The Company did not record any impairment charges on its nonmarketable equity investments during the three months ended March 31, 2026 and 2025. In addition, there were no observable price change events that were completed during the three months ended March 31, 2026 and 2025.
8. DEBT
The following is a summary of the Company’s outstanding debt (in thousands):
|
|
|
|
|
|
|
|
|
|
|
As of |
|
|
|
March 31, |
|
|
December 31, |
|
|
|
2026 |
|
|
2025 |
|
First Lien Term Loan (due November 2031) |
|
$ |
4,605,967 |
|
|
$ |
3,717,569 |
|
Other Secured Loans |
|
|
62,285 |
|
|
|
63,067 |
|
Notes payable |
|
|
2,902 |
|
|
|
2,552 |
|
Total principal |
|
|
4,671,154 |
|
|
|
3,783,188 |
|
Unamortized discount |
|
|
(11,637 |
) |
|
|
(9,761 |
) |
Unamortized debt issuance cost |
|
|
(19,597 |
) |
|
|
(11,303 |
) |
Total debt |
|
|
4,639,920 |
|
|
|
3,762,124 |
|
Less: Current portion of long-term debt |
|
|
(45,887 |
) |
|
|
(38,061 |
) |
Total long-term debt |
|
$ |
4,594,033 |
|
|
$ |
3,724,063 |
|
First Lien Term Loan (due November 2031)
As of March 31, 2026 and December 31, 2025, the Company had $4.6 billion and $3.7 billion, respectively, outstanding under a credit agreement dated August 18, 2016 (as amended and/or restated, the “First Lien Credit Agreement”) by and among TKO Guarantor, LLC or “TKO Guarantor” (f/k/a “UFC Guarantor, LLC” or “Zuffa Guarantor, LLC”), TKO Worldwide Holdings, LLC or “TKO Worldwide Holdings” (f/k/a “UFC Holdings, LLC”), as borrower, the lenders party thereto and Goldman Sachs Bank USA, as administrative agent, which was entered into in connection with the acquisition of Zuffa by EGH in 2016. TKO OpCo and TKO are holding companies with limited business operations, cash flows, assets and liabilities other than the equity interests in the borrower entities TKO Guarantor and TKO Worldwide Holdings.
On March 10, 2026 (the “Closing Date”), TKO Worldwide Holdings entered into an amendment to the First Lien Credit Agreement to, among other things, (i) provide for an additional $900.0 million incremental first lien secured term loan ("Incremental Term Loan") as a fungible increase to the existing first lien secured term loans of $3.7 billion (the “Existing Term Loans” and together with the Incremental Term Loan, the "Term Loans"), (ii) upsize the revolving credit facility under the existing credit agreement from $205.0 million to $350.0 million (the “Revolving Credit Facility” and together with the Term Loans, the “Credit Facilities”), and (iii) make certain other changes to the First Lien Credit Agreement. The Credit Facilities are secured by liens on substantially all of the assets of TKO Guarantor and TKO Worldwide Holdings and certain subsidiaries thereof. On the Closing Date, TKO Worldwide Holdings borrowed the full $900.0 million of the Incremental Term Loan.
The Incremental Term Loan bears interest at a variable interest rate equal to either, at the option of TKO Worldwide Holdings, Term SOFR or the ABR plus, in each case, an applicable margin. SOFR term loans accrue interest at a rate equal to Term SOFR plus 2.00%, with a SOFR floor of 0.00%. ABR term loans accrue interest at a rate equal to (i) the highest of (a) the Federal Funds Effective Rate plus 0.5%, (b) the prime rate in effect for such day, and (c) Term SOFR for a one-month interest period plus (ii) 1.00%, with an ABR floor of 1.00%. The Incremental Term Loan has the same amortization schedule as the existing first lien term loans, amortizing at 1% per annum, and matures on November 21, 2031.
The Company capitalized $14.8 million in transaction costs related to the amendments associated with the First Lien Credit Agreement during the three months ended March 31, 2026. Of these amounts, $11.0 million was capitalized as a component of long-term debt related to the Incremental Term Loan and $3.8 million was capitalized as a component of other assets related to increasing the borrowing capacity of the Revolving Credit Facility.
The loans made pursuant to the upsized Revolving Credit Facility bear interest at a variable interest rate equal to either, at the option of TKO Worldwide Holdings, Term SOFR or the ABR plus, in each case, an applicable margin. SOFR revolving loans accrue interest at a rate equal to Term SOFR plus 1.50%-1.75%, depending on the First Lien Leverage Ratio (as defined in the First Lien Credit Agreement), with a SOFR floor of 0.00%. ABR revolving loans accrue interest at a rate equal to (i) the highest of (a) the Federal Funds Effective Rate plus 0.5%, (b) the prime rate in effect for such day, and (c) Term SOFR for a one-month interest period plus (ii) 0.50%-0.75%, with an ABR floor of 1.00%. The Revolving Credit Facility matures on September 15, 2030.
As of March 31, 2026 and December 31, 2025, there was no outstanding balance under the Revolving Credit Facility.
The First Lien Credit Agreement contains a financial covenant that requires the Company to maintain, commencing with the fiscal quarter ended June 30, 2025, a First Lien Leverage Ratio of Consolidated First Lien Debt to Consolidated EBITDA of 8.25-to-1. The Company is only required to comply with the foregoing financial covenant if the sum of outstanding borrowings under the Revolving Credit Facility (excluding any letters of credit, whether drawn or undrawn) is greater than the greater of (i) $85.0 million and (ii) forty percent of the borrowing capacity of the Revolving Credit Facility. This covenant did not apply as of March 31, 2026 and December 31, 2025, as the Company had no borrowings outstanding under the Revolving Credit Facility.
The Credit Facilities restrict the ability of certain subsidiaries of the Company to make distributions and other payments to the Company. These restrictions include exceptions for, among other things, (1) amounts necessary to make tax payments, (2) a limited annual amount for employee equity repurchases, (3) distributions required to fund certain parent entities, (4) other specific allowable situations and (5) a general restricted payment basket, which generally provides for no restrictions as long as the Total Leverage Ratio (as defined in the First Lien Credit Agreement) is less than 5.0x.
As of March 31, 2026 and December 31, 2025, TKO Worldwide Holdings had outstanding letters of credit of $1.1 million.
The estimated fair values of the Company’s outstanding term loans are based on quoted market values for the debt. As of March 31, 2026 and December 31, 2025, the face amount of the Company’s term loans approximated their fair value.
Other Secured Loans
As of March 31, 2026 and December 31, 2025, the Company had $62.3 million and $63.1 million, respectively, of other secured loans outstanding, which were entered into in order to finance the purchase of certain assets. These loans are secured by the underlying assets of the Company and bear interest at rates ranging from SOFR plus 1.70% to SOFR plus 2.25%. Principal amortization is payable in monthly installments with any remaining balance payable on the final maturity dates of November 1, 2028 and January 1, 2031.
One of the Company's other secured loans contains a financial covenant that requires the Company to maintain a Debt Service Coverage Ratio of consolidated debt to Adjusted EBITDA as defined in the applicable loan agreements of no less than 1.15-to-1 as measured on an annual basis. As of March 31, 2026 and December 31, 2025, the Company was in compliance with its financial debt covenant under this secured loan.
9. STOCKHOLDERS’ EQUITY
Endeavor Share Purchases
During the three months ended March 31, 2025, Endeavor OpCo purchased 1,897,650 shares of TKO Class A common stock for an aggregate amount of $300.9 million under EGH and its subsidiaries' Rule 10b5-1 trading plan for the Company. The trading plan was terminated on February 14, 2025.
Endeavor Asset Acquisition — Equity Consideration
On February 28, 2025, as consideration paid in connection with the Endeavor Asset Acquisition, the Company issued approximately 26.54 million Common Units of TKO OpCo and an equivalent number of corresponding shares of TKO Class B common stock to Endeavor OpCo and certain of EGH's other subsidiaries. The equity consideration increased the nonredeemable non-controlling interest in TKO OpCo, with a corresponding increase to additional paid-in capital.
Capital Return Program
TKO Share Repurchases
During the three months ended March 31, 2026, the following share repurchases of TKO Class A common stock were made under the Company's previously announced $2.0 billion share repurchase program:
•During January 1, 2026 through February 26, 2026, the Company repurchased 187,819 shares of TKO Class A common stock for an aggregate purchase price of $38.3 million based on an aggregate volume-weighted average price of $203.97 per share. All shares repurchased have been retired. The share repurchases were made pursuant to a Rule 10b5-1 trading plan previously executed in September 2025 which expired on February 26, 2026.
•On March 10, 2026, the Company entered into an accelerated share repurchase agreement (the “ASR Agreement”) with Morgan Stanley & Co. LLC to repurchase $800.0 million of shares of its Class A common stock. Under the ASR Agreement, the Company paid $800.0 million on March 11, 2026 and received an initial delivery of 3,136,179 shares.
12. INCOME TAXES
TKO Group Holdings, Inc. was incorporated as a Delaware corporation in March 2023. As the sole managing member of TKO OpCo, TKO Group Holdings, Inc. ultimately controls the business affairs of TKO OpCo. TKO Group Holdings, Inc. is subject to corporate income taxes on its share of taxable income of TKO OpCo. TKO OpCo is treated as a partnership for U.S. federal income tax purposes and is therefore generally not subject to U.S. corporate income tax. TKO OpCo’s foreign subsidiaries are subject to entity-level taxes. TKO OpCo’s U.S. subsidiaries are subject to withholding taxes on sales in certain foreign jurisdictions which are included as a component of foreign current taxes. TKO OpCo is subject to entity-level income taxes in certain U.S. state and local jurisdictions.
In accordance with ASC 740, each interim period is considered integral to the annual period and tax expense is generally determined using an estimate of the annual effective income tax rate (“AETR”). The Company records income tax expense each quarter using the estimated AETR to provide for income taxes on a current year-to-date basis, adjusted for discrete items that are noted in the relevant period. In accordance with the authoritative guidance for accounting for income taxes in interim periods, the Company computed its income tax provision for the three months ended March 31, 2026 and 2025, respectively, adjusted for discrete items as noted.
