Endeavor Releases Third Quarter 2024 Results
Endeavor Group Holdings (NYSE: EDR) reported Q3 2024 revenue of $2.032 billion with a net loss of $420.4 million and Adjusted EBITDA of $277.6 million. The company saw growth in Owned Sports Properties, driven by WWE and PBR performance. The Representation segment showed strength in WME's music and talent groups. Owned Sports Properties revenue increased 53.2% to $735.2 million, while Events, Experiences & Rights revenue grew 145.1% to $899.8 million. The company announced a $3.25 billion deal with TKO Group Holdings to sell PBR, On Location, and IMG assets. Additionally, Endeavor is proceeding with its take-private transaction with Silver Lake at $27.50 per share.
Endeavor Group Holdings (NYSE: EDR) ha riportato un fatturato di 2,032 miliardi di dollari nel Q3 2024 con una perdita netta di 420,4 milioni di dollari e un EBITDA rettificato di 277,6 milioni di dollari. L'azienda ha registrato una crescita nelle Proprietà Sportive Proprietarie, trainata dalle performance di WWE e PBR. Il segmento di Rappresentanza ha mostrato forza nei gruppi musicali e di talenti di WME. Il fatturato delle Proprietà Sportive Proprietarie è aumentato del 53,2% raggiungendo i 735,2 milioni di dollari, mentre il fatturato di Eventi, Esperienze e Diritti è cresciuto del 145,1% fissandosi a 899,8 milioni di dollari. La società ha annunciato un accordo di 3,25 miliardi di dollari con TKO Group Holdings per vendere PBR, On Location e i beni di IMG. Inoltre, Endeavor sta procedendo con la sua transazione di privatizzazione con Silver Lake a 27,50 dollari per azione.
Endeavor Group Holdings (NYSE: EDR) reportó unos ingresos de $2.032 mil millones en el Q3 2024 con una pérdida neta de $420.4 millones y un EBITDA ajustado de $277.6 millones. La empresa vio crecimiento en Propiedades Deportivas Propias, impulsado por el rendimiento de WWE y PBR. El segmento de Representación mostró fortaleza en los grupos de música y talentos de WME. Los ingresos de Propiedades Deportivas Propias aumentaron un 53,2% hasta alcanzar los $735.2 millones, mientras que los ingresos de Eventos, Experiencias y Derechos crecieron un 145,1% alcanzando los $899.8 millones. La compañía anunció un acuerdo de $3.25 mil millones con TKO Group Holdings para vender PBR, On Location y activos de IMG. Además, Endeavor avanza con su transacción de privatización con Silver Lake a $27.50 por acción.
Endeavor Group Holdings (NYSE: EDR)는 2024년 3분기 매출 20억 3200만 달러를 보고했으며, 순손실 4억 2040만 달러와 조정 EBITDA 2억 7760만 달러를 기록했습니다. 회사는 WWE와 PBR 성과에 힘입어 자사 스포츠 자산에서 성장을 보였습니다. 대행 부문은 WME의 음악 및 인재 그룹에서 강세를 보였습니다. 자사 스포츠 자산 매출은 53.2% 증가하여 7억 3520만 달러에 달했습니다, 반면 이벤트, 경험 및 권리 매출은 145.1% 증가하여 8억 9980만 달러에 도달했습니다. 이 회사는 PBR, On Location 및 IMG 자산을 판매하기 위해 TKO Group Holdings와 32억 5000만 달러 규모의 거래를 발표했습니다. 또한 Endeavor는 주당 27.50달러에 Silver Lake와의 비공개 거래를 진행하고 있습니다.
