Warner Music Group reported quarterly revenue was up 6% as of Sept. 30, as the third-largest U.S.-based music rode a solid release slate that included the Barbie soundtrack, Zach Bryan and FIFTY FIFTY to eclipse $6 billion in overall annual revenue for the first time.
WMG reported revenue for its fiscal fourth quarter rose to $1.58 billion, driven by a stronger release schedule and a 17% uptick in music publishing revenue of $298 million. Streaming revenue rose by 12.6% overall and digital revenue was up 8% to $1.06 billion compared to the year ago quarter. Net profit edged slightly higher to $154 million from $150 million a year ago.
“We delivered on our promise of second-half improvement,” said Robert Kyncl, CEO, Warner Music Group in prepared remarks ahead of the company’s earnings call with investors. “As the music ecosystem is recognizing the value of premium content and emerging markets continue to gain traction, our industry is healthy and growing.”
WMG’s share price edged slightly lower in pre-market trading, down 0.54% to $32.85 on Thursday at 8:19 a.m. New York time.
Recorded music revenue over the course of the quarter rose 4% to nearly $1.3 billion, bolstered by a 6% increase in digital revenue to $877 million and a 9.6%% increase in streaming revenue ($848 million on its own) on the stronger release schedule and growth in ad-supported revenue, which WMG said reflects the company’s TikTok licensing renewal. Licensing revenue increased 9.2% to 95 million, and artist services and expanded-rights revenue decreased 7.4% to $189 million, due to sagging merchandising revenue. Physical revenue ticked up 5.7% to $130 million, thanks to that aforementioned better slate of albums releases. Downloads? Down 48% for the quarter at just $29 million in revenue.
The growth in music publishing revenues was driven by a 20.8% uptick in digital revenue to $192 million and 28.4% increase in streaming revenue, reflecting the impact of digital deal renewals (ie. TikTok) and a revenue true-up of $14 million from the CRB. Mechanical revenue spiked about 42% — to $17 million — primarily due to the timing of distributions in the quarter, and synchronization was basically flat at $41 million.
WMG prefers to use operating income before depreciation and amortization (OIBDA) as a metric to assess its overall business health, and OIBDA increased 19% to $291 million in the quarter compared to $245 million a year ago. Adjusted OIBDA rose 20% to $317 million from $265 million a year ago.
Key WMG financial highlights for its Q4:
- Total revenue rose 6% to $1.586 billion for the fourth quarter 2023, from $1.5 billion in the same quarter 2022.
- Net profit, or net income, was up 3% at $154 million this quarter compared to $150 million in the year ago quarter.
- Digital revenue rose 8% to $1.068 billion from $989 million in in the year ago quarter.
- Streaming revenue for both recorded music and publishing rose 13% to $1.03 billion.
- Recorded music revenue rose 4% to $1.291 billion from $1.244 billion in the year ago quarter.
- Music publishing revenue rose 17% to $298 million from $254 million in the year ago quarter.
- Operating income was up 30% to $212 million from $163 million in the year ago quarter.
- OIBDA was up 19% to $291 million compared to $245 million in the year ago quarter.
Key WMG financial highlights for its full fiscal year:
- Total revenue rose 2% to $6.037 billion for the fiscal year, from $5.9 billion in 2022.
- Recorded music revenue flattened at $4.955 billion from $4.966 billion in 2022.
- Music publishing revenue rose 14% to $1.08 billion from $958 million a year ago.
- Digital revenue rose 3% to $3.9 billion from $3.8 billion in 2022.
- Operating income was up 11% to $790 million from $714 million a year ago.
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