WMG Reports Strong Q3 Driven By Streaming Revenue


WMG-W-logoWarner Music Group Corp. today announced third quarter financial results for the period ending June 30, 2017. It was WMG’s strongest quarter in years. Net income was $143 million, compared to a $7 million loss in the prior-year quarter. 

 
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Total revenue grew 13.1% or was up 15.5% in constant currency 
 
• Digital revenue grew 30.2% or was up 33.0% in constant currency 
 
• Net income was $143 million vs. $7 million loss in the prior-year quarter
 
• OIBDA was $115 million vs. $120 million in the prior-year quarter
 
Warner Music Group reported strong quarterly earnings on Tuesday morning, driven by an impressive jump in revenue from streaming. 
 
“Our momentum continues with our eighth consecutive quarter of revenue growth – the last seven of which were up double digits,” said Steve Cooper, Warner Music Group’s CEO. 
 
Overall, WMG revenue grew 13.1% last quarter, with growth in digital, licensing, artist services and music publishing offsetting declines in physical sales and music publishing mechanical revenue. Revenue grew in all major regions led by top sellers Ed Sheeran, Bruno Mars, Gorillaz, Clean Bandit and TWICE.
 
image from laoblogger.comStreaming Grows As Downloads Decline 28%

Driving the growth was digital revenue, which grew 30.2% and represented 54.1% of total revenue, compared to 47.0% in the prior-year quarter. This is the second consecutive quarter where digital revenue exceeded 50% of the company’s total revenue driven by explosive growth in music streaming: 

• Streaming accounted for 80% of total digital revenue growing to $360 million last quarter, up from $227 in Q3 2016. 

• Download revenue fell 28% from the prior year quarter to $88 million

• Streaming is on track to contribute more than $1.35 billion to WMG total 2017 revenue in 2017

Music Publishing revenue rose 11.9%. Publishing revenue grew in performance and digital, but mechanical revenue declined due to the continuing shift to streaming. Synchronization revenue was flat.  Music Publishing operating income was $6 million, flat with the prior-year quarter.  

“I’m proud of our team for delivering such strong results, particularly against difficult comparisons in the prior-year quarter,” added Eric Levin, Warner Music Group’s Executive Vice President and CFO.  “I’m confident that 2017 will be another strong year.”