TKO Group Holdings, Inc. (TKO): Results of Operations and Financial Condition
TKO Group Holdings, Inc. (TKO) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 FOR IMMEDIATE RELEASE Contacts: Investors: Seth Zaslow szaslow@tkogrp.com Media: press@tkogrp.com TKO Reports Second Quarter 2026 Results Raises Full Year 2026 Guidance Announces Intent to Commence Additional Share Repurchases Second Quarter 2026 Financial Highlights
How this was made
The 30-second read
Why it matters
The guidance increase and strong segment EBITDA growth are likely to drive estimate revisions, while cash flow decline and WWE-related legal fees introduce downside risk to near-term quality of earnings.
Market read
A same-day guidance raise with quantified Q2 operating metrics is a direct catalyst for earnings-model updates and buyback expectations.
What to watch
UFC margin compression tied to the UFC Freedom 250 event profile and the escrow-related working capital line item could make quarterly comparability less favorable even with higher consolidated EBITDA.
TKO Reports Second Quarter 2026 Results Raises Full Year 2026 Guidance Announces Intent to Commence Additional Share Repurchases
Revenue increased 18% to $1.547 billion, net income improved to $303.9 million, and Adjusted EBITDA increased 23% to $649.9 million. The Company raised its full-year revenue and Adjusted EBITDA targets, while UFC margin declined due entirely to the financial profile of UFC Freedom 250.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $1.547 billion | – | 18%, or $238.7 million |
| Net IncomeGAAP | $303.9 million | – | an improvement of $30.8 million |
| Adjusted EBITDAnon-GAAP | $649.9 million | – | 23%, or $123.4 million |
| Adjusted EBITDA marginnon-GAAP | 42% | – | increased to 42% from 40% |
| Cash flows generated by operating activitiesGAAP | $374.0 million | – | a decrease of $22.2 million |
| Free Cash Flownon-GAAP | $349.6 million | – | a decrease of $25.3 million |
| Cash and cash equivalentsGAAP | $592.5 million | – | – |
| Gross debtGAAP | $4.659 billion | – | – |
| Increase in direct operating costsGAAP | $79.7 million | – | – |
| Increase in selling, general and administrative expensesGAAP | $98.4 million | – | – |
| Total Revenue, Six Months Ended June 30, 2026GAAP | $3,144.0 million | – | – |
| Total Adjusted EBITDA, Six Months Ended June 30, 2026non-GAAP | $1,199.7 million | – | – |
| Total revenue from reportable segments, Three Months Ended June 30, 2026GAAP | 1,511.3 | – | – |
| Total Adjusted EBITDA from reportable segments, Three Months Ended June 30, 2026non-GAAP | 727.3 | – | – |
| Total revenue from reportable segments, Six Months Ended June 30, 2026GAAP | 3,043.6 | – | – |
| Total Adjusted EBITDA from reportable segments, Six Months Ended June 30, 2026non-GAAP | 1,335.2 | – | – |
| Corporate and Other Adjusted EBITDA, Three Months Ended June 30, 2026non-GAAP | (77.4) | – | – |
| Corporate and Other Adjusted EBITDA, Six Months Ended June 30, 2026non-GAAP | (135.5) | – | – |
| Eliminations, Three Months Ended June 30, 2026GAAP | (12.7) | – | – |
| Eliminations, Six Months Ended June 30, 2026GAAP | (22.0) | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| UFCHigher media rights fees reflecting the new distribution agreement with Paramount that began in January 2026, new partners and higher renewal fees largely driven by UFC Freedom 250, and higher royalties on UFC-branded products, partially offset by lower live events and hospitality revenue. | $535.7 million | – | 29%, or $119.8 million |
| WWEHigher media rights fees, notably the new distribution agreement with ESPN that began in September 2025, plus WWE-branded product sales and partnerships and marketing growth, partially offset by lower live events and hospitality revenue almost exclusively related to WrestleMania 42 in Las Vegas. | $620.9 million | – | 12%, or $64.7 million |
| IMGFIFA World Cup 2026 hospitality sales at On Location increased live events and hospitality revenue, partly offset by the loss of a contract for Italy’s premier professional cycling event. | $354.7 million | – | 16%, or $48.1 million |
| Corporate and OtherThe increase was primarily related to 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. | $48.5 million | – | 9%, or $3.9 million |
Full Year 2026 outlook
- Revenue$5.775 billion to $5.825 billion
- NoteAdjusted EBITDA: $2.275 billion to $2.305 billion
Capital returns
- 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 distributions.
