Universal Music Group has published its financial results for the three months to the end of September.
The headline figure from the world’s largest music rights company’s Q3 results: UMG generated revenues of EUR €2.752 billion (USD $2.995bn) during the quarter across all of its divisions (including recorded music, publishing and more).
That Q3 revenue figure was up 9.9% YoY at constant currency.
UMG, which trades on the Euronext in Amsterdam, reported today (October 26) that its “Recorded Music, Music Publishing and Merchandising and Other segments all contributed to the revenue growth in the quarter”.
Commenting on the company’s latest results, UMG Chairman and CEO Sir Lucian Grainge, said: “Our performance this quarter was marked not only by continued growth across our businesses but also by strong progress on our long-term strategy.
“Our performance this quarter was marked not only by continued growth across our businesses but also by strong progress on our long-term strategy.”
Sir Lucian Grainge
Grainge added: “We remain laser-focused on driving sustainable value creation for the company and its stakeholders: identifying and capitalizing on new revenue streams for UMG and our artists, responsibly advancing new technology, and expanding our global footprint.”
UMG notes that its revenues in Q3 included a €53 million benefit in Music Publishing from the accrual for a catch-up payment from certain DSPs related to the Copyright Royalty Board Phonorecords III ruling in 2023.
The company’s revenue in Q3 also included a previously disclosed €71 million benefit in Recorded Music from the settlement of a copyright infringement lawsuit with an internet service provider.
Excluding both of these items, UMG reports that its revenue grew 10.6% YoY at constant currency.
Universal’s overall recorded music revenues for Q3 2023 (including streaming plus physical etc.) were €2.037 billion ($2.21bn) up 5.2% YoY at constant currency (see below).
Within the Recorded Music segment, UMG’s ‘Subscription and streaming revenues’ (including ad-supported and subscription streaming revenues) grew 10.9% YoY at constant currency to €1.414 billion ($1.53bn) in Q3.
Breaking down UMG’s recorded music streaming figure for Q3 further reveals that the company’s subscription streaming revenues specifically grew 13% YoY at constant currency to €1.057 billion ($1.15bn) and was driven, according to UMG, “primarily by the growth in global subscribers”.
The growth in global streaming subscribers was highlighted earlier this week, when Spotify published its own quarterly results, reporting that its Premium subscriber base grew by 6 million subs to 226 million global paying users in Q3.
Meanwhile, Universal’s ad-supported recorded music streaming revenue was up 5% YoY at constant currency (see above) to €357 million ($388.55m) in Q3.
Within Universal’s recorded music business, physical revenues grew 20% YoY at constant currency to €294 million ($319.98m). UMG says that this result was “driven by strong vinyl sales, particularly in the US and Europe, as well as multi-format physical growth in Japan”.
UMG’s top sellers across the quarter included releases from Taylor Swift, SEVENTEEN, Morgan Wallen, Olivia Rodrigo and King & Prince, while top sellers in the prior-year quarter included BTS, BLACKPINK, Ado, INI and Morgan Wallen.
Meanwhile, Universal’s Music Publishing division, Universal Music Publishing Group, generated revenues of €491 million ($534.40m) in Q3 2023, up 24.6% YoY at constant currency (see below).
Within Music Publishing, Digital revenue grew 33.6% YoY at constant currency to €294 million ($319.98m) in Q3.
Performance revenue grew 21.8% YoY at constant currency to €106 million ($115.37m) in Q3.
Synchronization revenue grew 3.8% YoY at constant currency to €55 million ($59.86m).
Universal’s ‘Merchandising and Other’ revenue in Q3 reached €227 million ($247.06m), an increase of 27.5% YoY at constant currency, driven “by growth in direct-to-consumer sales and higher touring merchandise sales”.
In Q3 2023, UMG’s EBITDA (earnings before interest, taxes, and depreciation) fell 5.9% YoY at constant currency, to €478 million ($520.25m).
EBITDA margin was 17.4%, compared to 20.2% in the third quarter of 2022 (see below).
According to UMG, its EBITDA and EBITDA margin were impacted by non-cash share-based compensation expenses of €103 million during Q3 2023, compared to €14 million during the third quarter of 2022.
Universal reports that its Adjusted EBITDA for Q3 was €581 million ($632.36m), up 11.3% YoY at constant currency.
Adjusted EBITDA margin improved to 21.1% in Q3, compared to 20.8% in Q3 2022.
Also commenting on UMG’s Q3 results, Boyd Muir, UMG’s EVP, CFO and President of Operations, said: “For the ninth consecutive quarter as a stand-alone public company, we once again reported strong growth in revenue and Adjusted EBITDA.
“Even as we deliver current results, we continue to execute on the growth prospects that lie ahead for UMG.”
Boyd Muir, UMG
Added Muir: Even as we deliver current results, we continue to execute on the growth prospects that lie ahead for UMG.”
All references to YoY percentages in this story, whether stated as such or not, are in constant currency. All EUR-USD conversions made at the average rate of the relevant period according to the European Central BankMusic Business Worldwide