Conference Transcript - TKO 2026-03-02

Ben Swinburne, Analyst — Morgan Stanley

All right. I think we're going to get started. Yes. Good morning, everybody. Welcome to Morgan Stanley's TMT Conference. I'm Ben Swinburne. Quick disclosure. For important disclosures, please see the Morgan Stanley Research Disclosure website at morgonstanley.com slash research disclosures. If you have any questions, please reach out to your Morgan Stanley sales rep. And I'm really excited to welcome, help kick us off here, day one, slot one, President and COO of TKA Holdings, Mark Shapiro. Mark, thanks for being here.

Mark Shapiro, COO

Good to see you, Ben. Last few days, I didn't know if I was going to walk in and get Sean or not. Soon to come. Soon to come. Soon to come.

Ben Swinburne, Analyst — Morgan Stanley

So last week you reported your fourth quarter results. You provided 2026 guidance to the market. Maybe just to level set the audience here, talk about the outlook for this year and kind of the strategic priorities for the company as you look ahead.

Mark Shapiro, COO

Look, I think that we are, barring everything else, we're a high-quality execution story, as we talked about on the earnings call, with really multiple avenues and levers of outperformance. I think it starts with media rights. because our first couple years being public here was what's going to happen with WWE renewal, what's going to happen with UFC renewals, are you going to split it up, how many platforms? I mean, I would tell you that was probably the most popular question of any interview we did. And, you know, we came out of the shoot and we've done an aggregate of $15 billion of media deals across all of our properties over the next five to seven years. So it's strong visibility, recurring, contractual, and easy to model when you have that as driving the entire ship. Then you've got our partnerships, right, which we recently said we had a guide out there, or I should say a target, really, that was a billion dollars by 2030, and now we've raised that to a billion two. And again, mostly contractual, recurring, high visibility, high margin. On the live events side, despite what's going on in the world, and I'm sure we'll talk about that, we're seeing just big pickup for our events. The experience economy is alive and kicking, and we have elasticity on pricing, especially at the WWE, which has been a good story for us. And we've announced a real target for our financial incentive packages, which are fees that are paid to us from local governments and municipalities to bring our show to town, sometimes hard cash, sometimes value in kind, sometimes just subsidies. But we've put a target out there of about $380 million to $420 million by 2030. And at the same time, keep in mind, on a run rate right now, we're at $240 million. At $300 million, but take away some of the one-timers, we're at $240 million. So $240 million to $380 million is going to be a good story for us. I think you flip over to some of the smaller businesses that certainly round out the wheel and sort of our platform strategy, but, you know, aren't as high margin. You've got On Location, where Milan, you know, I was there for the better part of the Olympics, just a sensational story. I think for sports overall, for culture, for the world, a nice peaceful time for a couple of weeks, which is the way it's supposed to be. And Milan was a big winner, and LA 28, you know, I had a meeting with Casey Wasserman last week. They've got 7 million pre-sale sign-ups for the Olympics, not tickets that have been bought, just folks saying, put me in line to buy tickets. That's triple what we had for Paris. So that's going to be a really strong story. IMG, of course, is in the media rights business. There's nothing bigger, more popular, more in-demand than sports rights, and that's their business. So that's very strong and robust. And then, of course, on the new growth side, we're going to build boxing into a version of what the UFC is and get out the corruption, get out the confusion, and make sure the best fighters are fighting the best fighters and being paid, as they should, to fight the best fighters. And then, you know, outside of that, we've got the White House event. So I think in totality, in summary, you've got a story here three ways. You've got high-quality execution. We're laser-focused on that. You've got new events, new growth, new initiatives like boxing, and we'll talk about that. And then, of course, you've got our capital return program, which we're really proud of because we're way ahead of schedule on that. And we've been very clear with our investor base that returning cash to shareholders is a priority.

