WWE Reports $255.8 Million Revenue For Third Quarter 2021, Full Financial Results

Jeremy LambertNovember 4, 2021, 8:23 pm

WWE has reported its third quarter financial results from 2021.

The company brought in a revenue of $255.8 million for the quarter, an increase of 15% or $34.2 million.

“During the third quarter, we returned to live event touring with record average attendance, driving our better-than-expected performance,” said Vince McMahon, WWE Chairman & CEO. “Even with only one large-scale international event due to COVID-related circumstances, we will exceed our previous financial guidance given the overall strength in each of our business lines. We think our performance highlights the strength of our brand globally and supports our belief that we are well-positioned to maximize the value of our content and drive long-term shareholder value.”

Kristina Salen, WWE Chief Financial Officer, added “In the quarter, our better-than-expected revenue of $255.8 million and Adjusted OIBDA of $77.9 million reflected robust demand for our live events as we returned to touring and attracted average attendance above 2019 levels. Even with only one large-scale international event this year, we are raising our full-year 2021 Adjusted OIBDA guidance to a range of $305 million to $315 million.”

Highlights from the report:

Third Quarter 2021 Highlights*
* (All comparisons are versus the prior year period unless stated otherwise)

Revenue was $255.8 million, an increase of 15% or $34.2 million, primarily driven by higher ticket sales and, to a lesser extent, venue merchandise sales, resulting from the Company’s return to ticketed live events, including SummerSlam

Operating income was $64.0 million, an increase of 1% or $0.6 million, benefitting from the growth in revenue and the absence of COVID-associated severance expense as compared to the prior year. This benefit was largely offset by higher television and event-related production expense

Adjusted OIBDA1 was $77.9 million, a decrease of 8% or $6.4 million. Adjusted OIBDA in the prior year quarter excludes COVID-associated severance expense

WWE returned to live event touring beginning July 16, 2021, with strong demand for tickets that outpaced expectations. WWE live events in North America attracted the highest quarterly average attendance in more than a decade

SummerSlam was held at Allegiant Stadium in Las Vegas in front of a record-breaking, sold-out crowd of more than 51,000 fans. As the most watched SummerSlam in the Company’s history, the event also set a record for sponsorship and grew merchandise sales by 155% compared with 2019’s SummerSlam

Digital video views were a record 12.8 billion, an increase of 39%, and hours consumed were a record 411 million, an increase of 20%, across digital and social platforms2

Return of capital to shareholders totaled $31.0 million, including $21.9 million in share repurchases and $9.1 million in dividends paid

Business Outlook3

* (All comparisons are versus the prior year period unless stated otherwise)

In January, the Company issued Adjusted OIBDA guidance of $270 million to $305 million for the full year 2021. Based on outperformance to-date and revised expectations for the full year, the Company is raising its guidance. Adjusted OIBDA is now expected to be within a range of $305 million to $315 million with the staging of only one large-scale international event. The revised full year guidance implies fourth quarter Adjusted OIBDA of $75 million to $85 million as compared to $51.2 million in the fourth quarter 2020. The year-over-year increase in fourth quarter 2021 is driven by the staging of one large-scale international event, which the Company was unable to stage in fourth quarter 2020

Third-Quarter Consolidated Results*

* (All comparisons are versus the prior year period unless stated otherwise)

Revenue was $255.8 million, an increase of 15% or $34.2 million, primarily driven by higher ticket sales and, to a lesser extent, venue merchandise sales, resulting from the Company’s return to ticketed live events, including SummerSlam. Additionally, the contractual escalation of core content rights fees from the distribution of the Company’s flagship programs, Raw and SmackDown, was partially offset by a decrease in network revenue, driven by the timing of the recognition of content license fees associated with the delivery of WWE Network content to Peacock as compared to the recognition of subscription revenue in the prior year quarter.

Operating Income was $64.0 million, an increase of 1% or $0.6 million, benefitting from the growth in revenue (described above) and the absence of a $5.5 million COVID-associated severance expense as compared to the prior year. This benefit was largely offset by higher television and event-related production expense related to the Company’s weekly, in-ring content and SummerSlam as the Company returned to live event touring in July. In the prior year quarter, WWE produced a majority of weekly, televised content from its lower production cost training facility. The Company’s operating income margin decreased to 25.0% from 28.6%, driven by the increase in production expense (described above).

Adjusted OIBDA (which excludes stock compensation) was $77.9 million, a decrease of 8% or $6.4 million. Adjusted OIBDA in the prior year quarter excludes $5.5 million in COVID-associated severance expense (described above). The Company’s Adjusted OIBDA margin decreased to 30.5% from 38.0%.

Net Income was $43.5 million, or $0.52 per diluted share, a decrease from $48.2 million, or $0.57 per diluted share, in the third quarter 2020, reflecting after-tax unrealized gains of $5.2 million in the prior year quarter primarily related to the value of the Company’s DraftKings investment.

Cash flows generated by operating activities were $56.9 million, a decrease from $116.8 million, primarily driven by the timing of collections associated with our large-scale international events in the prior year quarter.

Free Cash Flow was $44.8 million, a decrease from $110.8 million, driven by the decrease in operating cash flow primarily due to the change in working capital and, to a lesser extent, the increase in capital expenditures.4

Cash, cash equivalents and short-term investments were $449 million as of September 30, 2021.

Debt totaled $221 million as of September 30, 2021, including $200 million associated with the carrying value of convertible senior notes due 2023. The Company has no amounts outstanding under its revolving line of credit and estimates related debt capacity of approximately $200 million.