{"id":9314,"date":"2018-06-05T09:56:24","date_gmt":"2018-06-05T09:56:24","guid":{"rendered":"http:\/\/prowrestlingjournal.com\/?p=9314"},"modified":"2018-06-05T09:56:24","modified_gmt":"2018-06-05T09:56:24","slug":"wwe-reports-strong-first-quarter-2018-results","status":"publish","type":"post","link":"https:\/\/prowrestlingjournal.com\/index.php\/2018\/06\/05\/wwe-reports-strong-first-quarter-2018-results\/","title":{"rendered":"WWE\u00ae Reports Strong First Quarter 2018 Results"},"content":{"rendered":"<p><strong>By Ciaran James@<\/strong><a href=\"https:\/\/twitter.com\/TheCiaranJames\">TheCiaranJames<\/a><\/p>\n<p><b>First Quarter 2018 Highlights<\/b><\/p>\n<ul>\n<li class=\"bwlistitemmargb\">Revenues reached\u00a0$187.7 million, which was on-par with Q1 2017 (increasing 5% on a comparable year-over basis excluding the impact of ASC Topic 606 in Q1 2018)<sup>1<\/sup><\/li>\n<li class=\"bwlistitemmargb\">Operating income was\u00a0$21.8 million($29.0 million\u00a0on a comparable basis) as compared to\u00a0$4.0 million\u00a0in the prior year quarter<\/li>\n<li class=\"bwlistitemmargb\">Adjusted OIBDA<sup>2<\/sup>\u00a0increased 40% to\u00a0$35.2 million\u00a0(increasing 68% to\u00a0$42.4 million\u00a0on a comparable basis)<\/li>\n<li class=\"bwlistitemmargb\"><i>WWE Network<\/i>\u00a0average paid subscribers<sup>3<\/sup>\u00a0increased 5% to 1.56 million paid subscribers, consistent with the Company\u2019s guidance<\/li>\n<li class=\"bwlistitemmargb\">Digital video views increased 56% to 6.7 billion and hours consumed increased 69% to 243 million across digital and social media platforms<sup>4<\/sup><\/li>\n<\/ul>\n<p><b>Selected\u00a0<i>WrestleMania<\/i>\u00a0Highlights<\/b><\/p>\n<ul>\n<li class=\"bwlistitemmargb\"><i>WrestleMania<\/i>\u00a0(April 8, 2018) broke the record for the Mercedes-Benz Superdome\u2019s highest grossing entertainment event at\u00a0$14.1 million, attracting 78,133 fans<\/li>\n<li class=\"bwlistitemmargb\"><i>WrestleMania\u00a0<\/i>hit a record 2.12 million global households on\u00a0<i>WWE Network<\/i>\u00a0alone, making it the most-watched\u00a0<i>WrestleMania<\/i>\u00a0in history<\/li>\n<li class=\"bwlistitemmargb\"><i>WWE Network<\/i>\u00a0subscribers viewed 25.2 million hours during\u00a0<i>WrestleMania<\/i>\u00a0week or 14 hours per subscriber during the week. This compares to 22.5 million hours last year, a 12% year-over-year increase<\/li>\n<li class=\"bwlistitemmargb\">During\u00a0<i>WrestleMania<\/i>\u00a0week, 13.9 million hours were consumed on digital and social media platforms, up 27% from the prior year; April 9 was WWE\u2019s most viewed day ever on YouTube with more than 50 million views<\/li>\n<\/ul>\n<p>STAMFORD, Conn.&#8211;(BUSINESS WIRE)&#8211; WWE (NYSE:WWE) today announced financial results for its first quarter ended March\u00a031, 2018.<\/p>\n<p>\u201cWe\u2019re pleased with our continued success in creating and monetizing our content as evidenced by another record-breaking\u00a0<i>WrestleMania,<\/i>\u00a0which set new highs for network subscribers and viewership,\u201d said Vince McMahon, WWE Chairman and Chief Executive Officer. \u201cWe will continue to focus on broadening our global audience across multiple platforms, providing the basis for significant growth.\u201d<\/p>\n<p>George Barrios, Co-President, added, \u201cDuring the first quarter, higher content rights fees, increased sales of advertising and sponsorships, and the continued growth of\u00a0<i>WWE Network<\/i>\u00a0supported strong 40% growth in Adjusted OIBDA. Based on our momentum and ability to capitalize on global opportunities, we are raising our target for 2018 Adjusted OIBDA to at least\u00a0$150 million, which would be an all-time record, exceeding our previous guidance of at least\u00a0$145 million.