AI Takeaway
TKO delivered strong Q1 FY2026 results with revenue surging 25.9% YoY to $1.60B and net income jumping 53.0% to $89.4M, driven by robust operating leverage, though long-term debt rose sharply by 68.4% to $4.64B.
Revenue
$1.6B
++25.86% YoY
EPS (Basic)
$1.16
++61.11% YoY
Operating Income
$338.48M
++42.60% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
TKO's revenue grew 25.9% YoY from $1.27B to $1.60B in Q1 FY2026, reflecting strong momentum across its live sports and entertainment properties, including WWE and UFC events.
Source: Source: 10-Q Income Statement
Operating income rose 42.6% YoY to $338.5M, with operating margin expanding approximately 250 basis points to 21.2%, indicating that revenue growth is outpacing cost increases and driving meaningful profitability improvement.
Source: Source: 10-Q Income Statement
Operating cash flow surged 326.6% YoY from $162.8M to $694.5M, a dramatic improvement that signals significantly stronger cash generation from core business operations in Q1 FY2026.
Source: Source: 10-Q Cash Flow Statement
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Upgrade to unlockLong-term debt surged 68.4% YoY to $4.64B, pushing the debt-to-equity ratio to 2.22x. This elevated leverage increases TKO's sensitivity to interest rate changes and could constrain financial flexibility in a downturn or if operating performance weakens.
Source: Source: 10-Q Balance Sheet
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $1.12 versus the $1.20 analyst consensus — a -6.7% miss for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $1.6B | $1.27B | +25.86% |
Operating Income | $338.48M | $237.36M | +42.60% |
Net Income | $89.35M | $58.41M | +52.98% |
EPS (Basic) | $1.16 | $0.72 | +61.11% |
EPS (Diluted) | $1.12 | $0.69 | +62.32% |
SG&A Expense | $380.24M | $363.29M | +4.67% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $16.02B | $15.01B | +6.75% |
Current Assets | $2.93B | $1.52B | +93.18% |
Total Liabilities | $7.5B | $4.82B | +55.68% |
Current Liabilities | $2.19B | $1.22B | +79.78% |
Stockholders' Equity | $3.38B | $4.16B | -18.89% |
Cash & Equivalents | $788.89M | $470.86M | +67.54% |
Long-Term Debt | $4.64B | $2.76B | +68.39% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $694.54M | $162.82M | +326.56% |
Investing Cash Flow | $-21.48M | $-30.99M | +30.69% |
Financing Cash Flow | $-127.54M | $-185.67M | +31.31% |
Share Buybacks | $838.31M | — | — |
D&A | $143.8M | $100.53M | +43.04% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 21.2% | 18.7% | +2.49% |
Net Margin | 5.6% | — | — |
ROE | 2.6% | — | — |
ROA | 0.6% | — | — |
Current Ratio | $1.339 | — | — |
Debt to Equity | $2.22 | — | — |
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TKO's revenue grew 25.9% YoY to $1.60B in Q1 FY2026, up from $1.27B in the prior year period. This growth reflects strong performance across its live sports and entertainment portfolio, including UFC and WWE events.
The key takeaways from TKO's Q1 FY2026 earnings include a 25.9% revenue increase to $1.60B, a 53.0% jump in net income to $89.4M, and a remarkable 326.6% surge in operating cash flow to $694.5M. However, long-term debt rose sharply by 68.4% to $4.64B, partly due to $838.3M in share buybacks, raising leverage concerns.
Yes, TKO is profitable in Q1 FY2026, reporting net income of $89.4M and an operating income of $338.5M. However, the net margin of 5.6% is well below the 21.2% operating margin, suggesting significant interest and non-operating expenses are weighing on bottom-line results.
Based on the financial data, key risks include TKO's elevated leverage with long-term debt rising 68.4% to $4.64B and a debt-to-equity ratio of 2.22x, as well as declining stockholders' equity of $3.38B (down 18.9% YoY) driven by aggressive share buybacks. The company's large intangible asset base also poses potential goodwill impairment risk.
TKO's near-term liquidity appears adequate with a current ratio of 1.34x and cash of $788.9M, and operating cash flow is very strong at $694.5M. However, the longer-term financial health is tempered by a high debt-to-equity ratio of 2.22x and long-term debt of $4.64B, which investors should watch closely given the company's aggressive capital allocation strategy.