Warner Music Group registers $1.5bn revenue growth

This marked a 9.9% year-on-year (YoY) increase in overall revenues in the three months to the end of 30 June 2023 – comprising recorded music, music publishing and other income streams.

Reacting to the report, WMG CEO Robert Kyncl praised the “company’s strength across many different territories, labels and revenue lines.”

The report shows recorded music revenues increased 8.6% YoY to $1.282bn in the quarter, while recorded music streaming revenues were up 7.3% YoY to $822m, in what has been “a stronger release schedule and growth in ad-supported revenue recovered due to moderation in a market-related slowdown.”

Digital revenue rose by 9.8% YoY while streaming revenue increased 10.5%. Music publishing streaming revenue also increased by 28.1%, with Warner Chappell Music revenue growing by 16% YoY to $283m.

In terms of operating income, WMG posted $189m – an increase from $146m in the prior-year quarter. As of 30 June, WMG reported a cash balance of $600m, total debt of $3.988bn and net debt of $3.388bn. Net debt is defined as total debt, net of deferred financing costs, premiums and discounts, minus cash and equivalents.

The company’s operating income before depreciation and amortisation (OIBDA) was $275m, an increase of 20.1%. Artist services and expanded rights revenue went up by 14.1% thanks to an “increase in concert promotion and merchandising revenue”, whereas licensing revenue grew by 24.3% across sync, broadcast fees and other permits.

The company’s physical revenue was up 2.4%, due to “stronger performance in the US”, with standout releases from Ed Sheeran, Linkin Park and Melanie Martinez.

“Our Q3 results were driven by a wide diversity of music, and our strength came from many different territories, labels and revenue lines,” Kyncl said. “We succeeded with artists and songwriters across the spectrum of genres and generations, with both new releases and catalogue projects.

“We expect our momentum to build, led by our extraordinary music and inventive campaigns, as well as improving macro and industry trends. We continue to invest in new creative talent, and evolve our expertise and resources, while collaborating with partners across the entertainment economy to drive long term success.”

Warner Music Group chief financial officer Eric Levin added: “In the third quarter, we delivered solid growth across key metrics which give us increased confidence in our full-year margin and operating cash flow targets. The market’s adoption of subscription price increases, combined with the ongoing evolution of our key partnerships, gives us tremendous optimism for the future of streaming growth.”

Summary of WMG’s financial results for the three months ended 30 June 2023:

• Total revenue increased 9% or 10% in constant currency.
• Digital revenue increased 9% or 10% in constant currency.
• Net income was $124m versus $125m in the prior-year quarter.
• OIBDA increased 18% to $275m vs. $233m in the prior-year quarter or 20% in constant currency.
• Adjusted OIBDA increased 16% to $297m vs. $255m in the prior-year quarter or 18% in constant currency.
• Cash from operating activities decreased 10% to $146m from $163m in the prior-year quarter.