Ben Swinburne, Analyst — Morgan Stanley

That's a great setup. We'll talk about all those businesses. One thing I wanted to ask you about, Mark, I think you bought the UFC, what, maybe a decade ago, something like that, on the Endeavor side, WWE. A couple years ago, we've watched you guys run these businesses, and even relative to the forecast, I think that you guys laid out, WWE's ahead of plan. So the question is, is there like a sort of a reusable playbook in the Endeavor TKO management team that maybe allows you guys to do this across multiple premium live event assets as you think about allocating capital and deploying the management team in the future?

Mark Shapiro, COO

Yeah, that's a very insightful question.

Ben Swinburne, Analyst — Morgan Stanley

And I would say, first of all, it starts with having best-in-class operators.

Mark Shapiro, COO

And, you know, I started my career at ESPN, so I've been kind of knee-deep and steeped in sports for decades now, I hate to admit. But we have a good feel, a good grasp with best-in-class operators, and we really spare no expense in getting them on our team. And those that aren't performing are quickly off the team. We're running, you know, a mile a minute here. These are properties that are year-round across the board, right? UFC is year-round. WWE is year-round. PBR is year-round. And then IMG is selling sports rights year-round. On location has an event year-round. I mean, there's no Christmas holiday when it comes to TKO. So we need best-in-class operators that are strong, insightful, intelligent, killers, if you will, and really just workaholics. I hate to say it, but we do promote work-life balance, but that's hard to do.

Ben Swinburne, Analyst — Morgan Stanley

Everyone who knows you knows.

Mark Shapiro, COO

Yeah, that's how you get to 40% margins, by the way, is you work really hard. And I would say what we look for is we do look for properties that are year-round. It starts there. Strong, high-quality IP that we can leverage, that's scalable, that's global. We look for businesses that give us a lot of operating leverage. Very, very important. And you add all that up, and it's just a rinse and repeat cycle. That's how we play it out.

Ben Swinburne, Analyst — Morgan Stanley

And those are hard to find, right?

Mark Shapiro, COO

You know, they're not, you know, some of these bigger leagues, some of the majors that we compete with, major league baseball and the NBA and NFL, they're not for sale. Teams are for sale, but not leagues. So if you can identify one of them and you see the upside of kind of putting it into our machine, you pounce.

Ben Swinburne, Analyst — Morgan Stanley

All right, last big-picture question. The number one focus in the space has been the Warner Brothers discovery process now for some time. It appears to be at least coming to an end from an agreement perspective with Paramount announcing and discussing their acquisition this morning. From a TKO point of view, obviously you have a new relationship with Paramount in a number of markets. But how would you, when you look at this combination, assuming it goes through, what does it mean, if anything, for your business?

Mark Shapiro, COO

Super upside, frankly. And by the way, I would have listed several pros had Netflix been the winner here. And as you said, it has not yet closed. But I very much enjoyed their conversation this morning because what did it tell you more than anything else? They're going to take HBO, and they're going to take P+, and they're going to merge them into one strong competitive platform. And that's only good for us. That's where it starts for me. When I look at the whole WBD portfolio, there are two brands that are steeped in sports tradition and have been appointment for many sports fans. And that's TNT, CBS as well, but TNT and HBO, especially in the boxing space. And now their portfolio of sports is second to none. I mean, I would say that it rivals ESPN, if not is better than ESPN. So they've got strong brands, they've got strong reach, strong engagement, a big sub-base, DBS still, you know, a bellwether, a megaphone to grow sports and grow audience, and that will help us certainly starting with UFC, but potentially soon to be boxing. And they know how to work with great IP. We have a great relationship with them. We came out of the gate very, very strong. 7 million viewers for our first event. And this Saturday will be the first time that we have CBS simulcasting a couple of hours of our UFC fight, which will bode well for new sign-ups in terms of subscribers for Paramount+. So we're really, really excited. David Burson runs CBS Sports. He came from ESPN. I worked with him quite closely for many years. Like, he gets it. He knows how to build sports. He knows how to promote sports. They clearly have shown they know how to market sports with those commercials they were running around the clock, tying in the movie clips and scenes along with the UFC. So we're in a great position. Our house just got bigger.

