TKO · Q1 2026 Earnings
BullishTKO Group Holdings
Reported May 6, 2026
30-second summary
TKO printed Q1 FY2026 revenue of $1.597B (+26% YoY) at a 34% adjusted EBITDA margin ($549.8M) with 123% FCF conversion, and reaffirmed the FY26 guide of $5.675–5.775B revenue (+21%) and $2.240–2.290B EBITDA (+43%, 39.6% midpoint margin). Every segment grew — UFC +11.5%, WWE +21.5%, IMG +37.6% — and management's framing shifted from "achievable" to "delivered as planned." The print clears the most important Q1 FY2026 question: the media rights step-up, FIP framework, and partnership ramp that underwrite the FY26 ~600bps margin expansion are tracking, not aspirational.
Headline numbers
EPS
Q1 FY2026
$1.12
Revenue
Q1 FY2026
$1.60B
+26.0% YoY
Free cash flow
Q1 FY2026
$0.67B
Operating margin
Q1 FY2026
21.2%
Key financials
Q1 FY2026| Metric | Q1 FY2026 | YoY | Q4 FY2025 | QoQ |
|---|---|---|---|---|
| Revenue | $1.60B | +26.0% | $1.04B | +53.9% |
| EPS | $1.12 | — | $-0.08 | +1500.0% |
| Operating margin | 21.2% | — | 5.5% | +1570bps |
| Free cash flow | $0.67B | — | $0.25B | +170.4% |
Guidance
TKO reaffirms full-year FY2026 guidance across all metrics (revenue, EBITDA, growth rates, margin expansion) following a strong Q1 FY2026 beat on revenue and EBITDA.
Guidance is issued for both next quarter and the full year. Both may appear below.
Reaffirmed unchanged this quarter: Revenue ($5.675 billion to $5.775 billion), Revenue growth (21%), Adjusted EBITDA ($2.240 billion to $2.290 billion), Adjusted EBITDA growth (43%), Adjusted EBITDA margin expansion (approximately 600 basis points to 39.6% at midpoint)
Segment performance
Q1 FY2026| Segment | Q1 FY2026 | YoY |
|---|---|---|
| UFC | $0.401B | +11.5% |
| WWE | $0.476B | +21.5% |
| IMG | $0.655B | +37.6% |
| UFC Adjusted EBITDA | $254.5 million | — |
| UFC Adjusted EBITDA Margin | 63% | — |
| WWE Adjusted EBITDA | $256.1 million | — |
| WWE Adjusted EBITDA Margin | 54% | — |
| IMG Adjusted EBITDA | $97.3 million | — |
Profitability
Q1 FY2026| Segment | Q1 FY2026 |
|---|---|
| Adjusted EBITDA | $549.8 million |
| Adjusted EBITDA Margin | 34% |
| Free Cash Flow Conversion | 123% |
Management tone
Narrative arc: ESPN PLE deal validates rights baseline (Q2 25) → Paramount UFC deal closes and resets distribution model (Q3 25) → media rights stack as foundation for a 39.6% margin business (Q4 25) → Q1 FY2026 validates execution and reframes growth as compounding.
Three quarters ago media rights were an emerging opportunity. Two quarters ago the Paramount UFC deal closed and removed the US PPV paywall. Last quarter the rights stack was reframed as underwriting the FY26 margin step-up. This quarter the framing crossed another threshold — from "secured" to "compounding." Ari: "The growth drivers are not just performing, they're compounding." That word matters. Compounding implies accelerating tailwinds beyond the FY26 algorithm, not just delivery of the bridge already disclosed. Mark backed this with the most concrete distribution data point yet: "UFC 326, was the most watched live UFC event since 2016. The CBS audience alone was more than 270% above last year's UFC average on Linear." The sampling thesis behind the Paramount deal — get UFC in front of audiences that wouldn't pay PPV — is printing with measurable audience uplift in its first full quarter.
The Middle East risk language shifted from cautious hedging to assertive defense. Mark stated "our partners in Saudi Arabia have confirmed... their commitment to our properties in 2026 and beyond is unwavering" despite explicit acknowledgement of "a challenging environment." This is not the tone of a management team hedging exposure — it's the tone of a team that has tested partner commitment and is willing to put their credibility behind it publicly. Six Zuffa, WWE, and UFC events remain scheduled in the Middle East through year-end.
Zuffa Boxing crossed the goalpost. This quarter Ari said the property is "exceeding our internal growth plan and timeline" with over 100 fighters signed and five events staged. Internal-projection-beats are the rarest tone signal in this sector — management is signaling that the equity vesting structure tied to 2026 financial performance is tracking to the upside.
AI framing inverted. Ari: "As AI transforms how content is created and consumed, the value of our IP and properties increases. Our content is live, it's communal, it's scarce, and no algorithm can replicate it." What was previously latent risk is now positioned as moat — a deliberate response to the broader media-IP-vs-AI investor concern, not an organic talking point.
WrestleMania creative criticism was met with a sharper rebuttal than expected. Mark: "We are not concerned about the ticket performance whatsoever, as it was unrealistic to expect year two growth in Las Vegas. And even with that, WrestleMania 42 was still one of the highest gates in WWE history." This is the first time management has directly addressed online fan creative criticism on the call, and the dismissal — "these are not new criticisms" — suggests confidence that the volume of complaints does not translate to gate or viewership impact.
