Warner Music Group reported a solid Q3 that mirrors gains throughout the recorded music industry driven by streaming, Total quarterly revenue grew 10.4% with 12.5% growth in streaming revenue.
Highlights
• Total revenue grew 10.4% or was up 13.4% in constant currency
• Digital revenue grew 12.5% or was up 15.5% in constant currency
• Net income fell, $14 million versus $321 million in the prior-year quarter. “The decline was due to a gain on the sale of Spotify shares in the prior-year quarter and net losses related to changes in exchange rates on the Company’s Euro-denominated debt and losses on the value of investments in the quarter.”
• OIBDA was $124 million, up 25.3% from $99 million in the prior-year quarter
• Music Publishing revenue declined $12 million or 7.5% (or 4.5% in constant currency). The adoption of ASC 606 had an $8 million negative impact. Revenue grew in digital due to the ongoing shift to streaming and in synchronization due to higher activity. Revenue declined in performance and mechanical driven by lower market share and loss of administration rights in certain catalogs.
“Our third-quarter results are proof of our continued momentum,” said Steve Cooper, Warner Music Group’s CEO. “To say that streaming is responsible for the recovery of our business is an oversimplification. Without the talent and creativity of our artists and songwriters, and all of the investment and expertise that we put behind them, there would be no growth.”
“We had strong growth in revenue, OIBDA and cash flow,” added Eric Levin, Warner Music Group’s Executive Vice President and CFO. “We expect fiscal 2019 to be another great year.”