Warner recorded music revenues jump 15% to hit $791m in first quarter of 2018

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Warner’s recorded music operation generated revenues of $791m in the first calendar quarter of 2018, the company’s fiscal Q2.

That figure was up 15% year-on-year, but was boosted by currency exchange benefits (at constant currency it was up 9.1%).

Within that $791m figure, streaming took the lion’s share: the format generated $415m in calendar Q1 – up by $115m, or 38.3% year-on-year.

Streaming therefore claimed 52.5% of all WMG’s recorded music revenues in the three months.

Physical music revenues were up $5m on the prior year quarter to $147m – a rise that Warner said was largely currency-related – while quarterly download sales (plus other digital) fell $24m to $76m.

Major sellers included Ed Sheeran, The Greatest Showman soundtrack album (pictured), Bruno Mars, WANIMA and Dua Lipa.

Warner said that growth in digital, physical and licensing revenue was partially offset by a decline in artist services and expanded-rights revenue. 

Recorded Music operating income was $80m in the quarter (to end of March).  That was up from $69 million in the prior-year period, leaving recorded music operating margin flat at 10.1%. 


Separately, Warner Music Group’s publishing company, Warner/Chappell Music, turned over $174m in the three months to end of March – up 20.0% year-on-year (or 13.7% in constant currency).

Digital revenue at Chappell rose 33% to $57m.

Its operating income was flat at $41m, while OIBDA grew slightly (+3%) to $60m.


Across Warner Music Group – including recorded music and publishing operations – revenue grew 16.7% (or 10.4% in constant currency) to $963m.

Digital revenue increased 24.6% (or 19.7% in constant currency), and represented 56.8% of total revenue, compared to 53.2% in the prior-year quarter.

Operating income was $83 million compared to $78 million in the prior-year quarter.  OIBDA rose 7.8% to $152 million from $141 million in the prior-year quarter and OIBDA margin declined 1.3% to 15.8% from 17.1% in the prior-year quarter.

Net loss was $1m compared to net income of $20 million in the prior-year quarter and Adjusted net income was $28 million compared to Adjusted net income of $25 million in the prior-year quarter.  Warer primarily attributed this a loss to an extinguishment of debt of $23m related to the partial redemption of the Company’s 6.75% Senior Notes, and higher non-cash tax expense in the quarter related to a one-time tax benefit in the prior-year quarter, offset by higher operating income.

As of March 31, 2018, WMG reported a cash balance of $612m, total debt of $2.947bn and net debt (total long-term debt, which is net of deferred financing costs of $33 million, minus cash) of $2.335bn.

“We’re having another excellent year with strong momentum around the world in both Recorded Music and Music Publishing,” said Steve Cooper, Warner Music Group’s CEO.

“We’re investing heavily in A&R, digital innovation and the transformation of our operations to ensure that we are positioned for long-term success.”

“We showed strong revenue and OIBDA growth in our second quarter,” added Eric Levin, Warner Music Group’s Executive Vice President and CFO. “This is our eleventh consecutive quarter of year- over-year revenue growth and we’re proud of our ability to deliver robust results on a consistent basis.”Music Business Worldwide

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