Endeavor Group Holdings (NYSE: EDR) a annoncé un chiffre d'affaires de 2,032 milliards de dollars pour le T3 2024 avec une perte nette de 420,4 millions de dollars et un EBITDA ajusté de 277,6 millions de dollars. L'entreprise a connu une croissance dans les Propriétés Sportives Possédées, soutenue par les performances de WWE et PBR. Le segment de la Représentation a montré de la force dans les groupes de musique et de talents de WME. Les revenus des Propriétés Sportives Possédées ont augmenté de 53,2 % pour atteindre 735,2 millions de dollars, tandis que les revenus des Événements, Expériences et Droits ont augmenté de 145,1 % pour s'établir à 899,8 millions de dollars. L'entreprise a annoncé un accord de 3,25 milliards de dollars avec TKO Group Holdings pour vendre PBR, On Location et les actifs d'IMG. De plus, Endeavor avance dans sa transaction de privatisation avec Silver Lake à 27,50 dollars par action.
Endeavor Group Holdings (NYSE: EDR) berichtete über Umsätze von 2,032 Milliarden Dollar im Q3 2024 mit einem Nettoverlust von 420,4 Millionen Dollar und einem bereinigten EBITDA von 277,6 Millionen Dollar. Das Unternehmen verzeichnete Wachstumsraten im Bereich der Eigenen Sportimmobilien, die durch die Performance von WWE und PBR angetrieben wurden. Der Bereich der Vertretung zeigte Stärke in den Musik- und Talentgruppen von WME. Die Einnahmen aus Eigenen Sportimmobilien stiegen um 53,2% auf 735,2 Millionen Dollar, während die Einnahmen aus Veranstaltungen, Erlebnissen und Rechten um 145,1% auf 899,8 Millionen Dollar wuchsen. Das Unternehmen kündigte einen Deal im Wert von 3,25 Milliarden Dollar mit TKO Group Holdings an, um PBR, On Location und IMG-Aktiva zu verkaufen. Darüber hinaus setzt Endeavor die Transaktion zur Übernahme durch Silver Lake zu einem Preis von 27,50 Dollar pro Aktie fort.
- Revenue increased to $2.032 billion in Q3 2024
- Owned Sports Properties revenue up 53.2% to $735.2 million
- Events, Experiences & Rights revenue grew 145.1% to $899.8 million
- Representation segment revenue increased 11.3% to $429.2 million
- Cash and cash equivalents increased to $1.004 billion from $697.7 million in Q2
- Net loss of $420.4 million in Q3 2024
- Events, Experiences & Rights segment reported negative Adjusted EBITDA of $68.0 million
- Total debt increased to $5.228 billion from $5.073 billion in Q2
- Decreases in UFC revenue due to fewer events
- Decreases in nonscripted content production business
Insights
The Q3 results show significant financial movements with
The pending
The quarterly results reflect a complex transition period with multiple strategic moves in play. The strong performance in live events and content segments indicates robust consumer demand, particularly in sports and entertainment. The Representation segment's
The strategic review of IMG portfolio assets and the planned consolidation with TKO demonstrates a shift toward streamlining operations. This restructuring, combined with the Silver Lake privatization, positions the company for potentially more agile decision-making away from public market pressures.
Highlights
-
$2.03 2 billion - Growth across Owned Sports Properties driven by strong revenue performance at WWE, as well as increases in media rights at Professional Bull Riders (“PBR”)
- Strength within Representation segment driven by growth in WME’s music and talent groups, reflecting continued consumer demand for live music and ongoing recovery following resolution of the WGA and SAG-AFTRA strikes
Q3 2024 Consolidated Financial Results
-
Revenue:
$2.03 2 billion -
Net loss:
$420.4 million -
Adjusted EBITDA:
$277.6 million
“During the quarter, our owned sports and representation segments delivered solid results driven by continued consumer demand for live events and content,” said Ariel Emanuel, CEO, Endeavor. “As we work toward the close of our take-private transaction with
Segment Operating Results
-
Owned Sports Properties segment revenue was
$735.2 million $255.5 million 53.2% , compared to the third quarter of 2023. The increase was primarily attributed to the acquisition of WWE in September 2023, which contributed$275 million $315.5 million $78.1 million 32.9% , year-over-year.
