Warner Music Group FY revenues top $6bn for first time; company’s recorded music streaming up 8.9% YoY in calendar Q3

Warner Music Group has posted its fiscal Q4 (calendar Q3) and FY financial results ending September 30, 2023.

WMG’s total revenues for its full fiscal year (the 12 months ended September 30) “eclipsed” $6 billion ($6.037bn) for the first time in the company’s history.

That FY figure – encompassing recorded music, music publishing and other activities – was up  3.9% YoY at constant currency.

In calendar Q3 (the three months ended September 30 and the company’s fiscal fourth quarter), WMG generated total revenues of $1.586 billion across recorded music, music publishing and other activities. That Q3 revenue figure was up 4.5% YoY at constant currency.

The quarter included successful releases from the Barbie soundtrack, FIFTY FIFTY, Ed Sheeran, MISAMO and Zach Bryan.

Commenting on the company’s new set of results, Robert Kyncl, CEO, Warner Music Group, told investors on Thursday (November 16) that “we delivered on our promise of second-half improvement, and reached over $6 billion in annual revenue for the first time in WMG’s history”.

“We delivered on our promise of second-half improvement, and reached over $6 billion in annual revenue for the first time in WMG’s history.”

Robert Kyncl, Warner Music Group

He added: “As the music ecosystem is recognizing the value of premium content and emerging markets continue to gain traction, our industry is healthy and growing.

“With these tailwinds at our back, we’ve been working hard to build a WMG that will excel in the music industry of tomorrow and look forward to bringing you incredible music in 2024 from our extraordinary artists and songwriters.”

Recorded Music

In calendar Q3, Warner Music Group’s Recorded Music revenue was up 2.5% YoY at constant currency to $1.291 billion.

Warner’s recorded music streaming revenue was up 8.9% YoY at constant currency in calendar Q3 to $848 million (see below).

According to Warner, this growth in streaming revenue came as a result of a stronger release schedule and growth in ad-supported revenue, which the company says includes the impact of its TikTok renewal.

Meanwhile, Warner’s physical revenue in calendar Q3 reached $130 million, up 5.7% YoY at constant currency, “primarily due to stronger performance in the United States”.

Warner’s Licensing revenue reached $95 million in calendar Q3, up 6.7% YoY at constant currency “with growth in broadcast fees and other licensing” according to WMG.

Artist services and expanded-rights revenue decreased 10.8% YoY at constant currency to $189 million. According to WMG, this was “primarily due to lower merchandising revenue, [and was] partially offset by an increase in concert promotion revenue”.

Music Publishing

Warner’s global music publishing division – Warner Chappell Music – increased its turnover by 15.1% YoY at calendar Q3 at constant currency to $298 million (see below).

WMG reports that its music publishing streaming revenue increased 25.8% YoY at constant currency to $190 million.

That growth in music publishing streaming revenue came as a result, according to Warner, of “the continued growth in streaming”, as well as the impact of digital deal renewals, which includes the company’s TikTok licensing deal renewal.

WARNER’S CALENDAR Q3 IN SUMMARY (% IN CONSTANT CURRENCY):

• Warner Music Group’s overall revenues were up 4.5% YoY to $1.586 billion in calendar Q3;
• Recorded music revenues were up 2.5% YoY to $1.291 billion;
• Within that figure, recorded music streaming revenues were up 8.9% YoY to $848 million;
• Music publishing revenues – at Warner Chappell Music – were up 15.1% YoY to $298 million.

WMG: PROFITABILITY IN CALENDAR Q3

• WMG’s net income stood at $154 million in the calendar Q3 quarter, versus $150 million in the prior-year quarter.
• The firm’s quarterly adjusted OIBDA increased by 17.8% YoY to $317 million.
• And its adjusted EBITDA increased by 23%  (not constant currency) to $340 million versus $276 million in the prior-year quarter (see below).

In a statement issued to investors today, Bryan Castellani, CFO, Warner Music Group, said: “Our performance in the quarter was underpinned by a solid release slate and momentum in our Recorded Music streaming growth.”

 “Our performance in the quarter was underpinned by a solid release slate and momentum in our Recorded Music streaming growth.”

Bryan Castellani, Warner Music Group

He added: “This fueled our second-half improvement which, combined with our disciplined cost management, resulted in robust Adjusted OIBDA growth and margin expansion for the full year.

“We are excited about the opportunities that lie ahead for WMG to capitalize on favorable industry trends and drive shareholder value through profitable growth and healthy cash flow conversion in 2024 and beyond.”Music Business Worldwide