- Announces Intent to Commence Additional Share Repurchases.
What drove it
- Consolidated revenue growth primarily reflected increases of $119.8 million at UFC, $64.7 million at WWE, and $48.1 million at IMG.
- UFC media rights, production and content revenue increased by $64.7 million, primarily from higher media rights fees under the Paramount distribution agreement that began in January 2026.
- WWE media rights, production and content revenue increased by $80.8 million, notably from the ESPN distribution agreement that began in September 2025.
- IMG live events and hospitality revenue increased by $66.4 million, primarily from FIFA World Cup 2026 hospitality sales at On Location.
- Adjusted EBITDA increased by $35.6 million at UFC, $38.5 million at WWE, and $49.6 million at IMG.
Concerns
- Selling, general and administrative expenses increased primarily due to legal fees and settlement costs associated with stockholder litigation related to WWE.
- Cash flows generated by operating activities decreased primarily due to the timing of working capital.
- UFC Adjusted EBITDA margin decreased to 52% from 59%, entirely due to the financial profile of UFC Freedom 250.
- WWE live events and hospitality revenue decreased by $33.7 million, almost exclusively related to WrestleMania 42 in Las Vegas.
- IMG media rights, production and content revenue decreased by $16.2 million, primarily reflecting the loss of a contract for Italy’s premier professional cycling event.
What to watch
- Execution against the increased Full Year 2026 revenue target of $5.775 billion to $5.825 billion.
- Execution against the increased Full Year 2026 Adjusted EBITDA target of $2.275 billion to $2.305 billion.
- FIFA World Cup 2026 hospitality sales at On Location and related working-capital pre-payments held in escrow.
- UFC profitability following the UFC Freedom 250 event, for which the Company said margins would have increased year-over-year absent Freedom 250.
- Additional share repurchases following the announced intent to commence them.
Balance sheet and cash flow
- Cash flows generated by operating activities were $374.0 million, a decrease of $22.2 million from $396.2 million.
- Free Cash Flow was $349.6 million, a decrease of $25.3 million from $374.9 million.
- 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.
- Cash and cash equivalents were $592.5 million as of June 30, 2026.
- Gross debt was $4.659 billion as of June 30, 2026.
Analysis
TKO reported second-quarter revenue of $1.547 billion, up 18%, or $238.7 million, and net income of $303.9 million, an improvement of $30.8 million from $273.1 million in the prior-year period. Adjusted EBITDA increased 23%, or $123.4 million, to $649.9 million, and Adjusted EBITDA margin increased to 42% from 40%. The Company raised both its Full Year 2026 revenue target and Adjusted EBITDA target.
UFC revenue increased 29%, or $119.8 million, to $535.7 million. Higher media rights fees under the Paramount distribution agreement, new partners and higher renewal fees associated largely with UFC Freedom 250, and higher consumer-product royalties more than offset lower live events and hospitality revenue. UFC Adjusted EBITDA increased to $280.4 million, but margin declined to 52% from 59%; the Company attributed the entire decrease to the financial profile of UFC Freedom 250.
WWE revenue increased 12%, or $64.7 million, to $620.9 million, led by higher media rights fees associated with the ESPN agreement that began in September 2025. Consumer products licensing and other revenue and partnerships and marketing also increased. These gains were partly offset by a $33.7 million decline in live events and hospitality revenue, almost exclusively related to WrestleMania 42 in Las Vegas. WWE Adjusted EBITDA increased to $368.3 million and margin was 59% for both periods.
