Last week WWE reported its fourth quarter and year end 2015 financials, touting a strong quarter and record revenue for the year. While WWE (NYSE: WWE) posted a $1.2 million loss for the quarter, it ended 2015 in the black with net income of $24.1 million, a significant improvement over its $30.1 million loss for the year 2014.

Fourth quarter 2015 highlights:

• Revenue increased 18% to $166.2 million.
• WWE Network had 1,217,000 million paid subscribers at the end of Q4, a 49% increase year-over-year.
• WWE Network averaged 1,237,000 million paid subscribers for Q4, a 72% increase year-over-year.
• Parks Associates ranked WWE Network as the fifth largest OTT subscription service in the U.S., ranking below Netflix, Amazon Video, Hulu and MLB.TV.

Full year 2015 highlights:

• Revenue was $658.8, a 21% increase and the highest revenue in company history.
• Total international revenue was $169.8 million, an increase of 46%.
• WWE Network subscribers watched an estimated total of 265 million hours of content, an average of 188 hours per household.
• WWE content received more than 8 billion views on YouTube.
• WWE was the most followed sports channel on YouTube and the second most followed sports brand on Facebook.
• WWE generated 790 million social media fan engagements and ranked as the 6^th most social brand worldwide.

In addition, WWE provided the following updates in its financial report:

Global markets: In November 2015, WWE Network expanded into India, and in January 2016, it became available in Germany, Austria, Switzerland and Japan. Its next targets for global expansion are China, Thailand and the Philippines. At the end of the fourth quarter, WWE Network had 277,000 international subscribers.

Content: WWE added 85 hours of original content to its network, bringing the total video-on-demand library to more than 4,300 hours. It debuted Breaking Ground, an original series, and two live specials. The company is planning 300 hours of additional original content in 2016, including WrestleMania on April 3.

Subscriptions: For the first quarter of 2016, the company projected average paid subscribers of 1,280,000, a 38% increase year-over-year. It did not, however, estimate how many subscribers WWE Network would have at the end of the first quarter of 2016. It will report its total number of subscribers on April 4, following WrestleMania.

“Our record revenue in 2015 reflected innovation across all of our businesses, which was highlighted by the successful execution of our network strategy,” said WWE Chairman and CEO Vince McMahon in a press release. “Over the next year, we will continue to focus on producing engaging content across all platforms, investing in emerging markets, and deploying technology across the enterprise to drive our long-term growth.”

George Barrios, Chief Strategy & Financial Officer, added, “Our strong performance in 2015 reflected the effective execution of our strategy and our investments in content, technology and global markets. As an example, these initiatives led to WWE Network subscribers watching an estimated average of 188 hours of content per household, and WWE garnering more than 8 billion views on YouTube and achieving record international revenues of $170 million. These metrics demonstrate the unique power of our brands and our potential to capitalize on a multi-platform content strategy to drive long-term growth.”

Insider Take:

Subscription growth has slowed from quarter to quarter, but year to year, paid subscriptions have increased significantly from 816,000 (2014) to 1,217,000 (2015) paid subscribers. However, with WrestleMania less than two months away, subscriptions could see a spike as they saw last year, with WrestleMania 31 being the highest grossing live event in WWE history and achieving a 77% conversion rate from free viewers to paid ones.

WWE’s continued expansion into global markets will boost international growth. In 2014, WWE had 44,000 international paid subscribers, compared to 277,000 in 2015. At $9.99 per month per subscriber, even adding 100,000 new international subscribers could boost revenue by nearly $12 million a year.

As we stated in August 2015 when we reported WWE’s Q2 financials, we believe WWE has had success because it knows its audiences very well. It knows what they like and what they don’t, and WWE has found a way to harness the emerging OTT market to offer fans something they can’t find anywhere else – comebacks, cheap shots, clean finishes and head drops.

With a sharp focus on content, WWE has had success converting free viewers to paid ones, and they’re expanding to reach out to untapped markets. We think they’ve got a money match here, and they’re showing other subscription companies how to do OTT right.