Company Posts $1.47 Billion in Revenue – Billboard

Endeavor topped Wall Street expectations in Q1 2022, beating on revenue and earnings per share as the company’s segments continue to see growth return in a world with significantly fewer COVID-19 restrictions.

The company reported revenue of $1.47 billion, net income of $517.7 million, adjusted EBITDA of $314.4 million and earnings per share of $1.16. Wall Street consensus had been for revenue of $1.33 billion and EPS of $0.30.

The company also increased its guidance to $5.235 billion – $5.475 billion for the year, up from $5.2 billion-$5.45 billion.

The company swung from a slim loss of $16.7 million last quarter to more than a $500 million profit this quarter, though the sale of Endeavor Content in the quarter accounts for some of that gain. Endeavor reported a gain of $464 million related to the sale of 80 percent of the production studio.

Endeavor sold the stake in Endeavor Content to South Korea’s CJ ENM in a deal that valued the studio at $850 million.

Among Endeavor’s operating segments, its representation business, led by WME, continued its strong comeback as music and comedy touring returned in force, and with continued strong growth in content and brand spending. Endeavor’s representation business had revenue of $357.3 million, up 44 percent from the same quarter a year ago.

Similarly, the company’s live events and experiences segment was up 53 percent from a year ago to $825.8 million, driven by more full-capacity events that the company had exposure to or ownership of, including Super Bowl LVI, the Miami Open, the NCAA Final Four and Frieze LA.

Endeavor’s owned sports properties, led by UFC and PBR, were up 5 percent to $296.7 million, mostly due to improved sponsorship, licensing and attendance figures at UFC (UFC had one less event last quarter than it did a year ago, and no “signature” events), as well as additional PBR events.

Endeavor CEO Ari Emanuel, on the company’s earnings call, poured cold water on worries that overall industry content spend would be declining in the near future.

“There is no indication, across any of the platforms,” Emanuel said, adding that “we believe the spend is going up, not down, because Apple and Amazon are pushing in, also into sports.”

Emanuel noted that TV and film content spend typically gets locked in well over a year in advance of the show or movie actually becoming available.

“They are locked in through 2023, and in some cases into 2024,” he said.

After Netflix suggested that it would be taking a more prudent approach to content spend, analysts became concerned that the red-hot entertainment market could begin to cool. Emanuel, however, argued that new players, content pushes from ad-supported streaming services, and a need to defend legacy cable and broadcast networks could keep the market frothy.

“They are all in, they have made these bets of being in SVOD services… but they also have to defend their legacy businesses,” he said. “Their value proposition is defined by the content they put on their services.”

But if content spend does slow down, Endeavor appears poised to be the canary in the coal mine.
“You can think of us as the ultimate proxy for content growth,” Emanuel said.

This article was originally published by The Hollywood Reporter.

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