<sup>5<\/sup><\/p>\n<p><span class=\"bwuline\"><b>First-Quarter Consolidated Results<\/b><\/span><\/p>\n<p><b>Revenues<\/b>\u00a0of\u00a0$187.7 million\u00a0were essentially on-par with the first quarter 2017. Revenues in the first quarter 2018 were reduced by\u00a0$10.3 million\u00a0as a result of adopting a new FASB standard for revenue recognition, ASC Topic 606. On a comparable year-over-year basis (i.e., if the Company had maintained the prior year approach), revenue increased 5% driven by increased revenue from the Media segment. See\u00a0<i>Basis of Presentation<\/i>\u00a0below and\u00a0<i>Financial Results \u2013 Excluding the Impact of Adopting ASC Topic 606<\/i>\u00a0on page 15 for additional information.<\/p>\n<p><b>Operating Income<\/b>\u00a0increased to\u00a0$21.8 million\u00a0($29.0 million\u00a0on a comparable basis) as compared to\u00a0$4.0 million\u00a0in the prior year quarter reflecting increased profits from the Media segment and the impact of\u00a0$7.7 million\u00a0in certain non-recurring expenses in the first quarter 2017. The Company\u2019s Operating income margin was 12% as compared to 2% in the prior year quarter.<\/p>\n<p><b>Adjusted OIBDA<\/b>\u00a0increased 40% to\u00a0$35.2 million\u00a0as the increased monetization of content as reflected in the Media segment more than offset the impact of adopting ASC Topic 606. On a comparable basis, excluding the impact of ASC Topic 606, Adjusted OIBDA would have been\u00a0$42.4 million, representing a 68% increase. The Company\u2019s Adjusted OIBDA margin increased to 19% (or 21% on a comparable basis) from 13% in the prior year quarter.<\/p>\n<p><b>Net Income<\/b>\u00a0increased to\u00a0$14.8 million, or\u00a0$0.18\u00a0per diluted share, as compared to\u00a0$0.9 million, or\u00a0$0.01\u00a0per diluted share, in the prior year quarter.<\/p>\n<p><b>Cash flows generated by operating activities<\/b>\u00a0of\u00a0$2.6 million\u00a0were essentially unchanged from the prior year quarter as improved operating performance was offset by the unfavorable timing of working capital.\u00a0<b>Free Cash Flow<\/b>\u00a0demonstrated a\u00a0$1.8 million\u00a0use of cash, which was also comparable to the prior year quarter.<sup>6<\/sup><\/p>\n<p><b>Cash, cash equivalents and short-term investments<\/b>\u00a0were\u00a0$285 million\u00a0as of March\u00a031, 2018, and the Company estimates\u00a0<b>debt capacity<\/b>\u00a0under its revolving line of credit of approximately\u00a0$100 million.<\/p>\n<p><b>Effective Tax Rate<\/b>\u00a0declined to 26% from 36% in the prior year quarter, primarily driven by the reduction of the federal corporate income tax rate as a result of the Tax Cuts and Jobs Act of 2017 (the \u201cTax Act\u201d), which reduced the corporate rate from 35% to 21%, effective January 1, 2018.<\/p>\n<p><span class=\"bwuline\"><b>Basis of Presentation<\/b><\/span><\/p>\n<p>Effective with the communication of first quarter 2018 results (herein), the Company has begun to report its financial results using three reportable segments: Media, Live Events and Consumer Products as well as to allocate certain costs that were previously included in \u201cCorporate &amp; Other\u201d to its revised segments.