The provision for income taxes for the three months ended March 31, 2026 and 2025 was $34.0 million and $21.2 million, respectively, based on pretax income of $282.1 million and $184.2 million, respectively. The effective tax rate was 12.0% and 11.5% for the three months ended March 31, 2026 and 2025, respectively. The tax provision for the three and three months ended March 31, 2026 differs from tax benefit in the same period in 2025 primarily due to the increase in pretax income. Any tax balances reflected on the Company’s consolidated balance sheets as of March 31, 2026 will be adjusted accordingly to reflect the actual financial results for the year ending December 31, 2026.
The Company’s effective tax rate differs from the U.S. federal statutory rate primarily due to state and local income taxes, non-controlling interest, withholding taxes in foreign jurisdictions that are not based on net income, and increased income subject to tax in foreign jurisdictions which differ from the U.S. federal statutory income tax rate.
As of March 31, 2026 and December 31, 2025, the Company had unrecognized tax benefits of $43.1 million and $36.7 million, respectively, for which the Company is unable to make a reasonable and reliable estimate of the period in which these liabilities will be settled with the respective tax authorities. We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense (benefit) on the Company's consolidated statement of operations. Accrued interest and penalties of $15.8 million and $14.4 million are included as a component of the related tax liabilities on the Company's consolidated balance sheets as of March 31, 2026 and December 31, 2025, respectively. Of the $58.9 million combined unrecognized tax benefits and accrued interest and penalties as of March 31, 2026, $43.2 million is subject to an offsetting indemnity asset, as set forth in the Endeavor Asset Acquisition Agreement, which is included as a component of Other assets on the Company's consolidated balance sheets.
The Company records valuation allowances against its net deferred tax assets when it is more likely than not that all, or a portion, of a deferred tax asset will not be realized. The Company evaluates the realizability of its deferred tax assets by assessing the likelihood that its deferred tax assets will be recovered based on all available positive and negative evidence, including historical results, reversals of deferred tax liabilities, estimates of future taxable income, tax planning strategies and results of operations.
Other Matters
In December 2022, the Organization for Economic Co-operation and Development (“OECD”) proposed Global Anti-Base Erosion Rules, which provides for changes to numerous long-standing tax principles including the adoption of a global minimum tax rate of 15% for multinational enterprises ("GloBE rules"). Various jurisdictions have adopted or are in the process of enacting legislation to adopt GloBE rules and other countries are expected to adopt GloBE rules in the future. While changes in tax laws in the various countries in which the Company operates can negatively impact the Company’s results of operations and financial position in future periods, the Company’s impact related to the adoption of the GloBE rules was not material to the Company’s consolidated financial position. Recent G7 Country (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States) statements released a side-by-side (SbS) safe harbor that exempts certain U.S.-parented groups from these rules. The side-by-side Safe Harbor provides that Multinational Enterprise Groups with an Ultimate Parent Entity (UPE) in a jurisdiction with qualified SbS regime will not be subject to the Income Inclusion Rule and Undertaxed Profits Rule if they elect the SbS Safe Harbor, applicable as of the beginning of 2026. The Company continues to monitor United States and global legislative actions as well as administrative guidance related to Pillar Two for potential impacts.
13. COMMITMENTS AND CONTINGENCIES
Legal Proceedings
The Company is involved in legal proceedings, claims and governmental investigations arising in the normal course of business. The types of allegations that arise in connection with such legal proceedings vary in nature, but can include, among others, contract, employment, tax and intellectual property matters. The Company evaluates all cases and records liabilities for losses from legal proceedings when the Company determines that it is probable that the outcome will be unfavorable and the amount, or potential range, of loss can be reasonably estimated. While any outcome related to litigation or such governmental proceedings cannot be predicted with certainty, management believes that the outcome of these matters, except as otherwise may be discussed below, individually or in the aggregate, will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.
UFC Legal Proceedings
Five related class-action lawsuits were filed against Zuffa between December 2014 and March 2015 by a total of eleven former UFC fighters. These substantially identical lawsuits, were transferred to the United States District Court for the District of Nevada and consolidated into a single action in June 2015, captioned Le et al. v. Zuffa, LLC, No. 2:15-cv-1045-RFB-BNW (D. Nev.) (the “Le” case). The Le case alleged that Zuffa violated Section 2 of the Sherman Act by monopsonizing an alleged market for the services of elite professional MMA athletes. The fighter plaintiffs claimed that Zuffa’s alleged conduct injured them by artificially depressing their compensation for their services. On September 26, 2024, following the court’s denial of an earlier proposed settlement agreement, the parties agreed to settle all claims asserted in the Le case for an aggregate amount of $375.0 million payable in installments over an agreed-upon period of time by the Company (the “Updated Settlement Agreement”). The district court approved the Updated Settlement Agreement on February 6, 2025. In connection with the Updated Settlement Agreement, the Company recorded charges of $375.0 million during the year ended December 31, 2024, which are included as a component of selling, general and administrative expenses in the consolidated statements of operations, and completed payment of the settlement amount in June 2025.
On June 24, 2021, another lawsuit, Johnson et al. v. Zuffa, LLC et al., No. 2:21-cv-1189-RFB-BNW (D. Nev.) (the “Johnson” case), was filed by a putative class of former UFC fighters and covering the period from July 1, 2017, to the present. The Johnson case alleges substantially similar claims to the Le case and seeks both damages and injunctive relief. No trial date has been set in the Johnson action and the parties are in the midst of the discovery process.
On May 23, 2025, Cirkunovs v. Zuffa, LLC et al., No. 2:25-cv-00914-RFB-BNW (D. Nev.) (the “Cirkunovs” case), was filed by a putative class of former UFC fighters who signed contracts with arbitration clauses and class action waiver agreements during the period July 1, 2017, to the present. The complaint in Cirkunovs contains nearly identical allegations to Johnson and further alleges that the arbitration clauses and class action waivers contained in the fighters’ contracts are unenforceable. The Cirkunovs complaint seeks injunctive relief invalidating these arbitration clauses and class action waivers, as well as treble damages under the antitrust laws and attorneys’ fees and costs. Zuffa filed a motion to compel arbitration, and the Court has allowed Plaintiffs to seek discovery regarding the arbitration clause before ruling on Zuffa’s motion. Defendants appealed the district court’s order permitting discovery rather than ruling on Zuffa’s motion to compel arbitration. No trial date has been set in Cirkunovs.
On May 29, 2025, a similar complaint was filed by a current Professional Fighters League fighter, Phil Davis. Davis v. Zuffa, LLC et al., No. 2:25-cv-00946-RFB-BNW (D. Nev.) (the “Davis” case). The Davis complaint also asserts nearly identical allegations as in Johnson and Cirkunovs, except Davis seeks to represent a class of fighters who competed in U.S.-bouts for non-UFC promotions from May 29, 2021, onward, excluding all currently contracted UFC fighters, as well as the Johnson and Cirkunovs class members. The Davis case alleges UFC’s alleged anticompetitive conduct impairs the ability of non-UFC fighters to advance their careers and artificially suppresses non-UFC fighter pay. The Davis case does not seek monetary damages and instead seeks injunctive relief. On March 31, 2026, the district court denied Zuffa’s motion to dismiss Davis. No trial date has been set in Davis.
On February 26, 2026, two plaintiffs who allegedly paid to view UFC broadcasts filed a putative antitrust class action against Zuffa, TKO Group Holdings, Inc., TKO OpCo, and EGH, Costantino, et al. v. Zuffa, LLC, et al., No. 2:26-cv-00539-RFB-EJY (D. Nev) (the “Costantino” case). The complaint alleges, like the complaints in Le, Johnson, Cirkunovs, and Davis, that the defendants monopsonized the market for professional MMA fighter services and monopolized the market for professional MMA bouts in the United States. The Costantino plaintiffs allege that this resulted in increased prices for consumers who purchased (i) UFC pay-per-view events and (ii) the Paramount+ streaming service that now televises UFC bouts. The plaintiffs assert claims under Section 2 of the Sherman Act and certain state laws and seek unspecified damages on behalf of classes of persons and entities in relevant states that either (i) purchased UFC pay per view events through January 1, 2026, or (ii) subscribed to Paramount+ from January 1, 2026 to the present. They also seek to assert equitable relief claims on behalf of a purported nationwide class of Paramount+ subscribers.
WWE Legal Proceedings
As announced in June 2022, a Special Committee of independent members of WWE’s board of directors (the “Special Committee”) was formed to investigate alleged misconduct by WWE’s then-Chief Executive Officer, Vincent K. McMahon (the “Special Committee investigation”). The Special Committee investigation is complete and, in January 2024, Mr. McMahon resigned from his position as Executive Chair and member of the Company's board of directors, as well as other positions, employment and otherwise, at TKO and its subsidiaries. No charges have been brought against the Company.
On January 25, 2024, a former WWE employee filed a lawsuit against WWE, Mr. McMahon and another former WWE executive, John Laurinaitis, in the United States District Court for the District of Connecticut alleging, among other things, that she was sexually assaulted by Mr. McMahon and Mr. Laurinaitis and asserting claims under the Trafficking Victims Protection Act. On May 30, 2025, Mr. Laurinaitis was dismissed from the matter with prejudice pursuant to a stipulation of dismissal. WWE has moved to compel the matter to arbitration, and its motion is pending.
On October 23, 2024, five unnamed plaintiffs filed a lawsuit against Mr. McMahon, Linda McMahon, WWE, and TKO in Maryland court, alleging sexual abuse by a former World Wrestling Federation ring announcer during the 1980s. On April 28, 2025, plaintiffs filed an amended complaint adding three unnamed plaintiffs, but no new defendants. On December 10, 2025, the court dismissed the claims asserted by one of the unnamed plaintiffs (and certain other claims asserted against Ms. McMahon) but otherwise denied defendants' motions to dismiss. In April 2026, the court permitted the Attorney General of Maryland to intervene for purposes of briefing defendants’ constitutional challenges to the state law on which the plaintiffs’ claims are premised.
