Warner Music Group grows revenues 4.6% YoY in calendar Q1; recorded music streaming revenue rises 2.2% YoY

Warner Music Group‘s quarterly revenues grew 4.6% YoY to USD $1.399 billion within the opening three months of 2023 (calendar Q1) – the primary quarter through which the corporate has been run by its new CEO, Robert Kycl.

These numbers, introduced by the corporate right now (Could 9) signify WMG’s company-wide operation, throughout recorded music, music publishing, and different actions.

When it comes to recorded music alone, Warner noticed a 2.2% YoY uptick in calendar Q1 (fiscal Q2) revenues to $1.143 billion. Inside that determine, streaming recorded music revenues rose 2.2% YoY to $773 million.

Regardless of WMG posting sub-5% YoY development – in the identical quarter that Spotify posted a 13% YoY rise in revenues – Robert Kyncl stated right now (Could 9) that Warner was “optimistic concerning the second half of the 12 months”, attributable to elements together with “a extra strong schedule that features the return of worldwide superstars and new artists breaking globally”.

Added Kyncl: “Because the music ecosystem continues to morph, and the use instances multiply, it solely will increase conviction in our tech-enabled technique.

“In a extremely proactive, fiscally accountable approach, we’re investing within the artists, songwriters, workforce, and know-how that can ship continued development and long-term success.”

“Because the music ecosystem continues to morph, and the use instances multiply, it solely will increase conviction in our tech-enabled technique.”

Robert Kyncl, Warner Music Group

Mentioned Eric Levin, CFO of WMG: “Whereas macroeconomic, foreign money, and launch slate headwinds continued to influence our income this quarter, our fiscal self-discipline enabled us to ship stable Adjusted OIBDA development and margin enlargement.

“As we glance to the longer term, we’ll mix A&R and advertising excellence with tech innovation to attain better effectivity, scale, and development.”

The largest vivid spot for Warner Music Group in calendar Q1, by way of YoY share development, was its music publishing division – Warner Chappell Music – run by co-Chair and CEO, Man Moot, alongside co-Chair and COO, Carianne Marshall.

The corporate’s music publishing income elevated 14.7% YoY within the quarter to $257 million – a efficiency that Warner stated was “pushed by development in digital, efficiency and mechanical income”.

Music publishing streaming income elevated 18.3% YoY to $142m, which WMG stated mirrored “the continued development in streaming and the influence of digital deal renewals”.

(All share figures cited above are at fixed foreign money.)

Warner Music Group: General calendar Q1 efficiency

WMG’s company-wide income (together with each recorded music and publishing) was up 1.7% YoY (or 4.6% YoY in fixed foreign money, as talked about) in calendar Q1.

Warner famous right now that “income development was unfavorably impacted by overseas foreign money alternate charges”.

Digital income elevated 1.2% YoY (3.7% YoY in fixed foreign money) and streaming income elevated 1.9% YoY (4.5% YoY in fixed foreign money) primarily pushed by that development in Warner Chappell’s streaming income of 16.4% YoY (18.3% YoY in fixed foreign money).

Working revenue in calendar Q1 was $124 million in comparison with $166 million within the prior-year quarter, whereas quarterly OIBDA (working revenue earlier than depreciation and amortization) was $207 million, in comparison with $255 million within the prior-year quarter, a lower of 18.8% YoY (or 15.9% YoY in fixed foreign money).

The decreases in working revenue and OIBDA, stated Warner, have been “primarily attributable to $41 million in severance prices associated to the restructuring plan introduced within the quarter”. (Warner introduced that it was shedding round 4% of its world workforce – roughly 270 folks – in late March.)

Further elements affecting the Q1 working revenue /OIBDA lower included “non-cash stock-based compensation and different associated bills primarily associated to the departure of our earlier CEO”, stated Warner, plus “different prices related to the departure of our earlier CEO and deliberate departure of our CFO”.

Warner Music Group: calendar Q1 recorded music efficiency

Warner’s recorded music income was down 0.3% YoY in calendar Q1 (or up 2.5% YoY in fixed foreign money, as talked about).

Streaming income was down 0.4% YoY (or up 2.2% YoY in fixed foreign money).

This streaming income efficiency, stated Warner, mirrored “a lighter launch schedule [than the prior year] and a market-related slowdown in ad-supported income”.

Recorded music licensing income elevated 22.5% YoY (or 27.3% YoY in fixed foreign money), together with development in model revenue and a licensing settlement.

Bodily recorded music income was down 3.3% YoY (or up 0.9% YoY in fixed foreign money) primarily because of the unfavorable influence of alternate charges, which offset sturdy efficiency in america.

‘Artist companies and expanded-rights’ income – protecting Warner’s actions in merch, stay and different fields – decreased 7.1% YoY (or 4.4% YoY in fixed foreign money).

The corporate blamed this slip totally on “decrease merchandising and promoting income, partially offset by a rise in live performance promotion income”.

Warner’s main recorded music sellers within the quarter included Michael Bublé, Ed Sheeran, Linkin Park, Zach Bryan and Dua Lipa.

WMG’s recorded music working revenue in calendar Q1 was $151 million, down from $189 million within the prior-year quarter.

OIBDA decreased 18.8% YoY (or 15.8% YoY in fixed foreign money). to $203 million from $250 million within the prior-year quarter.

Warner stated its lower in recorded music working revenue and OIBDA have been primarily attributable to prices associated to its restructuring in Q1.

Warner Music Group: calendar Q1 music publishing efficiency

WMG’s music Publishing income elevated 11.7% YoY (or 14.7% YoY in fixed foreign money, as talked about).

Digital income elevated 15.0% YoY (or 17.7% YoY in fixed foreign money) and streaming income elevated 16.4% YoY (or 18.3% YoY in fixed foreign money), reflecting, stated Warner, “the continued development in streaming and the influence of digital deal renewals”.

Efficiency income in music publishing elevated because of the timing of funds from assortment societies and continued restoration from COVID disruption.

Mechanical income elevated pushed by sturdy share of bodily gross sales.

Synchronization income was decrease on an as-reported foundation and in fixed foreign money, primarily attributable to decrease industrial licensing exercise in america, partially offset by copyright infringement settlements.

Music Publishing working revenue in calendar Q1 was $52 million in comparison with $38 million within the prior-year quarter. Music Publishing OIBDA elevated 23.0% YoY (the identical in fixed foreign money) to $75 million.

The will increase in working revenue and OIBDA in music publishing, stated WMG, have been “primarily attributable to sturdy working efficiency”.

Music Enterprise Worldwide