Warner Music Group posted $1.37 billion in revenue for its fiscal fourth quarter ended Sept. 30, the company announced today (Nov. 15). That represents a 22% revenue growth over the same period last year, a time frame hit hard by the pandemic, and was fueled by 22% growth in recorded music that pushed the segment’s revenues to $1.17 billion.
For the 12 months ended Sept. 30, WMG said its total revenues were $5.301 billion.
Recorded music’s growth during Q4 was driven by another big annual jump in digital revenues, which rose 19% to $926 million, though that was a tick down from Q3 when that tally was $928 million. Streaming generated a lucky $777 million, up 22% from the same period on 2020. As a share of total revenue, however, digital actually shrunk compared to the same period last year (68.9% vs. 70.9%), due to what the company calls a “partial recovery of certain COVID-impacted revenue streams in the quarter,” including a 71.4% jump in artist services and expanded-rights revenue ($168 million) and a steady uptick in physical revenue — which grew 21% to $127 million for the quarter thanks to consistent demand for vinyl. Licensing revenues fell nearly 8% to $70 million, which the company attributes to one-time licensing settlements in the prior-year quarter.
Per usual, the fly in WMG’s recorded music ointment was the downloads and other digital segment, which fell 25% to $30 million for the frame.
The company said major sellers included Iron Maiden, Dua Lipa, Ed Sheeran, Masked Wolf and Ava Max.
Looking closely at publishing, Warner Chappell Music grew a whopping 21.3% to $205 million from $169 million the same quarter last year. Breaking down publishing revenue, digital generated $120 million, up 20% from $100 million from the same period last year. With Hollywood back in the swing of things, synchronization revenues increased to $39 million from $27 million in Q4 of 2021. Mechanical increased to $13 million from $10, thanks to wider business recovery and an increase in physical sales. As a percentage of revenue, digital decreased slightly to 58.5% of total publishing revenue versus 59.2% in the prior-year quarter.
As for profit, all those positive metrics helped pump net income for the quarter to $30 million compared to $1 million in the prior-year quarter, which was impacted by the pandemic. OIBDA (operating income before depreciation and amortization) came in at $179 million versus $155 million in the year earlier period. Operating income was $100 million compared to $88 million in the prior-year quarter.
Over the 12-month period, WMG generated total revenues of $5.301 billion from $4.463 billion in the prior year, a 19% increase. Recorded music accounted for $4.544 billion of that tally, up 19%, with digital scooping up $3.1 billion (itself up 21% y/y). Music publishing increased 16% to $761 million for the 12-month stretch. As for full-year profit, ’21 was a good year compared to 2020 when losses extended $470 million. With first-year pandemic conditions easing, WMG’s net for the year was $307 million, the company said.
“Music is essential to billions of people across the globe. But now, more than ever, great talent needs help to cut through the noise. By delivering for new artists and songwriters, returning superstars, and global legends, we’ve also delivered outstanding results in 2021,” said Steve Cooper, CEO, WMG.
“Our strong fourth-quarter results put an exclamation point on an outstanding year,” added Lou Dickler, acting CFO. “Even as certain revenue was impacted by COVID, the strength and resilience of our music propelled us to double-digit revenue growth and margin expansion in 2021. As the possibilities for music continue to evolve, we remain focused on delivering shareholder value through our financially disciplined investment strategy and positioning ourselves for the next wave of growth.”
Fiscal Q4 financial performance
- Revenue: $1.38 billion, up 22.2% y/y
- Adjusted EBITDA: $237 million, up 33.9% y/y
For year ending Sept. 30, 2021
- Revenue: $5.3 billion, up 18.8% y/y
- Adjusted EBITDA: $1.1 billion million, up 30.2% y/y
Recorded music revenue for year ending Sept. 30, 2021
- Total recorded music: $4.54 billion, up 19.3%
- Digital: $3.11 billion, up 20.9% y/y
- Streaming: $2.98 billion billion, up 23.7% y/y
- Physical: $549 million, up 26.5% y/y
- Expanded rights: $599 million, up 14.1% y/y
- Licensing: $291 million, up 2.8% y/y
Music publishing revenue for year ending Sept. 30, 2021
- Total music publishing: $761 million, 15.8% y/y
- Performance: $122 million, down 14.1% y/y
- Digital: $436 million, up 29.4% y/y
- Mechanical: $49 million, up 2% y/y
- Synchronization: $144 million, up 21% y/y
- Other: $10 million, down 9.1% y/y