On November 17, 2023, a purported former stockholder of WWE, Laborers’ District Council and Contractors’ Pension Fund of Ohio, filed a verified class action complaint on behalf of former WWE stockholders in the Court of Chancery of the State of Delaware (“Delaware Court”). On November 20, 2023, another purported former WWE stockholder, Dennis Palkon, filed a substantially similar verified class action complaint. Both complaints allege breach of fiduciary duty claims against former WWE directors Mr. McMahon, Nick Khan, Paul Levesque, George A. Barrios, Steve Koonin, Michelle D. Wilson, and Frank A. Riddick III (collectively, the “Individual Defendants”), arising out of the TKO Transactions. On April 24, 2024, the City of Pontiac Reestablished General Employees’ Retirement System, a third purported former WWE stockholder, filed another verified class action complaint, which similarly alleges breach of fiduciary duty claims against the Individual Defendants and added claims against WWE and TKO for denying stockholders their appraisal rights under DGCL § 262, as well as claims against EGH for aiding and abetting the alleged breaches of fiduciary duties and for civil conspiracy to violate DGCL § 262. On May 2, 2024, the Court entered an order consolidating all actions under the caption In re World Wrestling Entertainment, Inc. Merger Litigation, C.A. No. 2023-1166-JTL (“Consolidated Action”). Lead plaintiffs subsequently designated the Palkon complaint as operative. As a result, WWE, TKO and EGH are no longer defendants. On October 24, 2024, the Delaware Court entered a stipulation dismissing all claims against Messrs. Koonin and Riddick, who, therefore, are no longer defendants. The remaining Individual Defendants filed answers to the complaint on October 28, 2024. Fact discovery closed on December 19, 2025, and expert discovery closed on April 10, 2026. Trial is scheduled for June 2026.
IMG Legal Proceedings
As set forth in the Endeavor Asset Acquisition Agreement and pursuant to other agreements between the Company and Endeavor Group Holdings, Inc., Endeavor Group Holdings, Inc. is obligated to indemnify the Company for, and pay directly, any judgment entered against IMG or settlement entered into with respect to IMG, including with respect to claims or actions brought by other parties related to the proceedings described below.
In July 2017, the Italian Competition Authority (“ICA”) issued a decision opening an investigation into alleged breaches of competition law in Italy, involving inter alia IMG, and relating to bidding for certain media rights of the Serie A and Serie B football leagues. In April 2018, the European Commission conducted on-site inspections at a number of companies that are involved with sports media rights, including IMG. The inspections were part of an ongoing investigation into the sector and into potential violations of certain antitrust laws that may have taken place within it. IMG investigated these ICA matters, as well as other regulatory compliance matters. In May 2019, the ICA completed its investigation and fined IMG approximately EUR 0.3 million. As part of its decision, the ICA acknowledged IMG's cooperation and ongoing compliance efforts since the investigation commenced. In July 2019, three football clubs (the “Original Plaintiffs”) and in June 2020, the Serie A football league (Lega Nazionale Professionisti Serie A or “Lega Nazionale,” and together with the Original Plaintiffs, the “Plaintiffs”) each filed separate claims against IMG and certain other unrelated parties in the Court of Milan, Italy, alleging that IMG engaged in anti-competitive practices with regard to bidding for certain media rights of the Serie A and Serie B football leagues. The Plaintiffs seek damages from all defendants deriving from the lower value of the media rights in amounts totaling EUR 554.6 million in the aggregate relating to the Original Plaintiffs and EUR 1,750 million relating to Lega Nazionale, along with attorneys’ fees and costs. Since December 2020, four additional clubs have each filed requests to intervene in the Lega Nazionale proceedings and individually seek to claim damages deriving from the lower value of the media rights and totaling EUR 251.5 million. The Original Plaintiffs and these four additional clubs are also seeking additional damages relating to alleged lost profits and additional charges, totaling EUR 1,675 million. Ten other clubs also filed requests to intervene in support of Lega Nazionale’s claim or alternatively to individually claim damages deriving from the lower value of the media rights totaling EUR 284.9 million, in the case of five clubs, and unspecified amounts (to be quantified as a percentage of the total amount sought by Lega Nazionale) in the other five cases. Collectively, the
interventions of these 14 clubs are the “Interventions.” By judgment issued on May 8, 2024, the Court of Milan ruled that the clubs have a concurrent right to bring a claim, and Lega Nazionale is entitled to retain only 10% of the aggregate loss suffered (if any) by the clubs deriving from the lower value of the media rights. IMG reserved the right to appeal the partial ruling. In December 2022, one further football club filed a separate claim against IMG and certain other unrelated parties seeking damages from all defendants deriving from the lower value of the media rights totaling EUR 326.9 million, in addition to EUR 513.5 million in alleged additional damages relating to lost profits and additional charges. During April to June 2025, two additional clubs intervened in the proceedings in support of Lega Nazionale’s claims, but did not bring new claims. During December 2025 to January 2026, two additional clubs intervened in the proceedings in support of Lega Nazionale’s claims or alternatively to individually claim damages deriving from the lower value of the media rights in the amount of EUR 277.8 million. Currently, the total number of Interventions amounts to 18 clubs.
At the end of April 2026, the parties agreed to settle all claims asserted in the above-described litigation. The settlement, which includes any obligations of IMG, will be paid directly by a subsidiary of Endeavor Group Holdings, Inc. pursuant to its indemnification obligations. IMG may also be subject to regulatory and other claims and actions with respect to these ICA and other regulatory matters.
Endeavor Asset Acquisition Litigation
On March 27, 2026, a purported stockholder of TKO, Jonathan Jordan, filed a verified stockholder derivative complaint on behalf of TKO in the Court of Chancery of the State of Delaware, captioned Jordan v. Endeavor Group Holdings, Inc., et al., C.A. No. 2026-0422-LWW (the “Jordan” case). Jordan alleges breach of fiduciary duty and unjust enrichment claims arising out of the Endeavor Asset Acquisition against Endeavor Group Holdings, Inc.; Silver Lake Group, L.L.C. and various affiliate funds; TKO directors Ariel Emanuel, Egon Durban, Dwayne Johnson, Nick Khan, Mark Shapiro, Peter Bynoe, Steven Koonin, Nancy Tellem, Carrie Wheeler, Bradley Keywell, Jonathan Kraft, and Sonya Medina; and TKO officers Ariel Emanuel, Seth R. Krauss, Andrew Schleimer, and Mark Shapiro. Jordan also alleges claims against Moelis & Company LLC for aiding and abetting the alleged breaches of fiduciary duties. Among other things, Jordan seeks equitable relief and monetary damages. The defendants have not yet appeared in the case, and no trial date has been set.
14. SEGMENT INFORMATION
The Company has three reportable segments: UFC, WWE and IMG to align with how the Company’s CODM manages the businesses, evaluates financial results, and makes key operating decisions. The UFC segment consists entirely of the operations of the Company's UFC business and the WWE segment consists entirely of the operations of the Company's WWE business. The IMG segment consists of the operations of the IMG business and On Location.
The Company also reports the results for the “Corporate and Other” group. The Corporate and Other group reflects operations not allocated to the UFC, WWE or IMG segments and primarily consists of general and administrative expenses as well as operations of PBR and boxing. Boxing includes the joint venture with Sela Company for the Zuffa Boxing brand as well as promotional services TKO provides for boxing events.
Revenue from our Corporate and Other group principally consists of media rights fees associated with the distribution of PBR's programming content; ticket sales and financial incentive packages associated with live events; partnerships and marketing; and consumer products licensing agreements of PBR-branded products. Revenue also consists of management and promotional fees for services primarily related to boxing.
General and administrative expenses relate largely to corporate activities, including information technology, facilities, legal, human resources, finance and accounting, treasury, investor relations, corporate communications, community relations and compensation to TKO’s management and board of directors, which support all reportable segments. Corporate and Other expenses also include service fees paid by the Company to EGH and its subsidiaries under the Services Agreement, inclusive of fees paid for revenue producing services related to the segments. On the closing date of the Endeavor Asset Acquisition, the Services Agreement between EGH and TKO OpCo was terminated and the Transition Services Agreement was entered into between the EGH Parties, TWI and the TKO Parties.
As disclosed within Note 2, Summary of Significant Accounting Policies, the historical financial data includes the recast combined results of TKO and the Acquired Businesses for all periods prior to February 28, 2025. All prior period amounts related to the segment change have been retrospectively reclassified to conform to the new presentation.
The profitability measure employed by the Company’s CODM for allocating resources and assessing operating performance is Adjusted EBITDA. The Company defines Adjusted EBITDA as net income, excluding income taxes, net interest expense, depreciation and amortization, equity-based compensation, merger, acquisition and earnout costs, certain legal costs, restructuring, severance and impairment charges, foreign exchange (gains) losses, and certain other items when applicable. Adjusted EBITDA includes amortization expenses directly related to supporting the operations of the Company’s segments, including content
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the information set forth in our unaudited consolidated financial statements and related notes included in this Quarterly Report and with our audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Annual Report”). This discussion contains forward-looking statements based upon management’s current plans, expectations and beliefs that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various known and unknown factors, including those set forth under Part I, Item 1A. “Risk Factors” of our 2025 Annual Report or in other sections of the 2025 Annual Report and this Quarterly Report.
