Warner Music Group has released its financial results for the three months ending on December 31, 2024 (Q4 calendar is the company's financial quarter).
According to the financial presentation published today (February 6), the company reported a quarterly global income of 1.666 billion US dollars (encompassing recorded music, music publishing, and other events) for Q4 calendar.
A brief background before we dive into the numbers:
Warner Music Group’s recent statement indicated that the recorded growth in income from music during the quarter (Q4 calendar) was positively impacted by the extension of a licensing agreement for the artist’s catalog, which generated 75 million dollars in licensing income from the prior quarter.
Moreover, the registered music growth at WMG resulted from the termination of its distribution agreement with BMG, leading to a reduction of 32 million dollars in recorded music income compared to the previous quarter (the same in constant currency), of which 16 million dollars was attributed to streaming income and 16 million dollars to physical income impacts.
Warner’s recorded music growth was also affected by updates with one of its digital partners, which accounted for 30 million dollars in streaming income for the previous quarter (or $26 million in constant currency).
Excluding the effects of licensing expansion, the termination of BMG, and the digital licensing extension, the Warner Music Group experienced a total income growth of 4.4%dominance in constant currency during Q4 calendar.
(Including the effects of licensing extension, termination of BMG, and digital licenses, income saw a decrease of 3.6% year in constant currency.
Insights into Recorded Music Income
Recorded music
Warner Music Group’s recorded music income stood at 1.345 billion dollars for calendar Q4, reflecting a decline of 5.9% year in constant currency. According to WMG, this was “driven by declines in digital licensing services and artist services, partially offset by growth in physical income.”
When excluding the impacts of licensing expansions, the termination of BMG, and digital license extensions mentioned earlier, WMG’s recorded music income rose 3.8% year in constant currency.
The standout artists for the quarter included Linkin Park, Charli XCX, Teddy Swims, Mariya Takeuchi, and Benson Boone.
Warner’s recorded music streaming income (including advertisement-supported and subscription income) reached 854 million dollars in Q4, representing an increase of 2.6%% dominance on a constant currency basis (adjusted for the effects of BMG termination and digital license extension).
WMG also delineates this metric in its balance sheet to highlight its performance in subscription streaming income and advertisement–supported streaming income, respectively.
The company’s income from recorded music subscription streaming reached 631 million dollars for the Q4 calendar.
When taking into account the effects of the BMG termination and digital license extension, WMG’s subscription streaming income increased by 6.6% year in constant currency, illustrating the “continued market growth and price increases noted by WMG.
Generated from WMG’s 223 million dollars in advertisement-supported recorded income from streaming music in the Q4 calendar, which exhibited a decrease of 7.1% year in constant currency (adjusted for the effects of BMG termination).
This advertisement-supported income, according to WMG, was affected by “timing of transaction updates and content delivery with certain emerging streaming platforms in the previous quarter.”
In other sectors of the recorded music business, WMG generated 110 million dollars from licensing, a decline of 38.5%dominance in constant currency, primarily due to the aforementioned licensing expansion effects.
Physical income for the quarter reached 166 million dollars.
Adjusted for the impact of the BMG termination, WMG’s physical income rose 21.2% year in constant currency, attributed to “strong releases during the quarter, particularly in the USA and Japan.”
Artist services and extended income experienced a decline of 3% year in constant currency due to “lower income from concert promotions, primarily in France, and reduced income related to the divestment of the company’s owned and operated media”, as declared in WMG’s strategic restructuring plan.
“In this quarter, we saw success with new stars, global superstars, long-standing legends, and an indispensable catalog.”
Robert Kinkl, Warner Music Group
“In this quarter, we saw success with new stars, global superstars, long-standing legends, and an indispensable catalog,” stated Robert Kinkl, General Director of Warner Music Group, in today’s statement.
He further added: “As we enhance efficiency, we are fostering our virtuous reinvesting cycle, creating new opportunities for talent, long-term growth, and shareholder value.”
Kinkl also noted that WMG is constantly working to grow its market share and is increasing expenditures on A&R, acquiring valuable catalogs, and securing important agreements with streaming services.
WMG announced earlier that it has secured a new agreement with Spotify that redefines the complicated structure of CRB ‘Association in the United States. The company confirmed today that it has acquired a controlling interest in Pace Music in a deal valued at approximately 450 million dollars.
Speaking about the company’s revenue call today, Kinkl noted that the “acquisition of Pace” is an excellent example of our M&A strategy in action.
He added: “As we become more effective, we create a virtuous cycle that will boost reinvestment and accelerate growth.”
Musical Publishing Performance
Warner’s Global Musical Publishing Department, Warner Chappell Music, reported a quarterly income increase of 7% dominance in constant currency, totaling 323 million dollars. This growth was attributed to rising digital metrics, performance, and other revenue streams, partially offset by declining mechanical income.
Mizes increased 6.8% year in constant currency to 205 million dollars, reflecting the “continuation of market growth and catalog expansion.”
Productivity income climbed 12% year in constant currency to 56 million dollars, due to “increased touring activity outside the United States and higher radio activity,” according to WMG.
However, mechanical income dropped 6.7% year in constant currency to 14 million dollars, while synchronization income remained flat, reaching 39 million dollars compared to the previous quarter.
Total income for Warner Music Group 3.6%dominance totaling $ 1.666 billion.
Excluding licensing extensions, BMG termination, and digital license extensions, overall income increased 4.4%dominance in constant currency for Q4 calendar.
Recorded musical income (adjusted for the effects of licensing expansion, BMG completion, and digital license updates) grew by 3.8% year to 1.345 billion dollars;
Within this total, recorded music streaming income (including advertising support and subscription) reached 854 million dollars in Q4, marking a growth of 2.6%% dominance in constant currency (adjusted for the impacts of BMG termination and digital license extension);
Recorded music subscriptionstreaming income (adjusted for the effects of BMG and digital license extension) increased by 6.6% year in constant currency to 631 million dollars;
Revenues from musical publishing – specifically Warner Chappell Music – saw an increase of 7%% dominance in constant currency to 323 million dollars.
WMG Profitability in Q4 2024
Net income for WMG amounted to 241 million dollars as compared to 193 million dollars in the preceding quarter.
Operating income registered at 214 million dollars versus 354 million dollars in the prior quarter.
The company’s adjusted EBITDA was 363 million dollars compared to 451 million dollars in the previous quarter, reflecting a 18% year decline in constant currency.
Commenting on the latest results, Brian Castellani, financial director of Warner Music Group, remarked: “While temporary macroeconomic pressures impacted this quarter, the core of our business remains strong.”
“We are optimistic about our future, especially as our industry continues to evolve models that enhance our growth potential.”
Brian Castellani, WMG
“Our results were bolstered by the performance of our new releases and catalog, as well as a healthy base of global subscribers.”
“We are confident in our outlook, especially as our industry continues to innovate models that will boost future growth.”
Lucas focuses on the interaction between music and society. He specializes in how music influences and reflects cultures, analyzing the role of sound in social, political, and cultural events around the world.
