TKO · Q3 2025 Earnings
BullishTKO Group Holdings
Reported November 5, 2025
30-second summary
TKO closed the UFC media rights chapter that defined the prior call — a Paramount deal that explicitly removes the US PPV paywall — and raised FY2025 guidance for the third straight quarter to $4.690–4.720B revenue and $1.570–1.580B EBITDA. The Q3 optical print is ugly (-27.4% YoY to $1.12B) but mechanical: IMG comps the 2024 Paris Olympics (On Location) benefit and falls 59.4%, while WWE (+23.2%) and a 32% adjusted EBITDA margin with 111% FCF conversion do the actual work. The story has moved from "will the UFC deal print" to "how does the post-PPV economics flow through 2026."
Headline numbers
EPS
Q3 FY2025
$0.47
Revenue
Q3 FY2025
$1.12B
-27.4% YoY
Free cash flow
Q3 FY2025
$0.40B
Operating margin
Q3 FY2025
15.4%
Key financials
Q3 FY2025| Metric | Q3 FY2025 | YoY | Q2 FY2025 | QoQ |
|---|---|---|---|---|
| Revenue | $1.12B | -27.4% | $1.31B | -14.4% |
| EPS | $0.47 | — | $1.17 | -59.8% |
| Operating margin | 15.4% | — | 28.1% | -1270bps |
| Free cash flow | $0.40B | — | $0.38B | +6.4% |
Guidance
TKO raised full-year FY2025 guidance for both revenue and Adjusted EBITDA, driven by sustained momentum in UFC and WWE despite Q3 showing -27.4% YoY revenue decline due to comparison timing.
Guidance is issued for both next quarter and the full year. Both may appear below.
Changes to prior guidance
| Metric | Period | Prior guide | New guide | Δ | Result |
|---|---|---|---|---|---|
| Revenue | FY 2025 | $4.630 billion - $4.690 billion | $4.690 billion - $4.720 billion | +$0.06B high end, +$0.03B low end (midpoint +$0.025B) | Raised |
| Adjusted EBITDA | FY 2025 | $1.540 billion - $1.560 billion | $1.570 billion - $1.580 billion | +$0.030B low end, +$0.020B high end (midpoint +$0.025B) | Raised |
Segment performance
Q3 FY2025| Segment | Q3 FY2025 | YoY |
|---|---|---|
| UFC | $0.325B | -8.4% |
| WWE | $0.402B | +23.2% |
| IMG | $0.337B | -59.4% |
| UFC Adjusted EBITDA Margin | 51% | — |
| WWE Adjusted EBITDA Margin | 52% | — |
| IMG Adjusted EBITDA Margin | 18% | — |
Profitability
Q3 FY2025| Segment | Q3 FY2025 |
|---|---|
| Adjusted EBITDA | $360.2M |
| Adjusted EBITDA Margin | 32% |
| Free Cash Flow Conversion | 111% |
Management tone
Narrative arc: ESPN PLE deal validates rights baseline (Q2) → Paramount UFC deal closes and resets distribution model (Q3).
Last quarter Shapiro called the UFC deal "in the home stretch" and was actively defending the ESPN PLE step-up to $325M AAV as a portability proof point. This quarter the UFC deal is signed (Paramount, US, plus LATAM/Australia/Canada) and the conversation has moved one layer deeper: management is now explaining the second-order consequences — fighter compensation restructuring, sponsor repricing, and international territory strategy for the rights not yet sold. The Q&A is dense with operational detail in a way Q2's was not, because the strategic question has flipped from "can they get the deal done" to "how does the new model monetize."
On sponsorship, management reiterated $450M in FY25 high-margin partnership revenue at UFC and WWE combined, and reaffirmed the trajectory toward $1B in total company partnership revenue by around 2030. Recently announced UFC deals include Wingstop, Prime Video, and Sony Pictures; WWE landed JPMorgan Chase as presenting sponsor for SummerSlam and Maybelline as its first-ever official cosmetics partner.
On boxing, the tone is more disciplined than expected given the Canelo-Crawford optics (third-largest gate in boxing history at $47M, 41M Netflix viewers). Shapiro explicitly ruled out wholly-owned promotion: the model is a JV with $10M service fees per super fight, 2-4 super fights annually in 2026, plus media rights commissions, partnership fees, and marketing fees. Management is treating boxing as high-margin incremental rather than a third operating leg.
The fighter pay disclosure deserves its own callout. Epstein confirmed that premium athlete contracts are being restructured away from PPV-percentage compensation — a structural change to UFC's economic model that wasn't flagged in Q2. Pay rises but margins are held "consistent with the margins we've maintained over the last several years." The market will want to see this in the Q4 print.
Q&A highlights
Steven Elastel · Goldman Sachs
Asked why Paramount was chosen as the partner for UFC's LATAM and Australian media rights, and what the strategic approach is for remaining international territories where opportunities still exist.
