Warner Music Group has announced its latest financial results, reporting $1.55 billion in revenue for fiscal Q3 2024.
The headline figures for the period ending June 30, 2024 showed that revenue was down 0.6% (or up 0.6% in constant currency) on the prior-year quarter, while net income increased 14% to $141 million.
Operating income rose 10% year-on-year to $207m and adjusted OIBDA increased 6% to $316m (or 8% in constant currency).
In addition, digital revenue increased 4.7% (5.9%) and streaming revenue increased 5.5% (6.7%), with recorded music streaming revenue ascending 5.0% (6.4%). Revenue increases in the quarter were also driven by growth in music publishing performance and synchronisation revenue.
"Our strong subscription streaming growth in Q3 was driven by the performance of our music and healthy industry trends,” said Robert Kyncl, CEO of Warner Music Group. “We’re nurturing the next generation of artists and songwriters, creating fresh impact for our iconic catalogue, and working with our partners to increase the value of music. Our commitment to long-term artist development, combined with a flatter structure in recorded music, will enable us to super-serve talent and set WMG up for sustained future growth."
WMG said that recorded music digital revenue growth was "unfavorably impacted" by the termination of the distribution agreement with BMG, which resulted in $26 million less revenue compared to the prior-year quarter. It added that a renewal with one of the company’s digital partners resulted in a $3m unfavorable impact.
“Our Q3 results were highlighted by strong margin expansion and operating cash flow growth, reflecting robust streaming performance and disciplined cost management,” said Bryan Castellani, CFO, Warner Music Group. “Looking ahead, we are focused on delivering a strong close to the year. The industry remains healthy and we continue to position ourselves for long-term success.”
I'd like to thank Max Lousada for his exceptional contributions to this company over the past two decades, especially for his last seven years as our recorded music CEO
Robert Kyncl
Speaking on the company's earnings call, Kyncl further discussed the huge reorganisation of the major's recorded music operations and paid tribute to outgoing CEO, recorded music, Max Lousada.
"I'd like to thank Max Lousada for his exceptional contributions to this company over the past two decades, especially for his last seven years as our recorded music CEO," he said. "A first class leader, he's been instrumental in building the WMG of today and creating a strong foundation for our future.
"He's agreed to stay on until the end of our fiscal year on September 30, and after that, he'll remain an advisor through the end of January."
Kyncl continued: "Our reorganisation will help us achieve three important things. One, we'll have new flatter structure that will elevate our creative regional leadership, setting up more direct channels between local expertise and global opportunities. We have a deep bench of executives. Going forward, we'll be organised into four major regions in recorded music, each overseen by a talented leader who will report directly to me.
"Two, we'll be compounding our strength in the United States, the world's biggest music market, by organising our frontline labels into two groups: Warner Records, which is on an incredible run with chart-topping artists such as Zach Bryan and Benson Boone, will expand its responsibilities to oversee Warner Music Nashville. Atlantic Music Group, which already includes Atlantic Records and 300 Elektra Entertainment, will now also encompass the recently acquired 10K Projects.
"And three, we'll be strengthening our central operations in order to maximise our worldwide impact and provide operating leverage across the entire organisation."
