Third-Quarter 2015 Financial Highlights
• OIBDA1 of $23.4 million increased $20.7 million from the prior year quarter
• Total international revenue increased by 43% to $119.0 million through the first nine months of 2015
• WWE Network total subscribers increased 79% to more than 1.3 million from the third quarter 2014; paid subscribers increased 7% to more than 1.2 million from the second quarter 2015
• Network segment revenue reached a record of $145.8 million on a trailing 12-month basis
Third-Quarter 2015 Business Highlights
• WWE Network premiered more than 85 hours of original content including the network’s highly rated programs, Beast in the East, NXT Takeover: Brooklyn, Swerved and Stone Cold Podcast
• SummerSlam, Raw and NXT delivered 3 consecutive sell-out events at the Barclays Center in Brooklyn, New York (August 22 – 24)
• 37 new advertisers were secured for WWE programming following NBCUniversal’s Upfront
• WWE was the most-viewed channel on YouTube in August ranking above other popular channels such as BuzzFeed and Taylor Swift; WWE content (on and off-channel) garnered close to 7 billion views on a trailing twelve month basis
• WWE exceeded 660 million social media engagements to-date in 2015 and continued to rank 6th on Sprinklr’s Social Business Index, ahead of the NBA, NFL and other media properties
For the third quarter 2015, the Company reported net income of $10.4 million, or $0.14 per share, compared to a net loss of $5.9 million, or $0.08 loss per share, in the third quarter last year. Revenues increased 38% to $166.2 million from $120.2 million in the prior year quarter. North American revenues increased 34% driven primarily by the escalation and timing of television rights fees and the expansion of WWE Network subscribers as reflected in the Company’s Media Division, as well as increased Live Event and Licensing revenues, where the latter was driven by increased video game sales. Revenues from outside North America increased 53% driven by the increased monetization of content as reflected in the Media Division across EMEA, Asia Pacific, and Latin America. Revenue in the current quarter was reduced by approximately $1.9 million due to unfavorable changes in foreign exchange rates.
Total revenues for the nine months ended September 30, 2015 were $492.6 million as compared to $402.1 million in the prior year period. Operating income for the current year period was $40.3 million versus an operating loss of $39.7 million in the prior year period. Net income was $25.3 million, or $0.33 per share, as compared to a net loss of $28.5 million, or $0.38 per share, in the prior year period. OIBDA increased $76.7 million to $57.6 million for the current nine month period as compared to an OIBDA loss of $19.1 million in the prior year period. Excluding items that impacted comparability on a year-over-year basis, adjusted operating income was $40.3 million in 2015 compared to an adjusted operating loss of $33.9 million in the prior year period, and adjusted net income was $25.3 million, or $0.33 per share, compared to an adjusted net loss of $22.2 million, or $0.30 per share, in the prior year period.
Revenues increased 23% to $492.6 million from $402.1 million. North American revenues increased 17% driven by the escalation of television rights fees and the expansion of WWE Network as reflected in the Company’s Media Division, higher video game sales as reflected in the Consumer Products Division as well as higher average ticket prices for the Company’s live events. These growth drivers were partially offset by a reduction in Home Entertainment revenue. Revenues from outside North America increased 43% driven by the increased monetization of content as reflected in the Company’s Media Division across the EMEA and Asia Pacific regions. Revenue in the current period was reduced by approximately $5.4 million due to adverse changes in foreign exchange rates.
(1) Reconciliation of Operating Income to Adjusted OIBDA can be found in the Supplemental Information in the Company’s Earnings Release issued on October 29, 2015.
Comparability of Results
In the prior year quarter, the Company recorded a one-time pre-tax restructuring charge of $4.2 million comprised of severance and other costs ($2.1 million recorded in Corporate and Other Expenses, $0.3 million in Digital Media segment expense, and $1.8 million in depreciation expense) and a $4.0 million impairment of an equity investment.
Results for the nine months ended September 30, 2014 included a $4.2 million restructuring charge, a $4.0 million impairment of an equity investment, and a $1.6 million adjustment to reduce the carrying value of the old Corporate Aircraft to its estimated fair value in conjunction with the sale of this asset, which occurred during the third quarter 2014. In order to facilitate an analysis of financial results on a comparable basis where noted, the Company’s results have been adjusted to exclude these items. (See Schedule of Adjustments in Supplemental Information in the Company’s Earnings Release dated October 29, 2015).