World Wrestling Entertainment, Inc. Class A

Hello and welcome to WWE second quarter earnings call. We have just a few announcements before we begin. First please use the question mark icon in the upper right hand corner of your web console for technical assistance. The option to enlarge slides is located to the right of your slides with the four arrows pointing in different directions. You may ask a question at any time by typing your question into the question box located on the web interface and clicking send. If you are listening through a phone line, you may ask a question verbally by pressing star, then 1 on your touchtone phone. If you wish to be removed from the queue, please press star 2. I will now turn the call over to Seth Zaslow, SVP and Head of Investor Relations. Please go ahead, Seth.

Thank you, and good morning, everyone. Welcome to WWE's second quarter 2022 earnings conference call. Leading today's discussion are Stephanie McMahon, WWE's chairwoman and co-CEO, Nick Kahn, WWE's co-CEO, Paul Levesque, WWE's head of creative and talent, and Frank Riddick, WWE's chief financial and administrative officer. Their remarks will be followed by a Q&A session. We issued our earnings release earlier this morning and have posted the release, our earnings presentation, and other supporting materials to our website. Today's discussion will include forward-looking statements. These statements reflect our current views, are based on various assumptions, and are subject to risks and uncertainties disclosed in our SEC filings. Actual results may differ materially and undue reliance should not be placed on them. Additionally, The matters we will be discussing today may include non-GAAP financial measures. Reconciliations of non-GAAP to GAAP information are provided in our earnings release and presentation, which are available on our website. Finally, as a reminder, today's conference call is being recorded, and the replay will be available on our website. I would now like to turn the call over to Stephanie.

Good morning, everyone. Thank you for joining us today. Before I discuss highlights from the quarter, I wanted to address some of our recent management changes. After more than 40 years of running WWE, my father, Vince McMahon, has retired. As a true founder and entrepreneur, my father, and my mother for that matter, poured their heart and souls into building this business and taking WWE from a regional wrestling promotion in the 1980s to the global media enterprise we are today. He built the foundation that WWE stands on and prepared us for the future. WWE and its board of directors have had succession plans in place, and it is both a privilege and an honor to be leading WWE with my partner, Nick Khan, as co-CEOs, and with Paul Triple H Levesque, also my husband, leading our talent and creative. Nick, Paul, and I first met around 2015 about a talent that Nick was representing. Our relationship grew with the three of us having the opportunity to work together during our last media rights negotiation. Nick was still an agent at the time, but it became quite clear how well the three of us worked together and what a tremendous asset Nick would be to our executive team. A few years and Triple H's 50th birthday party later, it's hard to imagine where we are now. We independently fell in love with WWE as kids. and now have the opportunity to live our dream as professionals. Paul is joining us today fresh from last night's broadcast of Monday Night Raw in D.C. You'll be hearing from him in a few moments. Working alongside Frank Riddick, our CFO, and our strong leadership team, our goals are to maximize shareholder value by continuing to grow WWE across all lines of business. The team's success in doing just that, as demonstrated by our strong year-to-date performance, has given us the confidence to raise our full year 2022 guidance, which Frank will provide more detail on shortly. This quarter saw record results for AQ2. We generated revenue of $328 million and adjusted OIBDA of $92 million, increases of 24% and 34%, respectively, over the prior year. In fact, each business line saw increases over the previous year quarter, highlighting the strength of each one of our segments. Since our last call, we staged four premium live events. Each one has continued the trend of viewership growth since licensing WWE Network to Peacock here in the US, and represents the highest viewership in their respective histories. The following four comparisons are all year over year. For Backlash in May, we saw a 49% viewership increase. Hell in a Cell in June, we saw a 45% viewership increase. Money in the Bank in early July had a 17% viewership increase. And SummerSlam at the end of July, we saw a 20% increase in viewership. Our flagship linear programs, Raw and SmackDown, continue to perform well driving in and out of those premium live events. We saw this trend clearly on the August 1st episode of Monday Night Raw on USA Network coming two days after SummerSlam. That show drew more than 2.2 million viewers, making it our most viewed episode since March 2020. For the quarter, Raw ranked behind only rounds one and two of the NBA playoffs in the key 18 to 49 demo among all Monday night cable programs. And SmackDown on Fox ranked number one in 18 to 49 among all Friday night broadcast programs in the quarter. Our viewership success is not limited to our in-ring content. Last month, our second season of Biography, WWE Legends, premiered on A&E along with two new shows, WWE Rivals and WWE Smack Talk. The Sunday block of primetime programming delivered a 77% increase over the prior year's time slot. This marks the latest step in a growing partnership with A&E Networks that will see us deliver more than 130 hours of programming over the next several years. On our social platforms, just last month, our YouTube channel crossed the 90 million subscriber threshold. We also surpassed 70 billion lifetime views, becoming just the seventh channel on YouTube to achieve those numbers. On TikTok, WWE remains the number one most followed sports league with over 18 million followers, more than the NFL, MLB, NBA, and USC. Whether on broadcast or streaming, cable or social, WWE programming is achieving market leading viewership. Our diversified distribution approach is capturing fans at multiple touch points. Nick will speak about how we plan to capitalize on that strong viewership performance as we head into our next round of domestic rights renewal. Before I turn the call over, I want to reiterate how humbled and committed I am to WWE in my new role. I've literally spent my entire life in and around this company. And I have a deep appreciation and respect for our brand, employees, fans, and superstars that makes WWE a unique media property unlike anything else in sports or entertainment. With that, I'll turn the call over to my partner and co-CEO, Nick Conn.