On February 28, 2025, TKO Operating Company, LLC, a Delaware limited liability company (“TKO OpCo”), and TKO Group Holdings, Inc., a Delaware corporation (together with TKO OpCo, the “TKO Parties”), completed the Endeavor Asset Acquisition, acquiring the IMG business, including certain businesses operating under the IMG brand, On Location, and Professional Bull Riders (“PBR”) (collectively, the “Acquired Businesses”), pursuant to a transaction agreement, dated as of October 23, 2024 (as amended, the “Endeavor Asset Acquisition Agreement”), by and among the TKO Parties, Endeavor OpCo, IMG Worldwide, LLC, a Delaware limited liability company (“IMG Worldwide” and, together with Endeavor OpCo, the “EGH Parties”), and Trans World International, LLC, a Delaware limited liability company and subsidiary of EGH (“TWI”).
The Endeavor Asset Acquisition was treated as a merger between entities under common control, due to EGH’s control of both TKO and the Acquired Businesses. As a result of the common control acquisition, the net assets of the Acquired Businesses were combined with those of TKO at their historical carrying amounts, and the financial statements have been retrospectively recast on a combined basis for historical periods prior to February 28, 2025 because they were under common control for all periods presented.
The following is a discussion and analysis of, and a comparison between, our results of operations for the three months ended March 31, 2026 and 2025. Certain prior period amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.
Overview
TKO is a premium sports and entertainment company which operates leading combat sports and sports entertainment companies. The Company monetizes its brands through four principal activities: (i) Media rights, production and content, (ii) Live events and hospitality, (iii) Partnerships and marketing, and (iv) Consumer products licensing.
TKO was formed through the combination of Zuffa Parent, LLC (n/k/a TKO Operating Company, LLC) which owns and operates the Ultimate Fighting Championship (“UFC”), a preeminent combat sports brand, and World Wrestling Entertainment, Inc. (n/k/a World Wrestling Entertainment, LLC) (“WWE”), a renowned sports entertainment business (the “TKO Transactions”). The TKO Transactions unite two complementary sports and sports entertainment properties in a single company.
Endeavor Asset Acquisition
In connection with the Endeavor Asset Acquisition Agreement, the TKO Parties acquired the Acquired Businesses for total consideration of approximately $3.25 billion plus a $50 million purchase price adjustment (based on the volume-weighted average sales price of TKO Class A common stock for the twenty five trading days ending on October 23, 2024). The EGH Parties received approximately 26.54 million common units of TKO OpCo and subscribed for an equivalent number of corresponding shares of TKO’s Class B common stock.
With respect to the historical financial data of the Acquired Businesses for the periods prior to the completion of the Endeavor Asset Acquisition, the historical financial data has been derived from the combined financial statements and accounting records of Endeavor Group Holdings, Inc. and were prepared on a standalone basis in accordance with U.S. generally accepted accounting principles (“GAAP”) and may not be indicative of what they would have been had the Acquired Businesses been independent standalone companies, nor are they necessarily indicative of the Acquired Businesses’ future financial data.
With respect to the historical combined financial statements of the Company, they include all revenues and costs directly attributable to the Acquired Businesses and reflect allocations of certain Endeavor Group Holdings, Inc.'s corporate, infrastructure and shared services expenses, including centralized research, legal, human resources, payroll, finance and accounting, employee benefits, real estate, insurance, information technology, telecommunications, treasury, and other expenses. Where possible, these charges were allocated based on direct usage, with the remainder allocated on a pro rata basis of headcount and gross profit, or other allocation methodologies that are considered to be a reasonable reflection of the utilization of services provided or the benefit received by the Acquired Businesses during the periods presented. The allocations may not, however, reflect the expense the Acquired Businesses would have incurred as standalone companies for the periods presented. These costs also may not be indicative
of the expenses that the Acquired Businesses will incur in the future or would have incurred if the Acquired Businesses had obtained these services from a third party.
Accordingly, as discussed above, the historical financial data presented within this discussion and analysis of our financial condition and results of operations includes the consolidated historical financial data of TKO and the Acquired Businesses for all periods presented.
Segments
As of March 31, 2026, we operated our business under three reportable segments, UFC, WWE and IMG. In addition, we also report results for the “Corporate and Other” group, which incurs revenue and expenses that are not allocated to the business segments. Refer to Note 14, Segment Information, within the unaudited consolidated financial statements included within this Quarterly Report on Form 10-Q.
UFC
The UFC segment reflects the business operations of UFC. Revenue from our UFC segment principally consists of media rights fees associated with the distribution of its programming content; ticket sales and financial incentive packages associated with the business’s global live events; partnerships and marketing; and consumer products licensing agreements of UFC-branded products.
WWE
The WWE segment reflects the business operations of WWE. Revenue from our WWE segment principally consists of media rights fees associated with the distribution of its programming content; ticket sales and financial incentive packages associated with the business’s global live events; partnerships and marketing; and consumer products licensing agreements of WWE-branded products.
IMG
The IMG segment reflects the operations of the following businesses:
•The IMG business is a leading global sports marketing company, specializing in media rights management and sales, multi-channel content production and distribution, brand partnerships, strategic consulting, digital services, and event management.
•On Location is a premium experiential hospitality business, offering ticketing, curated guest experiences, live event production and travel management services.
Revenue from our IMG segment principally consists of media rights sales, commissions, production services and studio fees; ticket and premium experience sales; and partnerships and marketing.
Corporate and Other
Corporate and Other reflects operations not allocated to the UFC, WWE or IMG segments and primarily consists of general and administrative expenses as well as operations of PBR and boxing. PBR owns the Professional Bull Riders brand, which organizes bull riding competitions, promotes the sport and its athletes through live events and broadcasts. Boxing includes the joint venture with Sela Company for the Zuffa Boxing brand as well as promotional services TKO provides for boxing events.
Revenue from our Corporate and Other group principally consists of media rights fees associated with the distribution of PBR's programming content; ticket sales and financial incentive packages associated with live events; partnerships and marketing; and consumer products licensing agreements of PBR-branded products. Revenue also consists of management and promotional fees for services primarily related to boxing.
General and administrative expenses relate largely to corporate activities, including information technology, facilities, legal, human resources, finance and accounting, treasury, investor relations, corporate communications, community relations and compensation to TKO’s management and board of directors, which support all reportable segments. Corporate and Other expenses also include service fees paid by the Company to Endeavor Group Holdings, Inc. under the Services Agreement, inclusive of fees paid for revenue producing services related to the segments. On the closing date of the Endeavor Asset Acquisition, the Services Agreement between EGH and TKO OpCo was terminated and the Transition Services Agreement was entered into between the EGH Parties, TWI and the TKO Parties.
Components of Our Operating Results
Revenue
TKO primarily generates revenue via domestic and international media rights fees, production services and studio fees, ticket sales at live events, hospitality sales and financial incentive packages, partnerships and marketing, and consumer products licensing.
Direct Operating Costs
TKO’s direct operating costs primarily include costs associated with our athletes and talent, marketing, venue costs related to live events, expenses associated with the production of events and experiences, event ticket sales and fees for media rights. These costs include required payments related to media sales agency contracts when minimum sales guarantees are not met, materials and related costs associated with consumer product merchandise sales, commissions and direct costs with distributors, as well as certain service fees paid to Endeavor Group Holdings, Inc. under the Services Agreement and Transition Services Agreement.
Selling, General and Administrative
TKO’s selling, general and administrative expenses primarily include personnel costs as well as rent, travel, professional service costs, overhead required to support operations, and certain service fees paid to Endeavor Group Holdings, Inc. under the Services Agreement and Transition Services Agreement.
Provision for Income Taxes
TKO Group Holdings, Inc. was incorporated as a Delaware corporation in March 2023. As the sole managing member of TKO OpCo, TKO Group Holdings, Inc. ultimately controls the business affairs of TKO OpCo. TKO Group Holdings, Inc. is subject to corporate income taxes on its share of taxable income of TKO OpCo. TKO OpCo is treated as a partnership for U.S. federal income tax purposes and is therefore generally not subject to U.S. corporate income tax. TKO OpCo’s foreign subsidiaries are subject to entity-level taxes. TKO OpCo’s U.S. subsidiaries are subject to withholding taxes on sales in certain foreign jurisdictions which are included as a component of foreign current taxes. TKO OpCo is subject to entity-level income taxes in certain U.S. state and local jurisdictions. For the periods prior to the Endeavor Asset Acquisition, the Acquired Businesses primarily consisted of U.S. flow through entities that are not themselves subject to U.S. federal income taxes as well as some foreign subsidiaries and U.S. regarded corporations subject to entity level taxes. Income taxes related to the Acquired Businesses reflected in the consolidated tax provision are attributable to U.S. regarded entities and foreign entities subject to tax in their respective jurisdictions.
RESULTS OF OPERATIONS
(dollars in millions, except where noted)
The following is a discussion of our consolidated results of operations for the three months ended March 31, 2026 and 2025. This information is derived from our accompanying consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2026 |
|
|
2025 |
|
Revenue |
|
$ |
1,596.9 |
|
|
$ |
1,268.8 |
|
Operating expenses: |
|
|
|
|
|
|
Direct operating costs |
|
|
734.4 |
|
|
|
567.6 |
|
Selling, general and administrative expenses |
|
|
380.2 |
|
|
|
363.3 |
|
Depreciation and amortization |
|
|
143.8 |
|
|
|
100.5 |
|
Total operating expenses |
|
|
1,258.4 |
|
|
|
1,031.4 |
|
Operating income |
|
|
338.5 |
|
|
|
237.4 |
|
Other expenses: |
|
|
|
|
|
|
Interest expense, net |
|
|
(60.6 |
) |
|
|
(44.8 |
) |
Other income (expense), net |
|
|
4.3 |
|
|
|
(8.4 |
) |
Income before income taxes and equity earnings of affiliates |
|
|
282.2 |
|
|
|
184.2 |
|
Provision for income taxes |
|
|
34.0 |
|
|
|
21.2 |
|
Income before equity earnings of affiliates |
|
|
248.2 |
|
|
|
163.0 |
|
Equity earnings of affiliates, net of tax |
|
|
1.6 |
|
|
|
2.5 |
|
Net income |
|
|
249.8 |
|
|
|
165.5 |
|
Less: Net income attributable to non-controlling interests |
|
|
160.4 |
|
|
|
107.1 |
|
Net income attributable to TKO Group Holdings, Inc. |
|
$ |
89.4 |
|
|
$ |
58.4 |
|
Revenue
Revenue increased by $328.1 million, or 26%, to $1,596.9 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
•UFC revenue increased by $41.5 million, or 12%. This increase was primarily due to $51.2 million of increased media rights, production and content revenue from higher media rights fees resulting from increases in contractual revenues, including the new content distribution agreement with Paramount that became effective in January 2026, partially offset by two fewer Fight Night events compared to the prior year. Additionally, UFC generated $2.8 million of higher partnerships revenue from new sponsors and increases in fees from renewals, partially offset by the impact of two fewer Fight Night events compared to the prior year. These increases were partially offset by a decline of $10.1 million in live event revenue driven primarily by lower financial incentive packages which were associated with a Fight Night event held in Saudi Arabia in the prior year, which more than offset higher ticket sales revenue compared to the prior year. Further, a decrease of $2.4 million in consumer products licensing revenue resulted from lower royalties on UFC-branded products compared to the prior year.
