Warner Music Group (WMG) has released its financial results for the quarter ending June 30, 2024, marking its fiscal Q3. The company’s global revenue for the period reached $1.554 billion, encompassing earnings from recorded music, music publishing, and other activities.
In its SEC filing on August 7, WMG disclosed that its recorded music digital revenue growth was adversely affected by the termination of its distribution agreement with BMG. This change resulted in a $26 million decrease in revenue compared to the same quarter last year.
Additionally, WMG experienced a $3 million negative impact on its recorded music streaming revenue due to a renewal with one of its digital partners. Despite these setbacks, the company reported that excluding the effects of the BMG termination, the digital license renewal, and the CRB rate benefit, its total revenue increased by 3.1% year-over-year (YoY) at constant currency.
Including the aforementioned factors, WMG’s total revenue saw a modest increase of 0.6% YoY at constant currency. Recorded music revenues amounted to $1.251 billion, reflecting a 1.1% YoY decrease at constant currency. This decline was driven by reduced artist services and expanded-rights revenue, lower physical sales, and decreased licensing revenue, though these were partially offset by growth in digital revenue.
Notably, WMG’s recorded music streaming revenue, which includes both ad-supported and subscription models, rose by 10.2% YoY at constant currency, reaching $863 million. Within this, subscription streaming revenue increased by 13.7% YoY at constant currency to $640 million, while ad-supported streaming revenue grew by 0.9% YoY at constant currency to $223 million.
The quarter’s major performers included Dua Lipa, Benson Boone, Zach Bryan, Teddy Swims, and Twenty One Pilots. The company also saw $90 million in licensing revenue, a 1.1% YoY decrease at constant currency, and $120 million from physical sales, down 4% YoY at constant currency. Artist services and expanded-rights revenue dropped by 26% YoY at constant currency to $159 million, due to lower merchandising and concert promotion revenues.
Warner Music Group’s global music publishing division, Warner Chappell Music, reported an 8.9% YoY increase in revenues at constant currency, totaling $305 million. Excluding the prior-year benefit from the CRB rate adjustment, music publishing revenue rose by 11.7% YoY at constant currency. Streaming revenue in music publishing grew by 7.9% YoY at constant currency to $192 million, while performance revenue surged 33.3% YoY to $52 million. Mechanical revenue fell by 18.8% YoY, and synchronization revenue grew by 2.4% YoY.
For Q2 2024, WMG’s net income increased to $141 million from $124 million in the previous year’s quarter. Operating income rose to $207 million from $189 million, and adjusted OIBDA (Operating Income Before Depreciation and Amortization) reached $316 million, up 8% YoY at constant currency.
“Our Q3 results reflect strong margin expansion and operating cash flow growth, driven by robust streaming performance and effective cost management,” said Bryan Castellani, CFO of Warner Music Group. “Looking ahead, we are committed to delivering a strong finish to the year. The industry remains healthy, and we are well-positioned for long-term success.”
Warner Music Group remains focused on nurturing emerging talent and enhancing its catalog to drive future growth.