Endeavor Posts Q2 Profit as Sports, Live Events, Talent Representation Units See Gains

Endeavor delivered strong second quarter earnings on Thursday with wind at the back of its sports, live events and talent representation operations.

The company that is home to UFC, WME and IMG saw year-over year revenue gains at its key units for the quarter as sports and entertainment activity continues to adjust to the post-pandemic new normal. Strong demand especially for sports and events pushed Endeavor to post net income of $42.2 million on revenue of $1.3 billion, which was up about 18% from the year-ago mark.

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The upswing prompted Endeavor to slightly adjust its full-year forecast for adjusted earnings before interest taxes, depreciation and amortization to a range of $1.13 billion to $1.17 billion, which is up from the estimate of $1.1 billion to $1.15 billion offered in May with Q1 results. Revenue guidance stayed the same as the prior quarter at $5.235 billion and $5.475 billion.

Endeavor also stated it would repay $250 million of debt by the end of Q3. Endeavor’s debt load has been a significant focus for investors. As of June 30, long-term debt stood at $5.684 billlion.

“We benefited from strong growth globally across our segments in the second quarter,” said Endeavor CEO Ariel Emanuel. “While we recognize there are broader macroeconomic forces at play, given the quarter’s performance and our line of sight through the end of the year, we’ve once again raised our Adjusted EBITDA guidance. We remain focused on our long-term strategy – leveraging the diversity and scale of our businesses to drive maximum value for our shareholders, our clients and our owned IP.”

Endeavor’s Owned Sports Properties delivered $331.9 million for the quarter, up 28%, thanks to growth in media rights, live events, consumer product and licensing revenues for UFC and PBR. The unit’s adjusted EBITDA was $161.3 million, up 22%. The quarter included the operations of Diamond Baseball Holdings, a group of minor league teams that Endeavor acquired in late 2021. But that created turbulence in other parts of Endeavor, namely for the sports representation group in WME because conflict of interest concerns with Endeavor also being a team owner.

The Events, Experiences & Rights arm generated $627.9 million, up 19%, with adjusted EBITDA hitting $108.1 million, up 194% thanks to major events including the NCAA Final Four, the Masters and Madrid Open.

Representation, primarily WME, turned out $358 million for the quarter, up 9%. Adjusted EBITDA soared 80% to $111.2 million.

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