Endeavor (EDR) 8 Aug 232023 Q2 Earnings call transcript

Good afternoon. Thank you for attending the Endeavor Group Holdings Second Quarter 2023 Earnings Call. My name is Matt, and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call for an opportunity for questions and answers at the end [Operator Instructions].

I would now like to pass the conference over to our host, James Marsh. ahead. go please James,

everyone investor.endeavorco.com. welcome at while second XX-Qs press ago, view our via the Relations you this And as will and prove outlook will for Shapiro discussed our If incorrect, this call. filings assumptions risk such be to and projections year. include from Lublin, also before of release, Securities President XXXX A can may balance available least site, Investor our XX short or we hear the forward-looking site our on any projections. addition of is recording these will those with statements I described involve to as The Jason financial you afternoon. including call us of results quarter call from Exchange for Endeavour's Endeavor's that earnings which Q&A. factors A Good COO, issued and you assumptions, implied CFO, the regarding differ and to Mark will ever provide days. Today, and that section or forward-looking in or risks, uncertainties and/or information the CEO, risks join for materially Ari in XXXX with Emanuel; the XX-K. second remind our in uncertainties to materialize that and performance well purpose information a expressed of do our statements Commission, want quarter

of required. or events statements and in to they're them we information made only undertake future the light obligation of legally update date as Forward-looking no publicly except speak as new

our be in tool to non-GAAP which believe our considered Our Web for in press accordance in we commentary financial for reported or well a not as from This results substitute can release metrics provide financial in as use with posted an operating measures, all between issue for GAAP the GAAP. as results IR information in additional financial ongoing be should trends. site. and will isolation prepared our of found today in measure include today Reconciliations investors non-GAAP evaluating also and non-GAAP information

I'll that, to turn our With it CEO, Emanuel. Ari over

afternoon, quarter, ongoing results delivered and demand and solid for content everyone. reflecting We live the second good premium in James, Thanks, events.

Before share to segments, our highlights two in from I particular. four note I'd deals like

Academy First, IMG at of an value billion. we $X.XX closed sale our enterprise of

in As announced, initiatives now commence share dividend previously our will the repurchase quarter. we and third payment

Group on combination for antitrust launch of completed proposed TKO we having September. currently expect mid WWE, in the reviews UFC Holdings, Second, closing and are of late which in our we to

outlook upside of TKO TKO underway we and cost the As the XX% endeavor. And ownership to have I'm synergies exposure renewal closing. the is bullish discussed, offers controlling on begin compelling Media WWE maximizing for our upon to revenue via immediately progress discussions. Planning and

will We course. due in give initiatives further those clarity on

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WME is clients the of tours the the outside for strike performed music XXX best and beginning participated particular, the WGA touring. having within our in quarter, nearly selling in it home at well. Also win more including from Kimberly years. XX Musical, than over WME CMA this throughout including and nominations the Best XXX slots Finally, seventh performance within celebrated verticals in segment, to WME category year awards film are country our musical many the television behind quarter, coming of clients, comedy last and strong, representation awards, despite in creative In back we're the where out, Tony Broadway music, for making five Awards Fest WME Week Talent the Akimbo June. in team took

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and walk models I as and Jason Before resolution now been the creative again, whose and actors, the writers the work depend have over upon clients, no I with I entertainment we adjust turn interests. call issues stand Time a advocate through my through close exception, behalf industry on to continue in strikes turn real detail. all many livelihoods the for I'd Jason, that, their and economy. of XX to things more are of than strikes. to we protects and through to is now like push will technologies. over commercial change to has creatives and to years you that navigated over and our our There their some new quarter With thoughts with to on types representing distribution

good color second on some will financial start our I for All through walking then each everyone. XXXX. seeing to we will will the Ari, results afternoon, you are provide by I what in comparisons Thanks, the quarter of operating and be second segments. our quarter. of

revenue, we $X.XXX in for EBITDA The was generated to quarter which $X.X in Academy, the income the of at Net million, consolidated largely $XXX.X the X.X%. $XXX.X XX, billion the end quarter by gain For was income million ended IMG was June. change net $XX.X million. for compared $XXX.X million. or up million XXXX, from the of Adjusted sale driven we completed quarter down the the June

each our you of segments. walk Now I'll through

Our segment segment's million Owned XX.X%. or while EBITDA or revenue X.X%, adjusted $X.X quarter the $XXX.X million Properties Sports $XX was million the the in million, quarter, for of generated up $XXX.X up