•WWE revenue increased by $84.2 million, or 22%. This increase was due to $47.2 million of increased live event revenue, primarily driven by the financial incentive package for Royal Rumble in Riyadh, Saudi Arabia. The increase was also due to $30.1 million of higher media rights, production and content revenue from media rights fees resulting from increases in contractual revenues, including the content distribution agreements with Netflix and ESPN. Additionally, WWE generated $6.3 million of increased consumer products licensing revenue related to the sale of WWE-branded products, including mobile games and collectibles, compared to the prior year.
•IMG revenue increased by $179.1 million, or 38%. This increase was attributable to $177.5 million of revenue generated at On Location primarily driven by hospitality related revenues from the 2026 Milano Cortina Olympics. Additionally, higher revenues of $1.7 million from the IMG business driven by the impact of new production agreements and commissions for a boxing event were partially offset by the biennial impact of the Arabian Gulf Cup.
•Corporate and Other revenue increased by $19.5 million, or 36%. This increase was primarily driven by $9.9 million of higher management fees for services primarily related to boxing. Additionally, PBR revenue increased by $9.5 million, or 17%, due to higher media rights fees primarily driven by the content distribution agreement with Paramount that became effective in November 2025, as well as higher partnerships revenue from new sponsors and increases in fees from renewals.
Direct Operating Costs
Direct operating costs increased by $166.8 million, or 29%, to $734.4 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
•UFC direct operating costs increased by $9.0 million, or 10%. This increase was due to $8.6 million of higher athlete, production, marketing and other event-related costs primarily associated with UFC 324, which was the inaugural event under the new content distribution agreement with Paramount.
•WWE direct operating costs increased by $16.6 million, or 13%. This increase was primarily driven by $18.3 million of higher talent and production costs associated with WWE's weekly television programming and premium live events, including Royal Rumble in Riyadh, Saudi Arabia compared to that event being held domestically in the prior year.
•IMG segment direct operating costs increased by $138.2 million, or 42%. This increase was primarily driven by incremental costs of $139.4 million from On Location, largely related to the impact of the 2026 Milano Cortina Olympics. Direct operating costs declined by $1.2 million in the IMG business as the biennial impact of the Arabian Gulf Cup was partially offset by increased costs associated with new production agreements.
•Corporate and Other direct operating costs decreased by $2.5 million, or 7%. This decrease was primarily driven by service fees paid to EGH in the prior year for various operational functions that support revenue generating activities pursuant to the Services Agreement. The Services Agreement was terminated during the first quarter of 2025.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased by $16.9 million, or 5%, to $380.2 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
•UFC selling, general and administrative expenses increased by $5.5 million, or 11%. This increase was primarily driven by $7.2 million of higher personnel and travel costs compared to the prior year.
•WWE selling, general and administrative expenses increased by $3.2 million, or 4%. The increase is primarily attributable to $3.6 million of higher travel costs driven by the increase in number of international events compared to the prior year.
•IMG segment selling, general, and administrative expenses increased by $17.5 million, or 22%. This increase was primarily driven by $10.4 million of higher personnel and travel costs, as well as other costs associated with the 2026 Milano Cortina Olympics at On Location.
•Corporate and Other selling, general and administrative expenses decreased by $7.4 million, or 5%. This decrease was primarily driven by $37.4 million of lower professional fees associated with strategic transactions, primarily the Endeavor Asset Acquisition, and the impact of $21.7 million of lower corporate allocated costs from EGH to the Acquired Businesses, compared to the prior year. These decreases were mostly offset by $35.0 million of higher personnel and other operating expenses, as well as $16.7 million of higher legal fees associated with certain litigation matters.
Depreciation and Amortization
Depreciation and amortization increased by $43.3 million, or 43%, to $143.8 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily driven by a $44.1 million acceleration of WWE customer relationship assets following the modification of a related media revenue arrangement during the third quarter of 2025.
Interest Expense, Net
Interest expense, net increased by $15.8 million, or 35%, to $60.6 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. This increase was driven primarily by incremental interest expense from higher debt levels maintained during the current year period as compared to the prior year period due to the $1.0 billion and $900.0 million incremental first lien term loans entered in September 2025 and March 2026, respectively.
Other Income (Expense), Net
Other income (expense), net for the three months ended March 31, 2026 and 2025 includes net gains and losses on foreign currency transactions and other miscellaneous nonoperating gains and losses. During the three months ended March 31, 2025, other
income (expense), net also includes a net loss of $4.7 million on the sale of certain equity method investments, partially offset by a gain of $1.3 million on the sale of PBR's former headquarters.
Provision for Income Taxes
For the three months ended March 31, 2026, TKO recorded a provision for income taxes of $34.0 million compared to $21.2 million for the three months ended March 31, 2025. This change was primarily related to increased pretax income for the three months ended March 31, 2026.
Net Income Attributable to Non-Controlling Interests
Net income attributable to non-controlling interests was income of $160.4 million and $107.1 million for the three months ended March 31, 2026 and 2025, respectively. The change was primarily due to the change in the amount of reported net income for the three months ended March 31, 2026 as compared to the reported net income for the three months ended March 31, 2025.
Segment Results of Operations
As described above, the following discussion and analysis of our financial condition and results of operations presents three reportable segments as of March 31, 2026: UFC, WWE and IMG, which were determined to be our reportable segments following the close of the Endeavor Asset Acquisition. Our chief operating decision maker evaluates the performance of our segments based on segment Revenue and segment Adjusted EBITDA. Management believes segment Adjusted EBITDA is indicative of operational performance and ongoing profitability, and Adjusted EBITDA is used to evaluate the operating performance of our segments and for planning and forecasting purposes, including the allocation of resources and capital. Segment operating results reflect earnings before corporate expenses. These segment results of operations should be read in conjunction with our discussion of the Company’s consolidated results of operations included above.
The following tables set forth Revenue and Adjusted EBITDA for each of our segments for the three months ended March 31, 2026 and 2025:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2026 |
|
|
2025 |
|
Revenue: |
|
|
|
|
|
|
UFC |
|
$ |
401.2 |
|
|
$ |
359.7 |
|
WWE |
|
|
475.7 |
|
|
|
391.5 |
|
IMG |
|
|
655.4 |
|
|
|
476.3 |
|
Total revenue from reportable segments |
|
|
1,532.3 |
|
|
|
1,227.5 |
|
Corporate and Other |
|
|
73.9 |
|
|
|
54.4 |
|
Eliminations |
|
|
(9.3 |
) |
|
|
(13.1 |
) |
Total Revenue |
|
$ |
1,596.9 |
|
|
$ |
1,268.8 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2026 |
|
|
2025 |
|
Adjusted EBITDA: |
|
|
|
|
|
|
UFC |
|
$ |
254.5 |
|
|
$ |
227.4 |
|
WWE |
|
|
256.1 |
|
|
|
193.9 |
|
IMG |
|
|
97.3 |
|
|
|
73.5 |
|
Total Adjusted EBITDA from reportable segments |
|
|
607.9 |
|
|
|
494.8 |
|
Corporate and Other |
|
|
(58.1 |
) |
|
|
(77.4 |
) |
Total Adjusted EBITDA |
|
$ |
549.8 |
|
|
$ |
417.4 |
|
UFC
The following table sets forth our UFC segment results for the three months ended March 31, 2026 and 2025:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2026 |
|
|
2025 |
|
Revenue: |
|
|
|
|
|
|
Media rights, production and content |
|
$ |
275.3 |
|
|
$ |
224.1 |
|
Live events and hospitality |
|
|
48.5 |
|
|
|
58.6 |
|
Partnerships and marketing |
|
|
67.1 |
|
|
|
64.3 |
|
Consumer products licensing and other |
|
|
10.3 |
|
|
|
12.7 |
|
Total Revenue |
|
$ |
401.2 |
|
|
$ |
359.7 |
|
|
|
|
|
|
|
|
Direct operating costs |
|
$ |
98.6 |
|
|
$ |
89.7 |
|
Selling, general and administrative expenses |
|
$ |
48.1 |
|
|
$ |
42.6 |
|
Adjusted EBITDA |
|
$ |
254.5 |
|
|
$ |
227.4 |
|
Adjusted EBITDA margin |
|
|
63 |
% |
|
|
63 |
% |
|
|
|
|
|
|
|
UFC Operating Metrics: |
|
|
|
|
|
|
Number of events |
|
|
|
|
|
|
Numbered events |
|
|
3 |
|
|
|
3 |
|
Fight Nights |
|
|
6 |
|
|
|
8 |
|
Total events |
|
|
9 |
|
|
|
11 |
|
|
|
|
|
|
|
|
Location of events |
|
|
|
|
|
|
United States |
|
|