Ben Swinburne, Analyst — Morgan Stanley

Let's talk more about the UFC, and let's start with the CBS-Paramount relationship. So when the deal was announced, there was some discussion about, you know, clearly Paramount Plus benefits from UFC content. And if it's exclusive, it really benefits. You guys benefit on the CBS side from all the reach. How do you, now that you're into it, how do we think about that balance between maximizing reach on CBS, which with what I'm sure Paramount's goals are, which is to grow Paramount Plus?

Mark Shapiro, COO

Look, they're paying us a hefty rights fee. So they're going to do what's best for their platform. But to their credit, they do it in concert with us. Open conversations, not weekly meetings, daily meetings across each of the business verticals and i mean content but then also we're both out there selling ads and experiential and activation and social and we're marketing together so we have to work hand in glove and i think david sets the tone at the top and that's how they're working across the board like they got the message and they've made us a major priority and we're always going to be a priority just by the sheer fact of how much they're paying to have ufc on the platform they've been a super collaborator terrific communicator it's not any kind of attitude or not invented here or you don't understand our business like ufc is new to them so they're you know they're learning combat sports are largely new to them they're learning they're asking questions and we're finding the best ways to work together as i mentioned the our first event was huge for them for signups i believe also strong for attention and on top of that keep in mind whatever was reported in terms of their new subs is is is not even close to what they ultimately had in terms of new subscribers because you had ufc fans signing up for paramount plus weeks in advance from that fight so it wasn't just about that night so i think we're bringing new eyeballs to their platform they mentioned that their programming has been sort of symbiotic with UFC fans they're finding a lot of UFC fans watching Landman driving viewership there and vice versa so I think we've really tapped into something and it's only going to grow when you add HBO content premium content like that onto the platform and then you add all the other sports from TNT and TBS I mean really across the year from the Masters to NCAA Final Four and reunifying that and of course the NFL we're sitting in a really enviable position.

Ben Swinburne, Analyst — Morgan Stanley

Is the White House event on CBS or Paramount Plus or TBD?

Mark Shapiro, COO

TBD on that. I know Dana had mentioned he thought CBS might have a role to play there. Look, I think from a news perspective, CBS should be there, right? This is a news event. This is a cultural event. This is going to be something, right? Right there on the South Lawn, we're still putting our fight card together. But the president is and has always been a huge UFC fan, and we're excited to be part of the 250th America Celebration.

Ben Swinburne, Analyst — Morgan Stanley

You want to touch on sort of the financial piece of that event since we're on that topic?

Mark Shapiro, COO

We talked about that on our earnings call, but what we're sitting today is we'll roughly spend $60 million on the event. That is inclusive of the fees we pay to the fighters. However, we're not done there yet because the card's not done. So I see that $60,000 probably inching forward, but we expect today to capture $30,000, roughly half of the $60,000 in inventory packages that we're selling to corporate sponsors. But we're doing that in full communication, obviously, with the White House, and if we inch above the $60,000, the revenue will come up commensurately. So we should be in a good position. And by the way, whatever we lose, $30 million at this point on the event, are we really losing? I mean, other properties would kill to have the opportunity we're going to have. And we're grateful to the president for wanting to do this and putting us front and center in the birthday celebration, if you will. So this is going to be enormous in terms of attention, in terms of earned media, in terms of our fans being happy. The fight card is going to be off the charts, exceptional. Fight to fight, not leading up to the championship fight, each fight will be all-star caliber. And I would just say from a sampling perspective, given the promotion and press and the attention we're going to get, the publicity, you're going to have so many viewers content viewers entertainment viewers sports viewers that are just surfing and tuning in to see what this spectacle is all about so we are going to fully capitalize on the stage that is the white house but we're not going to capitalize on america we will not profit from this event no matter what we will not be making money on this event or exploiting the birthday of our country in any way, shape, or form, it's going to be a massive celebration.