-
Events, Experiences & Rights segment revenue was
$899.8 million $532.7 million 145.1% , compared to the third quarter of 2023. The increase was driven primarily by theParis 2024 Olympic and Paralympic Games, for which On Location served as exclusive hospitality provider. The segment’s Adjusted EBITDA was$(68.0) million $97.8 million
-
Representation segment revenue was
$429.2 million $43.6 million 11.3% , compared to the third quarter of 2023. The increase in revenue is primarily attributed to growth in WME’s talent and music divisions, partially offset by decreases in the nonscripted content production business. Adjusted EBITDA was$124.9 million $28.6 million 29.7% , year-over-year.
Sports Data & Technology Segment
In the second quarter, we began to actively market the businesses comprising the Sports Data & Technology segment, OpenBet and IMG ARENA. As such, for financial reporting purposes, these businesses are considered Held for Sale and the Sports Data & Technology segment is presented as discontinued operations in the Q3 2024 consolidated interim financial statements.
Balance Sheet and Liquidity
At September 30, 2024, cash and cash equivalents totaled
For further information regarding the Company's financial results, as well as certain non-GAAP financial measures, and the reconciliations thereof, please refer to the following pages of this release or visit the Company’s Investor Relations site at investor.endeavorco.com.
Recent Updates
On October 24, 2024, the Company announced a definitive agreement with TKO Group Holdings, Inc. (NYSE: TKO) to acquire Endeavor assets including PBR, On Location, and IMG in an all-equity transaction valued at
Also on October 24, 2024, the Company announced it has commenced a review and potential sale of certain events within its IMG portfolio, including but not limited to the Miami Open and Madrid Open tennis tournaments and art platform Frieze. No definitive timetable has been set for completion of this review process, and there is no assurance that the review will result in any specific action.
On November 5, 2024, On Location and the NFL announced a multi-year extension of their global hospitality partnership. With the extension, On Location will continue as NFL’s Official Hospitality Provider through 2036, covering all premier NFL events including the Super Bowl, NFL Draft, Pro Football Hall of Fame, Pro Bowl Games and Scouting Combine. Additionally, On Location’s rights to sell and market International Games has been expanded to include all international markets.
Silver Lake Transaction
On April 2, 2024, Endeavor announced that it entered into a definitive agreement to be acquired by
Webcast Details
Following the prior announcement of Endeavor’s definitive agreement to be acquired by
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, the Company’s business strategy, the expected take-private of the Company by
Non-GAAP Financial Measures
We refer to certain financial measures that are not recognized under
About Endeavor
Endeavor (NYSE: EDR) is a global sports and entertainment company, home to many of the world’s most dynamic and engaging storytellers, brands, live events, and experiences. The Endeavor network specializes in talent representation through entertainment agency WME; sports operations and advisory, event management, media production and distribution, and brand licensing through IMG; live event experiences and hospitality through On Location; full-service marketing through global cultural marketing agency 160over90; and sports data and technology through OpenBet. Endeavor is also the majority owner of TKO Group Holdings (NYSE: TKO), a premium sports and entertainment company comprising UFC and WWE.
Website Disclosure
Investors and others should note that we announce material financial and operational information to our investors using press releases, SEC filings and public conference calls and webcasts, as well as our Investor Relations site at investor.endeavorco.com. We may also use our website as a distribution channel of material Company information. In addition, you may automatically receive email alerts and other information about Endeavor when you enroll your email address by visiting the “Investor Email Alerts” option under the Resources tab on investor.endeavorco.com.