<sup>7<\/sup>\u00a0In addition, the Company has changed its primary measure of performance from OIBDA to Adjusted OIBDA, and modified its definition of Adjusted OIBDA to exclude stock-based compensation expense, a non-cash expense that may vary from period to period with limited correlation to underlying operating performance in the period. To facilitate evaluation of the Company\u2019s performance under its revised approach, the Company has made schedules available that provide a perspective of historical results over the 2015-2017 period as if these results had been reported under the revised structure and using the revised measure of profit (see\u00a0<a href=\"http:\/\/cts.businesswire.com\/ct\/CT?id=smartlink&amp;url=http%3A%2F%2Fwww.corporate.wwe.com%2Finvestors&amp;esheet=51800290&amp;newsitemid=20180503005332&amp;lan=en-US&amp;anchor=www.corporate.wwe.com%2Finvestors&amp;index=1&amp;md5=201102615eab17fa7613835f00cbd6b3\" rel=\"nofollow\"><span class=\"bwuline\">www.corporate.wwe.com\/investors<\/span><\/a>).<\/p>\n<p>Effective January 1, 2018, the Company adopted a new FASB standard for revenue recognition (ASC Topic 606). Adoption of this standard reduced revenue in the quarter by\u00a0$10.3 million\u00a0and reduced Operating income and Adjusted OIBDA by\u00a0$7.2 million. See\u00a0<i>Financial Results \u2013 Excluding the Impact of Adopting ASC Topic 606<\/i>\u00a0on page 15 of this release.<\/p>\n<p>For the first quarter 2017, reported Operating income reflected several non-recurring items that impact comparability on a year-over-year basis, including\u00a0$5.6 million\u00a0in expenses primarily related to certain legal matters and other contractual obligations and\u00a0$2.1 million\u00a0in film impairment charges. These items have been excluded from 2017 Adjusted OIBDA. For the first quarter 2018, there were no such items that impacted year-over-year comparability.<\/p>\n<p><b>Operating income<\/b>\u00a0increased\u00a0$20.7 million\u00a0to\u00a0$35.9 million\u00a0primarily due to the growth in revenue as well as lower operating expenses that derived from creative decisions related to\u00a0<i>WWE Network<\/i>\u00a0content, such as the scheduling of\u00a0<i>Holy Foley!<\/i>, which aired in the prior year quarter.<\/p>\n<p><b>Adjusted OIBDA<\/b>\u00a0increased 74% to\u00a0$43.6 million.<\/p>\n<p><b>Key Highlights:<\/b><i><\/i>During the first quarter, WWE continued to produce top-quality flagship programming while introducing highly appealing new content across media platforms. The Company celebrated the 25<sup>th<\/sup>\u00a0anniversary of\u00a0<i>Monday Night Raw<\/i>, a ratings juggernaut that remained the highest-rated program on\u00a0USA\u00a0Network building on its track record as the highest-rated program on its host network for 20 of the past 25 years.<sup>10<\/sup>\u00a0On its streaming service,\u00a0<i>WWE Network<\/i>, pay-per-views, original series, and specials continued to drive viewer engagement while providing compelling new content, such as\u00a0<i>NXT Takeover:\u00a0Philadelphia<\/i>, and new episodes of the weekly series\u00a0<i>Ride Along<\/i>. The Company added more than 60 hours of original content to\u00a0<i>WWE Network\u2019s<\/i>\u00a0featured programming and nearly 600 hours of archival content, which resulted in an on-demand library of over 10,000 hours at quarter-end. On the digital platform, Facebook Watch, WWE launched\u00a0<i>Mixed Match Challenge<\/i>, a live in-ring series which has generated more than 35 million views to-date. The success of WWE programming was reflected in the interest garnered from the advertising community, which generated a 30% increase in global sponsorship revenue. Subsequent to quarter end, the Company held its largest event outside the\u00a0U.S.\u00a0in 16 years with a sold-out crowd in attendance at the\u00a0<i>Greatest Royal Rumble<\/i>\u00a0event in\u00a0Jeddah, Saudi Arabia. The April 27 event marked the beginning of a 10-year partnership with the\u00a0Kingdom of Saudi Arabia.