Warner Music Group reports Q4 revenue growth as net income declines

The company generated $1.84 billion in revenue during the three months to the end of 2025, representing a 10.4% increase compared with the same period a year earlier. Net income for the quarter fell by 27% to $175 million. Operating income rose 35% year on year to $288 million.

Recorded music revenue totalled $1.48 billion, up 10% year on year. Growth was driven primarily by subscription streaming, which increased by 14.3% to $721 million. Advertising-supported revenue rose by 7.2% to $239 million, while artist services increased by 17.9% to $231 million. Licensing revenue grew by 10% to $121 million.

Physical sales declined by 8.4% to $152 million, which the company attributed to a strong comparative period in the previous year that included major releases from artists such as Linkin Park. Recorded music operating income increased by 38.2% to $329 million. The company’s top-performing artists during the quarter included Alex Warren, Sombr, Cardi B and Ed Sheeran.

Warner Chappell Music, the group’s publishing division, reported revenue of $362 million, an increase of 12.1% year on year. Digital revenue, including streaming, rose by 3.9% to $215 million, while synchronisation income increased sharply by 53.8% to $60 million.

Following the earnings announcement, Warner Music Group shares rose by approximately 1.3% in after-hours trading to around $28.60.

During the company’s earnings call, chief executive Robert Kyncl confirmed that Warner Music had renewed its licensing agreement with TikTok under revised terms. “I’m also pleased to announce we’ve renewed our deal with TikTok, resulting in improved deal economics,” he said.

Kyncl added that the agreement included changes beyond direct financial returns. “Obviously, I cannot disclose the deal terms, but it contains structural changes that better reflect the value of music,” he said. “Our deals are never just about money. They’re also about data, promotion, insights, and all the things that can help advance our business overall.” He noted that TikTok-related revenue represents “the lower single digits” as a proportion of the company’s total income.

Chief financial officer Armin Zerza also highlighted the company’s partnership with artificial intelligence music platform Suno, stating that it is “already earning several hundred millions” of dollars in annual revenue. He added: “We expect this partnership to be a material top- and bottom-line growth driver starting in fiscal 2027.”

Both executives said the company expects artificial intelligence to play a growing role in its business, including in artist discovery, marketing automation, legal processes and the creation of visual assets. They also suggested that AI tools could contribute to higher average revenue per user through future premium subscription tiers on digital streaming platforms.

Kyncl said there had been strong engagement from artists regarding participation in third-party AI tools and argued for a balanced approach to access and control. “The issue is getting painted too much in black and white,” he said. “Black and white is never the answer.”

In addition, Warner Music and Bain Capital have expanded their joint venture, increasing its available capital from $1.2 billion to $1.65 billion. Zerza said the company plans to deploy a significant portion of the funds before the end of the current fiscal year and indicated that further announcements are expected.