WWE has published its financial results for the third quarter of 2022, which show revenue at $304.6 million, a year-on-year rise of 19%.
The company claims the rise was primarily due to an increase in rights fees for Raw and SmackDown, as well as the monetization of third-party original programming.
However, operating income decreased by 8% to $58.9 million, which WWE said was due to the increase in revenue being offset by higher operating expenses.
The company noted that the increase in operating expenses was primarily driven by higher costs of content creation, “as well as the impact of certain costs related to the Special Committee investigation.”
The Special Committee, which has ended its investigation and been disbanded, was set up to look into alleged misconduct and secret payments by former CEO, Vince McMahon.
In its full Securities and Exchange Commission filing, WWE stated: “Management is working with the Board of Directors to implement the recommendations of the Special Committee related to the investigation.”
In its corporate news release, the company also noted that Clash at the Castle was the most viewed international event in WWE’s history.
WWE further stated that the domestic premium live events during the quarter (Money in the Bank, SummerSlam, and Extreme Rules) were the most viewed in their history with year-over-year increases of 17%, 20%, and 36%, respectively, in domestic unique viewership on Peacock.
Third Quarter 2022 Highlights
- Revenue was $304.6 million, an increase of 19%; Operating Income was $58.9 million, a decrease of 8%; and Adjusted OIBDA was $91.2 million, an increase of 17%
- Returned $9.1 million of capital to shareholders through dividends paid
- Clash at the Castle, the first major WWE stadium event in the UK in over 30 years, was held at Principality Stadium in Cardiff, Wales. Clash at the Castle was the most viewed international event in WWE’s history
- Each WWE domestic premium live event (Money in the Bank, SummerSlam and Extreme Rules) was the most viewed event in its history with year-over-year increases of 17%, 20% and 36%, respectively, in domestic unique viewership on Peacock
- WWE announced a multi-year agreement with its long-standing partner, the Foxtel Group, to expand the distribution of the Company’s content in Australia
- WWE announced the creation of NXT Europe, which is planned to launch in 2023, to expand the NXT brand internationally
- In October, WWE announced its “Campus Rush” recruitment tour to further enhance the Company’s talent development program
2022 Business Outlook
In February, the Company issued Adjusted OIBDA guidance of $360 – $375 million for the full year 2022. In August, the Company raised its guidance to $370 – $385 million. Based on performance through the first nine months of the year as well management’s current expectations for the fourth quarter, the Company now expects full year 2022 Adjusted OIBDA to be at the upper-end of the range of $370 – $385 million.
STAMFORD, Conn.–(BUSINESS WIRE)– WWE (NYSE: WWE) today announced financial results for its third quarter ended September 30, 2022.
“We generated strong financial results in the quarter, highlighted by record revenue and Adjusted OIBDA for a third quarter, and remain firmly on track to deliver record revenue and Adjusted OIBDA for the full year,” said Stephanie McMahon and Nick Khan, WWE co-Chief Executive Officers. “We continue to effectively execute our strategy, including staging a record-setting international stadium event, Clash at the Castle, in early September. Clash at the Castle, as well as our other premium live events (“PLEs”) including SummerSlam and Extreme Rules all continue our streak of delivering record viewership for each respective event. These PLEs, along with strong ratings for our flagship programs, Raw and SmackDown, continue to expand the reach of our brands and enhance the value of our content across various platforms, both domestically and abroad.”
Frank Riddick, WWE President & Chief Financial Officer, added “In the quarter, we exceeded our guidance. Adjusted OIBDA increased 17% reflecting 19% revenue growth over the prior year. Our financial performance was primarily driven by growth in our Media segment as well as a shift in the timing of revenue related to certain licensing agreements. These items more than offset an increase in certain costs to support the creation of content. For 2022, we now anticipate Adjusted OIBDA at the upper-end of the range of $370 to $385 million.”
Third-Quarter Consolidated Results
- Revenue increased 19% to $304.6 million, primarily due to an increase in core content rights fees for the Company’s flagship programs, Raw and SmackDown, and the monetization of third-party original programming. To a lesser extent, higher consumer product licensing revenue and international ticket sales also contributed to the increase in revenue.
- Operating Income decreased 8%, or $5.1 million, to $58.9 million, as the increase in revenue was offset by an increase in operating expenses. The increase in operating expenses was primarily driven by higher costs to support the creation of content as well as the impact of certain costs related to the Special Committee investigation. (See the “Special Committee Investigation” discussion for further details.) The Company’s operating income margin decreased to 19% from 25%.
- Adjusted OIBDA (which excludes stock-based compensation and other items included in operating income) increased 17%, or $13.3 million, to $91.2 million. The Company’s Adjusted OIBDA margin remained flat at 30%.
- Net Income was $41.7 million, or $0.49 per diluted share, a slight decline from $43.5 million, or $0.52 per diluted share in the third quarter of 2021, primarily reflecting the decrease in operating performance.
- Cash flows generated by operating activities were $54.5 million, a slight decline from $56.9 million, primarily due to lower net income and higher working capital requirements.
- Free Cash Flow was $3.5 million, a decrease from $44.8 million, primarily due to an increase in capital expenditures. For the three months ended September 30, 2022, the Company incurred $42.3 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 September 30, 2022 was $45.8 million.
John Pollock will be joined by Brandon Thurston on Thursday at 1 p.m. ET for a special show covering the WWE’s third-quarter earnings report and its call with media analysts. The show will air live on the POST Wrestling YouTube channel.
