WMG Confirms Q3 Results Showing Strong Streaming, Profit Growth

Robert Kyncl

Warner Music Group's fiscal Q3 results landed largely in line with the preliminary figures the company released earlier this week, confirming another quarter of double-digit streaming growth, expanding margins and sharply improved profitability.

For the quarter ended June 30, WMG posted revenue of $1.86b, up 10% year over year (9% in constant currency), while net income swung to $200m from a $16m loss in the prior-year period. Operating income climbed 80% to $305m, adjusted OIBDA increased 16% to $433m and adjusted earnings per share rose to $0.51 from $0.42. Cash provided by operating activities more than tripled to $142m.

The final results confirm the preliminary earnings update WMG issued on Aug. 3 after accelerating its reporting schedule in the wake of last week's executive shakeup, which saw COO/CFO Armin Zerza depart, Warner Records Co-chairman Tom Corson assume the COO role and Chief Accounting Officer Lou Dickler become acting CFO.

Streaming remained the company's biggest growth engine; recorded-music streaming revenue increased 11.8% and subscription streaming revenue rose 12.5%, driven by subscriber growth, improved deal economics with DSP partners and continued market-share gains. Music-publishing streaming revenue climbed 14.4%.

WMG noted that comparisons were affected by last year's copyright-settlement revenue and the expiration of its distribution agreement with BMG. Excluding those items, total revenue would have increased 12.1%, with recorded-music revenue up 12%.

As it stands, recorded-music revenue rose 9.9%, supported by growth in streaming, artist services, expanded rights and physical sales. The company's top sellers during the quarter included Bruno Mars, Don Toliver, SOMBR, Alex Warren and Madonna. Music-publishing revenue increased 12.2%, fueled by gains in streaming, synchronization, mechanical and performance income.

"For the fifth consecutive quarter, WMG has delivered or over-delivered on our targets, proving the strength of our strategy and the momentum of our business," CEO Robert Kyncl said. Dickler added that the company remains on pace to achieve the high end of its previously issued guidance of 150-200 basis points of margin expansion for fiscal 2026.

WMG also declared a quarterly dividend of $0.20 per share, payable Sept. 1 to shareholders of record as of Aug. 20.