WWE BUSINESS: WWE reports Q1 2022 financial results

Posted on 5/06/122 by Colin Vassallo

First Quarter 2022 Highlights

– Revenue was $333.4 million, an increase of 27% and a
quarterly record; Operating Income was $92.4 million, an
increase of 42%; and Adjusted OIBDA1 was $111.7 million, an
increase of 33% and a quarterly record
Returned capital to shareholders totaling $38.9 million,
including share repurchases and dividends paid

– Announced a multi-year expansion of the Company’s original
programming partnership with A&E that includes more than 130
new hours of premium WWE-themed series and specials

– Announced a broadcast partnership with MBC Group, the
largest and leading group in the Middle East and North
Africa (MENA) region, to air WWE premium live events, live
episodes of Raw and SmackDown as well as WWE Network’s vast
library of content

– Announced a comprehensive, long-term partnership with
Fanatics to create a new, enhanced digital platform for e-
commerce and licensed merchandise, as well as physical,
digital, and non-fungible token (NFT) trading cards

– WWE 2K22, the latest installment of the Company’s flagship
video game franchise, was released to strong consumer demand
and rave reviews

WrestleMania Highlights (April 2-3, 2022)

– WrestleMania was held at AT&T Stadium in Dallas over two
consecutive nights in front of a combined 156,352 fans.
WrestleMania was WWE’s highest-grossing and most-attended
event in company history

– WrestleMania was the most viewed WWE premium live event of
all time. Global unique viewership increased 54% and
domestic unique viewership increased 61% year-over-year

– WrestleMania was the second most viewed event on Peacock
to date, behind only Super Bowl LVI

– WrestleMania generated 2.2 billion social media
impressions, more than the 1.8 billion impressions generated
by Super Bowl LVI
WrestleMania viewership in India was a record 56.1 million,
a 29% increase year-over-year

2022 Business Outlook

– The Company reaffirms its expectations for 2022, which
assume ticketed audiences at the Company’s live events for
the full year, and target record revenue and an Adjusted
OIBDA range of $360 – $375 million, which would be an all-
time record. This range of anticipated performance reflects
the continued ramp-up of live events, including large-scale
international events, and increased monetization of content,
partially offset by increased production, content-related,
and other expenses.

STAMFORD, Conn., May 5, 2022 – WWE (NYSE: WWE) today
announced financial results for its first quarter ended
March 31, 2022.

“We are off to a strong start in 2022, highlighted by record
quarterly revenue and Adjusted OIBDA,” said Vince McMahon,
WWE Chairman & CEO. “We continued to effectively execute our
strategy, including staging the most stupendous WrestleMania
ever in early April. WrestleMania, as well as our other
successful premium live events such as Day 1, Royal Rumble
and Elimination Chamber, further expanded the reach of our
brands and enhanced the value of our content as evidenced by
increased ticket revenue and viewership. We continue to
monetize our intellectual property across various platforms
through our media rights agreements, both domestically and
abroad, as well as through the monetization of new original
series, including our expanded partnership with A&E.”

Frank Riddick, WWE Chief Financial and Administrative
Officer, added “In the quarter, we exceeded the high end of
our guidance. Adjusted OIBDA increased 33% reflecting 27%
revenue growth. Our strong financial performance was
primarily driven by our return to a full live event
schedule, including the staging of a successful large-scale
international event. These items more than offset the
absence of one-time upfront revenue recognition related to
the delivery of certain WWE Network intellectual property
rights in the prior year period.”

First-Quarter Consolidated Results

Revenue increased 27% to $333.4 million, primarily due to
the timing of a large-scale international event as well as
higher ticket sales due to the return of ticketed audiences
at our live events. These increases were partially offset by
a decline in network revenues primarily due to the impact of
upfront revenue recognition in the prior year quarter
related to the delivery of certain WWE Network intellectual
property rights.

Operating Income increased 42%, or $27.3 million, to $92.4
million, driven by the increase in revenue partially offset
by an increase in operating expenses. The increase in
operating expenses was primarily driven by return to live
event touring, including the timing of a large-scale
international event, partially offset by lower television
production costs associated with the creation of the
Company’s weekly, in-ring content. In the prior year period,
WWE produced its weekly, televised programs utilizing the
higher cost environment of WWE ThunderDome at Tropicana
Field in Tampa, Florida.

The Company’s operating income margin increased to 28% from
Adjusted OIBDA (which excludes stock compensation) increased
33%, or $27.8 million, to $111.7 million. The Company’s
adjusted OIBDA margin increased to 34% from 32%.

Net Income was $66.1 million, or $0.77 per diluted share, an
increase from $43.8 million, or $0.51 per diluted share in
the first quarter of 2021, primarily reflecting higher
operating performance.

Cash flows generated by operating activities were $95.5
million, an increase from $59.9 million, primarily due to
the timing of collections associated with WWE Network
revenue and, to a lesser extent, higher net income. These
increases were partially offset by the increased payout of
management incentive compensation.

Free Cash Flow3 was $74.0 million, an increase from $53.8
million, primarily due to the change in operating cash flow,
partially offset by an increase in capital expenditures.4
For the three months ended March 31, 2022, the Company
incurred $13.1 million of capital expenditures related to
its new headquarter facility. Excluding the capital
expenditures related to the new headquarter facility, Free
Cash Flow for the three months ended March 31, 2022 was
$87.1 million.

Return of Capital to Shareholders

The Company returned $38.9 million to shareholders in the
first quarter of 2022, including $30.0 million in share
repurchases and $8.9 million in dividends paid. Under the
Company’s existing stock repurchase program, approximately
525,000 shares were repurchased at an average price of
$57.21 per share. As of March 31, 2022, the Company had $221
million available under its $500 million stock repurchase

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