TKO earnings analysis
What we found in TKO's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
TKO delivered Q2 revenue of $1.5471 billion, up 18% year over year and modestly above consensus, while diluted EPS of $1.34 rose from $1.17 but missed the $1.45 estimate. Growth was broad across UFC, WWE and IMG, supported by new or higher media-rights contracts and FIFA World Cup hospitality, and gross margin increased to approximately 64.1%. Offsetting these positives were substantial litigation costs, a 46% rise in net interest expense, and first-lien debt of $4.6 billion; the filing itself did not provide numeric guidance.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue grew 18% year over year
- Q2 revenue rose $238.7 million, or 18%, year over year to $1.5471 billion. This was 3.3% below Q1 2026 revenue of $1.6 billion, reflecting event and hospitality timing, but exceeded the supplied $1.5382 billion consensus estimate by 0.6%.
- Gross margin expanded; operating margin rebounded
- Gross margin was approximately 64.1%, calculated from $1.5471 billion of revenue less $556.1 million of direct operating costs. That is roughly 0.5 percentage points above Q2 2025's 63.6% and 10.1 points above Q1 2026's 54.0%; operating margin was 27.8%, versus 28.2% a year ago and 21.2% in Q1.
- EPS rose year over year but missed consensus
- Diluted EPS was $1.34, up from $1.17 in Q2 2025 and $1.12 in Q1 2026, but below the supplied $1.45 consensus estimate. Net income attributable to TKO increased $3.3 million to $101.6 million despite $22.4 million higher net interest expense.
- UFC and WWE media-rights momentum
- UFC revenue rose 29% to $535.7 million, driven by a $64.7 million increase in media rights and a $59.0 million increase in partnerships. WWE revenue increased 12% to $620.9 million, led by $80.8 million of higher media-rights, production and content revenue.
- IMG profit inflected on hospitality demand
- IMG revenue increased 16% to $354.7 million and adjusted EBITDA rose $49.6 million to $78.6 million. On Location's FIFA World Cup 2026 hospitality sales drove a $66.4 million rise in IMG live-events and hospitality revenue.
- Strong cash conversion and low capex intensity
- Six-month operating cash flow was $1.0685 billion, up from $559.0 million, while property, buildings and equipment spending was $44.4 million. This implies six-month free cash flow of approximately $1.0241 billion and capex equal to about 4.2% of operating cash flow.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Litigation costs materially pressured expenses
- Corporate and Other SG&A rose $79.9 million, or 67%, to $462.7 million, primarily including $61.4 million of higher legal fees. The quarter included a $30.0 million estimated loss net of probable insurance recoveries and $25.6 million of WWE stockholder-litigation professional fees.
- Higher leverage and floating-rate exposure
- First-lien term-loan debt increased to $4.6 billion at June 30, 2026 from $3.7 billion at December 31, 2025. Net interest expense rose $22.4 million, or 46%, to $70.6 million; a 1% increase in effective rates would raise annual interest expense by about $46 million.
- Event revenue remains sensitive to calendar and venue
- Live-event revenue declined in both core franchises despite total growth: UFC live-event revenue fell $10.7 million and WWE live-event revenue fell $33.7 million. Management attributed these declines to one fewer UFC Numbered Event, absence of UFC Freedom 250 ticket sales, and lower WrestleMania ticket revenue from returning to Las Vegas for a second year.
- No formal risk-factor updates; IMG contract loss
- The company reported no material changes to the risk factors disclosed in its 2025 Annual Report on Form 10-K. However, IMG media-rights, production and content revenue fell $16.2 million, principally following the loss of a professional-cycling contract.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $1.34
- Gross margin
- 64.1%
- Operating margin
- 27.8%
- Segment
- UFC revenue: $535.7 million, up $119.8 million (29%) year over year
- Segment
- WWE revenue: $620.9 million, up $64.7 million (12%) year over year
- Segment
- IMG revenue: $354.7 million, up $48.1 million (16%) year over year
- Segment
- Corporate and Other revenue: $48.5 million, up $3.9 million (9%) year over year
What they said about what is next.
The 10-Q MD&A provides no quantitative revenue or EPS outlook. Management states that it expects existing liquidity sources to fund working-capital requirements and commitments, including debt service, for at least the next 12 months; quantitative FY2026 guidance was provided separately in the earnings release/call.
The filing reads about the same as the one before it.
What came before.
- 10-Q · May 6, 2026
- TKO Group Holdings delivered strong Q1 2026 results with revenue of $1.597 billion, exceeding consensus estimates of $1.596 billion and a 26% increase from $1.269 billion in Q1 2025. Diluted EPS improved to $1.12,…
- 10-K · February 25, 2026
- TKO positions itself as a consolidated premium sports & entertainment platform combining UFC, WWE and the Acquired Businesses (IMG, On Location, PBR) to monetize media rights, live events, hospitality and partnerships.…
- 10-Q · November 5, 2025
- TKO Group Holdings reported Q3 results that surpassed revenue estimates while missing on EPS. Revenue reached $1.12 billion, a 27.7% decline year-over-year, with EPS at $0.47, lower than the expected $0.54. The…
- 10-Q · August 6, 2025
- TKO reported a strong quarter: revenue of $1,308,442,000 (three months ended June 30, 2025) increased ~9.6% year-over-year and ~3.1% sequentially, with gross margin expanding to 63.6% and operating income rising to…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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