TKO

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TKO Group Holdings

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Market Data

Financials

XBRL · SEC EDGAR

2021–2025(5yr)

Revenue

Net Income

Free CF

Metric	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$1.0B	$1.1B	$1.7B	$2.8B	$4.7B	+68.9%
Operating Income	$391.1M	$544.4M	$446.7M	$282.9M	$835.0M	+195.2%
Operating Margin	37.9%	47.7%	26.7%	10.1%	17.6%	+7.5pp
Net Income	$273.6M	$389.0M	-$35.2M	$9.4M	$195.4M	+1977.0%
Net Margin	26.5%	34.1%	-2.1%	0.3%	4.1%	+3.8pp
EPS (Diluted)	—	—	$-0.43	$0.02	$2.26	+11200.0%

Total Debt$3.8B

Cash & Equiv.$831.1M

Net Debt$2.9B

4 min read

1. THE BIG PICTURE

TKO Group Holdings has effectively decoupled sports entertainment from the traditional "season," creating a perpetual content machine that owns its intellectual property outright rather than managing a collection of independent franchises. By controlling both the UFC and WWE, TKO Group Holdings has moved from being a mere event promoter to a global media rights owner that can unilaterally dictate its schedule and distribution strategy to maximize value across 500 annual events.

2. WHERE THE RISKS HIT HARDEST

TKO Group Holdings’s "structural autonomy"—its ability to make rapid, unilateral decisions without consulting franchise owners—is directly threatened by its concentrated control. Because Silver Lake and Endeavor hold 63% of voting interests, the "nimble" decision-making management cites as a competitive advantage may prioritize the strategic needs of these controlling entities over the interests of minority shareholders (10-K Item 1A).

Furthermore, TKO’s strategic priority of media rights renewals is increasingly precarious due to its distribution partner dependency. While revenue grew 12% in the most recent quarter, this growth is tied to a handful of partners including Netflix, ESPN, and Paramount (8-K). If any of these entities reduce their sports rights budgets, TKO’s primary engine for "capitalizing on the increased value of premium live sports" would stall, leaving TKO Group Holdings to service $3.7 billion in debt with a diminished cash flow.

3. WHAT THE NUMBERS SAY TOGETHER

(XBRL) TKO’s financial profile is one of massive top-line expansion paired with thin bottom-line margins. While TKO Group Holdings leads its peer group in revenue growth at +68.9% (TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter), its net margin of 4.1% ranks fifth out of six peers, trailing significantly behind Comcast’s 17.4%. This gap suggests that while TKO is highly effective at capturing market share and scaling its brands, it has yet to convert that scale into the high-margin efficiency seen in more mature media peers.

The growth trajectory shows signs of normalization: the TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth of 68.9% is heavily influenced by the structural formation of TKO Group Holdings, whereas the most recent quarter’s 12% growth reflects the actual operational momentum of the integrated UFC and WWE businesses (8-K). Sentiment remains cautious among some investors, evidenced by a short interest of 8.8% of the float and 7.1 days to cover, suggesting the market is waiting to see if the recent shift from a $60.9 million loss to a $0.8 million profit is sustainable.

4. IS IT WORTH IT AT THIS PRICE?

At a 52.6x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, TKO trades at a 142% premium to the peer median of 21.7x. According to the (CAPM analysis), the market is pricing in approximately 3.5% long-term growth. This expectation seems modest given that TKO’s revenue grew 12% in the most recent quarter and it currently returns 5.3% of its market cap to shareholders via buybacks—the third-highest yield in its peer group.

However, the valuation is sensitive to any deceleration. If long-term growth expectations were to slip to 2.5% (GDP-pace), the justified multiple would fall to 34.3x, representing significant downside from current levels. The current premium is supported by TKO's +68.9% revenue growth, which dwarfs the growth of every other peer in the set, including Live Nation (+8.8%) and Netflix. The biggest risk to this valuation is the $3.7 billion debt load, which limits the "financial flexibility" required to maintain this aggressive growth posture.

5. WHAT WOULD CHANGE THIS VIEW?

Constructive if net margins expand toward the 10% range (matching Electronic Arts), proving that the UFC and WWE merger is generating the "operational strength" and synergies management has promised.
Cautious if the interest expense on the $3.7 billion in outstanding indebtedness begins to crowd out the 5.3% buyback yield, signaling that debt service is taking priority over shareholder returns.
Cautious if any upcoming media rights renewal with ESPN or Netflix is signed at a lower-than-expected premium, undermining the "high-quality execution story" cited by leadership.