Recurring themes management leaned on this quarter:
Risks management surfaced:
Q&A highlights
Brandon Ross · LightShed Partners
Addressed fan criticism about excessive sponsorship and ticket pricing monetization at UFC and WWE. Asked how management balances fan-facing monetization with fan experience, and whether vocal critics represent the broader fan base.
Management acknowledged feedback as high priority but contextualized pricing/sponsorship as industry-wide practice (comparable to Hollywood, NBA, MLB). Emphasized product quality comes first, noted audience is resilient, and highlighted record attendance, viewership, and engagement. Acknowledged trial-and-error approach to commercial integration, particularly for WWE which is new to such practices.
Sean Diffley · Morgan Stanley
Asked about financial incentive package (FIP) pipeline growth, Azerbaijan deal details, Middle East impact, and potential implications of Paramount-WBD combination for UFC/Zufa (boxing) distribution and a potential combat sports super app.
Management expressed enthusiasm about Paramount-WBD deal closing but declined to comment on specific carriage, promotion, or marketing details. Confirmed no consumer pullback globally from geopolitical uncertainty. Highlighted six upcoming events (UFC, WWE, boxing) in Middle East through year-end, mostly Q4. Confirmed FIP strategy momentum with new domestic (Philadelphia UFC 330, Belgrade Fight Night) and international deals (Baku multi-year renewal at higher rates).
Brandon Ross · LightShed Partners
Asked about reported weakness in UFC card quality and what management is doing to improve.
Management dismissed premise that UFC cards are weak. Emphasized product strength, brand at all-time high, and record reach. Highlighted recent strong events (UFC 327 in Miami, Fight Night in Perth sellout) and young talent pipeline (Joshua Vann, Carlos Paredes, Michael Morales, Ilya Teporia). Referenced Dana White's 25-year track record and world-class matchmakers (Hunter Campbell, Sean Shelby, Mick Maynard). Noted natural ebbs and flows in sports are cyclical, comparing to NBA's history with Jordan and Shaq/Kobe.
Steven Lazik · Goldman Sachs
Asked about engagement momentum from ESPN and Paramount distribution deals, how engagement translates to live events and sponsorship revenue, and P&L flow-through this year. Also asked about partnership and marketing revenue deceleration in Q1 and outlook for growth in this line item for UFC and WWE.
Management credited distribution partnerships driving demand for live experiences. Highlighted WrestleMania topping charts in 33 countries (up from 28). Noted engagement on Paramount+ will translate to global partnerships and FIP upside, merchandise demand, and overall experience value. Acknowledged Q1 partnership/marketing deceleration was timing-driven: UFC had two fewer fight nights; WWE had 12 international events (lower monetization) and Riyadh event with restrictions. Emphasized pipeline is robust and they expect strong year-over-year growth, with FIP deals offsetting any Q1 softness.
Peter Supino · Wolf Research
Asked about segmentation of demand across price points for WWE and UFC and how that informs revenue maximization strategy. Also asked how success of UFC on Paramount+ translates across the business over next few years.
Management declined to discuss specific yield monetization or dynamic pricing AI tools but confirmed gates are strong. Focused on experience delivery and noted leisure demand shifting due to four-day work weeks spreading demand across shoulder days, increasing physical aggregation demand. Described Paramount+ growth converting MMA audience over time, citing millions of minutes watched including ancillary programming. Larger fan base drives all revenue-generating pipelines (sponsorships, FIPs, merchandise).
Answers to last quarter's watch list
What to watch into next quarter
UFC segment margin holding at 63%+. Q1 FY2026 hit 63%, on par with prior-year. Watch whether the Paramount step-up flows through to margin expansion in Q2 once UFC 324 launch costs lap and event cadence normalizes — management explicitly guided that "for the full year, UFC margins will meaningfully outpace 2025."
H1 cumulative FCF conversion vs. the FY 60% guide. Q1 FY2026's 123% contains material timing benefits (World Cup escrow pre-payments) flagged by Schweimer. Watch whether H1 cumulative conversion sits meaningfully above the FY target (supporting a buyback acceleration narrative) or whether Q2 gives back the Q1 FY2026 timing benefit.
Partnership and marketing revenue reacceleration. Q1 FY2026 UFC partnership/marketing grew only 4% — Schweimer attributed to two fewer UFC fight nights and the WWE international/Riyadh mix. Watch Q2 for whether the line reaccelerates, especially in light of recent renewals (Baku) and new FIP wins (Philadelphia UFC 330, Belgrade).
First Zuffa Boxing revenue/EBITDA quantification. Management said the property is exceeding internal plan but has not disclosed numbers. Watch Q2 for the first segment-level financial contribution and whether the second equity-vesting gate based on 2026 performance is on track.
Middle East Q4 event execution. Six TKO events scheduled through year-end "mostly Q4." Watch whether any are deferred, downsized, or rebudgeted — and whether the Royal Rumble outside North America delivers the gate uplift implied by the "highest-grossing gate ever for that event" framing.
CBS/Paramount sampling-to-sponsorship conversion. UFC 326 CBS audience was +270% above prior-year UFC linear average. Watch Q2 for whether incremental sponsor wins in the sponsorship line tie to the audience expansion, or whether the audience uplift remains a narrative point ahead of P&L flow-through.
Sources
- TKO Group Holdings Q1 FY2026 press release / 8-K Exhibit 99.1 — https://www.sec.gov/Archives/edgar/data/1973266/000119312526208955/tko-ex99_1.htm
- TKO Q1 FY2026 earnings call Q&A excerpts (LightShed Partners, Morgan Stanley, Goldman Sachs, Wolf Research)
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