Photo Credit AB+DMLizzo was one of Warner's biggest sellers in calendar Q3
Warner Music Group generated total revenues of USD $1.497 billion in calendar Q3 (the three months to end of September) 2022.
That figure – encompassing recorded music, music publishing and other activities – was up 16% YoY at constant currency, the firm told investors on Tuesday (November 22).
The music company revealed these numbers as part of its calendar Q3 (fiscal Q4) financial results.
Warner Music Group‘s outgoing CEO Steve Cooper told WMG’s investors in a statement that “against the backdrop of a challenging macro environment, we once again proved music’s resilience, with new commercial opportunities emerging all the time”.
Digging deeper into Warner’s filing reveals some finer details about the performance of the major music company’s recorded music and music publishing operations:
Recorded Music
Recorded Music revenue was up13.1% YoYat constant currency to $1.244 billion in calendar Q3.
WMG said that this increase was due to artist services and expanded-rights revenue growth of 33.3% YoY at constant currency, “reflecting an increase in merchandising and concert promotion revenue”.
Warner’s recorded music streaming revenue was up4.7%YoY at constant currency in calendar Q3 to $774 million (see below).
WMG said that this growth came “as a result of the continued growth in subscription revenue, offset by a market-related slowdown in ad-supported revenue, the impact of exchange rates and the impact of a new deal with one of [our] digital partners”.
(This ‘new deal’ has now hit Warner’s results for four straight quarters. Essentially, from what MBW can tell, the company struck a licensing agreement with a particular digital partner in 2021 that has resulted in a negative YoY impact on its streaming revenue figures ever since. With those four quarters now complete, the YoY impact will not affect future quarters at WMG.)
Adjusted for the YoY impact of this ‘new deal’, Warner says that its Recorded Music streaming revenue was up 10.4%YoY at constant currency in calendar Q3.
Meanwhile, WMG generated physical revenues of $123 million in calendar Q3 (see below), which was down 3.1% YoY (but up 6% at constant currency).
Warner says this was “primarily due to the impact of exchange rates, which offset higher vinyl sales and strong performance in Japan”.
Warner’s Licensing revenue reached $87 million in calendar Q3, up 38.1%YoY at constant currency, mainly due “to higher broadcast fees, synchronization and other activity, partially offset by the impact of exchange rates”, according to WMG.
Warner’s major recorded music sellers in calendar Q3 included Ed Sheeran, Jack Harlow, Dua Lipa and Lizzo.
Music Publishing
Warner’s global music publishing division – Warner Chappell Music – increased its turnover by 32.3%YoY in calendar Q3 at constant currency to $254 million (see below).
Warner says that music publishing streaming revenue increased 37% at constant currency and that this growth reflects “the continued growth in streaming services and timing of new digital deals”.
WARNER’S CALENDAR Q3 IN SUMMARY (% IN CONSTANT CURRENCY):
Warner Music Group’s overall revenues were up 16%YoY to $1.497 billion in calendar Q3;
Recorded music revenues were up13.1% YoY to $1.244 billion.
Within that figure, recorded music streaming revenues were up 4.7% YoY to $774 million.
Music publishing revenues – at Warner Chappell Music – were up32.3% YoY to $254 million.
WMG: PROFITABILITY IN CALENDAR Q3
WMG’s net income stood at $150 million in the calendar Q3 quarter, versus $30 million in the prior-year quarter.
The firm’s quarterly adjusted OIBDA increased by 33% YoY to $265 million.
And its adjusted EBITDA decreased by 16% (not constant currency) to $276 million versus $237 million in the prior-year quarter.
In a statement issued to investors today, Warner Music Group’s outgoing CEO Steve Cooper, said: “Our strong fourth quarter and full year results were driven by our talented artists, songwriters, and teams, across a wide range of genres, geographies, and generations.
“Our strong fourth quarter and full year results were driven by our talented artists, songwriters, and teams, across a wide range of genres, geographies, and generations.”
Steve Cooper, Warner Music Group
He added: “Against the backdrop of a challenging macro environment, we once again proved music’s resilience, with new commercial opportunities emerging all the time. We’re very well positioned for long-term creative success, and continued top and bottom line growth.
“We’re excited to have Robert Kyncl joining next year as WMG’s new CEO, as we enter the next dynamic phase of our evolution.”
“The momentum in our business is strong, underpinned by global subscriber growth, subscription price increases, and the expansion of emerging platforms.”
Eric Levin, Warner Music Group
Eric Levin, CFO, Warner Music Group, said: “We’ve delivered double-digit revenue growth on a constant currency basis and robust cash flow, driven by excellent operating performance across the company
“The momentum in our business is strong, underpinned by global subscriber growth, subscription price increases, and the expansion of emerging platforms.
“As we look ahead, we’re excited to share amazing releases from the world’s hottest artists, as well as innovative tech collaborations that will strengthen our position at the intersection of music, film, TV, social media, fitness, and gaming.”
