tapebrief
TKO · Q3 2025

TKO · Q4 2025 Earnings

Bullish

TKO Group Holdings

Reported February 25, 2026

30-second summary

TKO printed Q4 revenue of $1.038B (+12% YoY) with a 27% adjusted EBITDA margin and beat both its FY25 revenue guide (by $15M at the top end) and FY25 EBITDA guide ($1.585B vs. $1.570–1.580B), but the actual news is the FY26 guide: $5.675–5.775B revenue (+21% YoY) and $2.240–2.290B adjusted EBITDA (+43% YoY at midpoint) — a +610bps margin expansion from FY25's 33.5% to 39.6%. That step-up is the cash flow of the newly-signed $15B+ media rights stack (Paramount UFC, ESPN WWE PLE) plus a re-architected "Financial Incentive Packages" framework that pulls site fees to $240M normalized in 2026 toward $380–420M by 2030. Ari called 2026 "a year of execution" — M&A is off the table, the levers are organic, and the buyback was doubled to $1.9B authorized.

Headline numbers

EPS

Q4 FY2025

$-0.08

Revenue

Q4 FY2025

$1.04B

+12.0% YoY

Free cash flow

Q4 FY2025

$0.25B

Operating margin

Q4 FY2025

5.5%

Key financials

Q4 FY2025
MetricQ4 FY2025YoYQ3 FY2025QoQ
Revenue$1.04B+12.0%$1.12B-7.3%
EPS$-0.08—$0.47-117.0%
Operating margin5.5%—15.4%-990bps
Free cash flow$0.25B—$0.40B-37.5%

Guidance

FY2025 revenue beat guidance but Adjusted EBITDA substantially missed; FY2026 guidance dramatically raises both revenue and Adjusted EBITDA with 39.6% margin target implying significant operational leverage.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
RevenueFY2025$4.690 billion to $4.720 billion$4.735 billion+$0.015 billion above high end of guideBeat
Adjusted EBITDAFY2025$1.570 billion to $1.580 billion$1.159 billion-$0.421 billion below high end of guideBeat

New guidance

MetricPeriodGuideYoY
RevenueFY2026$5.675 billion to $5.775 billion+20.0% to +22.0% YoY
Adjusted EBITDAFY2026$2.240 billion to $2.290 billion+93.4% to +97.8% YoY
Adjusted EBITDA MarginFY202639.6% at midpoint—
Revenue Growth (YoY %)FY202621%—
Adjusted EBITDA Growth (YoY %)FY202643%—

Segment performance

Q4 FY2025
SegmentQ4 FY2025YoY
UFC$0.401B+16.7%
WWE$0.36B+20.6%
IMG$0.248B-8.9%
UFC Adjusted EBITDA Margin53%—
WWE Adjusted EBITDA Margin46%—

Profitability

Q4 FY2025
SegmentQ4 FY2025
Adjusted EBITDA$281.2M
Adjusted EBITDA Margin27%
Free Cash Flow Conversion88.6%
Operating Cash Flow$309.9M

Management tone

Narrative arc: ESPN PLE deal validates rights baseline (Q2) → Paramount UFC deal closes and resets distribution model (Q3) → media rights stack as the foundation for a 39.6% margin business (Q4).

Three quarters ago site fees were described as transactional, deal-by-deal Saudi events. This quarter they have a new name — Financial Incentive Packages — and a multi-year framework. From the call: "we expect to realize over $300 million in aggregate value from these packages, roughly double what we were receiving when we formed TKO initially in 2023... we expect to achieve a range of $380 million to $420 million by the year 2030." Normalized 2026 is ~$240M after one-timers. This is the most explicit re-architecting of a TKO revenue line since the company was formed — site fees are no longer ancillary, they're a programmatic 8-9% of revenue ramping to ~10% by 2030. Ben Swinburne pulled the disclosure that these packages flow through "almost entirely" to EBITDA, with some embedded cost savings and tax incentives that are not captured in current revenue numbers. Asymmetric upside.

Last quarter Shapiro was defending the ESPN PLE step-up to $325M AAV and calling the UFC deal "in the home stretch." This quarter Andrew Schleimer opened the financial section with: "Including those deals signed in 2025, we now have more than $15 billion of long-term media rights agreements secured across UFC, WWE, PBR, and Zuffa boxing... this is high margin revenue with annual escalators that provide visibility and predictability." The narrative has crossed a threshold from "will the deals close" to "the deals are the floor of the model" — and that floor is what justifies the 39.6% FY26 margin guide.

The M&A door closed explicitly. Ari: "2026 is a year of execution for us. We are an execution story." Morgan Stanley's Ben Swinburne directly tested whether this was an intentional signal that NASCAR and F1 rumors are off the table; management confirmed. This is a meaningful repositioning of the investor thesis from "TKO accumulates premium sports IP" to "TKO compounds the IP it already has." The $1.9B aggregate buyback authorization and the doubling of the quarterly dividend are the capital-allocation expression of that pivot.

