AI Takeaway
TKO Group Holdings delivered a dramatic profitability turnaround in FY2025, with operating income surging 2,598% to $835M and net income jumping 2,964% to $195M, even as revenue dipped 3.1% to $4.74B, driven by sharply lower SG&A costs and improved operational efficiency.
Revenue
$4.74B
-3.05% YoY
EPS (Basic)
$2.42
++1916.67% YoY
Operating Income
$835.01M
++2598.30% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
Total revenue fell 3.1% year-over-year from $4.88B to $4.74B in FY2025, yet the company achieved a dramatic improvement in profitability, suggesting significant cost restructuring and operational discipline rather than top-line growth as the primary driver of earnings improvement.
Source: Source: 10-K Income Statement
SG&A expenses declined 14.6% from $1.77B to $1.51B, a reduction of approximately $260M, which was a key contributor to the operating margin expanding from 0.63% to 17.63% — a transformational improvement reflecting cost discipline and integration efficiencies.
Source: Source: 10-K Income Statement
Operating cash flow surged 119.4% from $586M to $1.29B in FY2025, demonstrating strong cash generation capability and suggesting that earnings quality is high, with cash conversion significantly improving year-over-year.
Source: Source: 10-K Cash Flow Statement
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Upgrade to unlockLong-term debt increased by approximately $1B to $3.76B in FY2025, pushing the Debt-to-Equity ratio to 1.67x. This elevated leverage increases TKO's sensitivity to interest rate changes and could constrain financial flexibility in a downturn or if cash flows deteriorate.
Source: Source: 10-K Balance Sheet
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Upgrade to unlockReported EPS of $-0.08 versus the $0.30 analyst consensus — a -126.3% miss for FY2025.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $4.74B | $4.88B | -3.05% |
Operating Income | $835.01M | $30.95M | +2598.30% |
Net Income | $195.4M | $6.38M | +2964.14% |
EPS (Basic) | $2.42 | $0.12 | +1916.67% |
EPS (Diluted) | $2.26 | $0.02 | +11200.00% |
SG&A Expense | $1.51B | $1.77B | -14.65% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $15.5B | $15.11B | +2.54% |
Current Assets | $2.33B | $1.53B | +52.38% |
Total Liabilities | $6.25B | $4.97B | +25.70% |
Current Liabilities | $1.85B | $1.41B | +30.65% |
Stockholders' Equity | $3.74B | $4.09B | -8.64% |
Cash & Equivalents | $831.1M | $619.79M | +34.09% |
Long-Term Debt | $3.76B | $2.76B | +36.20% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $1.29B | $586.08M | +119.38% |
Investing Cash Flow | $-146.89M | $-117.24M | -25.28% |
Financing Cash Flow | $-635.73M | $-154.96M | -310.26% |
Share Buybacks | $866.85M | $165M | +425.36% |
D&A | $484.99M | $457.93M | +5.91% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 17.6% | 0.6% | +17.00% |
Net Margin | 4.1% | — | — |
ROE | 5.2% | — | — |
ROA | 1.3% | — | — |
Current Ratio | $1.261 | — | — |
Debt to Equity | $1.671 | — | — |
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TKO delivered a dramatic earnings turnaround in FY2025, with net income surging 2,964% to $195M and basic EPS rising from $0.12 to $2.42. Operating income jumped 2,598% to $835M, primarily driven by a 14.6% reduction in SG&A expenses from $1.77B to $1.51B.
TKO's revenue fell 3.1% year-over-year from $4.88B to $4.74B in FY2025, a modest top-line contraction likely related to the timing of media rights agreements and live event scheduling across its WWE and UFC properties. Despite the revenue dip, profitability improved dramatically due to aggressive cost management.
TKO's financial health shows a mixed picture: operating cash flow more than doubled to $1.29B and the current ratio is a healthy 1.26x with $831M in cash, but long-term debt rose 36.2% to $3.76B, pushing the Debt-to-Equity ratio to 1.67x. Stockholders' equity also declined 8.6% to $3.74B, partly due to the $867M share buyback program.
Yes, TKO significantly accelerated its share repurchase program in FY2025, buying back $867M in shares — a 425.4% increase from $165M in the prior year. This aggressive buyback contributed to higher financing cash outflows and a reduction in stockholders' equity, but also boosted EPS by reducing the share count.
Key risks for TKO include its elevated debt load (long-term debt of $3.76B and Debt-to-Equity of 1.67x), continued revenue pressure (revenue declined 3.1% to $4.74B), and the concentration of goodwill and intangibles in a $15.5B asset base that could be subject to impairment. Sustaining the dramatic cost reductions that drove FY2025's profitability improvement is also a critical execution risk.