IMG revenue increased 16%, or $48.1 million, to $354.7 million, with FIFA World Cup 2026 hospitality sales at On Location driving a $66.4 million increase in live events and hospitality revenue. The segment faced a $16.2 million decline in media rights, production and content revenue, primarily from the loss of an Italian professional cycling contract. IMG Adjusted EBITDA increased 171%, or $49.6 million, to $78.6 million, while margin increased to 22% from 9%.
Operating cash flow was $374.0 million and Free Cash Flow was $349.6 million, both below the prior-year period because of working-capital timing, with Free Cash Flow also affected by increased capital expenditures. Cash and cash equivalents were $592.5 million and gross debt was $4.659 billion as of June 30, 2026. The Company said it had returned in excess of $1.3 billion to equity holders year-to-date through repurchases, dividends and related distributions, and announced its intent to commence additional share repurchases.
Management, verbatim
Despite a challenging global environment, TKO delivered solid results in Q2, with strong momentum heading into the back half of the year. 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.
Ariel Emanuel, Executive Chair and CEO of TKO
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.
Mark Shapiro, President and COO of TKO
Not in the filing
stated, not guessed- Gross profit and gross margin
- Operating income and operating margin
- GAAP diluted EPS and non-GAAP diluted EPS
- Income tax expense and tax rate
- Total capital expenditures
- Share repurchases, dividend payments and related distributions broken out by amount
- Net debt
- Debt maturity schedule and interest expense
- Prior-quarter comparisons
- Full Year 2026 gross margin, operating expenses and tax-rate guidance
- Prior outlook guidance, which was not provided
- Corporate and Other Adjusted EBITDA narrative for the second quarter, as the filing text is truncated after the Corporate and Other revenue discussion
- Detailed cash flow statement and reconciliation of Free Cash Flow, which were not included in the provided filing text
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
TKO filed an SEC 8-K (Item 2.02) with Q2 2026 results, segment performance, and updated full-year 2026 guidance, plus an intent to commence additional share repurchases.
Ticker impact
TKO reported Q2 2026 results and raised full-year 2026 revenue to $5.775B-$5.825B and Adjusted EBITDA to $2.275B-$2.305B.
Likely positive bias for shares on guidance raise, with follow-through dependent on whether investors focus on EBITDA growth versus free-cash-flow decline and WWE litigation costs.
The filing discloses both the Q2 operating performance (revenue +18%, Adjusted EBITDA +23%) and explicit full-year guidance increases, which are direct drivers for valuation and estimates. It also provides offsetting negatives (operating cash flow down, free cash flow down, and higher SG&A tied to WWE stockholder litigation), which can limit upside.
Market effects
Sports media and live entertainment peers may see read-across on demand for premium live content and monetization across rights, partnerships, and hospitality.
Primarily US-listed large-cap media and entertainment sentiment; limited direct regional transmission beyond equity risk appetite.
References to FIFA World Cup 2026 escrow and global events reinforce international calendar-driven revenue visibility for sports-rights businesses.
Counterpoint
Investors may discount the guidance raise if free cash flow and operating cash flow softness persist, especially given working-capital timing and higher legal costs.
Key entities
- companyTKO Group Holdings, Inc.
Reported Q2 2026 revenue of $1.547B, Adjusted EBITDA of $649.9M, and raised full-year 2026 guidance; also announced intent for additional share repurchases.
- segmentUFC
Q2 revenue $535.7M and Adjusted EBITDA $280.4M; margin decreased to 52% due to UFC Freedom 250 event financial profile.
- segmentWWE
Q2 revenue $620.9M and Adjusted EBITDA $368.3M; SG&A increased due to legal fees and settlement costs tied to stockholder litigation.
- segmentIMG
Q2 revenue $354.7M and Adjusted EBITDA $78.6M, contributing to consolidated EBITDA growth.