Ben Swinburne, Analyst — Morgan Stanley

Mark, earlier you mentioned site fees, which I think you're now describing as financial incentive payments.

Mark Shapiro, COO

Thank you. Financial incentive packages, FIPs, created by my CFO, Andrew Schleimer, sitting right over there.

Ben Swinburne, Analyst — Morgan Stanley

This has been an area that, I think, five, ten years ago didn't even really exist. I mean, there were some sports that were able to benefit. F1 was great.

Mark Shapiro, COO

F1 still is great.

Ben Swinburne, Analyst — Morgan Stanley

They sort of led the way. But can you talk a little bit about what's happening among the customer base here, which I think are municipalities, venue operators, private-public partnerships? Why all of a sudden is this, I mean, not all of a sudden, but a rapidly growing multi-hundred-million-dollar opportunity that years ago was not even a thing? What's happening in the business structurally?

Mark Shapiro, COO

Yeah, I just think overall, right, we're, I'm just a big believer in the experience economy, right, that events win out. Your time is, is, they're fighting for your time, right? Marketers are fighting for your time. Content's fighting for your time. discretionary time around the weekends it's just folks are looking for something to do especially in this k-shaped economy where you have you know those that are struggling with affordability looking for something to do to occupy time to share time to share experiences largely driven by youth that share content socially that live and die by FOMO and they want to be a part of it they want to be mixed they want to they want to feel it up it up and close you know the number one question that i got after spending all the time at the olympics was were you with the gold medal game the men's gold medal game right like you want to be there it's something it's something special it's something unique it's often dynamic and you just can't replace it it's not just sports sports leads the way but music food festivals fashion shows book fairs i mean you could go on and on people we're social animals right we want we want those community those communal events and we are we are profiting and prospering from that and serving it uh in in you know full full and reach in a fully enriched way and i don't think that's going away anytime soon right and uh for the by and large it's it's a good bang for your buck so we're excited to be front and center and we're constantly looking to your point earlier for those properties that would fit right into our platform strategy of supersizing content experiences for the consumer all walks of life, right? You're not necessarily going to be able to get a ticket to the White House event but you can certainly see the UFC in any city weekend after weekend or the WWE several times a week.

Ben Swinburne, Analyst — Morgan Stanley

Maybe the last question. I want to tie the UFC to your margin guidance. You gave margin guidance for 26 last week. One of the big focus areas, as you know, has been fighter pay and sort of how much you guys think you'll be investing back into particularly talent with all these big media rights step ups. So maybe now that you're into 26 and you're starting to look at the year and you've got a budget, can you talk a little bit about how you thought about investing in fighter talent, et cetera, with the

Mark Shapiro, COO

margin expansion? Yeah, I would start picking up a little bit before you left off on the financial incentive packages. Right. Given all this demand for these events and everybody, every city slash country wants wants events that are going to bring mass massive audiences. They're willing to pay. And pay doesn't just mean cash. You know, write me the biggest check. You know, we make a decision on where we're going to go based on, yes, what the financial incentive package might be. And it might be no cash. It might be value and kind. But we also are trying to serve our thirsty fans that want to taste and want to touch our properties. Really important to us because it's not just about the check. We have to grow the brand. We have to expand our audience. And as it relates to fighter pay or superstar pay on the WWE side, our margins last year were on adjusted EBITDA, 33.5%. We've announced at the midpoint of our guidance, we're going to be roughly 39.6%, so 40%. And that margin is inclusive of increase in fighter and superstar pay. And we take that very seriously. Right out of the gate after our CBS Paramount deal, Dana White doubled the performance bonuses for fighters. And we're talking eight-figure. And one by one, we'll be looking at this, and we are focused on really all the ingredients that make our events as great as they are. And that starts with fighters and superstars. But whatever increases we have, and we will have increases, they are inclusive of the margin guidance we have targeted.

