WWE is crowing about their second quarter financials today. And even if they hadn't been desperate for good news in the wake of cutting ties with one of their most famous performers and ratings struggles, the numbers released today (July 30, 2015) would be a relief.
Their over-the-top streaming service, WWE Network - Vince McMahon's biggest gamble since starting the XFL or bankrolling his wife's Senate campaign - is looking more and more like a winner. Total subscribers increased 75% over the same quarter in 2014 (the second of the service's existence) to more than 1.2 million. More importantly, that was also a 31% improvement over the first quarter of this year.
Having those kinds of numbers in the three-month period after WrestleMania will be seen as a big win on Wall Street, since the Network's ability to keep paying subscribers once they got the company's flagship event for a fraction of its pay-per-view (PPV) price has long been a concern.
Also impressive is the news that from July 2014 - June 2015, the Network generated more revenue than PPV ever did in any 12 month period in WWE's existence. That will be seen as a big vindication of McMahon's jump from PPV to streaming - especially when you factor in 264,000 PPV buys still coming in for the quarter, which were not included in most of the company's projections and does appear to be the 'found money' Vince said it would be last year at the Network's launch.
Finally, international subscribers are said to make up 18% of the total number. 217,000 paying customers from markets other than the United States is a big improvement from the 44,000 WWE reported at the end of calendar year 2014.
Here's the press release with quotes from McMahon and CFO George Barrios:
WWE® Reports Strong Second-Quarter 2015 Earnings Growth
STAMFORD, Conn.--(BUSINESS WIRE)--WWE (NYSE:WWE) today announced financial results for its second quarter ended June 30, 2015. For the quarter, the Company reported net income of $5.1 million, or $0.07 per share, compared to a net loss of $14.5 million, or $0.19 loss per share, in the second quarter last year.
"Our strong earnings growth was driven primarily by the expansion of WWE Network subscribers, the escalation of our television rights fees as well as strong sales of our franchise video game. For the quarter, our OIBDA surpassed our expectations"
"The performance of WWE Network demonstrates our ability to transform our legacy pay-per-view business into a global subscription business with high growth potential," said WWE Chairman & CEO Vince McMahon. "We have made meaningful progress executing our key strategic initiatives, including the achievement of significant international growth and increased engagement across our digital and social media platforms."
"Our strong earnings growth was driven primarily by the expansion of WWE Network subscribers, the escalation of our television rights fees as well as strong sales of our franchise video game. For the quarter, our OIBDA surpassed our expectations," added George Barrios, Chief Strategy & Financial Officer. "The ramp-up of WWE Network subscribers, while exhibiting a seasonal pattern, continued to show strong year-over-year growth. Our success in developing WWE Network, maximizing our television rights fees and driving revenue growth from our global markets reinforces our long-term potential."
We'll have more on the results and future plans WWE discusses as part of the financial reporting throughout the day.