World Wrestling Entertainment (WWE) Tops Q1 EPS by 6c, Revenues Beat

World Wrestling Entertainment (NYSE: WWE) reported Q1 EPS of $0.31, $0.06 better than the analyst estimate of $0.25. Revenue for the quarter came in at $291 million versus the consensus estimate of $266.52 million.

First Quarter 2020 Highlights

• Revenues increased 60% to $291.0 million as compared to the prior year quarter
• Operating income was $53.3 million as compared to a loss of $6.8 million in the prior year quarter
• Adj. OIBDA1 increased to $77.3 million from $12.4 million in the prior year quarter
• Announced multi-year distribution agreements with Sony Pictures Networks in India and DAZN in Germany to extend the reach of WWE content across television and digital platforms
• WWE Network average paid subscribers2 were 1.46 million, consistent with the Company’s guidance
• Digital video views increased 25% to 9.6 billion and hours consumed increased 15% to 344 million across digital and social media platforms3

WrestleMania Highlights (April 4-5, 2020)

• WWE set WrestleMania Week viewership records with more than 967 million video views across digital and social platforms4, representing a 20% increase from the prior year. A record 46 million hours of content was consumed during the week, an increase of 28% from the prior year
• WrestleMania(April 4 & 5, 2020) was the most social event in WWE history with more than 13.8 million total social media interactions on Facebook, Instagram and Twitter, up 57% vs. last year’s WrestleMania5
• WWE Network’s WrestleMania weekend subscriber additions (Friday-Sunday) were the highest in its history. Total subscribers reached 2.10 million on April 6, 2020, up 5% from the day after WrestleMania last year

COVID-19 Actions and Outlook

• Due to COVID-19 and related government-mandated impacts on WWE moving forward, the Company has implemented various short-term cost reductions and cash flow improvement actions. These precautionary measures include reducing executive and board member compensation, decreasing operating expenses, cutting third-party staffing, consulting and talent costs, and reducing employee headcount by way of furlough
• To enhance liquidity, management deferred spending on the Company’s new headquarters (reducing 2020 capital expenditures by $140 million), temporarily suspended the repurchase of stock under its $500 million program, and drew $200 million from its revolving credit facility after quarter-end
• Management continues to believe the Company’s growth prospects remain strong and that WWE is well positioned to take full advantage of the changing media landscape and increasing value of live sports rights over the longer term (See COVID-19 Actions and Business Outlook, page 7)

“Our first quarter financial performance was strong and largely unimpacted by the COVID-19 outbreak,” said Vince McMahon, WWE Chairman & CEO. “Now we are in the midst of unprecedented times, which require us to be especially nimble, creative and efficient in order to ensure the long-term value of WWE. We are taking precautions to protect the health and safety of our performers and staff as we produce content in new ways, engage fans with a much-needed diversion and operate effectively in this evolving environment.”

Frank Riddick, interim Chief Financial Officer, added, “In the quarter, we delivered revenue of $291 million and Adjusted OIBDA of $77.3 million exceeding our rescinded guidance as we offset the impact of canceled events by reducing production and other costs. Given the current uncertainties of the potential impacts of COVID-19 on our business, we have reduced employee, talent and other costs and delayed approximately $140 million in capital spending related to our new headquarters to strengthen our financial performance going forward and to ensure we have the resources necessary to execute our value creation strategy.”

For earnings history and earnings-related data on World Wrestling Entertainment (WWE) click here.

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