Credit: Pavel Suslov / WMGThe Red Hot Chili Peppers were one of WMG's biggest-selling recorded music acts globally in calendar Q4
Warner Music Group generated total revenues of USD $1.48 billion in calendar Q4 2022 (the three months to end of December).
That figure – encompassing recorded music, music publishing and other activities – was down 2.7%YoY at constant currency, the firm told investors on Thursday (February 9).
The music company revealed these numbers as part of its calendar Q4 2022 (fiscal Q1) financial results.
Within the filing, Warner notes that it saw “underlying growth in total streaming revenue despite a challenged macroeconomic environment and the impact of an additional week in the prior-year quarter”.
Excluding the impact of the additional week, Warner’s total revenue was up 2.0% at constant currency.
Warner’s filing reveals some finer details about the performance of the business’s recorded music and music publishing operations:
Recorded Music
The company’s recorded music revenue was down 5.6% YoY at constant currency to $1.239 billion in calendar Q4.
Warner says that this result was driven “by a decline in digital, physical and artist services and expanded-rights revenue”.
Warner’s recorded music streaming revenue, meanwhile, was down 2.6%YoY at constant currency in calendar Q4 to $780 million (see below).
Adjusted for the impact of an additional week in the prior-year quarter, recorded music streaming revenue was up 4.8% in constant currency.
The company says that its recorded music streaming revenue result in Q4 2022, “reflects a lighter release schedule and a market-related slowdown in ad-supported revenue”.
Warner reports that it generated physical revenues of $133 million in calendar Q4 (see below), which was down 26.5%at constant currency. The company says that this result was “primarily due to a lighter release schedule”.
Meanwhile, the company’s artist services and expanded-rights revenue decreased 4.2% at constant currency to $206 million, with the result owing, according to Warner, “to lower direct-to-consumer merchandising revenue at EMP and lower advertising revenue”.
Elsewhere at the company’s recorded music business, licensing revenues increased 16.9% at constant currency to $97 million, due “to an increase in broadcast fees, synchronization and other third-party licensing, partially offset by the impact of exchange rates”, according to the company.
Excluding the impact of the additional week, recorded music revenue decreased 0.2% at constant currency.
Warner’s major recorded music sellers in Q4 2022 included Red Hot Chili Peppers, Zach Bryan, Lizzo and Ed Sheeran.
Music Publishing
Warner’s global music publishing division – Warner Chappell Music – saw its turnover increase by 14.2% YoY at constant currency in calendar Q4 to $250 million (see below).
The company’s music publishing streaming revenue increased 16.8% at constant currency, reflecting what it says was “the continued growth in streaming and timing of new digital deals”.
WARNER’S CALENDAR Q4 IN SUMMARY (% IN CONSTANT CURRENCY):
Warner Music Group’s overall revenues were down 2.7% YoY at constant currency to $1.488 billion in calendar Q4;
Excluding the impact of an additional week in the prior-year quarter, Warner’s total revenue was up 2.0% at constant currency;
Recorded music revenues were down 5.6% YoY at constant currency to $1.239 billion;
Within that figure, recorded music streaming revenues were down 2.6%YoY at constant currency to $780 million;
Music publishing revenues – at Warner Chappell Music – were up 14.2% YoY at constant currency to $250 million.
WMG: PROFITABILITY IN CALENDAR Q4
WMG’s net income stood at $124 million in the calendar Q4 quarter, versus $188 million in the prior-year quarter.
The firm’s quarterly adjusted OIBDA was $335 million, which was flat at constant currency.
And its adjusted EBITDA declined by 4% (not constant currency) to $350 million versus $389million in the prior-year quarter.
Commenting on the results in a statement within the filing today, Warner Music Group’s new CEO Robert Kyncl, told investors: “As we navigate a challenging business environment, we expect to have a strong release schedule in the second half of 2023 while managing our costs throughout.”
“As we navigate a challenging business environment, we expect to have a strong release schedule in the second half of 2023 while managing our costs throughout.”
Robert Kyncl, Warner Music Group
Added Kyncl: “Music’s value, power, and ubiquity are among the many reasons I decided to join WMG and lead the next phase of our evolution.
“The foundations of this company are strong, and our addressable market is continuously growing. We are excited to drive new monetization opportunities through our investments in new artists and songwriters, our catalog, and our global expansion.”
“Our results reflect our resilience and operational discipline in the face of macroeconomic headwinds, as well as the impact of the extra week in the prior-year quarter.”
Eric Levin, Warner Music Group
Eric Levin, CFO, Warner Music Group, added: “Our results reflect our resilience and operational discipline in the face of macroeconomic headwinds, as well as the impact of the extra week in the prior-year quarter.
“Our continued focus on efficiency enabled us to deliver strong operating and free cash flow growth, even while certain revenue lines came under pressure. We are enthusiastic about our release schedule for the second half of the fiscal year, which will feature amazing music from some of our biggest artists.”