Ben Swinburne, Analyst — Morgan Stanley

Let's talk about WWE then. Moving from Peacock to ESPN on the premium live events front in the U.S., how is that relationship evolving? What does ESPN do for WWE? And maybe you can fold in, Mark, their new unlimited tier and how you think that might impact, if at all, WWE's reach and popularity.

Mark Shapiro, COO

Oh, it definitely impacts us. I will tell you this. Just think of it this way. When the WWE first went to Peacock,

Ben Swinburne, Analyst — Morgan Stanley

the same questions were asked.

Mark Shapiro, COO

Are you worried about it disappearing? Are you worried about their subs? Because their sub base was a lot less than it is today. are you worried you'll get lost are you worried people have a hard time finding you are you worried they'll take up the sub price too high so the cost of entry will be prohibitive and peacock ended up being a total success long term and we play the long game for wwe and that's what we're doing here with espn it's kind of like starting over you know i'll remind you when we took the ufc to espn plus espn plus was in three million homes that's it and by the time we were done, it was in 25 million homes, and we were proud to play a part in that growth. It's the same thing here. ESPN Unlimited is a phenomenal package. It really is. It's worth every penny if you're a sports fan. And if you're watching ESPN, you are some level of a sports fan, if not a diehard sports fan. We've got some work to do here. Look, things will immediately get better once they strike their deal with comcast youtube and dish specifically those three that allows viewers to authenticate so i'm at home i have direct tv as an example and because i have direct tv i authenticate on espn unlimited it's a very easy process and it costs me zero bubkis to get espn unlimited if you don't have espn or excuse me direct tv or that or you have comcast and ESPN hasn't closed out their deal yet, well, then you have to pay $29.99. And that is, I believe, somewhat prohibitive, especially in today's economy and the struggles that certainly middle-income and low-income earners are having with affordability. So they have to get those deals done. And until they do, that will affect our audience. But I believe they're going to get them done. Jimmy Pataro has promised us they're on the heels of getting them done. And when they do, ESPN Unlimited will be the same appointment viewership destination that it is today on the mothership. So we're excited about that ultimately getting done. And I should tell you this, very important here, Ben. We had a massive event in Chicago this weekend, Elimination Chamber, one of our big premium live events, PLEs as we call it. And we saw a significant increase in audience from the first event we did last year with ESPN, which was Wrestlepalooza. So they're already making strides. Are they where Netflix was last year? Not yet. Are they where Peacock was after all those years? Not yet. But inching closer, and I was optimistic, I am optimistic, and I was super encouraged by the numbers that Nick Khan was sending me by the hour this past weekend. Nick Khan, of course, is the president of WWE.

Ben Swinburne, Analyst — Morgan Stanley

Yes, WWE. You mentioned partnership revenues before and your long-term ambitions. When you bought WWE, that was not a big business for them, and you ramped that quickly. But what's the opportunity still ahead for that property, and how do you think about going to market combined versus sort of selling standalone inventory?

Mark Shapiro, COO

I would say, first off, unless it's a new category for the WWE, meaning UFC already has the category and WWE doesn't, then we might just go in with WWE or professional bull riders. But if it's a category where it's not taken yet,

Ben Swinburne, Analyst — Morgan Stanley

we always go in with the triple, always.