Ariat PBR's we was increase live The year to we this agreement sold prior new a records, of rights in term we with series. revenue primarily the at Revenue approximately we increased partnership The Diamond in sponsorships sold events event series which rights Bass commercial since in by long Beast and As Unleash Indonesia. two a related in event extensions partnerships At Largely $XX we the in Baseball segment with In set and fees out from higher pay-per-view. Apex, signed with held outside for of growth increase XXX% driven our PBR, XX and UFC. began Mola prior more the and Shops Pro AAV multi-year an eight signed performances. revenue media XXXX. revenue and Pendleton tracking deals million over quarter, reminder, quarter included including XXXX. Holdings, We Whiskey in team new of remains of September aggregate inked QX

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early X.X%. on revenue our was partially segment to as in increase content million at strike, X.X% business. adjusted in deliveries down impact offset $XX.X quarter. $XXX.X the content segment as million, or segment. of attributed Moving EBITDA an primarily EBITDA stage business, was Revenue to growth the was The impact had adjusted well $XXX.X or while non-scripted on Representation production our was our the writer the The million, by million within which up $X.X XXXoverXX increase

cycle. $XXX.X to of down increased in addition year of Arena. in as at adjusted offset well Arena Sports Technology QX was our the from at contracts inclusion was Revenue XXX.X% of acquired OpenBet, we betting $XX.X attributed & OpenBet, segment growth or $X.X while Data existing million by XX.X%. to in costs was the data advance Segment Revenue $XX.X sales benefited last IMG which the was turning million, the million, or segment. million Now as of IMG up adjusted EBITDA data growth in the which EBITDA,

we As new these anticipated. which margins, we data temporary create previously continue costs to pressure noted, on segment

previous loaded We half of with remains these expect rights monetize back the being quarter our upcoming segment continue cycle. year. Performance the the data in to in consistent for to commentary the sales

debt in Moving in ended to structure. our and quarter billion billion on approximately in We in debt. the capital $X.XX net $X.XX cash, billion $X.XX with resulting

commence to debt. XXX Class Our we million at at of million quarter common was net times July, Later quarter share pay expect end. of $XX our down In leverage up we X.XX to our end. stock month, A this of of completed voluntary repurchase

also dividend A an to $XX other at amount equity our to holders our in stock Operating We to holders distribute our up first Company. and quarterly Class million common intend of Endeavor

Now the through strikes in flows average, XX outlook. $XX to is our revenue the first estimate month WGA We impact largely approximately related and years, currently million to our EBITDA. per are striking which by SAG-AFTRA This will adjusted time both on simultaneously. adversely

would calendar update on knowing of updates given to rely not of that earnings of eventual the the future and Accordingly, the to the on visibility. a development our shape taken the the especially of encourage to communicated premature impact greater plan guidance scope, and guidance duration without targets strike call relatively course strike speculate when dollar We be July However, impacts QX the the and SAG-AFTRA effect new earnings as investors our recovery, resolved balance XXth, it the labor further provide these we annual disputes expect is on and are having previously aggregate new announcements have during only we year. we ordinary during estimates. for to

track businesses James. Beyond With continue it the impact related I'll remain be strike, our our Despite expectations. strategy. near with that, on disruptions the focused our back adjusted we in EBITDA executing you, on strike, term to to of aggregate turn the to other

we Jason. questions the Thanks, for please? call Great. can Operator, up open

Hodulik first is line [Operator the with Instructions] question of The from UBS. John

withdraw question. there, guidance mean, the sort else the housekeeping something latest strike, I the comments on I a your update of why has business? just for first, versus guess, unless guidance changed guess, I in Jason,

SAG-AFTRA annual The situation of added is the the of out in know, first ultimate figure Look, the we recovery. development hard recent all, monthly. of guidance guidance, provide and as duration our largely not currently unknown unprecedented. you we're with annual complicated. forecasting is shape complexity And strike, to The

at we on are try monthly current forecast transparency just to based to time, said, our estimate too impact. So we not giving business of today. this prudent parts moving we our know many basis, believe annual our what it's on That providing best an by

strike. So the your the ultimate impact you inputs of the on own make assumptions have to

results as Excluding in billion are strike, of is roughly the expectations, business for are also of our adjusted done revenue $XXX expectations million QX EBITDA adjusted in line ahead on EBITDA. we'll update $X more we QX as rest over just we've with year-to-date, in in track. And we share and street more previous said, plan the business the with know and more our to we'll everybody. and

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generation in is event. a So once a this

