Warner Music Group reported on Thursday that total revenue for its fiscal year rose 6% from a year ago on strong digital and streaming subscription revenue.
The company reported total revenue of $6.43 billion for the twelve months ended Sept. 30, up from about $6 billion the company generated 12 months earlier. That figure included $5.22 billion in recorded music revenue, up 5% from a year ago, and $1.2 billion in music publishing revenue, up 11% year-over-year before.
WMG's digital revenue was up 7.3% and streaming revenue was up 8.2% year over year, despite a distribution deal with BMG that negatively impacted both digital and streaming revenue via recorded music. Subscription streaming revenue rose 8% to $2.5 billion for the year.
Streaming revenue from music publishing rose 14.6%, as both divisions benefited from licensing, physical sales, performance and sync revenue, the company said. Overall, publishing revenue rose 11% year over year to $1.2 billion.
Operating income increased $33 million to $823 million, primarily due to lower depreciation and amortization and restructuring charges. Net income increased $39 million to $478 million, helped by lower income tax expense and other factors. Basic and diluted earnings per share were $0.83. Cash provided by operating activities increased 10% to $754 million, while free cash flow increased 14% to $638 million.
“Our strong flow performance, supported by positive industry trends and combined with our cost discipline, has led to strong cash flow generation.” Brian CastellaniCFO of Warner Music Group, said in a statement. We're excited about the opportunities ahead and look forward to delivering more culture-shaping music in 2025 and beyond.”
WMG financial highlights for the full financial year:
- Total revenue rose 6% to $6.426 billion for the fiscal year, from $6.037 billion in 2023.
- Net earnings, or net income, rose 9% to $478 million compared to $439 million.
- Recorded revenue rose 5% to $5.223 billion from $4.995 billion.
- Publishing revenue rose 11% to $1.210 billion from $1.08 billion.
- Digital revenue grew 7.3% to $4.280 billion from $3.9 billion in 2023.
- Streaming revenue from recorded music subscriptions increased 8% to $2.543 billion from $2.349 billion (up 3% ad-supported).
- Operating income rose 4% to $823 million from $790 million, so operating margin fell slightly to 12.8% compared to the prior year when it was 13.1% of revenue.
As for WMG's fiscal fourth quarter, which also ended Sept. 30, the No. 3 big felt the sting of BMG's termination, which they say resulted in $25 million less digital revenue, but still led to a steady stream of releases from Benson Boone. Zach Bryan, Charli XCX and others to increase total revenue by 3% to $1.6 billion.
WMG said its recorded music division accounted for $1.338 billion of $1.6 billion in the quarter, an improvement of 3.6 percent.
Digital revenue fell slightly by 0.2% in the fourth quarter, while streaming revenue increased by 1.0%. Adjusted for the BMG termination and digital license renewal, recorded music streaming revenue rose 5.6%. Streaming revenue from recorded music subscriptions rose 5% to $645 million from $615 million, although revenue from ad-supported subscriptions fell 5%.
Music Publishing streaming revenue fell 4.2%, but adjusted for the prior-year benefit, rose 5.2%. The increase in revenue was driven by increases in recorded music licensing, physical sales, artist services and sync revenue, offset by lower mechanical equipment revenue. WMG said the increase in digital revenue from music publishing was affected by a prior-year benefit from a Copyright Board ruling, which added $17 million last year.
Operating income fell to $143 million from $212 million, impacted by restructuring charges, higher stock-based compensation and other expenses. Net income decreased $106 million to $48 million due to higher interest expense and currency effects, partially offset by lower tax expense.
The company reported a cash balance of $694 million and total debt of $4.014 billion. Cash provided by operating activities fell 10% to $304 million and capital expenditures fell to $33 million. Free cash flow also fell 10% to $271 million.
WMG Q4 financial highlights:
- Total revenue rose 2.8% to $1.630 billion for the fourth quarter of 2024, from $1.586 billion in the same quarter of 2023.
- Net income fell 69% to $48 million this quarter compared to $154 million.
- Digital revenue fell 0.2% to $1.066 billion from $1.068 billion.
- Streaming revenue for both recorded music and publishing rose 1% to $1.048 billion from $1.038 billion.
- Recorded music subscription streaming revenue rose 5% to $645 million from $615 million (down 5% ad-supported).
- Recorded music revenue rose 3.6% to $1.338 billion from $1.291 billion.
- Publishing revenue fell 1% to $295 million from $298 million.
- Operating income fell 33% to $143 million from $212 million.
- OIBDA fell 22% to 226 million. dollars versus $291 million.
Warner stock was up 2.25% in premarket trading at 8:04 a.m. in New York.
