WWE issued the following today:
WWE® Reports Strong Fourth-Quarter 2016 Results Achieving Record Revenue for the Full Year
Fourth-Quarter 2016 Highlights
- Revenue increased 17% to $194.9 million as compared to the prior year quarter
- Operating income of $13.9 million and Adjusted OIBDA1 of $20.5 million were in line with guidance
- WWE Network subscribers increased 14% from the fourth quarter 2015 to 1.41 million average paid subscribers over the fourth quarter 2016, consistent with the Company's guidance
- The Company premiered new original content across platforms, including Total Bellas® (E! network), The Bella Twins® (YouTube channel), 205 Live™ and WWE Story Time™ (WWE Network)
- Announced new UK Championship Tournament to showcase local talent, which successfully engaged both attendees and network viewers in January 2017
- Announced SNICKERS® will once again serve as the exclusive presenting partner of WrestleMania® (April 2, 2017), which will be held at the Orlando Citrus Bowl and broadcast live globally on WWE Network
- WWE issued $215 million of convertible note financing to support the execution of the Company's long-term growth strategy and for general corporate purposes2
Full Year 2016 Highlights
- Revenue increased 11% to $729.2 million, the highest in the Company's history, including record levels of revenue from its Network, Television, Live Event, Venue Merchandise, and WWE Shop segments
- Total international revenue increased by 11% to a record $189.3 million
- Operating income increased 44% to $55.7 million and Adjusted OIBDA3 increased 17% to $80.1 million, with both measures within the relevant range of Company guidance
- WWE Network subscribers watched a total of 294 million hours of content (up 15% from 256 million in 2015), yielding an average of 194 hours per household that places it among top cable and broadcast networks
- Digital engagement continued to grow with video views up 56% to more than 15.1 billion and social media engagements up 45% to 1.1 billion from the prior year4
STAMFORD, Conn.--(BUSINESS WIRE)-- WWE (NYSE:WWE) today announced financial results for its fourth quarter and year ended December 31, 2016. For the quarter, the Company reported Net income of $8.0 million, or $0.10 per share, as compared to a Net loss of $1.2 million, or a $0.02 loss per share, in the prior year quarter. Operating income increased to $13.9 million from an Operating loss of $1.5 million. Excluding items affecting comparability, Adjusted OIBDA increased to $20.5 million from $11.1 million.
"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. "The increased engagement with our brands across multiple platforms provides a foundation for achieving our 2017 and long-term financial objectives."
Q1 2017 Business Outlook
For the first quarter 2017, the Company projects Operating income of $16 million to $20 million and Adjusted OIBDA3 of approximately $23 million to $27 million. Additionally, the Company projects average paid subscribers to WWE Network of 1.48 million (+/- 2%).5 The first quarter 2017 subscriber forecast represents an approximate 15% year-over-year increase from the first quarter 2016, and a sequential quarter increase of 5% from the fourth quarter 2016. The Company's first quarter 2017 subscriber guidance is based on WWE Network's subscriber performance in January. As of January 31, 2017, WWE Network had 1.5 million ending paid subscribers including 1.1 million ending paid U.S. subscribers and 0.4 million ending paid international subscribers, which represent growth of 15% and 27% respectively, from January 31, 2016.
In 2017, WWE management expects the Company to achieve another year of record revenue and has targeted Operating income of $70 million and Adjusted OIBDA of $100 million, which would be an all-time record (up approximately 25% from 2016 Adjusted OIBDA of $80.1 million).5
Supporting the continued growth in the Company's revenue and profits, management anticipates contractual increases in television rights fees from key distribution agreements and expects the level of WWE Network subscribers will continue to increase, albeit at a lower rate, on a year-over-year basis. As management believes there is a significant long-term growth opportunity for WWE, the Company plans to continue to invest in key areas, as reflected in operating expenses and capital expenditures, to optimize WWE's long-term performance while driving strong bottom line performance.
Providing perspective on the growth of WWE Network and the Company's targeted profit expansion, Mr. Barrios reiterated previous comments, "Given the current scale and leverage of WWE Network, increases in its subscribers have the potential to drive meaningful growth in revenue and profit." Mr. Barrios added, "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."
Comparability of Results
For the fourth quarter 2016, there were no material items that impacted the comparability of results on a year-over-year basis. For the fourth quarter 2015, Corporate and Other expense included a $7.1 million non-cash abandonment charge to write-off the value of costs related to a media center expansion project. These costs were incurred several years ago but the expansion was delayed and the Company determined that these plans would no longer be viable and deemed them abandoned.
You can read the full release on WWE Corporate at this link.