Consolidated Statements of Operations |
||||||||||||||||
(Unaudited) |
||||||||||||||||
(In thousands, except share and per share data) |
||||||||||||||||
| Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|||||
| Revenue | $ |
2,031,790 |
|
$ |
1,219,547 |
|
$ |
5,542,708 |
|
$ |
4,021,173 |
|
||||
| Operating expenses: | ||||||||||||||||
| Direct operating costs |
|
1,097,631 |
|
|
431,076 |
|
|
2,630,435 |
|
|
1,618,563 |
|
||||
| Selling, general and administrative expenses |
|
791,650 |
|
|
671,505 |
|
|
2,596,795 |
|
|
1,884,568 |
|
||||
| Depreciation and amortization |
|
135,524 |
|
|
66,602 |
|
|
416,556 |
|
|
171,715 |
|
||||
| Impairment charges |
|
— |
|
|
28,196 |
|
|
— |
|
|
28,196 |
|
||||
| Total operating expenses |
|
2,024,805 |
|
|
1,197,379 |
|
|
5,643,786 |
|
|
3,703,042 |
|
||||
| Operating income (loss) from continuing operations |
|
6,985 |
|
|
22,168 |
|
|
(101,078 |
) |
|
318,131 |
|
||||
| Other (expense) income: | ||||||||||||||||
| Interest expense, net |
|
(108,134 |
) |
|
(82,271 |
) |
|
(302,531 |
) |
|
(257,811 |
) |
||||
| Tax receivable agreement liability adjustment |
|
(16 |
) |
|
(20,297 |
) |
|
(2,460 |
) |
|
(7,779 |
) |
||||
| Other income (expense), net |
|
33,846 |
|
|
(12,989 |
) |
|
32,574 |
|
|
753,544 |
|
||||
| (Loss) income from continuing operations before income taxes and equity losses of affiliates |
|
(67,319 |
) |
|
(93,389 |
) |
|
(373,495 |
) |
|
806,085 |
|
||||
| Provision for (benefit from) income taxes |
|
113,774 |
|
|
20,853 |
|
|
(93,129 |
) |
|
195,521 |
|
||||
| (Loss) income from continuing operations before equity losses of affiliates |
|
(181,093 |
) |
|
(114,242 |
) |
|
(280,366 |
) |
|
610,564 |
|
||||
| Equity losses of affiliates, net of tax |
|
(5,219 |
) |
|
(2,748 |
) |
|
(10,315 |
) |
|
(22,291 |
) |
||||
| (Loss) income from continuing operations, net of tax |
|
(186,312 |
) |
|
(116,990 |
) |
|
(290,681 |
) |
|
588,273 |
|
||||
| Discontinued operations: | ||||||||||||||||
| (Loss) income from discontinued operations |
|
(442,279 |
) |
|
10,148 |
|
|
(710,886 |
) |
|
8,918 |
|
||||
| (Benefit for) provision for income taxes |
|
(208,229 |
) |
|
9,142 |
|
|
(23,962 |
) |
|
10,385 |
|
||||
| (Loss) income from discontinued operations, net of tax |
|
(234,050 |
) |
|
1,006 |
|
|
(686,924 |
) |
|
(1,467 |
) |
||||
| Net (loss) income |
|
(420,362 |
) |
|
(115,984 |
) |
|
(977,605 |
) |
|
586,806 |
|
||||
| Less: Net (loss) income attributable to non-controlling interests |
|
(155,693 |
) |
|
(46,776 |
) |
|
(361,078 |
) |
|
244,809 |
|
||||
| Net (loss) income attributable to Endeavor Group Holdings, Inc. | $ |
(264,669 |
) |
$ |
(69,208 |
) |
$ |
(616,527 |
) |
$ |
341,997 |
|
||||
| (Loss) earnings per share of Class A common stock: | ||||||||||||||||
| Basic from continuing operations | $ |
(0.44 |
) |
$ |
(0.22 |
) |
$ |
(0.60 |
) |
$ |
1.15 |
|
||||
| Basic from discontinued operations |
|
(0.42 |
) |
|
(0.01 |
) |
|
(1.42 |
) |
|
(0.01 |
) |
||||
| Basic | $ |
(0.86 |
) |
$ |
(0.23 |
) |
$ |
(2.02 |
) |
$ |
1.14 |
|
||||
| Diluted from continuing operations | $ |
(0.44 |
) |
$ |
(0.24 |
) |
$ |
(0.60 |
) |
$ |
1.13 |
|
||||
| Diluted from discontinued operations |
|
(0.42 |
) |
|
(0.01 |
