In This Article:
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Total Revenue: Increased 1%.
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Recorded Music Revenue: Increased 1%.
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Music Publishing Revenue: Increased 3%.
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Subscription Streaming Growth: Increased 3%.
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Ad-Supported Streaming: Declined 3%.
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Physical Revenue: Increased 2%.
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Artist Services and Expanded Rights Revenue: Decreased 6%.
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Licensing Revenue: Increased 3%.
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Adjusted OIBDA: Decreased 1% with a margin of 20.4%.
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Recorded Music Adjusted OIBDA Margin: Increased 10 basis points to 23%.
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Music Publishing Adjusted OIBDA: Increased 5% with a margin of 27.4%.
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Operating Cash Flow: Increased to $69 million from a use of $31 million in the prior year quarter.
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Free Cash Flow: Increased to $33 million from a use of $57 million in the prior year quarter.
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Cash Balance: $637 million as of March 31.
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Total Debt: $4.3 billion, with net debt of $3.7 billion.
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Weighted Average Cost of Debt: 4.1%.
Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Warner Music Group Corp (NASDAQ:WMG) reported a 1% increase in total revenue, with recorded music revenue growing by 1% and music publishing revenue by 3%.
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The company has a strong presence on global charts, with significant success in Spotify Global 200 and Billboard charts, indicating effective A&R investments.
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WMG is expanding its market share in high-growth regions such as MENA, Nigeria, and India, where monetization is shifting towards paid streaming.
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The company is actively investing in technology, exemplified by the launch of the WMG Pulse app, which provides artists with real-time insights from major DSPs and social media platforms.
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WMG is focusing on strategic M&A activities to enhance its market position, with plans to reinvest cost savings into high-quality music assets with high margins.
Negative Points
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WMG experienced a decrease in adjusted OIBDA by 1% and a decline in adjusted OIBDA margin by 50 basis points, primarily due to revenue mix.
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The company faced market share pressure in China and a tough year-over-year comparison in subscription streaming, impacting overall growth.
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Ad-supported streaming revenue declined by 3% due to a soft overall ad environment.
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Artist services and expanded rights revenue decreased by 6%, attributed to lower concert promotion revenue and ongoing weakness in the e-commerce business.
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The company anticipates challenges in subscription streaming growth to persist for the remainder of the fiscal year, resulting in lower growth than previously expected.
Q & A Highlights
Q: Given the challenging quarter and limited visibility, what confidence can you give investors about Warner Music's growth prospects? Also, how are you thinking about subscription streaming growth for the year? A: Robert Kyncl, CEO: We are excited about our strategy, which focuses on growing market share, increasing the value of music, and improving efficiency to reinvest in music and technology. Our investments in A&R are showing early signs of success, with significant chart presence and market share growth in new releases. We expect similar trends as in Q2 for the rest of the year.