Endeavor Group Holdings, Inc. (NYSE:EDR) is a global sports and entertainment company that has solidified its position as a diversified industry leader. With a robust portfolio of premium sports and entertainment properties, including the UFC and WWE through its majority ownership of TKO, as well as a thriving representation business and a growing sports data and technology segment, Endeavor has demonstrated its ability to navigate the evolving media landscape and deliver consistent financial performance.
Financials
In the fiscal year 2023, Endeavor reported annual revenue of $5.96 billion, up from $5.27 billion in the prior year. The company's net income for the year stood at $557.5 million, compared to $321.7 million in the previous year. Endeavor's annual operating cash flow was $393.6 million, while its free cash flow reached $156.1 million.
The company's strong financial results were driven by the successful integration of its acquisition of WWE, which contributed $383 million in revenue from September 12 to December 31, 2023. Additionally, the company's Owned Sports Properties segment, which includes the UFC and PBR, saw revenue growth of 36% to $1.82 billion, driven by higher media rights and content fees, increased live event revenue, and growth in partnerships.
In the fourth quarter of 2023, Endeavor reported revenue of $1.58 billion, up 26% from the same period in the prior year. Adjusted EBITDA for the quarter was $292.8 million, an increase of 22% year-over-year. The company's net loss for the quarter was $29.3 million, compared to a net loss of $225.7 million in the fourth quarter of 2022.
Business Overview
Owned Sports Properties
Endeavor's Owned Sports Properties segment was the standout performer in the fourth quarter, generating revenue of $642.8 million, up 113% from the same period in the previous year. This growth was primarily driven by the inclusion of WWE, as well as continued strength in the UFC's media rights, content fees, and live event revenue.
Events, Experiences & Rights
The company's Events, Experiences & Rights segment reported revenue of $414.5 million in the fourth quarter, down 8% year-over-year, due to the sale of the IMG Academy and a decrease in the on-location music touring business. However, this was partially offset by growth from new and existing events across the portfolio, the timing of biennial and quadrennial events, and increases in sports production.
Representation
Endeavor's Representation segment generated revenue of $427.4 million in the fourth quarter, up 5% from the same period in the prior year. While the segment's revenue growth was adversely impacted by the WGA and SAG-AFTRA strikes, this was more than offset by growth in the company's other representation businesses.
Sports Data and Technology
The Sports Data and Technology segment reported revenue of $113.6 million in the fourth quarter, up 5% year-over-year, driven by the inclusion of OpenBet for the full year and growth in betting data and streaming at IMG ARENA.
Outlook
Looking ahead, Endeavor remains focused on executing its strategy and maintaining momentum in 2024. Within the Owned Sports Properties segment, the company anticipates continued progress in integrating TKO and leveraging its flywheel to create synergies and unlock further value. The company expects growth to be driven by continued strength in live events, growth from partnerships, and renewals of licensing agreements for UFC content in certain international markets.
In the Events, Experiences & Rights segment, Endeavor is focused on executing its investment in On Location for the IOC initiative and capitalizing on the favorable location of the recent Super Bowl in Las Vegas. The company also expects continued growth from its own events, such as Barrett-Jackson, the Miami Open, Madrid Open, as well as its Frieze events and Hyde Park Winter Wonderland.
Within the Representation segment, Endeavor expects growth in its agency business, driven by the continued post-strike recovery of the TV and film industry, as well as in its sports and music divisions. The company also anticipates continued growth at 160over90 as brands seek unique ways to be culturally relevant, particularly with the upcoming Summer Olympic games.
In the Sports Data and Technology segment, Endeavor is focused on optimizing its products and services and driving operating efficiencies as the market for betting data and streaming rights remains competitive. The company is well-positioned to capitalize on global growth trends, especially around regulation and regulating markets, as evidenced by OpenBet's expansion into responsible gaming solutions.
Conclusion
Overall, Endeavor's diversified business model, strategic acquisitions, and focus on execution have positioned the company for continued growth and success in the dynamic sports and entertainment industry. The company's strong financial performance, coupled with its strategic initiatives, suggest that Endeavor is well-equipped to navigate the evolving landscape and deliver value for its shareholders.