<\/p>\n<p><span class=\"bwuline\"><i>Live Events<\/i><\/span><\/p>\n<p><b>Revenues<\/b>\u00a0declined 4% to\u00a0$30.8 million\u00a0primarily due to the timing of international events and a reduction in ticket revenue at the Company\u2019s\u00a0<i>Royal Rumble<\/i>\u00a0event, which primarily reflected lower stadium attendance capacity.<\/p>\n<ul>\n<li class=\"bwlistitemmargb\">There were 99 total events (excluding NXT) in the current quarter, which were held entirely in\u00a0North America, as compared to 95 events in the prior year quarter, which consisted of 91 events in\u00a0North America\u00a0and 4 in international markets.<\/li>\n<li class=\"bwlistitemmargb\">North American ticket sales of\u00a0$29.8 million\u00a0were essentially unchanged from the prior year quarter. Increased revenue from the staging of eight additional events was offset by lower\u00a0<i>Royal Rumble<\/i>\u00a0ticket sales, which derived from the reduction in stadium capacity and resulting attendance. Excluding the impact of\u00a0<i>Royal Rumble<\/i>\u00a0in both the current and prior year quarter, average attendance decreased 2% to 5,300 and average ticket price increased 10% to\u00a0$50.57.<\/li>\n<li><b>Operating income\u00a0<\/b>was\u00a0$2.9 million\u00a0as compared to\u00a0$3.7 million\u00a0in the prior year quarter, primarily due to the reduction in\u00a0<i>Royal Rumble<\/i>\u00a0ticket sales (as described above).\n<p><b>Adjusted OIBDA\u00a0<\/b>was\u00a0$3.6 million\u00a0as compared to\u00a0$4.5 million\u00a0in the prior year quarter.<\/p>\n<p><b>Key Highlights:\u00a0<\/b>Ronda Rousey, a former champion in mixed martial arts and Olympic judo, made a surprise appearance at\u00a0<i>Royal Rumble<\/i>\u00a0and subsequently had her debut match at\u00a0<i>WrestleMania<\/i>\u00a0(April 8). The Company continued to expand its global talent base, signing 7 athletes from\u00a0India\u00a0and the\u00a0Middle East.<\/p>\n<p><span class=\"bwuline\"><i>Consumer Products<\/i><\/span><\/p>\n<p><b>Revenues<\/b>\u00a0were\u00a0$23.5 million\u00a0as compared to\u00a0$35.1 million\u00a0in the prior year quarter primarily due to the impact of adopting ASC Topic 606, which reduced revenue by\u00a0$9.7 million. On a comparable basis, excluding the impact of ASC Topic 606 in Q1 2018, consumer product revenues declined 5% from the prior year quarter primarily due to the timing of merchandise sales related to WWE\u2019s\u00a0<i>WrestleMania Fan Axxess<\/i>\u00a0and royalties from the sale of toy products<\/li>\n<li><b>Operating income\u00a0<\/b>was\u00a0$6.0 million\u00a0as compared to\u00a0$14.4 million\u00a0in the prior year quarter based on the change in revenue. The adoption of ASC Topic 606 reduced Operating income by\u00a0$7.2 million.\n<p><b>Adjusted OIBDA\u00a0<\/b>was\u00a0$6.9 million\u00a0as compared to\u00a0$15.2 million\u00a0in the prior year quarter. The adoption of ASC Topic 606 reduced Adjusted OIBDA by\u00a0$7.2 million.<\/p>\n<p><b>Key Highlights:\u00a0<\/b>During the quarter, the Company remained one of the top three brands in the\u00a0U.S.\u00a0action figure category while developing new licensing partnerships, such as with LIDS to create WWE headwear on demand, and with Carl\u2019s Jr.\u2019s to promote kids meals and expand the presence of WWE among children.\u00a0The Company also continued to increase the penetration of its mobile games. As of quarter-end, the Company had more than 70 million installs and an average of over 800,000 daily active users across its game portfolio. This includes WWE\u2019s most popular mobile game,\u00a0<i>WWE Champions<\/i>, which has reached 29 million installs. The kids-oriented mobile game,\u00a0<i>WWE Mayhem<\/i>\u00a0(Reliance)\u00a0now has more than 9 million installs and recently earned the Editor\u2019s Choice award on Google Play.