Mark Shapiro explained that the decision was based on negotiations with multiple bidders and came down to three factors: brand alignment, reach/marketing capability, and rights fees. For those three territories (LATAM, Australia, Canada), Paramount and other bidders provided the best overall package. Management emphasized they're prioritizing closing the gap on international monetization since the majority of UFC's fanbase is international. They're continuing to explore additional territories with a focus on maximizing media rights opportunities globally.
Brandon Ross · LightShed Partners
Asked about the distribution model for the Paramount deal, the future of transactional pay-per-view internationally, and fighter compensation structure given the shift away from PPV revenue sharing.
Mark Shapiro clarified that pay-per-view is minimal—primarily Australia (Foxtel) and Canada. The UFC sells 42 nights of content to distributors and their go-to-market strategy drives distribution decisions. For fighter compensation, Lawrence Epstein confirmed there will be structural changes to premium athlete deals that previously had PPV-based compensation, but fighter pay will increase and remain consistent with historical margins. Management is currently working through these deal structures with premium athletes.
Ben Swinburne · Morgan Stanley
Asked whether TKO would consider acquiring and wholly owning a boxing promotion versus the current JV structure, given the success of the Canelo-Crawford fight and TKO's financial resources.
Mark Shapiro indicated TKO is focused on the Zufa Boxing JV structure and expects to generate revenue through multiple fee-based streams: $10M service fees per super fight (2-4 annually), media rights commissions, partnership deals, ticket sales commissions, and marketing fees. Management is not ruling out larger boxing opportunities but is keeping bandwidth focused on execution of current assets (UFC, WWE, PBR, Zufa). They framed boxing as a high-margin, incremental dollar opportunity that complements core franchises rather than pursuing wholly-owned promotion at this time.
Peter Cepino · Wolf Research
Asked for more color on site fee opportunity in 2026, what magnitude of impact they could have, and strategic approach to capturing them.
Andrew Pandya highlighted inorganic timing benefits from three Saudi Arabia events in 2026 (vs. one in 2025) including the first-ever Royal Rumble in Saudi Arabia in January. He outlined three organic strategic focuses: existing premium markets, expansion into Raw/SmackDown/Fight Night events, and geographic diversification with multiple comps supporting momentum. Management noted they recently hired a dedicated full-time site fee team of 6 people (past 3 months) and are in conversations on 60+ events ranging from hundreds of thousands to multi-millions globally. Emphasized this is high-margin revenue opportunity being pursued strategically.
Ryan Gravitt · UBS
Asked how the removal of the UFC PPV paywall and shift to Paramount distribution affects sponsor conversations and partnership growth in 2026.
Mark Shapiro and Nick Khan explained that sponsors are excited about broader audience access to premium numbered events. Drew parallel to ESPN+ launch (2.3M to 20M+ subs) where despite narrower distribution initially, they achieved sponsor growth. Now with Paramount's 75M+ global subs, the dynamic is reversed—sponsors proactively asking for higher fees. Management noted they can layer in commercial inventory from media rights deals to support partnership growth toward the $1B company goal. Two new major partnership deals expected to be announced by end of 2025.
Answers to last quarter's watch list
What to watch into next quarter
Q4 UFC margin under the new Paramount model. Q3 held 51%. Watch whether the restructured fighter compensation (premium athletes moving off PPV-percentage deals) flows through Q4 without margin compression, since Epstein explicitly committed to margins "consistent with what we've maintained over the last several years."
Partnership momentum toward the $1B target. Management reiterated $450M in FY25 UFC+WWE partnership revenue and the $1B total-company target by around 2030. Watch the cadence of new and renewed deals and whether the inventory unlocked by the Paramount and ESPN deals begins to show up in Q4.
IMG normalized growth ex-Olympics. Q4 still has IMG headwinds — absence of the Gulf Cup (biannual) and higher On Location costs tied to preparation for the upcoming Olympics; management already guided IMG Q4 revenue and EBITDA down modestly YoY in absolute dollars. Watch whether the underlying IMG studios growth and On Location synergy contribution is enough to bridge to a clean read in 2026.
Site fee 2026 magnitude. Three Saudi events confirmed (vs. one in 2025) plus 60+ conversations in pipeline. Watch the FY2026 initial guide (likely with Q4 print in February) for what site fees contribute.
Initial FY2026 guide shape. With the Paramount deal locked, the WWE ESPN PLE deal locked, and Zuffa Boxing service fees quantified at $10M per super fight, the Q4 print should carry the first credible FY2026 framework. Watch whether the initial guide reflects the full step-up or whether management sandbags around fighter compensation transition costs.
Sources
- TKO Group Holdings Q3 FY2025 press release / 8-K Exhibit 99.1 — https://www.sec.gov/Archives/edgar/data/1973266/000119312525266943/tko-ex99_1.htm
- TKO Q3 FY2025 earnings call Q&A (exchanges with Goldman Sachs, LightShed Partners, Morgan Stanley, Wolf Research)
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