Last week WWE (NYSE: WWE) reported its fourth quarter and full year financials for 2016 with impressive results, including fourth quarter revenue of $194.9 million, a 17 percent increase, and total revenue for the year of $729.2 million, the highest in the company’s history. Other financial and operational highlights include:

Q4 2016 Results:

• Operating income of $13.9 million and adjusted OIBDA of $20.5 million, consistence with the company’s guidance.
• Net income of $8.0 million, or $0.10 per share, compared to a net loss of $1.2 million, or $0.02 per share, for the same period last year.
• WWE Network’s subscribers increased 14 percent to 1.41 million average paid subscribers, consistent with the company’s guidance.
• WWE premiered original content across multiple platforms, including E! network, YouTube and WWE Network. New programming includes Total Bellas, The Bella Twins, 205 Live and WWE Story Time.
• WWE announced the UK Championship Tournament.
• Snickers will be the exclusive presenting partner of WrestleMania, scheduled for April 2, in Orlando.

Full Year Results:

• Record revenue of $729.2 million, an 11 percent increase year-over-year, including record revenue from network, TV, live events, venue merchandise and WWE shops.
• Total international revenue grew 11 percent to $189.3 million, another company record.
• Operating income was $55.7 million, a 44 percent increase year-over-year, and adjusted OIBDA of $80.1 million, a 17 percent increase.
• WWE Network subscribers watched a total of 294 million hours of content, a 15 percent increase from 256 million hours in 2015.
• Digital engagement grew with video views up 56  percent to more than 15.1 billion, and social media engagements up 45 percent to 1.1 billion from 2015.

“During the past year, we continued to successfully execute our content strategy, which resulted in significant operational achievements and generated record revenue. We grew WWE Network to an average of more than 1.5 million subscribers, attracted record attendance of 101,763 fans at WrestleMania, and strengthened the global reach of our television programs, completing distribution deals in China, Australia, Germany and Spain, among other countries,” said WWE Chairman & CEO Vince McMahon in a statement. “The increased engagement with our brands across multiple platforms provides a foundation for achieving our 2017 and long-term financial objectives.”

For the first quarter of 2017, WWE is projecting the following:

• Operating income of $16 million to $20 million
• Adjusted OIBDA between $23 million and $27 million
• Average paid subscribers for WWE Network of 1.48 million

For the full year, WWE projects the following:

• Operating income of $70 million
• Adjusted OIBDA of $100 million, an all-time record
• Total subscribers will continue to grow but at a lower rate, year-over-year.

“Given the current scale and leverage of WWE Network, increases in its subscribers have the potential to drive meaningful growth in revenue and profit.” George Barrios, chief strategy and financial officer, said.

“Based on anticipated subscriber growth, we believe we can achieve our targeted record financial results. In 2017, we will continue to evaluate our financial performance and to balance earnings growth with investments that could enable us to deliver a wider range of content, strengthen our engagement with a broadening audience, and support our continuing digital and direct-to-consumer transformation,” he added.

Investors reacted favorably. On February 8, the day before the financials were released, WWE stock was valued at $19.28 per share. Since February 9, the stock price has risen steadily. As of 5:45 PM EST on February 15, stock was valued at $22.62 per share, a considerable jump from where it was on February 18, 2016 – $15.24 per share.

Insider Take:

WWE ended 2016 on an excellent note, finishing the year with net income instead of a net loss and steady subscriber growth. We agree that subscribers will continue to grow, but at a slower pace. WWE Network will probably see a subscriber bump in late March leading up to WrestleMania and continuing into April. They may see some churn from those who subscribe just for WrestleMania, as has happened in the past, but they are fine-tuning their offerings and will retain more subscribers with their original programming. As one of the early OTT players, they are setting the stage for how to do OTT right for niche audiences.