Thursday, March 23, 2023

Endeavor Q2 Earnings Powered by UFC and Representation Unit Growth

Strong demand for UFC bouts and double-digit revenue gains in its representation unit powered Endeavor Group Holdings’ second quarter earnings.

Endeavor on Monday reporting revenue for the quarter ended June 30 of $1.1 billlion, in line with analysts’ estimates for the company that went public in April. Adjusted earnings before interest, taxes depreciation and amortization came improved in all three of the company’s major reporting segments.

But Endeavor’s bottom line for the quarter includes a net loss of $319.6 million. The company’s rate of cash burn slowed significantly during the quarter. Endeavor reported having $869.8 million in cash on its books at quarter’s end, compared to $880.9 million as of March 30 and $1 billion last December.

Endeavor likes what it sees for the rest of this year. The company raised its revenue target for full year 2021 to $4.8 billion to $4.85 billion, up from $4.76 billion to $4.83 billion forecast in June. Adjusted EBITDA is up to $765 million to $775 million, up from the $735 million-$745 million previously projected.

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“Despite continued challenges brought on by the pandemic, our company once again demonstrated resilience, due in large part to our global portfolio of premium assets and the creativity of our employees and partners,” said Ariel Emanuel, CEO of Endeavor.

“As you look at the secular trends defining our industries – marked by the growing demand for content, the increased value of the talent and brands behind that content, and the desire of people to come together around live events and experiences – Endeavor remains firmly and uniquely positioned for a strong second half of 2021.”

UFC was once again the standout for the company. Endeavor’s Owned Sports Properties unit saw revenue soar 70% over the COVID-19-battered environment in the year-ago quarter to hit $258.9 million. Adjusted EBITDA hit $132.3 million, more than double the year-ago quarter. Emanuel emphasized on the call that UFC has logged its best first six months of any year in its 26-year history, thanks to ticket sales and demand for its pay-per-view events held through ESPN Plus.

Given the lockdown environment a year ago, Events, Experiences and Rights unit roared back to life with $528.7 million fueled in part by the return of a full slate of European soccer matches compared to 2020. Adjusted EBITDA improved from a $42.6 million loss a year ago.

The Representation unit that houses Endeavor Content as well as the WME and IMG agencies also saw a dramatic rebound with a 70% gain in revenue to $328.2 million. Adjusted EBITDA grew 18.5% to $61.7 million.

More to come


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