TKO issued the following:
TKO Reports Second Quarter 2026 Results
Raises Full Year 2026 Guidance [And] Announces Intent to Commence Additional Share Repurchases
Second Quarter 2026 Financial Highlights
* Revenue of $1.547 billion
* Net income of $303.9 million
* Adjusted EBITDA1 of $649.9 million
* Year-to-date, the Company has returned in excess of $1.3 billion of capital to equity holders through share repurchases and dividend payments and related distributionsFull Year 2026 Guidance
* The Company increased its target for revenue to $5.775 billion to $5.825 billion
* The Company increased its target for Adjusted EBITDA to $2.275 billion to $2.305 billionNEW YORK–(BUSINESS WIRE)– TKO Group Holdings, Inc. (“TKO” or the “Company”) (NYSE: TKO) today announced financial results for its second quarter ended June 30, 2026.
“Despite a challenging global environment, TKO delivered solid results in Q2, with strong momentum heading into the back half of the year,” said Ariel Emanuel, Executive Chair and CEO of TKO. “Premium live content and experiences are heating up in an increasingly AI-driven world, and our businesses are well positioned to fully capitalize on societal secular tailwinds.”
“From UFC Freedom 250 to the FIFA World Cup, TKO continues to deliver on the biggest stages and this quarter reinforced our 2026 execution story. Our decision to raise full-year guidance reflects both our performance to date and our confidence in TKO’s multi-year trajectory,” said Mark Shapiro, President and COO of TKO. “Our global fan base is expanding, and we are capitalizing on the commercial promise across ticketing, premium hospitality, marketing partnerships, and financial incentive packages. The demand in the experience economy is undeniable and positions us well for multi-year growth, margin expansion, and overall value creation.”
Consolidated Results2
Second Quarter 2026
Revenue increased 18%, or $238.7 million, to $1.547 billion. The increase primarily reflected an increase of $119.8 million at UFC, to $535.7 million, an increase of $64.7 million at WWE, to $620.9 million, and an increase of $48.1 million at the IMG segment, to $354.7 million.
Net Income was $303.9 million, an improvement of $30.8 million from $273.1 million in the prior year period. The improvement reflected the increase in revenue partially offset by an increase in operating expenses. The increase in operating expenses primarily reflected an increase in direct operating costs of $79.7 million and an increase in selling, general and administrative expenses of $98.4 million. The increase in selling, general and administrative expenses primarily reflected legal fees and settlement costs associated with stockholder litigation related to WWE.
Adjusted EBITDA1 increased 23%, or $123.4 million, to $649.9 million, due primarily to an increase of $35.6 million at UFC, an increase of $38.5 million at WWE, and an increase of $49.6 million at the IMG segment.
Adjusted EBITDA margin increased to 42% from 40%.
Cash flows generated by operating activities were $374.0 million, a decrease of $22.2 million from $396.2 million, primarily due to the timing of working capital, partially offset by the improved operating performance. Working capital for the three months ended June 30, 2026 and June 30, 2025 included approximately $22.4 million and $164.8 million, respectively, of net pre-payments held in escrow related to FIFA World Cup 2026.
Free Cash Flow3 was $349.6 million, a decrease of $25.3 million from $374.9 million, due to the decrease in cash flows generated by operating activities and an increase in capital expenditures.
Cash and cash equivalents were $592.5 million as of June 30, 2026. Gross debt was $4.659 billion as of June 30, 2026.
Second Quarter 2026
Revenue increased 9%, or $3.9 million, to $48.5 million. The increase was primarily related to an increase in management fees for services related to the Company’s boxing initiatives. Revenue at PBR increased by $1.0 million principally related to higher live events and hospitality revenue, which was driven by the Space Cowboys event at the U.S. Air Force Academy.
Adjusted EBITDA was a loss of $77.4 million, essentially comparable to a loss of $77.1 million in the prior year period. Results primarily reflected the increase in revenue (as described above) offset by an increase in expenses. Expenses reflected higher personnel and other operating costs partially offset by lower event-related costs at PBR from holding ten fewer events due to a strategic review to remove non-core events compared to the prior year period.
Full Year 2026 Guidance
In February, the Company issued revenue and Adjusted EBITDA guidance of $5.675 billion to $5.775 billion and $2.240 billion to $2.290 billion, respectively, for the full year 2026. Based on performance through the first six months of the year and our visibility into and anticipated performance for the remainder of the year, the Company is raising its guidance and now expects full year 2026 revenue of $5.775 billion to $5.825 billion and Adjusted EBITDA of $2.275 billion to $2.305 billion.
The Company intends to provide additional detail related to its 2026 guidance on today’s earnings call.
Other Matters
Return of Capital Program
The Company announced that it intends to commence additional repurchases of its outstanding Class A common stock under its existing share repurchase program. 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.
As previously disclosed, the Company’s board of directors has authorized the repurchase of up to $3 billion of outstanding Class A common stock. The share repurchase program has no expiration and may be modified, suspended, or discontinued at any time.
