Endeavor’s total revenue slid 10% in the first quarter to $1.07 billion, but the company swung from a year-ago loss to $2.4 million in net income in the quarter.
The report was the company’s first since going public in April. The company’s portfolio includes entertainment agency WME; sports, fashion, events and media company IMG; and mixed martial arts circuit UFC.
Operating income rose to $94.5 million from $53.8 million in the first quarter of 2020. The $2.4 million in net income compared with a year-ago loss of $51.3 million. Adjusted EBITDA and adjusted net income increased to $199.5 million and $58.1 million, respectively, compared with $176.2 million and $43.8 million.
“As we emerge from the pandemic, we are witnessing strong demand for all forms of content,” CEO Ariel Emanuel said. “Our company was purpose-built to fulfill this demand on a global scale – be it live events and experiences or premium on-screen content. While our first quarter results were still negatively impacted by Covid-19, we are well positioned to benefit from the pent-up demand for content, while maintaining our long-term focus on secular trends and high-growth areas that have been both validated and amplified by the pandemic.”
In 2020, Endeavor’s total revenue slid 24% to $3.5 billion as the coronavirus pandemic upended the entire media and entertainment sector.
Endeavor went public at the end of April on the New York Stock Exchange, completing a process that had been planned for September 2019. The company decided to pull its IPO at the last moment, citing worsening market conditions.
The company’s shares started out at $24, the top of its initial range. After a strong debut, they have continued to gap higher, settling recently in a steady range between $29 and $30 a share. They closed today at $29.38, down a bit less than 1% on lighter-than-average trading volume.
Along with its quarterly financials, Endeavor also provided 2021 guidance for investors. The company said its full-year revenue will total between $4.76 billion and $4.83 billion (up from $3.5 billion in 2020). It sees adjusted EBITDA hitting between $735 million and $745 million and said it expects to reduce its debt by $600 million in the third quarter.
Among the three divisions of Endeavor, Owned Sports Properties saw the biggest gains, with revenue up 22% year-over year to $283.5 million. The credit went to increased event output and higher media rights and sponsorship fees at UFC, which Endeavor took full control of in a transaction that accompanied the IPO. Higher UFC revenue in the period boosted adjusted EBITDA 42.3% to $145.5 million in the quarter.
Times were notably tougher in the Events, Experiences & Rights unit as well as Representation, with revenue in the two falling 19% and 15%, respectively.
Experiences were flagged as a source of post-pandemic growth, in particular On Location, which Endeavor acquired in January 2020. The operation, which had previously been part of the NFL, had been controlled by private equity until the acquisition, which was pegged at about $650 million to $700 million.
The International Olympic Committee earlier today named On Location the global hospitality provider for the Olympic and Paralympic Games over three Games starting with Paris 2024. Endeavor said it is the first time the IOC has appointed a company as a global hospitality provider for multiple Games. On Location continues to work with the NFL, the NCAA and the PGA Championship.