Skip to main content

Warner Music Posts $1.42B Revenue in Quarter Boosted By Publishing Growth

WMG's results were impacted by "a slowdown in the advertising market and some one-off items affecting year-over-year comparisons," said CEO Steve Cooper.

Warner Music Group, helped by strong growth in its Warner Chappell Music publishing segment, improved its revenue 12.1% at constant currency (6.9% as reported) to $1.42 billion in the fiscal third quarter ended June 30, the company announced Tuesday (Aug. 9). Adjusted earnings before interest, taxes, amortization and depreciation decreased 7% to $263 million.

WMG’s share price fell 9.1% to $29.13 on Tuesday morning and ended the trading day at $29.50, down 7.9%.


The quarter’s results were impacted by “a slowdown in the advertising market and some one-off items affecting year-over-year comparisons,” CEO Steve Cooper said in a statement.

In its two previous earnings releases, WMG explained some of the year-over-year change was attributable to an expired licensing deal with a digital service partner that produced an unfavorable comparison to the prior-year quarter. Additionally, online advertising is a rare weakness for the music streaming market.

As Billboard noted last week, Spotify experienced a slowdown in advertising revenues in the last half of June and advertising-driven companies such as Alphabet and Snap reported lower-than-expected second-quarter earnings.

Foreign exchange has been a major factor in international companies’ second-quarter earnings because the U.S. dollar strengthened against currencies such as the euro and Great British pound.

For WMG, which converts foreign sales into U.S. dollars for reporting purposes, a strong dollar created an unfavorable comparison. WMG’s international segment, which accounted for 55% of the company’s total revenue, generated revenue of $782 million in the quarter.

That was a 14.3% improvement from the prior-year quarter’s $684 million revenue at current-year exchange rates but just 4.7% higher than the as-reported amount of $747 million. So, comparing the company’s results at constant currency — which removes foreign exchange changes — offers the best insight into its performance over the year.

Digital revenue improved 5.7% at constant currency or 1.7% as reported. Total streaming revenue improved 6.5% at constant currency (2.7% as reported) due primarily to a growth in music publishing streaming revenue of 34.6% at constant currency (29.6% as reported), which includes a $17 million benefit from the Copyright Royalty Board’s ruling in Phonorecords III.

Recorded music streaming increased 2.7% at constant currency (down 1% as reported). That single-digit growth figure stemmed from licensing deals and an $11 million “catch-up” payment in the prior-year period. Despite continued streaming growth, digital’s share of total revenue fell from 69.3% to 65.9%.

The publishing segment improved 34.6% (29.6% as reported) to $245 million on the strength of streaming growth, the one-time CRB rate benefit, and timing of new licensing deals. Performance royalties grew 80% at constant currency (66.7% as reported) to $45 million as fee-paying businesses such as venues, bars and restaurants continued to recover from a COVID-related slowdown.

Digital was the greatest gainer in dollar terms, jumping 32.1% at constant currency (27.4% as reported) to $144 million. Mechanical royalties dropped 9.1% at constant currency (-23.1% as reported) to $10 million. Synchronization royalties climbed 20.6% to $41 million.

In WMG’s recorded music segment, revenues rose 8.5% at constant currency (3.2% as reported) to $1.19 billion. Expanded rights revenue improved 55.7% to $190 million at constant currency (42.9% as reported) due to an increase in concert promotion revenue following the disruption of the touring business in 2021.

Physical sales of $123 million were up 1.7% at constant currency (down 5.4% as reported). Digital revenues accounted for 67.4% of recorded music revenue, down from 70.7% in the prior-year period, due mainly to the growth of expanded rights.