Mark Shapiro, COO

And it's no different, really, than my days at ESPN. If you want to buy SportsCenter, which everyone wants to buy, you have to buy outdoor programming on Saturday mornings, fishing, because otherwise we'd have a tough time selling fishing and hunting. And that package serves as leverage and proved to be a successful equation and model. And that's really what we do here. We go in with a boatload of value for a certain advertiser or marketer that ties to all three properties, that keeps them going year-round with disparate and endemic audiences and hopefully run the table in a way that creates value for our partner and at the same time helps our growth on the partnerships front from a dollar perspective, but once again straddles the fence of growing the brand, marketing. Some of these deals, I mean, they are chock full of marketing opportunities in aisles or grocery stores or institutional inventory or just simple marketing materials that many of these brands send out to their consumers on a daily basis, digitally and socially. We want to be tied to that. We need to grow our audience, and we still need more sampling across each of our sports. Some of our sports, of course, are nascent sports. So that's really important to us. And I think on this front, you know, we're out there, there's still more categories we can sell, and we're also benefiting from the fact that some of these deals are lapsing and we're renewing them for higher prices. but also that gives us an opportunity to bring in one of the other properties. So if it's a UFC category that they've had for years, but the deal is up, in the renewal we'll bring WWE into it. Some fit, some don't. But to your point, there's a great deal of upside on the WWE and the PBR front, and we have put out a target, as I said, that by 2030, this will be a $1.2 billion bucket for us, high margin.

Ben Swinburne, Analyst — Morgan Stanley

Yep, yep, okay. I want to make sure we touch on a couple other things before we run out of time. So on location, part of the Endeavor portfolio brought into TKO last year. Can you talk a little bit, I don't know if you have the numbers yet, but Milan's performance versus plan and anything you learned now that you've had Paris, Milan, going into L.A. on the Olympic front, just to make sure you maximize that opportunity as well.

Mark Shapiro, COO

With seven minutes and 45 seconds, I could never tell you all that we learned because both Paris and Milan have been massive learning lessons leading up to what will be, what I believe, the greatest Olympics of a generation and certainly in my lifetime. It's going to be just extraordinary. And I'll remind you, this will be the last event, barring all rules and laws are obliged, that the president touches before he leaves office. So this will very much be President Trump's Olympics, and he's been a phenomenal partner if you will so we are uh we are leading up to it tons of learnings um milan was i would say a little behind plan not much but a little behind plan and that literally was driven only by the fact that unfortunately the consumer couldn't be sure there were even going to be hockey games i mean we're talking about an arena that wasn't finished what 48 72 hours beforehand and if you walked around the arena like i did you're in hallways where they don't even have carpeting in yet i mean they literally did what they needed to do to pass inspection and then they put on glorious games uh and i'm just grateful they got it done and that the water was running because we're selling suites and 72 hours beforehand there was no plumbing so this was tough there was a lot of bad press on that and bad press on facilities not being ready ultimately is a uh sales prevention for selling tickets and by the way once they finished the news got out that basically everything was done except for the gondolas that never never did finish uh in terms of fans getting up the mountain to to enjoy the event in a premium experience way experiential way um our ticket sales went through the roof i mean those last few days were insane in terms of packages we were selling so we almost got to our target we were just off but nonetheless uh we will we will hit our guidance which was 130 million dollars of EBITDA just at EBITDA between the two Milan and the Los Angeles games so we're on target for that and excited about being able to focus on that once we finish the World Cup.

Ben Swinburne, Analyst — Morgan Stanley

Right, right. Anything you want to highlight on the World Cup, other than the plumbing being ready to go?

Mark Shapiro, COO

First of all, one of the learnings, I'll give you the biggest learning, is really tough to do international events. I mean, we'll do them here and there, but by and large, we would like On Location to stick with U.S. soil events. And the World Cup is showing that we're ahead of plan. The demand has been insane, and they haven't even really started marketing it in a big way. And we expect to stick and hit our guidance, which is $75 million of adjusted EBITDA on the World Cup.

Ben Swinburne, Analyst — Morgan Stanley

Okay. Let's talk boxing. This is sort of, I guess, the next project for the company to sort of build something kind of from scratch with partners. What's the thesis here for putting capital work behind boxing?