6 |
|
|
|
7 |
|
International |
|
|
3 |
|
|
|
4 |
|
Total events |
|
|
9 |
|
|
|
11 |
|
WWE
The following table sets forth our WWE segment results for the three months ended March 31, 2026 and 2025:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2026 |
|
|
2025 |
|
Revenue: |
|
|
|
|
|
|
Media rights, production and content |
|
$ |
281.7 |
|
|
$ |
251.6 |
|
Live events and hospitality |
|
|
123.5 |
|
|
|
76.3 |
|
Partnerships and marketing |
|
|
26.2 |
|
|
|
25.6 |
|
Consumer products licensing and other |
|
|
44.3 |
|
|
|
38.0 |
|
Total Revenue |
|
$ |
475.7 |
|
|
$ |
391.5 |
|
|
|
|
|
|
|
|
Direct operating costs |
|
$ |
138.6 |
|
|
$ |
122.1 |
|
Selling, general and administrative expenses |
|
$ |
81.0 |
|
|
$ |
75.5 |
|
Adjusted EBITDA |
|
$ |
256.1 |
|
|
$ |
193.9 |
|
Adjusted EBITDA margin |
|
|
54 |
% |
|
|
50 |
% |
|
|
|
|
|
|
|
WWE Operating Metrics: |
|
|
|
|
|
|
Number of events |
|
|
|
|
|
|
Premium live events |
|
|
3 |
|
|
|
3 |
|
Televised events |
|
|
44 |
|
|
|
40 |
|
Non-televised events |
|
|
33 |
|
|
|
18 |
|
Total events |
|
|
80 |
|
|
|
61 |
|
|
|
|
|
|
|
|
Location of events |
|
|
|
|
|
|
United States |
|
|
59 |
|
|
|
47 |
|
International |
|
|
21 |
|
|
|
14 |
|
Total events |
|
|
80 |
|
|
|
61 |
|
IMG
The following table sets forth our IMG segment results for the three months ended March 31, 2026 and 2025:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2026 |
|
|
2025 |
|
Revenue: |
|
|
|
|
|
|
Media rights, production and content |
|
$ |
160.2 |
|
|
$ |
161.3 |
|
Live events and hospitality |
|
|
467.7 |
|
|
|
288.5 |
|
Partnerships and marketing |
|
|
21.5 |
|
|
|
22.3 |
|
Consumer products licensing and other |
|
|
6.0 |
|
|
|
4.2 |
|
Total Revenue |
|
$ |
655.4 |
|
|
$ |
476.3 |
|
|
|
|
|
|
|
|
Direct operating costs |
|
$ |
463.2 |
|
|
$ |
325.0 |
|
Selling, general and administrative expenses |
|
$ |
94.9 |
|
|
$ |
77.8 |
|
Adjusted EBITDA |
|
$ |
97.3 |
|
|
$ |
73.5 |
|
Adjusted EBITDA margin |
|
|
15 |
% |
|
|
15 |
% |
|
|
|
|
|
|
|
IMG Business Operating Metrics: |
|
|
|
|
|
|
Number of clients with events (1) |
|
|
|
|
|
|
Rights |
|
|
66 |
|
|
|
74 |
|
Studios |
|
|
76 |
|
|
|
88 |
|
Event management |
|
|
23 |
|
|
|
22 |
|
Total |
|
|
165 |
|
|
|
184 |
|
|
|
|
|
|
|
|
(1) Represents unique clients generating revenue in the period; quarterly counts may include repeats. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
On Location Operating Metrics (1) |
|
March 31, 2026 |
|
|
March 31, 2025 |
|
|
|
Number of Events |
|
|
Packages Sold |
|
|
Number of Events |
|
|
Packages Sold |
|
NFL |
|
|
24 |
|
|
|
33,314 |
|
|
|
26 |
|
|
|
32,325 |
|
Collegiate Sports |
|
|
67 |
|
|
|
71,663 |
|
|
|
58 |
|
|
|
72,001 |
|
Combat Sports |
|
|
11 |
|
|
|
1,910 |
|
|
|
15 |
|
|
|
4,639 |
|
Other Sports |
|
|
10 |
|
|
|
13,855 |
|
|
|
8 |
|
|
|
10,024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) On Location metrics do not include non-recurring events (e.g., Olympics). |
|
Corporate and Other
Corporate and Other revenue primarily relates to media rights fees associated with the distribution of PBR's programming content; ticket sales and financial incentive packages associated with live events; partnerships and marketing; and consumer products licensing agreements of PBR-branded products. Revenue also consists of management and promotional fees for services primarily related to boxing. Corporate and Other expenses relate to direct operating costs and general and administrative expenses attributable to PBR as well as general and administrative expenses largely related to corporate activities, including information technology, facilities, legal, human resources, finance and accounting, treasury, investor relations, corporate communications, community relations and compensation to TKO’s management and board of directors, which support each of the reportable segments. Corporate and Other expenses also include service fees paid by the Company to Endeavor related to corporate activities as well as revenue generating activities under the Services Agreement, prior to its termination on February 28, 2025. As discussed above, on the closing date of the Endeavor Asset Acquisition, the Services Agreement between TKO OpCo and Endeavor was terminated and a Transition Services Agreement has been entered into between the EGH Parties, TWI and the TKO Parties.
The following table sets forth results for Corporate and Other for the three months ended March 31, 2026 and 2025:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2026 |
|
|
2025 |
|
Revenue |
|
$ |
73.9 |
|
|
$ |
54.4 |
|
Adjusted EBITDA |
|
$ |
(58.1 |
) |
|
$ |
(77.4 |
) |
The following table sets forth our operating metrics for PBR for the three months ended March 31, 2026 and 2025:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2026 |
|
|
2025 |
|
PBR Operating Metrics: |
|
|
|
|
|
|
Number of events: |
|
|
|
|
|
|
Unleash The Beast ("UTB") |
|
|
13 |
|
|
|
13 |
|
Teams |
|
|
— |
|
|
|
— |
|
Velocity/Challenger |
|
|
21 |
|
|
|
27 |
|
Other |
|
|
2 |
|
|
|
7 |
|
Total events |
|
|
36 |
|
|
|
47 |
|
|
|
|
|
|
|
|
Location of events: |
|
|
|
|
|
|
United States |
|
|
34 |
|
|
|
45 |
|
International |
|
|
2 |
|
|
|
2 |
|
Total events |
|
|
36 |
|
|
|
47 |
|
Adjusted EBITDA for the three months ended March 31, 2026 increased by $19.3 million, or 25%, compared to the three months ended March 31, 2025. This increase was primarily driven by the impact of $21.7 million of lower corporate allocated costs from Endeavor Group Holdings, Inc. to the Acquired Businesses and $9.9 million of incremental revenue from higher management fees for services primarily related to boxing. Additionally, PBR revenue increased by $9.5 million, or 17%, due to higher media rights fees and partnerships revenue. These revenue increases were partially offset by $21.8 million of higher cost of personnel and other operating expenses compared to the prior year.
NON-GAAP FINANCIAL MEASURES
Adjusted EBITDA is a non-GAAP financial measure and is defined as net income, excluding income taxes, net interest expense, depreciation and amortization, equity-based compensation, merger, acquisition and earnout costs, certain legal costs, restructuring, severance and impairment charges, foreign exchange (gains) losses, and certain other items when applicable. Adjusted EBITDA margin is a non-GAAP financial measure defined as Adjusted EBITDA divided by Revenue.
TKO management believes that Adjusted EBITDA and Adjusted EBITDA margin are useful to investors as these measures eliminate the significant level of non-cash depreciation and amortization expense that results from its capital investments and intangible assets, and improve comparability by eliminating the significant level of interest expense associated with TKO’s debt facilities, as well as income taxes which may not be comparable with other companies based on TKO’s tax and corporate structure.
Adjusted EBITDA and Adjusted EBITDA margin are used as the primary bases to evaluate TKO’s 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 TKO’s 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 TKO’s 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 TKO’s statements of cash flows.
TKO management compensates 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 TKO’s 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 as indicators of TKO’s financial performance, as measures of discretionary cash available to it to invest in the growth of its business or as measures of cash that will be available to TKO to meet its obligations. Although TKO uses Adjusted EBITDA and Adjusted EBITDA margin as financial measures to assess the performance of its business, such use is limited because it does not include certain material costs necessary to operate TKO’s business. TKO’s presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed as indications that its future results will be unaffected by unusual or nonrecurring items. These non-GAAP financial measures, as determined and presented by TKO, may not be comparable to related or similarly titled measures reported by other companies. Set forth below are reconciliations of TKO’s most directly comparable financial measures calculated in accordance with GAAP to these non-GAAP financial measures on a consolidated basis.
Adjusted EBITDA and Adjusted EBITDA Margin
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2026 |
|
|
2025 |
|
Reconciliation of Net Income to Adjusted EBITDA |
|
|
|
|
|
|
Net income |
|
$ |
249.8 |
|
|
$ |
165.5 |
|
Provision for income taxes |
|
|
34.0 |
|
|
|
21.2 |
|
Interest expense, net |
|
|
60.6 |
|
|
|
44.8 |
|
Depreciation and amortization |
|
|
143.8 |
|
|
|
100.5 |
|
Equity-based compensation expense (1) |
|
|
39.6 |
|
|
|
30.3 |
|
Merger, acquisition and earnout costs (2) |
|
|
2.4 |
|
|
|
39.8 |
|
Certain legal costs (3) |
|
|
23.2 |
|
|
|
6.5 |
|
Restructuring, severance and impairment (4) |
|
|
0.4 |
|
|
|
1.5 |
|
Foreign exchange (gains) and losses (5) |
|
|
(3.3 |
) |
|
|
4.9 |
|
Other adjustments (6) |
|
|
(0.7 |
) |
|
|
2.4 |
|
Total Adjusted EBITDA |
|
$ |
549.8 |
|
|
$ |
417.4 |
|
Net income margin |
|
|
16 |
% |
|
|
13 |
% |
Adjusted EBITDA margin |
|
|
34 |
% |
|
|
33 |
% |
(1)Equity-based compensation represents non-cash compensation expense for various awards issued under the TKO 2023 Incentive Award Plan, awards assumed in connection with the acquisition of WWE in September 2023, and awards issued under Endeavor Group Holdings, Inc.’s 2021 Plan.
