World Wrestling Entertainment, Inc. Class A

Hello and welcome to WWE's Third Quarter Earnings Conference Call. There will be a question and answer session. At that time, if you would like to ask a question, please signal by pressing star 1 on your telephone keypad. I would now like to turn the call over to Seth Vazlo, SVP and Head of Investor Relations. Please go ahead, Seth.

Thank you and good afternoon, everyone. Welcome to WWE's Third 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 chief content officer, and Frank Riddick, WWE's president and chief financial officer. Their remarks will be followed by a Q&A session. We issued our earnings release about an hour ago and have posted the release, our earnings presentation, and other supporting materials on 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. 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.

Thank you, Seth, and thank you all for joining us. Q3 was another record-setting quarter for a third quarter, generating $305 million in revenue and adjusted OIBDA of $91 million, representing increases of 19% and 17%, respectively, year over year. And we remain solidly on track to deliver record revenue and adjusted OIBDA for the full year. As a backdrop to the strong financial performance for the quarter, The renewed energy around our creative has boosted viewership across platforms. In a world of declining television ratings, WWE is growing. Monday Night Raw on USA Network is up almost 5% year over year, while the top 25 cable networks are down 12%. SmackDown on Fox is up 1%, while broadcast networks are down over 15% year over year. In fact, SmackDown regularly attracts over 2 million viewers and ranks number one in the coveted 18 to 49 demo among all Friday night broadcast programs. Just before the close of Q3, the September 23rd episode of SmackDown saw its biggest audience since 2020. That rating in particular is directly attributable to a first of its kind multimedia campaign called The White Rabbit Project, which was designed to engage and intrigue viewers through a series of clues and cues using a myriad of platforms and technology, one of which led to SmackDown on September 23rd as a destination. Our Chief Content Officer, Paul Levesque, will speak more to this in a moment. Year to date, viewership of our premium live events on Peacock is up 38% for the same period in 2021. One notable highlight being Clash at the Castle, our first return to a stadium show in the UK in 30 years, becoming WWE's most viewed international event in both the US on Peacock and in the UK, with a 39% increase in viewership year over year. In fact, Clash became the highest-grossing European event, setting records for merchandise and ticket sales. Because strong IP and better storytelling drive all lines of business. In Q3, we also saw the successful relaunch of WWE Shop in partnership with Fanatics. As we head into the holiday shopping season, Fanatics plans to scale the WWE product offering by 25% compared to last year. And our partnership with Panini has been significantly delivering above plan. This success is in large part due to a focused effort to weave product into storyline and take a fresh approach with partners, opening doors that had previously been closed. Take our partnership with Major League Baseball, for example. As we discussed on a prior call, WWE has been creating customized championship title belts for MLB teams. We expedited the production and distribution of the Yankees titles in response to the excitement around Aaron Judge's then chase for the home run record. Orders were placed by Yankee Stadium as well as Fanatics, and we instantly sold through the initial inventory. We also remain bullish on sales and sponsorship. While current market conditions have impacted our results this year, we already have some exciting deals in place that make us optimistic about our performance in 2023. Speaking of the future, Nick, Paul, Frank, and I are excited about the opportunities ahead with a focus across five key areas. Of course, the escalation of our media rights and content, international PCs and the local globalization of the IP across multiple lines of business, monetization of our intellectual property, including brand moats around our superstars, digital and Web3 and whatever the metaverse becomes, and potential M&A that aligns with our core competencies. We are just getting started, and we look forward to sharing more as we fully develop our plans. And with that, I will turn the call over to my co-CEO, Nick Kahn.