TKO Group Earnings Call Highlights Media-Fueled Surge

TKO Group Holdings, Inc. ((TKO)) has held its Q4 earnings call. Read on for the main highlights of the call.

TKO Group Holdings’ latest earnings call struck a decidedly upbeat tone despite some near-term noise. Executives leaned into record media-rights deals, powerful margin expansion and strong free cash flow to argue that the business is entering a structurally more profitable phase. Temporary revenue headwinds, IMG softness and timing issues were acknowledged but framed as manageable within a robust growth trajectory.

Media Rights Windfall Locks In High-Margin Growth

TKO underscored transformational media-rights wins as the backbone of its story, led by UFC’s $7.7 billion deal with Paramount and WWE’s $1.6 billion pact with ESPN. Management now counts more than $15 billion of long-term media rights across UFC, WWE, PBR and Zuffa Boxing, describing them as recurring, high-margin revenue streams with built-in annual escalators that materially de-risk the growth outlook.

EBITDA Surges with Sharp Margin Expansion

Management highlighted a step-change in profitability as adjusted EBITDA jumped 47% year over year to $1.585 billion in 2025, with margins widening to 33.5%, more than 11 percentage points higher than 2024. The company’s 2026 guidance points to another leg up, with adjusted EBITDA expected between $2.24 billion and $2.29 billion and margins nearing 40%, implying roughly 600 basis points of additional expansion at the midpoint.

Revenue Momentum Builds into 2026

Despite a modest full-year revenue dip, the fourth quarter showcased improving top-line trends with revenue rising 12% to $1.038 billion and adjusted EBITDA up 30% to $281 million, lifting Q4 margins to 27%. For 2026, TKO is guiding revenue to a range of $5.675 billion to $5.775 billion, implying roughly 21% growth from 2025 and signaling confidence that new deals and events will drive a solid re-acceleration.

UFC and WWE Powerhouse Performance

The company’s core combat brands continued to deliver standout results, with UFC posting Q4 revenue of $401 million, up 17%, and adjusted EBITDA of $213 million, up 20%, for a hefty 53% margin. WWE was equally strong, with Q4 revenue up 21% to $360 million and adjusted EBITDA up 44% to $165 million, helping WWE exceed 50% margins for the full year and reach 46% in Q4 alone.

Partnerships and Streaming Engagement Scale Up

Commercial partnerships and fan engagement emerged as major growth levers, with UFC partnerships surging 39% in Q4 to $93 million and WWE partnerships up 57% to $36 million. Management pointed to 525 million hours of WWE content streamed on Netflix in the first year and nearly 5 million views for UFC 324 on Paramount+, the platform’s largest exclusive live event, and raised its 2030 partnerships revenue target from $1.0 billion to $1.2 billion.

Cash Generation Fuels Dividends and Buybacks

TKO emphasized its cash machine credentials, generating $1.159 billion of free cash flow in 2025 with a conversion rate of 73% of adjusted EBITDA and a normalized target above 60%. That firepower funded approximately $452 million in dividends and about $900 million of Class A share repurchases, and the company signaled continued shareholder returns with plans to buy back up to an additional $1 billion of stock.

Live Events Strength and Financial Incentive Upside

Live-event demand remained strong, with UFC selling out six events in the fourth quarter and WWE delivering its highest-grossing arena date tied to John Cena’s farewell. Beyond ticket and hospitality revenue, TKO expects to realize more than $300 million in aggregate value from financial incentive packages in 2026, normalized around $240 million, and is targeting between $380 million and $420 million from these incentives by 2030.

Building New Platforms Through Integration and Boxing

Management highlighted progress in integrating IMG and On Location to expand rights, production and premium hospitality capabilities, noting On Location’s role at more than 65 events. The call also spotlighted the launch of Zuffa Boxing, which already has an initial media-rights deal on Paramount+ for the U.S., Canada and Latin America and is moving toward additional equity tranches in the joint venture as milestones are met.

Explaining the Full-Year Revenue Decline

Amid the generally bullish narrative, TKO acknowledged that 2025 revenue declined 3% to $4.735 billion from $4.884 billion in 2024, a headline that could unsettle some investors. Management attributed a meaningful portion of the drop to timing factors, including the 2024 event mix and impacts related to the Paris Olympics cycle, and argued that these effects should reverse as the calendar normalizes.

IMG Weakness Weighs on Results

The IMG segment was a notable soft spot, with fourth-quarter revenue down 9% to $248 million and adjusted EBITDA swinging to a $4 million loss, a $20 million deterioration year over year. The margin turned negative 2% from a positive 6% previously, as the absence of the biennial Arabian Gulf Cup and other timing variability hit both revenue and profitability, though management characterized these issues as cyclical rather than structural.

Timing Pressures on WWE Live Events

WWE’s live events and hospitality business faced timing-driven pressure in the quarter, with revenue falling 27% to $68 million as fewer premium live event nights and a shifted Saudi event reduced the Q4 slate. Management cautioned that the first quarter of 2026 will also lack a Saudi Fight Night that helped boost Q1 2025 comparisons, setting the stage for some near-term volatility in live-events metrics.

One-Off Cash Swings Distort Free Cash Flow

While free cash flow was strong overall, TKO flagged sizable one-time swings, including a $297 million net collection at On Location related to the 2026 FIFA World Cup and roughly $300 million of outflows tied to antitrust settlement payments and related fees. Looking to 2026, the company expects free cash flow to be pressured by the timing of World Cup distributions and a back-weighted payment schedule under the Paramount deal, which will create negative working-capital effects.

White House Event: Marketing Spend, Not Profit Driver

Executives described the planned UFC event at the White House as a strategic branding play with a deliberately modest financial return profile, estimating total costs could exceed $60 million. They expect to monetize roughly half through sellable inventory, implying an approximate $30 million net loss and stressing that this is a one-time awareness investment rather than a template for future events.

Rising Tax Burden to Clip Future Cash Flows

Investors were warned to expect materially higher cash taxes in 2026 as taxable net income rises alongside stronger adjusted EBITDA and certain 2025 tax benefits roll off. This will drive larger cash tax payments at the public company and mandatory tax distributions from the operating partnership, creating a headwind for net free cash flow even as underlying profitability continues to climb.

PR Noise Around Zuffa Boxing Super Fight

Management addressed reputational noise around Zuffa Boxing’s decision to sign Conor Benn for a one-off super fight that drew public and competitor criticism over the reported purse size. Executives emphasized that partner Sela is covering the purse and that the arrangement is limited to a single fight, while acknowledging the episode has stirred some short-term friction in the combat sports ecosystem.

Guidance Signals Another Step-Change in 2026

TKO’s 2026 outlook calls for revenue of $5.675 billion to $5.775 billion and adjusted EBITDA of $2.24 billion to $2.29 billion, implying around 21% and 43% growth respectively, with margins approaching 40%. Management pointed to over $15 billion in media rights, more than $300 million of financial incentive packages, growing partnerships, contributions from the World Cup and Milano Olympics, and continued capital returns, while flagging near-term working-capital and tax headwinds.

The call ultimately painted a picture of a company trading near-term timing headaches and segment softness for long-dated, contracted growth and expanding cash returns. For investors, the key takeaway is that structurally higher margins and locked-in media rights appear to outweigh the temporary drags from IMG, calendar shifts and cash-flow volatility, leaving TKO positioned as a scaled, high-margin player in global sports entertainment.