(2)Includes (i) certain costs of professional advisors related to strategic transactions, primarily the Endeavor Asset Acquisition and (ii) certain costs related to integration initiatives resulting from the Endeavor Asset Acquisition.
(3)Includes costs, net of insurance recoveries, related to certain litigation matters including antitrust lawsuits for UFC and stockholder litigation related to WWE and Endeavor.
(4)Includes costs resulting from the Company’s cost reduction programs.
(5)Includes gains and losses on foreign exchange transactions.
(6)Includes other miscellaneous nonoperating gains and losses. During the three months ended March 31, 2025, other adjustments includes a net loss of $4.7 million on the sale of certain equity method investments, partially offset by a gain of $1.3 million on the sale of PBR’s former headquarters.
Liquidity and Capital Resources
Sources and Uses of Cash
Cash flows from operations are used to fund TKO’s day-to-day operations, revenue-generating activities, and routine capital expenditures, as well as service its long-term debt, and are expected to be used to fund our capital return programs.
First Lien Term Loan (due November 2031)
As of March 31, 2026 and December 31, 2025, we had $4.6 billion and $3.7 billion, respectively, outstanding under a credit agreement dated August 18, 2016 (as amended and/or restated, the “First Lien Credit Agreement”). On March 10, 2026, TKO Worldwide Holdings entered into an amendment to the First Lien Credit Agreement to, among other things, (i) provide for an additional $900.0 million incremental first lien secured term loan (“Incremental Term Loan”) as a fungible increase to the existing first lien secured term loans of $3.7 billion (the “Existing Term Loans” and together with the Incremental Term Loan, the “Term Loans”), (ii) upsize the revolving credit facility under the existing credit agreement from $205.0 million to $350.0 million (the “Revolving Credit Facility” and together with the Term Loans, the “Credit Facilities”), and (iii) make certain other changes to the First Lien Credit Agreement. As of March 31, 2026 and December 31, 2025, there were no borrowings outstanding under the Revolving Credit Facility.
The Incremental Term Loan bears interest at a variable interest rate equal to either, at the option of TKO Worldwide Holdings, Term SOFR or the ABR plus, in each case, an applicable margin. SOFR term loans accrue interest at a rate equal to Term SOFR plus 2.00%, with a SOFR floor of 0.00%. ABR term loans accrue interest at a rate equal to (i) the highest of (a) the Federal Funds Effective Rate plus 0.5%, (b) the prime rate in effect for such day, and (c) Term SOFR for a one-month interest period plus (ii) 1.00%, with an ABR floor of 1.00%. The Incremental Term Loan has the same amortization schedule as the existing first lien term loans, amortizing at 1% per annum, and matures on November 21, 2031.
The loans made pursuant to the upsized Revolving Credit Facility bear interest at a variable interest rate equal to either, at the option of TKO Worldwide Holdings, Term SOFR or the ABR plus, in each case, an applicable margin. SOFR revolving loans accrue interest at a rate equal to Term SOFR plus 1.50%-1.75%, depending on the First Lien Leverage Ratio (as defined in the First Lien Credit Agreement), with a SOFR floor of 0.00%. ABR revolving loans accrue interest at a rate equal to (i) the highest of (a) the Federal Funds Effective Rate plus 0.5%, (b) the prime rate in effect for such day, and (c) Term SOFR for a one-month interest period plus (ii) 0.50%-0.75%, with an ABR floor of 1.00%. The Revolving Credit Facility matures on September 15, 2030.
During the three months ended March 31, 2026, we capitalized $14.8 million in transaction costs related to the amendments associated with the First Lien Credit Agreement. Of these amounts, $11.0 million was capitalized as a component of long-term debt related to the Incremental Term Loan and $3.8 million was capitalized as a component of other assets related to increasing the borrowing capacity of the Revolving Credit Facility.
Other Secured Loans
As of March 31, 2026 and December 31, 2025, the Company had $62.3 million and $63.1 million, respectively, of other secured loans outstanding, which were entered into in order to finance the purchase of certain assets. Principal amortization is payable in monthly installments with any remaining balance payable on the final maturity dates of November 1, 2028 and January 1, 2031.
Covenants and Restrictions on Dividends
The First Lien Credit Agreement contains a financial covenant that requires the Company to maintain, commencing with the fiscal quarter ended June 30, 2025, a First Lien Leverage Ratio of Consolidated First Lien Debt to Consolidated EBITDA of 8.25-to-1; however, the Company is only required to comply with this covenant if outstanding borrowings under the Revolving Credit Facility, excluding letters of credit, exceed specified thresholds. In addition, one of the Company’s other secured loans contains a financial covenant that requires the Company to maintain a Debt Service Coverage Ratio of no less than 1.15-to-1, as defined in the applicable loan agreement. The Credit Facilities also restrict the ability of certain subsidiaries of the Company to make distributions and other payments to the Company, subject to various exceptions, including amounts necessary to make tax payments, a limited annual amount for employee equity repurchases, distributions required to fund certain parent entities and a general restricted payment basket that generally provides for no restrictions as long as the Total Leverage Ratio (as defined in the First Lien Credit
Agreement) is less than 5.0x. As of March 31, 2026, the Company was not subject to the financial covenant under the First Lien Credit Agreement and was in compliance with the financial covenant under its other secured loan.
For additional information regarding the Company's debt arrangements, see Note 8, Debt, to the accompanying interim consolidated financial statements.
Capital Return Program
During the three months ended March 31, 2026, we continued to return capital to shareholders through share repurchases and dividends. From January 1, 2026 through February 26, 2026, we repurchased 187,819 shares for $38.3 million under our previously existing Rule 10b5-1 trading plan. On March 10, 2026, we entered into an accelerated share repurchase agreement (the “ASR Agreement”) to repurchase $800.0 million of our Class A common stock and received an initial delivery of 3,136,179 shares. On March 10, 2026, we also entered into a new Rule 10b5-1 trading plan for up to $200.0 million of additional repurchases, which becomes effective upon completion of the ASR Agreement.
On May 6, 2026, the Company announced that its board of directors has authorized up to an additional $1.0 billion of repurchases of its Class A common stock. This authorization is incremental to the Company's previously announced $2.0 billion share repurchase program.
During the three months ended March 31, 2026, our board declared a quarterly cash dividend of $0.78 per share, compared to $0.38 per share in the prior-year period. The dividend represented TKO’s share of pro rata distributions made by TKO OpCo to its equity holders.
Cash Flows Overview
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
2026 |
|
|
2025 |
|
Net cash provided by operating activities |
|
$ |
694.5 |
|
|
$ |
162.8 |
|
Net cash used in investing activities |
|
$ |
(21.5 |
) |
|
$ |
(31.0 |
) |
Net cash used in financing activities |
|
$ |
(127.5 |
) |
|
$ |
(185.7 |
) |
Operating activities increased from $162.8 million of cash provided in the three months ended March 31, 2025 to $694.5 million of cash provided in the three months ended March 31, 2026. Cash provided in the three months ended March 31, 2026 was primarily due to net income for the period of $249.8 million, which included certain non-cash items, including depreciation and amortization of $143.8 million and equity-based compensation of $39.6 million, as well as an increase in restricted cash of $582.4 million related to On Location for the FIFA World Cup 2026. These increases were partially offset by the timing of revenue recognition in advance of cash collections from customers as well as the timing of annual bonus payments. Cash provided in the three months ended March 31, 2025 was primarily due to net income for the period of $165.5 million, which included certain non-cash items, including depreciation and amortization of $100.5 million and equity-based compensation of $30.3 million, as well as an increase in restricted cash of $100.3 million related to On Location for the FIFA World Cup 2026. This increase was partially offset by a decline in accounts payable and accrued liabilities of $199.6 million primarily driven by the $125.0 million payment under the settlement agreement in the UFC antitrust lawsuits and the timing of bonus payments.
Investing activities decreased from $31.0 million of cash used in the three months ended March 31, 2025 to $21.5 million of cash used in the three months ended March 31, 2026. Cash used in the three months ended March 31, 2026 primarily reflects payments for property, buildings and equipment of $20.0 million and investments in affiliates of $2.0 million. Cash used in the three months ended March 31, 2025 primarily reflects payments for property, buildings and equipment of $27.3 million and investments in affiliates of $11.0 million, partially offset by proceeds from the sale of assets of $7.3 million.
Financing activities decreased from $185.7 million of cash used in the three months ended March 31, 2025 to $127.5 million of cash used in the three months ended March 31, 2026. Cash used in the three months ended March 31, 2026 primarily reflects payments for share repurchases of $838.3 million, distributions to EGH and its subsidiaries of $90.8 million, dividends paid to holders of TKO Class A common stock of $58.5 million, and net payments of $31.8 million to repay our outstanding debt and refinance our existing first lien term loan. These payments were partially offset by net proceeds of $900.0 million received from the upsizing of the Company's existing first lien term loan in March 2026. Cash used in the three months ended March 31, 2025 primarily reflects net transfers to Endeavor Group Holdings, Inc. of $122.5 million, distributions to EGH and its subsidiaries of $44.3 million, dividends paid to holders of TKO Class A common stock of $31.1 million and net payments on debt of $11.0 million. These decreases were partially offset by contributions of $23.3 million from Endeavor Group Holdings, Inc. in connection with the Endeavor Asset Acquisition.
Future Sources and Uses of Liquidity
TKO’s sources of liquidity are (1) cash on hand, (2) cash flows from operations and (3) available borrowings under the Credit Facilities (which borrowings would be subject to certain restrictive covenants contained therein). Based on our current expectations, we believe that these sources of liquidity will be sufficient to fund our working capital requirements and to meet our commitments, including long-term debt service, for at least the next 12 months.