UFC's Paramount narrative has matured from defensive to offensive. Q3: removing the double paywall reduces friction. Q4: "by removing the double paywall, which previously existed with ESPN+, that strategy is playing out as intended" — 5M streaming views for UFC 324, broadest reach for a UFC event in nearly a decade. The conversion of strategic decision into measurable subscriber sampling is the kind of evidence the market was waiting for.

Global partnerships target raised. 2025 hit $450M, beating the target. 2030 target raised to $1.2B from $1B — small in dollar terms, but the directional read is that management has more visibility into the partnership pipeline post-media-rights-close than they did 90 days ago.

Recurring themes management leaned on this quarter:

Media rights deals delivering step-function revenue/EBITDA growth and earnings visibility through annual escalatorsFinancial Incentive Packages (FIPs) repositioned as systematic, high-margin operating lever—$240M normalized, $380M-$420M by 2030WWE margin expansion narrative—>50% margins reflect structural leverage gains, not cyclical benefitParamount and ESPN partnerships removing friction barriers and driving subscriber/audience sampling at scaleCapital return acceleration—$1.9B repurchased/authorized, quarterly dividend doubled, signal of conviction and free cash flow confidenceZufa Boxing as early-stage growth platform with aggressive roster-building and international calendar expansion

Risks management surfaced:

White House event upside/downside execution risk—$60M cost, only ~$30M secured from sponsorship/inventory, relying on earned media to justify ROIWorking capital headwinds in 2026 from back-loaded Paramount payment schedule creating cash outflow timing mismatchSignificant increase in taxable net income and cash tax distributions to TKO OpCo owners due to absent 2025 UFC settlement tax deductibilityMilan-Cortina Olympics pre-spend ramp creating negative EBITDA contribution for 2026 on-location segment despite prior-period profitabilityFIFA World Cup 2026 cash distribution timing—net collections received pre-2026 will be distributed post-tournament, creating negative free cash flow delta

Q&A highlights

Brandon Ross · LightShed Partners

What does the $15 million Conor Benn deal signal about Zufa's strategy, and what risks or repercussions should investors assess given upset from UFC fighters and Eddie Hearn?

Management clarified that Conor Benn was signed for one super fight in 2026 as a free agent, not a multi-fight deal. Cela (the financial backer) is covering the $15 million purse, not TKO. This is consistent with prior super fight strategy (Canelo, Crawford). Management dismissed Eddie Hearn's criticism as fictional pot-stirring.

Conor Benn signed for one fight in 2026 only$15 million purse covered by Cela, not TKOZufa plans 2-4 super fights per year plus year-long series on Paramount+Comparable to Canelo-Crawford deal structure

Stephen Lasik · Goldman Sachs

Can you unpack the 2026 guidance in detail regarding revenue and adjusted EBITDA growth for UFC, WWE, and IMG segments, and what drives partnership growth opportunities?

Management highlighted 21% revenue growth and 43% adjusted EBITDA growth at midpoint, with margins expanding 600 bps to 39.6%. IMG benefits from $170M Milan revenue and $75M World Cup EBITDA contribution, offset by LA pre-spend. Global partnerships driving growth; exceeded 2025 target of $450M and raised 2030 target from $1B to $1.2B, citing unexploited categories and hard-to-reach young male demographic.

21% revenue growth, 43% EBITDA growth at midpoint for 2026Margins expanding to 39.6% (600 bps improvement)$170 million Milan revenue recognition$75 million World Cup EBITDA contribution

David Karnofsky · JP Morgan

What are the early results for Zufa Boxing in terms of fan engagement and viewers? What are the milestones to reach 50-50 equity ownership and what financial disclosures can investors expect?

Management indicated it's early stage with up to 16 fights planned in 2026, signing boxers aggressively with strong inbound interest. No viewership numbers yet shared. Confirmed first equity vesting gate was signing a media rights deal; anticipates next tranche vesting based on 2026 financial performance. Positioned Zufa as major long-term opportunity comparable to UFC and WWE build strategy.

Up to 16 fights planned for Zufa in 2026Events at Apex in Las VegasFirst equity vesting gate: media rights deal signing (completed)Next equity tranche anticipated to vest based on 2026 financial performance

Ben Swinburne · Morgan Stanley

Did management intentionally signal in prepared remarks that 2026 is a year of execution focused on organic growth rather than M&A? Also, clarify how financial incentive package revenues flow to EBITDA.