) |
|
(1.42 |
) |
|
(0.01 |
) |
||||
| Diluted | $ |
(0.86 |
) |
$ |
(0.25 |
) |
$ |
(2.02 |
) |
$ |
1.12 |
|
||||
| Weighted average number of shares used in computing (loss) earnings per share: | ||||||||||||||||
| Basic |
|
306,992,963 |
|
|
301,876,322 |
|
|
303,893,880 |
|
|
298,311,200 |
|
||||
| Diluted(1) |
|
306,992,963 |
|
|
300,640,142 |
|
|
303,893,880 |
|
|
301,305,267 |
|
||||
(1) The diluted weighted average number of shares of 306,992,963 and 303,893,880 for the three and nine months ended September 30, 2024, respectively, did not include any additional shares from securities which had an anti-dilutive impact on the calculation of (loss) earnings per share. |
||||||||
Securities that are anti-dilutive for the three and nine months ended September 30, 2024, are additional shares based on an assumed exchange of Endeavor Manager Units and Endeavor Operating Units into 145,050,978 shares, additional shares based on an assumed exchange of Endeavor Profits Units into shares of the Company’s Class A common stock, as well as additional shares from Stock Options, RSUs and Phantom Units. |
Segment Results |
|||||||||||||||||
(Unaudited) |
|||||||||||||||||
(In thousands) |
|||||||||||||||||
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||||
| Revenue: | |||||||||||||||||
| Owned Sports Properties | $ |
735,205 |
|
$ |
479,748 |
|
$ |
2,314,691 |
|
$ |
1,173,125 |
|
|||||
| Events, Experiences & Rights |
|
899,761 |
|
|
367,064 |
|
|
2,116,879 |
|
|
1,758,928 |
|
|||||
| Representation |
|
429,207 |
|
|
385,619 |
|
|
1,185,964 |
|
|
1,117,008 |
|
|||||
| Eliminations |
|
(32,383 |
) |
|
(12,884 |
) |
|
(74,826 |
) |
|
(27,888 |
) |
|||||
| Total Revenue | $ |
2,031,790 |
|
$ |
1,219,547 |
|
$ |
5,542,708 |
|
$ |
4,021,173 |
|
|||||
| Adjusted EBITDA: | |||||||||||||||||
| Owned Sports Properties | $ |
315,474 |
|
$ |
237,417 |
|
$ |
1,037,273 |
|
$ |
602,322 |
|
|||||
| Events, Experiences & Rights |
|
(67,970 |
) |
|
29,846 |
|
|
(40,804 |
) |
|
214,420 |
|
|||||
| Representation |
|
124,917 |
|
|
96,325 |
|
|
297,502 |
|
|
287,680 |
|
|||||
| Corporate and other |
|
(94,823 |
) |
|
(77,448 |
) |
|
(255,054 |
) |
|
(230,195 |
) |
|||||
Consolidated Balance Sheets |
|||||||||
(Unaudited) |
|||||||||
(In thousands, except share data) |
|||||||||
| September 30, | December 31, | ||||||||
|
2024 |
|
|
2023 |
|
||||
| ASSETS | |||||||||
| Current Assets: | |||||||||
| Cash and cash equivalents | $ |
1,004,129 |
|
$ |
1,166,526 |
|
|||
| Restricted cash |
|
325,147 |
|
|
278,456 |
|
|||
| Accounts receivable (net of allowance for doubtful accounts of |
|
1,029,559 |
|
|
810,857 |
|
|||
| Deferred costs |
|
250,051 |
|
|
606,207 |
|
|||
| Other current assets |
|
515,068 |
|
|
432,042 |
|
|||
| Current assets of discontinued operations |
|
220,883 |
|
|
170,459 |
|
|||
| Total current assets |
|
3,344,837 |
|
|
3,464,547 |
|
|||
| Property and equipment, net |
|
842,623 |
|
|
914,645 |
|
|||
| Operating lease right-of-use assets |
|
405,237 |
|
|
309,704 |
|
|||
| Intangible assets, net |
|
4,558,531 |
|
|
4,812,284 |
|
|||
| Goodwill |
|
9,519,126 |
|
|
9,517,143 |
|
|||
| Investments |
|
404,693 |
|
|
394,179 |
|
|||
| Deferred income taxes |
|
448,992 |
|
