WWE Reports Record 2021 Results and 2022 Business Outlook
WWE issued their 2021 Q4 earnings report today with the outlook for 2022, and reported record results for last year.
WWE Chairman & CEO Vince McMahon noted in the press release that WWE reached a significant milestone of more than $1 billion in revenue for the first time ever.
“In 2021, we reached a significant milestone of over $1 billion in revenue, for the first time in the Company’s history. We ended the year with strong performance across each of our business lines that reflected the engagement of a wider audience with distribution on new digital platforms, including Peacock, and the return of fans at our live events,” said McMahon. “We expect the execution of key initiatives in the coming year, such as the licensing of network content in international markets, monetization of new original series, and the continued shift to a stadium strategy for WWE’s premium live events, will further expand the reach of our brands and enhance the value of our content.”
Frank Riddick, WWE Chief Financial and Administrative Officer, added “For the year, we achieved record revenue and Adjusted OIBDA, which exceeded the high end of our guidance. Adjusted OIBDA increased 14% reflecting higher revenue and profit from the distribution of network programming on Peacock, the contractual escalation of rights fees for our flagship shows, Raw and SmackDown, and the return of ticketed audiences to our live events. In 2022, we anticipate Adjusted OIBDA of $360 million to $375 million, reflecting the full year performance of our ticketed live events as well as the increased production and monetization of content.”
Stay tuned for more from the WWE earnings report. Below is the full report:
WWE® Reports Record 2021 Results and 2022 Business Outlook
02/03/2022
Fourth Quarter 2021 Highlights
* Revenue increased 30% to $310.3 million
* Operating income increased 131% to $83.6 million
* Adjusted OIBDA1 increased 90% to $97.2 million
* Returned capital to shareholders totaling $59.0 million, including share repurchases and dividends paid
Full Year 2021 Highlights
* Revenue increased 12% to $1.095 billion, the highest in the Company’s history
* Operating income increased 24% to $259.0 million
* Adjusted OIBDA1 increased 14% to a record $327.1 million
* Launched WWE Network content on Peacock, NBCU’s streaming service in the U.S., providing a larger audience and increasing viewership for WWE’s premium live shows, original series, and vast library
* Announced a new strategy for premium live events, which focuses on staging these events in stadiums rather than arenas, and utilizes targeted dates to maximize WWE’s live audience potential
* Completed consumer product deals including partnerships with Blockchain Creative Labs (Fox) to launch an NFT marketplace and with Panini to be the exclusive provider of WWE trading cards
* Created the Next in Line program to recruit the next generation of WWE Superstars, which was initiated with 16 collegiate athletes, including Olympic gold medalist Gable Steveson
* Returned capital to shareholders totaling $202.0 million, including share repurchases and dividends paid
2022 Business Outlook2
* The Company outlines its expectations for 2022, which assume ticketed audiences at the Company’s live events for the full year, and target record revenue and an Adjusted OIBDA range of $360 – $375 million, which would be an all-time record. This range of anticipated performance reflects the continued ramp-up of live events, including large-scale international events, and increased monetization of content, partially offset by increased production, content-related, and other expenses.
* Management believes WWE is well positioned to capitalize on significant future opportunities. In 2022, key initiatives that could have meaningful implications for long-term growth include the licensing of WWE Network in international markets, monetization of new original series, the licensing of Raw second window rights, further progress with sponsorship sales, and the continued execution of WWE’s stadium strategy for premium live events.
(See 2022 Business Outlook discussion on pages 8-9 for additional information)
STAMFORD, Conn.–(BUSINESS WIRE)– WWE (NYSE: WWE) today announced financial results for its fourth quarter and year ended December 31, 2021.
“In 2021, we reached a significant milestone of over $1 billion in revenue, for the first time in the Company’s history. We ended the year with strong performance across each of our business lines that reflected the engagement of a wider audience with distribution on new digital platforms, including Peacock, and the return of fans at our live events,” said Vince McMahon, WWE Chairman & CEO. “We expect the execution of key initiatives in the coming year, such as the licensing of network content in international markets, monetization of new original series, and the continued shift to a stadium strategy for WWE’s premium live events, will further expand the reach of our brands and enhance the value of our content.”
Frank Riddick, WWE Chief Financial and Administrative Officer, added “For the year, we achieved record revenue and Adjusted OIBDA, which exceeded the high end of our guidance. Adjusted OIBDA increased 14% reflecting higher revenue and profit from the distribution of network programming on Peacock, the contractual escalation of rights fees for our flagship shows, Raw and SmackDown, and the return of ticketed audiences to our live events. In 2022, we anticipate Adjusted OIBDA of $360 million to $375 million, reflecting the full year performance of our ticketed live events as well as the increased production and monetization of content.”
Fourth-Quarter Consolidated Results
Revenue increased 30% to $310.3 million, primarily due to the impact of a large-scale international event as well as higher ticket and venue merchandise sales resulting from the return to ticketed live events, which began in July 2021.
Operating Income increased 131%, or $47.4 million, to $83.6 million, driven by the impact of the Company’s large-scale international event, and, to a lesser extent, the return to other ticketed live events, which was partially offset by an increase in management incentive compensation costs associated with the Company’s improved operating performance. The Company’s Operating income margin increased to 27% from 15%.
