Warner Music Group Reports Revenues Up

Q4 And YTD Financials

WARNER MUSIC GROUP CORP. has released its fourth-quarter and full-year financial results for the period ended September 30, 2018.  

“We’ve had another terrific year and revenue exceeded $4 billion for the first time in our fifteen-year history as a standalone company,” said CEO STEVE COOPER. “We continue to invest in our business for the benefit of our recording artists and songwriters and to fuel our long-term growth.”  

“The fact that we ended the year with over $500 million in cash, despite significant spend on A&R, marketing, M&A and dividends, is evidence of the underlying strength of our business,” added EVP/CFO ERIC LEVIN. “We’re on a great run and I’m looking forward to many more years of success.”

The Highlights

• Total revenue for the full year grew 12.0% or 9.2% in constant currency
• Digital revenue for the full year grew 20.4% or 18.5% in constant currency
• Net income for the full year was $312 million versus $149 million in the prior year
• OIBDA for the full year was $478 million versus $473 million in the prior year
• Total revenue for the quarter grew 13.3% or 14.8% in constant currency
• Digital revenue for the quarter grew 21.4% or 23.1% in constant currency
• Net loss for the quarter was $13 million versus $38 million in the prior-year quarter
• OIBDA for the quarter was $72 million versus $60 million in the prior-year quarter

Fourth-Quarter Results

Revenue grew 13.3% (or 14.8% in constant currency).  Growth in Recorded Music digital, licensing and artist services and expanded-rights revenue and growth in Music Publishing digital, performance, synchronization and mechanical revenue were partially offset by a decline in Recorded Music physical revenue.  Revenue grew in all regions.  Digital revenue grew 21.4% (or 23.1% in constant currency), and represented 57.4% of total revenue, compared to 53.5% in the prior-year quarter. 

Operating income was $16 million compared to an operating loss of $1 million in the prior-year quarter.  OIBDA was $72 million, up 20.0% from $60 million in the prior-year quarter and OIBDA margin increased 0.4 percentage points to 6.9% from 6.5% in the prior-year quarter. 

Net loss was $13 million compared to a net loss of $38 million in the prior-year quarter and Adjusted net income was $10 million compared to an Adjusted net loss of $39 million in the prior-year quarter. 

Adjusted operating income, Adjusted OIBDA and Adjusted net income (loss) exclude certain costs related to the relocation of the Company’s U.S. shared service center to NASHVILLE and the Company’s LOS ANGELES office consolidation and restructuring in the quarter, and certain costs related to the Nashville relocation, LOS ANGELES office consolidation, restructuring and PLG-related asset sales in the prior-year quarter. 

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