|
430,339 |
|
|||
| Other assets |
|
737,894 |
|
|
599,765 |
|
|||
| Long-term assets of discontinued operations |
|
515,991 |
|
|
1,102,167 |
|
|||
| Total assets | $ |
20,777,924 |
|
$ |
21,544,773 |
|
|||
| LIABILITIES, REDEEMABLE INTERESTS AND SHAREHOLDERS' EQUITY | |||||||||
| Current Liabilities: | |||||||||
| Accounts payable | $ |
541,431 |
|
$ |
462,361 |
|
|||
| Accrued liabilities |
|
1,132,911 |
|
|
684,390 |
|
|||
| Current portion of long-term debt |
|
2,323,825 |
|
|
58,894 |
|
|||
| Current portion of operating lease liabilities |
|
67,705 |
|
|
73,899 |
|
|||
| Deferred revenue |
|
509,754 |
|
|
802,344 |
|
|||
| Deposits received on behalf of clients |
|
311,880 |
|
|
262,436 |
|
|||
| Current portion of tax receivable agreement liability |
|
124,015 |
|
|
156,155 |
|
|||
| Other current liabilities |
|
51,223 |
|
|
97,190 |
|
|||
| Current liabilities of discontinued operations |
|
208,384 |
|
|
199,276 |
|
|||
| Total current liabilities |
|
5,271,128 |
|
|
2,796,945 |
|
|||
| Long-term debt |
|
2,904,272 |
|
|
4,969,417 |
|
|||
| Long-term operating lease liabilities |
|
378,953 |
|
|
279,042 |
|
|||
| Long-term tax receivable agreement liability |
|
744,948 |
|
|
834,298 |
|
|||
| Deferred tax liabilities |
|
448,618 |
|
|
446,861 |
|
|||
| Other long-term liabilities |
|
439,364 |
|
|
393,322 |
|
|||
| Long-term liabilities of discontinued operations |
|
101,711 |
|
|
102,377 |
|
|||
| Total liabilities |
|
10,288,994 |
|
|
9,822,262 |
|
|||
| Commitments and contingencies | |||||||||
| Redeemable non-controlling interests |
|
226,731 |
|
|
215,458 |
|
|||
| Shareholders' Equity: | |||||||||
| Class A common stock, |
|
3 |
|
|
3 |
|
|||
| Class B common stock, |
|
— |
|
|
— |
|
|||
| Class C common stock, |
|
— |
|
|
— |
|
|||
| Class X common stock, |
|
1 |
|
|
1 |
|
|||
| Class Y common stock, |
|
2 |
|
|
2 |
|
|||
| Additional paid-in capital |
|
5,000,001 |
|
|
4,901,922 |
|
|||
| Accumulated deficit |
|
(788,454 |
) |
|
(117,065 |
) |
|||
| Accumulated other comprehensive loss |
|
13,283 |
|
|
(157 |
) |
|||
| Total Endeavor Group Holdings, Inc. shareholders' equity |
|
4,224,836 |
|
|
4,784,706 |
|
|||
| Nonredeemable non-controlling interests |
|
6,037,363 |
|
|
6,722,347 |
|
|||
| Total shareholders' equity |
|
10,262,199 |
|
|
11,507,053 |
|
|||
| Total liabilities, redeemable interests and shareholders' equity | $ |
20,777,924 |
|
$ |
21,544,773 |
|
|||
Note Regarding Non-GAAP Financial Measures
This press release includes financial measures that are not calculated in accordance with
Adjusted EBITDA is a non-GAAP financial measure and is defined as net income (loss), excluding the results of discontinued operations, income taxes, net interest expense, depreciation and amortization, equity-based compensation, merger, acquisition and earn-out costs, certain legal costs and settlements, restructuring, severance and impairment charges, certain non-cash fair value adjustments, certain equity earnings (losses), net gains on sales of businesses, tax receivable agreement (“TRA”) liability adjustment, and certain other items, when applicable. Adjusted EBITDA margin is a non-GAAP financial measure defined as Adjusted EBITDA divided by Revenue.
