NYSE:TKO
TKO Group Holdings, Inc.
A global leader in mixed martial arts and combat sports event management with a diversified portfolio of premium brands and strong free cash flow generation.
Key Metrics
Investment Thesis
Bull Case
TKO offers compelling growth potential through its expanding combat sports portfolio and increasing global footprint in a fragmented industry. The company's ability to generate over $1.29 billion in operating cash flow provides flexibility for strategic M&A activity and shareholder returns via buybacks. Valuation metrics suggest the market has not fully priced in the long-term value of its exclusive content rights and digital media growth opportunities.
Bear Case
The volatility in net income, swinging from $6.4M in 2024 to $546.3M in 2025, indicates earnings instability that could be attributed to one-off items or aggressive accounting adjustments. High levels of goodwill at $8.44B pose impairment risks if the combat sports market slows or if regulatory headwinds reduce event frequency. Significant debt obligations with $3.72B in long-term debt and interest expenses of $202.7M could constrain future growth capital and dividend sustainability.
About TKO Group Holdings, Inc.
TKO Group Holdings is a premier sports and entertainment events management company based in Las Vegas, serving global markets with iconic brands like UFC, ONE Championship, and Bellator MMA. The company generates revenue primarily through event production rights, ticket sales distribution, and sponsorship deals across the United States and internationally. With robust cash flow from operations exceeding $1.29 billion, TKO leverages its exclusive content portfolio to drive growth in the live sports entertainment sector.
Analysis
Management Discussion
The company demonstrated significant operational leverage in 2025, reporting $1.29 billion in cash flow from operations compared to $606.6 million in profit before tax, highlighting efficient cost management at scale. Despite heavy investments including $8.7M in acquisitions and substantial share repurchases of $866.8M, the balance sheet remains healthy with $1.19 billion in ending cash. Revenue surged from $2.80B in 2024 to $4.74B in 2025, indicating strong market demand and successful brand expansion strategies.
Industry Overview
The global combat sports and entertainment events industry is experiencing rapid consolidation as promoters seek exclusive partnerships to secure media rights and sponsorships. Market growth is driven by increasing fan engagement, digital streaming adoption, and the emergence of new fighting organizations in emerging markets. Regulatory scrutiny on athlete welfare remains a critical factor influencing long-term industry profitability and operational models.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $1.67B | $2.80B | $4.74B |
| Cost of Revenue | $0 | $0 | $0 |
| Gross Profit | $1.67B | $2.80B | $4.74B |
| Operating Expenses | $1.23B | $2.52B | $3.90B |
| Operating Income | $446.7M | $282.9M | $835.0M |
| G&A | $549.1M | $1.23B | $1.51B |
| Stock-Based Comp | $57.1M | $94.6M | $117.6M |
| D&A | $164.6M | $392.8M | $485.0M |
| Depreciation | $29.9M | $67.6M | $91.2M |
| Amortization | $129.3M | $304.5M | $367.8M |
| Other OpEx | $679.2M | $1.29B | $2.39B |
| Non-Operating Income | $-239.2M | $-248.6M | $-228.4M |
| Interest Expense | $239.0M | $249.1M | $202.7M |
| Pre-Tax Income | $207.4M | $34.4M | $606.6M |
| Income Tax | $31.4M | $25.7M | $73.8M |
| Continuing Ops | $176.0M | $8.6M | $532.9M |
| Discontinued Ops | $-266.1K | $-2.3M | $13.4M |
| Net Income | $175.7M | $6.4M | $546.3M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $175.7M | $6.4M | $546.3M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $492.4M | $869.6M | $2.33B |
| Cash & Equivalents | $235.8M | $525.6M | $831.1M |
| Accounts Receivable | $135.4M | $184.1M | $558.3M |
| Other Current Assets | $121.2M | $160.0M | $939.7M |
| Long-Term Assets | $12.20B | $11.83B | $13.17B |
| PP&E (Net) | $608.4M | $533.8M | $639.9M |
| Intangibles | $3.56B | $3.26B | $3.33B |
| Goodwill | $7.67B | $7.66B | $8.44B |
| Operating Leases | $35.5M | $31.7M | $54.8M |
| LT Investments | $16.4M | $32.2M | $131.6M |
| Other LT Assets | $304.1M | $288.0M | $464.7M |
| Total Assets | $12.69B | $12.70B | $15.50B |
| Current Liabilities | $472.1M | $670.7M | $1.85B |
| Accounts Payable | $42.0M | $29.7M | $194.8M |
| Current Debt | $22.4M | $26.5M | $38.1M |
| Current Leases | $4.2M | $4.7M | $17.6M |
| Deferred Revenue | $119.0M | $101.2M | $663.0M |
| Other Current Liab | $17.1M | $29.4M | $407.3M |
| Long-Term Liabilities | $3.37B | $3.31B | $4.40B |
| Long-Term Debt | $2.71B | $2.73B | $3.72B |
| LT Operating Leases | $32.9M | $28.5M | $41.1M |
| Other LT Liab | $620.5M | $547.0M | $633.5M |
| Total Liabilities | $3.84B | $3.98B | $6.25B |
| Shareholders' Equity | $8.85B | $8.72B | $9.25B |
| Retained Earnings | $-135.2M | $-291.7M | $-797.3M |
| AOCI | $-332.0K | $-2.5M | $-17.5M |
| Total L&E | $12.69B | $12.70B | $15.50B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $175.7M | $6.4M | $546.3M |
| Non-Cash Adjustments | $283.9M | $253.0M | $91.6M |
| Working Capital Changes | $8.8M | $324.1M | $647.8M |
| Cash from Operations | $468.4M | $583.4M | $1.29B |
| Cash from Investing | $12.3M | $-59.0M | $-146.9M |
| Debt Issuances | $100.0M | $2.90B | $1.05B |
| Debt Repayments | $133.4M | $2.89B | $70.4M |
| Share Buybacks | $100.0M | $165.0M | $866.8M |
| Dividends Paid | — | — | $185.2M |
| Cash from Financing | $-424.5M | $-232.3M | $-635.7M |
| FX Effect | $-923.0K | $-2.4M | $4.8M |
| Net Change in Cash | $55.3M | $289.7M | $507.9M |
| Beginning Cash | $180.6M | $235.8M | $678.1M |
| Ending Cash | $235.8M | $525.6M | $1.19B |
Frequently Asked Questions
How does TKO Group Holdings, Inc. make money?
Primary revenue streams include UFC and ONE Championship events which dominate the MMA market, Bellator MMA operations, and ancillary businesses such as TKO Fight Park and licensing partnerships. The company also derives income from broadcasting rights distribution, sponsorship activations, and digital media content across its various fighting organizations.
What are the main risks for TKO?
Regulatory changes regarding athlete compensation and labor practices could impact operational margins and content production costs. Volatility in global travel restrictions and geopolitical tensions may disrupt international event scheduling and sponsorship deals. High fixed costs associated with large-scale live events create sensitivity to ticket sales shortfalls or force majeure cancellations.
What is TKO's competitive advantage?
Exclusive long-term contracts with major promoters provide a stable revenue base and high barriers to entry for competitors. Strong brand equity in the combat sports niche creates deep consumer loyalty and allows for premium pricing power on event tickets and sponsorships. Diversified portfolio across multiple MMA organizations mitigates risk associated with any single promoter's performance.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.