Mark Shapiro, COO

Look, I'm proud of this one, Ben, because when things, after we finished the Paramount deal and the ESPN deal for WWE, we had a lot of questions from our investors. Okay, you've got great momentum, and now you're going to execute. You know, like, where's the growth, you know, beyond that, right? It's never enough. That's how we all have to operate. What have you done for me lately? And now we have something specifically to point to. Boxing is a massive opportunity. It's not like we have to go out and buy it. I mean, certainly we have to sign up fighters and we have to pay fighters, but this is ripe with opportunity. For years, confusion in the marketplace, fights that cost too much money from a pay-per-view perspective, knee-deep in corruption, number one doesn't fight number two, champion doesn't fight number one ranked. Like, it's really, I'm surprised it's gone on for this long. Too many promoters, backroom deals, we are cleaning that up, and we are going to create a real league here where we can market the personalities, we can create the next Sugar Ray Leonard. Nobody better to do it than Dana White and Nick Khan, who know boxing backwards and forward, and grew up fight fans before there was ever a WWE or a UFC. And, of course, Lawrence Epstein, the president of the UFC, plays a big role in there as well. So we are ready for battle. And we're signing some big stars, as evidenced by recently signing up Conor Benn to a big super fight, and we hope to get him exclusively in the Zufa League, which is Zufa Boxing, that's the name of the league. And we'll cut media deals, and we'll cut partnership deals, and we'll get them into our financial incentive packages, and we'll have consumer products and licensing. And we'll take the show outside of the U.S. Even in the first year, we'll likely go to the U.K. for a couple of fights. So we're coming out gangbusters, guns a-blazing. And this is a huge opportunity. And if we can just build boxing in the next five years, five to ten years, excuse me, into half of what the UFC is or WWE, well, then, you know, we're a growth story that you want to jump into.

Ben Swinburne, Analyst — Morgan Stanley

Okay. Maybe in the time we have left, Mark, you guys announced buyback plans for the year. You have a ton of cash flow. You've got a leverage framework. Maybe you could just talk a little bit about how the company balances returning capital, delevering the business, investing organically when you think about your capital allocation priorities.

Mark Shapiro, COO

We're very comfortable with our leverage position and certainly can expand that, um you know depending on timing and desire what i would say is just just look at what we've done i mean it's all about putting your money where your mouth is uh we we launched a dividend in what q1 of last year we doubled it in q3 and there's there's more work to do there uh and i would be excited to see us move the ball further on that front in the next 12 months not committing to anything, but would like to see it progress in that fashion. On the same token, we announced our intention to launch a share repurchase to the tune of $2 billion over the next three to four years in October of 24. We then commenced that at the end of last year, leading into our earnings, and got to approximately the first billion, and then came right back on our earnings and announced we're moving on the second billion. So we are committed. I mean, there's no other way to say it. We're not drunken sailors. We're not going to go acquire and buy things for the sake of buying them. We're ruthless when it comes to costs and expenses and our margins. We want to be one of the best-run businesses that an investor could ever find, and we're going to stick on that track. So we have room, and we expect to move on the second billion, if you will, that share repurchase fast. And we will stay committed to this, whether it's share repurchases or dividends. We will stay committed to that over the next few years.

Ben Swinburne, Analyst — Morgan Stanley

And where does M&A fit or not fit in, Mark, into the capital allocation framework that you guys have? You talked a little bit about that last week.

Mark Shapiro, COO

Look, there's a reason why we put a comment on M&A. right at the top of Ari's prepared comments on our earnings call because we get this question often. We want to be prudent. We want to be responsible. We have a history and endeavor of just buying a lot of stuff that I think made the story, the narrative, the model confusing to investors and that's not going to happen here.

Ben Swinburne, Analyst — Morgan Stanley

So we will always explore.

Mark Shapiro, COO

We will always evaluate but we will be prudent and if there's something that we can be opportunistic about, we will do such a thing. But right now, it's execute, high quality execution, focus on the operations. It is boxing, new growth,

Ben Swinburne, Analyst — Morgan Stanley

and it is capital return. Great. Well, we are out of time. Mark, thanks so much for coming. Great to see you. Thank you so much. Thanks to you.