Management believes that Adjusted EBITDA is useful to investors as it eliminates the significant level of non-cash depreciation and amortization expense that results from our capital investments and intangible assets recognized in business combinations, and improves comparability by eliminating the significant level of interest expense associated with our debt facilities, as well as income taxes and the TRA, which may not be comparable with other companies based on our tax and corporate structure.
Adjusted EBITDA and Adjusted EBITDA margin are used as the primary bases to evaluate our 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 our 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 our 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 our statements of cash flows.
We compensate 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 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 (loss) as indicators of our financial performance, as measures of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations. Although we use Adjusted EBITDA and Adjusted EBITDA margin as financial measures to assess the performance of our business, such use is limited because it does not include certain material costs necessary to operate our business. Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed as indications that our future results will be unaffected by unusual or nonrecurring items. These non-GAAP financial measures, as determined and presented by us, may not be comparable to related or similarly titled measures reported by other companies. Set forth below are reconciliations of our most directly comparable financial measures calculated in accordance with GAAP to these non-GAAP financial measures on a consolidated basis.
Adjusted EBITDA |
|||||||||||||||||
(Unaudited) |
|||||||||||||||||
(In thousands) |
|||||||||||||||||
| Three Months Ended September 30, |
Six Months Ended September 30, |
||||||||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||||
| Net (loss) income | $ |
(420,362 |
) |
$ |
(115,984 |
) |
$ |
(977,605 |
) |
$ |
586,806 |
|
|||||
| Loss (income) from discontinued operations, net of tax |
|
234,050 |
|
|
(1,006 |
) |
|
686,924 |
|
|
1,467 |
|
|||||
| (Benefit from) provision for income taxes |
|
113,774 |
|
|
20,853 |
|
|
(93,129 |
) |
|
195,521 |
|
|||||
| Interest expense, net |
|
108,134 |
|
|
82,271 |
|
|
302,531 |
|
|
257,811 |
|
|||||
| Depreciation and amortization |
|
135,524 |
|
|
66,602 |
|
|
416,556 |
|
|
171,715 |
|
|||||
| Equity-based compensation expense (1) |
|
50,831 |
|
|
61,441 |
|
|
162,559 |
|
|
200,984 |
|
|||||
| Merger, acquisition and earn-out costs (2) |
|
33,849 |
|
|
76,032 |
|
|
91,031 |
|
|
105,770 |
|
|||||
| Certain legal costs (3) |
|
6,790 |
|
|
8,322 |
|
|
26,622 |
|
|
12,233 |
|
|||||
| Legal settlement (4) |
|
40,000 |
|
|
— |
|
|
375,000 |
|
|
— |
|
|||||
| Restructuring, severance and impairment (5) |
|
5,362 |
|
|
48,852 |
|
|
65,776 |
|
|
70,788 |
|
|||||
| Fair value adjustment - equity investments (6) |
|
63 |
|
|
(148 |
) |
|
(37 |
) |
|
(929 |
) |
|||||
| Equity method losses - Fifth Season (7) |
|
3,456 |
|
|
4,594 |
|
|
10,784 |
|
|
19,697 |
|
|||||
| Net gain on sale of the Academy business (8) |
|
— |
|
|
— |
|
|
— |
|
|
(736,978 |
) |
|||||
| Tax receivable agreement liability adjustment (9) |
|
16 |
|
|
20,297 |
|
|
2,460 |
|
|
7,779 |
|
|||||
| Other (10) |
|
(33,889 |
) |
|
14,014 |
|
|
(30,555 |
) |
|
(18,437 |
) |
|||||
| Adjusted EBITDA | $ |
277,598 |
|
$ |
286,140 |
|
$ |
1,038,917 |
|
$ |
874,227 |
|
|||||
| Net (loss) income margin |
|
(20.7 |
%) |
|
(9.5 |
%) |
|
(17.6 |
%) |
|
14.6 |
% |
|||||
| Adjusted EBITDA margin |
|
13.7 |
% |
|
23.5 |
% |