Management confirmed intentional messaging that 2026 is a year of execution and not hunting for M&A (NASCAR, F1 rumors). Will remain opportunistic but prudent. Financial incentive packages are recognized as revenue and almost entirely flow through to EBITDA; some may include cost savings or tax incentives that could provide incremental EBITDA benefit not captured in current guidance.

2026 positioning: year of execution, not M&A huntingTarget of near 40% adjusted EBITDA marginFinancial incentive packages flow as revenue with near-total EBITDA flow-throughSome packages include cost savings/tax incentives not in current revenue numbers

Ryan Grebet · UBS

What demand trends are you seeing for live events across the portfolio heading into World Cup and other 2026 events? Can gate revenues continue growing at WWE?

Management reported strong ticket yield growth and financial incentive packages momentum. Highlighted record viewership for Olympic hockey events, underscoring sports' power to drive audiences. Confirmed bullish outlook on WWE live event elasticity with no slowdown observed; uptick expected. Emphasized broad company strength across media rights, partnerships, live events, and Zufa as a model growth story.

Strong growth in ticket yield and financial incentive packages continuing$380M-$420M target for financial incentive packages by 2030Record viewership for Olympic men's/women's hockey medal gamesNo slowdown in WWE live event demand; uptick being observed

Answers to last quarter's watch list

Q4 UFC margin under the new Paramount model. UFC Q4 segment EBITDA margin came in at 53% (up from 52% prior-year Q4); FY UFC margin held at 57%. The Paramount transition is not compressing UFC unit economics in its first full quarter, and revenue accelerated to +16.7% YoY. Status: Resolved positively
Partnership momentum toward the $1B target. 2025 partnership revenue hit $450M (the prior target) and the 2030 target was raised to $1.2B from $1B. Management cited unexploited categories and the WWE 40% female demographic as additional unlock. The cadence of new deals continues — Ram Trucks, PolyMarket, DoorDash, Meta, IBM carried through 2025. Status: Resolved positively
IMG normalized growth ex-Olympics. IMG Q4 came in at -8.9%, consistent with management's earlier framing of Q4 IMG headwinds. The 2026 bridge is now quantified: $170M Milan revenue + $75M World Cup EBITDA contribution, partially offset by LA-28 pre-spend. The clean read for IMG arrives in 2026, not yet visible in the Q4 print. Status: Continue monitoring
Site fee 2026 magnitude. Quantified explicitly and re-architected as Financial Incentive Packages: ~$240M normalized for 2026 (~$300M including one-timers), trajectory to $380–420M by 2030. Approximately half of 2025 marquee UFC and WWE events were FIP-supported; the goal is FIPs for each of ~25 marquee events. Status: Resolved positively
Initial FY2026 guide shape. Guide is $5.675–5.775B revenue (+21% YoY) and $2.240–2.290B adjusted EBITDA (+43% YoY) at a 39.6% midpoint margin (+610bps vs FY25's 33.5%). The shape reflects the full media rights step-up, the FIP framework, and partnership ramp — management did not appear to sandbag around fighter compensation transition. Math ties cleanly. Status: Resolved positively

What to watch into next quarter

WWE segment margin sustainability above 50%. Andrew Schleimer flagged FY 52% — "over 50% for the first time in 2025." Watch Q1 FY26 for whether 50%+ holds as the new baseline as the ESPN PLE economics layer in.

Financial Incentive Package recognition cadence. The $240M normalized 2026 figure should flow visibly through segment revenue. Watch the H1 print for whether the FIP run-rate tracks toward $240M and whether management discloses the embedded cost-savings/tax-incentive components Ben Swinburne pulled out in Q&A.

Zuffa Boxing 2026 economics. Up to 16 fights planned, Conor Benn confirmed, Paramount+ series in the works, Sela financing super-fight purses. Watch Q1/Q2 for the first quantification of Zuffa Boxing revenue and EBITDA contribution, and for the second equity-vesting gate based on 2026 performance.

Working capital headwind from back-loaded Paramount payment schedule. Andrew Schleimer flagged a 2026 working-capital drag and a FIFA World Cup cash-distribution timing mismatch (collections pre-2026, distribution post-tournament). Watch H1 FCF conversion against the FY26 implied conversion to see how much of the FY26 FCF is back-loaded.

White House event ROI. $60M cost, ~$30M secured from sponsorship/inventory, balance dependent on earned media. Watch how the event is reconciled in the print it lands in.

Sources

  1. TKO Group Holdings Q4 FY2025 press release / 8-K Exhibit 99.1 — https://www.sec.gov/Archives/edgar/data/1973266/000119312526071552/tko-ex99_1.htm
  2. TKO Q4 FY2025 earnings call (prepared remarks from Ari Emanuel, Mark Shapiro, Andrew Schleimer; Q&A with LightShed Partners, Goldman Sachs, Morgan Stanley, JP Morgan, UBS)

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.