<\/p>\n<p><span class=\"bwuline\"><b>Q2 2018 Business Outlook<\/b><\/span><\/p>\n<p>The Company anticipates a meaningful increase in revenue based on the distribution of new content in certain international markets, as well as higher rights fees in existing content agreements and the continued growth of\u00a0<i>WWE Network<\/i>. The Company projects Adjusted OIBDA of\u00a0$30 million\u00a0to\u00a0$34 million.<sup>5<\/sup>\u00a0This range of results would compare to Adjusted OIBDA of\u00a0$24.3 million\u00a0in the second quarter 2017.<\/p>\n<p>WWE is unable to provide a reconciliation of second quarter guidance to GAAP measures as, at this time, WWE cannot accurately determine all of the adjustments that would be required.<\/p>\n<p>For the second quarter 2018, the Company projects average paid subscribers of approximately 1.77 million, which represents an 8% increase from the second quarter 2017.<\/p>\n<p><span class=\"bwuline\"><b>2018 Perspective<\/b><\/span><\/p>\n<p>The range of financial performance projected for the second quarter would result in Adjusted OIBDA for the first half of 2018 that represents growth of 32% to 40% from the prior year period. Based on this projected growth and expectations of strong performance over the remainder of the year, the Company is raising its target for 2018 Adjusted OIBDA to at least\u00a0$150 million\u00a0(excluding stock-based compensation expense), which would be an all-time record, exceeding its previous guidance of at least\u00a0$145 million.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>By Ciaran James@TheCiaranJames First Quarter 2018 Highlights Revenues reached\u00a0$187.7 million, which was on-par with Q1 2017 (increasing 5% on a comparable year-over basis excluding the impact of ASC Topic 606 [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":9315,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_forum_subforum_count":0,"tdm_status":"","tdm_grid_status":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[185],"tags":[394,47],"class_list":["post-9314","post","type-post","status-publish","format-standard","has-post-thumbnail","category-wwe","tag-first-quarter-2018-results","tag-wwe"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p9jnWd-2qe","jetpack_featured_media_url":"https:\/\/i0.wp.com\/prowrestlingjournal.com\/wp-content\/uploads\/2018\/06\/download.png?fit=242%2C208&ssl=1","_links":{"self":[{"href":"https:\/\/prowrestlingjournal.com\/index.php\/wp-json\/wp\/v2\/posts\/9314","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prowrestlingjournal.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prowrestlingjournal.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prowrestlingjournal.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prowrestlingjournal.com\/index.php\/wp-json\/wp\/v2\/comments?post=9314"}],"version-history":[{"count":1,"href":"https:\/\/prowrestlingjournal.com\/index.php\/wp-json\/wp\/v2\/posts\/9314\/revisions"}],"predecessor-version":[{"id":9316,"href":"https:\/\/prowrestlingjournal.com\/index.php\/wp-json\/wp\/v2\/posts\/9314\/revisions\/9316"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/prowrestlingjournal.com\/index.php\/wp-json\/wp\/v2\/media\/9315"}],"wp:attachment":[{"href":"https:\/\/prowrestlingjournal.com\/index.php\/wp-json\/wp\/v2\/media?parent=9314"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prowrestlingjournal.com\/index.php\/wp-json\/wp\/v2\/categories?post=9314"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prowrestlingjournal.com\/index.php\/wp-json\/wp\/v2\/tags?post=9314"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}