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in I in sort of million billion the just the $X.X to six $XX the the so, Jason, what there, goes EBITDA And rest year, a saying for make it year. understand of the sure that of $X.XX I Do lasts for sort from of the right? guidance you're effectively neighborhood got month, months,

best I for business that not is, than guidance we're or know aligned, give months our the say and on days the reasonable that's given the any at give different. on we noting of as estimates look has for at now we look, given first think of what to we changes impact SAG-AFTRA that at seeing to XX the the would John, QX what view the to So being business… the based our But performed based I numbers. the fact rest less look and actuals of reasonable are and is the in that But to anything old will year. strike strike, to QX and definitely our going way basis a the generally through That what impact of date six to of update look that's I the business business to a -- and well said, course

people strikes or get settled anticipate. earlier Including most that these down, than up the events

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front any of that, either evidence sports less and or mean, Mark we weakness ecosystem is halfway I appetite that the my center. are you now linear of for seeing that to sort mean, sort rights? through translating And I Ari, And definitely earnings in weakness from here. guess, question, I actual are is And TV the

Well, is I'd say. what here

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We also WWE think of premium television appointment and that those rights. the about the UFC are and properties like value feel content great

of Next Swinburne line Ben Morgan question Stanley. from the with is

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moment. or of whether all We on levers. the can all the freezing in are And portfolio we're is our to tight controls, third efficiencies T&E, hiring word the it pruning just bet And comes you lifting question?

What was the question? third

allocation you the do with capital flow and capital think TKO there, the you that what given might all leverage cash potential? do

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the from of with is question Next [indiscernible] line Evercore ISI.

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share around and ahead most there guidance. gets on going And a you what remaining see non-TKO here flow? there's is I know But group, don't or you outlook excited the Jason, the So could you your Ari then I expect profile particularly for free for cash businesses? these views you can about Mark, anything on share the on lot financial

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could I And & just then Jason. Technology maybe more for the one segment Sports on if Data

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meant year. and weighted the the in the QX basically in majority of the QX segment EBITDA We that for is

clearly, of news you, tell a I'll the with and we betting ecosystem. PowerSchool Entertainment, you and ESPN I ESPN ones major saw that the today Bet PEN not part the mean, sports only are think is and

Reif of with Securities. The is next BoA from Ehrlich question line the Jessica

just back content, Kind of a to three parter strike. on going the

at end of companies. You are the reporting tail most

about impact you about content an lot this your is move entities? How pretty then, impact Mark, how and unless the spend licensing, efficient. some of a becoming how mitigate post time but the mean, everybody’s seems these then two changing like can going TKO? So some that between offshore, and business? you your strike do you heard And you this of strikes a seeing lot or companies the And a in just production. thinking industry I to forward? third-party a of split but talking we are thing, think Ari have obvious, structurally plan Do there's of that does for will increase small And they're it that guess content know global I more

questions… four Jessica, record, New

your what more to yet, efficiency. there's see maintains and I in internationally would spend, other stuff we're many There's, thing. Here's that buying don't say you. programming, been and pullback. indications, now. subs you In content been don't mean, get always. new the any Netflix that there's does subs. the strike Sports people trying We I believe to have same I

buyers seven movie on to with side Sony business. six the to think direct and Paramount I there's and consumer also

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I of that our we're good would one a strength And So to we company. is global you is about say feel that.

bunch eyes you also world, sports our one as for businesses, so for over our we the said Mark have but of, And non-scripted all when kind a of say acquisitions.

So covered that in go we're forward a space basis. on

Next Research. question Seaport with is from line of David Joyce the

for in agencies builds, getting of organic the representation. Given What that the acquisitions, organic international international TKO the be gestation the I front norms? in you the in is for of for up and acquisitions to sets wondering footprint representation the what the opportunities opportunity or creation doing terms terms what's out pending build one through are of terms on the or division footprint. building was of period might

just this hand advantage seeing I we're dovetails goes in with of spaced Yes, of with It that. think are in little just Jessica's bit the a globally in David, geographically kind take localized this terms country, look, content. we're of content and not question that for seeing to hand we demand

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as we growth a see major us. So that for area of

up opportunity probably everywhere in Korea. fact, where you'll offices see see more content to India In globally us from open we

Piper of Tom Next Sandler. question Champion is from with line the

just little a So the the on little related bit if about spend bit you maybe strike. to view curious Technology. you could experiences, business the consumer. overall Data then, & the of to Sports a talk But talk consumer of just could in about appetite if And uncertainty

Greece. talked referenced And deal venues I watching the past domestically. Mark, you've part the I opportunity new business? here a in should you of the we non-traditional in think that in that about be for What's think

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