Adjusted OIBDA (which excludes stock compensation) increased 90%, or $46.0 million, to $97.2 million. The Company’s Adjusted OIBDA margin increased to 31% from 21%.
Net Income was $63.9 million, or $0.76 per diluted share, an increase from $13.6 million, or $0.16 per diluted share, primarily reflecting higher operating performance. The results for the fourth quarter of 2021 also reflected an after-tax gain of $5.2 million from the reduction of leased space as part of an amendment to the Company’s new Stamford headquarters lease. The results for the fourth quarter of 2020 reflected an after-tax loss of $5.8 million related to certain equity investments and $1.0 million in after-tax severance expense resulting from a reduction in force due to COVID-19. Excluding these items, Adjusted Net Income3 was $58.7 million, or $0.70 per diluted share, as compared to $20.4 million, or $0.24 per diluted share.
Cash flows generated by operating activities were $42.3 million, a decrease from $62.4 million, as higher net income was more than offset by a decrease in non-cash adjustments, as well as the timing of collections associated with large-scale international events.
Free Cash Flow was $27.5 million, a decrease from $56.2 million, primarily due to the change in operating cash flow and, to a lesser extent, an increase in capital expenditures.4
Return of Capital to Shareholders
The Company returned $59.0 million to shareholders in the fourth quarter of 2021, including $50.0 million in share repurchases and $9.0 million in dividends paid. Under the Company’s existing stock repurchase program, approximately 1.0 million shares were repurchased at an average price of $50.73 per share.
Full Year 2021 Consolidated Results
Revenue increased 12%, or $121.0 million, to nearly $1.1 billion, driven by higher ticket and venue merchandise sales that resulted from the Company’s return to ticketed live events for a portion of the year, including WrestleMania and SummerSlam. The growth in revenue also reflected the contractual escalation of core content rights fees associated with the distribution of the Company’s flagship programs, Raw and SmackDown, and an increase in network revenue, which stemmed primarily from the upfront revenue recognition related to the delivery of certain WWE Network intellectual property rights to Peacock in the first quarter.
Operating Income increased 24%, or $50.4 million, to $259.0 million, as the growth in revenue was partially offset by higher television and event-related production expense related to the Company’s weekly, in-ring content, as well as WrestleMania and SummerSlam. Prior to the resumption of live event touring in July 2021, the Company produced its weekly, televised programs utilizing the higher cost environment of WWE ThunderDome at Tropicana Field and Yuengling Center in Tampa, Florida. During the prior year, WWE produced a significant portion of weekly, televised content from its lower production cost performance center in Orlando. Operating income was also impacted by higher staff related costs, including severance and management incentive compensation, the latter resulting from improved operating performance in the current year. The Company’s Operating income margin increased to 24% from 21%.
Adjusted OIBDA (which excludes stock compensation) increased 14%, or $40.9 million, to $327.1 million. The increase in Adjusted OIBDA is less than the increase in Operating Income because the latter benefited from lower stock compensation expense in the current year. The Company’s Adjusted OIBDA margin increased to 30% from 29%.
Net Income increased to $180.4 million, or $2.12 per diluted share, from $131.8 million, or $1.56 per diluted share, primarily due to stronger operating performance. The results for 2021 also reflected $6.3 million in after-tax severance expense associated with the combination of WWE’s television, digital and studios teams into one organization, partially offset by an after-tax gain of $5.2 million from the reduction of leased space as part of an amendment to the Company’s new Stamford headquarters lease. The results for 2020 reflected $5.4 million in after-tax severance expense and an after-tax net loss of $4.4 million related to certain investment securities. Excluding these items, Adjusted Net Income3 was $181.5 million, or $2.14 per diluted share, as compared to $141.6 million, or $1.68 per diluted share.
Cash flows generated by operating activities were $178.6 million, a decrease from $319.9 million, as higher net income was more than offset by a decrease in non-cash adjustments, as well as the timing of collections associated with the Company’s large-scale international events and WWE Network revenues.
Free Cash Flow was $139.4 million, a decrease from $292.3 million, primarily driven by the decrease in operating cash flow and, to a lesser extent, an increase in capital expenditures.4
Cash, cash equivalents and short-term investments were $416 million as of December 31, 2021. The Company currently estimates debt capacity under its revolving line of credit of $200 million.
Return of Capital to Shareholders
The Company returned $202.0 million to shareholders in 2021, including $165.6 million in share repurchases and $36.4 million in dividends paid. Under the Company’s existing stock repurchase program, 4.6 million shares have been repurchased to-date at an average price of $53.57 per share, resulting in approximately $251 million remaining available for repurchase pursuant to the Company’s $500 million authorization. WWE intends to continue opportunistic repurchases under the program.
Basis of Presentation
For the fourth quarter of 2021, the Company’s consolidated pre-tax results included the impact of a $6.7 million gain from the reduction of leased space as part of an amendment to its new Stamford headquarters lease. For the twelve-month period ended December 31, 2021, the Company’s consolidated pre-tax results included $8.1 million in severance expense associated with the combination of WWE’s television, digital and studios teams into one organization. A reconciliation of Net Income to Adjusted Net Income for the three and twelve-month periods ended December 31, 2021 and 2020 can be found in the supplemental schedule on page 16 of this release.
You can click here to view the full press release on the WWE Corporate website.
