WMG Corp. Q2 Results: Streaming Revenue Grows Despite Challenged Economic Environment
Warner Music Group Corp. announced its second-quarter financial results for the period ended March 31, 2023.
The results show that revenue was up 1.7 percent(or 4.6 percent in constant currency), but revenue growth was unfavorably impacted by foreign currency exchange rates, which is consistent with the prior quarter. Digital revenue increased 1.2 percent (or 3.7 percent in constant currency) and streaming revenue increased 1.9 percent (or 4.5 percent in constant currency) primarily driven by growth in Music Publishing streaming revenue of 16.4 percent (or 18.3 percent in constant currency).
Recorded Music streaming revenue decreased by 0.4 percent (or increased by 2.2 percent in constant currency) as a result of a lighter release schedule and the impact of exchange rates as well as a market-related slowdown in ad-supported revenue. Recorded Music licensing revenue and Music Publishing performance and mechanical revenue all had double-digit growth.
Recorded Music physical revenue decreased on an as-reported basis but increased in constant currency. Recorded Music artist services and expanded-rights revenue and Music Publishing synchronization revenue were lower on an as-reported basis and in constant currency.
“With continued momentum in music publishing, and a more robust schedule that includes the return of worldwide superstars and new artists breaking globally, we are optimistic about the second half of the year,” says Robert Kyncl, CEO, Warner Music Group. “As the music ecosystem continues to morph, and the use cases multiply, it only increases conviction in our tech-enabled strategy. In a highly proactive, fiscally responsible way, we’re investing in the artists, songwriters, team and technology that will deliver continued growth and long-term success.”
“While macroeconomic, currency and release slate headwinds continued to impact our revenue this quarter, our fiscal discipline enabled us to deliver solid Adjusted OIBDA growth and margin expansion,” adds Eric Levin, CFO, Warner Music Group. “As we look to the future, we’ll combine A&R and marketing excellence with tech innovation to achieve greater efficiency, scale, and growth.”
– Underlying Growth in Recorded Music Streaming Revenue Despite a Challenged Macroeconomic Environment
– Continued Momentum in Music Publishing Drives Double-Digit Revenue Growth
– Adjusted OIBDA Growth and Margin Improvement Underpinned by Financial Discipline
– Cost Savings to be Reinvested in Tech-Focused Initiatives and Expertise to Drive Long-Term Growth
For the three months ended March 31, 2023:
– Total revenue increased two percent or five percent in constant currency
– Digital revenue increased one percent or four percent in constant currency
– Net income was $37 million versus $92 million in the prior-year quarter
– OIBDA decreased 19 percent to $207 million versus $255 million in the prior-year quarter or 16 percent in constant currency
– Adjusted OIBDA increased four percent to $286 million versus $274 million in the prior-year quarter or eight percent in constant currency
– Cash from operating activities decreased 114 percent to a use of six million dollars versus a source of $44 million in the prior-year quarter
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