WWE revealed the company’s first quarter results for 2020 on Thursday morning.
Q1 Highlights include:
— Revenues increased 60% to $291 million compared to the prior quarter, but was partially offset by lower live event ticket revenue and lower merchandise sales.
— Operating income increased to $53.3 million from a loss of $6.8 million on the prior year’s quarter.
— Average paid subscribers to the WWE Network were 1.46 million. WrestleMania weekend subscriber additions (Friday to Sunday) were 2.10 million, the highest in history.
— Digital video views increased 25% to 9.6 billion. Hours consumed watching grew to 344 million across digital and social media platforms, an increase of 15%.
WWE Chairman and CEO Vince McMahon was quoted in the press release talking about the COVID-19 pandemic and its impact on business:
“Our first quarter financial performance was strong and largely unimpacted by the COVID-19 outbreak. 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.”
You can view the press release below:
WWE® Reports Strong First Quarter 2020 Results
STAMFORD, Conn., April 23, 2020 – WWE (NYSE: WWE) today announced financial results for its first quarter ended March 31, 2020.
“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Officer, added “In the quarter, we delivered revenue of $291 million and Adjusted OIBDA of $77.3 million exceeding our rescinded guidance as we offset the impact of canceled events by reducing production and other costs.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.”
First-Quarter Consolidated Results
Revenues increased 60% to $291.0 million as compared to the prior year quarter, primarily due to increased monetization of content in the Media segment, which was partially offset by a reduction in live event ticket revenue and lower merchandise sales.
Operating Income was $53.3 million as compared to a loss of $6.8 million in the prior year quarter, driven by increased revenues in the Media segment partially offset by increases in fixed costs, particularly to support the creation of content. The Company’s Operating income margin increased to 18% from (4%) in the prior year quarter.
Adjusted OIBDA (which excludes stock compensation) increased to $77.3 million from $12.4 million in the prior year quarter. The Company’s Adjusted OIBDA margin increased to 27% from 7%.
Net Income was $26.2 million, or $0.31 per diluted share, as compared to a loss of $8.4 million, or a loss of $0.11 per diluted share, in the first quarter 2019. Net income in the current period reflected the impact of the finance lease that commenced in July 2019 related to the Company’s new headquarters. Current period results also included $11.5 million in impairment charges related to certain equity investments. Excluding the impact of the equity investment impairment charges, Adjusted Net Income6 increased to $34.9 million, or $0.41 per diluted share, due to improved operating performance.
Effective Tax Rate declined to 25% as compared to 26% in the prior year quarter.
Cash flows generated by operating activities reached $65.9 million as compared to $6.7 million in the prior year quarter driven by improved operating performance and, to a lesser extent, a reduced payout of management incentive compensation.
Free Cash Flow totaled $57.6 million as compared to a $10.1 million use of cash in the first quarter 2019 primarily due to the change in operating cash flow and, to a lesser extent, a reduction in capital expenditures.7
Cash, cash equivalents and short-term investments were $292 million as of March 31, 2020. Additionally, subsequent to quarter-end, the Company drew $200 million in cash under its revolving line of credit. The Company’s current liquidity position (cash and short-term investments) is approximately $500 million, which management believes provides adequate liquidity in this uncertain environment.
Return of Capital to Shareholders
The Company paid $9.3 million in dividends to shareholders during the first quarter. Given the economic uncertainties of the current business environment, the Company has temporarily suspended purchases of WWE stock under its $500 million share repurchase program.