Maintains Solid Performance in Challenging Environment

Third Quarter 2020 Highlights*
* (All comparisons are versus the prior year period unless stated otherwise)
• Revenue was $221.6 million an increase of 19% or $35.3 million
• Operating income was $63.4 million an increase of nearly 9x or $57.0 million
• Adjusted OIBDA¹ was $84.3 million an increase of more than 2x or $58.9 million
• WWE ThunderDome debuted at the Amway Center in Orlando Florida. It provides an interactive virtual experience for WWE fans and recreates the in-arena atmosphere (WWE has not performed an event with ticketed fans since mid-March 2020)
• WWE Network average paid subscribers² were 1.6 million an increase of 6%
• Digital video views were 9.2 billion an increase of 3% and hours consumed were 342 million an increase of 3% across digital and social media platforms³
• eCommerce revenue was $9.1 million an increase of 60% offsetting the loss of venue merchandise sales due to 74 fewer events in the quarter

Business Outlook

• The Company continues to adapt its business to the changing environment with investment to enhance content production value and further fan engagement including an incremental $22 - $27 million investment in the fourth quarter (4Q20 vs. 3Q20) primarily associated with the creation of WWE ThunderDome and increased personnel expenses as employees return from furlough

• Management previously withdrew full year 2020 guidance. Based on sustained uncertainties related to the potential impact of COVID-19 on its business WWE is not reinstating guidance at this time⁴

• Management continues to believe WWE has significant long-term opportunities and is well positioned to deliver on its strategic initiatives (See COVID-19 Actions and Business Outlook on page 4)

STAMFORD Conn. October 29 2020 - WWE (NYSE: WWE) today announced financial results for its third quarter ended September 30 2020.

“Our third quarter financial performance was strong and reflected our ongoing creativity in a challenging environment ” said Vince McMahon WWE Chairman & CEO. “We continue to adapt our business as demonstrated by the creation of WWE ThunderDome focusing on increasing audience interaction and engagement to support the value of our content globally.”

Kristina Salen WWE Chief Financial Officer added “In the quarter we delivered revenue of $221.6 million and Adjusted OIBDA of $84.3 million based on increased rights fees for the Company’s flagship programming. With $638 million in cash and short-term investments at quarter-end we believe WWE has substantial capital resources to manage challenges that may lie ahead and to deliver on key strategic initiatives.”

Third-Quarter Consolidated Results*

* (All comparisons are versus the prior year period unless stated otherwise)

Revenue was $221.6 million an increase of 19% or $35.3 million primarily driven by the growth of core content rights fees in the Media segment. This revenue increase was partially offset by the loss of ticket and merchandise sales that resulted from the continued cancellation postponement and relocation of live events due to public health concerns related to the COVID-19 outbreak that began in mid-March 2020.

Operating Income was $63.4 million an increase of nearly 9x or $57.0 million primarily due to increased revenue from the growth of core content rights fees as well as a decline in event-related production expenses and short-term cost reductions implemented as a result of COVID-19. The increase in operating income was partially offset by $5.5 million in severance expense resulting from a reduction in force due to COVID-19. The Company’s Operating income margin increased to 28.6%.

Adjusted OIBDA (which excludes stock compensation) was $84.3 million an increase of more than 2x or $58.9 million. Adjusted OIBDA excludes $5.5 million in severance expense (described above). The Company’s Adjusted OIBDA margin increased to 38.0%.

Income Tax Provision was $13.0 million an increase of $20.1 million. The increase was driven by stronger operating performance coupled with an $8.2 million decrease in tax benefits associated with the vesting of share-based compensation. The effective tax rate in the quarter was 21%.

Net Income was $48.2 million or $0.57 per diluted share an increase from $5.8 million or $0.06 per diluted share in the third quarter 2019 primarily reflecting stronger operating performance partially offset by the impact of the decrease in tax benefits as discussed above. Current period results also reflected after-tax unrealized gains of $5.2 million primarily related to the value of the Company’s DraftKings investment partially offset by $4.3 million in after-tax severance expense (described above). Excluding these items Adjusted Net Income⁵ was $47.3 million or $0.56 per diluted share.

Cash flows generated by operating activities were $116.8 million an increase from $3.2 million driven by improved working capital which reflects the timing of collections associated with our large-scale international events and stronger operating performance.

Free Cash Flow was $110.8 million an increase from a $16.4 million use of cash primarily due to the change in operating cash flow and to a lesser extent a reduction in capital expenditures⁶.

Cash cash equivalents and short-term investments were $638 million as of September 30 2020 which includes $200 million the Company borrowed under its revolving line of credit during the second quarter 2020.

Click here to view full Press Release