Warner Music Group generated $1.55bn in calendar Q2; subscription streaming revenues rose 13.7% YoY

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Warner Music Group has printed its monetary outcomes for the three months ended June 30, 2024 (calendar Q2 – the corporate’s fiscal Q3).

In response to the corporate’s fiscal Q3 (calendar Q2) outcomes, WMG noticed its quarterly international company-wide revenues attain USD $1.554 billion (throughout recorded music, music publishing, and different actions).

WMG famous in its SEC submitting on Wednesday (August 7) that “in line with the prior quarter”, the corporate’s recorded music digital income development was unfavorably impacted by the termination of its distribution settlement with BMG, which, it stated, resulted in $26 million much less income in comparison with the prior-year quarter.

The corporate additionally famous that there was a $3 million “unfavorable affect” inside its recorded music streaming income in comparison with the prior 12 months quarter on account of a renewal with certainly one of its digital companions.

For WMG’s Publishing division, the corporate studies that its digital income development was unfavorably impacted by a $7 million profit within the prior-year quarter “on account of a ruling by the Copyright Royalty Board in Phonorecords III upholding increased proportion of income US mechanical royalty charges”.

Excluding the BMG Termination, the Digital License Renewal, and the CRB Price Profit, WMG’s whole income was up 3.1% YoY at fixed forex.

(Together with the BMG Termination, the Digital License Renewal, and the CRB Price Profit, WMG’s company-wide income in calendar Q2 was up 0.6% YoY at fixed forex.

RECORDED MUSIC

Warner Music Group’s recorded music revenues reached $1.251 billion in calendar Q2, down 1.1% YoY at fixed forex, and pushed, based on WMG, by “decreases in artist providers and expanded-rights, bodily and licensing income, partially offset by development in digital income”.

Excluding the affect from the BMG Termination and the Digital License Renewal detailed above, WMG’s recorded music income elevated 1.2% YoY at fixed forex.

Warner’s recorded music streaming income (together with ad-supported and subscription) was up 10.2% YoY on a relentless forex foundation (adjusted for the affect of the BMG Termination and the Digital License Renewal) to $863 million (see under).

WMG additionally breaks that determine down in its steadiness sheet to focus on the efficiency of its subscription streaming and advert–supported streaming revenues, respectively.

The corporate’s revenues from recorded music subscription streaming reached $640 million in calendar Q2. Adjusted for the BMG Termination and the Digital License Renewal, revenues from recorded music subscription streaming have been up 13.7% YoY at fixed forex.

WMG generated $223 million in ad-supported recorded music streaming revenues in calendar Q2, which was up 0.9% YoY at fixed forex.

Main sellers in calendar Q2 included Dua Lipa, Benson Boone, Zach Bryan, Teddy Swims, and Twenty One Pilots.

Elsewhere in WMG’s recorded music enterprise, the corporate generated $90 million from Licensing, which decreased 1.1% YoY at fixed forex, pushed, based on WMG, “by the timing of copyright infringement settlements”.

Bodily income, in the meantime, decreased 4% YoY at fixed forex to $120 million, primarily pushed by the “timing of releases and powerful US releases within the prior-year quarter,” WMG stated on Wednesday.

Artist providers and expanded-rights income decreased 26% YoY at fixed forex to $159 million. WMG stated that this efficiency was primarily on account of “decrease merchandising income, decrease live performance promotion income primarily associated to Japan and France, and a lower in income associated to the exit of the corporate’s owned and operated media properties introduced as a part of the Strategic Restructuring Plan”.

“Our robust subscription streaming development in Q3 was pushed by the efficiency of our music and wholesome trade developments. We’re nurturing the subsequent technology of artists and songwriters, creating contemporary affect for our iconic catalog, and dealing with our companions to extend the worth of music.”

Robert Kyncl, WMG

“Our robust subscription streaming development in Q3 was pushed by the efficiency of our music and wholesome trade developments,” stated Warner Music Group CEO Robert Kyncl on Wednesday.

“We’re nurturing the subsequent technology of artists and songwriters, creating contemporary affect for our iconic catalog, and dealing with our companions to extend the worth of music.

“Our dedication to long-term artist improvement, mixed with a flatter construction in recorded music, will allow us to super-serve expertise and set WMG up for sustained future development.”

Music Publishing

Warner’s international music publishing division – Warner Chappell Music – noticed its quarterly revenues improve by 8.9% YoY at fixed forex to $305 million.

Excluding the affect from the CRB Price Profit detailed earlier, WMG’s Music Publishing income elevated 11.7% YoY at fixed forex.

Music publishing streaming income elevated 7.9% YoY at fixed forex to $192 million. Excluding the CRB Price Profit within the prior-year quarter, streaming income elevated 12.3% YoY at fixed forex, “reflecting continued market development, enlargement of [WMG’s] publishing catalog and timing of funds”.

Efficiency income elevated 33.3% YoY at fixed forex to $52 million on account of a rise in touring exercise outdoors the US, plus US radio exercise.

Mechanical income decreased 18.8% YoY at fixed forex, primarily pushed by decrease bodily gross sales, WMG stated on Wednesday.

Synchronization income, in the meantime, grew 2.4% YoY at fixed forex, pushed, based on WMG, by “increased worldwide industrial licensing exercise, partially offset by the timing of copyright infringement settlements within the US”.

WARNER’S CALENDAR Q2 2024 IN SUMMARY (% IN CONSTANT CURRENCY):

• Warner Music Group’s general revenues have been up 0.6% YoY at fixed forex to $1.554 billion in calendar Q2;
• Excluding the BMG Termination, Digital License Renewal and CRB Price Profit detailed in WMG’s earnings launch, whole income was up 3.1% YoY on a relentless forex foundation.
• Recorded music revenues have been up 1.2% YoY on a relentless forex foundation to $1.251 billion;
• Inside that determine, recorded music streaming revenues have been up 10.2% YoY at fixed forex to $863 million.
• Recorded music subscription streaming revenues have been up 13.7% YoY on a relentless forex foundation to $640 million.
• Music publishing revenues – at Warner Chappell Music – have been up 11.7% YoY at fixed forex (excluding the affect from the CRB Price Profit) to $305 million.

WMG: PROFITABILITY IN CALENDAR Q2 2024

• WMG’s web revenue stood at $141 million versus $124 million within the prior-year quarter.
• Working revenue stood at $207 million versus $189 million within the prior-year quarter.
• The agency’s quarterly adjusted OIBDA was $316 million versus $297 million within the prior-year quarter, up 8% YoY at fixed forex.

“Trying forward, we’re centered on delivering a powerful near the 12 months. The trade stays wholesome and we proceed to place ourselves for long-term success.”

Bryan Castellani, Warner Music Group

“Our Q3 outcomes have been highlighted by robust margin enlargement and working money circulation development, reflecting sturdy streaming efficiency and disciplined value administration,” stated Bryan Castellani, CFO, Warner Music Group.

“Trying forward, we’re centered on delivering a powerful near the 12 months. The trade stays wholesome and we proceed to place ourselves for long-term success.”

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