|
18.7 |
% |
|
21.7 |
% |
|||||
______________ |
||
(1) |
|
Equity-based compensation represents primarily non-cash compensation expense associated with our equity-based compensation plans. |
|
|
|
|
|
The decrease for the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023 was primarily due to awards granted at the IPO under the Endeavor Group Holdings, Inc.'s 2021 Incentive Award Plan becoming fully vested partially offset by awards granted under the new TKO equity plan and the WWE plan assumed in connection with the TKO Transactions. Equity-based compensation was recognized in all segments and Corporate for three and nine months ended September 30, 2024 and 2023. |
|
|
|
(2) |
|
Includes (i) certain costs of professional advisors related to mergers, acquisitions, dispositions or joint ventures and (ii) fair value adjustments for contingent consideration liabilities related to acquired businesses and compensation expense for deferred consideration associated with selling shareholders that are required to retain our employees. |
|
|
Such costs for the three months ended September 30, 2024 primarily related to professional advisor costs, and includes approximately |
|
|
|
|
|
Such costs for the three months ended September 30, 2023 primarily related to professional advisor costs, which were approximately |
|
|
|
|
|
Such costs for the nine months ended September 30, 2024 primarily related to professional advisor costs, which were approximately |
|
|
|
|
|
Such costs for the nine months ended September 30, 2023 primarily related to professional advisor costs, which were approximately |
|
|
|
(3) |
|
Includes costs related to certain litigation or regulatory matters in our Owned Sports Properties and Events, Experiences & Rights segments and Corporate. |
|
|
|
(4) |
|
Relates to a legal settlement in our Owned Sports Properties segment. |
|
|
|
(5) |
|
Includes certain costs related to our restructuring activities and non-cash impairment charges. |
|
|
|
|
|
Such costs for the three months ended September 30, 2024 primarily related to restructuring expenses in all of our segments and Corporate. |
|
|
|
|
|
Such costs for the three and nine months ended September 30, 2023 primarily related to approximately |
|
|
|
|
|
Such costs for the nine months ended September 30, 2024 primarily related to an estimated loss of |
|
|
|
|
|
Such costs for the nine months ended September 30, 2023 primarily related to approximately |
|
|
|
(6) |
|
Includes the net change in fair value for certain equity investments with and without readily determinable fair values, based on observable price changes. |
|
|
|
(7) |
|
Relates to our share of losses for our investment in Fifth Season. |
|
|
|
(8) |
|
Relates to the gain recorded for the sale of the Academy business, net of transactions costs of |
|
|
|
(9) |
|
For the three and nine months ended September 30, 2024 and 2023, the adjustment for the tax receivable agreement liability related to a change in estimates of future TRA payments. |
|
|
|
(10) |
|
For the three months ended September 30, 2024, other was comprised primarily of gains of approximately |
|
|
|
|
|
For the three months ended September 30, 2023, other was comprised primarily of losses of approximately |
|
|
|
|
|
For the nine months ended September 30, 2024, other was comprised primarily of gains of approximately |
|
|
|
|
|
For the nine months ended September 30, 2023, other was comprised primarily of a gain of approximately |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241106630810/en/
Investors: investor@endeavorco.com
Press: press@endeavorco.com
Source: Endeavor Group Holdings
FAQ
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