6. BOTTOM LINE

Structural Advantage: Full ownership of premium, non-seasonal sports intellectual property and a centralized decision-making model that eliminates the friction of a traditional franchise system. Bottom Line: TKO is a high-growth media play that justifies its steep valuation premium through market-leading revenue expansion, provided its heavy debt load does not eventually force a choice between growth and stability.

Source: Synthesis · LLM Analysis

4 min read

1. Top 5 Material Risks

Distribution Partner Dependency: TKO Group Holdings generates a significant percentage of its revenue from key relationships with distributors including Paramount, ESPN, Netflix, USA Network, The CW, and Peacock. Failure to maintain or renew these agreements, or a deterioration in the perceived value of these channels, could adversely affect operating results.
Substantial Indebtedness: As of December 31, 2025, TKO Group Holdings had $3.7 billion in outstanding indebtedness under its Credit Facilities. This leverage requires TKO Group Holdings to dedicate a substantial portion of cash flow to debt service, reducing funds available for working capital and capital expenditures.
Concentrated Control: Silver Lake and Endeavor collectively own approximately 63% of the voting interests in TKO Group Holdings. This concentration allows these entities to control board elections, mergers, and asset sales, potentially creating conflicts of interest with minority stockholders.
Macroeconomic Sensitivity: TKO Group Holdings’s revenue is highly dependent on discretionary consumer and corporate spending. Economic downturns, inflation, or unemployment can lead to reduced corporate sponsorships, lower attendance at live events, and decreased spending on merchandising.
Integration and Operational Risks: The success of the Endeavor Asset Acquisition depends on TKO Group Holdings's ability to integrate transferred businesses and realize identified synergies. Failure to achieve these benefits or manage the transition of services could negatively impact financial performance.

2. Company-Specific Risks

Reputational Impact of Key Personnel: TKO Group Holdings’s professional reputation is essential to its success; negative publicity concerning management, key personnel, or athletes—such as the misconduct allegations involving Vincent K. McMahon—can lead to the termination of media rights, sponsorships, or licensing agreements.
Event Cancellation Exposure: TKO Group Holdings acts as a principal in managing live events, bearing significant up-front costs. If an event is cancelled or postponed due to weather, regulatory issues, or security incidents, TKO Group Holdings may lose substantial costs and be forced to issue refunds.
Intellectual Property Piracy: The value of TKO Group Holdings’s streaming services, such as UFC FIGHT PASS, is directly threatened by the global growth of piracy. Unauthorized streaming of events can reduce the value of media rights and consumer willingness to pay for content.
Data Privacy and Cybersecurity: TKO Group Holdings relies on complex IT systems and third-party providers to process personal information. Any breach or failure to comply with evolving global privacy laws (such as the CCPA, GDPR, or PIPL) could result in fines based on a percentage of global revenue.

3. Regulatory/Legal Risks

Unrecorded Expenses and Internal Controls: WWE previously identified $19.6 million in "Unrecorded Expenses" related to misconduct by Vincent K. McMahon, leading to a conclusion that internal controls over financial reporting were not effective. TKO Group Holdings continues to face regulatory inquiries and litigation related to these matters.
Independent Contractor Classification: Legislative initiatives in states like California and New York challenge TKO Group Holdings’s ability to treat talent as independent contractors. If reclassified as employees, TKO Group Holdings would face increased expenses related to worker’s compensation and other labor-related costs.
Anti-Corruption Compliance: TKO Group Holdings is subject to the U.S. Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act. Operating in countries with heightened corruption risks exposes TKO Group Holdings to potential sanctions, fines, and debarment from government contracts.
Tax Audit Rules: Under the Bipartisan Budget Act of 2015, TKO OpCo may be required to pay taxes, interest, and penalties at the entity level resulting from tax audits, which could adversely affect the liquidity of TKO Group Holdings.

4. Financial Impact Map

Distribution Partner Dependency → Revenue → Significant percentage of total revenue is derived from a limited number of media partners.
Substantial Indebtedness → Interest Expense / Cash Flow → $3.7 billion in debt; a 100 basis point increase in interest rates would increase annual interest expense by approximately $37 million.
Macroeconomic Sensitivity → Operating Results → Reductions in corporate sponsorships, advertising, and live event attendance directly impact top-line growth.
Event Cancellation Exposure → Operating Expenses / Cash Flow → Up-front costs for live events are incurred prior to revenue; cancellation results in lost costs and potential refund liabilities.
Data Privacy and Cybersecurity → General and Administrative Expenses → Fines under regulations like the GDPR can be assessed as a percentage of revenue, and remediation costs are significant.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
8-K	Feb 2026	—
10-K	Feb 2026	Dec 2025
10-Q	Nov 2025	Sep 2025
14A	Apr 2025	—