WWE has announced financial results for its second quarter ended June 30, 2021.
“During the second quarter, we generated solid financial results as we continued to focus on building fan engagement,” said Vince McMahon, WWE Chairman & CEO. “With the announced return to live event touring and robust ticket demand, we believe we can further consumption across platforms, maximise new business opportunities and drive long-term growth.”
Kristina Salen, WWE Chief Financial Officer, added: “In the quarter, Adjusted OIBDA results reflected an increase in television production expenses to enhance the viewing experience of WWE’s fans. Although Adjusted OIBDA declined, key performance metrics demonstrated positive trends and we continue to realise better than expected television production efficiencies, stronger sponsorship sales and heightened demand for our live events.”
Second-Quarter Consolidated Results
Revenue was $265.6 million, an increase of 19 per cent or $42.2 million, primarily due to an increase in Media segment revenue driven by the increased monetisation of content and, to a lesser extent, an increase in Live Event segment revenue reflecting ticket sales from WrestleMania, the Company’s first ticketed live event since the first quarter 2020.
Operating Income was $46.3 million, a decrease of 17 per cent or $9.4 million, primarily driven by increased television and event-related production expense due to WWE ThunderDome and WrestleMania 37. In the prior year quarter, WWE produced all televised content, including WrestleMania 36, from its lower production cost training facility. The decrease in operating income was also driven by an increase in personnel expense, which includes $8.1 million in severance expense primarily related to the combination of WWE’s television, digital and studios teams into one organisation for a more unified content strategy and more streamlined content production, as well as higher compensation expense as employees returned from furlough. The increase in operating expense was partially offset by an increase in Media segment revenue driven by the increased monetization of content and, to a lesser extent, an increase in Live Event segment revenue reflecting ticket sales from WrestleMania. Additionally, operating income reflected a $4.2 million year-over-year reduction in stock compensation expense primarily due to forfeitures arising from the Company’s business restructuring. The Company’s operating income margin decreased to 17.4 per cent from 24.9 per cent, driven by the increase in production and personnel expenses.
Adjusted OIBDA (which excludes stock compensation) was $68.1 million, a decrease of 7 per cent or $5.4 million. Adjusted OIBDA excludes $8.1 million in severance expense. The Company’s Adjusted OIBDA margin decreased to 25.6 per cent from 32.9 per cent.
Net Income was $29.2 million, a decrease of 33 per cent or $14.6 million, reflecting lower operating performance as described above. Current period results reflected the after-tax impact of $6.3 million in severance expense and compared to the after-tax impact of $6.1 million from an unrealized gain on an equity investment in the prior year period. Excluding these items, Adjusted Net Income was $35.5 million, a decrease of 6 per cent or $2.2 million.
Cash flows generated by operating activities were $19.5 million, a decrease from $74.8 million, primarily driven by the timing of collections associated with Network revenue, higher federal income tax payments due to lower foreign tax credits and, to a lesser extent, lower operating performance.
Free Cash Flow was $13.3 million, a decrease from $67.7 million, primarily driven by the change in operating cash flow.
Cash, cash equivalents and short-term investments were $443 million as of June 30th 2021.
Debt totaled $220 million as of June 30, 2021, including $198 million associated with the carrying value of convertible senior notes due 2023. The Company has no amounts outstanding under its revolving line of credit and estimates related debt capacity of approximately $200 million.