The only thing stronger than WWE’s host of celebrity wrestlers is its rock-solid financials, as evidenced by WWE’s fourth quarter and full-year 2017 financials, released last week. Among the highlights for the fourth quarter for WWE (NYSE: WWE) was record revenue of $211.6 million, an increase of 9 percent over the fourth quarter of 2016. The company reported net income of $4.8 million, or $0.06 per share, compared to $8.0 million, or $0.10 per share, for the same period last year.
The decline in net income was due to an $11.3 million, or $0.14 per diluted share, charge caused by the new tax law. Without these changes, WWE would have had net income of $16.1 million.
Other highlights for Q4 2017 include:
- Television revenues were $75.3 million, a 10 percent increase from $68.6 million in the prior year quarter.
- Network revenue, which includes WWE Network and pay-per-view revenue, was $46.2 million, a 6 percent increase.
- WWE Network subscription revenue grew 5 percent to $43.4 million.
- Digital media revenue was $12.8 million, a 51 percent increase due to higher ad sales and consumption of WWE video content.
- Live event revenue dropped to $35.2 million from $38.6 million, due to a 7 percent average decline in attendance, offset by a 5 percent increase in ticket prices.
- Total paid subscribers were 1.47 million as of December 31, 2017 (1.07 million from the U.S. and 0.4 million international subscribers.)
- Operating income was $27.0 million.
- Adjusted OIBDA was $34.8 million, consistent with company guidance.
- The company celebrated the 25th anniversary of Monday Night Raw.
- Smackdown surpassed 950 episodes and was the WWE Network’s second longest running episodic program in history, behind Raw.
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‘In 2017, WWE achieved record financial results, generating the highest level of revenue and Adjusted OIBDA in the Company’s history. Our operating metrics demonstrate the strength of our content and brands worldwide, which positions us well to achieve our long-term objectives. We will continue to focus on creating compelling content for multiple platforms, leveraging data analytics and capitalizing on international opportunities to drive our continued growth,’ said WWE Chairman and CEO Vince McMahon in a news release.
For the full year 2017, WWE reported the following highlights:
- Revenue was $801.0 million, a 10 percent increase and the highest in company history, compared to $729.2 million in the prior year.
- WWE had net income for the year of $32.6 million, or $0.42 per diluted share, compared to $33.8 million, or $0.44 per diluted share, in the prior year.
- Operating income was $75.6 million, a 36 percent increase compared to the prior year.
- Adjusted OIBDA was $111.9 million, a 40 percent increase.
- Digital engagement grew with a 32 percent increase in video views (20 billion).
- Social media engagement grew 4 percent to approximately 1.2 billion over 2016.
- WWE Network added close to 300 hours of original content to featured programming in 2017, and more than 2,400 hours of archived content. The on-demand library now offers close to 9,400 hours of content.
- WWE’s YouTube channel was the most viewed sports channel and the second most viewed channel on YouTube with 20 billion lifetime views, as of January 31, 2018).
- Forbes named Wrestlemania one of the top 10 most valuable sports brands for the fourth year in a row, along with the Super Bowl, Olympics, FIFA World Cup and NCAA Men’s Final Four.
‘We achieved record revenue that exceeded $800 million, record Adjusted OIBDA that was within the range of our guidance, and record subscriber levels. As we continue to drive WWE’s digital and direct-to-consumer transformation while optimizing the monetization of our long-form content, we expect to balance 2018 OIBDA growth with investment in strategic areas, maximizing our long-term opportunities and shareholder value,’ said George Barrios, WWE chief strategy and financial officer.
For the first quarter of 2018, WWE estimated adjusted OIBDA between $23 million and $27 million. The company estimates average paid subscribers to the WWE Network of approximately 1.53 million. For the full year 2018, WWE estimates adjusted OIBDA of at least $115 million, which would be an all-time record.
On the same day financials were released, McMahon announced that Barrios and Michelle Wilson were promoted to co-presidents and appointed to the company’s board of directors in recognition of their contributions of record revenues to the company over the previous four years.
‘The successful transformation of our business model has put us in a position to capitalize on all that the changing global media landscape has to offer. I am confident that our executive management team, led by Michelle and George, will achieve continued success across key strategic initiatives and ensure our long-term growth,’ said McMahon.
Investors reacted favorably to the company’s earnings report. The day before financials were released, February 7, the company’s stock price was $33.99 per share. It dipped slightly to $33.84 on February 8 but then rose to $36.07 as of 4:36 PM EST yesterday.
Quarter after quarter and year after year, WWE continues to post solid financials, including record revenue and a steadily growing subscriber base. The WWE Network was one of the first over-the-top TV networks to really make a success out of this model. As live event attendance has dropped off, WWE has made up for it with its streaming TV revenue stream. Subscriptions continue to grow, though at a slightly slower pace, but those will pick up later this year during Wrestlemania season when the network tends to pick up a wave of new fans willing to pay for this exclusive content.