As previously disclosed, on June 30, 2026, the Company announced the completion of its accelerated share repurchase agreement (the “ASR Agreement”) to repurchase $800 million, or 4,167,298 shares, of its outstanding Class A common stock.
As previously disclosed, on May 11, 2026, the Company entered into a Rule 10b5-1 trading plan for the repurchase of up to $200 million of its outstanding Class A Common Stock (the “10b5-1 Plan”). During the second quarter, the Company repurchased 648,919 shares for approximately $129.3 million. From July 1, 2026 through July 21, 2026, the Company repurchased 373,515 shares for approximately $70.7 million thus completing the 10b5-1 Plan.
As of August 3, 2026, the Company has slightly in excess of $1 billion available under its existing authorization.
On June 30, 2026, the Company paid a quarterly cash dividend to the holders of the Company’s Class A common stock based on their pro rata share of an aggregate distribution of approximately $150 million, or $0.79 per share, from TKO Operating Company, LLC.
Non-GAAP Financial Measures
The Company refers to certain financial measures that are not recognized under United States generally accepted accounting principles (“GAAP”). This press release includes financial measures that are not calculated in accordance with GAAP, including Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow and Free Cash Flow Conversion. Please see the definitions below and the reconciliation tables included in this release for additional information and a reconciliation of the Non-GAAP financial measures to the most comparable GAAP financial measures.
The Company defines Adjusted EBITDA as net income excluding income taxes, net interest expense, depreciation and amortization, equity-based compensation, merger, acquisition and earnout costs, certain legal costs, restructuring, severance and impairment charges, foreign exchange (gains) losses, and certain other items when applicable. Adjusted EBITDA margin is 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:
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 TKO’s 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 TKO’s statements of cash flows.
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.
The Company defines Free Cash Flow as net cash provided by operating activities less cash used for capital expenditures. TKO views net cash provided by operating activities as the most directly comparable GAAP measure. Free Cash Flow Conversion is defined as Free Cash Flow divided by Adjusted EBITDA. Although they are not recognized measures of liquidity under U.S. GAAP, Free Cash Flow and Free Cash Flow Conversion provide useful information regarding the amount of cash TKO’s continuing business generates after capital expenditures and is available for reinvesting in the business, debt service, share repurchases and payment of dividends. Free Cash Flow and Free Cash Flow Conversion have certain limitations in that they do not represent the total increase or decrease in the cash balance for the period, nor do they represent the residual cash flow for discretionary expenditures.
Reconciliations of the Company’s Non-GAAP financial measure guidance to the most directly comparable GAAP financial measures cannot be provided without unreasonable efforts and are not provided herein because of the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations and certain other items reflected in our reconciliation of historical Non-GAAP financial measures, the amounts of which could be material.
Basis of Presentation
As a result of the February 28, 2025 closing of the Company’s agreement with Endeavor to acquire IMG, On Location, and PBR (the “Acquired Businesses”) in a common control transaction, TKO’s consolidated financial information presented herein reflect the combined results of TKO and the Acquired Businesses as if they had been part of TKO during the historical periods presented under common control.
TKO’s financial information presented herein for the periods that it did not own the Acquired Businesses were prepared by Endeavor Group Holdings, Inc. and include allocations for corporate expenses to the businesses based on Endeavor Group Holdings, Inc.’s corporate expense profile. These expenses consisted of certain support functions that were provided on a centralized basis, such as expenses related to finance, human resources, information technology, facilities, and legal, among others and were allocated to the Acquired Businesses. Endeavor Group Holdings, Inc. allocated these corporate expenses on a pro rata basis of headcount, gross profit, and other allocation methodologies. Corporate allocations were $21.7 million for the six months ended June 30, 2025 representing allocations from January 1 through February 28, 2025. Under TKO ownership effective February 28, 2025, such corporate allocations no longer occur.
Effective February 28, 2025, the Company operates its business under three reportable segments, UFC, WWE, and IMG. The UFC and WWE segments consist entirely of the operations of these businesses, while the IMG segment consists entirely of the operations of IMG and On Location. In addition, the Company reports results for the “Corporate and Other” group, which includes the operations of PBR, management and promotional fees for services primarily related to boxing as well as general and administrative expenses that are not allocated to the business segments. These expenses largely relate 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 the reportable segments. All prior period amounts related to the segment change have been retrospectively reclassified to conform to the new presentation. The profitability measure employed by the Company in assessing operating performance, including that of its segments, is Adjusted EBITDA. The Company defines Adjusted EBITDA as net income, excluding income taxes, net interest expense, depreciation and amortization, equity-based compensation, merger, acquisition and earnout costs, certain legal costs, restructuring, severance and impairment charges, and certain other items when applicable. Adjusted EBITDA includes amortization expenses directly related to supporting the operations of the Company’s segments, including content production asset amortization.
