WWE (NYSE: WWE) today announced financial results for its second quarter ended June 30, 2023.
“We generated strong financial results in the quarter, highlighted by record quarterly revenue and Adjusted OIBDA. Operationally, we continue to effectively execute our strategy, including staging the most successful WrestleMania of all time in early April. WrestleMania, as well as our other premium live events such as Backlash, Night of Champions and Money in the Bank all delivered record viewership. Our weekly flagship programs, Raw, SmackDown and NXT, delivered strong double-digit growth in viewership, significantly outpacing overall industry performance,” said Nick Khan, WWE Chief Executive Officer. “Strategically, in early April, we entered into a historic agreement with Endeavor to combine WWE with UFC to create a one-of-a-kind global sports and entertainment company. We believe that bringing these two iconic and highly complementary brands together will allow us to create incremental value for our shareholders.”
Frank Riddick, WWE President & Chief Financial Officer, added “In the quarter, we exceeded the high end of our guidance. Adjusted OIBDA was $141 million on revenue of $410 million. Our financial performance was favorably impacted by a shift in the timing of the staging of a large-scale international event. Our results in the quarter also reflected strong consumer demand for our live events, which benefited performance across our various lines of business.”
Second-Quarter Consolidated Results
Revenue increased 25%, or $82.1 million, to $410.3 million, primarily due to the timing of the staging of a large-scale international event, an increase in revenue related to the media rights fees for the Company’s premium live events and flagship weekly programming, and higher live events revenue.
Operating Income increased 26%, or $18.0 million, to $87.3 million, reflecting the increase in revenue partially offset by an increase in operating expenses. The increase in operating expenses primarily reflected an increase in content creation costs, including the timing of a large-scale international event, and the impact of certain costs related to the Company’s strategic alternatives review and recently announced agreement with Endeavor. (See the “WWE and Endeavor Transaction” discussion for further details.) The Company’s operating income margin remained flat at 21%.
Adjusted OIBDA increased 54%, or $49.2 million, to $140.7 million. The Company’s Adjusted OIBDA margin increased to 34% from 28%.
Net Income was $52.0 million, or $0.67 per diluted share, an increase from $49.0 million, or $0.58 per diluted share, primarily reflecting the increase in operating performance partially offset by an increase in the Company’s effective tax rate.
Cash flows generated by operating activities were $77.0 million, an increase from $56.9 million, primarily due to higher net income and lower working capital requirements.
Free Cash Flow3 was $31.1 million, an increase of $21.7 million from $9.4 million, primarily due to the increase in cash flows generated by operating activities. For the three months ended June 30, 2023, the Company incurred $31.7 million of capital expenditures related to its new headquarter facility. Excluding the capital expenditures related to the new headquarter facility, Free Cash Flow for the three months ended June 30, 2023 was $62.8 million.
Cash, cash equivalents and short-term investments were $523.8 million as of June 30, 2023. The Company currently estimates debt capacity under its revolving line of credit of $200 million.
Results by Operating Segment
The schedule below reflects WWE’s performance by operating segment (in millions):
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Net Revenue: | ||||||||||||||||
Media | $ | 320.3 | $ | 243.1 | $ | 546.0 | $ | 521.2 | ||||||||
Live Events | 62.0 | 41.0 | 94.6 | 64.1 | ||||||||||||
Consumer Products | 28.0 | 44.1 | 67.3 | 76.3 | ||||||||||||
Total Net Revenue | $ | 410.3 | $ | 328.2 | $ | 707.9 | $ | 661.6 | ||||||||
Operating Income (Loss): | ||||||||||||||||
Media | $ | 107.3 | $ | 78.4 | $ | 180.9 | $ | 195.8 | ||||||||
Live Events | 33.1 | 13.2 | 39.2 | 15.2 | ||||||||||||
Consumer Products | 11.1 | 15.9 | 32.5 | 27.1 | ||||||||||||
Corporate | (64.2 | ) | (38.2 | ) | (112.2 | ) | (76.4 | ) | ||||||||
Total Operating Income | $ | 87.3 | $ | 69.3 | $ | 140.4 | $ | 161.7 | ||||||||
Adjusted OIBDA: | ||||||||||||||||
Media | $ | 126.1 | $ | 90.7 | $ | 213.9 | $ | 218.9 | ||||||||
Live Events | 34.5 | 13.8 | 41.5 | 16.6 | ||||||||||||
Consumer Products | 12.5 | 16.5 | 34.7 | 28.4 | ||||||||||||
Corporate | (32.4 | ) | (29.5 | ) | (65.2 | ) | (60.7 | ) | ||||||||
Total Adjusted OIBDA | $ | 140.7 | $ | 91.5 | $ | 224.9 | $ | 203.2 | ||||||||
Media
Second-Quarter 2023
Revenue increased 32%, or $77.2 million, to $320.3 million, primarily due to the timing of a large-scale international event and, to a lesser extent, an increase in revenue related to the contractual escalation of media rights fees for the Company’s flagship weekly programming, Raw and SmackDown, and premium live events. During the quarter, approximately $7 million of incremental Network revenue was recorded as a result of a change in the premium live events calendar.
