WWE reports 2nd quarter earnings

July 30, 2015

The WWE announced its second quarter earnings on Thursday and the numbers pleased many analysts.  The WWE reported net income of $5.1 million ($0.07 per share) compared to a net loss of $14.5 million ($0.19 loss per share) in the second quarter last year.

The WWE reported quarterly revenue of $150.2 million exceeding $1.5 million better than analysts expectations.

The total number of WWE Network subscribers increased 75% from the second quarter in 2014.  The WWE Network had 1,156,000 paid subscribers at 2015 2nd quarter end.  It is a 31% increase from the first quarter of 2015.  The network continues to think of its future plans which includes new content and adding approximately 180 hours of original content by year’s end.

WWE stock has increased 59% since the start of 2015.  It closed up $2.88, 17%, to $19.36 on Thursday.

Notable earnings highlights and announcements:

  • Live Event revenues decreased 34% to $26.4 million from $40.3 million in the prior year quarter primarily due to the timing of WrestleMania.
  • The WWE video game, WWE2K15, has done well. It has assisted in boosting the Consumer Products Division revenues up 36% from $16.0 million to $21.8 million this quarter.  Licensing revenues increased 105% from $5.5 million to $11.3 million on the strength of the game based on higher unit sales and effective royalty rates.
  • WWE Studios increased slightly from $1.7 million (Q2 in 2014) to $2.1 million this year.
  • In enticing fans to subscribe to the WWE, it plans to introduce a 3 month subscription card at retail which would give a “no credit card required” payment option.
  • Despite the Network, PPV buys are still solid with an average of approximately 56,000 for the 3 events of the second quarter. Although not considered a PPV, a July 4th live event from Japan, Beast in the East become the most watched program of all-time on the network excluding PPVs.
  • Television revenues increased 19% from $43.8 million (Q2 in 2014) to $52.1 million. The revenues do not include the timing of Total Divas which began airing in July.

Payout Perspective:

The one take in comparing the WWE Network from this quarter last year was that the network was only available in the U.S. in July 2014.  Now, the WWE has expanded internationally.  Still, a bulk of the over 1 million subscribers are in the U.S.  The earnings report is a win for the WWE as it appears that its most recent big gamble, the network, is doing well.  The big challenge is maintaining and retaining subscribers.  There is still a deficit in the amount of investment in the infrastructure of the network lost PPV revenue and TV licensing fees.  Yet, the network appears to have caught on.

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