TKO expects that its primary liquidity needs will be cash to (1) provide capital to facilitate organic growth of its business, (2) pay operating expenses, including cash compensation to its employees, athletes and talent, (3) fund capital expenditures and strategic investments, (4) pay interest and principal when due on the Credit Facilities, (5) pay income taxes, (6) reduce its outstanding indebtedness under the Credit Facilities, (7) fund share repurchases as authorized by the Board and (8) make distributions to members and, in accordance with the Company’s cash management policy, to TKO stockholders, including the planned quarterly dividend when declared by the Board.
Recent Accounting Pronouncements
See Note 3, Recent Accounting Pronouncements, to our unaudited consolidated financial statements included in this Quarterly Report for further information on certain accounting standards that have been recently adopted or that have not yet been required to be implemented and may be applicable to our future operations.
Critical Accounting Estimates
For a description of our policies regarding our critical accounting estimates, see “Critical Accounting Estimates” in our 2025 Annual Report. During the three months ended March 31, 2026, there were no significant changes in our critical accounting policies and estimates or the application or the results of the application of those policies to our unaudited consolidated financial statements from those previously disclosed in the 2025 Annual Report.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
TKO is exposed to market risks in the ordinary course of its business. Market risk represents the risk of loss that may impact TKO’s financial position due to adverse changes in financial market prices and rates.
Interest Rate Risk
Our exposure to changes in interest rates relates primarily to the floating interest component on our long-term debt. The Credit Facilities bear interest at floating rates and we regularly monitor and manage interest rate risks. Holding debt levels constant as of March 31, 2026, a 1% increase in the effective interest rates would have increased our annual interest expense by approximately $46 million.
Foreign Currency Risk
We have operations in several countries outside of the United States, and certain of our operations are conducted in foreign currencies, principally the British Pound. The value of these currencies fluctuates relative to the U.S. dollar. These changes could adversely affect the U.S. dollar equivalent of TKO’s non-U.S. dollar revenue and operating costs and expenses and reduce international demand for its content and services, all of which could negatively affect TKO’s business, financial condition and results of operations in a given period or in specific territories.
Holding other variables constant (such as interest rates and debt levels), if the U.S. dollar appreciated by 10% against the foreign currencies used by TKO’s operations in the three months ended March 31, 2026, revenues would have decreased by approximately $35.7 million and operating income would have decreased by approximately $6.3 million.
We regularly review our foreign exchange exposures that may have a material impact on our business and from time to time use foreign currency forward exchange contracts or other derivative financial instruments to hedge the effects of potential adverse fluctuations in foreign currency exchange rates arising from these exposures. TKO does not enter into foreign exchange contracts or other derivatives for speculative purposes.
Credit Risk
TKO maintains its cash and cash equivalents with various major banks and other high quality financial institutions, and its deposits at these institutions exceed insured limits. Market conditions can impact the viability of these institutions and the failure of any of the financial institutions where we maintain our cash and cash equivalents or any inability to access or delays in our ability to access our funds could adversely affect our business and financial position.
Item 4. Controls and Procedures
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
The Company’s management has evaluated, with the participation of the Chief Executive Officer and the Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2026.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may be involved in claims and proceedings arising in the course of our business. The outcome of any such claims or proceedings, regardless of the merits, is inherently uncertain. For a description of our legal proceedings, refer to Note 13, Commitments and Contingencies, to our unaudited consolidated financial statements included in this Quarterly Report, which is incorporated herein by reference.
Item 1A. Risk Factors
Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described as risk factors, any one or more of which could, directly or indirectly, cause our actual operating results and financial condition to vary materially from past, or anticipated future, operating results and financial condition. For a discussion of these potential risks and uncertainties, see Part I, Item 1A. "Risk Factors" in our 2025 Annual Report. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results and the price of our common stock. There have been no material changes in our risk factors to those included in our 2025 Annual Report.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Report of Offering of Securities and Use of Proceeds Therefrom
None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
The following table presents information with respect to purchases of the Company's Class A common stock by the Company and its affiliated purchasers made during the three months ended March 31, 2026:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period |
|
Total Number
of Shares
Purchased
(1) |
|
|
Average Price
Paid Per Share
(2) |
|
|
Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
(1) |
|
|
Approximate
Dollar Value of
Shares that
May Yet Be
Purchased
Under the Plans
or Programs
(in thousands)
(1)(3) |
|
January 1, 2026 to January 31, 2026 |
|
|
113,637 |
|
|
$ |
202.47 |
|
|
|
113,637 |
|
|
$ |
1,110,146 |
|
February 1, 2026 to February 28, 2026 |
|
|
74,182 |
|
|
$ |
206.27 |
|
|
|
74,182 |
|
|
$ |
1,094,844 |
|
March 1, 2026 to March 31, 2026 |
|
|
3,136,179 |
|
|
$ |
255.09 |
|
|
|
3,136,179 |
|
|
$ |
294,844 |
|
Total |
|
|
3,323,998 |
|
|
|
|
|
|
3,323,998 |
|
|
|
|
(1)Includes shares of our Class A common stock (i) delivered under the ASR Agreement and (ii) repurchased under a Rule 10b5-1 trading plan, in each case in connection with our previously announced share repurchase program of $2.0 billion.
(2)Average price paid per share excludes any broker commissions and other costs of execution, including excise taxes. Under the ASR Agreement, on March 11, 2026, the Company paid $800 million to Morgan Stanley & Co. LLC and received an initial delivery of 3,136,179 shares of Class A common stock with additional shares expected to be delivered by June 2026. The average price paid per share shown in the table includes the initial delivery of shares under the ASR Agreement and the impact of the upfront payment structure under the agreement.
(3)On March 10, 2026, we announced that we had entered into a new Rule 10b5-1 trading plan, with repurchases contemplated thereunder to commence immediately following the completion of the ASR Agreement. We will determine at our discretion the timing and the amount of any repurchases based on its evaluation of market conditions, share price, and other factors. Repurchases under the share repurchase program may be made in the open market, in privately negotiated transactions or otherwise, and we are not obligated to acquire any particular amount under the share repurchase program. The share repurchase program has no expiration, and may be modified, suspended, or discontinued at any time.
Unregistered Sales of Equity Securities
None.
Item 5. Other Information
(a) Disclosure in lieu of reporting on a Current Report on Form 8-K.
None.
(b) Material changes to the procedures by which security holders may recommend nominees to the Board.
None.
(c) Insider trading arrangements and policies.
Other than the below, during the three months ended March 31, 2026, no director or "officer" (as defined under 16a-1(f) of the Exchange Act) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
On March 13, 2026, Nick Khan, a member of the Board of Directors, entered into a Rule 10b5-1 trading arrangement intended to satisfy the affirmative defense of Rule 10b5-1(c) (the “2026 Khan Trading Arrangement”). The 2026 Khan Trading Arrangement provides for the sale of up to (i) 67,127 shares of Class A common stock plus (ii) the net number of shares of Class A common stock underlying 37,423 restricted stock units received after giving effect to the number of shares sold to satisfy tax withholding obligations on each vesting date specified under the 2026 Khan Trading Arrangement (such total number of shares is not determinable), with a plan end date of December 31, 2026.
Item 6. Exhibits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exhibit Number |
Description |
Form |
File No. |
Exhibit |
Filing Date |
Filed/Furnished Herewith |
2.1# |
Transaction Agreement, dated April 2, 2023, by and among Endeavor Group Holdings, Inc., Endeavor Operating Company, LLC, Zuffa Parent, LLC, World Wrestling Entertainment, Inc., New Whale Inc., and Whale Merger Sub Inc. |
424(b)(3) |
333-271893 |
Annex A |
08/22/2023 |
|
3.1 |
Amended and Restated Certificate of Incorporation of TKO Group Holdings, Inc. |
S-8 |
333-274480 |
4.1 |
09/12/2023 |
|
3.2 |
Amended and Restated Bylaws of TKO Group Holdings, Inc. |
S-8 |
333-274480 |
4.2 |
09/12/2023 |
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4.1 |
Registration Rights Agreement, dated as of September 12, 2023, by and among TKO Group Holdings, Inc., Endeavor Group Holdings, Inc. and Vincent K. McMahon. |
8-K |
001-41797 |
4.1 |
09/12/2023 |
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10.1# |
Fourteenth Amendment, dated as of March 10, 2026, to the First Lien Credit Agreement, dated as of August 18, 2016, among TKO Guarantor, LLC, as holdings, TKO Worldwide Holdings, LLC, as borrower, the lenders party thereto and Goldman Sachs Bank USA, as administrative agent. |
8-K |
001-41797 |
10.1 |
03/10/2026 |
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10.2 |
Employment Agreement, dated as of May 4, 2026, by and between World Wrestling Entertainment, LLC and Nick Khan |
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* |
10.3 |
Form of Other Stock or Cash Based Award Grant Notice and Other Stock or Cash Based Award Agreement under the TKO Group Holdings, Inc. 2023 Incentive Award Plan |
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* |
31.1 |
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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* |
31.2 |
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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* |
32.1 |
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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** |
32.2 |
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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** |
101.INS |
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
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* |
101.SCH |
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents. |
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104 |
Cover Page Interactive Data File – formatted as Inline XBRL and contained in Exhibit 101. |
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* |
* Filed herewith.
** Furnished herewith.
# Annexes, schedules and/or exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Registrant undertakes to furnish supplemental copies of any of the omitted schedules or similar attachments upon request by the SEC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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TKO GROUP HOLDINGS, INC. |
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Date: |
May 6, 2026 |
By: |
/s/ ANDREW SCHLEIMER |
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Andrew Schleimer |
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Chief Financial Officer |
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(principal financial officer and authorized |
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signatory) |
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Date: |
May 6, 2026 |
By: |
/s/ SHANE KAPRAL |
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Shane Kapral |
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Deputy Chief Financial Officer |
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(principal accounting officer and authorized |
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signatory) |
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