Due mainly to non-cash stock-based compensation related to its IPO on June 3, Warner posted a $519 million net loss last quarter compared to net income of $14 million a year earlier. After removing these one-time costs -- such as adjusted EBITDA includes one-time items such as restructuring costs and a loss on the extinguishment of debt -- Warner’s earnings before interest, taxes, amortization and depreciation (EBITDA) was $189 million, an improvement from $159 million in the same quarter last year.
The hit to earnings wasn't a surprise. During its IPO roadshow, Warner warned potential investors about the pending non-cash compensation hit to earnings and did not predict 2020 performance, a source told Billboard. Instead, Warner forecasted $1 billion in EBITDA in 2021. So far, Warner appears to be on pace: over the last four quarters, Warner’s adjusted EBITDA rose 6.8% from $735 million to $785 million.
Recorded music revenue in the quarter declined 5.7% from $913 million to $861 million, or 4.2% at constant currency, in spite of an 7.9% increase in digital revenue, from $584 million to $630 million. Streaming revenue of $589 million rose 9.1%, accounting for 93.5% of the quarter’s digital revenue and 68.4% of total recorded music sales. Digital revenue declined 1.2% over the prior three quarters, from $2.89 billion to $2.85 billion, even though streaming revenue grew 11.7% from $1.58 billion to $1.76 billion.
Streaming revenue was "largely unaffected by COVID," said CEO Stephen Cooper during the earnings call on Tuesday morning. Levin described streaming revenue growth as "consistently double-digit" and "quite stable," adding that he was "extremely kind of pleased" that subscription revenue continued its "strong trends" in the latest quarter.
Warner's publishing revenue grew 2.8% to $149 million in the quarter and climbed 5.6% to $488 million in the previous three quarters. Digital revenue of $90 million was 60.4% of total publishing revenue, up from 44.8% a year ago. The other three publishing categories -- performance, mechanical and synchronization -- collectively tumbled 26.3% to $59 million.
WMG shares rose as high as 1.9% to $30.51 in Tuesday morning trading and fell to $29.55, down 1.8%, at midday.