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
Media Revenue: | ||||||||||||
Network (a) | $ | 80.1 | $ | 67.0 | $ | 131.5 | $ | 125.7 | ||||
Core content rights fees (b) | 154.8 | 148.5 | 308.7 | 287.6 | ||||||||
Advertising and sponsorship (c) | 18.9 | 17.9 | 34.5 | 37.7 | ||||||||
Other (d) | 66.5 | 9.7 | 71.3 | 70.2 | ||||||||
Total Revenue | $ | 320.3 | $ | 243.1 | $ | 546.0 | $ | 521.2 | ||||
| (a) | Network revenue consists primarily of license fees from the global distribution of WWE Network content associated with our licensed partner agreements. | |
| (b) | Core content rights fees consist primarily of licensing revenue from the distribution of our flagship programs, Raw and SmackDown, as well as NXT programming, through global broadcast, pay television and digital platforms. | |
| (c) | Advertising and sponsorship revenue within the Media segment consists primarily of advertising revenue from the Company’s content on third-party social media platforms and sponsorship fees from sponsors who promote products utilizing the Company’s media platforms, including promotion on the Company’s digital websites and on-air promotional media spots. | |
| (d) | Other revenue within the Media segment reflects revenue from the distribution of other WWE content, including, but not limited to, certain live in-ring programming content in international markets, scripted, reality and other programming. |
Operating income increased 37%, or $28.9 million, to $107.3 million, as the increase in revenue (as described above) was partially offset by an increase in operating expenses. The increase in operating expenses primarily reflected an increase in content creation costs, including the timing of a large-scale international event, as well as an increase in stock-based compensation.
Adjusted OIBDA increased 39%, or $35.4 million, to $126.1 million.
Live Events
Second-Quarter 2023
Revenue increased 51%, or $21.0 million, to $62.0 million, primarily due to an increase in ticket sales, both domestically and internationally, and an increase in advertising and sponsorship revenue. There were 53 total ticketed live events in the current quarter, consisting of 43 events in North America and 10 events in international markets. Average attendance at the Company’s North America events was approximately 9,900. In the prior year period, the Company staged 59 total ticketed live events, consisting of 55 events in North America and 4 events in international markets. Average attendance at the Company’s North America events was approximately 6,800.
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
Live Events Revenue: | ||||||||||||
North American ticket sales | $ | 40.3 | $ | 34.9 | $ | 70.5 | $ | 54.8 | ||||
International ticket sales | 6.4 | 2.2 | 6.4 | 2.2 | ||||||||
Advertising and sponsorship (e) | 8.8 | 1.6 | 9.8 | 2.7 | ||||||||
Other (f) | 6.5 | 2.3 | 7.9 | 4.4 | ||||||||
Total Revenue | $ | 62.0 | $ | 41.0 | $ | 94.6 | $ | 64.1 | ||||
| (e) | Advertising and sponsorship revenue within the Live Events segment consists primarily of fees from advertisers and sponsors that promote products utilizing the Company’s live events (i.e., presenting sponsor of fan engagement events and advertising signage at events). | |
| (f) | Other revenue within the Live Events segment reflects revenue from the sale of travel packages associated with the Company’s global live events, and commissions earned through secondary ticketing. |
Operating income increased 151%, or $19.9 million, to $33.1 million, as a result of the increase in revenues (as described above) and relatively flat event-related expenses.
Adjusted OIBDA increased 150%, or $20.7 million, to $34.5 million.
Consumer Products
Second-Quarter 2023
Revenue decreased 37%, or $16.1 million, to $28.0 million, primarily reflecting a decrease in licensing and eCommerce revenue. Licensing revenue primarily reflected a decrease in video gaming and collectibles revenue. The year-over-year change in eCommercerevenue reflected the previously disclosed transition of our digital retail platform to Fanatics.
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||
Consumer Products Revenue: | ||||||||||||
Consumer product licensing | $ | 15.6 | $ | 22.6 | $ | 42.4 | ||||||
