IMG secured a long-term partnership with World Rugby and is powering Apple's Formula 1 broadcast. PBR opened the year with record performance in seven markets, and its Team Series approved a two-franchise expansion for 2027, with franchise values significantly increasing. Zuffa Boxing is exceeding internal growth plans, signing over 100 fighters and securing media rights deals globally.

    05

    Capital Structure and Shareholder Returns

    TKO generated $675 million in free cash flow in Q1, with a 123% conversion rate of adjusted EBITDA. The company returned approximately $1 billion to shareholders in Q1 through dividends and share repurchases. An incremental $1 billion share repurchase authorization was announced, complementing the existing $2 billion program. The company ended the quarter with $4.671 billion in debt, $789 million in cash, and a net leverage of 2.3x, with comfort operating at higher leverage due to natural deleveraging.

    06

    Fan Experience vs. Monetization Balance

    Management addressed vocal fan criticism regarding sponsorship, ticket pricing, and creative execution, acknowledging the challenge of balancing fan experience with monetization. They noted that commercial integration is new for WWE and that change takes getting used to, but emphasized that product quality remains the top priority. The company believes its audience is resilient, as evidenced by record attendance, viewership, and engagement.

    AI-generated summary of the company’s earnings call. Not investment advice.