TKO Group Holdings, Inc. (TKO) Earnings & Analysis

Latest quarter

TKO reported third-quarter revenue below the consensus by 0.91%, while adjusted earnings per share of $1.33 exceeded the $1.20 consensus. Revenue rose 21.5% from a year earlier to $1.4 billion, compared with $1.1 billion.

The company’s filing attributed UFC’s revenue increase primarily to higher media rights fees, including its new Skydance distribution agreement, and additional events. The filing also cited higher ticket sales and partnership revenue. WWE revenue declined as fewer premium live events and lower SummerSlam ticket sales outweighed increases in partnership and media rights revenue. IMG revenue rose, helped by new commission deals and World Cup hospitality sales.

TKO’s gross margin increased to 64.0% from 60.7% a year earlier, while operating margin rose to 27.8% from 15.4%. The filing said depreciation and amortization fell partly because the prior-year quarter included accelerated amortization of WWE customer relationship assets.

Free cash flow was $450.1 million, compared with $398.9 million a year earlier. TKO reported $4.6 billion in debt and $630.9 million in cash at September 30, 2026.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

CFO Andrew Schleimer said UFC’s quarterly event mix helped results: the business staged 12 events, compared with 10 a year earlier. He attributed higher media rights revenue to the Skydance fee increase and the additional events, while ticket demand and the event calendar lifted live-event revenue. He also said new partners and higher renewal fees contributed to partnership growth.

Schleimer said UFC expenses increased with athlete, production and other event-related costs, including those associated with the additional events and UFC 329. He expects the UFC margin profile to improve in the fourth quarter and for the full year.

At WWE, Schleimer said the business held one main-roster premium live event in the quarter, compared with four a year earlier. Even with fewer events, he said partnership revenue rose 28%, driven by SummerSlam, new partnerships and renewals. Lower production, talent and other event-related costs reduced expenses, and he expects WWE margins to increase in the fourth quarter and for the year.

Asked about WWE event performance, President and COO Mark Shapiro said WrestleMania in Las Vegas had been planned to decline from the prior year but exceeded internal estimates. He said SummerSlam’s Minneapolis location differed from the prior event’s New York and New Jersey market, and that decisions also considered fans, the brand, audiences and media partners.

For IMG, Schleimer said the World Cup contributed approximately $90 million of full-year adjusted EBITDA, above an approximately $75 million estimate. He also cited new tennis and soccer marketing and distribution deals, partly offset by the absence of the Ryder Cup.

On capital allocation, Schleimer said TKO had completed repurchases under its original $2 billion authorization and intended to use cash on hand and new debt for the remaining authorization. He said the company was planning an Investor Day discussion of its longer-term revenue streams, including UFC international media rights and Zuffa Boxing.

Guidance

Schleimer said TKO raised its full-year 2026 revenue outlook to $5.79 billion to $5.83 billion and adjusted EBITDA guidance to $2.295 billion to $2.315 billion. He said the respective range midpoints increased by $10 million and $15 million from the guidance issued in August.

Schleimer said the outlook assumes scheduled Middle East events proceed as planned and would be affected if TKO cannot stage them.