Endeavor Group Holdings, which is navigating the return of production and live events after the worst of the Covid-19 pandemic, reported mixed second-quarter results.
The company said Monday that revenue in the period ending June 30 increased $650 million from the year-earlier quarter to $1.1 billion. That fell short of Wall Street analysts’ consensus forecast for $1.14 billion.
Operating losses widened to $307.5 million from $251.9 million in the year-earlier period. Adjusted EBITDA — a metric favored by media companies given the frequent gyrations of the industry — more than tripled to $168 million, from $45.4 million in the year-ago quarter.
Each of the company’s three operating units posted dramatically better financials than the doldrums of 2020, when Covid wiped out sports, live events, theaters, production and more. Owned Sports Properties saw revenue shoot up 70% to $106.6 million. The increase was primarily driven by media rights fees and an increased number of UFC and PBR events as pandemic restrictions eased. At the same time it completed its IPO, Endeavor also clinched a deal to take full control of the UFC, which had the best first half of a year in the circuit’s 26-year history in terms of revenue and EBITDA.
Revenue in the Events, Experiences & Rights unit increased $408.8 million, to $528.7 million. The company credited higher media rights fees due to the return of a full schedule of European soccer matches in 2021. The Representation segment, which includes agency WME, reported a 70% surge in revenue to $135.4 million.
The company raised its full-year financial targets, with revenue now expected to be between $4.8 billion and $4.85 billion. Adjusted EBITDA will come in at between $765 million and $775 million.
Private-equity-backed Endeavor went public last spring after withdrawing a previous offering in the fall of 2019 at the eleventh hour. Since going public at $24, Endeavor stock has run up and then come back down to earth in recent weeks. It closed Monday at $23.09, down 2% for the day.
After reaching a settlement with the WGA several months ago over packaging, the company’s content unit is headed for a sale. Initial discussions for Endeavor Content are underway with multiple suitors, with Endeavor planning to retain a 20% stake. Valuation remains a question mark, but recent acquisition targets like Hello Sunshine and SpringHill have fetched lofty valuations in the high-nine-figure realm.
“Despite continued challenges brought on by the pandemic, our company once again demonstrated resilience, due in large part to our global portfolio of premium assets and the creativity of our employees and partners,” CEO Ari Emanuel said in the company’s earnings release.
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